2002 Group Annual Report Eng3

Independent
auditors’
report on the
Consolidated
financial
statements
BERGAMO Piazza Vecchia

Consolidated
financial
statements
MODENA Duomo. Ghirlandina Tower

Consolidated financial statements
CONSOLIDATED BALANCE SHEET 31-12-2001

ASSETS (in thousands of euros) 31-12-2002 pro-forma Changes
10 CASH AND FUNDS WITH CENTRAL BANKS

AND POST OFFICES 336,041 364,523 -28,482 -7.8%
20 TREASURY BILLS AND OTHER BILLS

ELIGIBLE FOR REFINANCING
WITH CENTRAL BANKS 1,166,883 2,286,648 -1,119,765 -49.0%
30 DUE FROM BANKS 6,063,184 8,599,151 -2,535,967 -29.5%

a) on demand 380,718 1,220,647 -839,929 -68.8%
b) other loans 5,682,466 7,378,504 -1,696,038 -23.0%
40 DUE FROM CUSTOMERS 31,949,244 31,254,781 694,463 2.2%

of which:
- loans with third party assets under administration 101,554 10,648 90,906 853.7%
50 BONDS AND OTHER DEBT SECURITIES 3,633,256 3,229,605 403,651 12.5%

a) government 1,091,249 471,002 620,247 131.7%
b) banks 1,485,285 1,814,221 -328,936 -18.1%
of which:
- own securities 45,719 70,008 -24,289 -34.7%
c) financial institutions 577,543 528,929 48,614 9.2%
d) other issuers 479,179 415,453 63,726 15.3%
60 SHARES AND OTHER EQUITY SECURITIES 197,152 89,793 107,359 119.6%
70 EQUITY INVESTMENTS 417,239 345,998 71,241 20.6%

a) valued along the equity method 175,313 168,371 6,942 4.1%
b) other 241,926 177,627 64,299 36.2%
80 EQUITY INVESTMENTS IN GROUP COMPANIES 111,675 97,913 13,762 14.1%

a) valued along the equity method 59,234 41,874 17,360 41.5%
b) other 52,441 56,039 -3,598 -6.4%
90 POSITIVE CONSOLIDATION DIFFERENCES 353,892 333,681 20,211 6.1%
100 POSITIVE DIFFERENCES FROM EQUITY METHOD - 735 -735 -100.0%
110 INTANGIBLE ASSETS 197,955 274,432 -76,477 -27.9%

of which:
- start-up costs 21,264 16,073 5,191 32.3%
- goodwill 55,328 90,752 -35,424 -39.0%
120 TANGIBLE ASSETS 823,386 916,580 -93,194 -10.2%
150 OTHER ASSETS 2,478,761 2,467,708 11,053 0.4%
160 ACCRUED INCOME AND PREPAID EXPENSES 518,822 543,315 -24,493 -4.5%
a) accrued income 499,207 521,355 -22,148 -4.2%
b) prepaid expenses 19,615 21,960 -2,345 -10.7%
TOTAL ASSETS 48,247,490 50,804,863 -2,557,373 -5.0%
78

LIABILITIES (in thousands of euros) 31-12-2002 pro-forma Changes
10 DUE TO BANKS 6,055,868 9,077,044 -3,021.176 -33.3%

a) on demand 1,822,320 1,056,232 766,088 72.5%
b) term or with notice 4,233,548 8,020,812 -3,787,264 -47.2%
20 DUE TO CUSTOMERS 21,435,359 21,193,862 241,497 1.1%

a) on demand 16,438,325 15,962,627 475,698 3.0%
b) term or with notice 4,997,034 5,231,235 -234,201 -4.5%
30 DEBT SECURITIES IN ISSUE 12,693,334 12,979,189 -285,855 -2.2%

a) bonds 9,782,016 9,713,630 68,386 0.7%
b) certifications of deposit 2,740,239 2,898,917 -158,678 -5.5%
c) other 171,079 366,642 -195,563 -53.3%
40 THIRD PARTY ASSETS UNDER ADMINISTRATION 14,601 10,836 3,765 34.7%
50 OTHER LIABILITIES 2,178,953 2,070,201 108,752 5.3%
60 ACCRUED EXPENSES AND DEFERRED INCOME 367,221 451,457 -84,236 -18.7%

a) accrued expenses 292,101 380,624 -88,523 -23.3%
b) deferred income 75,120 70,833 4,287 6.1%
70 PROVISION FOR TERMINATION

BENEFITS 331,212 314,007 17,205 5.5%
80 PROVISIONS FOR RISKS AND CHARGES 650,399 585,136 65,263 11.2%

a) retirement fund and similar obligations 2,054 15,172 -13,118 -86.5%
b) tax provisions 443,471 402,254 41,217 10.2%
d) other provisions 204,874 167,710 37,164 22.2%
90 LOAN LOSS RESERVES - 854 -854 -100.0%
100 ALLOWANCE FOR GENERAL BANKING RISKS 58,265 58,265 - -
110 SUBORDINATED LIABILITIES 1,084,562 953,881 130,681 13.7%
120 NEGATIVE CONSOLIDATION DIFFERENCES - 6,703 -6,703 -100.0%
130 NEGATIVE DIFFERENCES FROM EQUITY METHOD 33,673 34,128 -455 -1.3%
140 MINORITY INTEREST 147,436 180,188 -32,752 -18.2%
150 SHARE CAPITAL 1,332,174 1,323,359 8,815 0.7%
160 SHARE PREMIUMS 162,008 97,798 64,210 65.7%
170 RESERVES 1,185,739 1,065,246 120,493 11.3%

a) legal reserve 259,331 231,699 27,632 11.9%
b) reserve for treasury shares - 51,646 -51,646 -100.0%
c) statutory reserves 508,094 373,890 134,204 35.9%
d) other reserves 418,314 408,011 10,303 2.5%
180 REVALUATION RESERVES 87,473 85,099 2,374 2.8%
200 NET INCOME (LOSS) FOR THE YEAR 429,213 317,610 111,603 35.1%
TOTAL LIABILITIES 48,247,490 50,804,863 -2,557,373 -5.0%
79

GUARANTEES AND COMMITMENTS (in thousands of euros) 31-12-2002 pro-forma Changes
10 GUARANTEES ISSUED 3,775,724 3,468,697 307,027 8.9%

of which:
- acceptances 79.893 79,352 541 0.7%
- other guarantees 3,695,831 3,389,345 306,486 9.0%
20 COMMITMENTS 3,064,345 2,842,195 222,150 7.8%

of which:
- sales with repurchase obligation - 1,433 -1,433 -100.0%
80
CONSOLIDATED INCOME STATEMENT 2001

(in thousands of euros) 2002 pro-forma Changes
10 INTEREST INCOME AND SIMILAR REVENUES 2,345,483 2,699,236 -353,753 -13.1%

of which:
- on due from customers 1,795,686 2,011,535 -215,849 -10.7%
- on debt securities 221,833 289,063 -67,230 -23.3%
20 INTEREST EXPENSE AND SIMILAR CHARGES -1,084,018 -1,485,686 -401,668 -27.0%
of which:
- on due to customers -355,226 -468,965 -113,739 -24.3%
- on debt securities in issue -462,302 -526,048 -63,746 -12.1%
30 DIVIDENDS AND OTHER EQUITY PROFITS 15,261 15,775 -514 -3.3%
a) on shares and other equity securities 968 2,378 -1,410 -59.3%
b) on equity investments 13,225 10,114 3,111 30.8%
c) on equity investments in Group companies 1,068 3,283 -2,215 -67.5%
40 COMMISSION INCOME 771,687 788,022 -16,335 -2.1%
50 COMMISSION EXPENSE -72,563 -70,738 1,825 2.6%
60 PROFITS FROM FINANCIAL TRANSACTIONS 67,148 53,538 13,610 25.4%
70 OTHER OPERATING INCOME 234,555 197,611 36,944 18.7%
80 OPERATING COSTS -1,287,754 -1,261,011 26,743 2.1%
a) personnel expenses -815,492 -814,687 805 0.1%
of which:
- salaries and wages -518,161 -558,492 -40,331 -7.2%
- social security charges -151,866 -164,294 -12,428 -7.6%
- termination benefits -42,564 -44,689 -2,125 -4.8%
- retirement funds and similar obligations -18,878 -17,895 983 5.5%
b) other administrative expenses -472,262 -446,324 25,938 5.8%
90 AMORTIZATION AND DEPRECIATION
OF TANGIBLE AND INTANGIBLE ASSETS -213,266 -201,716 11,550 5.7%
100 PROVISIONS FOR RISKS AND CHARGES -38,930 -18,015 20,915 116.1%
110 OTHER OPERATING EXPENSES -11,393 -16,075 -4,682 -29.1%
120 WRITE-DOWN OF LOANS AND PROVISIONS
FOR GUARANTEES AND COMMITMENTS -288,188 -214,643 73,545 34.3%
130 WRITE-BACK OF LOANS AND PROVISIONS
FOR GUARANTEES AND COMMITMENTS 117,381 66,562 50,819 76.3%
140 PROVISIONS TO LOAN LOSS RESERVES - -705 705 -100.0%
150 WRITE-DOWN OF FINANCIAL
FIXED ASSETS -4,263 -10,319 -6,056 -58.7%
160 WRITE-BACK OF FINANCIAL
FIXED ASSETS - 261 -261 -100.0%
170 INCOME (LOSS) ON EQUITY INVESTMENTS
VALUED ALONG THE EQUITY METHOD 20,275 7,918 12,357 156.1%
180 INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS 571,415 550,015 21,400 3.9%
190 EXTRAORDINARY REVENUES 223,847 54,252 169,595 312.6%
200 EXTRAORDINARY CHARGES -35,032 -19,669 15,363 78.1%
210 EXTRAORDINARY INCOME 188,815 34,583 154,232 446.0%
230 CHANGES IN THE ALLOWANCE FOR GENERAL
BANKING RISKS - 190 -190 -100.0%
240 INCOME TAXES -314,014 -258,330 55,684 21.6%
250 MINORITY INTEREST -17,003 -17,609 -606 -3.4%
260 NET INCOME (LOSS) FOR THE YEAR 429,213 308,849 120,364 39.0%
81
Notes to the
consolidated
financial
statements
VENICE Doge’s Palace

84
Notes to the consolidated financial statements
Introductory note
STRUCTURE AND CONTENTS OF THE CONSOLIDATED FINANCIAL
STATEMENTS
The consolidated financial statements were drawn up in application of Law

Decree n. 87 of 27 January 1992 and in compliance with the Bank of Italy’s
requirements set forth on 30 July 1992 and following amendments, while with
regard to what does not fall under the above special laws, in application of the
civil code regulations, in keeping with the national accounting principles.
The consolidated financial statements are comprised by the consolidated Bal-
ance sheet, the consolidated Income statement, this Note to the accounts, and
it is complemented with the Directors’ report on operations and on the Group.
The following documents are attached to the notes to the financial statements:
- statement of changes in the consolidated shareholders’ equity;
- consolidated statement of cash flows;
- composition of item 70 “Equity investments”.
PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS AS OF 31-12-2001
As described above, the Banking Group Popolare di Verona e Novara was incor-
porated on June 1st, 2002. In order to provide comparable data on the per-
formance of the new Group, it was necessary to draw up pro-forma balance
sheets and income statements referring to December 31st, 2001.
Criteria adopted to draw up pro-forma data
The reason for drawing up the pro-forma consolidated balance sheet, income
statement and notes to the accounts is that of representing the effects of the
above merger on the financial position of Gruppo Banco Popolare di Verona e
Novara, along valuation criteria that are consistent with historical data and in
compliance with the relevant regulations, as if the merger had virtually occurred
on December 31st, 2001 and – with reference to the profit and loss impact
alone – at the beginning of financial year 2001.
As a result, the pro-forma data is shown as the summation of the consolidated

balance sheet and income statement of the two former Groups, adjusted to
eliminate intercompany relations, to harmonize the valuation criteria and to rep-
resent the distribution of part of the share premium reserve of the former Banca
Popolare di Novara s.c. r.l., the cancellation of the shareholders’ equity of the
two entities and the formation of the share capital and reserves of Banco Popo-
lare di Verona e Novara.
In particular, the pro-forma consolidated balance sheet as of December 31st, 2001
were drawn up along the methodology and the assumptions described below:
• the consolidated balance sheet items derived from the consolidated finan-
cial statements of BPV and BPN were aggregated;
85
• the main intercompany transactions outstanding between the companies

of the BPV Group and the companies of the BPN group were eliminated, in
compliance with the standard consolidation method;
• BPN’s “below par issue” shown in its consolidated financial statements
under prepaid expenses was directly deducted from item “Debt securities
in issue” in order to harmonize the classification criteria adopted by the
two Groups;
• With reference to the equity interests held by both BPN and BPV Groups
(“Banca Centrale per il Leasing delle Banche Popolari – Italease S.pA.”,
“Factorit S.p.A. Società di Factoring delle Banche Popolari Italiane” and
“Istituto Centrale delle Banche Popolari Italiane S.p.A.”), that in the aggre-
gate exceed the 20% equity interest, the necessary adjustments were car-
ried out to adapt the relevant book values to the equity method valuation,
as described below:
a) Italease: Gruppo BPN in the past already valued the company along
the equity method; whereas since Gruppo BPV held a lower than 20%
stake, it recognized its shareholding at cost. When drawing up the
pro-forma accounts, the aggregate shareholding was valued under the
equity method;
b) Factorit: similarly to what described above for Italease (Gruppo BPN
already valued the company under the equity method, whereas Grup-
po BPV recognized it at cost), also in this case the aggregate share-
holding of the two Banks was valued along the equity method;
c) Istituto Centrale delle Banche Popolari Italiane: in both Banks’ consol-
idated financial statements the company was valued at cost. However,
having taken in both BPN’s (15%) and BPV’s (7.09%) interest, to date
Banco Popolare holds an aggregate stake of 22.09%. As a result,
when drawing up the pro-forma accounts the equity method was
adopted;
• With regards to shareholders’ equity, based upon the account balances at

the end of the accounting periods concerned and the number of shares
outstanding on said dates, the following actions were carried out:
a) record the effect deriving from the distribution to BPN shareholders of

part of the share premiums amounting to Euro 1.72 per BPN share in
existence at the time of payment, while posting an assumed debt of
478.4 million Euro under “due to banks”;
b) cancel the shareholders’ equities of the two Banks and state the share
capital of Banco Popolare based upon the exchange ratio determined
in 1 share of Banco at a par value of Euro 3.60 per BPV share with a
nominal value of Euro 2.58 and 0.48 Banco shares at a par value of
Euro 3.60 per BPN share with a nominal value of Euro 2.58, or 12
Banco shares every 25 BPN shares – still having a nominal value of Euro
2.58;
c) compute Banco’s reserves.
86
It should be noted, that the share capital of Banco was computed by taking into
consideration only BPV and BPN shares outstanding on December 31st, 2001,
without assuming any early conversion of bonds and warrants in existence on
such date.
The 2001 pro-forma consolidated income statement was drawn up along the
methodology and assumptions described below:
• The income statements derived from the 2001 consolidated financial state-
ments of BPV and BPN were aggregated;
• the main intercompany transactions occurred in 2001 between companies
of the BPV group and the companies of the BPN group were eliminated,
along the standard consolidation methodology;
• the assumed financial charges were calculated, referring to a theoretical
indebtedness equal to BPN’s total distributed share premium reserve. The
computation of the above charges was based upon a rate equal to the one
month Euribor average;
• with reference to the above described adjustments of the valuations of the
equity investments in “Banca Centrale per il Leasing delle Banche Popolari
– Italease S.pA.”, “Factorit S.p.A. Società di Factoring delle Banche Popo-
lari Italiane” and “Istituto Centrale delle Banche Popolari Italiane S.p.A.”,
the following actions were carried out:
a) the percentage interest in the profit generated in 2001 by the above

mentioned investee companies was credited to the pro-forma consol-
idated income statements;
b) an amount equal to the dividends cashed in and recognized by BPV
and BPN in 2001 referring to the above equity investments was debit-
ed to the pro-forma consolidated income statements;
c) when calculating income taxes, the fiscal effect deriving from the
deductibility of the above assumed financial charges was taken into
account.
87
Effect of pro-forma adjustments to the 2001 consolidated net income

and on the consolidated shareholders’ equity as of December 31st, 2001
The reconciliation between the consolidated net income as of December 31st,

2001 of BPV and BPN and the pro-forma consolidated net income of the BPVN
Group is shown below:
(in thousands of euros)
BPV consolidated net income for the year 2001 208,881
BPN consolidated net income for the year 2001 108,729
Grand total 317,610
Effect of valuing the equity investments in Istituto Centrale

delle Banche Popolari Italiane S.p.A., Banca per il Leasing - Italease S.p.A.
and Factorit S.p.A. along the equity method 3,639
Accounting of assumed financial charges relating to

the distribution of part of the share premiums net of the
relevant fiscal effect -12,400
Pro-forma consolidated net income for the year 2001 308,849
The reconciliation between the consolidated shareholders’ equity as of Decem-

ber 31st, 2001 of BPV and BPN and the pro-forma consolidated shareholders’
equity of the BPVN Group is shown below:
(in thousands of euros)
BPV consolidated shareholders’ equity as of 31-12-2001 1,936,962
BPN consolidated shareholders’ equity as of 31-12-2001 1,518,721
Grand total 3,455,683
Effect of valuing the equity investments in Istituto Centrale

delle Banche Popolari Italiane S.p.A., Banca per il Leasing - Italease S.p.A.
and Factorit S.p.A. along the equity method 10,937
Effect of distributing part of the share premiums

and of canceling own shares held -478,412
Pro-forma consolidated shareholders’ equity as of 31-12-2001 2,988,208
88
Consolidation criteria
The consolidation criteria applied are in accordance with Law Decree n° 87 of
January 27th, 1992, as well as the requirements expressed by the Governor of
the Bank of Italy on January 16th, 1995, with its latest amendment on July
30th, 2002.
Consolidation area
The full consolidation area coincides with the Banking Group Banco Popolare di
Verona e Novara registered in the relevant Register under art. 64 of Law Decree
n. 385 of September 1st, 1993 – that includes the Parent company and all the
companies where the latter holds either directly or indirectly the majority of vot-
ing rights, as well as companies controlled as a result of bylaw provisions or
shareholders’ agreements, that operate in the banking or financial sectors or
whose sole or main activity is instrumental to the Group, with the exception of
a few minor subsidiaries whose financial and operating results do not have any
material effect on the consolidated financial statements, or that are under liq-
uidation or being disposed:
- Aletti Fiduciaria S.p.A.
- Aletti Gestielle SGR S.p.A.
- Aletti Gestielle Alternative SGR S.p.A.
- Aletti International S.A.
- Aletti Invest SIM S.p.A.
- Aletti Merchant S.p.A.
- Aletti Private Equity SGR S.p.A.
- Banca Aletti & C. S.p.A.
- Banca Aletti & C. (Suisse) S.A.
- Banca Popolare di Novara S.p.A.
- Banco Popolare di Verona e Novara (France) S.A.
- Banco Popolare di Verona e Novara (Luxembourg) S.A.
- BPVN Immobiliare S.r.l.
- Compagnie d’Angely S.A.
- Credito Bergamasco S.p.A.
- Holding di Partecipazioni Finanziarie Popolare di Verona – S.Geminiano
e S.Prospero S.p.A.
- Immobiliare BPV S.r.l.
- Leasimpresa S.p.A.
- Novara Immobiliare S.r.l.
- Novara Invest SIM S.p.A.
- SA.RI. Sannitica Riscossioni S.p.A.
- Sestri S.p.A.
- Società Gestione Servizi – BPVN S.p.A.
Included in the consolidation area, but accounted for using the equity method are:
• Equity investments in companies controlled directly or indirectly, or under

joint control, other than banks, financial companies or companies instru-
mental to the Group:
89
- Arena Broker S.r.l.

- Assisebino S.r.l.
- BPV Vita S.p.A.
- Novara Vita S.p.A.
- Tecmarket Servizi S.p.A.
• Equity investments in affiliated companies, under article 36 of Law Decree

87/1992, subject to significant influence:
- Aosta Factor S.p.A.

- Banca Centrale per il Leasing – Italease S.p.A.
- Factorit S.p.A.
- G.I. Holding S.p.A.
- Gema Magazzini Generali BPV – BSGSP S.p.A.
- Istituto Centrale delle Banche Popolari Italiane S.p.A.
- Società Cooperativa fra le Banche Popolari “L. Luzzatti” S.c.r.l.
The consolidation area does not include, and neither are they accounted for
along the equity method, equity investments that:
• were out of operation at the time of account;
• had no material effect on the true and fair representation of the consoli-
dated financial statements, under art. 29, paragraph 1, of Law Decree
87/1992:
- FINERT Finanziaria Esattorie Tesorerie e Ricevitorie S.p.A. under liqui-

dation
- Novara Foar S.r.l. under bankruptcy procedure
- Novara Promuove S.r.l.
- Servizi Riscossione Imposte SE.RI. S.p.A. under liquidation
- Sinergia S.r.l. under liquidation
- Teliber S.A.
• were under liquidation:
- Compagnia Finanziaria Ligure Piemontese S.p.A.

- Seefinanz AG
Equity investments acquired as part of the Group’s merchant banking activities

were valued at cost.
90
Reference date of the accounts and of the financial statements under

consolidation
All the companies falling under the consolidation area are consolidated accord-
ing to their financial statement drafts as of December 31st, 2002, as approved
by their Board of Directors, with the exception of Holding di Partecipazioni
Finanziarie Popolare di Verona - S.Geminiano e S.Prospero S.p.A. and Aletti
International S.A. whose financial year closed on June 30th and October 31st,
2002, respectively. The consolidation of said companies was based upon an
interim report specifically drawn up for this purpose.
The statutory financial statements of consolidated companies, that were drawn
up along accounting principles differing from those governing banks, have been
duly conformed. Wherever necessary, financial statements and accounts have
been suitably adjusted and restated to be consistent with the Group’s account-
ing principles.
Money of account
The money of account is the euro. All the financial statements of the consoli-
dated companies are euro-denominated, with the exception of Banca Aletti &
C. (Suisse) S.A. whose money of account is the Swiss franc.
In drawing up the consolidated financial statements, accounts that were
denominated in currencies other then the Euro were converted into Euro, apply-
ing the following principles:
• assets and liabilities at the official exchange rate upon closing of the
accounting period;
• equity and reserves at the official exchange rate on the day they were set
up, or at the historical exchange rate before inclusion in the consolidation
area;
• revenues and expenses at the daily average of the official exchange rates
recorded throughout the financial period;
• translation differences arising from applying the above exchange rates are
charged/credited directly to net equity.
All amounts shown in the financial statements, unless otherwise specified, are
expressed in thousands of Euros.
Consolidation methods
Consolidation of equity investments
The book value of equity investments consolidated along the full consolidation
method is offset against the corresponding stake of net equity held. The com-
pensation is based upon the book value upon acquisition, or that outstanding
on the date of their first consolidation.
Any differences resulting from compensations are stated, where possible, under
91
assets or liabilities of the subsidiary to which they pertain. Any further assets and
liabilities differences are entered in the consolidated balance sheet under "pos-
itive differences upon consolidation" or "negative differences upon consolida-
tion". However, positive differences upon consolidation are offset against neg-
ative differences upon consolidation until the final balance is reached. Residual
positive differences upon consolidation are then amortized on a straight-line
basis over five years or over a limited longer period if justified by the type of dif-
ference.
The consolidated shareholders’ equity and net income attributable to minority

interest are shown under "Minority interests" and "Income/loss attributable to
minority interests" in the consolidated balance sheet and income statement,
respectively ".
Intercompany eliminations
Assets and liabilities, “off-balance sheet” transactions, revenues and charges

associated with transactions carried out over the period of account between
companies under full consolidation were eliminated, with the exception of prof-
its and losses from financial transactions and revenues and charges similar to
interest referring to “off-balance sheet” transactions negotiated within the
Group under normal market conditions, as provided for under article 34 of Law
Decree 87/1992.
Any possible residual difference was stated in the income statement or in the
balance sheet, in compliance with the provisions issued by the Bank of Italy on
July 30th, 1992 and following amendments and supplements.
Elimination of duplications arising from the accounting of intercompany

dividends or of write-downs or write-ups of consolidated equity invest-
ments
Intercompany dividends stated in the accounts of the parent company in the

financial year subsequent to that in which the corresponding profits were regis-
tered by the subsidiary companies, are written off the income statement and
included in net equity. Any write-ups or downs of equity investments in consol-
idated companies are eliminated.
Valuation of non consolidated equity investments
Subsidiary companies not consolidated along the full consolidation method and
companies over which the Parent company, either directly or indirectly, exercis-
es a considerable control, are valued based upon the corresponding stake of net
equity of the investee companies. Any positive or negative differences emerging
from replacing the actual equity stake value with the above valuation are shown
under "positive differences on application of the equity method " and "nega-
tive differences on application of the equity method". However, positive differ-
ences on application of the equity method are offset against the negative dif-
ferences on application of the equity method, until the final balance is reached.
92
Residual positive differences on application of the equity method are amortized

on a straight-line basis over five years or a limited longer period if justified by
the type of difference.
The portion of the subsidiary’s net income corresponding to the stake of net
equity held is shown under the relevant item of the consolidated income state-
ment.
Tax adjustments
Adjustments to assets and provisions carried out in the financial statements of

companies included in the consolidation area that have been made exclusively
to comply with tax regulations are eliminated from the consolidated financial
statements, the original value of the above assets is reinstated, provisions set
aside are written off and the relevant deferred tax liability is posted.
Lease transactions
Lease transactions are recognized in the consolidated financial statements along

the so called financial method (i.e., theoretical substance). The net value of
transactions carried out with consolidated companies are posted under the rel-
evant assets items after determining the original costs o the assets and their
depreciation until the end of the financial year.
93
Chapter A - Accounting criteria

SECTION 1 – DESCRIPTION
The financial statements are drawn up in compliance with the general evalua-
tion criteria stated below:
• evaluation consistency: the same criteria used in drawing up the annual

report have been consistently applied over time, unless otherwise express-
ly stated;
• substance prevails over form: to provide a true and fair view of the finan-
cial situation, the annual report was drawn up in such a way that, when-
ever possible, substance prevails over form, with settlement prevailing over
trading;
• going concern: valuations of items in the financial statement are made on
the assumption that the company will continue its business;
• prudence: the annual report shows only actually realized profits, unless oth-
erwise stated in the specific evaluation criteria. In addition, all predictable
losses are included, comprising those which came to light after the closure
of the administrative period. Provisions for risks and charges are intended
only to cover losses, debts or defined charges that are either probable or
definite but whose amount or date of occurrence are not yet known at the
date of accounting;
• accrual accounting: revenues are recognized when earned and expenses
when incurred;
• separate evaluation: on- and off-balance sheet assets and liabilities are val-
ued separately, i.e., not on an aggregate basis, except for what stated
below;
• evaluation uniformity: correlated on- and off-balance sheet assets and lia-
bilities are valued by means of a consistent approach, i.e. using homoge-
neous criteria.
1 - Loans receivable and payable, guarantees and commitments
Due from and to customers
Cash credit lines to customers are recognized upon execution. Loans under
finance contracts are shown under the balance sheet item "Due from cus-
tomers" inasmuch as they have actually been granted.
Financial lease contracts are stated according to the finance method.
With regard to discount factoring, loans shown in the balance sheet take into
account the portfolio risk relating to receivables still due at the time of account-
ing. The portfolio risk is shown net of deferred income relating to interest not
accrued at the time of accounting.
Loans, including overdue interest and the consequent interest on arrears, are
recorded at their estimated realizable value.
94
The estimated realizable value of non-performing loans, watch-list loans,

restructured loans and loans under restructuring is calculated on the basis of
analytical evaluations.
Performing loans are written-down by a lump-sum percentage calculated by
taking account the number of loans turning into NPLs and losses suffered in pre-
vious years, and taking also into consideration the expected credit risk evolution.
Loans granted to residents in countries at risk are subject to a further lump-sum

write-down.
The estimated realizable value is calculated separately with regard to the loan
portion relating to interest on arrears.
Write-downs - calculated as described above - are directly deducted from loans.
The full value of the loans is reinstated whenever the reasons for their original
write-down no longer apply.
Deposits are stated at face value.
Other due to and due from
Transactions with lending institutions in the form of deposits and finance oper-
ations are recognized upon settlement. Loans receivable, inclusive of interest
accrued, are evaluated at their estimated realizable value.
Loans payable are evaluated at face value inclusive of interest due at the date
of accounting.
Guarantees and commitments
Guarantees issued are stated at a value equal to the commitment taken.

Commitments to loan funds are entered at a value equal to the amount to be
settled.
Commitments to purchase securities are stated at a value equal to the forward
price agreed upon by the parties.
2 - Securities and “off-balance sheet” transactions (other than foreign

currency transactions)
Securities transactions are recognized upon settlement.
Repurchase agreements on trading assets subject to the obligation to repur-

chase or resell at a stated time are treated as due to/due from items with no
posting in the trading account. The cost of funding/loan revenues generated
from expired coupons on securities sold or purchased spot and the spread
between the sale/purchase spot price and the resale/repurchase forward price
are charged to the income statement on an accrual basis under "Interest
expense and similar charges" or "Interest income and similar revenues".
95
Investment securities
Securities held for non trading purposes, presumably until their expiry dates,
represent financial investment securities and are valued at cost, adjusted for any
difference between the cost and any higher or lower redemption value accrued
as of the date of accounting. The purchase cost is calculated along the daily
“continuous weighted average cost” method.
The difference between the securities' issue price and redemption price is rec-
ognized as a higher interest on the securities in compliance with the accrual
principle.
The difference between the purchase cost, net of any withdrawal for the issue
discount accrued by the date of purchase, and the higher or lower redemption
price of fixed-income securities treated as investment securities are recognized
respectively as a higher or lower securities interest in line with the accrual prin-
ciple.
Trading securities
Securities that are not considered investment securities, are valued:
- at market value, if listed on organized markets;

- at the lower between cost or market value, if not listed on organized mar-
kets. Unlisted securities correlated to listed derivative contracts or to deriv-
ative contracts linked to listed parameters are however marked to market,
in line with the valuation of such contracts.
The cost is calculated along the daily “continuous weighted average cost”
method, adjusted by the difference between the issue price and the redemption
price of the securities.
The market value is calculated:
- for securities listed on organized market by referring to the official price

reported in the last day of the accounting period;
- for securities that are not listed on organized markets, by referring to the
price of securities that have similar characteristics and that are listed on
organized markets, to the discounting of future flows based upon the
expected market returns, and, if not available, by referring to other objec-
tive elements.
The difference between the securities’ issue price and redemption price is rec-
ognized as securities interest in line with the accrual principle.
The original value of the securities is reinstated in following financial years

whenever the reasons for their original write-down in previous years no longer
apply.
96
The valuation of securities takes into due account the creditworthiness of the
borrower, and any possible debt servicing difficulties encountered by the bor-
rower’s Country of residence.
“Off-balance sheet” transactions (other than foreign currency transac-

tions)
Derivative instruments representing “off-balance sheet” transactions outstand-

ing at the end of the financial year are valued as follows:
a) securities purchased to hedge assets or liabilities or otherwise underlying

other on- or off-balance sheet assets or liabilities:
a.1 spreads are accounted for on an accrual basis as interest expense or
income depending upon the revenues or costs generated by the
hedged assets or liabilities, or with reference to the contract term in
case of underlying securities or general hedges;
a.2 hedging derivative instruments outstanding at the end of the account-
ing period are valued according to the assets or liabilities hedged or
underlying, as described below:
- at market value, if used to hedge securities belonging to the trad-
ing portfolio;
- at cost if used to hedge interest bearing assets/liabilities other
than investment securities, accordingly to the stake under hedg-
ing;
b) securities underlying trading transactions
b.1 spreads are accounted for under “profits (losses) from financial trans-
actions";
b.2 listed derivatives are marked to market with reference to the service’s
last day of operation. Any expected profits or losses generated by the
aggregate transactions outstanding at the time of year-end account-
ing are therefore credited/debited to income as profits/losses from
financial transactions, with “other assets”/”other liabilities” as offset
accounts;
b.3 unlisted derivatives that are associated to prices, quotations or indices
that can be derived from prevalent information circuits at internation-
al level, and that in any case can be fairly calculated, are marked to
market according to the current values of the base parameters on the
market;
b.4 the remaining unlisted derivatives are valued at cost or market value,
whichever is lower. Only losses expected from the aggregate transac-
tions outstanding at the date of accounting are charged to income as
losses from financial transactions, with “other liabilities” as offset
account.
Premiums paid or earned in options trading are held in abeyance and reported
accordingly under “other assets” or “other liabilities”. These same premiums
are debited or credited to income if the option is not exercised. The value of the
97
premium of exercised options is added to or subtracted from the cost or pro-

ceed generated by the security sale or purchase.
Off-balance sheet transactions represented by securities due-in as a result of

contracts completed but not yet settled at the time of year-end accounting are
valued along the criteria defined for the portfolios of destination.
Off-balance sheet transactions represented by securities due-out as a result

of contracts completed but not yet settled at the time of year-end account-
ing are valued at book value or at the forward price agreed upon, whichever
is lower.
3 - Equity investments
Equity investments that are not included in the consolidated financial state-
ments, according to what described under the consolidation criteria, are valued
at cost, plus any write-up in accordance with Law n. 408 of December 29, 1990.
Equity investments are written down in case of permanent value loss. The orig-
inal value of the equity investment is reinstated in following years should the
reasons for the write-down no longer apply.
Equity investments in companies under liquidation are valued at cost or at the

value stated by the same investee companies in the 2001 consolidated annual
report of Banca Popolare di Novara s.c. a r.l.. Said equity investments are sub-
ject to write-downs in case the shareholders’ equity resulting from the liquida-
tion account statement is lower than the investee company’s carrying value,
due to the recognition of greater losses.
Dividends are accounted for in the financial year in which they are collected and
are shown pre-tax credit.
4 - Assets and liabilities in foreign currency (including off-balance sheet

transactions)
Foreign currency transactions are accounted for upon settlement. This principle
is applied also to Euro-denominated opposite transactions in case of Euro
against currency swaps.
Costs and revenues in foreign currency are recognized at the exchange rate in
effect at the time of accounting. Specifically, the following items are stated
under “profits (losses) from financial transactions":
- profits and losses from currency trading;

- positive and negative differences on foreign currency derivative contracts;
- the difference between the current value of assets and liabilities and of off-
98
balance sheet transactions in foreign currency at the end of the accounting

period and their book value.
Assets and liabilities in foreign currency
Assets and liabilities in foreign currency are stated at the spot exchange rate in
effect at year-end, as reported by the Bank of Italy.
Off-balance sheet transactions
Spot off-balance sheet transactions are stated at the spot exchange rate in
effect at year-end.
Forward off-balance sheet transactions carried out to hedge against exchange

risks or in any case underlying other on- or off-balance sheet assets or liabilities
are valued at the spot exchange rate in force at year-end, in that in line with the
valuation criteria adopted for such assets or liabilities.
Any forward off-balance sheet transactions carried out for reasons other than
to hedge against exchange risks or in any case not underlying other on- and off-
balance sheet assets or liabilities, are valued at the forward exchange rate in
force at year-end for similar maturities to those of the transactions under valu-
ation.
Premiums paid or collected from currency options trading whose exercise date
falls beyond the year-end accounting period are held in abeyance, and are
reported accordingly under “other assets” or “other liabilities”.
5 - Tangible and intangible fixed assets
Tangible assets
Property and equipment is carried at cost including ancillary charges and incre-
mented by the write-ups defined by the relevant law.
Part of the properties acquired through mergers underwent a revaluation at the

time of acquisition based upon article 123 of Presidential Decree n° 917 of
December 22, 1986, within the values assessed by the relevant surveys pro-
duced by experts.
A residual portion of the original revaluation amount could not be realized

because of subsequent alienations and/or of the depreciation of the re-val-
ued fixed assets. Such outstanding portion is posted under “Revaluation
reserves”.
Technical fixed assets are entered net of depreciation. They are depreciated on
99
a straight-line basis over their estimated useful life and in any case for no longer
a period than indicated in the following table:
Categories Years
Buildings 34
Loading, unloading and hoisting equipment 12
Light equipment 8
Ordinary office furniture and machines 7
Safety systems and safes 7
Furnishings 5
Armored counters or with armored glass 3
Fork-lift trucks and internal vehicles 3
Electromechanical and electronic office machines 3
Cars, motor vehicles and similar 3
Internal communications and remote signaling systems 3
Alarm systems and closed circuit TV and camera systems 3
Maintenance and repair expenses that do not increase the value of property are
charged to income for the period, while capital improvements are capitalized
under the specific technical fixed assets they apply to.
Intangible assets
Copyrights and licenses are stated at cost, including ancillary charges. They are
systematically amortized over their estimated useful life and in any case for no
longer than five years.
The portions of positive differences arising on consolidation of Banco S.Gemini-

ano e S.Prospero and of Banca Sannitica, allocated to goodwill following their
merger into the Parent company, are amortized on a straight-line basis over ten
years.
The portion of positive differences arising on consolidation of Cliam Gestioni

S.p.A., allocated to goodwill following its merger into Gestielle Asset Manage-
ment SGR S.p.A. (now Aletti Gestielle SGR S.p.A.), is amortized on a straight-
line basis over ten years.
The above goodwill amortization periods are based on the consideration that
the benefits from the excess cost paid for the acquisition will manifest them-
selves over an estimated ten year period.
Organization and start-up costs and other deferred charges are amortized over
a five year period, with the following exceptions:
- costs incurred for the furnishing of third party property leased before Jan-
uary 1st, 1993, are amortized throughout the life of the relevant lease con-
tracts;
100
- costs incurred to purchase or produce software products, as well as IT and

organizational procedures are amortized on a straight-line basis over three
to five years.
6 - Other
Positive differences arising on consolidation and on application of the

equity method
These are amortized on a straight-line basis over a five year period or a limited
longer period if justified by the type of difference.
The positive difference arising from the consolidation of the equity investment
in Credito Bergamasco S.p.A. is being amortized on a straight-line basis starting
from year 1998 over 20 years, by then - this being the underlying rationale - the
benefits from the excess cost paid for the acquisition will have manifested them-
selves.
The positive difference arising from the consolidation of the equity investment
in Banca Aletti & C. S.p.A. is amortized on a straight-line basis starting from year
2000 over 10 years.
Accrued and deferred assets and liabilities
Accrued and deferred assets and liabilities are calculated in such a way as to
ensure the allocation of costs and revenues extending over more accounting
periods, and accruing proportionally over time, according to the accrual princi-
ple.
Third party assets under administration
These are entered at a value expressing the outstanding liability towards the
third party holders.
Provision for termination benefits
The above provision is set aside in order to provide for total liabilities against
employees, as required under the law and the labor contracts in force.
Tax provisions
Tax provisions provide for current taxes, deferred tax liabilities and the risk deriv-
ing from outstanding tax disputes.
The allowance for current taxes represents a reasonable forecast of the net
income tax burden, calculated according to the tax laws currently in force.
Deferred taxation is recorded by applying the balance sheet liability method
101
defined in IAS 12 in compliance with the specific regulations set forth by the
Bank of Italy.
In particular, tax provisions provide for deferred tax liabilities originated by tem-
porary taxable differences that are likely to be incurred. No provision has been
set aside for deferred taxes on capital reserves under tax moratorium, since, as
things stand, no such transactions are expected to be carried out that will give
rise to taxation. Any deferred tax assets, originated by temporary deductible dif-
ferences that are likely to be recovered based upon expected future taxable
income, is entered under “other assets”.
Other provisions for risks and charges
Other provisions for risks and charges are set aside in view of predictable losses
on guarantees issued and commitments made, as well as other probable or def-
inite liabilities whose amount or date of occurrence are not predictable at the
date of accounting.
Allowance for general banking risks
This provision is set aside to provide for corporate global risk and therefore
should be posted under equity.
Internal deals
The Group adopted an organizational structure where Banca Aletti represents

the only specialist operating desk authorized to trade given derivative products
on the market. This organizational structure is essentially the result of opera-
tional efficiency considerations, to better manage market and counterpart risks
and to optimize the distribution and allocation of specialized human resources.
To this end, Banca Aletti acts as a counterpart for the other companies of the
Group by way of internal sales and purchases of derivative contracts (internal
deals) at market prices.
As regards the valuation of derivative contracts outstanding on December 31st,

2002, it should be noted that:
- internal derivative contracts outstanding on December 31st, 2002 have

been classified by “Banca Aletti” as trading contracts and are therefore
marked to market;
- the same internal contracts are however classified by the “other companies
of the Group” as trading contracts or hedging contracts, depending upon
the specific aims for which they were carried out. Consequently, the valua-
tion of these contracts is consistent with said aims.
As a result of the application of the above criteria, derivative contracts internal

to the Group are material to the accounting of the consolidated financial state-
ment only with regard to contracts entered into by “other companies of the
Group” for hedging purposes. It should be noted, that in compliance with cur-
102
rent regulations, the related income and charges from internal sales and pur-
chases of derivative contracts are not eliminated from the consolidated financial
statements.
In Chapter B of the Notes to the accounts more information shall be provided

with regard to the value of internal deals outstanding on December 31st, 2002
and on potential capital gains/losses from hedging transactions.
SECTION 2 – TAX ADJUSTMENTS AND PROVISIONS
Write-downs and provisions carried in the financial statements of consolidated

companies exclusively to comply with tax regulations have been eliminated in
order to provide an orderly representation of the Group’s operating and finan-
cial position according to statutory criteria; deferred taxes have been recognized
along the same line. As a result, in these consolidated financial statements there
are no items that have been posted for purely fiscal purposes.
SECTION 3 – OTHER
Changes to accounting criteria
In 2002, the criteria used to account for trading securities and derivative prod-
ucts were changed compared to those used in drawing up the Interim report on
operations of the first half of 2002, the Quarterly report of September 30th,
2002 and the pro-forma consolidated financial statements as of December 31st,
2001.
In particular, with regard to the valuation of listed securities in the trading port-
folio, the “lower of cost or market value” principle was replaced by the “mar-
ket value” principle. The market value was estimated based upon the official
quotation on the last day of the accounting period, instead of the arithmetic
mean of the values registered over the last month. The same principle was
adopted for listed derivatives and unlisted securities underlying derivative con-
tracts. In addition, for the entire trading securities portfolio, the annual L.I.F.O.
method was replaced by the daily weighted average cost method.
The introduction of the new valuation principle is explained by the need to:
- ensure the conformity of the accounting criteria across the whole Group;
- simplify the accounting of the operating results generated by the finance
area;
- bring the accounting principles in line with the operating principles of the
finance area, with ensuing operational benefits on the portfolio risk man-
agement and on the assessment of the global performance.
In compliance with the directives of the Bank of Italy and Consob’s recommen-
dations, and in accordance with the Accounting principle n. 29 of the National
103
Council of Charted Accountants (Consiglio Nazionale dei Dottori Commercial-

isti) and of the National Council of Accountants (Consiglio Nazionale dei
Ragionieri), the retrospective component ensuing from the effects of the change
to the valuation criteria was determined.
Retrospective Current
(in thousands of euros) effect effect Total
Securities 1,075 2.967 4,042

Asset swaps 1,016 1,448 2,463
Derivative contracts 2,192 28,382 30,575
Gross effect 4,283 32,798 37,081

Fiscal effect -1,747 -13,538 -15,285
Net effect 2,536 19,259 21,795
All in all, the change to the valuation principle produced a positive variation in
the consolidated income statement equal to €37,081 thousand (€21,795 thou-
sand net of the fiscal effect), of which €4,283 thousand were stated under
“extraordinary income”, as it is a retrospective component, while the remaining
€32,798 thousand were stated under “profits/losses from financial transac-
tions”. The change in income before taxes and in net income carries the same
sign and value. A similar effect was produced on the consolidated shareholders’
equity.
Changes to classification criteria
With regard to classification principles, the stake representing 50% of the equi-
ty of Novara Vita S.p.A. shown in the consolidated financial statement of
December 31st, 2002 was posted under item 80 “Equity investments in com-
panies of the Group”, because based upon the shareholders’ agreements in
force, the Parent company holds a controlling interest under art. 2359 of the
civil code. To permit a direct comparison with the previous year, the pro-forma
balance sheet as of December 31st, 2001 was restated with the equity invest-
ment value, equal to €30,129 thousand, reclassified from item 70 “Equity
investments valued along the equity method” to item 80 “Equity investments in
companies of the Group valued along the equity method”.
With regard to item 80 “Equity investments in companies of the Group”, the

values as of December 31st, 2001 referring to the subsidiaries under liquidation
Seefinanz S.A. (€44,261 thousand) and Compagnia Finanziaria Ligure e
Piemontese S.p.A. (€7,544 thousand) were reclassified from sub-item “a) val-
ued along the equity method” to sub-item “b) other”, to bring them in line with
the approach adopted on December 31st, 2002.
104
In addition, expenses payable by third parties charged on deposits and checking

accounts, amounting to €29,544 thousand, were reclassified in the 2001 pro-
forma consolidated income statement from item 40 “Commissions income” to
item 70 “Other operating income”, to bring them in line with the approach
adopted on December 31st, 2002.
105
Chapter B – Notes to the consolidated

balance sheet
SECTION 1 – LOANS
1.1 – Breakdown of item 30 "Due from banks"
31-12-2001
(in thousands of euros) 31-12-2002 Changes
pro-forma
a) repurchase agreements 2,517,840 2,764,320 -246,480 -8.92%

b) deposits 2,480,102 4,454,774 -1,974,672 -44.33%
c) due from central banks 338,530 660,445 -321,915 -48.74%
d) current accounts 308,869 450,367 -141,498 -31.42%
e) financing facilities 131,795 190,797 -59,002 -30.92%
f) other 286,135 78,644 207,491 263.84%
Total 6,063,271 8,599,347 -2,536,076 -29.49%

- write-downs -87 -196 -109 -55.61%
Total 6,063,184 8,599,151 -2,535,967 -29.49%
1.2 – Due from banks – Cash credit lines
Total
31-12-2002 Gross write- Net
(in thousands of euros) exposure downs exposure
A Impaired loans 5,724 -87 5,637

A.1. NPLs - - -
A.2. watchlist loans - - -
A.3. loans under restructuring - - -
A.4. restructured loans - - -
A.5. unsecured loans to
Countries at risk 5,724 -87 5,637
B Performing loans 6,057,547 - 6,057,547
Total 6,063,271 -87 6,063,184
106
Total
31-12-2001 pro-forma Gross write- Net
(in thousands of euros) exposure downs exposure
A Impaired loans 18,760 -196 18,564

A.1. NPLs - - -
A.2. watchlist loans - - -
A.4. restructured loans - - -
A.5. unsecured loans to
Countries at risk 18,760 -196 18,564
B Performing loans 8,580,587 - 8,580,587
Total 8,599,347 -196 8,599,151
1.3 – Due from banks – Changes in impaired loans
Loans Unsecured
31-12-2002 Watchlist
NPLs under Restructured loans to Total
(in thousands of euros) loans
restructuring loans Countries at risk
A. Initial gross exposure - - - - 18,760 18,760

A.1. of which:
- for default interest - - - - - -
B. Increments - - - - 5,612 5,612

B.1. from performing loans - - - - 33 33
B.2. default interest - - - - - -
B.3. transfer from other
impaired loan classes - - - - - -
B.4. other increments - - - - 5,579 5,579
C. Decrements - - - - -18,648 -18,648

C.1. back to performing loans - - - - - -
C.2. write-offs - - - - - -
C.3. collections - - - - -7 -7
C.4. proceeds from disposals - - - - - -
C.5. transfer to other
impaired loans classes - - - - - -
C.6. other decrements - - - - -18,641 -18,641
D. Final gross exposure - - - - 5,724 5,724

D.1. of which:
- for default interest - - - - - -
107
1.4 – Due from banks – Changes in total loan value adjustments
Loans Unsecured
31-12-2002 Watchlist Restructure loans to Performing
NPLs under Total
(in thousands of euros) loans loans loans
restructuring Countries
A. Initial total adjustments - - - - 196 - 196

A.1. of which:
- for default interest - - - - - - -
B. Increases - - - - 10 - 10
B.1. increases - - - - 5 - 5
B.1.1. of which:
B.2. drawdown on loans
loss reserves - - - - - - -
loans classes - - - - - - -
B.4. other increases - - - - 5 - 5
C. Dcreases - - - - -119 - -119

C.1. valuation write-backs - - - - -24 - -24
C.1.1. of which:
C.2. collection write-backs - - - - -1 - -1
C.2.1. of which:
C.3. write-offs - - - - - - -
loans classes - - - - - - -
C.5. other decreases - - - - -94 - -94
D. Final total adjustments - - - - 87 - 87

D.1. of which:
108
1.5 – Breakdown of item 40 "Due from customers"
31-12-2001
pro-forma
a) checking accounts 11,587,145 12,261,490 -674,345 -5.50%

b) mortgages 10,394,436 9,650,751 743,685 7.71%
c) financing operations and other subsidies 4,716,754 4,477,954 238,800 5.33%
d) nonperforming loans 1,603,359 1,719,042 -115,683 -6.73%
e) loans for financial lease
contracts 924,848 1,139,455 -214,607 -18.83%
f) repurchase agreements 481,381 134,589 346,792 257.67%
g) portfolio risks 303,977 315,464 -11,487 -3.64%
of which:
- bills eligible for refinancing
with central banks 44,961 65,714 -20,753 -31.58%
h) securities lending - - -
i) other 2,853,661 2,540,505 313,156 12.33%
Total 32,865,561 32,239,250 626,311 1.94%

- write-downs -916,317 -984,469 -68,152 -6.92%
Total 31,949,244 31,254,781 694,463 2.22%
The decrease in loans from financial lease contracts is due to the securitization
transaction by Leasimpresa regarding loans from lease contracts amounting to
about €680 million.
1.6 – Secured loans to customers
31-12-2001
pro-forma
a) mortgages 7,844,382 7,035,338 809,044 11.50%
b) pledges 1,257,907 609,244 648,663 106.47%

1. on cash deposits 583,177 122,025 461,152 377.92%
2. on securities 559,782 375,918 183,864 48.91%
3. other 114,948 111,301 3,647 3.28%
c) guarantees 4,965,238 4,853,139 112,099 2.31%

1. Governments 10,273 14,401 -4,128 -28.66%
2. other public agencies 2,113 6,732 -4,619 -68.61%
3. banks 479,235 439,291 39,944 9.09%
4. other 4,473,617 4,392,715 80,902 1.84%
Total 14,067,527 12,497,721 1,569,806 12.56%
As shown in the above table, total secured loans account for 42.80% of cus-
tomer loans, including write-downs, compared to 38.77% in the previous year.
109
1.7 – Due from customers – Cash credit lines
Rettifiche
31-12-2002 Esposizione di valore Esposizione
(in thousands of euros) lorda complessive netta
A Impaired loans 2,508,063 -734,348 1,773,715

A.1. NPLs 1,603,359 -623,703 979,656
A.2. watchlist loans 813,243 -94,496 718,747
A.3. loans under restructuring 2,152 -645 1,507
A.4. restructured loans 83,771 -14,399 69,372
A.5. unsecured loans
to Countries at risk 5,538 -1,105 4,433
B Performing loans 30,357,498 -181,969 30,175,529
Total 32,865,561 -916,317 31,949,244
Rettifiche
31-12-2001 pro-forma Esposizione di valore Esposizione
(in thousands of euros) lorda complessive netta
A Impaired loans 2,538,960 -800,171 1,738,789

A.1. NPLs 1,719,042 -712,363 1,006,679
A.2. watchlist loans 707,961 -69,125 638,836
A.4. restructured loans 97,392 -16,595 80,797
A.5. unsecured loans
to Countries at risk 14,565 -2,088 12,477
B Performing loans 29,700,290 -184,298 29,515,992
Total 32,239,250 -984,469 31,254,781
110
1.8 – Due from customers – Changes in impaired loans
Loans Unsecured
2002 Watchlist
NPLs under Restructured loans to Total
restructuring loans Countries at risk
A. Initial gross exposure 1,719,042 707,961 - 97,392 14,565 2,538,960

A.1. of which:
- for default interest 296,461 5,779 - 21,577 - 323,817
B. Increments 379,431 733,259 2,329 65,060 356 1,180,435
B.1. from performing loans 134,451 665,012 - 40,513 11 839,987
B.2. default interest 33,203 6,122 - - - 39,325
impaired loan classes 184,338 - - 21,765 - 206,103
B.4. other increments 27,439 62,125 2,329 2,782 345 95,020
C. Decrements -495,114 -627,977 -177 -78,681 -9,383 -1,211,332
C.1. back to performing loans -1,580 -242,800 - -10,177 - -254,557
C.2. write-offs -306,959 -1,052 - -234 -755 -309,000
C.3. collections -181,917 -64,340 -177 -53,635 -108 -300,177
C.4. proceeds from disposals -2,700 - - - - -2,700
impaired loans classes - -199,272 - -6,831 - -206,103
C.6. other decrements -1,958 -120,513 - -7,804 -8,520 -138,795
D. Final gross exposure 1,603,359 813,243 2,152 83,771 5,538 2,508,063
D.1. of which:
- for default interest 251,966 7,499 - 17 - 259,482
1.9 – Due from customers – Changes in total loan value adjustments
Watchlist Loans Unsecured

2002 NPLs under Restructured loans to Performing Total
restructuring loans Countries at risk loans
A. Initial total adjustments 712,363 69,125 - 16,595 2,088 184,298 984,469

A.1. of which:
- for default interest 245,243 2,160 - 1,627 - 798 249,828
B. Increases 204,028 76,669 645 8,944 2,163 11,026 303,475
B.1. increases 152,268 74,845 645 8,172 149 9,510 245,589
B.1.1. of which:
- for default interest 23,128 2,085 - 1,893 - 503 27,609
B.2. drawdown on loan loss
reserves 18,645 - - - - - 18,645
B.3. transfer from other -
loan classes 32,484 42 - 772 - 600 33,898
B.4. other increases 631 1,782 - - 2,014 916 5,343
C. Decreases -292,688 -51,298 - -11,140 -3,146 -13,355 -371,627
C.1. valuation write-backs -18,144 -10,102 - -102 -65 -4,760 -33,173
C.1.1. of which:
- for default interest -183 -1 - - -55 -9 -248
C.2. collection write-backs -27,147 -3,247 - -7,867 -1,117 -463 -39,841
C.2.1. of which:
- for default interest -7,969 - - -1,627 - -385 -9,981
C.3. write-offs -211,677 -2,454 - -253 - -6,544 -220,928
loan classes -157 -30,234 - -2,918 - -589 -33,898
C.5. other increases -35,563 -5,261 - - -1,964 -999 -43,787
D. Final total adjustments 623,703 94,496 645 14,399 1,105 181,969 916,317
D.1. of which:
- for default interest 192,265 2,043 - 17 - 963 195,288
111
Non-performing loans (inclusive of default interest)
Non-performing loans, net of write-downs, break down as follows:
31-12-2001
(in thousands of euros) 31-12-2002 pro-forma Changes
a) principal 919,955 974,598 -54,643 -5.61%

b) interest 59,701 32,081 27,620 86.09%
Total 979,656 1,006,679 -27,023 -2.68%
Including write-downs, they amounted to €1,603,359 thousand, down 6.7%

from the previous year (€1,719,042 thousand).
The gross NPLs to total gross cash loans ratio, i.e., including write-downs,
accounted for 4.88% from 5.33% in the previous year. Net of write-downs, the
NPL to loans ratio stood at 3.07% from 3.22% in the previous year.
Due from default interest
The chart’s bottom-line shows total default interest posted under the assets side
of the balance sheet, further to direct loan write-downs.
31-12-2001
a) nonperforming loans 59,701 32,081 27,620 86.09%

b) other loans 5,456 5,529 -73 -1.32%
Total 65,157 37,610 27,547 73.24%
112
SECTION 2 - SECURITIES
Own securities reported under items 20, 50 and 60 of the consolidated balance
sheet’s assets amount to €4,997,291 thousand and break down as follows:
31-12-2001
20 Treasuries and similar bills

eligible to refinancing with
central banks 1,166,883 2,286,648 -1,119,765 -48.97%
50 Bonds and other debt securities 3,633,256 3,229,605 403,651 12.50%
60 shares, and other equity securities 197,152 89,793 107,359 119.56%
Total 4,997,291 5,606,046 -608,755 -10.86%

of which:
- investment securities 1,052,241 1,631,243 -579,002 -35.49%
- trading securities 3,945,050 3,974,803 -29,753 -0.75%
2.1 – Investment securities

Book valure Market value
(in thousands of euros) 31-12-2002 31-12-2001 31-12-2002 31-12-2001
pro-forma pro-forma
1. Debt securities 1,040,472 1,619,919 955,484 1,533,449
1.1. Treasuries 242,792 679,195 245,789 681,561

- listed 142,792 474,217 143,709 474,145
- unlisted 100,000 204,978 102,080 207,416
1.2. other securities 797,680 940,724 709,695 851,888

- listed 518,830 568,223 470,142 522,482
- unlisted 278,850 372,501 239,553 329,406
2. Equity securities 11,769 11,324 16,984 19,726

- listed - - -
- unlisted 11,769 11,324 16,984 19,726
Total 1,052,241 1,631,243 972,468 1,553,175
At year-end, the investment portion of the securities portfolio stood at

21.06%, compared with 29.10% in the previous year. It is made up of secu-
rities specifically picked to become long term investments further to specific
resolutions.
As of December 31st, 2002, investment securities, valued at cost, showed a

€79.773 thousand liability spread between book value and market value.
113
2.2 – Annual changes in investment securities
2001
(in thousands of euros) 2002 pro-forma
A. Opening balance 1,631,243 1,633,475

B. Increments 85,952 75,377
B.1. purchase 35,680 51,007
B.2. write-backs 59 -
B.3. transfers from trading
portfolio 19,473 -
B.4. other changes 30,740 24,370
C. Decrements -664,954 -77,609
C.1. sales -12,018 -20,309
C.2. redemptions -400,777 -36,752
C.3. write-downs -2,805 -4,937
of which:
- write-offs -2,796 -4,937
C.4. transfers to trading
portfolio -195,891 -1,062
C.5. other changes -53,463 -14,549
D. Final balance 1,052,241 1,631,243
Transfers to the trading portfolio carried out in 2002 are explained by the deci-
sion to review investment profiles made in December 2001 by the Board of
Directors of the former Banca Popolare di Novara s.c.r.l.. Out of the above trans-
fers, the main portion is represented by fixed income securities, amounting to a
total nominal value of €200 million.
2.3 – Trading securities
Book value Market value

(in thousands of euros) 31-12-2002 31-12-2001 31-12-2002 31-12-2001
pro-forma pro-forma
1. Debt securities 3,759,667 3,896,334 3,761,010 3,934,705

1.1. treasuries 1,866,409 1,585,146 1,866,417 1,592,221
- listed 1,866,395 1,354,224 1,866,396 1,356,227
- unlisted 14 230,922 21 235,994
1.2. other securities 1,893,258 2,311,188 1,894,593 2,342,484
- listed 1,225,433 1,236,254 1,225,484 1,258,899
- unlisted 667,825 1,074,934 669,109 1,083,585
2. Equity securities 185,383 78,469 189,793 82,367
- listed 17,340 18,885 17,361 21,772
- unlisted 168,043 59,584 172,432 60,595
Total 3,945,050 3,974,803 3,950,803 4,017,072
114
2.4 – Annual changes in trading securities
The changes in the portfolio under examination occurred during the year are
summarized in the chart below:
2001
A. Opening balance 3,974,803 4,629,374
B. Increments: 42,158,671 36,665,192

B.1. purchases 41,851,714 36,598,498
- debt securities 40,182,575 32,492,115
- treasuries 32,647,211 25,748,576
- other securities 7,535,364 6,743,539
- equity securities 1,669,139 4,106,383
B.2. write-backs and write-ups 45,575 9,436
B.3. transfers from investment
portfolio 201,107 1,062
B.4. other changes 60,275 56,196
C. Decrements: -42,188,424 -37,319,763

C.1. sales and redemptions -42,109,645 -37,291,316
- debt securities -40,568,680 -33,157,032
- treasuries -32,608,900 -26,672,306
- other securities -7,959,780 -6,484,726
- equity securities -1,540,965 -4,134,284
C.2. write-downs -25,255 -17,817
C.3. transfer to investment
portfolio -19,473 -
C.4. other changes -34,051 -10,630
D. Closing balance 3,945,050 3,974,803
115
SECTION 3 – EQUITY INVESTMENTS
3.1 – Significant equity investments
Type Shareholders’ Votes in

Head Income Shareholding rrelation Book
(in thousands of euros) of relation equity general Notes
office (Loss) Company Share % value
(a) (b) meetings %
A. Imprese incluse nel consolidamento
Banco Popolare di Verona e Novara S.c.r.l. Verona 3,129,034 233,595 Parent Company
A.1 Full consolidation
1 Aletti Fiduciaria S.p.A. Milano (1) 123 4 Banca Aletti 50.000% 50.000% xxx
2 Aletti Gestielle SGR S.p.A. Milano (1) 29,951 -104 BPVN 32.612% 32.612% xxx
Creberg 19.591% 19.591% xxx
Holding 47.797% 47.797% xxx
3 Aletti Gestielle Alternative SGR S.p.A. Milano (1) 1,616 -291 Holding 70.800% 70.800% xxx
Creberg 29.200% 29.200% xxx
4 Aletti International S.A. Lussemburgo (1) 422 391 Aletti Merchant 99.677% 99.677% xxx
5 Aletti Invest SIM S.p.A. Bergamo (1) 11,537 -1,042 BPVN 50.000% 50.000% xxx
Creberg 50.000% 50.000% xxx
6 Aletti Merchant S.p.A. Verona (1) 17,791 -3,974 BPVN 60.000% 60.000% xxx
Creberg 40.000% 40.000% xxx
7 Aletti Private Equity SGR S.p.A. Verona (1) 1,055 -291 Aletti Merchant 99.867% 99.867% xxx
Holding 0.133% 0.133% xxx
8 Banca Aletti & C. S.p.A. Milano (1) 107,161 12,550 BPVN 74.225% 74.225% xxx
Creberg 25.775% 25.775% xxx
9 Banca Aletti & C. (Suisse) S.A. CH - Lugano (1) 8,338 -453 BPV Int. 100.000% 100.000% xxx
10 Banca Popolare di Novara S.p.A. Novara (1) 865,642 83,974 BPVN 100.000% 100.000% xxx
11 BPVN (France) S.A. F - Parigi (1) 37,379 475 BPVN 99.977% 99.977% xxx
12 BPVN Immobiliare S.r.l. Verona (1) 22,311 -63 BPVN 100.000% 100.000% xxx
13 BPVN (Luxembourg) S.A. Lussemburgo (1) 37,771 333 BPVN 99.966% 99.966% xxx
14 Compagnie D'Angely S.A. F - Parigi (1) 45 5 BPVN France 99.440% 99.440% xxx
15 Credito Bergamasco S.p.A. Bergamo (1) 753,448 85,066 BPVN 81.252% 81.252% xxx
16 Holding di Partecipazioni Finanziarie Popolare xxx
di Verona - S.Geminiano e S.Prospero S.p.A. Verona (1) 123,201 10,092 BPVN 100.000% 100.000% xxx
17 Immobiliare BPV S.r.l. Verona (1) 3,651 98 BPVN 100.000% 100.000% xxx
18 Leasimpresa S.p.A. Torino (1) 56,580 8,084 Holding 66.660% 66.660% xxx
Creberg 33.340% 33.340% xxx
19 Novara Immobiliare S.p.A. Novara (1) 374 144 BPVN Immob. 100.000% 100.000% xxx
20 Novara Invest SIM S.p.A. Novara (1) 895 -2,203 BPVN 99.000% 99.000% xxx
Aletti Gestielle 1.000% 1.000% xxx
21 SA.RI Sannitica Riscossioni S.p.A. Novara (1) 2,742 160 BPVN 99.950% 99.950% xxx
22 Sestri S.p.A. Novara (1) 3,633 -1,065 BPVN 100.000% 100.000% xxx
23 Società Gestione Servizi - BPVN S.p.A. Verona (1) 108,440 4,011 BPVN 75.490% 75.490% xxx
Creberg 24.510% 24.510% xxx
A.2 Proportional method
116
Type Shareholders’ Votes in

Head Income Shareholding relation Book Notes
(in thousands of euros) of relation equity general
office (Loss) Company Share % value
(a) (b) meetings %
B. Equity investments carried at equity

B.1 Subsidiaries
1 Arena Broker S.r.l. Verona (1) 858 84 Holding 51.000% 51.000% xxx
2 Assisebino S.r.l. Bergamo (1) 19 2 Arena Broker 51.000% 51.000% xxx
Creberg 9.000% 9.000% xxx
3 BPV Vita S.p.A. Verona (4) 45,348 5,041 BPVN 35.000% 35.000% xxx
Creberg 15.000% 15.000% xxx
4 Novara Vita S.p.A. Novara (4) 69,978 2,586 BPVN 50.000% 50.000% xxx
5 Tecmarket Servizi S.p.A. Verona (1) 1,532 548 BPVN 47.500% 47.500% xxx
SGS-BPVN 52.500% 52.500% xxx
B.1 Affiliates
6 Aosta Factor S.p.A. Aosta (8) 15,399 1,032 BPVN 20.000% 20.000% xxx
7 Banca per il Leasing - Italease S.p.A. Milano (8) 282,213 7,302 BPVN 27.626% 27.626% xxx (c)
Holding 10.534% 10.534% xxx
8 Factorit S.p.A. Milano (8) 54,451 5,323 BPVN 30.474% 30.474% xxx
9 GEMA Magazzini Generali
BPV-BSGSP S.p.A. Castelnovo Sotto (RE)(8) 3,850 -140 BPVN 33.333% 33.333% xxx
10 Istituto Centrale delle Banche

Pop. Italiane S.p.A. Roma (8) 191,872 34,362 BPVN 15.000% 15.000% xxx (c)
11 Soc. Coop. fra le Banche Pop.
"L.Luzzatti" S.c.r.l. Roma (8) 254 -11 BPVN 25.100% 25.100% xxx (d)
C. Other significant equity investments

C.1 Subsidiaries
1 Compagnia Fin. Ligure Piemontese S.p.A.
(in liq.) Milano (1) 14,960 1,996 BPVN 100.000% 100.000% 7.545
2 FIN.E.R.T. Fin. Esatt. Tesor. e Ricev. S.p.A.
(in liq.) Marano (NA) (1) -2,946 -54 SE.RI. 100.000% 100.000% - (e)
3 Seefinanz S.A. (in liq.) CH - Lugano (1) 67,793 -19,652 BPVN 100.000% 100.000% 44.896
4 Servizi Riscossione Imposte SE.RI. S.p.A.
(in liq.) Napoli (1) -31 -3 Sestri 80.000% 80.000% - (e)
5 Sinergia S.r.l. (in liq.) Novara (1) -50 -61 BPVN 100.000% 100.000% - (e)
6 Teliber S.A. CH - Lugano (1) 42 -18 Seefinanz 100.000% 100.000% - (e)
C.1 Affiliates
7 Conceria Mastrotto S.p.A. Arzignano (VI) (8) 59,358 7,821 Aletti Merchant 20.000% 20.000% 16.026 (f)
8 G.I. Holding S.p.A. Milano (8) 1,800 n.d. Aletti Merchant 25.050% 25.050% 467 (g)
9 Novara Promuove S.r.l. Novara (8) 76 2 BPN 49.000% 49.000% - (e)
10 Nuova Foar S.r.l. (in fallimento) Foggia (8) COFILP 30.000% 30.000% - (e)
11 Pama S.p.A. Rovereto (TN) (8) 5,000 n.d. Aletti Merchant 24.000% 24.000% 1.216 (f)
12 Veronagest S.A. Lussemburgo (8) 16,442 73 Aletti Merchant 37.150% 37.150% 28
(a) Type of relation:

(1) Control under art. 2359 civil code, paragraph 1, n. 1, (majority of voting rights at general meetings)
(2) Control under art. 2359 civil code, paragraph 1, n. 2, (dominant influence at general meetings)
(3) Control under art. 23 T.U., paragraph 2, n. 1, (agreements with other shareholders)
(4) Other types of control
(5) Independent management under art. 26, paragraph 1, of Law Decree n. 87 of 27 January 1992
(6) Independent management under art. 26, paragraph 2, of Law Decree n. 87 of 27 January 1992
(7) Joint control
(8) Affiliated company
(b) Inclusive of net income for the year
(c) Shareholders’ equity and net income refer to financial statements
(d) Shareholders’ equity and net income refer to financial statements as on 30/09/2001
(e) The company is not material to a true and fair view of the financial statements under art. 29, par. 1, Law dec. 87/1992
(f) Shareholders’ equity and net income refer to the 2001 consolidated financial statements
(g) The company was turned into an S.p.A. (joint stock co.) during the year; the shareholders’ equity is represented by share capital.
117
3.2 – Assets and liabilities towards companies of the Group
The main assets and liabilities outstanding at the date of accounting with non
consolidated investee companies of the Group are shown below:
31-12-2001
a) assets 37,196 20,034 17,162 86.00%

1. due from banks - - -
of which:
- subordinated - - -
2. due from financial institutions 37,121 17,236 19,885 115.00%
of which:
- subordinated 15,494 15,494 -
3. due from other customers 75 2,798 -2,723
of which:
4. bonds and other debt securities - - -
of which:
b) liabilities 81,526 84,716 -3,190 -4.00%
1. due to banks - - -
2. due to financial institutions 80,475 23,371 57,104 244.00%
3. due to other customers 1,051 61,345 -60,294 -98.00%
4. debt securities in issue - - -
5. subordinated liabilities - - -
c) guarantees and commitments 4,852 4,488 364 8.00%
1. guarantees issued 1,736 1,906 -170 -9.00%
2. commitments 3,116 2,582 534 21.00%
3.3 – Assets and liabilities towards affiliated companies
The main assets and liabilities outstanding at the date of accounting with affili-
ates other than companies of the Group are shown below:
31-12-2001
a) asstes 734,410 330,154 268,980 81.47%

1. due from banks 230,222 152,842 77,380 50.63%
of which:
2. due from financial institutions 280,980 117,239 163,741 139.66%
of which:
3. due from other customers 72,776 49,644 23,132 46.60%
of which:
4. bonds and other debt securities 15,156 10,429 4,727 45.33%
of which:
- subordinated 9,059 1,877 7,182 382.63%
b) liabilities 550,804 327,267 223,537 68.30%
1. due to banks 297,710 908 296,802 32687.44%
2. due to financial institutions 155,379 41,853 113,526 271.25%
3. due to other customers 61,082 106,628 -45,546 -42.71%
4. debt securities in issue 36,633 99,357 -62,724 -63.13%
5. subordinated liabilities - 78,521 -78,521 -100.00%
c) guarantees and commitments 81,287 70,001 11,286 16.12%
1. guarantees issued 42,172 25,200 16,972 67.35%
2. commitments 39,115 44,801 -5,686 -12.69%
118
3.4 – Composition of item 70 "Equity investments"
The chart below shows a synoptic breakdown of item “Equity investments”,

based upon the companies’ business sector:
31-12-2001
a) in banks 256,273 172,209 84,064 48.82%

1. listed 77 - 77
2. unlisted 256,196 172,209 83,987 48.77%
b) in financial institutions 55,787 47,046 8,741 18.58%

1. listed - 1 -1 -100.00%
2. unlisted 55,787 47,045 8,742 18.58%
c) other 105,179 126,743 -21,564 -17.01%

1. listed 6 6 -
2. unlisted 105,173 126,737 -21,564 -17.01%
Total 417,239 345,998 71,241 20.59%
3.5 – Composition of item 80 "Equity investments in companies of the

Group"
The chart below shows a synoptic breakdown of non consolidated companies

of the Group based upon their business sector:
31-12-2001
a) in banks 44,896 44,261 635 1.43%

1. listed - - -
2. unlisted 44,896 44,261 635 1.43%
b) in financial institutions 65,043 7,587 57,456 757.30%

1. listed - - -
2. unlisted 65,043 7,587 57,456 757.30%
c) other 1,736 46,065 -44,329 -96.23%

1. listed - - -
2. unlisted 1,736 46,065 -44,329 -96.23%
Total 111,675 97,913 13,762 14.06%
119
3.6 – Annual changes in equity investments
3.6.1 – Equity investments in companies of the Group
2001
A. Opening balance 97.913 88.739

B. Increments 18.235 11.476
B.1. purchases 14.551 9.072
B.2. write-backs - -
B.3. write-ups - -
B.4. other changes 3.684 2.404
C. Decrements -4.473 -2.302
C.1. sales -4.235 -
C.2. write-downs - -10
of which:
- write-off - -10
C.3. other changes -238 -2.292
D. Closing balance 111.675 97.913
E. Total write-ups - -
F. Total write-downs 35.592 32.271
3.6.2 – Other equity investments
2001
A. Opening balance 345.998 291.344

B. Increments 133.854 138.473
B.1. purchases 106.700 84.429
B.2. write-backs - 9.106
B.3. write-ups - -
B.4. other changes 27.154 44.938
C. Decrements -62.613 -83.819
C.1. sales -53.603 -76.923
C.2. write-downs -684 -5.372
of which:
- write-offs -684 -5.218
C.3. other changes -8.326 -1.524
D. Closing balance 417.239 345.998
E. Total write-ups 1 1
F. Total write-downs 26.744 26.412
120
SECTION 4 – TANGIBLE AND INTANGIBLE FIXED ASSETS
Tangible assets (item 120 of assets)
31-12-2001
a) buildings 509,343 660,388 -151,045 -22.87%

b) plant and equipment 49,163 64,908 -15,745 -24.26%
c) furniture and fittings 18,311 21,194 -2,883 -13.60%
d) goods pending to be under finance lease 246,569 170,090 76,479 44.96%
Total 823,386 916,580 -93,194 -10.17%
Intangible assets (item 110 of assets)
31-12-2001
a) goodwill 55,328 90,752 -35,424 -39.03%

b) software purchase costs 63,728 78,104 -14,376 -18.41%
c) organization costs 21,264 16,073 5,191 32.30%
d) other 57,635 89,503 -31,868 -35.61%
Total 197,955 274,432 -76,477 -27.87%
Goodwill costs are mainly represented by:
• €52,356 thousand for the portion of negative difference on consolidation

of Banco S.Geminiano e S.Prospero still to be amortized, that was not allo-
cated to increase the value of the property. The amortization portion
charged to income for the year amounted to €34,903 thousand;
• €2,941 thousand for the portion of negative difference upon consolidation

of Cliam Gestioni S.p.A. in Aletti Gestielle SGR S.p.A., still to be amortized.
The amortization portion charged to income for the year amounted to
€490 thousand.
The other intangible assets include the residual net book value of the charge
incurred by the former Banca Popolare di Novara s.c.r.l., equal to €36,783
thousand, to implement the early retirement plan with access to the industry
Solidarity Fund.
121
The original charge incurred in 2001, for a total of €61,305 thousand was post-
ed under intangible assets – as sanctioned in the relevant regulations, overrid-
ing what provided for by the relevant accounting principles that require said
charge to be fully charged to income in the year in which the liability was gen-
erated.
Said charge is amortized on a straight-line basis over five years starting from
2001. The amortization portion for the year amounted to €12.261 thou-
sand.
4.1 – Annual changes in tangible assets
Goods
2002 Buildings Furniture Equipment pending Total
(in thousands of euros) fin. lease
A. Opening balance 660,388 21,194 64,908 170,090 916,580
B. Increments 50,961 5,992 28,555 194,288 279,796

B.1. purchases 14,816 5,709 21,144 192,381 234,050
B.2. write-backs - - - 1,907 1,907
B.3. write-ups - - - - -
B.4. other changes 36,145 283 7,411 - 43,839
C. Decrements -202,006 -8,875 -44,300 -117,809 -372,990

C.1. sales -3,898 -10 -830 - -4,738
C.2. write-downs -25,206 -4,229 -36,320 - -65,755
a) depreciations -25,206 -4,229 -36,320 - -65,755
b) write-offs - - - - -
C.3. other changes -172,902 -4,636 -7,150 -117,809 -302,497
D. Closing balance 509,343 18,311 49,163 246,569 823,386
E. Total write-ups 344,108 - - - 344,108
F. Total write-downs 350,057 78,653 221,029 - 649,739

a) depreciation 350,057 78,648 224,253 - 652,958
b) write-offs - 5 -3,224 - -3,219
122
4.2 – Annual changes in intangible assets
2002 Organization Other

(in thousands of euros) costs Goodwill fixed asstes Total
A. Opening balance 16,073 90,752 167,607 274,432
B. Increments 15,984 - 75,301 91,285

B.1. purchases 9,254 - 42,150 51,404
B.2. write-backs - - - -
B.3. write-ups - - - -
B.4. other changes 6,730 - 33,151 39,881
C. Decrements -10,793 -35,424 -121,545 -167,762

C.1. sales - - - -
C.2. write-downs -10,789 -35,424 -73,994 -120,207
a) amoritzation -10,789 -35,424 -73,994 -120,207
b) write-offs - - - -
C.3. other changes -4 - -47,551 -47,555
D. Closing balance 21,264 55,328 121,363 197,955
E. Total write-ups - - - -
F. Total write-downs 30,262 380,244 45,493 455,999

a) amortization 30,262 380,244 45,493 455,999
b) write-offs - - - -
123
SECTION 5 – OTHER ASSETS
5.1 - Composition of item 150 "Other assets"
31-12-2001
a) tax items 689,333 552,601 136,732 24.74%

b) pending items 462,144 432,662 29,482 6.81%
c) due for advances tax collection service 357,065 379,091 -22,026 -5.81%
d) deferred tax assets 187,152 212,540 -25,388 -11.95%
e) cash and other valuables held
by the cashier 165,206 260,446 -95,240 -36.57%
f) items deriving from off-balance
sheet transactions 100,900 17,880 83,020 464.32%
g) other items 516,961 612,488 -95,527 -15.60%
Total 2,478,761 2,467,708 11,053 0.45%
5.2 - Composition of item 160 "Accrued income and prepaid expenses"
31-12-2001
a) accrued income 499,207 521,355 -22,148 -4.25%

1. interest accrued on derivative
contracts 310,223 171,812 138,411 80.56%
2. interest on interbank loans 17,485 46,224 -28,739 -62.17%
3. interest on customer loans 57,250 91,478 -34,228 -37.42%
4. interest income on securities 96,460 89,493 6,967 7.78%
5. other 17,789 122,348 -104,559 -85,46%
b) prepaid expenses 19,615 21,960 -2,345 -10.68%

1. non-accrued interest on derivative
contracts 4,015 844 3,171 375.71%
2. G/A expenses 8,846 9,786 -940 -9.61%
3. other 6,754 11,330 -4,576 -40.39%
Total 518,822 543,315 -24,493 -4.51%
5.3. – Adjustments for accrued income and prepaid expenses
Accrued interest on “zero coupon” securities present in the proprietary portfolio and
on issue differences was partly allocated to increase the securities value, and partly
posted under “due from Inland Revenue”, by specific instruction of the Bank of Italy.
No company of the Group availed itself of the possibility put forth by art. 12,
paragraph 2, of Law decree n. 87, of January 27th, 1992, according to which,
whenever technically correct, accrued income and prepaid expenses may be
directly credited or debited to their relevant asset or liability items.
124

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BERGAMO Piazza Vecchia

MODENA Duomo. Ghirlandina Tower

CONSOLIDATED BALANCE SHEET 31-12-2001

10 CASH AND FUNDS WITH CENTRAL BANKS

20 TREASURY BILLS AND OTHER BILLS

30 DUE FROM BANKS 6,063,184 8,599,151 -2,535,967 -29.5%

40 DUE FROM CUSTOMERS 31,949,244 31,254,781 694,463 2.2%

50 BONDS AND OTHER DEBT SECURITIES 3,633,256 3,229,605 403,651 12.5%

60 SHARES AND OTHER EQUITY SECURITIES 197,152 89,793 107,359 119.6%

70 EQUITY INVESTMENTS 417,239 345,998 71,241 20.6%

80 EQUITY INVESTMENTS IN GROUP COMPANIES 111,675 97,913 13,762 14.1%

90 POSITIVE CONSOLIDATION DIFFERENCES 353,892 333,681 20,211 6.1%

100 POSITIVE DIFFERENCES FROM EQUITY METHOD - 735 -735 -100.0%

110 INTANGIBLE ASSETS 197,955 274,432 -76,477 -27.9%

120 TANGIBLE ASSETS 823,386 916,580 -93,194 -10.2%

150 OTHER ASSETS 2,478,761 2,467,708 11,053 0.4%

TOTAL ASSETS 48,247,490 50,804,863 -2,557,373 -5.0%

CONSOLIDATED BALANCE SHEET 31-12-2001

10 DUE TO BANKS 6,055,868 9,077,044 -3,021.176 -33.3%

20 DUE TO CUSTOMERS 21,435,359 21,193,862 241,497 1.1%

30 DEBT SECURITIES IN ISSUE 12,693,334 12,979,189 -285,855 -2.2%

40 THIRD PARTY ASSETS UNDER ADMINISTRATION 14,601 10,836 3,765 34.7%

50 OTHER LIABILITIES 2,178,953 2,070,201 108,752 5.3%

60 ACCRUED EXPENSES AND DEFERRED INCOME 367,221 451,457 -84,236 -18.7%

70 PROVISION FOR TERMINATION

80 PROVISIONS FOR RISKS AND CHARGES 650,399 585,136 65,263 11.2%

90 LOAN LOSS RESERVES - 854 -854 -100.0%

100 ALLOWANCE FOR GENERAL BANKING RISKS 58,265 58,265 - -

110 SUBORDINATED LIABILITIES 1,084,562 953,881 130,681 13.7%

120 NEGATIVE CONSOLIDATION DIFFERENCES - 6,703 -6,703 -100.0%

140 MINORITY INTEREST 147,436 180,188 -32,752 -18.2%

150 SHARE CAPITAL 1,332,174 1,323,359 8,815 0.7%

160 SHARE PREMIUMS 162,008 97,798 64,210 65.7%

170 RESERVES 1,185,739 1,065,246 120,493 11.3%

180 REVALUATION RESERVES 87,473 85,099 2,374 2.8%

TOTAL LIABILITIES 48,247,490 50,804,863 -2,557,373 -5.0%

CONSOLIDATED BALANCE SHEET 31-12-2001

10 GUARANTEES ISSUED 3,775,724 3,468,697 307,027 8.9%

20 COMMITMENTS 3,064,345 2,842,195 222,150 7.8%

CONSOLIDATED INCOME STATEMENT 2001

10 INTEREST INCOME AND SIMILAR REVENUES 2,345,483 2,699,236 -353,753 -13.1%

VENICE Doge’s Palace

The consolidated financial statements were drawn up in application of Law

PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS AS OF 31-12-2001

Criteria adopted to draw up pro-forma data

As a result, the pro-forma data is shown as the summation of the consolidated

• the main intercompany transactions outstanding between the companies

• With regards to shareholders’ equity, based upon the account balances at

a) record the effect deriving from the distribution to BPN shareholders of

a) the percentage interest in the profit generated in 2001 by the above

Effect of pro-forma adjustments to the 2001 consolidated net income

The reconciliation between the consolidated net income as of December 31st,

(in thousands of euros)

BPV consolidated net income for the year 2001 208,881

BPN consolidated net income for the year 2001 108,729

Grand total 317,610

Effect of valuing the equity investments in Istituto Centrale

Accounting of assumed financial charges relating to

Pro-forma consolidated net income for the year 2001 308,849

The reconciliation between the consolidated shareholders’ equity as of Decem-

(in thousands of euros)

BPV consolidated shareholders’ equity as of 31-12-2001 1,936,962

BPN consolidated shareholders’ equity as of 31-12-2001 1,518,721