Half yearly report 2012 - Gruppo Banca Carige

CONSOLIDATED FINANCIAL HIGHLIGHTSBALANCE SHEET (1)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/2012 06/201206/2011 06/2011Total assets 47,314,048 44,860,061 42,374,106 5.5 11.7Funding 36,246,804 34,362,190 31,256,275 5.5 16.0- Direct deposits (a) 27,630,325 28,439,887 28,311,847 -2.8 -2.4* Due to customers 16,104,290 15,919,602 15,636,164 1.2 3.0* Securities issued 10,668,463 11,616,164 11,399,971 -8.2 -6.4* Financial liabilities designated at fair value through profit and loss (2) 857,572 904,121 1,275,712 -5.1 -32.8- Due to banks 8,616,479 5,922,303 2,944,428 45.5 …Indirect deposits (b) 22,868,695 23,571,160 24,280,660 -3.0 -5.8- Assets under management 9,659,963 9,523,339 10,185,110 1.4 -5.2- Assets under administration 13,208,732 14,047,821 14,095,550 -6.0 -6.3Financial Intermediation Activities (FIA) (a+b) 50,499,020 52,011,047 52,592,507 -2.9 -4.0Investments 42,810,901 39,951,781 38,264,024 7.2 11.9- Loans to customers (3) (4) 27,450,266 27,534,610 26,560,685 -0.3 3.3- Due from banks (3) (4) 1,914,992 1,638,928 1,468,880 16.8 30.4- Securities portfolio (5) 13,445,643 10,778,243 10,234,459 24.7 31.4Share capital and reserves 3,282,469 2,634,729 3,595,757 24.6 -8.7INCOME STATEMENT (1)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/2012Net interest and other banking income 612,811 1,144,144 541,654 13.1Net income from banking and insurance activities 463,457 944,635 455,441 1.8Income (loss) before tax from continuing operations 125,965 279,491 119,485 5.4Parent Company's net income (loss) 90,230 186,651 75,158 20.112/2011RESOURCES (6) Change %Number of branches 677 677 670 - 1.0Insurance agencies 437 431 436 1.4 0.2Number of bank employees 5,443 5,481 5,525 -0.7 -1.5Number of bank and insurance employees 5,941 5,974 6,013 -0.6 -1.2FINANCIAL RATIOSOperating expensesNet interest and other banking income 55.5% 58.5% 62.5%Income (loss) before tax from continuing operations/Share capital and reserves 3.8% 10.6% 3.3%ROE 2.7% 7.1% 2.1%ROE (7) 2.5% 5.9% 2.2%ROAE (8) 3.0% 6.1% 2.1%ROAE (7) (8) 2.7% 6.0% 2.3%Earnings per share (in Euro)- basic 0.044 0.114 0.041- diluted 0.044 0.100 0.041REGULATORY RATIOS (9) (10)Total weighted assets (1) 23,532,000 23,132,897 22,469,925 1.7 4.7Core Tier 1 ratio 6.7% 6.7% 5.9%Tier1 ratio 7.4% 7.4% 6.6%Total capital ratio 9.9% 10.1% 9.1%(1) Figures in thousands of euro.(2) Carige Vita Nuova liabilities, designated at fair value and relating to products for which risk is borne by insureds, are not included in this table.(3) Before value adjustments.(4) Net of debt securities classified as L&R.(5) The aggregate includes Balance Sheet items 20 (net of derivatives), 30 (net of liquidity invested facing the insurance contracts for which the investmentrisk is borne by theinsured), 40, 60 (only the portion relating to L&R) and 70 (only the portion relating to L&R).(6) Statistics of the end of period.(7) Net of the AFS reserve (item 140 of balance sheet liabilities).(8) Net profit on average shareholders' equity (Return On Average Equity).(9) The figures as at 06/30/2012 result from accounting and management estimates(10) The figures as at 12/31/2011 are stated on a pro-forma basis, taking into account the conversion of the "Banca Carige 4.75% 2010-2015 convertible bond with the option ofredemption in shares" ("Banca Carige 4,75% 2010-2015 convertibile con facoltà di rimborso in azioni").4

BOARD OF DIRECTORS, BOARD OF STATUTORY AUDITORS ANDINDIPENDENT AUDITORSBOARD OF DIRECTORS GENERAL MANAGERS BOARD OF STATUTORYAUDITORSCHAIRMAN GENERAL MANAGER CHAIRMANGiovanni Berneschi * Ennio La Monica Andrea TraversoDEPUTY CHAIRMAN CO-GENERAL STANDING AUDITORSAlessandro Scajola *MANAGER(CREDIT AND WEALTHDomenico SardanoMassimo ScottonMANAGEMENT)Mario CavannaDIRECTORSPiergiorgio Alberti CO-GENERAL ALTERNATE AUDITORSPiero Guido Alpa MANAGER Stefano LunardiJérome Gaston Raymond Bonnet (ADMINISTRATION AND Pietro SegalerbaLuca Bonsignore RESOURCES)Cesare Castelbarco Albani Giacomo Ottonello INDIPENDENT AUDITORSRemo Angelo Checconi *Reconta Ernst & Young SpABruno CordazzoDEPUTY GENERALIvo De Michelis * MANAGER MANAGER RESPONSIBLEPhilippe Marie Michel Garsuault (GOVERNANCE ANDCONTROL)Daria BagnascoFOR PREPARING THECOMPANY’S FINANCIALREPORTSLuigi Gastaldi *Daria BagnascoGiovanni MarongiuPaolo Cesare Odone *DEPUTY GENERALGuido PescioneMANAGERAlessandro Repetto *(COMMERCIAL)Mario VenturinoGabriele DelmontePhilippe Wattecamps* Member of the Executive CommitteeThe Board of Directors was appointed by the Ordinary Shareholders’ Meeting on 27 April 2012 for the 2012-2013-2014 financial years and,therefore, with a term of office lasting until approval of the financial statements for the year ended 31 December 2014.The Board of Statutory Auditors was appointed by the Ordinary Shareholders’ Meeting on 29 April 2011 for the financial years 2011-2012-2013, hence with a term of office up to the date of the Shareholders’ Meeting called to approve the financial statements as at 31 December2013. Standing Auditor Mr. Antonio Semeria, who passed away, was replaced in office on 12 May 2011, pursuant to art. 26 of the Articles ofAssociation, by Substitute Auditor Mr. Domenico Sardano. In accordance with the aforementioned art. 26 of the Articles of Association and art.2401, paragraph 1, of the Italian Civil Code, the Shareholders’ Meeting held on 13 February 2012 then supplemented the Board of StatutoryAuditors by appointing Mr. Domenico Sardano as Standing Auditor and Mr. Pietro Segalerba as Substitute Auditor, with the same expiry of termin office as the other members of the Board of Statutory Auditors.The Executive Committee was appointed by the Board of Directors on 2 May 2012 with term of office up to 31 December 2012.The mandate to the Audit Firm, Reconta Ernst & Young SpA, was granted by the Ordinary Shareholders’ Meeting held on 29 April 2011 for thenine-year period 2012-2020.5

INTERIM REPORT ON OPERATIONS6

THE REAL AND MONETARY SITUATION 1In the first six months of 2012, the macroeconomicscenario stagnated considerably inEurope, recorded a fragile recovery in theUnited States and saw a reduction in the rate ofgrowth in emerging countries. Uncertainties inthe international financial markets and the worseningin household and business confidence notonly restricted the performance of domestic demandbut commercial trade too, with internationaltrade slowing down due to the exports ofindustrialised and emerging economies and theimports of more mature economies. Lowergrowth prospects for the global economy alsoled to a fall in oil prices.A 3.1% increase in global GDP was estimatedfor the whole of 2012 (3.7% in 2011), with internationaltrade up 4.4% compared to 6% in2011.In the United States, the economic situationshowed weak growth, still not enough to bringdomestic GDP back to pre-crisis levels. In thefirst few months of 2012, GDP fell below expectations(first quarter growth +2.2% YoY), theunemployment rate stood at 8.2% in May, consistentlyhigh but below the 2011 average of9%, and the rate of employment continued tohover below 59%, compared to an average of63% in the 2002-2007 pre-crisis period. Inflationfell further (2.3% in May), leaving the FederalReserve with ample room to continue withits expansive monetary policy aimed at stimulatingthe real economy.Emerging countries suffered from the contractionin foreign trade and the slowdown in investmentsand the expansive monetary policy measurestargeted at counteracting the drop off ingrowth contributed to the depreciation of nationalcurrencies against the dollar.The EU economy registered essentially stablegrowth, as result of different development profileswithin the EU area: While Germany, Franceand Finland recorded growth, Italy, Spain,Greece, Portugal and Holland are in a recession;measures implemented by the individualEU member states to reduce public debt werenot enough to eliminate the lack of confidencein the EU’s general economic system, contributingto the weakening of the Euro and the widen-1 The figures shown in this section are the latestavailable at the time of drafting.ing of peripheral nations’ spreads against theGerman bund: in Italy, the spread surpassed500 basis points.Industrial production in the EU area fell (-1.8%in April; -0.7% in Germany); new manufacturingorders also recorded a decrease (-2.6% inMarch) and retail sales were down 2.4% inApril. The unemployment rate went up again,(11.1% in May), 1% higher than the averagerate in 2011. Consumer prices deceleratedslightly (2.4% in June), in particular as a result ofthe trend in the energy component, but core inflationalso slowed (+1.9% in April).Italy is in the midst of a recession, due to boththe worsening in the external context, and thenegative trend in domestic demand. On top ofthis, we have the tensions over sovereign debtthe government is attempting to control, byadopting a series of urgent economic policyprovisions and structural reforms to augmentDecree 201/2011, introducing “Urgent provisionsfor growth, equity and consolidation ofpublic finances (so-called “Salva Italia”), convertedto Law in December 2011. In March,Parliament approved Decree 1/2012 introducing“Urgent provisions for competition, infrastructuraldevelopment and competitiveness”(so-called “Cresci Italia”) and on 10 July, theDecree “Urgent provisions for the review of publicspending with no change to the services tocitizens” (so-called “Spending Review”), waspresented to the Senate for discussion, whichmakes provision, through a series of measuresinvolving higher revenues and lower expenses,for a reduction of around € 600 million in thedeficit. As regards the labour market more specifically,aside from pension reform, implementedby means of the aforementioned “SalvaItalia” Decree”, Law no. 92 of 28 June 2012came into force on 18 July, introducing “Provisionsgoverning reform of the labour market witha view to achieving growth”. These provisionsare targeted at creating the conditions forachieving a balanced budget by 2013, instillingconfidence regarding the sustainability of Italy’spublic finances and stimulating growth.GDP, up 0.5% in 2011, fell by 1.4% YoY in thefirst quarter of 2012: all components of domesticdemand recorded a decrease, with the exceptionof public spending, while the contributionof the trade balance was still positive.In the first five months of 2012, the fall in industrialproduction (-6.7% YoY) reflected the decreasein all industrial sectors, especially intermediategoods (-8.8%) and consumer goods (-7

7.1%). Industrial turnover recorded a more containeddecrease (-3%), which showed growth inforeign turnover (+4%), against a fall in domesticturnover (-6.3%). Industrial orders registereda marked decrease (down 11.2%), especially inthe domestic market (-13.6%), while retail salesfell by 1.6%, with a better performance recordedby foodstuffs (-0.2%) and large-scale distribution(-0.3%).The labour market appeared to deteriorate further,especially in terms of female and youthemployment, despite slight growth in employmentnumbers. The unemployment rate stood at10.1% in May, up 1.9% YoY, but youth unemploymentreached 36.2% (up 8.7% YoY).Inflation remained at high levels (3.6% in June),sustained by the dynamic trends in almost all areasof spending, especially home, transport andtobacco.As regards foreign trade, both exports and importsfell: in the first five months of the year, theformer increased by 3.9% YoY, with exports toEU countries stable and exports up 9.3% to non-EU countries; imports were stable, with growthfrom non-EU countries offset by the contractionfrom EU countries.Public finance improved: in the first five monthsof 2012, the cumulative cash requirements ofthe government sector amounted to about € 35billion, less than the € 45 billion of the first fivemonths of 2011.The weakness of the economic cycle and persistentsovereign debt crises affecting many Europeancountries adversely influenced the financialmarkets and the crisis of confidence between intermediariesbrought trading on the interbankmarket and medium/long-term wholesale marketsto a standstill, creating severe liquidity tensionswhich the ECB tried to alleviate throughconventional and unconventional measures(such as the introduction of two three-yearlymoney auctions held in December and at theend of February, known as Long Term RefinancingOperations - LTRO). Market interest ratesshowed a decreasing trend, in line with the expansivemonetary policy: the 3-month Euriborrate fell from 1.44% in December to 0.66% inJune, the 6-month Euribor from 1.68% to0.94% and the Rendistato (yield on governmentsecurities) from 6.30% to 5.41%.In Italy, in particular, yields on governmentbonds fell, despite partially reversing the trend inthe second quarter: Treasury bills decreasedfrom an average of 4.02% in December to0.97% in March, then rose again to 2.66% inJune 2012; treasury credit certificates fell from8.91% to 3.50% then increased to 5.79%; longtermtreasury bonds dropped from 6.59% to4.76% then recovered to 5.64%.As regards the monetary policy, the recessionarycontext forced the ECB to cut interest rates by0.25% to 0.75% on 5 July 2012. The UnitedStates also continued with its “zero interest rate”and high bank liquidity policy, launched at theend of 2008: the Federal Reserve, whose mandatecombines objectives regarding controllingthe stability of prices and employment, kept theinterest rate in the 0-0.25% band.The currency exchange market was characterisedby a depreciation of the Euro against theUS Dollar: the exchange rate fell from 1.29 to1.26 in the first half of 2012.With reference to banking intermediation, directdeposits registered a slight decrease as at June,down 0.1% on a trend basis (+0.8% in December2011), due essentially to the fall in bondfunding (-5.1%; +3.2% in December 2011),while deposits recorded low growth (+2.6%;down 0.4% in December 2011).Loans recorded a lethargic performance, withYoY growth in loans to the private sector of0.2% (+2.9% in December 2011); in particular,a slight decrease in loans to households andnon-financial businesses was recorded (down0.6%), across all maturities. The quality of bankcredit remained critical, with a net badloans/loans ratio of around 3.1%, in line withthe figure in December 2011.Bank interest rates settled. The average interestrate on loans to households and non-financialbusinesses, which gradually fell in the half, stoodat 3.99% in June (4.23% at the end of 2011)and the rate on deposits was 1.23% (1.08% inDecember 2011); consequently, the spread recordeda decrease. By contrast, the interest rateson new loans increased.STRATEGYThe fundamental strategic goal of the Group, inline with the path started at the beginning of the‘90s, is the creation of value in the medium/long-termfor all stakeholders (shareholders,human resources, customers and the community)in a balanced manner, leveraging thedevelopment of relations with customers anddimensional growth, as a key requirement for8

maintaining an important position in the domesticbanking system.In line with this objective, on 16 May 2011 thenew 2011-2014 Group Strategic Plan was approved,which confirms the mission of consolidatingthe role of banking, financial, welfareand insurance conglomerate at national level,with a strong presence in the individual localmarkets, able to distinguish itself for the qualityof service offered to the customer, also througha multi-channel approach and the progressivedevelopment in the quality of resources andstructures. The Group Strategic Plan defined thefollowing strategic guidelines targeted at thecreation of value:- Increase in revenues and expansion of thecommercial offer, with the goal of identifyingbusiness areas (areas, products, customers)with untapped potential;- rationalisation of costs and operating processes,through the constant focus on technical-operationalefficiency, particularly as regardsthe review of the processes which use aconsiderable amount of resources;- optimisation of liquidity, capital and the costof risk, aimed at allocating scarce resourcesefficiently;- focus on innovation and on skills, for the continuousimprovement in processes and products,but also the conduct and the relationshipbuilding capacity of human resources.These guidelines were translated into strategicgoals which will be implemented through specificinitiatives focused on the achievement ofplan targets.In order to implement the initiatives of the StrategicPlan more effectively, in a market contextwhich is gradually getting worse, on 21 May2012, the Carige Group Restructuring Projectwas approved, which involves the incorporationof a new bank, wholly owned by the currentBanca Carige, called “Banca Carige Italia”, towhich the 353 Banca Carige branches operatingoutside Liguria will be transferred, both thoseopened directly and those acquired over timefrom other banking groups.Corporate separation will make it possible tomore effectively pursue the different missions inherentin the two networks: Banca Carige Italia,like the other Group banks, will operate as a“network bank” whose main objective is to accelerategrowth in traded volumes and in thenumber of customers; the more recently formedand broader based network can experiment withan innovative service model, which will leveragein-depth integration of traditional branches withhi-tech distribution channels.Banca Carige will continue to fulfil the role ofParent Company – carrying out management,coordination, control and service functions forthe entire Group – and commercial bank, withthe main goal of preserving customer relationshipsand leadership of the market in Liguria,the region in which the Bank has a strong presence.Subject to obtainment of the necessary authorisationsfrom the Supervisory Authorities, the restructuringwill take effect on 1 January 2013and will be effective from 31 December 2012for tax and accounting purposes.Since 1997, Banca Carige requested and obtainedratings from the main specialised internationalrating agencies, Moody’s, Standard &Poor’s and Fitch. As with the majority of Italianintermediaries, in the last few months of the yearthis rating was lowered on average by 2notches, as a consequence of the worsening ofthe economic and financial situation and thedowngrading of the Italian public debt.The ratings assigned to Parent Company BancaCarige are shown below:9

BANCA CARIGE RATINGSdate of the last rating short-term long-term BFSR (1) (2) Individual (2) Support (3)Fitch November 2011 (4) F3 BBB - C 3Moody's July 2012 (4) P-3 Baa3 D+ - -Standard & Poor's February 2012 (5) A-3 BBB- - - -(1) Bank Financial Strength Ratings.(2) BFS ratings express the intrinsic strength and solidity of a bank, as well as its financial reliability given the bank's assets. Ratings range from A to E.(3) Support ratings indicate the likelihood of the Government or other public entity, or shareholders, stepping in to support the bank in the event of crisis.Ratings range from 1 to 5.(4) Date relative to the last press release issued by the rating agency.(5) Date relative to the last press release issued by the rating agency.BUSINESS PERFORMANCEDespite the difficult and complex macroeconomicscenario, the Carige Group essentially kept thetrend in equity and income statement results inline with the expectations.Intermediation activities with customers in the firstfew months of the year, in confirming the signs ofa slowdown in growth already recorded in 2011,registered results slightly below the expectations,both in terms of deposits and loans but, in anycase, essentially in line with the results recordedby the banking system.In terms of funding, the Group availed itself ofrefinancing at the European Central Bank, participatingin two extraordinary three-year auctionsin December and February, also taking advantageof the possibility offered to Italian banks ofdiscounting issued bank covered bonds at theECB. As regards the total amount financed of € 7billion, € 2 billion was new funding and the remainderwas used to replace loans with a closermaturity. This allowed a big improvement in theshort-term net financial position and strengthenedthe Group’s structural equilibrium, allowingthe Group to continue with the envisaged creditdevelopment policies.Bond placements with customers also continued:against roughly € 298 million in maturities and €437 million in repurchases, placements stood at€ 974 million at the end of June.As at 30 June 2012, the Group’s Financial IntermediationActivities (FIA) fell by 4% over thesame period in the previous year and 2.9% sincethe start of the year, partly due to the conversionof the “Banca Carige 4.75% 2010-2015 convertiblebond with the option of redemption inshares” (“Banca Carige 4,75% 2010-2015 convertibilecon facoltà di rimborso in azioni") andthe application of the new legislation which requiresthe transfer of the treasury current accountsof Public Authorities to the State Treasury(variation of -2.8% and -1.7% net of said effectsrecorded in the twelve and six-month periods).Loans to customers increased by 3.3% in thetwelve months and were essentially stable fromthe start of the year.Consolidated net profit in the first six monthscame to € 90.2 million, up 20.1% on the figurerecorded in the same period in 2011. In particular,an increase was registered in the interestmargin and net service revenues when comparedto June 2011. Value adjustments increasedon both loans and available-for-sale financialassets, while operating costs were keptunder control.HIGHLIGHTS FOR FIRST HALF-YEAR2012On 14 February, Carige’s Executive Committeeresolved to approve the Group’s adoption of thenew Agreement signed on 31 January 2012 betweenABI (Italian Banking Association) and theconsumer associations for the extension to 31July 2012 of the deadlines for submitting applicationsfor the suspension of mortgage instalments,pursuant to the Agreement of 18 December2009. On 6 March, said Committee resolvedCarige’s adoption of the agreement“New measures for credit for small and mediumsized enterprises” signed on 28 February 2012by the Ministry of Economic Development, Infrastructureand Transport, the Ministry of Economyand Finance, the Italian Banking Associationand other associations representing businesses.10

On 20 February, the Parent Company's Boardof Directors resolved the full early redemption ofthe entire bond loan called "Banca Carige4.75% 2010-2015, convertible with the optionof redemption in shares" (“Banca Carige 4,75%2010-2015 convertibile con facoltà di rimborsoin azioni"), which is represented by more than €163 million in outstanding bonds, with a nominalvalue of € 2.40 each, for a total amount of€ 391.3 million. The early redemption was concludedon 23 March, with € 386.8 million innew shares issued.On 29 February, by taking advantage of thepossibility offered to Italian banks of discountingissued bank covered bonds at the ECB, BancaCarige adhered to a long term refinancing operation(Long-Term Refinancing Operation -LTRO), which involved the acquisition of newmeans of funding, for the total amount of € 0.7billion, at a rate of 1%.On 27 April, the Ordinary Shareholders’ Meetingof the Parent Company appointed the Boardof Directors for the 2012-2014 three-year periodwhich, on 2 May, elected:– the members of the Executive Committee,setting their term of office at 31 December2012, and– the members of the Internal Committees(Control and Risks, Remuneration and Appointments),as well as members of the SupervisoryAuthority established in accordancewith Legislative Decree 231/2001.On 14 May, the Board of Directors – in relationto two programs in place for the issuing of securedbank bonds and in accordance with therespective Framework Transfer Contracts relatingto the two programs in question – inter alia,resolved the transfer, within the current year, ofadditional eligible assets totalling roughly € 1.4billion, in the form of residential and commercialmortgages originated or renegotiated byCarige and its subsidiaries by 31 December2011, to be split between the two programs onthe basis of the Group’s liquidity requirementsand potential market developments.On 21 May, the Board of Directors approvedthe aforementioned Group Restructuring Project,targeted at developing the potential of BancaCarige’s network outside Liguria, which will bethe object of a transfer – effective as of 31 December2012 and open to the public from 1January 2013 – to a bank known as “BancaCarige Italia SpA”, incorporated on 23 May2012, with the simultaneous full payment bysole shareholder Banca Carige of the sharecapital of € 7 million. On 29 May, BancaCarige Italia SpA submitted its request to theBank of Italy for the authorisation to carry outbanking activities.On 28 May, the Boards of Directors of the InsuranceCompanies resolved to hire RobertoLaganà as General Manager, effective as of 1July 2012, replacing the outgoing Managing DirectorDiego Fumagalli.The ratings assigned to the Parent Companywere revised downward as a result of the worseningof the credit rating of the Italian government:on 10 February Standard & Poor’s loweredCarige’s long-term rating from “BBB/A-2“to “BBB- /A-3” (with a negative outlook) and on15 May, Moody’s lowered this from “Baa1” to“Baa2” (with a negative outlook) and then to“Baa3” in July, as shown in the section “Eventsafter the close of the half-year period”.The Carige Group has the following pending taxdisputes:- alleged “abuses of right” in the use of the taxcredit for taxes paid abroad for the years from2004 to 2006 (Banca Carige and Cassa di Risparmiodi Carrara) and for financial transactionswith Italian shares as underlying for the 2005-2006 years (Banca Carige).As regards the dispute involving Banca Carige, itshould be noted that, in respect of the judgmentfiled on 6 February 2012 with which the ProvincialTax Commission of Genoa rejectedCarige’s appeal, which Carige will appeal beforethe Supreme Court, on 14 February and 25May 2012, tax bills, penalties and Ires interestrelating to 2004 were paid totalling € 10.5 million.With reference to the 2005 tax year, Carige filedan appeal and obtained the suspension of therelative tax collection notice; discussions havebeen set for next 3 October. In the meantime,on 22 February the Tax Authorities notifiedCarige of the imposition of penalties which weredisputed before the competent Tax Commission.In relation to the 2006 tax year, Carige submittedtax settlement proposals and, on 21 June2012, filed the associated appeals at the ProvincialTax Commission of Liguria.By contrast, as regards similar transactions carriedout by Cassa di Risparmio di Carrara in theyears 2004 and 2005, appeals were upheld bythe Provincial Tax Commission of Florence forthe year 2004 (ruling filed on 12 December2011) and by the Provincial Tax Commission ofMassa Carrara for the year 2005 (ruling filed on21 February 2012) respectively. Appeals were11

submitted by the Tax Authorities against said rulings.- Ires (corporate income tax) and Irap (regionalbusiness tax) taxes for the 2003-2005 years(Carige Assicurazioni) related to adjustments onReinsurance contracts that are capitalised andcharged pro-rata in the financial statements ofthe years disputed.The Ires and Irap dispute against Carige Assicurazioniinvolve amounts payable of € 7.6million and € 1.2 million per annum respectively,due to the non-acceptance of the appealsby the Provincial Tax Commission of Milan forthe years 2004 and 2005. In March, Irap taxnotices were paid and May saw the start ofpayments of Ires tax notices for 2004 and 2005.As regards the same dispute, the Tax Commissionof Genoa, which had upheld the appeal inits first instance judgment for 2004, thenchanged the decision in the appeal judgmentthrough the ruling filed on 20 March 2012,against which the company will appeal beforethe Supreme Court.The Group, backed by opinions of qualified externalprofessionals, believes that there are substantialand legal grounds for their rationale regardingthe legal nature of their transactions, arationale that will be pursued at all appropriatenational and international levels.RISK MANAGEMENTIn the Carige Group, any policies related to theassumption of risks are set by the Board of Directorsof the Parent Company at the moment ofpreparation of strategic planning and the annualbudget.The Parent Company performs orientation andsupervisory functions as regards all risks, in particularby managing, in an integrated context,the Pillar 1 and Pillar 2 risks, in accordance withthe provisions contained in the Supervisory Instructionsof the Bank of Italy (Circular No. 263dated 27 December 2006 and subsequent updates).The individual Group banks operate within specificlimits of independence and avail themselvesof their own control structures, whose analysesare supported not only by regulatory models, butby more advanced models which have made itpossible, over time, to expand the range of risksmonitored and improve the assessment of thecapital adequacy, from both a regulatory andan managerial perspective. For details on riskmanagement, please refer to the paragraph“Risk management” in the Explanatory notes ofthe Condensed Consolidated Half-Yearly FinancialStatements.SUBSEQUENT EVENTSOn 16 July, as part of the review of the ratingsof Italian banks following the downgrading ofthe rating of Italian government bonds, Moody’slowered Carige’s long-term rating from “Baa2”to “Baa3” and its short-term rating from “P-2” to“P-3”. The bank financial strength rating (BFSR)was confirmed at “D+”. The outlook remainednegative.MAIN RISKS AND UNCERTAINTIESAND BUSINESSOUTLOOKIn light of the positive results obtained by theCarige Group in the first half of 2012 too –which confirms its solid strategic positioning intraditional bankassurance activities – and inconsideration of the constant focus on liquidityprofiles, capitalisation and risk, and on thebenefits in terms of efficiency expected from theinvestments in information technology, the halfyearlyfinancial report was drawn up in the assumptionof the company as a going concern.Operations were performed in the first half ofthe year against the backdrop of a slowdown inglobal economy and accentuated tensions in thefinancial markets, shaped by the sovereign debtcrises in certain European countries, which sawspreads between Italian and German governmentbonds increase, despite significant measuresimplemented to reduce public debt and theextraordinary monetary policy provisionsadopted at European level.In particular, in Italy, the phase of recession isexpected to last until 2013, with an estimatedfall in GDP of around 2% in 2012, characterisedby a decrease in household consumption,stagnation in investments by businesses and aslowdown in foreign trade. The harsh fiscal policiestargeted at reducing the public deficit andstructural reforms put in place by the Italiangovernment to stimulate future growth and re-12

store market confidence in the country, couldadversely affect private consumption and investmentsin the immediate future. Additional taxincreases could then be adopted over the comingmonths in relation to the development of thesituation.It is necessary for the banking system to be exposedto the criticalities in the economicfinancialcontext and it will be affected by thesein the near future too, in terms of traded volumes,liquidity funding, enhancement of assetsand profitability.These effects will be augmented by the penalisingindustry regulations introduced over the lastfew years, including, in particular, pricing regulationmeasures and the revision of prudentialsupervisory regulations (known as Basel 3),which introduces stricter restrictions regardingcapital and liquidity requirements. To complywith these, the banking system must graduallyobtain more available capital and liquidity reserves.After an in-depth evaluation of the risks and uncertaintiesinherent in the aforementioned criticalities,which are predicted to continue to characterisethe economic-financial context and, asa result, the banking sector in the near future,the Group is confident that it can continue withits balanced path of growth.INFORMATION ON RELATIONSWITH RELATED PARTIESThis half-yearly financial report acknowledgesthe legislative changes made to IAS 24 – RelatedParty Disclosures - published in November2009 by the IASB (EC Reg. no. 632/2010 of 19July 2010) in relation to the definition of the perimeterof related parties.The Group maintains relations with BancaCarige shareholders who are able to exercise asignificant influence, subsidiaries and other relatedparties regulated under market conditions.For details of existing relations, please refer tothe paragraph “transactions with related parties”in the explanatory notes to the condensed consolidatedhalf-yearly financial statements.13

HALF-YEARLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS14

CONSOLIDATED FINANCIAL STATEMENTS15

CONSOLIDATED BALANCE SHEETASSETS (thousands of euro)Change30/06/2012 31/12/2011 absolute %10 -CASH AND CASH EQUIVALENTS 288,105 604,122 (316,017) -52.320 -FINANCIAL ASSETS HELD FOR TRADING 257,602 170,364 87,238 51.230 -FINANCIAL ASSETS DESIGNATED AT FAIR VALUETHROUGH PROFIT AND LOSS 545,003 534,176 10,827 2.040 -FINANCIAL ASSETS AVAILABLE-FOR-SALE 12,308,951 9,665,750 2,643,201 27.360 -DUE FROM BANKS 2,215,925 1,986,409 229,516 11.670 -LOANS TO CUSTOMERS 26,710,668 26,885,944 (175,276) -0.780 -HEDGING DERIVATIVES 188,509 152,543 35,966 23.6100 -INVESTMENTS IN ASSOCIATES AND COMPANIESSUBJECT TO JOINT CONTROL 62,839 53,885 8,954 16.6110 -TECHNICAL INSURANCE RESERVES REASSURED WITHTHIRD PARTIES 171,892 154,748 17,144 11.1120 -PROPERTY AND EQUIPMENT 1,208,539 1,206,593 1,946 0.2130 -INTANGIBLE ASSETS 1,856,142 1,859,969 (3,827) -0.2of which:- goodwill 1,779,644 1,779,644 - -140 -TAX ASSETS 1,024,243 1,063,682 (39,439) -3.7a) current 179,827 109,880 69,947 63.7b) deferred 844,416 953,802 (109,386) -11.5160 -OTHER ASSETS 475,630 521,876 (46,246) -8.9TOTAL ASSETS 47,314,048 44,860,061 2,453,987 5.5LIABILITIES AND SHAREHOLDERS' EQUITY (thousands of euro)Change30/06/2012 31/12/2011 absolute %10 -DUE TO BANKS 8,616,479 5,922,303 2,694,176 45.520 -DUE TO CUSTOMERS 16,104,290 15,919,602 184,688 1.230 -SECURITIES ISSUED 10,668,463 11,616,164 (947,701) -8.240 -FINANCIAL LIABILITIES HELD FOR TRADING 47,076 66,150 (19,074) -28.850 -FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUETHROUGH PROFIT AND LOSS 1,425,596 1,460,833 (35,237) -2.460 -HEDGING DERIVATIVES 1,343,450 1,212,376 131,074 10.880 -TAX LIABILITIES 419,522 412,785 6,737 1.6(a) current 39,113 47,454 (8,341) -17.6(b) deferred 380,409 365,331 15,078 4.1100 -OTHER LIABILITIES 697,227 894,101 (196,874) -22.0110 -EMPLOYEE TERMINATION INDEMNITIES 84,524 85,206 (682) -0.8120 -ALLOWANCES FOR RISKS AND CHARGES: 296,203 298,726 (2,523) -0.8a) post employment benefits 269,086 269,263 (177) -0.1b) other allowances 27,117 29,463 (2,346) -8.0130 -TECHNICAL RESERVES 4,183,634 4,096,189 87,445 2.1140 -VALUATION RESERVES (280,233) (514,516) 234,283 -45.5160 -EQUITY INSTRUMENTS 1,173 15,772 (14,599) -92.6170 -RESERVES 363,996 329,804 34,192 10.4180 -SHARE PREMIUM RESERVE 1,020,314 1,013,277 7,037 0.7190 -SHARE CAPITAL 2,177,219 1,790,392 386,827 21.6210 -MINORITY INTERESTS (+/-) 54,885 54,246 639 1.2220 -NET INCOME (LOSS) 90,230 186,651 (96,421) -51.7TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 47,314,048 44,860,061 2,453,987 5.5The Manager in charge ofpreparing the company’saccounting documentsThe Chairman of the Board ofDirectorsThe General Manager16

CONSOLIDATED INCOME STATEMENT(thousands of euro)Change 6 months 2012 - 6 months 20116 months 2012 6 months 2011 absolute %10 - INTEREST AND SIMILAR INCOME 753,468 601,586 151,882 25.220 - INTEREST AND SIMILAR EXPENSE -331,376 -229,428 -101,948 44.430 -INTEREST MARGIN 422,092 372,158 49,934 13.440 - FEE AND COMMISSION INCOME 184,725 163,091 21,634 13.350 - FEE AND COMMISSION EXPENSE - 26,551 - 16,120 - 10,431 64.760 -NET FEE AND COMMISSION INCOME 158,174 146,971 11,203 7.670 - DIVIDEND AND SIMILAR INCOME 5,991 8,304 -2,313 - 27.980 - PROFITS (LOSSES) ON TRADING -504 15,189 -15,693 …90 - FAIR VALUE ADJUSTMENTS IN HEDGE ACCOUNTING -1,942 -91 -1,851 …100 - PROFITS (LOSSES) ON DISPOSAL OR REPURCHASE OF: 27,148 146 27,002 …a) loans 1,912 -501 2,413 …b) financial assets available-for-sale 23,883 1,594 22,289 …d) financial liabilities 1,353 -947 2,300 …110 - PROFITS (LOSSES) ON FINANCIAL ASSETS AND LIABILITIESDESIGNATED AT FAIR VALUE 1,852 -1,023 2,875 …120 -NET INTEREST AND OTHER BANKING INCOME 612,811 541,654 71,157 13.1130 - NET LOSSES/RECOVERIES ON IMPARMENT -93,539 -61,987 -31,552 50.9a) loans -74,066 -55,830 -18,236 32.7b) financial assets available-for-sale -19,535 -4,240 -15,295 …d) other financial activities 62 -1,917 1,979 …140 -NET INCOME FROM BANKING ACTIVITIES 519,272 479,667 39,605 8.3150 - NET INSURANCE PREMIUMS 513,527 652,502 -138,975 - 21.3160- OTHER NET INSURANCE INCOME (ESPENSE) -569,342 -676,728 107,386 - 15.9170- NET INCOME FROM BANKING AND INSURANCEACTIVITIES 463,457 455,441 8,016 1.8180 - ADMINISTRATIVE EXPENSES: -339,591 -348,657 9,066 - 2.6a) personnel expenses -208,915 -211,250 2,335 - 1.1b) other administrative expenses -130,676 -137,407 6,731 - 4.9190 - NET PROVISIONS FOR RISKS AND CHARGES -621 -1,715 1,094 - 63.8200 - NET ADJUSTMENTS TO/RECOVERIES ON PROPERTY ANDEQUIPMENT -13,560 -12,643 -917 7.3210 - NET ADJUSTMENTS TO/RECOVERIES ON INTANGIBLE ASSETS -16,700 -15,306 -1,394 9.1220 - OTHER OPERATING EXPENSES (INCOME) 30,616 40,027 -9,411 - 23.5230 -OPERATING EXPENSES -339,856 -338,294 -1,562 0.5240 - PROFITS (LOSSES) ON INVESTMENTS IN ASSOCIATES ANDCOMPANIES SUBJECT TO JOINT CONTROL 2,366 2,332 34 1.5270 - PROFITS (LOSSES) FROM DISPOSAL OF INVESTMENTS -2 6 -8 …280 -INCOME (LOSS) BEFORE TAX FROM CONTINUINGOPERATIONS 125,965 119,485 6,480 5.4290 - TAXES ON INCOME FROM CONTINUING OPERATIONS -33,407 -43,332 9,925 - 22.9300 -INCOME (LOSS) AFTER TAX FROM CONTINUINGOPERATIONS 92,558 76,153 16,405 21.5320 -NET INCOME (LOSS) 92,558 76,153 16,405 21.5330 - MINORITY INTERESTS 2,328 995 1,333 …340 -PARENT COMPANY'S NET INCOME (LOSS) 90,230 75,158 15,072 20.1Earnings per share (in euro)- Basic 0.044 0.041- Diluted 0.044 0.041The Manager in charge ofpreparing the company’saccounting documentsThe Chairman of the Board ofDirectorsThe General Manager17

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME(thousands of euro)Change % 1st half 2012 - 1° half 20111st half 2012 1st half 2011 absolute %10 NET INCOME (LOSS) 92,558 76,153 16,405 22Other comprehensive income (net of tax)20 Financial assets available-for-sale 258,076 17,688 240,388 …60 Cash flow hedges (23,565) 13,097 (36,662) …100 Share of valuation reserves connected with investments carried at equity - (233) 233 (100)110 Total other comprehensive income (net of tax) 234,511 30,552 203,959 …120 TOTAL COMPREHENSIVE INCOME (captions 10 + 110) 327,069 106,705 220,364 …130 Total consolidated comprehensive income pertaining to minority interests 2,556 1,075 1,481 …140 Total consolidated comprehensive income pertaining to theParent Company 324,513 105,630 218,883 …The Manager in charge ofpreparing the company’saccounting documentsThe Chairman of the Board ofDirectorsThe General Manager18

CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY AS AT 30/06/2012(thousands of euro)Allocation of profits/losses for theprevious periodChanges in the periodJune 2012Amounts as at 31/12/2011Change in opening balancesAmounts as at 01/01/2012ReservesDividends and other allocationsChanges in reservesIssue of new sharesTransactions on Shareholders' equityPurchase of treasury sharesExtraordinary dividendsChanges in equity instrumentsDerivatives on treasury sharesStock optionsTotal comprehensive income as at30/06/2012Group Shareholders' equity as at30/06/2012Minority interests as at 30/06/2012Share capital: 1,817,455 - 1,817,455 - 386,831 - 2,177,219 27,067a) ordinary shares 1,814,901 1,814,901 - 386,831 - 2,174,665 27,067b) other shares 2,554 2,554 - 2,554 -Share premium reserve 1,028,972 1,028,972 - 7,037 - 1,020,314 15,695Reserves: 337,205 - 337,205 34,258 - (2) - - - - - - - 363,996 7,465a) retained earnings 265,252 265,252 34,258 (2) - - 292,240 7,268b) other 71,953 71,953 - - 71,756 197Valuation reserves (512,399) (512,399) - - - - 234,511 (280,233) 2,345Equity instruments 15,772 15,772 - (14,599) - 1,173 -Treasury shares (15) (15) - - - (15)Net income (Loss) 188,636 188,636 (34,258) (154,378) 92,558 90,230 2,328Group Shareholders' equity 2,821,380 - 2,821,380 - (152,456) (3) 393,864 - - (14,599) - - 324,513 3,372,699 XMinority interests 54,246 - 54,246 - (1,922) 1 4 - 2,556 X 54,885The Manager in charge ofpreparing the company’saccounting documentsThe Chairman of the Board ofDirectors19The General Manager

CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY AS AT 30/06/2011(thousands of euro)Allocation of profits/losses for theprevious periodChanges in the periodAmounts as at 31/12/2011Change in opening balancesAmounts as at 01/01/2012ReservesDividends and other allocationsChanges in reservesIssue of new sharesTransactions on Shareholders' equityPurchase of treasury sharesExtraordinary dividendsChanges in equity instrumentsDerivatives on treasury sharesStock optionsTotal comprehensive income as at30/06/2012Group Shareholders' equity as at30/06/2011Minority interests as at 30/06/2011Share capital: 1,811,150 - 1,811,150 - 3,202 (9) 1,790,391 23,952a) ordinary shares 1,636,840 1,636,840 - 3,202 (9) 1,616,081 23,952b) other shares 174,310 174,310 - 174,310 -Share premium reserve 1,023,099 1,023,099 - 2,996 - 1,013,280 12,815Reserves: 289,276 - 289,276 48,527 - (53) - (311) - - - - - 329,996 7,443a) retained earnings 217,323 217,323 48,527 (53) - (311) - 258,240 7,246b) other 71,953 71,953 - - - 71,756 197Valuation reserves 418,016 418,016 - - - - 30,552 446,322 2,246Equity instruments 15,784 15,784 - (16) - 15,768 -Treasury shares (15) (15) - - - (15)Net income (Loss) 179,636 179,636 (48,527) (131,109) 76,153 75,158 995Group Shareholders' equity 3,694,184 - 3,694,184 - (128,819) (54) 198 (208) - (16) - - 105,630 3,670,915 XMinority interests 42,762 - 42,762 - (2,290) 1 6,000 (112) 1,075 X 47,436The Manager in charge of preparingthe company’s accounting documentsThe Chairman of the Board ofDirectors20The General Manager

CONSOLIDATED STATEMENT OF CASH FLOWS(thousands of euro)Direct methodA. OPERATING ACTIVITIES 30/06/2012 30/06/20111. Cash flow from operations 246,329 410,231- interest income received (+) 703,169 563,751- interest expenses paid (-) (298,777) (173,673)- dividend and similar income (+) 5,996 5,645- net fee and commissions (+/-) 161,457 156,991- personnel costs (-) (167,359) (178,917)- net insurance premiums collected 524,578 650,221- other insurance income and expenses (-) (489,431) (500,475)- other costs (-) (199,486) (191,983)- other income (+) 93,328 115,374- taxes and duties (-) (87,146) (36,703)2. Cash flow from/used in financial assets (2,484,274) (2,178,547)- financial assets held for trading (73,745) 88,060- financial assets designated at fair value through profit and loss 2,578 56,178- financial assets available-for-sale (2,239,452) (630,432)- loans to customers 118,053 (1,134,024)- due from banks: repayable on demand 227,978 27,969- due from banks: other (468,746) (363,633)- other assets (50,940) (222,665)3. Cash flows from/used in financial liabilities 2,111,150 1,915,675- due to banks: repayable on demand 1,659,523 (66,155)- due to banks: other 1,011,088 (167,246)- due to customers 181,389 258,028- securities issued (891,758) 1,573,723- financial liabilities held from trading 11,587 8,626- financial liabilities designated at fair value through profit and loss (56,474) (48,618)- other liabilities 195,795 357,317Net cash flow from/used in operating activities (126,795) 147,359B. INVESTING ACTIVITIES1. Cash flow from 592 4,476- dividends collected on investments in associates and companies subject to joint control 412 4,234- sales of property and equipment 180 2422. Cash flow used in (35,436) (42,550)- purchase of investments in associates and companies subject to joint control - -- purchase of property and equipment (15,975) (27,084)- purchase of intangible assets (12,455) (15,466)- purchase of subsidiaries and business branches (7,006) -Net cash flow from/used in investing activities (34,844) (38,074)C. FINANCING ACTIVITIES- issues/purchases of treasury shares - 5,680- dividend distribution and others (154,378) (131,109)Net cash flow from/used in financing activities (154,378) (125,429)NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (316,017) (16,144)LEGEND: (+) from; (-) used inRECONCILIATIONBalance sheet items Amount Amount30/06/2012 30/06/2011Cash and cash equivalents at the beginning of the period 604,122 300,103Net increase (decrease) in cash and cash equivalents (316,017) (16,144)Cash and cash equivalents at the end of the period 288,105 283,959The Manager in charge ofpreparing the company’saccounting documentsThe Chairman of the Board ofDirectorsThe General Manager21

EXPLANATORY NOTESACCOUNTING POLICIESThe condensed consolidated half-yearlyfinancial statements of the Banca Carige Groupas at 30 June 2012 were prepared inconformance with IAS 34 (interim reports). Theinternational accounting standards (IAS/IFRS)and the related interpretations (SIC/IFRIC),officially approved by the European Commissionand in force on 30 June 2012, were applied forthe valuation and measurement of theaccounting balances, and, where necessary, thedirections referred to in the Bank of Italy Circularno. 262 dated 22 December 2005 – update of18 November 2009 - were observed (financialstatements for banks: schemes and rules forpreparation) and subsequent clarification letters(so-called “Roneata”).The condensed consolidated half-yearlyfinancial statements, prepared using the Euro asthe accounting currency, drafted in summaryform as permitted by IAS 34, are composed ofthe Balance Sheet, the Income Statement, theStatement of Comprehensive Income, theStatement of Changes in Shareholders’ Equity,the Cash Flow Statement and the ExplanatoryNotes.Unless otherwise specified, the amountsindicated in the Financial Statements and in theExplanatory notes are expressed in thousands ofEuro.As regards the phases of classification,recording, valuation and cancellation of assetand liability items involved in preparing thisReport, as with the methods of entering costsand revenues, the same accounting principlesused in preparation of the financial statementsas at 31 December 2011.Preparation of the condensed consolidated halfyearlyfinancial statements requires the use ofestimates and assumptions for the calculation ofcertain cost and revenue components and forthe valuation of assets and liabilities. For adescription of these please refer to the 2011Financial Statements. In addition, it should benoted that certain valuation processes,particularly the more complex ones such as thecalculation of impairment of assets, aregenerally performed in a comprehensive mannerduring the drafting of the annual financialstatements, except in the presence of impairmentindicators which require the determination ofany impairment.The amendments made to IFRS 7 – Financialinstruments: Additional disclosures – Transfers offinancial assets (approved with EC Regulationno. 1205/2011 of 22/11/2011) apply to thesecondensed consolidated half-yearly financialstatements. The amendments aim to allowfinancial statement users to effect a betterassessment of exposure to risks related to thetransfer of financial assets and the effects of saidrisks on the Group’s financial position and applyto financial statements for years starting on orafter 30 June 2011. The Group did not availitself of the option of early application of saidamendments which did not have any effects onthe Group’s equity, economic and financialposition.Furthermore, it should be noted that, during thehalf-year period, amendments to IAS 1 –Presentation of the financial statements, and toIAS 19 – Employee benefits (EC Regulation no.475/2012 of 05/06/2012) were approved. Theamendments to IAS 1 apply to financialstatements for years starting on or after 1 July2012, while the changes to IAS 19 apply tofinancial statements for years starting on or after1 January 2013.Lastly, the documents published by theInternational Accounting Standards Board (IASB)should be noted. In the event the current versionis approved by the European Commission, thesedocuments could have accounting effects.- “Annual Improvements to IFRSs”: thedocument incorporates theamendments, not defined by the IASB tobe urgent but necessary, made to IFRS1, IAS 1, IAS 16, IAS 32, IAS 34;- amendments to IFRS 10 – theconsolidated financial statements, IFRS11 – Joint arrangements and IFRS 12 –additional disclosures on interests inother entities.22

The current macroeconomic context and highlevel of volatility financial markets make theevaluation of credit risk, the valuation offinancial instruments, assessment of impairmentof available-for-sale (AFS) securities and thedetermination of the recoverable value ofgoodwill recorded increasingly morecomplicated and require an analysis of theeffects these valuations can have. It should bepointed out that no symptoms were recognisedin the equity and financial structure and inoperations which may lead to uncertainties overthe going concern assumptions,The classification and valuation of credits wereperformed using the normal valuation criteria,also in order to promptly and correctlyacknowledge the consequences of the negativedevelopment of the current economic context.The section “Equity investments and intangibleassets with an indefinite useful life” in thesecondensed consolidated half-yearly financialstatements details the impairment testsperformed on goodwill and the associatedconclusions.The condensed consolidated half-yearlyfinancial statements contained in this half-yearlyfinancial Report were subject to a limited auditby the company Reconta Ernst & Young SpA,according to the task conferred by resolution ofthe Shareholders’ Meeting of 29 April 2011 forthe nine-year period 2012-2020, pursuant toart. 159 of Legislative Decree 58/1998 andsubsequent amendments and additions derivingfrom art. 18 of Law 262/2005.Financial instruments were generally valued atfair value, determined using the followingrespectively,1. listed prices (not adjusted) on the activemarket for recognised assets or liabilities(Level 1-L1);2. input data other than Level 1 listedprices which can be observed for theasset or liability, either directly (as forprices) or indirectly (i.e. as derived fromthe prices (Level 2- L2); and3. input data related to assets or liabilitiesthat are not based on observable marketdata (non-observable data) (Level 3-L3).Details of the fair value levels attributed tofinancial assets and liabilities valued at fair valueare shown in the section “Intermediationactivities”.During preparation of the condensedconsolidated half-yearly financial statements,checks were performed to assess anyimpairment of available-for-sale securities,intangible values and goodwill, through ananalysis which involves checking for thepresence of impairment indicators and thedetermination of any write-down. In particular,available-for-sale securities and goodwillrecorded were subject to impairment testing, inorder to assess the existence of objectiveevidence which leads the company to believetheir value cannot be fully recovered.23

SCOPE OF CONSOLIDATION ANDCONSOLIDATION METHODS1. EQUITY INVESTMENTS INFULLY AND JOINTLY CONTROLLEDSUBSIDIARIESAccording to IAS/IFRS the consolidation areaincludes all directly or indirectly controlledsubsidiaries: therefore, even companies notclassified as credit, financial or instrumentalinstitutions (i.e. dissimilar activities) have beenconsolidated on a line-by-line basis.The control concept applied is that establishedin IAS 27.During the course of the first six months of2012, the consolidation area remainedunchanged from that determined for preparationof the financial statements for the year ended at31 December 2011, with the exception of theinclusion of Carige Covered Bond 2 Srl.24

1. Equity investments in exclusive subsidiaries and subsidiaries subject to joint control (consolidated proportionally)Type ofrelationsShareholding relationship Availability of votes (2) (3)Name of the companiesHead officeshipHolding company(1)% Shareholding Actual % Potential %A. CompaniesA.1 Consolidated line-by-lineBanking group1. Banca CARIGE SpA Genoa2. Cassa di Risparmio di Savona S.p.A. Savona 1 A1.1 95.90 95.90 4.103. Cassa di Risparmio di Carrara SpA Carrara 1 A1.1 90.004. Banca del Monte Lucca SpA Lucca 1 A1.1 60.005. Banca Cesare Ponti SpA Milan 1 A1.1 100.006. Carige Asset Management SpA Genoa 1 A1.1 99.50A1.18 0.507. Creditis Servizi Finanziari SpA Genoa 1 A1.1 100.008. Centro Fiduciario SpA Genoa 1 A1.1 76.95A1.2 20.009. Argo Finance One Srl Genoa 1 A1.1 100.0010. Priamar Finance Srl Genoa 1 A1.1 100.0011. Argo Mortgage Srl Genoa 1 A1.1 60.0012. Argo Mortgage 2 Srl Genoa 1 A1.1 60.0013. Carige Covered Bond Srl Genoa 1 A1.1 60.0014. Carige Covered Bond 2 Srl Genoa 1 A1.1 60.0015. Columbus Carige Immobiliare SpA Genoa 1 A1.1 100.0016. Immobiliare CARISA Srl Savona 1 A1.2 100.00Insurance companies17. Carige Assicurazioni SpA (4) Milan 1 A1.1 98.40 99.5518. Carige Vita Nuova SpA Genoa 1 A1.1 100.00Other companies19. Dafne Immobiliare Srl Milan 1 A1.17 100.0020. I. H. Roma Srl Milan 1 A1.18 100.0021. Assi 90 Srl Genoa 1 A1.17 39.75A1.18 60.25A.2 Consolidated proportionally -Legend(1) Type of relationship:1 = majority of voting rights at ordinary shareholders’ meeting2 = dominant influence at ordinary shareholders’ meeting3 = agreements with other shareholders4 = other forms of control5 = single management pursuant to article 26, paragraph 1 of Legislative Decree 87/926 = single management pursuant to article 26, paragraph 2 of Legislative Decree 87/927 = joint control(2) Availability of voting rights at ordinary shareholders’ meeting, distinguishing between actual and potential(3) Figure entered only if different from the equity investment share(4) The percentage of actual availability of votes differs from the equity investment share as it iscalculated on the capital excluding own shares.Concerning operations, the subsidiaries can bedivided into banking (Banca Carige SpA, Cassadi Risparmio di Savona SpA, Cassa di Risparmiodi Carrara SpA, Banca del Monte di Lucca SpA,Banca Cesare Ponti SpA), asset management(Carige Asset Management SGR SpA), consumercredit (Crediti Servizi Finanziari SpA), trustcompanies (Centro Fiduciario SpA), specialpurpose vehicles for securitisation transactions(Argo Finance One Srl, Priamar Finance Srl,Argo Mortgage Srl, Argo Mortgage 2 Srl),special purpose vehicles for the issue of coveredbonds (Carige Covered Bond Srl and CarigeCovered Bond 2 Srl), insurance (Carige VitaNuova Spa, Carige Assicurazioni SpA) realestate (Columbus Carige Immobiliare SpA,Immobiliare Carisa Srl, Dafne Immobiliare Srland I.H. Roma Srl) and insurance agencies (Assi90 Srl).25

With regard to the four companies establishedfor the same number of securitisationtransactions – Argo Finance One, PriamarFinance, Argo Mortgage and Argo Mortgage 2– and to the companies Carige Covered Bondand Carige Covered Bond 2, please note thatthey have all been consolidated in thesefinancial statements on a line-by-line basis.With regard to the securitisation of BancaCarige’s performing loans carried out by ArgoMortgage 2 in 2004, as the transaction doesnot fully satisfy the conditions of the substantialtransfer to third parties of related risks andrewards, consolidation was carried out on thebasis of the company’s segregated assets.The condensed consolidated half-yearlyfinancial statements have been prepared using:- the condensed half-yearly financialstatements of the Parent Company and ofthe other consolidated companies as at30 June 2012, approved by theirrespective Boards of Directors andprepared in accordance with theapproved IAS/IFRS in force;- reporting packages prepared by thosecompanies that did not adopt the IAS/IFRSand approved by the respective Boards ofDirectors.Minor subsidiaries outside of the area ofconsolidation were recorded at cost, inaccordance with the general principles set out inthe systematic framework. All companiesbelonging to the banking group and theinsurance companies were deemed relevant.With exclusive reference to companies notbelonging to the banking group, those withfinancial statement totals of less than € 10million, and provided that the total of thecompanies excluded does not exceed € 50million, have been classified as minorsubsidiaries, in accordance with the provisionson consolidated supervisory reportingestablished by the Bank of Italy with circular no.115 of 7 August 1990 and subsequent updates.Therefore, as at 30 June 2012, Banca CarigeItalia SpA, wholly owned by the ParentCompany, was excluded from line-by-lineconsolidation.In addition, companies for which shares withvoting rights have been received as a form ofcredit guarantee rather than as a means ofexercising control over the companies underreview were excluded from the area ofconsolidation.2. OTHER INFORMATIONAssociates, i.e. companies subject to significantinfluence, were measured using the equitymethod.Equity investments in companies subject to significant influence (consolidated using the equity method)Name of the companiesA. Companies consolidated withthe equity methodHead officesShareholding relationshipAvailability of votesHolding company % Shareholding Actual % Potential %1. Autostrada dei Fiori Spa Savona Banca Carige S.p.A. 16.62Cassa di Risparmio diSavona S.p.A. 4.00Companies in which the Group exerts asignificant influence that are not considered tobe significant have been valued at cost, inaccordance with the general principles set out inthe framework.26

Equity investments in companies subject to significant influence excluded from the equity methodName of the companiesHead officesShareholding relationshipAvailability of votesHolding company % Shareholding Actual % Potential %1. Sport e Sicurezza Srl Milan Carige Ass.ni SpA 25.00Carige V. N. SpA 25.002. Nuova Erzelli Srl Genoa Banca Carige S.p.A. 40.0027

TRADING ACTIVITIESAs at June 2012, Financial Intermediation Activities(FIA) on behalf of customers – direct and indirectdeposits – amounted to € 50,499 million(net of € 568 million in financial liabilities designatedat fair value through profit and loss relatingto the insurance products of Carige VitaNuova in which the investment risk is borne bythe insured). This figure recorded a 2.9% decreasecompared to December and was down4% YoY.Direct deposits amounted to € 27,630.3 million,whilst indirect deposits amounted to € 22,868.7million. The latter accounted for 45.3% of FIAand was made up of assets under management(42.2%) and assets under administration(57.8%).FINANCIAL INTERMEDIATION ACTIVITIES ( thousands of euro)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Total (A+B) 50,499,020 52,011,047 52,592,507 -2.9 -4.0Direct deposits (A) (1) 27,630,325 28,439,887 28,311,847 -2.8 -2.4% on Total 54.7% 54.7% 53.8%Indirect deposits (B) 22,868,695 23,571,160 24,280,660 -3.0 -5.8% on Total 45.3% 45.3% 46.2%- Assets under management 9,659,963 9,523,339 10,185,110 1.4 -5.2% on Total 19.1% 18.3% 19.4%% on Indirect deposits 42.2% 40.4% 41.9%- Assets under administration 13,208,732 14,047,821 14,095,550 -6.0 -6.3% on Total 26.2% 27.0% 26.8%% on Indirect deposits 57.8% 59.6% 58.1%(1) items 20, 30 and 50 of Liabilities and Shareholders' equity. Carige Vita Nuova liabilities, carried at fair value and relating toproducts for which investment risk is borne by the insured, are not included in this table.Global funding, equal to € 36,246.8 million,increased by 5.5% in the half and 16% over thetwelve-month period, and is characterised by asignificant increase in the funding from centralbanks in relation to extraordinary interventionsof the European Central Bank (Long term refinancingoperation – LTRO).Direct deposits totalled € 27,630.3 million,down by 2.8% in the half and 2.4% in the year.The trend in the half was affected by the maturityof a € 836 million loan in February, as part ofthe EMTN programme, the conversion intoshares, in March, of € 394 million of the “BancaCarige 4.75% 2010-2015 convertible bondwith the option of redemption in shares” (“BancaCarige 4,75% 2010-2015 convertibile confacoltà di rimborso in azioni") and application ofthe new legislation which requires the transfer ofthe treasury current accounts of the Public Authoritiesto the State Treasury. The repayment inNovember 2011, of € 383 million of the Bancopostaloan also affected the total for thetwelve-month period.More specifically, due to customers, amountingto € 16,104.3 million, increased by 1.2% in thehalf and 3% in the year. Securities issued andfinancial liabilities designated at fair valuethrough profit and loss totalled € 11,526 million,marking a decrease as a result of the maturityof the aforementioned EMTN loan (down7.9% in the half and 9.1% in the year). The totalis made up almost entirely of bonds; bondsplaced with ordinary customers (62%), EMTNprogrammes and covered bonds (28%), andcovered bonds represented by subordinatedloans (10%).In the first half, in strict compliance with Mifidlegislation on investor protection, againstaround € 300 million in maturities and € 400million in repurchases, new bonds were placedfor a total of roughly 1 billion. The long termrefinancing operation (LTRO) allowed the acquisitionof new deposit means (€ 0.7 billion),bringing total deposits from this means to € 2billion. The use of this financing form allowedthe Group, as regards assets, to carry on its customerfinancing policy and to support the demandfor Italian Government bonds in a particularlytense moment, and as regards liabilities,28

to adequately tackle the expected bond maturityterms.As regards the contract duration, short-term depositsaccounted for 58.5% of the total, registeringan increase of 1.1% over December 2011and 2.9% YoY, while medium/long-term deposits,following said repayments, accounted for41.5% of the total, down by 7.9% and 9.1% respectivelyover December and June 2011.Due to banks amounted to € 8,616.5 million,up over the € 5,922.3 million recorded in Decemberand € 2,944.4 million in June 2011.Due to central banks stood at € 7,189.6 million(€ 3,841.8 million in December 2011; € 700.7million in June 2011). The increase is attributableto refinancing at the European CentralBank.FUNDING (thousands of euro)Situation as atChange %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Total (A+B) 36,246,804 34,362,190 31,256,275 5.5 16.0Direct deposits (A) 27,630,325 28,439,887 28,311,847 -2.8 -2.4Due to customers 16,104,290 15,919,602 15,636,164 1.2 3.0current accounts and free deposits 12,942,129 13,148,524 13,121,616 -1.6 -1.4repurchase agreements 2,969,094 2,509,926 2,366,965 18.3 25.4term deposits 13,459 15,417 10,461 -12.7 28.7loans 5,809 3,255 3,271 78.5 77.6commitments to repurchase own equityinstruments 10,845 10,845 10,845 - 0.0other deposits 162,954 231,635 123,006 -29.7 32.5Securities issued 10,668,463 11,616,164 11,399,971 -8.2 -6.4bonds 10,590,805 11,528,827 11,306,639 -8.1 -6.3other securities 77,658 87,337 93,332 -11.1 -16.8Financial liabilities designated at fairvalue through profit and loss (1) 857,572 904,121 1,275,712 -5.1 -32.8bonds 857,572 904,121 1,275,712 -5.1 -32.8short term 16,159,819 15,979,628 15,697,405 1.1 2.9% on Total 58.5 56.2 55.4medium-long term 11,470,506 12,460,259 12,614,442 -7.9 -9.1% on Total 41.5 43.8 44.6Due to banks (B) 8,616,479 5,922,303 2,944,428 45.5 …Deposits of central banks 7,189,609 3,841,754 700,656 87.1 …Current accounts and free deposits 328,912 10,267 75,518 … …Term deposits 52,007 120,830 130,322 -57.0 -60.1Repurchase agreements 548,404 1,487,107 1,677,347 -63.1 -67.3Financing 375,344 389,231 360,582 -3.6 4.1Other 122,203 73,114 3 67.1 …(1) items 20, 30 and 50 of Liabilities and Shareholders' equity. Carige Vita Nuova liabilities, carried at fair value and relating toproducts for which investment risk is borne by the insured, are not included in this table.Liguria holds a portion of direct deposits equalto 57.7%, up over both December (56.8%) andJune 2011 (56.1%). The second most significantregion is Lombardy, with a portion of 8.8%(8.9% in December and 9.3% in June 2011).Tuscany was the third region, in terms of importance,at the end of June 2012, registering ashare of 8.2%. Veneto holds a 6.3% share andLazio 5.4%. The other regions’ shares are lessthan 5%.29

DIRECT DEPOSITS (1) - GEOGRAPHICAL DISTRIBUTION (thousands of euro)Situation as at30/06/12 31/12/11 30/06/11% % %Liguria 11,347,273 57.7% 11,276,086 56.8% 10,936,034 56.1%Lombardy 1,728,532 8.8% 1,761,230 8.9% 1,820,362 9.3%Tuscany 1,619,042 8.2% 1,644,259 8.3% 1,647,484 8.4%Veneto 1,232,248 6.3% 1,254,650 6.3% 1,209,344 6.2%Latium 1,058,891 5.4% 1,100,712 5.5% 1,115,874 5.7%Sicily 950,341 4.8% 985,314 5.0% 979,167 5.0%Piedmont 760,059 3.9% 778,208 3.9% 775,550 4.0%Emilia Romagna 315,195 1.6% 352,677 1.8% 339,336 1.7%Apulia 201,683 1.0% 214,378 1.1% 210,679 1.1%Sardinia 178,555 0.9% 188,446 0.9% 195,491 1.0%Marches 124,400 0.6% 130,474 0.7% 133,615 0.7%Valle d'Aosta 72,195 0.4% 78,934 0.4% 78,140 0.4%Umbria 42,008 0.2% 49,430 0.2% 45,083 0.2%Total Italy 19,630,422 99.8% 19,814,799 99.8% 19,486,160 99.9%Abroad 33,350 0.2% 32,142 0.2% 22,893 0.1%Total Italy + Abroad 19,663,772 100.0% 19,846,941 100.0% 19,509,053 100.0%Other items (2) (3) 7,966,553 8,592,946 8,802,794Total direct deposits 27,630,325 28,439,887 28,311,847(1) items 20, 30 and 50 of Liabilities and Shareholders' equity. Carige Vita Nuova liabilities, designated at fair value and relating to products for whichinvestment risk is borne by the insured, are not included in this table.(2) Bonds issued under the EMTN programme, covered bonds, subordinated loans, bonds issued and placed through the BancoPosta network, repurchaseagreements, other bonds issued by the SPV relating to the securitization of loans, deposits from the "contoconto" on line deposit account and "Banca Carige4.75% 2010-2015 convertible bond with the option of redemption in shares" ("Banca Carige 4,75% 2010-2015 convertibile con facoltà di rimborso inazioni").(3) From 30 June balance sheet "Banca carige 4.75% 2010-2015 convertibile con facoltà di rimborso", therefore previous periods are classified forhomogeneityDIRECT DEPOSITS AS AT 30/06/2012 (1)100%= 27,630.3 MILLIONSDIRECT DEPOSITS AS AT 30/06/2011 (1)100%= 28,311.8 MILLIONSLiguria3.9%4.8%4.9%Liguria4.0%5.0%5.3%LombardyTuscany5.4%LombardyTuscany5.7%VenetoVenetoLatiumSicily6.3%LatiumSicily6.2%PiedmontOthers8.2%57.7%PiedmontOthers8.4%56.1%(1) Net of other items.8.8%9.3%A total of 67.4% of due to customers involvesfamilies, at € 8,856.6 million (68.2% in Decemberand 68% in June 2010). Non-financialcompanies and personal businesses (€ 2,761.8million) represent 21% (20.1% in December2011 and 20.9% in June 2011). Private socialbodies intermediated € 594.5 million (4.5%),financial and insurance companies € 457.9 million(3.5% of the total) and public administrations€ 232.6 million (1.8% of the total).30

DIRECT DEPOSITS (1) - DISTRIBUTION BY BUSINESS SEGMENT (thousands of euro)Situation as at30/06/12 31/12/11 30/06/11% % %Public Administration 232,591 1.8% 506,831 3.8% 514,330 3.9%Financial and insurance businesses (2) 457,907 3.5% 322,185 2.4% 285,926 2.2%Non-financial businesses and personal businesses 2,761,755 21.0% 2,699,372 20.1% 2,776,523 20.9%Private social bodies and non classified entities 594,511 4.5% 579,628 4.3% 571,483 4.3%Households 8,856,625 67.4% 9,147,824 68.2% 9,024,516 68.0%Total residents 12,903,389 98.2% 13,255,841 98.9% 13,172,777 99.3%Rest of the world 231,807 1.8% 153,835 1.1% 96,422 0.7%Total distribution by business segment 13,135,196 100.0% 13,409,676 100.0% 13,269,199 100.0%Repurchase agreements 2,969,094 2,509,926 2,366,965Total due to customers 16,104,290 15,919,602 15,636,164Securities issued 10,668,463 11,616,164 11,399,971Financial liabilities designated at fair valuethrough profit and loss857,572 904,121 1,275,712Total direct deposits 27,630,325 28,439,887 28,311,847(1) Items 20, 30 and 50 of Liabilities and Shareholders' equity. Carige Vita Nuova liabilities, designated at fair value and relating to products for whichinvestment risk is borne by the insured, are not included in this table.(2) Borrowing repurchase agreements are shown separately, for a homogenous comparison previous periods have therefore been reclassified.Indirect deposits amounted to € 22,868.7 million,down over both the last half (-3%) and overthe year (-5.8%). The negative trend in assetsunder administration continued, whichamounted to € 13,208.7 million, down by 6%and 6.3% respectively over six and twelvemonths; in particular, the reduction was due tothe trend in bonds (-13% and -19.7% in six andtwelve months) and shares (-23.2% and -32.5%), also due to the trend in prices. The item“Other”, amounting to € 4,083.7 million, madeup almost entirely of assets under administrationof insurance companies, fell by 0.8% in the halfand increased by 0.9% YoY.Assets under management, amounting to €9,660 million, fell by 5.2% over June 2011, butwere up 1.4% over December 2011.Mutual funds totalled € 4,769.8 million, downby 0.2% in six months and 10.4% in twelvemonths.Around 70% of the funds refer to the subsidiaryCarige A.M. SGR, whose management was affectedby the difficult market conditions, althoughit stood out for the quality of the resultsachieved.The bank-insurance products amounted to €4,250.3 million (+2.4% in the last half and+0.9% compared to June 2011).Assets managed amounted to € 639.9 million,up 7.9% in the last half, bucking the trend recordedin the previous half (down 1.5% YoY).INDIRECT DEPOSITS (thousands of euro)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Total (A+B) 22,868,695 23,571,160 24,280,660 -3.0 -5.8Assets under management (A) 9,659,963 9,523,339 10,185,110 1.4 -5.2Mutual funds and unit trusts 4,769,817 4,781,017 5,321,548 -0.2 -10.4Assets management 639,875 593,050 649,662 7.9 -1.5Bancassurance products 4,250,271 4,149,272 4,213,900 2.4 0.9Assets under administration (B) 13,208,732 14,047,821 14,095,550 -6.0 -6.3Government securities 5,597,543 5,653,318 5,313,928 -1.0 5.3Bonds 2,075,387 2,386,239 2,585,106 -13.0 -19.7Shares 1,452,137 1,889,972 2,149,758 -23.2 -32.5Other 4,083,665 4,118,292 4,046,758 -0.8 0.931

Premiums collected on bankassurance productsdistributed by the banking network came to €212.9 million, compared to € 312.1 million inJune 2011 (down 31.8%). More specifically,premiums collected in the life insurance segmentamounted to € 204.7 million (€ 307.9 million inJune 2011) and relate almost entirely to traditionallife insurance policies (€ 193.4 millioncompared to € 305.4 million in June 2011).Premiums collected in the non-life insurancesegment amounted to € 8.3 million, almostdouble the € 4.2 million recorded in June 2011,mainly relating to the trend in the car insurancesegment (€ 3.6 million), which registered significantgrowth (€ 0.6 million in June 2011). Thiswas also due to the fact that a sales initiativewas launched regarding the third party motorliability insurance product of Carige Assicurazioni,sold directly at bank branches.BANK ASSURANCE (thousands of euro)Change %30/06/2012 2011 30/06/2011 06/1206/11Total premiums collected 212,934 551,965 312,083 -31.8Life 204,685 543,489 307,893 -33.5. Unit linked/Index policies 11,324 10,632 2,451 …. Traditional policies 193,360 532,856 305,442 -36.7Non-life 8,250 8,476 4,190 96.9. Car insurance 3,586 2,197 633 …. Elementary (non-car) insurance 4,664 6,279 3,557 31.1As regards indirect deposits, the Liguria region’scontribution stood at 64.6% (64.7% in December2011 and 64.1% in June 2011), followedby Lombardy with 12.8% (12.7% in December2011 and 12.3% in June 2011) and Tuscanywith 6.6% (6.6% in December 2011 and 7.1%in June 2011).INDIRECT DEPOSITS - GEOGRAPHICAL DISTRIBUTION (thousands of euro)Situation as at30/06/12 31/12/11 30/06/11% % %Liguria 14,774,591 64.6% 15,238,796 64.7% 15,566,350 64.1%Lombardy 2,919,597 12.8% 2,986,592 12.7% 2,986,670 12.3%Tuscany 1,510,438 6.6% 1,555,912 6.6% 1,712,261 7.1%Veneto 1,043,539 4.6% 1,081,708 4.6% 1,151,215 4.7%Piedmont 734,583 3.2% 757,075 3.2% 792,340 3.3%Latium 653,352 2.9% 687,499 2.9% 722,920 3.0%Sicily 605,304 2.6% 620,838 2.6% 679,457 2.8%Emilia Romagna 263,730 1.2% 270,100 1.1% 269,377 1.1%Apulia 90,844 0.4% 94,124 0.4% 101,045 0.4%Valle d'Aosta 79,691 0.3% 78,460 0.3% 90,770 0.4%Sardinia 79,133 0.3% 81,893 0.3% 85,630 0.4%Marches 70,074 0.3% 71,588 0.3% 72,554 0.3%Umbria 42,132 0.2% 44,256 0.2% 46,613 0.2%Total Italy 22,867,008 100.0% 23,568,841 100.0% 24,277,203 100.0%Abroad 1,687 0.0% 2,319 0.0% 3,457 0.0%Total indirect deposits 22,868,695 100.0% 23,571,160 100.0% 24,280,660 100.0%32

INDIRECT DEPOSITS AS AT 30/06/2012100%= 22,868.7 MILLLIONSINDIRECT DEPOSITS AS AT 30/06/2011100%= 24,280.7 MILLIONSLiguriaLombardyTuscany4.6%2.9% 2.6% 2.7%3.2%LiguriaLombardy4.7%3.0% 2.8%2.8%3.3%Veneto6.6%TuscanyVeneto7.1%PiedmontPiedmontLatiumSicily12.8%64.6%LatiumSicily12.3%64.1%OthersOthersThe share of families stood at 73.1%; the shareof financial and insurance companies at 19.6%and of non-financial companies and personalbusinesses at 5.5%.INDIRECT DEPOSITS - DISTRIBUTION BY BUSINESS SEGMENT (thousands of euro)Situation as at30/06/12 31/12/11 30/06/11% % %Public Administration 118,314 0.5% 170,310 0.7% 184,468 0.8%Financial and insurance businesses 4,487,936 19.6% 4,610,206 19.6% 4,579,301 18.9%Non-financial businesses and personal businesses 1,257,739 5.5% 1,298,726 5.5% 1,325,814 5.5%Private social bodies and non classified entities 213,756 0.9% 201,746 0.9% 188,686 0.8%Households 16,710,770 73.1% 17,150,438 72.8% 17,863,334 73.6%Total residents 22,788,515 99.6% 23,431,426 99.4% 24,141,604 99.4%Rest of the world 80,180 0.4% 139,734 0.6% 139,056 0.6%Total indirect deposits 22,868,695 100.0% 23,571,160 100.0% 24,280,660 100.0%In 2012 as well, the supply and management ofloans granted was geared towards a recompositionof the portfolio, aimed at optimising quality,while adequately diversifying lending and monitoringthe concentration risk, especially singlename risk, in view of producing income and limitingthe capital absorbed by credit intermediationactivities.Cash loans to customers totalled € 27,450.3million, recording a 1% increase over six monthsand 4.5% YoY, before value adjustments totalling€ 875.4 million and net of repurchaseagreements.Net loans stood at € 26,574.9 million; net ofrepurchase agreements, they recorded a 0.8%increase in the half and 4% over June 2011.This trend, despite liquidity tensions, confirmsthe consolidated support to business andhousehold segments, where the Group has alsoundertaken significant steps aimed at overcomingthe challenging economic situation.Private individuals account for 29.1% of the total,down by 1% in the last half and, despite liquiditytensions and the negative economicsituation, remained stable over the last 12months; loans to companies accounted for55.7% of the total, up by 1.6% and 2.8% oversix and twelve months respectively.The short-term component, equal to 25% of thetotal, amounted to € 6,866.8 million; net of repurchaseagreements, this recorded a decreaseof 15.4% over six months and 15.7% YoY.The medium/long-term component amounted to€ 19,090.5 million (-1.4% in the half and+3.3% in twelve months) and is approximately60% financed by non-short-term deposits.Loans, amounting to € 14,231.3 million, makeup the biggest portion (down 0.4% and +3% insix and twelve months).Bad loans amounted to € 1,493 million, up by20.7% in the year (+10.7% in the half) acrossthe board, due to the continuation of the negativeeconomic situation; loans’ share of the totalrose from 4.9% in December 2011 to 5.4%.The impairment rate was lower than in the previousyear.As at 30 June 2012, 80.3% of loans were financedby direct retail deposits.Due from banks, before value adjustments of €0.9 million (same value in December and inJune 2011), amounted to € 1,914.1 million, upin six months (+16.9%) and in twelve months(+30.4%); they are mostly comprised of shorttermloans.The net interbank position (difference betweenloans and due to banks before repurchase33

agreement assets and liabilities) showed a netdebt position of € 6,702.4 million, comparedwith € 4,284.2 million in December and €1,476.4 million in June 2011.LOANS (1) (thousands of euro)Situation as atChange %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Total (A+B) 28,489,021 28,378,624 27,307,364 0.4 4.3Loans to customers (A) 26,574,901 26,740,568 25,839,351 -0.6 2.8-Gross exposure (2) 27,450,266 27,534,610 26,560,685 -0.3 3.3current accounts 3,264,655 3,282,421 3,232,812 -0.5 1.0lending repurchase agreements 1,099,711 1,457,057 1,340,157 -24.5 -17.9mortgage loans 14,231,302 14,290,005 13,812,427 -0.4 3.0credit cards, personal loans andsalary-backed loans 663,922 655,818 496,884 1.2 33.6leasing 854,319 826,925 810,762 3.3 5.4factoring 179,284 188,780 199,019 -5.0 -9.9other loans 4,205,428 4,314,139 4,285,711 -2.5 -1.9impaired assets 2,951,645 2,519,465 2,382,913 17.2 23.9-short term 6,866,759 6,815,085 6,837,074 0.8 0.4% on nominal value 25.0 24.7 25.7-medium/long term 19,090,497 19,370,738 18,486,562 -1.4 3.3% on nominal value 69.5 70.4 69.6-Bad loans 1,493,010 1,348,787 1,237,049 10.7 20.7% on nominal value 5.4 4.9 4.7-Value adjustments (-) 875,365 794,042 721,334 10.2 21.4Due from banks (B) 1,914,120 1,638,056 1,468,013 16.9 30.4-Gross exposure (2) 1,914,992 1,638,928 1,468,880 16.8 30.4compulsory reserves 136,558 235,952 109,824 -42.1 24.3current accounts and free deposits 134,246 207,203 121,727 -35.2 10.3term deposits 1,524 26,157 287,993 -94.2 -99.5repurchase agreements 289,708 - 285,292 … 1.5loans 1,335,965 1,152,925 647,637 15.9 …impaired assets 16,991 16,691 16,407 1.8 3.6-short term 1,867,973 1,592,161 1,404,377 17.3 33.0% on nominal value 97.5 97.1 95.6-medium/long term 47,019 46,767 64,503 0.5 -27.1% on nominal value 2.5 2.9 4.4-Value adjustments (-) 872 872 867 - 0.6(1) Net of debt securities classified as L&R, amounting to as at 30 June 2012 to 135,767 thousands of euro (loans to customers) and to301,805 thousands of euro (due from banks).(2) Before value adjustments.As regards the geographical breakdown, Liguriaaccounts for 49.9% of the loans to customers,up from 49.6% in December and 48.1% in June2011. Lombardy is the second region, with ashare of 12.5% (12.2% in December and 13.4%in June 2011), Tuscany is the third region with ashare of 10.2% (10.3% and 10.5% in Decemberand June 2011 respectively).34

TOTAL LOANS TO CUSTOMERS (1) - GEOGRAPHICAL DISTRIBUTION (2) (3)( thousands of euro)Situation as at30/06/12 31/12/1130/06/11% % %Liguria 13,139,844 49.9% 12,936,970 49.6% 12,120,091 48.1%Lombardy 3,280,723 12.5% 3,175,635 12.2% 3,381,029 13.4%Tuscany 2,680,992 10.2% 2,692,291 10.3% 2,649,138 10.5%Emilia Romagna 1,837,944 7.0% 1,802,029 6.9% 1,677,289 6.7%Piedmont 1,550,134 5.9% 1,574,626 6.0% 1,492,364 5.9%Veneto 1,281,608 4.9% 1,267,640 4.9% 1,269,916 5.0%Latium 923,879 3.5% 952,115 3.7% 941,576 3.7%Sicily 607,052 2.3% 618,726 2.4% 656,590 2.6%Sardinia 366,070 1.4% 362,082 1.4% 350,611 1.4%Apulia 229,714 0.9% 232,844 0.9% 228,281 0.9%Marches 159,713 0.6% 162,957 0.6% 152,429 0.6%Umbria 106,045 0.4% 108,033 0.4% 107,604 0.4%Valle d'Aosta 27,649 0.1% 29,216 0.1% 25,921 0.1%Total Italy 26,191,366 99.4% 25,915,163 99.4% 25,052,840 99.3%Abroad 159,189 0.6% 162,391 0.6% 167,688 0.7%Loans to customers, excluding repurchase agreements 26,350,555 100.0% 26,077,553 100.0% 25,220,528 100.0%Lending repurchase agreements with financial firms 1,099,711 1,457,057 1,340,157Total loans to customers 27,450,266 27,534,610 26,560,685(1) Gross of value adjustments and net of debt securities classified as L&R.(2) Figures per branch province.(3) Lending repurchase agreements with financial firms are shown separately, for a homogenous comparison previous periods have therefore been restated.TOTAL LOANS TO CUSTOMERS AS AT 30/06/2012 (1)100%= 27,450.3 MILLIONS6.3%3.5%4.9%LiguriaLombardy5.9%49.9%TOTAL LOANS TO CUSTOMERS AS AT 30/06/2012 (1)100%= 26,560.7 MILLIONS6.7%LiguriaLombardyTuscany5.9%3.7%5.0%48.1%TuscanyEmilia Romagna7.0%Emilia RomagnaPiedmont6.7%Piedmont10.2%Veneto10.5%VenetoLatiumLatiumOthers12.5%(1) Net of lending repurchase agreements with financial firms.Others13.4%(1) Net of lending repurchase agreements with financial firms.As regards the distribution by segment, nonfinancialcompanies and personal businessesaccounted for 60.6% of loans to customers, foran amount of € 15,970.3 million (60.5% in December2011 and 59.8% in June 2011). Themost significant aspects include the increase inthe share pertaining to building and publicworks. These works were mainly focused on medium-smallsize initiatives, mostly in the Liguriaregion, whose property market is characterisedby essentially stable prices. The share pertainingto the family sector decreased in the half andover the year. It is equal to 26.9% and is mostlyrepresented by mortgage loans for the purchaseof homes. The share pertaining to public administrationsis equal to 6%, (5.9% in Decemberand 5.4% in June 2011). As regards financialand insurance companies, their share stood at4.9% (4.4% in December and 5.5% in June2011).35

TOTAL LOANS TO CUSTOMERS (1) - DISTRIBUTION BY BUSINESS SEGMENT ( thousands of euro)Situation as at30/06/12 31/12/11 30/06/11% % %Public Administration 1,575,868 6.0% 1,538,845 5.9% 1,361,065 5.4%Financial and insurance businesses (2) 1,293,044 4.9% 1,154,254 4.4% 1,396,608 5.5%Non-financial businesses and personal businesses 15,970,282 60.6% 15,786,531 60.5% 15,082,729 59.8%Sales-related services 5,882,433 22.3% 5,816,592 22.3% 5,669,126 22.5%Building and public works 2,343,159 8.9% 2,237,659 8.6% 2,078,890 8.2%Wholesale & retail trade, salvage and repairs 2,318,158 8.8% 2,379,865 9.1% 2,365,738 9.4%Hotel and catering services 737,679 2.8% 743,142 2.8% 718,427 2.8%Shipping and air transport 532,238 2.0% 483,783 1.9% 395,038 1.6%Other 4,156,615 15.8% 4,125,489 15.8% 3,855,510 15.3%Private social bodies and non classified entities 135,261 0.5% 136,943 0.5% 136,607 0.5%Households 7,078,523 26.9% 7,173,601 27.5% 6,991,147 27.7%Total residents 26,052,977 98.9% 25,790,174 98.9% 24,968,156 99.0%Rest of the world 297,578 1.1% 287,379 1.1% 252,372 1.0%Total distribution by business segment 26,350,555 100.0% 26,077,553 100.0% 25,220,528 100.0%Lending repurchase agreements with financial firms 1,099,711 1,457,057 1,340,157Total loans to customers 27,450,266 27,534,610 26,560,685(1) Gross of value adjustments and net of debt securities classified as L&R.(2) Lending repurchase agreements with financial firms are shown separately, for a homogenous comparison previous periods have therefore been restated.Impaired loans totalled € 2,996.4 million, up17% over six months; 99.4% of these relate toordinary customers. The corresponding valueadjustments amounted to € 790.9 million(+11.7% in the first six months).Cash loans to customers amounted to €2,951.6 million (+17.2%); endorsement loanscame to € 27.7 million (+13.4%).As regards cash loans to customers:− bad loans came to € 1,493 million, up by10.7% in the half; these were written down−by 45.2%;watchlist loans amounted to € 867.9 million,up 14% over December and were writtendown by 10.1%;− rescheduled loans amounted to € 150.3million (+15.5%); these were written downby 7.3%;− Past due loans came to € 440.5 million (€279.4 million in December and € 335.9million in June 2011); given that the majorityof these relate to loans backed by mortgageguarantee, the increase in the first halfis largely due to the reduction, effective from1 January 2012, from 180 days late to 90days late, for the classification in the aggregateof unsecured past due or borderlineloans. These positions were written down by2.5%.Impaired endorsement loans amounted to €27.7 million, up 13.4% in six months and28.5% from June 2011, and were written downby 19.5%.Overall, also considering performing loans,value adjustments on cash and endorsementloans amounted to € 888.9 million, € 876.2million of which refer to cash loans and € 12.7million of which refer to endorsement loans(2.9% hedging level).36

CREDIT QUALITY (1) ( thousands of euro)30/06/201231/12/2011Gross exposureValue% Value%Net exposureGross exposureNet exposureadjustments(b) / (a)adjustments(b) / (a)(a) (b) (a)-(b) (a) (b) (a)-(b)Cash loansBad loans 1,493,010 674,709 818,301 45.2 1,348,787 609,848 738,939 45.2- customers 1,493,010 674,709 818,301 45.2 1,348,787 609,848 738,939 45.2Watchlist loans 884,886 88,956 795,930 10.1 777,828 81,413 696,415 10.5- banks 16,991 872 16,119 5.1 16,691 872 15,819 5.2- customers 867,895 88,084 779,811 10.1 761,137 80,541 680,596 10.6Rescheduled loans 150,266 10,912 139,354 7.3 130,097 3,225 126,872 2.5- customers 150,266 10,912 139,354 7.3 130,097 3,225 126,872 2.5Past due loans 440,474 10,881 429,593 2.5 279,444 7,705 271,739 2.8- customers 440,474 10,881 429,593 2.5 279,444 7,705 271,739 2.8Total Impaired loans 2,968,636 785,458 2,183,178 26.5 2,536,156 702,191 1,833,965 27.7Performing loans 26,396,622 90,779 26,305,843 0.3 26,637,382 92,723 26,544,659 0.3- banks 1,898,001 1,898,001 - 1,622,237 - 1,622,237 -- customers 24,498,621 90,779 24,407,842 0.4 25,015,145 92,723 24,922,422 0.4Total cash loans 29,365,258 876,237 28,489,021 3.0 29,173,538 794,914 28,378,624 2.7- banks 1,914,992 872 1,914,120 0.0 1,638,928 872 1,638,056 0.1- customers 27,450,266 875,365 26,574,901 3.2 27,534,610 794,042 26,740,568 2.9Endorsement loansImpaired 27,749 5,408 22,341 19.5 24,461 5,561 18,900 22.7- customers 27,749 5,408 22,341 19.5 24,461 5,561 18,900 22.7Other loans 1,692,828 7,255 1,685,573 0.4 1,721,681 7,166 1,714,515 0.4- banks 44,949 - 44,949 - 48,436 - 48,436 -- customers 1,647,879 7,255 1,640,624 0.4 1,673,245 7,166 1,666,079 0.4Total endorsement loans 1,720,577 12,663 1,707,914 0.7 1,746,142 12,727 1,733,415 0.7- banks 44,949 - 44,949 - 48,436 - 48,436 -- customers 1,675,628 12,663 1,662,965 0.8 1,697,706 12,727 1,684,979 0.7Total 31,085,835 888,900 30,196,935 2.9 30,919,680 807,641 30,112,039 2.6- banks 1,959,941 872 1,959,069 0.0 1,687,364 872 1,686,492 0.1- customers 29,125,894 888,028 28,237,866 3.0 29,232,316 806,769 28,425,547 2.8(1) Net of debt securities classified as L&R, amounting to as at 30 June 2012 to 135,767 thousands of euro (loans to customers) and to 301,805 thousands of euro (due frombanks)As regards the geographical breakdown of badloans, Liguria has the largest share of the total(30.2%), followed by Lombardy (22.9%) andPiedmont (11.6%).BAD LOANS TO CUSTOMERS (1) - GEOGRAPHICAL DISTRIBUTION (2) (thousands of euro)Situation as at30/06/12 31/12/11 30/06/11% % %Liguria 450,876 30.2% 404,558 30.0% 378,495 30.6%Lombardy 341,831 22.9% 314,767 23.3% 296,533 24.0%Piedmont 172,804 11.6% 163,744 12.1% 158,150 12.8%Tuscany 175,148 11.7% 148,026 11.0% 114,653 9.3%Emilia Romagna 105,492 7.1% 96,326 7.1% 92,127 7.4%Veneto 70,506 4.7% 65,355 4.8% 59,368 4.8%Latium 53,462 3.6% 49,203 3.6% 43,948 3.6%Sicily 38,113 2.6% 33,737 2.5% 28,506 2.3%Apulia 25,014 1.7% 22,952 1.7% 19,761 1.6%Sardinia 22,763 1.5% 20,847 1.5% 18,835 1.5%Marches 20,076 1.3% 13,614 1.0% 12,953 1.0%Umbria 8,625 0.6% 8,577 0.6% 8,146 0.7%Valle d'Aosta 3,804 0.3% 3,332 0.2% 3,168 0.3%Total Italy 1,488,514 99.7% 1,345,037 99.7% 1,234,643 99.8%Abroad 4,496 0.3% 3,750 0.3% 2,406 0.2%Total bad loans 1,493,010 100.0% 1,348,787 100.0% 1,237,049 100.0%(1) Gross of value adjustments and net of debt securities classified as L&R.(2) Figures per branch province.37

BAD LOANS TO CUSTOMERS AS AT 30/06/2012100%= 1,493 MILLIONSBAD LOANS TO CUSTOMERS AS AT 30/06/2011100%= 1,237 MILLIONSLiguriaLombardyPiedmontTuscany7.1%4.7%3.6%8.2%30.2%LiguriaLombardyPiedmontTuscanyEmilia RomagnaVeneto4.8%7.4%3.6%7.6%30.6%Emilia RomagnaVeneto11.7%LatiumOthers9.3%LatiumOthers11.6%22.9%12.8%24.0%The bad loans/loans ratio registered growth inalmost all regions during the year: Liguria hasthe lowest ratio (3.2%). Valle d’Aosta has thehighest ratio (13.8%), however representing aminimal share, followed by the Marches(12.6%).BAD LOANS/LENDING RATIO (1) - GEOGRAPHICAL DISTRIBUTION (2)(Percentage values). Situation as at30/06/12 31/12/11 30/06/11Liguria 3.2% 2.8% 2.8%Lombardy 10.4% 9.9% 8.8%Piedmont 6.5% 5.5% 4.3%Tuscany 5.7% 5.3% 5.5%Emilia Romagna 11.1% 10.4% 10.6%Veneto 5.5% 5.2% 4.7%Latium 5.8% 5.2% 4.7%Sicily 6.3% 5.5% 4.3%Apulia 6.2% 5.8% 5.4%Sardinia 10.9% 9.9% 8.7%Marches 12.6% 8.4% 8.5%Umbria 8.1% 7.9% 7.6%Valle d'Aosta 13.8% 11.4% 12.2%Total Italy 5.5% 4.9% 4.7%Abroad 2.8% 2.3% 1.4%Total bad loans 5.4% 4.9% 4.7%(1) Gross of value adjustments and net of debt securities classified as L&R.(2) Figures per branch province.The breakdown by business segment showed anincrease in bad loans for non-financial businessesand personal businesses (€ 1,069.6 million)with a share of 71.6% (70.6% in Decemberand 70.6% in June 2011). The segment with thehighest share of bad loans was the building andpublic works segment (€ 266.9 million, 17.9%),followed by sales services (€ 228.5 million,15.3%).Households represented the second sector byvolume with a share of 26% of the aggregate,lower than the 27% in December and 26.8% inJune 2011.38

BAD LOANS (1) - DISTRIBUTION BY BUSINESS SEGMENT (thousand of euro)Situation as at30/06/12 31/12/11 30/06/11% % %Public Administration - - - - - -Financial and insurance businesses 26,128 1.8% 25,605 1.9% 25,012 2.0%Non-financial businesses and personal businesses 1,069,588 71.6% 952,332 70.6% 872,955 70.6%Building and public works 266,894 17.9% 231,600 17.2% 214,070 17.3%Sales-related services 228,519 15.3% 193,399 14.3% 171,386 13.9%Wholesale & retail trade, salvage and repairs 204,440 13.7% 184,951 13.7% 171,854 13.9%Hotel and catering services 44,353 3.0% 42,169 3.1% 39,688 3.2%Metal products 39,970 2.7% 38,307 2.8% 35,303 2.9%Other 285,411 19.1% 261,906 19.4% 240,654 19.5%Private social bodies and non classified entities 2,100 0.1% 2,044 0.2% 1,860 0.2%Households 388,432 26.0% 363,700 27.0% 331,626 26.8%Total residents 1,486,248 99.5% 1,343,681 99.6% 1,231,453 99.5%Rest of the world 6,762 0.5% 5,106 0.4% 5,596 0.5%Total bad loans 1,493,010 100.0% 1,348,787 100.0% 1,237,049 100.0%(1) Gross of value adjustments and net of debt securities classified as L&R.The bad loans/loans ratio is above the Groupaverage for non-financial companies and personalbusinesses, at 6.7% (6% and 5.8% in Decemberand June 2011, respectively) while forhouseholds it is equal to 5.5% (5.1% in Decemberand 4.7% in June 2011).BAD LOANS/LENDING RATIO (1) - DISTRIBUTION BY BUSINESS SEGMENT (percentage values)Situation as at30/06/12 31/12/11 30/06/11Public Administration - - -Financial businesses 2.0% 2.2% 1.8%Non-financial businesses and personal businesses 6.7% 6.0% 5.8%- of which (2):Sales-related services 3.9% 3.3% 3.0%Building and public works 11.4% 10.4% 10.3%Wholesale & retail trade, salvage and repairs 8.8% 7.8% 7.3%Hotel and catering services 6.0% 5.7% 5.5%Shipping and air transport 4.2% 4.2% 5.2%Private social bodies and non classified entities 1.6% 1.5% 1.4%Households 5.5% 5.1% 4.7%Total residents 5.7% 5.2% 4.9%Rest of the world 2.3% 1.8% 2.2%Total 5.4% 4.9% 4.7%(1) Gross of value adjustments and net of debt securities classified as L&R.(2) Main business segments in terms of overall credit exposure shown.Securities in the portfolio amounted to €13,445.6 million, up 24.7% in the half and31.4% in twelve months as a result of the purchasesof Italian government bonds in the lastfew months of 2011 and the first few months of2012; debt securities (€ 12,061.4 million) accountfor 89.7% of the portfolio, up 27.7% in sixmonths and 36.5% YoY. The total includes BalanceSheet items 20 (net of derivatives amountingto € 101.2 million as at 30 June 2012), 30(net of the investment in liquidity to cover insurancepolicies with investment risk borne by theinsured amounting to € 2.3 million), 40, 60(solely the part relating to L&R) and 70 (solelythe part relating to L&R).Equities amounted to € 1,061.1 million. Equitiesinclude the 4.03% equity investment in the Bankof Italy, accounted for € 892.2 million; this figureresults from a valuation at fair value - usingshareholders’ equity as the most reliable proxyof fair value – performed on the basis of thebalance sheet figures of the Bank of Italy as at31 December 2011 (last approved set of financialstatements). The effects of said valuation atfair value were sterilised by a valuation reserveof the same amount, net of deferred taxes.Shares in CIS (collective investment schemes)amounted to € 323.2 million, up by 7.5% in sixmonths and down by 3.6% YoY.With regard to the breakdown prescribed by theinternational accounting standards (IAS/IFRS),Available for Sale securities, or AFS (€ 12,309million), which account for 94.6%, increasedboth in the six-month period (+27.3%) and inthe year (+34.7%) in relation to the aforementionedinvestments made mostly in Italian governmentbonds; Held for Trading securities, orHFT, amounting to € 156.4 million, account for39

1.2%, marking an increase of 75.5% in sixmonths, and a decrease of 8.3% in twelvemonths.Assets deriving from Loans and Receivables –L&R, amounted to € 437.6 million, down by11.4% in the half, but up 22.4% in the year.Securities designated at fair value (€ 542.7 million)represent 4.2% of the portfolio, up 2.5%over six months and down 4.9% over the year.These are held in the portfolio of Carige VitaNuova and, as they are issued against policieswith risk borne by the insured party, they are offsetfor the same amount under liabilities.As regards AFS securities, Italian governmentbonds totalled € 9,408.1 million, accounting foraround 76.4% of the total; more specifically,treasury bills amounted to € 1,196.4 million,long-term treasury bonds totalled € 6,548.1 million,treasury credit certificates came to € 710.5million and zero coupon treasury bills totalled €953.1 million; in terms of maturities, 46.5%have a maturity of less than three years and53.5% less than five.SECURITIES PORTFOLIO (thousands of euro)Situation as atChange %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Debt securities 12,061,350 9,448,632 8,838,714 27.7 36.5Held for trading 137,282 75,229 155,330 82.5 -11.6Available for sale 11,115,495 8,513,295 7,942,164 30.6 40.0Fair value 371,001 366,379 383,705 1.3 -3.3Loans and Receivable 437,572 493,729 357,515 -11.4 22.4Equities 1,061,062 1,029,024 1,060,340 3.1 0.1Held for trading 4 4 148 - -97.3Available for sale 1,061,058 1,029,020 1,060,192 3.1 0.1Shares in CIS 323,231 300,587 335,405 7.5 -3.6Held for trading 19,116 13,869 15,151 37.8 26.2Available for sale 132,398 123,435 133,515 7.3 -0.8Fair value 171,717 163,283 186,739 5.2 -8.0Total (1) 13,445,643 10,778,243 10,234,459 24.7 31.4of which:Held for trading 156,402 89,102 170,629 75.5 -8.3Available for sale 12,308,951 9,665,750 9,135,871 27.3 34.7Fair value 542,718 529,662 570,444 2.5 -4.9Loans and Receivable 437,572 493,729 357,515 -11.4 22.4(1) Balance sheet items 20 (net of derivatives), 30 (net of the cash investment against the unit linked e index linked insurance contracts for which investment risk is borne by theinsured), 40, 60 (only for the part relative to L&Rs) and 70 (only for the part relative to L&Rs) are included in the aggregate.The amendments made to international accountingstandards IAS 39 and IFRS 7 in Octoberand November 2008 allowed new types ofreclassifications in case of financial crisis.Pursuant to said amendments, the Group reclassifiedsecurities, effective 1 July, 1 October2008 and 1 October 2011, for a total residualamount of € 354 million as at 30 June 2012, asdetailed in the table below:40

TRANSFERS BETWEEN PORTFOLIOS: BOOK VALUE, FAIR VALUE AND EFFECTS ON COMPREHENSIVE INCOME(thousands of euro)Type of financialinstrumentOriginportfolioAllocationportfolioBook value as at30/06/2012Fair Value asat30/06/2012Income components in the absenceof the transfer (before tax)Income components recorded forthe period (before tax)Valuation-related Others Valuation-related OthersDebt securities HFT AFS 48,071 48,071 6,012 1,218 5,723 992Equities HFT AFS 4,695 4,695 97 31 97 31CIS units HFT AFS 72,088 72,088 1,095 - 1,095 -Debt securities HFT HTM (1) 198 198 6 1 (3) 2Debt securities HFT L&R 97,688 89,918 2,113 959 - 552Debt securities AFS L&R 131,282 112,842 2,762 3,862 (1,648) 1,816Total 354,022 327,812 12,085 6,071 5,264 3,393(1) An information disclosure has been provided for securities which, after being previously classified from HFT to HTM, have been reclassified from the latter to AFS following the application of forecasts setforth in paragraph 52 of IAS 39 in financial statements as at 31/12/2009.If the Group had not reclassified the financialassets listed above, the half would have recordedpositive income components amountingto € 12.1 million instead of the € 5.3 million reported.The exposure of the Group to certain financialinstruments perceived by the market to be highrisk(according to the definition in the Recommendationissued on 7 April 2008 by the FinancialStability Forum and the joint document issuedby the Bank of Italy / CONSOB / ISVAPno. 2 of 6 February 2009) amounted to € 160million, equal to 1% of the security portfolio andconcerns:- securities resulting from securitisationtransactions (with the exclusion ofCDOs - Collateralised Debt Obligations),allocated to both the tradingportfolio and to the portfolio of assetsavailable for sale, for an aggregatebook value of € 42.7 million, (0.33% ofthe securities portfolio). They do not includeany exposures to subprime mortgagesand they are comprised of Junior,Mezzanine and Senior tranches(73.1%)of securitisations of mortgageloans granted by Group banks andoriginating from proprietary vehicles;SECURITIES FROM SECURITISATION TRANSACTIONS ( thousands of euro)countervalues at costprice% portion on totalsecurities portfolioSenior 10,540 0.08%Mezzanine 929 0.01%Junior - -Securitisations of consumer loans, leases, mortgage loans, ot11,469 0.09%Senior 803 0.01%Mezzanine 899 0.01%Junior 29,508 0.23%Securitisations of mortgages of the Group 31,210 0.24%Total 42,680 0.33%- CDOs portfolio, for a book value of € 2.1million (0.02% of the total portfolio), comprisedof synthetic securitisations which includeCDS (Credit Default Swap) and securitisationsof securitisations with exposures toRMBS (Residential Mortgage-Backed Securities)CMBS (Commercial Mortgage-BackedSecurities) ABS (Asset-Backed Securities)and subprime positions;41

CDO PORTFOLIO (1) (thousands of euro)Rating% portion on totalsecurities portfolioBBB+ 2,050 0.02%Total 2,050 0.02%(1) CDO = Collateralized debt obligation: (see glossary)countervalues at cost price- securities and derivatives related to leveragedfinance transactions comprisedof funded and unfunded securities. Theformer have a book value of € 76 million(equal to 0.58% of the portfolio)and 98% of these are structured in aprotected/guaranteed format, with thehedging of the specific risk or, in anycase, with the provision for the repaymentat par at maturity;- Unfunded securities are subdivided intocredit and interest rate instrumentswhich, against a notional amount of €25 million, had a limited negative impactof € 0.37 million.SECURITIES/DERIVATIVES FROM LEVERAGE TRANSACTIONS (thousands of euro)countervalues at costprice% portion on total securitiesportfolioUnhedged leveraged instruments: 75,975 0.58%credit 30,976 0.24%of which with repayment at par rate 29,313 0.23%44,999 0.35%of which with repayment at par 44,111 0.34%Hedged leveraged instruments: 26,814 0.21%rate 26,814 0.21%Total 102,789 0.79%42

The exposures towards Special Purpose Entities(SPE) were substantially limited to vehicle companiesin the securitisation transactions carriedout directly by the Group.As regards the exposure in financial instrumentsissued in sovereign debt of countries in difficulty,the Carige Group is exposed to Spain (€ 16 million)and Greece (€ 3.2 million). On the wholethese exposures amount to € 19.2 million andrepresent 0.1% of the entire portfolio.As at 30 June 2012, net valuation reserves pertainingto the Group and minority interests, relativeto securities classified in the AFS (AvailableFor Sale) category amounted to € -151.9 million(an increase of € 258.1 million compared withthe negative balance of € 410 million at 31 December2011) and comprised € 946.3 million inpositive reserves, relating mainly to the valuationof the equity investment in the Bank of Italy (€827.9 million), and € 1,098.2 million in negativereserves. The latter refer to debt securities (€947.6 million), composed almost entirely ofGovernment, bank and corporate bonds withhigh credit ratings, and to equities of leadingbanking and insurance issuers and shares in collectiveinvestment schemes amounting to €150.6 million (€ 160.4 million as at 31 December2011).As required by the reference IAS/IFRS regulations(IFR7 – Financial Instruments –Additionalinformation and IAS 39 – Financial Instruments:Recognition and Measurement), and in compliancewith Bank of Italy Circular no. 262 of 22December 2005 “Bank financial statements:schemes and rules for preparation”, the BancaCARIGE Group provides, for each class of financialinstrument, the fair value hierarchy levelat which the entire fair value measurements areclassified.On the basis of the hierarchical fair value scaledescribed in relation to accounting policies,level 3 of the fair value hierarchy was used forthe same financial instruments present at 31 December2011, including the equity investmentheld in the Bank of Italy. The percentage of instrumentsassessed using this methodology, outof all instruments evaluated at fair value for theBanca Carige Group, stood at 0.91% (1.18% asat 31 December 2011), net of the equity investmentheld in the Bank of Italy.The following table shows the breakdown accordingto fair value levels of the Banca CarigeGroup’s accounting portfolios:FAIR VALUE HIERARCHY CASH PORTFOLIOS, DIVISION BY LEVEL OF FAIR VALUE(thousands of euro)30/06/2012 31/12/2011L1 L2 L3 L1 L2 L31. Financial assets held for trading 56,339 196,260 5,003 52,934 117,376 542. Financial assets carried at fair value 174,002 371,001 - 167,797 366,379 -3. Available-for-sale financial assets 10,688,777 648,165 972,009 7,875,459 841,592 948,6994. Hedging derivatives - 188,509 - - 152,543 -Total financial assets carried at fair value 10,919,118 1,403,935 977,012 8,096,190 1,477,890 948,7531. Financial liabilities held for trading - 47,046 - - 66,150 -2. Financial liabilities carried at fair value 1,425,596 - - 1,460,833 - -3. Hedging derivatives - 1,343,450 - - 1,212,376 -Total financial liabilities carried at fair value 1,425,596 1,390,496 - 1,460,833 1,278,526 -Legend:L1 = Level 1; L2 = Level 2 L3 = Level 3The notional value of derivative contracts is €12,812 million, down by 8.5% from December2011.43

NOTIONAL VALUES OF DERIVATIVE CONTRACTS (1) (thousands of euro)Situation as atSituation as atUnderlying assets/Types of derivatives 30/06/2012 TOTAL 31/12/2011TOTAL CHANGEBanking portfolioBanking portfolioRegulatory Hedging Other derivativesRegulatory Hedging Other derivativescontractscontractsTOTALtrading06/12 12/11trading portfolioportfolio%1. Debt securities and interest rates 1,835,812 8,984,071 1,233,501 12,053,384 2,319,370 9,066,191 1,319,674 12,705,235 -5.1Options 222,152 711,313 178,597 1,112,062 244,258 725,649 100,000 1,069,907 3.9Swap 1,613,260 8,272,758 1,044,904 10,930,922 1,654,355 8,340,542 944,904 10,939,801 -0.1Forward - - 10,000 10,000 420,357 - 274,770 695,127 -98.6Futures 400 - - 400 400 - - 400 -2. Equities and share indexes 358,568 - - 358,568 427,315 - 206,847 634,162 -43.5Options 357,196 - - 357,196 426,975 - 206,847 633,822 -43.6Futures 1,372 - - 1,372 340 - - 340 …3.Currencies and gold 352,530 - - 352,530 581,490 - - 581,490 -39.4Options 42,175 - - 42,175 28,435 - - 28,435 48.3Forward 310,355 - - 310,355 553,055 - - 553,055 -43.94. Credit derivatives 47,500 - - 47,500 87,500 - - 87,500 -45.7Protection acquisitions 47,500 - - 47,500 52,500 - - 52,500 -9.5Hedging sales - - - - 35,000 - - 35,000 -100.0Total 2,594,410 8,984,071 1,233,501 12,811,982 3,415,675 9,066,191 1,526,521 14,008,387 - 8.51) The table has been prepared based on the criteria set out in the Circular No. 262/2005 of the Bank of Italy in relation to the tables in the Notes - Part E - Derivative instruments - tables A.1, A.2.1, A.2.2 and B.1. In thecolumn "Other derivatives" the notional values of the derivative contracts agreed with insurance companies have been added.Positive values of hedging derivative contractswere equal to € 188.5 million and negative valuesamounted to € 1,343.5 million, mostly tohedge interest rate risk.ASSETS FROM HEDGING DERIVATIVES BY HEDGE TYPE( thousands of euro)Situation as at Change %30/06/12 31/12/11 30/06/2011 06/12 06/1212/11 06/11Asset hedging derivatives 166 - 7,289 … -97.7Fair value hedging 166 - 786 … -78.9interest rates 166 - 786 … -78.9Cash flow hedging - - 6,503 … -100.0interest rates - - 6,503 … -100.0Liability hedging derivatives 188,343 152,543 81,331 23.5 …Fair value hedging 181,531 141,853 63,837 28.0 …interest rates 181,531 141,853 63,837 28.0 …General interest rate risk hedging 6,812 10,690 17,494 -36.3 -61.1Total 188,509 152,543 88,620 23.6 …LIABILITIES FROM HEDGING DERIVATIVES BY HEDGE TYPE( thousands of euro)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Asset hedging derivatives 1,107,801 1,024,485 574,442 8.1 92.8Fair value hedging 1,107,801 1,024,485 574,442 8.1 92.8interest rates 1,107,801 1,024,485 574,442 8.1 92.8Liability hedging derivatives 235,649 187,891 113,050 25.4 …Fair value hedging 20,089 5,448 27,695 … -27.5interest rates 20,089 5,448 27,695 … -27.5General interest rate risk hedging 215,560 182,443 85,355 18.2 …Total 1,343,450 1,212,376 687,492 10.8 95.4The positive values of trading derivative contractsamounted to € 101.2 million, and negativevalues totalled € 47.1 million.44

TRADING DERIVATIVES ( thousands of euro)Situation as atChange %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Assets for trading derivatives 101,200 81,262 33,305 24.5 …Financial derivatives 94,461 74,554 30,936 26.7 …- trading 23,826 19,028 18,011 25.2 32.3- connected with the fair value option 70,635 55,526 12,925 27.2 …- others - … …Credit derivatives 6,739 6,708 2,369 0.5 …- trading 6,739 6,708 2,369 0.5 …- connected with the fair value option … …- others … …Total 101,200 81,262 33,305 24.5 …Liabilities for trading derivatives 47,076 66,150 54,062 -28.8 -12.9Financial derivatives 47,076 56,755 48,521 -17.1 -3.0- trading 47,076 56,755 41,495 -17.1 13.4- connected with the fair value option 7,026 … -100.0- others … …Credit derivatives - 9,395 5,541 -100.0 -100.0- trading 9,395 5,541 -100.0 -100.0- connected with the fair value option … …- others … …Total 47,076 66,150 54,062 -28.8 -12.945

ECONOMIC RESULTSThe first six months of 2012 closed with a netincome of € 90.2 million, versus € 75.2 millionin the same period in 2011 (+20.1%).The increase in the net interest and other bankingincome was particularly pronounced as regardsinterest margin, against an increase in adjustmentsto both loans and financial assets, asa result of the persistence of the crisis in the realeconomy and in the financial markets.INCOME STATEMENT(thousands of euro)Change 6 months 2012 - 6 months 20116 months 2012 6 months 2011 absolute %10 - INTEREST AND SIMILAR INCOME 753,468 601,586 151,882 25.220 - INTEREST AND SIMILAR EXPENSE -331,376 -229,428 -101,948 44.430 -INTEREST MARGIN 422,092 372,158 49,934 13.440 - FEE AND COMMISSION INCOME 184,725 163,091 21,634 13.350 - FEE AND COMMISSION EXPENSE - 26,551 - 16,120 - 10,431 64.760 -NET FEE AND COMMISSION INCOME 158,174 146,971 11,203 7.670 - DIVIDEND AND SIMILAR INCOME 5,991 8,304 -2,313 - 27.980 - PROFITS (LOSSES) ON TRADING -504 15,189 -15,693 …90 - FAIR VALUE ADJUSTMENTS IN HEDGE ACCOUNTING -1,942 -91 -1,851 …100 - PROFITS (LOSSES) ON DISPOSAL OR REPURCHASE OF: 27,148 146 27,002 …a) loans 1,912 -501 2,413 …b) financial assets available-for-sale 23,883 1,594 22,289 …d) financial liabilities 1,353 -947 2,300 …110 - PROFITS (LOSSES) ON FINANCIAL ASSETS AND LIABILITIESDESIGNATED AT FAIR VALUE 1,852 -1,023 2,875 …120 -NET INTEREST AND OTHER BANKING INCOME 612,811 541,654 71,157 13.1130 - NET LOSSES/RECOVERIES ON IMPARMENT -93,539 -61,987 -31,552 50.9a) loans -74,066 -55,830 -18,236 32.7b) financial assets available-for-sale -19,535 -4,240 -15,295 …d) other financial activities 62 -1,917 1,979 …140 -NET INCOME FROM BANKING ACTIVITIES 519,272 479,667 39,605 8.3150 - NET INSURANCE PREMIUMS 513,527 652,502 -138,975 - 21.3160- OTHER NET INSURANCE INCOME (ESPENSE) -569,342 -676,728 107,386 - 15.9170- NET INCOME FROM BANKING AND INSURANCEACTIVITIES 463,457 455,441 8,016 1.8180 - ADMINISTRATIVE EXPENSES: -339,591 -348,657 9,066 - 2.6a) personnel expenses -208,915 -211,250 2,335 - 1.1b) other administrative expenses -130,676 -137,407 6,731 - 4.9190 - NET PROVISIONS FOR RISKS AND CHARGES -621 -1,715 1,094 - 63.8200 - NET ADJUSTMENTS TO/RECOVERIES ON PROPERTY ANDEQUIPMENT -13,560 -12,643 -917 7.3210 - NET ADJUSTMENTS TO/RECOVERIES ON INTANGIBLE ASSETS -16,700 -15,306 -1,394 9.1220 - OTHER OPERATING EXPENSES (INCOME) 30,616 40,027 -9,411 - 23.5230 -OPERATING EXPENSES -339,856 -338,294 -1,562 0.5240 - PROFITS (LOSSES) ON INVESTMENTS IN ASSOCIATES ANDCOMPANIES SUBJECT TO JOINT CONTROL 2,366 2,332 34 1.5270 - PROFITS (LOSSES) FROM DISPOSAL OF INVESTMENTS -2 6 -8 …280 -INCOME (LOSS) BEFORE TAX FROM CONTINUINGOPERATIONS 125,965 119,485 6,480 5.4290 - TAXES ON INCOME FROM CONTINUING OPERATIONS -33,407 -43,332 9,925 - 22.9300 -INCOME (LOSS) AFTER TAX FROM CONTINUINGOPERATIONS 92,558 76,153 16,405 21.5320 -NET INCOME (LOSS) 92,558 76,153 16,405 21.5330 - MINORITY INTERESTS 2,328 995 1,333 …340 -PARENT COMPANY'S NET INCOME (LOSS) 90,230 75,158 15,072 20.1More specifically, the interest margin amountedto € 422.1 million, up by 13.4% compared toJune 2011, as a result of the development intraded volumes and investments in financial assets.Interest income grew to € 753.5 million(+25.2%) while interest expense increased to €331.4 million (+44.4 %).46

INTEREST AND SIMILAR INCOME (thousands of euro)Change % % 1st half 2012 - 1st half 20111st half 2012 2011 1st half 2011 absolute %Financial assets held for trading 12,283 4,498 3,110 9,173 …Financial assets available-for-sale 216,024 305,926 139,408 76,616 55.0Due from banks 11,188 20,250 10,491 697 6.6Loans to customers 511,248 946,967 445,861 65,387 14.7Other assets 2,725 8,084 2,716 9 0.3Total interest and similar income 753,468 1,285,725 601,586 151,882 25.2INTEREST AND SIMILAR EXPENSE (thousands of euro)Change 1st half 2012 - 1st half 20111st half 2012 2011 1st half 2011 absolute %Due to banks 44,315 44,814 16,664 27,651 …Due to customers 72,021 104,032 44,045 27,976 63.5Securities issued 183,035 338,820 153,608 29,427 19.2Financial liabilities designated at fair valuethrough profit and loss 9,293 20,298 10,150 - 857 -8.4Other liabilities 1,251 480 954 297 31.1Hedging derivatives 21,461 13,331 4,007 17,454 …Total interest and similar expense 331,376 521,775 229,428 101,948 44.4Net fee and commission income increased by7.6% to € 158.2 million.Fee and commission income increased by13.3% to € 184.7 million, mainly relating tocurrent accounts which, among other things, includean item previously recognised under interestincome. Fee and commission expense,standing at € 26.6 million, rose by 64.7%, duein particular to the guarantees received component,which rose from € 194 thousand in the firsthalf of 2011 to € 9.6 million, relating to LTROs.FEE AND COMMISSION INCOME (thousands oh euro)Change 1st half 2012 - 1st half 20111st half 2012 2011 1st half 2011 absolute %Guarantees issued 8,975 17,231 7,765 1,210 15.6Management, intermediation and consultancy services: 44,881 90,871 45,833 - 952 -2.11. Financial instruments trading 639 800 299 340 …2. Currency trading 1,371 3,220 1,656 - 285 -17.23. Portfolio management 19,465 42,761 21,800 - 2,335 -10.74. Securities custody and administration 1,355 2,683 1,250 105 8.46. Placement of securities 7,160 11,473 5,952 1,208 20.37. receipt and issue of orders 6,073 11,846 5,859 214 3.78. Consultancy services 1 13 7 - 6 -85.79. Distribution of third-party services 8,817 18,075 9,010 - 193 -2.1- portfolio management 43 94 47 - 4 -8.5- insurance products 800 1,432 847 - 47 -5.5- other products 7,974 16,549 8,116 - 142 -1.7Collection and payment services 32,657 66,881 32,009 648 2.0Servicing for securitizations 118 490 335 - 217 -64.8Factoring services 760 2,004 1,004 - 244 -24.3Maintenance and management of the current accounts 74,067 114,694 57,216 16,851 29.5Other services 23,267 42,696 18,929 4,338 22.9Total fee and commission income 184,725 334,867 163,091 21,634 13.3FEE AND COMMISSION EXPENSE (thousands of euro)Change 1st half 2012 - 1st half 20111st half 2012 2011 1st half 2011 absolute %Guarantees received 9,598 371 194 9,404 …Management and intermediation services 1,456 2,451 1,017 439 43.21. Financial instruments trading 100 169 70 30 42.93. Portfolio management 6 21 9 - 3 -33.34. Securities custody and administration (1) 907 1,796 753 154 20.55. Placement of financial instruments 27 12 12 15 …6. Door-to-door sale of securities, financial products and services 416 453 173 243 …Collection and payment services 9,403 19,367 8,845 558 6.3Other services 6,094 12,334 6,064 30 0.5Total fee and commission expense 26,551 34,523 16,120 10,431 64.747

The management of financial items provided apositive overall contribution of € 30.6 million,up 33% over the first half of 2011.More specifically, dividend and similar incomeamounted to € 6 million (€ 8.3 million in the firsthalf of 2011); loss on trading was a € 0.5 million(compared to a profit of € 15.2 million inJune 2011).PROFIT (LOSSES) ON TRADING (thousands of euro)Change 1st half 2012 - 1st half 20111st half 2012 2011 1st half 2011 absolute %Debt securities -8,263 1,287 997 -9,260 …Equities & collective investment schemes 477 137 122 355 …Total equities, debt securities & collectiveinvestment schemes -7,786 1,424 1,119 -8,905 …Financial derivatives -15,895 10,934 32,607 -48,502 …Credit derivatives 1,368 1,120 1,010 358 35.4Currency differences 19,459 9,025 -21,429 40,888 …Other financial assets/liabilities from trading 2,350 3,621 1,882 468 24.9Total profit (losses) on trading -504 26,124 15,189 -15,693 …Net income from trading in derivative instrumentswas a positive € 4.9 million, compared to€ 12.2 million in June 2011.NET INCOME FROM TRADING IN DERIVATIVE INSTRUMENTS(thousands of euro)Situation as atChange %1st half 2012 1st half 2011 1st half 2012 - 1° half 20111. Financial derivatives: - 15,895 32,607 …- on debt securities and interest rates 3,156 11,410 -72.3- on equities and equity indices 177 - 149 …- on currencies and gold - 19,192 21,346 …- others - 36 - …2 - Credit derivatives 1,368 1,010 35.4Total - 14,527 33,617 …3. Currency differences included in the trading income 19,459 - 21,429 …Total net 4,932 12,188 - 60Fair value adjustments in hedging accountingwas € -1.9 million, compared with € -91 thousandin June 2011.FAIR VALUE ADJUSTMENTS IN HEDGING ACCOUNTING(thousands of euro)Situation as atChange %1st half 2012 1st half 2011 1st half 2012 - 1° half 2011Income from hedge accounting (A) 155,744 320,450 -51.4Fair value hedging derivatives 45,610 25,019 82.3Hedged financial assets (fair value) 106,392 228,054 -53.3Hedged financial liabilities (fair value) 3,742 67,377 -94.4Cash flow hedge financial derivatives - - …Currency assets and liabilities - - …Charges from hedging activities (B) - 157,686 - 320,541 -50.8Fair value hedging derivatives - 105,167 - 242,263 -56.6Hedged financial assets (fair value) - 15,719 - 43,383 -63.8Hedged financial liabilities (fair value) - 36,800 - 34,895 5.5Cash flow hedge financial derivatives - - …Currency assets and liabilities - - …Fair value adjustments in hedging accounting (A-B) - 1,942 - 91 …By contrast, profit from the sale or repurchase ofloans and financial assets/liabilities amounted to48

€ 27.1 million (€ 146 thousand in the first halfof 2011), relating primarily to the sale of financialassets available-for-sale.Profit on financial assets/liabilities designated atfair value was € 1.9 million (loss of € 1 millionas at June 2011).PROFIT (LOSSES) ON FINANCIAL ASSETS AND LIABILITIES DESIGNATED AT FAIR VALUE(thousands of euro)Situation as atChange %1st half 2012 1st half 2011 1st half 2012 - 1° half 2011Financial assets 22,572 1,465 …Financial liabilities - 35,731 5,805 …Foreign currency financial assets and liabilities: currency differences - - …Financial and credit derivatives 15,011 - 8,293 …Profit (losses) on financial assets and liabiliteis designated at fairvalue1,852 - 1,023 …Therefore, the net interest and other banking incomereached € 612.8 million, up by 13.1%.Net losses on impairment of loans and other financialitems stood at € 93.5 million, 50.9%higher than the first half of 2011: losses on impairmentof cash loans amounted to € 74.1 million(up 32.6% over the first half of 2011);losses on impairment of financial assets available-for-saletotalled € 19.5 million (€ 4.2 millionas at June 2011).NET LOSSES/RECOVERIES ON IMPAIRMENT OF LOANS AND OTHER FINANCIAL ITEMS(thousands of euro )Change 1st half 2012 - 1st half 20111st half 2012 2011 1st half 2011 absolute %Due from banks - - 4 - 9 9 - 100.0Loans to customers 74,066 118,003 55,839 18,227 32.6Credit commitments (other financial transactions) - 62 2,723 1,917 - 1,979 …Financial assets available-for-sale 19,535 54,998 4,240 15,295 …Total net losses/recoveries on impairment ofloans and other financial items93,539 175,720 61,987 31,552 50.9Net income from banking and insurance activitiesincreased by 1.8%, amounting to € 463.5million.Operating expenses stood at € 339.9 million,stable with respect to June 2011.More specifically, administrative expensesamounted to € 339.6 million, down by 2.6%and these include:- personnel costs, down by 1.1% to € 208.9million;- other administrative expenses amounted to €130.7 million (-4.9%); within this component,general expenses increased by 2.9%,while indirect taxes decreased by 24.6%,which, in the first half of 2011 included a €11.3 million one-off payment of substitutetaxes on leasing.Net provisions for risks and charges amountedto € 621 thousand (€ 1.7 million in June 2011;-63.8%).Net adjustments on property and equipmentamounted to € 30.3 million, up 8.3% in twelvemonths (€ 27.9 million in June 2011), in relationto continued investments. The cost/incomeratio fell to 55.5% from 62.5% in June 2011.49

OPERATING EXPENSES (thousands of euro)Change 1st half 2012 - 1st half 20111st half 2012 2011 1st half 2011 absolute %Personnel costs 208,915 403,613 211,250 - 2,335 -1.1Other administrative expenses 130,676 274,001 137,407 - 6,731 -4.9- general expenses 101,269 205,704 98,525 2,744 2.8- indirect taxes(1) 29,407 68,297 38,882 - 9,475 -24.4Net provisions for risks and charges 621 2,492 1,715 - 1,094 -63.8Net losses/recoveries on: 30,260 58,265 27,949 2,311 8.3- intangible assets 16,700 32,283 15,306 1,394 9.1- property and equipment 13,560 25,982 12,643 917 7.3Other operating expenses (income) - 30,616 - 68,547 - 40,027 9,411 -23.5Total operating expenses 339,856 669,824 338,294 1,562 0.5(1) The taxes recovered from the customers are recorded in item 220 “Other operating expense and revenues”.Other operating income fell by 23.5% to € 30.6million compared to the first half of 2011 in relationto the aforementioned loss of a one-offpayment in 2011 on the recovery of taxes fromleasing.OTHER OPERATING EXPENSES (INCOME) (thousands of euro)Change 1st half 2012 - 1st half 20111st half 2012 2011 1st half 2011 absolute %Lease income and rent 6,604 12,878 6,716 - 112 - 1.7Charges to third parties: 23,857 60,263 34,432 - 10,575 - 30.7- recovery of taxes (1) 23,828 60,203 34,401 - 10,573 - 30.7- customer insurance premiums 29 60 31 - 2 - 6.5Other income 14,037 26,320 11,720 2,317 19.8Total other income 44,498 99,461 52,868 - 8,370 - 15.8Operating expenses on financialleases - 2,860 - 1,106 - 522 - 2,338 …Ordinary maintenance expenseson investment property - 2,264 - 5,203 - 2,863 599 - 20.9Expenses for improvement ofthird parties’ assets - 543 - 1,044 - 476 - 67 14.1Other expenses - 8,215 - 23,561 - 8,980 765 - 8.5Total other expenses - 13,882 - 30,914 - 12,841 - 1,041 8.1Total net operatingexpenses (income) 30,616 68,547 40,027 - 9,411 -23.5(1) The item is composed of taxes recovered from the customers, the cost of which is recorded under sub-item 180 b) "Otheradministrative expenses" in the income statement.50

Income before tax from continuing operationsamounted to € 126 million (+5.4% comparedwith € 119.5 million in the first half of 2011).Tax on income from continuing operation,equal to € 33.4 million (€ 43.3 million in June2011), and profit attributable to minority interests,equal to € 2.3 million, net income pertainingto the Parent Company amounted to €90.2 million vs € 75.2 million in the first half of2011.Under the item taxes for the year, a total of €17.6 million was accounted for deriving fromthe possibility of deducting from IRES becauseof taxable income, for previous years, (set forthby art. 4, paragraph 12 of Decree Law16/2012 converted from Law 44/2012), thehigher IRAP paid due to the non-deductibilityof personnel costs from the latter tax.The total consolidated comprehensiveincome pertaining to the Parent Company,which includes income components chargeddirectly to shareholders’ equity, stood at €324.5 million, compared to € 105.6 million inthe first half of 2011.The rise is mainly a result of the increase in thefair value of financial assets available-for-salein the first half of the year, with particular referenceto debt securities issued by the ItalianGovernment and, to a lesser extent, (€ 26.2million), to the revaluation of the equity investmentin the Bank of Italy.DIVIDENDS DISTRIBUTED IN THEHALF-YEAR PERIOD BYPARENT COMPANYBANCA CARIGEDISTRIBUTION OF NET PROFITIn the first half, in line with Shareholders’ Meetingresolution of 27 April 2012, the ParentCompany distributed € 175,808,784.20,equal to the net profit achieved in the 2011financial year (€ 175,808,768.25) and the reservefor dividends on own shares (€ 15.95) asfollows:Net profit 175,808,768.25Reserve for dividends on own shares 15.95Total 175,808,784.20Allocation to the legal reserve 17,580,876.83Allocation to the extraordinary reserve 5,777,905.71Dividend of ordinary shares (0.07 € per share) 152,226,507.58Dividend of savings shares (0.0875 € per share) 223,494.08Dividend payment will take place starting on24 May 2012 (coupon detachment date 21May 2012.51

INSURANCE BUSINESSThe IAS income of the insurance Groupamounted to a negative € 2.3 million, downcompared to June 2011. This is due mainly tothe accounting of charges deriving from adhesionto the proposed exchange of Greek securities,so-called PSI (Private Sector Involvement),with a net negative effect of around € 28 million,partially offset by gains on sale on the securityportfolio. The premiums from insurance activities,net of reinsurance, amounted to € 513.5million, down by 21.3% compared to June2011; more specifically, net premiums fromnon-life business fell by 4.3% to € 304.8 million,while those from life business decreased from €337.6 million to € 211.1 million. The largestportion refers to the bank channel, which accountsfor 91.4% of the total, while the agencychannel recorded € 19.2 million.The net change in technical reserves stood at anegative € 112.6 million (down € 256 million inJune 2011) and net expenses from insurancemanagement came to € 79.3 million, comparedto € 86.8 million in June 2011. Technical reservesreached € 4,184 million, up 2.1% fromthe start of the year; the change related mainlyto the life business, with an increase of 2.7%(compared to December 2011), while technicalreserves in the non-life segment were stable withrespect to December 2011. Total technical reservescharged on reinsurers increased by11.1% compared to the end of the year (€171.9 million).52

PREMIUMS-RESERVES-ECONOMIC RESULT (1) (thousands of euro)Change %06/12 06/12Figures relative to the insurance group 30/06/2012 31/12/2011 30/06/2011 12/11 06/11Insurance management -64,533 -43,536 -34,523 86.9Premiums excluding reinsurance 513,527 1,194,021 652,502 - 21.3Life insurance 208,682 577,802 333,981 - 37.5recognised gross premiums (+) 211,106 585,779 337,610 - 37.5premiums ceded to reinsurers (-) 2,424 7,977 3,629 - 33.2Non-life insurance 304,845 616,219 318,521 - 4.3recognised gross premiums (+) 336,458 673,688 346,165 - 2.8premiums ceded to reinsurers (-) 25,332 63,569 22,274 13.7variations (+/-) to premium reserve gross balances -6,282 5,517 -7,983 - 21.3variations (-/+) to premium reserves charged on reinsurers 1 583 2,613 - 100.0Net variations to technical reserves -112,561 -354,247 -255,996 - 56.0Life insurance -112,561 -354,316 -255,996 - 56.0Non-life insurance - 69 - …Claims incurred and settled during the period -386,232 -723,636 -344,258 12.2Life insurance -228,444 -250,147 -109,232 …Non-life insurance -157,788 -473,489 -235,026 - 32.9Other insurance revenues and expenses -79,267 -159,674 -86,771 - 8.6Life insurance -8,956 -20,673 -11,232 - 20.3Non-life insurance -70,311 -139,001 -75,539 - 6.9Net income from financial management 79,192 107,238 67,622 17.1Other items in the income statement -16,317 -39,334 -18,319 - 10.9Gross profit -1,658 24,368 14,780 …Taxation -701 -12,859 -6,790 - 89.7Minority interests 8 57 -14 …Net profit -2,351 11,566 7,976 …Technical reserves 4,183,634 4,096,189 4,044,959 2.1 3.4Non-life insurance 876,779 876,756 890,069 0.0 - 1.5premium reserves 248,628 242,346 255,846 2.6 - 2.8accident reserves 627,547 633,806 633,550 - 1.0 - 0.9other reserves 604 604 673 - - 10.3Life insurance 3,306,855 3,219,433 3,154,890 2.7 4.8mathematical reserves 3,486,864 3,399,994 3,262,644 2.6 6.9reserves for amounts payable 9,640 8,351 6,708 15.4 43.7other reserves -189,649 -188,912 -114,462 0.4 65.7Technical insurance reserves reassured with third parties 171,892 154,748 155,301 11.1 10.7Non-life insurance 106,481 85,642 81,717 24.3 30.3premium reserves 13,151 10,486 13,272 25.4 - 0.9accident reserves 93,330 75,156 68,445 24.2 36.4other reserves - - - … …Life insurance 65,411 69,106 73,584 - 5.3 - 11.1mathematical reserves 65,155 69,492 73,203 - 6.2 - 11.0reserves for amounts payable 3,281 4,076 3,457 - 19.5 - 5.1other reserves -3,025 -4,462 -3,076 - 32.2 - 1.7(1) Figures are gross of relations with the companies belonging to the banking groupTRANSACTIONS WITH RELATED PARTIESThe Group maintains relations with BancaCarige shareholders who are able to exercise asignificant influence, subsidiaries and other relatedparties regulated at market conditions.During the half, a highly significant transactionwas entered into with subsidiary Carige AssicurazioniSpA, consisting of the renewal ofcontracts totalling € 145 million, excluded fromthe application of procedures pursuant to theRegulations governing transactions with relatedparties adopted by the Parent Company’s Boardof Directors in compliance with Consob resolutionno. 17221 of 12 March 2010.53

As at 30 June 2012, asset and liability transactions(with the exception of directors’ and statutoryauditors’ fees, which are published annuallyin the Explanatory Notes to the Consolidated FinancialStatements) were as follows:TRANSACTIONS WITH SHAREHOLDERS EXERCISING SIGNIFICANT INFLUENCE AND WITH INVESTEES (1) (thousands of euro)Shareholders, and their subsidiaries, able to exercisesignificant influence on the Parent Company (4)Subsidiaries outside the area of consolidationAssets Liabilities Guarantees Revenues Expense Dividends (2) (3)and commitments49,423 591 1,428 61,1767,004 5Companies subject to significant influence 4,278 494 280 41 363TOTAL 53,701 7,498 280 632 1,796 61,176(1) Relations with subsidiaries included in the area of consolidation were not taken into account.(2) Dividends collected by companies subject to significant influence netted off in the consolidation process were not shown.(3) Dividends distributed by Banca Carige.(4) Items "Other revenues" and "Expenses" include also components related to hedging derivatives and equalised trading signed with BPCE Group companies.TRANSACTIONS WITH OTHER RELATED PARTIES (thousands of euro)Assets Liabilities Guarantees Revenues Expense Purchase of assets Insurance Indemnitiesand commitments and services premiums and insuranceredemptions7,908 7,417 535 204 102 16 29 357,908 7,417 535 204 102 16 29 35Overall, the share of the total of transactionswith related parties is shown in the following table:WEIGHT OF THE TRANSACTIONS WITH RELATED PARTIES AS AT 30/06/2012 ( thousands of euro)Amount of thetransactions withrelated partiesAmount of balancesheet item% weightAssetsItem 70 - Loans to customers 57,167 26,710,668 0.2%Other asset items 4,442 20,624,124 0.0%LiabilitiesItem 20 - Due to customers 14,915 16,104,290 0.1%Other liability Items (1) - 27,802,918 0.0%Income statementItem 10 - Interest income 643 753,468 0.1%Item 20 - Interest expenses (1,542) (331,376) 0.5%Item 160 - Balance of other expenses/revenues from insurance management (+/-) (391) (569,342) 0.1%Other positive Items in the income statement 222 766,286 0.0%Other negative Items in the income statement (2) -16 (493,071) 0.0%(1) The weight is calculated on the other liability items, except for those referred to the shareholders' equity.(2) The weight is calculated on the other negative items, except for taxes and profit attributed to minority interests.Based on the new version of IAS 24 – Relatedparty disclosures – published in November 2009(EC Regulation no. 632/2010 of 19 July 2010)other related parties include:- executives with strategic responsibility for theentity and its Parent Company; this refers tothose who have the power and responsibility,directly or indirectly, for the management andcontrol of the Parent Company's activities, includingthe Directors, the Statutory Auditors,the Managing Director or the General Manager,Co-General Managers, the DeputyGeneral Managers and the Central Managers;- close relatives of one of the subjects referredto in the previous point; this refers to personsthat can be expected to influence, or be influencedby, the interested party in their relationswith the Group and therefore, by way ofexample, may include the common-lawspouse and persons dependent upon the interestedparty or upon the common-lawspouse;- subjects controlled or jointly controlled byone of the entities referred to in the previouspoints.54

EQUITY INVESTMENTS ANDINTANGIBLE ASSETS WITH ANINDEFINITE USEFUL LIFEEquity investments totalled € 62.8 million (€55.9 million in June 2011); these relate to Autostradadei Fiori, a company subject to a significantinfluence, valued according to the equitymethod and companies carried at cost such asBanca Carige Italia – incorporated with a paymentof € 7 million on 23 May 2012, in implementationof the Restructuring Project put inplace by the Parent Company – and minorcompanies over which a significant influence isexercised.ANNUAL CHANGES IN EQUITY INVESTMENTS (thousands of euro)1st half 2012 2011 1st half 2011A. Opening balance 53,885 54,994 54,994B. Additions 8,954 52 889B.1 Acquisitions 7,000 52 -B.3 Revaluations - - -B.4 Other changes 1,954 - 889C. Decreases - 1,161 30C1. Sales - 341 -C2. Value adjustments - 30 30C3. Other changes - 790 -D. Closing balance 62,839 53,885 55,853Goodwill booked to the financial statements asat 30 June 2012 amounted to € 1,780 million,of which € 1,767 million relating to bank CashFigures in thousands of euroGenerating Units (CGU) for which the book valuesused for the purposes of impairment testingare shown below:Residualgoodwill(a)Consolidated book valueMinorityinterests (*)(b)Total(c = a+b)Extra Liguria network 1,526,407 693,593 2,220,000Cassa di Risparmio di Savona SpA (CRS) 57,302 182,964 240,266Banca del Monte di Lucca SpA (BML) 42,331 50,494 92,825Cassa di Risparmio di Carrara SpA (CRC) 78,692 113,622 192,314Banca Cesare Ponti (BCP) 0 15,679 15,679TOTAL BANCA CARIGE 1,704,732 1,056,352 2,761,084(*) Minority interests of BML, CRC and BCP include the goodwill recorded in respective separate financialstatements respectively amounting to 62 million.The consolidated book value of said CGUsamounted to € 3 billion. The Extra-Liguria networkis composed of a perimeter which essentiallycoincides with the one that will be the objectof transfer to the newly formed companyBanca Carige Italia, as part of the Banca CarigeGroup’s Restructuring Project, for which the authorisationis expected to be received from theBank of Italy (see the chapter “significant eventsduring the half-year period”).IAS 36 requires the company to verify that intangibleassets with an indefinite useful life are notrecorded in the financial statements for a valuethat exceeds the recoverable value. This checkmust be performed at least once per year and, ifthere is evidence of impairment, at each financialstatement date.As at 30 June 2012, Banca Carige’s ManagementBodies conducted an analysis on possible55

impairment indicators, identifying the followingas such:• the worsening in the macroeconomic scenario;• uncertain prospects in the financial system;• the decrease in the price to book value –P/BV in the half (ratio of capitalisation toequity) of Carige’s share from € 0.72 to €0.52 (-27.8%). However, this value isamong the highest in the Italian bankingsystem and, net of the Bank of Italy valuationreserve, rises to € 0.65.In the presence of said indicators, impairmenttesting was carried out, the results of which confirmedthat the recoverable value of the individualCGUs was higher than the respective bookvalue charged to the financial statements.In support of said conclusions, the Bank requesteda fairness opinion from consultancy firmKPMG Advisory on the consistency and accuracyof the internal valuations. The fairness opinion,issued on 27 July 2012, confirmed the valuationsof the Bank.In light of said valuations, Banca Carige SpA’sBoard of Directors acknowledged the existenceof the values of the intangible assets recognisedin the financial statements (goodwill).Method used for the impairment testThe method used for the impairment test isbased on the Excess Capital version of the DividendDiscount Model (DDM). In said model, therecoverable value is equal to the current valueof cash flows distributable by each CGU, i.e. themaximum amount of dividends that can theoreticallybe distributed, in observance of givencapitalisation requirements (common equity ratio).Expressed by the formula:n( −k) (1 + g)( −n)W = ∑ Y ( 1 ) ( 1 )K 1 k+ Ke + Yn+ Ke=( Ke − g)where:W = recoverable valueY k = flow of dividends distributable in year k,calculated as the sum of net profits achieved inthe year, increased by the value of primary equityavailable and decreased by the capital requirement.Ke = cost of capitalg = rate of long-term growth of distributablecash flows, beyond the express forecast period.Assumptions and forecasts of the modelThe assumptions and forecasts forming the basisof the DDM concern:• the time span of the profitability valuation;• assumptions regarding growth in equityand economic volumes and interest rates;• the discount rate (Ke), the rate of perpetualgrowth (g) and the Common equity ratio.The time span is broken down into two subperiods:• a first sub-period for the analyticalevaluation of economic results, determinedby taking into account the equityvolumes and prices; said period is equalto five years for subsidiary bank CGUsand ten years for the CGUs of the Extra-Liguria bank branch network;• a subsequent sub-period – infinite – withreference to which the perpetual yieldvalue (terminal value) was determinedon the basis of the economic result ofthe last analytical evaluation year.For the Extra-Liguria bank branch network CGUas at 30 June 2012, an analytical valuationsub-period of ten years was used, rather than 5years as at the end of 2011. This time span appearsto be consistent with the business plannew company Banca Carige Italia intends topursue, a plan based on strong technologicalintegration of the physical channels currently inplace with the non-physical channels to be implemented(online banking, mobile banking, callcentre, other); said integration will require significantinvestments, the economic effects ofwhich will only be fully realised in the secondfive-year period of activities of the new bank.The growth assumptions relating to the equityand economic volumes and interest rates are assumedas follows:• for subsidiary banks, from Strategic Plans(2011-2014), updated to take account ofthe changed macroeconomic context;• for the Extra-Liguria branch network, fromthe Action Plan (2013-2017) which BancaCarige Italia sent to the Bank of Italy on29 May together with the request for theauthorisation to carry out banking activities.For years following the analytical valuation period,reference was made to:56

• the trend in equity volumes and interestrates, service revenues, staff costs andadministrative expenses envisaged by researchinstitute Prometeia in its most recentpublications, expressly up until2014, suitably supplemented for subsequentyears taking as a reference 2014data and adjusted on the basis of theactions management intends to undertake;• as regards the trend in credit risk, to aforecast for value adjustments, alwaysequal to 0.4% of the credit portfolio.The discount rate (cost of capital) is determinedas follows:Ke = Risk free interest rate + Equity risk premium* coefficient βwhere:• the risk free interest rate is equal to theaverage rate of return in the last twoyearperiod of the investments in Italianten-year Government bonds (5.25%);• the Equity risk premium is equal to themedian of risk premiums assumed by theequity analysts (5%);• the coefficient β, which represents thesystem risk sensitivity index (volatility ofthe bond) is equal to 0.85 (Source:Bloomberg).On the basis of these parameters, the cost ofcapital was 9.5%. However, in order to take accountof a possible worsening in market conditionsand provide a more precautionary valuation,an increase of 0.25% was applied, obtaininga Ke of 9.75%. This rate, used in the basicscenario of the valuation model, is contrastedwith the rate of 9% adopted in the same scenarioof the impairment test conducted in December2011.The cash flow relating to the terminal value wasnormalised, as at the end of 2011, to a constantrate of growth (g), equal to 2%.The Common equity ratio was fixed at 8% in thebasic scenario, both for the analytical valuationsub-period and the subsequent sub-period. Forthe impairment test carried out at the end of2011, the requirement was 7% in the analyticalvaluation sub-period and 8% afterwards.As at 30 June 2012, the basic valuation scenarioalso took into consideration – by discountingthem – the higher cash flows connected withthe off-balance sheet amortisation, over 18years, of the goodwill recorded and derivingfrom the acquisitions of business units, givendefinitely recoverable as per the legal provisionscontained in the recent SalvaItalia Decree inDecember 2011.Impairment testing resultsThe table below summarises the values testedand measurement of the differential – consistentlypositive - between the recoverable valueand the consolidated book value of the individualCGUs:Value of futurecash flows (a)Perpetualgrowth (b)Value in useTotal(c=a+b)% part.Carige (d)Value in useattributable(e = c*d)Minority interests(f)Consolidated book valueResidualgoodwill (g)Total(h=f+g)Delta(e-h)Extra Liguria network 1,120,695 1,337,902 2,458,597 100.0% 2,458,597 693,593 1,526,407 2,220,000 238,597Carisa 123,501 146,264 269,765 95.9% 258,708 182,964 57,302 240,266 18,442Carrara 64,825 165,098 229,923 90.0% 206,931 113,622 78,692 192,314 14,617BML 50,288 125,083 175,372 60.0% 105,223 50,494 42,331 92,825 12,398BCP 27,436 45,414 72,850 100.0% 72,850 15,679 0 15,679 57,171Total 1,386,745 1,819,762 3,206,507 3,102,308 1,056,352 1,704,731 2,761,083 341,225Thousands of euroIn order to best value the sensitivity of the impairmenttest, sensitivity analyses were also performedon the recoverable value, which acknowledge,with respect to the basic scenario,the following three pejorative hypotheses:• the increase of 50 basis points in thecost of capital to 10.25%;• the rise in the Common equity ratio to9%;• solely for the Extra-Liguria bank branchnetwork, in the second five-year period,a greater deceleration in growth rates –particularly loans – for which, in the lastanalytical valuation year, the increase innet profit came to 4%, compared to10.17%.57

Also in each of these more unfavourable scenarios,the recoverable values of the different CGUswere higher than those recorded in the financialstatements.Lastly, it should be noted that both the basicscenario and the sensitivity analyses did not prudentiallytake into account the additional benefitswhich are expected to derive from:• further positive tax effects related to theimplementation of the aforementionedRestructuring Project of the BancaCarige Group;• the authorisation to use, for all CGUs,the new Advanced Internal Rating Based(AIRB) model, for which ample documentationwas issued to the Bank of Italy,and the formal launch of the valuationprocess is pending, which couldlead to a significant reduction in RiskWeighted Assets – RWA;• the application, to the Risk Weighted Assetsof the individual CGUs, of a 25%discount set forth for banks belonging toa Banking Group (for the Extra-Liguriabank branch network CGU, after the RestructuringProject).Lastly, in relation to the reduced price of theCarige share and, therefore, the Bank’s level ofstock market capitalisation, it is believed that thevaluation of the market presents characteristicswhich differentiate it from a “fundamental”valuation represented, by contrast, by the valuein use.The latter aspect meets the requirements of ageneral approach, according to which the valueof an asset is a direct expression of the cashflows it is able to generate over its period of use.Therefore, said value is also based on the company’sinternal expectations and on specific synergiesthe company is able to generate. By contrast,market valuations are linked, in particular,to investors’ short-term or extremely short-termexpectations.TREASURY SHARES, STATEMENT OFCASH FLOW ANDSHAREHOLDERS’EQUITYAs at 30 June 2012, Banca Carige holds a portfoliothat contains 44 old ordinary shares withnominal values of Lire 10,000 thousand,equivalent to 228 current ordinary shares.The presence of these shares derives from theconversion of share capital to Euro, resolved bythe Extraordinary Shareholders’ Meeting on 6December 2001 and the subsequent fragmentationof capital: in fact, 6 ordinary nondematerialisedshares have still not been presentedfor conversion and, therefore, it has notbeen possible to fulfil the obligations set out inthe aforementioned resolution, which requires aminimum threshold of 50 shares.The Group absorbed liquidity of € 316 million inthe first six months. Operating assets generatedcash amounting to € 126.8 million. In particular,management generated a positive cash flowof € 246.3 million, financial activities absorbedliquidity totalling € 2,484.3 million, and financialliabilities generated cash amounting to €2,111.2 million. Liquidity absorbed by investmentactivities amounted to € 34.8 million, andthat absorbed by funding activity totalled €154.4 million.The consolidated shareholders' equity and thenet consolidated income pertaining to the ParentCompany are obtained from Banca Carige's netshareholders’ equity and income for the yearthrough the following changes:58

RECONCILIATION STATEMENT OF BANCA CARIGE SHAREHOLDERS'EQUITY AND INCOME AND CONSOLIDATED FIGURES(thousands of euro)Shareholders' equity of which profitBalance as at 30/06/2012 - Banca Carige 3,610,177 94,659Variations on book value -140,181 27,849Value adjustments to allocated gains -4,403 -382Share options survey - subsidiaries -10,845 -Amortised goodwill (previous accounting periods) -43,298 -Dividends distributed by subsidiaries and written off -32,917 -32,917Dividends distributed by associated companies and written off -409 -409Other -5,425 1,430Consolidated balance as at 30/06/2012 3,372,699 90,230RESOURCE MANAGEMENTThe Carige Group’s distribution system is splitinto traditional, remote and mobile channels.The traditional channels are made up bybranches, private and corporate consultancy districts,affluent advisors and small business advisors,based on a service specialisation modeltargeted at customers, which provides for themove, when possible and deemed useful, fromone type of general management of relationsinvolving an operating unit to personalisedmanagement of customers handled by specificadvisors.The personal financial advisory service, dedicatedto customers with the highest profile, isstructured on a total of 139 private banking advisorsand 340 affluent advisors.In addition to the personal financial consultancythere is company financial consultancy servicewhich associates commercial efficiency with acareful monitoring of the credit quality; there are151 corporate advisors, of which 6 Large Corporate,145 Mid Corporate, divided into 75teams, and 288 small business advisors.Remote channels include the ATM-Bancomatcash machines, the self-service Bancacontinuabranches and online services. ATM-Bancomatcash machines operating at the end of June2012 numbered 795, up compared to 781 inJune 2011, while the number of Bancacontinuacash machines remained unchanged at 19. Inorder to reduce the work load of the branchesand speed up the over-the-counter transactionsof current account holders, the Group has 152cash in machines set up for the paying in ofcash or cheques, distributed in 148 branches. Inthe branches involved, at the end of June, thepercentage transfer of migratable paymentsstood at 24.8%.The number of contracts for online services increasedfrom 298,038 to 353,193 (+18.5%).With regard to mobile channels, the Group hasa network of 437 insurance agencies (299 ofwhich also place bank products) locatedthroughout Italy (436 in June 2011).59

BRANCH NETWORKA) TRADITIONAL CHANNELS30/06/2012 31/12/2011 30/06/2011number %S number %S number %SNORTHWEST 387 57.2 387 57.2 386 57.6Liguria 254 37.5 254 37.5 254 37.9- Genoa 140 20.7 140 20.7 140 20.9- Savona 64 9.5 64 9.5 64 9.6- Imperia 29 4.3 29 4.3 29 4.3- La Spezia 21 3.1 21 3.1 21 3.1Lombardy 76 11.2 76 11.2 75 11.2Piedmont 56 8.3 56 8.3 56 8.4Valle d'Aosta 1 0.1 1 0.1 1 0.1NORTHEAST 75 11.1 75 11.1 75 11.2Veneto 46 6.8 46 6.8 46 6.9Emilia Romagna 29 4.3 29 4.3 29 4.3CENTRE 131 19.4 131 19.4 125 18.7Tuscany 85 12.6 85 12.6 79 11.8Latium 39 5.8 39 5.8 39 5.8Marches 5 0.7 5 0.7 5 0.7Umbria 2 0.3 2 0.3 2 0.3SOUTH AND ISLANDS 83 12.3 83 12.3 83 12.4Sicily 63 9.3 63 9.3 63 9.4Apulia 9 1.3 9 1.3 9 1.3Sardinia 11 1.6 11 1.6 11 1.6ABROAD: Nice (France) 1 0.1 1 0.1 1 0.1Total number of branches 677 100.0 677 100.0 670 100.030/06/2012 31/12/2011 30/06/2011Private consultants 139 142 140Corporate consultants 151 151 151Affluent consultants 340 327 320Small business consultants 288 291 287Total consultants 918 911 898B) REMOTE CHANNELS 30/06/2012 31/12/2011 30/06/2011ATM - Bancomat 795 790 781Self-service "Bancacontinua" branches 19 19 19On line services (1) 353,193 323,724 298,038C) MOBILE CHANNELS 30/06/2012 31/12/2011 30/06/2011Insurance agencies 437 431 436- of which: distributing banking products 299 297 292(1) Number of Internet banking and Call center contracts.At the end of June 2012, Group personnel totalled5,941 units (5,974 in December and6,013 in June 2011). There were 5,443 bankingemployees, down by 82 in the year. Executivesrepresented 1.5% of the aggregate andmanagers 26.5%, while the rest of the personnelaccounted for 72.1% of the aggregate.The number of employees operating on themarket stood at 71.7% of the total (71.9% inDecember and 71.5% in June 2011).Insurance personnel amounted to 498 units(493 and 488 as at December and June 2011,respectively).60

PERSONNELNumber of bank employees30/06/2012 31/12/2011 30/06/2011number % number % number %GradeExecutives 79 1.5 74 1.4 76 1.4Managers 1,441 26.5 1,363 24.9 1,391 25.2Other employees 3,923 72.1 4,044 73.8 4,058 73.4Total 5,443 100.0 5,481 100.0 5,525 100.0AssetsOffices (1) 1,541 28.3 1,538 28.1 1,574 28.5Market (1) 3,902 71.7 3,943 71.9 3,951 71.5Total Insurance personnel 498 493 488Total (banking and insurance) 5,941 5,974 6,013(1) Figures related to the previous periods have been reclassified based on a different criterion of allocation ofpersonnel absent from the service.General aspectsRISK MANAGEMENTAny policies related to the assumption of risksare set by the Parent Company’s Board of Directorswhen strategic planning and the annualbudget are prepared.The various risk categories are monitored by thecompetent functions of the Parent Company: Research,Strategic Planning, Risk Management,Credit Monitoring, Compliance (which containsthe anti-money laundering function) - and theoutcome is subject to periodic reporting to theBoard of Directors, the Asset & Liability ManagementCommittee and to the ICAAP (InternalCapital Adequacy Assessment Process) Committeeand to the Executive Management.The analyses are supported not only by regulatorymodels, but by more advanced methodologieswhich have made it possible, over time, toexpand the range of risks monitored and to improvethe assessment of the capital adequacy,from both a regulatory and a managerial perspective.The Parent Company performs orientation andsupervisory functions as regards all risks, in particularby managing, in an integrated context,the Pillar 1 and Pillar 2 risks, in accordance withthe provisions contained in the Supervisory Instructionsof the Bank of Italy (Circular No. 263dated 27 December 2006 and subsequent updates).The Group banks operate within specific limitsof independence and avail themselves of theirown supervisory structures.The Second Pillar regulations require the Banks,also through the use of proprietary procedures,to assess their current and future capital adequacy,expanding the range of risks to be takeninto account compared with the First Pillar.Carige carried out activities aimed at identifyingthe risks to which the Group is exposed, with regardto its own operations and reference marketsand were included within the perimeter ofanalysis for ICAAP purposes, as well as credit,market, operating, concentration (both the singlename and geo-sectorial components), interestrate, liquidity, insurance, reputational, strategicand residual risks, and those deriving fromsecuritisations.Then, the related assessment procedures - of aquantitative nature when measurement methodsare present, of a qualitative nature if related toorganisational controls - were defined. In therisk area, management activities, which aremostly already in place, were traced to an organicframework.With reference to the methods used, internalmodels for the quantification of the credit, marketand interest rate risks were used, togetherwith regulatory models for operating and concentrationrisk.The analyses related to the remaining risks wereperformed though the use of specific scorecardsaimed at using qualitative techniques to identifythe potential level of risk and the supervisionmeasures introduced.As regards capitalisation aspects and the hedgingof existing risk with its own capital means,the Group confirms its compliance with the expectedthresholds for all Bank of Italy ratios currentlyin force and calculated on the basis of Instructionsfor the compilation of reports on the61

egulatory capital and prudential coefficients(Bank of Italy circular no. 155 of 18 December1991), and new provisions of prudential supervisionfor banks (Bank of Italy circular no. 263of 27 December 2006).As regards the Bank of Italy Measure of 18 May2010: Regulatory Capital – Prudential filters 1 , ata meeting on 14 June 2010, the Board of Directorsresolved to exercise the option to applythe approach in accordance with annex a) of theProvision with application to the calculation ofregulatory capital starting with the one referredto 30 June 2010.The Group thus showed higher Total Capital Ratio(9.9%) Tier 1 Ratio (7.4%) and Core Tier 1Ratio (6.7%) indicators than the supervisory limits,and an excess capital of € 456.4 million,and it expects, also in the continuation of the financialyear, to maintain capitalisation levelsabove the supervisory limits.The analyses of the impacts on capital of thesecond pillar regulations confirm, increasing it,the solid capitalisation of the Group because theproprietary methods set up in this sector, albeitwith a prudential attitude, take into accountsome assets for which first pillar regulations imposeneutralisation in the regulatory capital: thisrefers specifically to controlling interests in insurancecompanies and to the portion of goodwillderiving from acquisitions made in recent years,deemed for all intents and purposes to be‘property and equipment’.This setup allows the implicit higher capitalisationof the Carige Group to fully emerge, ableto more than adequately cover all first and secondpillar risks, as well as the insurance risk in afinancial conglomerate context, both in case ofnormal business conditions and in case of stress.regulations, on 23 March 2012, Banca Carigeconverted the convertible bond to shares.The Group’s restructuring project will also allowCarige to show its capital strength more fully,also for the purposes of the capitalisation objectivesset out by the Basel Committee.From 1 January 2013 on, the new supervisoryregulations known as Basel 3 will progressivelytake effect.In order to comply as soon as possible with themore stringent capital requirements of the new1 This provision gives Banks, Stock Brokerage Firms and financialintermediaries registered in the “Special List” – limited to securitiesissued by central administrations of EU countries included in the“available for sale financial assets” (AFS) portfolio – the possibilityof adopting, for the purposes of determination of regulatory capital,an approach that makes provision for "fully neutralising bothcapital gains and losses, as if securities were valued at cost" - subapproacha) – as an alternative to the approach set out by the supervisoryprovisions in force – sub-approach b) – which providesfor “fully deducting capital losses from tier 1 capital and partiallyincluding capital gains in tier 2 capital, according to an “asymmetric"approach.62

BREAKDOWN OF CONSOLIDATED REGULATORY CAPITAL (1)(thousands of euro)Situation as at30/06/2012 31/12/2011 30/06/2011(2)positive elements (a) 3,787,233 3,770,208 3,470,074Share capital 2,203,550 2,203,511 1,813,628Reserves 371,764 337,441 457,602Share Premium Reserve 1,036,466 1,035,033 1,025,938Profit for the period 15,553 34,323 13,006Innovative equity instruments (h) 159,900 159,900 159,900Tier 1 capital: negative elements (b) 1,756,345 1,768,045 1,764,752Goodwill 1,676,581 1,688,281 1,686,571Other negative elements 79,764 79,764 78,181Prudential filters for regulatory capital (c) -186,903 -187,276 -113,847Deductions (d) 98,408 100,653 97,586Total Tier 1 capital (e = a-b+c-d) 1,745,577 1,714,234 1,493,889Core Tier 1 Capital (e-h) 1,585,677 1,554,334 1,333,989Tier 2 capital (f) 846,063 869,942 874,639Deductions (g) 252,697 252,697 340,485Regulatory capital (e+f-g) 2,338,943 2,331,479 2,028,043Tier 3 capital - - 27,651Portion not calculable as Tier 3 capital - - 16,323Regulatory capital including Tier 3 2,338,943 2,331,479 2,044,366Subordinated loans not calculable in the Tier 3 - - 11,328(1) Pending official regulatory figures to be disclosed, figures relating to weighted assets, capital requirements and ratios as at 30 June 2012 result from accountingand management estimates. Similarly, comparison figures as at 30 June 2011 differ from those originally published and resulting from estimates.(2) Figures as at 31/12/2011 are pro-formed taking into account the conversion of the convertible loan 'Banca Carige 4,75% 2010-2015 convertible with theoption of reimbursement in shares.(3) It is the portion of Lower Tier 2 subordinates exceeding the limit for the calculation of the Tier 2 capital.CONSOLIDATED REGULATORY CAPITAL AND SOLVENCY RATIOS(thousands of euro)Situation as at30/06/2012 31/12/2011 30/06/2011(2)Regulatory capitalCore Tier 1 Capital 1,585,677 1,554,334 1,333,989Tier 1 capital 1,745,577 1,714,234 1,493,889Regulatory capital including Tier 3 2,338,943 2,331,479 2,044,366Weighted assetsCredit risk 21,423,793 20,991,475 20,342,963Market risk 253,432 286,647 285,738Operational risk 1,854,775 1,854,775 1,841,225Other prudential requirements - - -Total weighted assets 23,532,000 23,132,897 22,469,925Capital requirementsCredit risk 1,713,903 1,679,318 1,627,437Market risk 20,275 22,932 22,859Operational risk 148,382 148,382 147,298Other prudential requirements - - -Total 1,882,560 1,850,566 1,797,594Subordinated loans covering market risks - - -Surplus capital 456,383 480,913 246,772RatiosCore Tier 1/Total Risk-Weighted Assets 6.7% 6.7% 5.9%Tier 1 capital/Total weighted assets 7.4% 7.4% 6.6%Regulatory capital including Tier 3 capital/Total weighted assets 9.9% 10.1% 9.1%(1) Pending official regulatory figures to be disclosed, figures relating to weighted assets, capital requirements and ratios as at 30 June 2012 resultfrom accounting and management estimates. Similarly, comparison figures as at 30 June 2011 differ from those originally published and resultingfrom estimates.(2) Figures as at 31/12/2011 are pro-formed taking into account the conversion of the convertible loan 'Banca Carige 4,75% 2010-2015 convertiblewith the option of reimbursement in shares.63

B. RisksCredit and counterparty riskThe risk measurement, management and controlprocess is carried out through the following activities:− Credit Risk Management, aimed at the strategicgovernance of the Group’s lending activities,through the monitoring of the portfolioquality on the basis of analyses regardingthe performance of the risk indicators fromrating sources (Probability of Default PD, LossGiven Default LGD and Exposure At DefaultEAD) and the timely verification of compliancewith the limits prescribed by the SupervisoryRegulations pertaining to concentrationand capital adequacy in view of the risks assumed.In fact, the Parent Company has developedinternal rating models on historicaldata with reference to the Retail segments(Private individuals and Small Businesses),Corporate (SME) and Large Corporate forthe determination of the PD, LGD and EAD.The Expected Loss (product of PD, LGD andEAD) is used as a parameter for the deliberationof loan approval procedures to counterpartsin the Retail, Corporate and Large Corporatesegments;− operational nature, aimed at overseeing thequality of the credit disbursed, by means ofdiversified action based on differentiated criteriaon the basis of the customer segment,the product type, etc., which envisage astandardised approach on the portions ofportfolio with greater fragmentation of therisk and targeted measures for the positionswhich, by size or pertinent segment, are includedwithin the core business of the Bank’slending activities.Market riskThis is measured on the securities and derivativesportfolio through the daily determination ofthe Value at Risk (VaR) in accordance with theMontecarlo approach, with a confidence intervalof 99% and a holding period of ten days. VaRanalysis is supplemented by daily monitoring ofprofitability profiles with the calculation of accruedinterests, profit and loss, and capitalgains/losses recognised on the financial instrumentsheld in the portfolio. The profitability determinedin this way is constantly compared withthe scenarios set out in the budget. The foreignexchange risk and the gamma and vega risk onoptions are calculated with the standard Bank ofItaly approach.Operational riskThe basic Bank of Italy approach is used, whichprovides for capital absorption equal to 15% ofthe average gross operating income of the lastthree years. Since its inception at the ABI’s initiative,the Group has participated in the DIPOConsortium (Database Italiano Perdite Operative,Italian Database of Operating Losses) andit defined a Business Continuity and Disaster Recoveryplan aimed at identifying critical processesand strategies to minimise their risks andthe correlated economic consequences, in orderto guarantee a timely resumption of operatingprocesses.Interest rate riskThe analysis of the interest rate risk is performedon a monthly basis with Gap analysis (with thethree methodologies of incremental gap, incrementalbeta gap and shifted beta gap), Durationanalysis and Sensitivity analysis techniques. Inaddition, at the consolidated level, the ParentCompany periodically monitors its exposure tointerest rate risk, in application of the standardSupervisory model.Concentration riskThis risk is quantified using the Herfindhal indexin accordance with the procedures provided bythe Bank of Italy, as regards the single nameapplication; as regards geo-sectorial concentrationrisk, reference is made to the method proposedby ABI and validated by the Bank of Italy.Liquidity riskA series of analyses are performed which areaimed at assessing the financial balance in boththe treasury items and at the structural level.Exposure to short term liquidity risk is assessedon the basis of instruments and methods (MaturityLadder and Stress Testing) set out in theGroup’s Liquidity Policy, which prescribes specificoperating limitations on the time bucketscalibrated using a stress test scenario.The medium/long–term liquidity risk is analysedby monitoring both asset and liability items maturingin the future and comparing them with thegrowth objectives set forth by strategic planning.In addition, on one hand, indicators have beendefined in terms of gap ratios on maturities beyondone year which place restrictions on the64

possibility of financing long-term assets withshort-term liabilities, consistent with the maturitytransformation limitation approach; on theother, a Contingency Plan was defined, approvedby the Board of Directors, which definesand describes the intervention strategies andprocesses in stress and crisis situations, the referenceorganisational structure and risk indicators,with the associated trigger points and calculationmethods.Reputational risk, strategic risk, risk onsecuritisations and residual riskRisk is analysed through the use of specificscorecards which assess the risk exposure aswell as the control processes and the existingmitigation instruments. In particular, reputationalrisk is assessed through certain indicators relatedto a variety of stakeholders (customers, shareholders,bond holders and employees) and ismitigated by providing organisational controls.Strategic risk is monitored through a scorecardwhich assesses aspects such as the extent of thedifference between forecasts and final results,the solidity of the market assumptions underlyingthe model, the ability to understand the impactof relevant normative drivers, as well as the riskof inadequate implementation of decisions. Securitisationtransaction risks are assessedthrough a qualitative investigation, with referenceto the monitoring of expected cash flowslinked to securitisation, entities involved in thetransaction and legal aspects. Finally, residualrisk is evaluated on the basis of qualitative opinionsprovided by different managers regardingthe process of acquisition, management, monitoringand enforcement of guarantees.In line with legal and supervisory regulations,and in compliance with the Code of Conduct forListed Companies, in order to ensure sound,prudent management which combines businessprofitability with a consistent assumption of risksand operations based on criteria of transparencyand correctness, the Parent Company set up aninternal control system (the “Internal ControlSystem or ICS”) suitable to continuously detect,measure and verify the typical risks of the company’sbusiness.From the operating point of view, the ICS includes3 levels of control:1. Line controls (1 st level) for the purpose of ensuringthe correct performance of operations;these are carried out by the operating structuresor included in the supporting IT procedures;2. Risk management controls (2 nd level) aimedat defining the methods for measuring riskand verifying compliance with the limits assignedto the various operating departments.These are assigned to structures other thanproductive departments: The Officer incharge of preparing the company’s accountingdocuments, Risk Management (which includesthe Ratings System Validation Office),Credit Monitoring, Planning and ManagementControl, Insurance Company Planningand Control, Compliance (which includes theAnti-Money Laundering Department);3. Internal Audit (3 rd level) is carried out by theInternal Audit departments (which are differentand independent from the productionstructures), and is aimed at controlling operationalregulatory and the performance ofrisks, monitoring compliance with internaland external regulations.The Internal Control System organisation is explainedin further detail in the “2010 Report oncorporate governance and ownership structures”available on the website www.gruppocarige.it.C. Risks of the insurance sectorThe operations of Group insurance companiesare subject to three distinct risk categories:− insurance risks, which are generated from thespecific activities of the insurer, which acts asan intermediary able to determine an assignmentand a subsequent reduction of therisk, through the professional centralisedmanagement of risks;− financial risks, generated by the managementof the investment portfolios of the Companies,comprised of real estate properties, securities,receivables of different types andother liquid assets;− operational risks, or possible losses, includingmissed opportunities, originating fromdeficiencies and/or inadequate performancesof processes and/or control systems, due toboth internal and external reasons.Insurance risks, result from the fact that insurancepolicies are characterised by the nonfinancialrisk that an uncertain event may occur.The uncertainty concerns the likelihood, timingand the seriousness of the occurrence of thatevent.65

Three sub-categories may be identified: assumedrisk, reserve risk and reinsurance risk.Assumed risk is linked to the underwriting of insurancepolicies, for which actuarial models areused to determine pricing needs and to monitorclaims. In addition, underwriting guidelines areissued along with rules for assumption limits foreach individual risk category. As regards the reserverisk, which represents the possibility thatthe actual amounts of claims and settlements tobe paid would exceed the book value of the insuranceliabilities, comprised of amounts registeredunder reserve, the Company constantlymonitors the development in the reserves relatedto claims occurred but not yet paid and thechanges in said reserves. For this purpose, independentactuaries are appointed to apply specialactuarial methods.With regard to reinsurance risks, after the definitionof self-retention levels, arrangements aremade to underwrite cover contracts for the mainbusiness lines, only with leading market counterparts,in order to mitigate the risk of insolvency.Financial risks affecting companies may be brokendown into credit risks, liquidity risks andmarket risks.The companies manage the credit risk levelthrough a careful and appropriate counterpartselection policy. Credit risks are inherent inloans to customers, receivables from reinsurers,in securities and other financial instruments includingderivative contracts.Loans to customers are managed through thedirect collection carried out by the intermediaries,the payments of which, made on a decadalbasis, are subject to careful supervision by thecentral and peripheral structures for the purposeof limiting the risk of insolvency.As regards receivables from reinsurers, thecounterparties are constantly monitored and theexposure limits are reviewed annually, in compliancewith the reinsurance policy outlined byManagement, in order to verify the credit standingof the reinsurer and any potential need tocarry out write-downs.With regard to securities and other financial instruments,the Boards of Directors of the Companiesdefined the limits of investment as regardsthe individual issuer based on the natureand on the rating of the counterparty and on thetype of instruments purchased.Finally, as regards derivative instrument transactions,the Insurance Companies operate incompliance with the provisions of the SupervisoryBody and in accordance with the resolutionsof the individual Boards of Directors. Derivativecontracts for hedging and for the effectivemanagement of investments are stipulatedwith counterparties of high standing and involvefinancial instruments with a high degree of liquidity.In any case, the Insurance Companiesdo not take any proprietary positions, except forthe derivatives implicit in the structured financialinstruments and for the derivatives – with exclusivelydefensive purposes – that may be connectedwith the unit- or index-linked policiesmarketed by Carige Vita Nuova.The company manages and minimises the liquidityrisk in the short-term by accurately managingthe incoming cash flows (premiums andother amounts collected), linking them to theoutgoing cash flows (settlements and other payments),whereas for long-term management, anALM (Asset Liability Management) system is beingimplemented, which will allow a comparativeanalysis between the incoming flows frominvestments and the expected maturities of theliability commitments (as of now, the incomingcash flow component has been completed whilethe part relating to the outgoing cash flows is inthe implementation phase).The Insurance Companies control the marketrisk through sensitivity analysis and stress testing,also conducting impairment tests for the purposeof identifying, where it may be objectively determined,the need for value adjustments.As regards specifically the activities of CarigeVita Nuova, in some cases there is a direct linkbetween investments and obligations towardsthe insured; in addition, certain types of Life insurancepolicies are subject to the minimumguaranteed interest rate risk; said risk is monitoredthrough specific Asset–Liability Management(ALM) models.For the management of operational risks, theRisk Management function has been implemented,with the definition of an operational informationcollection tool (database) in which thecompany risks subject to monitoring are assessed.They are attributed to different risk areasand company processes, and in addition, assigneda risk owner.This function is implementing the methods andanalyses aimed at obtaining a more efficient riskevaluation that conforms to the requirements ofSolvency Directive II which will come into forceon 31 October 2012 and makes provision, forinsurance companies and Groups, for: thechange of the capital requirement calculation66

method; different methods of calculation oftechnical reserves and of solvency requirements;amendments to the criteria for the admissibilityof assets for the hedging of reserves and theelements of available capital.As regards tax disputes please refer to the section‘significant events during the half-year period”included in the Report on Operations.RESULTS BYBUSINESS SEGMENTThe Carige Group’s business model is developedand analysed according to a dual dimension;the territorial, since the sales network isbroken down into the geographical areas Liguriaand the Extra Liguria dimension; and bycustomer segment, considering that the organisationaland sales structure makes provision forspecific service approaches (in terms of products,prices and infrastructures) aimed at the differenttypes of customer.In accordance with the management approachdefined by IFRS 8, the bank chose the territorymodel as a model of reference for segment reporting,which breaks down the results and theactivities into the following operating segments:- “Liguria”: operating customers atbranches of the Parent Company in thatgeographic area, together with the resultsof Cassa di Risparmio di Savona, prevalentlylocated in that area;- “Extra Liguria”: operating customers at thebranch banks of the Parent Company locatedin other regions, together with theresults of subsidiary banks located in thesegeographical areas (Cassa di Risparmiodi Carrara, Banca del Monte di Lucca andBanca Cesare Ponti);- “Other operating segments”: include remainingcustomers and the other Groupcompanies that perform asset management,insurance (life and non-life business),financial and instrumental activities;- “Netting and unallocated items”: remainingsegment explicitly envisaged in theregulations for reporting intra-group nettingand reconciliation items compared tothe accounting figures.This report will be integrated with a summary illustrationby customer segment of the incomestatement and balance sheet values.So as to allow a significant time-based comparison,the data for previous periods have beenreworked in line with current disclosure approaches.At the end of the first half of 2012 the results ofthe geographical operating sectors were as follows:- the Liguria network recorded an increasein values compared to the first six monthsof 2011: gross operating incomeamounted to € 250.3 million (+8.1% overthe first half of 2011; 44.9% of the Grouptotal), net income from financial and insurancemanagement totalled € 230.5million (up 6.2% over the first half of2011; 49.5% of the Group total) and operatingcosts came to € 116.1 million(+5.0% over the first half of 2011; 34.2%of the Group total). These figures are reflectedin profits from ordinary activities of€ 114.4 million (+7.3% compared to thefirst half of 2011) and a cost/income ratioof 46.4% (47.7% at the end of the firsthalf of 2011). With regards to volumes,loans to customers stood at € 11,944 million,+6.5% over 30 June 2011; due tocustomers totalled € 6,555 million (-0.5%); securities issued and financial liabilitiesdesignated at fair value amountedto € 4,478 million (+1.7%) indirect depositsamounted to € 11,035 million (-7.2%). On the whole, financial intermediationactivities totalled € 22,068 million(-3.6%).- the Extra-Liguria network achieved a grossoperating income of € 263.7 million, up12.8% over the first half of 2011, incomefrom financial and insurance managementtotalled 224.2 million (+17.2% over thefirst half of 2011) and operating costsamounted to € 162.8 million (up 9.0%over the first half of 2011): these figures67

contribute to a profit from ordinary activitiesof € 61.4 million, significantly higherthan the total in the first half of 2011(+46.7%). These increases highlight theimprovement in the performances of theExtra-Liguria network, in line with the provisionsof the Group’s current strategicplan, and allowed a cost-income ratio of61.7% to be reached, down compared to63.9% in the first half of 2011.As regards equity volumes, loans to customersamounted to € 12,058 million (-0.2%), due to customers came to € 6,212million (-4.3%), securities issuedamounted to € 3,138 million (+7.8%)and indirect deposits amounted to €8,937 million (-5.8%).Overall, financial intermediation activitiesamounted to € 18,288 million, a decreaseof -3.2% compared to 30 June2011.- the other operating segments showed agross operating income of € 72.9 million,income from financial and insurancemanagement amounted to € 38.7 millionand operating costs came to € 57.1 million(16.8% of the Group total). With referenceto equity totals, 51.1% of securitiesissued and financial liabilities of theGroup relate to the sector (€ 5,895 million,relating mainly to bond issues for theinstitutional market).Financial intermediation activitiesamounted to € 13,707 million (27.1% ofthe Group total) and include due to customersof € 3,749 million (mainly representedby borrowing repurchase agreements)and other financial assets amountingto € 4,063 million, attributable to theindirect deposits of Insurance Companies.68

Business geographic areas( thousands of euro)LiguriaOutsideLiguriaOtheroperatingsegmentsNetting-offand otheritemsTOTAL8.1% 12.8% -20.5% -24.4% 7.6%Net interest and other banking income (1) 500,650 527,380 145,890 -59,928 1,113,9921st half 2012 250,325 263,690 72,945 -29,964 556,9962011 year 485,182 490,830 180,934 -36,591 1,120,3551st half 2011 231,558 233,750 91,763 -39,643 517,4286.2% 17.2% -55.3% -26.0% 1.8%Net income from banking and insuranceactivities (2)461,055 448,340 77,443 -55,196 931,6421st half 2012 230,528 224,170 38,721 -27,598 465,8212011 year 451,627 408,575 121,516 -32,403 949,3151st half 2011 217,136 191,220 86,704 -37,281 457,7795.0% 9.0% -23.6% 6.7% 0.5%Operating expenses -232,163 -325,566 -114,265 -7,718 -679,7121st half 2012 -116,082 -162,783 -57,132 -3,859 -339,8562011 year -223,406 -303,385 -134,627 -8,406 -669,8241st half 2011 -110,515 -149,364 -74,798 -3,616 -338,2947.3% 46.7% -254.6% -23.1% 5.4%Income (Loss) before tax from continuingoperations228,892 122,774 -36,822 -62,914 251,9301st half 2012 114,446 61,387 -18,411 -31,457 125,9652011 year 228,221 105,190 -13,110 -40,809 279,4911st half 2011 106,620 41,855 11,906 -40,897 119,485Cost income (%) -1 -2 -3 -41st half 2012 46.4 61.7 78.3 61.02011 year 46.0 61.8 74.4 59.81st half 2011 47.7 63.9 81.5 65.4Net interbank30/06/2012 0 0 -5,114,601 -1,285,953 -6,400,55431/12/2011 -2,710,924 -1,224,970 -3,935,89430/06/2011 -465,203 -810,788 -1,275,9916.5% -0.2% -0.4% -4.1% 2.7%Loans to customers 726,511 -21,749 -14,090 23,553 714,22630/06/2012 11,944,155 12,057,858 3,256,367 -547,712 26,710,66831/12/2011 11,701,445 12,059,970 3,649,430 -524,901 26,885,94430/06/2011 11,217,644 12,079,606 3,270,457 -571,265 25,996,442-0.5% -4.3% 28.7% 14.5% 3.0%Due to customers (a) -35,055 -280,043 835,293 -52,070 468,12630/06/2012 6,554,918 6,212,356 3,748,967 -411,951 16,104,29031/12/2011 6,641,535 6,358,801 3,250,707 -331,441 15,919,60230/06/2011 6,589,973 6,492,399 2,913,673 -359,881 15,636,1641.7% 7.8% -13.8% 34.7% -9.1%Securities issued and financial liabilitiesdesignated at fair value through profit 75,270 227,871 -941,666 -511,123 -1,149,648and loss (3) (b)30/06/2012 4,478,280 3,137,713 5,895,141 -1,985,099 11,526,03531/12/2011 4,548,975 3,084,007 6,809,449 -1,922,146 12,520,28530/06/2011 4,403,010 2,909,842 6,836,807 -1,473,976 12,675,683-7.2% -5.8% 1.4% 5.6% -5.8%Other financial assets (c) -854,661 -552,227 56,887 -61,963 -1,411,96530/06/2012 11,035,204 8,937,462 4,062,580 -1,166,551 22,868,69531/12/2011 11,463,902 9,148,219 4,091,366 -1,132,327 23,571,16030/06/2011 11,889,865 9,489,689 4,005,693 -1,104,588 24,280,660-3.6% -3.2% -0.4% 21.3% -4.0%Financial Intermediation Activities (FIA)(d= a+b+c)-814,445 -604,398 -49,487 -625,156 -2,093,48730/06/2012 22,068,403 18,287,531 13,706,687 -3,563,601 50,499,02031/12/2011 22,654,412 18,591,027 14,151,522 -3,385,914 52,011,04730/06/2011 22,882,848 18,891,930 13,756,174 -2,938,445 52,592,507(1) Including income from insurance management(2) Including profits from equity investments and disposal of investments.(3) Carige Vita Nuova liabilities, designated at fair value and relating to products for which risk of the investment is borne by theinsured, are not included in this table.69

Business geographic areas(% on the total)LiguriaOutsideLiguriaOtheroperatingsegmentsNetting-offand otheritemsTOTALNet interest and other banking income (1)1st half 2012 44.9 47.3 13.1 -5.4 100.02011 year 43.3 43.8 16.1 -3.3 100.01st half 2011 44.8 45.2 17.7 -7.7 100.0Net income from banking and insuranceactivities (2)1st half 2012 49.5 48.1 8.3 -5.9 100.02011 year 47.6 43.0 12.8 -3.4 100.01st half 2011 47.4 41.8 18.9 -8.1 100.0Operating expenses1st half 2012 34.2 47.9 16.8 1.1 100.02011 year 33.4 45.3 20.1 1.3 100.01st half 2011 32.7 44.2 22.1 1.1 100.0Income (Loss) before tax from continuingoperations1st half 2012 90.9 48.7 -14.6 -25.0 100.02011 year 81.7 37.6 -4.7 -14.6 100.01st half 2011 89.2 35.0 10.0 -34.2 100.0Loans to customers30/06/2012 44.7 45.1 12.2 -2.1 100.031/12/2011 43.5 44.9 13.6 -2.0 100.030/06/2011 43.2 46.5 12.6 -2.2 100.0Due to customers (a)30/06/2012 40.7 38.6 23.3 -2.6 100.031/12/2011 41.7 39.9 20.4 -2.1 100.030/06/2011 42.1 41.5 18.6 -2.3 100.0Securities issued and financial liabilitiesdesignated at fair value through profitand loss (3) (b)30/06/2012 38.9 27.2 51.1 -17.2 100.031/12/2011 36.3 24.6 54.4 -15.4 100.030/06/2011 34.7 23.0 53.9 -11.6 100.0Other financial assets (c)30/06/2012 48.3 39.1 17.8 -5.1 100.031/12/2011 48.6 38.8 17.4 -4.8 100.030/06/2011 49.0 39.1 16.5 -4.5 100.0Financial Intermediation Activities (FIA)(d= a+b+c)30/06/2012 43.7 36.2 27.1 -7.1 100.031/12/2011 43.6 35.7 27.2 -6.5 100.030/06/2011 43.5 35.9 26.2 -5.6 100.0(1) Including income from insurance management(2) Including profits from equity investments and disposal of investments.(3) Carige Vita Nuova liabilities, designated at fair value and relating to products for which risk of the investment is borne by theinsured, are not included in this table.70

Net income from financial management1st half 2012Net income from financial management 201160.050.040.049.548.160.050.040.047.6 43.030.030.020.010.08.3-5.920.010.012.8-3.40.00.0-10.0LiguriaOutside Liguria Other operating Netting-off andsegments other items-10.0LiguriaOutside LiguriaOther operating Netting-off andsegments other itemsNet income financial management1st Q 201160.050.040.030.020.010.00.0-10.0-20.047.4 41.8Liguria18.9-8.1Outside LiguriaOther operating Netting-off andsegments other itemsBy contrast, with reference to customers served,private and affluent customers recorded a grossoperating income of € 84.1 million, down15.4% compared to the first six months of 2011,while operating costs totalled € 60.3 million, inturn down 12.1%; profit from ordinary activitiescame to € 23.8 million, down 22.8% comparedto 30 June 2012 and the cost/income ratiostood at 71.7% (69% at the end of the first sixmonths of 2011). As regards the trend in volumes,due to customers totalled € 5,762 million,up +1.5% compared to 30 June 2011, securitiesissued amounted to € 4,732 million (-1.5%)and other financial assets equalled € 14,617million (-5.9%). Financial intermediation activitiescame out at € 25,111 million (-3.5%) andrepresent 49.7% of the Group total.The Corporate segment closed the first half of2012 with a gross operating income of € 178.9million, up considerably compared to the firsthalf of 2011 (+32.6%). Operating costs totalled€ 59.6 million (up 10.2% over the first half of2011): therefore, profit from ordinary activitiesamounted to € 86.3 million, significantly higherthan the figure recorded in the first half of 2011(up 90.5%). The cost/income ratio stood at33.8% (40.1% at 30 June 2011). As regardsequity items, loans to customers amounted to €12,449 million, an increase of 5.4% comparedto 30 June 2011; these represent 46.6% of theaggregate at the Group level.The Retail segment closed the half with a grossoperating margin of € 203.6 million (up 1.3%over the first half of 2011), operating costs totalled€ 146.6 million (up 1.8%) and profit fromordinary activities came to € 30 million, down by15.5% over the first half of 2011. Thecost/income ratio stood at 72%. As regards balancesheet aggregates, loans to customers totalled€ 8,601 million (32.2% of the Group total),€ 4,881 million is owed to customers(30.3% of the Group total), securities issued andfinancial liabilities designated at fair value cameto € 983.6 million (8.5% of the Group total); indirectdeposits amounted to € 2,842 million(12.4% of the Group total) and Financial IntermediationActivities amounted to € 8,707 million(17.2% of the Group total).71

Customer segments( thousands of euro)Private andAffluent Corporate RetailTotal customersegmentsTotal financialstatements-15.4% 32.6% 1.3% 7.2% 7.6%Net interest and other banking income (1) 168,107 357,884 407,152 933,143 1,113,9921st half 2012 84,053 178,942 203,576 466,571 556,9962011 year 204,363 286,440 422,470 913,273 1,120,3551st half 2011 99,324 134,974 200,973 435,272 517,428-15.4% 46.8% -1.6% 7.5% 1.8%Net income from banking and insuranceactivities (2)168,099 291,816 353,098 813,013 931,6421st half 2012 84,049 145,908 176,549 406,506 465,8212011 year 203,930 218,601 376,538 799,069 949,3151st half 2011 99,326 99,377 179,436 378,139 457,779-12.1% 10.2% 1.8% -0.1% 0.5%Operating expenses -120,509 -119,134 -293,183 -532,826 -679,7121st half 2012 -60,254 -59,567 -146,592 -266,413 -339,8562011 year -130,205 -102,389 -288,282 -520,875 -669,8241st half 2011 -68,524 -54,058 -143,994 -266,575 -338,294-22.8% 90.5% -15.5% 25.6% 5.4%Income (Loss) before tax from continuingoperations47,590 172,682 59,915 280,187 251,9301st half 2012 23,795 86,341 29,957 140,093 125,9652011 year 73,725 116,213 88,256 278,194 279,4911st half 2011 30,803 45,320 35,442 111,565 119,485-3.3% -2.4% -0.8% -1.3% -0.6%Number of customers -6,992 -434 -6,787 -14,213 -7,0551st half 2012 205,384 17,894 872,112 1,095,390 1,134,2022011 year 208,468 18,267 877,111 1,103,846 1,135,9131st half 2011 212,376 18,328 878,899 1,109,603 1,141,257Profit per customer (figures in euro)1st half 2012 115.9 4,825.1 34.42011 year 353.7 6,361.9 100.61st half 2011 145.0 2,472.7 40.3Cost income (%) 2.7 - 6.80.4 - 4.1 -4.41st half 2012 71.7 33.3 72.0 57.1 61.02011 year 63.7 35.7 68.2 57.0 59.81st half 2011 69.0 40.1 71.6 61.2 65.48.9% 5.4% 5.5% 5.6% 2.7%Loans to customers 48,635 639,405 451,226 1,139,265 714,22630/06/2012 596,357 12,448,869 8,600,988 21,646,214 26,710,66831/12/2011 594,792 12,252,966 8,724,066 21,571,824 26,885,94430/06/2011 547,722 11,809,464 8,149,763 20,506,949 25,996,4421.5% -7.8% -1.1% -0.8% 3.0%Due to customers (a) 84,432 -126,055 -56,246 -97,869 468,12630/06/2012 5,762,361 1,487,593 4,881,384 12,131,338 16,104,29031/12/2011 5,684,129 1,512,516 4,983,573 12,180,218 15,919,60230/06/2011 5,677,929 1,613,649 4,937,629 12,229,207 15,636,164-1.5% -7.5% -26.3% -6.9% -9.1%Securities issued and financial liabilitiesdesignated at fair value through profit -72,039 -12,259 -351,804 -436,103 -1,149,648and loss (3) (b)30/06/2012 4,732,042 150,677 983,589 5,866,308 11,526,03531/12/2011 4,850,231 165,594 984,048 5,999,873 12,520,28530/06/2011 4,804,082 162,936 1,335,393 6,302,411 12,675,683-5.9% -11.8% -9.8% -6.8% -5.8%Other financial assets (c) -917,452 -108,477 -308,180 -1,334,108 -1,411,96530/06/2012 14,616,703 812,927 2,841,704 18,271,334 22,868,69531/12/2011 14,922,825 966,815 2,945,777 18,835,417 23,571,16030/06/2011 15,534,155 921,403 3,149,884 19,605,442 24,280,660-3.5% -9.1% -7.6% -4.9% -4.0%Financial Intermediation Activities (FIA) (d= a + b + c)-905,059 -246,791 -716,229 -1,868,079 -2,093,48730/06/2012 25,111,107 2,451,196 8,706,677 36,268,980 50,499,02031/12/2011 25,457,184 2,644,925 8,913,398 37,015,507 52,011,04730/06/2011 26,016,165 2,697,988 9,422,906 38,137,059 52,592,507(1) Including income from insurance management(2) Including profits from equity investments and disposal of investments.(3) Carige Vita Nuova liabilities, designated at fair value and relating to products for which risk of the investment is borne by the insured, are notincluded in this table.72

SUBSEQUENT EVENTSOn 16th July, as part of the review of the ratingsof Italian banks following the downgrading ofthe rating of Italian Government bonds,Moody’s lowered Carige’s long-term rating from“Baa2” to “Baa3” and its short-term rating from“P-2” to “P-3”. The bank financial strength rating(BFSR) was confirmed at “D+”. The outlookremains negative.73

THE PARENT COMPANY AND SUBSIDIARIES74

THE PARENT COMPANY:FINANCIAL STATEMENTS AND EXPLANATORY NOTESFinancial highlightsBALANCE SHEET (1)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Total assets 40,878,431 38,475,355 35,507,224 6.2 15.1Financial Intermediation Activities (FIA) (a+b) 44,991,754 46,181,236 46,471,213 -2.6 -3.2- Direct deposits (a) 26,178,752 26,775,861 26,375,631 -2.2 -0.7* Due to customers 14,264,074 13,966,699 13,666,225 2.1 4.4* Securities issued 11,058,416 11,906,543 11,435,151 -7.1 -3.3* Financial liabilities designated at fair value through profit and loss 856,262 902,619 1,274,255 -5.1 -32.8- Indirect deposits (b) 18,813,002 19,405,375 20,095,582 -3.1 -6.4- Assets under management 7,853,143 7,863,223 8,443,457 -0.1 -7.0- Assets under administration 10,959,859 11,542,153 11,652,125 -5.0 -5.9Loans to customers (2) (3) 23,562,411 23,722,184 22,927,991 -0.7 2.8Securities portfolio (4) 10,071,891 7,668,721 6,795,989 31.3 48.2Share capital and reserves 3,515,518 3,024,566 3,717,953 16.2 -5.4INCOME STATEMENT (1)Net interest and other banking income 456,613 858,249 428,767 6.5Net income from banking activities 378,864 749,948 378,206 0.2Income (loss) before tax from continuing operations 115,035 237,350 117,342 -2.0Net income (loss) 94,659 175,809 83,666 13.1RESOURCES (5)Number of branches 560 560 557 - 0.5Staff 4,546 4,577 4,616 -0.7 -1.5FINANCIAL RATIOSOperating expenses / Net interest and other banking income 57.8% 59.7% 60.8%Income (loss) before tax from continuing operations/Share capital and reserves 3.3% 7.8% 3.2%ROE 2.69% 5.81% 2.25%ROE (6) 2.59% 5.41% 2.58%ROAE (7) 2.89% 5.28% 2.28%ROAE (6) (7) 2.74% 5.45% 2.60%REGULATORY RATIOS (8)Total weighted assets (1) 20,662,428 20,315,041 19,816,823 1.7 4.3Core Tier 1 ratio 12.0% 9.2% 10.0%Tier1 ratio 13.0% 10.3% 11.1%Total capital ratio 16.1% 13.5% 14.8%(1) Figures in thousands of euro.(2) Before value adjustments.(3) Net of debt securities classified as L&R.(4) The aggregate includes Balance Sheet items 20 (net of 229,863 thousand derivatives as at 30 June 2012), 30, 40, 60 (only the portion relating to L&R) and70 (only the portion relating to L&R).(5) Statistics of the end of period.(6) Net of the AFS reserve (item 130 of balance sheet liabilities).(7) Net profit on average shareholders' equity (Return On Average Equity).(8) The figures as at 06/30/2012 result from accounting and management estimates pending the consolidated official disclosure.75

1. Financial statements as at 30 June 2012ASSETS ( thousands of euro)Change30/06/2012 31/12/2011absolute %10 -CASH AND CASH EQUIVALENTS 227,368 551,888 -324,520 -58.820 -FINANCIAL ASSETS HELD FOR TRADING 300,306 259,010 41,296 15.940 -FINANCIAL ASSETS AVAILABLE-FOR-SALE 8,452,390 6,036,795 2,415,595 40.060 -DUE FROM BANKS 4,346,642 3,819,310 527,332 13.870 -LOANS TO CUSTOMERS 22,892,505 23,119,985 -227,480 -1.080 -HEDGING DERIVATIVES 190,291 154,046 36,245 23.5100 -INVESTMENTS IN ASSOCIATES AND COMPANIESSUBJECT TO JOINT CONTROL 1,170,177 1,163,171 7,006 0.6110 -PROPERTY AND EQUIPMENT 680,787 676,948 3,839 0.6120 -INTANGIBLE ASSETS 1,594,284 1,597,031 -2,747 -0.2of which:- goodwill 1,526,407 1,526,407 - -130 -TAX ASSETS 717,778 704,565 13,213 1.9a) current 111,610 59,659 51,951 87.1b) deferred 606,168 644,906 -38,738 -6.0150 -OTHER ASSETS 305,903 392,606 -86,703 -22.1TOTAL ASSETS 40,878,431 38,475,355 2,403,076 6.25LIABILITIES AND SHAREHOLDERS' EQUITY (thousands of euro)Change30/06/2012 31/12/2011absolute %10 -DUE TO BANKS 8,680,367 5,981,455 2,698,912 45.120 -DUE TO CUSTOMERS 14,264,074 13,966,699 297,375 2.130 -SECURITIES ISSUED 11,058,416 11,906,543 -848,127 -7.140 -FINANCIAL LIABILITIES HELD FOR TRADING 184,230 187,178 -2,948 -1.650 - FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUETHROUGH PROFIT AND LOSS 856,262 902,619 -46,357 -5.160 -HEDGING DERIVATIVES 1,195,304 1,087,832 107,472 9.980 -TAX LIABILITIES 274,855 270,013 4,842 1.8(a) current 31,184 36,407 -5,223 -14.3(b) deferred 243,671 233,606 10,065 4.3100 -OTHER LIABILITIES 424,946 640,700 -215,754 -33.7110 -EMPLOYEE TERMINATION INDEMNITIES 60,318 60,818 -500 -0.8120 -ALLOWANCES FOR RISKS AND CHARGES: 269,482 271,123 -1,641 -0.6a) post employment benefits 250,067 250,143 -76 -0.0b) other allowances 19,415 20,980 -1,565 -7.5130 -VALUATION RESERVES (136,212) (224,540) 88,328 -39.3150 -EQUITY INSTRUMENTS 1,173 15,772 -14,599 -92.6160 -RESERVES 453,024 429,665 23,359 5.4170 -SHARE PREMIUM RESERVE 1,020,314 1,013,277 7,037 0.7180 -SHARE CAPITAL 2,177,219 1,790,392 386,827 21.6200 -NET INCOME (LOSS) 94,659 175,809 -81,150 -46.2TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 40,878,431 38,475,355 2,403,076 6.2576

INCOME STATEMENT (thousands of euro)Change 6 months 2012 - 6 months 20116 months 2012 6 months 2011 absolute %10 - INTEREST AND SIMILAR INCOME 588,706 468,441 120,265 25.720 - INTEREST AND SIMILAR EXPENSE (329,901) (226,715) -103,186 45.530 -INTEREST MARGIN 258,805 241,726 17,079 7.140 - FEE AND COMMISSION INCOME 155,681 137,594 18,087 13.150 - FEE AND COMMISSION EXPENSE (26,827) (15,050) -11,777 78.360 -NET FEE AND COMMISSION INCOME 128,854 122,544 6,310 5.170 - DIVIDEND AND SIMILAR INCOME 37,488 47,274 -9,786 -20.780 - PROFITS (LOSSES) ON TRADING 9,349 16,124 -6,775 -42.090 - FAIR VALUE ADJUSTMENTS IN HEDGE ACCOUNTING (1,591) (3) -1,588 …100 - PROFITS (LOSSES) ON DISPOSAL OR REPURCHASE OF: 21,363 2,051 19,312 …a) loans (132) (435) 303 -69.7b) financial assets available-for-sale 20,612 3,468 17,144 …d) financial liabilities 883 (982) 1,865 …110 - PROFITS (LOSSES) ON FINANCIAL ASSETS AND LIABILITIESDESIGNATED AT FAIR VALUE 2,345 (949) 3,294 …120 -NET INTEREST AND OTHER BANKING INCOME 456,613 428,767 27,846 6.5130 - NET LOSSES/RECOVERIES ON IMPARMENT (77,749) (50,561) -27,188 53.8a) loans (59,860) (46,341) -13,519 29.2b) financial assets available-for-sale (18,048) (2,370) -15,678 …d) other financial activities 159 (1,850) 2,009 …140 -NET INCOME FROM BANKING ACTIVITIES 378,864 378,206 658 0.2150 - ADMINISTRATIVE EXPENSES: (269,826) (280,255) 10,429 -3.7a) personnel expenses (166,225) (170,275) 4,050 -2.4b) other administrative expenses (103,601) (109,980) 6,379 -5.8160 - NET PROVISIONS FOR RISKS AND CHARGES (277) (694) 417 -60.1170 - NET ADJUSTMENTS TO/RECOVERIES ON PROPERTY ANDEQUIPMENT (9,134) (8,734) -400 4.6180 -NET ADJUSTMENTS TO/RECOVERIES ON INTANGIBLE ASSETS (13,872) (13,217) -655 5.0190 - OTHER OPERATING EXPENSES (INCOME) 29,282 42,062 -12,780 -30.4200 -OPERATING EXPENSES (263,827) (260,838) -2,989 1.1210 - PROFITS (LOSSES) ON INVESTMENTS IN ASSOCIATES ANDCOMPANIES SUBJECT TO JOINT CONTROL - (29) 29 -100.0240 - PROFITS (LOSSES) FROM DISPOSAL OF INVESTMENTS (2) 3 -5 …250 -INCOME (LOSS) BEFORE TAX FROM CONTINUINGOPERATIONS 115,035 117,342 -2,307 -2.0260 - TAXES ON INCOME FROM CONTINUING OPERATIONS (20,376) (33,676) 13,300 -39.5270 -INCOME (LOSS) AFTER TAX FROM CONTINUINGOPERATIONS 94,659 83,666 10,993 13.1290 -NET INCOME (LOSS) 94,659 83,666 10,993 13.177

STATEMENT OF COMPREHENSIVE INCOME(thousands of euro)1st half 2012 1st half 2011 Change 1st half 2012 / 1st half 2011absolute %10 NET INCOME (LOSS) 94,659 83,666 10,993 13.1Other comprehensive income (net of tax)20 Financial assets available-for-sale 111,800 14,005 97,795 …60 Cash flow hedges (23,471) 13,014 -36,485 …110 Total other comprehensive income (net of tax)88,329 27,019 61,310 …120 TOTAL COMPREHENSIVE INCOME (captions 10 + 110) 182,988 110,685 72,303 65.378

2. Trading activitiesIn examining the figures regarding the financialintermediation activities of the Parent Company,consider that in accordance with Law262/2005, starting from 2006, Banca Carigedecided to be the unique bond issuer of theGroup, entrusting the placement activity to allthe subsidiaries; subsequently, to avoidproblems connected with maturitytransformation, Carige’s Board of Directorsdecided to hedge the medium/long-termfinancial requirements of subsidiary banksthrough the issue of its bonds by thesubsidiaries, subscribed by Carige.FINANCIAL INTERMEDIATION ACTIVITIES ( thousands of euro)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Total (A+B) 44,991,754 46,181,236 46,471,213 -2.6 -3.2Direct deposits (A) 26,178,752 26,775,861 26,375,631 -2.2 -0.7% on Total 58.2 58.0 56.8Due to customers 14,264,074 13,966,699 13,666,225 2.1 4.4current accounts and free deposits 11,013,495 11,046,822 11,018,288 -0.3 -0.0repurchase agreements 2,907,827 2,486,693 2,293,959 16.9 26.8term deposits 8,327 9,492 4,839 -12.3 72.1loans 4,930 2,255 2,162 … …funds managed on behalf of third parties - - - … …other deposits 329,495 421,437 346,977 -21.8 -5.0Securities issued 11,058,416 11,906,543 11,435,151 -7.1 -3.3bonds 10,983,450 11,822,269 11,345,470 -7.1 -3.2other securities 74,966 84,274 89,681 -11.0 -16.4Financial liabilities designated at fair value throughprofit and loss 856,262 902,619 1,274,255 -5.1 -32.8bonds 856,262 902,619 1,274,255 -5.1 -32.8short term 14,138,632 13,824,646 13,500,413 2.3 4.7% on Total 54.0 51.6 51.2medium-long term 12,040,120 12,951,215 12,875,218 -7.0 -6.5% on Total 46.0 48.4 48.8Indirect deposits (B) 18,813,002 19,405,375 20,095,582 -3.1 -6.4% on Total 41.8 42.0 43.2 -0.5 -3.3- Assets under management 7,853,143 7,863,223 8,443,457 -0.1 -7.0Mutual funds 3,682,577 3,771,181 4,232,907 -2.3 -13.0Assets management 394,098 399,100 446,883 -1.3 -11.8Bancassurance products 3,776,468 3,692,941 3,763,667 2.3…0.3…- Assets under administration 10,959,859 11,542,153 11,652,125 -5.0 -5.9Government securities 4,430,908 4,422,768 4,211,257 0.2 5.2Bonds 1,411,351 1,569,449 1,718,509 -10.1 -17.9Shares 1,041,716 1,440,776 1,690,837 -27.7 -38.4Other 4,075,884 4,109,160 4,031,522 -0.8 1.1The aggregate of the Financial IntermediationActivities on behalf of customers – direct andindirect deposits – totalled € 44,991.8 million,down by 2.6% and 3.2% in the six-month andtwelve-month periods, respectively. Excludingbonds issued by the bank and placed bysubsidiaries, financial intermediation activitiesfell by 2.7% from December and 3.4% fromJune 2011. Direct deposits decreased by 2.2%from December 2011 and 0.7% from June2011. Excluding bonds issued by the bank andplaced by subsidiaries, direct deposits fell by2.5% and 1% respectively.79

The short-term component, accounting for 54%of the total, amounts to € 14,138.6 million, up2.3% in the half and 4.7% in twelve months.Medium/long-term deposits, equal to €12,040.1 million, fell by 7% during the half andby 6.5% during the year, accounting for 46% ofthe total (48.4% as at December and 48.8% asat June 2011).Within direct deposits, due to customers totalled€ 14,264.1 million (+2.1% and +4.4% in sixand twelve months respectively). Bonds (down7.1% in six months, affected by the conversion,in March 2012, of € 394 million of the “BancaCarige 4.75% 2010-2015 convertible bondwith option of redemption in shares” (“BancaCarige 4,75% 2010-2015 convertibile confacoltà di rimborso in azioni"); -3.2% over twelvemonths) accounted for almost all securitiesissued, totalling € 11,058.4 million (down 7.1%and 3.3% respectively in six and twelve months).Financial liabilities designated at fair valuethrough profit and loss (€ 856.3 million) fell by5.1% in the half and 32.8% YoY.Indirect deposits totalled € 18,813 million, downby 3.1% in the half and 6.4% in the year.Assets under management came to € 7,853.1million, stable when compared to December2011, but down 7% over June 2011. Withinindirect deposits, mutual funds amounted to €3,682.6 million (-2.3% in the last half; down13% in twelve months), assets managed totalled€ 394.1 million (down 1.3% in the last half;down 11.8% in twelve months) andbankassurance products came to € 3,776.5million (up 2.3% in the last half; +0.3% intwelve months).Assets under administration totalled € 10,959.9million, down by 5% in the half and 5.9% in theyear; in particular, Government bonds increasedto € 4,430.9 million (+0.2% and +5.2%, in thesix-month and twelve-month periodsrespectively), while both bonds (€ 1,411.4million; -10.1% and -17.9% in the six-monthand twelve-month periods respectively), andshares (€ 1,041.7 million; -27.7% and -38.4%in six and twelve months) decreased. The item“Other”, equal to € 4,075.9 million, refersalmost entirely to assets under administration ofinsurance companies, down in the three-monthperiod (-0.8%) and up in the twelve-monthperiod (+1.1%).LOANS (1) (thousands of euro)Situation as atChange %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Loans to customers (A) 22,826,283 23,053,175 22,315,066 - 1.0 2.3- Gross exposure (2) 23,562,411 23,722,184 22,927,991 - 0.7 2.8current accounts 2,690,314 2,729,169 2,695,902 - 1.4 - 0.2repurchase agreements 1,099,711 1,457,057 1,403,343 - 24.5 - 21.6mortgage loans 12,197,854 12,226,907 11,800,391 - 0.2 3.4credit cards, personal loans andsalary-backed loans 119,634 135,108 153,812 - 11.5 - 22.2leasing 854,319 826,925 810,762 3.3 5.4factoring 179,284 188,780 199,019 - 5.0 - 9.9other loans 3,840,450 3,940,542 3,756,813 - 2.5 2.2impaired assets 2,580,845 2,217,696 2,107,949 16.4…22.4…-short term 6,261,129 6,348,939 6,437,665 - 1.4 - 2.7% on nominal value 26.6 26.8 28.1 -0.7-medium/long term 16,009,696 16,195,944 15,398,119 - 1.1 4.0% on nominal value 67.9 68.3 67.1 -0.5- Bad loans 1,291,585 1,177,301 1,092,207 9.7 18.3% on nominal value 5.5 5.0 4.8 10.5-Value adjustments (-) 736,128 669,009 612,925 10.0 20.1(1) Net of debt securities classified as L&R amounting to 66,222 thousands of euro as at 30 June 2012.(2) Before value adjustments.Cash loans to customers, net of valueadjustments for € 736.1 million, amounted to €22,826.3 million, down by 1% on December2011 (+2.3% in the twelve-month period). This80

figure does not include debt securities classifiedas L&R.Before adjustments, the aggregate amounted to€ 23,562.4 million, marking a 0.7% decrease insix months and up 2.8% in twelve months.Net of repurchase agreements with financialcompanies (amounting to € 1,099.7 million inJune 2012 compared to € 1,457.1 million inDecember and € 1,403.3 million in June 2011)the total stood at € 22,462.7 million, up by0.9% in six months and 4.4% in twelve. Thegrowth in loans to customers confirms thetraditional support both to businesses and tohouseholds, in whose favour the Bank has alsoundertaken significant steps aimed atovercoming the challenging economic situation.Personal loans (26.7% of total loans) decreasedby 0.5% in twelve months (-1.7% in the half);loans to companies amounted to 58% of thetotal and, compared with June 2011, increasedby 3% (+1.7% in the half).The short-term component, equal to 26.6% ofthe total, amounted to € 6,261.1 million, downby 1.4% in six months and 2.7% in twelvemonths. In particular, current accounts totalled €2,690.3 million (-1.4% in the half and stable inthe year). The medium-long term componentamounted to € 16,009.7 million (-1.1% sinceDecember and +4% in the twelve-month period)and accounts for 67.9% of the total. Within thiscomponent, mortgage loans stood at €12,197.8 million (stable when compared toDecember 2011 and up 3.4% since June2011), mainly increasing in the businesssegment.The trend in consumer credit – credit cards,personal loans and salary backed loans – feltthe effects, as of 1 July 2008, of the placementactivities of subsidiary Creditis Servizi FinanziariSpA; if we include loans granted by Creditis,consumer credit rises by 7.7% in six and 16.3%in twelve months.Bad loans totalled € 1,291.6 million (+9.7%since December and +18.3% in twelve months)accounting for 5.5% of total loans, higher thanthe 5% recorded in December and 4.8% in June2011; this trend is essentially in line with that ofthe banking System.CREDIT QUALITY (1) (thousands of euro)30/06/2012 31/12/2011Grossexposure (a)Valueadjustments (b)Netexposure (a-b)%Grossexposure (a)Valueadjustments (b)Netexposure (a-b)%b/ab/aCash loansBad loans 1,291,585 587,486 704,099 45.5 1,177,301 535,450 641,851 45.5- customers 1,291,585 587,486 704,099 45.5 1,177,301 535,450 641,851 45.5Watchlist loans 793,719 78,664 715,055 9.9 695,392 69,269 626,123 10.0- banks 16,991 872 16,119 5.1 16,691 872 15,819 5.2- customers 776,728 77,792 698,936 10.0 678,701 68,397 610,304 10.1Rescheduled loans 134,432 10,142 124,290 7.5 123,238 2,824 120,414 2.3- customers 134,432 10,142 124,290 7.5 123,238 2,824 120,414 2.3Past due loans 378,100 8,979 369,121 2.4 238,456 6,647 231,809 2.8- customers 378,100 8,979 369,121 2.4 238,456 6,647 231,809 2.8Total Impaired loans 2,597,836 685,271 1,912,565 26.4 2,234,387 614,190 1,620,197 27.5Performing loans 23,829,253 51,729 23,777,524 0.2 23,807,958 55,691 23,752,267 0.2- banks 2,847,687 - 2,847,687 - 2,303,470 - 2,303,470 -- customers 20,981,566 51,729 20,929,837 0.2 21,504,488 55,691 21,448,797 0.3Total cash loans 26,427,089 737,000 25,690,089 2.8 26,042,345 669,881 25,372,464 2.6- banks 2,864,678 872 2,863,806 0.0 2,320,161 872 2,319,289 0.0- customers 23,562,411 736,128 22,826,283 3.1 23,722,184 669,009 23,053,175 2.8Endorsement loansImpaired 21,165 4,716 16,449 22.3 22,020 5,222 16,798 23.7- customers 21,165 4,716 16,449 22.3 22,020 5,222 16,798 23.7Other loans 1,582,883 6,691 1,576,192 0.4 1,602,126 6,344 1,595,782 0.4- banks 45,482 - 45,482 - 46,776 - 46,776 -- customers 1,537,401 6,691 1,530,710 0.4 1,555,350 6,344 1,549,006 0.4Total endorsement loans 1,604,048 11,407 1,592,641 0.7 1,624,145 11,566 1,612,579 0.7- banks 45,482 - 45,482 - 46,775 - 46,775 -- customers 1,558,566 11,407 1,547,159 0.7 1,577,370 11,566 1,565,804 0.7Total 28,031,137 748,407 27,282,730 2.7 27,666,490 681,447 26,985,043 2.5- banks 2,910,160 872 2,909,288 0.0 2,366,936 872 2,366,064 0.0- customers 25,120,977 747,535 24,373,442 3.0 25,299,554 680,575 24,618,979 2.7(1) Net of debt securities classified as L&R, amounting to as at 30 June 2012 to 1,482,836 thousands of euro (due from banks) and to 66,222thousands of euro (loans to customers).Impaired cash and endorsement loans amounted to € 2,619 million, up by 16.1% from81

December. A total of 99.4% of these relate toordinary customers; the corresponding valueadjustments stand at € 690 million (+11.4% insix months), representing a coverage level ofabout 26.3%.Cash loans to customers amounted to €2,580.8 million (+16.4% from December);endorsement loans came to € 21.2 million (-3.9% in six months).As regards cash loans to customers, thefollowing should be highlighted:− bad loans amounted to € 1,291.6 million,up 9.7% in the half; they were written down−by 45.5% (as in December);watchlist loans totalled € 776.7 million, upby 14.4% in the half. They were writtendown by 10% (10.1% in December);− rescheduled loans amounted to € 134.4million, up by 9.1% in the half. They werewritten down by 7.5% (2.3% in December);− past due loans amounted to € 378.1million, up 58.6% compared to December2011; given that the majority of these relateto loans secured by mortgage guarantees,the increase recorded in the first half waslargely due to the elimination, effective as of1 January 2012, of the 180 day limit for theclassification in the aggregate of unsecuredpast due or borderline loans, whosequalification threshold was lowered to 90days of continuous delay. These positionswere written down by 2.4% (2.8% inDecember).Impaired endorsement loans amounted to €21.2 million, down by -3.9% in the six-monthperiod, and were written down by 22.3% (23.7%as at December).Overall, value adjustments on cash andendorsement loans amounted to € 747.5million, € 736.1 million of which refers to cashloans and € 11.4 million of which refers toendorsement loans.SECURITIES PORTFOLIO (thousands of euro)Situation as atChange %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11Debt securities 8,918,465 6,558,115 5,646,034 36.0 58.0Held for trading 51,324 51,222 172,165 0.2 -70.2Available for sale 7,318,083 4,940,062 4,265,167 48.1 71.6Loans & Receivable 1,549,058 1,566,831 1,208,702 -1.1 28.2Held to maturity - - - …Equities 1,037,399 1,006,320 1,036,719 3.1 0.1Held for trading 3 4 148 -25.0 -98.0Available for sale 1,037,396 1,006,316 1,036,571 3.1 0.1Shares in CIS 116,027 104,286 113,236 11.3 2.5Held for trading 19,116 13,869 15,151 37.8 26.2Available for sale 96,911 90,417 98,085 7.2 -1.2Total (1) 10,071,891 7,668,721 6,795,989 31.3 48.2of which:Held for trading 70,443 65,095 187,464 8.2 -62.4Available for sale 8,452,390 6,036,795 5,399,823 40.0 56.5Loans & Receivable 1,549,058 1,566,831 1,208,702 -1.1 28.2(1) Balance sheet items 20 (net of derivatives as at 30 June 2012 amounting to 229,863 thousands), 30, 40, 60 (only for the part relative to L&Rs amounting to 1,482,836 thousands ofeuro) and 70 (only for the part relative to L&Rs amounting to 66,222 thousands ) are included in the aggregate.The securities portfolio amounted to € 10,071.9million, up by 31.3% since December and48.2% in the twelve-month period, also by virtueof the purchase of Government bonds. Theportfolio is made up by around 88.5% of debtsecurities, up by 36% since December and 58%in the twelve-month period, primarily due toinvestments made in Italian Government bondsclassified as “available for sale”. Equities rose by3.1% since December and were essentiallystable over twelve months; shares in UCITS grewby 11.3% in the six-month period and 2.5% inthe twelve-month period. Equities available forsale included the equity investment of 3.96% inthe Bank of Italy, accounted for at € 875.5million; this figure results from a valuation at fairvalue - using shareholders’ equity as the mostreliable proxy of fair value – performed on thebasis of the balance sheet data of the Bank ofItaly as at 31 December 2011 (last approvedfinancial statements), consistent with theaccounting principle adopted for thepreparation of the financial statements of theBank and of the consolidated financialstatements of the Banca Carige Group as at 31December 2011. The effects of this valuation atfair value were sterilised by a valuation reserveof the same amount, net of deferred taxes.82

As regards the breakdown set forth byinternational accounting standards (IAS/IFRS),Available-for-sale securities (AFS) stood at €8,452.4 million, accounting for 83.9% of theportfolio, up 40% in six months and 56.5% intwelve months; securities held for trading (HFT)totalled € 70.4 million, accounting for 0.7% ofthe portfolio.Within the AFS securities, the ItalianGovernment Bonds amounted to € 6,659.4million, equal to around 79% of the aggregate;in detail, Treasury bills were equal to € 1,196.4million, long-term treasury bonds to € 4,473.1million, treasury credit certificates to € 245.6million and zero coupon treasury bills € 744.3million.Assets deriving from Loans and Receivables(L&R) amounted to € 1,549.1 million, downslightly compared to December (-1.1%) and up28.2% over June 2011; they are mainlycomposed of the bonds of subsidiary banks.83

3. Income statement resultsAs at 30 June 2012, the income statementposted a net profit of € 94.7 million against €83.7 million in the first half of 2011 (+13.1%).Interest margin amounted to € 258.8 million, up7.1% due to larger investments in securities.In detail, interest and similar income grew by25.7% to € 588.7 million. The componentregarding the interest accrued on loans tocustomers (which includes also the interestmargin on financial assets sold but notderecognised) is up 14.7% to € 424.7 millionand that regarding due from banks increasedfrom € 21.9 million in June 2011 to € 28.2million in June 2012 (+29.1%). Interest marginon the securities component (AFS, HFT)amounted to € 133.2 million, almost double thefigure recorded in June 2011.Interest and similar expense (€ 329.9 million),registered an increase of 45.5% in relation, inparticular, to the increase in due to customers(+64.5%), due to banks (up from € 17.3 millionin June 2011 to € 43.8 million in June 2012)and securities issued (up 21.8% to € 189.1million).INTEREST AND SIMILAR INCOME (thousands of euro)Change 12/11 - 12/10 1st half 12 - 1st half 111st half 2012 2011 1st half 2011 absolute %Financial assets held for trading 918 5,437 3,703 -2,785 -75.2Financial assets available-for-sale 132,246 159,631 69,869 62,377 89.3Due from banks (1) 28,234 47,067 21,863 6,371 29.1Loans to customers (1) 424,714 788,103 370,436 54,278 14.7Other assets 2,594 7,782 2,570 24 0.9Total interest and similar income 588,706 1,008,020 468,441 120,265 25.7(1) This item includes interest income on the L&R credit component.INTEREST AND SIMILAR EXPENSE (thousands of euro)Change 12/11 - 12/10 1st half 12 - 1st half 111st half 2012 2011 1st half 2011 absolute %Due to banks 43,815 45,194 17,273 26,542 …Due to customers 67,607 96,444 41,104 26,503 64.5Securities issued 189,008 343,310 155,143 33,865 21.8Financial liabilities designated at fair value 9,269 20,255 10,132 -863through profit and loss-8.5Other liabilities 1,253 484 97 1,156 …Hedging derivatives 18,949 11,460 2,966 15,983 …Total interest and similar expense 329,901 517,147 226,715 103,186 45.5Net fee and commission income amounted to €128.9 million, an increase of 5.1% over theyear.Fee and commission income amounted to €155.7 million, up 13.1% compared to June2011. Fee and commission income from themaintenance and management of currentaccounts increased, but said income from thedistribution of third party services fell.Fee and commission expense rose by 78.3% to€ 26.8 million, due to the increase in expensesfrom management and intermediation services,particularly for guarantees received in relation torefinancing transactions at the ECB.84

FEE AND COMMISSION INCOME (thousands of euro)Change 12/11 - 12/10 1st half 12 - 1st half 111st half 2012 2011 1st half 2011 absolute %Guarantees issued 8,286 15,779 7,071 1,215 17.2Management, intermediation and consultancy services: 39,535 82,687 41,818 -2,283 -5.51. Financial instruments trading 638 827 286 352 …2. Currency trading 1,136 2,704 1,407 -271 -19.33. Assets management 2,065 4,818 2,261 -196 -8.74. Securities custody and administration 1,229 2,417 1,048 181 17.36. Placement of securities 15,233 30,800 16,082 -849 -5.37. Collection of orders 4,511 8,988 4,307 204 4.78. Consultancy services 2 12 7 -5 -71.49. Distribution of third-party services 14,721 32,121 16,420 -1,699 -10.3- portfolio management 713 1,303 641 72 11.2- insurance products 6,108 14,712 7,826 -1,718 -22.0- other products 7,900 16,106 7,953 -53 -0.7Collection and payment services 27,217 55,485 26,704 513 1.9Servicing for securitizations 1,890 3,012 1,498 392 26.2Factoring services 760 2,004 1,004 -244 -24.3Maintenance and management of the current accounts 61,392 94,627 47,44713,945 29.4Other services 16,601 28,724 12,052 4,549 37.7Total fee and commission income 155,681 282,318 137,594 18,087 13.1FEE AND COMMISSION EXPENSE (thousands of euro)Change 12/11 - 12/10 1st half 12 - 1st half 111st half 2012 2011 1st half 2011 absolute %Guarantees received 9,763 514 192 9,571 …Management and intermediation services 3,905 5,199 2,549 1,356 53.21. Financial instruments trading 41 97 33 8 24.23. Portfolio management 417 1,080 440 -23 -5.24. Securities custody and administration 632 1,285 506 126 24.95. Placement of financial instruments 2,815 2,737 1,570 1,245 79.3Collection and payment services 8,105 16,625 7,593 512 6.7Other services 5,054 9,779 4,716 338 7.2Total fee and commission expense 26,827 32,117 15,050 11,777 78.3Dividend and other similar income came to €37.5 million (down 20.7%). The profit ontrading was € 9.3 million, compared with € 16.1million recorded in June 2011.The positive impacts on debt securities(+11.2%) should be noted.PROFIT (LOSSES) ON TRADING (thousands of euro)Change 12/11 - 12/10 1st half 12 - 1st half 111st half 2012 2011 1st half 2011 absolute %Debt securities 2,201 2,322 1,980 221 11.2Equities & collective investment schemes 697 137 118 579 …Total debt securities, equities & collectiveinvestment schemes 2,898 2,459 2,098 800 38.1Financial derivatives (16,334) 11,130 32,760 (49,094) …Credit derivatives 1,368 1,120 1,010 358 35.4Currency differences 19,459 9,039 (21,548) 41,007 …Other financial assets/liabilities from trading 1,958 3,091 1,804 154 8.5Total profit (losses) on trading 9,349 26,839 16,124 (6,775) -42.0Profit/loss from the disposal or repurchase ofloans and financial assets/liabilities is positivefor a total amount of € 21.4 million (€ 2.1million as at 30 June 2011), primarily due tofinancial assets available for sale (€ 20.6million) and the repurchase of financial liabilities(€ 0.9 million).Net interest and other banking incomeamounted to € 456.6 million, an increase of6.5% compared to June 2011.Net losses on impairment of loans and otherfinancial items totalled € 77.7 million, up by+53.8% over June 2011. This item includeslosses on impairment of loans of € 59.9 million,up by 29.2% over June 2011, and those onfinancial assets available for sale amounted to €18 million.85

NET LOSSES/RECOVERIES ON IMPAIRMENT OF LOANS AND OTHER FINANCIAL ITEMS(thousands of euro)Change 12/11 - 12/10 1st half 12 - 1st half 111st half 2012 2011 1st half 2011 absolute %Due from banks - (4) (8) 8 -100.0Loans to customers 59,860 92,821 46,349 13,511 29.2Credit commitments (other financial transactions)…(159) 2,246 1,850 -2,009Financial assets available-for-sale 18,048 13,238 2,370 15,678 …Total net losses/recoveries onimpairment of loans and other financialitems 77,749 108,301 50,561 27,188 53.8Therefore, the net income from bankingactivities amounted to € 378.9 million, up by0.2% in the twelve-month period.Operating expenses amounted to € 263.8million, up by 1.1% compared to June 2011.In detail, administrative expenses amounted to €269.8 million, down by 3.7% over the twelvemonthperiod and within these:- personnel costs fell by 2.4% to € 166.2million);- other administrative expenses amounted to €103.6 million (down 5.8%), due to the factthat the first half of 2011 included thesubstitute tax on leasing contracts whoserecovery from customers is shown underitem 190 “Other operating income(expenses)”.Net provisions for risks and charges amountedto € 0.3 million, down 60.1% compared to June2011.Net losses on property and equipment and onintangible assets amounted to € 23 million, anincrease of 4.8% in the twelve-month period.OPERATING EXPENSES (thousands of euro)Change 12/11 - 12/10 1st half 12 - 1st half 111st half 2012 2011 1st half 2011 absolute %Personnel costs 166,225 321,986 170,275 -4,050 -2.4Other administrative expenses 103,601 219,404 109,980 -6,379 -5.8- general expenses 79,832 161,956 76,206 3,626 4.8- indirect taxes(1) 23,769 57,448 33,774 -10,005 -29.6Net provisions for risks and charges 277 812 694 -417 -60.1Net losses/recoveries on: 23,006 45,674 21,951 1,055 4.8- intangible assets 13,872 28,064 13,217 655 5.0- property and equipment 9,134 17,610 8,734 400 4.6Other operating expenses (income) (29,282) (75,330) (42,062) 12,780 -30.4Total operating expenses 263,827 512,546 260,838 2,989 1.1(1) The taxes recovered from the customers are recorded in item 190 “Other operating expense and revenues”.Other operating income fell by 30.4%,amounting to € 29.3 million given that the firsthalf of 2011 also included recoveries ofsubstitute tax paid on leasing contracts whosecost was shown under item 150 b “Otheradministrative expenses”.86

OTHER OPERATING EXPENSES (INCOME) (thousands of euro)Change 12/11 - 12/10 1st half 12 - 1st half 111st half 2012 2011 1st half 2011 absolute %Lease income and rent 2,814 5,322 2,650 164 6.2Charges to third parties: 19,433 51,010 29,638 -10,205 -34.4recovery of taxes (1) 19,408 50,957 29,611 -10,203 -34.5customer insurance premiums 25 53 27 -2 -7.4Other revenues 16,526 35,194 15,775 751 4.8Total other income 38,773 91,526 48,063 -9,290 -19.3Operating costs on financial leases (2,860) (1,106) (522) -2,338 …Ordinary maintenance costs on investment (368) (756) (848) 480 -56.6Expenses for improvement of third parties’ assets (332) (657) (307) -25 8.1Other expenses (5,931) (13,677) (4,324) -1,607 37.2Total other expenses (9,491) (16,196) (6,001) -3,490 6,001 58.2 100.0Total net operating expenses (income) 29,282 75,3306 00142,062 -12,780 -30.4(1) The item is composed of taxes recovered from the customers, the cost of which is recorded under sub-item 150 b) "Other administrative costs" inthe income statement.Taking into account taxes on income fromcontinuing operation of € 20.4 million, net profitstood at € 94.7 million, up 13.1% compared to€ 83.7 million in the first half of 2011.Under the item taxes for the year, a total of € 14million was accounted for deriving from thepossibility of deducting from IRES taxableincome, for previous years, (set forth by art. 4,paragraph 12 of Decree Law 16/2012), thehigher IRAP paid due to the non-deductibility ofstaff costs from the latter tax.The total comprehensive income, which includesthe income components charged directly toshareholders’ equity, was a positive € 183million, compared to a positive result of € 110.7million in June 2011. The increase derivesmainly from the increase in the fair value ofavailable-for-sale financial assets in the first halfof 2012.87

4. Relations with related partiesAsset and liability transactions with shareholderswho are able to exercise a significant influence,with investee companies (subsidiaries subject toa significant influence) and with other relatedparties as at 30 June 2012 were as follows:RELATIONS WITH SHAREHOLDERS AND WITH INVESTEE COMPANIES (thousands of euro)30/06/2012Assets Liabilities Guarantees Dividends Other revenues Expenseand commitments distributedCARIGE SHAREHOLDERS WHO EXERCISE ASIGNIFICANT INFLUENCE 49,423 - - 61,176 575 1,428Fondazione Cassa di Risparmio di Genova e Imperia 49,423 - - 61,176 575 1,42830/06/2012Assets Liabilities Guarantees Dividends Other revenues Expenseand commitments collectedSUBSIDIARIES 2,951,040 957,799 20,277 31,370 59,469 20,610Cassa di Risparmio di Carrara SpA 642,828 137,011 1,880 4,184 7,828 4,393Cassa di Risparmio di Savona S.p.A. 921,689 128,304 2,240 11,889 9,324 3,221Banca del Monte di Lucca SpA 466,018 60,099 2,326 1,397 6,729 997Banca Cesare Ponti SpA 381,655 188,046 478 4,872 3,481 2,619Banca Carige Italia SpA - 7,004 - - - 5Carige Asset Management Sgr SpA 6,690 8,976 - 1,035 12,354 395Centro Fiduciario SpA 872 1,160 - 327 341 280Argo Finance One Srl 15 12 - - 5 -Argo Mortgage Srl 7 12 - - 5 -Argo Mortgage 2 Srl 17 11 - - 5 -Priamar Finance Srl 15 12 - - 5 -Columbus Carige Immobiliare SpA 4,541 11 - - 141 -Carige Vita Nuova SpA 3,537 392,010 - - 6,169 8,444Carige Assicurazioni SpA 28,324 11,077 11,645 - 2,748 184Assi 90 Srl 16 3,546 - - 3 11Dafne Immobiliare Srl 118 1,002 - - - -IH Roma Srl 139 1,833 - - - -Creditis Servizi Finanziari SpA 494,525 17,653 1,708 7,666 10,321 61Carige Covered Bond Srl 29 10 - - 5 -Carige Covered Bond 2 Srl 5 10 - - 5 -ENTITIES SUBJECT TO SIGNIFICANT INFLUENCE 3,389 494 280 332 41 7Autostrada dei Fiori SpA and subsidiaries 3,389 72 51 332 41 7Sport e Sicurezza Srl - 380 229 - - -Nuova Erzelli Srl - 42 - - - -Total 2,954,429 958,293 20,557 31,702 59,510 20,617(1) Items "Other revenues" and "Expenses" include also components related to hedging derivatives and equalised trading.RELATIONS WITH OTHER RELATED PARTIES (thousands of euro)Assets Liabilities GuaranteesandcommitmentsRevenues Expense Purchase ofgoods andservicesOther related parties 7,890 7,076 535 204 102 16TOTAL 7,890 7,076 535 204 102 16For the definition of other related parties, please referto the paragraph "Transactions with related parties”in the Explanatory Notes to the CondensedConsolidated Half-yearly Financial Statements.88

5. Regulatory capitalREGULATORY CAPITAL AND SOLVENCY RATIOS (1)(thousands of euro)Situation as at30/06/2012 31/12/2011 30/06/2011Regulatory capitalCore Tier 1 Capital 1,858,715 1,406,247 1,490,751Tier 1 capital 2,018,615 1,566,147 1,650,651Tier 2 capital 815,126 835,641 887,291less: deductions -339,213 -339,213 -340,485Total capital 2,494,529 2,062,575 2,197,457Tier 3 capital - - -Tier 3 calculable portion - - -Regulatory capital including Tier 3 2,494,529 2,062,575 2,197,457Weighted assetsCredit risk 18,895,339 18,502,868 17,989,010Market risk 172,398 217,483 246,368Operational risk 1,594,690 1,594,690 1,581,444Other prudential requirements - - -Total weighted assets 20,662,428 20,315,041 19,816,823Capital requirementsCredit risk 1,511,627 1,480,229 1,439,121Market risk 13,792 17,399 19,709Operational risk 127,575 127,575 126,516Other prudential requirements - - -Capital reduction by 25% 413,249 406,301 396,336Total requirements 1,239,746 1,218,902 1,189,009Surplus capital 1,254,783 843,673 1,008,447RatiosCore Tier 1/ 75% Total Risk-Weighted Assets 12.0% 9.2% 10.0%Tier 1 capital/ 75% Total weighted assets 13.0% 10.3% 11.1%Regulatory capital including Tier 3 capital/ 75% Total weighted assets 16.1% 13.5% 14.8%(1) Pending official regulatory figures to be disclosed, figures relating to weighted assets, capital requirements and ratios as at 30June 2012 result from accounting and management estimates. Similarly, comparison figures as at 30 June 2011 differ from thoseoriginally published and resulting from estimates.89

SUBSIDIARY BANKSIt should be noted that, in 2006, the ParentCompany decided to be the only bond issuer,leaving only placement activity to the otherbanks of the Group: consequently, subsidiarybanks do not take account of bonds placed withcustomers in direct deposits, but in indirectdeposits, especially in the assets underadministration segment.In this context, in order to maintain a balanceddistribution of maturities, subsidiary banks issuebonds fully subscribed by the Parent Companyand recognised in direct deposits.For bank subsidiaries these transactions resultedin a higher amount of assets underadministration and bonds and a decrease ininterbank liabilities.90

CASSA DI RISPARMIO DI SAVONA ( thousands of euro)Situation as atChange %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11BALANCE SHEETTotal assets 1,991,696 1,914,913 1,817,823 4.0 9.6Direct deposits (a) 1,337,585 1,386,240 1,229,069 -3.5 8.8Indirect deposits (b) 1,768,891 1,804,439 1,849,634 -2.0 -4.4- Assets under management 644,468 646,864 694,936 -0.4 -7.3- Assets under administration 1,124,423 1,157,575 1,154,698 -2.9 -2.6Financial Intermediation Activities (FIA) (a+b) 3,106,476 3,190,679 3,078,703 -2.6 0.9Loans to customers (1) 1,573,815 1,506,796 1,452,093 4.4 8.4Securities portfolio 331,131 310,770 186,278 6.6 77.8Share capital and reserves 178,607 176,369 176,600 1.3 1.1INCOME STATEMENTNet interest and other banking income 38,831 66,976 31,448 23.5Net income from banking activities 36,003 60,151 27,686 30.0Income (loss) before tax from continuing operations 17,772 21,187 8,074 …Net income (loss) for the period 12,177 13,254 4,443 …RESOURCESNumber of branches 50 50 50 - -Staff 333 334 341 -0.3 -2.3(1) Before value adjustments.The Financial intermediation activities (FIA) ofCassa di Risparmio di Savona SpA, amounted to€ 3,106.5 million, down 2.6% compared to theend of 2011 and rose by 0.9% compared toJune 2011. Direct deposits amounted to €1,337.6 million, down by 3.5% in six months,but up by 8.8% over the year. Including bondissues carried out on behalf of Banca Carigeand excluding intercompany issues, directdeposits fall by 2.4% in six months and 1.1% intwelve months. Short-term deposits totalled €801.1 million, down 5.7% over December and4.4% over June 2011. The medium/long-termcomponent, standing at € 536.5 million, wasessentially stable compared to December 2011(-0.1%) and rose by 37.2% in twelve months.Indirect deposits amounted to € 1,768.9 million,down 2% and 4.4% compared to Decemberand June 2011; more specifically, assets undermanagement came to € 644.5 million (-0.4%and -7.3% in six and twelve monthsrespectively), assets under administration totalled€ 1,124.4 million (-2.9% and -2.6% in six andtwelve months respectively). Excluding bondissues placed on behalf of Banca Carige,indirect deposits fall by 4% and 8.1% in six andtwelve months.Loans to customers, before value adjustments,amounted to € 1,573.8 million, up by 4.4% inthe half and 8.4% from June 2011. The badloans/loans ratio stood at 3.1% (2.5% inDecember and 2.5% in June 2011).The securities portfolio amounted to € 331.1million, up by 6.6% in the six-month period andby 77.8% in twelve months.The income statement posted a net profit of €12.2 million, more than double the € 4.4 millionrecorded in June 2011, mainly thanks to thetrend in interest margin and net commissions.The cost/income ratio fell from 62.4% to 46.9%in the year.Net interest margin grew by 24% to € 24.5million; net fee and commissions grew by 19.2%to € 13.5 million; the profit on trading was €621 thousand, compared to € 26 thousand in2011; net interest and other banking incomerose by 23.5%, reaching € 38.8 million.Net losses on impairment of loans and otherfinancial assets amounted to € 2.8 million,versus € 3.8 million in June 2011.Operating expenses totalled € 18.2 million,down by 7%.The income before tax from continuingoperations amount to € 17.8 million (€ 8.1million in June 2011). Net of tax on incomefrom continuing operations, amounting to € 5.6million, the profit for the year totalled € 12.2million.Personnel numbered 333 units in the half, downby 1 unit.91

BANCA DEL MONTE DI LUCCA ( thousands of euro)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11BALANCE SHEETTotal assets 1,026,857 1,019,642 998,329 0.7 2.9Direct deposits (a) 868,991 869,455 809,222 -0.1 7.4Indirect deposits (b) 531,239 535,684 539,198 -0.8 -1.5- Assets under management 121,629 117,237 125,520 3.7 -3.1- Assets under administration 409,610 418,447 413,678 -2.1 -1.0Financial Intermediation Activities (FIA) (a+b) 1,400,230 1,405,139 1,348,420 -0.3 3.8Loans to customers (1) 935,278 931,144 922,002 0.4 1.4Securities portfolio 52,680 43,911 28,712 20.0 83.5Share capital and reserves 81,093 80,904 65,905 0.2 23.0INCOME STATEMENTNet interest and other banking income 17,026 31,822 15,460 10.1Net income from banking activities 14,765 25,164 12,423 18.9Income (loss) before tax from continuing operations 4,437 5,273 2,409 84.2Net income (loss) for the period 3,063 2,511 1,073 …RESOURCESNumber of branches 23 23 22 - 4.5Staff 168 168 167 - 0.6(1) Before value adjustments.Financial intermediation activities on behalf ofcustomers (FIA) of Banca del Monte di LuccaSpA totalled € 1,400.2 million, stable in the lasthalf and up by 3.8% in the twelve-month period.Within FIA, direct deposits stood at € 869million, stable in the half and up 7.4% overtwelve months, while indirect deposits came to €531.2 million, down by 0.8% in the last half and1.5% in twelve months. Excluding intercompanybond issues and including bond issues carriedout on behalf of Banca Carige, direct depositsrecorded contained growth of 0.3% in sixmonths, and a modest decrease of 0.8% overthe year. Short-term deposits, at € 408 million,showed a decrease of 0.4% in six months and4.1% over the year. The medium-/long-termcomponent, at € 461 million, was stable in thehalf and up by 20.1% in twelve months. Withinindirect deposits, assets under managementamounted to € 121.6 million, up 3.7% overDecember 2011 and down 3.1% over June2011, assets under administration came to €409.6 million, down 2.1% in the last half and1% over the year; excluding bond issues carriedout on behalf of Banca Carige, indirect depositsfell by 2.9% in the half and 6% over twelvemonths. Loans to customers, before valueadjustments, amounted to € 935.3 million, up0.4% in the half, and 1.4% in the year. The badloans/gross loans ratio was equal to 8.2% (7.2%in December and 6.2% in June 2011). Thesecurities portfolio amounted to € 52.7 million,€ 43.9 as at December and € 28.7 as at June2011.The income statement showed a net profit of €3.1 million, higher than the € 1.1 million in June2011, mainly due to the growth in the interestmargin and net fee and commissions; thecost/income ratio fell from 64.8% to 60.7%. Theinterest margin increased by 3.8%, to € 11.2million. Net commissions rose by 17.1%,standing at € 5.5 million. In total, the net interestand other banking income increased by 10.1%,to € 17 million. Net losses on impairment ofloans and other financial assets amounted to €2.3 million (€ 3 million in June 2011).Operating expense increased by 3.1% to € 10.3million. In particular, personnel expenses rose by0.4%, reaching € 6.3 million, while otheradministrative expenses increased by 0.7% to €4.4 million. The income before tax fromcontinuing operations amount to € 4.4 million (€2.4 million in June 2011). Net of tax on incomefrom continuing operations amounting to € 1.4million, the profit for the year totalled € 3.1million.Staff units numbered 168, stable compared tothe end of the year.92

CASSA DI RISPARMIO DI CARRARA (thousands of euro)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11BALANCE SHEETTotal assets 1,503,190 1,413,118 1,376,888 6.4 9.2Direct deposits (a) 1,033,183 1,022,977 1,070,306 1.0 -3.5Indirect deposits (b) 1,030,529 1,059,322 1,070,409 -2.7 -3.7- Assets under management 320,773 318,707 340,432 0.6 -5.8- Assets under administration 709,756 740,615 729,977 -4.2 -2.8Financial Intermediation Activities (FIA) (a+b) 2,063,712 2,082,299 2,140,715 -0.9 -3.6Loans to customers (1) 1,099,871 1,092,105 1,059,589 0.7 3.8Securities portfolio 261,439 241,074 140,848 8.4 85.6Share capital and reserves 120,260 119,163 118,810 0.9 1.2INCOME STATEMENTNet interest and other banking income 28,110 46,761 22,355 25.7Net income from banking activities 25,443 40,624 22,054 15.4Income (loss) before tax from continuing operations 8,615 9,166 6,279 37.2Net income (loss) for the period 5,987 4,943 3,594 66.6RESOURCESNumber of branches 37 37 35 - 5.7Staff 313 319 318 -1.9 -1.6(1) Before value adjustments.Financial intermediation activities on behalf ofcustomers (FIA) of Cassa di Risparmio diCarrara SpA totalled € 2,063.7 million, down0.9% in the last half and 3.6% in the twelvemonthperiod. Within financial intermediationactivities, direct deposits stood at € 1,033.2million, up 1% in the half but down 3.5% intwelve months; including bond issues effectedon behalf of Banca Carige and excludingintercompany issues, direct deposits increase by2.1% in the last half and but fall by 1.4% intwelve months. Short-term deposits, amountingto € 676.7 million, recorded an increase of1.5% in the half, but fell 4.9% in twelve months.The medium-/long-term component, at € 356.5million, was essentially stable in the half and updown 0.7% in twelve months.Indirect deposits came to € 1,030.5 million,down by 2.7% in the half and 3.7% in twelvemonths; within this component, assets underadministration totalled € 709.8 million (down4.2% over December and 2.8% on June 2011)and assets under management amounted to €320.8 million (up 0.6% and down 5.8% overDecember and June 2011). Excluding bondissues effected on behalf of Banca Carigeindirect deposits fall by 6.4% in the half and 9%over the year. Loans to customers, before valueadjustments, amounted to € 1,099.9 million, up0.7% in the half, and 3.8% in the year. The badloans/gross loans ratio stood at 6.2% (5.6% inDecember and 4.4% in June 2011). Thesecurities portfolio amounted to € 261.4 million,up 8.4% compared to December and 85.6%over June 2011.The income statement posted a net profit of € 6million, up 66.6% over the figure in June 2011,in particular thanks to the trend in interestmargin, net fee and commissions and profits ontrading. The cost/income ratio fell to 59.9%,compared to 70.6% in June 2011.The interest margin amounted to € 17.8 million(+23.2%); net fee and commissions stood at €9.5 million (+20%); profit on trading was € 740thousand (negative € 69 thousand in June2011). Net interest and other banking incomereached € 28.1 million, an increase of 25.7%.Losses on impairment of loans and otherfinancial assets amount to € 2.7 million (€ 0,3million in June 2011). Operating expensescame to € 16.8 million (up 6.7%). Personnelexpenses, increased by 7.6% to compared toJune 2011.The income before tax from continuingoperations amount to € 8.6 million (€ 6.3million in June 2011). Net of tax on incomefrom continuing operations of around € 2.6million, profit for the year came to € 6 million,against € 3.6 million in 2011.Bank staff numbered 313 units, down in the halfdue to 6 terminations.93

BANCA CESARE PONTI ( thousands of euro)Situation as at Change %30/06/2012 31/12/2011 30/06/2011 06/12 06/1212/11 06/11BALANCE SHEETTotal assets 823,004 719,528 545,461 14.4 50.9Direct deposits (a) 366,391 371,498 369,997 -1.4 -1.0Indirect deposits (b) 1,891,585 1,898,667 1,830,425 -0.4 3.3- Assets under management 719,949 577,308 580,765 24.7 24.0- Assets under administration 1,171,636 1,321,359 1,249,660 -11.3 -6.2Financial Intermediation Activities (FIA) (a+b) 2,257,976 2,270,165 2,200,422 -0.5 2.6Loans to customers (1) 114,219 114,443 113,380 -0.2 0.7Securities portfolio 594,415 490,710 291,998 21.1 …Share capital and reserves 62,070 57,260 57,259 8.4 8.4INCOME STATEMENTNet interest and other banking income 11,486 18,050 7,969 44.1Net income from banking activities 11,080 17,648 7,860 41.0Income (loss) before tax from continuing operations 4,153 5,462 1,766 …Net income (loss) for the period 2,513 9,681 7,530 -66.6RESOURCESNumber of branches 7 7 6 - 16.7Staff 81 81 81 - -(1) Before value adjustments.Financial intermediation activities (FIA) on behalfof the customers of Banca Cesare Ponti SpAtotalled € 2,258 million (down 0.5% in the halfand up 2.6% in the year), due, in particular, tothe managed component of indirect deposits. Asregards financial intermediation activities, directdeposits came to € 366.4 million (down 1.4% insix months and down 1% over twelve months)and indirect deposits totalled € 1,891.6 million(-0.4% in the half and +3.3% in the year);within the latter component, assets undermanagement amounted to € 720 million(+24.7% and +24% respectively); assets underadministration totalled € 1,171.6 million, down11.3% in the half and 6.2% in the year). Shorttermdeposits, at € 365.4 million, showed anincrease of 2.8% in six months and were up by3.3% over the year. Loans to customers, beforevalue adjustments, amounted to € 114.2 million(stable in the half, and up 0.7% in the year). Thebad loans/gross loans ratio was equal to 0.7%(0.2% in December and 0.2% in June 2011).The securities portfolio amounted to € 594.4million (€ 490.7 million as at December and €292 million as at June 2011).The income statement shows a net profit of €2.5 million. The cost/income ratio fell to 60.3%from 76.5% in June 2011.Net interest margin stood at € 6.9 million (€ 4.2million in June 2011). Net fee and commissionsincreased by 22.1% to € 4.6 million. The netinterest and other banking income is therefore €11.5 million (+44.1%). Loss on impairment ofloans and other financial assets amounted to €406 thousand; within this component, losses onimpairment of loans totalled € 397 thousand.Operating expenses stood at € 6.9 million (up16.6%), of which € 4.2 million personnel costsand € 3.4 million other administrative expenses.The income before tax from continuingoperations amounts to € 4.2 million. Net oftaxes on income from continuing operationsamounting to € 1.6 million, the profit for theyear totalled € 2.5 million.The Bank’s workforce comprises 81 employees,of which 26 work at the main office and 55 inthe market.94

INSURANCE SUBSIDIARIESThe results of the two insurance companies ofthe Group (Carige Assicurazioni SpA andCarige Vita Nuova SpA) are presented below,prepared in accordance with the applicableprovisions of the Italian Civil Code and with theprovisions specific for the insurance industry inItaly (Legislative Decree 173/1997, LegislativeDecree 209/2005, ISVAP Regulation No.22/2008 amended and supplemented by ISVAPProvision 2771 dated 29 January 2010 and byISVAP Provision No. 2845 dated 17 November2010 ).It should be noted that such results are differentfrom those reported in the section “Insuranceactivities” of this Report in which theinformation, gathered from the so-calledreporting packages, is prepared by thecompanies based on the joint provisions of Bankof Italy Instruction no. 262 dated 22 December2005, ISVAP Regulation no. 7 dated 13 July2007 amended by ISVAP Provision No.2784/2010 and consistent instructions from theParent Company.CARIGE ASSICURAZIONI ( thousands of euro.)Situation as at Change %06/12 06/1230/06/2012 31/12/2011 30/06/2011 12/11 06/11Recognised gross premiums 336,458 673,688 346,165 -2.8Premiums excluding reinsurance 304,183 616,266 318,464 -4.5Claims incurred and settled net of reinsurance 229,165 474,878 235,513 -2.7Operating costs 75,624 154,839 80,532 -6.1Profit/loss from technical account -7,794 -9,480 635 …Profit for the period -7,664 -9,404 -798 …Investments (1) 746,283 782,922 822,570 -4.7 -9.3Technical reserves net of reinsurance 776,345 796,498 813,725 -2.5 -4.6Shareholders' equity with income 120,014 127,677 136,283 -6.0 -11.9Insurance agencies 426 421 429 1.2 -0.7Staff 382 375 375 1.9 1.9(1) Included cash equivalents.The shareholders’ equity of Carige AssicurazioniSpA as at 30 June 2012 (operating in the nonlifesegment) amounted to € 120 million;technical reserves net of the reinsuranceamount, in the first six months, decreased by2.5%, while investments decreased by 4.7% andstood at € 776.3 million.The first half of 2012 closed with a negativeresult of € 7.7 million, compared with a loss of €0.8 million in the same period in 2011. Theincome of the technical account decreased from€ 0.6 million in June 2011 to a negative € 7.8million in 2012. The result was affected by thefall in premiums for the period net ofreinsurance (-4.5% to € 304.2 million), thereduction in management expenses (-6.1% to €75.6 million), by a fall in claims for the period,including the claims of previous years, net ofreinsurance (down 2.7% to € 229.2 million),and the transfer of a portion of the profit frominvestments equal to € 0.7 million, compared to€ 5 million in the previous year. The incomestatement consolidates the effects of the issuing,by ISVAP, of Regulation no. 43 of 12 July 2012which limited, with respect to Regulation no. 28previously in force, the possibility of thesterilisation of losses from the market alignmentof solely Government bonds issued or securedby EU Member States. Due to the adoption ofthe new above-mentioned provisions, losses ofaround € 10.5 million were booked to theincome statement, relating to bonds that do fallwithin the field of application of ISVAPRegulation no. 43. The undistributable reserveas at 30 June 2012, calculated on the basis ofnew Regulation no. 43, amounted to € 18.7million.95

CARIGE VITA NUOVA SPA ( thousands of euro)Situation as at Change %06/12 06/1230/06/2012 31/12/2011 30/06/2011 12/11 06/11Recognised gross premiums 221,698 596,432 339,907 -34.8Premiums excluding reinsurance 219,274 588,456 336,279 -34.8Claims incurred and settled net of reinsurance (1) 178,103 369,752 190,079 -6.3Operating costs 11,520 26,456 13,458 -14.4Profit/loss from technical account -4,286 -3,182 7,456 …Profit for the period -192 4,349 6,922 …Investments (2) 4,197,521 4,109,394 3,962,618 2.1 5.9Technical reserves net of reinsurance (2) 4,028,300 3,925,513 3,830,811 2.6 5.2Shareholders' equity with income 218,953 219,145 171,718 -0.1 27.5Insurance agencies 310 306 303 1.3 2.3Staff 116 118 113 -1.7 2.7(1) The item includes the amounts paid net of reinsurance ceded.(2) Including cash equivalents and the investments where risk is borne by the insured and pension funds. These are mainlyinvestments in index- and unit-linked products.The shareholders’ equity as at 30 June 2012 ofCarige Vita Nuova SpA (operating in the lifeinsurance industry) amounted to € 219 million;investments and technical reserves rose by 2.1%(to € 4,198 million) and by 2.6% (to € 4,028million) in the first six months respectively.The first half of 2012 recorded a loss of € 0.2million, compared to a profit of € 6.9 million inJune 2011.Income from technical management decreasedfrom € 7.5 million in June 2011 to a negative €4.3 million in June 2012. It should be notedthat as regards the close of the first half of2012, the income statement consolidates theeffects of the issuing, by ISVAP, of Regulationno. 43 of 12 July 2012 which limited thepossibility of the sterilisation of losses from themarket alignment of solely Government bondsissued or secured by EU Member States. In fact,losses of around € 22 million were booked tothe income statement, relating to bonds that dofall within the field of application of ISVAPRegulation no. 43. The undistributable reserveas at 30 June 2012, calculated on the basis ofnew Regulation no. 43, amounted to € 33.7million.In the second quarter, charges were alsoaccounted for deriving from the adhesion to theproposed exchange of Greek securities, socalledPSI (Private Sector Involvement), with anegative effect of around € 7 million (atconsolidated level according to IAS, the effectstands at a negative € 28 million), which is offsetby gains from sales on the securities portfolio.Premiums issued recorded a decrease of 34.8%,down from € 339.9 million to € 221.7 million,against a reduction of 21% registered by themarket in March 2012. The highest loss wasrecorded in the agency channel, with a 39.7%decrease, primarily due to the issue in the firsthalf of 2011 of capitalisation policies, for a totalamount of around € 12.3 million; in 2012 thecompany resolved not to acquire these policies,to reduce the inherent risks. Excluding saidpolicies, a 1.7% decrease in production wouldbe recorded.The decrease in premiums issued had nosignificant effects on the result for the year, ascharges related to products currently traded inthe subscription year do not generate anysignificant profits.The charges for claims in the financial year (netof reinsurance ceded), which also includedredemptions and expirations, amount to € 178.1million, down by 6.3% over the same period lastyear. This decrease is due mainly to the loweramount of products maturing, partly offset bythe increase in redemptions to € 106.2 millionin June 2012, compared to € 78.8 million inJune 2011.96

FINANCIAL SUBSIDIARIESCARIGE A.M. SGR (thousands of euro)Situation as at Change %06/12 06/1230/06/201231/12/201130/06/2011 12/11 06/11DEALINGAssets under management 4,316,177 4,434,841 4,912,698 -2.7 -12.1- Mutual funds 3,407,678 3,548,804 3,991,510 -4.0 -14.6- Assets management (customer assets) 411,176 417,832 466,335 -1.6 -11.8- Insurance products (customer assets) 155,072 153,876 154,593 0.8 0.3- Pension funds 342,251 314,328 300,259 8.9 14.0Total assets 16,999 17,854 18,145 -4.8 -6.3Share capital and reserves 7,421 7,445 7,443 -0.3 -0.3INCOME STATEMENTNet fee and commission income 3,938 8,734 4,412 -10.7Administrative expenses 3,490 6,789 3,499 -0.3Operating income 470 1,935 876 -46.3Profit for the period 341 1,145 511 -33.3RESOURCESStaff (1) 33 33 33 - -(1) Seconded Parent Company personnel.Carige AM SGR SpA manages 15 mutual Funds(of which 14 targeted at retail customers andone reserved for institutional investors), the 4sub funds of the Fondo Pensione Aperto Carige,as well as the portfolios of products for whichGroup companies delegated the managementof the related financial resources; specifically,individual asset management lines of the ParentCompany, internal lines of the Gestilinkinsurance fund, and the insurance product Rosadei Venti.Overall, assets under management came to €4.3 billion, down 2.7% in the last six months.The trend confirms the solid progress of theFondo Pensione Aperto (+8.9%), but also theslowdown in the volumes of mutual funds (down4%). As regards the products managed by virtueof delegation, Assets under Managementrecorded a decrease of 1.6% from the end ofDecember 2011, while the insurance segmentsrecorded slight growth of 0.8%.Profit amounted to € 341 thousand, down € 169thousand over the first half of the previous year,due to the constant decrease in assets managedwhich led to lower net commissions of € 428thousand. In particular, net commissionsamounted to € 3.9 million, resulting fromcommission income of € 17.3 million andcommission expense of € 13.4 million. Netinterest and other banking income totalled € 4million and operating and running costs totalled€ 3.6 million; therefore, the result fromoperations came to € 470 thousand.After income tax, equal to € 128 thousand, thenet profit was € 341 thousand.Carige AM SGR has 33 employees, allseconded by the Parent Company.97

CREDITIS SERVIZI FINANZIARI (thousands of euro)DEALINGSituation as at Change %06/12 06/1230/06/2012 31/12/2011 30/06/2011 12/11 06/11Loans to customers (1) 522,220 489,192 459,491 6.8 13.7- Personal loans (1) 412,963 400,387 384,377 3.1 7.4- Revolving credit cards (1) 20,110 19,433 18,323 3.5 9.8- Salary-backed loans (1) 89,147 69,372 56,791 28.5 … 57.0 …Total assets 545,360 524,520 490,410 4.0 11.2Capital and reserves 39,541 38,680 39,860 2.2 -0.8INCOME STATEMENTNet interest income 11,701 20,712 9,827 19.1Net commissions 1,859 3,458 1,868 -0.5Administrative costs 4,846 9,029 4,559 6.3Operating income 6,476 12,577 5,905 9.7Profit for the period 4,175 8,070 3,696 13.0RESOURCESStaff (2) 37 38 34 -2.6 8.8(1) Before value adjustments.(2) Seconded Parent Company personnel.Creditis Servizi Finanziari SpA, operating since2008, continued to consolidate its activities.Loans to customers reached € 522.2 million,compared to € 489.2 million at 31 December2011. During the half, 8 thousand personalloans were granted totalling € 85.9 million, andover 1,800 salary-backed loans totalling € 26.2million. In the same period, more than 3thousand instalment-based credit cards wereissued and almost 700 were activated bycustomers; there were 68 thousand uses for atotal of € 7.1 million. Almost 4,800 instantcredit contracts were agreed (revolving creditlines using the insurance network to divide thethird party motor liability policies into instalmentswhen subscribing to the policy or renewing it) bythe 220 insurance agents with arrangementswith the Company, with a total of € 3.1 millionfinanced.From an economic perspective, the first half of2012 closed with a profit of € 4.2 million. Thenet interest margin stood at € 11.7 million.Interest margin, at € 18.5 million, is made upmainly by interest on personal loans (€ 14.9million). Interest payable amounts to € 6.8million and was generated by loans given by theParent Company. Commission incomeamounted to € 2.4 million, of which € 1.6million in commission from insurancecompanies for the distribution of policies.Commission expense amounted to € 0.5 million,of which € 0.2 million in bank commissions paidto the Parent Company. Net value adjustmentsfor impaired loans amounted to € 2.2 million. Interms of expenses, costs for staff, fully secondedby the Parent Company, amounted to € 1.8million. Other administrative costs, includingamortisation and depreciation, total € 3.3million. The pre-tax result was a positive € 6.5million; net of income taxes of € 2.3 million, aprofit of € 4.2 million was generated.98

Argo Finance One Srl, vehicle company in thesecuritisation of bad loans, carried out by BancaCarige at the end of 2000, recorded takings €1.5 million in the first half of 2012. Against anet value from disposal of loans of € 165.3million, collections from the start of theoperation amounted to € 229 million. A total of€ 15.2 million in class C securities entirelysubscribed by Carige remain to be paid.Priamar Finance Srl, special purpose vehicle forthe securitisation of bad loans established byCassa di Risparmio di Savona at the end of2002, collected € 0.4 million in the first half of2012. Against a net value from disposal ofloans of € 28 million, collections from the startof the operation amounted to € 40.9 million. Atotal of € 3.5 million in class B securities entirelysubscribed by subsidiary Cassa di Risparmio diSavona remain to be paid.Argo Mortgage Srl, a special purpose vehicle forthe securitisation of private mortgage loansestablished by Banca Carige at the end of2001, recorded takings for a total of € 579.3million, of which € 7 million in the first half of2012.As at 30 June 2012, the following securitieswere in issue:- € 11.2 million in class A securities;- € 22 million in class B securities;- € 11.5 million in class C securities;- € 9.2 million in class D securities.Argo Mortgage 2 Srl, a special purpose vehiclein the securitisation of mortgage loans to privatecustomers, established by Banca Carige in June2004, registered overall collections of € 846.9million, € 24.4 million of which in the first half of2012.As at 30 June 2012, the following securitieswere in issue:- € 136 million in class A securities;- € 26.8 million in class B securities;- € 29.3 million in class C securities.Carige Covered Bond Srl is the special purposevehicle used to carry out the medium/long-termdeposit programme for a maximum of € 5billion, to be implemented over a period of fiveyears (2008-2013).In the first half of 2012, the sales of a furthertwo blocks of loans deriving from residential andcommercial mortgages were completed,totalling € 1 billion. Overall, as at 30 June2012, the company purchased loans originatednot only by the Parent Company Banca CarigeSpA but also by subsidiary banks Cassa diRisparmio di Savona SpA, Cassa di Risparmio diCarrara SpA and Banca del Monte di LuccaSpA. Total loans transferred by the BancaCarige Group to the vehicle company came to €6.5 billion which, as at 30 June 2012, remainedas residual debt totalling € 5.2 billion.Covered bank bonds issued as part of thisprogramme and still not paid as at 30 June2012 amounted to € 3.3 billion, of which € 180million represent bonds issued in the first half of2012; bonds used by the Parent Company formedium and long-term refinancing operations atthe ECB amounted to € 850 million.Carige Covered Bond 2 Srl is the specialpurpose vehicle for the medium-/long-termdeposit programme for a maximum of € 5billion, to be implemented over a period of fiveyears (2011-2016).During the first half of 2012, two transfers ofcommercial mortgages were completed,amounting to € 1 billion, originated not only bythe Parent Company Banca Carige SpA, butalso subsidiary banks Cassa di Risparmio diSavona SpA, Cassa di Risparmio di Carrara SpAand Banca del Monte di Lucca SpA.In the first half of 2012, a first tranche ofcovered bank bonds of € 800 million wasissued, used by the Parent Company for mediumand long-term refinancing operations at theECB.99

THE OTHER MAIN SUBSIDIARIESColumbus Carige Immobiliare SpA closed thefirst half of 2012 with a profit of around € 14.7thousand, against a loss of € 110.3 thousand inthe same period in 2011.The profit is due essentially to the transfer of thededuction of interest expense of previous yearsto tax consolidation and the decrease infinancial charges on credit lines granted by theParent Company. Owing to the difficult situationin the real estate market, no property sales werecompleted in the first half.Immobiliare Carisa Srl recorded a loss of € 12.7thousand in the first half of 2012, compared toa loss or around € 8.4 thousand in the sameperiod in 2011; the negative result is due to thecontinued lack of property sales. With respect tothe same period in the previous year, anincrease in the tax charge was recorded derivingfrom the introduction of the Imu (UniqueMunicipal Tax), as well a decrease in revenuesfrom leasing and lower extraordinary expenseson properties owned.Centro Fiduciario C.F. SpA closed the first halfof 2012 with a net profit of € 191 thousand,down 8.6% compared to the correspondingperiod in 2011, a result achieved by chargingtaxes of € 99 thousand.Production revenues stood at € 677 thousand, areduction of 8.2% on the previous year, as aresult of the decrease in both fiduciarycommissions (-5.9%), and amounts paid by theParent Company for the provision of fiduciaryservices (-11.4%).The decrease recorded by the main revenueitems is due largely to the unfavourableeconomic-financial situation, rather than the lossof competitiveness of the company which, on thecontrary, essentially maintained the positionsacquired in the previous year, with growth infiduciary volumes of € 531.5 million. (+0.6%over the close of 2011).Ordinary operating costs, which are in line withthe previous year, reached € 438 thousand,marking an increase of 0.6% compared to2011.The ordinary operating profit amounted to €239 thousand, a decrease of 20.9%.The decrease recorded by the ordinaryoperating profit was largely contained thanks tothe positive result of extraordinary operationswhich recorded a surplus of € 51 thousand,marking growth of more than € 30 thousandcompared to the previous year.Genoa, 30 July 2012The Manager in charge ofpreparing the company’saccounting documentsThe Chairman of the Boardof DirectorsThe General Manager100

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GLOSSARY OF TECHNICAL TERMS AND ACRONYMSUSEDAABS - Asset-Backed SecuritiesFinancial instruments issued under securitisation transactions (seedefinition), whose yield and redemption are guaranteed by theassets of the issuer (see definition), exclusively earmarked for thesatisfaction of the rights incorporated in said financial instruments.Technically, debt securities are issued by an SPV (see definition).The portfolio underlying the securitisation may comprise mortgages,loans, bonds, trade receivables, credit card receivables and so on.Based on the type of underlying asset, ABS may be classified in:- credit loan obligations (the portfolio is composed of bank loans);- collateralised bond obligations CBO (the portfolio is composedof junk bonds);- collateralised debt obligations CDO (the portfolio is composedof bonds, debt instruments and securities in general);- residential mortgage-backed security RMBS (the portfolio iscomposed of mortgages on residential properties);- commercial mortgage-backed security CMBS (the portfolio iscomposed of mortgages on commercial properties).ABS CDOCDO type securities (see definition) with underlying ABS tranches.Absorbed capitalAbsorbed capital is the capital requested to cover the business risks.It equals the maximum between the regulatory capital (obtained bymultiplying the weighted assets by the risk for the core tier 1 ratioobjective) and internal capital. Internal capital is the amount ofcapital that must be retained to withstand potential losses and isneeded to support business activities and the positions held. Totalcapital is given by the sum of the economic capital, obtained byaggregating the different risk types, in addition to a reserve to takeaccount of the effects of the cycle and risk model.ABX index CDSThe ABX indexes fall under the ABS Index type. Every ABX refers toa basket of 20 reference obligations belonging to a specific ABSsegment. Each ABX (a total of five) reproduces a rating class (AAA,AA, A, BBB, and BBB-). In fact, for ABX the market does notprovide credit curve valuations, but rather a direct price evaluation.As detailed in the ISDA 2005 documentation, the settlementpermitted for ABX Index contracts is PAUG (Pay As You Go). Thisrequires the protection seller to pay any incurred losses to theprotection buyer as and when they occur, without howeverdetermining termination of the contract. It has to be borne in mindthat hedging through ABI Index purchases, even if structured togive the best possible match for the characteristics of the hedgedportfolio, remains subject to “basis risk”. In other words, given it isnot a specific hedge of single positions, it may generate incomestatement volatility in the phases of less than perfect correlationbetween index prices and market values of hedged positions.Additional returnForm of remuneration of junior securities deriving fromsecuritisation transactions. In addition to a fixed coupon, thesesecurities accrue periodic earnings (quarterly, half-yearly, etc.), theamount of which depends on the margin produced by thetransaction (in turn reflecting the performance of the securitisedassets).AdvisorFinancial broker who assists government authorities or companiesinvolved in privatisations or other corporate finance operations,whose tasks range from the preparation of appraisals, drawing upof documents and provision of general consultancy about specifictransactions.AFS - Available For SaleIAS accounting category used to classify assets available for sale.ALM – Asset & Liability ManagementIntegrated management of assets and liabilities designed toallocate resources with a view to optimising the risk-return ratio.ALT-A AgencySecurities backed by Alt-A mortgages, guaranteed by specialisedGovernment Agencies.ALT- A - Alternative A LoanResidential mortgages generally of “prime” quality; however theLTV ratio, the documentation provided, the work/employmentsituation, the type of property or other factors, do not allow themto be qualified as standard contracts able to be used insubscription programmes. The main reason for a loan beingclassified as “Alt-A” is the non-submission of all the requireddocumentation.Alternative investmentAlternative investments cover a broad range of types of investment,including those in private equity (see definition) and hedge funds(see definition).Amortised costIt differs from cost in that it allows for the progressive amortisationor depreciation of the differential between book value and nominalvalue of an asset or liability in accordance with the actual rate ofreturn.AP – Attachment PointLevel above which a protection seller would start covering lossesincurred by a protection buyer. Typically used in synthetic CDOs.ArrangerIn structured finance, the arranger is the person who – albeit indifferent forms with different titles (mandated lead arranger, jointlead arranger, sole arranger etc.) – acts as a coordinator of theorganisational aspects of the transaction.Arrangement (commission)Commission payment for advisory and support services in thestructuring and organisation stage of a loan.Asset allocationChoice of markets, geographical areas, sectors and products inwhich to invest.Asset managementVarious forms of activity relating to the management andadministration of customer assets.ATM - Automated teller machineAn automatic electronic device that allows customers to carry outtransactions, e.g. cash withdrawals, paying-in of cash or cheques,account information requests, bill payments, phone top-ups, etc.Customers activate the terminal by introducing a card and enteringtheir PIN (personal identification number).Audit102

In listed companies, it is the overall checking on the business andbookkeeping of a company, performed by both in-house staff(internal audit) and independent audit firms (external audit).BBack officeThe unit of a bank, or financial company that handles alltransactions performed by operational units (front office).Back testingRetrospective analysis performed to verify the reliability of themeasurement of risk sources associated with the asset portfoliopositions.BancassuranceOffer of insurance products, normally through the operatingnetwork of a bank.Banking bookNormally refers to securities or financial instruments in general,identifying the portion of a portfolio dedicated to “proprietary"trading.Basel 2The new international agreement on capital, which redefines theguidelines for the calculation of minimum capital requirements forbanks.The new prudential regulation is based on three pillars:- first pillar (Pillar 1): without prejudice to the objective of an 8%risk-weighted capital ratio, a new system of rules has been outlinedfor the measurement of typical banking and financial risks (credit,counterparty, market and operating risks) which provides foralternative calculation methods characterised by varying levels ofcomplexity, with the ability to use, with the prior authorisation ofthe Supervisory Body, models developed in-house;- second pillar (Pillar 2): banks must be equipped with theprocesses and tools for determining the overall level of internalcapital (Internal Capital Adequacy Assessment Process – ICAAP)necessary to face all types of risk, including those not covered bythe first pillar (overall capital requirement). The Supervisory Body isresponsible for examining the ICAAP process, formulating anoverall opinion and, where necessary, implementing theappropriate corrective measures;- third pillar (Pillar 3): obligations of transparency were introducedwith regard to information disclosed to the public on capital levels,risks and their management.Basel 3Basel 3 indicates a series of instructions approved by the BaselCommittee for banking supervision following the financial crisis of2007-2008, with the intent of finalising the pre-existing prudentialregulations of the banking sector (correctly denominated Basel 2),as well the effectiveness of the regulatory action and the ability ofintermediaries to manage the risks they undertake.Basis pointCorresponds to one hundredth of one percentage point (0.01%).Basis swapContract providing for the exchange between two counterparties ofpayments linked to different floating rates.BenchmarkReference parameter of financial investments: can also berepresented by the most well-known market indexes or by otherindexes considered more representative of the investment’srisk/return profile.Best practiceIdentifies conduct commensurate with the more important and/orhighest-level skills and techniques achieved in a giventechnical/professional sphere.Bid-ask spreadThe difference between the bid price and the ask price of a givenfinancial instrument or set of financial instruments.BookrunnerSee Lead Manager definition.Business riskRisks of adverse or unexpected changes in profits/marginscompared to forecasts, related to volatility in turnover due tocompetitive pressure or market situations.CCAGR – Compound annual growth rateThe year by year growth rate applied to an investment or otheractivities over a multiple-year period. The CAGR calculationformula is (current value/base value)^(1/no. of years).Capital allocationA process of how companies divide their investment between thedifferent categories of financial activity (in particular, bonds, sharesand liquidity). Capital allocation decisions are determined by theneed to optimise the risk/return ratio in relation to the investor’stime horizon and expectations.Capital Asset Pricing ModelThe Capital Asset Pricing Model (or CAPM) is a financial modelthat establishes a relationship between the return on a security andits risk level. It has several financial applications, including the“opportunity cost” calculation, i.e. the amount of income neededby a company to fund the cost of capital.Capital bonds (insurance)These capitalisation contracts fall under the field of application ofdirect life insurance pursuant to Legislative Decree no. 209 of 7September 2005 (Private Insurance Code). As set out by Art. 179of the same Legislative Decree, it involves contracts whereby aninsurance company - with no agreement on life expectancy -undertakes to pay specific amounts on expiry of a long-term periodin exchange for single or regular premiums paid, either in cash orthrough other assets. The contract cannot be for less than fiveyears and includes an option for the contracting party to claimredemption of the contract from the beginning of year two andprovided that the contracting party had paid the premium for theentire year. In accordance with article 42 of the already mentionedPrivate Insurance Code, the financial assets to hedge the technicalreserves are linked solely to performance of the related capitalbonds (separate management). Therefore, in the event ofliquidation of the insurance company (article 258), thebeneficiaries of these policies are actually the preferred owners ofthe credit positions.Capital structureAs regards securitisation transactions (see definition), the SPVissues various classes of bond (tranches), guaranteed by theacquired portfolio, that have different risks and returns, in order tosatisfy the needs of the different categories of investor. All thetranches combined constitute the Capital Structure. Thesubordination ratios between the various tranches are governed bya series of regulations that specify the distribution of collaterallosses:• Equity Tranche: the most risky portion of the portfolio, alsoknown as “first loss” and is subordinated to all other tranches; it istherefore the first to bear losses that may occur during recovery ofthe underlying assets.103

• Mezzanine Tranche: the intermediate tranche ranking betweenthe equity tranche and the senior tranche. The mezzanine trancheis normally divided into 2-4 tranches with different levels of risk,each subordinated to the others. They are typically characterisedby a rating in the BBB-AAA range.• Senior/Supersenior Tranche: the tranche with the highest level ofcredit enhancement (see definition), i.e. the highest level ofprivilege in terms of remuneration and redemption priority.Capitalisation policiesSee definition Certificates (insurance) of capitalisationCaptiveTerm generically referring to “networks”, or companies operatingin the sole interest of the company or the Group to which theybelong.Cash flow hedgeThe hedging of exposure to cash flow fluctuations attributable to aparticular risk.Cash managementA banking service which, in addition to making a whole series ofinformation available to companies on the status of relations withthe bank, provides an operating tool that allows businesses totransfer funds and thereby achieve a more efficient treasurymanagement.Categories of financial instruments envisaged in IAS 39Trading activity (Held For Trading – HFT) which includes thefollowing; assets purchased for short-term sale or part of portfoliosof instruments managed jointly for the purpose of realising profitsin the short-term, and assets that the entity decides to record at fairvalue with variation in value entered in the income statement (FairValue Through Profit & Loss – FVTPL); assets held to maturity (HeldTo Maturity – HTM), non-derivative assets with a fixed term andpayments that are fixed or determinable, concerning which there isa real intention and capacity to hold them to maturity; credits andloans (Loans & Receivables - L&R), non-derivative assets withpayments that are fixed or determinable, not quoted on the activemarket; assets available for sale (Available For Sale – AFS),specifically designated as such, or others not falling under theprevious types.CBO - Collateralised Bond ObligationCDO type securities (see definition) with underlying bonds.CDO - Collateralised Debt ObligationDebt securities, issued by a SPV, guaranteed by underlying assetsin the form of loans, bonds, Asset-Backed Securities (see definition)or other CDOs. These types of structures are constituted toeliminate (“derecognition”) assets from the balance sheet and toarbitrage the yield differences between securitised assets andsecurities issued by the SPV.CDOs can by “funded”, if the SPV legally purchases ownership ofthe assets, or synthetic ("unfunded") if the SPV acquires theunderlying risk of the assets through Credit Default Swaps (seedefinition) or other similar forms of guarantee.CDS - Credit Default SwapsDerivative contract under which one party (protection seller)undertakes, against payment of a sum, to pay a pre-fixed amountto another party (protection buyer), in case an event, agreed uponin advance, occurs, related to the default (see definition) of a thirdparty (reference entity).CLN - Credit Linked NoteSecurity with an embedded credit derivative, typically a creditdefault swap (CDS).CLO - Collateralized Loan ObligationA CDO backed by loans granted to registered Corporates.CMBS - Commercial Mortgage-Backed SecuritiesLoan securitisations backed by mortgages on commercialproperties.CMO - Collateralized Mortgage ObligationMortgage-backed securities in which the total amount of the issueis broken down into tranches with different maturities and yields.The tranches are repaid in the order specified on issue.Commercial paperShort-term notes issued to gather funds from third-party subscribersas an alternative to other forms of borrowing.Concentration riskA risk resulting from exposures in the banking portfolio tocounterparties, groups of counterparties in the same economicsector or who exercise the same activity or belong to the samegeographical area. Concentration risk can be divided between twosub-classes:- Single name concentration risk;- Sector concentration risk.ConduitsAsset-Backed Commercial Paper Conduits are a specific type ofSpecial Purpose Vehicle established for the securitisation ofdifferent types of assets and financed through the issue ofCommercial Paper. Commercial Papers are typically securities witha 270-day maturity, for which capital and interest repaymentdepend on cash flows from the underlying assets.Based on the number of underlying asset portfolios, ABCP conduitsmay be classified as single-seller or multi-seller.Generally the structure of ABCP conduits provides for theformation of different SPVs. In fact, top level companies issuecommercial paper and finance one or more second level SPVs thatacquire the securitised assets.The typical elements of an ABCP Conduit are as follows:• issue of short-term securities that determine a maturity mismatchbetween assets held and securities issued;• Inclusion of lines of liquidity to cover the maturity mismatch;• Inclusion of guarantees to cover the insolvency risk of assets,both specific and used on the programme as a whole.Consumer ABSABS backed by consumer credit.Contingency funding planIntervention plans for liquidity management in crisis conditions;their main objective is to protect the bank’s capital in the event ofa liquidity drain, through the preparation of crisis managementstrategies and procedures for obtaining emergency funding.Core BusinessPrimary area of business constituting the focal point of acompany’s strategies and policies.Core Tier 1 CapitalValue calculated by subtracting innovative capital instruments fromTier 1 Capital (see definition). It is the net tangible equity of thebank.Core tier 1 ratioIndicates the ratio of basic (tier 1) assets, not including preferenceshares, to total risk-weighted assets. Preference shares areinnovative capital instruments normally issued by foreignsubsidiaries, and included in the basic assets if they havecharacteristics guaranteeing the capital stability of the banks. Thetier 1 ratio is the same ratio that, in the numerator, includes thepreference shares.CorporateSegment of customers corresponding to medium- and large-sizedcompanies (mid-corporate and large corporate).104

Corporate governanceThrough the composition and functioning of internal and externalcorporate bodies the corporate governance structure defines thedistribution of rights and responsibilities among those thatparticipate in the company’s business, with reference to thebreakdown of tasks, and assumption of responsibilities anddecision-making powers. The fundamental objective of corporategovernance is to maximise value for shareholders, which in themedium/long-term also leads to positive results for otherstakeholders, i.e. customers, suppliers, employees, creditors,consumers and the community.Cost/Income RatioThe ratio of operating costs to gross operating income. This is oneof the key indicators of a bank’s operating efficiency: the lower thevalue, the more efficient the bank.Cost of riskIt is the ratio between net adjustments on loans and loans tocustomers. It is one of the risk indicators for bank assets: as theindicator diminishes, so does the level of bank asset risk.Covered bondA special bank bond which, in addition to the issuing bankguarantee, can also use the guarantee on a portfolio of mortgageloans or other prime quality loans granted to a specific SPV for thispurpose.Banks that intend to issue covered bonds must possess capital ofno less than 500 million and a capital coefficient atconsolidated level no lower than 9%.For assets that may potentially be used as a guarantee, the portiontransferred cannot exceed the following limits, fixed according tothe level of capitalisation:- 25% when the capital coefficient is ≥ 9% and

Exotics (derivatives)Non-standard derivatives, normally not listed on regulated markets.EVA - Economic Value AddedEVA is an indicator of the value created by a company. It expressesthe capacity to generate value in monetary terms, as the differencebetween net operating profit (NOPAT) and the cost of investedcapital.FFactoringA disposal contract with recourse (credit risk borne by the factor) orwithout recourse (credit risk borne by the seller) transferringaccounts receivable to banks or specialist companies formanagement and collection purposes, which may be associatedwith a loan granted to the seller.Fair valueThe amount for which an asset could be exchanged or a liabilityextinguished in an arm’s length transaction between willing andknowledgeable parties. Often identical to the market price. Basedon IAS (see definition), banks apply fair value to the evaluation offinancial instruments (assets and liabilities) for trading andavailable for sale and to derivatives, and can use it to increase thevalue of equity investments and various tangible and intangibleassets (with different types of impact on the income statementaccording to the different activities considered).Fair value hedgeHedging against exposure to a variation in the fair value of abalance sheet item, attributable to a particular risk.Fairness/Legal opinionAn opinion given on request by experts with proven professionalcapacity and competence, relating to the fairness of economicterms and/or lawfulness and/or technical aspects of a giventransaction.Floating LegFloating “leg” of an IRS (see definition) under which two partiesswap a fixed interest rate flow (fixed leg) for a floating interest rateflow (floating leg) calculated on a notional amount.FloorOTC interest rate derivative contract which sets a minimum limiton decreases in the buyer rate.ForwardsForward contracts on interest rates, exchange rates or stockindexes, generally negotiated in over-the-counter markets andwhose conditions are established at the time when the contract isentered into, but which will be fulfilled at a predetermined futuredate, through the receipt or payment of differentials calculated withreference to parameters that vary according to the purpose of thecontract.FRA - Forward Rate AgreementContract by which the parties agree to receive (pay) on maturity thedifference between the value calculated by applying apredetermined interest rate to the transaction value and the valueachieved by a benchmark rate chosen in advance by the parties.FundingProvision of the funds, in various forms, necessary to financecompany activity or specific financial transactions.FuturesStandardised future contracts under which the parties agree toexchange securities or physical commodities at a fixed forwardprice and at a future date. These contracts are normally traded onorganised markets where their execution is guaranteed. In practice,futures on securities often do not involve the physical exchange ofthe underlying value.GGap analysisTechnique supporting Asset and Liability Management (seedefinition), which analyses the difference (gap) between asset andliability items, on the basis of the interest rate review date of saiditems. A positive gap indicates a positive change in expectedinterest margin widens as interest rates increase. Vice versa in theopposite case.Gap RatiosGap-related indicators.GoodwillIdentifies the amount paid to acquire a shareholding and is equalto the difference between the cost and the correspondingpercentage of shareholders’ equity, for the part not attributable toelements making up the assets of the acquired company.GovernanceIdentifies the set of instruments and regulations that govern the waya company is run, with particular reference to the transparency ofcorporate documents and records and to the completeness ofdisclosures to the market.GreeksParameters that measure the sensitivity with which a derivativecontract (e.g. an option) reacts to changes in value of theunderlying asset, or other parameters (typically intrinsic volatility,interest rates, share prices, etc.).HHedge accountingRules on the accounting of hedging transactions.Hedge fundA mutual investment fund - denied to traditional investors - able touse sophisticated tools or investment strategies such as "shortselling", derivatives (options or futures, even above 100% ofcapital), hedging (of the portfolio against market volatility throughshort selling and use of derivatives) and financial leverage(borrowing for the purpose of investing the sum borrowed).Herfindahl Indexni1H ni1EADEAD2ii: index (calculated in relation toexposures) used in the algorithm that determines the measure ofinternal capital relative to concentration risk.HFT - Held For TradingIAS accounting category used to classify trading assets andliabilities.HTM - Held To MaturityIAS accounting category used to classify assets held to maturity(financial instruments).106

IIAS/IFRSInternational accounting standards issued by the InternationalAccounting Standard Board (IASB), an international independentbody established in April 2001, involving the accountingprofessions in the main countries and, with observer status, theEuropean Union, IOSCO (International Organisation of SecuritiesCommissions) and the Basle Committee. This body succeeded theInternational Accounting Committee (IASC) formed in 1973 topromote the harmonisation of regulations for the preparation ofcorporate financial statements. When IASC became IASB, thedecision was taken, inter alia, to call the new standards the“International Financial Reporting Standards” (IFRS).ImpairmentAs regards IAS (see definition), impairment refers to the loss invalue of a balance sheet asset, recorded in the event in which thebook value exceeds the recoverable value or the amount thatcould be obtained from selling or using the asset. All assets mustbe impairment tested, with the exception of those designated at fairvalue, for which any loss (and gain) in value is intrinsic.Incremental Beta GapGap analysis method which, for customer-originated items, takesinto account the percentage of absorption by internal rates of achange in the external market rate.Index linkedPolicies with performance directly linked to a share index or otherreference value.Interest rate riskCurrent or prospective risk of a change in the interest margin andeconomic value of the company following unexpected changes ininterest rates with an impact on the banking book.Internal dealingTransactions performed by distinct operating units of a company.The associated documentation assumes accounting significanceand contributes to determining the position (trading or hedging) ofindividual units that performed it.IntradayUsed to refer to an investment/disinvestment transaction performedin the course of a single day involving the negotiation of a security.It is also used in reference to prices listed during the course of anyone day.Investment bankingThis is a highly specialised finance segment that deals in particularwith helping companies and governments issue securities and,more generally, to gather funds on the capital market.Investment gradeTerm used with reference to high quality bonds that have receiveda medium/high rating (e.g. no less than BBB on Standard & Poor’sscale).IRB - Internal Rating Based AdvancedInternal rating approach within the framework of the New BasleAccord, separated into basic and advanced methods. Theadvanced approach can only be used by institutions that meet thestrictest minimum requirements with respect to the basic approach.In this case, all input estimations PD, LGD, EAD, Maturity) for thecredit risk assessment are made internally. In the basic method,only the PD is estimated by the Bank.IRS – Interest Rate SwapA contract in which two parties agree to exchange flows onpredetermined notional amount with a fixed/floating orfloating/floating rate.JJudgmentalA rating assignment method also based on a subjective opinion.JuniorIn a securitisation transaction, it is the lowest-ranking tranche ofthe securities issued, being the first to bear losses that may occur inthe course of recovery of the underlying assets.“Junior”, “Senior” and “Mezzanine” exposuresJunior exposures are those reimbursed last, therefore absorbingthe initial losses produced by the securitisation operation. Seniorexposures are the first exposures to be redeemed. The “mezzanine”category includes the exposures with reimbursement priority at anintermediate stage.LL.A.T. - Liability Adequacy TestProcedure involving the adequacy test of the book value of netreserves (meaning balance sheet reserves reduced by the costs ofacquisition to be deferred and intangible assets) based on thediscounting of expected future cash flows generated by contracts inthe policy portfolio examined and using the best and mostconsistent actuarial assumptions. Should this test show that the netreserves are less than the “realistic reserve", the resulting reservedeficit would have to be recorded in the income statement.Lead arrangerBank responsible for organising a securitisation transaction. Theactivities performed by the arranger include, inter alia, checking ofthe portfolio derived from the securitisation through qualiquantitativeanalysis, the handling of relations with ratingsagencies, preparation of an information prospectus and theidentification and resolution of accounting and legal problems.Lead manager – BookrunnerThe lead figure in an issuing syndicate of a bond; he deals with thedebtor, is responsible for choosing the “co-lead manager” andother members of the underwriting syndicate in agreement with thesame debtor; he determines the terms and conditions of issue,manages the execution (almost always undertaking to place themost relevant portion on the market) and keeps the books(bookrunner); in addition to the reimbursement of expenses andusual fees, he receives a special commission for this service.L&R - Loans & ReceivablesIAS accounting category used to classify financial assets other thanderivatives and not listed on active markets, with fixed orcalculable payments measured at amortised cost.LGD - Loss Given DefaultIt indicates the estimated loss rate in the event of the default of adebtor.Liquidity riskThe likelihood that the company will not be able to meet itspayment commitments due to its inability to liquidate assets orobtain enough market funding (funding liquidity risk) or due to thedifficulty/impossibility of easily converting positions in financialassets into cash without significantly and unfavourably influencingthe price due to the insufficient strength of the financial market orits temporary malfunctioning (market liquidity risk).107

Lower Tier IISubordinated liabilities forming part of Tier II capital (seedefinition) provided that the contracts governing their issueexpressly envisage:a) In the event of winding-up of the issuer, that the debt isredeemed only after all other creditors not equally subordinatedhave been paid;b) The term of the contractual relations is equal to or greater than5 years and, should the maturity be undetermined, notice of atleast 5 years is required for repayment;c) Early repayment of the liabilities only at the issuer’s initiative andrequires specific approval from the Bank of Italy.The amount of subordinated loans admitted to Tier 2 capital isreduced by one fifth each year during the 5 years prior to expiry ofthe contract, in the absence of an amortisation plan that producessimilar effects.LTV – Loan to Value RatioRatio between the amount of the mortgage, and the value of theproperty for which the loan is required or the price paid by thedebtor to acquire the property. The LTV ratio measures the amountof own funds used by the debtor to purchase the property as aproportion of the value of the asset guaranteeing the loan. Thehigher the LTV ratio, the lower the amount of own funds the debtorneeds to purchase the property, and the lower the protection thecreditor enjoys.MMark to MarketProcess of evaluating a portfolio of securities or other financialinstruments based on the application of mathematical financialmodels.Mark to ModelProcess of evaluating a portfolio of securities or other financialinstruments, which makes it possible to carry out value adjustmentsof mark to market estimates (see definition), in order to incorporatein the balance sheet values the element of "uncertainty" whichcannot be shown in a model. These adjustments, which satisfy thegeneral principle of caution and are based on experience, areperformed, for example, when inputs to the model are mainlyestimated within the company (“entity-specific”), when it is knownthat the model does not incorporate certain recent structuralchanges in the market and, in general, each time that a part of thephenomenon is not explained by the variables considered. Thisvaluation policy must be applied consistently in the long term andaccompanied by suitable disclosures to the public on theestimation methods used and reasons underlying the adjustmentsmade.Mark upMargin applied as remuneration, which for a bank is given ataggregate level by the difference between the average activeinterest rate of the technical forms of application considered andthe Euribor rate.Market dislocationFinancial market turbulence characterised by a sharp decrease intrading on financial markets with difficulty in obtaining priceinformation from specialised info-providers.Market makingFinancial activity carried out by specialised intermediaries, whosetask consists of guaranteeing liquidity and depth to the market,both through their continuous presence and through their role ascompetitive pricing guide.Market riskRisk of variation in the market value of the positions in the tradingportfolio for supervisory purposes due to unexpected changes inmarket conditions and creditworthiness. This also includes the risksfrom unexpected changes in exchange rates and commodity pricesrelating to balance sheet positions.Maturity LadderThe increasing scale of maturities of treasury asset and liabilityitems.Medium Term noteDebt securities with a maturity of 5-10 years.Merchant bankingThis includes the activities of subscription of securities - shares ordebt securities - issued by corporate clients for subsequentplacement on the market, acquisition of shareholdings for longerperiods but with the aim of transferring them later, and theproviding of business consulting services in the matter of mergersand acquisitions or reorganisation.MezzanineIn a securitisation transaction it represents the tranche rankingbetween the junior tranche and senior tranche.MonolineInsurance companies that, in exchange for a commission,guarantee the redemption of given bond issues. Established in the1970s to ensure the issues of local entities against insolvency, theirservices were particularly appreciated for issues of complexfinancial products: the structure and underlying assets of saidissues are often extremely problematic; through monolinecoverage, the portions of debt guaranteed by the latter becomemuch easier to evaluate and more attractive to risk averse investors,given that the risk of insolvency is assumed by the insurancecompany.NNAV - Net Asset ValueThe value of the unit into which the fund’s capital is divided.Non performingTerm generally referring to loans characterised by irregularperformance.OOperational riskThe risk of suffering losses due to the inadequacy or inefficiency ofprocedures, human resources or internal systems, or by externalevents. Operational risk also includes legal risk, or the risk of lossdue to the infringement of laws or regulations, contractual or offcontractliability or other disputes; however it does not includestrategic risk (loss due to incorrect management strategies) orreputation risk (loss of market share when the bank brandbecomes associated with negative events).OptionRepresents the right, but not the commitment, acquired onpayment of a premium, to purchase (call option) or sell (putoption) a financial instrument at a determined price (strike price) by(American option) or at a fixed date in the future (European option)OriginatorThe party transferring an owned portfolio of assets with deferredliquidity to an SPV (see definition) for securitisation.108

OTC - Over-The-CounterTransactions carried out directly between parties, rather thanthrough an organised market.OTC derivativesOver-The-Counter (OTC) derivatives are those agreed directlybetween the parties outside a regulated market.Over-collateralisationForm of credit guarantee in which the portfolio of assets pledgedas collateral to the securities issued must have a higher value thansecurities offered.Overdue receivables“Overdue exposures” are exposures that are overdue and/orborderline as defined in current supervisory instructions.PPast dueExposures that are continuously overdue and/or borderline formore than 90/180 days, in accordance with the definitionprovided in current Supervisory Instructions.Payout ratioIndicates the percentage of net profit distributed to shareholders.This amount depends largely on the company’s self-financingneeds and the returns expected by shareholders.PD - Probability of DefaultRepresents the probability that, within the space of one year, adebtor will default.PerformingTerm generally referring to loans with a steady performance.Plain vanilla (derivatives)Derivative products (see definition) where the contractual terms areconsidered standard (e.g. Call/Put, Futures, Swap).Price sensitiveTerm that generally refers to data or information not of publicdomain which, if made public, could considerably affect the priceof a security.Price-to-Book RatioRatio between capitalisation and the book value of a listedcompany.PricingBroadly speaking, it generally refers to the methods used todetermine returns and/or costs of products and services offered bythe Bank.Private bankingBusiness designed to provide high-end customers with assetmanagement, advisory and other customised services.Private equityActivity targeting the acquisition of equity interests and theirsubsequent sale to specific counterparties, without publicplacement.RRARORAC - Risk Adjusted Return On Risk Adjusted CapitalIs an indicator calculated as the ratio between EVA (see definition)and allocated/absorbed capital. It is the value generation capacityper unit of risk assumed, expressed in percentage terms.RatingAn evaluation of the quality of a company or its debt security issues,based on the company’s financial strength and outlook. Thisassessment is performed by specialist agencies.Regulatory capitalIt comprises the base capital – admitted to the calculation withoutany limits – and the extra capital which is admitted within themaximum limit of the base capital. Equity investments, innovativeand non-innovative capital instruments, hybrid capitalisationinstruments and subordinated liabilities, held in other banks andfinancial businesses are deducted from these aggregates. Equityinvestments in insurance companies and subordinated liabilitiesissued by the same companies are also deducted, together withfurther elements connected with the calculation of capital requisites.Especially, the elements listed hereunder are deducted by 50%from the base capital and by 50% by the Tier 2 capital:a) Equity investments in banks, finance businesses, IMELand superior payment institutions that are higher than10 per cent of the share capital of the investee and theinnovative and non-innovative capital instruments, thehybrid capitalisation instruments and the subordinatedinstruments (2nd and 3rd level) issued by those entities,whatever the allocation portfolio;b) Equity investments in insurance companies, as well ascapital instruments issued by the same companies, ifcalculated by the issuer for capital purposes;c) Nominal shares of Italian and foreign variable capitalinvestment companies, if over 20,000 shares;d) Shares or quotas in banks, finance businesses, IMEL andsuperior payment institutions that are equal or lowerthan 10 per cent of the share capital of the investee andthe innovative and non-innovative capital instrumentsand the subordinated instruments (2nd and 3rd level),other than those indicated in the above item a), issuedin favour of banks, finance businesses, IMEL andpayment institutions, even not investees, whatever theallocation portfolio. These elements are deducted forthe portion of their total amount exceeding 10 per centof the Tier 1 and Tier 2 capital value, beforedeductions;e) Securitisation positions;f) Limited to banks authorised to use the IRB systems tocalculate the capital requisite with respect to credit andcounterparty risk: i) the surplus of expected losses withrespect to total value adjustments; ii) expected lossesrelated to capital instruments and expositions to savingscollective investment bodies in the event of underlyingrelated to or treated as capital instruments;g) Equity holding in the Bank of Italy;h) Exposures connected with the settlement risk on non-DVP transactions.Reputation riskRisk of incurring losses as a result of negative perception of thebank’s image by customers, counterparties, bank shareholders,investors, supervisory authorities or other stakeholders.Restructured creditPosition whereby the Bank has agreed to extend the repaymentterms, renegotiating the exposure at interest rates that are lowerthan market rates.Risk free rateInterest rate on a risk free asset. In practice this indicates theinterest rate of short term government securities, which in effectcannot be considered risk free.Risk management109

Acquisition, measurement, assessment and overall management ofthe various types of risk and related hedging.Risk-weighted assetsThis is the amount obtained by multiplying the total regulatorycapital (credit risk, market risk and other prudential requirements)by a coefficient equal to 12.5. For companies in banking groups,the total regulatory capital is reduced by 25%.RMBS - Residential Mortgage-Backed SecuritiesABS issued under securitisations of loans backed by residentialproperty mortgages.RWA - Risk Weighted AssetsCash and off-balance sheet assets (derivatives and guarantees)classified and weighted based on different risk-related coefficients,pursuant to banking regulations issued by the supervisory bodies(e.g.: Bank of Italy, Bafin, etc.) for the calculation of solvencycoefficients.SScorecardSystem of expert quality assessment methods.ScoringSystem of analysis of company clientele, resulting in an indicatorobtained from the examination of financial statements figures andassessment of sector performance forecasts, analysed usingstatistical methods.SecuritisationDisposal of loans or other non-negotiable financial assets to aqualified company (SPV) created for the sole purpose ofimplementing such transactions and arranging conversion of theloans or assets into securities that can be traded on a secondarymarket.Senior/super seniorIn a securitisation, the tranche with the highest privilege in terms ofremuneration and redemption priority.Sensitivity analysisAn analysis that examines the sensitivity of the actual value of theBank’s assets and liabilities to changes in the external interest ratescenarios; this analysis is a refined version of duration analysis inthat rather than assessing the impact of a parallel shift in theinterest rate curve, it assesses the market value of the Bank’s assetsand liabilities and, consequently, the market value of capital, byusing interest rate curves different from those in force.ServicerIn securitisation transactions, this figure - on the basis of a specialservicing contract - continues to manage the securitised credits orassets after they have been transferred to the SPV responsible forthe issue of the securities.Shadow accountingAccounting method that provides for the allocation to technicalreserves of insurance or investment contracts with discretionaryprofit sharing, unrealised capital losses and/or gains from relatedactivities, as if they had been realised.Said adjustment is charged to shareholders’ equity or the incomestatement depending on whether the corresponding gains or lossesare charged to shareholders’ equity or the income statement.In the case of net capital losses, these are attributed to the insuredonly after having checked the guaranteed minimum using theLiability Adequacy Test; in the opposite case, these remain fullycharged to the company. For example, if assets are classified as“Available for Sale” then at year end their book value is aligned tomarket value at the end of the financial year, recognition ofshadow liabilities are recognised to technical reserves in thebalance sheet to the extent of latent capital gains/losses pertainingto the insured, countered by recognition to shareholders’ equity foran amount equal to the latent capital gains/losses of the portionpertaining to shareholders. On the other hand, in the event inwhich the relative securities are recorded at fair value in theincome statement, account will be taken of the effect of the latentcapital gains/losses , recording shadow liabilities and passingthem to the income statement, with a variation in the technicalreserves for the share pertaining to the insured.Shifted Beta GapGap analysis method which, in addition to the repositioning ratiosmentioned earlier, in determining the impact on the interest marginalso takes into account phenomenon of shifts in customeroriginateditems; i.e. the fact that the rates of a single customeroriginateditem will not react immediately to decisions to adjustmarket rates but, due to stickiness, will be gradual and diluted.“Sovereign” riskThe sovereign risk with respect to the central Government, an entitywhich has the legal power of taking resources from tax payers andmaking choices of economic policy for the purposes of creatingresources, denominated in foreign or domestic currency, neededto fulfil commitments with respect of foreign creditors. The risk iscalled sovereign by reason of the fact that, unlike privateindividuals, the central Government is the highest authority, whichtheoretically is vested with the power of issuing laws, at its owndiscretion, which might allow to infringe, within its own legislation,commitments with respect to debtors, thus declaring default orunilaterally rescheduling contract terms on special public debtsecurities.SPE/SPVSpecial Purpose Entities (SPE) or Special Purpose Vehicles (SPV) aresubjects (companies, “trusts” or other entities) that are speciallycreated to reach a set objective that is well defined and delimited,or to carry out a specific transaction. SPE/SPVs have a legalstructure independent of other parties to the transaction andgenerally have no operating or management structures of theirown.Speculative gradeTerm used to identify issuers with a low rating (e.g.: below BBB onthe Standard & Poor’s scale).SpreadThis term usually indicates the difference between two interest rates,the difference between the bid and ask price in securities trading orthe price paid by a securities issuer in addition to the reference rate.StakeholdersPersons or entities who, in different capacities, interact with thecompany, contribute to results, influence its performance andassess its economic, social and environmental impact.StandardsThis term applies without distinction to both IAS/IFRS (InternationalAccounting Standards/International Financial and ReportingStandards) and FAS (Financial Accounting Standards).Stock optionTerm used to define the options offered to managers of a company,giving them the right to buy shares in the company based on aspecified price (strike price).Strategic riskCurrent or prospective risk of a reduction in profits or capital dueto:- Changes in the operating context;- Erroneous corporate decisions;- Inadequate implementation of decisions;110

- Poor reaction to changes in the competitive context.Stress testA simulating procedure designed to assess the impact of extrememarket scenarios on a bank’s overall risk exposure.Structured bondsBonds where the interest and/or repayment value depend on areal parameter (related to the commodity price) or indexperformances. In these cases the implicit option is separated outfor accounting by the host contract. In the event of parametrisationto interest rates or inflation (for example treasury certificates) theimplicit option is not separated out for accounting by the hostcontract.Subordinated loansFinancial instruments where the contractual terms envisage thatholders of documents representing the loan have rights that aresubordinate to other creditors in the event of winding-up of theissuer.Subprime loansThe subprime concept does not refer to the loan operation per se,but rather to the borrower. Technically subprime refers to aborrower that does not have a fully positive credit history as itcontains negative credit elements such as: unpaid instalments onprevious loans, bounced cheques, complaints, etc. These pastevents can indicate greater risk inherent in the party,corresponding to higher payments required by the intermediarygranting the loan.Operations with subprime customers developed on the Americanfinancial market, often using securitisation and security issuesagainst such loan agreements.Alt-A mortgages refer to mortgages granted on the basis ofincomplete or inadequate documentation.Swaps (of interest rates and currencies)Transactions consisting of an exchange of financial flows betweenoperators under various contractual arrangements. In interest rateswaps (IRS), the counterparties swap interest payment flowscalculated on a notional reference capital according todifferentiated criteria (e.g. one counterparty pays a fixed rate, theother a floating rate). In the case of a currency swap, thecounterparties exchange specific amounts of two differentcurrencies, repaying them over time according to predefinedarrangements that may regard both the notional capital andinterest.Synthetic securitisationSecuritisation structure (see definition) whereby transfer of the assetportfolio is performed through the use of credit derivatives orsimilar types of guarantee that allow transfer of the portfolio risk.TTainting RuleRule defined in paragraph 9 of IAS 39, applicable to financialinstruments classified as HTM on the strength of which "(...) anentity must not classify any financial asset as held to maturity if,during the course of the current or previous two financial years, ithas sold or reclassified, prior to maturity, a significant amount ofinvestments held to maturity (not insignificant in relation to theoverall held to maturity portfolio), (...)”.Tier 1 CapitalIt is made up by the following elements: a1) the capital paid; a2)the reserves, included share premium; a3) innovative and noninnovativecapital instruments; a4) profit for the period; a5)positive prudential filters of Tier1 capital.The following negative elements are deducted: b1) own shares;b2) goodwill; b3) intangible assets; b4) value adjustments onreceivables; b5) losses recorded in previous years and in thecurrent year; b5) regulatory value adjustments on assets measuredat fair value; b7) other negative elements; b8) negative prudentialfilters of the Tier 1 capital.The difference between the sum of elements from a1) to a5) andthe sum of those from b1) to b8) makes up the “Tier 1 capital".The Bank of Italy might require that other elements be deductedwhich, due to their characteristics, might dilute the Tier 1 capital.Tier 1 RatioRatio of a bank’s Tier 1 capital to the bank's or the bankinggroup's aggregate capital requisite, multiplied by 12.5.Tier 2 (supplementary capital)It is made up by the following elements: a1) valuation reserves; a2)innovative and non-innovative capital instruments, which cannotbe calculated in the Tier 1 capital; a3) hybrid capitalisationinstruments and subordinated liabilities; a4) net capital gains onequity investments; a5) any surplus on total value adjustmentscompared to expected losses; a6) other positive elements; a7)positive prudential filters of the supplementary capital.The following negative elements are deducted: b1) net capitallosses on equity investments; b2) other negative elements; b3)negative prudential filters of the supplementary capital.The difference between the sum of elements from a1) to a5) andthe sum of those from b1) to b8) makes up the “Tier 2 capital".Tier 3The capital elements included in the Tier 3 capital can be onlyusedto hedge the capital requisite of market risks – excluding thecapital requisiteswith respect to the counterparty risk and the settlement risk relatedto the “Regulatorytrading portfolio” and within the limit equal to 71.4% of theabove-mentioned requisites.Time valueChange in the financial value of an instrument in relation to adifferent time horizon when certain cash flows will becomeavailable or due.Total return swapA contract under which one party, usually the owner of the securityor reference credit, agrees to make periodic payments to aninvestor (protection seller) based on the capital and interestgenerated by said asset. Vice versa, the investor agrees to pay afloating rate, plus any asset depreciation compared to when thecontract was signed.Trading bookUsually refers to securities or in any event financial instruments ingeneral, identifying the portion of the portfolio held for trading.Trigger eventA contractually predefined event triggering specified contractingparty rights.Trigger PointThresholds.TROR - Total rate of return swapA contract under which the “protection buyer”(also called the “totalreturn buyer”) undertakes to transfer all cash flows generated bythe “reference obligation” to the “protection seller” (also called the“total return receiver”), who transfers as a counter-item to the“protection buyer” cash flows linked to the performance of the“reference rate”. At the cash flow coupon date (or contract expiry),the total return payer pays the total return receiver anyappreciation of the reference obligation; vice versa, in the event ofdepreciation of the reference obligation it is instead the total return111

eceiver that pays the related amount to the total return payer.Essentially, a TROR is a structured financial product combining acredit derivative with an interest rate swap.UUCIT - Undertaking for Collective Investment in TransferableSecurities“Collective Investment Schemes", pursuant to letter m), article 1 ofthe TUF, (Consolidated Law on Finance) which invest sums ofmoney collected from the saving public in financial instruments orother assets in accordance with the principle of the apportionmentof risk. They include mutual funds (open and closed end, Italianand foreign) and SICAVs.ZZero couponA bond without coupon, the return on which is the differencebetween the issue price (or purchase price) and the redemptionvalue.Underwriting (commission)Commission claimed in advance by the bank based on assumptionof the underwriting risk associated with a loan.Unit-linkedLife insurance policies with performance linked investment fundvalues.UpfrontAmount paid to a counterparty at the time of signing a derivativecontract.Upper Tier IIHybrid capitalisation instruments included in Tier II capital (seedefinition) when the contract envisages that:a) In the event of balance sheet losses resulting in a decrease inpaid-up capital and reserves to below the minimum requiredcapital for banking activity authorisation, amounts collected on theaforementioned liabilities and accrued interest can be used tocover such losses, allowing the issuer to continue operations;b) In the event of a negative operating performance, the right torepayment can be suspended to the extent necessary to avoid orlimit potential losses as much as possible;c) In the event of winding-up of the issuer, the debt is redeemedonly after all other creditors not equally subordinated have beenpaid;Non irredeemable hybrid capital instruments must have a term ofequal to or more than 10 years. The contract must explicitlycontain the clause that subordinates repayment of the loan onissue of a declaration of no impediment by the Bank of Italy.VVaR - Value at RiskValue indicating the maximum possible loss on a portfolio due tothe effect of market performance, with a certain probability andassuming that the positions require a given period of time forrelated disposal.WWarrantNegotiable instrument offering the holder the right to buy or sellfixed income securities or shares according to precise methodsfrom/to the issuer.Watchlist loansLoans at nominal value in respect of which subjects are in asituation of objective difficulty which, however, can be surmountedin a suitable period of time.112

1) International accounting standards (IAS/IFRS)IAS/IFRS Description Endorsement EC Regulation (1)Framework Framework See note (2)IAS 1Presentation of Financial StatementsReg. 1274/2008 (18/12/2008); Reg. 53 (22/01/2009), Reg. 70(24/01/2009), Reg. 494 (12/06/2009), Reg. 243/2010 (24/03/2010),Reg. 149/2011 (19/02/2011)IAS 2 Inventories Reg. 1126/2008 (29/11/2008), Reg. 70 (24/01/2009)IAS 7Cash flow statementReg. 1126/2008 (29/11/2008), Reg. 1260 (17/12/2008), Reg. 1274(18/12/2008), Reg. 70/2009 (24/01/2009); Reg. 494/2009(12/06/2009); Reg. 243/2010 (24/03/2010)IAS 8IAS 10IAS 11IAS 12Accounting Policies, Changes in Estimates and ErrorsReg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 70/2009(24/01/2009)Events after the Balance Sheet Date Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 70/2009(23/01/2009), Reg. 1142 (27/11/2009)Construction ContractsTaxes on incomeReg. 1126/2008 (29/11/2008), Reg. 1260 (17/12/2008), Reg. 1274(18/12/2008)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 495(12/06/2009)IAS 16 Property, Plant and EquipmentReg. 1126/2008 (29/11/2008), Reg. 1260 (17/12/2008), Reg. 1274(18/12/2008), Reg. 70/2009 (24/01/2009); Reg. 495 (12/06/2009)IAS 17 Leasing Reg. 1126/2008 (29/11/2008), Reg. 243/2010 (24/03/2010)IAS 18 Revenues Reg. 1126/2008 (29/11/2008), Reg. 69 (24/01/2009)IAS 19IAS 20Employee BenefitsAccounting for Government Grants and Disclosure ofGovernment AssistanceReg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 70/2009(24/01/2009)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 70/2009(24/01/2009)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 69IAS 21 The Effects of Changes in Foreign Exchange Rates (24/01/2009), Reg. 494 (12/06/2009), Reg. 149/2011 (19/02/2011)IAS 23 Financial charges Reg. 1260 (17/12/2008), Reg. 70/2009 (24/01/2009)IAS 24Related Party DisclosuresIAS 26 Accounting and Reporting by Retirement Benefit Plans Reg. 1126/2008 (29/11/2008)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 632/2010(20/07/2010)IAS 27IAS 28IAS 29IAS 31Consolidated and Separate Financial StatementsInvestment in AssociateFinancial Reporting in Hyperinflationary EconomiesInterests in Joint VenturesReg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 69/2009(24/01/2009), Reg. 70/2009 (24/01/2009), Reg. 494/2009 (12/06/2009)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 70/2009(24/01/2009), Reg. 494 (12/06/2009), Reg. 495 (12/06/2009), Reg.149/2011 (19/02/2011)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 70/2009(24/01/2009)Reg. 1126/2008 (29/11/2008), Reg. 70/2009 (24/01/2009), Reg. 494(12/06/2009), Reg. 149/2011 (19/02/2011)IAS 32Financial instruments: presentationReg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 53/2009(22/01/2009), Reg. 70/2009 (24/01/2009), Reg. 494 (12/06/2009), Reg.495 (12/06/2009), Reg. 149/2011 (19/02/2011)IAS 33Earnings per ShareReg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 494(12/06/2009), Reg. 495 (12/06/2009)113

IAS 34IAS 36IAS 37IAS 38Interim Financial ReportingImpairment of assetsProvisions, Contingent Liabilities and ContingentAssetsIntangible assetsReg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 70/2009(24/01/2009), Reg. 495 (12/06/2009), Reg. 149/2011 (19/02/2011)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 69/2009(24/01/2009), Reg. 70/2009 (24/01/2009), Reg. 495 (12/06/2009), Reg.243/2010 (24/03/2010)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 495(12/06/2009)Reg. 1126/2008 (29/11/2008), Reg. 1260 (17/12/2008), Reg. 1274(18/12/2008), Reg. 70/2009 (24/01/2009), Reg. 495 (12/06/2009), Reg.243/2010 (24/03/2010)IAS 39IAS 40IAS 41Financial instruments: recognition and measurementInvestment PropertyAgricultureReg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 53(22/01/2009), Reg. 70 (24/01/2009); Reg. 494 (12/06/2009), Reg. 495(12/06/2009), Reg. 824/2009 (10/09/2009); Reg. 839/2009(16/09/2009); Reg. 1171/2009 (01/12/2009); Reg. 243/2010(24/03/2010), Reg. 149/2011 (19/02/2011)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 70/2009(24/01/2009)Reg. 1126/2008 (29/11/2008), Reg. 1274 (18/12/2008), Reg. 70/2009(24/01/2009)IFRS 1IFRS 2IFRS 3IFRS 4First adoption of the international accounting standardsShare-based paymentsBusiness combinationsInsurance agreementsReg. 1126/2008 (29/11/2008), Reg. 1260 (17/12/2008), Reg. 1274(18/12/2008), Reg. 69 (24/01/2009), Reg. 70 (24/01/2009), Reg. 254(26/03/2009), Reg. 494 (12/06/2009), Reg. 495 (12/06/2009), Reg.1136 (26/11/2009), Reg. 1164 (01/12/2009), Reg. 550/2010(24/06/2010), Reg. 574/2010 (01/07/2010), Reg. 662/2010(24/07/2010), Reg. 149/2011 (19/02/2011)Reg. 1126/2008 (29/11/2008), Reg. 1261 (17/12/2008), Reg. 495(12/06/2009), Reg. 243/2010 (24/03/2010); Reg. 244/2010(24/03/2010)Reg. 1126/2008 (29/11/2008), Reg. 495/2009 (12/06/2009), Reg.149/2011 (19/02/2011)Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008), Reg.494/2009 (12/06/2009), Reg. 1165/2009 (01/12/2009)IFRS 5Non-current Assets Held for Sale and DiscontinuedOperationsIFRS 6 Exploration for and Evaluation of Mineral Resources Reg. 1126/2008 (29/11/2008)IFRS 7Financial instruments: Additional informationReg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008), Reg.70/2009 (24/01/2009); Reg. 494/2009 (12/06/2009), Reg. 1142/2009(27/11/2009), Reg. 243/2010 (24/03/2010)Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008), Reg.53/2009 (22/01/2009), Reg. 70/2009 (24/01/2009), Reg. 495/2009(12/06/2009), Reg. 824/2009 (10/09/2009), Reg. 1165/2009(01/12/2009), Reg. 574/2010 (01/07/2010), Reg. 149/2011(19/02/2011)IFRS 8Financial instruments: Additional informationReg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008), Reg.243/2010 (24/03/2010), Reg. 632/2010 (20/07/2010)114

2) Interpretations (SIC/IFRIC)SIC / IFRIC Description Endorsement EC Regulation (1)IFRIC 1Changes in Existing Decommissioning, Restorationand Similar LiabilitiesReg. 1126/2008 (29/11/2008), Reg. 1260/2008 (17/12/2008), Reg.1274/2008 (18/12/2008)IFRIC 2Members' Shares in Co-operative Entities and SimilarInstruments Reg. 1126/2008 (29/11/2008), Reg. 53/2009 (22/01/2009)IFRIC 4Determining Whether an Arrangement Contains aLease Reg. 1126/2008 (29/11/2008), Reg. 254/2009 (26/03/2009)IFRIC 5Rights to Interests Arising from Decommissioning,Restoration and Environmental Rehabilitation Funds Reg. 1126/2008 (29/11/2008)IFRIC 6IFRIC 7Liabilities Arising from Participating in a SpecificMarket - Waste Electrical and Electronic Equipment Reg. 1126/2008 (29/11/2008)Applying the Restatement Approach under IAS 29Financial Reporting in Hyperinflationary Economies Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008)IFRIC 9 Reassessment of Embedded DerivativesReg. 1126/2008 (29/11/2008), Reg. 495/2009 (12/06/2009), Reg.1171/2009 (01/12/2009); Reg. 243/2010 (24/03/2010)IFRIC 10 Interim Financial Reporting and Impairment Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008)IFRIC 12 Agreements for services licensed Reg. 254/2009 (26/03/2009)IFRIC 13 Customer Loyalty Programmes Reg. 1262/2008 (17/12/2008), Reg. 149/2011 (19/02/2011)IFRIC 14The Limit on a Defined Benefit Asset, MinimumFunding Requirements and their InteractionReg. 1263/2008 (17/12/2008); Reg. 1274/2008 (18/12/2008), Reg.633/2010 (20/07/2010)IFRIC 15 Agreements for the construction of real estate Reg. 636/2009 (23/07/2009)IFRIC 16 Hedge of net investment in a foreign management Reg. 460/2009 (05/06/09); Reg. 243/2010 (24/03/2010)IFRIC 17 Distributions of non-cash assets to owners Reg. 1142/2009 (27/11/2009)IFRIC 18 Transfers of assets from customers Reg. 1164/2009 (01/12/2009)IFRIC 19 Extinguishing financial liabilities with equity instruments Reg. 662/2010 (24/07/2010)SIC 7 Introduction of the €Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008), Reg.494/2009 (12/06/2009)SIC 10Government Assistance – No Specific Relation toOperating Activities Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008)SIC 12 Consolidation – Special Purpose Entities Reg. 1126/2008 (29/11/2008)SIC 13Jointly Controlled Entities – Non-MonetaryContributions by Venturers Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008)SIC 15 Operating Leases – Incentives Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008)SIC 21Income Taxes – Recovery of Revalued Non-Depreciable Assets Reg. 1126/2008 (29/11/2008)SIC 25Income Taxes – Changes in the Tax Status of anEnterprise or its Shareholders Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008)SIC 27Evaluating the Substance of Transactions in the LegalForm of a Lease Reg. 1126/2008 (29/11/2008)SIC 29 Disclosure – Service Concession ArrangementsReg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008), Reg.254/2009 (26/03/2009)SIC 31Revenue – Barter Transactions Involving AdvertisingServices Reg. 1126/2008 (29/11/2008)SIC 32 Intangible Assets – Web Site Costs Reg. 1126/2008 (29/11/2008), Reg. 1274/2008 (18/12/2008)(1) The reported date refers to the publication of the Regulation in the Official Gazette of the European Community.(2) The framework of the international accounting standards is not an applicable accounting standard and can not be used to justifyexceptions to the standards adopted.On the contrary, it can be used to interpret and apply existing standards. The objectives of the reference framework include supportto IASB and national accounting standards boards for the development of new standards and the implementation of convergenceprojects for national and international standards.In case the reference framework and some accounting standards are in contrast, the international accounting standard wouldprevail.It is divided into four main parts: a) the objective of the financial statements; b) the qualitative characteristics that determine theusefulness of information in financial statements; c) the definition, recognition and measurement of the elements from whichfinancial statements are constructed; d) concepts of capital and capital maintenance.115

CERTIFICATION OF THE HALF-YEARLY CONDENSED FINANCIAL STATEMENTSPURSUANT TO ART. 81-TER OF CONSOB REGULATION NO. 11971 OF 14 MAY1999 AND SUBSEQUENT AMENDMENTS AND ADDITIONS116

Certification of the half-yearly condensed financial statements pursuant toart. 81-ter of Consob Regulation no. 11971 of 14 May 1999 and subsequentamendments and additions1. The undersigned Giovanni Berneschi, in his capacity as Chairman of the Board of Directors,and Daria Bagnasco, in her capacity as Manager responsible for preparing the Company'sfinancial reports, of Banca CARIGE S.p.A. certify, taking also into consideration Article 154-bis, paragraphs 3 and 4, of the Italian Legislative Decree no. 58 of 24 February 1998:- the adequacy in relation of the Company features and- the actual applicationof the administrative and accounting procedures put in place for preparing the half-yearlycondensed financial statements, in the first half of 2012.2. The assessment of the adequacy of the administrative and accounting procedures put in placefor preparing the half-yearly condensed financial statements as at 30 June 2012 is based on aModel defined by Banca CARIGE S.p.A. consistently with the Internal Control – IntegratedFramework issued by the Committee of Sponsoring Organisations of the TreadwayCommission, which represents the international commonly accepted standard for internalcontrol system.3. The undersigned also certify that:3.1 the half-yearly condensed financial statements:a) have been drawn up in compliance with applicable international accounting standardsrecognised by the European Community pursuant to European Parliament and CouncilRegulation no. 1606/2002 of 19 July 2002;b) correspond to the results of the accounting books and records;c) are suitable to provide a true and correct representation of the asset and liabilities and ofthe economic and financial situation of the issuer and of the group of companies includedin the scope of consolidation.3.2 The interim report on operations contains a reliable analysis of the references to the moresignificant events occurred in the first six months of this financial year and their impact onthe condensed half-yearly financial statements, together with a description of the mainrisks and uncertainties faced in the remaining six months of the financial year. The interimreport on operations also contains a reliable analysis of the information on significantrelated party transactions.Genoa, 30 July 2012The Chairmanof the Board of DirectorsGiovanni BerneschiThe Manager responsible for preparingthe Company’s financial reportsDaria BagnascoThis document has been translated into the English language solelyfor the convenience of international readers.It has been signed on the Italian original version.117

INDEPENDENT AUDITOR’S REPORT ON THE LIMITED AUDIT OF THE HALF-YEARLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS118

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