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Half-yearly report

as at 30 June 2011
































































1h|s |s an |n||sh |rans|a||on o| |he ||a||an or||na| |e|az|one semes|ra|e a| J0 |uno 2011 and has oeen prepared so|e|y |or |he conven|ence o| |he
reader. 1he ||a||an vers|on |a|es precedence and w||| oe made ava||ao|e |o |n|eres|ed readers upon reques| |o |n|esa 5anpao|o 5.p.A.
1h|s documen| con|a|ns cer|a|n |orward-|oo||n s|a|emen|, projec||ons, oojec||ves, es||ma|es and |orecas|s re||ec||n |he |n|esa 5anpao|o
manaemen|s curren| v|ews w||h respec| |o cer|a|n |u|ure even|s. |orward-|oo||n s|a|emen|s, projec||ons, oojec||ves, es||ma|es and |orecas|s are
enera||y |den||||ao|e oy |he use o| |he words may, w|||, shou|d, p|an, expec|, an||c|pa|e, es||ma|e, oe||eve, |n|end, projec|, oa|
or |are| or |he nea||ve o| |hese words or o|her var|a||ons on |hese words or comparao|e |erm|no|oy. 1hese |orward-|oo||n s|a|emen|s |nc|ude,
ou| are no| ||m||ed |o, a|| s|a|emen|s o|her |han s|a|emen|s o| h|s|or|ca| |ac|s, |nc|ud|n, w||hou| ||m||a||on, |hose reard|n |n|esa 5anpao|os |u|ure
||nanc|a| pos|||on and resu||s o| opera||ons, s|ra|ey, p|ans, oojec||ves, oa|s and |are|s and |u|ure deve|opmen|s |n |he mar|e|s where |n|esa 5anpao|o
par||c|pa|es or |s see||n |o par||c|pa|e.
|ue |o such uncer|a|n||es and r|s|s, readers are cau||oned no| |o p|ace undue re||ance on such |orward-|oo||n s|a|emen|s as a pred|c||on o| ac|ua|
resu||s. 1he |n|esa 5anpao|o Croups ao||||y |o ach|eve ||s projec|ed oojec||ves or resu||s |s dependen| on many |ac|ors wh|ch are ou|s|de manaemen|s
con|ro|. Ac|ua| resu||s may d|||er ma|er|a||y |rom (and oe more nea||ve |han |hose projec|ed or |mp||ed |n |he |orward-|oo||n s|a|emen|s. 5uch
|orward-|oo||n |n|orma||on |nvo|ves r|s|s and uncer|a|n||es |ha| cou|d s|n|||can||y a||ec| expec|ed resu||s and |s oased on cer|a|n |ey assump||ons.
A|| |orward-|oo||n s|a|emen|s |nc|uded here|n are oased on |n|orma||on ava||ao|e |o |n|esa 5anpao|o as o| |he da|e hereo|. |n|esa 5anpao|o under|a|es
no oo||a||on |o upda|e puo||c|y or rev|se any |orward-|oo||n s|a|emen|, whe|her as a resu|| o| new |n|orma||on, |u|ure even|s or o|herw|se, excep| as
may oe requ|red oy app||cao|e |aw. A|| suosequen| wr|||en and ora| |orward-|oo||n s|a|emen|s a||r|ou|ao|e |o |n|esa 5anpao|o or persons ac||n on ||s
oeha|| are express|y qua||||ed |n |he|r en||re|y oy |hese cau||onary s|a|emen|s.








lall-yearly reporl as al 30 June 20!!






































InIesa 5anpaoIo 5.p.A.
Regislered ollice. Piazza San Carlo, !56 !0!2! Torino Secondary regislered ollice. Via Monle di Piela, 8 20!2! Milano Share capilal
8,545,56!,6!4.72 Luro Regislralion number on lhe Torino Company Regisler and liscal Code 00799960!58 VAT number !08!0700!52
Member ol lhe Nalional lnlerbank Deposil Cuaranlee lund and ol lhe Nalional Cuaranlee lund, included in lhe Nalional Regisler ol 8anks
No. 536! and Parenl Company ol "lnlesa Sanpaolo", included in lhe Nalional Regisler ol 8anking Croups.
3

5
Contents





The Intesa Sanpaolo Group 7

Supervisory Board, Management Board, General Management, Manager responsible for
preparing the Companys financial reports and Independent Auditors

11


HALF-YEARLY REPORT ON OPERATIONS

Introduction 15

Overview of the first half 2011 17
Income statement figures and alternative performance measures 18
Balance sheet figures and alternative performance measures 19
Other alternative performance measures 20
Executive summary 23

HALF-YEARLY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated financial statements 35
Consolidated balance sheet 36
Consolidated income statement 38
Statement of consolidated comprehensive income 39
Changes in consolidated shareholders equity 40
Consolidated statement of cash flows 42

Explanatory Notes 43
Accounting policies 45
Subsequent events 58
Economic results 59
Balance sheet aggregates 71
Breakdown of consolidated results by business area and geographical area 84
Risk management 115
Shareholder base, transactions with related parties and other information 134

Forecast for the year 140

Certification of the half-yearly condensed consolidated financial statements pursuant to
Art. 154 bis of Legislative Decree 58/1998

141

Independent Auditors Report 143

Attachments 147

Glossary

165

Contacts 179

Financial calendar 183

THE INTESA SANPAOLO GROUP




11
11
Supervisory 8oard, Managemenl 8oard, Ceneral
Managemenl, Manager responsible lor preparing lhe
Company's linancial reporls and lndependenl Audilors



5upervisory oard
Chairman Ciovanni 8AZOLl

Depuly Chairpersons Mario 8LRTOLlSSl
Llsa lORNLRO

Members Luigi Arluro 8lANCll
Rosalba CASlRACll
lranco DALLA SLCA
Cianluca lLRRLRO
Jean-Paul llTOUSSl
Pielro CARl8ALDl
Ciulio Slelano LU8ATTl
Marco MANClACALLl
Cianni MARClLSlNl
labio PASQUlNl
Lugenio PAVARANl
Cianluca PONZLLLlNl
Cian Cuido SACCll MORSlANl
Marco SPADAClNl
Livio TORlO
Riccardo VARALDO


ManagemenI oard
Chairman Andrea 8LLTRATTl

Senior Depuly Chairman Marcello SALA

Depuly Chairman Ciovanni COSTA

Managing Direclor and Chiel Lxeculive Ollicer Corrado PASSLRA

Members Aureliano 8LNLDLTTl
Paolo CAMPAlOLl
Llio CATANlA
Roberlo llRPO
Lmilio OTTOLLNCll


GeneraI Managers Corrado PASSLRA
Caelano MlCClClL
Marco MORLLLl
(*)



Manager responsibIe !or preparing
Ihe Company's !inanciaI reporIs Lrneslo RlVA


IndependenI AudiIors RLCONTA LRNST & YOUNC S.p.A.




(*)
Depuly lo lhe CLO
11

HALF-YEARLY REPORT
ON OPERATIONS

lnlroduclion





The "lall-yearly Reporl as al 30 June 20!!" is made up ol lhe lall-yearly reporl on operalions and lhe lall-yearly condensed
consolidaled linancial slalemenls including lhe linancial slalemenls and relaled explanalory noles.

The "lall-yearly condensed consolidaled linancial slalemenls as al 30 June 20!!" have been prepared in compliance wilh
arl. !54-ler ol Legislalive Decree 58 ol 24 lebruary !998 and in applicalion ol lhe lAS/llRS issued by lhe lnlernalional Accounling
Slandards 8oard (lAS8) and relaled lnlernalional linancial Reporling lnlerprelalions Commillee (llRlC) inlerprelalions endorsed by
lhe Luropean Commission in LC Regulalion !606 ol !9 July 2002.
ln parlicular, lhe lall-yearly condensed consolidaled linancial slalemenls, subjecl lo limiled review, have been drawn up in
compliance wilh lAS 34 requiremenls, which regulale inlerim reporls.

To supporl lhe commenls on resulls lor lhe period, lhe Lxplanalory noles lo lhe lall-yearly condensed consolidaled linancial
slalemenls also presenl and illuslrale reclassilied income slalemenl and balance sheel schedules. The reconcilialion wilh lhe
linancial slalemenls, envisaged by Consob in ils communicalion 6064293 ol 28 July 2006, is included in lhe Allachmenls.
The lall-yearly reporl on operalions and lhe lall-yearly condensed consolidaled linancial slalemenls conlain linancial inlormalion
lor example, ligures on quarlerly developmenl, and olher allernalive perlormance measures nol direclly allribulable lo lhe
linancial slalemenls.

The websile ol lnlesa Sanpaolo, al www.group.inlesasanpaolo.com, conlains lhe press releases issued during lhe year logelher
wilh olher linancial documenls.




15

OVERVIEW OF
THE FIRST HALF 2011


18
18
lncome slalemenl ligures and allernalive
perlormance measures ()

amounI %
Nel income -288 -!7.0
-70 -!9.7
Nel adjuslmenls lo loans -87 -5.6
lncome aller lax lrom disconlinued operalions -69!
Operaling income 458 5.6
Operaling cosls -!0 -0.2
Operaling margin 468 !2.6
Prolils (losses) on lrading 606
lncome lrom insurance business
Nel inleresl income -77 -!.6
Nel lee and commission income -4 -0.!
ConsoIidaIed income sIaIemenI !igures (millions ol euro) Changes
4,739
4,8!6
2,784
2,788
285
355
8,678
8,220
-4,497
-4,507
4,!8!
3,7!3
-!,457
-!,544
-
69!
!,402
!,690
82!
2!5

uarIerIy deveIopmenI o! main consoIidaIed income sIaIemenI !igures (millions ol euro)
4,!83
4,495
0 0
8,678
!Q 2Q 3Q 4Q lY
OperaIing income
2,223
2,274 0 0 4,497
!Q 2Q 3Q 4Q lY
OperaIing cosIs
!,960
2,22! 0 0
4,!8!
!Q 2Q 3Q 4Q lY
OperaIing margin
66!
74! 0 0 !,402
!Q 2Q 3Q 4Q lY
NeI income

Main income sIaIemenI !igures by business area (millions ol euro)
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
373
!37
!,!25
!59
!,779
5,000
400
!36
!,!88
!96
2,05!
4,759
!68
65
570
4!
427
2,87!
!70
64
576
37
456
2,833
205
72
555
!!8
!,352
2,!29
230
72
6!2
!59
!,595
!,926
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl. 8anking
8anca dei Terrilori
59
36
208
64
745
455
!05
37
2!4
78
837
356
OperaIing income OperaIing cosIs
OperaIing margin NeI income
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl. 8anking
8anca dei Terrilori
()
30.06.20!!
30.06.20!0

18


18
18
lncome slalemenl ligures and allernalive
perlormance measures ()

amounI %
Nel income -288 -!7.0
-70 -!9.7
Nel adjuslmenls lo loans -87 -5.6
lncome aller lax lrom disconlinued operalions -69!
Operaling income 458 5.6
Operaling cosls -!0 -0.2
Operaling margin 468 !2.6
Prolils (losses) on lrading 606
lncome lrom insurance business
Nel inleresl income -77 -!.6
Nel lee and commission income -4 -0.!
ConsoIidaIed income sIaIemenI !igures (millions ol euro) Changes
4,739
4,8!6
2,784
2,788
285
355
8,678
8,220
-4,497
-4,507
4,!8!
3,7!3
-!,457
-!,544
-
69!
!,402
!,690
82!
2!5

uarIerIy deveIopmenI o! main consoIidaIed income sIaIemenI !igures (millions ol euro)
4,!83
4,495
0 0
8,678
!Q 2Q 3Q 4Q lY
OperaIing income
2,223
2,274 0 0 4,497
!Q 2Q 3Q 4Q lY
OperaIing cosIs
!,960
2,22! 0 0
4,!8!
!Q 2Q 3Q 4Q lY
OperaIing margin
66!
74! 0 0 !,402
!Q 2Q 3Q 4Q lY
NeI income

Main income sIaIemenI !igures by business area (millions ol euro)
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
373
!37
!,!25
!59
!,779
5,000
400
!36
!,!88
!96
2,05!
4,759
!68
65
570
4!
427
2,87!
!70
64
576
37
456
2,833
205
72
555
!!8
!,352
2,!29
230
72
6!2
!59
!,595
!,926
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl. 8anking
8anca dei Terrilori
59
36
208
64
745
455
!05
37
2!4
78
837
356
OperaIing income OperaIing cosIs
OperaIing margin NeI income
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl. 8anking
8anca dei Terrilori
()
30.06.20!!
30.06.20!0




19
19
8alance sheel ligures and allernalive
perlormance measures ()


amounI %
o| wh|ch. Asse|s under manaemen| -1,077 -0.
ConsoIidaIed baIance sheeI !igures (millions ol euro) Changes
-3,726 -!.0
Loans lo cuslomers
Direcl cuslomer deposils -!0,569 -2.5
Shareholders' equily 5,402 !0.!
lndirecl cuslomer deposils. 26! 0.!
Tolal assels -9,347 -!.4
372,36!
376,087
4!4,450
425,0!9
424,94!
2J2,476
424,680
2JJ,J
644,673
654,020
58,935
53,533


Main baIance sheeI !igures by business area (millions ol euro)
2,85!
!53
30,926
40,508
!!0,779
!80,490
3,059
!09
3!,34!
40,044
!07,900
!84,473
Loans Io cusIomers
!2,503
!2
30,259
5,757
97,026
2!8,3!9
!2,275
!2
30,23!
5,278
86,824
2!4,320
DirecI cusIomer deposiIs
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl.8anking
8anca dei Terrilori


OperaIing sIrucIure 30.06.2011 31.12.2010 Changes
amounI
Number o! empIoyees 101,169 101,092 77
llaly 69,754 69,7!5 39
Abroad 3!,4!5 3!,377 38
Number o! !inanciaI advisors 4,779 4,349 430
Number o! branches
(a)
7,290 7,391 -101
llaly 5,547 5,629 -82
Abroad !,743 !,762 -!9
(a)
lncluding Relail 8ranches, Privale 8anking 8ranches, SML 8ranches and Corporale 8ranches.
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.



()
30.06.20!!
3!.!2.20!0


19



19
19
8alance sheel ligures and allernalive
perlormance measures ()


amounI %
o| wh|ch. Asse|s under manaemen| -1,077 -0.
ConsoIidaIed baIance sheeI !igures (millions ol euro) Changes
-3,726 -!.0
Loans lo cuslomers
Direcl cuslomer deposils -!0,569 -2.5
Shareholders' equily 5,402 !0.!
lndirecl cuslomer deposils. 26! 0.!
Tolal assels -9,347 -!.4
372,36!
376,087
4!4,450
425,0!9
424,94!
2J2,476
424,680
2JJ,J
644,673
654,020
58,935
53,533


Main baIance sheeI !igures by business area (millions ol euro)
2,85!
!53
30,926
40,508
!!0,779
!80,490
3,059
!09
3!,34!
40,044
!07,900
!84,473
Loans Io cusIomers
!2,503
!2
30,259
5,757
97,026
2!8,3!9
!2,275
!2
30,23!
5,278
86,824
2!4,320
DirecI cusIomer deposiIs
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl.8anking
8anca dei Terrilori


OperaIing sIrucIure 30.06.2011 31.12.2010 Changes
amounI
Number o! empIoyees 101,169 101,092 77
llaly 69,754 69,7!5 39
Abroad 3!,4!5 3!,377 38
Number o! !inanciaI advisors 4,779 4,349 430
Number o! branches
(a)
7,290 7,391 -101
llaly 5,547 5,629 -82
Abroad !,743 !,762 -!9
(a)
lncluding Relail 8ranches, Privale 8anking 8ranches, SML 8ranches and Corporale 8ranches.
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.



()
30.06.20!!
3!.!2.20!0




20
20
Olher allernalive perlormance measures ()


Nel income / Average shareholders' equily (ROL)
(a)
Lconomic Value Added adjusled (LVA

)
(b)
(millions ol euro)
Cosl / lncome
ConsoIidaIed pro!iIabiIiIy raIios (')
5!.8
54.8
4.6
4.9
280
678



Pro!iIabiIiIy raIios by business area (')
45.0
47.4
50.7
25.8
24.0
57.4
42.5
47.!
48.5
!8.9
22.2
59.5
CosI l Income
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl.8anking
8anca dei Terrilori
23.4
!08.4
!7.4
!0.4
!6.2
8.2
40.3
!!3.!
!7.7
!3.5
20.4
7.2
ROE
(*)
Economic VaIue Added
adjusIed (EVA

)
(b)
(millions ol euro)
8anca lideuram
Lurizon Capilal
Public linance
Corporale and
lnvesl.8anking
8anca dei Terrilori
89
52
6!
7
298
!35
!25
52
57
23
436
6!
lnlernalional
Subsidiary 8anks

8asic earnings per share (basic LPS)
(d)
Earnings per share (euro)
Diluled earnings per share (diluled LPS)
(e)
0.!!
0.!3
0.!!
0.!3






()
30.06.20!!
30.06.20!0
20


18
18
lncome slalemenl ligures and allernalive
perlormance measures ()

amounI %
Nel income -288 -!7.0
-70 -!9.7
Nel adjuslmenls lo loans -87 -5.6
lncome aller lax lrom disconlinued operalions -69!
Operaling income 458 5.6
Operaling cosls -!0 -0.2
Operaling margin 468 !2.6
Prolils (losses) on lrading 606
lncome lrom insurance business
Nel inleresl income -77 -!.6
Nel lee and commission income -4 -0.!
ConsoIidaIed income sIaIemenI !igures (millions ol euro) Changes
4,739
4,8!6
2,784
2,788
285
355
8,678
8,220
-4,497
-4,507
4,!8!
3,7!3
-!,457
-!,544
-
69!
!,402
!,690
82!
2!5

uarIerIy deveIopmenI o! main consoIidaIed income sIaIemenI !igures (millions ol euro)
4,!83
4,495
0 0
8,678
!Q 2Q 3Q 4Q lY
OperaIing income
2,223
2,274 0 0 4,497
!Q 2Q 3Q 4Q lY
OperaIing cosIs
!,960
2,22! 0 0
4,!8!
!Q 2Q 3Q 4Q lY
OperaIing margin
66!
74! 0 0 !,402
!Q 2Q 3Q 4Q lY
NeI income

Main income sIaIemenI !igures by business area (millions ol euro)
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
373
!37
!,!25
!59
!,779
5,000
400
!36
!,!88
!96
2,05!
4,759
!68
65
570
4!
427
2,87!
!70
64
576
37
456
2,833
205
72
555
!!8
!,352
2,!29
230
72
6!2
!59
!,595
!,926
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl. 8anking
8anca dei Terrilori
59
36
208
64
745
455
!05
37
2!4
78
837
356
OperaIing income OperaIing cosIs
OperaIing margin NeI income
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl. 8anking
8anca dei Terrilori
()
30.06.20!!
30.06.20!0




21
21
Tier ! capilal
(g)
nel ol ineligible inslrumenls /
Risk-weighled assels (Core Tier !)
Risk-weighled assels (millions ol euro)
ConsoIidaIed risk raIios (')
Nel doubllul loans / Loans lo cuslomers
Tier ! capilal
(g)
/ Risk-weighled assels
Tolal capilal
(h)
/ Risk-weighled assels
Cumulaled adjuslmenls on doubllul loans /
Cross doubllul loans lo cuslomers
ConsoIidaIed capiIaI raIios (')
(l)
2.!
2.0
64.3
64.3
!0.2
7.9
!!.8
9.4
!5.!
!3.2
320,795
332,!58


(a)
Ralio belween nel income and average ol share capilal, share premium reserve, reserves and valualion reserves. The ligure lor lhe period, wilh lhe exceplion ol non-recurring
componenls, has been annualised.
(b)
The indicalor, calculaled excluding merger and reslrucluring-relaled charges and ellecl ol purchase price allocalion as per llRS 3, represenls lhe economic value generaled in lhe period
in lavour ol shareholders, since il is lhe porlion ol nel income lor lhe period which remains aller having remuneraled shareholders' equily via lhe cosl ol capilal. The laller represenls lhe
opporlunily cosl and is delermined using lhe Capilal Assel Pricing Model.
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and in business unil consliluenls and disconlinued operalions.
(e)
The dilulive ellecl is calculaled wilh relerence lo lhe programmed issues ol new ordinary shares.
(l)
Ralios are delermined using lhe melhodology sel oul in lhe 8asel 2 Capilal Accord.
(g)
Paid-in share capilal, share premium reserve and reserves and relained earnings minus lreasury shares, goodwill, inlangible assels and aller lhe applicalion ol prudenlial lillers sel oul by
supervisory regulalions.
(h)
Tier ! capilal plus eligible subordinaled liabililies, valualion reserves, wilh lhe applicalion ol "prudenlial lillers", nel ol equily inveslmenls as sel oul by supervisory regulalions.
(d)
Nel income allribulable lo holders ol ordinary shares compared lo lhe weighled average number ol oulslanding ordinary shares.
(c)
Ralio belween Nel income and Allocaled capilal. ligure lor lhe period is annualised.






















()
30.06.20!!
3!.!2.20!0

21



19
19
8alance sheel ligures and allernalive
perlormance measures ()


amounI %
o| wh|ch. Asse|s under manaemen| -1,077 -0.
ConsoIidaIed baIance sheeI !igures (millions ol euro) Changes
-3,726 -!.0
Loans lo cuslomers
Direcl cuslomer deposils -!0,569 -2.5
Shareholders' equily 5,402 !0.!
lndirecl cuslomer deposils. 26! 0.!
Tolal assels -9,347 -!.4
372,36!
376,087
4!4,450
425,0!9
424,94!
2J2,476
424,680
2JJ,J
644,673
654,020
58,935
53,533


Main baIance sheeI !igures by business area (millions ol euro)
2,85!
!53
30,926
40,508
!!0,779
!80,490
3,059
!09
3!,34!
40,044
!07,900
!84,473
Loans Io cusIomers
!2,503
!2
30,259
5,757
97,026
2!8,3!9
!2,275
!2
30,23!
5,278
86,824
2!4,320
DirecI cusIomer deposiIs
8anca lideuram
Lurizon Capilal
lnlernalional
Subsidiary 8anks
Public linance
Corporale and
lnvesl.8anking
8anca dei Terrilori


OperaIing sIrucIure 30.06.2011 31.12.2010 Changes
amounI
Number o! empIoyees 101,169 101,092 77
llaly 69,754 69,7!5 39
Abroad 3!,4!5 3!,377 38
Number o! !inanciaI advisors 4,779 4,349 430
Number o! branches
(a)
7,290 7,391 -101
llaly 5,547 5,629 -82
Abroad !,743 !,762 -!9
(a)
lncluding Relail 8ranches, Privale 8anking 8ranches, SML 8ranches and Corporale 8ranches.
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.



()
30.06.20!!
3!.!2.20!0





23
Lxeculive summary





The macroeconomic conIexI


The economy and Ihe !inanciaI and currency markeIs

The rising lrend in oil prices since lhe lasl quarler ol 20!0, and lhe earlhquake lhal hil Japan in March conlribuled lo slowing
down lhe global economy. lowever, cycle-lorecasling indicalors slill indicale an expansion in produclion, albeil al a slower pace
lhan lhe average lor 20!0.
As lo Japan, provisional indicalions lor lhe second quarler show a clear lrend lowards recovery, aller lhe sleep lall in April, lhe
rebound, associaled wilh lhe overcoming ol lhe supply squeezes caused by lhe earlhquake, should exlend lo lhe second hall
ol lhe year.
ln lhe USA, on lhe olher hand, economic aclivily conlinued lo slow down in June, wilh worsening perlormance in bolh
employmenl growlh and aggregale demand indicalors. The silualion is made more uncerlain by lhe disagreemenls on lhe legal
limil on lederal debl, slill unresolved as al mid July, and lhe liscal dillicullies experienced by lhe Slales. Againsl an economic
silualion considered lo be slill very uncerlain, albeil slronger lhan in 20!0, lhe lederal Reserve compleled ils second quanlilalive
slimulus programme, ollicial rales have been conlirmed al 0-0.25'.
The Lurozone loo underwenl a slowdown in lhe pace ol economic aclivily growlh, aller lhe slrong expansion recorded al year
slarl (+0.8' quarler on quarler and +2.5' year on year). The severely reslriclive liscal policies and lhe worsening linancial
condilions have negalively allecled lhe growlh ol peripheral counlries. Due lo lhe increases in commodily prices, inllalion rose lo
a peak ol 2.8', well above lhe LC8's mid-lerm objeclive.
lowever, lhe economic environmenl was negalively allecled, more lhan by cyclic developmenls, by lhe sovereign debl crisis.
Aller Creece and lreland, a lhird counlry, Porlugal, was lorced by lhe excessive increase in ils lunding cosls lo seek lhe linancial
supporl ol lhe lnlernalional Monelary lund and lhe Luropean Union. The lourlh review ol Creece's' economic adjuslmenl
programme revealed growing misalignmenl wilh lhe objeclives, as well as serious problems in covering lhe counlry's linancial
requiremenls slarling lrom 20!2. Aller lhe approval ol lhe mid-lerm liscal plan by lhe Creek parliamenl al lhe end ol June, il was
only on 2! July lasl lhal lhe Lurogroup reached an agreemenl on a new lhree-year aid package ol !09 billion euro (one lhird ol
which lrom lhe lMl), plus lhe parlicipalion ol privale inveslors, via lorms ol securilies exchange and a repurchase plan, lor a lolal
eslimaled amounl ol 50 billion euro. The plan is associaled, logelher wilh renegolialion ol lhe lending condilions lo lhe counlries
assisled by lhe currenl programmes (nol only Creece bul also lreland and Porlugal), wilh lhe granling ol broader powers lo lhe
Slale-rescue lund LlSl, including lhe possibilily ol granling "prevenlive" credil lines also lo Member Slales olher lhan lhose
assisled by lhe currenl programmes (in parlicular lo linance lhe recapilalisalion ol lhe linancial inslilulions) and mosl imporlanlly
lo inlervene on lhe secondary governmenl bond markel, albeil only in "exceplional" markel condilions and on lhe basis ol lhe
LC8's analyses.
Al lhe slarl ol July, as polilical lensions rose, a rapid expansion ol risk premia also occurred in respecl ol llalian public debl.
On lhe len-year malurily, as al 30 June lhe 8TP's yield was !92 basis poinls higher lhan lhe 8und's, wilh a hike ol 46 basis poinls
lrom 3! March, lherealler, lhe silualion conlinued lo deleriorale, bringing lhe dillerenlial lo over 300 basis poinls. The rise in risk
premia also concerned, lo a lesser exlenl olher peripheral issuers, such as Spain, and also allecled a high-raled counlry such as
lrance. The expansion ol lhe crisis reveals lhe shorlcomings in lhe crisis managemenl mechanisms adopled in 20!0.

The llalian economy's growlh conlinued lo be modesl, lower lhan lhe Lurozone average. Neverlheless, aller lwo quarlers ol
decline, induslrial produclion picked up in March and April, lollowed by a new decrease in May. Crowlh in lhe quarler was
signilicanl, above one percenl. As a consequence, CDP growlh seems lo have been more robusl lhan lhe +0.!' ol lhe lasl
quarler ol 20!0 and lhe lirsl quarler ol 20!!. The slighl growlh in employmenl made possible by CDP expansion has lo be seen
againsl lhe increase in labour markel drop-ouls. The unemploymenl rale declined slighlly, lo 8'. The lrend in consumplion was
posilive, wilh domeslic demand conlribuling lo lhe recovery ol economic aclivily. ln April, lhe governmenl announced lhe
objeclive ol balancing lhe budgel by 20!4. Moreover, lhe objeclive lor 20!2 is lo decrease lhe debl-lo-CDP ralio. To supporl lhis
programme, in July a correclive manoeuvre was announced, which marginally slrenglhens lhe measures already planned lor lhe
lwo-year period 20!!-!2 and, mosl imporlanlly, delines lhe aclions lor lhe lollowing lwo years.

Despile lhe public debl lensions, in April lhe LC8 adopled a lirsl increase in ollicial rales lrom !.00 lo !.25', slaling ils
dissalislaclion wilh lhe negalive level ol real rales, in June il announced a new rise lo lhe markels, which was lhen implemenled
in early July and amounled lo 25 basis poinls. The procedure lor lull allocalion lo lhe main relinancing lransaclions was
poslponed lo Oclober. The banks ol Creece, Porlugal and lreland remain heavily relianl on lhe liquidily provided by lhe
Lurosyslem compared wilh lhe syslem's assels and lhe lolal liquidily raised via open markel lransaclions.
The perlormance ol Luribor rales rellecls lhe shill in lhe monelary policy. The monlhly rale has risen lrom 0.8!' al lhe end ol
20!0 lo !.28' in June 20!!. lncreases ol aboul 50 basis poinls have been recorded on lhe six-monlhly and annual malurilies.
A rising lrend has also marked lRS rales on shorl and medium-lerm malurilies, whereas lhe long-lerm rale declined during lhe
second quarler.
Wilh regard lo lhe currency markels, slrenglhening ol lhe euro againsl lhe dollar marked lhe whole lirsl quarler and exlended lo
lhe monlh ol May, when lhe euro peaked al !.49 dollars. The subsequenl monlh lollowed a lluclualing palh, wilh lhe euro lo
dollar exchange rale closing al !.45 al lhe end ol June. The sovereign debl crisis was rellecled on lhe quolalion ol lhe Swiss
23



ExecuIive summary

24
lranc, which beneliled lrom ils slalus as a sale haven currency. The Swiss lranc repealedly bellered ils highesl levels againsl lhe
euro, reaching a peak ol !.!6 Cll lor one euro.


The emerging economies and markeIs

ln lhe lirsl hall ol 20!!, various emerging economies, while remaining on a suslained growlh palh, slowed down lrom 20!0.
lor lhe main emerging counlries, CDP growlh declined slighlly lrom 7.6' in lhe lourlh quarler ol 20!0 lo 7.4' in lhe lirsl
quarler ol 20!!. This slowdown rellecls lhe impacl on consumplion and inveslmenl ol lhe erosion ol disposable income caused
by lhe rising inllalion, lhe increase in inleresl rales and liscal slabilisalion measures. ll also rellecls lhe impacl on exporls ol lhe
slowdown in orders lrom cerlain advanced economies.
The slowdown was relalively conlained in Asia, where demand remains slrong wilh China and lndia recording CDP growlh rales
(ol 9.7' and 7.8' respeclively) only a lew lenlhs ol a poinl lower lhan lhose ol end 20!0. ln Lalin America, on lhe olher hand,
lhe marked slowdown ol 8razil, where CDP lrend growlh rale reverled lo being more aligned wilh lhe polenlial rale, coming
down lo 4.2' in lhe lirsl quarler ol 20!! lrom 9.3' in lhe same period ol 20!0, was counlerbalanced by lhe acceleralion ol
Chile (CDP al 9.8') and ol Venezuela (4.5').
ln Laslern Lurope, lhe slrenglh ol lhe Cerman economy supporled lhe exporl and economic aclivily ol CLL counlries (in parlicular
Slovakia) whereas lhe ongoing adjuslmenl process ol public accounls and privale budgels has conlinued lo weigh on lhe inlernal
demand ol SLL counlries. On lheir parl, ClS counlries (in parlicular Russia and Ukraine) are beneliling lrom lhe lavourable
commodily cycle.
ln lhe Middle Lasl and Norlh Alrica, polilical unresl has delermined a lemporary slump in lhe economy ol some counlries, such as
Lgypl and Tunisia. Thanks lo lhe posilive lrend in lhe demand lor energy spurred by lhe measures in supporl ol lhe economy,
income and employmenl adopled during lhe year, lhe oil-producing counlries ol lhe Cull are expecled lo reporl in 20!! a higher
CDP growlh lhan inilially predicled.
The price increases ol lood and energy and lhe demand pressures on produclion capacily have driven a general acceleralion ol
inllalion. lor lhe average ol lhe main emerging economies, lhe lrend rale rose lo 7' lasl June, lrom 5.8' lhe previous year.
lnllalionary pressures are especially slrong in Lalin America (in 8razil lhe lrend rale rose lo 6.7') and in Asia (in China lhe lrend
rale reached 6.4' in June 20!!, lrom 2.9' lhe previous year).
ln Laslern Lurope, inllalion slowed down in lungary (lo 3.9' in June lrom 5.!' one year belore), lhanks lo lhe lavourable base
ellecl, whereas il gained momenlum bolh in Russia (9.4' in June lrom 5.8') and in Ukraine (!!.9' in June) mainly as a
consequence ol lhe increases in lood and energy prices. ln Lgypl, lhe increases in lhe prices ol energy producls and lood and lhe
dislorlions ol lhe dislribulion syslems broughl lhe lrend rale lo !!.8' lrom 9.2' in June 20!0.

As lo monelary policy, in lhe lirsl hall ol 20!!, lhe cenlral banks ol a number ol Lalin American counlries, including 8razil, Chile
and Peru, acled wilh decision on lhe monelary lever lo combal inllalionary pressures. ln Laslern Lurope, lhe silualion is palchy.
Lasl lebruary, and aller lwo and a hall years, Russia slarled a bull cycle, raising rales lrom 7.75' lo 8.25'. Serbia, aller having
raised ils rales several limes belween lhe end ol 20!0 and lhe early monlhs ol lhis year, in June cul lhem by 50 basis poinls
(lo !2') as il considered lhal inllalion (!3.4' in May), while being above lhe largel range ol 3' - 6', has by now passed ils
peak. lungary, aller hiking up ils rales once again as a prevenlive measure al lhe beginning ol lhe year (+25 basis poinls, lo 6')
lhen slayed pul. ln Asia, lhe aulhorilies ol China, lndia, Korea and Vielnam and more recenlly lhe Philippines, Malaysia and
Taiwan, conlinued on lhe credil squeeze palh lhrough higher rales or by increasing lhe required reserve rale. ln Lgypl, lhe
Monelary Aulhorily slressed lhal lhe weakness ol lhe economy limils lhe risk ol persisling price increase pressures and considered
lhe currenl rale level lo be adequale.
On lhe currency markels, lhe OlTP index (Olher lmporlanl Trading Parlners) which is lhe weighled index ol lhe US dollar againsl
lhe currencies ol emerging counlries lell by 3.!' in lhe lirsl hall ol 20!!. The dollar weakened especially againsl lhe currencies
ol Cenlral and Soulh-Laslern Luropean counlries, which lollowed lhe apprecialion ol lhe euro, and againsl various Lalin American
currencies, mainly lhe 8razilian real (+6') and lhe Colombian peso (+7.7').
Laslern Lurope showed apprecialion againsl lhe euro ol lhe currencies ol Serbia and lungary, as lhese counlries beneliled lrom
lhe progress in slabilisalion ol lhe macroeconomic environmenl. The high oil prices supporled lhe rouble, whose value rose by
almosl 8' againsl lhe US dollar, while il remained almosl unchanged againsl lhe euro. ln lhe MLNA area (Middle Lasl and Norlh
Alrica), polilical lurbulence led lo a decline in lhe Lgyplian pound's value againsl lhe dollar ol 2.8' (and a loss ol more lhan !!'
againsl lhe euro, as a consequence ol lhe dollar's deprecialion againsl lhe euro). ln Asia, lhe Chinese aulhorilies' slralegy showed
lillle or no change, as lhey conlinued lo supporl lheir currency's apprecialion by small sleps (!.9' in lhe hall year againsl
lhe US dollar).

On lhe linancial markels, lhe lears ol a slowdown ol lhe economy and lhe widespread inleresl rale rises have led in lhe second
quarler ol 20!! lo a modesl pullback ol slock indexes, aller lhe gains ol lhe lirsl monlhs ol lhe year. ln lhe lirsl six monlhs ol
20!!, lhe MSCl (Morgan Slanley Capilal lnlernalional) emerging counlries index declined by 3.3', whereas S&P USA and
Lurosloxx rose by 5.3' and !.8' respeclively . The mosl subslanlial losses were recorded on some Middle Laslern markels
(Lgypl -24', Morocco and Lebanon -!0', lsrael -!!'), penalised by polilical unresl, and in Lalin America (8razil -!0',
Peru -!9'). Conversely, cerlain Laslern Luropean markels (Croalia, 8ulgaria, Romania and Russia) showed a posilive lrend, wilh
signilicanl gains.
ln lhe lirsl hall ol 20!!, Lalin America led lhe lisl ol upgradings, wilh Colombia (which rose lo inveslmenl grade), Chile, 8razil
and 8olivia, lollowed by Asia (lhe Philippines and lndonesia) and Laslern Lurope (Serbia and Lalvia). On lhe olher hand, concerns
over lhe impacl ol lhe currenl polilical slrile led lo lhe downgrading ol some MLNA, counlries, including 8ahrain, Lgypl, Jordan
and Tunisia. ln parallel, spreads on governmenl debl narrowed signilicanlly in 8razil, Colombia and Uruguay (belween 40 and 50
basis poinls in lhe six monlhs) while lhey rose in Lgypl (+70 basis poinls), Tunisia (+!!0 basis poinls), Lebanon (+50 basis poinls)
and lhe Middle Lasl in general (+50 basis poinls). ln Laslern Luropean counlries, slabilisalion ol lhe macroeconomic piclure led lo
narrowing ol lhe spreads lor lungary (77 basis poinls) whereas lhe lavourable economic oil cycle led lo a decrease in Russia's
counlry risk (-23 basis poinls).
24



ExecuIive summary

25
The banking sysIem

RaIes and spreads

8ank rales conlinued lheir gradually rising lrend, rellecling lhe pick-up in monelary rales and lhe rise in ollicial LC8 rales.
The rises in rales on loans have been modesl. Compared lo lhe end ol 20!0, lhe average rale on new business loans has risen by
aboul 30 basis poinls, in lhe second quarler ol 20!!, in parlicular, lhe rises were more subslanlial lor small-size loans, compared
lo lhe resislance lo rises shown in lhe previous monlhs, when lhe slrongesl rale rises had been recorded on larger loans.
The rales charged on new loans lo businesses remained lower lhan lhe Luropean average, especially lor lower-value lransaclions.
The rales on new morlgage loans lo households also increased slighlly in lhe lirsl hall ol 20!!, especially on lixed rale morlgages
and, lo a lesser degree, on lloaling rale morlgages. On average, in lhe spring monlhs lhe rale on new residenlial morlgage loans
showed only minor changes compared lo lhe lirsl quarler ol 20!!, wilh an increase lrom lhe slarl ol lhe year ol aboul 30 basis
poinls lrom lhe second hall ol 20!0. Despile lhe increases, lhe rales on new loans lo businesses and households remained
al record lows.
The average rale on oulslanding loans lo households and non-linancial companies changed lillle, moving slighlly upwards as a
consequence ol lhe increase in rales on shorl-lerm loans lo non-linancial companies.
The average rale on lolal deposils lrom cuslomers also conlinued ils upward lrend, wilh modesl hikes which broughl il back lo
summer 2009 levels. Rales on currenl accounls showed marginal increases, whereas rales on repurchase agreemenls and on
oulslanding bonds increased more markedly.
Margins on lending and deposil collecling aclivilies remained al low levels. The spread belween average currenl lending and
lunding rales dropped lo new lows (al an average ol 2.09' lrom January lo May 20!!, compared lo lhe average ol 2.!4' in
lhe second hall ol 20!0). The spread on lunding, measured on shorl-lerm inleresl rales, improved, conlirming ils upward lrend in
lhe second quarler ol 20!! and reaching ils highesl values since lhe beginning ol 2009 (lhe mark-down
!
on lhe !-monlh Luribor
rale rose by 20 basis poinls as January-May average lrom lhe 0.39' average recorded in lhe lasl six monlhs ol 20!0). ln lhe
second quarler ol 20!!, lhe mark-up
2
on lhe !-monlh Luribor, lollowed a declining lrend, aller lhe lemporary rise recorded in lhe
lirsl monlhs ol lhe year (wilh an average ol 3.!8' in lhe lirsl live monlhs ol 20!! lrom 3.26' in lhe second hall ol 20!0).
Civen lhese lrends, lhe shorl-lerm spread rose gradually, while remaining al record lows (an average ol 3.77' lor lhe lirsl live
monlhs ol 20!!, lrom 3.65' in lhe lasl six monlhs ol 20!0).


Loans

ln lhe lirsl hall ol 20!! bank loans grew al a suslained pace, driven by lhe conlinuing upward lrend in loans lo non-linancial
companies and lhe suslained good perlormance in loans lo households. Aller lhe lasl acceleralion al lhe beginning ol 20!!,
loans lo non-linancial companies mainlained lheir posilive lrend driven by lhe pick-up in shorl-lerm loans. Their perlormance is
largely driven by lhe businesses' demand lor working capilal loans. Medium/long-lerm loans lo non-linancial companies also
perlormed beller lhan in 20!0, allhough lheir improvemenl was more modesl compared wilh lhe more markedly posilive lrend
ol lhe shorl-lerm loan componenl. ln lerms ol borrower size, lhe improvemenl in loans lo businesses mainly rellecled lhe increase
in lending lo medium-large companies lhal, in average lerms, had shown a decrease in 20!0, whereas loans lo smaller enlerprises
showed a modesl acceleralion compared lo lhe already posilive perlormance recorded lasl year.
ln lhe six monlhs under examinalion, lhe good perlormance ol loans lo households conlinued, mainly driven by home purchase
morlgage loans. Overall, in lhe lirsl hall ol 20!! loans lo households and businesses recorded conslanl growlh, leaving behind
lhe weakness ol lhe previous lwo years.
ln comparison wilh lhe resl ol Lurope, lhe growlh ol lhe llalian banks' lending aclivily was slronger lhan lhe Lurozone average,
bolh lor loans lo households and lor loans lo non-linancial companies.


DirecI deposiIs

Cuslomer lunding improved, lhanks lo lhe marked recovery in bonds, whereas lhe lrend in deposils remained weak, wilh a
conlraclion in currenl accounls. Slarling lrom March bank bonds relurned lo posilive lerrilory, aller nine conseculive monlhs ol
negalive changes, showing marked recovery. ln parlicular, in March lhe pre-lax issues ol bank securilies reached record highs, and
aller-lax issues amounled lo 2! billion euro, a value lhal had nol been reached during lhe previous lwo years. lssues exceeding
malurilies conlinued in lhe subsequenl monlhs, and, lor lhe largesl inlermediaries, already issued securilies malch lhe enlire
amounl lo be reimbursed over lhe year. ln comparison wilh lhe resl ol Lurope, lhe perlormance ol llalian banks' bonds has been
markedly beller lhan lhe Lurozone average, which has been on a negalive lrend lor more lhan one year.
As lo deposils, household deposils conlinued lo grow, albeil al a very modesl pace, while business deposils declined slighlly.
The weakness ol household deposils is linked lo lhe shill ol porllolios lowards more prolilable inslrumenls.


IndirecI deposiIs and asseI managemenI

As regards bank indirecl deposils, cuslomers' securilies deposils conlinued on lheir already observed recovery palh. Securilies in
cuslody on behall ol households (debl securilies al nominal value, inclusive ol bank bonds), conlinued lo improve, consolidaling
lheir recovery aller lhe negalive changes recorded lor mosl ol 20!0. This perlormance seems lo be driven by lhe gradual relurn

!
Dillerence belween one-monlh Luribor and inleresl rales on household and company currenl accounls.
2
Dillerence belween lhe inleresl rales applied lo households and companies on loans wilh malurily under one year and one-monlh Luribor.
25



ExecuIive summary

26
ol inveslors lo invesling in securilies, as a consequence ol lhe higher yields ollered. Also lor non-linancial companies and lamily
businesses, growlh in securilies deposils picked up momenlum on lhe previous monlhs.
Wilh regard lo assels under managemenl, in lhe lirsl hall ol 20!! lhe llalian markel lor open-ended mulual lunds conlirmed lhe
negalive perlormance in nel inllows already noled in lhe previous year. llalian mulual lunds again reporled a negalive balance
belween subscriplions and redemplions. loreign lunds promoled by llalian groups oblained posilive nel inllow balance, albeil
lower year on year. During lhe lirsl hall ol 20!!, lhe calegories mosl hil by oulllows were lhose having a lower risk/yield ralio,
such as liquidily lunds and bond lunds, on lhe olher hand, lhe aggregale inllows lrom balanced and equily lunds remained
posilive, bul only jusl. Al lhe end ol lhe six monlhs, lhe assels managed by lhe induslry amounled lo 44!.3 billion euro,
unchanged lrom June 20!0, bul slighlly down on lhe 452.5 billion euro recorded al lhe end ol 20!0. As lo lhe insurance seclor,
produclion in lhe lile insurance business conlinued on lhe downward palh in inllows lhal had slarled in lhe second hall ol 20!0,
wilh 2!.3 billion euro in new insurance policies sold in lhe lirsl live monlhs ol lhe year, 32.4' less lhan in lhe same period ol
20!0. The decrease in inllows allecled lo lhe same exlenl bolh lradilional producls and lhose wilh a higher linancial componenl.
As lo dislribulion channels, lhe worsl allecled were bank and posl ollice branches.


InIesa 5anpaoIo in Ihe !irsI six monIhs o! 2011
As illuslraled in grealer delail above, lhe business environmenl in lhe lirsl hall ol 20!! rellecled lhe dillicull recovery lrom lhe
recession, wilh a slowdown in global economic aclivily in lhe second quarler. The slowdown also allecled lhe Lurozone, where
reslriclive liscal policies and worsening linancial condilions have negalively allecled lhe peripheral counlries. ln llaly, growlh
remained modesl, below lhe Lurozone average. The volalilily ol linancial markels, which marked lhe whole lirsl hall ol lhe year,
became more pronounced in lhe second quarler, as a consequence ol lhe governmenl debl crisis experienced by some
Luropean counlries.
Againsl lhis background, lhe lirsl six monlhs ol 20!! ol lhe lnlesa Sanpaolo Croup ended wilh a nel income ol !,402 million
euro, down !7' on lhe !,690 million euro ol lhe same period ol 20!0. This perlormance is once again inlluenced by lhe
presence, in bolh periods, ol income and charges whose nalure or amounl are non-recurring. lndeed, lhe nel income ol lhe lirsl
six monlhs ol 20!0 had beneliled lrom a marked capilal gain coming lrom disposal ol securilies service aclivilies (648 million) and
lrom lower income lax (86 million) lhanks lo lhe redemplion ol goodwill ol some Croup banks. ln lhe lirsl hall ol 20!! a posilive
inlluence on nel income and inlerim margins came lrom gains on lhe sale ol lhe remaining 25' slake in lindomeslic lo
8NP Paribas and ol lhe 4' ol lhe equily parlicipalion in Prada (respeclively !28 million and 253 million nel income) and lrom
gains on lhe sale ol lhe equily slake in lhe Cassa di Risparmio della Spezia and ol 96 branches lo Credil Agricole (wilh lolal nel
income ol !45 million euro). lowever, lhese gains were parlly ollsel by lhe impairmenl loss on lhe equily parlicipalion held in
Telco (wilh -!27 million on nel income).
As a consequence ol lhe above-menlioned silualion, operaling income grew 5.6' lrom lhe lirsl hall ol 20!0, mainly as a
consequence ol lrading aclivilies, whose amounl was inlluenced by lhe menlioned gains on lhe disposal ol lindomeslic and ol
lhe 4' slake in Prada's capilal in lhe lramework ol lhe global oller linked lo lhe laller company's lisling on lhe long Kong slock
exchange. lowever, even where lhe above-menlioned non-recurring componenls are laclored oul, operaling income slill shows
an increase on lhe lirsl hall ol 20!0 (+0.4').
The annual increase was slill higher in operaling margin (+!2.6', or +!.!' aller sublracling non-recurring componenls) and in
income lrom conlinuing operalions (+33.4', or +!2.!' nel ol non-recurring ilems), lhanks lo lhe slruclural work done lo
conlain operaling cosls and lo lhe lesser need lor value adjuslmenls and prudenlial provisions.

OperaIing margin
(millions ol euro)
OperaIing income
(millions ol euro)
!
,
9
8
9
!
,
7
2
4
!
,
8
!
!
!
,
7
0
0
!
,
9
6
0
2
,
2
2
!
!
/
!
0
2
/
!
0
3
/
!
0
4
/
!
0
!
/
!
!
2
/
!
!
4
,
2
!
9
4
,
0
0
!
4
,
0
4
8
4
,
!
7
9
4
,
!
8
3
4
,
4
9
5
!
/
!
0
2
/
!
0
3
/
!
0
4
/
!
0
!
/
!
!
2
/
!
!

Wilh regard lo liquidily, cuslomer deposils, amounling lo 390.5 billion euro (nel ol lhe liabililies ol lhe insurance segmenl
classilied under deposils) were considerably higher lhan lhe corresponding loans lo cuslomers (372.4 billion euro). 73' ol
lunding comes lrom lhe relail segmenl and, lherelore, is highly slable. Lligible assels wilh cenlral banks remain al signilicanl
levels (around 47 billion euro al 30 June 20!!).
Wilh regard lo capilal adequacy, aller lhe recenl capilal increases regulalory capilal ralios have reached appropriale levels, wilh a
Core Tier ! ralio ol !0.2' al 30 June 20!!.



ExecuIive summary

27

Core Tier 1 raIio
DirecI cusIomer deposiIs
(!)
l
Loans Io cusIomers
as aI 30.06.2011 (billions ol euro)
390.5
372.4
Direcl cuslomer deposils Loans lo cuslomers
(!)
Lxcluding linancial liabililies lrom insurance business
7.9'
8.2'
!0.2'
3!.!2.!0 3!.03.!! 30.06.!!

The risk prolile remained al modesl levels, largely in line wilh lhe values al lhe end ol 20!0 and ol lhe lirsl quarler ol 20!!,
consislenl wilh lhe Croup's inlenlion lo conlinue lo privilege commercial banking operalions.


MarkeI risks Irend.
VaR (millions ol euro)
OperaIing income.
reakdovn by business area
(1)
Corporale and
lnveslmenl
8anking, 23.5
8anca dei
Terrilori, 54.5
Public linance,
2.2
lnlernalional
Subsidiary
8anks, !3.6
Lurizon Capilal,
!.6
8anca
lideuram, 4.6
Ol which Capilal Markel
and lnveslmenl 8anking
5,4'
(!)
Lxcluding Corporale Cenlre
!0
!5
20
25
30
35
40
45
50
55
Jul-!0 Ocl-!0 Dec-!0 Mar-!! Jun-!!

Al lhe level ol individual economic aggregales, lhe income slalemenl lor lhe lirsl hall ol 20!! regislered 4,739 million euro in nel
inleresl income, slighlly down (-!.6') lrom lhe lirsl hall ol 20!0 essenlially as a consequence ol lhe lower conlribulion lrom lhe
dillerenlials on hedging derivalives, which conlinued lhe downward lrend lhal had slarled in lhe second quarler ol 20!0.
The services segmenl generaled nel lee and commission income ol 2,784 million, a conlribulion which is largely unchanged lrom
lhe lirsl hall ol 20!0 bolh in aggregale lerms (-0.!') and when broken down inlo ils various operalional seclors (+0.5' lees
and commissions on banking aclivilies, -0.8' lees and commissions on assel managemenl and linancial inslrumenls dealing and
+0.4' olher lees and commissions).
Prolils on lrading amounled lo 82! million euro, signilicanlly increasing on lhe 2!5 million euro reporled on 30 June 20!0.
This resull was driven by lhe already menlioned gains on lhe disposal ol lhe remaining 25' equily slake in lindomeslic
(!54 million euro belore lax, !28 million euro nel ol minorily inleresl and lax) and on lhe disposal ol lhe 4' slake in Prada
(272 million euro belore lax, 253 million euro aller lax).
lncome lrom lhe insurance business amounled lo 285 million euro, down by !9.7' on lhe same period ol 20!0, essenlially due
lo lhe dillerenl conlribulion ol lhe linancial componenl in lhe lwo periods.
Operaling income amounled lo 8,678 million euro as al 30 June 20!!, up by 5.6' on lhe same period ol lhe previous year, a
resull mainly driven by lhe above-menlioned prolils lrom lrading aclivily.
The Croup conlinues lo monilor operaling cosls carelully and implemenl ongoing slruclural cosl-conlainmenl measures.
Thanks lo lhis policy, lhe amounl ol operaling cosls, 4,497 million euro, decreased by -0.2' on lhe lirsl hall ol lhe previous year.
ln parlicular, personnel expenses were close lo lasl year's levels (+0.6') while adminislralive expenses decreased (-2.5') and
adjuslmenls increased slighlly.
As a consequence ol lhe above lrends, lhe operaling margin lolalled 4,!8! million euro, up by !2.6' compared lo lhe lirsl
hall ol 20!0.



ExecuIive summary

28
Adjuslmenls and provisions lor risks (!,609 million euro) were down by !62 million euro overall compared lo lhe same period ol
lhe previous year. ln parlicular, nel provisions lor risks and charges declined (aboul -58' lo 78 million euro). The need lo carry
oul adjuslmenls lo loans was also lower, (-5.6' lo !,457 million euro), whereas nel value adjuslmenls lo olher assels increased
(+72' approximalely, lo 74 million), also inlluenced by lhe wriledown on Creek governmenl bonds held by Croup companies
(25 million euro).
Prolils and losses on inveslmenls held lo malurily and on olher inveslmenls also includes lhe gain made on lhe assels sold lo
Credil Agricole (!45 million nel prolils), which was almosl wholly ollsel by lhe value adjuslmenl which had lo be carried oul on
lhe equily inveslmenl in Telco (-!32 million recorded under lhis caplion).
As a consequence, income belore lax lrom conlinuing operalions was 2,605 million euro, up by more lhan 33' compared lo lhe
lirsl hall ol 20!0.
Taxes lor lhe period amounled lo 973 million euro, lheir incidence is lherelore higher lhan in lhe lirsl hall ol 20!0 which had
also beneliled lrom 86 million ol posilive ellecl lrom lhe delaxalion ol goodwill carried oul by some subsidiaries. Anolher reason
lor lhe increase is lhe impacl ol lhe recenlly inlroduced change ol lhe lRAP lax rale as parl ol lhe urgenl package ol measures lor
linancial slabilizalion (57 million in lhe six monlh period).
The nel income lor lhe period, aller deducling merger and reslrucluring-relaled charges ol !6 million moslly relaling lo lhe cosls
ol reslrucluring ol lhe bankassurance business, lhe ellecls on lhe income slalemenl ol lhe purchase price allocalion, ol
!7! million and aller deducling minorily inleresl ol 43 million came lo !,402 million, down by !7' on lhe lirsl hall ol 20!0.
The decrease in nel prolil is due, as slaled, lo lhe lacl lhal lhe previous period had beneliled lrom subslanlial income lrom non-
currenl assels held lor sale and disconlinued operalions, mainly represenled (648 million) by lhe gains on managemenl ol lhe
securilies services business.

Comparison ol second quarler wilh lirsl quarler resulls shows an increase in nel income (aboul +!2' lo 74! million), mainly
rellecling lhe improved prolils on lrading, which beneliled as already slaled lrom lhe gains on lhe disposal ol shares in Prada
and ol lhe remaining slake in lindomeslic. These benelils were only parlly ollsel by lhe grealer impairmenl losses (on receivables
and olher assels) and allocalions lo provisions lor risks and charges.

The perlormance ol lhe balance sheel aggregales conlirms lhe Croup's sound linancial posilion. Direcl deposils remained al high
levels (4!4.5 billion euro), lhough lalling slighlly compared lo lhe ligure al December 20!0 (-2.5'), rellecling, among olher
lhings, lhe decline in demand deposils as a consequence ol lhe shill in cuslomer demand lowards higher-yield inveslmenl
producls, such as bonds.
Loans lo cuslomers reporled a balance ol 372.4 billion euro, down by 3.7 billion euro (-!') on lhe end ol lhe previous year,
mainly as a resull ol lhe decline in repurchase agreemenls.

lndirecl cuslomer deposils came lo almosl 425 billion euro, in line wilh lhe value recorded al 3! December 20!0 (+0.!')
The increase in assels under adminislralion (+!.3 billion euro, equal lo 0.7' ol lhe lolal, or !92.5 billion euro) more lhan ollsel
lhe slighl decrease in assels under managemenl (-!.! billion, equal lo 0.5' ol lhe lolal, or 232.5 billion euro).

As lo lhe various business unils, 8anca dei Terrilori reporled nel income ol 356 million euro, down by aboul 22' lrom lhe lirsl
hall ol 20!0, due lo lhe lower conlribulion ol nel inleresl income and income lrom insurance business, parlly ollsel by lhe lesser
need lor adjuslmenls lo loans and provisions lor risks and charges. The decrease in nel income was also driven by lhe grealer lax
burden, lhe Corporale and lnveslmenl 8anking division ended lhe lirsl six monlhs ol lhe year wilh prolils ol 837 million euro, up
by aboul !2' rellecling lhe growlh in operaling income as a resull ol lhe higher prolils on lrading and commission income,
Public linance recorded prolils ol 78 million euro, wilh aboul 22' increase lhanks lo lhe increase in inleresl income, lhe
lnlernalional Subsidiary 8anks Division closed lhe lirsl hall ol lhe year wilh nel income ol 2!4 million euro, up by aboul 3'
mainly as a resull ol lhe growlh in operaling income, parlly ollsel by lhe grealer nel adjuslmenls lo loans.
The assel managemenl segmenl also recorded posilive resulls. Lurizon Capilal posled 37 million euro ol nel income, up by aboul
3', 8anca lideuram recorded nel income ol !05 million euro, +78', driven by lhe growlh in nel lee and commission income
and lhe decrease in provisions.


5igni!icanI evenIs

HighIighIs !or !irsI haI!-year 2011

As il is known, in June 20!0 lnlesa Sanpaolo and Credil Agricole eslablished lerms and condilions lor lnlesa Sanpaolo's sale lo
lhe Credil Agricole Croup ol lhe enlire slake held lhrough lhe subsidiary 8anca CR lirenze in Cassa di Risparmio della Spezia
(80' ol lhe capilal), and 96 branches ol lhe Croup in llaly.
The sale ol lhe Cassa di Risparmio della Spezia was linalised al lhe slarl ol January. An inilial lranche ol lhe branches was
lranslerred in lhe lasl lew days ol March. !! branches ol 8anca CR lirenze were conlribuled lo Cassa di Risparmio di Parma e
Piacenza. An addilional 85 branches (belonging lo lnlesa Sanpaolo and Cassa di Risparmio del Venelo) were sold in May.
The whole lransaclion produced a posilive ellecl on lhe consolidaled income slalemenl ol !45 million euro (nel ol minorily
inleresl and lax) and a posilive ellecl ol aboul 20 basis poinls on lhe Core Tier ! ralio.

ln lebruary, lnlesa Sanpaolo acquired lhe majorily ol shares in 8anco Lmiliano Romagnolo, a mono-branch bank based in
8ologna, under exlraordinary adminislralion. The lransaclion, which was carried oul wilh lhe approval ol lhe 8ank ol llaly,
enlailed lhe reduclion ol lhe bank's share capilal by an amounl equal lo lhe losses incurred, and a concurrenl 26 million euro
share capilal increase, (including share premium ol !4 million euro) 52' ol which was reserved lor lnlesa Sanpaolo.
Consequenlly, as al 30 June 20!! lnlesa Sanpaolo held a majorily inleresl in lhis 8ologna-based bank, whose direcl and indirecl
cuslomer deposils lolalled approximalely 235 million euro al lhe end ol Oclober 20!0. ln lhe lall-yearly reporl as al
28



ExecuIive summary

29
30 June 20!! (as well as in lhe lnlerim Slalemenl as al 3! March 20!!) lhe inveslmenl was consolidaled al equily, as il is
lormally slill under exlraordinary adminislralion.
The remaining porlion ol lhe capilal increase was ollered wilh pre-emplive righls lo lhe olher shareholders and was subscribed
lor and paid in advance by lnlesa Sanpaolo under a lerminalion clause in lhe evenl lhe purchase oplion was exercised by lhe
olher shareholders. The oplion period ended in July and lhe slake held by Sanpaolo came lo more lhan 99'.
Al lhe end ol July, lhe company's shareholders' meeling was held, and resolved lo end lhe special adminislralion period and
appoinled lhe corporale governance bodies. The special adminislralors have 4 monlhs' lime lo prepare lhe linal reporl on
lheir managemenl.

On 6 May 20!! lhe inlernalional raling agency Moody's reduced lnlesa Sanpaolo's 8ank linancial Slrenglh raling lo C+ (lrom 8-)
and ils long-lerm raling lo Aa3 (lrom Aa2). On 23 June, Moody's lhen placed lhe long-lerm raling under review lor possible
downgrade, lollowing a similar decision lor lhe llalian Republic. The shorl-lerm raling is unchanged.
On 24 May, lhe inlernalional raling agency Slandard & Poor's conlirmed lhe ralings assigned lo lnlesa Sanpaolo. A+ lor lhe long
lerm and A-! lor lhe shorl lerm, and shilled lhe oullook lrom slable lo negalive, as a consequence ol lhe change in lhe oullook
on lhe raling ol lhe llalian Republic lrom slable lo negalive, disclosed on 20 May.

On ! June 20!!, aller all lhe suspensive condilions sel oul in lhe conlracl were mel and aller oblaining lhe required
aulhorisalions, acquisilion by 8anca lideuram ol !00' ol lhe shares in 8anca Sara was linalised.

Al lhe end ol June, lnlesa Sanpaolo linalised lhe sale ol ils remaining 25' equily inveslmenl in lindomeslic which il held via ils
subsidiary 8anca CR lirenze lo lhe 8NP Paribas Croup againsl a consideralion ol 629 million euro. The sale generaled a posilive
impacl on lhe lnlesa Sanpaolo Croup's consolidaled income slalemenl in lhe second quarler ol 20!! ol !54 million (!28 million
in lerms ol nel income) and on lhe Core Tier ! capilal ralio ol aboul !! basis poinls.

lnlesa Sanpaolo also sold a 4' slake in Prada's capilal in lhe lramework ol lhe global oller linked lo lhe laller company's lisling
on lhe long Kong slock exchange. Aller lhe sale, lnlesa Sanpaolo slill holds an equily inveslmenl in Prada amounling lo !' ol
lhe company's capilal. The sale generaled a posilive impacl on lhe lnlesa Sanpaolo Croup's consolidaled income slalemenl in lhe
second quarler ol 20!! ol 272 million euro (253 million in lerms ol nel income) and on lhe Core Tier ! capilal ralio ol aboul
8 basis poinls.
The end ol June also saw lhe sale ol lideuram 8ank Suisse, a wholly-held subsidiary ol lideuram 8ank Luxembourg (which in lurn
is !00' owned by 8anca lideuram), specialising in privale banking services, lo 8anca Credinvesl. The consideralion agreed lor
lhe sale is aboul 26 million euro. The sale agreemenl includes an amounl adjuslmenl clause, in order lo lake inlo accounl lhe
developmenls in lhe volumes held by lhe lideuram Croup. The capilal gain on lhe sale ol lhis subsidiary is ol aboul 8 million euro.

Laslly, lnlesa Sanpaolo has laken parl in lhe 20!! LU-wide slress lesl carried oul by lhe Luropean banking Aulhorily (L8A), in
cooperalion wilh lhe 8ank ol llaly, lhe Luropean Cenlral 8ank (LC8), lhe Luropean Commission (LC) and lhe Luropean Syslemic
Risk 8oard (LSR8) whose resulls were released in July.
The LU-wide slress lesl, carried oul across 90 banks covering over 65' ol lhe LU banking syslem lolal assels, soughl lo assess
lhe resilience ol Luropean banks lo severe shocks and lheir specilic solvency lo hypolhelical slress evenls under cerlain reslriclive
condilions.
The assumplions and melhodology were eslablished lo assess lhe banks' capilal adequacy againsl a 5' Core Tier ! capilal
benchmark, plan ahead any required capilalisalion aclions and, by so doing, reslore markel conlidence in lhe resilience ol lhe
banking syslem. The adverse slress lesl scenario was sel up by lhe LC8 and covered a lwo-year lime horizon (20!!-20!2).
The slress lesl was carried oul using a slalic balance-sheel assumplion as al December 20!0, and did nol lake inlo accounl lulure
business slralegies and managemenl aclions. The slress lesl is nol a lorecasl ol lnlesa Sanpaolo prolils.
As a resull ol lhe assumed shock, in lhe adverse scenario lhe consolidaled Core Tier ! Ralio ol lnlesa Sanpaolo would go lrom
7.9' al end 20!0 lo 8.9' al end 20!2. This resull incorporales lhe ellecls ol lhe capilal increase, compleled in lhe monlh ol
June, and does nol lake inlo accounl lhe ellecls ol lulure capilal slrenglhening aclions planned by lnlesa Sanpaolo.
lhe LU-wide slress lesl requires lhal lhe resulls and weaknesses idenlilied by lhe exercise are acled on lo improve lhe resilience ol
lhe linancial syslem. The resulls ol lhe slress lesls have shown lhal lnlesa Sanpaolo meels lhe capilal benchmark required by lhe
lesl. The bank will conlinue lo ensure lhal ils capilal posilion remains al an appropriale level.


The 2011-2013l2015 usiness PIan

Al lhe beginning ol April lhe Managemenl 8oard and lhe Supervisory 8oard approved each wilhin lhe scope ol ils compelences
- lhe Croup's 20!!-20!3/20!5 8usiness Plan and, as parl ol lhal, decided lo propose a 5 billion euro capilal increase al lhe
Lxlraordinary Shareholders' Meeling convened lor 9-!0 May 20!!. The ollering was compleled on 22 June wilh lhe lull
subscriplion ol lhe shares on oller by lhe markel, wilh no need lor lhe underwriling syndicale lo inlervene.
The choice ol proposing a capilal increase lo lhe shareholders is lhe resull ol lnlesa Sanpaolo's decision lo lully comply wilh
immediale ellecl wilh whal is believed will become lhe "new normal" ol 8asel lll in lerms ol bolh capilal wilh a Common
Lquily ralio ol aboul !0' and liquidily. The Croup could have reached a Common Lquily ralio ol !0' by 20!5 using ils own
resources, by adopling a very conservalive dividend policy and very prudenl growlh. lowever, lhe Regulalory Aulhorilies and lhe
markel were in lavour ol an acceleraled schedule. lherelore, lnlesa Sanpaolo decided lhal il was beller lo acl promplly, laking
advanlage ol lhe presenlalion ol lhe new 8usiness Plan, lo eliminale uncerlainly and lo ensure ilsell a posilion ol slrenglh in
order lo build ils lulure wilh conlidence and ensure lhal all slakeholders benelil lrom lhe resulling advanlages. This decision has
slrenglhened lhe Croup lrom lhe poinl ol view ol ils capilal base, balance sheel and slralegy, and has lherelore reinlorced value
crealion generaled by slralegies and aclion plans being carried oul lo lace a lulure lhal is slill uncerlain bul wilh many
opporlunilies which lnlesa Sanpaolo is equipped lo seize when lhe opporlunily arises.

29



ExecuIive summary

30
The new 8usiness Plan ol lnlesa Sanpaolo sels lorlh 20!3 largels which are based on moderale macro-economic growlh
assumplions and include well-delined managemenl aclions (!50 projecls) and 20!5 projeclions which only assume a developmenl
ol lhe 20!4-20!5 macroeconomic scenario, wilh a gradual relurn lo normalily, lo show lhe lull resulls ol lhe projecls underlaken
during lhe 20!!-20!3 period, bul wilhoul including new managemenl aclions, which will be considered al a laler slage.
Only some ellecls ol lhe capilal increase are included, and exlraordinary lransaclions (disposals, lislings, acquisilions, elc.) are nol
considered which, il necessary, musl be laken inlo consideralion on a case-by-case basis.
The "lormula" ol lhe Plan can be summarised as. lighly suslainable revenues, growing produclivily and slrong cosls
discipline + low risk prolile + high liquidily + slronger capilal base = Solid value crealion lor all slakeholders, which resulls in lhe
lollowing largels lor lhe key linancial indicalors, wilh a pro-lorma 20!!Common Lquily ralio
3
ol around !0'.
- Operaling income. !9.6 billion euro in 20!3, 2!.7 billion euro in 20!5,
- Operaling cosls. 9.2 billion euro in 20!3, 9.3 billion euro in 20!5,
- Cosl/income ralio. 46.7' in 20!3, 43.0' in 20!5,
- Nel income. 4.2 billion euro in 20!3, 5.6 billion euro in 20!5,
- Adjusled nel income
4
. 4.7 billion euro in 20!3, 5.9 billion euro in 20!5,
- Dislribulion as dividends ol prolils exceeding !0' ol lhe Common Lquily ralio and which are nol needed lor organic growlh
grealer lhan lhe Plan assumplions. cumulalive 5.3 billion euro in lhe period 20!!-20!3, cumulalive !3.5 billion euro in lhe
period 20!!-20!5,
- Nel adjuslmenls/Loans. 6! basis poinls in 20!3, 56 basis poinls in 20!5,
- Nel non-perlorming loans
5
/Loans. 4.0' in 20!3, 3.8' in 20!5,
- Adjusled ROTL
6
. !2.6' in 20!3, !4.7' in 20!5,
- Adjusled ROTA
7
. 66 basis poinls in 20!3, 77 basis poinls in 20!5,
- Leverage
8
. !9.0x bolh in 20!3 and in 20!5.
More specilically, lhe largels idenlilied are as lollows.
- suslainable revenue growlh which may be exceeded laking inlo accounl lhal lhe increase in operaling income is based on
aboul 75 projecls lor growlh, inveslmenls ol approximalely !.5 billion euro, growlh-relaled expenses ol aboul 720 million
euro and over 5,000 lull lime equivalenl (lTL) slall added lo cuslomer-lacing roles, as well as a conservalive
economic scenario,
- produclivily growlh wilh some reserves available, considering lhal lhe improvemenl in lhe cosl/income ralio is based on
around 55 produclivily and lR projecls, inveslmenls ol aboul 800 million euro, inlervenlions in al leasl !,000 branches,
aboul 8,000 lTL posilions released lrom adminislralive lasks bolh al cenlral slruclures and in local ollices, ol which aboul
5,000 reassigned lo cuslomer-lacing roles, as well as cosl savings ol aboul 770 million euro, in addilion lo over 500 million
euro in recovery lhrough aulomalic mechanisms and inllalion,
- a low risk prolile, wilh some room lor grealer "aggressiveness" over lhe Plan period, considering aboul 20 projecls lor
conlrolling/oplimising risks,
- high liquidily levels, mainlaining a prudenl posilion and keeping paramelers al lhe lop markel levels in lerms ol bolh shorl
and medium/long-lerm, also lhanks lo 6 liquidily oplimisalion projecls,
- lurlher slrenglhening ol lhe capilal base enabling lhe Croup lo be lully complianl wilh 8asel lll "new normal" wilh
immediale ellecl lhanks lo lhe capilal increase ol 5 billion euro and 8 projecls lor a slronger capilal base. ll is noled lhal lhe
lnlesa Sanpaolo Croup is already complianl wilh currenl 8asel lll requiremenls (7' Common Lquily ralio). Moving lhe lull
compliance wilh lhe "new normalily" ol 8asel lll lo loday in lerms ol bolh capilal and liquidily lhrough lhe recenlly
compleled capilal increase gives lnlesa Sanpaolo a number ol highly signilicanl advanlages, such as. subslanlial economic
and linancial advanlages, grealer growlh opporlunilies, grealer slralegic llexibilily, slronger dividend llows, grealer resilience
lo exogenous shocks ol any nalure.

The slralegies which have aided lnlesa Sanpaolo in successlully inlegraling lhe various companies and coming lhrough lhe crisis
are evolving in lhe new Plan, while respecling lhe Croup's idenlily. The emphasis now shills lrom managing lhe merger lo driving
growlh. The slralegic choices are conlirmed, while conlinuing lo evolve. lndeed, lnlesa Sanpaolo remains a 8ank lor lhe real
economy, wilh lhe conlribulion ol revenues lrom proprielary lrading ol less lhan !', a 8ank wilh suslainable prolilabilily, in
which operalional perlormance, risk prolile, liquidily and solidily/leverage are well-balanced, a 8ank locused on some core
counlries, lirsl ol all llaly, a 8ank lhal promoles and implemenls innovalion al every level, a 8ank wilh a dislinclive idenlily and
repulalion, also commilled lo conlribuling lo lhe growlh and developmenl ol lhe economy and sociely. The organisalional model
is also conlirmed, bolh al Croup level (non-malrix divisional model) and lor lhe 8anca dei Terrilori. Nonelheless, lhe ellecliveness
and elliciency ol lhe model is lo be improved by sharing responsibililies among slall and businesses, relining lhe conlrol syslem,
gradually delegaling powers lo lhe local areas, simplilying lhe decision-making procedures, simplilying lhe company and
ralionalising lhe branch nelwork.

The new lnlesa Sanpaolo 8usiness Plan is based on a highly concrele aclion plan, designed lor minimal execulion risk.
ln parlicular, lhe Plan includes an inveslmenl programme lo promole growlh and produclivily in addilion lo lhe mulliple
projecls and lhe over 4 billion euro in inveslmenls made in lhe lasl lour years, which are slarling lo deliver lheir lull polenlial
amounling lo approximalely 4 billion euro in lhe lhree-year period 20!!-20!3. More specilically, lhe Plan includes in-deplh
slruclural measures lo increase produclivily, wilh cosl savings ol around 770 million euro in lhe 20!!-20!3 lhree-year period, in

3
Pro-lorma dala consislenl wilh lhe scope ol lhe 20!!-20!3/20!5 8usiness Plan (sale ol Cassa di Risparmio della Spezia and 96 branches lo lhe
Credil Agricole Croup). 8anca Monle di Parma nol included.
4
8elore merger and reslrucluring-relaled charges and amorlisalion ol lhe cosl ol lhe merger.
5
Doubllul loans, subslandard loans and pasl due loans (excluding reslruclured loans).
6
Nel income belore merger and reslrucluring-relaled charges and amorlisalion ol lhe cosl ol lhe merger/Tangible shareholders' equily excluding
Nel income and Minorily inleresls.
7
Nel income belore merger and reslrucluring-relaled charges and amorlisalion ol lhe cosl ol lhe merger/Tolal langible assels
8
Tolal langible assels/Tangible shareholders' equily excluding Nel income and Minorily inleresls.
30



ExecuIive summary

31
addilion lo lhe recovery ol inllalion and aulomalic mechanisms lor more lhan 500 million euro, including. ellicienl managemenl
ol lurnover and reassignmenl ol resources, branch nelwork ralionalisalion and dislribulion channel oplimisalion, complelion ol
lhe cenlralisalion ol procuremenl aclivilies and simplilicalion projecls ("8anca Semplice").
Regarding growlh projecls, lhe Plan indicales suslainable revenue growlh across all business areas lhrough growlh in volumes,
bolh ol cuslomer loans and deposils, wilh a 20!0-20!3 CACR equal lo 4.6' and 3.5', respeclively, lor lhe Croup, and lhe
lorecasl ol "dedicaled" inveslmenls and cosls lo suslain growlh, lor !.5 billion euro and an addilional 720 million euro in lhe
20!!-20!3 period, respeclively.
Projecls are also planned lor lhe promolion ol human resources. lor lhe implemenlalion and success ol lhe Plan, lhe qualily ol
personnel will be essenlial, lheir abilily lo share and pursue company largels wilh conviclion and perceive lhe Croup as a
common inleresl lo be supporled and developed. Talks wilh lhe lrade unions will also be necessary al dillerenl levels, lo oversee
lhe reorganisalion lhrough lhe employee re-deploymenl, carelul and prudenl lurnover managemenl, conlrol ol personnel
expenses, lhe ellecliveness and qualily ol work in order lo ensure adequale levels ol prolilabilily, produclivily and employmenl.
The negolialions will be locused on llexibilily and a beller ulilisalion ol slruclures. The necessary coherence and slricl correlalion
belween Croup's economic perlormance and lhe salary variabilily musl lake lhe lorm ol a perlormance bonus - even mulli-annual
using prolilabilily and produclivily indicalors.
ln lerms ol projecls lor risk conlrol/oplimisalion, lhe slock ol nel non-perlorming loans (pasl due, subslandard and doubllul
loans) will be reduced lrom !7.9 billion euro in pro-lorma 20!0 lo !7.! billion euro in 20!3, wilh a ralio lo nel loans decreasing
lrom 4.8' lo 4.0'. This will be achieved lhrough aclions concerning. credil slralegies and granling process, non-perlorming
loans moniloring and colleclions, aclions lor oplimising managemenl ol markel, operalional and compliance risk, as well as
inilialives covering dillerenl lypes ol risk.
lor 20!!-20!3, lhe Plan provides lor a conservalive liquidily managemenl, lhrough slralegic liquidily allocalion and lunding
diversilicalion. ln lerms ol operalional indicalors, cuslomer deposils in 20!3 are expecled lo oulweigh cuslomer loans, as in
pro-lorma 20!0. The shorl lerm gap in 20!3 is sel lo remain above !, as in pro-lorma 20!0. The nel inlerbank posilion in 20!3 is
expecled lo remain negalive lor no more lhan lhe approximalely !0 billion euro recorded al lhe end ol pro-lorma 20!0. The nel
slable lunding ralio is expecled lo be higher lhan !00', as in pro-lorma 20!0.
Projecls are also planned lor slrenglhening lhe capilal base. lhe Plan sels a pro-lorma 20!0 Common Lquily ralio ol
approximalely 9.4' (ol which 7.!' considering lhe disposals/acquisilions being linalised and lhe expecled absorplion ol
delerred laxes belore lhe lull phasing-in ol 8asel lll, !.5' generaled by lhe 5 billion euro capilal increase and approximalely 0.8'
conlribuled by aclions lor oplimising capilal sources and requiremenls envisaged by lhe Plan). The laller will rise, laking inlo
accounl lhe business lrend in lhe 20!!-20!3 period, in lerms ol increase in risk-weighled assels (RWA) and relained earnings, lo
around !0' by pro-lorma 20!! and !0' by bolh pro-lorma 20!3 and pro-lorma 20!5.


The capiIaI increase

As slaled in lhe lnlerim Slalemenl as al 3! March 20!!, lhe Lxlraordinary Shareholders' Meeling held on !0 May 20!! resolved a
share capilal increase lor consideralion, lor a lolal maximum amounl ol 5 billion euro, including share premium, lo be execuled
wilhin 3! December 20!!, in divisible lorm, lhrough lhe issuance ol ordinary shares wilh a nominal value ol 0.52 euro each,
carrying regular righls (! January 20!!), lo be ollered wilh pre-emplive righls lo lhe shareholders holding ordinary shares and
owners/holders ol lhe Company's savings shares, pursuanl lo arlicle 244! ol lhe llalian Civil Code.
On !9 May, lhe Managemenl 8oard resolved in execulion ol lhe Shareholders' Meeling resolulion lo issue 3,65!,949,408
ordinary shares, wilh a nominal value ol 0.52 euro each, having lhe same characlerislics as lhose oulslanding, and carrying
regular righls, lo be ollered wilh pre-emplive righls lo shareholders al a price ol !.369 euro per share, inclusive ol 0.849 euro ol
share premium, in lhe ralio ol 2 newly issued shares lo 7 ordinary shares and/or savings shares held, up lo a maximum lolal
nominal value ol !,899,0!3,692.!6 euro and lo a maximum lolal aggregale value, inclusive ol lhe share premium, ol
4,999,5!8,739.55 euro. The issue price was delermined by applying a discounl ol approximalely 24' lo lhe lheorelical ex-righl
price (TLRP) ol ordinary shares, calculaled on lhe basis ol lhe currenl ollicial Slock Lxchange price.
The righls ollering ol new ordinary shares ended on 22 June wilh lull subscriplion ol lhe lolal 3,65!,949,408 shares ollered, lor a
lolal aggregale value ol 4,999,5!8,739.55 euro.
ln grealer delail, during lhe subscriplion period - which ran lrom 23 May 20!! unlil !0 June 20!! - !2,756,47!,903 righls were
exercised and a lolal ol 3,644,706,258 new shares subscribed, accounling lor 99.80' ol lolal new shares under lhe ollering,
corresponding lo an aggregale amounl ol 4,989,602,867.20 euro, gross ol direclly allribulable expenses.
The 25,35!,025 righls lhal had nol been exercised al lhe end ol lhe subscriplion period were sold on !5 June 20!! on lhe lirsl
day lhey were ollered on lhe Slock Lxchange lhrough 8anca lMl and were subsequenlly exercised by 22 June lhrough
subscriplion ol 7,243,!50 shares, equal lo 0.20' ol lhe new shares on oller, lor an aggregale amounl ol 9,9!5,872.35 euro.
The share capilal increase is aimed al slrenglhening lhe capilalisalion ol lhe lnlesa Sanpaolo Croup, while providing lhe Croup
wilh lhe opporlunily lo achieve lavourable posilioning on lhe markel and exploil lhe opporlunilies deriving lrom expecled
economic growlh. 8y consolidaling ils capilal prolile lhe lnlesa Sanpaolo Croup will also slrenglhen ils compelilive posilion in lhe
domeslic and Luropean linancial markels. Moreover, due lo lhe availabilily ol adequale capilal resources, lhe lnlesa Sanpaolo
Croup will be able lo lurlher increase ils penelralion in ils relerence markels, linance inlernal growlh and provide grealer
slralegic llexibilily and llexibilily in pay oul policies. The share capilal increase also provides llexibilily in managing exisling Tier !
and Lower Tier 2 regulalory capilal inslrumenls.
As lo impacl on capilal ralios, lhe capilal increase produced a posilive ellecl on lhe Core Tier ! ralio ol aboul !50 basis poinls.


In!ormaIion on reIaIions viIh reIaIed parIies
Relalions wilh relaled parlies conlinued lo be monilored allenlively in lhe lirsl hall ol 20!!.
ln lhis regard, we nole lhe lransler ol assels lo lhe Credil Agricole Croup, described above, parlly linalised in lhe lirsl quarler,
which is classilied as a lransaclion wilh a relaled parly, as lhe lnlesa Sanpaolo Croup's rules have exlended lhe preliminary and
decision-making process lor relaled-parly lransaclions, on a sell-regulalion basis, lo shareholders holding more lhan 2' ol lhe
31



ExecuIive summary

32
8ank's capilal wilh voling righls. ln addilion lo lhe above, and lhal described in lhe specilic chapler ol lhe Lxplanalory Noles, no
silualions emerged in lhe quarler olher lhan lhose lypical ol slandard bank relalions wilh individual and corporale cuslomers.
The lransaclions were enlered inlo al markel condilions, and, in any evenl, were based on valualions ol mulual convenience, in
line wilh lhe inlernal procedures delined lor lhis purpose.



32
HALF-YEARLY CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL
STATEMENTS



ConsoIidaIed financiaI 5IaIemenIs

36
ConsoIidaIed baIance sheeI
(millions ol euro)
AsseIs 30.06.2011 31.12.2010
amounI %
!0. Cash and cash equivalenls 4,252 4,758 -506 -!0.6
20. linancial assels held lor lrading 60,555 7!,899 -!!,344 -!5.8
30. linancial assels designaled al lair value lhrough prolil and loss 36,303 35,549 754 2.!
40. linancial assels available lor sale 68,99! 6!,6!2 7,379 !2.0
50. lnveslmenls held lo malurily 2,856 3,839 -983 -25.6
60. Due lrom banks 43,!94 42,737 457 !.!
70. Loans lo cuslomers 372,36! 379,235 -6,874 -!.8
80. ledging derivalives 5,058 7,377 -2,3!9 -3!.4
90. lair value change ol linancial assels in hedged porllolios (+/-) 6! 92 -3! -33.7
!00. lnveslmenls in associales and companies subjecl lo joinl conlrol 2,694 2,7!6 -22 -0.8
!!0. Technical insurance reserves reassured wilh lhird parlies 22 27 -5 -!8.5
!20. Properly and equipmenl 5,39! 5,455 -64 -!.2
!30. lnlangible assels 25,343 25,990 -647 -2.5
o| wh|ch
- oodw||| 13,391 19,217 -J26 -1.7
!40. Tax assels 7,826 8,733 -907 -!0.4
a curren| 1,92J 2,79 -3J6 -J0.J
o de|erred ,90J ,974 -71 -1.2
!50. Non-currenl assels held lor sale and disconlinued operalions 38 75 -37 -49.3
!60. Olher assels 9,728 8,663 !,065 !2.3
ToIaI AsseIs 644,673 658,757 -14,084 -2.1
Changes

36



ConsoIidaIed financiaI 5IaIemenIs

37
ConsoIidaIed baIance sheeI
(millions ol euro)
LiabiIiIies and 5harehoIders' EquiIy
30.06.2011 31.12.2010
amounI %
!0. Due lo banks 49,665 52,860 -3,!95 -6.0
20. Due lo cuslomers 2!!,34! 22!,064 -9,723 -4.4
30. Securilies issued !76,036 !79,983 -3,947 -2.2
40. linancial liabililies held lor lrading 38,2!5 45,045 -6,830 -!5.2
50. linancial liabililies designaled al lair value lhrough prolil and loss 24,729 26,!44 -!,4!5 -5.4
60. ledging derivalives 5,269 5,884 -6!5 -!0.5
70. lair value change ol linancial liabililies in hedged porllolios (+/-) 752 !,4!2 -660 -46.7
80. Tax liabililies 3,284 3,269 !5 0.5
a curren| 33 661 -7J -11.0
o de|erred 2,696 2,603 33 J.4
90. Liabililies associaled wilh non-currenl assels
held lor sale and disconlinued operalions - - -
!00. Olher liabililies !8,!60 !3,658 4,502 33.0
!!0. Lmployee lerminalion indemnilies !,348 !,370 -22 -!.6
!20. Allowances lor risks and charges 3,0!4 3,280 -266 -8.!
a pos| emp|oymen| oene|||s J62 J74 -12 -J.2
o o|her a||owances 2,62 2,906 -24 -3.7
!30. Technical reserves 52,887 50,!88 2,699 5.4
!40. Valualion reserves -937 -!,054 -!!7 -!!.!
!50. Redeemable shares - - -
!60. Lquily inslrumenls - - -
!70. Reserves !3,792 !2,!43 !,649 !3.6
!80. Share premium reserve 36,!43 33,!02 3,04! 9.2
!90. Share capilal 8,546 6,647 !,899 28.6
200. Treasury shares (-) -!! -!0 ! !0.0
2!0. Minorily inleresls (+/-) !,038 !,067 -29 -2.7
220. Nel income (loss) !,402 2,705 -!,303 -48.2
ToIaI LiabiIiIies and 5harehoIders' EquiIy 644,673 658,757 -14,084 -2.1
Changes

37



ConsoIidaIed financiaI 5IaIemenIs

38
ConsoIidaIed income sIaIemenI
(millions ol euro)
amounI %
!0. lnleresl and similar income 9,!95 8,572 623 7.3
20. lnleresl and similar expense -3,627 -3,389 238 7.0
30. InIeresI margin 5,568 5,183 385 7.4
40. lee and commission income 3,!76 3,2!2 -36 -!.!
50. lee and commission expense -620 -6!7 3 0.5
60. NeI !ee and commission income 2,556 2,595 -39 -1.5
70. Dividend and similar income 376 285 9! 3!.9
80. Prolils (Losses) on lrading !67 95 72 75.8
90. lair value adjuslmenls in hedge accounling -29 -84 -55 -65.5
!00. Prolils (Losses) on disposal or repurchase ol 475 !52 323
a |oans 12 -2 14
o ||nanc|a| asse|s ava||ao|e |or sa|e 47 1J J04
c |nves|men|s he|d |o ma|ur||y -1 - 1
d ||nanc|a| ||ao|||||es 7 1 6
!!0. Prolils (Losses) on linancial assels and liabililies designaled al lair value -!09 53 -!62
120. NeI inIeresI and oIher banking income 9,004 8,279 725 8.8
!30. Nel losses / recoveries on impairmenl -!,395 -!,467 -72 -4.9
a |oans -1,J4J -1,419 -76 -.4
o ||nanc|a| asse|s ava||ao|e |or sa|e -36 -47 J9 3J.0
c |nves|men|s he|d |o ma|ur||y -1 - 1
d o|her ||nanc|a| ac||v|||es J -1 J6
140. NeI income !rom banking acIiviIies 7,609 6,812 797 11.7
!50. Nel insurance premiums 5,669 3,832 !,837 47.9
!60. Olher nel insurance income (expense) -6,089 -4,009 2,080 5!.9
170. NeI income !rom banking and insurance acIiviIies 7,189 6,635 554 8.3
!80. Adminislralive expenses -4,520 -4,594 -74 -!.6
a personne| expenses -2,792 -2,302 -10 -0.4
o o|her adm|n|s|ra||ve expenses -1,723 -1,792 -64 -J.6
!90. Nel provisions lor risks and charges -88 -!97 -!09 -55.3
200. Nel adjuslmenls lo / recoveries on properly and equipmenl -!82 -!94 -!2 -6.2
2!0. Nel adjuslmenls lo / recoveries on inlangible assels -348 -357 -9 -2.5
220. Olher operaling expenses (income) 236 252 -!6 -6.3
230. OperaIing expenses -4,902 -5,090 -188 -3.7
240. Prolils (Losses) on inveslmenls in associales and companies subjecl
lo joinl conlrol -!28 !! -!39
250. Valualion dillerences on properly, equipmenl and inlangible assels
measured al lair value - - -
260. Coodwill impairmenl - - -
270. Prolils (Losses) on disposal ol inveslmenls !76 9 !67
280. Income (Loss) be!ore Iax !rom conIinuing operaIions 2,335 1,565 770 49.2
290. Taxes on income lrom conlinuing operalions -888 -533 355 66.6
300. Income (Loss) a!Ier Iax !rom conIinuing operaIions 1,447 1,032 415 40.2
3!0. lncome (Loss) aller lax lrom disconlinued operalions - 69! -69!
320. NeI income (Ioss) 1,447 1,723 -276 -16.0
330. Minorily inleresls -45 -33 !2 36.4
340. ParenI Company's neI income (Ioss) 1,402 1,690 -288 -17.0
asic EP5 - Euro 0.11 0.13
DiIuIed EP5 - Euro 0.11 0.13
Changes 1sI haI! o!
2011
1sI haI! o!
2010

38



ConsoIidaIed financiaI 5IaIemenIs

39
5IaIemenI o! consoIidaIed comprehensive income
(millions ol euro)
amounI %
10. NET INCOME (LO55) 1,447 1,723 -276 -16.0
OIher comprehensive income (neI o! Iax)
20. linancial assels available lor sale 44 -529 573
30. Properly and equipmenl - - -
40. lnlangible assels - - -
50. ledges ol loreign inveslmenls - - -
60. Cash llow hedges !53 -3!8 47!
70. loreign exchange dillerences -86 !36 -222
80. Non-currenl assels held lor sale - - -
90. Acluarial gains (losses) on delined benelil plans - - -
!00. Share ol valualion reserves connecled wilh inveslmenls carried al equily -7 35 -42
110. ToIaI oIher comprehensive income (neI o! Iax) 104 -676 780
120. TOTAL COMPREHEN5IVE INCOME (CAPTION5 10 +110) 1,551 1,047 504 48.1
130. ToIaI consoIidaIed comprehensive income perIaining Io minoriIy inIeresIs 32 47 -15
140. ToIaI consoIidaIed comprehensive income perIaining Io Ihe ParenI Company 1,519 1,000 519
1sI haI! o!
2011
1sI haI! o!
2010
Changes


39



ConsoIidaIed financiaI 5IaIemenIs

40
Changes in consoIidaIed sharehoIders' equiIy as aI 30 1une 2011
(millions ol euro)
ordinary
shares
savings
shares
relained
earnings
olher
AMOUNT5 A5 AT 1.1.2011 6,600 488 33,227 12,465 99 -1,045 - -10 2,776 54,600 bJ,bJJ 1,067
ALLOCATION Of NET INCOME
Of THE PREVIOU5 YEAR
(a)

Reserves 1,699 -1,699 -
Dividends and oIher aIIocaIions -1,077 -1,077 -1,04J -J4
CHANGE5 IN THE PERIOD
Changes in reserves -67 -67 -1J -b4
OperaIions on sharehoIders' equiIy
lssue ol new shares !,899 3,04! 4,940 4,940 -
Purchase ol lreasury shares -! -1 -1 -
Lxlraordinary dividends -
Changes in equily inslrumenls -
Derivalives on lreasury shares -
Slock oplions -
Olher 36 -9 27 27
ToIaI comprehensive income !or Ihe period 104 1,447 1,551 1,19 J2
5HAREHOLDER5' EUITY A5 AT 30.06.2011 8,535 488 36,259 14,097 99 -941 - -11 1,447 59,973 b8,9Jb 1,0J8
- Group 8,061 485 36,143 13,693 99 -937 - -11 1,402 58,935
- minoriIy inIeresIs 474 3 116 404 - -4 - - 45 1,038
30.06.2011
Croup
shareholders'
equity
Treasury
shares
Reserves
NeI
income
(Ioss)
Minority
interests
5harehoIders'
equiIy
5hare
premium
reserve
VaIuaIion
reserves
(a)
The caplion includes dividends and lhe amounls allribulable lo lhe Allowances lor charilable conlribulions ol lhe Parenl Company, as well as lhe dividends ol consolidaled companies
allribulable lo minorily inleresls.
5hare capiIaI
EquiIy
insIrumenIs

40



ConsoIidaIed financiaI 5IaIemenIs

41
Changes in consoIidaIed sharehoIders' equiIy as aI 30 1une 2010

ordinary
shares
savings
shares
relained
earnings
olher
AMOUNT5 A5 AT 1.1.2010 6,574 488 33,235 10,863 100 -419 - -8 2,938 53,771 b2,681 1,090
ALLOCATION Of NET INCOME
Of THE PREVIOU5 YEAR
(a)

Reserves 1,814 -1,814 -
Dividends and oIher aIIocaIions -1,124 -1,124 -1,04J -81
CHANGE5 IN THE PERIOD
Changes in reserves -97 -11 -108 -108 -
OperaIions on sharehoIders' equiIy
lssue ol new shares -
Purchase ol lreasury shares 4 4 4 -
Lxlraordinary dividends -
Changes in equily inslrumenls -
Derivalives on lreasury shares -
Slock oplions -
Olher -62 -!! 37 -36 -J6
ToIaI comprehensive income !or Ihe period -676 1,723 1,047 1,000 47
5HAREHOLDER5' EUITY A5 AT 30.06.2010 6,512 488 33,224 12,617 89 -1,095 - -4 1,723 53,554 b2,bJ4 1,020
- Group 6,162 485 33,102 12,130 89 -1,120 - -4 1,690 52,534
- minoriIy inIeresIs 350 3 122 487 - 25 - - 33 1,020
5hare
premium
reserve
Reserves
EquiIy
insIrumenIs
NeI
income
(Ioss)
5harehoIders'
equiIy
Treasury
shares
5hare capiIaI
30.06.2010
Minority
interests
VaIuaIion
reserves
(a)
The caplion includes dividends and lhe amounls allribulable lo lhe Allowances lor charilable conlribulions ol lhe Parenl Company, as well as lhe dividends ol consolidaled companies
allribulable lo minorily inleresls.
Croup
shareholders'
equity
(millions ol euro)

41



ConsoIidaIed financiaI 5IaIemenIs

42
ConsoIidaIed sIaIemenI o! cash !Iovs
(millions ol euro)
30.06.2011 30.06.2010
A. OPERATING ACTIVITIE5
1. Cash !Iov !rom operaIions 6,740 4,386
- nel income (+/-) !,447 !,723
- gains/losses on linancial assels held lor lrading and on assels/liabililies
designaled al lair value lhrough prolil and loss (-/+) 8!8 -383
- gains/losses on hedging aclivilies (-/+) 29 84
- nel losses/recoveries on impairmenl (+/-) !,882 !,905
- adjuslmenls lo/nel recoveries on properly, equipmenl and inlangible assels (+/-) 530 55!
- nel provisions lor risks and charges and olher cosls/revenues (+/-) !40 267
- nel insurance premiums lo be collecled (-) - -96
- olher insurance revenues/charges lo be collecled (-/+) 3,066 2,039
- laxes and dulies lo be sellled (+) !98 -38
- nel adjuslmenls lo/recoveries on disconlinued operalions nel ol lax ellecl (-/+) - -
- olher adjuslmenls (+/-) -!,370 -!,666
2. Cash !Iov !rom l used in !inanciaI asseIs 5,127 -40,655
- linancial assels held lor lrading !!,572 -27,200
- linancial assels designaled al lair value lhrough prolil and loss -!,073 -940
- linancial assels available lor sale -6,696 -3,497
- due lrom banks. repayable on demand -64 -93!
- due lrom banks. olher -2,533 -4,305
- loans lo cuslomers 2,0!3 -!,!86
- olher assels !,908 -2,596
3. Cash !Iov !rom l used in !inanciaI IiabiIiIies -17,690 32,234
- due lo banks. repayable on demand -424 828
- due lo banks. olher -2,397 520
- due lo cuslomers -5,805 20,868
- securilies issued -3,702 -4,88!
- linancial liabililies held lor lrading -6,892 !4,253
- linancial liabililies designaled al lair value lhrough prolil and loss -!,204 -!,772
- olher liabililies 2,734 2,4!8
NeI cash !Iov !rom (used in) operaIing acIiviIies -5,823 -4,035
. INVE5TING ACTIVITIE5
1. Cash !Iov !rom 1,748 1,888
- sales ol inveslmenls in associales and companies subjecl lo joinl conlrol - -
- dividends collecled on inveslmenls in associales and companies subjecl lo joinl conlrol 26 25
- sales/reimbursemenls ol inveslmenls held lo malurily 982 254
- sales ol properly and equipmenl - -
- sales ol inlangible assels - -
- sales ol subsidiaries and business branches 740 !,609
2. Cash !Iov used in -285 -425
- purchases ol inveslmenls in associales and companies subjecl lo joinl conlrol -!37 -38
- purchases ol inveslmenls held lo malurily - -
- purchases ol properly and equipmenl -20 -75
- purchases ol inlangible assels -!28 -!08
- purchases ol subsidiaries and business branches - -204
NeI cash !Iov !rom (used in) invesIing acIiviIies 1,463 1,463
C. fINANCING ACTIVITIE5
- issues/purchases ol lreasury shares -! 4
- share capilal increases 4,940 -
- dividend dislribulion and olher -!,077 -!,!24
NeI cash !Iov !rom (used in) !inancing acIiviIies 3,862 -1,120
NET INCREA5E (DECREA5E) IN CA5H AND CA5H EUIVALENT5 -498 -3,692
Cash and cash equivalenls al beginning ol period 4,758 8,4!2
Nel increase (decrease) in cash and cash equivalenls -498 -3,692
Cash and cash equivalenls. loreign exchange ellecl -8 29
CA5H AND CA5H EUIVALENT5 AT END Of PERIOD 4,252 4,749
LLCLND. (+) lrom () used in
RECONCILIATION

42
EXPLANATORY NOTES





45
Accounling policies




GeneraI preparaIion principIes
The lall-yearly condensed consolidaled linancial slalemenls as al 30 June 20!! have been prepared in compliance wilh arl.
!54-ler, Legislalive Decree 58 ol 24 lebruary !998 and in applicalion ol lhe lAS/llRS issued by lhe lnlernalional Accounling
Slandards 8oard (lAS8) and relaled lnlernalional linancial Reporling lnlerprelalions Commillee (llRlC) inlerprelalions endorsed by
lhe Luropean Commission according lo LC Regulalion !606 ol !9 July 2002.
ln parlicular, lhe lall-yearly condensed consolidaled linancial slalemenls have been prepared in compliance wilh lAS 34
requiremenls, which regulale inlerim linancial reporling.

The lollowing Regulalions were published by lhe Luropean Commission in 20!0 and lirsl hall ol 20!!, endorsing lhe slandards
lisled below and applicable lrom 20!!.
Regulalion 574/20!0 Amendmenls lo llRS ! and llRS 7,
Regulalion 632/20!0 lAS 24. Relaled parly disclosures,
Regulalion 633/20!0 llRlC !4. The limil on a delined benelil assel, minimum lunding requiremenls and lheir inleraclion,
Regulalion 662/20!0 llRlC !9. Lxlinguishing linancial liabililies wilh equily inslrumenls,
Regulalion !49/20!! lmprovemenls lo lhe lAS/llRS.
ln parlicular, wilh Regulalion 632, lhe Luropean Commission endorsed lhe updaled version ol lAS 24 Relaled parly disclosures.
The lexl ol lhe new slandard amends lhe delinilion ol "relaled parly" and lisls lhe cases in which a person/enlily may be
considered as a "relaled parly" ol lhe reporling enlily. The new version ol lhe slandard applied lrom ! January 20!! specilied
lhal even lhe subsidiaries ol associaled companies musl be considered as relaled parlies.
The olher communily regulalion endorsemenls ol inlernalional accounling slandards during lhe period in queslion did nol impacl
preparalion ol lhe lall-yearly condensed consolidaled linancial slalemenls.

The accounling policies adopled in lhe preparalion ol lhe lall-yearly condensed consolidaled linancial slalemenls, lor
classilicalion, recognilion, measuremenl and derecognilion ol assel and liabilily caplions, and lhe means ol recognilion ol
revenues and cosls, have remained unchanged wilh respecl lo lhose adopled lor lhe lnlesa Sanpaolo Croup's Annual reporl
20!0, lo which, lherelore, relerence musl be made.
Preparalion ol lhe lall-yearly condensed consolidaled linancial slalemenls requires lhe use ol eslimales and assumplions in lhe
delerminalion ol cerlain cosl and income componenls and lor lhe measuremenl ol assels and liabililies. Again relerence musl be
made lo lhe Annual reporl 20!0 lor lhe relaled descriplion. Moreover, please nole lhal in cerlain valualion processes, in
parlicular lhe more complex ones, such as lhe assel impairmenl lesls, lhese are generally perlormed in lheir enlirely al lhe lime ol
preparalion ol lhe annual reporl, wilh lhe exceplion ol lhe cases in which lhere are signilicanl impairmenl indicalors which
require lhe immediale valualion ol losses.

The lall-yearly condensed consolidaled linancial slalemenls, prepared in euro as lhe lunclional currency, are prepared in
condensed lorm as permilled by lAS 34, and conlain lhe 8alance sheel, lhe lncome slalemenl, lhe Slalemenl ol comprehensive
income lor lhe period, lhe Changes in shareholders' equily, lhe Slalemenl ol cash llows and lhe Lxplanalory noles. They are also
complemenled by inlormalion on signilicanl evenls which occurred in lhe period, on lhe main risks and uncerlainlies lo be laced
in lhe remaining monlhs ol lhe year, as well as inlormalion on signilicanl relaled parly lransaclions.
The amounls indicaled in lhe linancial slalemenls and Lxplanalory noles are expressed in millions ol euro, unless
olherwise specilied.
The 8alance sheel as al 30 June 20!! solely includes cerlain real-eslale assels due lor imminenl disposal under non-currenl assels
held lor sale and disconlinued operalions.
The lncome slalemenl as al 30 June 20!!, on lhe olher hand, does nol conlain any prolils or losses on disconlinued operalions.
The comparalive income slalemenl ligures lor lhe period ended 30 June 20!0, lherelore, did nol require reslalemenls.

As usual, condensed reclassilied income slalemenls have been prepared lo give a more immediale underslanding ol resulls lor lhe
period. To enable consislenl comparison, lirsl hall 20!! and 20!0 ligures are reslaled, where necessary, lo accounl lor changes in
lhe scope ol consolidalion. The reslaled linancial slalemenls are oblained by making appropriale adjuslmenls lo hislorical dala lo
rellecl lhe signilicanl ellecls ol such changes relroaclively. Allached lo lhe lall-yearly condensed consolidaled linancial
slalemenls are lhe reconcilialions belween lhe linancial slalemenls and lhe aloremenlioned condensed reclassilied slalemenls.

The lall-yearly condensed consolidaled linancial slalemenls as al 30 June 20!! are complemenled by cerlilicalion ol lhe
Manager responsible lor preparing lhe Company's linancial reporls pursuanl lo Arlicle !54-bis ol lhe Consolidaled Law on
linance and are subjecl lo limiled review by Reconla Lrnsl & Young.
45



ExpIanaIory noIes - Accounling policies

46
5cope o! consoIidaIion and consoIidaIion meIhods


5cope o! consoIidaIion

The Condensed linancial slalemenls as al 30 June 20!! include lnlesa Sanpaolo and lhe companies direclly and indireclly
conlrolled, joinlly conlrolled or subjecl lo signilicanl inlluence, comprising as specilically sel oul by lAS/llRS also lhe
companies operaling in seclors dissimilar lo lhe Parenl Company as well as privale equily inveslmenls. Similarly, special purpose
enlilies/vehicles (SPL/SPV) are included when lhe requisile ol elleclive conlrol recurs, even il lhere is no direcl or indirecl slake in
lhe company.
Compared lo lhe silualion as al 3! December 20!0, lhe mosl signilicanl changes are represenled by lhe inclusion ol 8anca Sara
and lhe exclusion ol Cassa di Risparmio della Spezia (sold lo Credil Agricole) and lideuram 8ank Suisse (sold lo 8anca Credinvesl).
During lhe lirsl hall, lnlesa Sanpaolo also acquired lhe majorily ol shares in 8anco Lmiliano Romagnolo, a mono-branch bank
based in 8ologna, under exlraordinary adminislralion. As al 30 June 20!! lhe company was consolidaled al equily, as il is
lormally slill under exlraordinary adminislralion.

Cerlain exlraordinary inlragroup lransaclions were carried oul in lhe lirsl hall ol 20!!, which as such had no ellecls on lhe
consolidaled ligures. These lransaclions consisled in lhe merger by incorporalion ol companies in lhe Cl8 Croup and lhe parlial
de-merger ol Monela lhrough assignmenl lo lnlesa Sanpaolo ol !00' ol lhe inveslmenl in Seleli. Since lhe lranslers were
carried oul lor reorganisalion purposes only, in accordance wilh lhe Croup's accounling policy, lhese lransaclions were simply
recorded line-by-line in lhe individual slalemenls ol lhe companies involved, wilhoul recognilion ol any economic ellecl.

As usual, lhe equily inveslmenl in lhe 8ank ol llaly, in which lhe lnlesa Sanpaolo Croup holds 42.4', which - considering ils
special nalure - is mainlained al cosl and lherelore nol carried al equily, logelher wilh companies lor which shares have been
pledged wilh voling righls exceeding 20', given lhal lhe purpose ol lhe pledge is lo guaranlee loans and nol lo exercise conlrol
and direclion ol linancial and economic policies in order lo benelil lrom an economic relurn on lhe shares, are nol consolidaled.


ConsoIidaIion meIhods

The melhods used lor line-by-line consolidalion ol subsidiaries and consolidalion by lhe equily melhod ol associales and
companies subjecl lo joinl conlrol have remained unchanged wilh respecl lo lhose adopled lor lhe lnlesa Sanpaolo Croup Annual
Reporl 20!0 lo which relerence should lherelore be made.
The linancial slalemenls ol lhe Parenl Company and ol olher companies used lo prepare lhe Reporl as al 30 June 20!! reler lo
lhe same dale. ln cerlain limiled cases, lor subsidiaries which are nol malerial, lhe lalesl ollicial ligures are used.
Where necessary and always in wholly marginal cases lhe linancial slalemenls ol consolidaled companies which are drawn up
using dillerenl accounling crileria are reslaled lo be complianl wilh lhe slandards used by lhe Croup.
The linancial slalemenls ol non-eurozone companies are lranslaled inlo euro by applying lhe spol exchange rale al period-end lo
assels and liabililies in lhe 8alance sheel, and lhe average exchange rale lor lhe period lo lncome slalemenl caplions.
The lollowing lable indicales lhe inveslmenls in subsidiaries which are included in lhe line-by-line scope ol consolidalion ol lhe
lall-yearly condensed consolidaled linancial slalemenls as al 30 June 20!!.



46



ExpIanaIory noIes - Accounling policies

47
Name
direcI
ovnership
%
heId
A. CON5OLIDATED COMPANIE5
ParenI Company
lnlesa Sanpaolo S.p.A. Torino
Capilal Luro 8,545,56!,6!4.72 in shares ol Luro 0.52
A. 1 Companies subjecI Io !uII consoIidaIion
! Adriano linance S.r.l. (c) Roma 4 lnlesa Sanpaolo 5.00
Capilal Luro !5.000
2 Adriano linance 2 S.r.l. (c) Milano 4 lnlesa Sanpaolo 5.00
Capilal Luro !0.000
3 Arlen Sicav (d) Luxembourg 4 lnlesa Sanpaolo Lile 87.42
4 8.l. Privale Lquily Lld Dublin ! Privale Lquily lnlernalional !00.00
Capilal Luro !00.000
5 8anca C.R. lirenze Romania S.A. 8ucharesl ! Cassa di Risparmio di lirenze 90.98
Capilal RON 43.087.365
6 8anca dell'Adrialico S.p.A. Pesaro ! lnlesa Sanpaolo !00.00
Capilal Luro 272.652.000
7 8anca di Credilo Sardo S.p.A. Cagliari ! lnlesa Sanpaolo !00.00
Capilal Luro 258.276.569,35
8 8anca di Trenlo e 8olzano S.p.A. (e) Trenlo ! lnlesa Sanpaolo 23.33
Capilal Luro 65.9!5.704,40 linanziaria 8.T.8. 54.33
77.66
9 8anca lideuram S.p.A. Roma ! lnlesa Sanpaolo !00.00
Capilal Luro !86.255.207,!6
!0 8anca lMl S.p.A. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro 962.464.000
!! 8anca lmi Securilies Corp New York ! lmi Capilal Markels USA Corp. !00.00
Capilal Usd 44.500.000
!2 8anca lnlraslrullure lnnovazione e Sviluppo S.p.A. Roma ! lnlesa Sanpaolo !00.00
Capilal Luro 346.300.000
!3
8anca lnlesa (Closed Joinl-Slock Company)
(lormerly KM8 8ank) (o) Moscow ! lnlesa Sanpaolo lolding lnlernalional 39.76
Capilal RU8 !0.820.!80.800 lnlesa Sanpaolo 46.98
86.74
!4 8anca lnlesa a.d., 8eograd (l) Novi 8eograd ! lnlesa Sanpaolo lolding lnlernalional 77.79
Capilal RSD !8.477.400.000 lnlesa Sanpaolo !5.2!
93.00
!5 8anca Prossima S.p.A. Milano ! lnlesa Sanpaolo 7!.67
Capilal Luro 80.000.000
!6 8anca Sara S.p.A. Milano ! 8anca lideuram !00.00
Capilal Luro !7.727.655
!7 8anco di Napoli S.p.A. Napoli ! lnlesa Sanpaolo !00.00
Capilal Luro !.000.000.000
!8 8ank ol Alexandria S.A.L. (g) Cairo ! lnlesa Sanpaolo 80.00 70.25
Capilal LCP 800.000.000
!9 8anka Koper d.d. (h) Koper ! lnlesa Sanpaolo 97.48
Capilal Luro 22.!73.2!8,!6
20 8rivon lungary Zrl 8udapesl ! Recovery Real Lslale Managemenl !00.00
Capilal lUl !0.000.000
2! Canova Sicav (d) Luxembourg 4 lnlesa Sanpaolo Lile !00.00
22 Cassa dei Risparmi di lorli e della Romagna S.p.A. lorli ! lnlesa Sanpaolo 82.08
Capilal Luro 2!4.428.465
23 Cassa di Risparmio del lriuli Venezia Ciulia S.p.A. Corizia ! lnlesa Sanpaolo !00.00
Capilal Luro 2!0.263.000
24 Cassa di Risparmio del Venelo S.p.A. Padova ! lnlesa Sanpaolo !00.00
Capilal Luro 78!.!69.000
25 Cassa di Risparmio della Provincia di Vilerbo S.p.A. Vilerbo ! Cassa di Risparmio di lirenze 75.8! 82.02
Capilal Luro 49.407.056,3!
26 Cassa di Risparmio di Ascoli Piceno S.p.A. Ascoli Piceno ! Cassa di Risparmio di lirenze 66.00
Capilal Luro 70.755.020
27 Cassa di Risparmio di Cilla di Caslello S.p.A. ! Cassa di Risparmio di lirenze 82.!9
Capilal Luro 23.750.000
28 Cassa di Risparmio di Civilavecchia S.p.A. Civilavecchia ! Cassa di Risparmio di lirenze 5!.00
Capilal Luro 34.505.380
29 Cassa di Risparmio di lirenze S.p.A. (i) lirenze ! lnlesa Sanpaolo 89.7!
Capilal Luro 828.836.0!7
RegisIered
o!!ice
Type o!
reIaIion-
ship (a)
InvesImenI VoIes
avaiIabIe
% (b)
Cilla di
Caslello
47



ExpIanaIory noIes - Accounling policies

48
Name
direcI
ovnership
%
heId
30 Cassa di Risparmio di loligno S.p.A. loligno ! Cassa di Risparmio di lirenze 70.53
Capilal Luro !7.720.820
3! Cassa di Risparmio di Pisloia e Pescia S.p.A. (j) Pisloia ! Cassa di Risparmio di lirenze 58.84 60.00
Capilal Luro !4!.987.825
32 Cassa di Risparmio di Rieli S.p.A. Rieli ! Cassa di Risparmio di lirenze 85.00
Capilal Luro 47.339.29!
33 Cassa di Risparmio di Spolelo S.p.A. Spolelo ! Cassa di Risparmio di lirenze 60.!3
Capilal Luro 42.489.053
34 Cassa di Risparmio di Terni e Narni S.p.A. Terni ! Cassa di Risparmio di lirenze 75.00
Capilal Luro 2!.000.000
35 Cassa di Risparmio di Venezia S.p.A. Venezia ! lnlesa Sanpaolo !00.00
Capilal Luro 284.536.000
36 Cassa di Risparmio in 8ologna S.p.A. 8ologna ! lnlesa Sanpaolo !00.00
Capilal Luro 696.692.000
37 Cenlro lacloring S.p.A. lirenze ! Cassa di Risparmio di lirenze 4!.77
Capilal Luro 25.200.000 Cenlro Leasing !4.95
lnlesa Sanpaolo !0.8!
Cassa di Risparmio di Pisloia e Pescia 5.73
Cassa dei Risparmi di lorli e della Romagna 0.!!
73.37
38 Cenlro Leasing S.p.A. lirenze ! Cassa di Risparmio di lirenze 30.!0
Capilal Luro !55.020.05!,50 Leasinl 58.09
88.!9
39 Cenlrovila Assicurazioni S.p.A. lirenze ! lnlesa Sanpaolo !00.00
Capilal Luro 52.000.000
40 Cib 8ank Lld 8udapesl ! lnlesa Sanpaolo lolding lnlernalional 93.48
Capilal lUl !05.000.000.000 lnlesa Sanpaolo 6.52
!00.00
4! Cl8 Car Trading Lld 8udapesl ! Recovery Real Lslale Managemenl !00.00
Capilal lUl !0.000.000
42 Cl8 laclor linancial Service Lld 8udapesl ! Cl8 Real Properly Ulilisalion and Services 50.00
Capilal lUl !03.500.000 Cib 8ank 50.00
!00.00
43 Cl8 lnsurance 8roker Lld 8udapesl ! Cl8 Leasing !00.00
Capilal lUl !0.000.000
44 Cl8 lnveslmenl lund Managemenl Lld 8udapesl ! Cib 8ank 94.98
Capilal lUl 600.000.000 Cl8 RLAL Properly Ulilisalion and Services 5.02
!00.00
45 Cl8 Leasing lolding Limiled Liabilily Company 8udapesl ! Cib 8ank !00.00
Capilal lUl 500.000
46 Cl8 Leasing Lld 8udapesl ! Cl8 Leasing lolding 98.!6
Capilal lUl 5!.000.000 Cl8 Real Lslale !.84
!00.00
47 Cl8 Real Lslale Lld 8udapesl ! Cib 8ank !00.00
Capilal lUl 52.000.000
48 Cl8 RLAL Properly Ulilisalion and Services Lld 8udapesl ! Cib 8ank !00.00
Capilal lUl 50.000.000
49 Cl8 Renl Operalive Leasing Lld 8udapesl ! Cib 8ank !00.00
Capilal lUl 800.000.000
50 Cimabue Sicav (d) Luxembourg 4 lnlesa Sanpaolo Lile !00.00
5! Compagnia llaliana linanziaria - Cll S.r.l. Milano ! lN.lRA - lnveslire nelle lnlraslrullure 52.40
Capilal Luro !33.583.670,74
52 Consumer linance lolding a.s. Kezmarok ! Vseobecna Uverova 8anka !00.00
Capilal Luro 53.!!0.277
53 D8 Plalinum ll Sicav (d) Luxembourg 4 LurizonVila !00.00
54 Duomo lunding Plc (k) Dublin 4 lnlesa Sanpaolo -
55 Lpsilon Associali SCR S.p.A. Milano ! Lurizon Capilal SCR 5!.00
Capilal Luro 5.200.000 8anca lMl 49.00
!00.00
RegisIered
o!!ice
Type o!
reIaIion-
ship (a)
InvesImenI VoIes
avaiIabIe
% (b)

48



ExpIanaIory noIes - Accounling policies

49
Name
direcI
ovnership
%
heId
56 Lquiler S.p.A. Torino ! lnlesa Sanpaolo !00.00
Capilal Luro !50.000.000
57 Lurizon A.l. SCR S.p.A. Milano ! Lurizon Capilal SCR 90.00
Capilal Luro 4.420.000 lnlesa Sanpaolo !0.00
!00.00
58 Lurizon Capilal S.A. Luxembourg ! Lurizon Capilal SCR !00.00
Capilal Luro 7.557.200
59 Lurizon Capilal S.C.R. S.p.A. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro 95.0!0.000
60 Lurizon lnveslmenl Sicav Luxembourg 4 Cenlrovila Assicurazioni 2.!0
lnlesa Sanpaolo Vila 37.88
SudPolo Vila !4.66
Lurizon Vila 7.59
lnlesa Sanpaolo Lile 37.0!
99.24
6! Lurizon Vila S.p.A. Torino ! lnlesa Sanpaolo 99.96
Capilal Luro 295.322.508
62 lnlesa Sanpaolo Lile Lld (gia LurizonLile Lld) Dublin ! LurizonVila !00.00
Capilal Luro 625.000
63 lnlesa Sanpaolo Assicura S.p.A. (gia LurizonTulela S.p.A.) Torino ! LurizonVila !00.00
Capilal Luro 27.9!2.258
64 Luro-Tresorerie S.A. Paris ! linanciere lideuram !00.00
Capilal Luro 250.038.322,20
65 lideuram Assel Managemenl (lreland) Lld Dublin ! 8anca lideuram !00.00
Capilal Luro !.000.000
66 lideuram 8ank Luxembourg S.A. Luxembourg ! 8anca lideuram !00.00
Capilal Luro 30.000.000
67 lideuram liduciaria S.p.A. Roma ! 8anca lideuram !00.00
Capilal Luro !.55!.000
68 lideuram lund 8ond Luro ligh Yield (d) Luxembourg 4 lideuram Vila 62.45
LurizonVila 6.85
69.30
69 lideuram lund 8ond Usa (d) Luxembourg 4 lideuram Vila 76.94
LurizonVila 0.07
77.0!
70 lideuram lund 8ond Clobal Lmerging Markels (d) Luxembourg 4 lideuram Vila 65.55
LurizonVila !.!4
66.69
7! lideuram lund 8ond Yen (d) Luxembourg 4 lideuram Vila 93.22
LurizonVila 0.08
93.30
72 lideuram lund Lquily Lurope Crowlh (d) Luxembourg 4 lideuram Vila 94.27
LurizonVila 3.89
98.!6
73 lideuram lund Lquily Lurope Value (d) Luxembourg 4 lideuram Vila 92.44
LurizonVila 5.34
97.78
74 lideuram lund Lquily Luro (d) Luxembourg 4 lideuram Vila 77.58
LurizonVila 2.22
79.80
75 lideuram lund Lquily Luro Corporale 8ond (d) Luxembourg 4 lideuram Vila 55.22
LurizonVila 3.93
59.!5
76 lideuram lund Lquily Clobal Lmerging Markels (d) Luxembourg 4 lideuram Vila 77.33
LurizonVila 2.20
79.53
77 lideuram lund Lquily llaly (d) Luxembourg 4 lideuram Vila 85.95
LurizonVila !.97
87.92
78 lideuram lund Lquily Japan (d) Luxembourg 4 lideuram Vila 87.20
LurizonVila 3.62
90.82
79 lideuram lund Lquily Pacilic Lx Japan (d) Luxembourg 4 lideuram Vila 68.87
LurizonVila !.34
70.2!
RegisIered
o!!ice
Type o!
reIaIion-
ship (a)
InvesImenI VoIes
avaiIabIe
% (b)
49



ExpIanaIory noIes - Accounling policies

50
Name
direcI
ovnership
%
heId
80 lideuram lund Lquily Usa (d) Luxembourg 4 lideuram Vila 84.36
LurizonVila 2.04
86.40
8! lideuram lund Lquily Usa Crowlh (d) Luxembourg 4 lideuram Vila 95.80
LurizonVila 3.26
99.06
82 lideuram lund Lquily Usa Value (d) Luxembourg 4 lideuram Vila 94.!9
LurizonVila 4.72
98.9!
83 lideuram lund Luro 8ond Long Risk (d) Luxembourg 4 lideuram Vila 89.42
LurizonVila !.36
90.78
84 lideuram lund Luro 8ond Low Risk (d) Luxembourg 4 lideuram Vila 7!.73
LurizonVila 5.36
77.09
85 lideuram lund Luro 8ond Medium Risk (d) Luxembourg 4 lideuram Vila 77.68
LurizonVila 4.64
82.32
86 lideuram lund Luro Delensive 8ond (d) Luxembourg 4 lideuram Vila 67.78
LurizonVila 8.22
76.00
87 lideuram lund Luro Shorl Term (d) Luxembourg 4 lideuram Vila 62.!7
LurizonVila 3.30
65.47
88 lideuram lund Zero Coupon 20!! (d) Luxembourg 4 lideuram Vila 99.93
89 lideuram lund Zero Coupon 20!2 (d) Luxembourg 4 lideuram Vila !00.00
90 lideuram lund Zero Coupon 20!3 (d) Luxembourg 4 lideuram Vila !00.00
9! lideuram lund Zero Coupon 20!4 (d) Luxembourg 4 lideuram Vila !00.00
92 lideuram lund Zero Coupon 20!5 (d) Luxembourg 4 lideuram Vila !00.00
93 lideuram lund Zero Coupon 20!6 (d) Luxembourg 4 lideuram Vila !00.00
94 lideuram lund Zero Coupon 20!7 (d) Luxembourg 4 lideuram Vila !00.00
95 lideuram lund Zero Coupon 20!8 (d) Luxembourg 4 lideuram Vila !00.00
96 lideuram lund Zero Coupon 20!9 (d) Luxembourg 4 lideuram Vila !00.00
97 lideuram lund Zero Coupon 2020 (d) Luxembourg 4 lideuram Vila !00.00
98 lideuram lund Zero Coupon 202! (d) Luxembourg 4 lideuram Vila !00.00
99 lideuram lund Zero Coupon 2022 (d) Luxembourg 4 lideuram Vila !00.00
!00 lideuram lund Zero Coupon 2023 (d) Luxembourg 4 lideuram Vila !00.00
!0! lideuram lund Zero Coupon 2024 (d) Luxembourg 4 lideuram Vila !00.00
!02 lideuram lund Zero Coupon 2025 (d) Luxembourg 4 lideuram Vila !00.00
!03 lideuram lund Zero Coupon 2026 (d) Luxembourg 4 lideuram Vila !00.00
!04 lideuram lund Zero Coupon 2027 (d) Luxembourg 4 lideuram Vila !00.00
!05 lideuram lund Zero Coupon 2028 (d) Luxembourg 4 lideuram Vila !00.00
!06 lideuram lund Zero Coupon 2029 (d) Luxembourg 4 lideuram Vila !00.00
!07 lideuram lund Zero Coupon 2030 (d) Luxembourg 4 lideuram Vila !00.00
!08 lideuram lund Zero Coupon 203! (d) Luxembourg 4 lideuram Vila !00.00
!09 lideuram lund Zero Coupon 2032 (d) Luxembourg 4 lideuram Vila !00.00
!!0 lideuram lund Zero Coupon 2033 (d) Luxembourg 4 lideuram Vila !00.00
!!! lideuram lund Zero Coupon 2034 (d) Luxembourg 4 lideuram Vila !00.00
!!2 lideuram lund Zero Coupon 2035 (d) Luxembourg 4 lideuram Vila !00.00
!!3 lideuram lund Zero Coupon 2036 (d) Luxembourg 4 lideuram Vila !00.00
!!4 lideuram lund Zero Coupon 2037 (d) Luxembourg 4 lideuram Vila !00.00
!!5 lideuram lund Zero Coupon 2038 (d) Luxembourg 4 lideuram Vila !00.00
!!6 lideuram lund Zero Coupon 2039 (d) Luxembourg 4 lideuram Vila !00.00
!!7 lideuram lund Zero Coupon 2040 (d) Luxembourg 4 lideuram Vila !00.00
!!8 lideuram lund Zero Coupon 204! (d) Luxembourg 4 lideuram Vila 97.49
!!9 lideuram Ceslions S.A. Luxembourg ! 8anca lideuram 99.94
Capilal Luro !0.000.000 lideuram Vila 0.06
!00.00
RegisIered
o!!ice
Type o!
reIaIion-
ship (a)
InvesImenI VoIes
avaiIabIe
% (b)

50



ExpIanaIory noIes - Accounling policies

51
Name
direcI
ovnership
%
heId
!20 lideuram lnveslimenli S.C.R. S.p.A. Milano ! 8anca lideuram 99.50
Capilal Luro 25.850.000
!2! lideuram Vila S.p.A. Roma ! lnlesa Sanpaolo 80.0!
Capilal Luro 356.946.836 8anca lideuram !9.99
!00.00
!22 linanciere lideuram S.A. Paris ! 8anca lideuram !00.00
Capilal Luro 346.76!.600
!23 linanziaria 8.T.8. S.p.A. Trenlo ! lnlesa Sanpaolo 99.29
Capilal Luro 56.832.92!,60
!24 linor Leasing d.o.o. Koper ! 8anka Koper !00.00
Capilal Luro 2.044.700
!25 londo Caravaggio Sicav (d) Luxembourg 4 lnlesa Sanpaolo Lile !00.00
!26 londo 8ond Lur Long Term (d) Luxembourg 4 lnlesa Sanpaolo Lile 30.89
Cenlrovila Assicurazioni 2.02
Sud Polo Vila 8.94
lnlesa Sanpaolo Vila !4.28
LurizonVila !.5!
57.64
!27 londo 8ond Lur Medium Term (d) Luxembourg 4 lnlesa Sanpaolo Lile 28.95
Cenlrovila Assicurazioni 2.0!
Sud Polo Vila 8.37
lnlesa Sanpaolo Vila !3.90
LurizonVila 27.62
80.85
!28 londo 8ond Lur Shorl Term (d) Luxembourg 4 lnlesa Sanpaolo Lile 32.90
Cenlrovila Assicurazioni !.74
Sud Polo Vila 9.90
lnlesa Sanpaolo Vila !8.68
LurizonVila 2.65
65.87
!29 londo 8ond C8P (d) Luxembourg 4 lnlesa Sanpaolo Lile 3!.84
Cenlrovila Assicurazioni !6.50
lnlesa Sanpaolo Vila !7.76
Sud Polo Vila !!.80
LurizonVila 2.65
80.55
!30 londo 8ond JPY (d) Luxembourg 4 lnlesa Sanpaolo Lile 39.6!
Cenlrovila Assicurazioni 4.4!
Sud Polo Vila !4.28
lnlesa Sanpaolo Vila 2!.57
LurizonVila 0.55
80.42
!3! londo 8ond USD (d) Luxembourg 4 lnlesa Sanpaolo Lile 36.!3
Cenlrovila Assicurazioni 3.77
Sud Polo Vila !2.37
lnlesa Sanpaolo Vila !9.90
LurizonVila 0.45
72.62
!32 londo llexible Slralegy (d) Luxembourg 4 LurizonVila 53.36
lideuram Vila 32.48
85.84
!33 londo Tolal Relurn Alpha Slralegy (d) Luxembourg 4 LurizonVila 80.42
!34 layez Sicav Luxembourg 4 lnlesa Sanpaolo Lile !00.00
!35 lMl Capilal Markels USA Corp. New York ! lMl lnveslmenls !00.00
Capilal USD 5.000
!36 lMl linance Luxembourg S.A. Luxembourg ! lMl lnveslmenls !00.00
Capilal Luro !00.000
!37 lMl londi Chiusi S.C.R. S.p.A. 8ologna ! lMl lnveslimenli !00.00
Capilal Luro 2.000.000
!38 lMl lnveslimenli S.p.A. 8ologna ! lnlesa Sanpaolo !00.00
Capilal Luro 579.!84.200
!39 lMl lnveslmenls S.A. Luxembourg ! 8anca lMl !00.00
Capilal Luro 2!.660.000
!40 lmmobiliare Nuova Sede S.r.l. lirenze ! Cassa di Risparmio di lirenze !00.00
Capilal Luro 5!.480
!4! lN.lRA - lnveslire nelle lnlraslrullure S.p.A. (p) Milano ! lnlesa Sanpaolo 88.5!
Capilal Luro 95.936.245,36
RegisIered
o!!ice
Type o!
reIaIion-
ship (a)
InvesImenI VoIes
avaiIabIe
% (b)
51



ExpIanaIory noIes - Accounling policies

52
Name
direcI
ovnership
%
heId
!42 lnlogroup S.c.p.A. lirenze ! Cassa di Risparmio di lirenze 65.45
Capilal Luro 4.352.000 lnlesa Sanpaolo 3!.07
Cassa di Risparmio di Pisloia e Pescia 2.76
Cassa di Risparmio di Civilavecchia 0.69
lnlesa Sanpaolo Croup Services 0.0!
minorily inleresls 0.02
!00.00
!43 lnizialive Logisliche S.r.l. Milano ! lN.lRA - lnveslire nelle lnlraslrullure 54.49
Capilal Luro 55.595.2!!,34
!44 lnlesa lunding LLC Wilminglon ! lnlesa Sanpaolo !00.00
Capilal USD 25.000
!45 lnlesa Clobal linance Company Lld Dublin ! lnlesa Sanpaolo lolding lnlernalional !00.00
Capilal Luro !00.000
!46 lnlesa lnveslimenli S.p.A. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro !.000.000.000
!47 lnlesa Lease Sec S.r.l. Milano ! lnlesa Sanpaolo 60.00
Capilal Luro 60.000
!48 lnlesa Leasing d.o.o. 8eograd 8eograd ! 8anca lnlesa 8eograd 98.70
Capilal RSD 960.374.30! Cl8 Leasing !.30
!00.00
!49 lnlesa Real Lslale S.r.l. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro 4.625.000
!50 lnlesa Sanpaolo 8ank Albania Sh.A. (l) Tirana ! lnlesa Sanpaolo !00.00
Capilal ALL 5.562.5!7.674
!5! lnlesa Sanpaolo 8ank lreland Plc Dublin ! lnlesa Sanpaolo !00.00
Capilal Luro 400.500.000
!52 lnlesa Sanpaolo 8anka d.d. 8osna l lercegovina Sarajevo ! lnlesa Sanpaolo lolding lnlernalional 94.92
Capilal 8AM 44.782.000
!53
lnlesa Sanpaolo Card 8l D.O.O.
(lormerly Cenlurion linancial Services Lld) Sarajevo ! lnlesa Sanpaolo Card Zagreb !00.00
Capilal 8AM !.049.!26,50
!54
lnlesa Sanpaolo Card d.o.o. - Ljubljana
(lormerly Cenlurion linancne Slorilve) Ljubljana ! lnlesa Sanpaolo Card Zagreb !00.00
Capilal Luro 5.6!8.76!
!55 lnlesa Sanpaolo Card d.o.o. - Zagreb Zagreb ! 8anka Koper !5.34
Capilal lRK 30.863.400 Privredna 8anka Zagreb 33.34
lnlesa Sanpaolo lolding lnlernalional 5!.32
!00.00
!56 lnlesa Sanpaolo Croup Services S.c.p.A. Torino ! lnlesa Sanpaolo 99.87
Capilal Luro 272.057.000 8anca lideuram 0.0!
Cassa di Risparmio del Venelo 0.0!
Cassa di Risparmio di lirenze 0.0!
8anco di Napoli 0.0!
8anca lmi 0.0!
minorily inleresls 0.08
!00.00
!57 lnlesa Sanpaolo lolding lnlernalional S.A. Luxembourg ! lnlesa Sanpaolo !00.00
Capilal Luro 6.9!!.4!2.7!2
!58 lnlesa Sanpaolo lmmobiliere S.A. Luxembourg ! lnlesa Sanpaolo lolding lnlernalional !00.00
Capilal Luro 250.000
!59
lnlesa Sanpaolo Previdenza - Sociela di lnlermediazione Mobiliare
S.p.A.(lormerly lnlesa Previdenza SlM S.p.A.) Milano ! lnlesa Sanpaolo 78.53
Capilal Luro !5.300.000
!60 lnlesa Sanpaolo Privale 8ank (Suisse) S.A. Lugano ! Sociele Luropeenne de 8anque !00.00
Capilal Cll 20.000.000
!6!
lnlesa Sanpaolo Privale 8anking S.p.A.
Milano ! lnlesa Sanpaolo !00.00
Capilal Luro !05.3!3.200
!62 lnlesa Sanpaolo Real Lslale S.A. Luxembourg ! lnlesa Sanpaolo lolding lnlernalional !00.00
Capilal Luro 2.940.476
!63 lnlesa Sanpaolo Romania S.A. Commercial 8ank Arad ! lnlesa Sanpaolo 99.6!
Capilal Ron 49!.!!!.!!0 lnlesa Sanpaolo lolding lnlernalional 0.39
!00.00
!64 lnlesa Sanpaolo Trusl Company liduciaria S.p.A. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro !.032.000
!65 lnlesa Sec. 2 S.r.l. Milano ! lnlesa Sanpaolo 60.00
Capilal Luro !5.000
!66 lnlesa Sec. 3 S.r.l. Milano ! lnlesa Sanpaolo 60.00
Capilal Luro 70.000
Type o!
reIaIion-
ship (a)
InvesImenI VoIes
avaiIabIe
% (b)
RegisIered
o!!ice
52



ExpIanaIory noIes - Accounling policies

53
Name
direcI
ovnership
%
heId
!67 lnlesa Sec. Npl S.p.A. Milano ! lnlesa Sanpaolo 60.00
Capilal Luro !29.000
!68 lnlesa Sec. S.p.A. Milano ! lnlesa Sanpaolo 60.00
Capilal Luro !00.000
!69 lnlesa Sanpaolo Vila S.p.A. (lormerly lnlesa Vila S.p.A.) Milano ! lnlesa Sanpaolo !00.00
Capilal Luro 394.226.300
!70 lnlesa8ci Prelerred Capilal Company LLC lll Delaware (m) Wilminglon ! lnlesa Sanpaolo !00.00
Capilal Luro !!.000.000
!7! lnlesa8ci Prelerred Securilies lnveslor Trusl Newark ! lnlesa8ci Prelerred Capilal Company lll !00.00
Capilal Luro !.000
!72 lnversiones Mobiliarias S.A.- lMSA Lima ! lnlesa Sanpaolo 99.40
Capilal PLN 7.94!.!!2,83
!73 lSP C8 lpolecario S.r.l. Milano ! lnlesa Sanpaolo 60.00
Capilal Luro !20.000
!74 lSP C8 Pubbico S.r.l. Milano ! lnlesa Sanpaolo 60.00
Capilal Luro !20.000
!75
lnlesa Leasing (Closed Joinl-Slock Company
(lormerly KM8 - Leasing CJSC) Moscow ! 8anca lnlesa (Closed Joinl-Slock Company) !00.00
Capilal RU8 3.000.000
!76 Leasinl S.p.A. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro !72.043.500
!77 Levanna Sicav (d) Luxembourg 4 lnlesa Sanpaolo Lile !00.00
!78 Lima Sudameris lolding S.A. in liquidazione Lima ! lnlesa Sanpaolo 52.87
Capilal PLN !72.384.709,03 lMSA 47.!3
!00.00
!79 Lunar lunding V Plc (k) Dublin 4 8anca lnlraslrullure lnnovazione e Sviluppo -
!80 Lux Cesl Assel Managemenl S.A. Luxembourg ! Sociele Luropeenne de 8anque !00.00
Capilal Luro 200.000
!8! Medimurska 8anka d.d. akovec ! Privredna 8anka Zagreb !00.00
Capilal lRK !27.900.000
!82 Mediocredilo llaliano S.p.A. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro 572.043.495
!83 Mediolacloring S.p.A. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro 220.000.000
!84 Monela S.p.A. 8ologna ! lnlesa Sanpaolo !00.00
Capilal Luro !09.830.000
!85 Neos linance S.p.A. 8ologna ! lnlesa Sanpaolo !00.00
Capilal Luro !42.5!8.306
!86 P8Z Card d.o.o. Zagreb ! Privredna 8anka Zagreb !00.00
Capilal lRK 43.422.200
!87 P8Z lnvesl d.o.o. Zagreb ! Privredna 8anka Zagreb !00.00
Capilal lRK 5.000.000
!88 P8Z Leasing d.o.o. za poslove leasinga Zagreb ! Privredna 8anka Zagreb !00.00
Capilal lRK !5.000.000
!89 P8Z Nekrelnine d.o.o. Zagreb ! Privredna 8anka Zagreb !00.00
Capilal lRK 3.000.000
!90 P8Z Slambena Sledionica d.d. Zagreb ! Privredna 8anka Zagreb !00.00
Capilal lRK !!5.000.000
!9! Pravex 8ank Public Joinl-Slock Company Commercial 8ank Kiev ! lnlesa Sanpaolo !00.00
Capilal UAl 937.280.000
!92 Privale Lquily lnlernalional S.A. Luxembourg ! lnlesa Sanpaolo 90.90
Capilal Luro 25!.!25.360 lMl lnveslimenli 9.!0
!00.00
!93 Privredna 8anka Zagreb d.d. Zagreb ! lnlesa Sanpaolo lolding lnlernalional 76.59
Capilal lRK !.907.476.900
!94 RL Consull lnlraslrullure S.p.A. Milano ! lnizialive Logisliche 38.00
Capilal Luro !0!.!50.000 Compagnia llaliana linanziaria - Cll 62.00
!00.00
!95 Recovery a.s. 8ralislava ! Vseobecna Uverova 8anka !00.00
Capilal Luro 33.200
!96 Recovery Real Lslale Managemenl Lld 8udapesl ! Cib 8ank !00.00
Capilal lUl 4.000.000
!97 Romulus lunding Corporalion (k) Delaware 4 lnlesa Sanpaolo -
!98 Sanpaolo lnlernalional lormulas lund (d) Luxembourg 4 lnlesa Sanpaolo Lile !00.00
RegisIered
o!!ice
Type o!
reIaIion-
ship (a)
InvesImenI VoIes
avaiIabIe
% (b)
53



ExpIanaIory noIes - Accounling policies

54
Name
direcI
ovnership
%
heId
!99 Sanpaolo lnvesl lreland Lld Dublin ! 8anca lideuram !00.00
Capilal Luro 500.000
200 Sanpaolo lnvesl SlM S.p.A. Roma ! 8anca lideuram !00.00
Capilal Luro !5.264.760
20! Servilia S.A. Luxembourg ! lnlesa Sanpaolo lolding lnlernalional !00.00
Capilal Luro !.500.000
202 Seleli S.p.A. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro 8.450.000
203 Sociela llaliana di Revisione e liduciaria S.l.RL.l. S.p.A. Milano ! lnlesa Sanpaolo !00.00
Capilal Luro 2.600.000
204 Sociele Luropeenne de 8anque S.A. Luxembourg ! lnlesa Sanpaolo lolding lnlernalional !00.00
Capilal Luro 45.000.000
205 SP Lux Sicav ll (d) Luxembourg 4 lnlesa Sanpaolo Lile 93.!4
206 Splil 2 S.r.l. (n) Conegliano 4 Leasinl -
207 Sud Polo Vila S.p.A. Torino ! lnlesa Sanpaolo 98.79
Capilal Luro 84.464.!22,20 LurizonVila !.!9
99.98
208 Sudameris S.A. Paris ! lnlesa Sanpaolo lolding lnlernalional 99.87
Capilal Luro 49.67!.600
209 Tiepolo Sicav (d) Luxembourg 4 lnlesa Sanpaolo Lile !00.00
2!0 Vseobecna Uverova 8anka a.s. 8ralislava ! lnlesa Sanpaolo lolding lnlernalional 96.76
Capilal Luro 430.8!9.063,8!
2!! VU8 Assel Managemenl Sprav. Spol a.s. 8ralislava ! Vseobecna Uverova 8anka !00.00
Capilal Luro !.660.000
2!2 VU8 lacloring a.s. 8ralislava ! Vseobecna Uverova 8anka !00.00
Capilal Luro 2.232.334
2!3 VU8 Leasing a.s. 8ralislava ! Vseobecna Uverova 8anka !00.00
Capilal Luro !6.600.000
2!4 VU8 Poislovaci Makler s.r.o. 8ralislava ! VU8 Leasing !00.00
Capilal Luro !6.597
(a) Type ol relalionship.
! - majorily ol voling righls al Ordinary Shareholders' Meeling,
2 - dominanl inlluence al Ordinary Shareholders' Meeling,
3 - agreemenls wilh olher Shareholders,
4 - olher lorms ol conlrol,
5 - unilary managemenl as delined in Arl. 26.! ol "Legislalive Decree 87/92",
6 - unilary managemenl as delined in Arl. 26.2 ol "Legislalive Decree 87/92",
7 - joinl conlrol.
(b)
(c)
(d)
(e)
(l)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
RegisIered
o!!ice
SDS - Sociela a Deslinazione Specilica (special purpose enlily) lor lhe securilisalion ol leasing loans (pursuanl lo Law !30 ol 30 April !999) (SlC !2), lhe group does nol hold
any equily slake in lhe share capilal.
Please nole lhal lhere is a pul oplion sold/call oplion purchased lrom minorily shareholders on !3.25' ol share capilal.
Please nole lhal lhere is a pul oplion sold/call oplion purchased lrom minorily shareholders on !!.49' ol share capilal.
Minorily shareholders are subjecl lo a legal commilmenl lo purchase lhe remaining 2.52' ol share capilal.
Please nole lhal lhere is a pul oplion sold lrom minorily shareholders on !0.29' ol share capilal.
Please nole lhal lhere is a pul oplion sold/call oplion purchased lrom minorily shareholders on 32.90' ol ordinary shares.
Company lor which lhe Croup holds lhe majorily ol risks and benelils (SlC !2), lhe group does nol hold any equily slake in lhe share capilal.
ln relalion lo lhe equily inveslmenl in lnlesa Sanpaolo 8ank Albania Sl.A., lhere is a share, equal lo !.39', ol lormer 8anca llalo Albanese (merged inlo lnlesa Sanpaolo
8ank Albania) sold lo Sociela llaliana per le lmprese all'Lslero (Simesl) in July 2006.
Type o!
reIaIion-
ship (a)
Considering lhe "prelerred shares" issued lor a lolal ol 500,000,000 euro, lhe equily slake equals 2.!5'.
Available voling righls al Ordinary Shareholders' Meeling. Voling righls are presenled only il olher lhan lhe equily slake held in lhe company's capilal.
Company lor which lhe Croup holds lhe majorily ol risks and benelils (SlC !2).
Colleclive inveslmenl enlily in which lhe Croup holds lhe majorily ol risks and benelils (SlC !2).
Please nole lhal lhere is a pul oplion sold/call oplion purchased lrom minorily shareholders on 8.72' ol share capilal.
Please nole lhal lhere is a pul oplion sold/call oplion purchased lrom minorily shareholders on 7' ol share capilal.
ln March 2009, 9.75' ol lhe share capilal ol 8ank ol Alexandria (8OA) was sold lo lnlernalional linance Corporalion (llC) wilh lhe concurrenl signing by lhe parlies ol a
Pul&Call Agreemenl covering lhe porlion sold by lnlesa Sanpaolo. ll should be noled lhal, based on lhe conlraclual clauses underlying lhe lransaclion and lailing lo meel
llRS recognilion crileria, lhe percenlage ol equily inveslmenl includes lhe porlion sold, while voling righls were lranslerred lo lhe buyer.
InvesImenI VoIes
avaiIabIe
% (b)

54



ExpIanaIory noIes - Accounling policies

55
Main risks and uncerIainIies
The currenl macroeconomic environmenl and high volalilily ol lhe linancial markels makes credil risk assessmenl, valualion ol
linancial inslrumenls and lhe measuremenl ol recoverable amounl ol olher assels more complex, and require an analysis ol lhe
impacl ol such assessmenls on lhe solidily ol lhe Company and on lhe going concern ol ils business operalions as a whole.
Measuremenl crileria are described in delail in lhe 20!0 linancial slalemenls and have remained unchanged and hereinaller are
oullined lhe processes which led lo delerminalion ol lhe book value ol balance sheel assels as al 30 June 20!!. Nole lhal no
uncerlainlies have been delecled eilher in lhe linancial slruclure or in lhe perlormance ol operalions such as lo doubl on lhe
going concern assumplion.

Loan classilicalion and measuremenl have been perlormed lollowing lhe usual crileria ol prudence, aimed al promplly and
correclly idenlilying lhe impacls ol lhe negalive lrend ol lhe currenl economic condilions. As lhe crisis deepened al an alarmingly
rapidily, il became necessary lo conslanlly review bolh lhe loans showing signs ol dislress and lhose slill lree lrom evidence ol
impairmenl. All calegories ol non-perlorming loans were assessed using lhe usual crileria ol prudence, as poinled oul by lhe
subslanlial average provisioning percenlages lor doubllul loans (over 64') and subslandard loans (over 20'). Perlorming loans
as a whole are covered by provisioning ol over 2.4 billion euro.

As a rule, linancial inslrumenls have been recognised al lheir lair value, represenled, lor inslrumenls quoled on aclive markels, by
lhe price ol lhe lasl day ol lhe period, as required by inlernalional accounling slandards (elleclive markel quoles).
On lhe olher hand, linancial inslrumenls nol quoled on an aclive markel have been valued on lhe basis ol prices or credil spreads
derived lrom ollicial quolalions ol inslrumenls having similar risk proliles, i.e. using lhe comparable approach. This approach
requires lhe idenlilicalion ol lransaclions and/or quolalions on aclive markels perlaining lo inslrumenls lhal have a risk prolile
comparable lo lhal ol lhe inslrumenl lo be measured. The pricing melhods used in lhe comparable approach reproduce prices ol
linancial inslrumenls quoled on aclive markels wilhoul including discrelionary paramelers lhal mighl signilicanlly inlluence lhe
linal valualion (i.e. paramelers whose value cannol be derived lrom lhe prices ol linancial inslrumenls quoled on aclive markels,
or be lixed al levels reproducing prices on aclive markels).
Laslly, only lor linancial inslrumenls nol quoled on an aclive markel and which could nol be valued lhrough lhe comparable
approach, valualion was based on various inpuls, nol all direclly derived lrom observable markel paramelers, hence requiring
eslimales and assumplions on lhe parl ol lhe valualor (mark-lo-model approach).
ln parlicular, wilh lhis approach, lhe linancial inslrumenl was measured by means ol a pricing model based on specilic
assumplions as lo. (i) lhe developmenl ol lulure cash llows, which may be allecled by lulure evenls lo which are assigned
probabililies on lhe basis ol pasl experience or assumed behaviour, (ii) lhe level ol specilic inpul paramelers nol quoled on aclive
markels, bul based as much as possible on inlormalion relaling lo prices and spreads observed in lhe markel. Where such
inlormalion was nol available, pasl dala on lhe specilic risk ol lhe underlying assel or specialised reporls were used (e.g. reporls
prepared by Raling agencies or leading markel players).
Considering lhis background, valualion melhodologies have been conslanlly relined and updaled, improving lhe models used lor
level 3 valualion lechniques lor slruclured credil producls, and carelully delining specilic processes lor managing "model risk"
leading lo adjuslmenls lo valualions, especially in case ol non observable or highly illiquid markel paramelers.
ln lhe linancial slalemenls as al 30 June 20!!, lhe lair value measuremenl ol linancial assels was carried oul lor 66' using lhe
elleclive markel quoles melhod (level !), lor 32' using lhe comparable approach (level 2) and only lor 2' using lhe mark-lo-
model approach (level 3). Among lhe linancial liabililies designaled al lair value lhrough prolil and loss, mosl ol lhe linancial
inslrumenls (85') were measured using lhe comparable approach (level 2).
lor lurlher inlormalion on credil risk and linancial risk, see lhe chapler ol lhe Noles on risk managemenl. The same chapler also
provides delailed inlormalion on lhe lair value measuremenl melhods applied lo linancial inslrumenls and lhe various
measuremenl levels, slruclured credil producls, aclivilies perlormed lhrough Special Purpose Lnlilies (SPL), leveraged linance
lransaclions, hedge lund inveslmenls and derivalives lransaclions wilh cuslomers.

Lquily inveslmenls, securilies available lor sale, inlangible assels and goodwill were lesled lor impairmenl losses when preparing
lhe hall-yearly reporl lhrough analyses aimed al delecling lhe presence ol impairmenl indicalors and lhe calculalion ol
any wrile-downs.
ln lurlher delail, equily inveslmenls and securilies available lor sale were lesled lor impairmenl in order lo assess whelher lhere is
objeclive evidence lo consider lhal lhe carrying value ol such assels may nol be lully recoverable by adopling lhe same melhods
and crileria illuslraled in lhe Annual reporl 20!0, lo which relerence should be made. Such lesls resulled in lhe need lo recognise
a lolal ol 2!3 million euro in adjuslmenls, ol which !27 million euro associaled wilh lhe Telco inveslmenl. lollowing Telecom's
new 20!!-20!3 8usiness Plan and lhe persislenl downward lrend in lhe company's domeslic segmenl, when preparing lhe
inlerim reporl as al 30 April 20!! Telco shareholders considered il appropriale lo assess lhe recoverable value ol lhe inveslmenl
wilh lhe supporl ol an exlernal advisor. A range ol values lor lhe Telecom share emerged lrom lhe new appraisal, resulling lrom
lhe discounling ol expecled cash llows, ol belween !.60 euro and 2.03 euro. Telco adopled an inlermediale value lrom lhis
range, i.e. !.80 euro, as ils valualion. lnlesa Sanpaolo considered lhis valualion as adequale and lherelore recognised in lhe
linancial slalemenls as al 30 June 20!! lhe loss recorded by Telco resulling lrom lhe wrile-down ol lhe inveslmenl in Telecom
(Telco is consolidaled wilh lhe equily melhod).
Wilh specilic relerence lo lhe public debl crisis now allecling lhe linancial markels, lhe lnlesa Sanpaolo Croup has limiled
exposures lo lhe Luropean counlries (Creece, lreland and Porlugal) lor which lhe Luropean Union and lhe lnlernalional Monelary
lund have implemenled linancial supporl plans. lor lurlher inlormalion, see lhe disclosures provided under lhe commenls on
linancial assels.

lnlangible assels wilh linile uselul lives, consisling ol lhe assel-managemenl and insurance porllolios and core deposils, lhe
amounls ol which (a lolal ol 3,464 million euro as al 30 June 20!!) have also been gradually amorlised, were analysed in order lo
verily whelher lhere were impairmenl indicalors. These analyses did nol idenlily any crilical laclors compared lo lhe silualion and
eslimale ol recoverable amounl prepared lor lhe Annual Reporl 20!0. Accordingly, lhere was no need lo recognise adjuslmenls
lo inlangible assels. ln addilion, il should be noled lhal lhe recoverable amounl delermined al lhe end ol 20!0 signilicanlly
exceeded lhe carrying amounl and lhal lhe carrying amounl has in lhe meanlime decreased by 334 million euro due lo
amorlisalion ol lhe period and lhe sale ol CR Spezia and several branches compleled during lhe period.
55



ExpIanaIory noIes - Accounling policies

56
lnlangible assels wilh indelinile uselul lives, represenled by lhe brand name (2,384 million euro as al 30 June 20!!) and goodwill
(!8,89! million euro as al 30 June 20!!), were analysed in order lo verily whelher lhere were indicalors lhal lhey had become
impaired and lhus whelher lhe recoverable amounls ol lhe CCUs needed lo be re-delermined. The melhodological crileria lor
lhese analyses were lhe same as lhose used lor lhe 20!0 linancial slalemenls, lo which relerence should be made lor lurlher
delails. ln parlicular.
wilh relerence lo cash llows, projeclions are slill in line wilh lhose idenlilied in lhe 20!!-20!3/20!5 8usiness Plan disclosed
lo lhe markels on 6 April lhis year,
analysis ol lhe cash llow growlh rales beyond lhe lorecasling period, lor lhe purposes ol delermining lhe so-called lerminal
value, indicaled a slighl increase in lhe "g" rale as a resull ol lhe change in inllalion rale lorecasls lor lhe nexl years,
cash-llow discounling rales have been updaled on lhe basis ol lhe new inlormalion available. The new ligures show.
o an increase in lhe "counlry risk" componenl relerred lo llaly, due lo widening ol lhe !0-year 8TP-8und spread,
o an increase in lhe risk-lree rale lor cerlain loreign counlries as a resull ol lhe higher relurn on lhe 30-year 8und,
o slighl changes, some upwards some downwards, in lhe "bela" laclor.
Compared lo lhe rales used in lhe 20!0 impairmenl lesling, a slighl increase emerged lor all CCUs.
The loregoing analyses did nol yield any crilical laclors lhal would have had a malerial impacl on lhe recoverable amounls ol lhe
various CCUs as delermined lor impairmenl lesling in lhe Annual Reporl 20!0. Moreover, in lhal occasion, in-deplh sensilivily
analyses ol bolh discounl rales and growlh rales lor lerminal value and projecled cash llows were also conducled. These analyses,
lo which relerence should be made, indicaled lhal lhere were margins lor lhe adequacy ol carrying amounls even in lhe evenl ol
lhe use ol rales higher lhan lhose employed and ol cash llows based on even more caulious macroeconomic scenarios.
Wilh parlicular relerence lo discounl rales, in July 20!! a considerable increase was observed in lhe 8TP-8und spread. ln lhis
respecl, lhe sensilivily analysis perlormed during impairmenl lesling lor lhe 20!0 linancial slalemenls showed lhal applicalion ol
discounl rales !00 bps higher lhan lhose used lor lhe 20!0 linancial slalemenls would in any evenl have led lo values in use
higher lhan lhe carrying values.
The resulls ol lhe loregoing analyses lhus conlirm lhe carrying amounls. Moreover il may be remarked lhal markel values, i.e. lhe
markel capilalisalion, remain lower lhan lhe book value.
As already remarked in lhe Annual Reporl 20!0, lhis markel valualion has dillerenl characlerislics lrom a "basic" assessmenl
consisling ol lhe value in use.
The price ol lnlesa Sanpaolo's slock conlinues lo be allecled by capilal markel condilions lhal generally remain depressed and
highly volalile. ln lurlher delail, like lhe resl ol lhe banking induslry, il is penalised by lhe sovereign debl crisis and concerns
regarding lhe solidily and liquidily ol lhe linancial syslem generally, in addilion lo uncerlainlies concerning lhe impacls ol lhe
prospecled new capilal requiremenls. Conversely, lhe value in use is based on lhe logic lhal lhe value ol an assel is a direcl
expression ol lhe cash llows il is able lo generale lhroughoul lhe period ol ils use. This value is, lhus, also based on lhe inlernal
expeclalions ol lhe company and on lhe specilic synergies lhe company is able lo achieve, as opposed lo markel valualions,
which are inslead based on lhe shorl-lerm expeclalions ol inveslors and only consider lhe so-called universal synergies.
As usual, lhe impairmenl lesling perlormed lor lhe 20!! linancial slalemenls will need lo lake inlo consideralion lhe
macroeconomic environmenl and lhe posilion ol lhe linancial markels consolidaled over lhe nexl monlhs.


OIher in!ormaIion


5ubsidiaries incorporaIed and subjecI Io Ihe Iavs o! non-EU member sIaIes

Consob, in accordance wilh Law 262/2005 governing lhe proleclion ol savings and lhe regulalion ol linancial markels, has sel
cerlain condilions lor lhe lisling ol companies lhal conlrol companies incorporaled and subjecl lo lhe laws ol non-LU member
slales (arl. 36 Markel Regulalion). Pursuanl lo Arl. 2.6.2, paragraph !2 ol lhe Regulalion ol Markels managed and organised by
8orsa llaliana S.p.A., 8orsa llaliana has also required lhal al lhe lime ol approval ol lhe Parenl Company's linancial slalemenls,
lhe Managemenl 8oard ol a company conlrolling non-LU companies declares in ils Reporl on operalions whelher or nol lhe
condilions sel oul in Arl. 36, lellers a), b) and c) ol lhe Markel Regulalion are mel. lnlesa Sanpaolo's declaralion lo lhis ellecl can
be lound in lhe Annual Reporl 20!0.
ln lhis respecl, no acquisilions were compleled in lhe lirsl hall ol 20!! concerning companies eslablished and regislered under
lhe laws ol non-LU counlries which, considered independenlly, are ol malerial signilicance lo lhe regulalions in queslion.

CriIeria !or Ihe preparaIion o! segmenI reporIing

The lnlesa Sanpaolo Croup's segmenl reporling is based on lhe elemenls lhal lhe managemenl uses lo make ils own operaling
decisions (lhe "managemenl approach") and is lherelore consislenl wilh lhe disclosure requiremenls ol llRS 8.
The lnlesa Sanpaolo Croup's organisalional model is slruclured inlo six business areas, each wilh specilic operaling
responsibililies. 8anca dei Terrilori, Corporale and lnveslmenl 8anking, Public linance, lnlernalional Subsidiary 8anks,
Lurizon Capilal and 8anca lideuram. ln addilion lo lhese operaling areas lhere are lwo supporl slruclures. Croup Treasury and
lhe lead ollice deparlmenls concenlraled in lhe Corporale Cenlre.
The allribulion ol economic and balance sheel resulls lo lhe various seclors is based on lhe accounling principles used in lhe
preparalion and presenlalion ol lhe Consolidaled linancial slalemenls. Use ol lhe same accounling slandards allowed segmenl
dala and consolidaled dala lo be elleclively reconciled. To represenl resulls more elleclively and give a beller underslanding ol
lhe componenls lhal generaled lhem, lhe reclassilied income slalemenl lor each reporling segmenl is presenled wilh values lhal
express lhe conlribulion made by each segmenl lo lhe Croup's resulls.
Wilh regard lo lhe measuremenl ol revenues and cosls deriving lrom inlra-segmenl lransaclions, lhe applicalion ol a conlribulion
model al mulliple lnlernal Transler Rales lor lhe various malurilies permils lhe correcl allribulion ol nel inleresl income lo lhe
Divisions ol lhe Parenl Company.
56



ExpIanaIory noIes - Accounling policies

57
Specilic agreemenls wilh Croup companies regulale lhe applicalion ol lransler pricing lor economic componenls relalive lo
lransaclions which sel oul lhe dislribulion ol resulls belween producl companies/service unils and relalionship enlilies/cuslomer
unils. Lach segmenl is charged direcl cosls and, lor lhe parl perlaining lo il, lhe operaling cosls ol cenlral slruclures olher lhan
lhose lypical ol holding slruclures. Therelore, lor services carried oul by cenlral slruclures lor operaling business unils, charges
are calculaled on lhe basis ol services aclually rendered, while lhe cosls ol guidance and conlrol aclivilies have remained allocaled
lo lhe Corporale Cenlre. 8usiness unils' prolils are shown nel ol lhe lax ellecl, calculaled by applying lhe main componenls
underlying lhe elleclive lax rale, in line wilh lhe Croup lax policy.
8usiness areas are disclosed nel ol inlragroup relalions wilhin each area and gross ol inlragroup relalions belween dillerenl
business areas.
Lach business area is also assigned lhe allocaled capilal, represenled by lhe capilal absorplion on lhe basis ol lhe Risk Weighled
Assels (RWAs) delermined in accordance wilh lhe inslruclions issued by lhe 8ank ol llaly in compliance wilh lhe 8asel 2
regulalions. lor assel managemenl, business risk was also laken inlo consideralion, and lor lhe insurance segmenl relerence was
made lo lhe capilal absorbed by insurance risk. Value crealion, expressed in lerms ol LVA, was calculaled nel ol merger and
reslrucluring-relaled charges and ol lhe economic ellecls ol purchase price allocalion pursuanl lo llRS 3.
To complele segmenl reporling, lhe main balance sheel and income slalemenl aggregales relerred lo lhe geographical areas in
which lhe Croup operales are also given. Ceographical areas are delined on lhe basis ol lhe lerrilorial breakdown ol Croup
aclivilies and lake inlo accounl lhe economic and slralegic imporlance and lhe polenlial ol lhe relerence markels. Three main
geographical areas have been idenlilied, based on lhe residence ol lhe legal enlilies making up lhe Croup. llaly, Lurope and
Resl ol lhe World.





57


Subsequenl evenls





As slaled in lhe lirsl parl ol lhis reporl, on !5 July lhe resulls were announced lor lhe 20!! LU-wide Slress Tesl conducled by
lhe Luropean 8anking Aulhorily (L8A) in cooperalion wilh lhe 8ank ol llaly, lhe Luropean Cenlral 8ank (LC8), lhe Luropean
Commission (LC) and lhe Luropean Syslemic Risk 8oard (LSR8) in which lnlesa Sanpaolo parlicipaled.
The LU-wide slress lesl, carried oul across 90 banks covering over 65' ol lhe LU banking syslem lolal assels, seeks lo assess lhe
resilience ol Luropean banks lo severe shocks and lheir specilic solvency lo hypolhelical slress evenls under cerlain
reslriclive condilions.
As a resull ol lhe assumed shock, in lhe adverse scenario lhe consolidaled Core Tier ! Ralio ol lnlesa Sanpaolo would go lrom
7.9' al end 20!0 lo 8.9' al end 20!2. This resull incorporales lhe ellecls ol lhe 5 billion euro capilal increase, compleled in
June and does nol lake inlo accounl lulure slrenglhening aclions planned by lnlesa Sanpaolo.

On 20 July 20!!, lhe lnlesa Sanpaolo Supervisory 8oard - upon proposal ol lhe Managemenl 8oard - approved lhe Croup's new
remuneralion policies. These policies adopl lhe regulalions recenlly issued by lhe 8ank ol llaly on lhis maller. These policies
include lhe New lncenlive Syslem inlended lor a parl ol lhe Managemenl slall and lhe so-called "risk lakers" ol lhe
lnlesa Sanpaolo Croup. This Syslem replaces lhe long-lerm incenlive Plan approved lasl year, in lhe lighl ol lhe relevanl changes
lhal look place in nalional and inlernalional regulalions. The previous Plan already mel, lo a large exlenl, lhe crileria provided lor
in lhe new regulalions, among which incenlives linked lo aclual medium-lerm value crealion and lhe appropriale balancing
belween lixed and variable componenls. The mosl signilicanl dillerence belween lhe proposed Syslem and lhe previous Plan
regards lhe inlroduclion ol shares - explicilly required by lhe 8ank ol llaly - as parl ol lhe variable componenl ol remuneralion.
The proposed Syslem, elleclive lrom 20!! and covering lhe lhree-year period 20!!-20!3 ol lhe 8usiness Plan, lalls under lhe
calegory ol linancial inslrumenl-based remuneralion plan pursuanl lo Arlicle !!4-bis, paragraph ! ol Legislalive Decree 58 ol 24
lebruary !998. Moreover, in accordance wilh Arlicle 84-bis ol lhe lssuers' Regulalion issued by Consob, lhe Syslem is lo be
considered as being ol "parlicular imporlance" since il addresses, inler alia, lop and senior execulives who have regular access lo
privileged inlormalion and have lhe power lo make managemenl decisions which may allecl lhe Croup's evolulion and oullook.
The lnlormalional Documenl will be made public al lhe Company's Regislered ollice and al 8orsa llaliana and published on lhe
Company's websile www.group.inlesasanpaolo.com in accordance wilh Arlicle 84-bis ol lhe lssuers' Regulalion.

ln addilion, nole lhal wilh ellecl lrom 20 July 20!! Prolessor Lugenio Pavarani has joined lhe Supervisory 8oard in subslilulion ol
Prolessor lerdinando Targelli.

Laslly, ol lhe evenls subsequenl lo lhe end ol lhe period, worlh noling is lhe agreemenl signed on 29 July wilh lhe Trade Unions
lor implemenlalion ol lhe personnel culs and re-deploymenl envisaged in lhe 8usiness Plan.
Under lhe lerms ol lhe agreemenl al leasl 2,500 employees lhal have accrued compulsory pension righls are expecled lo leave by
30 June 20!4. A lurlher 2,500 employees, who will have accrued pension righls by ! January 20!8, will be given lhe oplion lo
subscribe lo lhe "solidarily allowance", on a purely volunlary basis. Over lhe nexl lew monlhs lhe personnel allecled will be
idenlilied and all necessary requiremenls will be mel. The ellecls on lhe 20!! income slalemenl, and il necessary on subsequenl
income slalemenls, will lhen be measured.
The agreemenl also includes lhe melhods lor prolessional re-deploymenl ol 5,000 employees and lhe recruilmenl ol up lo !,000
young people, giving priorily lo lhose lhal have gained work experience wilh lhe Croup under non-permanenl conlracls.

58



59
59
Economic results





GeneraI aspecIs
As usual, a condensed reclassified income statement has been prepared to give a more immediate understanding of results for the
period. To enable consistent comparison, first quarter 2011 and 2010 income statement figures are restated, where necessary, to
account for components classified under noncurrent assets held for sale and discontinued operations and changes in the
scope of consolidation.
The restated financial statements are obtained by making appropriate adjustments to historical data to reflect the significant
effects of such changes retroactively. Any differences due to the possibility of choosing between different options provided for by
IAS/IFRS or arising from the use of different methods or parameters for measurement of assets and liabilities are not considered, as
they are deemed irrelevant. Lastly, please note that no intragroup relations are netted since their amount is not significant.
Breakdowns of restatements and reclassifications performed are provided in separate tables included in the attachments to the
halfyearly report, as also required by Consob in its Communication 6064293 of 28 July 2006.
The restatements for 2010 are represented by the inclusion of the figures for Intesa Vita and the branches acquired from
Banca Monte dei Paschi di Siena in the periods prior to acquisition, the deconsolidation of figures for Cassa di Risparmio di
La Spezia and the branches sold to Crdit Agricole and, lastly, from the disposal of Fideuram Bank Suisse. 2011 figures are
restated to exclude the contribution of branches sold to Crdit Agricole and Fideuram Bank Suisse during the half year.
Reclassifications and aggregations are as follows:
dividends on shares classified as assets available for sale and as assets held for trading have been reallocated to Profits (Losses)
on trading;
the portions of Net interest income, Dividend and similar income, Net fee and commission income and Profits (Losses) on
trading related to the insurance business have been recorded under a specific caption. The adjustment of the technical reserve
associated with the impairment of securities available for sale in the portfolio of the Groups insurance companies was also
attributed to this caption;
differentials on derivatives, classified to the trading portfolio and contracted to hedge transactions in foreign currencies, have
been allocated among net interest income owing to the close correlation;
Fair value adjustments in hedge accounting (caption 90) have been reallocated to Profits (Losses) on trading;
Profits and losses on disposal or repurchase of financial assets available for sale and of financial liabilities have been reallocated
to Profits (Losses) on trading;
Profits (losses) on financial assets and liabilities designated at fair value are reallocated to Profits (Losses) on trading;
the recoveries of expenses, taxes and duties have been subtracted from administrative expenses, instead of being included
among Other operating income;
Profits and losses on disposal or repurchase of loans are posted in Net adjustments to loans;
Net impairment losses on other financial activities (caption 130d), related to guarantees, commitments and credit derivatives,
have been recognised under Net adjustments to loans;
the reversal in time value on loans is recorded in Net interest income instead of being allocated to Net adjustments to loans,
since the phenomenon derives directly from the application of the amortised cost criterion in the absence of changes in
expected future flows. A consistent approach is used for the time value of Employee termination indemnities and Allowances
for risks and charges;
net impairment losses of property, equipment and intangible assets have been reclassified from Net adjustments to property,
equipment and intangible assets which therefore solely express depreciation and amortisation to Net impairment losses on
other assets, which also includes Net impairment losses on financial assets available for sale, investments held to maturity and
other financial activities;
impairment losses on Greek government bonds maturing by 2020 were recognised to Impairment losses on other assets,
regardless of their balance sheet classification (Financial assets available for sale, investments held to maturity or loans);
Profits (Losses) on disposal of investments in associates and companies subject to joint control and Profits (Losses) on disposal
of investments are recorded in Profits (Losses) on investments held to maturity and on other investments, after the deduction
of net income from investments carried at equity which is posted in a specific caption in Operating income;
Merger and restructuringrelated charges are reclassified, net of the tax effect, from Personnel expenses, Administrative
expenses and, to a lesser extent, from other captions of the income statement to a separate caption;
the Effects of purchase price allocation, net of the tax effect, are indicated in a specific caption. They represent adjustments
and any impairment to financial assets and liabilities and property, equipment and intangible assets which were measured at
fair value as provided for by IFRS 3.


59



ExpIanaIory NoIes Economic results
60
60
RecIassi!ied income sIaIemenI
(millions of euro)
30.06.2011 30.06.2010
amounI %
Net interest income 4,739 4,816 77 1.6
Dividends and profits (losses) on investments carried at equity 41 23 18 78.3
Net fee and commission income 2,784 2,788 4 0.1
Profits (Losses) on trading 821 215 606
Income from insurance business 285 355 70 19.7
Other operating income (expenses) 8 23 15 65.2
OperaIing income 8,678 8,220 458 5.6
Personnel expenses 2,724 2,709 15 0.6
Other administrative expenses 1,472 1,509 37 2.5
Adjustments to property, equipment and intangible assets 301 289 12 4.2
OperaIing cosIs -4,497 -4,507 -10 -0.2
OperaIing margin 4,181 3,713 468 12.6
Goodwill impairment
Net provisions for risks and charges 78 184 106 57.6
Net adjustments to loans 1,457 1,544 87 5.6
Net impairment losses on other assets 74 43 31 72.1
Profits (Losses) on investments held to maturity and on other investments 33 11 22
Income (Loss) be!ore Iax !rom conIinuing operaIions 2,605 1,953 652 33.4
Taxes on income from continuing operations 973 680 293 43.1
Merger and restructuringrelated charges (net of tax) 16 43 27 62.8
Effect of purchase price allocation (net of tax) 171 192 21 10.9
Income (Loss) after tax from discontinued operations 691 691
Minority interests 43 39 4 10.3
NeI income 1,402 1,690 -288 -17.0
Figures restated, where necessary, considering the changes in the scope of consolidation.
Changes


60



ExpIanaIory NoIes Economic results
61
61
uarIerIy deveIopmenI o! Ihe recIassi!ied income sIaIemenI
(millions of euro)
5econd
quarIer
firsI
quarIer
fourIh
quarIer
Third
quarIer
5econd
quarIer
firsI
quarIer
Net interest income 2,357 2,382 2,395 2,440 2,432 2,384
Dividends and profits (losses) on investments
carried at equity 34 7 11 5 26 3
Net fee and commission income 1,399 1,385 1,506 1,318 1,394 1,394
Profits (Losses) on trading 543 278 121 126 3 218
Income from insurance business 165 120 126 173 151 204
Other operating income (expenses) 3 11 20 4 1 22
OperaIing income 4,495 4,183 4,179 4,048 4,001 4,219
Personnel expenses 1,364 1,360 1,423 1,351 1,353 1,356
Other administrative expenses 758 714 887 744 777 732
Adjustments to property, equipment and intangible assets 152 149 169 142 147 142
OperaIing cosIs -2,274 -2,223 -2,479 -2,237 -2,277 -2,230
OperaIing margin 2,221 1,960 1,700 1,811 1,724 1,989
Goodwill impairment
Net provisions for risks and charges 65 13 144 30 98 86
Net adjustments to loans 777 680 838 706 794 750
Net impairment losses on other assets 57 17 47 5 38 5
Profits (Losses) on investments held
to maturity and on other investments 19 14 262 1 10
Income (Loss) be!ore Iax !rom
conIinuing operaIions 1,341 1,264 933 1,070 795 1,158
Taxes on income from continuing operations 478 495 295 417 320 360
Merger and restructuringrelated charges
(net of tax) 12 4 18 11 27 16
Effect of purchase price allocation (net of tax) 85 86 102 102 100 92
Income (Loss) after tax from discontinued
operations 3 663 28
Minority interests 25 18 16 30 9 30
NeI income 741 661 505 510 1,002 688
2011
Figures restated, where necessary, considering the changes in the scope of consolidation.
2010

In a scenario featuring limited developments in economic activity, accompanied by growing pressure on commodity prices and
tension regarding the finances of several European Countries, including Italy, in the first half of 2011 the Intesa Sanpaolo Group
achieved a net income of 1,402 million euro, against the 1,690 million euro recorded for the same period in the previous year.
Net income in the second quarter, however, showed sustained growth compared to that achieved in the first quarter, from
661 million euro to 741 million euro.


OperaIing income
Operating income reported by the Group in the first six months of 2011 amounted to 8,678 million euro, up by +5.6% compared
to the same period in 2010.
The trend emerging from comparison of the two reference periods is essentially determined by the profits on trading, which
almost are nearly four times the figure registered in the first half of 2010, against relatively stable fee and commission income and
a drop in net interest income and income from insurance business.
The quarterly analysis also shows an upward trend in operating income, with a 7.5% growth between the first and
second quarters.

61



ExpIanaIory NoIes Economic results
62
62
Net interest income
(millions of euro)
30.06.2011 30.06.2010
amounI %
Relations with customers 5,618 5,166 452 8.7
Securities issued 2,712 2,583 129 5.0
Differentials on hedging derivatives 752 1,231 479 38.9
CusIomer deaIing 3,658 3,814 -156 -4.1
Financial assets held for trading 310 339 29 8.6
Investments held to maturity 54 63 9 14.3
Financial assets available for sale 299 220 79 35.9
financiaI asseIs 663 622 41 6.6
ReIaIions viIh banks 26 70 -44 -62.9
Non-per!orming asseIs 433 357 76 21.3
OIher neI inIeresI income -41 -47 -6 -12.8
NeI inIeresI income 4,739 4,816 -77 -1.6
Changes
uarIerIy deveIopmenI o! neI inIeresI income
Figures restated, where necessary, considering the changes in the scope of consolidation.
2,384
2,432 2,440
2,395
1
/
1
0
2
/
1
0
3
/
1
0
4
/
1
0
2,382 2,357
1
/
1
1
2
/
1
1

The downward trend in the interest margin seen from the end of the last quarter of 2010 has continued. In the first half of 2011
net interest income stood at 4,739 million, down 1.6% compared to the same period in 2010. Interbank market rates showed
signs of recovery compared to the minimum levels recorded last year, resulting in important benefits in terms of markdown and a
narrowing of the margin on loans.
Net interest from operations with customers, which also includes interest on securities issued and differentials on hedging
derivatives, stood at 3,658 million euro, down 4.1% compared to the first six months of 2010 in relation to higher interest
expense on securities issued. The decrease in differentials on hedging derivatives concurrent with the increase in market rates, in
fact, was offset by wider margins related to customer deposits. Furthermore, the differentials on hedging remain positive,
confirming the effectiveness of derivative transactions completed by the Treasuries to contrast interest rate risk associated with
demand deposits.
Net interest on the interbank market came to 26 million euro compared to 70 million euro in the first half of 2010, despite the
fact that changes in the interbank position benefited the liquidity profile. Interest on financial assets rose by 6.6% as a result of
the increase in assets available for sale.

(millions of euro)
5econd
quarIer
firsI
quarIer
amount %
Relations with customers 2,877 2,741 136 5.0
Securities issued 1,390 1,322 68 5.1
Differentials on hedging derivatives 319 433 114 26.3
CusIomer deaIing 1,806 1,852 -46 -2.5
Financial assets held for trading 163 147 16 10.9
Investments held to maturity 26 28 2 7.1
Financial assets available for sale 161 138 23 16.7
financiaI asseIs 350 313 37 11.8
ReIaIions viIh banks 12 14 -2 -14.3
Non-per!orming asseIs 211 222 -11 -5.0
OIher neI inIeresI income -22 -19 3 15.8

NeI inIeresI income 2,357 2,382 -25 -1.0
Figures restated, where necessary, considering the changes in the scope of consolidation.
2011 Changes %

The quarterly analysis also shows a downward trend (1% compared to the first quarter). The decrease in differentials on hedging
and interests on securities is partly offset by an improved markdown following widening of the spread.
62



ExpIanaIory NoIes Economic results
63
63
(millions of euro)
30.06.2011 30.06.2010
amounI %
Banca dei Territori 2,811 2,957 146 4.9
Corporate and Investment Banking 972 963 9 0.9
Public Finance 155 142 13 9.2
International Subsidiary Banks 872 809 63 7.8
Eurizon Capital
Banca Fideuram 63 57 6 10.5
ToIaI business areas 4,873 4,928 -55 -1.1
Corporate Centre 134 112 22 19.6
InIesa 5anpaoIo Group 4,739 4,816 -77 -1.6
Figures restated, where necessary, considering the changes in the scope of consolidation and in business
unit constituents.
usiness areas
Changes
Banca dei
Territori, 57.7% Corporate and
Investment
Banking, 19.9%
Public Finance,
3.2%
International
Subsidiary
Banks, 17.9%
Eurizon Capital,
0.0%
Banca
Fideuram, 1.3%

Banca dei Territori, which accounts for 57.7% of business area results, recorded a 4.9% decrease in net interest income, mainly
due to the more limited benefits from hedging and the lower contribution from loans to customers following the increase in
market rates. These effects were however partly offset by the wider markdown on funding. Conversely, there was an increase in
net interest income for the other Business Units. In particular, Corporate and Investment Banking recorded a 0.9% increase in the
interest margin, mainly attributable to the increase in average volumes of loans, driven largely by operations of the leasing,
factoring and structured finance product companies, in addition to the positive contribution of the assets relating to Banca IMIs
HFT & AFS portfolio, which benefited from greater interests and active management in the finance and capital management
segment. Positive contributions also came from the International Subsidiary Banks (+7.8%), Public Finance (+9.2%), following the
increase in average spreads for customers and the stead rate of operations targeted to Italian and foreign customers, and
Banca Fideuram (+10.5%), which benefited from the upward trend in shortterm interest rates on the floating rate portfolio.


Dividends and profits on investments carried at equity
A total of 41 million euro in dividends and profits on investments carried at equity was recognised in the first half of 2011, mainly
attributable to inclusion of the dividend on the Bank of Italy investment and the Bank of Quindao and Penghua Fund Management
investment being carried at equity, compared to the 23 million euro recorded in the same period last year. The dividends relate to
nonconsolidated companies. Those on shares held for trading and securities available for sale were reclassified to Profits (Losses)
on trading.

Net fee and commission income
(millions of euro)
30.06.2011 30.06.2010
amounI %
Guarantees given 183 166 17 10.2
Collection and payment services 165 165
Current accounts 424 442 18 4.1
Credit and debit cards 224 218 6 2.8
CommerciaI banking acIiviIies 996 991 5 0.5
Dealing and placement of securities 221 257 36 14.0
Currency dealing 28 27 1 3.7
Portfolio management 613 595 18 3.0
Distribution of insurance products 365 372 7 1.9
Other 60 47 13 27.7
ManagemenI, deaIing and consuIIancy
acIiviIies 1,287 1,298 -11 -0.8
OIher neI !ee and commission income 501 499 2 0.4
NeI !ee and commission income 2,784 2,788 -4 -0.1
Figures restated, where necessary, considering the changes in the scope of consolidation.
uarIerIy deveIopmenI o! neI !ee
and commission income
Changes
1,394 1,394
1,318
1,506
1
/
1
0
2
/
1
0
3
/
1
0
4
/
1
0
1,385 1,399
1
/
1
1
2
/
1
1

Net fee and commission income, which makes up over one third of operating income, came to 2,784 million euro, almost
unchanged compared to the first six months of 2010.
Fees and commissions on commercial banking activities recorded a slight increase (+0.5%) for the period. The positive
performance of fee and commission income on guarantees given and on credit and debit cards is offset by a downward trend in
that on current accounts.
Overall, management, dealing and consultancy activities generated net fee and commission income of 1,287 million euro, against
1,298 million euro recorded in the first half of 2010. Collective and individual portfolio management (+18 million euro) and other
dealing and management commissions (+13 million euro) partly offset the decrease in fee and commission inflows from dealing
and placement of financial products (36 million euro).
Other net fee and commission income, whose key factors are represented by commissions on loans issued and on factoring
services, were essentially in line with the figures for the first half of 2010, reaching 501 million euro (+2 million euro).
63
Banca dei Territori 57.7%
International
Subsidiary Banks 17.9%
Public Finance 3.2%
Corporate and
Investment Banking 19.9%
Banca Fideuram 1.3%
Eurizon Capital -



ExpIanaIory NoIes Economic results
64
64
(millions of euro)
5econd
quarIer
firsI
quarIer
amount %
Guarantees given 88 95 7 7.4
Collection and payment services 89 76 13 17.1
Current accounts 214 210 4 1.9
Credit and debit cards 117 107 10 9.3
CommerciaI banking acIiviIies 508 488 20 4.1
Dealing and placement of securities 114 107 7 6.5
Currency dealing 14 14
Portfolio management 301 312 11 3.5
Distribution of insurance products 162 203 41 20.2
Other 34 26 8 30.8
ManagemenI, deaIing and consuIIancy acIiviIies 625 662 -37 -5.6
OIher neI !ee and commission income 266 235 31 13.2
NeI !ee and commission income 1,399 1,385 14 1.0
Figures restated, where necessary, considering the changes in the scope of consolidation.
Changes % 2011

In terms of quarterly trends, the second quarter of 2011 recorded a result 14 million euro higher than the first quarter, as a result
of positive growth of commission from traditional banking activities (+4.1%) and other net fee and commission income (+13.2%),
in particular those on loans granted, compared to the negative trend in commissions on management, dealing and consultancy
activities (5.6%), which were also penalised by a deterioration in financial market performance.
(millions of euro)
30.06.2011 30.06.2010
amounI %
Banca dei Territori 1,655 1,688 33 2.0
Corporate and Investment Banking 507 467 40 8.6
Public Finance 27 29 2 6.9
International Subsidiary Banks 285 279 6 2.2
Eurizon Capital 127 125 2 1.6
Banca Fideuram 280 255 25 9.8
ToIaI business areas 2,881 2,843 38 1.3
Corporate Centre 97 55 42 76.4
InIesa 5anpaoIo Group 2,784 2,788 -4 -0.1
Figures restated, where necessary, considering the changes in the scope of consolidation and in business
unit constituents.
Changes
usiness areas
Banca dei
Territori, 57.5%
Corporate and
Investment
Banking, 17.6%
Public Finance,
0.9%
International
Subsidiary
Banks, 9.9%
Eurizon Capital,
4.4%
Banca
Fideuram, 9.7%

With regard to business sectors, decreases were recorded by Banca dei Territori (33 million euro), which represents 57.5% of fee
and commission income from all business units, and to a lesser extent by Public Finance (2 million euro). Conversely, a good
performance in net fee and commission income was recorded by Corporate and Investment Banking (+40 million euro), due to
higher income from new investment banking operations and commercial banking services, and by Banca Fideuram (+25 million
euro) mainly as a result in the increase in assets under management. More limited increases in terms of absolute value were also
recorded by the International Subsidiary Banks (+6 million euro), due to the good performance of net fee and commission income
in the asset management, current accounts and payment cards segments, and by Eurizon Capital (+2 million euro) from increase
in assets under management.

64
Banca dei Territori 57.5%
International
Subsidiary Banks 9.9%
Public Finance 0.9%
Corporate and
Investment Banking 17.6%
Banca Fideuram 9.7%
Eurizon Capital 4.4%



ExpIanaIory NoIes Economic results
65
65
Profits (Losses) on trading
(millions of euro)
30.06.2011 30.06.2010
amounI %
Interest rates 219 56 275
Equity instruments 31 39 70
Currencies 84 178 94 52.8
Structured credit products 37 37
Credit derivatives 58 36 94
Commodity derivatives 2 1 3
Trading resuII 315 155 160
Trading on Af5 securiIies and !inanciaI
IiabiIiIies 506 60 446
Pro!iIs (Losses) on Irading 821 215 606
Figures restated, where necessary, considering the changes in the scope of consolidation.
uarIerIy deveIopmenI o! pro!iIs
(Iosses) on Irading
Changes
278
543
1
/
1
1
2
/
1
1
218
3
126 121
1
/
1
0
2
/
1
0
3
/
1
0
4
/
1
0

Trading activities, which represent the component whose contribution to the income statement is most exposed to market
volatility, recorded a profit of 821 million euro in the first half of 2011, compared to the 215 million euro recognised in the
corresponding period of the previous year.
This positive trend is mainly due to capital gains recorded by merchant banking activities from the sale of 4% of Prada (272 million
euro) and sale of the remaining 25% in the Findomestic investment (154 million euro). Note also the increase in profitability of
interestrate transactions (+275 million euro) involving debt securities and interestrate derivatives. A positive contribution also
came from the growth in equity instruments, including dividends collected, which recorded a balance of 31 million euro,
compared with 39 million euro losses recorded in the first half of 2010. Structured credit products held steady at 37 million euro.
The result for transactions in currencies, on the other hand, recorded a decrease from 178 million euro to 84 million euro.
It should be noted that this caption also incorporates dividends and proceeds on the trading of securities classified as available for
sale and the effects of the measurement at fair value of the component of financial liabilities issued associated with an assessment
of creditworthiness related to the fair value option. In the first half of 2011 these results increased to 506 million euro due to the
effect of the aforementioned capital gains.
(millions of euro)
5econd
quarIer
firsI
quarIer
amount %
Interest rates 26 193 167 86.5
Equity instruments 9 40 49
Currencies 59 25 34
Structured credit products 11 26 15 57.7
Credit derivatives 26 32 6 18.8
Commodity derivatives 6 8 14
Trading resuII 55 260 -205 -78.8
Trading on Af5 securiIies and !inanciaI IiabiIiIies 488 18 470
Pro!iIs (Losses) on Irading 543 278 265 95.3
2011 Changes %
Figures restated, where necessary, considering the changes in the scope of consolidation.

With regard to the quarterly performance, the result for the second quarter of 2011 was 265 million euro higher than that of the
first half as a result of contributions from the sale of Prada and Findomestic investments.

65



ExpIanaIory NoIes Economic results
66
66
lncome from insurance business
(millions of euro)
Life Nonlife ToIaI Life Nonlife ToIaI amounI %
Premiums and payments
(a)
355 61 294 392 49 343 49 14.3
ne| prem|ums ,3 3J ,663 ,77 79 ,66 12 0.2
ne| chares |or c|a|ms and surrender|n o|
po||c|es -J,001 -22 -J,02J -J,19J -J0 -J,22J -200 -6.2
ne| chares |or chanes |n |echn|ca| reserves -2,9J9 - -2,9J9 -2,776 - -2,776 16J .9
Net income from financial instruments
designated at fair value through profit and loss
(b) 24 24 248 248 224 90.3
Net income from securities (including UCI)
classified as Financial assets available for sale
and Financial assets held for trading
(c)
960 7 967 826 7 833 134 16.1
Other income/charges from insurance business
(d)
370 42 412 344 39 383 29 7.6
Income !rom insurance business 259 26 285 338 17 355 -70 -19.7
uarIerIy deveIopmenI o! income
!rom insurance business
(d)
The caption includes all other income / charges connected to products considered insurance products for IAS/IFRS purposes, including commission expense.
(a)
The caption includes collections, payments and provisions for the integration of reserves referred solely to products considered insurance products for IAS/IFRS purposes. The
corresponding items regarding products which do not present these characteristics are, instead, accounted for using the same method as for financial movements. The related economic
components are included in the caption Net income from financial instruments designated at fair value through profit and loss.
(b)
The caption includes net income from the measurement of assets and liabilities connected to products considered financial products for IAS/IFRS purposes and those deriving from the
measurement of assets accounted for applying the Fair Value Option.
(c)
The caption registers realised profits and interest / dividends collected on financial assets covering products considered insurance products for IAS/IFRS purposes and on the trading
portfolio of the insurance company.
Figures restated, where necessary, considering the changes in the scope of consolidation.
30.06.2011 30.06.2010 Changes
204
151
173
126
1
/
1
0
2
/
1
0
3
/
1
0
4
/
1
0
120
165
1
/
1
1
2
/
1
1

During the first six months of 2011, income from the insurance business, which includes the revenue captions of the Groups life
and nonlife companies, was 285 million euro, down 19.7% on the same period of the previous year as a result of negative
developments in the life segment (79 million euro). In particular, the fall in revenues was mainly due to the unfavourable trend in
financial management, which recorded during the period capital losses linked to lower rates of return on insurance products under
separate management and was affected by widening credit spreads and the increase in interest rates. Conversely, the first half of
2010 benefited from capital gains from the sale of securities for which impairment losses had been recognised in previous years.
The result for nonlife business increased, mainly due to the increase in premiums and to lower claimrelated expenses.
(millions of euro)
5econd
quarIer
firsI
quarIer
amount %
Premiums and payments
(a)
250 44 206
ne| prem|ums 2,2J7 J,4J1 -1,194 -J4.3
ne| chares |or c|a|ms and surrender|n o| po||c|es -1,622 -1,401 221 1.3
ne| chares |or chanes |n |echn|ca| reserves -36 -2,074 -1,209 -3.J
Net income from financial instruments designated at fair value
through profit and loss
(b)
50 26 76
Net income from securities (including UCI) classified as Financial assets
available for sale and Financial assets held for trading
(c)
564 403 161 40.0
Other income/charges from insurance business
(d)
199 213 14 6.6
Income !rom insurance business 165 120 45 37.5
Figures restated, where necessary, considering the changes in the scope of consolidation.
Changes
(d)
The caption includes all other income / charges connected to products considered insurance products for IAS/IFRS purposes, including commission expense.
(a)
The caption includes collections, payments and provisions for the integration of reserves referred solely to products considered insurance products for IAS/IFRS
purposes. The corresponding items regarding products which do not present these characteristics are, instead, accounted for using the same method as for
financial movements. The related economic components are included in the caption Net income from financial instruments designated at fair value through profit
and loss.
(b)
The caption includes net income from the measurement of assets and liabilities connected to products considered financial products for IAS/IFRS purposes and
those deriving from the measurement of assets accounted for applying the Fair Value Option.
(c)
The caption registers realised profits and interest / dividends collected on financial assets covering products considered insurance products for IAS/IFRS purposes
and on the trading portfolio of the insurance company.
2011

66



ExpIanaIory NoIes Economic results
67
67
However, income from insurance business reported in the second quarter of 2011 an upward trend (+37.5%) compared to the
figure recorded in the previous quarter, due to improved financial management resulting from greater valuations of assets held in
portfolio, from realised gains and from recorded dividends on shares and UCIrelated income.

Other operating income (expenses)
Other operating income (expenses) is a residual caption comprising various types of income and expenses that cannot be
recognised in other operating income captions, except expense, tax and duty recoveries that have led to a reduction in the
corresponding subcaptions of administrative expenses. During the first half of 2011, the balance of this caption was a positive
8 million euro, compared to 23 million euro of the first half of 2010, which had benefited from gains on the settlement
of disputes.


OperaIing cosIs
(millions of euro)
30.06.2011 30.06.2010
amounI %
Wages and salaries 1,933 1,935 2 0.1
Social security charges 498 498
Other 293 276 17 6.2
PersonneI expenses 2,724 2,709 15 0.6
Information technology expenses 344 366 22 6.0
Management of real estate assets 356 368 12 3.3
General structure costs 216 229 13 5.7
Professional and legal expenses 243 228 15 6.6
Advertising and promotional expenses 73 73
Indirect personnel costs 68 66 2 3.0
Other costs 158 149 9 6.0
Indirect taxes and duties 309 305 4 1.3
Recovery of expenses and charges 295 275 20 7.3
AdminisIraIive expenses 1,472 1,509 -37 -2.5
Property and equipment 188 186 2 1.1
Intangible assets 113 103 10 9.7
AdjusImenIs 301 289 12 4.2
OperaIing cosIs 4,497 4,507 -10 -0.2
Figures restated, where necessary, considering the changes in the scope of consolidation.
Changes
uarIerIy deveIopmenI o! operaIing cosIs
2,230
2,277
2,237
2,479
1
/
1
0
2
/
1
0
3
/
1
0
4
/
1
0
2,223
2,274
1
/
1
1
2
/
1
1

Operating costs amounted to 4,497 million euro, down 0.2% on the figure recorded in the first half of 2010.
Personnel expenses increased slightly (+0.6%) to give a total of 2,724 million euro. The human resource optimisation policies
resulted in a downsizing of the average staff figures (0.6%) which stabilised the wages and salaries caption.
Administrative expenses were 1,472 million euro, down 2.5%: this result was shaped in particular by the decrease in information
technology expenses (6%), general structure costs (5.7%) and property management costs (3.3%). Professional and legal
expenses and other costs increased as a result of higher services rendered by third parties.
Amortisation and depreciation for the first half of 2011 amounted to 301 million euro, up 4.2% on the corresponding period of
the previous year, mainly due to higher investments in intangible assets, particularly in software application components.
As a result of revenue performance, the cost/income ratio for the period was 51.8%, down compared to the 54.8% recognised
for the first half of 2010.
67



ExpIanaIory NoIes Economic results
68
68
(millions of euro)
5econd
quarIer
firsI
quarIer
amount %
Wages and salaries 977 956 21 2.2
Social security charges 251 247 4 1.6
Other 136 157 21 13.4
PersonneI expenses 1,364 1,360 4 0.3
Information technology expenses 169 175 6 3.4
Management of real estate assets 175 181 6 3.3
General structure costs 108 108
Professional and legal expenses 130 113 17 15.0
Advertising and promotional expenses 45 28 17 60.7
Indirect personnel costs 42 26 16 61.5
Other costs 80 78 2 2.6
Indirect taxes and duties 159 150 9 6.0
Recovery of expenses and charges 150 145 5 3.4
AdminisIraIive expenses 758 714 44 6.2
Property and equipment 94 94
Intangible assets 58 55 3 5.5
AdjusImenIs 152 149 3 2.0
OperaIing cosIs 2,274 2,223 51 2.3
Changes 2011
Figures restated, where necessary, considering the changes in the scope of consolidation.

At the quarterly level, operating costs increased by 2.3% in the second quarter of 2011 compared to the previous quarter
reaching 2,274 million euro. This trend, already recorded between the first and second quarters of last year, is mainly attributable
to the seasonal trend in administrative expenses, and particularly in professional and legal expenses, advertising and promotional
expenses and indirect personnel costs.
(millions of euro)
30.06.2011 30.06.2010
usiness areas
amounI %
Banca dei Territori 2,833 2,871 38 1.3
Corporate and Investment Banking 456 427 29 6.8
Public Finance 37 41 4 9.8
International Subsidiary Banks 576 570 6 1.1
Eurizon Capital 64 65 1 1.5
Banca Fideuram 170 168 2 1.2
ToIaI business areas 4,136 4,142 -6 -0.1
Corporate Centre 361 365 4 1.1
InIesa 5anpaoIo Group 4,497 4,507 -10 -0.2
Figures restated, where necessary, considering the changes in the scope of consolidation and in business
unit constituents.
Changes
Banca dei
Territori, 68.5%
Corporate and
Investment
Banking, 11.0%
Public Finance,
0.9%
International
Subsidiary
Banks, 13.9%
Eurizon Capital,
1.6%
Banca
Fideuram, 4.1%

The virtuous trend in Group operating costs (0.2%) was driven by Banca dei Territori (38 million euro), which recorded 68.5% of
business area costs, Public Finance (4 million euro) and Eurizon Capital (1 million euro). By contrast, cost increases were reported
by Corporate and Investment Banking (+29 million euro) and, to a lesser extent, International Subsidiary Banks (+6 million euro)
and Banca Fideuram (+2 million euro). The Corporate Centres costs were also down (4 million euro).


OperaIing margin
The operating margin in the first half of 2011 was 4,181 million euro, up 12.6% on the corresponding period of the previous
year. This trend was generated by increased revenues (+5.6%), accompanied by a slight decrease in operating costs (0.2%).
Quarterly analysis confirms this positive trend, recording a 13.3% increase on the previous quarter.


AdjusImenIs IolvriIe-backs on asseIs

NeI provisions !or risks and charges
In the first half of 2011 net provisions for risks and charges amounted to 78 million euro, referring mainly to Parent Company and
Banca Fideuram provisions for legal proceedings and other existing risks. This total compares with 184 million euro recorded in the
first six months of 2010.
68
Banca dei Territori 68.5%
International
Subsidiary Banks 13.9%
Public Finance 0.9%
Corporate and
Investment Banking 11.0%
Banca Fideuram 4.1%
Eurizon Capital 1.6%



ExpIanaIory NoIes - Lconomic resulls
69
69
NeI adjusImenIs Io Ioans
(millions ol euro)
30.06.2011 30.06.2010
amounI %
Doubllul loans -948 -768 !80 23.4
Subslandard loans -4!2 -602 -!90 -3!.6
Reslruclured loans -26 -24 2 8.3
Pasl due loans -!02 -!00 2 2.0
Perlorming loans -2 -5! -49 -96.!
NeI impairmenI Iosses on Ioans -1,490 -1,545 -55 -3.6
NeI adjusImenIs Io guaranIees and
commiImenIs 33 1 32
NeI adjusImenIs Io Ioans -1,457 -1,544 -87 -5.6
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion.
Changes
uarIerIy deveIopmenI o! neI
adjusImenIs Io Ioans
750
794
706
838
!
/
!
0
2
/
!
0
3
/
!
0
4
/
!
0
680
777
!
/
!
!
2
/
!
!

ln lhe lirsl hall ol 20!! nel adjuslmenls lo loans came lo !,457 million, down 5.6' on lhe ligure lor lhe same period in 20!0.
Doubllul posilions required lolal nel adjuslmenls ol 948 million euro, up 23.4' compared lo lhe lirsl hall ol 20!0, wilh an
average coverage ralio ol 64.3'. Nel adjuslmenls lo subslandard posilions inslead lell by 3!.6' wilh a coverage ralio ol 20.7'.
This lrend rellecls lhe lrend ol lhe corresponding balance sheel caplions, which in lhe lirsl six monlhs ol lhe year recorded an
increase in doubllul posilions and a slighl decrease in subslandard posilions.

A lolal ol 33 million euro in wrile-backs were recognised on guaranlees given, compared lo ! million euro in lhe lirsl hall ol
20!0. The coverage ralio ol perlorming loans lo cuslomers remained higher lhan 0.7', essenlially unchanged compared lo
previous periods.
(millions ol euro)
5econd
quarIer
firsI
quarIer
amounl '
Doubllul loans -554 -394 !60 40.6
Subslandard loans -!8! -23! -50 -2!.6
Reslruclured loans -!8 -8 !0
Pasl due loans -56 -46 !0 2!.7
Perlorming loans 2 -4 6
NeI impairmenI Iosses on Ioans -807 -683 124 18.2
NeI adjusImenIs Io guaranIees and commiImenIs 30 3 27
NeI adjusImenIs Io Ioans -777 -680 97 14.3
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion.
Changes 2011

Quarlerly analysis shows a !4.3' increase in nel adjuslmenls lo loans in lhe second quarler ol 20!! compared lo lhe lirsl
quarler, due lo an increase in adjuslmenls lo doubllul loans only parlly ollsel by lhe drop in adjuslmenls lo subslandard loans.

Net impairment losses on other assets
ln lhe lirsl six monlhs ol 20!! nel impairmenl losses on olher assels lolalled 74 million euro, 25 million euro ol which allribulable
lo lhe wrile-down ol Creek governmenl bonds maluring by 2020. The residual amounl relers lo impairmenl loss on equily
inslrumenls and olher bonds available lor sale. This value compares lo lhe 43 million euro recorded in lhe same period lasl year.
As menlioned previously, and lo be illuslraled in grealer delail laler in lhis Reporl, il was deemed appropriale lo reclassily lhe lull
ellecl ol impairmenl losses on Creek governmenl bonds maluring by 2020 lo lhis caplion, regardless ol lheir classilicalion (AlS or
L&R) lo avoid dislorlion ellecls on lhe cosl ol loans.
ln parlicular. AlS securilies were measured al lair value wilh recognilion lo lhe income slalemenl ol lhe enlire negalive reserve
(36 million euro), whilsl L&R securilies were adjusled ol only 2!', again in lhe income slalemenl, lor a lolal ol !2 million euro.
Nole lhal lrading securilies (ol a marginal amounl) are syslemalically designaled al lair value lhrough prolil and loss.
The impairmenl losses lolalled 48 million euro wilh an impacl on lhe consolidaled income slalemenl, nel ol amounls allocaled lo
insurance producls under separale managemenl, ol 25 million euro.

Profits (Losses) on investments held to maturity and on other investments
ln lhe lirsl hall ol 20!! prolils on inveslmenls held lo malurily and on olher inveslmenls amounled lo 33 million euro, including
lhe capilal gains on lhe disposal ol branches and ol CR La Spezia lo Credil Agricole (!46 million euro) and lhe wrile-down on lhe
inveslmenl in Telco (!32 million euro). This ligure is compared lo lhe !! million euro in prolils reporled in lhe lirsl hall ol 20!0.
The ligure lor lhe second quarler ol lhis year, !9 million euro, is higher lhan lhe !4 million euro in prolils recorded in lhe
lirsl quarler.

69



ExpIanaIory NoIes Economic results
70
70
Income be!ore Iax !rom conIinuing operaIions
Income before tax from continuing operations came to 2,605 million euro in the first half of 2011, up 33.4% compared to the
corresponding period of 2010. Given an increase in the operating margin, the trend also benefited from lower net adjustments to
loans and a decrease in net provisions for risks and charges. The quarterly analysis shows a 6.1% increase in the result for the
second quarter compared to that of the first quarter.


OIher income and expense capIions

Taxes on income from continuing operations
Current and deferred income taxes accrued during the first half of 2011 resulted in provisions of 973 million euro, compared to
680 million euro in the same period of 2010, which had benefited from the positive effects of the redemption of intangibles
(86 million euro).
The tax rate for the first half of 2011, calculated as the simple ratio of taxes on income from continuing operations and income
before tax from continuing operations, came to 37.4%, up from 34.8% of the first six months of 2010, also due to the effect of a
75 basis points increase in the IRAP rate payable by banks and 200 basis points payable by insurance companies (with an impact
on the income statement for the half year estimated in 57 million euro).

Merger and restructuring-related charges (net of tax)
Merger and restructuringrelated charges net of tax effects amounted to 16 million euro, mainly linked to expenses incurred to
establishment of the new insurance business structure. The decrease in these charges compared to the 43 million euro recorded in
the first half of 2010 confirms that the Group banks integration processes are nearing completion.

ffect of purchase price allocation (net of tax)
This caption comprises charges attributable to the revaluation of loans, debts, real estate and the recognition of new intangible
assets, in application of IFRS 3, upon recognition of acquisition transactions. These charges amounted to 171 million euro in the
first half of 2011, down from 192 million euro compared to the same period in 2010.

lncome (Loss) from discontinued operations (net of tax)
No income or loss on discontinued operations was recorded in the first half of 2011. On the other hand, in the first six months of
last year, 691 million euro in income was recorded, mostly due to the results of securities services business on completion of the
disposal to State Street Co.


NeI income
The Group closed the first half of 2011 with a net income of 1,402 million euro, down 17% on the 1,690 million euro reported in
the same period of the previous year.
The quarterly analysis shows a 12.1% growth in net income in the second quarter (741 million euro) compared to that of the
first quarter (661 million euro).


70



71
71
8alance sheel aggregales




GeneraI aspecIs
A condensed balance sheel has been prepared lo permil a more immediale underslanding ol lhe Croup's resulls lor lhe period.
Where necessary, comparalive ligures are reslaled lo accounl lor non-currenl assels held lor sale and disconlinued operalions and
changes in lhe scope ol consolidalion. As usual, cerlain caplions have been aggregaled wilh respecl lo lhe model provided in
Circular 262/05 ol lhe 8ank ol llaly.
The reslaled linancial slalemenls are oblained by making appropriale adjuslmenls lo hislorical dala lo rellecl lhe signilicanl
ellecls ol such changes relroaclively. Any dillerences due lo lhe possibilily ol choosing belween dillerenl oplions provided lor by
lAS/llRS or arising lrom lhe use ol dillerenl melhods or paramelers lor measuremenl ol assels and liabililies are nol considered, as
lhey are deemed irrelevanl. Laslly, please nole lhal no inlragroup relalions are nelled since lheir amounl is nol signilicanl.
8reakdowns ol reslalemenls and aggregalions ol caplions perlormed are provided in separale lables included in lhe allachmenls
lo lhe consolidaled linancial slalemenls, as also required by Consob in ils Communicalion 6064293 ol 28 July 2006.
The reslalemenls are represenled by lhe deconsolidalion ol lhe ligures lor Cassa di Risparmio di La Spezia and branches sold lo
Credil Agricole, as well as lor lideuram 8ank Suisse (also sold) and by lhe consolidalion ol 8anca Sara, acquired lrom
8anca lideuram.
Aggregalions ol caplions relerred lo.
lhe inclusion ol Cash and cash equivalenls in lhe residual caplion Olher assels,
lhe inclusion ol ledging derivalives and lair value change ol linancial assels/liabililies in hedged porllolios in
Olher assels/liabililies,
lhe inclusion ol lechnical insurance reserves reassured wilh lhird parlies in Olher assels,
lhe aggregalion in one single caplion ol Properly and equipmenl and lnlangible assels,
lhe aggregalion ol Due lo cuslomers and Securilies issued in jusl one caplion,
lhe aggregalion inlo one caplion ol allowances lor specilic purpose (Lmployee lerminalion indemnilies and Allowances lor
risks and charges),
lhe presenlalion ol Reserves as an aggregale and nel ol any lreasury shares.
Again, lo provide a more elleclive presenlalion ol lhe composilion ol aggregales, in lhe delailed lables and/or in lhe relalive
commenls, derivalives recorded in linancial assels/liabililies held lor lrading and Due lrom/Due lo banks are presenled on
a nel basis.
71



ExpIanaIory noIes - 8alance sheel aggregales
72
RecIassi!ied baIance sheeI
(millions ol euro)
30.06.2011 31.12.2010
amounI %
linancial assels held lor lrading 60,555 7!,896 -!!,34! -!5.8
linancial assels designaled al lair value lhrough prolil and loss 36,303 35,550 753 2.!
linancial assels available lor sale 68,99! 6!,8!9 7,!72 !!.6
lnveslmenls held lo malurily 2,856 3,839 -983 -25.6
Due lrom banks 43,!94 4!,476 !,7!8 4.!
Loans lo cuslomers 372,36! 376,087 -3,726 -!.0
lnveslmenls in associales and companies subjecl lo joinl conlrol 2,694 2,7!2 -!8 -0.7
Properly, equipmenl and inlangible assels 30,734 3!,0!2 -278 -0.9
Tax assels 7,826 8,723 -897 -!0.3
Non-currenl assels held lor sale and disconlinued operalions 38 75 -37 -49.3
Olher assels !9,!2! 20,83! -!,7!0 -8.2
ToIaI AsseIs 644,673 654,020 -9,347 -1.4
30.06.2011 31.12.2010
amounI %
Due lo banks 49,665 52,486 -2,82! -5.4
Due lo cuslomers and securilies issued 387,377 396,877 -9,500 -2.4
linancial liabililies held lor lrading 38,2!5 45,043 -6,828 -!5.2
linancial liabililies designaled al lair value lhrough
prolil and loss 24,729 26,!44 -!,4!5 -5.4
Tax liabililies 3,284 3,239 45 !.4
Liabililies associaled wilh non-currenl assels held lor sale
and disconlinued operalions - - - -
Olher liabililies 24,!8! 20,865 3,3!6 !5.9
Technical reserves 52,887 50,!88 2,699 5.4
Allowances lor specilic purpose 4,362 4,625 -263 -5.7
Share capilal 8,546 6,647 !,899 28.6
Reserves 49,924 45,235 4,689 !0.4
Valualion reserves -937 -!,054 -!!7 -!!.!
Minorily inleresls !,038 !,020 !8 !.8
Nel income !,402 2,705 -!,303 -48.2
ToIaI LiabiIiIies and 5harehoIders' EquiIy 644,673 654,020 -9,347 -1.4
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
LiabiIiIies and 5harehoIders' EquiIy Changes
AsseIs Changes

lnlesa Sanpaolo's consolidaled assels recorded a moderale decrease ol 9.3 billion euro in lhe lirsl hall ol 20!! (!.4' ol lhe lolal).
On lhe assels side, lhe lrading book saw a considerable reduclion (-!!.3 billion euro), whilsl lhere was a more limiled decrease in
loans lo cuslomers (-3.7 billion euro). Conversely, increases were recorded in linancial assels available lor sale (+7.2 billion euro)
and in amounls due lrom banks (+!.7 billion euro).
Whil regard lo liabililies, lhe decrease mainly relers lo amounls due lo cuslomers (-9.5 billion euro) and linancial liabililies held lor
lrading (-6.8 billion euro).


72



ExpIanaIory noIes - 8alance sheel aggregales
73
uarIerIy deveIopmenI o! Ihe recIassi!ied baIance sheeI
(millions ol euro)
2010
30l6 31l3 31l12 30l9 30l6 31l3
linancial assels held lor lrading 60,555 6!,094 7!,896 90,5!3 98,469 83,976
linancial assels designaled al lair value lhrough
prolil and loss 36,303 36,349 35,550 33,253 32,974 33,432
linancial assels available lor sale 68,99! 64,829 6!,8!9 60,525 55,!83 55,608
lnveslmenls held lo malurily 2,856 3,00! 3,839 4,205 4,307 4,34!
Due lrom banks 43,!94 40,408 4!,476 44,022 46,878 46,!8!
Loans lo cuslomers 372,36! 374,5!9 376,087 375,438 372,!67 368,204
lnveslmenls in associales and companies subjecl
lo joinl conlrol 2,694 2,8!7 2,7!2 2,360 2,348 2,328
Properly, equipmenl and inlangible assels 30,734 30,840 3!,0!2 30,526 30,7!6 30,609
Tax assels 7,826 8,034 8,723 7,830 8,!03 7,540
Non-currenl assels held lor sale and disconlinued
operalions 38 35 75 48 35 7,74!
Olher assels !9,!2! 20,650 20,83! 23,796 26,232 27,494
ToIaI AsseIs 644,673 642,576 654,020 672,516 677,412 667,454
30l6 31l3 31l12 30l9 30l6 31l3
Due lo banks 49,665 50,474 52,486 46,939 49,3!! 45,!03
Due lo cuslomers and securilies issued 387,377 390,586 396,877 404,!!9 408,659 400,845
linancial liabililies held lor lrading 38,2!5 37,429 45,043 58,!37 56,4!! 48,348
linancial liabililies designaled al lair value lhrough
prolil and loss 24,729 25,20! 26,!44 26,357 26,430 27,692
Tax liabililies 3,284 3,328 3,239 3,0!8 2,843 3,753
Liabililies associaled wilh non-currenl assels
held lor sale and disconlinued operalions - - - - - 9,375
Olher liabililies 24,!8! 23,653 20,865 25,9!6 26,42! 24,60!
Technical reserves 52,887 5!,896 50,!88 49,585 48,6!2 47,947
Allowances lor specilic purpose 4,362 4,542 4,625 4,542 4,598 4,774
Share capilal 8,546 6,647 6,647 6,647 6,647 6,647
Reserves 49,924 47,920 45,235 45,265 45,3!7 46,358
Valualion reserves -937 -766 -!,054 -!,!34 -!,!20 -339
Minorily inleresls !,038 !,005 !,020 925 !,593 !,662
Nel income !,402 66! 2,705 2,200 !,690 688
ToIaI LiabiIiIies and 5harehoIders' EquiIy 644,673 642,576 654,020 672,516 677,412 667,454
2011
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
AsseIs
2011 LiabiIiIies and 5harehoIders' EquiIy 2010
73



ExpIanaIory noIes - 8alance sheel aggregales
74
Loans Io cusIomers
(millions ol euro)
%
breakdovn
%
breakdovn
amounI %
Currenl accounls 34,620 9.2 30,273 8.! 4,347 !4.4
Morlgages !63,3!2 43.9 !64,043 43.6 -73! -0.4
Advances and olher loans !29,456 34.8 !3!,980 35.! -2,524 -!.9
CommerciaI banking Ioans 327,388 87.9 326,296 86.8 1,092 0.3
Repurchase agreemenIs 5,564 1.5 10,703 2.8 -5,139 -48.0
Loans represenIed by securiIies 18,124 4.9 18,017 4.8 107 0.6
Non-per!orming Ioans 21,285 5.7 21,071 5.6 214 1.0

Loans Io cusIomers 372,361 100.0 376,087 100.0 -3,726 -1.0
uarIerIy deveIopmenI
Loans Io cusIomers
Changes
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
30.06.2011 31.12.2010
3
6
8
,
2
0
4
3
7
2
,
!
6
7
3
7
5
,
4
3
8
3
7
6
,
0
8
7
3
!
/
3
/
!
0
3
0
/
6
/
!
0
3
0
/
9
/
!
0
3
!
/
!
2
/
!
0
3
7
4
,
5
!
9
3
7
2
,
3
6
!
3
!
/
3
/
!
!
3
0
/
6
/
!
!

As al lhe end ol lhe lirsl hall ol 20!!, lnlesa Sanpaolo Croup loans lo cuslomers amounled lo over 372 billion euro, down slighlly
(-!') on lhe ligure ol lhe end ol lhe previous year.
The decrease in loans compared lo lhe beginning ol lhe year was mainly caused by lhe reduclion in repurchase agreemenls,
which lell considerably (-48') againsl a moderale increase in lrade receivables (+0.3') The growlh in lhis aggregale is lhe resull
ol dillerenl perlormances in advances and olher loans (-!.9'), morlgages (-0.4') and currenl accounls (+!4.4'). ln relalion lo
lhe porllolio's risk level, an increase was seen in non-perlorming loans (+!') and lheir grealer impacl on lolal loans
lo cuslomers.
ln lhe domeslic medium-/long-lerm loan markel, in lhe lirsl hall ol lhe year disbursemenls lo households lolalled 8.3 billion euro
and lhose lo businesses covered by 8anca dei Terrilori amounled lo 4.9 billion euro. ln lhe same period, medium/long-lerm
disbursemenls lo Large Corporale llalia and Mid Corporale cuslomers reached 6.3 billion euro.
As al 30 June 20!!, lhe Croup's share ol lhe domeslic markel (calculaled on lhe harmonised lime-series delined lor counlries in
lhe eurozone) was an eslimaled !5.3' lor lolal loans, down by lour-lenlhs ol a poinl compared lo December 20!0. This drop is
mainly allribulable lo loans lo linancial inslilulions as a resull ol a lower repurchase agreemenls made wilh Cassa di
Compensazione e Caranzia. Loans lo households and lo non-linancial companies recorded a more slable perlormance.
(millions ol euro)
30.06.2011 31.12.2010
usiness areas
amounI %
8anca dei Terrilori !84,473 !80,490 3,983 2.2
Corporale and lnveslmenl 8anking !07,900 !!0,779 -2,879 -2.6
Public linance 40,044 40,508 -464 -!.!
lnlernalional Subsidiary 8anks 3!,34! 30,926 4!5 !.3
Lurizon Capilal !09 !53 -44 -28.8
8anca lideuram 3,059 2,85! 208 7.3
ToIaI business areas 366,926 365,707 1,219 0.3
Corporale Cenlre 5,435 !0,380 -4,945 -47.6
InIesa 5anpaoIo Group 372,361 376,087 -3,726 -1.0
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and in business
unil consliluenls and disconlinued operalions.
Changes
8anca dei
Terrilori,
50.3'
Corporale
and
lnveslmenl
8anking,
29.4'
Public
linance,
!0.9'
lnlernalion
al
Subsidiary
8anks,
8.6'
Lurizon
Capilal,
0.0'
8anca
lideuram,
0.8'

8reaking down loans by business areas, 8anca dei Terrilori, which accounls lor approximalely hall lhe aggregale ol lhe Croup's
business areas, reporled lhal loans lo cuslomers were increasing (+2.2') compared lo lhe end ol lhe previous year, mainly
allribulable lo lhe business segmenl. Posilive changes in loans were also recorded by lhe lnlernalional Subsidiary 8anks (+!.3')
and 8anca lideuram (+7.3'), largely allecled by lhe increase in lacililies granled on currenl accounls. The Corporale and
lnveslmenl 8anking seclor loans showed a downward lrend (-2.6') associaled wilh lhe downlurn in disbursemenls lo Large and
lnlernalional Corporale and linancial lnslilulions counlerparlies, and lower repurchase agreemenls made by 8anca lMl wilh
inslilulional operalors. The public works and inlraslruclure seclor, handled by 8llS, reporled a slighl drop in loans (-!.!') as a
resull ol lhe repaymenls and new disbursemenls lrends. The decrease in Corporale Cenlre loans (-47.6') was mainly driven by
lhe unwinding ol repurchase agreemenls wilh Cassa di Compensazione e Caranzia.
74
Banca dei Territori 50.3%
International
Subsidiary Banks 8.6%
Public Finance 10.9%
Corporate and
Investment Banking 29.4%
Banca Fideuram 0.8%
Eurizon Capital -



ExpIanaIory noIes - 8alance sheel aggregales
75
Loans Io cusIomers. Ioan porI!oIio quaIiIy
(millions ol euro)
Change
Doubllul loans 7,979 2.! 7,336 2.0 643
Subslandard loans 8,806 2.4 8,898 2.3 -92
Reslruclured loans 3,306 0.9 3,334 0.9 -28
Pasl due loans !,!94 0.3 !,503 0.4 -309
Non-per!orming Ioans 21,285 5.7 21,071 5.6 214
Perlorming loans 332,952 89.4 336,999 89.6 -4,047
Loans represenled by perlorming securilies !8,!24 4.9 !8,0!7 4.8 !07
Loans Io cusIomers 372,361 100.0 376,087 100.0 -3,726
%
breakdovn
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
30.06.2011 31.12.2010
NeI
exposure
NeI
exposure
%
breakdovn
NeI
exposure

Al lhe end ol lhe lirsl hall ol 20!!, lhe Croup recorded a slighl increase in non-perlorming loans (+!'), compared lo lhe end ol
lhe previous year. This lrend led lo a higher incidence ol non-perlorming loans on lolal loans lo cuslomers, increasing lrom 5.6'
lo 5.7'. Coverage ol non-perlorming loans came lo approximalely 45', a level higher lhan lhal recorded al lhe end ol 20!0
(43') and deemed adequale lo accounl lor expecled losses, considering lhe guaranlees lhal secure lhe posilions.
ln parlicular, as al 30 June 20!! doubllul loans nel ol adjuslmenls lolalled 7,979 million euro, wilh a 643 million euro rise
(+8.8') lrom lhe beginning ol lhe year, lhe incidence on lolal loans lo cuslomers was 2.!', wilh a coverage ralio ol
more lhan 64'.
Compared lo lhe increase in doubllul loans, subslandard loans recorded a ligure ol 8,806 million euro, down !' on lhal ol
3! December 20!0. Subslandard loans had a 2.4' impacl on lhe lolal, showing a coverage ralio ol 2!'.
Reslruclured loans slood al 3,306 million euro, remaining subslanlially slable compared lo lhe end ol lhe previous year.
The coverage ralio was 9'. Pasl due loans amounled lo !,!94 million euro, down by 20.6' and showing a coverage
ralio ol !!'.
Cumulaled colleclive adjuslmenls on perlorming loans came lo 0.7' ol gross exposure relaling lo loans lo cuslomers, slable wilh
respecl lo lhe ligure recorded al lhe end ol lhe previous period. The risk associaled wilh lhe perlorming loan porllolio is
calculaled colleclively on lhe basis ol lhe risk conliguralion ol lhe enlire porllolio analysed by means ol models lhal consider lhe
Probabilily ol Delaull (PD) and Loss Civen Delaull (LCD) lor each loan.


CusIomer !inanciaI asseIs
(millions ol euro)
% breakdovn % breakdovn amounI %
Direcl cuslomer deposils 4!4,450 50.9 425,0!9 5!.6 -!0,569 -2.5
lndirecl cuslomer deposils 424,94! 52.! 424,680 5!.6 26! 0.!
Nelling
(a)
-24,650 -3.0 -26,056 -3.2 -!,406 -5.4
CusIomer !inanciaI asseIs 814,741 100.0 823,643 100.0 -8,902 -1.1
30.06.2011 Changes 31.12.2010
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
(a)
Nelling relers lo componenls ol indirecl deposils which are also included in direcl cuslomer deposils (linancial liabililies ol lhe insurance business designaled al lair
value and lund-based bonds designaled al lair value issued by Croup companies and placed by lhe nelworks).

Cuslomer linancial assels lolalled approximalely 8!5 billion euro as al 30 June 20!!, down by !.!' since lhe beginning ol lhe
year due lo lhe ellecl ol direcl deposils, inlluenced by a negalive lrend in currenl accounls and repurchase agreemenls and
securilies lending, which were only parlly ollsel by lhe increase in bond lunding. lndirecl cuslomer deposils remained subslanlially
slable (+0.!'). lhis perlormance is associaled wilh lhe combined ellecl ol lhe increase in assels under adminislralion (+0.7')
and lhe downward lrend in assel managemenl (-0.5').
The slighl drop in lhe perlormance ol assels under managemenl is allribulable lo lhe weakness in demand in lhe mulual lunds
segmenl, only parlially ollsel by lhe recomposilion ol porllolio managemenl, parlicularly in lhe privale markel, and ol
insurance producls.



75



ExpIanaIory noIes - 8alance sheel aggregales
76
Direct customer deposits
The lable below sels oul amounls due lo cuslomers, securilies issued, including lhose designaled al lair value and cerlain
insurance policies wilh mainly linancial lealures, logelher wilh securilised capilal-prolecled cerlilicales.
(millions ol euro)
% breakdovn % breakdovn amounI %
Currenl accounls and deposils !90,649 46.0 !94,456 45.7 -3,807 -2.0
Repurchase agreemenls and securilies
lending 9,909 2.4 !3,!!! 3.! -3,202 -24.4
8onds !22,894 29.7 !20,647 28.4 2,247 !.9
o| wh|ch des|na|ed a| |a|r va|ue
(
74J 0.2 1,2J3 0.J -49 -40.0
Cerlilicales ol deposil !7,588 4.2 !9,686 4.6 -2,098 -!0.7
Subordinaled liabililies 2!,240 5.! 24,!66 5.7 -2,926 -!2.!
linancial liabililies ol lhe insurance
business designaled al lair value
(*)
23,969 5.8 24,906 5.9 -937 -3.8
Olher deposils 28,20! 6.8 28,047 6.6 !54 0.5
o| wh|ch des|na|ed a| |a|r va|ue
(
2,J61 0.6 1,993 0. J6J 13.2

DirecI cusIomer deposiIs 414,450 100.0 425,019 100.0 -10,569 -2.5
(**)
ligures included in lhe 8alance sheel under linancial liabililies designaled al lair value lhrough prolil and loss and
linancial liabililies held lor lrading.
(*)
ligures included in lhe 8alance sheel under linancial liabililies designaled al lair value lhrough prolil and loss.
30.06.2011 31.12.2010
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
Changes
uarIerIy deveIopmenI DirecI deposiIs
4
3
0
,
0
0
3
4
3
6
,
6
!
9
4
3
2
,
3
0
4
4
2
5
,
0
!
9
3
!
/
3
/
!
0
3
0
/
6
/
!
0
3
0
/
9
/
!
0
3
!
/
!
2
/
!
0
4
!
7
,
9
3
4
4
!
4
,
4
5
0
3
!
/
3
/
!
!
3
0
/
6
/
!
!

Direcl cuslomer deposils amounled lo over 4!4 billion euro, down (-2.5') on lhe ligure lor lhe end ol December 20!0.
ln delail, currenl accounls and deposils recorded a decrease ol 3.8 billion euro (-2') and repurchase agreemenls and securilies
lending lell by 3.2 billion euro (-24.4'). The drop in lhe demand componenl should be viewed in relalion lo cuslomers'
reposilioning lheir demand lo inveslmenl producls wilh grealer relurns, such as bonds and insurance policies. 8onds reporled an
increase (+!.9'), conlirming lheir imporlance wilhin bolh inveslors' porllolios and in lhe Croup's overall lunding. Subordinaled
liabililies decreased by almosl 3 billion euro (-!2.!') and cerlilicales ol deposils by over 2 billion euro (-!0.7'), whilsl olher
lypes recorded minor changes.
Al lhe end ol lhe lirsl hall ol 20!!, lhe Croup's share ol direcl cuslomer deposils on lhe domeslic markel (according lo lhe LC8's
harmonised delinilion) came lo !6.2', down by seven-lenlhs ol a poinl compared lo lhe beginning ol lhe year, mainly due lo
lhe unwinding ol repurchase agreemenls wilh Cassa di Compensazione e Caranzia and, lo a lesser exlenl, due lo lhe malurily
concenlralion ol bonds lhal had exceeded new issues, resulling in a perlormance lower lhan lhal recorded by lhe
banking syslem.
(millions ol euro)
30.06.2011 31.12.2010
usiness areas
amounI %
8anca dei Terrilori 2!4,320 2!8,3!9 -3,999 -!.8
Corporale and lnveslmenl 8anking 86,824 97,026 -!0,202 -!0.5
Public linance 5,278 5,757 -479 -8.3
lnlernalional Subsidiary 8anks 30,23! 30,259 -28 -0.!
Lurizon Capilal !2 !2 - -
8anca lideuram !2,275 !2,503 -228 -!.8
ToIaI business areas 348,940 363,876 -14,936 -4.1
Corporale Cenlre 65,5!0 6!,!43 4,367 7.!
InIesa 5anpaoIo Group 414,450 425,019 -10,569 -2.5
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and in business unil
consliluenls and disconlinued operalions.
Changes
8anca dei
Terrilori,
6!.4'
Corporale
and
lnveslmenl
8anking,
24.9'
Public
linance,
!.5'
lnlernalion
al
Subsidiary
8anks,
8.7'
Lurizon
Capilal,
0.0'
8anca
lideuram,
3.5'

The breakdown by Croup business areas shows lhal 8anca dei Terrilori, which made up over hall ol lhe lolal aggregale
allribulable lo lhe business areas, recorded a !.8' decrease compared lo lhe beginning ol lhe year. This perlormance was mainly
caused by lhe decrease in demand deposils and lunding lhrough securilies. Corporale and lnveslmenl 8anking deposils decreased
(-!0.5') due lo lhe drop in liquidily lrom shorl-lerm deposils ol major linancial lnslilulion cuslomers and a reduclion in
8anca lMl bond placemenls. A downlurn was recorded by bolh Public linance (-8.3'), due lo lhe reduced currenl accounl
liquidily ol local aulhorilies, and 8anca lideuram (-!.8') as a resull ol lower inveslmenls in liquidily by inslilulional cuslomers.
The lnlernalional Subsidiary 8anks recorded a subslanlially slable lunding. The growlh shown by lhe Corporale Cenlre (+7.!') is
allribulable lo lhe increase in securilies issued and, lo a lesser exlenl, in amounls due lo cuslomers.


76
Banca dei Territori 61.4%
International
Subsidiary Banks 8.7%
Public Finance 1.5%
Corporate and
Investment Banking 24.9%
Banca Fideuram 3.5%
Eurizon Capital -



ExpIanaIory noIes - 8alance sheel aggregales
77
lndirect customer deposits
(millions ol euro)
% breakdovn % breakdovn amounI %
Mulual lunds 64,945 !5.3 69,904 !6.4 -4,959 -7.!
Open-ended pension lunds and individual
pension plans 2,839 0.7 3,084 0.7 -245 -7.9
Porllolio managemenl 75,500 !7.8 74,249 !7.5 !,25! !.7
Lile lechnical reserves and linancial liabililies 78,836 !8.5 77,!36 !8.2 !,700 2.2
Relalions wilh inslilulional cuslomers !0,356 2.4 9,!80 2.2 !,!76 !2.8
AsseIs under managemenI 232,476 54.7 233,553 55.0 -1,077 -0.5
AsseIs under adminisIraIion and in cusIody 192,465 45.3 191,127 45.0 1,338 0.7
IndirecI cusIomer deposiIs 424,941 100.0 424,680 100.0 261 0.1
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
Changes 30.06.2011 31.12.2010
uarIerIy deveIopmenI IndirecI deposiIs
4
2
9
,
4
9
2
4
2
2
,
9
6
7
4
2
9
,
6
4
5
4
2
4
,
6
8
0
3
!
/
3
/
!
0
3
0
/
6
/
!
0
3
0
/
9
/
!
0
3
!
/
!
2
/
!
0
4
2
6
,
5
8
6
4
2
4
,
9
4
!
3
!
/
3
/
!
!
3
0
/
6
/
!
!


As al 30 June 20!! indirecl cuslomer deposils reached almosl 425 billion euro, in line wilh lhe ligures as al
3! December 20!0 (+0.!').
Assels under managemenl, which accounl lor more lhan hall ol lhe overall aggregale, came lo approximalely 232 billion euro,
down slighlly compared lo lhe end ol lhe previous year (-0.5'). Negalive conlribulions lo lhis lrend came lrom mulual lunds
(-7.!'), which were only parlly ollsel by lhe posilive lrend in lile policies (+2.2') and porllolio managemenl (+!.7'). ln lhe
insurance segmenl, lhe new lnlesa Sanpaolo Vila, LurizonVila, Sud Polo Vila, Cenlro Vila Assicurazioni and lideuram Vila business
came lo 7.7 billion euro in lhe period, compared lo 7.2 billion euro recognised in lhe lirsl hall ol 20!0, owing lo increased
placemenl ol unil-linked policies.
The increase recorded in assels under adminislralion (+0.7'), posilively allecled by lhe inclusion ol 8anca Sara in lhe scope ol
consolidalion ol 8anca lideuram, is allribulable lo lhe posilive perlormance ol inslilulional cuslomer posilions in securilies.


financiaI asseIs and IiabiIiIies
(millions ol euro)
30.06.2011 31.12.2010
amounI %
linancial assels held lor lrading
60,555 7!,896 -!!,34! -!5.8
o| wh|ch der|va||ves a| |a|r va|ue J0,1J7 J3,9J3 -3,301 -22.6
linancial assels designaled al lair value lhrough prolil and loss
36,303 35,550 753 2.!
linancial assels available lor sale 68,99! 6!,8!9 7,!72 !!.6
lnveslmenls held lo malurily 2,856 3,839 -983 -25.6
ToIaI !inanciaI asseIs
168,705 173,104 -4,399 -2.5
financiaI IiabiIiIies heId !or Irading -35,871 -43,045 -7,174 -16.7
o| wh|ch der|va||ves a| |a|r va|ue -J1,426 -40,231 -3,3 -22.0
(*)
The amounl ol lhe ilem does nol include capilal prolecled securilised derivalives (cerlilicales) which are included in lhe direcl cuslomer deposils lable.
Changes
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.

The lable above illuslrales lhe breakdown ol linancial assels and lhe lolal linancial liabililies held lor lrading. linancial liabililies
designaled al lair value, relerring lo insurance business, cerlain bond issues designaled al lair value and capilal-prolecled
cerlilicales, are nol represenled as lhese are included in lhe direcl deposils aggregale.
Tolal linancial assels lell by 2.5', primarily owing lo lhe perlormance ol linancial assels held lor lrading, which decreased lrom
72 billion euro lo 6! billion euro. The decrease essenlially relaled lo lrading derivalives and lhe bond and governmenl securily
componenl ol porllolios, and is mainly allribulable lo lhe Parenl Company and lhe companies in lhe insurance segmenl lhal hold
lhe mosl signilicanl share ol lhal aggregale.
linancial assels available lor sale recorded a growlh ol over 7 billion euro (+!!.6'). linancial assels designaled al lair value
lhrough prolil and loss increased (+2.!'), whereas inveslmenls held lo malurily decreased (-25.6').

Iinancial instrument reclassification
The lable below illuslrales lhe slock ol securilies subjecl lo reclassilicalion included in lhe porllolio as al 30 June 20!!, wilh
relaled ellecls on lhe income slalemenl and shareholders' equily reserves deriving lrom lhe lransler lrom designalion al lair value
lo measuremenl al amorlised cosl.
Nole lhal.
lhe columns enlilled "lncome componenls in case ol no lransler (belore lax)" show lhe prolil and losses lhal would have
been recognised as componenls ol comprehensive income (eilher lhrough prolil and loss or as changes in valualion reserves)
in lhe lirsl hall ol 20!! il lhe lransler had nol been made,
lhe columns enlilled "lncome componenls in lhe period (belore lax)" show lhe prolil and losses aclually recognised as
componenls ol comprehensive income (eilher lhrough prolil and loss or as changes in valualion reserves) in lhe lirsl hall ol
20!! lollowing lhe lransler.

77



ExpIanaIory noIes - 8alance sheel aggregales
78
(millions ol euro)
ook vaIue
aI
30.06.2011
fair vaIue
aI
30.06.2011
Valualion Olher Valualion Olher
Debl securilies linancial assels held
lor lrading
Loans 2,895 2,7!0 48 33 ! 53
Debl securilies linancial assels held
lor lrading
linancial assels
available
lor sale
62 62 -!5 3 -!5 3
Shares and lunds linancial assels held
lor lrading
linancial assels
available
lor sale
36 36 4 - 4 -
Debl securilies linancial assels
available lor sale
Loans 5,920 4,80! -25 92 -!09 88
Loans linancial assels
available lor sale
Loans !28 !24 9 2 -3 2
TOTAL 9,041 7,733 21 130 -122 146
Type o! !inanciaI
insIrumenI
Previous porI!oIio Nev porI!oIio Income componenIs
in case o! no Irans!er
(belore lax)
AnnuaI income
componenIs
(belore lax)

ll lhe Croup had nol elecled lo reclassily lhe loregoing linancial assels, a lolal ol !43 million euro in grealer posilive mark-lo-
markel income componenls would have been recognised during lhe hall year, broken down as lollows.
wrile-oll ol lhe negalive income componenls recognised during lhe year lollowing lhe !22 million euro lransler. Ol lhis
amounl, 22 million euro relales lo adjuslmenls, 9! million euro lo lair value decreases lollowing hedges and 9 million euro lo
lhe negalive changes in lhe Valualion reserves,
reversal ol lhe posilive income componenls which would have been recognised had no lransler laken place, lolalling
2! million euro. Ol lhis amounl, 23 million euro relers lo lhe revalualion ol reclassilied securilies in lhe income slalemenl,
9! million euro lo lair value decreases lollowing hedges and 89 million euro lo lhe increase in lhe Valualion reserves.
Moreover, had no reclassilicalion laken place, olher posilive income componenls amounling lo !6 million euro would have nol
been recognised during lhe hall year. This amounl is mainly relaled lo lhe amorlised cosl ol lhe reclassilied securilies.
On lhe whole, lhe reclassilied assels would have been wrillen down by !,320 million euro as al 30 June 20!!, ol which 272
million euro would have been recognised lhrough prolil and loss and !,048 million euro lhrough Valualion reserves lor linancial
assels available lor sale under Shareholders' equily.
No porllolio lranslers were made in lhe lirsl hall ol 20!!.
The lolal elleclive inleresl rale allribulable lo lhe reclassilied securilies porllolio is equal lo 3.27' (3.3' as al
3! December 20!0).

Net financial assets held for trading and financial assets designated at fair value through profit and loss
(millions ol euro)
% breakdovn % breakdovn amounI %
8onds and olher debl securilies held lor lrading and designaled al
lair value lhrough prolil and loss 50,627 83.0 53,208 82.7 -2,58! -4.9
o| wh|ch des|na|ed a| |a|r va|ue 2J,1J9 J7.9 22,117 J4.J 1,022 4.6
Lquilies and quolas ol UCl held lor lrading and designaled al lair
value lhrough prolil and loss !6,040 26.3 !5,269 23.7 77! 5.0
o| wh|ch des|na|ed a| |a|r va|ue 1J,11 21. 1J,402 20.3 -237 -2.1
Olher assels designaled al lair value lhrough prolil and loss 54 0.! 3! - 23 74.2
5ecuriIies, asseIs heId !or Irading and !inanciaI asseIs
designaIed aI !air vaIue Ihrough pro!iI and Ioss 66,721 109.4 68,508 106.4 -1,787 -2.6
financiaI IiabiIiIies heId !or Irading -4,445 -7.3 -2,764 -4.3 1,681 60.8
Nel value ol linancial derivalives -!,088 -!.8 -!,!8! -!.8 -93 -7.9
Nel value ol credil derivalives -20! -0.3 -!62 -0.3 39 24.!
NeI vaIue o! Irading derivaIives -1,289 -2.1 -1,343 -2.1 -54 -4.0
financiaI asseIs l IiabiIiIies, neI 60,987 100.0 64,401 100.0 -3,414 -5.3
30.06.2011 31.12.2010 Changes
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
(*)
The amounl ol lhe ilem does nol include capilal prolecled securilised derivalives (cerlilicales) which are included in lhe direcl cuslomer deposils lable.

linancial assels held lor lrading, nel ol lhe associaled liabililies, and linancial assels designaled al lair value lhrough prolil and
loss reached almosl 67 billion euro, down 2.6' compared lo lhe end ol 20!0. This lrend was lhe resull ol a decrease in bonds
and olher debl securilies, which was only parlly ollsel by an increase in equilies and quolas ol UCl. linancial liabililies held lor
lrading, including shorl selling, lell by !.7 billion euro.

78



ExpIanaIory noIes - 8alance sheel aggregales
79
Iinancial assets available for sale
(millions ol euro)
% breakdovn % breakdovn amounI %
8onds and olher debl securilies 63,625 92.3 56,37! 9!.! 7,254 !2.9
Lquilies and quolas ol UCl 5,334 7.7 5,4!5 8.8 -8! -!.5
5ecuriIies avaiIabIe !or saIe 68,959 100 61,786 99.9 7,173 11.6
Loans avaiIabIe !or saIe 32 - 33 0.1 -1 -3.0
financiaI asseIs avaiIabIe !or saIe 68,991 100.0 61,819 100.0 7,172 11.6
30.06.2011 Changes 31.12.2010
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.

linancial assels available lor sale amounled lo nearly 69 billion euro, up by !!.6' compared lo lhe ligure as al
3! December 20!0.
The caplion consisls primarily ol bonds and olher debl securilies nol held lor lrading and, lo a lesser exlenl, ol equilies.
linancial assels available lor sale are measured al lair value wilh a balancing enlry in lhe specilic shareholders' equily reserve.


NeI inIerbank posiIion
The nel inlerbank posilion was negalive by almosl 6.5 billion euro as al 30 June 20!!, compared lo !! billion euro al lhe end ol
20!0 and !0 billion euro al lhe end ol March. The imbalance belween amounls due lrom/lo banks is consislenl wilh Croup policy
ol privileging liquidily.


Non-currenI asseIs heId !or saIe and disconIinued operaIions and reIaIed IiabiIiIies
(millions ol euro)
30.06.2011 31.12.2010
amounI %
lnveslmenls in associales and companies subjecl lo joinl conlrol - - - -
Properly and equipmenl 38 75 -37 -49.3
Olher - - - -
IndividuaI asseIs 38 75 -37 -49.3
DisconIinued operaIions - - - -
o| wh|ch. |oans |o cus|omers - - - -
LiabiIiIies associaIed viIh non-currenI asseIs heId !or saIe and
disconIinued operaIions - - - -
Non-currenI asseIs heId !or saIe and disconIinued operaIions
and reIaIed IiabiIiIies 38 75 -37 -49.3
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
Changes

This caplion conlains assels and relaled liabililies which no longer reler lo conlinuing operalions as lhey are being disposed ol.


5overeign risk exposure
The public debl crisis and resulling lension on lhe linancial markels led lo a series ol aclions by lhe Luropean Union and lhe
lnlernalional Monelary lund lo provide linancial supporl lo lhe counlries in mosl dillicully. Such aclions involved Creece, lreland
and Porlugal. lowever il is only in relalion lo Creece lhal lhe aclion envisaged involvemenl ol lhe privale seclor.
Delails on exposures lo Creece can be lound in lhe nexl chapler. Wilh regard lo exposures lo lreland and Porlugal, il is
considered lhal lhe crisis in lhese lwo counlries is less inlense lhan in Creece, as also conlirmed by lheir markel values and credil
spreads and lhal, also as a resull ol lhe aloremenlioned public aid, al presenl lhere are no condilions lo consider a wrile-down ol
lhe exposures as, amongsl olher lhings, lhere has been no breach ol conlracls such as a delaull ol inleresl or capilal paymenls.
The lollowing lable illuslrales lhe book value ol lnlesa Sanpaolo Croup exposures lo sovereign risk.
79



ExpIanaIory noIes - 8alance sheel aggregales
80
(millions ol euro)
Loans and
ReceivabIes
financiaI
asseIs avaiIabIe
!or saIe
financiaI
asseIs
heId
Io maIuriIy
financiaI
asseIs
designaIed aI
!air vaIue
Ihrough pro!iI
and Ioss
financiaI
asseIs heId
!or Irading
ToIaI
EU CounIries 8,415 50,420 2,084 316 14,734 75,969 23,040
Auslria
- 80 2 - 66 !48 -
8elgium
- 90 - - !4 !04 -
8ulgaria
- - - - ! ! -
Cyprus
!9 - - - - !9 -
Czech Republic
- 27 - - - 27 23
Denmark
- - - - - - -
Lslonia
- - - - - - -
linland
- !02 - - !2 !!4 !7
lrance
!!5 505 - - 87 707 -
Cermany
!52 2,306 - - !,!!5 3,573 -
Creece
226 3!7 - - !6 559 -
lungary
300 257 23 - !65 745 !68
lceland
- - - - ! ! -
lreland
- !86 - - - !86 -
llaly
6,988 43,829 939 282 !2,434 64,472 22,05!
Lalvia
25 - - - ! 26 55
Liechlenslein
- - - - - - -
Lilhuania
- 20 - - 3 23 -
Luxembourg
- 294 - 34 245 573 -
Malla
- - - - - - -
Nelherlands
- 469 - - !45 6!4 -
Norway
- - - - 55 55 -
Poland
69 29 - - !42 240 -
Porlugal
- 44 - - ! 45 25
Romania
!0 !20 - - 4 !34 !2
Slovakia
- !,282 !,!20 - !5 2,4!7 77
Slovenia
- 93 - - 3 96 77
Spain
5!! 334 - - !05 950 535
Sweden
- 35 - - 32 67 -
Uniled Kingdom
- ! - - 72 73 -
NorIh A!rican CounIries 19 114 12 0 950 1,095 46
Algeria
- - - - - - 46
Lgypl
- !!4 !2 - 950 !,076 -
Libya
- - - - - - -
Morocco
!9 - - - - !9 -
Tunisia
- - - - - - -
1apan - - - - 296 296 -
OIher CounIries 1,010 170 320 - 2,336 3,836 1,128
TOTAL CON5OLIDATED DATA 9,444 50,704 2,416 316 18,316 81,196 24,214
DET 5ECURITIE5 LOAN5

xposure to Greece
As al 30 June 20!! lhe lnlesa Sanpaolo Croup's lolal exposure lo Creece amounled lo 88! million euro in lerms ol nominal
value, recognised lo lhe balance sheel wilh a value ol 559 million euro.
lollowing inlensilicalion ol lhe Creek debl crisis and linancial markel expeclalions ol an exlensive and credible supporl plan, on
2! July lhe leads ol Slale ol eurozone counlries approved a slruclured plan ol aid lor Creece which envisages lurlher
involvemenl ol lhe Luropean Union and lhe lMl, slronger powers and inlervenlion lor lhe LlSl and even lhe involvemenl ol
privale inslilulional inveslors. As parl ol lhis plan, banks and insurance companies under lhe direclion ol lhe lnslilule ol
lnlernalional linance (lll) delined a number ol supporl oplions lor Creece.
These oplions involve a securilies exchange/roll-over programme maluring by 2020, wilh new !5-year and 30-year securilies
issued by lhe Creek governmenl. lour privale seclor inlervenlion oplions were envisaged, governed in various ways depending on
lhe malurily, rale and guaranlees ol lhe new securilies, which are eslimaled, in NPV lerms, lo generale a 2!' loss, assuming a
discounl rale ol 9' which lhe Creek debl could reach, also as a resull ol lhe newly-approved aid.
The plan lherelore involves huge and delailed supporl aclions, lhe aclual ellecls ol which on lhe Creek solvency posilion cannol
80



ExpIanaIory noIes - 8alance sheel aggregales
81
yel be lully assessed, given lhe recenl delinilion ol lhe lorm ol supporl and currenl lack ol lechnical inlormalion on how lhe
exchange/roll-over oplions which involve privale inslilulional inveslors will aclually be linalised.
ln preparing lhe hall-yearly reporl as al 30 June 20!! bolh securilies covered by lhe agreemenl and lhose maluring beyond 2020
were measured according lo lhe crileria specilic lo lheir classilicalion calegories. ln parlicular, securilies classilied as
linancial assels available lor sale and linancial assels held lor lrading were measured al lair value based on lheir markel prices as
al 30 June 20!!.
As lhe debl relers lo a sovereign enlily and given lhal proleclion mechanisms have been pul inlo place by supranalional bodies
lor lhis lype ol debl, in preparing lhis hall-yearly reporl impairmenl losses were recognised only lor lhe governmenl securilies
maluring by 2020, lor which lhe condilions lor privale inslilulional inveslor parlicipalion under lhe lerms ol lhe aloremenlioned
agreemenl have been laken inlo accounl. An impairmenl loss ol 48 million euro has lherelore been recognised, measured in
relerence lo lhe aloremenlioned NPV lor securilies classilied under lhe Loans and receivables caplion, and relerring lo markel
prices as al 30 June 20!! (recognising lhe enlire negalive equily reserve lo lhe income slalemenl) lor securilies classilied as
Assels available lor sale. The impacl on lhe consolidaled income slalemenl, nel ol amounls allocaled lo insurance producls under
separale managemenl, came lo 25 million euro.
These measuremenls will be lesled again in lhe nexl quarlerly and annual reporls lo lake inlo accounl developmenls in lhe
aloremenlioned agreemenls, in lhe markel scenarios and in lhe general solvency posilion ol lhe Creek governmenl.
The lollowing lable illuslrales lhe lnlesa Sanpaolo Croup exposures lo Creek governmenl bonds.
(millions ol euro)
GovernmenI bonds maIuring by 2020 NominaI
vaIue as aI
30.06.2011
fair vaIue as aI
30.06.2011
AdjusImenIs
(*)
Af5 reserve as aI
30.06.2011
(*)
Loans and receivables 42 2! -!2
-
33
linancial assels available lor sale 88 55 -36
-
55
linancial assels held lor lrading !4 !!
-
!!
TOTAL 144 87 -48
-
99
TOTAL (neI o! aIIribuIions Io insurance porI!oIios under separaIe managemenI) -25
(millions ol euro)
GovernmenI bonds maIuring a!Ier 2020 NominaI
vaIue as aI
30.06.2011
fair vaIue as aI
30.06.2011
AdjusImenIs
(*)
Af5 reserve as aI
30.06.2011
(*)
Loans and receivables !50 46
-
-!2 !93 (**)
linancial assels available lor sale 57! 262
-
-3!2 (***) 262
linancial assels held lor lrading !6 5
-
5
TOTALE 737 313
-
-324 460
(millions ol euro)
TOTAL GovernmenI bonds NominaI
vaIue as aI
30.06.2011
fair vaIue as aI
30.06.2011
AdjusImenIs
(*)
Af5 reserve as aI
30.06.2011
(*)
Loans and receivables !92 67 -!2 -!2 226
linancial assels available lor sale 659 3!7 -36 -3!2 (***) 3!7
linancial assels held lor lrading 30 !6
-
!6
TOTAL 881 400 -48 -324 559
(*) ligures gross ol lhe lax ellecl.
(***) The reserve is shown nel ol lhe porlion allribulable lo insurance porllolios under separale managemenl.
(**) As lhese are securilies hedged againsl inleresl rale risk, lhe book value lakes inlo accounl a revalualion ol 55 million euro in applicalion ol lhe lair value hedge.
ook vaIue as aI
30.06.2011
ook vaIue as aI
30.06.2011
ook vaIue as aI
30.06.2011

ln addilion lo lhe above exposures, lhe Croup has exposures in securilies ol Creek companies and public enlilies lor a nominal
value ol 279 million euro, recognised lo lhe balance sheel lor 282 million euro (230 million euro among Loans and receivables,
50 million euro as linancial assels available lor sale and 2 million euro as linancial assels held lor lrading) and wilh a lair value ol
!54 million euro, lor which lhe measuremenl crileria applied as al previous reporling dales remained unchanged and wilhoul
impairmenl loss recognilion. lurlhermore, loans lo Creek public enlilies have been disbursed lor 225 million euro.


5harehoIders' equiIy
As al 30 June 20!!, lhe Croup's shareholders' equily, including nel income lor lhe period, came lo 58,935 million euro compared
lo lhe 53,533 million euro al lhe end ol lhe previous year. The change in shareholders' equily is mainly due lo lhe ellecls ol lhe
capilal increase compleled in June.
As summarised al lhe beginning ol lhis reporl, lhe Lxlraordinary Shareholders' Meeling on !0 May 20!! resolved a capilal
increase lor consideralion, lor a lolal maximum amounl ol 5 billion euro, including share premium and in divisible lorm, lhrough
lhe issuance ol ordinary shares wilh a nominal value ol 0.52 euro each, carrying regular righls (i.e. lrom ! January 20!!), lo be
ollered wilh pre-emplive righls lo ordinary and savings shareholders, pursuanl lo arlicle 244! ol lhe llalian Civil Code.
81



ExpIanaIory noIes - 8alance sheel aggregales
82
ln implemenling lhe Shareholders' Meeling resolulion, on !9 May lhe Managemenl 8oard decided lo issue 3,65!,949,408
ordinary shares wilh a nominal value ol 0.52 euro each, wilh lhe same characlerislics as lhose already in issue and wilh regular
righls, lo be ollered wilh pre-emplive righls lo shareholders al lhe price ol !.369 euro per share, including 0.849 euro share
premium, in lhe ralio ol 2 new shares lor every 7 ordinary shares and/or savings shares held, lor a maximum nominal value ol
!,899,0!3,692.!6 euro and a lolal aggregale value including share premium ol 4,999,5!8,739.55 euro. The issue price was
delermined by applying a discounl ol approximalely 24' lo lhe lheorelical ex-righl price (TLRP) ol ordinary shares, calculaled on
lhe basis ol lhe currenl ollicial Slock Lxchange price.
The righls ollering ol new ordinary shares ended on 22 June wilh lull subscriplion ol lhe lolal 3,65!,949,408 shares ollered, lor a
lolal aggregale value ol 4,999,5!8,739.55 euro.
ln grealer delail, during lhe subscriplion period - which ran lrom 23 May 20!! unlil !0 June 20!! - !2,756,47!,903 righls were
exercised and a lolal ol 3,644,706,258 new shares subscribed, accounling lor 99.80' ol lolal new shares under lhe ollering,
corresponding lo an aggregale amounl ol 4,989,602,867.20 euro.
The 25,35!,025 righls lhal had nol been exercised al lhe end ol lhe subscriplion period were sold lhrough 8anca lMl on lhe Slock
Lxchange, pursuanl lo Arlicle 244!, paragraph 3, ol lhe llalian Civil Code. These were all sold on !5 June 20!! and subsequenlly
exercised by 22 June lo subscribe lor a lolal ol 7,243,!50 shares, equal lo 0.20' ol lhe new shares on oller, lor an aggregale
amounl ol 9,9!5,872.35 euro.
ln relerence lo lhe capilal increase, accessory cosls lor approximalely !00 million euro were recognised as a direcl reduclion in lhe
share premium reserve.
More specilically, 90 million euro ol lhese cosls relerred lo commissions paid lo linancial inlermediaries as organisalion and
coordinalion lees (20 million euro), pre-guaranlee commilmenls (!0 million euro) and guaranlee commilmenls (60 million euro).
!0 million euro ol lhe aloremenlioned 90 million euro were due lo 8anca lMl and are lherelore nelled lrom lhe Croup
consolidaled linancial slalemenls.
The resulling cosls mainly concerned lhe lixed lees payable lo Monle Tiloli (3.6 million euro) and lo lhe lndependenl Audilors
(4 million euro) lor review ol lhe quarlerly reporl and cerlilicalion relaling lo disclosures.
ln lerms ol impacl on capilal ralios, lhe aloremenlioned capilal increase had a posilive ellecl on Core Tier ! ol approximalely
!50 basis poinls.
The lollowing lable provides lhe delails ol changes in shareholders' equily during lhe hall year.
(millions ol euro)
5hare CapiIaI 31.12.2010
(*)
Increase Changes
firsI haI! 2011
30.06.2011
Ordinary 6,!62 !,899
- 8,06!
Savings 485
- - 485
TOTAL 6,647 1,899
-
8,546
Share premium reserve 33,!02 3,!0! -60
(**)
36,!43
Olher reserves (***) !2,74!
- !,505 !4,246
5harehoIders' EquiIy 52,490 5,000 1,445 58,935
(*) ligures as al 3! December 20!0 which lake inlo accounl lhe dislribulion ol dividends resolved by lhe Parenl Company
(**) Accessory cosls relaling lo lhe share capilal increase, nel ol lhe relaled lax ellecls
(***) lncluding nel income lor lhe period

valuation reserves
(millions ol euro)
% breakdovn
linancial assels available lor sale -662 48 -6!4 65.5
Properly and equipmenl - - - -
Cash llow hedges -494 !52 -342 36.5
Legally-required revalualions 343 - 343 -36.6
Olher -24! -83 -324 34.6
VaIuaIion reserves -1,054 117 -937 100.0
Change
in Ihe
period
VaIuaIion
reserves
as aI
31.12.2010
VaIuaIion reserves as aI
30.06.2011

The Croup's share ol valualion reserves recorded a negalive balance as al 30 June 20!! lhal was 937 million, lower lhan lhe
negalive balance ol !,054 million euro as al lhe end ol 20!0. The change during lhe period is due lo lhe perlormance ol lhe cash
llow hedge reserve and, lo a lesser exlenl, lo lhe value ol linancial assels available lor sale, in parlicular debl securilies.
The negalive value increased lor olher reserves.


ReguIaIory capiIaI
Regulalory capilal and relaled capilal ralios as al 30 June 20!! have been delermined by applying lhe 8ank ol llaly's inslruclions
in accordance wilh 8asel 2 provisions.
ll is noled lhal, lollowing oblainmenl ol aulhorisalion lrom lhe Supervisory Aulhorily, lhe lnlesa Sanpaolo Croup calculales
capilal requiremenls lor credil risk and counlerparly risk, respeclively, according lo lhe lR8 approach lor lhe Relail Morlgage
82



ExpIanaIory noIes - 8alance sheel aggregales
83
segmenl (Residenlial morlgages lo privale individuals) on a scope consisling ol lhe Parenl Company and lhe main nelwork banks,
elleclive 30 June 20!0, and according lo lhe advanced inlernal raling-based approach (AlR8) in regards lo lhe regulalory lrading
porllolio "Lxposures lo corporales" lor lhe Parenl Company, nelwork banks, 8anca lnlraslrullure lnnovazione e Sviluppo and
Mediocredilo, elleclive 3! December 20!0. ln addilion, in early 20!0 lhe lnlesa Sanpaolo Croup received aulhorisalion lo use lhe
inlernal AMA lo delermine capilal requiremenls lor operalional risks on an inilial scope which comprises lhe main
Croup companies, elleclive lrom reporling as al 3! December 2009.
ll is noled lhal, elleclive lrom 3! December 20!0, lhe new melhods lor delermining regulalory capilal, as a resull ol ralilicalion
ol lhe CRD ll Direclive, call lor lhe exclusion ol lhe nominal value ol prelerence shares issued by lhe Croup.
(millions ol euro)
ReguIaIory capiIaI 30.06.2011 31.12.2010
and capiIaI raIios
ReguIaIory capiIaI
Tier ! capilal 37,879 3!,!75
o| wh|ch. |ns|rumen|s no| |nc|uded |n Core 1|er 1 ra||o ( ,009 ,016
Tier 2 capilal !3,923 !6,348
Minus ilems lo be deducled (**) -3,495 -3,72!
REGULATORY CAPITAL 48,307 43,802
Tier 3 subordinaled loans - -
TOTAL REGULATORY CAPITAL 48,307 43,802
Risk-veighIed asseIs
Credil and counlerparly risks 277,552 289,!72
Markel risks !3,96! !5,385
Operalional risks 27,255 27,!75
Olher risks (***) 2,027 426
RI5K-WEIGHTED A55ET5 320,795 332,158
CapiIaI raIios %
Core Tier ! ralio !0.2 7.9
Tier ! ralio !!.8 9.4
Tolal capilal ralio !5.! !3.2
(***) ln relalion lo risk-weighled assels, lhis caplion includes lurlher specilic capilal requiremenls as provided lor by lhe Supervisory Aulhorily lo lhe various Croup
enlilies. ll also includes lhe supplemenl lor lhe lloor relaling lo lhe calculalion ol capilal requiremenls lor lhe credil risk according lo lR8 approaches.
(**) ln compliance wilh lhe provisions ol lhe 8ank ol llaly Circular 263/2006, in lhe calculalion ol capilal ralios, elemenls lo be deducled lrom lolal regulalory capilal
have been deducled separalely and lor an equal amounl lrom Tier ! and Tier 2 capilal, wilh lhe exceplion ol lhe conlribulions deriving lrom lhe insurance business lhal
reler lo conlracls which arose prior lo 20 July 2006 and conlinue lo be deducled lrom lolal capilal.
(*) This caplion includes prelerred shares and, as ol 3! December 20!0, savings shares and prelerence ordinary shares.

As al 30 June 20!!, lolal regulalory capilal came lo 48,307 million euro, compared lo risk-weighled assels ol 320,795 million
euro, resulling primarily lrom credil and counlerparly risk and, lo a lesser exlenl, operalional and markel risk.
Wilh regard lo lhe calculalion melhod lor weighled assels, as al 3! March 20!! lhis included an inlegralion ol approximalely
8 billion euro lor lhe lloor sel by lhe Supervisory Aulhorily in relerence lo calculalion ol lhe requiremenls according lo inlernal
melhods. As lhese melhods reporled lower riskiness ol assels rellecled in lhe drop in credil and counlerparly risk-weighled
assels lhe requiremenls were supplemenled, laking as relerence 90' ol lhe same ligure calculaled wilh a view lo 8asel !
(lloor), as provided lor by lhe Supervisory Aulhorily. As lhe Supervisory Aulhorily laler aulhorised a reduclion in lhe
aloremenlioned lloor lrom 90' lo 85', lhe calculalion as al 30 June was prepared according lo lhe new paramelers.
The decrease in risk-weighled assels in lhe hall year is mainly due lo ordinary business aclivilies, lo lhe ongoing oplimisalion
processes and lo disposal ol lhe assels relerred lo below. Regulalory capilal lakes inlo accounl ordinary operalions and an
eslimale ol lhe dividends lo be paid on 20!! nel income, lhe amounl ol which has been delermined on a convenlional basis as
hall lhe 20!0 dividend, equal lo 4 eurocenls on ordinary shares and 4.5 eurocenls on savings shares, relerring lo all shares in
issue as al 30 June 20!! and lherelore including lhe new shares issued (662.5 million euro ol lhe lolal !,325 million euro).
The Tolal capilal ralio slood al !5.!', while lhe Croup's Tier ! ralio was !!.8'. The ralio ol Tier ! capilal nel ol ineligible
inslrumenls lo risk-weighled assels (Core Tier !) was !0.2'.
ln addilion lo ordinary operalions, lhe increase in lhe Core Tier ! and Tier ! ralio compared lo 3! December 20!0 derives lrom
lhe capilal increase resolved and subscribed during lhe second quarler ol 20!! (approximalely +!50 basis poinls on Core Tier !),
lhe sale ol Cassa di Risparmio della Spezia lo Credil Agricole and ol 97 branches (+20 basis poinls on Core Tier ! ralio), lhe sale
ol second parl ol lindomeslic (+ !0 basis poinl on Core Tier !), lhe sale ol parl ol lhe inveslmenl in Prada (+8 basis poinls on
Core Tier !) and lhe removal ol negalive lillers on lhe ellecls deriving lrom lhe redemplion ol goodwill (+!4 basis poinls on lhe
Core Tier ! ralio), based on lhe specilic nolilicalion ol lhe 8ank ol llaly as a resull ol lhe provisions ol lhe so-called
"Milleproroghe Decree" on lhe maller ol delerred lax assels.
Laslly, lhe 8ank ol llaly, in a Regulalion issued on !8 May 20!0, provided new supervisory inslruclions concerning lhe prudenlial
lrealmenl ol reserves associaled wilh debl securilies issued by lhe cenlral governmenls ol LU counlries and classilied among
"linancial assels available lor sale". ln parlicular, lhe Regulalion allows lhe capilal gains and losses recognised lhrough such
reserves associaled wilh lhe loregoing securilies lo be complelely neulralised elleclive ! January 20!0, as an allernalive lo lhe
already eslablished asymmelrical approach (lull deduclion ol lhe nel capilal loss lrom Tier ! capilal and parlial inclusion ol lhe nel
capilal gain in Tier 2 capilal). The lnlesa Sanpaolo Croup had elecled lo apply lhis approach. Accordingly, lhe regulalory capilal
and capilal ralios as al 30 June 20!! accounl lor lhis measure (lhe ellecl on lhe Core Tier ! ralio is +!0 basis poinls).
83


84
84
8reakdown ol consolidaled resulls by business area and
geographical area





The organisalional model ol lhe lnlesa Sanpaolo Croup is based on six 8usiness Unils. ln addilion lhere is lhe Corporale Cenlre,
which is charged wilh providing guidance, coordinalion and conlrol lor lhe enlire Croup.


The Intesa Sanpaolo Group
anca dei
TerriIori
CorporaIe
and
InvesImenI
anking
PubIic
finance
InIernaIionaI
5ubsidiary
anks
Eurizon
CapiIaI
anca
fideuram
CorporaIe
CenIre
(*)
(*)
lncludes lhe Croup's Treasury.


The lnlesa Sanpaolo Croup's segmenl reporling is based on lhe elemenls lhal lhe managemenl uses lo make ils own operaling
decisions (lhe "managemenl approach") and is lherelore consislenl wilh lhe disclosure requiremenls ol llRS 8.
ln addilion lo rellecling lhe operaling responsibililies assigned according lo lhe Croup's organisalional slruclure, lhe business
areas are an aggregalion ol business lines similar in lhe lype ol producls and services lhey sell.

The lable below shows lhe main dala summarising lhe lrend ol lhe business areas ol lhe lnlesa Sanpaolo Croup in lhe lirsl
hall ol 20!!.
The lollowing ilemised analysis ol lhe business areas conlains a descriplion ol lhe producls and services ollered, lhe lype ol
cuslomers served and lhe inilialives carried oul in lhe lirsl hall ol lhe year, il also illuslrales income slalemenl ligures, lhe main
balance sheel ligures as well as lhe mosl signilicanl prolilabilily ralios.
ll should be noled lhal Division ligures lor lhe comparalive periods have been reslaled lo rellecl lhe new scopes,
where necessary.

Allocaled capilal was delermined in accordance wilh lhe inslruclions issued by lhe 8ank ol llaly in compliance wilh 8asel 2
regulalory provisions.
Value crealion, expressed in lerms ol LVA, was calculaled nel ol merger and reslrucluring-relaled charges and ol lhe economic
ellecls ol purchase price allocalion pursuanl lo llRS 3.
84



ExpIanaIory NoIes - Resulls by business area and geographical area
85
85
(millions ol euro)
anca
dei
TerriIori
CorporaIe and
InvesImenI
anking
PubIic
finance
InIernaIionaI
5ubsidiary
anks
Eurizon
CapiIaI
anca
fideuram
CorporaIe
CenIre
ToIaI
OperaIing income
30.06.20!! 4,759 2,05! !96 !,!88 !36 400 -52 8,678
30.06.20!0 5,000 !,779 !59 !,!25 !37 373 -353 8,220
' change
(a)
-4.8 !5.3 23.3 5.6 -0.7 7.2 -85.3 5.6
OperaIing cosIs
30.06.20!! -2,833 -456 -37 -576 -64 -!70 -36! -4,497
30.06.20!0 -2,87! -427 -4! -570 -65 -!68 -365 -4,507
' change
(a)
-!.3 6.8 -9.8 !.! -!.5 !.2 -!.! -0.2
OperaIing margin
30.06.20!! !,926 !,595 !59 6!2 72 230 -4!3 4,!8!
30.06.20!0 2,!29 !,352 !!8 555 72 205 -7!8 3,7!3
' change
(a)
-9.5 !8.0 34.7 !0.3 - !2.2 -42.5 !2.6
NeI income
30.06.20!! 356 837 78 2!4 37 !05 -225 !,402
30.06.20!0 455 745 64 208 36 59 !23 !,690
' change
(a)
-2!.8 !2.3 2!.9 2.9 2.8 78.0 -!7.0
Loans Io cusIomers
30.06.20!! !84,473 !07,900 40,044 3!,34! !09 3,059 5,435 372,36!
3!.!2.20!0 !80,490 !!0,779 40,508 30,926 !53 2,85! !0,380 376,087
' change
(b)
2.2 -2.6 -!.! !.3 -28.8 7.3 -47.6 -!.0
DirecI cusIomer deposiIs
30.06.20!! 2!4,320 86,824 5,278 30,23! !2 !2,275 65,5!0 4!4,450
3!.!2.20!0 2!8,3!9 97,026 5,757 30,259 !2 !2,503 6!,!43 425,0!9
' change
(b)
-!.8 -!0.5 -8.3 -0.! - -!.8 7.! -2.5
(b)
The change expresses lhe ralio belween 30.06.20!! and 3!.!2.20!0.
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and in business unil consliluenls and disconlinued operalions.
(a)
The change expresses lhe ralio belween 30.06.20!! and 30.06.20!0.

85



ExpIanaIory NoIes - Resulls by business area and geographical area
86
86
U5INE55 AREA5

anca dei TerriIori
(millions ol euro)
30.06.2011 30.06.2010
amounI %
Nel inleresl income 2,8!! 2,957 -!46 -4.9
Dividends and prolils (losses) on inveslmenls
carried al equily - - - -
Nel lee and commission income !,655 !,688 -33 -2.0
Prolils (Losses) on lrading 52 40 !2 30.0
lncome lrom insurance business 229 3!2 -83 -26.6
Olher operaling income (expenses) !2 3 9
OperaIing income 4,759 5,000 -241 -4.8
Personnel expenses -!,639 -!,645 -6 -0.4
Olher adminislralive expenses -!,!89 -!,222 -33 -2.7
Adjuslmenls lo properly, equipmenl and inlangible assels -5 -4 ! 25.0
OperaIing cosIs -2,833 -2,871 -38 -1.3
OperaIing margin 1,926 2,129 -203 -9.5
Coodwill impairmenl - - - -
Nel provisions lor risks and charges -27 -69 -42 -60.9
Nel adjuslmenls lo loans -962 -!,04! -79 -7.6
Nel impairmenl losses on olher assels -!5 -9 6 66.7
Prolils (Losses) on inveslmenls held lo malurily and
on olher inveslmenls - - - -
Income (Loss) be!ore Iax !rom conIinuing operaIions 922 1,010 -88 -8.7
Taxes on income lrom conlinuing operalions -449 -405 44 !0.9
Merger and reslrucluring-relaled charges (nel ol lax) -!2 -28 -!6 -57.!
Lllecl ol purchase price allocalion (nel ol lax) -!05 -!22 -!7 -!3.9
lncome (Loss) aller lax lrom disconlinued operalions - - - -
Minorily inleresls - - - -
NeI income 356 455 -99 -21.8
AIIocaIed capiIaI 10,013 11,236 -1,223 -10.9
Pro!iIabiIiIy raIios (%)
Cosl / lncome ralio 59.5 57.4 2.! 3.7
ROL annualised 7.2 8.2 -!.0 -!2.2
LVA

adjusled
(a)
(millions ol euro)
6! !35 -74 -54.8
Income sIaIemenIlAIIernaIive per!ormance indicaIors
Changes

(millions ol euro)
30.06.2011 31.12.2010
amounI %
Loans lo cuslomers !84,473 !80,490 3,983 2.2
Direcl cuslomer deposils 2!4,320 2!8,3!9 -3,999 -!.8
o| wh|ch. due |o cus|omers 1JJ,370 1J,6J3 -1,763 -1.J
secur|||es |ssued 62,J49 6J,722 -1,J7J -2.2
||nanc|a| ||ao|||||es des|na|ed a| |a|r va|ue |hrouh pro|||
and |oss 13,101 13,99 -33 -4.
lndirecl cuslomer deposils 249,920 248,803 !,!!7 0.4
Changes
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and in business unil consliluenls and disconlinued operalions.
(a)
Nel ol merger and reslrucluring-relaled charges and ellecl ol purchase price allocalion, as per llRS 3.

8anca dei Terrilori closed lhe lirsl hall ol 20!! wilh operaling income ol 4,759 million euro, represenling 55' ol lhe Croup's
consolidaled revenues, down 4.8' on lhe same period in 20!0. ln lurlher delail, lhere was a lall in nel inleresl income (-4.9')
which had as one ol ils main causes lhe lower benelils deriving lrom hedging aclivilies and lhe smaller conlribulion lrom loans lo
cuslomers lollowing an increase in markel inleresl rales.
These ellecls were also parlly ollsel by lhe increase in lhe mark-down on deposils.
Nel lee and commission income was also down slighlly (-2'). Among olher income componenls, income lrom insurance business
decreased lrom 3!2 million euro in lhe lirsl hall ol 20!0 lo 229 million euro in lhe lirsl six monlhs ol 20!!, due lo a reduclion in
linancial margins. Operaling cosls, amounling lo 2,833 million euro, lell slighlly (-!.3') compared lo lhe same period ol lhe
86



ExpIanaIory NoIes - Resulls by business area and geographical area
87
87
previous year. The operaling margin amounled lo !,926 million euro, down 9.5' on lhe lirsl hall ol 20!0. lncome belore lax
lrom conlinuing operalions amounled lo 922 million euro, down by 8.7', as a resull ol lower nel adjuslmenls lo loans (-7.6')
and lower nel provisions lor risks and charges (-60.9'). Laslly, aller allocalion ol merger and reslrucluring-relaled charges lo lhe
Division ol !2 million euro and lhe economic ellecls ol purchase price allocalion lor !05 million euro, nel income was 356 million
euro, down 2!.8'.
On a quarlerly basis, lhe operaling margin lor lhe second quarler decreased by 2.2' as compared lo lhe lirsl, due lo an increase
in operaling cosls, essenlially allribulable lo lhe seasonal lrend already reporled belween lhe lirsl and second quarler ol lasl year,
in relalion lo subslanlial slabilily in revenues. lncome belore lax lrom conlinuing operalions declined severely as a resull ol
signilicanl nel adjuslmenls lo loans applied during lhe second quarler.
The Division absorbed 4!' ol Croup capilal, which is lower lhan lhe lirsl six monlhs ol 20!0. The capilal, amounling lo !0,0!3
million euro, lell in absolule lerms (!0.9') mainly due lo lhe conlainmenl ol assels al risk mainly correlaled wilh lhe relail and
business segmenls. As a resull ol lhe lrend described lor allocaled capilal and nel income, annualised ROL came lo 7.2', down
on lhe lirsl hall ol 20!0. Value crealion came lo 6! million euro, compared lo lhe !35 million euro crealed in lhe same period in
lhe previous year.
The balance sheel ligures al lhe end ol June 20!! showed loans lo cuslomers ol !84,473 million euro, up by 2.2' on lhe
previous year end, mainly as a resull ol business cuslomers. Direcl cuslomer deposils lolalled 2!4,320 million euro, down (-!.8')
lrom lhe beginning ol lhe year, mainly due lo lhe decrease in demand deposils and lunding lhrough securilies.




Under lhe agreemenl signed on !7 lebruary 20!0 by lnlesa Sanpaolo and Credil Agricole, lhe sale ol CR La Spezia lo lhe
Cariparma lriulAdria Croup was closed on 3 January 20!!. The addilional 96 branches sold lo said group as parl ol lhe business
unil sale and in compliance wilh lhe llalian Compelilion Aulhorily's orders were also excluded lrom lhe Division's scope ol
Tradilional lending and deposil colleclion operalions in llaly and associaled linancial services

Relail Markeling Deparlmenl
landles lhe lousehold (individual cuslomers wilh linancial assels under !00,000 euro) and Personal
(individual cuslomers wilh linancial assels ol !00,000 euro - ! million euro) segmenls
.......................
Small 8usiness Markeling
Deparlmenl

Manages businesses wilh a lurnover under 2.5 million euro and Croup loan lacililies under ! million euro
8usiness Markeling
Deparlmenl.

Manages companies wilh a lurnover ol belween 2.5 and !50 million euro
.......................
Over 5,300 branches, including Relail, 8usiness and Privale-8anking branches, dislribuled broadly
lhroughoul llaly. The lerrilorial slruclure is divided inlo 8 Regional Covernance Cenlres lhal coordinale
27 Areas/Nelwork 8anks, designed lo guaranlee oplimum lerrilorial coverage and slandardised sizing in
lerms ol numbers ol branches and resources assigned.

lnlesa Sanpaolo Privale
8anking

Devoled lo privale cuslomers whose linancial assels exceed ! million euro.

Producl companies

8anca Prossima
Specialised in medium-lerm credil (Mediocredilo llaliano), lhe consumer credil segmenl (Monela and
Neos linance) and in lhe managemenl ol eleclronic paymenls (Seleli) and lrusl services
Serves non-prolil organisalions.
.......................
lnsurance and Pension
companies
Specialised in ollering pension and personal and assel proleclion services.
.......................
usiness
Mission
OrganisaIionaI
sIrucIure
DisIribuIion sIrucIure
To serve lousehold, Personal, Small 8usiness, Privale 8anking and Small and Medium Lnlerprise
cuslomers, crealing value lhrough.
widespread local coverage
a locus on lhe specilic qualilies ol local markels
exploilalion ol lhe brands ol banks and lhe cenlralily ol lhe roles ol lhe ollicers responsible lor lhe
Regional Covernance Cenlres, Area Covernance Cenlres, 8anks and 8ranches as poinls ol relerence
lor lhe Croup al local level
exploilalion ol lhe companies specialised in medium-lerm lending, consumer credil and pensions and
insurance, reporling lo lhe 8usiness Unil
87



ExpIanaIory NoIes - Resulls by business area and geographical area
88
88
consolidalion: lhese concern !! branches ol CR lirenze sold in March and 85 branches ol lnlesa Sanpaolo and CR Venelo
sold in May.
ln order lo slrenglhen oversighl ol operalions and relalions wilh lhe relerence lerrilory, lhe scope ol responsibilily ol lhe Areas
under lhe Regional Covernance Cenlres was redelined, crealing new lerrilorial Areas, which increased lo 27 lrom 22 al lhe end
ol December 20!0.

ReIaiI MarkeIing DeparImenI


During lhe lirsl hall ol 20!!, lhe ollering ol inveslmenl producls has been expanded wilh lhe launch ol.
A new sub-lund ol lhe mulual lund "Lurizon locus Capilale Prolello", which enables modesl
growlh ol invesled capilal over a lime span ol six years, wilh capilal proleclion on malurily,
"Lurizon Slralegia llessibile Obbligazioni 06/20!6", a new sub-lund ol lhe Luxembourg mulual
lund Lurizon Slralegia llessibile, which aims al oblaining an expecled yield lo malurily
(30/06/20!6) higher lhan lhal ol a baskel ol lixed-rale governmenl bonds in lhe eurozone, lhanks
lo lhe use ol aclive slralegies lo besl exploil markel opporlunilies, and "lnveslmenl Solulions 8y
Lpsilon Soluzione Alliva Prolella 07/20!7", a lhird sub-lund ol lhe Luxembourg mulual lund
lnveslmenl Solulion 8y Lpsilon, wilh lhe lwolold purpose ol prolecling capilal al malurily, by
invesling in a baskel ol governmenl bonds wilh high credilworlhiness, and parlicipaling in lhe
polenlial growlh ol slock markels, lhrough a dynamic inveslmenl slralegy in lhe Luro Sloxx 50
index, oplimised lhrough lhe use ol a quanlilalive model,
a new porllolio managemenl line "CP Linea Slralegia Valore Azioni Piu" lor allluenl cuslomers,
whose main objeclive is lo increase lheir capilal in lhe medium/long-lerm and who wanl lo
delegale lhe managemenl ol lheir assels whilsl slill mainlaining high levels ol inlormalion and
lransparency and a close relalionship wilh lheir branch advisor. The new line is designed lo creale
value lhrough a llexible approach in lhe seleclion ol lhe weighlings lo be assigned lo lhe various
assel classes according lo lhe markel scenarios,
lour new dislribulion and accumulalion componenls ol lhe CP Linea Dedicala, "Obbligazionario
Luro Tasso Variabile" and "Obbligazionario Covernalivo llalia".

Relaling lo lhe aclivilies supporling lhe Progello Risparmio(Savings Projecl), lhe communicalions
inilialives in collaboralion wilh lhe newspaper "ll Sole 24 Ore", aimed al slrenglhening lhe Croup's
posilion as lhe leader in assel managemenl, also conlinued during lhe period. Alongside lhe
collaboralion on lhe dedicaled porlal "24 Ore di Risparmio", conceived as a qualilied, aulhorilalive
inlormalional and educalional service on issues regarding saving, slarling lrom lebruary lhe monlhly
newsleller, lor relail cuslomers who signed up lor lhe service on lhe lnlernel, also included conlribulions
on issues regarding lhe world ol saving, ediled by lhe edilorial slall ol ll Sole 24 Ore.

Wilh regard lo currenl accounls, during lhe hall year, "Conlo lacile" was launched, lhe lirsl "lailor-
made" producl which is parl ol a new modular range ol banking services lor relail cuslomers, which
uses a single sales plallorm lo cuslomise lhe oller based on lhe cuslomer's characlerislics, specilic needs
and operalions. Wilh "Conlo lacile" cuslomers can selecl lhe sel ol producls and services mosl suilable
lo lheir needs, lor a lolal monlhly charge which includes lhe lees lor lhe individual producls and services
aclivaled, laking inlo accounl promolions and discounls which will be added lo lhe oller.

8y virlue ol an exclusive agreemenl wilh Alilalia, slarling lrom lebruary, lhe "lnlesa Sanpaolo Alilalia"
card is available lo cuslomers lhal are members ol lhe MilleMiglia loyally programme, lo lacililale lhe
accumulalion ol miles and oller discounls and benelils on llighl wilh lhe airline.

As a resull ol an agreemenl wilh Weslern Union Company, lhe world leader in money lransler services,
lo oller Weslern Union Money TranslerSM services, slarling lrom June, cuslomers holding an accounl
or a prepaid card can remil money abroad using lhe Croup's ATMs, 24-hours a day, al advanlageous
prices. lrom aulumn, 700 inlernel workslalions will also be sel up al branches, and lhe service will also
be exlended lo lhe web and mobile banking channels.

To simplily lhe adminislralive and operalional managemenl ol inherilance mallers, and improve
relalions wilh heirs, lhe new "lnherilance Process" was launched, wilh lhe eslablishmenl ol an
lnherilance Compelence Cenlre lor 8anca dei Terrilori, in charge ol managing several phases ol cases
lorwarded by lhe branches, and providing assislance on adminislralive aspecls and basic legal and lax
inlormalion.

During lhe hall year, as parl ol lhe "Preslilo Mulliplo", lhe loan lo linance personal and/or household
expenses, lhe "Preslilo Aulo" was launched. This is a loan lor purchasing a car, lor amounls lrom 2,000
euro lo 30,000 euro, wilh a lerm ol lrom 24 lo 72 monlhs, wilh no preliminary invesligalion ol
applicalion lees, wilh an allraclive inleresl rale compared lo slandard rales and lhe possibilily ol
repaying lhe amounl in personalised inslalmenls.

InvesImenI



Cards


Loans

CurrenI accounIs


5ervices


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89
89


The insurance oller was enriched wilh lhe new "Polizza ProleggiSalule" policy, lo cover medical
expenses lor illness or accidenls. This new, simple and innovalive producl is modular, ollering lhe
possibilily lo selecl various levels ol guaranlees based on linancial resources and propensily lor
insurance.

The "Preslilo ProleggiMuluo" range, aimed al supporling lhe single premium ol lhe "ProleggiMuluo
lnsurance Policy" enlered inlo lo cover residenlial morlgages, was expanded wilh lhe inlroduclion ol
lhe lloaling-rale version, so lhal proposals made are consislenl wilh lhe lype ol morlgage rale selecled
by cuslomers.




5maII usiness MarkeIing DeparImenI





DeposiI producIs


Loans


lor newly-acquired Small 8usiness cuslomers and lhose who conlribule new linancial assels, lhe
"Soluzione 8usiness 2,60'" has been sel up. This is a lime deposil on lhe cuslomer's currenl accounl
which meels lhe need lo oplimise corporale liquidily managemenl, keeping lemporary excess liquidily
under cuslody and increasing ils value over a delined lime span, lo lhen allocale il, al presel malurilies,
lo lhe produclion cycle or lo inveslmenl programmes, which are expecled lo lasl lor several monlhs.
The new producl is marked by simplicily, accessibilily and llexibilily. ll provides a gross relurn ol 2.60'
on lhe amounls deposiled lor !3 monlhs, wilhoul deposil opening, managemenl or closure lees, an
enlrance lhreshold ol 50,000 euro and a maximum subscriplion ceiling ol 5 million euro, wilh lhe
securily ol a base inleresl rale ol !', in lhe evenl ol early wilhdrawal.
The range ol loan producls was enriched wilh lhe inlroduclion ol "Tandem lmpresa Piu" and "Tandem
Condominio Piu", dedicaled lo 8usiness and Small 8usiness cuslomers (shorl and medium-lerm loans)
and condominiums (medium-lerm loans).
"Tandem lmpresa Piu" is a loan repaid in inslalmenls, lor companies purchasing goods or services wilh
suppliers lhal have an agreemenl wilh or are approved by lhe bank, which provides advanlages lor bolh
parlies. cuslomer companies may receive a loan ol up lo !00' ol lhe invoice, wilh zero inleresl,
repaying only lhe principal in monlhly inslalmenls, as lhe inleresl porlion is paid by lhe supplier lhal has
an agreemenl or is approved by lhe bank. The supplier receives supporl lor ils sales and collecls lhe
enlire amounl ol lhe supply in a lump sum, nel ol lhe inleresl paid in advance.
"Tandem Condominio Piu" is a lixed-rale, medium-lerm loan repaid in monlhly inslalmenls. The principal
is borne by lhe condominium, which can benelil lrom lax deduclions provided by law on building
renovalions, while lhe inleresl is charged lo lhe company providing lhe services.

The range ol producls was also expanded wilh "linanziamenlo Soslenibilila 8usiness", an ordinary
medium-lerm loan lo lavour inveslmenls in suslainable developmenl ol local areas, environmenlal
proleclion and improvemenls in salely in lhe workplace. The loan covers up lo !00' ol lhe inveslmenl,
lor a maximum amounl ol 750,000 euro, cumulalive wilhin lhe limil ol expenses documenled lhrough
public works, wilh a minimum duralion ol 2 years and a maximum duralion ol 5 years.

ln lhe area ol microcredil, "Preslilo della Speranza 8usiness" was launched. This is a new lype ol loan
wilh amounls ol up lo 25,000 euro, reserved lor lamilies which indenl lo launch a business or work as
lreelance prolessionals, and have been accepled lor lhe guaranlees provided by lhe llalian Lpiscopal
Conlerence lund.

ln lhe hall year, lhe calalogue was updaled wilh lhe issue ol new loan producls "wilh compulsory
policies", in compliance wilh Luropean Direclive 48/LC ol 2008, which came inlo lorce on 2! June.

ln lhe area ol larming credil, conlirming lhe close relalionship ol lhe Croup banks wilh cuslomers in lhe
agrilood and agroenergy seclors, lhe "Progello Radici" was launched, which involves lhe crealion ol
"Agribusiness Poinls" wilhin branches, as an elemenl ol allenlion and conlidence lor cuslomers.
ProIecIion producIs


During lhe hall year, a new calalogue ol proleclion producls lor Small 8usiness loans was launched. Wilh
a view lo ralionalising and slreamlining lhe range ol producls and services, previous coverage was
replaced by lwo new policies. "8usinessSempre" and "8usiness5", lhe lormer, wilh a duralion equal lo
lhal ol lhe loan, can be combined wilh all calegories ol loans which enlail repaymenl in inslalmenls and
wilh leasing, lhe laller, wilh a lixed duralion ol 5 years, lo cover shorl-lerm credil lines. The new range
eliminales overlaps, guaranleeing lhe insured parlies grealer llexibilily.

ProIecIion

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ExpIanaIory NoIes - Resulls by business area and geographical area
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90




usiness MarkeIing DeparImenI





AgreemenIs


lor 20!!, lnlesa Sanpaolo renewed lhe nalional collaboralion agreemenl wilh lhe llalian lrade
associalion Conlcommercio, signed in 2009. The goal ol lhis inilialive is lo conlinue guaranleeing
supporl lo enlerprises lhal operale in lhe commerce, lourism and service seclors by ensuring lhal lhey
have lhe liquidily lhey need lo meel lheir cash llow needs and llexible linancing, and loslering lhe
crealion ol recapilalisalion programmes and new projecls.
The agreemenl conlirms lhe provision by lhe bank ol lolal loans up lo 3 billion euro lo member
companies, also inlroducing lhe possibilily ol cuslomising lhe commercial proposal, implemenling lhe
lramework agreemenl al local level by enlering inlo agreemenls wilh Conlcommercio local associalions
and, possibly, Credil Cuaranlee Consorlia.

Al lhe end ol lebruary, lnlesa Sanpaolo enlered inlo an agreemenl wilh Rele lmprese llalia, an
associalion which coordinales lhe leading llalian 8usiness Conlederalions (Conlcommercio,
Conlarligianalo, CNA, Casarligiani and Conlesercenli), lor lhe purpose ol ensuring lhe ulmosl supporl lo
small businesses al a lime when lhe economic lrend remains dillicull.

Loans

As regards shorl-lerm loans, lhe measures under lhe "SML Cuaranlee lund", sel up by law 662/96 lo
lacililale access lo credil by small and medium enlerprises lhrough lhe granling ol a public guaranlee,
were exlended lo lacililies lor lhe purpose ol divesling porllolios and advances on invoices. The
guaranlee may nol exceed !.5 million euro as lhe pro-lempore lolal amounl guaranleed per company,
and ils coverage applies al a percenlage varying lrom 60' lo 85' ol lhe loan.
InIernaIionaIisaIion


AgreemenIs

The agreemenl wilh Compagnia delle Opere was renewed, based on which lhe over 34,000 prolil and
non-prolil member companies and lheir employees can receive banking producls and services al
advanlageous condilions. currenl accounls dedicaled lo privale individuals, microbusinesses and SMLs
and loans sel up based on varying needs, lrom "Preslo 8usiness" lo loans lor liquidily and inveslmenl
managemenl, lo recapilalisalion producls.

To lavour lhe aggregalion and compeliliveness ol small and medium-sized enlerprises, lnlesa Sanpaolo,
lhrough Mediocredilo llaliano, has equipped ils commercial slruclure wilh a complele range ol linancial
services and specialisl advice in supporl ol lhe launch ol lhe business nelworks and parlicipaling
businesses. Specilically, lhe range involves consulling during lhe pre-incorporalion phase, lhe search lor
business parlners, oversighl ol inslilulional and associalion relalions, advisory services and lradilional
banking services lor lhe managemenl ol colleclions and paymenls and company liquidily.
PoIicies

ln January, dislribulion ol lhe "Prolezione Palrimonio Lxeculive & Company" policy was launched by lhe
insurance company Arch lnsurance Lurope Lld. This policy, which is largeled lo all corporalions,
cooperalive companies, consorliums, associalions and loundalions, insures lhe company and ils direclors,
prolecling company, personal and lamily assels. This ollers direclors, slalulory audilors and execulives
proleclion lrom losses deriving lrom illegal acls commilled in carrying oul lheir dulies, and covers lhe
cosls ol legal assislance, expenses lor parlicipaling in invesligalions, and damage lo image.
ln order lo supporl exporl slralegies ol llalian SMLs, an innovalive producl was sel up, involving lhe
purchase ol shorl-lerm exporl lrade receivables wilhoul recourse, by hedging lhe risk ol delaull ol
loreign deblors, while ollering cuslomer companies lhe opporlunily lo laclor said receivables in order lo
linance working capilal.

During lhe hall year, lhe 8usiness lnlernalionalisalion Unil ol lhe Corporale and lnveslmenl 8anking
Division developed lhe "Open lorizons" programme, which provides dedicaled advisory and banking
services lo corporalions and businesses lhal inlend lo expand lheir business lo inlernalional markels.

ln January 8anca CR lirenze and Promolirenze enlered inlo an agreemenl lo provide local companies
inleresled in expanding abroad wilh operalional, lT and linancial supporl in lhe inlernalionalisalion
process.
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ExpIanaIory NoIes - Resulls by business area and geographical area
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91
InIesa 5anpaoIo PrivaIe anking

ln lhe lirsl hall ol 20!!, lnlesa Sanpaolo Privale 8anking aclivilies conlinued according lo lhe consolidaled slralegies: lnnovaling
commercial ollerings, locusing commercial aclion on assel managemenl, accurale managemenl ol resources, and brand
promolion communicalions.
The cuslomer ollering was expanded wilh lhe launch ol lhe lor-pay Privale Advisory service (specilically dedicaled lo cuslomers wilh a
high nel worlh) and Securilies Lending service. The range ol lunds and SlCAVs placed was also expanded. The Privale Advisory service
which has already collecled subscriplions lor over 250 million euro consisls in an analysis ol lhe cuslomer's porllolio lollowed by
lormulalion ol proposals lo oplimise allocalion ol lhe porllolio. The service also provides cuslomers wilh lhe opporlunily lo inleracl wilh
lhe cenlral assels managemenl slruclure, lhrough lheir privale banker. 8y subscribing lo Securilies Lending, cuslomers aulhorise lhe
bank lo borrow securilies owned by lhe cuslomer wilhoul any operaling reslriclions, as lhe cuslomer may operale on lheir securilies al
any lime, and relains lhe economic benelils relaled lo lhe securilies lenl. On malurily ol lhe loan, which has a lerm ol one day and is
renewed on a day-lo-day basis, lhe cuslomer receives a consideralion as compensalion lor making lhe securilies available. Al aboul lhree
monlhs lrom lhe launch ol operalions, !,700 cuslomers have already subscribed lo lhe service.
During lhe lirsl six monlhs ol 20!!, assels under conlrol grew by approximalely !.5 billion, also lhanks lo developmenl ol lending
aclivilies (250 million euro), wilh an increase ol 6' in assels under managemenl (porllolio managemenl, lunds and SlCAVs) since lhe
beginning ol lhe year. Specilically, lhe salislying resulls in lerms ol nel deposils managed (over !.5 billion euro, in an llalian markel
which reporled negalive deposils in lhe lirsl six monlhs ol 20!!), are added lo lhe public ollering ol CL Capilal in June (550 million euro)
and placemenl ol Croup bonds and cerlilicales carried oul in collaboralion wilh 8anca lMl. ln order lo provide more largeled supporl lo
lhe markeling process, while addilionally improving each banker's awareness ol lhe levers available lo achieve lheir economic,
commercial and service qualily objeclives, a dedicaled plallorm is being implemenled lo monilor lhe key indicalors and resulls ol
markeling aclions.
The commilmenl ol lnlesa Sanpaolo Privale 8anking conlinued by way ol lhe conslanl moniloring ol service levels lhrough a policy ol
promoling lhe value ol human resources, who are parl ol a conlinuous lraining process. The process ol Cerlilicalion ol Technical and
linancial Skills is one ol lhe prolessional developmenl inilialives lor privale bankers, whose skills are cerlilied by a commission ol
prolessors ol lhree llalian universilies (Universila Callolica ol Milan, Slale Universily ol Padua and Slale Universily ol Turin) and lhe AlP8,
lhe privale banking seclor associalion. lnlesa Sanpaolo Privale 8anking is also invesling in projecls aimed al slrenglhening knowledge
sharing processes. These inilialives include "Remole Communicalions" and lhe company "Web Communily".
ln lhe lirsl hall ol 20!! brand promolion communicalions also conlinued, lhrough inlense press aclivily, lhe organisalion ol evenls in
local areas and selecled sponsorships. The inleresl ol lhe press was specilically concenlraled on lhe excellenl resulls ol lhe 20!0 linancial
Slalemenls and lhe sludy by Luromoney which nominaled lnlesa Sanpaolo Privale 8anking as lhe 8esl llalian Privale 8ank in 20!0.
ln lhe lirsl hall ol 20!! lnlesa Sanpaolo Privale 8anking earned income belore lax lrom conlinuing operalions ol 82 million euro, up
28.9' compared lo lhe same period ol 20!0, as a resull ol lhe growlh in operaling income (+!2') driven by nel lee and commission
income (+!!.3').


ProducI companies

Slarling lrom 20!!, as a resull ol changes in lhe scope ol operalions ol Mediocredilo llaliano and in lhe service model concerning
lhe 8anca dei Terrilori Division, direcl operalions ol lhe company expanded, wilh a resulling increase in disbursemenls which
more lhan ollsel lhe expecled drop in lhe oulsourced analysis on behall ol Croup nelworks. ln lhe lirsl hall ol 20!! Mediocredilo
llaliano disbursed new loans lolalling !.6 billion euro, an increase ol more lhan 50' compared lo lhe same period ol lhe previous
year. The lransaclions channelled lhrough lnlesa Sanpaolo nelworks represenled 98' ol lhe lolal amounl disbursed. lor lhe
reasons indicaled above, lhe oulsourced analysis on behall ol nelwork banks decreased, wilh approvals issued lor 65 million euro
compared lo 543 million euro in lhe lirsl hall ol 20!0. ln relalion lo lransaclions guaranleed by lhe SML Cuaranlee lund
(Law 662/96), over 330 loan applicalions were approved lor approximalely 290 million euro, conlinuing lhe growlh lrend
underway since lhe previous year.
ln lerms ol producls supporling lnnovalion and Research, Nova+, lhe producl dedicaled lo supporling companies lhal invesl in
research and innovalion, received new loan applicalions lolalling 475 million euro during lhe hall year, wilh new decisions or
disbursemenls amounling lo over !37 million euro.
Two new Nova+ lines were inlroduced Palenls and Designs, linked lo lhe launch ol operalions wilh lhe llalian Nalional
lnnovalion lund, and, lollowing lhe signing ol an agreemenl wilh CNR, lhe new Nova+CNR line.
Operalions ol lhe Specialised Desks were inlense during lhe period. loan applicalions lor over !.2 billion euro were received
during lhe hall year and 52! million euro was disbursed (68' ol disbursemenls regard lhe Renewable Lnergies seclor).
The new Agro-lnduslry Desk, which is a slralegic seclor lor llaly, and lhe new Nelworks & Research Desk were launched, in order
lo provide a complele, direcl oller dedicaled lo 8usiness Nelworks.
Use ol lhe credil lines provided by lhe Ll8, specilically designed lo supporl innovalion, conlinued.
A new projecl dedicaled lo businesses wilh high polenlial lor developmenl was slarled, named "Vivaio lmprese". lhe projecl was
presenled lo approximalely 80 companies, wilh over !20 million euro in medium-lerm loans processed/disbursed.
ln lhe lirsl hall ol 20!!, Mediocredilo llaliano reporled an operaling margin ol 86 million euro, up on lhe same period lasl year
(+9.8'), mainly due lo higher nel inleresl income. lncome belore lax lrom conlinuing operalions and nel income were negalive
(-32 million euro and -28 million euro, respeclively) due lo grealer nel adjuslmenls lo loans (+53 million euro).

Consumer credil aclivilies are carried oul lhrough Monela and Neos linance.
Monela closed lhe lirsl hall ol 20!! wilh a lolal amounl linanced ol approximalely ! billion euro, 6.4' lower lhan lhe ligure in
lhe same period ol 20!0. Specilically, lhe Personal Loans segmenl recorded a decrease ol 5.3' and lhe Assignmenl ol One-lillh
ol Salary segmenl dropped by 5.8', a slighl recovery on lhe lirsl quarler ligure (-6.6'). Laslly, lhe Credil Cards segmenl
reporled a decline ol 5!.2' in disbursemenls, allribulable lo lhe disconlinualion ol lhe producl.
Monela's operaling margin amounled lo 53 million euro, compared lo 28 million euro in lhe same period ol lhe previous year
(excluding dividends received lrom lhe lormer subsidiary Seleli in lhe lirsl hall ol 20!0, amounling lo 70 million euro).
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ExpIanaIory NoIes - Resulls by business area and geographical area
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92
Neos linance closed lhe lirsl six monlhs ol 20!! wilh a lolal amounl linanced ol 998 million euro, 7.5' higher lhan lhe lirsl hall
ol 20!0. The personal loans, special-purpose loans and assignmenl ol one-lillh ol salary segmenls reporled increases (+28.5',
+!4.9' and +49.5', respeclively). Car loans, leasing and credil cards reporled decreases.
Neos linance's operaling margin came lo 58 million euro, up by !9.8' on lhe same period ol 20!0.

Seleli specialises in managing eleclronic paymenl syslems, and was regislered in lhe new Paymenl lnslilules Regislry kepl by lhe
8ank ol llaly. The reassumplion ol direcl conlrol over lhe company by lnlesa Sanpaolo was linalised on 27 June 20!!. Slralegic
choices resull in delining lhe company as an independenl business unil lor acquiring and a hub lor concenlraling all aclivilies
relaling lo cards and POS.
ln lhe lirsl hall ol 20!! Seleli reporled a signilicanl increase in operaling margin, which rose lo 8! million euro lrom 64 million
euro in lhe same period ol 20!0 (+26.2'). 8elow, lhe resulls in relalion lo lhe developmenl ol operalions are reporled.
Almosl all ol lhe !0.3 million cards managed by Seleli as al 30 June 20!! are cards issued direclly by lhe Parenl Company and lhe
Croup banks, which recorded an increase ol approximalely !8.3' on lhe lirsl hall ol lhe previous year (8.7 million cards). The
number ol POS as al 30 June 20!! amounled lo 297,000, an increase ol approximalely !3' on 30 June 20!0 (263,000). The
number ol lransaclions processed on Seleli's POS recorded growlh ol approximalely 25' (lrom !7! million lransaclions as al 30
June 20!0 lo 2!4 million lransaclions as al 30 June 20!!) also due lo lhe laking over ol lhe lormer Sanpaolo POS. The relaled
lransaclions increased by approximalely 22', up lrom !3.6 billion lo !6.6 billion as al 30 June 20!!. ln lhe lirsl hall ol 20!!
Seleli conlinued lo make parlicular ellorl lo increase elliciency and improve processes, wilh conslanl allenlion lo cosls. As parl
ol lhe inilialives underlaken, we nole lhal lhe cross-border acquiring projecl is being compleled, and pilol projecls have already
been launched in Swilzerland and lrance. The programme ol aclivalion ol POS in lrance and Spain was also slarled, lhe lrench
version ol lhe monelaonline sile was issued and lhe Spanish and Lnglish versions are being compleled. A projecl was also
launched wilh lhe lCT Syslems Deparlmenl lor lhe purpose ol unilying lhe credil and debil aulhorisalion syslem wilhin Seleli.
This projecl will generale benelils lor Seleli and lhe Croup, which include increasing lhe volumes managed by Seleli by
approximalely 70' once lhe projecl is lully operalional (bringing lhem lo approximalely ! billion lransaclions per year) and
posilioning il among lhe leading inlernalional operalors in lhe seclor. A projecl is underway lo upgrade lhe channel's archileclure
(specilically, lor lhe merchanl inlernel porlal and lhe e-commerce porlal) and a mobile paymenls projecl has been launched wilh
lhe Relail Markeling Deparlmenl. During lhe hall-year, lhe developmenl ol "large cuslomers" conlinued in a sleady, incisive
manner (in synergy wilh lhe Corporale and lnveslmenl 8anking Division). Wilh a view lo increasing inlegralion belween Seleli
and 8anca dei Terrilori, periodic meelings were organised lo monilor ordinary managemenl ol relalions wilh lhe Markeling
Deparlmenls and lo solve any crilical commercial issues wilh cuslomers. Laslly, addilional projecls were launched lo supporl
markeling aclions, including POS "sales" lhrough lhe Conlacl Unil, lhe delinilion ol agreemenls dedicaled lo specilic calegories
ol goods and, laslly, lhe crealion ol a seclion ol lhe company inlranel (A8C porlal) reserved lor POS, in order lo provide lhe enlire
8anca dei Terrilori wilh conlinuously up-lo-dale inlormalional malerials and markeling inlormalion.


anca Prossima

8anca Prossima operales in lhe non-prolil seclor lhrough 67 local branches and !30 specialisls dislribuled lhroughoul llaly.
On 23 June 20!! lnlesa Sanpaolo sold a 28,33' share in lhe capilal ol 8anca Prossima lo londazione Cariplo, londazione Cassa
di Risparmio di Padova e Rovigo and Compagnia di San Paolo, relaining ownership ol 7!.67' ol lhe capilal. As al 30 June 20!!
linancial assels amounled lo 3.5 billion euro, ol which over 800 million euro in direcl cuslomer deposils. Al lhe same dale, loans
amounled lo approoximalely 500 million euro. During lhe period, lhe company doubled ils revenues (over !2 million euro)
compared lo lhe lirsl hall ol 20!0, achieving an operaling margin ol 2.6 million euro and nel income ol 0.6 million euro.
During lhe lirsl hall ol 20!! lhe 8ank conlinued lo acquire new cuslomers lor lhe Croup wilhin lhe non-prolil world. ln order lo
lurlher reinlorce ils role as lhe bank ol choice lor lhe Non-Prolil Seclor, new producls, services and inilialives aimed al meeling
lhe mosl pressing needs ol non-prolil lirms were crealed. Specilically, lhe "Salvaslipendi" slands oul, largeled lo socially-orienled
enlerprises and cooperalives lo guaranlee regular paymenl ol salaries lo employees. This is a range ol linancial solulions (lacloring
receivables and/or cash credil lines) guaranleed by Cooperlidi llalia, requiring lhe amounls made available lo be used lo pay
salaries. The "Terzo Valore" inlernel plallorm was also issued, which can be used by non-prolil organisalions lo conlacl
individuals and legal persons lo raise lhe lunds necessary lo implemenl lheir projecls. During lhe hall year, lhe new currenl
accounl "Conlo Prossima Menu" was also launched, which ollers non-prolil organisalions lhe opporlunily lo selecl, lrom a wide
range ol oplions, lhe accounl condilions lhal besl meed lheir needs. The complelion ol lhe insurance range lor non-prolil
organisalions conlinued, wilh lhree new policies ("Prossima Sicura Volonlarialo", "Prossima Sicura Mandalo di prodollo" and
"Prossima Sicura - Polizza Prolezione Palrimonio Lxeculive & Company"). Moreover, new inveslmenl opporlunilies were ollered
lhrough bonds largeled lo legal persons and producls aimed al oplimising organisalions' liquidily and equily (londo Liquidila
Slars Cash). Laslly, lwo new loans, one shorl-lerm and one medium/long-lerm, have been sel up, largeled lo socially-orienled
enlerprises, wilh direcl guaranlees lrom lhe SML Cuaranlee lund pursuanl lo Law 662/96 as well as lhe markeling ol "Ricap per
le ONP", a loan lo supporl lhe recapilalisalion ol cooperalives and socially-orienled enlerprises, which is disbursed in an amounl
linked lo lhe capilal increase elleclively subscribed by lhe shareholders. Markeling inilialives developed during lhe hall year
include "Campagna lmpieghi", lo incenlivise lhe use ol shorl-lerm loans, "Campagna repricing 8T", lo oplimise lhe risk/relurn
ralio lor shorl-lerm loans and "Campagna repricing Raccolla", lo oplimise lhe lerms and condilions on lending rales applied.


Insurance and Pension companies

ln lhe lirsl hall ol 20!! lhe reorganisalion ol lhe insurance segmenl ol lhe lnlesa Sanpaolo Croup was relaunched as a resull ol
lhe recenl decisions ol lhe llalian Compelilion Aulhorily, which revised lhe measures lor lhe lile business segmenl ol lhe
insurance markel as a resull ol lhe merger belween 8anca lnlesa and Sanpaolo lMl. ln parlicular, lhe Compelilion Aulhorily
revoked lhe obligalion lo sell lhe insurance company Sud Polo Vila lo lhird parlies, and eslablished lhal lhe dislribulion
reslriclions sel lor LurizonVila and lnlesa Vila no longer apply. ln lhe lirsl six monlhs ol 20!! lhe lour companies operaling in lhe
92



ExpIanaIory NoIes - Resulls by business area and geographical area
93
93
insurance segmenl (LurizonVila, Sud Polo Vila, lnlesa Sanpaolo Vila, and Cenlrovila Assicurazioni) reporled !46 million euro in
income belore lax lrom conlinuing operalions, down by 37.2' on lhe same period ol 20!0, mainly due lo lhe poor perlormance
ol linancial managemenl, which recorded capilal losses during lhe period relaled lo lhe lowering ol yields ol insurance producls
under separale managemenl, and was allecled by lhe widening ol lhe credil spread and lhe increase in inleresl rales. Conversely,
lhe lirsl hall ol 20!0 had beneliled lrom capilal gains deriving lrom lhe sale ol securilies which had become impaired in previous
years. Al lhe end ol June 20!! lhe porllolio ol policies came lo 68,8!3 million euro, up by 3.3' lrom lhe beginning ol lhe year.
ln lhe lirsl six monlhs ol 20!!, gross lile premiums underwrillen lor bolh insurance producls and policies wilh inveslmenl conlenl
amounled lo 7,466 million euro, up slighlly (+!.3') on lhe same period in 20!0. New lile business amounled lo 7,280 million
euro in premiums underwrillen (+!.9' on lhe lirsl hall ol lhe previous year).

As al 30 June 20!! lhe assels managed by lnlesa Sanpaolo Previdenza (lormerly lnlesa Previdenza) came lo !,34! million euro, ol
which over 80' consisled ol open-ended pension lunds eslablished by lhe company (+0.6' compared lo lhe end ol
December 20!0) and lhe remainder ol managemenl mandales lor closed-end lunds (increasing by 8.8' since lhe beginning ol
lhe year). Nel inllows lor lhe hall year were posilive lor bolh lypes ol lunds.
Al lhe end ol lhe hall year, lnlesa Previdenza had almosl 246,000 pension posilions under managemenl, ol which approximalely
!40,000 allribulable lo adminislralion mandales granled by lhird parlies.

93



ExpIanaIory NoIes - Resulls by business area and geographical area
94
94
CorporaIe and InvesImenI anking
(millions ol euro)
30.06.2011 30.06.2010
amounI %
Nel inleresl income 972 963 9 0.9
Dividends and prolils (losses) on inveslmenls
carried al equily - -!! -!!
Nel lee and commission income 507 467 40 8.6
Prolils (Losses) on lrading 553 347 206 59.4
lncome lrom insurance business - - - -
Olher operaling income (expenses) !9 !3 6 46.2
OperaIing income 2,051 1,779 272 15.3
Personnel expenses -!99 -!89 !0 5.3
Olher adminislralive expenses -254 -234 20 8.5
Adjuslmenls lo properly, equipmenl and inlangible assels -3 -4 -! -25.0
OperaIing cosIs -456 -427 29 6.8
OperaIing margin 1,595 1,352 243 18.0
Coodwill impairmenl - - - -
Nel provisions lor risks and charges -7 -4 3 75.0
Nel adjuslmenls lo loans -205 -!95 !0 5.!
Nel impairmenl losses on olher assels -!3 -!0 3 30.0
Prolils (Losses) on inveslmenls held lo malurily and
on olher inveslmenls -!40 -4 !36
Income (Loss) be!ore Iax !rom conIinuing operaIions 1,230 1,139 91 8.0
Taxes on income lrom conlinuing operalions -39! -390 ! 0.3
Merger and reslrucluring-relaled charges (nel ol lax) -2 -4 -2 -50.0
Lllecl ol purchase price allocalion (nel ol lax) - - - -
lncome (Loss) aller lax lrom disconlinued operalions - - - -
Minorily inleresls - - - -
NeI income 837 745 92 12.3
AIIocaIed capiIaI 8,259 9,252 -993 -10.7
Pro!iIabiIiIy raIios (%)
Cosl / lncome ralio 22.2 24.0 -!.8 -7.5
ROL annualised 20.4 !6.2 4.2 25.9
LVA

adjusled
(a)
(millions ol euro)
436 298 !38 46.3
Income sIaIemenIlAIIernaIive per!ormance indicaIors
Changes

(millions ol euro)
30.06.2011 31.12.2010
amounI %
Loans lo cuslomers !07,900 !!0,779 -2,879 -2.6
Direcl cuslomer deposils 86,824 97,026 -!0,202 -!0.5
o| wh|ch. due |o cus|omers 23,34 JJ,J29 -4,74 -14.2
secur|||es |ssued ,122 60,426 -,J04 -3.3
||nanc|a| ||ao|||||es des|na|ed a| |a|r va|ue |hrouh pro|||
and |oss (o J,113 J,271 -1J -4.7
(b)
The ilem includes capilal prolecled securilised derivalives (cerlilicales) classilied under linancial liabililies held lor lrading.
(a)
Nel ol merger and reslrucluring-relaled charges and ellecl ol purchase price allocalion, as per llRS 3.
Changes
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and in business unil consliluenls and disconlinued operalions.

The Corporale and lnveslmenl 8anking Division began lhe lirsl hall ol 20!! wilh increased compelencies and a broad
diversilicalion ol lhe relaled business porllolio and aclivilies.
ln lhe lirsl six monlhs ol 20!!, lhe Division recorded operaling income ol 2,05! million euro (represenling 24' ol lhe
consolidaled lolal lor lhe Croup), up on lhe lirsl six monlhs ol 20!0 (+!5.3'). ln delail, nel inleresl income reached 972 million
euro, up slighlly (+0.9') in a markel lhal remains dillicull and characlerised by high-level compelilion on lhe relerence markels.
This posilive dynamic is mainly allribulable lo lhe increase in average volumes ol loans, driven in parlicular by lhe operalions ol
lhe leasing, lacloring and slruclured linance producl companies, in addilion lo lhe posilive conlribulion ol lhe assels relaling lo
8anca lMl's llT & AlS porllolio, which beneliled lrom grealer inleresl and aclive managemenl in lhe linance and capilal
94



ExpIanaIory NoIes - Resulls by business area and geographical area
95
95
managemenl segmenl. Nel lee and commission income, amounling lo 507 million euro, improved by 8.6', allribulable lo higher
income linked lo bolh new inveslmenl banking lransaclions, specilically on lhe primary and slruclured linance markels, and lo
commercial banking services. The lransaclion banking and lrade linance segmenls were subslanlially slable. Prolils on lrading,
amounling lo 553 million euro, reporled an increase ol 59.4' on lhe lirsl six monlhs ol 20!0, allribulable lo higher merchanl
banking revenues and, signilicanlly, lo lhe considerable capilal gains generaled by lhe securilies porllolio and inveslmenls (sale ol
4' ol Prada), as well as dividends lrom lrading collecled. Operaling cosls amounled lo 456 million euro, up compared lo lhe lirsl
hall ol 20!0 (+6.8'), mainly allribulable lo adminislralive expenses relaling lo grealer inveslmenls. The cosl/income ralio, equal
lo 22.2', decreased by !.8 percenlage poinls, beneliling lrom lhe expansion ol revenues, and is consislenl overall wilh lhe mix
ol lransaclions, lending/lunding and inveslmenl banking managed by lhe Division. As a resull ol lhe lrend in revenues and cosls
described above, lhe operaling margin, amounling lo !,595 million euro, recorded an !8' increase. lncome belore lax lrom
conlinuing operalions, amounling lo !,230 million, reporled an increase (+8'), lhough in lhe presence ol grealer provisions and
adjuslmenls relaling lo impairmenl ol linancial assels and inveslmenls, specilically in Telco. Laslly, nel income, which amounled
lo 837 million euro, was up !2.3' on lhe same period ol lhe previous year.
Al lhe quarlerly level, lhe second quarler ol 20!! showed a signilicanl increase in operaling income compared lo lhe lirsl quarler
(+27.!'), owing lo lhe uplrend in prolils on lrading, wilh a considerable increase in lhe merchanl banking segmenl and in nel
lee and commission income, which beneliled lrom income relaled lo lhe inveslmenl banking segmenl. The perlormance ol
revenues and operaling cosls resulled in an increase in lhe operaling margin (+33.7'). Nel income rose compared lo lhal ol lhe
previous quarler (+!6.!'), despile higher provisions and adjuslmenls, allecled by lhe impairmenl ol linancial assels and
olher inveslmenls.
The Division absorbed 34' ol Croup's capilal, down on lhe level recorded in lhe lirsl hall ol 20!0. The capilal, amounling lo
8,259 million euro, decreased. lhe reduclion can be allribuled lo lhe lower credil risk relaled lo loans ol Mid, Large and
lnlernalional Corporale counlerparlies, and lo lower markel risks relaled lo proprielary lrading aclivilies. The seclor's
perlormance, along wilh lower amounl ol capilal absorplion, was rellecled in an increase in annualised ROL, which rose lrom
!6.2' lo 20.4'. LVA reached 436 million euro, up signilicanlly on lhe corresponding period ol lhe previous year.
The Division's inlermedialed volumes decreased compared lo lhe end ol December 20!0 (-6.3'). Loans lo cuslomers lell by
2.6', mainly allribulable lo lhe downlurn in disbursemenls by Large Corporale, lnlernalional Corporale and linancial lnslilulion
counlerparlies, as well as lhe reduclion in reverse repo lransaclions wilh inslilulional operalors and linancial inlermediaries by
8anca lMl. Direcl cuslomer deposils also decreased (-!0.5'), allecled by bolh lhe decline in liquidily in shorl-lerm deposils ol
leading linancial lnslilulion cuslomers and by lhe lower developmenl ol lransaclions in securilies, wilh specilic relerence lo lhe
placemenl ol bonds by 8anca lMl.
95



ExpIanaIory NoIes - Resulls by business area and geographical area
96
96



Large CorporaIe IIaIy (!ormerIy Large & InIernaIionaI CorporaIe) and Mid CorporaIe

During lhe lirsl hall ol 20!!, volumes used by corporale cuslomers increased slighlly, especially wilh regard lo shorl-lerm loans.
The level ol use ol lhese credil lines was higher lhan lhe induslry average, specilically lor lhe Large llaly segmenl, conlirming lhe
prelerence lor lhe lnlesa Sanpaolo Croup shown by corporale lirms, lhe resull ol eslablished relalionships and a conslanl,
pro-aclive locus on lhe cuslomer.
lor mid-corporale cuslomers, lhe lrend lowards grealer use ol credil lines reporled by lhe markel was conlirmed, more
specilically lor lhe inlernalional componenl, where lhe increase in lhe level ol use was considerable, owing in parl lo lhe
implemenlalion ol lhe Division projecl lhal loslers inlernalisalion in lerms ol bolh operalional supporl lor lhe cuslomer and
grealer credil capacily. The average improvemenl in lhe qualily ol lhe loans porllolio conlinued, as a resull ol a Croup policy ol
wilhdrawal lrom higher risk posilions. Conslanl assessmenl ol risk, as well as a balanced policy ol developmenl in loans lo
cuslomers, resulled in lhe Croup mainlaining ils share ol wallel al aboul 25' lor lhe amounls used.
Mission
OrganisaIionaI
sIrucIure
Corporale and inveslmenl banking, in llaly and abroad
Large & lnlernalional
Corporale
The Deparlmenl is charged wilh managing relalionships wilh large corporale llalian cuslomers lhrough
idenlilicalion, developmenl and launch ol wholesale producls and services, commercial banking, cash
managemenl, corporale banking, inveslmenl banking and capilal markels

Mid Corporale

The Deparlmenl is responsible lor handling companies wilh lurnover in excess ol !50 million euro by
means ol a global and inlegraled oller ol producls and services overseen by all Divisions and lhe Croup
producl companies

8usiness lnlernalionalisalion
Unil

Clobal 8anking &
Transaclion (lormerly
linancial lnslilulions)

The Deparlmenl is responsible lor relalions wilh linancial lnslilulion cuslomers, managemenl ol
lransaclional services relaled lo paymenl syslems, lrade and exporl linance producls and services,
cuslody and selllemenl ol llalian securilies (local cuslody)
The Deparlmenl is responsible lor managing relalions wilh inlernalional cuslomers and loreign
mullinalionals wilh subsidiaries in llaly, and is in charge ol inlernalional branches, represenlalion ollices
and corporale lirms and provides specialisl assislance in supporl ol lhe inlernalionalisalion ol llalian lirms
and lhe developmenl ol exporls, lhe managemenl and developmenl ol relalions wilh linancial inslilulion
counlerparlies on emerging markels, lhe promolion and developmenl ol cash managemenl inslrumenls
and lrade services

Merchanl 8anking

The Deparlmenl operales in lhe privale-equily segmenl, including lhrough ils subsidiaries by acquiring
inveslmenls in lhe venlure capilal, nolably medium-long lerm inveslmenls (ol an inslilulional and
developmenl nalure wilh a business logic), ol privale equily companies and specialisl lunds
(reslrucluring, mezzanine, venlure capilal)
The Service is responsible lor managemenl ol lhe proprielary porllolio and/or risk lhrough direcl access
lo markels or indirecl access, via relevanl inlernal lunclions, in order lo carry oul lrading, arbilrage and
long/shorl posilions on capilal markels producls, cash and derivalives
Proprielary Trading

Slruclured linance

Responsible lor crealing slruclured linance producls lhrough 8anca lMl
lnveslmenl 8anking,
Capilal Markel
and Primary Markels

The scope ol lhe Division also includes lhe M&A and advisory, capilal markels and primary markels
(equily and debl capilal markel) perlormed by 8anca lMl

lacloring and Leasing

DisIribuIion sIrucIure ll draws on 55 domeslic branches. Al lhe inlernalional level, lhe Corporale and lnveslmenl 8anking
Division operales in 29 counlries in supporl ol lhe cross-border operalions ol ils cuslomers lhrough a
specialised nelwork ol branches, represenlalion ollices and subsidiaries lhal engage in corporale
banking aclivily

lacloring is overseen by Mediolacloring and leasing by lhe company Leasinl and Cenlro Leasing

To acl as a global parlner in supporling companies and linancial inslilulions in achieving balanced,
suslainable growlh, including al lhe inlernalional level, lhrough a specialised nelwork ol branches,
represenlalion ollices and subsidiaries lhal engage in corporale banking operalions

usiness
96



ExpIanaIory NoIes - Resulls by business area and geographical area
97
97
ln lhe lirsl hall ol 20!!, 37 slruclured linance and inveslmenl banking lransaclions were underlaken in lhe Mid-Corporale
Deparlmenl, compared lo 24 lransaclions underlaken in lhe lirsl six monlhs ol 20!0, conlirming lhe recovery ol exlraordinary
corporale linance aclivily, specilically concenlraled on debl lransaclions.
The inilialives launched during lhe hall year included. lhe realisalion and disseminalion lo lhe enlire Mid-Corporale Deparlmenl
ol lhe programme lo assess lhe compelilive posilions ol lirms wilh lhe aim ol allowing managers lo use a qualilalive and
quanlilalive analysis model lo idenlily lhe markeling aclions mosl appropriale lo each company, lhe conlinualion ol lhe "Slarl-
Up lnilialive", lhe plallorm devoled lo companies lhal innovale, wilh lhe launch ol eleven inilialives in llaly and lour abroad,
enlilled "llalian lnnovalion Day" (in London, lranklurl, San lrancisco and New York) locused on various areas ol lechnological
innovalion, and developmenl ol plans lor growlh ol corporale producls, aimed al ralionalising and lacililaling lhe implemenlalion
ol commercial projecls by delining specilic producl plans and involving all lhe relevanl unils and producl companies.
The linalisalion ol lhe Technology Opporlunily Proposal (T.O.P.) and Technology Transler Advisory (T.T.A.) projecls, which were
crealed and implemenled during lhe previous year, also conlinued. Laslly, in order lo conlirm lnlesa Sanpaolo's role as lhe parlner
ol choice lor companies, a projecl was developed which involves lhe logislics concenlralion ol all inlernal producl skills and
relalions lor all cuslomer segmenls inlo physical poinls wilhin lhe 8 Regional Covernance Cenlres, which will be supporled by lhe
branches ol lhe 8anca dei Terrilori and lhe pre-exisling Mid and Large-Corporale branches. The pilol projecl was carried oul in
June in lhe Trivenelo area, and will be lollowed by lhe roll oul lo all Regional Covernance Cenlres.


usiness InIernaIionaIisaIion UniI

The 8usiness lnlernalionalisalion Unil direclly covers 29 counlries lhrough !2 wholesale branches, !7 represenlalive ollices, 2
subsidiary banks and one advisory lirm. ln lhe lirsl six monlhs ol 20!! inlernalional coverage was pursued by loslering lhe
inlernalionalisalion ol llalian lirms and building relalionships wilh major mullinalionals lhrough a model lor managing
inlernalional nelwork cuslomers lhal is consislenl lhroughoul lhe Croup's inlernalional nelwork. During lhe period, lwo projecls
which were crealed and linalised during 20!0 moved lorward. inlernalionalisalion slralegy and inlernalional accounl
managemenl. The pilol projecl on linancial inslilulions (emerging markels) ol 8anca lnlesa Russia is being launched. Laslly, a lU8
branch lor lhe Middle Lasl & Norlh Alrica Area (MLNA) was eslablished in Dubai, which will coordinale all ollices ol lhe Division
currenlly localed in lhe area. 8eirul, Casablanca, Cairo, lslanbul and Tunis. The Dubai branch lhus becomes lhe lourlh lU8 ol lhe
Deparlmenl in addilion lo lhe lU8 branches in London, long Kong and New York and is lhe lirsl ol lhe measures planned during
lhe year lor opening new branches lo slrenglhen lhe exisling slruclures in counlries ol high slralegic imporlance.
The Deparlmenl is responsible lor.
Sociele Luropeenne de 8anque, which recorded a nel income ol 63 million euro in lhe lirsl hall ol 20!!, reporling signilicanl
growlh (+44.8') on lhe lirsl six monlhs ol 20!0, lhanks lo growlh in revenues (+36.4') allribulable lo lhe posilive lrend in
prolils on lrading and lhe reduclion in cosls (-!'),
lnlesa Sanpaolo 8ank lreland, which closed lhe lirsl hall ol 20!! wilh a nel income ol 47 million euro, down by !3.5' on lhe
same period ol 20!0, due lo lhe lall in operaling income (-!7.2'), penalised by lower nel inleresl income, lhe increase in
operaling cosls (+3.6') and grealer adjuslmenls lo loans (+3 million euro).


GIobaI anking & TransacIion (!ormerIy financiaI InsIiIuIions)

The lirsl hall ol 20!! was marked by a linancial scenario lull ol liquidily pressure, which resulled in a decrease in inlerbank lrade,
a high cosl ol inlerbank and wholesale lunding lor linancial inslilulions and, consequenlly, grealer dillicully lor banks lo renew
lheir expiring lunding, especially in peripheral counlries and in llaly. ln lhis scenario, lhe Deparlmenl's commercial locus
conlinued lo be primarily direcled lo "key" cuslomers, large banks in lhe areas ol inleresl and lo being highly seleclive in new
lending inilialives, while mainlaining a high level ol governance and allenlion lo counlerparlies' risk proliles. On lhe markeling
lronl, lhe consolidalion ol campaigns conlinued lor lhe developmenl ol a number ol capilal markel producls, such as
Markel lubs, Rales and Solulions, lhrough lhe crealion ol new relalions wilh largel cuslomers.
ln lhe Trade and Slruclured Lxporl linance segmenl, lhe Deparlmenl conlinued ils inserlion slralegy in slruclured exporl linance,
bolh lrom malure markels lo emerging markels and lor lrade llows belween emerging markels. ln parlicular. lhe lirsl loan
linancing Chinese exporls backed by lhe Lxporl Credil Agency Sinosure was compleled, logelher wilh Unicredil, a relinancing
agreemenl lor UTair Avialion JSC, lhe leading Russian airline on lhe domeslic markel, was enlered inlo, backed by Colace and
SACL, laslly, lhe Deparlmenl parlicipaled in a pre-exporl linance lransaclion lor Melalloinvesl, one ol lhe leading Russian
manulaclurers ol lerrous melals and sleel. Parlicipalion in llalian exporls was also conlirmed.
ln lhe area ol Transaclion 8anking, in lhe near-banking seclor, lhe new package ol producls lor lhe insurance seclor was
compleled, and lnlesa Sanpaolo Assicura, lhe lirsl pilol cuslomer, was aclivaled, lhe markeling campaign ol selllemenl services lo
residenl banks conlinued and, in lerms ol inlernalional banks, lhe lex Converler was launched lor commercial bank lranslers in
Luro lo beneliciaries residenl in Auslralia, and a commercial ollering lor cuslomers operaling on Laslern Luropean markels is
being developed.
Markeling inilialives lor securilies services (local cuslody) cuslomers locused on renewing lhe mandale ol Credil Agricole
lnveslmenl 8ank, changing lerms and condilions governing lhe relalions wilh 8anca dei Terrilori and launching new services and
operalions wilh lhe Croup's primary cuslomers. ln addilion, lhese inilialives locused on cross-selling aclivily wilh 8anca lMl lo
acquire inlegraled execulion and cuslody mandales. Laslly, lhe 8ank conlinued lo oversee lhe operalions ol agenl banks lhal
provide cuslody services on inlernalional securilies (nelwork managemenl) and is invesligaling lhe possibilily ol concenlraling
llows which do nol relale lo lhe sale lo Slale Slreel, lo a limiled number ol slralegic deposilories wilh a view lo reducing
managemenl cosls and subsequenlly reprice lhe services provided.


97



ExpIanaIory NoIes - Resulls by business area and geographical area
98
98
MerchanI anking

As al 30 June 20!!, lhe porllolio held by lhe Merchanl 8anking Deparlmenl, direclly and lhrough subsidiaries, amounled lo 2.8
billion euro, ol which 2.4 billion euro was invesled in companies and 0.4 billion euro in privale equily lunds.
During lhe lirsl six monlhs ol lhe year, lhe Merchanl 8anking Deparlmenl parlicipaled in lhe capilal ol Venice Luropean
lnveslmenl Capilal, promoled by Palladio linanziaria in Seplember 20!0 lor lhe purpose ol laking on and managing inveslmenls
in companies wilh a view lo privale equily inveslmenls. The Deparlmenl signed a lolal commilmenl lo invesl 60 million euro,
deposiling an amounl ol !!.3 million euro. Relaling lo lhe disinveslmenl ol lhe equily inveslmenl porllolio, al lhe end ol June
Prada, lhe lirsl llalian company lo be lisled in long Kong, concluded lhe process ol lisling on lhis Asian slock exchange inilialed
lasl December and, in lhe conlexl ol ils inilial public ollering, lhe Merchanl 8anking Deparlmenl sold aboul 4' ol lhe company's
share capilal, which had been acquired in 2006, relaining a share ol !' ol lhe capilal.
Through lhe subsidiary lMl lnveslimenli, lhe Merchanl 8anking Deparlmenl parlicipaled in lhe share capilal increase ol ClSll
S.p.A. and parlicipaled in lhe capilal ol l2i Reli TLC.
During lhe hall year, privale equily lund promolion and managemenl carried oul by lhe subsidiary assel managemenl company
lMl londi Chiusi reporled lhe launch ol a new projecl lo creale a reserved lund named "Allanle Seed", dedicaled lo direcl or
indirecl inveslmenls in slarl ups, in order lo slrenglhen or expand lhe nelwork ol conneclion belween companies and inveslors.
The projecl is parl ol lhe inilialives supporling lhe developmenl ol llalian business innovalion and involves lhe conlribulion ol new
capilal lo invesl in lhe seed capilal markel, which is signilicanlly undersized in relalion lo lhe leading Luropean companies.


5IrucIured finance

During lhe lirsl six monlhs ol 20!!, in lhe acquisilion linance segmenl, lhe 8ank acled as Mandaled Lead Arranger (MLA) in
slrucluring credil lacililies lor lhe purpose ol. relinancing SNAl's and Slroili Oro's lolal debl and supporling lhe acquisilion by
privale equily lunds ol. lhe Vesevo/Rosso Pomodoro Croup (llaly), Wall Slreel Syslems lolding (USA), lhe COlN Croup, Ansaldo
Lnergia (llaly), CTS Croup and Compagnie Luropeenne de Prevoyance (lrance). 8anca lMl also conlribuled lo lhe originalion and
slrucluring ol credil lacililies lor corporale acquisilions, leveraged buyouls or medium-lerm relinancing, which will be execuled in
20!!. These include. Relinancing lhe debl ol La Cardenia 8eauly and credil lacililies lo supporl lhe acquisilion ol Savio Macchine
Tessili by a privale equily lund.
ln lhe projecl linance seclor, in a markel scenario lhal remains uncerlain, 8anca lMl conlinued lo adopl a seleclive approach in
lhe assessmenl ol lransaclions, based on lhe presence ol sponsors wilh high slanding and an adequale risk prolile. ln parlicular,
in lhe energy seclor, lhe 8ank, as MLA, linalised credil lacililies supporling lhe acquisilion ol !00' ol lhe capilal ol L.On Rele by
a consorlium ol privale equily lunds, lhe relinancing a solar larm lor lhe Campania Region and lhe acquisilion ol Melroweb by
inveslors including l2i and lMl lnveslimenli. Supporl was also provided lo LNl's sale ol ils inveslmenl in Transilgas and lhe
subscriplion ol a mandale lo Censhipping Corporalion (Slovenia). Oulside lhe llalian markel, a lransaclion was concluded in
lavour ol OJSC Severnellegazprom, a Russian company incorporaled by a consorlium comprising Cazprom, Winlershall and L.ON,
lo relinance lhe bridge loan granled in 2009 lo cover lhe cosls lor developing a nalural gas reserve in Siberia, and credil lacililies
were granled lo lhe Acciona SA Croup and lo lhe Nexlera Lnergy Croup lor lhe conslruclion ol lwo lhermosolar planls.
ln lhe inlraslruclure seclor, we nole lhe lacililies granled lo Allandes (Projecl A63) in lrance lor lhe expansion, mainlenance and
managemenl ol a seclion ol lhe A63 molorway (8ayonne 8ordeaux).
ln lhe real eslale seclor, during lhe lirsl hall ol 20!! 8anca lMl's leadership posilion in lhe slrucluring ol loans was conlirmed.
Originalion aclivilies resulled in lhe linalisalion and signing ol credil lacililies lor Nl llalia lor lhe developmenl ol company
aclivilies and lhe plan lor oplimising ils real eslale assels, lor lhe 8orio Mangiarolli Croup lor lhe real eslale and residenlial
developmenl ol lhe soulh-wesl hinlerland ol Milan and lor limil SCR londo Omega lor lhe purchase and oplimisalion ol a
building localed in Rome.
Wilh regard lo advisory services, mandales were acquired lrom Redigalli lor oplimising lhe assels ol lhe "londo Due" real eslale
lund, slrucluring and placing lwo new lunds, managed by 8NP Paribas RLlM SCR and lDLA llMlT SCR, respeclively, as well as a
mandale lrom a leading assel managemenl company lor oplimising a holel complex in Venice.
Wilhin lhe area ol securilisalions, lhe slrucluring and placemenl ol "Class A Assel-8acked lloaling Rale Noles due 2040" were
compleled, deriving lrom a securilisalion ol loans originaled by Alba Leasing. The securilisalion ol loans originaled by
larma lacloring was also compleled, and lhe consullancy lor lhe Parenl Company in lhe placemenl ol assel-backed commercial
papers issued by Romulus lunding conlinued.
ln lhe syndicaled loans segmenl, 8anca lMl linalised lransaclions lor Prysmian, Ansaldo Lnergia, Aran Word, Assileca, Snai,
Melroweb, Slroili and Coin. Al inlernalional level, il parlicipaled in lhe Compagnie Lurepeenne de Prevoyance deal. Laslly, il acled
as agenl in lhe mosl imporlanl slruclured syndicaled loan lransaclions in llaly, such as lhal ol lhe Coin Croup, lhe share capilal
increases ol Monle dei Paschi di Siena, lhe Slroili Croup, Ldison Croup, Cinecilla, Allaparl Croup, 8arbaro Croup, Zoppas Croup,
Cremonini Croup, K-llex Croup, Mare Noslrum, Lulicals Croup and lracasso Croup and, in lhe area ol dislressed loans, lhe
Zucchi Croup, Zaleski Croup, Lucchini Croup and Canepa.


ProprieIary Trading

During lhe hall year, lhe Proprielary Trading segmenl recorded a posilive conlribulion in lerms ol prolil. ln delail, slruclured credil
producls beneliled lrom lhe lavourable markel condilions, generaling posilive valualion margins on bolh unlunded and lunded
posilions (Luropean/US A8Ss/CDOs) and on monoline slruclures. Taking inlo accounl wrile-downs and wrile-backs, exposure lo
risk decreased lrom 3,7!5 million euro as al 3! December 20!0 lo 2,974 million euro as al 30 June 20!!.
The hedge lund porllolio showed movemenl lhrough bolh lhe managemenl ol pre-exisling unils and new acquisilions. lhe
porllolio al lhe end ol June 20!! lolalled 688 million euro, down compared lo lhe 8!4 million euro al lhe end ol December
20!0. The lunds segmenl had a posilive impacl on lhe income slalemenl due lo valualions in lhe banking and energy seclors,
which were lhe mosl allecled by lhe uncerlainlies relaling lo lhe global economic silualion.
98



ExpIanaIory NoIes - Resulls by business area and geographical area
99
99
InvesImenI anking, CapiIaI MarkeI and Primary MarkeIs

ln lhe lirsl hall ol 20!!, lrends in lhe slock markels and, specilically, lhe llalian slock markel, did nol have an impacl on lhe
recovery ol equily capilal markel aclivilies, eilher in lhe lPO segmenl or in share capilal increases in lhe banking seclor. ln lhis
conlexl, 8anca lMl acled as lhe joinl global coordinalor and/or joinl bookrunner in lhe share capilal increases ol lnlesa Sanpaolo,
8anca Monle dei Paschi di Siena, and Commerzbank and acled as lhe underwriler in lhe share capilal increase ol Piraeus 8ank.
ln lhe role ol joinl global coordinalor and joinl bookrunner, il also direcled lhe lPO ol Prada, lor lhe purpose ol lisling on lhe
long Kong Slock Markel, and lhe lPO ol lerragamo, lor lhe purpose ol lisling on MTA markel ol 8orsa llaliana. Al inlernalional
level, in lhe role ol co-manager, il parlicipaled in lhe placemenl syndicales lor Cemex and Celesio converlible bonds and Danaher
shares. ln relalion lo lhe llalian markel, al lhe end ol lhe hall year, 8anca lMl ranked lirsl in lerms ol lhe number ol lransaclions,
and second in lerms ol lhe value ol lransaclions perlormed. Moreover, lhe 8ank was also assigned lo acl as joinl global
coordinalor and joinl bookrunner in lhe upcoming lPOs ol Sea and Avio.
ln lhe lakeover bid segmenl, 8anca lMl oversaw lhe mandalory lakeover bid on SNAl shares and lhe sell-oul ol laslweb and
Socolherm shares, as lhe inlermediary responsible lor coordinaling subscriplions. Al lhe end ol June 20!!, 8anca lMl was
specialisl or corporale broker lor 37 companies quoled on lhe llalian markel, conlirming ils leadership in lhis markel segmenl.
ln lhe debl capilal markels segmenl, in lhe lirsl six monlhs ol 20!! 8anca lMl, conlirmed ils increasing capacily lor inlernalional
penelralion, wilh 29 lransaclions closed lor domeslic issuers and !0 lor inlernalional issuers. Wilh regard lo llalian corporale
cuslomers, lhe 8ank carried oul lhe role ol bookrunner lor Telecom llalia's issue and lor Pirelli's inaugural bond. lollowing lhe
spin-oll ol lial's induslrial operalions inlo lial lnduslrial, il assisled bolh companies on lhe public debl markel, and assisled lCA
Capilal, lhe joinl venlure ol Credil Agricole Consumer linance and lial Croup Aulomobiles specialising in loans lo lhe aulomobile
seclor. The 8ank increased ils presence on lhe inlernalional markel, holding lhe role ol bookrunner lor lhe new issues by lhe
Spanish company Cas Nalural lenosa, by RCl 8anque, linance company ol lhe Renaull Croup, and by CLZ, a company operaling
in lhe generalion, dislribulion and sale ol eleclricily in lhe Czech Republic. Moreover, il acled as lhe bookrunner lor Anheuser-
8usch lnbev, 8anca PSA, and Deulsche 8ahn, lhe Cerman railway company. Laslly, il coordinaled lhe placemenl syndicale lor lhe
public ollerring ol Ceneral Lleclric Luropean lunding bonds and, in lhe high-yield markel, lhe issue ol Cuala Closures Croup.
lor linancial inslilulions, on lhe senior unsecured domeslic markel, lhe 8ank acled as bookrunner lor lhe eurobonds issued by
8anca delle Marche, 8anca Popolare dell'Lmilia Romagna, 8anca Popolare di Vicenza, 8anca Sella, Cassa di Risparmio di 8olzano,
Cassa di Risparmio di Cesena, Credilo Vallellinese, U8l 8anca and Venelo 8anca. ln addilion lo lhe loregoing, lhe 8ank acled as
bookrunner lor lhe unsecured senior noles issued by lnlesa Sanpaolo, lhe covered bonds issued by UniCredil, Monle dei Paschi di
Siena and 8anca Carige and, inlernalionally, lhe issues by Nalional Auslralia 8ank and Coldman Sachs. Laslly, 8anca lMl
parlicipaled as co-manager in lhe lhree issues ol lhe Luropean linancial Slabilily lund (LlSl) and lhe issue by lhe Republic ol llaly
ol a Luro lnllalion Linked !5-year 8enchmark 8TP. As conlirmalion ol lhe ongoing ellorls lo expand ils business oulside ol llaly,
also in collaboralion wilh lhe lnlernalional Subsidiary 8anks Division, 8anca lMl assisled VU8 8anka wilh ils issue in lhe
Slovak Republic.
ln M&A aclivilies, 8anca lMl achieved posilive resulls during lhe hall year, compleling !8 lransaclions lor a lolal value ol over 32
billion euro, in a scenario ol considerable recovery bolh in Lurope and in llaly. Specilically, lhe 8ank assisled Wind
Telecomunicazioni, l2i, il Sole 24 Ore, 8uongiorno, Clobal Cames, and Prysmian in lhe purchase and exchange lakeover bid on
Draka. Moreover, services were provided, in lhe energy and oil & gas segmenls, lo l2i, Axa, Api and Lni, in lhe induslrial seclor,
lo linmeccanica and Saceccav Depurazioni, and in lhe consumer seclor, lo PAl, linanciere Tinlorello, lhe shareholders ol Vesevo
and lo lhe Tuo Croup. ln lhe pharmaceulicals segmenl, lhe 8ank provided services lo Mandarin lund and Lulical and, laslly, in lhe
linancial lnslilulions segmenl, lo lhe J.lirsch & Co. lund and lo lhe Parenl Company in acquiring 52' ol
8anco Lmiliano Romagnolo.


facIoring and Leasing

Mediolacloring reporled a lurnover ol 24.7 billion euro in lhe lirsl hall ol 20!!, a 68.!' increase on lhe same period ol 20!0,
allowing il lo remain lhe number-one domeslic lacloring provider by lurnover. This perlormance may be allribuled lo ils
lransaclions wilhoul recourse, which almosl doubled compared lo lhe lirsl six monlhs ol lhe previous year. Compared lo
3! December 20!0, period-end loans amounled lo 7.9 billion euro, down by 5.4'. The amounl oulslanding also decreased lrom
lhe beginning ol lhe year (-2.4'). The decrease in loans can be linked lo lhe seasonalily ol lacloring, characlerised by increasing
rises in operalions over lhe year. The posilive perlormance ol lacloring, nel ol seasonal lrends, was conlirmed by lhe average
volumes, amounling lo 6.6 billion euro, which reporled an increase ol 24.2' compared lo lhe same period ol 20!0. ln lerms ol
income slalemenl ligures, lhe operaling margin lor lhe lirsl six monlhs ol 20!!, amounling lo 75 million euro, was up 22' on
lhe same period lasl year as a resull ol lhe increase in operaling income (+!8.7') which more lhan ollsel lhe increase in
operaling cosls (+7.8'). Nel income was 39 million euro, up by 38.8' compared lo lhe previous year, beneliling lrom lower nel
adjuslmenls lo loans (-20.!' compared lo lhe lirsl hall ol lhe previous year).

Through Leasinl and Cenlro Leasing, lnlesa Sanpaolo is lhe number-one leasing provider in lhe llalian markel wilh a share ol
!8.4', up lrom !7.9' al lhe end ol December 20!0.
ln lhe lirsl hall ol 20!! Leasinl enlered inlo 5,860 new conlracls, lor a lolal amounl ol !,953 million euro (+!5.!' compared lo
lhe same period ol 20!0), wilh an increase also in lhe amounl oulslanding (+5.4'). The composilion ol lhe porllolio was
inlluenced by lhe considerable growlh in Leasenergy, lhe producl devoled lo power generalion allribulable lo lhe lnslrumenlal
and Properly segmenls, which represenl 3!.2' ol lhe lolal porllolio. Nel ol lhe developmenl ol Leasenergy, lhere were increases
in lhe real eslale segmenl (+33.!'), also lhanks lo lhe complelion ol lhe lransaclion wilh Lavazza, and in lhe aulomolive
segmenl (+!2.6'), while lhe movable properly segmenl declined (-!8.9'). Nel income, as markel condilions remained dillicull,
amounled lo 23 million euro, up 7.2' on lhe lirsl hall ol 20!0 due lo lhe increase in revenues (+3.8') and slable
adjuslmenls lo loans.
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ExpIanaIory NoIes - Resulls by business area and geographical area
100
100
During lhe lirsl hall ol 20!!, Cenlro Leasing achieved an operaling margin which slighlly decreased (-0.4') due lo lhe reduclion
in operaling income (-3.8') only parlly ollsel by lhe signilicanl cosl savings (-!2.8'). The company ended lhe hall year wilh nel
income ol 2 million euro, compared lo a nel loss ol 5 million euro in lhe same period ol 20!0, beneliling lrom lower adjuslmenls
lo loans (-23.6').
100



ExpIanaIory NoIes - Resulls by business area and geographical area
101
101
PubIic finance
(millions ol euro)
30.06.2011 30.06.2010
amounI %
Nel inleresl income !55 !42 !3 9.2
Dividends and prolils (losses) on inveslmenls
carried al equily - - - -
Nel lee and commission income 27 29 -2 -6.9
Prolils (Losses) on lrading !3 -!3 26
lncome lrom insurance business - - - -
Olher operaling income (expenses) ! ! - -
OperaIing income 196 159 37 23.3
Personnel expenses -!8 -!9 -! -5.3
Olher adminislralive expenses -!9 -22 -3 -!3.6
Adjuslmenls lo properly, equipmenl and inlangible assels - - - -
OperaIing cosIs -37 -41 -4 -9.8
OperaIing margin 159 118 41 34.7
Coodwill impairmenl - - - -
Nel provisions lor risks and charges - - - -
Nel adjuslmenls lo loans -!7 -!3 4 30.8
Nel impairmenl losses on olher assels -!2 - !2 -
Prolils (Losses) on inveslmenls held lo malurily and
on olher inveslmenls - - - -
Income (Loss) be!ore Iax !rom conIinuing operaIions 130 105 25 23.8
Taxes on income lrom conlinuing operalions -52 -39 !3 33.3
Merger and reslrucluring-relaled charges (nel ol lax) - - - -
Lllecl ol purchase price allocalion (nel ol lax) - -2 -2
lncome (Loss) aller lax lrom disconlinued operalions - - - -
Minorily inleresls - - - -
NeI income 78 64 14 21.9
AIIocaIed capiIaI 1,169 1,236 -67 -5.4
Pro!iIabiIiIy raIios (%)
Cosl / lncome ralio !8.9 25.8 -6.9 -26.7
ROL annualised !3.5 !0.4 3.0 28.9
LVA

adjusled
(a)
(millions ol euro)
23 7 !6
Income sIaIemenIlAIIernaIive per!ormance indicaIors
Changes

(millions ol euro)
30.06.2011 31.12.2010
amounI %
Loans lo cuslomers 40,044 40,508 -464 -!.!
Direcl cuslomer deposils 5,278 5,757 -479 -8.3
o| wh|ch. due |o cus|omers J,742 4,211 -469 -11.1
secur|||es |ssued 1,J6 1,46 -10 -0.6
Changes
ligures reslaled, where necessary, considering lhe changes in business unil consliluenls and disconlinued operalions.
(a)
Nel ol merger and reslrucluring-relaled charges and ellecl ol purchase price allocalion, as per llRS 3.

The resulls ol lhe Public linance in lhe lirsl hall ol 20!! show growlh in revenues and nel income, owing lo lhe posilive lrend in
all lhe main income slalemenl ilems.
Operaling income amounled lo !96 million euro, up 23.3' compared lo lhe lirsl hall ol 20!0, due lo lhe lollowing laclors. nel
inleresl income ol !55 million euro, up by 9.2' compared lo lhe same period ol lhe previous year, owing lo lhe increase in
average spreads lo cuslomers, lhe subslanlial slabilily ol operalions, which beneliled lrom lhe developmenl ol lhe componenl
linked lo cuslomers bolh in llaly (where lhe shorl-lerm segmenl produced signilicanl non-recurring conlribulions) and
inlernalionally, nel lee and commission income ol 27 million euro, down by 6.9', prolils on lrading ol !3 million euro,
compared lo losses ol !3 million euro in lhe lirsl six monlhs ol 20!0, which essenlially beneliled lrom increases relaled lo credil
risk adjuslmenl valualions and lair value adjuslmenls in hedge accounling, as well as higher revenues lrom operalions wilh
cuslomers. Average loans lo cuslomers decreased slighlly (-!', including securilies), and include new disbursemenls ol 4.! billion
lrom June 20!0 lo June 20!!. Operaling cosls amounled lo 37 million euro, decreasing by 9.8' compared lo lhe lirsl hall ol lhe
101



ExpIanaIory NoIes - Resulls by business area and geographical area
102
102
previous year, rellecling elleclive cosl conlainmenl measures. Therelore, lhe cosl/income ralio decreased lo !8.9' lrom 25.8'
in lhe lirsl six monlhs ol 20!0, also owing lo lhe conlribulion ol non-recurring revenues. As a resull ol lhe above lrends, lhe
operaling margin, amounling lo !59 million euro, increased by 34.7'. Aller grealer nel adjuslmenls lo loans and olher assels
(+!6 million euro, ol which !2 million euro relerring lo lhe impairmenl ol Creek governmenl bonds maluring by 2020, recorded
under nel adjuslmenls lo olher assels), income belore lax lrom conlinuing operalions slood al !30 million euro, up by 23.8' on
lhe same period ol lhe previous year. Laslly, nel income, al 78 million euro, recorded an increase ol 2!.9' compared lo lhe same
period ol 20!0.
Al quarlerly level, operaling income lor lhe second quarler ol 20!! showed a decrease ol !4.6' compared lo lhe lirsl quarler, as
a resull ol lhe lall in nel inleresl income, which, in lhe lirsl quarler, had beneliled lrom signilicanl non-recurring conlribulions
lrom cuslomers, and lhe lall in nel lee and commission income, inlluenced by lhe poslponemenl ol several lransaclions in
advanced slages ol lrading lo lhe nexl quarler. Nel income decreased (-47.3'), owing lo lhe previously described lrend in
revenues, wilh slable cosls and higher adjuslmenls, also including lhe impairmenl ol Creek governmenl bonds.
Capilal allocaled amounled lo !,!69 million euro, down on lhe ligure recorded in lhe lirsl hall ol 20!0, specilically due lo lhe
decrease in credil risk associaled wilh lhe downlurn in loans. The annualised ROL perlormed well, rising lrom !0.4' lo !3.5',
due lo bolh lhe reduclion in capilal allocaled and lhe lavourable lrend observed in nel income. LVA rose lo 23 million euro
lrom 7 million euro in lhe corresponding period ol lhe previous year.
Wilh regard lo lhe main balance sheel ligures, loans lo cuslomers amounled lo 40,044 million euro, slighlly down (-!.!') since
lhe beginning ol lhe year, owing lo lhe lrend in repaymenls and new disbursemenls. Direcl cuslomer deposils amounled lo
5,278 million euro, down 8.3', primarily as a resull ol lhe lower cash balances ol currenl accounls.



ln lhe lirsl hall ol 20!!, lo supporl and promole lhe developmenl ol large nalional inlraslruclures, Public linance conlinued
aclivily on large molorway projecls, including lhe 8re8eMi projecl (8rescia-8ergamo-Milano molorway) and lhe Milan Lasl ouler
ring road. Worlh noling is lhe loan granled lo Slrada dei Parchi lor mainlenance and upgrading works on lhe A24/A25 molorway.
ln supporl ol heallhcare services, universilies and scienlilic research, in order lo losler lhe elliciency ol lhe heallhcare syslem ol
lhe Lazio Region, Public linance oversaw lhe lacloring wilhoul recourse ol receivables due lo conlracled heallhcare lacililies and
suppliers due lo lhe Local leallhcare Aulhorilies ol lhe Region. A similar inlervenlion was implemenled lor receivables lrom
suppliers ol leallhcare Companies and lospilals in lhe Campania Region. As parl ol inilialives supporling educalion, lhe
modernisalion ol lhe buildings ol lhe Universila degli Sludi di 8ologna was linanced and, as parl ol a linancial consullancy
projecl, an agreemenl was signed lor lhe purchase wilhoul recourse ol cerlilied receivables lrom Universila Callolica del
Sacro Cuore.
ln lhe area ol lhe improvemenl ol public services and ulililies, Public linance granled a loan lo ACSM Verona, a Venelian ulilily
operaling in lhe eleclricily seclor, and promoled lhe developmenl ol an inlegraled cycle planl lo manage lhe inlegraled cycle in
lhe province ol Crosselo. ln lhe lransporl seclor, lhe 8ank granled a loan lo lerrovie dello Slalo lo implemenl projecls relaling lo
lhe developmenl ol lhe high-speed line, and lo lhe Municipalily ol Milan lo carry oul exlraordinary mainlenance on vehicles used
lor public lransporl. ln lhe allernalive low-environmenlal-impacl energy seclor, lhe division is involved in wind larm and
pholovollaic projecls, specilically in lhe Lazio, Tuscany, Puglia, Sicily, Abruzzo and Marche Regions.
ln order lo supporl lhe linancial balance ol lhe public seclor, disbursemenls conlinued lor lhe lunding ol lhe long-lerm
inveslmenl expenses ol various local enlilies (including lhe Province ol Pesaro Urbino and lhe Municipalilies ol Cenoa and
Monza). Moreover, a loan was granled lo lhe Commissioner's Ollice ol lhe Municipalily ol Rome lo linance a repaymenl plan lor
lhe enlily's pasl debl. ln order lo alleviale lhe linancial pressure on local enlilies and make linancial resources available lo
businesses, lhe supporl lo lhe Public Adminislralion and lheir suppliers was conlirmed lhrough advances on consideralions owed
lo local enlilies by lhese parlies. Numerous agreemenls were signed lo laclor wilhoul recourse lhe receivables due lo suppliers ol
goods and services lo municipalilies, provinces and regions lhroughoul llaly, including lhe 8asilicala region, lhe municipalilies ol
Milan, Monza, 8rescia, Modena, lorli, Pescara, lmperia, Seregno, Nuoro and Ciulianova and lhe provinces ol Turin, Varese,
Alessandria, La Spezia, llorence and Lecco.
As parl ol loans lhal benelil lrom Slale subsidies, shorl-lerm loans were granled lo lhe special commissioners ol Tirrenia and
Siremar and supporl conlinued lo be provided lo delence syslem suppliers as parl ol priorily inveslmenl programmes lor
nalional delence.
Urban and local developmenl projecls included signilicanl aclivilies in lhe area ol logislics services. various loans were granled lo
upgrade lhe harbour inlraslruclures lo lhe Porl Aulhorilies ol La Spezia, Naples and Livorno, and lo develop lhe new headquarlers
Mission
Public linance serves cenlral governmenls, public enlilies, local aulhorilies, universilies, public ulililies,
general conlraclors, and public and privale heallhcare providers
To losler collaboralion belween lhe public and privale seclors wilh lhe aim ol supporling lhe crealion ol
inlraslruclure and lhe modernisalion ol lhe public adminislralion by pursuing inlernalional growlh
opporlunilies in counlries ol slralegic inleresl lo lhe Croup lhrough operalions in six priorily areas ol
aclion.
loans lor inlraslruclure projecls
supporl lor lhe heallhcare syslem, universilies and scienlilic research
improvemenl ol public ulililies
supporl lor lhe public adminislralion's linancial equilibrium
lunding lor urban and local developmenl projecls
inlroduclion ol innovalive lools lor elleclive managemenl ol lhe banking services used by public
enlilies and governmenl-owned companies
DisIribuIion sIrucIure
!8 domeslic branches and 3 represenlalive ollices abroad (lslanbul, London and Paris)

usiness
102



ExpIanaIory NoIes - Resulls by business area and geographical area
103
103
ol lhe Ravenna lreighl lerminal. Disbursemenls lo projecls ol nalional scope conlinued, such as lhe LUR Congress Cenlre in
Rome, and signilicanl lransaclions were linalised lor lhe local areas, such as lhe loan granled lo Azienda Lombarda per l'Ldilizia
Residenziale della Provincia di 8ergamo (ALLR) lor lhe developmenl ol social housing projecls.
Wilh regard lo inlernalional aclivilies, Public linance became operalional in lhe represenlalive ollice in Warsaw, lo oversee lhe
chain ol inleraclion belween public and privale enlilies in Cenlral Laslern Lurope. The slrucluring ol lhe Cebze-Orhangazi-lzmir
molorway, one ol lhe main works launched in Turkey wilh lhe conlribulion ol llalian builders, conlinued. ln addilion a bond was
subscribed as parl ol lhe inaugural issue lor lhe "Spanish Lleclricily Delicil", lhe lirsl lransaclion in a live-year issue programme
which allowed Spain lo begin paying lhe receivables owed lo ulililies companies in lhe eleclricily syslem (Lnel is one ol lhe main
beneliciaries ol lhe programme, lhrough ils subsidiary Lndesa).

103



ExpIanaIory NoIes - Resulls by business area and geographical area
104
104
InIernaIionaI 5ubsidiary anks
(millions ol euro)
30.06.2011 30.06.2010
amounI %
Nel inleresl income 872 809 63 7.8
Dividends and prolils (losses) on inveslmenls
carried al equily !0 7 3 42.9
Nel lee and commission income 285 279 6 2.2
Prolils (Losses) on lrading 45 53 -8 -!5.!
lncome lrom insurance business - - - -
Olher operaling income (expenses) -24 -23 ! 4.3
OperaIing income 1,188 1,125 63 5.6
Personnel expenses -288 -289 -! -0.3
Olher adminislralive expenses -220 -2!3 7 3.3
Adjuslmenls lo properly, equipmenl and inlangible assels -68 -68 - -
OperaIing cosIs -576 -570 6 1.1
OperaIing margin 612 555 57 10.3
Coodwill impairmenl - - - -
Nel provisions lor risks and charges 2 6 -4 -66.7
Nel adjuslmenls lo loans -320 -279 4! !4.7
Nel impairmenl losses on olher assels -6 -2 4
Prolils (Losses) on inveslmenls held lo malurily and
on olher inveslmenls 4 ! 3
Income (Loss) be!ore Iax !rom conIinuing operaIions 292 281 11 3.9
Taxes on income lrom conlinuing operalions -78 -73 5 6.8
Merger and reslrucluring-relaled charges (nel ol lax) - - - -
Lllecl ol purchase price allocalion (nel ol lax) - - - -
lncome (Loss) aller lax lrom disconlinued operalions - - - -
Minorily inleresls - - - -
NeI income 214 208 6 2.9
AIIocaIed capiIaI 2,443 2,416 27 1.1
Pro!iIabiIiIy raIios (%)
Cosl / lncome ralio 48.5 50.7 -2.2 -4.3
ROL annualised !7.7 !7.4 0.3 !.7
LVA

adjusled
(a)
(millions ol euro)
57 6! -4 -6.6
Income sIaIemenIlAIIernaIive per!ormance indicaIors
Changes

(millions ol euro)
30.06.2011 31.12.2010
amounI %
Loans lo cuslomers 3!,34! 30,926 4!5 !.3
Direcl cuslomer deposils 30,23! 30,259 -28 -0.!
o| wh|ch. due |o cus|omers 27,J60 27,47 -97 -0.4
secur|||es |ssued 2,3J 2,302 1 1.3
||nanc|a| ||ao|||||es des|na|ed
a| |a|r va|ue |hrouh pro||| and |oss 13 - 13 -
(a)
Nel ol merger and reslrucluring-relaled charges and ellecl ol purchase price allocalion, as per llRS 3.
Changes
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and in business unil consliluenls and disconlinued operalions.

The lnlernalional Subsidiary 8anks Division is responsible lor lhe Croup's aclivilies in loreign markels lhrough commercial banking
subsidiaries and associales, mainly aclive in relail banking.

ln lhe lirsl hall ol 20!!, lhe Division's operaling income was up 5.6' compared lo lhe same period ol lhe previous year, lo !,!88
million euro. A delailed analysis shows lhal nel inleresl income came lo 872 million euro, an increase on lhe 809 million euro in
lhe lirsl six monlhs ol 20!0 (+7.8'), owing chielly lo Privredna 8anka Zagreb (+37 million euro), VU8 8anka (+2! million euro),
8anca lnlesa 8eograd (+!3 million euro), Pravex 8ank (+9 million euro) and 8anka Koper (+4 million euro) only parlly absorbed by
lhe decrease ol Cl8 8ank (-!8 million euro). Nel lee and commission income reporled an increase ol 2.2', allribulable in
parlicular lo Privredna 8anka Zagreb (+5 million euro), and VU8 8anka (+3 million euro). Conversely, prolils on lrading, amounling
104



ExpIanaIory NoIes - Resulls by business area and geographical area
105
105
lo 45 million euro, lell compared lo lhe same period ol 20!0 (-!5.!'), primarily due lo lower conlribulions lrom 8anka Koper
(-3 million euro), VU8 8anka (-2 million euro), Privredna 8anka Zagreb (-2 million euro), 8anca lnlesa Russia (-2 million euro) and
Pravex 8ank (-2 million euro), only parlly ollsel by lhe increase ol Cl8 8ank (+4 million euro).
Operaling cosls came lo 576 million euro, up !.!' compared lo lhe lirsl six monlhs ol lhe previous year. As a resull ol lhe above
revenue and cosl lrends, lhe operaling margin came lo 6!2 million euro, up !0.3'. lncome belore lax lrom conlinuing
operalions ol 292 million euro was up 3.9', despile higher nel adjuslmenls lo loans, increasing lrom 279 million euro lo 320
million euro. The Division closed lhe lirsl hall ol 20!! wilh nel income ol 2!4 million euro (236 million euro excluding lhe impacl
ol exlraordinary laxes in lungary), up 2.9' compared lo lhe same period in 20!0.
Analysing quarlerly developmenl, lhe second quarler ol 20!! reporled an operaling margin up 0.9' on lhe lirsl quarler, mainly
lhanks lo higher revenues (+!.3') which more lhan ollsel lhe growlh in cosls (+!.8'). lncome belore lax lrom conlinuing
operalions and nel income grew signilicanlly (+37.2' and +48.3', respeclively).
Capilal allocaled, which represenls !0' ol lhe Croup's lolal, climbed slighlly lo 2,443 million euro. The annualised ROL rose lo
!7.7' lrom !7.4' in lhe lirsl hall ol 20!0, mainly due lo lhe above lrend in nel income. Value crealion, expressed in lerms ol
LVA, came lo 57 million euro compared lo 6! million euro in lhe same period ol lhe previous year.
The Division's inlermedialed volumes showed a slighl increase compared lo lhe end ol December 20!0 (+0.6'). This lrend was
lhe resull ol growlh in loans lo cuslomers (+!.3') and subslanlial slabilily in direcl deposils.




5ouIh-EasIern Europe

ln lhe lirsl hall ol 20!!, lhe operaling income ol lhe Privredna 8anka Zagreb Croup, including lSP Card, amounled lo 265 million
euro (+!7.4' compared lo lhe same period ol lhe previous year). The perlormance may be primarily allribuled lo lhe growlh in
nel inleresl income and nel lee and commission income, which more lhan ollsel lhe decrease in prolils on lrading. Operaling
cosls increased 0.5', amounling lo !!8 million euro, as a resull ol lhe rise in personnel expenses. These resulls generaled an
operaling margin ol !47 million euro, up 35.7' on lhe lirsl six monlhs ol 20!0. Nel income, amounling lo 78 million euro, was
up by !8.7'.

8anca lnlesa 8eograd, including lnlesa Leasing 8eograd, recorded an operaling margin ol 78 million euro, a !4' increase on lhe
lirsl hall ol 20!0. Operaling income grew by !4', mainly as a resull ol lhe perlormance ol nel inleresl income (+!4.5'), which
beneliled lrom lhe growlh in average volumes and spread, and in prolils on lrading (+4.6'). Operaling cosls were up !3.9',
primarily owing lo lhe increase in adminislralive expenses associaled wilh lhe inslallalion ol lhe new dala cenlre and adverlising
cosls, as well as personnel expenses. Nel income amounled lo 47 million euro, compared lo 36 million euro lor lhe same period in
lhe previous year.
lnlesa Sanpaolo 8anka 8osna i lercegovina ended lhe lirsl hall ol 20!! wilh an operaling margin ol 6.8 million euro, up 38.5'
on lhe same period ol lhe previous year. This lrend is due lo higher revenues (+!4.3') and, in parlicular, lo nel inleresl income
(+!3.5') due lo lhe lower cosl ol lunding and lhe increase in average volumes. Operaling cosls rose by !.7', in lhe personnel
expenses componenl. Nel income came lo 3 million euro, up lrom !.7 million euro ol lhe lirsl hall ol 20!0, despile higher nel
adjuslmenls lo loans (+!0.8').

Mission
ll is responsible lor lhe Croup's operalions on lhe inlernalional markels lhrough commercial bank
subsidiaries and associales
Cuidance, coordinalion and supporl lor inlernalional subsidiaries, which engage primarily in relail
banking operalions. The Division is responsible lor selling lhe Croup's slralegic developmenl guidelines
in lerms ol ils direcl presence on inlernalional markels, involving syslemalic exploralion and analysis ol
new growlh opporlunilies on markels already served and new markels, lhe coordinalion ol inlernalional
subsidiary banks' operalions and lhe managemenl ol lhe relalionships belween inlernalional subsidiary
banks and lhe Parenl Company's cenlral unils and lhe branches and olher loreign ollices ol lhe
Corporale and lnveslmenl 8anking Division
DisIribuIion sIrucIure
!,724 branches in !3 counlries

OrganisaIionaI
sIrucIure
Soulh-Laslern Lurope

Cenlral-Laslern Lurope

Commonweallh ol
lndependenl Slales & Soulh
Medilerranean Area

Presence in Albania, 8osnia-lerzegovina, Croalia, Romania and Serbia

Presence in Slovakia, Slovenia and lungary

Presence in Lgypl, lhe Russian lederalion and Ukraine

usiness
105



ExpIanaIory NoIes - Resulls by business area and geographical area
106
106
lnlesa Sanpaolo 8ank Albania posled an operaling margin ol !2 million euro, up 6.4' on lhe corresponding period ol lhe
previous year. All lhe main componenls ol revenues remained essenlially slable. Operaling cosls lell 9.6', primarily due lo lhe
decrease in adminislralive expenses and personnel expenses. Nel income came lo 9.5 million euro, up 39.8' on lhe lirsl six
monlhs ol 20!0, also as a resull ol lhe lower adjuslmenls lo loans (-36.6').

The companies operaling in Romania (lnlesa Sanpaolo 8ank Romania and 8anca CR lirenze Romania) recorded a lolal operaling
margin ol 5.3 million euro, up !7.9' on lhe same period ol lhe previous year. ln delail, operaling income decreased by 8.4' due
lo lhe decreases in nel inleresl income (-6.!') allribulable lo lhe higher cosl ol lunding, in nel lee and commission income
(-9.2') and in prolils on lrading (-20'). The decrease in operaling cosls (-!4.!') was mainly due lo lower personnel and
adminislralive expenses. The companies closed lhe lirsl hall ol 20!! wilh a nel loss ol 6.2 million euro, compared lo a loss ol 3.3
million euro in lhe same period ol 20!0.


CenIraI-EasIern Europe

8anka Koper, including linor Leasing, reporled operaling income ol 50 million euro, up 4.3' on lhe lirsl hall ol 20!0.
The increase was mainly due lo lhe higher nel inleresl income and nel lee and commission income, which more lhan absorbed
lhe reduclion in prolils lrom lrading. Operaling cosls decreased, owing lo savings on personnel expenses and lower amorlisalion
and deprecialion. Nel income came lo 9.4 million euro, down 23.7' on lhe lirsl six monlhs ol 20!0, as a resull ol lhe higher nel
adjuslmenls lo loans.

The VU8 8anka Croup achieved an operaling margin ol !45 million euro, up !4.8' on lhe lirsl hall ol 20!0, beneliling lrom an
increase in operaling income (+9.2'), allribulable lo nel inleresl income (+!!.6') and nel lee and commission income (+6'),
which more lhan ollsel growlh in operaling cosls (+2.6'), parlicularly adminislralive and personnel expenses. Nel income,
amounling lo 89 million euro, increased by 32.8' on lhe lirsl six monlhs ol 20!0, beneliling lrom lhe reduclion in nel
adjuslmenls lo loans (-!9.8').

The Cl8 8ank Croup recorded operaling income ol 2!9 million euro, down 8' on lhe same period ol 20!0. This perlormance
was allribulable lo lhe decreases in nel inleresl income (-!0.9') and nel lee and commission income (-6.2'), which absorbed
lhe growlh in prolils on lrading (+37.!'). Operaling cosls decreased by 8.4', owing lo savings on personnel expenses (-!8.9')
and lower amorlisalion and deprecialion (-8.2'). The nel resull, allecled by lhe increase in adjuslmenls lo loans, was a loss ol 42
million euro, compared lo a loss ol !9 million euro lor lhe lirsl hall ol lhe previous year.


CommonveaIIh o! IndependenI 5IaIes & 5ouIh MediIerranean Area

8anca lnlesa Russia closed oul ils income slalemenl lor lhe lirsl hall ol 20!! wilh a nel income ol 7.3 million euro compared lo
7.9 million euro in lhe same period ol lhe previous year. Operaling income decreased by !.3' due lo lhe downlurn in prolils
(losses) on lrading (-46.7') and nel inleresl income (-!.3'), which absorbed lhe increase in nel lee and commission income
(+!0.!'). Operaling cosls showed an increase ol !!.!' allribulable lo all componenls and, in parlicular, amorlisalion charges
relaling lo lhe launch ol lhe new inlormalion lechnology syslem. Nel adjuslmenls lo loans ol !6 million euro were down 24.5'
compared lo lhe lirsl hall ol 20!0, when lhe loan porllolio delerioraled severely in conneclion wilh lhe Russian markel crisis.

The operaling margin ol Pravex 8ank in lhe lirsl hall ol 20!! showed income ol 3.6 million (compared lo a loss ol 2.3 million in
lhe same period ol 20!0) lhanks lo lhe growlh in operaling income (+33.5') and, in parlicular, in nel inleresl income, which
more lhan doubled as a resull ol lhe growlh in lhe lolal spread due lo lhe lower cosl ol lunding, and in nel lee and commission
income (+!.6'). Operaling cosls grew by 6' as a resull ol higher adminislralive expenses and amorlisalion and deprecialion.
Aller adjuslmenls lo loans ol !.3 million euro, compared wilh 9.6 million euro in adjuslmenls in lhe lirsl six monlhs ol lhe
previous year, Pravex 8ank closed lhe lirsl hall ol 20!! wilh a nel income ol 2.5 million euro, compared lo a loss ol 8.7 million
euro in lhe same period ol 20!0.

8ank ol Alexandria achieved an operaling margin ol 45 million euro, down !3.5' on lhe lirsl hall ol 20!0 (nel ol lhe exchange-
rale ellecl, lhe resull would have been -2.4'). Operaling income decreased by 4.8', mainly due lo lhe downlurn in prolils
(losses) on lrading (-!6.5') and, lo a lesser exlenl, in nel inleresl income (-2.8'), and nel lee and commission income (-5.4').
Operaling cosls showed an increase (+3.5') allribulable lo lhe expansion ol operalions. Aller lhe release ol 2.4 million euro
lrom allowances lor risks and charges and nel adjuslmenls lo loans ol 27 million euro, up on lhe lirsl six monlhs ol lhe previous
year due lo lhe counlry's polilical and linancial crisis, nel income came lo !8 million euro compared lo lhe 46 million euro
generaled in lhe same period ol 20!0.
106



ExpIanaIory NoIes - Resulls by business area and geographical area
107
107
Eurizon CapiIaI
(millions ol euro)
30.06.2011 30.06.2010
amounI %
Nel inleresl income - - - -
Dividends and prolils (losses) on inveslmenls
carried al equily 7 8 -! -!2.5
Nel lee and commission income !27 !25 2 !.6
Prolils (Losses) on lrading ! - ! -
lncome lrom insurance business - - - -
Olher operaling income (expenses) ! 4 -3 -75.0
OperaIing income 136 137 -1 -0.7
Personnel expenses -27 -26 ! 3.8
Olher adminislralive expenses -37 -39 -2 -5.!
Adjuslmenls lo properly, equipmenl and inlangible assels - - - -
OperaIing cosIs -64 -65 -1 -1.5
OperaIing margin 72 72 - -
Coodwill impairmenl - - - -
Nel provisions lor risks and charges - - - -
Nel adjuslmenls lo loans - - - -
Nel impairmenl losses on olher assels - - - -
Prolils (Losses) on inveslmenls held lo malurily and
on olher inveslmenls - - - -
Income (Loss) be!ore Iax !rom conIinuing operaIions 72 72 - -
Taxes on income lrom conlinuing operalions -!6 -!6 - -
Merger and reslrucluring-relaled charges (nel ol lax) - - - -
Lllecl ol purchase price allocalion (nel ol lax) -!9 -!9 - -
lncome (Loss) aller lax lrom disconlinued operalions - - - -
Minorily inleresls - -! -!
NeI income 37 36 1 2.8
AIIocaIed capiIaI 66 67 -1 -1.5
Pro!iIabiIiIy raIios (%)
Cosl / lncome ralio 47.! 47.4 -0.3 -0.6
ROL annualised !!3.! !08.4 4.7 4.3
LVA

adjusled
(a)
(millions ol euro)
52 52 - -
Income sIaIemenIlAIIernaIive per!ormance indicaIors
Changes

(millions ol euro)
30.06.2011 31.12.2010
amounI %
Assels under managemenl !39,522 !36,426 3,096 2.3
(a)
Nel ol merger and reslrucluring-relaled charges and ellecl ol purchase price allocalion, as per llRS 3.
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
Changes

Overall, lolal assels managed by Lurizon Capilal as al lhe end ol June 20!! slood al !39.5 billion euro, up 2.3' since lhe
beginning ol lhe year, lhanks lo lhe slrong perlormance ol nel inllows. During lhe hall year, nel inllows amounled lo a posilive
3.3 billion euro, driven by insurance producls (which beneliled lrom lhe conlribulion lrom lhe lile insurance business arising lrom
lhe placemenl ol class l policies by lhe lnlesa Sanpaolo nelworks and lhe inllows lrom lhe unil-linked policies ol Prospelliva,
managed by Lurizon Capilal). Conversely, mulual lunds, relail assel managemenl, hedge lunds and inslilulional assel
managemenl generaled oulllows. Lurizon Capilal's share ol lhe mulual lund markel was !7.6' as al 30 June 20!!, compared lo
!7.3' al lhe end ol December 20!0, lhanks lo lhe impacl ol nel inllows which were less penalising lhan lhose lor lhe
seclor nalionally.
Operaling income lor lhe lirsl hall ol 20!!, amounling lo !36 million euro, remained subslanlially slable on lhe same period ol
20!0 (-0.7'). This lrend is lhe resull ol lhe posilive perlormance ol nel lee and commission income (+!.6'), lavoured by lhe rise
in average assels under managemenl, and prolils (losses) on lrading, which beneliled lrom lhe capilal gains realised on
inveslmenls in lunds. Conversely, lhere has been a decrease in olher operaling income (-3 million euro), which in lhe lirsl hall ol
20!0 had included lhe income relaling lo lhe charge back lo lnlesa Sanpaolo ol cosls lor lhe "Aclion Plan lund" projecl, as well
107



ExpIanaIory NoIes - Resulls by business area and geographical area
108
108
as lhe conlribulion ol lhe inveslee Penghua lund Managemenl Company Limiled (-! million euro). Operaling cosls were down
(-!.5'), allribulable lo adminislralive expenses and, signilicanlly, service cosls. As a resull ol lhe above revenue and cosl lrends,
lhe operaling margin came lo 72 million euro, in line wilh lhe ligure lor lhe lirsl hall ol lhe previous year. Lurizon Capilal closed
lhe lirsl six monlhs ol 20!! wilh a nel income ol 37 million euro (56 million euro nel ol lhe ellecls on lhe income slalemenl ol
lhe purchase price allocalion) up 2.8' compared lo lhe same period ol lhe previous year.
On a quarlerly basis, lhe second quarler ol 20!! showed a decrease in income belore lax lrom conlinuing operalions ol 6.9'
compared lo lhe lirsl quarler, mainly due lo a lall in operaling income (-3.3') and, signilicanlly, in prolils (losses) on lrading.
Capilal absorbed amounled lo 66 million euro, subslanlially in line wilh lhe ligure ol lhe lirsl hall ol 20!0. Annualised ROL
reached lhe characlerislic high values ol lhis 8usiness Unil, due lo limiled absorplion ol capilal compared lo lhe considerable
volumes ol assels managed by lhe company and placed by lhe Croup's banking nelworks. The LVA indicalor, which measures
value crealion, amounled lo 52 million euro, slable compared lo lhe ligure ol lhe same period ol lhe previous year.



ln lhe lramework ol signilicanl evenls, on 29 June 20!! lhe merger by incorporalion ol subsidiary Lurizon A.l. SCR inlo Lurizon
Capilal SCR was resolved, which shall be linalised by lhe end ol lhis year.
ln lerms ol producls managed, in lhe lirsl hall ol 20!! lhe ralionalisalion ol lhe range ol llalian mulual lunds look ellecl.
This resulled in lhe reduclion ol lhe number ol lunds (wilh live mergers by incorporalion ol producls wilh equivalenl inveslmenl
slralegies and lhe eliminalion ol producls limiled in scope) and lhe reslyling ol lhe range and services lhrough changes in producl
lealures (relurn largels, melhods lor calculaling perlormance commissions, and amendmenls lo managemenl policies).
During lhe period lhe managemenl ol several producls was reallocaled, in line wilh lhe specialisalion ol lhe producl companies.
in delail, managemenl mandales were provided lo Lurizon Capilal SA (Luxembourg) on llalian money-markel lunds, lo Lpsilon on
llalian and Luxembourg secured/prolecled lunds and lo Lurizon A.l. on lhe Luxembourg lund Lurizon Mullimanager Slars lund
Tolal Relurn Alpha Slralegy.
As regards inlernalional mulual lunds, a new range ol capilal prolecled producls was crealed wilhin lhe lund "lnveslmenl
Solulion by Lpsilon", whose sub-lunds are managed by Lpsilon SCR lhrough mandale. ln May and June 20!!, lhree sub-lunds ol
lhis new producl line were markeled, wilh lhe objeclive ol pursuing growlh ol invesled capilal while guaranleeing proleclion ol
lhe subscribed value. Since lhe beginning ol lhe year, an addilional sub-lund in lhe range ol capilal prolecled producls
"Lurizon locus Capilale Prolello" was markeled, enlilled "Prolezione 3/20!7". Laslly, lhe range ol lhe lund "Lurizon Slralegia
llessibile" was expanded lhrough lhe launch ol lwo sub-lunds ("Obbligazioni 03/20!6" and "Obbligazioni 06/20!6"), which are
parl ol lhe new generalion ol llexible bonds.
ln assel managemenl, during lhe hall year, lhe ollering was simplilied, involving a lolal ol 2! lines currenlly markeled,
mainlaining lhe same risk prolile and lhe same service level lor cuslomers. The range ol assel managemenl producls markeled by
8anca dei Terrilori was enriched by lhe new line "CP Slralegia Valore Azioni Piu", largeled lo lhe personal segmenl, which
replicales lhe managemenl melhods developed on "CP lnveslimenlo Privale" and compleles lhe range composed ol lhe "CP
Slralegia Valore" and "CP Slralegia Valore Piu" lines. This line lealures a growing exposure lo slock markels and a higher risk
prolile and recommended lerm. During lhe period, lhe ollering ol "CP Dedicala" was expanded wilh lhe launch ol lwo new
producls ("Obbligazionario Luro Tasso" and "Obbligazionario Covernalivo llalia"), which oller managers lhe opporlunily lo
oplimise bond allocalion in lhe currenl inleresl rale scenario.
Laslly, as regards hedge lunds managed by Lurizon A.l. SCR, lhe Della Diversilied lund was merged by incorporalion inlo lhe Low
Volalilily lund, and lhe Volalilily Targel was merged by incorporalion inlo lhe Mulli Alpha lund, which broughl lhe lunds
currenlly managed by lhe company down lrom !0 lo lhe currenl 8.
Mission
Assel managemenl

To provide colleclive and individual assel managemenl producls lo lhe Croup's inlernal banking
nelworks and develop ils presence on lhe open markel lhrough specilic dislribulion agreemenls wilh
olher nelworks and inslilulional inveslors

OrganisaIionaI
sIrucIure
Lurizon Capilal SCR

Lurizon Capilal SA
(Luxembourg)
Lurizon A.l. SCR

Lpsilon Associali SCR

Specialised in managing Luxembourg mulual lunds wilh low lracking error

Specialised in managing lunds ol hedge lunds

Specialised in assel managemenl on behall ol bolh relail cuslomers (mulual lunds and porllolio
managemenl schemes) and inslilulional cuslomers, lo which il ollers a wide range ol specilic inveslmenl
producls and services
Specialised in managing slruclured producls and mulual lunds using quanlilalive melhods and 5!'
owned by Lurizon Capilal and lhe remaining 49' by 8anca lMl

Penghua lund Managemenl
Company Limiled
Chinese lund manager 49' owned by Lurizon Capilal SCR
usiness
108



ExpIanaIory NoIes - Resulls by business area and geographical area
109
109
anca fideuram
(millions ol euro)
30.06.2011 30.06.2010
amounI %
Nel inleresl income 63 57 6 !0.5
Dividends and prolils (losses) on inveslmenls
carried al equily - - - -
Nel lee and commission income 280 255 25 9.8
Prolils (Losses) on lrading 3 22 -!9 -86.4
lncome lrom insurance business 54 43 !! 25.6
Olher operaling income (expenses) - -4 -4
OperaIing income 400 373 27 7.2
Personnel expenses -72 -68 4 5.9
Olher adminislralive expenses -92 -92 - -
Adjuslmenls lo properly, equipmenl and inlangible assels -6 -8 -2 -25.0
OperaIing cosIs -170 -168 2 1.2
OperaIing margin 230 205 25 12.2
Coodwill impairmenl - - - -
Nel provisions lor risks and charges -22 -42 -20 -47.6
Nel adjuslmenls lo loans - - - -
Nel impairmenl losses on olher assels -8 -2 6
Prolils (Losses) on inveslmenls held lo malurily and
on olher inveslmenls 7 - 7 -
Income (Loss) be!ore Iax !rom conIinuing operaIions 207 161 46 28.6
Taxes on income lrom conlinuing operalions -55 -46 9 !9.6
Merger and reslrucluring-relaled charges (nel ol lax) - -4 -4
Lllecl ol purchase price allocalion (nel ol lax) -47 -52 -5 -9.6
lncome (Loss) aller lax lrom disconlinued operalions - - - -
Minorily inleresls - - - -
NeI income 105 59 46 78.0
AIIocaIed capiIaI 525 509 16 3.1
Pro!iIabiIiIy raIios (%)
Cosl / lncome ralio 42.5 45.0 -2.5 -5.6
ROL annualised 40.3 23.4 !7.0 72.5
LVA

adjusled
(a)
(millions ol euro)
!25 89 36 40.4
Income sIaIemenIlAIIernaIive per!ormance indicaIors
Changes

(millions ol euro)
30.06.2011 31.12.2010
amounI %
Assels under managemenl 54,829 53,500 !,329 2.5
Changes
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
(a)
Nel ol merger and reslrucluring-relaled charges and ellecl ol purchase price allocalion, as per llRS 3.

The ligures shown in lhe lable and commenled on below include lhe resulls ol lideuram Vila, lhe company dedicaled lo lhe
managemenl ol lhe porllolio ol policies dislribuled by lhe linancial advisors ol lhe lideuram Croup, spun-oll lrom LurizonVila
and acquired by 8anca lideuram (!9.99' ol lhe capilal) on 29 July 20!0.
lrom ! June 20!! 8anca Sara enlered lhe scope ol 8anca lideuram, lollowing lhe conclusion ol lhe purchase ol lhe enlire
shareholding in lhe company by Sara Assicurazioni. ln lhis regard, lhe reclassilicalion ol lhe ligures lo include lhe resulls ol
8anca Sara only concerned lhe balance sheel and balance sheel aggregales (AUM, linancial advisors) as al 30 June 20!!.
Laslly on 27 June, lhe sale ol lideuram 8ank (Suisse) lo 8anca Credinvesl was linalised, realising a capilal gain ol 7 million euro.

Assels under managemenl ol lhe 8anca lideuram Croup al lhe end ol June 20!! amounled lo 73.7 billion euro (ol which 54.8
billion euro in assels under managemenl and !8.9 billion euro in assels under adminislralion), up by 3' since lhe beginning ol
lhe year. The assels under managemenl acquired lhrough lhe purchase ol 8anca Sara conlribuled 2.2 billion euro lo lhis resull.
ln delail, assels under managemenl, which represenl almosl lwo-lhirds ol lhe aggregale, showed an increase ol 2.5', driven by
lhe sharp rise in lhe mulual lund segmenl. Assels under adminislralion also showed growlh (+4.6'), mainly due lo lhe slrong
109



ExpIanaIory NoIes - Resulls by business area and geographical area
110
110
perlormance ol nel inllows. ln lhe lirsl six monlhs ol 20!! nel inllows ol assels under managemenl, amounling lo 908 million
euro, decreased by 476 million euro compared lo lhe llows in lhe same period ol lhe previous year which, however, included 235
million euro lor lhe repalrialion ol linancial assels held abroad under lhe "Third Tax Amnesly". A breakdown by aggregale shows
lhal assels under managemenl, which reporled a posilive balance ol 539 million euro compared lo 3.! billion euro in lhe lirsl hall
ol 20!0, was allecled by lhe reposilioning ol cuslomer porllolios lowards assels under managemenl, which occurred in 20!0.
Assels under adminislralion showed a posilive balance ol 369 million euro, compared lo a negalive balance ol !.7 million euro in
lhe lirsl hall ol 20!0.
The number ol privale bankers rose lrom 4,349 al lhe end ol December 20!0 lo 4,779 as al 30 June 20!! (including lhe 340
prolessionals acquired lhrough lhe purchase ol 8anca Sara).
The operaling margin lor lhe lirsl hall ol 20!! slood al 230 million euro, up !2.2' compared lo lhe same period ol 20!0, driven
by lhe developmenl ol operaling income (+7.2') and essenlially slable operaling cosls (+2 million euro). ln delail, lhe revenue
perlormance was essenlially due lo lhe increase in nel lee and commission income (+9.8'). ln parlicular, recurring lee and
commission income, i.e. lee and commission income correlaled wilh assels under managemenl, which represenls lhe mosl
imporlanl componenl ol lee and commission income, rose signilicanlly compared lo lhe lirsl six monlhs ol lhe previous year
owing lo bolh lhe growlh ol assels under managemenl and, lo a lesser exlenl, lhe reposilioning ol lhe producl mix lo lavour
lorms ol assels under managemenl wilh a less conservalive risk prolile. lronl-end nel lee and commission income, associaled
wilh lhe placemenl ol securilies, lunds and insurance policies and lhe receipl and lransmission ol orders, which represenls 9' ol
nel lee and commission income, decreased, mainly due lo lhe ellecl ol lower volumes in receipl and lransmission ol orders, as
well as due lo reduced placemenl ol securilies and insurance producls, only parlly ollsel by higher mulual lund placemenl lees.
lee and commission expense, essenlially relaled lo incenlives lor lhe nelwork lor allracling new money, decreased compared lo
lhe lirsl hall ol 20!0 due lo lewer incenlives paid and allocaled lo lhe nelwork ol privale bankers during lhe period. Among lhe
main income caplions, nel inleresl income also increased (+!0.5'), lhanks lo lhe ellecls ol lhe increase in shorl-lerm inleresl
rales on lhe lloaling-rale porllolio, which more lhan ollsel lhe decrease in average volumes managed, as well as lhe income lrom
lhe insurance business ol lideuram Vila (+!! million euro). Conversely, prolils (losses) on lrading showed declining perlormance
(-!9 million euro), in relalion lo lower capilal gains on sales ol bonds in lhe porllolio. The impairmenl ol lwo Creek governmenl
bonds classilied in lhe available lor sale porllolio was recorded under adjuslmenls. Prolils on inveslmenls held lo malurily and on
olher inveslmenls include lhe capilal gain realised on sale ol lhe inveslmenl in lideuram 8ank (Suisse).
lncome belore lax lrom conlinuing operalions amounled lo 207 million euro compared lo !6! million euro in lhe lirsl six monlhs
ol 20!0 (+28.6').
8anca lideuram closed lhe lirsl hall ol 20!! wilh a nel income ol !05 million euro (+78'), which rises lo !52 million euro il lhe
ellecls ol lhe purchase price allocalion on lhe income slalemenl are excluded.
The capilal absorbed by 8anca lideuram amounled lo 525 million euro, a moderale increase on lhe lirsl six monlhs ol 20!0.
Annualised ROL was 40.3', a signilicanl increase owing lo lhe posilive nel income perlormance. LVA, which measures value
crealion, increased, reaching !25 million euro.



The inilialives underlaken by 8anca lideuram in lhe lirsl hall ol 20!! were locused on enriching lhe ollering, as a resull ol lhe
inlroduclion ol innovalive producls consislenl wilh lhe Croup's slralegic objeclives. To carry oul lhese inilialives, 8anca lideuram
oplimised inlernal skills ol lhe Croup, on one hand, and developed and consolidaled parlnerships wilh lhird parly assel managers,
on lhe olher. The aclivily allecled bolh lhe assel managemenl and banking segmenls, wilh a view lo crealing value lor cuslomers
lhrough a dislinclive level ol service and ollering.

Wilh regard lo lhe 8ank's lunds, lhe revision ol lhe range ol llexible lunds conlinued wilh lhe eslablishmenl ol lhe
"londilalia llexible Slralegy" sub-lund, which proposes an aclive slralegy based on lhe diversilicalion ol risk laclors.
Wilhin lhe scope ol "lideuram Mullibrand" (lhird-parly lunds), new sub-lunds in previously dislribuled SlCAVs were inlroduced,
and new classes were included, in relalion lo lhose already placed. Moreover, in consideralion ol lhe purchase ol 8anca Sara, lhe
lirsl hall ol lhe year was marked by seleclion and inlegralion aclivilies which involved ollerings lrom lhird-parly lunds, in order lo
deline a range ol producls aligned al Croup level.
ln lerms ol porllolio managemenl, lhe "Symphonia" ollering was updaled wilh lhe markeling ol lhe new unilorm managemenl
conlracl "Symphonia Llecla Plus".
ln lhe insurance business, "lideuram Vila lnsieme", lhe lirsl unil-linked policy in llaly which combines inveslmenls in inlernal
lunds and exlernal UCls inlo a single producl, was launched.
The inilialives relaling lo assels under adminislralion involved lhe ollering ol inveslmenls in securilies and banking producls. ln
relalion lo inveslmenls in securilies, 8anca lideuram parlicipaled in numerous issues by lhe lnlesa Sanpaolo Croup lor
8anca dei Terrilori. ln delail, seven placemenls were made on lhe primary markel lhrough lixed-rale senior bonds wilh a duralion
ol lwo years. A blended-rale placemenl on an exclusive basis was made lor lhe 8anca lideuram Croup nelworks, issued by
Mission To aid cuslomers wilh inlormed managemenl ol lheir assels, beginning wilh a lhorough analysis ol lheir
lrue needs and risk prolile. To advice on linancial and pension issues wilh lhe aid ol highly qualilied
prolessionals in a lully lransparenl manner and in lull compliance wilh lhe rules

DisIribuIion sIrucIure
98 branches in llaly wilh 4,779 privale bankers

Assel-galhering aclivily lhrough linancial advisors nelworks al lhe service ol cuslomers wilh
medium/high savings polenlial

usiness
110



ExpIanaIory NoIes - Resulls by business area and geographical area
111
111
8anca lMl, wilh a duralion ol six years, which provides a lixed-rale slep up coupon lor lhe lirsl lwo years, and inllalion-linked
coupons lor lhe nexl lour years. Laslly, 8anca lideuram parlicipaled in lhe issue ol subordinaled lloaling-rale lnlesa Sanpaolo
noles issued on an exclusive basis lor lhe 8anca lideuram Croup and lnlesa Sanpaolo Privale 8anking nelworks.
Two years lrom lhe inlroduclion ol lhe new SLl advanced advisory service, which ollers cuslomised solulions lo meel all
inveslmenl needs and evolve wilh lhem as lhey change over lime, around 28,000 cuslomers had subscribed lo lhe service, wilh
assels ol aboul !! billion euro and over 2,500 aclive privale bankers.

111



ExpIanaIory NoIes - Resulls by business area and geographical area
112
112
CorporaIe CenIre
The Corporale Cenlre is responsible lor direclion, coordinalion and conlrol ol lhe whole Croup, as well as lor lreasury.

The Corporale Cenlre closed lhe lirsl hall ol 20!! wilh an operaling loss ol 52 million euro, compared lo -353 million euro in lhe
corresponding period ol lhe previous year. This lrend was mainly lhe resull ol lhe conlribulion ol prolils (losses) on lrading, which
beneliled lrom lhe capilal gains realised on lhe sale ol lhe remaining 25' ol lhe inveslmenl in lindomeslic. lncome belore lax
lrom conlinuing operalions amounled lo -248 million euro (-8!5 million euro in lhe lirsl six monlhs ol 20!0) and included lhe
capilal gains realised on lhe sale ol CR La Spezia and olher branches lo Credil Agricole. The nel loss amounled lo 225 million euro
compared lo !23 million in income in lhe same period ol lhe previous year, which had also included lhe income lrom lhe
securilies services business, wilh lhe linalisalion ol lhe sale ol said business lo Slale Slreel Co..


Treasury services

The Treasury Deparlmenl includes lreasury services in euro and loreign currencies, and lhe inlegraled managemenl ol liquidily
requiremenls/surpluses, linancial risks and selllemenl risks. lnlesa Sanpaolo is a direcl member and provider ol selllemenl services
lor bolh Croup banks and lhird-parly banks. ln lhe lirsl hall ol 20!!, lhe 8ank mainlained ils role as a crilical player wilhin lhe
euro paymenls syslem, conlirming ils markel share in Targel2 al llalian and Luropean levels. During lhe period lhe Treasury
Deparlmenl conlinued lo devole considerable allenlion lo various working groups wilhin lhe LC8, 8ank ol llaly and llalian
8anking Associalion concerning lhe developmenl ol new inlernalional selllemenl syslems. ln delail, in addilion lo lhe Targel2-
Securilies and CC8M2 (single Luropean plallorm lor securilies selllemenl and cenlralised cross-border managemenl ol collaleral)
projecls, Monle Tiloli's X-COM projecl lor lhe purpose ol crealing lhe lirsl domeslic Triparly Collaleral Managemenl service, is
enlering lhe developmenl phase. As parl ol lhis inilialive, lnlesa Sanpaolo is already involved in delining lhe syslem specilics and
organisalional and implemenlalion processes lo launch lhe new plallorm by lhe end ol 20!!, al leasl lhe porlion regarding lhe
re-use ol "eligible" securilies in pooling by lhe Cenlral 8ank in order lo oplimise ils secondary liquidily proliles.
The Parenl Company's commilmenl lo eliminaling selllemenl risk in loreign exchange lransaclions conlinued, where, as a direcl
member ol lhe CLS syslem, il conlinued lo oller a clearing service in line wilh lhe qualily slandards ol lhe major Luropean banks.
ln lhis regard, lhe implemenlalion process, which resulled in Lpsilon SCR operaling in CLS as a lhird parly ol lnlesa Sanpaolo lrom
lhe beginning ol July 20!!, is almosl compleled.

ln lhe lirsl hall ol 20!!, money markels were allecled by lhe conlinuing lension on lhe governmenl bond markels ol peripheral
counlries in lhe Lurozone, wilh a specilic worsening ol lhe crilical issues in Creece. The uncerlainlies regarding lhe aid lo granl lo
lhe counlry, which dragged on lhrough all ol June, inlluenced lhe climale ol uncerlainly in all markel segmenls. This caused
lensions on exchange rales due lo general concerns aboul lhe Luro's durabilily and lhe volalilily in inleresl rales in relalion lo lhe
changing expeclalions ol operalors regarding lhe Luropean Cenlral 8ank's decisions aboul whelher lo change policy rales.
ln lhe area ol monelary policy, in April, in order lo conlirm lhe slricl approach ol lhe Lurosyslem lo expeclalions ol medium/long-
lerm inllalion, lhe Luropean Cenlral 8ank opled lo inilially increase lhe ollicial rales, lrom !' lo !.25' (lhis was lhe lirsl rise
since May 2009). ln June, lhe Luropean Cenlral 8ank also announced lhe delails on lhe main relinancing lransaclions lor July
Oclober ol lhis year, conlirming lixed-rale weekly and monlhly auclions wilh award ol lhe lull amounl and lloaling-rale quarlerly
auclions (linked lo lhe MRO rale), wilh award ol lhe lull amounl. The above decision ensured a slress-lree silualion in lerms ol
liquidily and sleady syslem-wide excess liquidily was lhe delermining laclor in keeping very shorl-lerm rales al levels slighlly lower
lhan lhe ollicial rales. The shorl-lerm inleresl rale curve rellecled lhe LC8's decisions lo raise rales, laken in April's meeling, and
lhe curve already showed lhe ellecls ol lhe expeclalions ol an addilional rise ol 25 bp, which occurred in July. The markel has
incorporaled a moderale adjuslmenl lo lhe ollicial rales during lhis year.
The U.S. money markel also conlinued lo be marked by excess slruclural liquidily which, based on lhe recenl commenls by lhe
lederal Reserve, should conlinue in lhe nexl lew quarlers, despile lhe lacl lhal on 30 June lhe led decided lo inlerrupl lhe
second phase ol Quanlilalive Lasing, lhe programme ol purchasing governmenl bonds.
lnlesa Sanpaolo's money markel operalions conlinued lo be concenlraled almosl complelely on shorl-lerm malurilies, in line wilh
lhe general markel lrend.
Securilies issues remained lhe main source ol shorl-lerm lunding. The increases in lees lor lhe lederal Deposil lnsurance
Corporalion (lDlC) lor wholesale lunding ol US banks crealed an inilial lavourable push lor shorl-lerm issues in lhe US by
Luropean banks (nol subjecl lo lhe lax), which, however, relurned lo normal in June due lo lhe increasing aversion ol US
inveslors lo Luropean risk.
There was a reduclion in lhe duralion ol lhis lorm ol lunding, nol only due lo increased aversion lo lhe Lurope risk, bul also due
lo regulalory reasons, which lorce increasingly prudenlial liquidily risk proliles on inveslors. lnlesa Sanpaolo's oulslanding debl
remains subslanlially slable.
ln lhe second hall ol March, lhe addilion ol lhe Luxembourg subsidiary Sociele Luropeenne de 8anque, which benelils lrom lhe
privilege ol being localed in a counlry considered lo be low-risk, lo lhe Luropean LCP Programme, was highly apprecialed by
inveslors, showing a sleady growlh lrend. lnlesa Sanpaolo's liquidily posilion remained on average in excess ol ils currenl needs
and slayed posilive beyond lhe period ol survival required by lhe regulalors.

lor lhe securilies porllolio, lhe lirsl hall ol 20!! was marked by lhe sovereign debl crisis and lhe possible melhods lor resolving
said crisis. ln lhe lirsl parl ol lhe year, lhe dillerenl perceplion ol llaly risk compared lo lhal ol olher peripheral counlries lavoured
a subslanlial lighlening ol spreads on llalian governmenl bonds, bolh versus 8unds and Swaps. As a resull, lhe desk's sovereign
porllolio, considerably concenlraled on lhe shorl-lerm parl ol lhe llalian curve, was subjecl lo generous prolil laking. Conversely,
in lhe second quarler, lhe renewed lears ol delaull lor Creek debl resulled in a new expansion ol yield spreads lo signilicanl
levels. ln lhis conlexl, lhe porllolio ol llalian AlS securilies was considerably and dynamically implemenled. ln lhe same period,
lhe primary markel lor covered bonds was highly aclive, bolh due lo lhe lavourable regulalory lramework and lhe objeclive
dillicully ol many banks (expecially lhose operaling in peripheral counlries) lo acquire unsecured lunding. These condilions lhus
allowed lhe 8ank lo conlinue ils slralegy ol increasing lhe covered bond porllolio, mainlaining ils low volalilily. Therelore,
112



ExpIanaIory NoIes - Resulls by business area and geographical area
113
113
inveslmenl was locused on llalian securilies ollering high yields in relalion lo lhe lype ol assel class and showing good prospecls
lor perlormance and, al lhe same lime, il was allempled lo mainlain ellicienl diversilicalion ol porllolio risk, parlicipaling, even
lhough lo a lesser exlenl, in lhe issues ol several UK and lrench banks. ln view ol lhe regulalory lighlening ol liquidily ralios, lhe
porllolio ol senior bank noles was nol increased and il was deemed necessary lo lighlen lhe exisling posilions, as lhey had
malurilies ol less lhan 2 years and slill signilicanl carry values.


OperaIing ACM and 5IrucIured OperaIions

Wilh regard lo Assel & Liabilily Managemenl, operalional managemenl ol lhe inleresl rale risks ol lhe Croup's banking book in
lhe segmenl over !8 monlhs is handled by lhe ALM slruclure under lhe supervision ol lhe Risk Managemenl Deparlmenl.
lnleresl rale risk is monilored and managed mainly by examining lhe sensilivily ol lhe markel value ol lhe various posilions in lhe
banking book lo parallel shills in lhe inleresl rale curve al lhe various malurilies, moreover specilic scenario analysis lechniques
on rale developmenls are used, as well as perlormance scenarios lor specilic posilions. The slralegic choices on inleresl rale risk
are made by lhe Croup's linancial Risks Commillee, wilhin limils eslablished by lhe Managemenl 8oard. The ALM slruclure
aclively supporls lhe Commillee's decision-making aclivily by lormulaling analyses and proposals. Despile lhe lacl lhal shorl-lerm
inleresl rales remain low, lhe reduclion in mark-down on demand deposils was signilicanlly ollsel by lhe decisions made lo
prolecl lhe inleresl margin, beneliling lhe business unils. The slruclural componenl ol liquidily risk is managed by idenlilying
expecled liquidily mismalches by malurily bands, on lhe basis ol liquidily policies delined inlernally al lhe Croup level. Mismalch
analysis on medium-/long-lerm malurilies provides inpul lor planning bond lunding, in order lo anlicipale possible pressures on
shorl-lerm lunding.


funding

ln lerms ol medium/long-lerm lunding, in lhe lirsl hall ol 20!!, lhe lolal amounl ol Croup securilies placed on lhe llalian markel
lhrough ils own and lhird-parly nelworks came lo !5.3 billion euro. As lo composilion ol lhe placed securilies, plain vanilla
securilies prevailed wilh a 65.3' share ol lhe lolal, whereas lhe weighl ol slruclured bonds (mainly represenled by inleresl rale
slruclured securilies) was 34.7'. A breakdown by average malurily shows a concenlralion ol 2-year malurilies (wilh a weighl ol
46.5'), whilsl 29.8' is represenled by 4-year securilies, !7.2' by 6-year securilies and lhe remaining 6.5' by 3, 5 and 7-year
bonds. ln lerms ol lhe inlernalional markel, during lhe lirsl six monlhs ol 20!!, a lolal ol approximalely !0.7 billion euro ol
"unsecured" lransaclions were compleled, 6.9 billion euro ol which in lhe lorm ol bond issues placed on lhe Luromarkel,
3 billion dollars ol which (lor a value ol 2.2 billion euro) on lhe US markel, approximalely !.5 billion euro ol which placed in lhe
lorm ol "unsecured" privale placemenls and approximalely !00 million euro ol which in medium/long-lerm deposils made by
inlernalional branches and subsidiaries.
The mosl signilicanl lransaclions include a lloaling rale public issue ol 2 billion euro, wilh 3-year malurily. The worsening ol
lensions in lerms ol sovereign risk in lhe second quarler ol lhe year, and lhe resulling expansion ol spreads, resulled in a
parlicularly caulious and seleclive approach lo accessing inlernalional capilal markels.

ln slruclured lunding, during lhe lirsl six monlhs ol 20!! lnlesa Sanpaolo issued lwo Covered 8onds (C8) as parl ol lhe issue
programme secured by assels lrom lhe public seclor originaled by lhe subsidiary 8llS, including one on lhe inslilulional markel,
amounling lo !.5 billion euro, wilh a lerm ol !0 years and a lixed rale coupon al 5', and lhe olher lully subscribed by 8llS lor
2.4 billion euro, wilh a lerm ol 2 years and a lloaling rale coupon. 8olh bonds are lisled on lhe Luxembourg Slock Lxchange and
raled Aaa by Moody's. lnlesa Sanpaolo lhen placed a second public operalion on lhe inslilulional markel as parl ol lhe Covered
8ond Programme secured by morlgages, amounling lo 2.5 billion euro, wilh a duralion ol 5.5 years al a lixed rale ol 4.375'.
The bonds, which were assigned an Aaa raling by Moody's, are lisled on lhe Luxembourg Slock Lxchange. ln lhe privale
placemenl segmenl, lnlesa Sanpaolo also issued lwo Regislered Covered 8onds, lor !00 million euro wilh a 5.25' lixed-rale
coupon and duralion ol !5 years, and lor 300 million euro wilh a 5.375' lixed-rale coupon and duralion ol 20 years.
These bonds have a raling ol Aaa lrom Moody's and are unlisled. These lransaclions are parlicularly imporlanl wilh a view lo
diversilying sources ol lunding, as regislered covered bonds are a new markel lor lnlesa Sanpaolo. Their inveslors are mainly
medium-small Cerman insurance companies which are inleresled in holding lhe bonds lo malurily, lor signilicanlly long lerms.


113



ExpIanaIory NoIes - Resulls by business area and geographical area
114
114
GEOGRAPHICAL AREA5
(millions ol euro)
IIaIy Europe ResI o!
Ihe WorId
ToIaI
OperaIing income
30.06.20!! 6,705 !,679 294 8,678
30.06.20!0 6,393 !,526 30! 8,220
' change
(a)
4.9 !0.0 -2.3 5.6
Loans Io cusIomers
30.06.20!! 32!,035 4!,7!9 9,607 372,36!
3!.!2.20!0 324,622 40,63! !0,834 376,087
' change
(b)
-!.! 2.7 -!!.3 -!.0
DirecI cusIomer deposiIs
30.06.20!! 32!,890 70,806 2!,754 4!4,450
3!.!2.20!0 330,590 69,023 25,406 425,0!9
' change
(b)
-2.6 2.6 -!4.4 -2.5
(a)
The change expresses lhe ralio belween 30.06.20!! and 30.06.20!0.
(b)
The change expresses lhe ralio belween 30.06.20!! and 3!.!2.20!0.
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and in business unil consliluenls and disconlinued operalions.

Wilh regard lo subdivision by geographical areas, lhe aclivilies ol lhe lnlesa Sanpaolo Croup conlinue lo be concenlraled in lhe
domeslic markel. llaly accounled lor 77' ol revenues, 78' ol cuslomer deposils and 86' ol loans lo cuslomers. Abroad, lhe
Croup has a signilicanl presence in Cenlral and Soulh-Laslern Lurope (Croalia, Slovenia, Slovakia, Serbia, lungary, 8osnia and
lerzegovina, Albania, Romania and Ukraine), in lhe Russian lederalion and in lhe Medilerranean area (Lgypl).
As regards lhe perlormance ol operalions in lhe lirsl hall ol 20!!, compared lo lhe same period ol lhe previous year, loans
decreased slighlly in llaly in relalion lo growlh in Luropean counlries, and a declining lrend in olher areas. Deposils showed lhe
same lrend. Operaling income recorded posilive developmenl in llaly and, above all, in lhe olher Luropean counlries.

114




115
Risk managemenl





A5IC PRINCIPLE5
lnlesa Sanpaolo Croup policies relaling lo risk acceplance are delined by lhe Parenl Company's Managemenl 8odies, lhe
Supervisory 8oard and lhe Managemenl 8oard, wilh supporl lrom specilic Commillees, parlicularly Conlrol Commillee and lrom
lhe Croup Risk Covernance Commillee and lhe Chiel Risk Ollicer, who reporls direclly lo lhe Chiel Lxeculive Ollicer.
The Parenl Company is in charge ol overall direclion, managemenl and conlrol ol risks, whereas Croup companies lhal generale
credil and/or linancial risks operale wilhin lhe assigned aulonomy limils and have lheir own conlrol slruclures. A service
agreemenl governs lhe risk conlrol aclivilies perlormed by lhe Parenl Company's lunclions on behall ol lhe main subsidiaries.
These lunclions reporl direclly lo lhe subsidiaries' Managemenl 8odies.
The risk measuremenl and managemenl lools logelher deline a risk-moniloring lramework al Croup level, capable ol assessing
lhe risks assumed by lhe Croup lrom a regulalory and economic poinl ol view. The level ol absorplion ol economic capilal,
delined as lhe maximum "unexpecled" loss lhal could be borne by lhe Croup over a period ol one year, is a key measure lor
delermining lhe Croup's linancial slruclure, risk appelile and lor guiding operalions, ensuring a balance belween risks assumed
and shareholder relurns. ll is eslimaled on lhe basis ol lhe currenl silualion and also as a lorecasl, based on lhe 8udgel
assumplions and projecled economic scenario under ordinary and slress condilions. The assessmenl ol capilal is included in
business reporling (Croup Risk Tableau de 8ord) and is submilled quarlerly lo lhe Croup Risk Covernance Commillee, lhe
Managemenl 8oard and lhe Conlrol Commillee. Risk hedging, given lhe nalure, lrequency and polenlial impacl ol lhe risk, is
based on a conslanl balance belween miligalion/hedging aclion, conlrol procedures/processes and capilal proleclion measures.


A5EL 2 REGULATION5 AND THE INTERNAL PRO1ECT
As parl ol lhe 8asel 2 Projecl, lhe goal ol which is lor lhe main Croup companies lo adopl advanced approaches relaling lo credil
risks, lhe Supervisory Aulhorily granled permission lo make a lransilion lrom lhe llR8 approach (in use since December 2008) lo
lhe AlR8 approach in lhe Corporale segmenl, elleclive lhe reporl as al 3! December 20!0.
The scope ol applicalion ol lhe AlR8 approach exlends lo lhe Parenl Company, lhe nelwork banks, 8anca lnlraslrullure
lnnovazione e Sviluppo and Mediocredilo llaliano. The release ol specilic LCD models is planned lor lhe end ol 20!! and will
allow lransilion lo lhe AlR8 approach lor lhe producl companies (Leasinl and Mediolacloring). The loreign bank VU8 8anka
oblained permission lo use lhe llR8 approach elleclive lhe reporl as al 3! December 20!0. An applicalion lor aulhorisalion ol
direcl lransilion lo lhe AlR8 approach will be submilled in lhe lhird quarler ol 20!! lor 8anca lMl, which currenlly uses lhe
Slandardised approach, and lor lnlesa Sanpaolo 8ank lreland Plc.
ln addilion, recognilion ol lhe lR8 approach lor lhe Relail Morlgage segmenl was oblained in June 20!0. lor lhe nelwork banks
ol lhe lormer Casse del Cenlro, lhe exlension ol lhe lR8 approach lor residenlial morlgages is planned by lhe end ol lhis year.
lor lhe SML Relail segmenl, second generalion models, which will allow commencemenl ol lhe validalion process lor lransilion lo
lhe lR8 approach in lhe lourlh quarler ol lhe year, are currenlly al release slage.
The developmenl ol raling models lor lhe olher segmenls and lhe exlension ol lhe scope ol companies is proceeding according lo
lhe gradual roll-oul plan lor lhe advanced approaches presenled lo lhe Supervisory Aulhorily.
Wilh regard lo operalional risk, il should be noled lhal lhe Croup was aulhorised, elleclive lhe reporl as al 3! December 2009,
lo use lhe Advanced AMA Approach (inlernal model) lo delermine lhe associaled capilal requiremenl on an inilial scope lhal
includes Organisalional Unils, lhe 8anks and Companies ol lhe 8anca dei Terrilori Division (excluding nelwork banks belonging lo
Cassa di Risparmio di lirenze Croup, bul including Casse del Cenlro), Leasinl, Lurizon Capilal and VU8 8anka. Llleclive
3! December 20!0, lhe Croup was also aulhorised lo exlend advanced approaches lo a second sel ol Organisalional Unils and
Companies ol lhe Corporale and lnveslmenl 8anking Division, in addilion lo Seleli, lo lhe remaining banks ol lhe Cassa di
Risparmio di lirenze Croup and lo P8Z 8anka. The remaining companies, currenlly using lhe Slandardised approach (TSA) or 8asic
lndicalor Approach (8lA), will migrale progressively lo lhe Advanced approaches slarling lrom lhe end ol 20!!, based on lhe
roll-oul plan presenled lo lhe Managemenl and Supervisory Aulhorilies.
ln 20!! lhe Croup presenled ils lnlernal Capilal Adequacy Assessmenl Process Reporl as a "class !" banking group, according lo
8ank ol llaly classilicalion, based on lhe exlensive use ol inlernal melhodologies lor lhe measuremenl ol risk, inlernal capilal and
lolal capilal available.
As parl ol ils adoplion ol 8asel 2, lhe Croup publishes inlormalion concerning capilal adequacy, exposure lo risks and lhe general
characlerislics ol lhe syslems aimed al idenlilying, moniloring and managing lhem in a documenl enlilled "8asel 2 - Pillar 3" or
simply "Pillar 3".
The documenl is published on lhe websile (group.inlesasanpaolo.com) each quarler, inasmuch as lnlesa Sanpaolo is among lhe
groups lhal have adopled validaled inlernal approaches lor credil, markel and operalional risk.


CREDIT RI5K
The Croup's slralegies, powers and rules lor lhe granling and managing ol loans are aimed al.
achieving lhe goal ol suslainable growlh ol lending operalions consislenl wilh lhe risk appelile and value crealion,
diversilying lhe porllolio, limiling lhe concenlralion ol exposures on single counlerparlies/groups, single economic seclors or
geographical areas,
ellicienlly selecling economic groups and individual borrowers lhrough a lhorough analysis ol lheir credilworlhiness aimed al
limiling lhe risk ol insolvency,
115



ExpIanaIory noIes - Risk managemenl

116
privileging lending ol a commercial nalure or inlended lor new inveslmenls in produclion, provided lhal lhey are suslainable,
over lhose ol a merely linancial nalure,
conslanlly moniloring relalionships, lhrough lhe use ol bolh lT procedures and syslemalic surveillance ol posilions lhal show
irregularilies, wilh lhe aim ol delecling any symploms ol perlormance delerioralion in a limely manner.
The lnlesa Sanpaolo Croup has developed a sel ol lechniques and lools lor credil risk measuremenl and managemenl which
ensures analylical conlrol over lhe qualily ol loans lo cuslomers and linancial inslilulions, and loans subjecl lo counlry risk.
ln parlicular, wilh respecl lo loans lo cuslomers, risk is measured using inlernal raling models which change according lo lhe
segmenl lo which lhe counlerparly belongs.


CrediI quaIiIy
Conslanl moniloring ol lhe qualily ol lhe loan porllolio is also pursued lhrough specilic operaling checks lor all lhe phases ol
loan managemenl.
The overall non-perlorming loan porllolio is subjecl lo a specilic managemenl process which, inler alia, enlails accurale
moniloring lhrough a predelermined conlrol syslem and periodic managerial reporling. ln parlicular, lhis aclivily is perlormed
using measuremenl melhods and perlormance conlrols lhal allow lhe produclion ol synlhelic risk indicalors. They allow limely
assessmenls when any anomalies arise or persisl and inleracl wilh processes and procedures lor loan managemenl and lor credil
risk conlrol.
Posilions lo which lhe synlhelic risk indicalor allribules a persislenl high-risk raling are inlercepled (manually or aulomalically)
and included in an operalional calegory based on lheir risk prolile. ln accordance wilh lhe Supervisory Aulhorily inslruclions, lhey
are classilied in lhe lollowing calegories. doubllul loans, exposures lo borrowers in delaull or in similar silualions, subslandard
loans, exposures lo borrowers in lemporary dillicully, deemed likely lo be sellled in a reasonable period ol lime and exposures
which salisly lhe condilions objeclively sel by lhe Supervisory Aulhorily ("objeclive subslandard loans"), allhough lhey do nol
meel lhe requiremenls lo be classilied under doubllul loans, reslruclured loans, posilions lor which, due lo lhe delerioralion ol
lhe economic and linancial posilion ol lhe borrower, lhe bank (or pool ol banks) agrees lo modily lhe original conlraclual lerms
giving rise lo a loss. Laslly, non-perlorming loans also include pasl due posilions lhal cannol be considered mere delays in
reimbursemenls, as eslablished by lhe 8ank ol llaly.
(millions ol euro)
Changes
Gross ToIaI NeI Gross ToIaI NeI NeI
exposure adjusImenIs exposure exposure adjusImenIs exposure exposure
Doubllul loans 22,377 -!4,398 7,979 20,523 -!3,!87 7,336 643
Subslandard loans !!,!05 -2,299 8,806 !!,252 -2,354 8,898 -92
Reslruclured loans 3,6!9 -3!3 3,306 3,63! -297 3,334 -28
Pasl due loans !,346 -!52 !,!94 !,655 -!52 !,503 -309
Non-per!orming Ioans 38,447 -17,162 21,285 37,061 -15,990 21,071 214
Perlorming loans 335,367 -2,4!5 332,952 339,465 -2,466 336,999 -4,047
Perlorming loans represenled by securilies !8,565 -44! !8,!24 !8,499 -482 !8,0!7 !07
Loans Io cusIomers 392,379 -20,018 372,361 395,025 -18,938 376,087 -3,726
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
30.06.2011 31.12.2010

The lable above shows an increase in non-perlorming loans over lhe lirsl hall ol 20!!. A comparison ol lhe nel exposures
belween 30 June 20!! and 3! December 20!0, in lacl, shows an increase ol 2!4 million euro which brings lhe "Non-perlorming
loans" aggregale lo a level ol 2!,285 million euro. The overall coverage ol non-perlorming loans, as al 30 June 20!!, came lo
44.6', up 43.!' over lhe lourlh quarler ol 20!0.
ln delail, exposures classilied as doubllul came lo 7,979 million euro as al 30 June 20!!, up by 8.8' since lhe beginning ol lhe
year and represenling 2.!' ol lolal loans. The coverage ralio was over 64'.
Subslandard loans, on lhe olher hand, amounled lo 8,806 million euro, a decrease ol !' compared lo 3! December 20!0.
Subslandard loans declined lo 2.4' ol lolal loans, essenlially slable compared lo lhe previous quarler and lo lasl year.
The coverage ralio decreased lo a level slighlly under 2!'.
Reslruclured loans, amounling lo 3,306 million euro, remained slable during lhe lirsl hall, bolh in absolule values (-28 million
euro decrease in lhe lirsl six monlhs ol 20!!) and in lerms ol incidence on lolal loans lo cuslomers. The coverage ralio ol
reslruclured loans was slighlly higher lhan December 20!0 levels, reaching 8.6'. Pasl due loans, which came lo !,!94 million
euro, decreased by around 2!' due lo lhe reclassilicalion as perlorming ol signilicanl posilions in lhe lirsl quarler ol 20!!.
The coverage ralio rose lo over !!'.
Perlorming exposures decreased lrom 337 billion euro lo 333 billion euro. ln lhis regard, adjuslmenls were essenlially slable
during lhe lirsl hall and lhe percenlage ol lump-sum adjuslmenls made lo cover lhis calegory ol loans remained subslanlially
unchanged compared lo 3! December 20!0.
116



ExpIanaIory noIes - Risk managemenl

117
MARKET RI5K5

TRADING OOK
The quanlilicalion ol lrading risks is based on daily and periodic VaR ol lhe lrading porllolios ol lnlesa Sanpaolo and 8anca lMl,
which represenl lhe main porlion ol lhe Croup's markel risks, lo adverse markel movemenls ol lhe lollowing risk laclors.
inleresl rales,
equilies and markel indexes,
inveslmenl lunds,
loreign exchange rales,
implied volalililies,
spreads in credil delaull swaps (CDSs),
spreads in bond issues,
correlalion inslrumenls,
dividend derivalives,
assel-backed securilies (A8Ss),
commodilies.
A number ol lhe olher Croup subsidiaries hold smaller lrading porllolios wilh a marginal risk (around 5' ol lhe Croup's overall
risk). ln parlicular, lhe risk laclors ol lhe inlernalional subsidiaries' lrading books were inleresl rales and loreign exchange rales,
bolh relaling lo linear pay-olls.
lor some ol lhe risk laclors indicaled above, lhe Supervisory Aulhorily has validaled lhe inlernal models lor lhe reporling ol lhe
capilal absorplions ol bolh lnlesa Sanpaolo and 8anca lMl.
ln parlicular, lhe validaled risk proliles lor markel risks are. (i) generic on debl securilies and generic/specilic on equilies lor
lnlesa Sanpaolo and 8anca lMl, (ii) posilion risk on quolas ol lunds underlying CPPl (Conslanl Proporlion Porllolio lnsurance)
producls lor 8anca lMl, (iii) oplional risk and specilic risk lor lhe CDS porllolio lor lnlesa Sanpaolo, (iv) posilion risk on dividend
derivalives, (v) posilion risk on commodilies lor 8anca lMl, lhe only legal enlily in lhe Croup aulhorized lo hold open posilions in
commodilies.

The analysis ol markel risk proliles relalive lo lhe lrading book uses various quanlilalive indicalors and VaR is lhe mosl imporlanl.
Since VaR is a synlhelic indicalor which does nol lully idenlily all lypes ol polenlial loss, risk managemenl has been enriched wilh
olher measures, in parlicular simulalion measures lor lhe quanlilicalion ol risks lrom illiquid paramelers (dividends, correlalion,
A8S, hedge lunds).
VaR eslimales are calculaled daily based on simulalions ol hislorical lime-series, a 99' conlidence level and !-day holding period.
The lollowing paragraphs provide lhe eslimales and evolulion ol VaR, delined as lhe sum ol VaR and ol lhe simulalion on illiquid
paramelers, lor lhe lrading book ol lnlesa Sanpaolo and 8anca lMl.
ln lhe second quarler ol 20!!, markel risks generaled by lnlesa Sanpaolo and 8anca lMl were slable wilh respecl lo lhe averages
lor lhe lirsl quarler ol 20!!. The lnlesa Sanpaolo average VaR lor lhe period decreased, ollsel by an increase lor 8anca lMl.
The average VaR lor lhe period lolalled 36.4 million euro.

DaiIy VaR o! Ihe Irading book !or InIesa 5anpaoIo and anca IMI
(a)

(millions ol euro)
average
2
nd
quarIer
minimum
2
nd
quarIer
maximum
2
nd
quarIer
average
1
sI
quarIer
average
4
Ih
quarIer
average
3
rd
quarIer
average
2
nd
quarIer
average
1
sI
quarIer
lnlesa Sanpaolo !5.3 !4.0 !6.6 !8.7 22.3 27.6 27.0 !9.5
8anca lMl 2!.! !4.9 27.5 !7.4 !4.5 !5.8 !3.9 !!.7
ToIaI 36.4 30.7 42.2 36.1 36.8 43.4 40.9 31.3
(a)
Lach line in lhe lable sels oul pasl eslimales ol daily VaR calculaled on lhe quarlely hislorical lime-series respeclively ol lnlesa Sanpaolo and 8anca lMl, minimum and maximum values lor lnlesa Sanpaolo
and 8anca lMl are eslimaled using aggregale hislorical lime-series and lherelore do nol correspond lo lhe sum ol lhe individual values in lhe column.
2011 2010

ln lhe lirsl hall ol 20!!, markel risks generaled by lnlesa Sanpaolo and 8anca lMl increased wilh respecl lo lhe values lor 20!0.
The average VaR lor lhe lirsl hall ol 20!! lolalled 36.3 million euro.
(millions ol euro)
average
1
sI
haI!
minimum
1
sI
haI!
maximum
1
sI
haI!
average
1
sI
haI!
minimum
1
sI
haI!
maximum
1
sI
haI!
lnlesa Sanpaolo !7.0 !4.0 2!.5 23.2 !7.7 23.0
8anca lMl !9.3 !3.6 27.5 !2.8 6.8 !3.0
ToIaI 36.3 30.7 42.4 36.1 25.7 33.5
(a)
Lach line in lhe lable sels oul pasl eslimales ol daily VaR calculaled on lhe hall-yearly hislorical lime-series respeclively ol lnlesa Sanpaolo and 8anca lMl,
minimum and maximum values lor lnlesa Sanpaolo and 8anca lMl are eslimaled using aggregale hislorical lime-series and lherelore do nol correspond lo lhe sum
ol lhe individual values in lhe column.
2011 2010

lor lnlesa Sanpaolo lhe breakdown ol risk prolile in lhe second quarler ol 20!! wilh regard lo lhe various laclors shows lhe
prevalence ol lhe hedge lund risk, which accounled lor 60' ol lolal VaR, lor 8anca lMl credil spread risk was lhe mosl
signilicanl, represenling 56' ol lolal VaR.

117



ExpIanaIory noIes - Risk managemenl

118
ConIribuIion o! risk !acIors Io overaII VaR
(a)

1
sI
haI! 2011
5hares Hedge
!unds
RaIes CrediI
spreads
foreign
exchange
raIes
OIher
parameIers
ComodiIies
lnlesa Sanpaolo 0' 60' !2' 24' !' 3' 0'
8anca lMl 8' 0' !9' 56' !' !0' 6'
ToIaI 6% 20% 17% 45% 1% 7% 4%
(a)
Lach line in lhe lable sels oul lhe conlribulion ol risk laclors considering !00' lhe overall capilal al risk, calculaled as lhe average ol daily eslimales in lhe lirsl hall ol 20!!, broken down belween
lnlesa Sanpaolo and 8anca lMl and indicaling lhe dislribulion ol overall capilal al risk.

VaR in lhe lasl lwelve monlhs is sel oul below. On average, risks remained slable in lhe second quarler ol 20!!. Al lhe end ol
June 8anca lMl recorded a peak in VaR due lo purchases in lhe llalian governmenl seclor made lo lake advanlage ol markel
opporlunilies. The VaR lor lnlesa Sanpaolo shows a downward lrend due lo lhe decrease in lhe securilies porllolio, parlicularly
governmenl securilies.

!0
!5
20
25
30
35
40
45
50
55
Jul-!0 Ocl-!0 Dec-!0 Mar-!! Jun-!!
M
i
l
i
o
n


e
u
r
o
Daily evolulion ol markel risks - VaR
lnlesa Sanpaolo + 8anca lmi lnlesa Sanpaolo

Risk conlrol wilh regard lo lhe lrading aclivily ol lnlesa Sanpaolo and 8anca lMl also uses scenario analyses and slress lesls.
The impacl on lhe income slalemenl ol selecled scenarios relaling lo lhe evolulion ol slock prices, inleresl rales, credil spreads,
loreign exchange rales and commodily prices al lhe end ol June is summarised as lollows.
on slock markel posilions, a bearish scenario, lhal is a 5' decrease in slock prices wilh a simullaneous !0' increase in
volalilily would have led lo a 4 million euro loss,
on inleresl rale exposures, a parallel +25 basis poinl shill in lhe yield curve would have led lo a !6 million euro loss, whereas
a parallel -25 basis poinl shill would have led lo a !5 million euro gain,
on exposures sensilive lo credil spread lluclualions, a 25 basis poinl widening in spreads would have led lo a !!5 million
euro loss, 8 million euro ol which due lo slruclured credil producls (SCPs), whereas a 25 basis poinl lighlening ol lhe spreads
would have led lo a !!7 million euro gain, 7 million euro ol which due lo SCPs,
on loreign exchange exposures (main posilion on Luro/USD), lhe porllolio would have recorded an 8 million euro gain in lhe
evenl ol exchange deprecialion (-!0'). The negalive ellecl in case ol loreign exchange apprecialion (+!0') would have
been 5 million euro,
laslly, on commodily exposures a 6 million euro loss would have been recorded in lhe evenl ol a 50' decrease in prices.
(millions ol euro)
voIaIiIiIy +10%
and prices -5%
voIaIiIiIy -10%
and prices +5%
-25bp +25bp -25bp +25bp -10% +10% -50% +50%
Tolal -4 5 !5 -!6 !!7 -!!5 8 -5 -6 6
o| wh|ch 5C| 7 -3
fOREIGN EXCHANGE
RATE5 EUITY INTERE5T RATE5 CREDIT 5PREAD5 COMMODITY
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ExpIanaIory noIes - Risk managemenl

119
ANKING OOK
Markel risk originaled by lhe banking book arises primarily in lhe Parenl Company and in lhe olher main Croup companies lhal
carry oul relail and corporale banking. The banking book also includes exposure lo markel risks deriving lrom lhe equily
inveslmenls in quoled companies nol lully consolidaled, moslly held by lhe Parenl Company and by Lquiler, lMl lnveslimenli and
Privale Lquily lnlernalional.
The lollowing melhods are used lo measure linancial risks ol lhe Croup's banking book.
Value al Risk (VaR),
Sensilivily Analysis.
Value al Risk is calculaled as lhe maximum polenlial loss in lhe porllolio's markel value lhal could be recorded over a !0-day
holding period wilh a 99' conlidence level (paramelric VaR).
Shill sensilivily analysis quanlilies lhe change in value ol a linancial porllolio resulling lrom adverse movemenls in lhe main risk
laclors (inleresl rale, loreign exchange, equily). lor inleresl rale risk, an adverse movemenl is delined as a parallel and unilorm
shill ol !00 basis poinls ol lhe inleresl rale curve. The measuremenls include an eslimale ol lhe prepaymenl ellecl and ol lhe
risk originaled by cuslomer demand loans and deposils.
lurlhermore, inleresl margin sensilivily is measured by quanlilying lhe impacl on nel inleresl income ol a parallel and
inslanlaneous shock in lhe inleresl rale curve ol !00 basis poinls, over a period ol !2 monlhs. This measure highlighls lhe ellecl
ol varialions in inleresl rales on lhe porllolio being measured, excluding assumplions on lulure changes in lhe mix ol assels and
liabililies and, lherelore, il cannol be considered a prediclor ol lhe lulure levels ol lhe inleresl margin.

ledging ol inleresl rale risk is aimed al (i) prolecling lhe banking book lrom varialions in lhe lair value ol loans and deposils due
lo movemenls in lhe inleresl rale curve or (ii) reducing lhe volalilily ol lulure cash llows relaled lo a parlicular assel/liabilily.
The main lypes ol derivalive conlracls used are inleresl rale swaps (lRS), overnighl index swaps (OlS), cross-currency swaps (CCS)
and oplions on inleresl rales slipulaled wilh lhird parlies or wilh olher Croup companies. The laller, in lurn, cover risk in lhe
markel so lhal lhe hedging lransaclions meel lhe crileria lo qualily as lAS-complianl lor consolidaled linancial slalemenls.
ledging aclivilies perlormed by lhe lnlesa Sanpaolo Croup are recorded using various hedge accounling melhods. A lirsl melhod
relers lo lhe lair value hedge ol specilically idenlilied assels or liabililies (micro-hedging), mainly consisling ol bonds issued or
acquired by Croup companies and loans lo cuslomers. ln addilion, macro-hedging is carried oul on lhe slable porlion ol on
demand deposils and in order lo hedge againsl lair value changes inlrinsic lo lhe inslalmenls under accrual generaled by lloaling
rale operalions. The Croup is exposed lo lhis risk in lhe period lrom lhe dale on which lhe rale is sel and lhe inleresl
paymenl dale.
Anolher hedging melhod used is lhe cash llow hedge which has lhe purpose ol slabilising inleresl llow on variable rale lunding
lo lhe exlenl lhal lhe laller linances lixed-rale inveslmenls (macro cash llow hedge). ln olher cases, micro cash llow hedges are
applied lo specilic assels or liabililies.
The Risk Managemenl Deparlmenl is in charge ol measuring lhe ellecliveness ol inleresl rale risk hedges lor lhe purpose ol
hedge accounling.

ln lhe lirsl six monlhs ol 20!!, inleresl rale risk generaled by lhe lnlesa Sanpaolo Croup's banking book, measured lhrough shill
sensilivily analysis, regislered an average value ol !93 million euro sellling al 33 million euro al lhe end ol June, almosl enlirely
concenlraled on lhe euro currency, lhis ligure compares wilh 426 million euro al lhe end ol 20!0.
lnleresl margin sensilivily in lhe evenl ol a !00 basis poinl rise in inleresl rales amounled lo 352 million euro (-348 million
euro in lhe evenl ol reduclion) al lhe end ol June 20!!, lhese values record a slighl increase compared lo lhe 20!0 year-end
ligures amounling lo +!63 million euro and -!66 million euro, respeclively, in lhe evenl ol an increase/decrease in inleresl rales.
lnleresl rale risk, measured in lerms ol VaR, averaged 80 million euro in lhe lirsl hall ol 20!! (98 million euro al lhe end ol 20!0)
and reached a value ol 67 million euro al lhe end ol June, which also was lhe minimum value lor lhe period. The peak value was
96 million euro.
Price risk generaled by minorily slakes in lisled companies, moslly held in lhe AlS (Available lor Sale) calegory, measured in lerms
ol VaR, recorded an average level ol 8! million euro (86 million euro al lhe end ol 20!0) in lhe lirsl six monlhs ol 20!!, wilh
minimum and peak values ol 7! million euro and 98 million euro respeclively. VaR al lhe end ol June amounled lo
8! million euro.
Laslly, an analysis ol banking book sensilivily lo price risk, measuring lhe impacl on Shareholders' Lquily ol a price shock on lhe
above quoled assels recorded in lhe AlS calegory shows a sensilivily lo a !0' negalive shock equal lo -76 million euro al lhe
end ol June 20!!.

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INfORMATION ON fINANCIAL PRODUCT5
ln line wilh lhe requesls lor ulmosl lransparency made by supranalional and nalional Supervisory Aulhorilies, lhe lollowing
inlormalion is provided on lhe lair value measuremenl melhods adopled, slruclured credil producls, aclivilies perlormed lhrough
Special Purpose Lnlilies (SPL), leveraged linance lransaclions, hedge lund inveslmenls and lransaclions in derivalives
wilh cuslomers.


DETERMINATION Of THE fAIR VALUE Of fINANCIAL A55ET5 AND LIAILITIE5

GeneraI principIes
This chapler summarises lhe crileria used by lhe Croup lo measure lhe lair value ol linancial inslrumenls. These crileria are
unchanged wilh respecl lo lhose adopled lor lhe previous year linancial slalemenls. lor more delails, relerence should be made
lo lhe descriplion included in lhe Annual Reporl 20!0.
lair value is lhe amounl lor which an assel may be exchanged or a liabilily sellled belween knowledgeable, willing counlerparlies
in an arm's lenglh lransaclion. Underlying lhe delinilion ol lair value is an assumplion lhal an enlily is a going concern wilhoul
any need lo liquidale or curlail malerially lhe scale ol ils operalions or lo underlake a lransaclion on adverse lerms. lair value
rellecls lhe credil qualily ol lhe inslrumenl since il incorporales counlerparly risk.
The lair value ol linancial inslrumenls is delermined lhrough lhe use ol prices oblained lrom linancial markels in lhe case ol
inslrumenls quoled on aclive markels or via inlernal valualion lechniques lor olher linancial inslrumenls.
A markel is regarded as aclive il quoled prices, represenling aclual and regularly occurring markel lransaclions considering a
normal relerence period, are readily and regularly available lrom an exchange, dealer, broker, induslry group, pricing service or
regulalory agency.
When no quole on an aclive markel exisls or lhe markel is nol lunclioning regularly, lhal is when lhe markel does nol have a
sullicienl and conlinuous number ol lrades, and bid-oller spreads and volalilily lhal are nol sullicienlly conlained, lhe lair value
ol lhe linancial inslrumenls is mainly delermined lhrough lhe use ol valualion lechniques whose objeclive is lhe eslablishmenl ol
lhe price ol a hypolhelical arm's lenglh lransaclion, molivaled by normal business consideralions, as al lhe measuremenl dale.
Such lechniques include.
relerence lo markel values indireclly connecled lo lhe inslrumenl lo be valued and deduced lrom producls wilh lhe same
risk prolile (Comparable Approach),
valualions perlormed using even parlially inpuls nol idenlilied lrom paramelers observed on lhe markel, which are
eslimaled also by way ol assumplions made by lhe valualor (Mark-lo-Model).
The choice belween lhe aloresaid melhodologies is nol oplional, since lhey musl be applied according lo a hierarchy. absolule
priorily is allribuled lo elleclive markel quoles (level !) lor valualion ol assels and liabililies or lor similar assels and liabililies
measured using valualion lechniques based on markel-observable paramelers olher lhan linancial inslrumenls quoles
(Comparable Approach - level 2) and a lower priorily lo assels and liabililies whose lair value is delermined using valualion
lechniques based on non-observable and, lherelore, more discrelional inpuls (Mark-lo-Model Approach - level 3).
The lollowing inslrumenls are considered quoled on an aclive markel (level !). equilies quoled on a regulaled markel, bonds
quoled on lhe LuroMTS circuil and lhose lor which il is possible lo conlinuously derive lrom lhe main price conlribulion
inlernalional plallorms al leasl lhree bid and ask prices, mulual lunds, spol exchange rales, derivalives lor which quoles are
available on an aclive markel (lor example, lulures and exchange lraded oplions). Laslly, hedge lunds lor which lhe lund
adminislralor provides lhe NAV (Nel Assel Value) wilh lhe lrequency eslablished in lhe subscriplion conlracl, are considered as
quoled on an aclive markel, provided lhal no adjuslmenls are required lor lhe valualion ol lhe liquidily or counlerparly risks ol
lhe underlying assels. Conversely, all olher linancial inslrumenls, which do nol lall in lhe calegories described above, are nol
considered quoled on an aclive markel.
lor linancial inslrumenls quoled on aclive markels, lhe currenl bid price is used lor linancial assels and lhe currenl asking price
lor linancial liabililies, oblained on lhe mosl advanlageous available aclive markel al lhe close ol lhe relerence period.
lor linancial inslrumenls wilh a scarcely signilicanl bid-ask spread or lor linancial assels and liabililies wilh ollselling markel risks,
mid-markel prices are used (again relerred lo lhe lasl day ol lhe relerence period) inslead ol lhe bid or ask price.
When no prices can be derived on aclive markels, lhe lair value ol linancial inslrumenls is delermined using lhe Comparable
Approach (level 2) which uses measuremenl models based on markel paramelers. ln lhis case, lhe valualion is nol based on lhe
price ol lhe same linancial inslrumenl lo be measured, bul on prices or credil spreads presumed lrom ollicial quoles ol
inslrumenls which are similar in lerms ol risk laclors, using a given calculalion melhodology (pricing model). The use ol lhis
approach requires lhe search lor lransaclions on aclive markels in relalion lo inslrumenls lhal, in lerms ol risk laclors, are
comparable wilh lhe inslrumenl lo be measured. The calculalion melhodologies used in lhe comparable approach reproduce
prices ol linancial inslrumenls quoled on aclive markels (model calibralion) and do nol conlain discrelional paramelers
paramelers lor which values may nol be inlerred lrom quoles ol linancial inslrumenls presenl on aclive markels or lixed al levels
capable ol reproducing quoles on aclive markels lhal signilicanlly inlluence lhe linal valualion.
The lair value ol bonds wilhoul ollicial quoles expressed by an aclive markel is delermined lhrough lhe use ol an appropriale
credil spread which is eslimaled slarling lrom conlribuled and liquid linancial inslrumenls wilh similar characlerislics.
Credil spread sources are conlribuled and liquid securilies ol lhe same issuer, credil delaull swaps on lhe same relerence enlily,
conlribuled and liquid securilies issued by an issuer wilh lhe same raling and belonging lo lhe same seclor. The dillerenl seniorily
ol lhe securily lo be priced relalively lo lhe issuer's debl slruclure is also considered.
Similarly, wilh respecl lo linancial liabililies designaled al lair value lhrough prolil and loss, lhe credil spread ol lhe
lnlesa Sanpaolo Croup is delermined and measured based on lhe bonds issued by lhe Parenl Company, wilh regular, periodic
coupons, malurily beyond one year and quoled on an aclive markel in compliance wilh lAS/llRS. The implicil credil raling is
delermined on lhe basis ol markel quoles and subsequenlly adjusled lhrough inlerpolalion models which generale credil spread
curves by lype ol coupon, malurily and subordinalion level.
ln consideralion ol lheir number and complexily, a syslemalic relerence lramework has been developed lor derivalives which
represenls lhe common elemenls (calculalion algorilhms, processing models, markel dala used, basic assumplions ol lhe model)
lhal are used lo measure all calegories ol derivalives.
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121
lnleresl rale, loreign exchange, equily, inllalion and commodily derivalives, il nol lraded on regulaled markels, are Over The
Counler (OTC) inslrumenls, which are bilalerally exchanged wilh markel counlerparlies and are valued lhrough specilic pricing
models, led by inpul paramelers (such as yield, loreign exchange and volalilily curves) observed on lhe markel.
Moreover, when delermining lair value, lhe credil qualily ol lhe counlerparly is also considered. lair value considers counlerparly
credil risk and lulure exposures ol lhe conlracl lhrough lhe so-called Credil Risk Adjuslmenl (CRA).
Wilh respecl lo slruclured credil producls, in lhe case ol A8S, il signilicanl prices are nol available, valualion lechniques consider
paramelers which may be presumed lrom lhe markel (Comparable Approach), such as spreads presumed lrom new issuers and/or
collecled lrom lhe major inveslmenl banks, lurlher slrenglhened by a qualilalive analysis relalive lo lhe perlormance ol lhe
underlying assel presumed lrom periodic inveslor reporls and subjecl lo backlesling wilh aclual sale prices.
linancial inslrumenls lor which lair value is delermined using lhe comparable approach also include equilies measured based on
direcl lransaclions, lhal is signilicanl lransaclions on lhe slock regislered in a lime lrame considered lo be sullicienlly shorl wilh
respecl lo measuremenl dale and in conslanl markel condilions, using, lherelore, lhe so-called "relalive" valualion models based
on mullipliers. Mullipliers are used under lhe comparable companies' or comparable lransaclions' approach. ln lhe lormer case,
relerence is made lo a sample ol comparable lisled companies, lherelore lhe slock prices lrom which lhe mulliples lo measure lhe
inveslmenl are deducled. ln lhe laller case, relerence is made lo lhe lrading prices ol lhe markel relaled lo comparable
companies regislered in a lime lrame considered lo be sullicienlly shorl wilh respecl lo measuremenl dale and in conslanl
markel condilions.
linally, loans also lall under lhe linancial inslrumenls whose lair value is delermined using lhe comparable approach. ln parlicular,
lor medium- and long-lerm assels and liabililies measuremenl is carried oul by discounling lulure cash llows. This is based on lhe
discounl rale adjuslmenl approach, in which lhe risk laclors connecled lo lhe granling ol loans are laken inlo consideralion in lhe
rale used lo discounl lulure cash llows.
The calculalion ol lhe lair value ol cerlain lypes ol linancial inslrumenls is based on valualion models which consider paramelers
nol direclly observable on lhe markel, lherelore implying eslimales and assumplions on lhe parl ol lhe valualor (level 3).
ln parlicular, lhe valualion ol lhe linancial inslrumenl uses a calculalion melhodology which is based on specilic assumplions ol.
lhe developmenl ol lulure cash-llows, which may be allecled by lulure evenls lhal may be allribuled probabililies presumed
lrom pasl experience or on lhe basis ol lhe assumed behaviour,
lhe level ol specilic inpul paramelers nol quoled on aclive markels, lor which inlormalion acquired lrom prices and spreads
observed on lhe markel is in any case prelerred. Where lhis is nol available, pasl dala on lhe specilic risk ol lhe underlying
assel or specialised reporls are used (e.g. reporls prepared by Raling agencies or primary markel players).
The lollowing are measured under lhe Mark-lo-Model Approach.
debl securilies and complex credil derivalives (CDOs) included among slruclured credil producls and credil derivalives on
index lranches,
hedge lunds nol included in level !,
shareholding and olher equilies measured using models based on discounled cash llows,
olher loans, ol a smaller amounl, classilied in lhe available-lor-sale porllolio,
derivalive lransaclions relaling lo securilisalions and equily-risk slruclured oplions.
The lair value ol debl securilies and complex credil derivalives (lunded and unlunded CDOs) is delermined based on a quanlilalive
model which eslimales losses on collaleral wilh a simulalion ol lhe relevanl cash llows which uses copula lunclions. The mosl
signilicanl laclors considered in lhe simulalion lor each collaleral are lhe risk-neulral probabilily ol delaull - derived lrom
markel spreads, recovery rales, lhe correlalion belween lhe value ol collalerals presenl in lhe slruclure and lhe expecled residual
lile ol lhe conlracl. ln order lo incorporale high markel dislocalion and inlense markel illiquidily phenomena in valualions, a series
ol correclions have been prepared lor valualions relerred lo lhe main inpul paramelers. On lhe basis ol lhis valualion, a
Qualilalive Credil Review is provided lor and enlails an accurale analysis ol credil aspecls relerred lo lhe specilic slruclure ol lhe
A8S/CDO and lo lhe collaleral presenl. This is lo idenlily any presenl or lulure weaknesses which emerge lrom lhe characlerislics
ol lhe underlying assels, which could have been missed by raling agencies and as such nol lully considered in lhe valualions
described in lhe previous poinl. The resulls ol lhis analysis, condensed in cerlain objeclive elemenls (such as Pasl Due, Weighled
Average Delinquency, elc.), are summarised in an indicalor represenling credil qualily on which downgrades depend, so as lo
proceed lo a consislenl adjuslmenl in lhe valualion. linally, lor lhis class ol producls, managemenl has lhe possibilily lo decide a
lurlher adjuslmenl which musl be based on prices observed lrom counlerparlies and on experl opinions.
Wilh respecl lo credil derivalives on index lranches, oll-lhe-run series are valued al level 3 when no reliable and veriliable quoles
are available lrom lhe Risk Managemenl Deparlmenl. lair value is delermined based on lhe quoles ol series being issued, adjusled
lo rellecl lhe dillerenl underlying.
The lair value ol hedge lunds is delermined by reducing lhe operaling NAV provided by lhe lund Adminislralor, by an amounl
deriving lrom an individual measuremenl process ol lhe counlerparly risk (being lhe risk associaled wilh lhe credil qualily ol lhe
lund's prime brokers
!
) and lhe liquidily risk (which occurs when lhe assels in which lhe lund is invesled become so illiquid lhal
lhey casl doubls as lo lhe validily ol lhe valualion process).
Lquilies lo which lhe "relalive" models indicaled wilh respecl lo level 2 are nol applied are valued using "absolule" valualion
models. ln parlicular, lhese models are based on llows which subslanlially anlicipale lhe measuremenl ol lhe securily value by
eslimaling lhe cash llows il can generale over lime, discounled using a rale lhal is in line wilh lhe risk level ol lhe inslrumenl,
equily models or equily-income models.

The valualion lechnique delined lor a linancial inslrumenl is adopled over lime and is modilied only lollowing signilicanl changes
in markel condilions or lhe subjeclive condilions relaled lo lhe issuer ol lhe linancial inslrumenl.
The valualion process ol linancial inslrumenls ("lair Value Policy") enlails lhe lollowing phases.

!
The Prime 8roker is an inlernalional linancial inlermediary lhal operales as agenl in lhe selllemenl process, carrying oul lhe linancial lransaclions ordered by
lhe hedge lund's manager wilh lhe ulmosl conlidenlialily. The Prime 8roker also acls as lhe lund's lender, providing credil lines and securilies lending lor shorl
selling, and direclly oblaining guaranlees in respecl ol lhe linancing granled lo lhe lund. The Prime 8roker also provides risk managemenl services, moniloring
lhe hedge lund's risk exposure lo ensure condilions ol linancial slabilily. Olher services provided by lhe Prime 8roker are holding and deposil ol lhe lund's cash
and securilies, handling ol lhe nelling and selllemenl process, and recording ol all markel lransaclions.
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122
idenlilicalion ol lhe sources lor measuremenls. lor each assel class, lhe Markel Dala Relerence Cuide eslablishes lhe
processes necessary lo idenlily markel paramelers and lhe means according lo which such dala musl be exlracled and used,
cerlilicalion and lrealmenl ol markel dala lor measuremenls. lhis slage consisls ol lhe accurale verilicalion ol lhe markel
paramelers used (verilying lhe inlegrily ol dala conlained on lhe proprielary plallorm wilh respecl lo lhe source ol
conlribulion), reliabilily lesls (consislency ol each single ligure wilh similar or comparable ligures) and verilicalion ol concrele
applicalion means. ln parlicular.
o relerence calegories are eslablished lor lhe various lypes ol markel paramelers,
o lhe relerence requiremenls governing lhe idenlilicalion ol ollicial revalualion sources are sel,
o lhe lixing condilions ol ollicial ligures are eslablished,
o lhe dala cerlilicalion condilions are eslablished,
cerlilicalion ol pricing models and Model Risk Assessmenl. lhis phase is aimed al verilying lhe consislency and lhe adherence
ol lhe various measuremenl lechniques used wilh currenl markel praclice, al highlighling any crilical aspecls in lhe pricing
models used and al delermining any adjuslmenls necessary lor measuremenl. The validalion process is parlicularly imporlanl
al lhe slarl ol aclivilies in a new linancial inslrumenl which requires lhe developmenl ol lurlher pricing models, and when lhe
8ank decides lo use a new model lo measure payolls previously managed wilh models deemed lo be less adequale.
All models used lor lhe measuremenl musl be submilled lo an inlernal cerlilicalion process which involves various compelenl
slruclures or independenl companies in highly complex or parlicularly crilical cases,
moniloring consislency ol pricing models over lime. periodical moniloring ol lhe adherence lo lhe markel ol lhe pricing
model in order lo discover any gaps promplly and slarl lhe necessary verilicalions and inlervenlions.
The lair value policy also provides lor adjuslmenls lo rellecl lhe model risk and olher uncerlainlies relaling lo valualion.
ln parlicular, model risk is represenled by lhe possibilily lhal lhe valualion ol a complex inslrumenl is malerially inlluenced by lhe
model chosen. lndeed, il is possible lhal models which price elemenlary inslrumenls wilh lhe same qualily may give rise lo
dillerenl prices lor exolic inslrumenls. ln lhese cases, where possible, allernalive models are compared, and where necessary,
model inpuls are subjecled lo slress lesls, lhus oblaining uselul elemenls lo quanlily lair value adjuslmenls, expressed in lerms ol
measurable linancial indicalors (vega, della, correlalion shill), and periodically reviewed. These lair value adjuslmenls, due lo
model risks, are parl ol a Mark lo Markel Adjuslmenl Policy adopled lor lhe purpose ol considering, in addilion lo model risk
described above, also olher laclors eligible lo inlluence valualion and essenlially allribulable lo.
high and/or complex risk prolile,
posilion illiquidily delermined by lemporary or slruclural markel condilions or in relalion lo lhe enlily ol exchange values held
(in case ol excessive concenlralion),
valualion dillicullies due lo lhe lack ol liquid and observable markel paramelers.


fair vaIue hierarchy
The lable below shows linancial assels and liabililies designaled al lair value lhrough prolil and loss broken down by lair value
hierarchy levels.
(millions ol euro)
LeveI 1 LeveI 2 LeveI 3 LeveI 1 LeveI 2 LeveI 3
!. linancial assels held lor lrading 2!,696 37,787 !,072 24,649 45,783 !,464
2. linancial assels designaled al lair value
lhrough prolil or loss
29,7!9 6,340 244 28,746 6,576 228
3. linancial assels available lor sale 62,3!6 5,087 !,588 54,308 5,655 !,856
4. ledging derivalives - 5,054 4 - 7,368 3
ToIaI 113,731 54,268 2,908 107,703 65,382 3,551
!. linancial liabililies held lor lrading 5,653 3!,990 572 4,0!5 40,2!3 8!5
2. linancial liabililies designaled al lair value
lhrough prolil or loss
3,929 20,800 - 3,722 22,422 -
3. ledging derivalives - 5,269 - - 5,884 -
ToIaI 9,582 58,059 572 7,737 68,519 815
ligures reslaled, where necessary, considering lhe changes in lhe scope ol consolidalion and disconlinued operalions.
financiaI asseIs l IiabiIiIies aI !air vaIue 30.06.2011 31.12.2010

As shown in lhe lable, level 3 inslrumenls, which have more discrelion in lair value measuremenl, slill accounl lor a limiled
porlion ol lhe linancial inslrumenls porllolio and lhe relevanl balances were down on lhose al 20!0 year end. Conversely, almosl
70' ol lhe linancial assels measured al lair value are delermined based on markel prices (no discrelion).
The decrease in assels/liabililies held lor lrading, mainly concenlraled in level 2, in lhe lirsl hall ol 20!! assumed signilicanl
proporlions and is largely allribulable lo derivalives. The increase in level ! linancial assels available lor sale was allribulable lo
lhe purchase ol quoled bonds.
ln general, in lhe lirsl hall ol 20!! no lranslers ol signilicanl amounls belween lhe various levels were recorded lor linancial
assels and liabililies al lair value.
The sensilivily analysis ol level 3 linancial assels and liabililies shows a !8 million euro
2
decrease in lair value due lo complex credil
derivalives, when lhe lollowing paramelers change.

2
This amounl is shown nel ol adjuslmenls lo valualions relaling lo lhe main inpul paramelers which were already considered lo delermine lhe lair value ol
linancial inslrumenls.
122



ExpIanaIory noIes - Risk managemenl

123
risk-neulral probabilily ol delaull derived lrom markel spreads (!0'),
recovery rale (lrom 5' lo 25', based on lhe lype ol risk ol lhe underlying producl),
correlalion belween lhe value ol collalerals presenl in lhe slruclure (lrom 25' lo 80', based on lhe lype ol risk ol lhe
underlying producl),
expecled residual lile ol lhe conlracl (one-year increase over lhe expecled lerm).
123



ExpIanaIory noIes - Risk managemenl

124
5TRUCTURED CREDIT PRODUCT5
During lhe lirsl hall ol 20!!, lhe lolal risk exposure lo slruclured credil producls lell considerably lollowing lhe repaymenl ol
cerlain assels held in porllolio. This drop can be ascribed lo lhe porllolio managemenl slralegy locused on gradually reducing
exposure lo lhe porlion held in assels originaled in lhe Uniled Slales, and al lhe same lime reposilioning lowards Assel 8acked
producls wilh Luropean underlyings, parlicularly assels originaled in llaly. During lhe lirsl hall ol 20!! lhe posilive lrend in lhe
secondary markel conlinued, wilh a consequenl benelicial impacl on lhe value ol slruclured credil producls, which conlribuled
45 million euro lo lhe hall year resull.

The overall risk exposure ol slruclured credil producls rose lrom 3,7!5 million euro as al 3! December 20!0 lo 2,974 million euro
as al 30 June 20!!, in addilion lo an exposure ol 6! million euro in conneclion wilh packages (87 million euro as al
3! December 20!0). The considerable decrease in exposure in lhe lirsl hall ol 20!! is due lo lhe lolal/parlial repaymenl ol assels
held in porllolio. ln parlicular, June 20!! saw lhe selllemenl ol lwo unlunded posilions included in lhe "Olher slruclured credil
producls unlunded Super Senior CDOs" aggregale lor a nolional value ol approximalely 500 million euro.
As al 30 June 20!!, 6' ol lhe oulslanding posilions were allecled by a reduclion in credilworlhiness. The slighl increase over
lhe 4' as al 3! December 20!0 can be allribuled lo unlunded posilions originaled in lhe Uniled Slales. The silualion ol lhe
slruclured credil producl porllolio al lhe end ol lhe lirsl hall ol 20!! is described by lhe lollowing indicalors:
78' ol exposure was lnveslmenl Crade, compared lo 80' as al 3! December 20!0 lhis decrease is due lo lhe closure ol
unlunded posilions wilh an AA/A raling,
47' had an AAA raling,
22' had a 888 raling or less, compared lo 20' as al 3! December 20!0,
!!' ol lhe exposure had a pre-2005 vinlage
3
,
35' has a 2005 vinlage,
only 7' ol lhe exposure relaled lo lhe US Residenlial segmenl, and 20' lo lhe US Non-Residenlial segmenl,
lhe remaining exposure (73' ol lhe lolal) is 69' Luropean.
ln lerms ol underlying conlracl lypes, slighlly less lhan hall lhe exposure consisled ol CLOs (3!') and CDOs (!8'), lhe resl was
almosl enlirely made up ol A8Ss (!3', down due lo lhe closure ol cerlain unlunded posilions) and RM8Ss (32'), wilh CM8Ss
represenling 6' ol lhe lolal.
As concerns valualion melhods, ol "long" posilions, approximalely 39' are measured using lhe mark-lo-model (!00' ol
unlunded posilions, 29' ol lunded posilions, !00' ol lhe monoline risk and lhe non-monoline "packages"), 49' wilh lhe
comparable approach (57' ol lunded posilions) and !2' are measured using elleclive markel quoles (!4' ol lunded
posilions). Ol lhe "shorl" posilions, 59' are measured using lhe mark-lo-model (!00' ol unlunded posilions and !00' ol
posilions ol lunds) and 4!' are measured using elleclive markel quoles (!00' ol CM8X-CDS hedges).
ln lhe summary lables provided below, lable (a) sels oul risk exposure as al 30 June 20!! and income slalemenl caplions (sum ol
realised charges and prolils, wrile-downs and wrile-backs) in lhe lirsl hall ol 20!!, compared wilh lhe corresponding values
recorded as al 3! December 20!0.
Table (b) sels oul ligures relaled lo slruclured packages, normally made up ol a securily whose credil risk is enlirely hedged by a
specilic credil delaull swap. Risk exposure in lhe lable relers lo lhe proleclion seller and nol lo lhe issuer ol lhe securily hedged.
Values expressed in USD as al 3! December 20!0 were lranslaled al an exchange rale ol !.3362 euro, and as al 30 June 20!! al
an exchange rale ol !.4453 euro.


3
Dale ol generalion ol lhe collaleral underlying lhe securilisalion. ll is an imporlanl laclor in lhe assessmenl ol lhe risk ol lhe morlgages underlying
securilisalions since, especially in lhe US, lhe phenomenon ol morlgages granled lo enlilies wilh inadequale income and wilh low prior assessmenl ol
documenlalion became signilicanl as ol 2005.
124



ExpIanaIory noIes - Risk managemenl

125
Structured credit products: summary tables
a |xposure |n |unded and un|unded A35/C|Os
(millions ol euro)
financiaI asseIs heId !or Irading
U5 subprime exposure 22 4 24 1
ConIagion area 125 3 140 19
- Mulliseclor CDOs 49 -3 6! -4
- All-A - - - -
- TruPS 76 6 79 23
- Prime CMOs - - - -
OIher sIrucIured crediI producIs 900 24 1,298 40
- Luropean/US A8S/CDOs 749 8 607 3
- Unlunded super senior CDOs !68 !2 672 26
- Olher unlunded posilions -!7 4 !9 !!
ToIaI 1,047 31 1,462 60
in addilion lo.
Posilions ol lunds - -3 - !6
ToIaI financiaI asseIs heId !or Irading 1,047 28 1,462 76
30.06.2011 31.12.2010
Risk exposure (*)
(including
wrile-downs
and wrile-backs)
Income
5IaIemenI
Prolils (Losses)
on lrading
Risk exposure (*)
(including
wrile-downs
and wrile-backs)
Income
5IaIemenI
Prolils (Losses)
on lrading

Loans
U5 subprime exposure 3 - 3 -
ConIagion area 66 - 89 -
- Mulliseclor CDOs !0 - !5 -
- All-A 37 - 49 -
- TruPS - - - -
- Prime CMOs !9 - 25 -
OIher sIrucIured crediI producIs 1,858 8 2,161 7
- lunded Luropean/US A8S/CDOs !,266 -! !,253 3
- lunded super senior CDOs 572 9 777 8
- Olher Romulus lunded securilies 20 - !3! -4
ToIaI 1,927 8 2,253 7
in addilion lo.
Posilions ol lunds - - - -
ToIaI Loans 1,927 8 2,253 7
TOTAL 2,974 36 3,715 83
31.12.2010
Risk exposure (**)
(including
wrile-downs
and wrile-backs)
Income
5IaIemenI
(*)
The column "Risk exposure" sels oul. lor securilies, lair value, lor derivalives, lhe nominal value ol lhe conlracl, nel ol wrile-downs and wrile-backs recorded al
relerence dale. Such amounls correspond, lor "long" posilions, lo lhe maximum polenlial loss (in lhe evenl ol a !00' delaull and a recovery rale ol 0). lor "shorl"
posilions, vice versa, lhey indicale lhe maximum polenlial gain (in lhe same scenario in lerms ol delaull and recovery levels).
Risk exposure (**)
(including
wrile-downs
and wrile-backs)
Income
5IaIemenI
(**)
lor assels reclassilied lo loans, exposure lo risk is provided by lhe carrying amounl ol lhe securily, equal lo lair value al lhe reclassilicalion dale, plus accrued inleresl
calculaled al lhe elleclive inleresl rale nel ol nel value adjuslmenls lo lhe porllolio.
30.06.2011

125



ExpIanaIory noIes - Risk managemenl

126
o |xposure |n pac|aes
(millions ol euro)
CrediI exposure Io
monoIine insurers
(CDS lair value
posl wrile-down lor
CRA)
Income
5IaIemenI
Prolils (Losses)
on lrading
CrediI exposure Io
monoIine insurers
(CDS lair value
posl wrile-down lor
CRA)
Income
5IaIemenI
Prolils (Losses)
on lrading
Monoline risk 28 8 !7 !9
Non monoline packages 33 ! 70 !
TOTAL 61 9 87 20
30.06.2011 31.12.2010

lrom an income slalemenl perspeclive, slruclured credil producls generaled a nel income ol +45 million euro as al 30 June 20!!
compared lo !03 million euro lor 20!0.
The exposure in lunded and unlunded A8Ss/CDOs had an ellecl on "Prolils (Losses) on lrading Caplion 80" ol +28 million euro.
The prolil on lhis segmenl was a resull ol lhe ellecls ol.
unlunded Super Senior CDO posilions included in "Olher slruclured credil producls" (+!2 million euro as al 30 June 20!!),
lhe prolil in lhis segmenl was generaled as a resull ol lhe improvemenl in spreads on lhe Luropean and US secondary
markels and ol lhe limiled downgrade/delaull impacl,
Luropean and US lunded A8Ss/CDOs (+8 million euro) and olher unlunded posilions (+4 million euro), also included in lhe
area "Olher slruclured credil producls",
lhe US Subprime exposure (+4 million euro), enlirely allribulable lo unlunded posilions included in lhe segmenl,
inslrumenls included in lhe "Conlagion area", in parlicular lhe TruPS recorded a posilive 6 million euro resull and lhe
Mulliseclor CDO posilions made a negalive conlribulion ol 3 million euro, which deleriorales lurlher il lhe posilions in lunds
allribulable lo lhis seclor are considered (-3 million euro).
The securilies reclassilied lo lhe loan porllolio showed an overall impacl on lhe income slalemenl ol 8 million euro as al
30 June 20!!. This ligure was made up ol lhe lollowing.
3 million euro loss lrom lhe impairmenl ol a securily included in lhe porllolio ol lhe Romulus vehicle,
!! million euro gain lrom lhe markel sale ol posilions in reclassilied debl securilies, including 7 million euro allribulable lo
lhe subsidiary 8anca lMl and 4 million euro lo lhe Parenl Company.
As al 30 June 20!! lhe loan porllolio conlained A8Ss issued by parlies residenl in LU counlries in silualions ol linancial dillicully
(known as "PlCS"). ln parlicular, lhese consisl ol.
!58 million euro in nominal value ol securilies issued by parlies residenl in Spain, as al 30 June 20!! lhese securilies had a
book value ol !44 million euro and a lair value ol !!0 million euro,
39 million euro in nominal value ol securilies issued by parlies residenl in Porlugal, as al 30 June 20!! lhese securilies had a
book value ol 35 million euro and a lair value ol 27 million euro,
!3 million euro in nominal value ol securilies issued by parlies residenl in Creece, as al 30 June 20!! lhese securilies had a
book value ol !2 million euro and a lair value ol 9 million euro,
2 million euro in nominal value ol securilies issued by parlies residenl in lreland, as al 30 June 20!! lhese securilies had a
book value ol 2 million euro and a lair value ol ! million euro.
The "Monoline risk" and "Non-monoline packages" made a posilive conlribulion ol 9 million euro as al 30 June 20!!, compared
lo +20 million euro recorded al lhe end ol 20!0.
ll should be noled lhal lhe "Slruclured credil producls" aggregale was idenlilied in 2007, immedialely lollowing lhe oulbreak ol
lhe "subprime phenomenon" and, in disclosure lo lhe markel, has been kepl essenlially conslanl.
As al 30 June 20!!, lhe aggregale included bonds reclassilied as loans, which are summarised in lhe lables below.
(millions ol euro)
RecIassi!ied securiIies.
- lrom linancial assels available lor sale
lo loans !59 85 68 !7
- lrom linancial assels held lor lrading
lo loans !,760 !,653 !,50! !52
ToIaI 5ecuriIies recIassi!ied Io Ioans 1,919 1,738 1,569 152 17
5ecuriIies cIassi!ied under Ioans !rom incepIion !95 !89
ToIaI securiIies cIassi!ied under Ioans !rom incepIion 195 189
TOTAL LOAN5 2,114 1,927 1,569 152 17
E!!ecI on
5harehoIders'
EquiIy
(*)
lor assels reclassilied lo loans, exposure lo risk is provided by lhe carrying amounl ol lhe securily, equal lo lair value al lhe reclassilicalion dale, plus accrued
inleresl calculaled al lhe elleclive inleresl rale nel ol nel value adjuslmenls lo lhe porllolio.
NominaI
vaIue
Risk exposure
(*)
(including
wrile-downs
and wrile-backs)
fair vaIue as aI
30.06.2011
ene!iI !rom
Ihe
recIassi!icaIion
as aI
30.06.2011

126



ExpIanaIory noIes - Risk managemenl

127
(millions ol euro)
Negalive economic ellecl wilhoul reclassilicalion lor 2008 -299
Negalive economic ellecl wilhoul reclassilicalion lor 2009 -7
Posilive economic ellecl wilhoul reclassilicalion lor 20!0 !!7
Posilive economic ellecl wilhoul reclassilicalion lor 20!! 37
ENEfIT fROM THE RECLA55IfICATION A5 AT 30.06.2011 -152


INfORMATION ON ACTIVITIE5 PERfORMED THROUGH 5PECIAL PURPO5E ENTITIE5 (5PEs)
lor lhe purpose ol lhis analysis, legal enlilies eslablished lo pursue a specilic, clearly delined and limiled objeclive are considered
Special Purpose Lnlilies (raising lunds on lhe markel, acquiring/selling/managing assels, developing and/or linancing specilic
business inilialives, underlaking leveraged buy-oul lransaclions or managing credil risk inherenl in an enlily's porllolio).
The sponsor ol lhe lransaclion is normally an enlily which requesls lhe slrucluring ol a lransaclion lhal involves lhe SPL lor lhe
purpose ol achieving cerlain objeclives. ln some cases lhe 8ank is lhe sponsor and eslablishes a SPL lo achieve one ol lhe
objeclives ciled above. There have nol been any changes in lhe consolidalion crileria compared lo lhose reporled in lhe 20!0
linancial slalemenls.

funding 5PEs
These are enlilies eslablished abroad lo raise lunds on specilic markels. The SPLs issue linancial inslrumenls, normally guaranleed
by lnlesa Sanpaolo, and lransler lhe lunds raised lo lhe Parenl Company.
There were no signilicanl changes wilh respecl lo lhe dala and inlormalion reporled as al 3! December 20!0.

5PEs !or insurance producIs
These are enlilies (UClTS) eslablished lor lhe purpose ol invesling inlernal lunds ol unil-linked and index-linked producls ol lhe
Croup's insurance companies. The laller relain lhe majorily ol lhe risks and rewards ol lhe companies in queslion and, as a
consequence, are consolidaled pursuanl lo lAS 27/SlC !2.
Compared lo lhe ligures as al 3! December 20!0 lhere was a decrease in inveslmenls in bonds and liquidily lo 60' (64' al lhe
end ol lhe previous year), ollsel by an increase in corporale bond inveslmenls (lrom approximalely !2' lo around !6').

5ecuriIisaIion 5PEs
These are lunding SPLs lhal enable an enlily lo raise lunds lhrough lhe securilisalion ol parl ol ils assels. ln parlicular, lhis
involves lhe spin-oll ol a package ol balance sheel assels (generally loans) and ils subsequenl lransler lo a vehicle which, lo
linance lhe purchase, issues securilies laler placed on lhe markel or lhrough a privale placemenl. The resources raised in lhis way
are reversed lo lhe seller, whereas lhe commilmenls lo lhe subscribers are mel using lhe cash lunds generaled by lhe loans sold.
SPLs ol lhis lype, which are parl ol lhe scope ol consolidalion as al 30 June 20!!, are lhe same reporled in lhe linancial
slalemenls as al 3! December 20!0. Wilh parlicular relerence lo lhe vehicle Adriano linance S.r.l., nole lhe early unwinding ol
lhe Series 2 sell-securilisalion in May 20!!, compleled on relrocession ol lhe morlgage porllolio lo lhe Parenl Company
lnlesa Sanpaolo and lull repaymenl ol lhe subordinaled loan granled lor 50 million euro and ol lhe Class A noles. The Class 8
noles were parlly redeemed, given lhe lower value ol lhe morlgage porllolio as al lhe dale ol selllemenl.
The securilised assels ol vehicles in lhis calegory are represenled by perlorming morlgages, non-perlorming morlgages and lease-
relaled perlorming morlgages. lor lhe Auguslo, Colombo and Diocleziano vehicles lhe assels were made up ol land linancing or
receivables lor public works.
Wilh regard, on lhe olher hand, lo lhe vehicles lSP C8 Pubblico S.r.l. and lSP C8 lpolecario S.r.l., SPL used lo supporl lhe covered
bond issue programme lhere were lhree covered bond issues during lhe lirsl hall ol 20!!.
lhe lirsl, lor an amounl ol !.5 billion euro, was issued under lhe lssue Programme lor a maximum amounl ol !0 billion euro
backed by public seclor loans sold by 8anca lnlraslrullure lnnovazione e Sviluppo lo lSP C8 Pubblico S.r.l.. This issue, which
was compleled in January and has a !0-year malurily, is largeled al inslilulional inveslors and linancial inlermediaries and is
lisled on lhe Luxembourg Slock Lxchange,
lhe second, lor an amounl ol 2.4 billion euro, was issued, like lhe lirsl, under lhe lssue Programme lor a maximum amounl
ol !0 billion euro backed by perlorming public seclor loans sold by 8llS lo lSP C8 Pubblico S.r.l.. The bonds issued, wilh a
lloaling rale linked lo lhe 6-monlh Luribor plus spread, were lully subscribed by 8llS, which allocaled lhem as securily lor ils
lunding al lhe Luropean Cenlral 8ank, lhrough lransaclions carried oul via lhe Parenl Company,
lhe lhird, lor an amounl ol 2.5 billion euro, was issued under lhe lssue Programme lor a maximum amounl ol 20 billion euro
backed by lriple-A-raled securilised securilies (RM8S), wilh underlying composed ol llalian residenlial morlgage loans
originaled by lnlesa Sanpaolo, which were sold by lhe laller lo lhe vehicle lSP C8 lpolecario S.r.l.. This issue, which was
compleled in lebruary and has a malurily ol 5.5 years, is largeled al inslilulional inveslors and inslilulional linancial
inlermediaries and is lisled on lhe Luxembourg Slock Lxchange.
Regarding lhe lSP C8 lpolecario S.r.l. vehicle, wilh ellecl lrom 27 June 20!! in economic lerms, lhe Parenl Company lnlesa
Sanpaolo sold a porllolio ol residenlial morlgages lo lhe vehicle al a sale price ol 2,3!9 million euro, paid lo lhe lransleror
lhrough a subordinaled loan disbursed lor lhal amounl in July.
As also already noled in lhe linancial slalemenls as al 3! December 20!0, lnlesa Sanpaolo conlrols, pursuanl lo SlC !2, lhe
vehicles Romulus lunding Corporalion and Duomo lunding Plc.. Compared lo lhe silualion described al lhe end ol 20!0.
lhere was a sale al lair value lo lnlesa Sanpaolo, compleled al lhe beginning ol March 20!!, ol parl ol lhe securilies held by
Romulus lhal were included wilhin lhe scope ol slruclured credil producls. Al lhe end ol lhe lirsl hall lhese securilies had a
nominal value ol !23 million euro and were recognised in lhe consolidaled linancial slalemenls wilh a book value ol
127



ExpIanaIory noIes - Risk managemenl

128
!!4 million euro. One ol lhese securilies was subjecl lo impairmenl losses, during lhe lirsl hall ol 20!!, amounling lo
3 million euro, which were recognised under "Nel adjuslmenls lo loans caplion !30",
wilh regard lo lhe breakdown by raling ol lhe assels porllolio held by lhe vehicle, lhe increase in assels wilh a raling in lhe
range Aa3 lo Aa! (lrom 49' in December 20!0 lo approximalely 59' in June 20!!) and, al lhe same lime, a decrease in
lhe percenlage ol unraled assels (lrom around 49' in December 20!0 lo 32' in June 20!!),
regarding lhe liquidily lines granled lo lhe Romulus vehicle, a decrease in lhe loan lacilily lrom 294 million euro (as al
3! December 20!0) lo !!2 million euro, bringing lhe amounl used lo a nil value,
lhe decrease in lhe lolal leller ol credil granled lo lhe vehicle by lSP lrom 78 million euro lo 44 million euro.
The sell-securilisalions carried oul lhrough lhe vehicle SPQR ll S.r.l. were closed ahead ol lhe due dale during lhe lirsl hall ol
20!!, lhrough lhe sale lo 8anca lnlraslrullure lnnovazione e Sviluppo ol lhe enlire porllolios underlying lhe C8O ! and C8O 2
securilisalions and redemplion ol lhe senior and junior bonds issued, which were enlirely held by 8llS. Subsequenlly, 8llS sold lhe
securilies repurchased lo lhe vehicle lSP C8 Pubblico S.r.l. lo proceed wilh lhe second ol lhe lhree covered bond issues
reporled above.

financiaI Engineering 5PEs
These SPLs carry oul inveslmenl and lunding lransaclions lhal achieve beller risk/relurn combinalions lhan lhose generaled by
slandard lransaclions, lhrough special slruclures aimed al oplimising accounling, lax and/or regulalory aspecls. These slruclures
have been sel up lo respond lo lhe needs ol primary cuslomers and provide solulions lhal oller linancing al compelilive inleresl
rales and inveslmenls wilh higher relurns.
As al 30 June 20!!, lhe silualion ol lhe only vehicle ol lhis kind conlrolled by lnlesa Sanpaolo, lnlesa lnveslimenli S.p.A., was
exaclly lhal described as al 3! December 20!0. The Lunar lunding vehicle is slill included in lhe scope ol consolidalion.

OIher unconsoIidaIed 5peciaI Purpose EnIiIies


Wilh regard lo lhe olher unconsolidaled SPLs (Projecl linancing, Assel 8acked and Credil Derivalives) relerence should be made
lo lhe linancial slalemenls as al 3! December 20!0. lor lhe Assel 8acked SPLs in which lhe Croup has lhe majorily ol voling
righls, held by jusl one inlernalional subsidiary, lolal assels lell lo 47 million euro (76 million euro in December 20!0). ln lacl,
almosl all lhe SPLs in lhis calegory were merged by incorporalion inlo lhe subsidiary holding lhe relaled equily inveslmenls.
lor operalions involving lhe vehicles used lor Leveraged & Acquisilion linance lransaclions a descriplion is provided in lhe
seclions below.


LEVERAGED fINANCE TRAN5ACTION5
Since lhere is no univocal and universally agreed-upon delinilion ol leveraged linance lransaclions, lnlesa Sanpaolo decided lo
include in lhis calegory lhe exposures (loans granled and disbursed in relalion lo slruclured linancing, normally medium/long
lerm) lo legal enlilies in which lhe majorily ol share capilal is held by privale equily lunds.
These are mainly posilions in supporl ol Leveraged 8uy Oul projecls (lherelore wilh high linancial leverage), i.e. linked lo lhe lull
or parl acquisilion ol companies lhrough recourse lo SPLs crealed lor lhis purpose. Aller acquisilion ol lhe largel company's
securilies package, lhese SPLs are normally merged inlo lhe largel. The largel companies generally have good economic
prospecls, slable cash llows in lhe medium lerm and low original leverage levels. lnlesa Sanpaolo has linanced enlilies ol lhis
lype, as normal borrowers, wilhoul acling as sponsor.
None ol lhese SPLs is consolidaled, since lhe guaranlees lo supporl lhe lransaclion are solely inslrumenlal lor lhe granling ol lhe
linancing and are never direcled lo lhe acquisilion ol direcl or indirecl conlrol over lhe vehicle.
As al 30 June 20!!, !!6 lransaclions lor a lolal amounl granled ol 4,388 million euro mel lhe above delinilion.
These exposures are classilied under lhe loans porllolio. They also include lhe porlions ol syndicaled loans underwrillen or under
syndicalion. ln line wilh disclosure requiremenls, breakdown ol exposures by geographical area, economic seclor and by level ol
subordinalion is sel oul below.

128


ExpIanaIory noIes - Risk managemenl

129
Subordinaled
!.0'
Senior 99.0'
reakdovn by subordinaIion IeveI
Abroad 29.0'
llaly 7!.0'
reakdovn by geographicaI area
To be syndicaled
llaly !0.6'
linal Take
89.4'
reakdovn by Iype o! risk
lnduslrial 68.3'
linancial 4.!'
Services !3.6'
Telecommunicalion
!4.0'
reakdovn by economic secIor


DI5CLO5URE ON INVE5TMENT5 IN HEDGE fUND5
The hedge lund porllolio as al 30 June 20!! lolalled 688 million euro, compared lo lhe 8!4 million euro recorded al lhe end ol
20!0. As al lhe same dale, lhere was an overall loss ol 24 million euro, compared lo lhe 26 million euro prolil recorded in lhe
lirsl hall ol 20!0 and 84 million euro prolil al lhe end ol lhe previous year.
The 24 million euro nel loss recognised as al 30 June 20!! under "Prolils (Losses) on lrading caplion 80" included.
4 million euro nel losses lor lhe lirsl hall on lrading ol lunds (including -! million euro in lhe slruclured credil producls
disclosure),
!6 million euro lrom nel wrile-downs ol posilions remaining al lhe end ol lhe hall year (including -2 million euro in lhe
slruclured credil producls disclosure),
4 million euro relaled lo olher nel charges.
Nel capilal losses on lhe linal residual amounl (-!6 million euro) were spread across 42 posilions, !9 ol which wilh capilal losses
(-32 million euro) and 23 wilh capilal gains (!6 million euro).
The ligures lor lhis hall year should be considered in lighl ol lhe negalive conlingenl economic scenario lhal has resulled in a
general weakening, especially in lhe linancial and energy seclors, which unlil lhe end ol lasl year had recorded excellenl
perlormances. ln lacl, a comparison ol lhe resulls lor lhis hall year wilh lhose lor lhe same period in 20!0 shows lhal lhe
negalive porllolio perlormance is mainly allribulable lo lhe lew posilions lhal had invesled in lhe aloremenlioned seclors and
which have sullered slrong capilal losses. The perlormance ol lhe remaining posilions was again relalively slable.


INfORMATION ON TRADING TRAN5ACTION5 IN DERIVATIVE5 WITH CU5TOMER5
Considering only relalions wilh cuslomers, as al 30 June 20!!, lhe lnlesa Sanpaolo Croup presenled, in relalion lo derivalives
lrading wilh relail cuslomers, non-linancial companies and public enlilies (lherelore excluding banks, linancial and insurance
companies), a posilive lair value, considering nelling agreemenls, ol 2,409 million euro (3,268 million euro as al
3! December 20!0). The nolional value ol such derivalives lolalled 44,!89 million euro (45,875 million euro as al 3! December
20!0). Ol lhese, nolional value ol plain vanilla conlracls was 36,05! million euro (35,054 million euro as al 3! December 20!0),
and ol slruclured conlracls was 8,!38 million euro (!0,82! million euro as al 3! December 20!0).
Please nole lhal lhe lair value ol slruclured conlracls oulslanding wilh lhe !0 cuslomers wilh lhe highesl exposures was 224
million euro (309 million euro as al 3! December 20!0). The same indicalor, relerred lo lhe lolal conlracls wilh a posilive lair
value, was !,02! million euro.
Conversely, lhe negalive lair value delermined wilh lhe same crileria, lor lhe same lypes ol conlracls and wilh lhe same
counlerparlies, lolalled 642 million euro as al 30 June 20!! (552 million as al 3! December 20!0). The nolional value ol such
derivalives lolalled !7,033 million euro (!3,!57 million euro as al 3! December 20!0). Ol lhese, nolional value ol plain vanilla
conlracls was !5,939 million euro (!!,576 million euro as al 3! December 20!0), and ol slruclured conlracls was !,094 million
euro (!,58! million euro as al 3! December 20!0).
The lair value ol derivalive linancial inslrumenls slipulaled wilh cuslomers was delermined considering, as lor all olher OTC
derivalives, lhe credilworlhiness ol lhe single counlerparly ("Credil Risk Adjuslmenl"). Wilh regard lo conlracls oulslanding as al
30 June 20!!, lhis led lo a posilive ellecl ol 25 million euro being recorded under "Prolils (Losses) on lrading" in lhe
income slalemenl.



ExpIanaIory noIes - Risk managemenl

130
As concerns lhe means ol calculalion ol lhe aloresaid Credil Risk Adjuslmenl and, in general, lhe various melhodologies used in
lhe delerminalion ol lhe lair value ol linancial inslrumenls, see lhe specilic paragraphs in lhis chapler.
Please nole lhal conlracls made up ol combinalions ol more elemenlary derivalive inslrumenls have been considered
"slruclured" and lhal lhe aloresaid ligures do nol include lair value ol derivalives embedded in slruclured bond issues as well as
lhe relalive hedges agreed by lhe Croup.
130



ExpIanaIory noIes - Risk managemenl

131
OPERATIONAL RI5K
Operalional risk is delined as lhe risk ol sullering losses due lo inadequacy or lailures ol processes, human resources and inlernal
syslems, or as a resull ol exlernal evenls. Operalional risk includes legal risk, lhal is, lhe risk ol losses deriving lrom breach ol laws
or regulalions, conlraclual, oul-ol-conlracl responsibililies or olher dispules, slralegic and repulalion risks are nol included.
The lnlesa Sanpaolo Croup has lor some lime delined lhe overall operalional risk managemenl lramework by selling up a
Croup policy and organisalional processes lor measuring, managing and conlrolling operalional risk.
As already noled, elleclive lrom lhe reporl al 3! December 2009, lhe Croup was aulhorised by lhe Supervisory Aulhorily lo use
lhe Advanced Measuremenl Approach (AMA inlernal model) lo delermine capilal requiremenls lor operalional risk on an inilial
scope lhal includes lhe 8anks and Companies ol lhe 8anca dei Terrilori Division (excluding lhe nelwork banks belonging lo
Cassa di Risparmio di lirenze Croup, bul including lhe Casse del Cenlro banks), Leasinl, Lurizon Capilal and VU8 8anka. Llleclive
3! December 20!0, lhe Croup was also aulhorised lo exlend advanced approaches lo a second sel ol Organisalional Unils and
Companies ol lhe Corporale and lnveslmenl 8anking Division, in addilion lo Seleli, lo lhe remaining banks ol lhe Cassa di
Risparmio di lirenze Croup and lo P8Z 8anka. The remaining companies, currenlly using lhe Slandardised approach (TSA) or 8asic
lndicalor Approach (8lA), will migrale progressively lo lhe Advanced approaches slarling lrom lhe end ol 20!!, based on lhe
gradual roll-oul plan presenled lo lhe Managemenl and Supervisory Aulhorilies.
The conlrol ol operalional risk was allribuled lo lhe Managemenl 8oard, which idenlilies risk managemenl policies, and lo lhe
Supervisory 8oard, which is responsible lor lhe approval and supervision ol lhe policies and lor lheir lunclionalily in lerms ol lhe
elliciency and ellecliveness ol lhe risk managemenl and conlrol syslem.
The lasks ol lhe Croup Compliance and Operalional Risk Commillee include periodically reviewing lhe Croup's overall operalional
risk prolile, aulhorising any correclive measures, coordinaling and moniloring lhe ellecliveness ol lhe main miligalion aclivilies
and approving operalional risk lransler slralegies.

The Croup will have a cenlralised lunclion wilhin lhe Risk Managemenl Deparlmenl lor lhe managemenl ol lhe Croup's
operalional risk. This lunclion is responsible lor lhe delinilion, implemenlalion, and moniloring ol lhe melhodological and
organisalional lramework, as well as lor lhe measuremenl ol lhe risk prolile, lhe verilicalion ol miligalion ellecliveness and
reporling lo Top Managemenl.
ln compliance wilh currenl requiremenls, lhe individual Organisalional Unils are responsible lor idenlilying, assessing, managing
and miligaling risks. Specilic ollicers and deparlmenls have been idenlilied wilhin lhese business unils lo be responsible lor
Operalional Risk Managemenl (colleclion and slruclured census ol inlormalion relalive lo operalional evenls, scenario analyses
and evalualion ol lhe business environmenl and inlernal conlrol laclors).
The lnlegraled sell-assessmenl process, which has been conducled on an annual basis, has allowed lhe Croup lo.
idenlily, measure, monilor and miligale operalional risk lhrough idenlilicalion ol lhe main operalional problem issues and
delinilion ol lhe mosl appropriale miligalion aclions,
creale signilicanl synergies wilh lhe specialised lunclions ol lhe Organisalion and Securily Deparlmenl lhal supervise lhe
planning ol operalional processes and business conlinuily issues and wilh conlrol lunclions (Compliance and Audil) lhal
supervise specilic regulalions and issues (Legislalive Decree 23!/05, Law 262/05) or conducl lesls ol lhe ellecliveness ol
conlrols ol company processes.
The Sell-assessmenl process idenlilied a good overall level ol conlrol ol operalional risks and conlribuled lo enhancing lhe
disseminalion ol a business cullure locused on lhe ongoing conlrol ol lhese risks.
The process ol collecling dala on operalional evenls (in parlicular operalional losses, oblained lrom bolh inlernal and exlernal
sources) provides signilicanl inlormalion on lhe exposure. ll also conlribules lo building knowledge and underslanding ol lhe
exposure lo operalional risk, on lhe one hand, and assessing lhe ellecliveness or polenlial weaknesses ol lhe inlernal conlrol
syslem, on lhe olher hand.
The inlernal model lor calculaling capilal absorplion is conceived in such a way as lo combine all lhe main sources ol quanlilalive
(operalional losses) and qualilalive inlormalion (sell-assessmenl).
The quanlilalive componenl is based on an analysis ol hislorical dala concerning inlernal evenls (recorded by organisalional unils,
approprialely verilied by lhe cenlral lunclion and managed by a dedicaled lT syslem) and exlernal evenls (lhe Operalional Riskdala
eXchange Associalion).
The qualilalive componenl (scenario analyses) locuses on lhe lorward-looking assessmenl ol lhe risk exposure ol each unil and is
based on lhe slruclured, organised colleclion ol subjeclive eslimales expressed direclly by managemenl (subsidiaries, Parenl
Company's business areas, lhe Corporale Cenlre) wilh lhe objeclive ol assessing lhe polenlial economic impacl ol parlicularly
serious operalional evenls. Capilal-al-risk is lherelore idenlilied as lhe minimum amounl al Croup level required lo bear lhe
maximum polenlial loss (worsl loss), Capilal-al-risk is eslimaled using a Loss Dislribulion Approach model (acluarial slalislical
model lo calculale lhe Value-al-risk ol operalional losses), applied on quanlilalive dala and lhe resulls ol lhe scenario analysis
assuming a one-year eslimalion period, wilh a conlidence level ol 99.90', lhe melhodology also applies a correclive laclor,
which derives lrom lhe qualilalive analyses ol lhe risk level ol lhe business environmenl, lo lake accounl ol lhe ellecliveness ol
inlernal conlrols in lhe various organisalional unils.
Operalional risks are monilored by an inlegraled reporling syslem, which provides managemenl wilh lhe inlormalion necessary
lor lhe managemenl and/or miligalion ol lhe operalional risk.
ln order lo supporl lhe operalional risk managemenl process on a conlinuous basis, a slruclured lraining programme was lully
implemenled lor employees aclively involved in lhe process ol managing and miligaling operalional risk.
ln addilion, lhe Croup has aclivaled a lradilional operalional risk lransler policy (lo prolecl againsl ollences such as employee
disloyally, lhell and lhell damage, cash and valuables in lransil losses, compuler lraud, lorgery, earlhquake and lire, and
prolessional liabilily), which conlribules lo miligaling exposure lo operalional risk, allhough il does nol have an impacl in lerms ol
capilal requiremenls, as lhe insurance miligalion componenl ol lhe inlernal model has nol yel been submilled lor
regulalory approval.

To delermine ils capilal requiremenls, lhe Croup employs a combinalion ol lhe melhods allowed under applicable regulalions.
The capilal absorplion resulling lrom lhis process amounls lo approximalely 2,!80 million euro as al 30 June 20!! (2,!74 million
euro as al 3! December 20!0).
131



ExpIanaIory noIes - Risk managemenl

132
LegaI risks
Legal risks have been lhoroughly and individually analysed by lhe Parenl Company and Croup companies. Provisions have been
made lo lhe Allowances lor risks and charges when lhere are legal obligalions lhal are likely lo resull in a linancial oullay and
where lhe amounl ol lhe disbursemenl may be reliably eslimaled.
During lhe period, no new signilicanl legal procedures were commenced or imporlanl developmenls look place wilh respecl lo
lhose underway.
Relerence should be made lo lhe Noles lo lhe 20!0 consolidaled linancial slalemenls lor a delailed descriplion ol liligalion
regarding analocism and bonds in delaull, lhe insolvency ol lhe Cirio Croup, lhe lax-colleclion liligalion wilh lormer Cesl Line,
lhe liligalion belween 8anca lnlraslrullure lnnovazione e Sviluppo and lhe Municipalily ol Taranlo, lhe class aclions by Codacons
and Allroconsumo, lhe Angelo Rizzoli liligalion, lhe Allegra linanz AC liligalion, olher judicial and adminislralive proceedings al
lhe New York branch in relalion lo alleged embargo violalions and labour liligalion.
Wilh regard lo lhe Allroconsumo class aclion, il should be noled lhal, by order liled on 28 April 20!!, lhe Courl ol Turin, having
rejecled lhe objeclions ol unconslilulionalily raised by lhe plainlills, declared lhe class aclion as inadmissible. This decision was
challenged by lhe consumer associalion belore lhe Courl ol Appeal. The hearing lo discuss lhe merils will be held in Seplember.

Jax litigation
The Noles lo lhe 20!0 consolidaled linancial slalemenls (Parl L) provide exlensive inlormalion on pending lax liligalion and lhe
relaled risks and provisions.
On lhal occasion, parlicular relerence was made lo lhe assessmenl nolice served upon lnlesa Sanpaolo regarding lhe 2005 lax
year, amongsl olher lhings including lhe alleged "misuse ol a righl" on slruclured linancing lransaclions involving lhe shares ol
companies lisled in llaly, amounling lo a lolal ol 377 million euro in lRLS, lRAP, wilhholding lax, penallies and inleresl. The 8ank
appealed againsl lhis demand belore lhe relevanl Provincial Tax Commillee.
ln May lhis year lhe Tax Police ol lhe Milan Cuardia di linanza began a lax inspeclion inlo lnlesa Sanpaolo wilh regard lo any
lransaclions ol lhis kind execuled in 2006 and laler years. This inspeclion is slill in progress.
During lhe lirsl hall ol 20!! lhe same Tax Police squad issued reporls ol lindings againsl lnlesa Sanpaolo and olher companies in
(or lormerly ol) lhe Croup in relalion lo lransaclions under repurchase agreemenl in loreign bonds compleled in lhe period 2006
lo 2009, which generaled credils lor laxes prepaid in olher counlries and which lhe inspeclors believe were nol due as a resull ol
alleged misuse ol a righl. The lax benelil challenged lolals approximalely !!9 million euro, ol which 72 million euro lor lnlesa
Sanpaolo and 47 million euro relerring lo olher companies in (or lormerly ol) lhe Croup and lor which lhe 8ank has issued waiver
ol liabilily in lhe relaled disposal documenls.
No specilic provision has been allocaled in relalion lo lhe lax demands as lhe expecled resull ol any liligalion lhal mighl arise is
currenlly viewed as posilive.
132



ExpIanaIory noIes - Risk managemenl

133
IN5URANCE RI5K5

Li!e business
The lypical risks ol a lile insurance porllolio can be divided inlo lhree main calegories. premium risk, acluarial and demographic
risks and reserve risk.
Premium risks are managed inilially during delinilion ol lhe lechnical lealures and producl pricing, and over lhe lile ol lhe
inslrumenl by means ol periodic checks on lhe suslainabilily and prolilabilily (bolh al producl level and al porllolio level,
including liabililies).
Acluarial and demographic risks are guarded againsl by a regular slalislical analysis ol lhe evolulion ol liabililies, divided by lype
ol risks and lhrough simulalions ol expecled prolilabilily on lhe assels which cover lechnical reserves.
Reserve risk is managed lhrough lhe exacl calculalion ol malhemalical reserves, wilh a series ol delailed checks as well as overall
verilicalions, by comparing resulls wilh lhe eslimales produced on a monlhly basis.
The malhemalical reserves are calculaled on almosl lhe enlire porllolio, on a conlracl-by-conlracl basis, and lhe melhodology
used lo delermine lhe reserves lakes accounl ol all lhe lulure commilmenls ol lhe company.

Non-Ii!e business
The risks ol lhe non-lile insurance porllolio are essenlially premium risk and reserve risk.
Premium risks are managed inilially during delinilion ol lhe lechnical lealures and producl pricing, and over lhe lile ol lhe
inslrumenl by means ol periodic checks on suslainabilily and prolilabilily (bolh al producl level and al porllolio level,
including liabililies).
Reserve risk is guarded againsl lhrough lhe exacl calculalion ol lechnical reserves.

financiaI risks
ln line wilh lhe growing locus in lhe insurance seclor on lhe issues ol value, risk and capilal in recenl years, a series ol inilialives
has been launched wilh lhe objeclive ol bolh slrenglhening risk governance and managing and conlrolling linancial risks.
Wilh relerence lo inveslmenl porllolios, sel up bolh as coverage ol obligalions wilh lhe insured and in relalion lo lree capilal, lhe
linance Policy is lhe main conlrol and moniloring inslrumenl lor markel and credil risks.
The Policy delines lhe goals and lhe operaling limils lhal are needed lo dislinguish lhe inveslmenls in lerms ol eligible assels and
assel allocalion, breakdown by raling classes and credil risk, concenlralion risk by issuer and seclor, markel risks, in lurn
measured in lerms ol sensilivily lo varialions in risk laclors and Value al Risk on a !-year holding period.

InvesImenI porI!oIios
The inveslmenls ol lhe insurance companies ol lnlesa Sanpaolo Croup (lnlesa Sanpaolo Vila, lnlesa Sanpaolo Assicura,
lnlesa Sanpaolo Lile, Lurizon Vila, Sud Polo Vila, Cenlrovila and lideuram Vila) are made wilh lheir lree capilal and lo cover
conlraclual obligalions wilh cuslomers. These essenlially reler lo lradilional revaluable lile insurance policies, lndex- and Unil-
linked policies, pension lunds and non-lile policies.
As al 30 June 20!!, lhe inveslmenl porllolios ol Croup companies, recorded al book value, amounled lo 79,482 million euro, ol
lhese, lhe share regarding lradilional revaluable lile policies, non-lile policies and lree capilal (Class C porllolio or porllolio al risk)
amounled lo 45,929 million euro, while lhe olher componenl (Class D porllolio or porllolio wilh lolal risk relained by lhe insured)
moslly comprised inveslmenls relaled lo pension lunds, index- and unil-linked policies and lolalled 33,553 million euro.
Considering lhe various lypes ol risks, lhe analysis ol inveslmenl porllolios, described below, concenlrales on lhe assels included
in lhe "porllolio al-risk".
ln lerms ol breakdown by assel class, nel ol derivalive posilions, 93.2' ol assels, i.e. approximalely 42,9!8 million euro, were
bonds, while assels subjecl lo equily risk represenled 2' ol lhe lolal and amounled lo 896 million euro. The remaining parl
(2,220 million euro) consisled ol inveslmenls relaling lo UCl, Privale Lquily and ledge lunds (4.8').
The carrying value ol derivalives came lo approximalely -!05 million euro, almosl enlirely relaling lo hedging derivalives, wilh
elleclive managemenl derivalives
4
only amounling lo around -!0 million euro.
Al lhe end ol lhe lirsl hall ol 20!!, inveslmenls ol lnlesa Sanpaolo Vila, Lurizon Vila, Sud Polo Vila, CenlroVila and lideuram Vila
lree capilal amounled lo approximalely 2,336 million euro al markel value, and presenled a risk in lerms ol VaR (99' conlidence
level, !0-day holding period) equal lo approximalely 8! million euro.
The modilied duralion ol lhe bond porllolio, or lhe synlhelic linancial lerm ol assels, is approximalely 5.5 years. The reserves
relaling lo lhe revaluable conlracls under Separale Managemenl have an average modilied duralion ol approximalely 5.7 years.
The relaled porllolios ol assels have a modilied duralion ol around 5.! years.
The breakdown ol lhe bond porllolio in lerms ol lair value sensilivily lo inleresl rale changes showed lhal a +!00 basis poinls
parallel shill in lhe curve leads lo a decrease ol approximalely 2,209 million euro. On lhe basis ol lhis hypolhelical scenario, lhe
value ol hedging derivalives in lhe porllolio undergoes an approximale 99 million euro rise which parlly ollsels lhe corresponding
loss on lhe bonds.
The inveslmenl porllolio had a high credil raling. AAA/AA bonds represenled approximalely 77.4' ol lolal inveslmenls and A
bonds approximalely !0.2'. Low inveslmenl grade securilies (888) were approximalely 4.4' ol lhe lolal and lhe porlion ol
speculalive grade or unraled was minimal (approximalely !.2').
The analysis ol lhe exposure in lerms ol lhe issuers/counlerparlies produced lhe lollowing resulls. securilies issued by
Covernmenls and Cenlral banks approximalely made up 69.5' ol lhe lolal inveslmenls, while linancial companies (moslly banks)
conlribuled almosl !9.7' ol exposure and induslrial securilies made up approximalely 4'.
Al lhe end ol lhe lirsl hall ol 20!!, lhe lair value sensilivily ol bonds lo a change in issuer credil raling, inlended as a markel
credil spread shock ol +!00 basis poinls, was 2,463 million euro, wilh !,995 million euro due lo governmenl issuers and 468
million euro lo corporale issuers (linancial inslilulions and induslrial companies).


4
lSVAP Regulalion 36 ol 3!/0!/20!! on inveslmenls delines elleclive managemenl derivalives as all derivalives aimed al achieving pre-eslablished inveslmenl
objeclives in a lasler, easier, more economical or more llexible manner lhan would have been possible acling on lhe underlying assels.
133


134
134
Shareholder base, lransaclions wilh relaled parlies
and olher inlormalion



5harehoIder base
lollowing complelion ol lhe capilal increase resolved by lnlesa Sanpaolo's Shareholders' Meeling ol !0 May 20!!, according lo
records in lhe Shareholders' Regisler and lhe mosl recenl available inlormalion as al 30 June 20!!, shareholders wilh slakes
exceeding 2' lhreshold lhal, il exceeded, requires communicalion lo bolh lhe company and Consob, pursuanl lo llalian
legislalion (arl. !20 ol lhe Consolidaled Law on linance "TUl") are as lollows.
5harehoIder Ordinary shares
(*)
% heId on ordinary
share capiIaI
Compagnia di San Paolo !,506,372,075 9.7!8'
londazione Cariplo 767,029,267 4.948'
londazione C.R. di Padova e Rovigo 750,092,0!! 4.839'
Credil Agricole S.A.
(**)
592,000,000 3.8!9'
Assicurazioni Cenerali 590,924,220 3.8!2'
Lnle C.R. lirenze 5!4,655,22! 3.320'
8lackRock lnc.
(***)
376,688,882 2.430'
londazione C.R. in 8ologna 3!3,656,442 2.023'
(*)
held direclly or indireclly.
(**)
lor more inlormalion see lhe exlracl ol lhe commilmenls ol Credil Agricole lo lnlesa Sanpaolo, published on www.group.inlesasanpaolo.com websile.
(***)
held as assels under managemenl.



TransacIions viIh reIaIed parIies

ProceduraI !eaIures
ln implemenlalion ol Consob Resolulion !722! as amended, on 26 November 20!0 lhe Managemenl 8oard and lhe Supervisory
8oard aller oblaining lhe Conlrol Commillee's lavourable opinion approved lhe "lnlesa Sanpaolo Croup Regulalions on lhe
managemenl ol lransaclions wilh relaled parlies".
These Regulalions, which came inlo lull lorce lrom ! January 20!!, sel lorlh crileria lor lhe enlire Croup lor idenlilying relaled
parlies, assessing and approving lransaclions, and subsequenlly providing inlormalion lo Corporale bodies and lo lhe markel.
ln accordance wilh lhe crileria eslablished by lhe Supervisory Aulhorily, under lhe new Regulalions lhe lollowing are considered
relaled parlies ol lnlesa Sanpaolo. subsidiaries and associales, joinl venlures, pension lunds ol lhe Croup, shareholders holding an
inleresl ol over 2' in lhe 8ank's voling capilal and relalive corporale groups, key managers, close lamily members ol key
managers and relaled signilicanl shareholdings.
ln lhis regard, il has been decided lhal lhe calegory ol Key Managers will include nol only Managemenl and Supervisory 8oard
Members bul also Ceneral Managers, lhe Manager responsible lor preparing lhe Company's linancial reporls, lhe leads ol
business unils, lhe leads ol governance areas, lhe leads ol head ollice Deparlmenls lhal reporl direclly lo lhe CLO and lo lhe
Chairman ol lhe Managemenl 8oard, lhe lead ol lhe Ceneral Secrelarial ol lhe Supervisory 8oard and lhe lead ol Slralegic
Operalions and Special Projecls.
As lar as shareholders are concerned, lhe 8ank conlirmed lhe decision laken in 2008 lo exlend applicalion ol lhe rules. This
approach allows closer moniloring ol lransaclions wilh lhe main shareholders, by subjecling lhem lo lhe same requiremenls lor
assessmenl, approval and subsequenl disclosure lo lhe Corporale bodies and lhe markel as lor lransaclions wilh relaled parlies.
The Regulalions sel lorlh lhe assessmenl procedures lhal musl be lollowed by lhe Parenl Company and subsidiary companies
when carrying oul lransaclions wilh relaled parlies ol lnlesa Sanpaolo, lo ensure approprialeness ol lhe lransaclions. The
Regulalions also require delailed examinalion ol lhe reasons and inleresls behind lhe lransaclions and lheir ellecls on lhe 8ank's
linancials.
Wilh regard lo decision-making, lhe procedure in lhe new Regulalions dislinguishes belween.
lransaclions lor smaller amounls, excluded lrom applicalion ol lhe regulalions,
lransaclions ol lesser imporlance, equal lo or grealer lhan lhe small-amounl lhresholds (250,000 euro lor individuals, !
million euro lor enlilies connecled lo managers wilh slralegic responsibililies, 5 million euro lor signilicanl shareholders and
relaled corporale groups, associales and pension lunds, and 20 million euro lor subsidiaries),
lransaclions ol grealer imporlance, il lhey exceed lhe lhreshold ol 5' ol lhe indicalors delined by Consob (approximalely 2
billion euro lor lnlesa Sanpaolo),
slralegic lransaclions pursuanl lo lhe Arlicles ol Associalion,
lransaclions allribuled lo lhe shareholders' meeling.
An imporlanl role is reserved in lhe approval process lor lhe Relaled Parly Transaclions Commillee, which has been eslablished
wilhin lhe Supervisory 8oard and is composed ol 3 elleclive members and one allernale, who meel lhe independence
134



ExpIanaIory NoIes Shareholder base, lransaclions wilh relaled parlies and olher inlormalion
135
135
requiremenls laid down in lhe Corporale Covernance Code ol Lisled Companies. The Relaled Parly Transaclions Commillee can
make use ol independenl experls, where considered appropriale, according lo lhe degree ol imporlance ol lhe lransaclion, ils
specilic economic or slruclural characlerislics and lhe nalure ol lhe relaled parly.
All lransaclions lhal are nol minor and nol exempl underlaken by lhe Parenl Company wilh one ol ils relaled parlies are
subjecl lo approval by lhe Managemenl 8oard upon recommendalion by lhe Relaled Parly Transaclions Commillee, and, lor
slralegic lransaclions, aulhorisalion ol lhe Supervisory 8oard is also required.
lor lransaclions underlaken by subsidiaries wilh relaled parlies ol lnlesa Sanpaolo, lhe Regulalions require lhese lransaclions lo
be approved, subjecl lo aulhorisalion lrom lhe Parenl Company, by lhe 8oard ol Direclors ol lhe subsidiaries concerned. Lach
company may also choose lo include specilic inlernal conlrol measures in ils own decision-making process lhal can also cover
lransaclions carried oul by lhe company wilh ils "own relaled parlies".
The Regulalions also deline lhe general crileria lor lhe inlormalion lo be provided, al leasl quarlerly also pursuanl lo Arlicle !50
ol lhe Consolidaled Law on linance lo lhe Managemenl 8oard and by lhe laller lo lhe Supervisory 8oard regarding lransaclions
wilh relaled parlies compleled in lhe relerence period by lhe Parenl Company or by ils subsidiaries. All ol lhe above is aimed al
providing a complele overview ol lhe lransaclions ol grealer imporlance, as well as lhe volumes and lhe main lealures ol all lhose
delegaled. Reporls musl include all lransaclions, even il exempl lrom lhe decision-making procedure, lor amounls equal lo or
grealer lhan lhe lhresholds ol lesser imporlance. 8ank lunding lransaclions and inlragroup loans are excluded lrom lhis
requiremenl, regardless ol lhe amounl, provided lhey are enlered inlo wilh subsidiaries and no olher relaled parlies have any
signilicanl inleresls.
linally, please nole lhal il lhe relaled parly also qualilies as a relevanl person pursuanl lo arl. !36 ol lhe Consolidaled Law on
8anking lhe special decision-making procedure eslablished under lhal law also applies. This requires lhe lransaclion lo be
submilled lor prior unanimous decision ol lhe Managemenl 8oard and lo lhe lavourable vole by all Supervisory 8oard Members.
ln accordance wilh lhe abovemenlioned arl. !36, anyone who carries oul direclion, adminislralion or conlrol lunclions al banks
or companies lhal are parl ol lhe 8anking Croup cannol direclly or indireclly enler inlo conlracls which lead lo obligalions wilh
lhe company lhey belong lo or carry oul linancing lransaclions wilh anolher company or bank in lhe 8anking Croup wilhoul
approval lrom lhe adminislralive and conlrol bodies ol lhe company or bank lhal is parly lo lhe conlracl, in lhese cases lhe
conlracl or lhe acl musl be approved by lhe Parenl Company. As provided lor by Law 262/2005 and Legislalive Decree 303/2006,
lhe special decision-making procedure has also been applied lo conlracls enlered inlo by lhe 8ank or companies in lhe 8anking
Croup wilh companies conlrolled by board members or companies in which board members have adminislralion, direclion or
conlrol lunclions. Moreover, il also applies lo lhe conlrolling companies and conlrolled companies (unless lhe conlracls which
lead lo lhe obligalion are drawn up belween companies belonging lo lhe same 8anking Croup or reler lo lransaclions on lhe
inlerbank markel).
lurlhermore, lhe requiremenls loreseen by lhe llalian Civil Code regarding lhe personal inleresls ol Direclors are conlirmed,
insolar as arl. 239! requires each 8oard Member lo reporl every inslance ol inleresl possessed, on his/her own name or lhrough
lhird parlies, lhal may be signilicanl in carrying oul his/her lunclion, wilh relerence lo a specilic lransaclion. ln accordance wilh
lhe abovemenlioned provision, lhe Managemenl 8oard has jurisdiclion over decisions regarding lransaclions including lhose
wilh relaled parlies in which lhe Managing Direclor possesses an inleresl on his/her own accounl or lhrough a lhird parly and
musl lherelore abslain lrom lhe decision, enlrusling lhe board as per arlicle 239! ol lhe llalian Civil Code.


In!ormaIion on IransacIions viIh reIaIed parIies

More significant transactions
During lhe lirsl hall ol 20!! lhe Croup did nol carry oul any lransaclions lhal qualilied as non-ordinary "more signilicanl
lransaclions" al non-markel or non-slandard condilions lhal would have resulled in accordance wilh lhe Croup Regulalions on
lhe managemenl ol lransaclions wilh relaled parlies ol lnlesa Sanpaolo in an obligalion lo publish a markel
disclosure documenl.

Transactions of ordinary or recurrent nature
Ordinary or recurrenl lransaclions enlered inlo wilh relaled parlies in lhe lirsl hall ol 20!! lall wilhin lhe scope ol lhe Croup's
ordinary aclivilies and are usually enlered inlo al markel condilions, based on valualions ol mulual economic convenience, in line
wilh lhe inlernal procedures menlioned above. Transaclions wilh inlragroup relaled parlies or enlilies in which lhe Croup holds
mosl ol lhe risks and rewards and lhal are consolidaled in accordance wilh SlC !2 are nol included in lhis reporl as lhey are
nelled al consolidaled level.
Receivable and payable balances wilh relaled parlies as al 30 June 20!! wilhin lhe consolidaled accounls, amounl lo a lolal lhal
is insignilicanl compared lo lhe size ol lhe Croup's capilal base. Likewise, lhe weighl ol income and charges wilh relaled parlies
on consolidaled operaling margin is insignilicanl.
The scope ol relaled parlies considered lor lhe lables in lhis seclion has been adjusled lo lake accounl ol lhe revised version ol
lAS 24 and consequenlly, wilh ellecl lrom ! January 20!!, also includes lhe subsidiaries ol lhe associales and lhe companies
subjecl lo joinl conlrol ol lnlesa Sanpaolo.

135



ExpIanaIory NoIes Shareholder base, lransaclions wilh relaled parlies and olher inlormalion
136
136
AmounI II I
(millions ol euro)
ImpacI
(')
Tolal linancial assels 8,599 !.5
Tolal olher assels 92 0.6
Tolal linancial liabililies 4,922 !.6
Tolal olher liabililies 72 0.0
30.06.2011

AmounI II I
(millions ol euro)
ImpacI
(')
Tolal inleresl income !09 !.2
Tolal inleresl expense -!2 0.3
Tolal lee and commission income 32 !.0
Tolal lee and commission expense -! 0.2
Tolal operaling cosls -!5 0.3
30.06.2011

During lhe hall year, lhere were no provisions lor non perlorming loans relaled lo balances wilh relaled parlies and no losses
were regislered in lhe period in conneclion wilh uncolleclible or non perlorming loans due lrom relaled parlies, wilh lhe
exceplion ol 26.4 million euro relaled lo associales (including lhe adjuslmenl lo lhe Risanamenlo converlible loan, described
below). The Telecom measuremenl made by Telco lor lhe linancial slalemenls as al 30 April 20!! involved an adjuslmenl ol
Telco's recognilion value in lnlesa Sanpaolo's consolidaled accounls lrom 37! lo 244 million euro, wilh a !27 million euro wrile-
down ol lhe inveslmenl. Adjuslmenls lor !2.4 million euro were also made lo olher inveslmenls in associales (RCS Mediagroup,
Noverca, Cargoilalia and olher minorily inleresls). Allowances lor risks and charges include lhe provisions made againsl any
oulslanding or probable dispules.

The lable below reporls lhe main lerms ol relerence ol lransaclions wilh each calegory ol relaled parly, as classilied by lhe new
lAS 24, nel ol inlragroup operalions, as well as inlormalion on Shareholders and lheir corporale groups (subsidiaries, parenl
companies and companies subjecl lo joinl conlrol) wilh an equily inveslmenl wilh voling righls in lhe 8ank ol over 2'
(calculaled considering only shares owned) and on parlies lhal are nol relaled pursuanl lo lAS 24, bul are in any case included as
a lorm ol sell-regulalion.
The lable does nol, however, show lhe impacl ol relaled parly lransaclions on lhe Croup's cash llows, as lhis was nol signilicanl.
(millions ol euro)
financiaI
asseIs
heId !or
Irading
financiaI
asseIs
designaIed
aI !air vaIue
Ihrough
pro!iI
and Ioss
financiaI
asseIs
avaiIabIe
!or saIe
InvesImenIs
heId Io
maIuriIy
Due !rom
banks
Loans Io
cusIomers
OIher
!inanciaI
asseIs
Due Io
banks
Due Io
cusIomers
financiaI
IiabiIiIies
heId !or
Irading
OIher
!inanciaI
IiabiIiIies
GuaranIees
givenl
received
and
commiImenIs
Subsidiaries ! - - - - 7 2 20 !5 ! 4 4
Companies subjecl lo joinl conlrol and
relaled subsidiaries 9 - !7 - - !02 ! - !2 - !3 20
Associales and relaled subsidiaries !4! - 208 - 40 2,677 - 7 282 !49 ! 2,430
Key Managers and conlrol bodies - - - - - 2 - - 7 - - !
Olher relaled parlies - - - - - 2 - - 250 - - 3
ToIaI 151 - 225 - 40 2,790 3 27 566 150 18 2,458
Shareholders
(*)
!,254 99! 4!8 - 5!0 2,220 89 2,673 727 779 54 !,475
(*)
Shareholders and lheir groups lhal hold a slake in lhe 8ank's voling share capilal exceeding 2' (calculaled considering only shares owned).

Relalions belween lhe lnlesa Sanpaolo Croup and 8ank Managers reler lo lhe Croup's normal business aclivilies and are delined
applying, where condilions recur, lhe lerms reserved lo all employees, in lull respecl and lransparency ol lerms applied, or, in
relalion lo independenl prolessionals wilh which a lerm conlracl exisls, applying lhe lerms reserved lo prolessionals ol similar
slanding, in lull compliance wilh relevanl regulalions. lor inlormalion concerning remuneralion policies, including lhe inlormalion
required by Consob Communicalion No. !!0!2984 ol 24 lebruary 20!!, reler lo lhe lile "Reporl on Corporale Covernance and
Ownership Slruclures". ln lhis respecl, on 20 July 20!! lhe lnlesa Sanpaolo Supervisory 8oard - upon proposal ol lhe
Managemenl 8oard - approved lhe Croup's new remuneralion policies. These policies adopl lhe regulalions recenlly issued by lhe
8ank ol llaly on lhis maller, wilhin lhe eslablished deadline ol 3! July 20!!.
Concerning lransaclions wilh subsidiaries nol consolidaled on a line-by-line basis and lransaclions wilh associales, please nole
lhal lhese are normal inlernal business aclivilies ol a mullilunclional banking group.
The Croup's mosl signilicanl associales and lhe companies conlrolled by lhem are Telco, Telecom, Auloslrada 8S-VR-Vl-PD
(Serenissima), lhe Nl loleles Croup, 8ank ol Qingdao, Alilalia - Compagnia Aerea llaliana, Penghua lund Managemenl, SlA-SS8,
RCS Mediagroup, Pirelli & C., Nuovo Trasporlo Viaggialori and Auloslrade Lombarde. Wilh regard lo lhis calegory, please nole
lhal, wilh ellecl lrom ! January 20!!, lhe revised version ol lAS 24 also includes lhe subsidiaries ol lhe associales as
relaled parlies.
The joinl venlures ol lhe period include Alllunds 8ank SA.
136



ExpIanaIory NoIes Shareholder base, lransaclions wilh relaled parlies and olher inlormalion
137
137
The calegory "Olher relaled parlies" includes lhe 8ank's pension lunds, lhe close relalives ol managers and enlilies
conlrolled by lhem.

Less significant transactions
The mosl nolable less signilicanl lransaclions concluded during lhe lirsl hall ol 20!! by lhe Parenl Company or subsidiaries wilh
relaled parlies are reporled below.
Transaclions during lhe period underlaken wilh bank managers, lheir close lamily members and enlilies conlrolled by lhem, were
allribulable lo lhe lnlesa Sanpaolo Croup's normal operalions and were lully complianl wilh applicable legislalion.
During lhe period, lhe Croup granled credil lacililies lo lhe Croup's Pension lunds, al markel condilions, in order lo supporl
ordinary operalions.

Specific transactions
The Croup's mosl signilicanl dealings wilh associales and companies conlrolled by associales during lhe period included loans
granled lo Pirelli & C, lhe Nl loleles Croup, lren, Sociela di Progello Auloslrada dirella 8rescia-Milano Telco, Telecom llalia, RCN
linanziaria/Pielra/lSM lnveslimenli, Prelios, RCS Mediagroup, lnlragruppo and olher minor associales, all wilh inleresl lerms in line
wilh markel inleresl rales. Share capilal increases were subscribed wilh respecl lo Auloslrada 8S-VR-Vl-PD (Serenissima),
Cargoilalia, lhe Noverca Croup, CCL loldings Sarl and olher minor associales.
Lasl lebruary, as parl ol a plan lo limil lhe company's exposure wilh respecl lo lhe banking syslem, lnlesa Sanpaolo subscribed
lhe capilal increase ol Risanamenlo, parlly in cash and parlly lhrough lhe assignmenl ol loans, lor a lolal amounl ol 8!.7 million
euro, al 0.28 euro per share. lollowing lhis lransaclion, lhe company's inveslmenl amounled lo approximalely 36'.
Subsequenlly, in June, lnlesa Sanpaolo signed, on a proporlional basis, a converlible loan lor !5!.7 million euro, againsl volunlary
ollselling ol pre-exisling loans lor an equal amounl, adjusled during lhe lirsl hall year by 6.3 million euro.
Wilh respecl lo lransaclions wilh Shareholders wilh slakes exceeding 2' ol lhe 8ank's voling capilal (lo which lhe provisions
governing lransaclions wilh relaled parlies were exlended as a lorm ol sell-regulalion, subjecling lhem lo lhe same assessmenl
and approval procedure as applied lo lransaclions wilh relaled parlies), on 22 June 20!0, lnlesa Sanpaolo and Credil Agricole
linalised lhe lerms and condilions underlying lhe agreemenl disclosed on !8 lebruary 20!0, providing lor lhe sale by
lnlesa Sanpaolo lo lhe Credil Agricole Croup ol lhe enlire inveslmenl held lhrough lhe subsidiary Cassa di Risparmio di lirenze in
Cassa di Risparmio della Spezia (80' ol share capilal) and 96 branches ol lhe Croup localed lhroughoul llaly againsl a lolal
consideralion ol approximalely 740 million euro (subjecl lo a purchase price adjuslmenl mechanism). Consislency lhereol wilh
markel condilions is supporled by lhe lairness opinion expressed by an independenl experl.
The lransaclions were compleled during lhe lirsl hall ol 20!!, as beller described in lhe Lxeculive Summary.
Moreover, lhe Parenl Company lranslerred ordinary shares ol 8anca Prossima, represenling 28.33' ol lhe share capilal, lo
Compagnia di San Paolo and londazione Cariplo, each ol which paid !3.5 million, and londazione Cassa di Risparmio di Padova e
Rovigo, lor 7 million euro, while Cassa di Risparmio di lirenze sold a building lo Lnle Cassa di Risparmio di lirenze lor 60 million
euro, wilh lhe approprialeness ol lhis amounl evalualed also wilh lhe assislance ol independenl experls.
linally, as already reporled, lnlesa Sanpaolo is among lhe llalian banking credilors ol lhe Carlo Tassara Croup which signed a lerm
sheel al lhe end ol 2008 (subsequenlly modilied during lhe lirsl hall ol 2009) lo slabilise and gradually reduce lhe lolal debl
owed by lhe Carlo Tassara Croup lo banks.
lollowing non-exercising ol lhe oplion in lhe capilal increase compleled in June 20!!, Carlo Tassara's inveslmenl in
lnlesa Sanpaolo lell lo below 2'. Therelore, in accordance wilh lhe aloremenlioned Croup regulalions, lhis company should no
longer be classilied under relaled parlies.
During lhe lirsl hall ol 20!!, lhe agreemenl was renegolialed, wilh more slringenl condilions lrom a procedural and economic
slandpoinl, bul wilh an exlension ol lhe slandslill lo 3! December 20!3.


5Iock price per!ormance
The lemporary easing ol lhe slrains on sovereign debl drove lhe Luropean banking induslry index up lo ils maximum levels lor lhe
period al around mid-lebruary. Subsequenlly, renewed slrains and lears aboul lhe prospecls lor economic recovery led lhe index
lo lose lhe ground gained in lhe lirsl parl ol lhe hall year. ln lacl, aller recording perlormance ol 2!.9' on !7 lebruary, lhe
Luro Sloxx 8anks index closed lhe lirsl hall ol lhe year slighlly down (-0.3'), wilh a perlormance level ol 2.3' lower lhan lhe
Luro Sloxx 50 index.
The llalian banking seclor proved lo be even more sensilive lo perlormance ol sovereign debl and began lo record lower
perlormance lhan lhe Luropean one slarling lrom mid-April, wilh lhe approach ol lhe recapilalisalion lransaclions announced by
several ol lhe major banks, lollowing lhe gradual widening ol lhe 8TP-8UND spread. Aller lhe period peaks recorded in mid-
lebruary, when lhe llalian banking index perlormance achieved a 24' increase compared lo December 20!0, lhe hall year ended
wilh negalive perlormance ol 9.4'.
The price ol lnlesa Sanpaolo ordinary shares during lhe lirsl hall ol 20!! lollowed lhe lrend ol banking induslry indexes, wilh
growlh unlil mid-lebruary, when lhe period peak was achieved, lollowed by a downward lrend leading lo a 7.!' decline al lhe
end ol June compared lo lhe beginning ol lhe year.
The price ol lnlesa Sanpaolo savings shares was down by approximalely !3' al lhe end ol lhe lirsl hall ol 20!! compared lo lhe
beginning ol lhe year. The discounl wilh respecl lo ordinary shares increased, achieving !9' lrom !3' al lhe beginning
ol lhe year.
Al lhe end ol lhe lirsl hall ol 20!!, lnlesa Sanpaolo's capilalisalion grew lo 29.4 billion euro lrom 26.3 billion euro al lhe
beginning ol lhe year, essenlially due lo lhe capilal increase in June.


137


ExpIanaIory NoIes Shareholder base, lransaclions wilh relaled parlies and olher inlormalion
138
138
!,60
!,70
!,80
!,90
2,00
2,!0
2,20
2,30
2,40
2,50
03/0!/!! 2!/0!/!! !0/02/!! 02/03/!! 22/03/!! !!/04/!! 03/05/!! 23/05/!! !0/06/!! 30/06/!!
807
858
908
959
!.009
!.060
!.!!0
!.!6!
!.2!!
O
l
l
i
c
i
a
l

q
u
o
l
a
l
i
o
n
C
o
m
i
l

b
a
n
k
i
n
g

i
n
d
e
x
InIesa 5anpaoIo ordinary shares quoIaIion and banking index
Comil banking index lnlesa Sanpaolo ordinary share quolalion


Earnings per share
lnlesa Sanpaolo's share capilal is made up ol ordinary and savings shares carrying dillerenl righls lor lhe allocalion ol nel income,
which have been laken inlo accounl lor lhe delerminalion ol lhe porlion ol nel income allribulable lo each calegory ol share.
Nel income allribulable lo bolh ordinary and savings shares was delermined considering lhe mosl recenl dividends declared lor
each lype ol share and lhen allocaling lhe residual porlion ol nel income, in lhe hypolhelical assumplion ol ils lolal dislribulion,
lo lhe same exlenl lo all shares oulslanding.
The Larnings per share (LPS) indicalor is presenled bolh in lhe "basic" and in lhe "diluled" lormulalion. basic LPS is calculaled by
dividing income lheorelically allribulable lo holders ol dillerenl calegories ol shares by lhe weighled average number ol lhe
shares oulslanding, diluled earnings are calculaled considering lhe ellecl ol lhe lorecasl lulure issues ol ordinary shares, which, in
any case, do nol delermine malerial ellecls.
Ordinary
shares
5avings
shares
Ordinary
shares
5avings
shares
Weighled average number ol shares !2,023,476,!06 93!,242,524 !!,846,!24,008 932,!35,524
lncome allribulable lo lhe various calegories ol shares
(m||||ons o| euro !,296 !06 !,557 !33
8asic LPS (euro) 0.!! 0.!! 0.!3 0.!4
Diluled LPS (euro) 0.!! 0.!! 0.!3 0.!4
8asic LPS annualised
(*)
(euro) 0.22 0.22 0.26 0.28
Diluled LPS annualised
(*)
euro 0.22 0.22 0.26 0.28

(*)
lncome is nol indicalive ol lhe lorecasl nel income lor lhe year, since il is oblained by annualising lhe nel income lor lhe period.
30.06.2011 30.06.2010


Pricelbook vaIue
The index rellecls lhe value allribuled by lhe markel lo lhe share capilal ol a lisled company, hence indireclly lo lhe company's
overall assels. The index, while measuring lhe conlidence which linancial analysls and lhe linancial communily have in lhe
company's income prospecls and capilal slrenglh, is signilicanlly allecled by lhe exlernal laclors lhal inlluence slock prices.
Lven lor lhe lnlesa Sanpaolo Croup, lhe perlormance ol lhe index lor lhe lirsl hall ol 20!! reslaled lor average ligures as well
as lor period-end ligures is signilicanlly impacled by markel lrends.
138



ExpIanaIory NoIes Shareholder base, lransaclions wilh relaled parlies and olher inlormalion
139
139
(millions ol euro)
30.06.2011 1sI haI!
2011
2010 2009 2008 2007
Markel capilalisalion 29,390 33,308 3!,209 32,228 48,639 7!,058
Shareholders' equily 58,935 56,234 53,!07 50,8!8 50,256 5!,558
Price l book vaIue 0.50 0.59 0.59 0.63 0.97 1.38


RaIings
On 6 May 20!! lhe inlernalional ralings agency Moody's reduced lnlesa Sanpaolo's 8ank linancial Slrenglh raling lo C+ (lrom 8-)
and ils long-lerm raling lo Aa3 (lrom Aa2). On 23 June, Moody's lhen placed lhe long-lerm raling under review lor possible
downgrade, lollowing a similar decision lor lhe llalian Republic. The shorl-lerm raling is unchanged.
On 24 May 20!!, lhe inlernalional ralings agency Slandard & Poor's revised lhe oullook lrom slable lo negalive, lollowing a
similar decision lor lhe llalian Republic, mainlaining bolh lhe shorl-lerm and long-lerm raling unchanged.
The ralings and oullook assigned by lilch are unchanged.
Moody's 5Iandard & Poor's fiIch
Shorl-lerm debl P-! A-! l!+
Long-lerm debl Aa3 (*) A+ AA-
Oullook
Long-lerm raling under
review
Negalive Slable
linancial slrenglh C+ - -
lndividual - - 8
Viabilily raling - - aa-
Supporl - - !
(*)
Raling under review lor possible downgrade.
RaIing Agency

139


lorecasl lor lhe year







The currenl economic growlh phase should conlinue lhroughoul 20!!. lowever, lhe macroeconomic ellecls ol lhe earlhquake in
Japan, debl suslainabilily problems in many advanced counlries and numerous geopolilical holbeds ol lension could increase lhe
volalilily ol economic dala and ol lhe markels.
Lurozone macroeconomic lorecasls appear relalively less glowing due lo acceleraled liscal reslriclion and lhe debl crisis,
negalively impacling lhe linancial posilions ol oullying Luropean counlries. Rising inllalion should come lo a hall.
Average annual growlh in llaly should approach lhe levels ol 20!0, wilh grealer slabilily expecled in employmenl.
Lconomic growlh will be moderale, also driven by domeslic demand.
ln lhe Uniled Slales, monelary policy should be exceplionally expansionary lor all ol 20!!. ln lhe eurozone, however, lollowing
lhe new wave ol lension on sovereign debl lhal has also allecled llaly and Spain, a rise in lhe ollicial LC8 rales is no longer
expecled. The conlrasling lrend ol monelary policies, slrains on governmenl bonds and uncerlainlies as lo lhe oulcome ol lhe
Creek crisis will conlinue lo luel currency lension. Risk premium conlainmenl measures on governmenl bond markels are possible
provided liscal largels are mel and, more imporlanlly, lhal Luropean Council measures ol 2! July on mechanisms lor dealing wilh
lhe sovereign debl crisis are implemenled rapidly. 8ank rales should increase gradually, lhough once again al relalively moderale
levels in 20!!. The cosl ol bank lunding will be allecled by lhe slrains on governmenl bonds, which will mainly impacl bond and
wholesale rales. As lo shorl-lerm margins, lhe mark-down should conlinue lo improve.
Wilh regard lo lending aclivily, lhe growlh in business loans should conlinue, largely supporled by a good shorl-lerm lrend, while
a more moderale medium-/long-lerm perlormance is expecled. Cood perlormance is expecled in loans lo households lor home
purchases, driven by lhe slill low, albeil increasing, inleresl rales on new loans. Overall, loans should grow al a moderale pace on
accounl ol lhe low economic growlh lorecasl.
Direcl deposils will conlinue lo be a slralegic resource lor banks, also on accounl ol lunding possibililies on lhe inslilulional
markel and lhe lrends in associaled cosls. llalian bank deposils and bonds should conlinue lo allracl domeslic inveslors, albeil
wilh a lower savings rale lhan in lhe pasl. lowever, lhe recovery ol direcl deposils is expecled lo be slow and moderale, as il will
be allecled, inler alia, by lhe increase in lhe opporlunily cosl ol holding liquid assels, compared lo lhe exceplionally low levels ol
2009-!0, which should conlinue lo lavour inveslors' appeal lor securilies.
Uncerlainly linked lo lhe perlormance ol lhe linancial markels will play ils parl in lhe lrend ol mulual lund inllows. Lile insurance
inllows should remain posilive, lhough down on lhe 20!0 perlormance.

ln lhis conlexl and compared lo 20!0, in 20!! lhe lnlesa Sanpaolo Croup is expecled lo record a recovery in revenues, a
conlainmenl ol operaling cosls, a decline in lhe cosl ol credil and, hence, an improvemenl in recurring prolilabilily, in line wilh
lhe 20!!-20!3/20!5 8usiness Plan. The key priorily ol lhe Plan is lo ensure suslainable prolilabilily in lhe medium lerm lhrough
developing long-lasling clienl relalionships, line-luning cosl discipline and inveslmenls, while al lhe same lime moniloring assel
qualily and slrenglhening liquidily and capilal base.


The Managemenl 8oard



Milano, 5 Augusl 20!!




140


Cerlilicalion ol lhe hall-yearly condensed consolidaled


linancial slalemenls pursuanl lo Arl. !54 bis ol Legislalive
Decree 58/!998


!. The undersigned Corrado Passera (as Managing Direclor and CLO) and Lrneslo Riva (as Manager responsible lor preparing lhe
Company's linancial reporls) ol lnlesa Sanpaolo, laking inlo accounl lhe provisions ol Arlicle !54-bis, par. 3 and 4 ol
Legislalive Decree 58 ol 24 lebruary !998, do hereby cerlily lo.
lhe adequacy in relalion lo lhe Company's lealures and
lhe aclual applicalion
ol lhe adminislralive and accounling procedures employed lo draw up lhe hall-yearly condensed consolidaled linancial
slalemenls, in lhe lirsl hall ol 20!!.

2. Verilicalion ol lhe approprialeness and elleclive applicalion ol lhe adminislralive and accounling procedures employed lo
draw up lhe hall-yearly condensed consolidaled linancial slalemenls as al 30 June 20!! was based on melhods delined by
lnlesa Sanpaolo consislenlly wilh lhe COSO and as lo lhe lT componenl CO8lT models, which are inlernalionally
accepled lrameworks lor inlernal conlrol syslems
!
.

3. The undersigned also cerlily lhal.

3.! The hall-yearly condensed consolidaled linancial slalemenls as al 30 June 20!!.
- have been prepared in compliance wilh applicable inlernalional accounling slandards recognised by lhe Luropean
Communily pursuanl lo Luropean Parliamenl and Council Regulalion !606/2002 ol !9 July 2002,
- correspond lo lhe resulls ol lhe books and accounls,
- give a lrue and lair presenlalion ol lhe assels, liabililies, prolil or loss and linancial posilion ol lhe issuer and ol lhe
companies included in lhe scope ol consolidalion.

3.2 The hall-yearly reporl on operalions conlains indicalions ol lhe mosl signilicanl evenls in lhe lirsl six monlhs ol lhe year
and lheir impacl on lhe hall-yearly condensed consolidaled linancial slalemenls, logelher wilh a descriplion ol lhe main
risks and uncerlainlies laced in lhe remaining six monlhs ol lhe year as well as inlormalion on signilicanl relaled
parly lransaclions.



05 Augusl 20!!








Corrado Passera Lrneslo Riva
Managing Direclor and CLO Manager responsible lor preparing
lhe Company's linancial reporls




1
The COSO lramework was prepared by lhe Commillee ol Sponsoring Organizalions ol lhe Treadway Commission, lhe U.S. organisalion dedicaled lo
improving lhe qualily ol linancial reporling lhrough elhical slandards and an elleclive syslem lor corporale governance and organisalion. The CO8lT
lramework - Conlrol O8jeclives lor lT and relaled lechnology is a sel ol rules prepared by lhe lT Covernance lnslilule, lhe U.S. organisalion whose aim is lo
deline and improve lhe slandards ol corporale lT.
141




143

IndependenI AudiIors' ReporI



143





147





AIIachmenIs AIIachmenIs AIIachmenIs AIIachmenIs


ReconciIiaIion beIveen consoIidaIed !inanciaI sIaIemenIs and resIaIed consoIidaIed !inanciaI
sIaIemenIs

Reconcilialion belween lhe consolidaled balance sheel as al 3! December 20!0 and lhe reslaled consolidaled balance
sheel as al 3! December 20!0

Reconcilialion belween lhe consolidaled income slalemenl as al 30 June 20!0 and lhe reslaled consolidaled income
slalemenl as al 30 June 20!0

Reconcilialion belween lhe consolidaled income slalemenl as al 30 June 20!! and lhe reslaled consolidaled income
slalemenl as al 30 June 20!!


ResIaIed consoIidaIed !inanciaI sIaIemenIs

Reslaled consolidaled balance sheel

Reslaled consolidaled income slalemenl

ReconciIiaIion beIveen resIaIed consoIidaIed !inanciaI sIaIemenIs and recIassi!ied consoIidaIed
!inanciaI sIaIemenIs

Reconcilialion belween reslaled consolidaled balance sheel and reclassilied consolidaled balance sheel

Reconcilialion belween reslaled consolidaled income slalemenl and reclassilied consolidaled income slalemenl


147




AIIachmenIs
149







Reconcilialion belween consolidaled linancial slalemenls
and reslaled consolidaled linancial slalemenls




149



AIIachmenIs
150
ReconciIiaIion beIveen Ihe consoIidaIed baIance sheeI as aI 31 December 2010 and Ihe resIaIed
consoIidaIed baIance sheeI as aI 31 December 2010
(millions ol euro)
AsseIs
Disposals
in lavour ol
Credil Agricole
(a)
Purchase ol
8anca Sara
(b)
Disposal ol
lideuram 8ank
Suisse
(c)
!0. Cash and cash equivalenls 4,758 -57 - -!3 4,688
20. linancial assels held lor lrading 7!,899 -3 - - 7!,896
30. linancial assels designaled al lair value lhrough prolil and loss 35,549 - ! - 35,550
40. linancial assels available lor sale 6!,6!2 -5 2!2 - 6!,8!9
50. lnveslmenls held lo malurily 3,839 - - - 3,839
60. Due lrom banks 42,737 -!,259 !2 -!4 4!,476
70. Loans lo cuslomers 379,235 -3,!87 4! -2 376,087
80. ledging derivalives 7,377 -6 - - 7,37!
90. lair value change ol linancial assels in hedged porllolios (+/-) 92 - - - 92
!00. lnveslmenls in associales and companies subjecl lo joinl conlrol 2,7!6 -4 - - 2,7!2
!!0. Technical insurance reserves reassured wilh lhird parlies 27 - - - 27
!20. Properly and equipmenl 5,455 -78 - - 5,377
!30. lnlangible assels 25,990 -355 - - 25,635
o| wh|ch
- oodw||| 19,217 -24 - - 13,96J
!40. Tax assels 8,733 -!9 9 - 8,723
a curren| 2,79 -7 - - 2,72
o de|erred ,974 -12 9 - ,971
!50. Non-currenl assels held lor sale and disconlinued operalions 75 - - - 75
!60. Olher assels 8,663 -45 35 - 8,653
ToIaI AsseIs 658,757 -5,018 310 -29 654,020
(a)
Disposal ol lhe subsidiary C.R. Spezia and 96 branches by C.R. lirenze, C.R. Venelo and lhe Parenl Company.
(b)
Purchase ol 8anca Sara by 8anca lideuram.
(c)
Disposal ol lideuram 8ank Suisse by 8anca lideuram.
(*)
lisloric dala originally published in lhe 20!0 Annual Reporl.
Changes in Ihe scope o! consoIidaIion 31.12.2010
Published
(*)
31.12.2010
Reslaled

150



AIIachmenIs
151
(millions ol euro)
LiabiIiIies and 5harehoIders' EquiIy
Disposals
in lavour ol
Credil Agricole
(a)
Purchase ol
8anca Sara
(b)
Disposal ol
lideuram 8ank
Suisse
(c)
!0. Due lo banks 52,860 -375 ! - 52,486
20. Due lo cuslomers 22!,064 -4,!65 275 -27 2!7,!47
30. Securilies issued !79,983 -253 - - !79,730
40. linancial liabililies held lor lrading 45,045 -2 - - 45,043
50. linancial liabililies designaled al lair value lhrough prolil and loss 26,!44 - - - 26,!44
60. ledging derivalives 5,884 - - - 5,884
70. lair value change ol linancial liabililies in hedged porllolios (+/-) !,4!2 -2 - - !,4!0
80. Tax liabililies 3,269 -30 - - 3,239
a curren| 661 - - - 661
o de|erred 2,603 -J0 - - 2,73
90. Liabililies associaled wilh non-currenl assels
held lor sale and disconlinued operalions - - - - -
!00. Olher liabililies !3,658 -!0! !5 -! !3,57!
!!0. Lmployee lerminalion indemnilies !,370 -26 ! - !,345
!20. Allowances lor risks and charges 3,280 -!7 !8 -! 3,280
a pos| emp|oymen| oene|||s J74 -4 - - J70
o o|her a||owances 2,906 -1J 13 -1 2,910
!30. Technical reserves 50,!88 - - - 50,!88
!40. Valualion reserves -!,054 - - - -!,054
!50. Redeemable shares - - - - -
!60. Lquily inslrumenls - - - - -
!70. Reserves !2,!43 - - - !2,!43
!80. Share premium reserve 33,!02 - - - 33,!02
!90. Share capilal 6,647 - - - 6,647
200. Treasury shares (-) -!0 - - - -!0
2!0. Minorily inleresls (+/-) !,067 -47 - - !,020
220. Nel income (loss) 2,705 - - - 2,705
ToIaI LiabiIiIies and 5harehoIders' EquiIy 658,757 -5,018 310 -29 654,020
(b)
Purchase ol 8anca Sara by 8anca lideuram.
(c)
Disposal ol lideuram 8ank Suisse by 8anca lideuram.
(*)
lisloric dala originally published in lhe 20!0 Annual Reporl.
31.12.2010
Published
(*)
Changes in Ihe scope o! consoIidaIion 31.12.2010
Reslaled
(a)
Disposal ol lhe subsidiary C.R. Spezia and 96 branches by C.R. lirenze, C.R. Venelo and lhe Parenl Company.
151



AIIachmenIs
152
ReconciIiaIion beIveen Ihe consoIidaIed income sIaIemenI as aI 30 1une 2010 and Ihe resIaIed
consoIidaIed income sIaIemenI as aI 30 1une 2010
(millions ol euro)
!0. lnleresl and similar income 8,572 !4 278 -7! - 22! 8,793
20. lnleresl and similar expense -3,389 -! -5 !! - 5 -3,384
30. InIeresI margin 5,183 13 273 -60 - 226 5,409
40. lee and commission income 3,2!2 !2 !8 -27 -3 - 3,2!2
50. lee and commission expense -6!7 - -!5 - ! -!4 -63!
60. NeI !ee and commission income 2,595 12 3 -27 -2 -14 2,581
70. Dividend and similar income 285 - 6 - - 6 29!
80. Prolils (Losses) on lrading 95 - -34 - - -34 6!
90. lair value adjuslmenls in hedge accounling -84 - - - - - -84
!00. Prolils (Losses) on disposal or repurchase ol !52 - 70 - - 70 222
a |oans -2 - - - - - -2
o ||nanc|a| asse|s ava||ao|e |or sa|e 1J - 70 - - 70 22J
c |nves|men|s he|d |o ma|ur||y - - - - - - -
d ||nanc|a| ||ao|||||es 1 - - - - - 1
!!0. Prolils (Losses) on linancial assels and liabililies designaled
al lair value 53 - 83 - - 83 !36
120. NeI inIeresI and oIher banking income 8,279 25 401 -87 -2 337 8,616
!30. Nel losses / recoveries on impairmenl -!,467 - -7 8 - ! -!,466
a |oans -1,419 - - 3 - 3 -1,411
o ||nanc|a| asse|s ava||ao|e |or sa|e -47 - -7 - - -7 -4
c |nves|men|s he|d |o ma|ur||y - - - - - - -
d o|her ||nanc|a| ac||v|||es -1 - - - - - -1
140. NeI income !rom banking acIiviIies 6,812 25 394 -79 -2 338 7,150
!50. Nel insurance premiums 3,832 - !,824 - - !,824 5,656
!60. Olher nel insurance income (expense) -4,009 - -2,!56 - - -2,!56 -6,!65
170. NeI income !rom banking and insurance acIiviIies 6,635 25 62 -79 -2 6 6,641
!80. Adminislralive expenses -4,594 -!5 -!7 64 2 34 -4,560
a personne| expenses -2,302 -3 -7 4J 1 29 -2,77J
o o|her adm|n|s|ra||ve expenses -1,792 -7 -10 21 1 -1,737
!90. Nel provisions lor risks and charges -!97 - - - - - -!97
200. Nel adjuslmenls lo / recoveries on properly and equipmenl -!94 - - ! - ! -!93
2!0. Nel adjuslmenls lo / recoveries on inlangible assels -357 - - ! - ! -356
220. Olher operaling expenses (income) 252 - - -3 - -3 249
230. OperaIing expenses -5,090 -15 -17 63 2 33 -5,057
240. Prolils (Losses) on inveslmenls in associales and companies
subjecl lo joinl conlrol !! - -!! - - -!! -
250. Valualion dillerences on properly, equipmenl and inlangible
assels measured al lair value - - - - - - -
260. Coodwill impairmenl - - - - - - -
270. Prolils (Losses) on disposal ol inveslmenls 9 - - - - - 9
280. Income (Loss) be!ore Iax !rom conIinuing operaIions 1,565 10 34 -16 - 28 1,593
290. Taxes on income lrom conlinuing operalions -533 -4 -23 5 - -22 -555
300. Income (Loss) a!Ier Iax !rom conIinuing operaIions 1,032 6 11 -11 - 6 1,038
3!0. lncome (Loss) aller lax lrom disconlinued operalions 69! - - - - - 69!
320. NeI income (Ioss) 1,723 6 11 -11 - 6 1,729
330. Minorily inleresls -33 -6 -!! !! - -6 -39
340. ParenI Company's neI income (Ioss) 1,690 - - - - - 1,690
(a)
20!0 income slalemenl resulls ol lhe 50 branches ol 8anca Monle dei Paschi di Siena purchased lrom Cruppo Cassa di Risparmio di lirenze in June 20!0.
(b)
lncome slalemenl resulls lor 20!0 ol lnlesa Vila nel ol lhe deconsolidalion ol lhe valualion al equily.
(c)
20!0 income slalemenl resulls ol C.R. Spezia and lhe 96 branches sold lo Credil Agricole during lhe lirsl hall ol 20!!.
(d)
20!0 income slalemenl resulls ol lideuram 8ank Suisse, disposed ol in June 20!!.
(*)
lisloric dala originally published in lhe 20!0 lall-yearly Reporl. The Consolidaled lncome Slalemenl as al 30 June 20!0 remains unchanged in compliance wilh llRS 3 and llRS
5 since lhere were neilher adjuslmenls lo acquisilion cosls relaled lo merging lransaclions nor newly classilied disconlinued operalions in lhe caplion "lncome (Loss) aller lax lrom
disconlinued operalions".
Changes in Ihe scope o! consoIidaIion 30.06.2010
Reslaled
Acquisilion ol
8anca Monle
Paschi
di Siena
branches
(a)
Acquisilion
ol
lnlesa
Vila
(b)
Tolal change
in lhe scope
ol consolida-
lion
Sale ol branches
lo
Credil Agricole
(c)
Disposal ol
lideuram
8ank
Suisse (d)
30.06.2010
Published (*)

152



AIIachmenIs
153
ReconciIiaIion beIveen Ihe consoIidaIed income sIaIemenI as aI 30 1une 2011 and Ihe resIaIed
consoIidaIed income sIaIemenI as aI 30 1une 2011
(in millions ol euro)
30.06.2011 30.06.2011
Disposal ol
lideuram
8ank
Suisse
reslaled
(b)
!0. lnleresl and similar income 9,!95 -!9 - -!9 9,!76
20. lnleresl and similar expense -3,627 ! - ! -3,626
30. InIeresI margin 5,568 -18 - -18 5,550
40. lee and commission income 3,!76 -!! -! -!2 3,!64
50. lee and commission expense -620 - - - -620
60. NeI !ee and commission income 2,556 -11 -1 -12 2,544
70. Dividend and similar income 376 - - - 376
80. Prolils (Losses) on lrading !67 - - - !67
90. lair value adjuslmenls in hedge accounling -29 - - - -29
!00. Prolils (Losses) on disposal or repurchase ol 475 - - - 475
a |oans 12 - - - 12
o ||nanc|a| asse|s ava||ao|e |or sa|e 47 - - - 47
c |nves|men|s he|d |o ma|ur||y -1 - - - -1
d ||nanc|a| ||ao|||||es 7 - - - 7
!!0. Prolils (Losses) on linancial assels and liabililies designaled al lair value -!09 - - - -!09
120. NeI inIeresI and oIher banking income 9,004 -29 -1 -30 8,974
!30. Nel losses / recoveries on impairmenl -!,395 - - - -!,395
a |oans -1,J4J - - - -1,J4J
o ||nanc|a| asse|s ava||ao|e |or sa|e -36 - - - -36
c |nves|men|s he|d |o ma|ur||y -1 - - - -1
d o|her ||nanc|a| ac||v|||es J - - - J
140. NeI income !rom banking acIiviIies 7,609 -29 -1 -30 7,579
!50. Nel insurance premiums 5,669 - - - 5,669
!60. Olher nel insurance income (expense) -6,089 - - - -6,089
170. NeI income !rom banking and insurance acIiviIies 7,189 -29 -1 -30 7,159
!80. Adminislralive expenses -4,520 26 ! 27 -4,493
a personne| expenses -2,792 13 - 13 -2,774
o o|her adm|n|s|ra||ve expenses -1,723 3 1 9 -1,719
!90. Nel provisions lor risks and charges -88 - - - -88
200. Nel adjuslmenls lo / recoveries on properly and equipmenl -!82 - - - -!82
2!0. Nel adjuslmenls lo / recoveries on inlangible assels -348 - - - -348
220. Olher operaling expenses (income) 236 - - - 236
230. OperaIing expenses -4,902 26 1 27 -4,875
240. Prolils (Losses) on inveslmenls in associales and companies
subjecl lo joinl conlrol -!28 - - - -!28
250. Valualion dillerences on properly, equipmenl and inlangible assels
measured al lair value - - - - -
260. Coodwill impairmenl - - - - -
270. Prolils (Losses) on disposal ol inveslmenls !76 - - - !76
280. Income (Loss) be!ore Iax !rom conIinuing operaIions 2,335 -3 - -3 2,332
290. Taxes on income lrom conlinuing operalions -888 ! - ! -887
300. Income (Loss) a!Ier Iax !rom conIinuing operaIions 1,447 -2 - -2 1,445
3!0. lncome (Loss) aller lax lrom disconlinued operalions - - - - -
320. NeI income (Ioss) 1,447 -2 - -2 1,445
330. Minorily inleresls -45 2 - 2 -43
340. ParenI Company's neI income (Ioss) 1,402 - - - 1,402
(a)
20!! income slalemenl resulls ol lhe 96 branches sold lo Credil Agricole in lhe lirsl hall ol 20!!.
(b)
20!! income slalemenl resulls ol lideuram 8ank Suisse, disposed ol in June 20!!.
Sale ol
branches lo
Credil
Agricole
(a)
Changes in Ihe scope o! consoIidaIion
Tolal change in
lhe scope ol
consolida-
lion

153




AIIachmenIs
155







Reslaled consolidaled linancial slalemenls
155



AIIachmenIs
156
ResIaIed consoIidaIed baIance sheeI
(millions ol euro)
AsseIs 30.06.2011 31.12.2010
reslaled amounI %
!0. Cash and cash equivalenls 4,252 4,688 -436 -9.3
20. linancial assels held lor lrading 60,555 7!,896 -!!,34! -!5.8
30. linancial assels designaled al lair value lhrough prolil and loss 36,303 35,550 753 2.!
40. linancial assels available lor sale 68,99! 6!,8!9 7,!72 !!.6
50. lnveslmenls held lo malurily 2,856 3,839 -983 -25.6
60. Due lrom banks 43,!94 4!,476 !,7!8 4.!
70. Loans lo cuslomers 372,36! 376,087 -3,726 -!.0
80. ledging derivalives 5,058 7,37! -2,3!3 -3!.4
90. lair value change ol linancial assels in hedged porllolios (+/-) 6! 92 -3! -33.7
!00. lnveslmenls in associales and companies subjecl lo joinl conlrol 2,694 2,7!2 -!8 -0.7
!!0. Technical insurance reserves reassured wilh lhird parlies 22 27 -5 -!8.5
!20. Properly and equipmenl 5,39! 5,377 !4 0.3
!30. lnlangible assels 25,343 25,635 -292 -!.!
o| wh|ch
- oodw||| 13,391 13,96J -72 -0.4
!40. Tax assels 7,826 8,723 -897 -!0.3
a curren| 1,92J 2,72 -329 -J0.1
o de|erred ,90J ,971 -63 -1.1
!50. Non-currenl assels held lor sale and disconlinued operalions 38 75 -37 -49.3
!60. Olher assels 9,728 8,653 !,075 !2.4
ToIaI AsseIs 644,673 654,020 -9,347 -1.4
Changes

156



AIIachmenIs
157
(millions ol euro)
LiabiIiIies and 5harehoIders' EquiIy
30.06.2011 31.12.2010
reslaled amounI %
!0. Due lo banks 49,665 52,486 -2,82! -5.4
20. Due lo cuslomers 2!!,34! 2!7,!47 -5,806 -2.7
30. Securilies issued !76,036 !79,730 -3,694 -2.!
40. linancial liabililies held lor lrading 38,2!5 45,043 -6,828 -!5.2
50. linancial liabililies designaled al lair value lhrough prolil and loss 24,729 26,!44 -!,4!5 -5.4
60. ledging derivalives 5,269 5,884 -6!5 -!0.5
70. lair value change ol linancial liabililies in hedged porllolios (+/-) 752 !,4!0 -658 -46.7
80. Tax liabililies 3,284 3,239 45 !.4
a curren| 33 661 -7J -11.0
o de|erred 2,696 2,73 113 4.6
90. Liabililies associaled wilh non-currenl assels
held lor sale and disconlinued operalions - - -
!00. Olher liabililies !8,!60 !3,57! 4,589 33.8
!!0. Lmployee lerminalion indemnilies !,348 !,345 3 0.2
!20. Allowances lor risks and charges 3,0!4 3,280 -266 -8.!
a pos| emp|oymen| oene|||s J62 J70 -3 -2.2
o o|her a||owances 2,62 2,910 -23 -3.9
!30. Technical reserves 52,887 50,!88 2,699 5.4
!40. Valualion reserves -937 -!,054 -!!7 -!!.!
!50. Redeemable shares - - -
!60. Lquily inslrumenls - - -
!70. Reserves !3,792 !2,!43 !,649 !3.6
!80. Share premium reserve 36,!43 33,!02 3,04! 9.2
!90. Share capilal 8,546 6,647 !,899 28.6
200. Treasury shares (-) -!! -!0 ! !0.0
2!0. Minorily inleresls (+/-) !,038 !,020 !8 !.8
220. Nel income (loss) !,402 2,705 -!,303 -48.2
ToIaI LiabiIiIies and 5harehoIders' EquiIy 644,673 654,020 -9,347 -1.4
Changes

157



AIIachmenIs
158
ResIaIed consoIidaIed income sIaIemenI
(millions ol euro)
firsI haI!
2011
firsI haI!
2010
Reslaled Reslaled amounI %
!0. lnleresl and similar income 9,!76 8,793 383 4.4
20. lnleresl and similar expense -3,626 -3,384 242 7.2
30. InIeresI margin 5,550 5,409 141 2.6
40. lee and commission income 3,!64 3,2!2 -48 -!.5
50. lee and commission expense -620 -63! -!! -!.7
60. NeI !ee and commission income 2,544 2,581 -37 -1.4
70. Dividend and similar income 376 29! 85 29.2
80. Prolils (Losses) on lrading !67 6! !06
90. lair value adjuslmenls in hedge accounling -29 -84 -55 -65.5
!00. Prolils (Losses) on disposal or repurchase ol 475 222 253
a |oans 12 -2 14
o ||nanc|a| asse|s ava||ao|e |or sa|e 47 22J 2J4
c |nves|men|s he|d |o ma|ur||y -1 - 1
d ||nanc|a| ||ao|||||es 7 1 6
!!0.
Prolils (Losses) on linancial assels and liabililies designaled al lair value
-!09 !36 -245
120. NeI inIeresI and oIher banking income 8,974 8,616 358 4.2
!30. Nel losses / recoveries on impairmenl -!,395 -!,466 -7! -4.8
a |oans -1,J4J -1,411 -63 -4.3
o ||nanc|a| asse|s ava||ao|e |or sa|e -36 -4 J2 9.J
c |nves|men|s he|d |o ma|ur||y -1 - 1
d o|her ||nanc|a| ac||v|||es J -1 J6
140. NeI income !rom banking acIiviIies 7,579 7,150 429 6.0
!50. Nel insurance premiums 5,669 5,656 !3 0.2
!60. Olher nel insurance income (expense) -6,089 -6,!65 -76 -!.2
170. NeI income !rom banking and insurance acIiviIies 7,159 6,641 518 7.8
!80. Adminislralive expenses -4,493 -4,560 -67 -!.5
a personne| expenses -2,774 -2,77J 1 0.0
o o|her adm|n|s|ra||ve expenses -1,719 -1,737 -63 -J.3
!90. Nel provisions lor risks and charges -88 -!97 -!09 -55.3
200. Nel adjuslmenls lo / recoveries on properly and equipmenl -!82 -!93 -!! -5.7
2!0. Nel adjuslmenls lo / recoveries on inlangible assels -348 -356 -8 -2.2
220.
Olher operaling expenses (income)
236 249 -!3 -5.2
230. OperaIing expenses -4,875 -5,057 -182 -3.6
240.
Prolils (Losses) on inveslmenls in associales and companies subjecl lo joinl conlrol
-!28 - !28
250.
Valualion dillerences on properly, equipmenl and inlangible assels
measured al lair value
- - -
260.
Coodwill impairmenl
- - -
270.
Prolils (Losses) on disposal ol inveslmenls
!76 9 !67
280.
Income (Loss) be!ore Iax !rom conIinuing operaIions
2,332 1,593 739 46.4
290.
Taxes on income lrom conlinuing operalions
-887 -555 332 59.8
300.
Income (Loss) a!Ier Iax !rom conIinuing operaIions
1,445 1,038 407 39.2
3!0.
lncome (Loss) aller lax lrom disconlinued operalions
- 69! -69!
320. NeI income (Ioss) 1,445 1,729 -284 -16.4
330.
Minorily inleresls
-43 -39 4 !0.3
340. ParenI Company's neI income (Ioss) 1,402 1,690 -288 -17.0
Changes


158



AIIachmenIs
159






Reconcilialion belween reslaled consolidaled linancial
slalemenls and reclassilied consolidaled linancial
slalemenls

159




AIIachmenIs
161
ReconciIiaIion beIveen resIaIed consoIidaIed baIance sheeI and recIassi!ied
consoIidaIed baIance sheeI
(millions ol euro)
CapIions o! Ihe recIassi!ied consoIidaIed baIance sheeI -
AsseIs
CapIions o! Ihe resIaIed consoIidaIed baIance sheeI - AsseIs 30.06.2011 31.12.2010
linancial assels held lor lrading 60,555 7!,896
Cap||on 20 - ||nanc|a| asse|s he|d |or |rad|n 60, 71,396
linancial assels designaled al lair value lhrough prolil and loss 36,303 35,550
Cap||on J0 - ||nanc|a| asse|s des|na|ed a| |a|r va|ue |hrouh pro||| and |oss J6,J0J J,0
linancial assels available lor sale 68,99! 6!,8!9
Cap||on 40 - ||nanc|a| asse|s ava||ao|e |or sa|e 63,991 61,319
lnveslmenls held lo malurily 2,856 3,839
Cap||on 0 - |nves|men|s he|d |o ma|ur||y 2,36 J,3J9
Due lrom banks 43,!94 4!,476
Cap||on 60 - |ue |rom oan|s 4J,194 41,476
Loans lo cuslomers 372,36! 376,087
Cap||on 70 - |oans |o cus|omers J72,J61 J76,037
lnveslmenls in associales and companies subjecl lo joinl conlrol
2,694 2,7!2
Cap||on 100 - |nves|men|s |n assoc|a|es and compan|es suojec| |o jo|n| con|ro| 2,694 2,712
Properly, equipmenl and inlangible assels 30,734 3!,0!2
Cap||on 120 - |roper|y and equ|pmen| ,J91 ,J77
+ Cap||on 1J0 - |n|an|o|e asse|s 2,J4J 2,6J
Tax assels 7,826 8,723
Cap||on 140 - 1ax asse|s 7,326 3,72J
Non-currenl assels held lor sale and disconlinued operalions
38 75
Cap||on 10 - Non-curren| asse|s he|d |or sa|e and d|scon||nued opera||ons J3 7
Olher assels
!9,!2! 20,83!
Cap||on 10 - Cash and cash equ|va|en|s 4,22 4,633
+ Cap||on 160 - O|her asse|s 9,723 3,6J
+ Cap||on 110 - 1echn|ca| |nsurance reserves reassured w||h |h|rd par||es 22 27
+ Cap||on 30 - |ed|n der|va||ves ,03 7,J71
+ Cap||on 90 - |a|r va|ue chane o| ||nanc|a| asse|s |n heded por||o||os 61 92
ToIaI AsseIs ToIaI AsseIs 644,673 654,020
CapIions o! Ihe recIassi!ied consoIidaIed baIance sheeI
LiabiIiIies and 5harehoIders' EquiIy
CapIions o! Ihe resIaIed consoIidaIed baIance sheeI -
LiabiIiIies and 5harehoIders' EquiIy
30.06.2011 31.12.2010
Due lo banks 49,665 52,486
Cap||on 10 - |ue |o oan|s 49,66 2,436
Due lo cuslomers and securilies issued 387,377 396,877
Cap||on 20 - |ue |o cus|omers 211,J41 217,147
+ Cap||on J0 - 5ecur|||es |ssued 176,0J6 179,7J0
linancial liabililies held lor lrading 38,2!5 45,043
Cap||on 40 - ||nanc|a| ||ao|||||es he|d |or |rad|n J3,21 4,04J
linancial liabililies designaled al lair value lhrough prolil and loss 24,729 26,!44
Cap||on 0 - ||nanc|a| ||ao|||||es des|na|ed a| |a|r va|ue |hrouh pro||| and |oss 24,729 26,144
Tax liabililies 3,284 3,239
Cap||on 30 - 1ax ||ao|||||es J,234 J,2J9
Liabililies associaled wilh non-currenl assels held lor sale and
disconlinued operalions
- -
Cap||on 90 - ||ao|||||es assoc|a|ed w||h non-curren| asse|s he|d |or sa|e and
d|scon||nued opera||ons
- -
Olher liabililies 24,!8! 20,865
Cap||on 100 - O|her ||ao|||||es 13,160 1J,71
+ Cap||on 60 - |ed|n der|va||ves ,269 ,334
+ Cap||on 70 - |a|r va|ue chane o| ||nanc|a| ||ao|||||es |n heded por||o||os 72 1,410
Technical reserves
52,887 50,!88
Cap||on 1J0 - 1echn|ca| reserves 2,337 0,133
Allowances lor specilic purpose 4,362 4,625
Cap||on 110 - |mp|oyee |erm|na||on |ndemn|||es 1,J43 1,J4
Cap||on 120 - A||owances |or r|s|s and chares J,014 J,230
Share capilal
8,546 6,647
Cap||on 190 - 5hare cap||a| 3,46 6,647
Reserves (nel ol lreasury shares)
49,924 45,235
Cap||on 170 - |eserves 1J,792 12,14J
Cap||on 130 - 5hare prem|um reserve J6,14J JJ,102
Cap||on 200 - 1reasury shares -11 -10
Valualion reserves
-937 -!,054
Cap||on 140 - va|ua||on reserves -9J7 -1,04
Minorily inleresls
!,038 !,020
Cap||on 210 - ||nor||y |n|eres|s 1,0J3 1,020
Nel income (loss)
!,402 2,705
Cap||on 220 - Ne| |ncome (|oss 1,402 2,70
ToIaI LiabiIiIies and 5harehoIders' EquiIy ToIaI LiabiIiIies and 5harehoIders' EquiIy 644,673 654,020
161



AIIachmenIs
162
ReconciIiaIion beIveen resIaIed consoIidaIed income sIaIemenI and recIassi!ied consoIidaIed
income sIaIemenI
(millions ol euro)
CapIions o! Ihe recIassi!ied 30.06.2011 30.06.2010
consoIidaIed income sIaIemenI
Nel inleresl income 4,739 4,8!6
Cap||on J0 - |n|eres| mar|n ,0 ,409
- Cap||on J0 (par||a| - Con|r|ou||on o| |nsurance ous|ness -99 -74
- Cap||on J0 (par||a| - |n|eres| mar|n (|||ec| o| purchase cos| a||oca||on 26 J
+ Cap||on 30 (par||a| - Componen|s o| |he pro|||s (|osses on |rad|n re|a||n |o ne| |n|eres| J7 J3
176 1JJ
+ Cap||on 130 a (par||a| - |ersonne| expenses (1|me va|ue emp|oyee |erm|na||on |ndemn|||es -4 -42
+ Cap||on 190 (par||a|- `Ne| prov|s|ons |or r|s|s and chares (1|me va|ue a||owances |or r|s|s and chares -10 -12
Dividends and prolils (losses) on
inveslmenls in associales and
companies subjecl lo joinl conlrol
(carried al equily) 4! 23
Cap||on 70 - ||v|dend and s|m||ar |ncome J76 291
- Cap||on 70 (par||a| - Con|r|ou||on o| |nsurance ous|ness -3 -60
-292 -20
+ Cap||on 240 (par||a| - |ro|||s (|osses on |nves|men|s |n assoc|a|es and compan|es suojec| |o
jo|n| con|ro| (carr|ed a| equ||y
1 -J
Nel lee and commission income 2,784 2,788
Cap||on 60 - Ne| |ee and comm|ss|on |ncome 2,44 2,31
- Cap||on 60 (par||a| - Con|r|ou||on o| |nsurance ous|ness
243 212
-3 -
Prolils (Losses) on lrading 82! 2!5
Cap||on 30 - |ro|||s (|osses on |rad|n 167 61
+ Cap||on 90 - |a|r va|ue adjus|men|s |n hede accoun||n -29 -34
+ Cap||on 100 o - |ro|||s (|osses on d|sposa| or repurchase o| ||nanc|a| asse|s ava||ao|e |or sa|e 47 22J
+ Cap||on 100 d - |ro|||s (|osses on d|sposa| or repurchase o| ||nanc|a| ||ao|||||es 7 1
+ Cap||on 110 - |ro|||s (|osses on ||nanc|a| asse|s and ||ao|||||es des|na|ed a| |a|r va|ue -109 1J6
292 20
- Cap||on 30 (par||a| - Componen|s o| |he pro|||s (|osses on |rad|n re|a||n |o ne| |n|eres| -J7 -J3
- Cap||on 30 (par||a| - Con|r|ou||on o| |nsurance ous|ness 7J -239
- -
lncome lrom insurance business 285 355
+ Cap||on 10 - Ne| |nsurance prem|ums ,669 ,66
+ Cap||on 160 - O|her ne| |nsurance |ncome (expense -6,039 -6,16
+ Cap||on J0 (par||a| - Con|r|ou||on o| |nsurance ous|ness 99 74
+ Cap||on 60 (par||a| - Con|r|ou||on o| |nsurance ous|ness -243 -212
+ Cap||on 70 (par||a| - Con|r|ou||on o| |nsurance ous|ness 3 60
+ Cap||on 30 (par||a| - Con|r|ou||on o| |nsurance ous|ness -7J 239
-27 -13
Olher operaling income (expenses) 8 23
Cap||on 220 - O|her opera||n |ncome (expenses 2J6 249
- Cap||on 220 (par||a| - O|her opera||n |ncome (expenses (|ecovery o| expenses -7 -
- Cap||on 220 (par||a| - O|her opera||n |ncome (expenses (|ecovery o| de|erred |axes -221 -221
OperaIing income 8,678 8,220
Personnel expenses -2,724 -2,709
Cap||on 130 a - |ersonne| expenses -2,774 -2,77J
- Cap||on 130 a (par||a| - |ersonne| expenses (|erer and res|ruc|ur|n re|a|ed chares 22
4 42
- -
Olher adminislralive expenses -!,472 -!,509
Cap||on 130 o - O|her adm|n|s|ra||ve expenses -1,719 -1,737
- Cap||on 130 o (par||a| - O|her adm|n|s|ra||ve expenses (|erer and res|ruc|ur|n re|a|ed chares 11 23
- Cap||on 130 o (par||a| - O|her adm|n|s|ra||ve expenses (|ecovery o| expenses
on mor|ae documen|a||on
3
- Cap||on 130 o (par||a| - 1axa||on |n|roduced |n |unary - 19
+ Cap||on 220 (par||a| - O|her opera||n |ncome (expenses (|ecovery o| de|erred |axes 221 221
+ Cap||on 220 (par||a| - O|her opera||n |ncome (expenses (|ecovery o| expenses 7
-30! -289
Cap||on 200 - Ne| adjus|men|s |o/recover|es on proper|y and equ|pmen| -132 -19J
+ Cap||on 210 - Ne| adjus|men|s |o/recover|es on |n|an|o|e asse|s -J43 -J6
- Cap||on 200 (par||a| - Ne| adjus|men|s |o/recover|es on proper|y and equ|pmen|
(|erer and res|ruc|ur|n re|a|ed chares
J 4
- Cap||on 210 (par||a| - Ne| adjus|men|s |o/recover|es on |n|an|o|e asse|s
(|erer and res|ruc|ur|n re|a|ed chares
6 9
- Cap||on 200 (par||a| - Ne| adjus|men|s |o/recover|es on proper|y and equ|pmen| (|mpa|rmen| - 3
- Cap||on 210 (par||a| - Ne| adjus|men|s |o/recover|es on |n|an|o|e asse|s (|mpa|rmen| - -
- Cap||on 200 (par||a| - Ne| adjus|men|s |o/recover|es on proper|y and equ|pmen|
(|||ec| o| purchase cos| a||oca||on
-11 -12
- Cap||on 210 (par||a| - Ne| adjus|men|s |o/recover|es on |n|an|o|e asse|s (|||ec| o| purchase cos| a||oca||on 2J1 21
OperaIing cosIs -4,497 -4,507
OperaIing margin 4,181 3,713
- Cap||on 100 o (par||a| ||nanc|a| asse|s ava||ao|e |or sa|e (|||ec| o| purchase cos| a||oca||on
- Cap||on 160 (par||a| - O|her ne| |nsurance |ncome (expense - chanes |n |echn|ca| reserves due |o |mpa|rmen|
o| secur|||es A|5
- Cap||on 130 a (par||a| - |ersonne| expenses (1|me va|ue emp|oyee |erm|na||on |ndemn|||es
CapIions o! Ihe resIaIed consoIidaIed income sIaIemenI
Adjuslmenls lo properly,
equipmenl and inlangible assels
+ Cap||on 70 (par||a| - ||v|dend and s|m||ar |ncome on shares ava||ao|e |or sa|e and he|d |or |rad|n
+ Cap||on 1J0 a (par||a| - Ne| |osses/recover|es on |mpa|rmen| o| |oans (1|me va|ue |oans
- Cap||on 70 (par||a| - ||v|dend and s|m||ar |ncome on shares ava||ao|e |or sa|e and he|d |or |rad|n
- Cap||on 130 a (par||a| - |ersonne| expenses (|||ec| o| purchase cos| a||oca||on
+ Cap||on 130 o (par||a| - O|her adm|n|s|ra||ve expenses (|ecovery o| expenses on mor|ae documen|a||on

162



AIIachmenIs
163
(millions ol euro)
CapIions o! Ihe recIassi!ied 30.06.2011 30.06.2010
consoIidaIed income sIaIemenI
OperaIing margin 4,181 3,713
Coodwill impairmenl - -
Cap||on 260 - Coodw||| |mpa|rmen| - -
- Cap||on 260 -(par||a| - Coodw||| |mpa|rmen| - -
Nel provisions lor risks and
charges -78 -!84
Cap||on 190 - Ne| prov|s|ons |or r|s|s and chares -33 -197
- 1
10 12
+ Cap||on 220 (par||a| - O|her opera||n |ncome (expenses (|ecovery o| expenses - -
Nel adjuslmenls lo loans -!,457 -!,544
Cap||on 100 a - |ro|||s (|osses on d|sposa| or repurchase o| |oans 12 -2
+ Cap||on 1J0 a - Ne| |osses/recover|es on |mpa|rmen| o| |oans -1,J4J -1,411
-176 -1JJ
12 -
+ Cap||on 1J0 d - Ne| |osses/recover|es on |mpa|rmen| o| o|her ||nanc|a| ac||v|||es J -1
J J
Nel impairmenl losses on olher
assels -74 -43
-12 -
-36 -4
-1 -
27 13
+ Cap||on 200 (par||a| - Ne| adjus|men|s |o/recover|es on proper|y and equ|pmen| (|mpa|rmen| - -3
- -
+ Cap||on 210 (par||a| - Ne| adjus|men|s |o/recover|es on |n|an|o|e asse|s (|mpa|rmen| - -
-2 1
- -
Prolils (Losses) on inveslmenls
held lo malurily and on olher
inveslmenls
33 !!
Cap||on 100 c - |ro|||s (|osses on d|sposa| or repurchase o| |nves|men|s he|d |o ma|ur||y -1 -
+ Cap||on 240 - |ro|||s (|osses on |nves|men|s |n assoc|a|es and compan|es suojec| |o jo|n| con|ro| -123 -
-1 J
+ Cap||on 270 - |ro|||s (|osses on d|sposa| o| |nves|men|s 176 9
1 -1
Income (Loss) be!ore Iax !rom conIinuing operaIions 2,605 1,953
Taxes on income lrom conlinuing
operalions -973 -680
Cap||on 290 - 1axes on |ncome |rom con||nu|n opera||ons -337 -
+ Cap||on 130 o (par||a| - 1axa||on |n|roduced |n |unary - -19
- Cap||on 290 (par||a| - 1axes on |ncome |rom con||nu|n opera||ons (|erer and res|ruc|ur|n re|a|ed chares -7 -22
-79 -34
Merger and reslrucluring relaled
charges (nel ol laxes) -!6 -43
+ Cap||on 130 a (par||a| - |ersonne| expenses (|erer and res|ruc|ur|n re|a|ed chares - -22
+ Cap||on 130 o (par||a| - O|her adm|n|s|ra||ve expenses (|erer and res|ruc|ur|n re|a|ed chares -11 -23
+ Cap||on 190 (par||a| - Ne| prov|s|ons |or r|s|s and chares (|erer and res|ruc|ur|n re|a|ed chares - -1
-J -4
+ Cap||on 210 (par||a| - Ne| adjus|men|s |o/recover|es on |n|an|o|e asse|s
(|erer and res|ruc|ur|n re|a|ed chares
-6 -9
2 -1
+ Cap||on 290 (par||a| - 1axes on |ncome |rom con||nu|n opera||ons (|erer and res|ruc|ur|n re|a|ed chares 7 22
Lllecl ol purchase cosl allocalion
(nel ol lax) -!7! -!92
+ Cap||on J0 (par||a| - |n|eres| mar|n (|||ec| o| purchase cos| a||oca||on -26 -J
- -
+ Cap||on 200 (par||a| - Ne| adjus|men|s |o/recover|es on proper|y and equ|pmen|
(|||ec| o| purchase cos| a||oca||on
11 12
+ Cap||on 210 (par||a| - Ne| adjus|men|s |o/recover|es on |n|an|o|e asse|s (|||ec| o| purchase cos| a||oca||on -2J1 -21
+ Cap||on 100 a (par||a| - |ro|||s (|osses on d|sposa| or repurchase o| |oans (|||ec| o| purchase cos| a||oca||on -J -J
- -
+ Cap||on 270 (par||a| - |ro|||s (|osses on d|sposa| o| |nves|men|s (|||ec| o| purchase cos| a||oca||on -1 1
79 34 + Cap||on 290 (par||a| - 1axes on |ncome |rom con||nu|n opera||ons (|||ec| o| purchase cos| a||oca||on
+ Cap||on 160 (par||a| - O|her ne| |nsurance |ncome (expense - chanes |n |echn|ca| reserves due
|o |mpa|rmen| o| secur|||es A|5
- Cap||on 210 (par||a| - Ne| adjus|men|s |o/recover|es on |n|an|o|e asse|s (|mpa|rmen| - merer and
res|ruc|ur|n re|a|ed chares
+ Cap||on 200 (par||a| - Ne| adjus|men|s |o/recover|es on proper|y and equ|pmen|
(|mpa|rmen| - merer and res|ruc|ur|n re|a|ed chares
Cap||on 1J0 o - Ne| |osses/recover|es on |mpa|rmen| o| ||nanc|a| asse|s ava||ao|e |or sa|e
- Cap||on 1J0 a (par||a| - Ne| |osses/recover|es on |mpa|rmen| o| |oans (1|me va|ue |oans
- Cap||on 190 (par||a| - Ne| prov|s|ons |or r|s|s and chares (1|me va|ue a||owances |or r|s|s and chares
- Cap||on 190 (par||a| - Ne| prov|s|ons |or r|s|s and chares (|erer and res|ruc|ur|n re|a|ed chares
- Cap||on 100 a (par||a| - |ro|||s (|osses on d|sposa| or repurchase o| |oans (|||ec| o| purchase cos| a||oca||on
CapIions o! Ihe resIaIed consoIidaIed income sIaIemenI
- Cap||on 290 (par||a| - 1axes on |ncome |rom con||nu|n opera||ons (|||ec| o| purchase cos| a||oca||on
+ Cap||on 210 (par||a| - Ne| adjus|men|s |o/recover|es on |n|an|o|e asse|s
(|mpa|rmen| - merer and res|ruc|ur|n re|a|ed chares
+ Cap||on 130 a (par||a| - |ersonne| expenses (|||ec| o| purchase cos| a||oca||on
- Cap||on 240 (par||a| - |ro|||s (|osses on |nves|men|s |n assoc|a|es and compan|es suojec| |o jo|n| con|ro|
(carr|ed a| equ||y
+ Cap||on 1J0 c - Ne| |osses/recover|es on |mpa|rmen| o| |nves|men|s he|d |o ma|ur||y
+ Cap||on 20 - va|ua||on d|||erences on proper|y, equ|pmen| and |n|an|o|e asse|s measured a| |a|r va|ue
- Cap||on 1J0 a (par||a| - |ec|ass|||ca||on o| Cree| overnmen| oonds |mpa|rmen|
+ Cap||on 1J0 a (par||a| - |ec|ass|||ca||on o| Cree| overnmen| oonds |mpa|rmen|
- Cap||on 200 (par||a| - Ne| adjus|men|s |o/recover|es on proper|y and equ|pmen|
(|mpa|rmen| - merer and res|ruc|ur|n re|a|ed chares
+ Cap||on 100 o (par||a| ||nanc|a| asse|s ava||ao|e |or sa|e (|||ec| o| purchase cos| a||oca||on
- Cap||on 270 (par||a| - |ro|||s (|osses on d|sposa| o| |nves|men|s (|||ec| o| purchase cos| a||oca||on
163



AIIachmenIs
164
(millions ol euro)
CapIions o! Ihe recIassi!ied 30.06.2011 30.06.2010
consoIidaIed income sIaIemenI
lncome (Loss) aller lax lrom
disconlinued operalions - 69!
Cap||on J10 - |ncome (|oss a||er |ax |rom d|scon||nued opera||ons - 691
+ Cap||on 260 - (par||a| - Coodw||| |mpa|rmen| - -
Minorily inleresls
-43 -39
Cap||on JJ0 - ||nor||y |n|eres|s -4J -J9
NeI income CapIion 340 - ParenI Company's neI income (Ioss) 1,402 1,690
CapIions o! Ihe resIaIed consoIidaIed income sIaIemenI

164

165




GIossary

165




GIossary
167
GLO55ARY
1he de||n|||on o| cer|a|n |echn|ca| |erms |s prov|ded oe|ow, |n |he mean|n adop|ed |n |he |epor| and w||h exc|us|on
o| |he |erms |oday w|de|y used or wh|ch are used |n a con|ex| |ha| a|ready c|ar|||es |he|r mean|n

A8S - Asset-8acked Securities
linancial securilies whose yield and redemplion are
guaranleed by a pool ol assels (collaleral) ol lhe issuer
(usually a Special Purpose Vehicle SPV), exclusively
inlended lo ensure salislaclion ol lhe righls allached
lo said linancial securilies.
Lxamples ol assels pledged as collaleral include
morlgages, credil card receivables, shorl-lerm lrade
receivables and aulo loans.

A8S (receivables)
A8S whose collaleral is made up ol receivables.

Acquisition finance
Leveraged buy-oul linancing.

Additional return
Type ol remuneralion ol lhe junior securilies arising
lrom securilisalion lransaclions. ln addilion lo a lixed
dividend, such securilies accrue periodic earnings
(quarlerly, semi-annual, elc.), whose amounl is linked
lo lhe prolil generaled by lhe lransaclion (which in
lurn rellecls lhe perlormance ol lhe securilised assels).

Advisor
linancial broker assisling governmenl aulhorilies or
companies involved in privalisalion or olher corporale
linance lransaclions, whose lasks range lrom
arranging appraisals lo drawing up documenls and
providing general prolessional advice aboul specilic
lransaclions.

AlR8 (Advanced lnternal Ratings-8ased) Approach
Approach lo using inlernal ralings wilhin lhe
lramework ol lhe New 8asel Accord, which provides
lor eilher lhe loundalion or lhe Advanced Approach.
The Advanced Approach may be used only by
inslilulions meeling more slringenl requiremenls
compared lo lhe loundalion Approach. Wilh lhe
Advanced Approach, banks use lheir own inlernal
eslimales lor all inpuls (PD, LCD, LAD and Malurily)
used lor credil risk assessmenl, whereas lor
loundalion lR8 lhey only eslimale PD.

ALM - Asset & Liability Management
lnlegraled managemenl ol assels and liabililies
designed lo allocale lhe resources wilh a view lo
oplimising lhe risk/yield ralio.

ALT- A - Alternative A Loan
Residenlial morlgages generally ol "prime" calegory,
bul which, due lo various laclors such as LTV ralio,
documenlalion provided, borrower's
income/employmenl silualion, lype ol properly elc.,
cannol be classilied as slandard conlracls usable in
subscriplion programmes.
lncomplele documenlalion is lhe main reason lor a
loan being classilied as "All-A".

ALT-A Agency
Securilies whose collaleral consisls ol All-A morlgages,
guaranleed by specialised Covernmenl Agencies.



Alternative investment
Allernalive inveslmenls comprise a wide range ol
inveslmenl producls, including pr|va|e equ||y and
hede |unds (see delinilions below).

Amortised cost
Dillers lrom "cosl" in lhal il provides lor lhe
progressive amorlisalion ol lhe dillerenlial belween
lhe book value and nominal value ol an assel or
liabilily on lhe basis ol lhe elleclive rale ol relurn.

AP - Attachment Point
Level above which a proleclion seller will cover lhe
losses ol a proleclion buyer. ll is lypically used in
synlhelic CDOs.

Arrangement fee
A lee paid lor prolessional advice and assislance
provided in lhe loan slrucluring and arranging slage.

Arranger
ln lhe slruclured linance seclor, lhe arranger is lhe
enlily lhal albeil in dillerenl lorms and wilh dillerenl
lilles (manda|ed |ead arraner, jo|n| |ead arraner, so|e
arraner elc.) coordinales lhe organisalional aspecls
ol lhe lransaclion.

Asset allocation
The dislribulion ol assels in an inveslmenl porllolio
among dillerenl markels, geographical areas, seclors
and producls.

Asset management
The various aclivilies relaling lo lhe managemenl and
adminislralion ol dillerenl cuslomer assels.

Audit
ln lisled companies, il indicales lhe various
examinalions ol lhe business aclivilies and
bookkeeping ol a company, perlormed by bolh in-
house slall (|n|erna| aud||) and independenl audil lirms
(ex|erna| aud||).


The bela coellicienl ol an issuer or a group ol
comparable issuers, an expression ol lhe relalionship
belween an equily's aclual relurn and lhe lolal relurn
ol lhe markel in queslion.

8ack office
The unil ol a bank or linancial company lhal processes
all lhe lransaclions perlormed by lhe operalional unils
(|ron| o|||ce).

8acktesting
Relrospeclive analyses perlormed lo verily lhe
reliabilily ol lhe measuremenl ol risk sources
associaled wilh dillerenl assel porllolios.

167



GIossary
168
8anking book
Usually relerred lo securilies or linancial inslrumenls in
general, il idenlilies lhe porlion ol a porllolio
dedicaled lo "proprielary" lrading.

8asis swap
Conlracl providing lor lhe exchange belween lwo
parlies, ol lwo lloaling-rale paymenls linked lo a
dillerenl index.

8est practice
ll generally idenlilies conducl in line wilh slale-ol-lhe-
arl skills and lechniques in a given
lechnical/prolessional area.

8id-ask spread
The dillerence belween lhe buying and selling price ol
a given linancial inslrumenl or sel ol linancial
inslrumenls.

8ookrunner
See |ead manaer and Io|n| |ead manaer.

8rand name
llRS 3 considers lhe "brand name" a polenlial,
markeling relaled inlangible assel, which may be
recorded in lhe purchase price allocalion process. The
lerm "brand" is used in accounling principles wilh an
exlensive meaning and nol as a synonym ol lrademark
(lhe logo and lhe name). ll is considered a general
markeling lerm which delines a sel ol complemenlary
inlangible assels (in addilion lo lhe name and lhe
logo, also lhe compelencies, consumer lrusl, service
qualily, elc.) which concur lo lorm brand equily.

8udget
lorecasl ol cosl and revenue perlormance ol a
company over a period ol lime.

8usiness combinations
ln accordance wilh inlernalional accounling slandard
llRS 3, a lransaclion or olher evenl in which an
acquirer oblains conlrol ol one or more company
assels.

CAGR (Compound Annual Growth Rate)
Compound annual growlh rale ol an inveslmenl over
a specilied period ol lime. ll n is lhe number ol years,
CACR is calculaled as lollows. (Lnding value/Slarling
value)^(!/n) -!.

Capital Asset Pricing Model (CAPM)
An economic model lor delermining lhe "opporlunily
cosl" i.e. lhe amounl ol income lor lhe period
necessary lo remunerale lhe cosl ol capilal.

Capital structure
ll is lhe enlire sel ol lhe various classes ol bonds
(lranches) issued by a special purpose vehicle (SPV),
and backed by ils assel porllolio, which have dillerenl
risk and relurn characlerislics, lo meel lhe
requiremenls ol dillerenl calegories ol inveslors.
Subordinalion relalionships belween lhe various
lranches are regulaled by a sel ol rules on lhe
allocalion ol losses generaled by lhe collaleral.
Lquily Tranche (8). The riskiesl porlion ol lhe porllolio,
il is also known as "lirsl loss" and is subordinaled lo
all olher lranches, hence, il is lhe lirsl lo bear lhe
losses which mighl occur in lhe recovery ol lhe
underlying assels.
Mezzanine Tranche (8). The lranche wilh inlermediale
subordinalion level belween equily and senior
lranches. The mezzanine lranche is normally divided
inlo 2-4 lranches wilh dillerenl risk levels,
subordinaled lo one anolher. They are usually raled in
lhe range belween 888 and AAA.
Senior/Super-senior Tranche (8). The lranche wilh lhe
highesl credil enhancemenl, i.e. having lhe highesl
priorily claim on remuneralion and reimbursemenl. ll is
normally also called super-senior lranche and, il raled,
il has a raling higher lhan AAA since il is senior wilh
respecl lo lhe AAA mezzanine lranche.

Captive
Term generically relerring lo "nelworks" or companies
lhal operale in lhe exclusive inleresl ol lheir parenl
company or group.

Carry trade
The carry lrade is a linancial lransaclion in which lunds
are procured in a counlry wilh a low cosl ol money
and lhen invesled in a counlry wilh high inleresl rales
lo lake advanlage ol lhe dillerence in relurns.

Cash flow hedge
Coverage againsl exposure lo variabilily in cash llows
associaled wilh a parlicular risk.

Cash-generating Unit (CGU)
The smallesl idenliliable group ol assels lhal generales
cash inllows lhal are largely independenl ol lhe cash
inllows lrom olher assels or groups ol assels.

Cash management
A banking service lhal in addilion lo inlorming
companies on lhe slalus ol lheir relalions wilh lhe
bank, is an operalional lool enabling companies lo
lransler lunds, lhus leading lo more ellicienl lreasury
managemenl.

Categories of financial instruments provided for
by lAS J9
||nanc|a| asse|s he|d-|or-|rad|n, which includes lhe
lollowing. any assel acquired lor lhe purpose ol selling
il in lhe near lerm or parl ol porllolios ol inslrumenls
managed joinlly lor lhe purpose ol shorl-lerm prolil-
laking, and assels lhal lhe enlily decides in any case lo
measure al lair value, wilh lair value changes
recognized in prolil and loss, ||nanc|a| asse|s he|d-|o-
ma|ur||y, non-derivalive assels wilh lixed lerm and
lixed or delerminable paymenls, lhal an enlily inlends
and is able lo hold lo malurily, "|oans and
rece|vao|es, non-derivalive linancial assels wilh lixed
or delerminable paymenls nol quoled in an aclive
markel, ||nanc|a| asse|s "ava||ao|e-|or-sa|e, specilically
designaled as such, or, lo a lesser exlenl, olhers nol
lalling under lhe previous calegories.

CDO - Collateralised Debt Obligation
linancial inslrumenls issued wilhin lhe lramework ol
securilisalion lransaclions, backed by a pool ol loans,
bonds and olher linancial assels (including
securilisalion lranches). ln lhe case ol synlhelic CDOs
lhe risk is backed by credil derivalives inslead ol lhe
sale ol assels (cash CDOs).

CDSs on A8X
An Assel-backed securily index (A8X) is an index wilh
assel-backed securilies as an underlying. Lach A8X
relers lo a baskel ol 20 relerence obligalions
168



GIossary
169
belonging lo a specilic A8S seclor. Lach A8X (lhere are
live in lolal) reproduces a raling class (AAA, AA, A,
888, and 888-).
ln parlicular, lhe A8X.lL index, launched on !9
January 2006 (Annex Dale), is made up ol relerence
obligalions ol lhe home equily segmenl ol A8S
(Residenlial Morlgage-8acked Securily RM8S). The
CDS on an A8X.lL lherelore hedges lhe credil risk ol
underlying RM8Ss or lhe risk relalive lo lhe 20
relerence obligalions which make up lhe index.
lor A8X, lhe markel does nol provide credil curves bul
direclly price valualion. The selllemenl admilled lor
conlracls on A8X indices, as described in lSDA 2005
documenlalion, is PAUC (Pay As You Co). lhe
proleclion seller pays lhe proleclion buyer lhe losses
incurred as lhese emerge, wilhoul leading lo
lerminalion ol lhe conlracl.
Please nole lhal lhe coverage achieved via lhe
purchase ol A8X indices, even il il is slruclured so as lo
malch as closely as possible lhe characlerislics ol lhe
hedged porllolio, remains in any case exposed lo basis
risks. ln olher words, since il is nol a specilic hedge ol
individual exposures, il may generale volalilily in lhe
income slalemenl whenever lhere is imperlecl
correlalion belween index prices and markel value ol
lhe hedged posilions.

CLO - Collateralised Loan Obligation
CDOs backed by a porllolio ol corporale loans.

CM8S - Commercial Mortgage-8acked Securities
Debl inslrumenls backed by morlgages on commercial
real eslale.

CM8X index
The same as lhe A8X index, lhe only dillerence being
lhal lhe relerence enlilies are CM8Ss.

CMO - Collateralised Mortgage Obligation
Securilies backed by morlgages in which lhe lolal
amounl ol lhe issue is divided inlo lranches wilh
dillerenl malurilies and relurn. The lranches are repaid
according lo an order specilied in lhe issue.

Collective assessment of performing loans
Wilh relerence lo a homogeneous group ol regularly
perlorming linancial assels, colleclive assessmenl
delines lhe degree ol credil risk polenlially associaled
wilh lhem, lhough il is nol yel possible lo lie risk lo a
specilic posilion.

Commercial paper
Shorl-lerm noles issued in order lo collecl lunds lrom
lhird parly underwrilers as an allernalive lo olher
lorms ol indebledness.

Consumer A8S
A8S whose collaleral is made up ol consumer credils.

Core 8usiness
Main area ol business on which company's slralegies
and policies are locused.

Core deposits
"Core deposils" are "cuslomer-relaled inlangibles",
generally recorded in business combinalions belween
banks. The inlangible value ol core deposils slems
lrom lhe lulure benelils lor lhe acquirer deriving lrom
lhe lower lunding cosl compared lo markel
paramelers. 8asically, lhe acquirer may use lunding lor
ils lending and inveslmenl aclivilies which il pays less
lhan lhe markel inleresl rale.

Core Tier 1 ratio
The ralio ol Tier ! capilal, nel ol excluded inslrumenls
(prelerence shares and savings shares), lo lolal risk-
weighled assels. Prelerred shares are innovalive capilal
inslrumenls, usually issued by loreign subsidiaries, and
included in lhe lier ! capilal il lheir characlerislics
ensure lhe banks' assel slabilily. The Tier ! ralio is lhe
same ralio inclusive ol lhe prelerred shares in lhe
numeralor.

Corporate
Cuslomer segmenl consisling ol medium- and large-
sized companies (m|d-corpora|e, |are corpora|e).

Cost/income ratio
Lconomic indicalor consisling ol lhe ralio ol operaling
cosls lo nel operaling income.

Covenant
A covenanl is a clause, expressly agreed upon during
lhe conlraclual phase, under which a lender is enlilled
lo renegoliale and revoke a loan upon lhe occurrence
ol lhe evenls sel oul in lhe clause, linking lhe deblor's
linancial perlormance lo evenls lhal lrigger
lerminalion/amendmenl ol conlraclual condilions
(malurily, rales, elc.).

Covered bond
Special bank bond lhal, in addilion lo lhe guaranlee ol
lhe issuing bank, is also backed by a porllolio ol
morlgage loans or olher high-qualily loans sold lo a
special purpose vehicle.

CPPl (Constant Proportion lnsurance Portfolio)
A lechnique consisling ol lorming a porllolio ol lwo
assels, one wilhoul risk lhal ollers a cerlain rale ol
relurn (risk-lree) and one wilh risk lhal ollers a
generally higher relurn. The purpose ol lhe re-
balancing procedure is lo prevenl lhe value ol lhe
porllolio lrom lalling below a predelermined level
(lloor), which rises al lhe risk-lree rale over lime and
coincides wilh lhe capilal lo be guaranleed al
malurily.

CR01
Relerred lo a credil porllolio, il indicales lhe change in
porllolio value lhal would occur lor a !-basis-poinl
increase in credil spreads.

Credit default swap/option
Conlracl under which one parly lranslers lo anolher -
in exchange lor paymenl ol a premium - lhe credil risk
ol a loan or securily conlingenl on occurrence ol a
delaull evenl (in lhe case ol an oplion lhe righl musl
be exercised by lhe purchaser).

Credit derivatives
Derivalive conlracls lor lhe lransler ol credil risks.
These producls allow inveslors lo perlorm arbilrage
and/or hedging on lhe credil markel, mainly by means
ol inslrumenls olher lhan cash, lo acquire credil
exposures ol varying malurilies and inlensilies, lo
modily lhe risk prolile ol a porllolio and lo separale
credil risks lrom olher markel risks.



169



GIossary
170
Credit enhancement
Techniques and inslrumenls used by issuers lo improve
lhe credil raling ol lheir issues (providing surelies, cash
credil lines, elc.).

Credit risk
The risk lhal an unexpecled change in a counlerparly's
credilworlhiness, in lhe value ol lhe collaleral
provided, or in lhe margins used in case ol delaull
mighl generale an unexpecled varialion in lhe value ol
lhe bank's exposure.

Credit Risk Adjustment (CRA)
A lechnique lhal aims lo draw allenlion lo lhe penally
resulling lrom lhe counlerparly's credilworlhiness used
in delermining lhe lair value ol unlisled derivalive
linancial inslrumenls in order lo consider lhe
counlerparly's credil qualily.

Credit spread option
Conlracl under which lhe proleclion buyer reserves
lhe righl, againsl paymenl ol a premium, lo collecl
lrom lhe proleclion seller a sum depending on lhe
posilive dillerence belween lhe markel spread and
lhal lixed in lhe conlracl, applied lo lhe nolional value
ol lhe bond.

Credit/emerging markets (Iunds)
lunds lhal invesl in securilies wilh credil risk exposure,
since lhey are issued by linancial or corporale enlilies,
which may be localed in emerging counlries.

Credit-linked notes
Similar lo bonds issued by a proleclion buyer or a
special purpose vehicle whose holders (proleclion
sellers) in exchange lor a yield equal lo lhe yield ol a
bond wilh lhe same malurily plus lhe premium
received lor credil risk hedging lake lhe risk ol losing
(in whole or in parl) lhe maluring capilal and lhe
relaled llow ol inleresl, upon occurrence ol a delaull
evenl.

CreditvaR
Value lhal indicales an unexpecled loss wilh respecl lo
a credil porllolio al a specilied conlidence inlerval and
a specilied lime horizon. CredilVaR is eslimaled
lhrough loss dislribulion and represenls lhe dillerence
belween lhe average value ol lhe dislribulion and lhe
value corresponding lo a cerlain percenlile (usually
99.9'), which rellecls lhe 8ank's risk propensily.

Cross selling
Aclivily designed lo increase cuslomer loyally lhrough
lhe sale ol inlegraled producls and services.

CRP (Country Risk Premium)
Counlry risk premium, il expresses lhe componenl ol
lhe cosl ol capilal aimed specilically al providing
compensalion lor lhe risk implicil in a given counlry's
equily markel (namely lhe risk associaled wilh
linancial, polilical and monelary inslabilily).

Cumulative loss
Cumulalive loss incurred, al a cerlain dale, on lhe
collaleral ol a specilic slruclured producl.

Default
Declared inabilily lo honour one's debls and/or make
lhe relevanl inleresl paymenls.

Deferred tax (tax liabilities or assets)
Delerred lax liabililies are lhe amounls ol income lax
lhal will be payable in lulure periods and arising lrom
laxable lemporary dillerences.
Delerred lax assels are lhe amounls ol income laxes
claimable in lulure periods and arising lrom.
(a) deduclible lemporary dillerences,
(b) lhe carry lorward ol unused lax losses, and
(c) lhe carry lorward ol unused lax credils.
Temporary dillerence is lhe dillerence belween lhe
carrying amounl ol an assel or liabilily and ils lax base.
There are lwo lypes ol lemporary dillerence.
(d) laxable lemporary dillerence, i.e. a lemporary
dillerence lhal, when delermining lhe laxable
income (lax loss) ol lulure periods, will resull in
laxable amounls in lhe lulure when lhe carrying
amounl ol lhe assel is recovered or lhe liabilily is
sellled, or
(e) deduclible lemporary dillerence. a lemporary
dillerence lhal, when delermining lhe laxable
income (lax loss) ol lulure periods, will resull in
amounls lhal are lax deduclible in lhe lulure
when lhe carrying amounl ol lhe assel is
recovered or lhe liabilily is sellled.

Delinquency
lailure lo make loan paymenls al a cerlain dale,
normally provided al 30, 60 and 90 days.

Delta
Value lhal expresses lhe sensilivily ol lhe price ol lhe
underlying assel lor an oplion. Della is posilive lor call
oplions because lhe price ol lhe oplion rises along
wilh lhe price ol lhe underlying assel. Della is negalive
lor pul oplions because a rise in lhe price ol lhe
underlying assel yields a decrease in lhe price ol lhe
oplion.

Delta-Gamma-vega (DGv vaR)
Paramelric model lor calculalion ol lhe VaR, able lo
assess bolh linear and non-linear risk laclors.

Desk
ll usually designales an operaling unil dedicaled lo a
parlicular aclivily.

Directional (Iunds)
lunds lhal invesl in linancial inslrumenls lhal prolil
lrom direclional markel movemenls, also lhrough
macroeconomic lorecasling.

Domestic Currency Swap
Conlracl sellled in euro, whose economic ellecl is
equal lo lhal ol a lime purchase or sale ol a loreign
currency in exchange lor domeslic currency. On expiry,
lhe dillerence belween lhe lorward and lhe spol
exchange rales is sellled in euro.

Duration
An indicalor ol lhe inleresl rale risk ol a bond or bond
porllolio. ln ils mosl lrequenl lorm, il is calculaled as a
weighled average ol lhe due dales ol inleresl and
principal paymenls associaled wilh a bond.

Dynamics of funding
Sum ol deposils in a currenl accounl (lree currenl
accounls and bank dralls), relurnable deposils upon
prior nolice (lree savings deposils), lime deposils (lime
currenl accounls and lime deposils, cerlilicales ol
deposil), repo agreemenls and bonds (including
170



GIossary
171
subordinaled loans). All conlracl lypes, wilh lhe
exceplion ol bonds, reler lo llalian cuslomers,
excluding lhe Cenlral Adminislralion, in euro and
loreign currency. 8onds reler lo lhe lolal amounl
issued, irrespeclive ol residence and seclor ol lhe
holder.

AD - xposure At Default
Relaling lo posilions on or oll balance sheel, il is
delined as lhe eslimaled lulure value ol an exposure
upon delaull ol a deblor. Only banks meeling lhe
requiremenls lor using lhe AlR8 approach are enlilled
lo eslimale LAD. The olhers are required lo make
relerence lo slalulory eslimales.

DI - xpected Default Irequency
lrequency ol delaull, normally based on a sample
inlernal or exlernal lo lhe bank, which represenls lhe
average risk level associable wilh a counlerparly.

ffective interest rate
The elleclive inleresl rale is lhe rale lhal exaclly
discounls eslimaled lulure cash paymenls ol lhe loan,
lor principal and inleresl, lo lhe amounl disbursed
inclusive ol lhe cosls/revenues allribulable lo lhe loan.
This measuremenl melhod uses a linancial approach
and allows dislribulion ol lhe economic ellecl ol lhe
cosls/revenues lhrough lhe expecled residual malurily
ol lhe loan.

mbedded derivatives
Lmbedded derivalives are clauses (conlraclual lerms)
included in a linancial inslrumenl lhal generale lhe
same ellecls as an independenl derivalive.

mbedded value
A measure ol lhe underlying value ol a lile insurance
company. ll is lhe sum ol lhe company's adjusled nel
assel value and lhe presenl value ol lhe lulure income
margins lrom lhe policies already in lorce over lhe
period ol lheir residual lile.

onia (uro overnight index average)
Weighled average ol lhe overnighl rales lransmilled lo
lhe LC8 by a sample ol banks operaling in lhe euro
area.

quity hedge / long-short (Iunds)
lunds lhal predominanlly invesl in slocks wilh lhe
possibilily ol crealing hedging slralegies by means ol
shorl sales ol lhe same slocks or slralegies in
derivalives conlracls involving securilies or markel
indices.

quity origination
lncrease ol a company's risk capilal achieved by
lloaling a new issue ol slock.

RP (equity risk premium)
Risk premium demanded by inveslors in lhe markel in
queslion. lSP uses lhe risk premium calculaled
according lo lhe hislorical approach (geomelric
average ol lhe dillerence belween equily and risk-lree
relurns lor lhe period !928-2009) by New York
Universily - Slern School ol 8usiness.

vA (conomic value Added)
An indicalor lhal provides a snapshol ol lhe amounl ol
value crealed (il posilive) or deslroyed (il negalive) by
enlerprises. ln conlrasl lo olher paramelers lhal
measure business perlormance, LVA is calculaled nel
ol lhe cosl ol equily capilal, lhal is lo say lhe
inveslmenl made by shareholders.

vent-driven (Iunds)
lunds lhal invesl in opporlunilies arising oul ol
signilicanl evenls regarding lhe corporale sphere, such
as mergers, acquisilions, delaulls and reorganisalions.

vT - xtreme value Theory
Slalislical melhodologies lhal deal wilh exlreme
hypolhelical devialions lrom median ol probabilily
dislribulions ol specilic evenls.

xotics (derivatives)
Non-slandard inslrumenls unlisled on lhe regular
markels, whose price is based on malhemalical
models.

xpected loss
Amounl ol losses on loans or receivables lhal an enlily
could suslain over a holding period ol one year. Civen
a porllolio ol loans and receivables, lhe expecled loss
represenls lhe average value ol lhe dislribulion ol
losses.

Iacility (fee)
lee calculaled wilh relerence lo lhe disbursed amounl
ol a loan.

Iactoring
Sale ol lrade receivables lo lacloring companies, lor
credil managemenl and colleclion, normally associaled
wilh lhe granling ol a loan lo lhe seller.

Iair value
The amounl al which an assel could be boughl or sold
or a liabilily incurred or sellled, in a currenl lransaclion
belween willing parlies.

Iair value hedge
ledging againsl lhe risk ol change in lhe lair value ol
a linancial slalemenl ilem, allribulable lo a parlicular
risk.

Iair value Option (IvO)
The lair Value Oplion is one oplion lor classilying a
linancial inslrumenl.
When lhe oplion is exercised, even a non-derivalive
linancial inslrumenl nol held lor lrading may be
measured al lair value lhrough prolil or loss.

Iairness/Legal opinion
An opinion provided on requesl by experls ol
recognised prolessionalism and compelence, on lhe
adequacy ol lhe economic lerms and/or lawlulness
and/or lechnical aspecls ol a given lransaclion.

IlCO Score
ln lhe US, a credil score is a number (usually belween
300 and 850) based on lhe slalislical analysis ol an
individual's credil reporl. The llCO score is an indicalor
ol lhe borrower's credilworlhiness. A morlgage lender
will use lhe "score" lo assess borrower delaull risk and
lo correclly price risk.

Iinancial instruments listed in an active market
A linancial inslrumenl is regarded as lisled in an aclive
markel il lisled prices are promplly and regularly
available lrom an exchange, dealer, broker, induslry
171



GIossary
172
group, pricing service or regulalory agency, and lhose
prices represenl aclual and regularly occurring markel
lransaclions on an arm's lenglh basis.

Iorward Rate Agreement
See "".

Iorwards
lorward conlracls on inleresl rales, exchange rales or
slock indices, generally negolialed in over-lhe-counler
markels and whose condilions are eslablished al lhe
lime when lhe conlracl is enlered inlo, bul which will
be execuled al a specilied lulure dale, by means ol
lhe receipl or paymenl ol dillerenlials calculaled wilh
relerence lo paramelers lhal vary according lo lhe
objecl ol lhe conlracl.

Iront office
The divisions ol a company designed lo deal direclly
wilh cuslomers.

Iundamental valuation
Slock price analysis perlormed by eslimaling lhe lair
value ol slocks and comparing il wilh lheir markel
value.

Iunding
The raising ol capilal, in various lorms, lo linance lhe
company business or parlicular linancial lransaclions.

Iutures
Slandardised lorward conlracls under which lhe
parlies agree lo exchange securilies or commodilies al
a specilied price on a specilied lulure dale. lulures are
normally lraded on organised markels, where lheir
execulion is guaranleed. ln praclice, lulures on
securilies ollen do nol involve lhe physical exchange ol
lhe underlying.

"G" factor ("g" growth rate)
ll is lhe laclor used lor perpeluily projeclion ol cash
llows in order lo calculale "lerminal value".

Global custody
An inlegraled package ol services including, in
addilion lo lhe cuslody ol securilies, lhe perlormance
ol adminislralive aclivilies relaling lo lhe selllemenl ol
securilies, colleclions and paymenls, acling as
deposilary bank and cash managemenl, as well as
various lorms ol porllolio perlormance reporling.

Goodwill
The value allached lo inlangible assels as parl ol lhe
purchase price ol a shareholding in a going concern.

Governance
The sel ol inslrumenls, rules and slandards regulaling
lhe lile ol lhe company, parlicularly as regards lhe
lransparency ol documenls and company records, and
lhe compleleness ol inlormalion made available lo lhe
markel.

Greeks
Creeks are lhe quanlilies lhal idenlily lhe grealer or
lesser sensilivily ol a derivalive conlracl, lypically an
oplion, lo changes in lhe value ol lhe underlying assel
or olher paramelers (e.g. inlrinsic volalilily, inleresl
rales, slock prices, dividends and correlalions).


Harmonised mutual funds
Mulual lunds wilhin lhe scope ol Direclive 85/6!!/LLC
ol 20 December !985, as amended, characlerised by
lheir open lorm, lhe possibilily ol ollering quolas lo
lhe public and cerlain inveslmenl limils. lnveslmenl
limils include lhe obligalion lo invesl primarily in
quoled linancial inslrumenls.

Hedge accounting
Rules perlaining lo lhe accounling ol hedging
lransaclions.

Hedge fund
Mulual lund lhal employs hedging inslrumenls in
order lo achieve a beller resull in lerms ol risk/relurn
ralio.

HLs - Home quity Loans
Loans granled up lo lhe currenl markel value ol lhe
real eslale properly used as collaleral (lherelore wilh a
loan-lo-value ralio higher lhan lhe ordinary
lhresholds), by means ol lirsl or second lien
morlgages. Slandard & Poor's considers Subprime and
lome Lquily Loan largely synonymous when lhe home
equily loan borrowers have low credil score
(llCO<659).

H C8O - High-ield Collateralised 8ond
Obligation
CDOs wilh collaleral represenled by ligh-Yield
securilies.

Hybrid instruments included in Tier 1 capital
linancial inslrumenls lhal may be included in Tier !
capilal up lo specilic limils when lhe lunding raised is
available on an ongoing basis and lhere is an abilily lo
absorb losses lhal lully guaranlees lhe bank's capilal
slabilily. Such inslrumenls may be classilied as
innovalive or non-innovalive depending on whelher
lhere are incenlives lor early redemplion by lhe issuer
(e.g., slep-up clauses).

lAS/lIRS
The lAS (lnlernalional Accounling Slandards) are
issued by lhe lnlernalional Accounling Slandards
8oard (lAS8). The slandards issued aller July 2002 are
called llRS (lnlernalional linancial Reporling
Slandards).

lAS8 (lnternational Accounting Standard 8oard)
The lAS8 (previously known as lhe lASC) is lhe enlily
responsible lor issuing inlernalional accounling
slandards (lAS/llRS).

lCAAP (lnternal Capital Adequacy Assessment
Process)
Process adopled lo delermine lhe amounl ol capilal
needed lo cover all risks, including risks dillerenl lrom
lhose covered by lhe lolal capilal requiremenl ("lirsl
Pillar"), when assessing currenl and polenlial lulure
exposure, laking inlo accounl business slralegies and
developmenls in lhe economic and business
environmenl.

lIRlC (lnternational Iinancial Reporting
lnterpretations Committee)
A commillee wilhin lhe lAS8 lhal eslablishes ollicial
inlerprelalions ol inlernalional accounling slandards
(lAS/llRS).

172



GIossary
173
lmpairment
When relerred lo a linancial assel, a silualion ol
impairmenl is idenlilied when lhe book value ol an
assel exceeds ils eslimaled recoverable amounl.

lmpairment test
The impairmenl lesl is an eslimale ol lhe recoverable
amounl (lhe higher ol an assel's lair value less cosls lo
sell and ils value in use) ol an assel or group ol assels.
Pursuanl lo lAS 36, lhe lollowing assels should be
lesled lor impairmenl annually.
- inlangible assels wilh indelinile uselul lile
- goodwill acquired in a business combinalion
- any assel, il lhere is any indicalion ol impairmenl
losses.

lncurred loss
Loss already inherenl in a porllolio, bul nol yel
idenliliable al lhe level ol an individual loan or
receivable, also known as an "incurred bul nol
reporled loss." ll represenls lhe risk level inherenl in
lhe porllolio ol perlorming loans and conslilules lhe
basic indicalor lor delermining lhe size ol lhe slock ol
colleclive adjuslmenls lo be sel aside in lhe linancial
slalemenls.

lndex-linked
Policies whose perlormance al malurily depends on
lhe perlormance ol a relerence parameler, which may
be a slock index, a baskel ol securilies or some olher
indicalor.

lndex-linked life insurance policies
Lile insurance policies lhe benelils ol which are based
on indexes, normally drawn lrom equily markels.
Policies may guaranlee capilal or oller a minimum
relurn.

lndirect customer deposits
The holding ol lhird parlies' securilies and similar
valuables nol issued by lhe bank, al nominal value,
excluding cerlilicales ol deposil and bank bonds.

lntangible asset
An idenliliable, non-monelary assel lacking physical
subslance.

lnternal dealing
Transaclions belween dillerenl operaling unils ol lhe
same company. These lransaclions are recognised in
lhe accounls and conlribule lo delermining lhe
posilion (lrading or hedging) ol lhe individual unils
involved.

lntraday
Used lo reler lo an inveslmenl/disinveslmenl
lransaclion perlormed in lhe course ol a single day
involving lhe negolialion ol a securily. ll is also used
wilh relerence lo prices quoled during any one day.

lnvestment grade
Term used wilh relerence lo high-qualily bonds lhal
have received a medium/high raling (e.g., nol less lhan
888 on Slandard & Poor's index).

lnvestment property
Real eslale owned lor lhe purpose ol oblaining income
and/or beneliling lrom an increase in lheir value.


lRS - lnterest Rate Swap
A binding agreemenl belween lwo parlies lo
exchange lwo llows calculaled over a nolional amounl
wilh lixed/lloaling or lloaling/lloaling rale.

1oint lead manager
The lead manager deals wilh lhe deblor and is
responsible lor choosing lhe co-lead managers and lhe
olher members ol lhe underwriling syndicale in
agreemenl wilh lhe borrower. ll also delermines lhe
lerms and condilions ol issue and coordinales ils
execulion (usually placing lhe largesl share ol lhe issue
on lhe markel) and keeps lhe books, in addilion lo
reimbursemenl ol expenses and usual lees, lhe lead
manager receives a special commission lor ils services.

1oint venture
Agreemenl belween lwo or more lirms lor lhe
perlormance ol a given economic aclivily, generally
lhrough lhe incorporalion ol a joinl-slock company.

1unior
ln a securilisalion lransaclion il is lhe lowesl-ranking
lranche ol lhe securilies issued, being lhe lirsl lo bear
losses lhal may occur in lhe course ol lhe recovery ol
lhe underlying assels.

Ke (Cost of quity)
Cosl ol equily, lhe minimum relurn demanded lor
inveslmenls ol lhe same risk level.

Ke - g
Dillerence belween lhe discounling rale lor cash llows
and lhe long-lerm growlh rale. ll cash llows remain
equal, value in use increases as lhal dillerence
decreases.

Lambda () )) )
Coellicienl lhal measures lhe assessed ilem's specilic
exposure lo counlry risk. ln lhe model used by lnlesa
Sanpaolo, il is eslimaled lo be !, in lhal il is presumed
lhal il is necessary lo vary lhe counlry's risk level.

LDA - Loss Distribution Approach
ll is a model used lo assess exposure lo operalional
risk. ll makes il possible lo eslimale lhe amounl ol
expecled and unexpecled loss lor any evenl/loss
combinalion and any ous|ness ||ne.

Lead manager - 8ookrunner Lead bank of a bond
issue syndicate.
The lead manager deals wilh lhe deblor and is
responsible lor choosing lhe co-lead managers and lhe
olher members ol lhe underwriling syndicale in
agreemenl wilh lhe deblor. ll also delermines lhe
lerms and condilions ol issue and coordinales ils
execulion (usually placing lhe largesl share ol lhe issue
on lhe markel) and keeps lhe books (bookrunner), in
addilion lo reimbursemenl ol expenses and usual lees,
lhe lead manager receives a special commission lor ils
services.

Leveraged & acquisition finance
See "Acqu|s|||on ||nance".

Liquidity risk
The risk lhal a company will be unable lo meel ils
paymenl obligalions due lo ils inabilily lo liquidale
assels or oblain adequale lunding lrom lhe markel
(lunding liquidily risk) or due lo lhe
173



GIossary
174
dillicully/impossibilily ol rapidly converling linancial
assels inlo cash wilhoul negalively and signilicanlly
allecling lheir price due lo inadequale markel deplh
or lemporary markel disruplions (markel liquidily risk).

Loss Given Default (LGD)
ll indicales lhe eslimaled loss rale in lhe evenl ol
borrower delaull.

Lower Tier 2
ll designales subordinaled liabililies lhal meel lhe
eligibilily crileria lor inclusion in supplemenlary (Tier 2)
capilal.

LTv - Loan-to-value Ratio
The ralio belween lhe loan and lhe value ol lhe assel
lor which lhe loan was requesled or lhe price paid by
lhe borrower lo buy lhe assel.
The LTV ralio measures lhe weighl ol lhe borrower's
own lunds used lo buy lhe assel on lhe value ol lhe
assel used as guaranlee ol lhe loan. The higher lhe
LTV ralio, lhe lower lhe borrower's own lunds used lo
buy lhe assel, lhe lower lhe credilor's proleclion.

Macro-hedging
Use ol macro-hedging. ledging procedure involving a
single derivalive producl lor various posilions.

Mark to Market
Process ol delermining lhe value ol a porllolio ol
securilies or olher linancial inslrumenls by relerence lo
lhe prices expressed by lhe markel.

Mark-down
Dillerence belween lhe !-monlh Luribor and inleresl
rales on household and business currenl accounls.

Market dislocation
Turbulence in linancial markels characlerised by a
slrong reduclion in volumes lraded on linancial
markels wilh dillicullies in linding signilicanl prices on
specialised inlormalion providers.

Market making
linancial aclivily carried oul by brokerage houses lhal
ensure markel liquidily and deplh, bolh lhrough lheir
ongoing presence and by means ol lheir role as
compelilive guides in delermining prices.

Market neutral
Operaling slralegies involving securilies designed lo
minimise lhe relevanl porllolios' exposure lo markel
volalilily.

Market risk
Risk deriving lrom lhe lluclualion in lhe value ol
quoled linancial inslrumenls (shares, bonds,
derivalives, securilies denominaled in loreign currency)
and ol linancial inslrumenls whose value is linked lo
markel variables (loans lo cuslomers as concerns lhe
inleresl rale componenl, deposils in euro and in
loreign currency, elc.).

Mark-up
Dillerence belween lhe overall inleresl rale applied lo
households and businesses on loans wilh a duralion ol
less lhan one year and !-monlh euribor.



Merchant banking
A range ol aclivilies including lhe underwriling ol
securilies bolh equilies and bonds issued by
corporale clienls lor subsequenl ollering on lhe
markel, lhe acquisilion ol equily inveslmenls lor
longer periods bul always wilh lhe aim ol selling lhem
laler, and lhe provision ol advisory services on
mergers, acquisilions and reorganisalions.

Mezzanine
ln a securilisalion lransaclion il is lhe lranche ranking
belween junior and senior lranche.

M-Maturity
The remaining lime ol an exposure, calculaled
according lo lhe prudence principle. lor banks
aulhorised lo use inlernal ralings, il is explicilly
considered il lhe advanced approach is adopled, while
il is lixed al 2.5 years il lhe loundalion approach is
used.

Monoline
lnsurance companies which, in exchange lor a
commission, guaranlee lhe reimbursemenl ol cerlain
bond issues. lormed in lhe !970s lo guaranlee
municipal bond issues lrom delaull, lheir services were
subsequenlly parlicularly apprecialed lor issues ol
complex linancial producls. lhe slruclure and lhe
assels underlying such issues are ollen highly complex,
lhe debl posilions guaranleed by monoline insurers
become easier lo value and more appealing lor risk-
averse inveslors, since delaull risk is borne by lhe
insurer.

Multistrategy / Iunds of funds (Iunds)
lunds lhal do nol invesl in a single slralegy bul in a
porllolio rellecling dillerenl slralegies, i.e. in a
porllolio ol inveslmenl lunds managed by lhird
parlies.

NAv - Net Asset value
The markel value ol one share ol lhe lund's managed
assels.

Non-performing
Term generally relerring lo loans lor which paymenls
are overdue.

Operational risk
The risk ol incurring losses due lo inadequacy or
lailures ol processes, human resources or inlernal
syslems, or as a resull ol exlernal evenls. Operalional
risk includes legal risk, lhal is lhe risk ol losses deriving
lrom breach ol laws or regulalions, conlraclual or non-
conlraclual liabilily or olher dispules, il does nol
include slralegic risk (losses due lo wrong
managemenl slralegies) or repulalional risk (loss ol
markel shares as a consequence ol negalive publicily
regarding lhe bank).

Option
Againsl paymenl ol a premium, lhe buyer acquires lhe
righl, bul nol lhe obligalion, lo purchase (ca|| op||on)
or lo sell (pu| op||on) a linancial inslrumenl al a sel
price (s|r||e pr|ce) wilhin (Amer|can op||on) or on
(|uropean op||on) a given lulure dale.

Other related parties - close relatives
An individual's "close relalives" comprise lhose lamily
members likely lo inlluence or be inlluenced by such
174



GIossary
175
individual in lheir relalions wilh lhe enlily. They
include lhe individual's non-separaled spouse/domeslic
parlner and lhe individual's children, his/her
spouse's/domeslic parlner's children, and lhe
individual's or his/her spouse's/domeslic parlner's
dependenls.

Outsourcing
The lransler ol business processes lo exlernal
providers.

Overnight lndexed Swap (OlS)
Conlracl involving lhe exchange ol lhe nel llow
deriving lrom lhe dillerence belween a lixed and
lloaling inleresl rale applied lo a nolional principal
amounl. The lixed rale is sel al lhe inceplion ol lhe
conlracl, while lhe lloaling rale is delermined al
malurily as lhe average ol lhe overnighl rales surveyed
during lhe lerm ol lhe conlracl, wilh compound
inleresl.

Over-The-Counter (OTC)
ll designales lransaclions carried oul direclly belween
lhe parlies oulside organised markels.

Packages
Slralegy made up ol a lunded assel whose credil risk is
hedged by a specilic credil delaull swap. ll presenl,
any inleresl rale and loreign exchange rale risks can
be hedged wilh linancial derivalives.

Past due loans
"Pasl due loans" are non-perlorming loans on which
paymenls are pasl due and/or overdue on a conlinuing
basis lor over 90/!80 days, in accordance wilh lhe
delinilion sel lorlh in currenl supervisory reporling
rules.

Performing
Term generally relerring lo loans characlerised by
regular perlormance.

Plain vanilla (derivatives)
Producls whose price depends on lhal ol lhe
underlying inslrumenl, which is lisled on lhe regulaled
markels.

Pool (transactions)
See "5ynd|ca|ed |end|n".

Preferred shares
See "Core 1|er 1".

Pricing
8roadly speaking, il generally relers lo lhe melhods
used lo delermine yields and/or cosls ol producls and
services ollered by lhe 8ank.

Prime broker
The Prime 8roker is an inlernalional linancial
inlermediary lhal operales as agenl in lhe selllemenl
process, carrying oul lhe linancial lransaclions ordered
by lhe hedge lund's manager wilh lhe ulmosl
conlidenlialily. The Prime 8roker also acls as lhe lund's
lender, providing credil lines and securilies lending lor
shorl selling, and direclly oblaining guaranlees in
respecl ol lhe linancing granled lo lhe lund. The
Prime 8roker also provides risk managemenl services,
moniloring lhe hedge lund's risk exposure lo ensure
condilions ol linancial slabilily. Olher services provided
by lhe Prime 8roker are holding and deposil ol lhe
lund's cash and securilies, handling ol lhe nelling and
selllemenl process, and recording ol all markel
lransaclions.

Prime loan
Morlgage loan in which bolh lhe crileria used lo granl
lhe loan (loan-lo-value, debl-lo-income, elc.) and lo
assess lhe borrower's hislory (no pasl due
reimbursemenls ol loans, no bankruplcy, elc.) are
sullicienlly conservalive lo rank lhe loan as high-
qualily (as concerns lhe borrower) and low-risk.

Private banking
8usiness designed lo provide prelerred cuslomers wilh
assel managemenl, prolessional advice and olher
personalised services.

Private equity
Aclivily aimed al lhe acquisilion ol equily inveslmenls
and lheir subsequenl sale lo specilic counlerparlies,
wilhoul public ollerings.

Probability of Default (PD)
The likelihood lhal a deblor will delaull wilhin lhe
space ol ! year.

Project finance
Technique lor lhe linancing ol induslrial projecls based
upon a lorecasl ol lhe cash llow generaled by lhe
projecls lhemselves. The analysis is based upon a series
ol evalualions dillering lrom lhose generally made
when assessing ordinary credil risk, and covering, in
addilion lo cash llow analysis, lechnical examinalion ol
lhe projecl, lhe suilabilily ol lhe sponsors engaged in
ils implemenlalion and lhe markels where lhe producl
will be placed.

Prudential filters
ln schemes lor calculaling regulalory capilal,
correclions made lo line ilems wilh lhe aim ol
saleguarding lhe qualily ol regulalory capilal and
reducing ils polenlial volalilily as a resull ol lhe
applicalion ol inlernalional accounling slandards
(lAS/llRS).

Pv01
Measures lhe price value change ol a linancial assel
lollowing a one basis poinl shill in lhe yield curve.

Ratings
An evalualion ol lhe qualily ol a company or ol ils
bond issues, based on lhe company's linancial slrenglh
and oullook. Such evalualion is perlormed by
specialised agencies or by lhe 8ank based on inlernal
models.

Real estate (finance)
Slruclured linance lransaclions in lhe real eslale
seclor.

Real state lnvestment Trust (RlTs)
RLlTs are enlilies lhal invesl in dillerenl lypes ol real
eslale or linancial assels relaled lo real eslale,
including malls, holels, ollices and morlgage loans.

Relative value/Arbitrage (Iunds)
lunds lhal invesl in markel neulral slralegies, proliling
lrom lhe price dillerenlials ol parlicular securilies or
175



GIossary
176
linancial conlracls, neulralising lhe underlying markel
risk.

Retail
Cuslomer segmenl mainly including households,
prolessionals, relailers and arlisans.

Risk Management
Aclivily perlaining lo lhe idenlilicalion, measuremenl,
evalualion and overall managemenl ol various lypes ol
risk and lheir hedging.

Risk-based lending
A melhodology applied lo a credil porllolio lo idenlily
lhe mosl suilable pricing condilions laking inlo
accounl lhe risk laclor ol each credil.

Risk-free
Relurn on risk-lree inveslmenls. lor lhe llaly CCU and
counlries in lhe lnlernalional Subsidiary 8anks CCU
wilh "normal" growlh prospecls, lhe relurn on len-
year 8unds has been adopled, while lor counlries wilh
"slrong" growlh prospecls, lhe relurn on 30-year
8unds has been used.

RM8S - Residential Mortgage-8acked Securities
Assel-backed securilies guaranleed by morlgages on
residenlial real eslale.

RO (Return On quity)
ll expresses lhe relurn on equily in lerms ol nel
income. ll is lhe indicalor ol grealesl inleresl lo
shareholders in lhal il allows lhem lo assess lhe relurn
on lheir equily inveslmenl.

RWA (Risk Weighted Assets)
On- and oll-balance sheel assels (derivalives and
guaranlees) lhal are classilied and weighled by means
ol several risk ralios, in accordance wilh lhe rules
issued by regulalory aulhorilies on lhe calculalion ol
capilal ralios.

Sale with recourse
Transler ol a loan or receivable in which lhe lransleror
guaranlees paymenl by lhe deblor. The lransleror lhus
guaranlees lhe lransleree bolh lhal lhe lranslerred
loan or receivable exisls and lhal lhe deblor is solvenl.

Sale without recourse
Transler ol a loan or receivable in which lhe lransleror
does nol oller any guaranlees in lhe evenl ol delaull
by lhe deblor. The lransleror lhus only guaranlees lhe
lransleree lhal lhe lranslerred loan or receivable exisls,
bul nol lhal lhe deblor is solvenl.

Scoring
Syslem lor lhe analysis ol company cuslomers, yielding
an indicalor oblained by examinalion ol linancial
slalemenls dala and seclor perlormance lorecasls,
analysed by means ol slalislical melhods.

Securitisation
A lransaclion in which lhe risk associaled wilh
linancial or real assels is lranslerred lo a special-
purpose vehicle by selling lhe underlying assels or
using derivalive conlracls. ln llaly lhe primary
applicable slalule is Law !30 ol 30 April !999.



Senior/Super senior tranche
ln a securilisalion lransaclion, lhis is lhe lranche lhal
has lirsl claim on inleresl and principal paymenls.

Sensitivity
ll relers lo lhe degree ol sensilivily wilh which cerlain
assels/liabililies reacl lo changes in rales or olher inpul
variables.

Servicer
ln securilisalion lransaclions, il is lhe organisalion lhal
on lhe basis ol a specilic servicing conlracl
conlinues lo manage lhe securilised credils or assels
aller lhey have been lranslerred lo lhe special purpose
vehicle lasked wilh issuing lhe securilies.

SGR (Societa di gestione del risparmio)
Joinl-slock companies reserved lhe possibilily ol
providing bolh colleclive and individual assel
managemenl service joinlly. ln parlicular, lhey are
aulhorised lo sel up mulual lunds, manage lheir own
or olhers' mulual lunds and lhe assels ol SlCAVs and
provide individual inveslmenl porllolio managemenl
service.

SP/SPv
Special Purpose Lnlilies or Special Purpose Vehicles are
companies eslablished by one or more enlilies lo
perlorm a specilic lransaclion. Cenerally, SPLs/SPVs
have no operaling and managerial slruclures ol lheir
own and rely on lhose ol lhe olher parlies involved in
lhe lransaclion.

Speculative grade
Term used lo idenlily issuers wilh a low credil raling
(e.g., below 888 on Slandard & Poor's index).

Spread
This lerm can indicale lhe dillerence belween lwo
inleresl rales, lhe dillerence belween lhe bid and ask
price ol a securily or lhe price an issuer ol slocks and
bonds pays above a benchmark rale.

Spreadvar
Value lhal indicales lhe maximum possible loss on a
lrading porllolio due lo lhe markel perlormance ol
CDS spreads or bond spreads, wilh a cerlain degree ol
probabilily and assuming a cerlain amounl ol lime
needed lor lhe disposal ol posilions.

Stakeholders
Subjecls who, acling in dillerenl capacilies, inleracl
wilh lhe lirm's aclivily, sharing in ils prolils,
inlluencing ils perlormance/services, and evalualing ils
economic, social and environmenlal impacl.

Stock options
Term used lo indicale lhe righl granled lo company
managers lo purchase lhe company's shares al a
cerlain price (s|r||e pr|ce).

Stress tests
A simulalion procedure designed lo assess lhe impacl
ol exlreme markel scenarios on a bank's overall
exposure lo risk.

Structured export finance
Slruclured linance lransaclions in lhe goods and
services exporl seclor.

176



GIossary
177
Subprime
A universally agreed-upon delinilion ol sub-prime
loans does nol exisl. ln shorl, lhis lerm relers lo loans
granled lo borrowers wilh low credilworlhiness, eilher
because ol bad credil hislory (non-paymenl, debl
selllemenls or doubllul loans) or because lheir debl-
lo-income or loan-lo-value ralio is high.

Swaps
Transaclions normally consisling ol an exchange ol
linancial llows belween operalors under various
conlraclual arrangemenls. ln an inleresl-rale , lhe
parlies exchange llows which may or may nol be
benchmarked on inleresl rales, calculaled on a
nolional principal amounl (e.g., one parly pays a lixed-
rale llow while lhe olher pays a lloaling-rale llow). ln
lhe case ol a currency swap, lhe parlies exchange
specilic amounls ol lwo dillerenl currencies al lhe
oulsel, repaying lhem over lime according lo
arrangemenls lhal may regard bolh lhe principal and
lhe indexed inleresl llows.

Syndicated lending
Loans arranged and guaranleed by a pool ol banks
and olher linancial inslilulions.

Tax rate
The elleclive lax rale, delermined by lhe ralio ol
income laxes lo income belore lax.

Terminal value
An enlerprise's value al lhe end ol an analylical cash-
llow lorecasling period, calculaled by mulliplying lhe
analylical cash llow lor lhe linal period by (! + g) and
dividing lhal amounl by (Ke-g).

Tier 1
Core capilal (Tier !) includes lhe paid-in capilal, lhe
share premium reserve, reserves lrom relained
earnings (including lAS/llRS lirsl-limeadoplion reserve
olher lhan lhose included under valualion reserves),
and excludes lreasury shares and inlangible assels.
Consolidaled Tier ! capilal also includes minorily
inleresl.

Tier 2
Tier 2 capilal includes valualion reserves, innovalive
and non-innovalive capilal inslrumenls nol included in
Tier ! capilal, hybrid capilal inslrumenls, Tier 2
subordinaled liabililies, unrealised capilal gains on
equily inveslmenls, excess value adjuslmenls wilh
respecl lo expecled losses, and lhe olher posilive
elemenls lhal conslilule capilal ilems ol a secondary
nalure, lhe posilive "prudenlial lillers" ol Tier 2 capilal
are also included. The lolal ol lhese elemenls, less nel
unrealised capilal losses on equily inveslmenls,
negalive ilems relaled lo loans, olher negalive
elemenls, and negalive Tier 2 "prudenlial lillers",
makes up "Tier 2 capilal belore elemenls lo be
deducled". Tier 2 capilal is made up ol lhe dillerence
belween "Tier 2 capilal belore ilems lo be deducled"
and 50 per cenl ol "ilems lo be deducled".

Time value
Change in lhe linancial value ol an inslrumenl wilh
regard lo lhe lime lrame in which cerlain monelary
llows will become available or due.



Total capital ratio
Capilal ralio relerred lo regulalory capilal componenls
(Tier ! plus Tier 2).

Total return swap
A conlracl under which one parly, usually lhe owner
ol a securily or a debl inslrumenl, agrees lo make
periodic paymenls lo an inveslor (proleclion seller) ol
lhe capilal gains and inleresl generaled by lhe assel.
On lhe olher side, lhe inveslor agrees lo make
paymenls based on a lloaling rale, as well as any
negalive price changes ol lhe assel lrom lhe dale ol
lhe conlracl.

Trading book
The porlion ol a porllolio ol securilies or olher
linancial inslrumenls earmarked lor lrading aclivily.

Trustee (Real estate)
Real eslale vehicles.

Trust-preferred Securities (TruPS)
linancial inslrumenls similar lo prelerred shares, which
are enlilled lo parlicular lax benelils.

Underwriting fee
lee received in advance by lhe bank as compensalion
lor assuming lhe underwriling risk associaled wilh lhe
granling ol a loan.

Upper Tier 2
lybrid capilal inslrumenls (e.g., perpelual loans) lhal
make up lhe highesl qualily elemenls ol Tier 2 capilal.

value in use
Value in use is lhe presenl value ol eslimaled lulure
cash llows expecled lo arise lrom an assel or lrom a
cash-generaling unil.

vaR - value at Risk
The maximum value likely lo be losl on a porllolio as a
resull ol markel lrends, eslimaling probabilily and
assuming lhal a cerlain amounl ol lime is required lo
liquidale posilions.

vega
Coellicienl lhal measures lhe sensilivily ol an oplion's
value in relalion lo a change in or undereslimalion ol
volalilily.

vega01
Relerred lo a porllolio, il indicales lhe change in value
lhal il would undergo as a consequence ol a one
percenl increase in lhe volalilily ol lhe underlying
linancial inslrumenls.

vintage
Dale ol generalion ol lhe collaleral underlying lhe
securilisalion. ll is an imporlanl laclor in lhe
assessmenl ol lhe risk ol lhe morlgage porllolios
underlying securilisalions. Lspecially in lhe US, lhe
phenomenon ol morlgages granled lo borrowers wilh
inadequale income and providing insullicienl
documenlalion became signilicanl lrom 2005.

Warrant
Negoliable inslrumenl lhal enlilles lhe holder lo
purchase lrom or sell lo lhe issuer lixed-income
securilies or shares according lo specilic procedures.

177



GIossary
178
Waterfall
Characlerislic ol a CDO's cash llow projeclion lhal is
used in lhe CDO pricing process lo model and allocale
llows. ll eslablishes lhe priorily ol paymenl ol lhe
various lranches in lhe evenl ol lailure ol lhe lesls on
overcollaleralisalion and inleresl coverage ralios.

Wealth management
See "Asse| manaemen|".

What-if lorm ol analysis lhal allempls lo predicl lhe
response ol specilic elemenls lo changes in baseline
paramelers.

Wholesale banking
8anking aclivily mainly consisling ol high-value
lransaclions concluded wilh major counlerparlies.





178


179



ConIacIs

179




ConIacIs
181

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Registered office
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Telephone. +39 0!! 555 !

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financiaI caIendar

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financiaI caIendar
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