BPER GROUP
BUSINESS PLAN 2012-2014
“The new BPER Group: growth, value and proximity
in a new Landscape"
Presentation to the Financial Community
Milan, March 14, 2012
Disclaimer
| Strettamente riservato e confidenziale
This document has been prepared by Banca popolare dell’Emilia Romagna solely for information purposes,
and only in order to present its strategies and main financial figures.
The information contained in this document has not been audited.
No guarantee, express or implied, can be given as to the document’s contents, nor should the completeness,
correctness or accuracy of the information or opinions herein be relied upon.
This is a translation into English of the original in Italian. The Italian text shall prevail over the English version.
Banca popolare dell’Emilia Romagna, its advisors and its representatives decline all liability (for negligence
or any other cause) for any loss occasioned by the use of this document or its contents.
All forecasts contained herein have been prepared on the basis of specific assumptions which could prove
wrong, in which case the actual data would differ from the figures given herein.
No part of this document may be regarded as forming the basis for any contract or agreement.
No part of the information contained herein may for any purpose be reproduced or published, as a whole or in
part, nor may such information be disseminated.
Page | 2
Agenda
| Strettamente riservato e confidenziale
1. Outlook for the Group and main results
2. Business Plan 2012-2014
Page | 3
History and Growth of the BPER Group
| Strettamente riservato e confidenziale
More than 40 rationalization actions since the Group was founded (1992) ...
(Total assets1 – bn €)
BPER
Group
foundation
35,1
35.1
36,2
36.2
2001
2002
60,5
52,8
60.5
2011
45,3
45.3
48,5
48.5
52.8
2006
2007
2008
Business
Plan
2012-2014
7,9
7.9
1992
1992
1994
 Growth in the
traditional core
business through
the acquisition of
Commercial
Banks
 Acquisition of Product
Factories
 Strengthening Group
Governance
 IT standardization
 Simplifying
organizational structure
 Gradual turnaround of
subsidiary banks
 IT development and
"operational machine”
strengthening
2012 - ….
 New Group structure:
mergers and
organizational alignment
of larger banks
 Cost base reduction
 Actions for growth
1) Data as of the end of each year
Page | 4
The BPER Group today
...which led to the current structure of the BPER Group
Commercial Banks
IT and Back
Office services
Product Factories
BP Emilia
Romagna
BP Ravenna
BP Aprilia
CR Aquila
BP
Mezzogiorno
Banca della
Campania
Banco di
Sardegna
| Strettamente riservato e confidenziale
BP Lanciano
e Sulmona
Corporate &
Investment Banking
Wealth
Management and
Insurance
Other financial
services
Meliorbanca
Optima Sgr
ABF Leasing
EMRO Fin.
Ireland
Arca Sgr
Sardaleasing
Arca Vita
EmilRo
Factor
Banca di
Sassari
BPER
Services
Presticinque
Foreign
Banks
BPER Int.
S.A.
Alba Leasing
 Presence of 9 territorial Commercial Banks
 The subsidiary banks operate primarily in the
regions of Central/ Southern Italy
Presence abroad
Subsidiaries
 Full range of products offered through the
Product Factories
Associates/ Commercial partnerships
Page | 5
| Strettamente riservato e confidenziale
Projects, business rationales and main results achieved
The last three years have been characterized by an intensive transformation plan...
Rationale
1 Know your customers and respond
effectively to their needs
2
Improve cost management
3 Govern the Group by making full use of
knowledge capital
4
5
Improve efficiency in loan
and credit management
Go beyond the traditional channel
exploiting remote points of contact
6
Achieve excellence in Group
Operations
7
Simplify Group structure
Projects in Business Plan 2009-2011
Results
■ New business model
■ CRM methods and commercial behaviours
■ Customer experience models and tools
■ 15% redemption on contacts suggested by CRM
■ 89% of Retail customers satisfied
■ 90% of Corporate customers satisfied
■ Policies and tools for streamlining personnel
costs
■ Cost efficiency
■ New processes/procedures in HR budgeting
■ New processes/procedures to govern Group costs
■ New Group Planning & Control processes and
■ - 30% time spent preparing monthly income
statements
■ ~60 new reports at customer/ branch/ segment/
Group level
procedures
■ New credit policies and processes
■ New credit management procedures
■ New direct channels
■ +50% average monthly traffic on new institutional
sites
■ Streamlining branch and back office processes
■ BPER Services evolution
Centralised:
■ 72 Back Office processes and 12 organisational
processes
■ 309 IT services
■ Special projects
■ >160 mn € of capital gains from disposal
Page | 6
Territorial growth and personnel evolution
... “selective” branches evolution programme and personnel management
| Strettamente riservato e confidenziale
Branches evolution programme - 2009-2011 (#)
Personnel evolution - 2009-2011 (#)
 8 new branches in provincial capitals not previously covered (Ascoli
Piceno, Treviso, Bari, Florence, Bergamo, Caserta, Lecco, Macerata)
 18 new branches in municipalities not previously covered
 12 new branches in municipalities previously covered to strengthen
market share
-341
1,272
38
19
12,337
952
1,293
11,996
Headcount as
of March 2009
New hires
Leavers
Headcount as of
December 2011
1,305
+33
14
Personnel breakdown – Centre vs. Network – BPER Group1
(%)
Headquarters + Local Areas
Branches at Meliorbanca/
Dec. 2008 Meliorbanca
Private
branches
New
branches
opened
Closed
Branches at
Dec. 2011
 8 branches closed in overlapped markets
 11 Meliorbanca branches closed
34.2%
Branches
45
29.0%
5.2 pips
65.8%
71.0%
42
December 2008
December 2011
XX
Average
age in 2011
1) Includes all Group employees, excluding all Product Factories, BPER Services and BSSS Consumer Division
Page | 7
Ranking and territorial positioning
Today the Group counts about 1,300 branches throughout the country...
Market share by province3, September 2011
Top 10 Banking Groups in Italy, June 2011
Ranking by
total assets
Total assets1 Employees1
(mn €)
(#)
Number of
branches1 (#)
1
Unicredit
2
Intesa SP
3
MPS
4
BP
5
UBI
6
BNL
7
BPER
8
BPM
9
Cariparma
10
Carige
9,518
7,290
2,955
918,772
160,562
644,673
101,169
243,892
31,239
138,238
19,209
132,751
19,546
98,125
14,654
59,354
12,057
776
56,030
8,438
905
52,211
9,049
42,374
6,013
2,104
1,886
870
1,3012
670
| Strettamente riservato e confidenziale
North-West
More than 8% (16)
Between 4% and 8% (10)
Between 2% and 4% (13)
Less than 2% (44)
Not present (27)
branches % on total
54
4.1%
North-East
377
29.0%
Centre
101
7.8%
South
335
25.7%
Islands
434
33.4%
Total
1,301
100.0%
(#) Number of province
1) Total including foreign branches (for BPER the Luxembourg branch)
2) Data as of December 2011: 1,305 branches
3) The analysis includes Banco Posta
Page | 8
Our customers
… with 60% of deposits in the Centre-South of Italy (mainly Retail)
Customers by segment (%, # ,000)
Institutional Counterparties
0.04%
Retail Affluent
(1)
9.7%
(214)
Corporate/ Large
Corporate
1.5%
(34)
Private
0.3%
(6)
Retail SME
12.8%
(283)
| Strettamente riservato e confidenziale
Share of business1 (%)
~2.2 mn
customers
52.3%
42.8%
47.3%
27.2%
11.0%
Retail Other
6.8%
(150)
Retail Mass Market
68.8%
(1,517)
Corporate
4.6%
Private
RetailMass
Market
RetailAffluent
RetailSME
Institutional
Counterparties
Direct deposits and loans by macroregions (%)
5%
12%
35%
39%
 Important contribution from the South and Islands
to Group overall deposits
7%
27%
10%
 Well positioned in traditional areas: 39% of loans
is concentrated in North-East Italy
20%
26%
19%
Direct deposits
Loans
North-West
North-East
Centre
South
Islands
1) Client loans in BPER/ Total client loans in the system
Page | 9
3-year business results and comparison with expected ones
| Strettamente riservato e confidenziale
Despite the context, the Group has maintained a good level of profitability
Net interests income and other banking income (mn €, %)
2,157
2,032
2,121
2,101
-1%
Provisions (mn €, %)
605
398
2009
2010
2011
Business Plan
2011 target
2009
Operating costs (mn €, %)
2010
350
368
2011
Business Plan
2011 target
-5%
Net profit and ROE (mn €, %)
%
1,254
1,250
1,243
1,265
4.3%
-2%
4.7%1
5.6%
6.5%
327
237
270
-12%
169
2009
2010
2011
Business Plan
2011 target
ROE
2009
2010
2011
Business Plan
2011 target
1) Net value of Arca Vita capital gain
Page | 10
Agenda
| Strettamente riservato e confidenziale
1. Outlook for the Group and main results
2. Business Plan 2012-2014

Cornerstones and actions

Economic and financial targets
Page | 11
Business Plan 2012-14
Cornerstones and actions
| Strettamente riservato e confidenziale
Streamline Group
2. Leverage recent investments
Optimize geographical coverage
and achieve cost savings
to generate growth and
1.
Business Plan 2012-2014
efficiency
“The new BPER Group: growth, value and
proximity in a new Landscape "
NOT-ORDINARY ACTIONS
ORDINARY ACTIONS
Group rationalization/
integration
Business governance
Commercial
5. Maintain
New governance
model
Capital and Risk
adequate
liquidity
Human Resources
Operational machine
strengthening
3. Strengthen
capital
Operations
4. Optimize risk
Page | 12
Not-ordinary actions
Guidelines and areas of intervention
| Strettamente riservato e confidenziale
Areas of intervention
Guidelines
Group
rationalization/
integration

4 mergers to simplify the organizational structure
and achieve cost saving opportunities

Creation of a “Grande BPER” as bank for the
Centre and the North of Italy

New organizational structure for the Parent Bank
to strengthen its guidance, control and risk
management role

New Network Bank models with a greater
emphasis on lending and commercial activities

BPER Services evolution by bringing in-house
services currently outsourced and centralizing
administrative activities currently performed at
branches level
■ Simplify the Group structure
■ Strengthen the Parent Bank's
guidance and control
■ Evolve Commercial Banks
structures
New governance
model
■ Empower Group's operational
machine
Operational
machine
strengthening
Page | 13
Group rationalization/ integration (1 of 4)
“Grande BPER” foundation
 Merger of Meliorbanca with
BPER and enhancement of
distinctive Corporate
Banking skills in the new
“Meliorbanca Division”
| Strettamente riservato e confidenziale
 Merger of Carispaq with
BPER and creation of the
“L‟Aquila Division”
2012
 Spin-off of Banca della
Campania's branches in Lazio
to BPER
 Transfer to BPER part of Banco
di Sardegna's branches in the
peninsula
2013
“Grande
BPER”
foundation
 Merger of Banca Popolare di
Aprilia with BPER
 Merger of Banca Popolare di
Lanciano and Sulmona with
BPER and creation of the
“Lanciano e Sulmona
Division”
Page | 14
Group rationalization/ integration (2 of 4)
“Grande BPER” main KPIs
| Strettamente riservato e confidenziale
The mergers will lead to a structural growth of BPER Bank, not affecting the overall productivity,
while assimilating BPER at the best practices in the personnel distribution between Centre and Network.
Number of branches (index number, %)
Personnel (index number, %)
+49%
+31%
149
100
Today Banca BPER
Tomorrow "Grande BPER"
Volumes1 per employee (index number, %)
-6%
Today Banca BPER
Tomorrow "Grande BPER"
Personnel distribution – Centre vs. Network (%)
Headquarter
100
Today Banca BPER
131
100
Local Areas
Branches
22.5%
21.9%
4.4%
4.4%
73.1%
73.7%
Today Banca BPER
Tomorrow "Grande BPER"
94
Tomorrow "Grande BPER"
1) Volumes (loans + deposits + indirect deposits)
Page | 15
Group rationalization/ integration (3 of 4)
The new Group's geographical coverage
| Strettamente riservato e confidenziale
New BPER Group‟s geographical coverage
From 8 to 5
Commercial
Banks
Organizational structure
Geographical coverage “as-is”
“Grande BPER” Parent Bank
Commercial Banks
Geographical coverage post not-ordinary actions
 BPER as principal bank in the
Centre-North of Italy thanks to the
creation of Local Divisions
 Banca della Campania and Banca
Popolare del Mezzogiorno to govern
our business in Southern Italy
 Optimization of our territorial
coverage in Sardinia
BPER
BPRA
BPAP
CRAQ
BPLS
BPMZ
BCAM
BSAR and/or BSSS
BPLS + CRAQ
BPER + BPAP + BSAR +
CRAQ + BSSS + BCAM
Not present
Page | 16
Group rationalization/ integration (4 of 4)
The new Group structure
“Target” Group structure
| Strettamente riservato e confidenziale
BPER Group personnel breakdown – Centre vs. Network2
NOT EXHAUSTIVE
= Parent Bank BPER
Board of
Directors
Headquarters + Local Areas
Managing
Director
Branches
29.0%
25.0%
71.0%
75.0%
“As-is”
“To-be”
General Manager
Commercial
Banks
Territorial
Divisions/
Meliorbanca
Division
BPER Business
Area1
 Parent Bank with 4 Divisions
 5 Commercial Banks
1) Includes Banca Popolare di Aprilia
Product
Factories
2) Includes all Group employees, excluding all product factories, BPER Services
and BSSS Consumer Division
Page | 17
New governance model (1 of 2)
“Grande BPER” Parent Bank - governance structure
| Strettamente riservato e confidenziale
Parent Bank organization chart
NOT EXHAUSTIVE
Board of Directors

Managing Director
Chief Lending
Officer (CLO)
o direct reporting of the Commercial Banks and
Local Divisions to the GM
o boosting the role of BPER„s GM through the
governance of the operational machine and
Group Human Resources
Chief Risk
Officer (CRO)
Chief Financial
Officer (CFO)
General Manager
Commercial
Division
Commercial
Banks
Local
Divisions

Creation of Chief Risk Officer, Chief Lending
Officer and Chief Financial Officer

Greater coordination of marketing and
commercial activities by creating the new role of
Group Commercial Manager

Greater business orientation by maintaining
Commercial and Lending functions within the
Local Divisions/ Business Area
Chief Operating
Officer (COO)
Human
resources
Business Area
BPER
Commercial
Commercial
Lending
Lending
Meliorbanca
Division
Strengthening Group’s guidance and control
ability by:
Product
Factories
Page | 18
New governance model (2 of 2)
Commercial Banks - organizational structure
| Strettamente riservato e confidenziale
Commercial Bank organization Chart
NOT EXHAUSTIVE
Board of Directors
 Greater business orientation through
the focus of Banks on commercial and
lending activities
General Manager
Local-Managers1
Human Resources
and Administration
 Faster decision-making and local
adoption of the Parent Bank's
guidelines, also thanks to the introduction
of key roles in core business areas
Business Area
Commercial
function
Lending
function
Local Areas
1) For all the functions that need to be replied at Commercial Bank level
Page | 19
Operational machine strengthening
Empower BPER Services structures
| Strettamente riservato e confidenziale
Rationale of the intervention
1
Exploit consolidated and specialized
expertises to evolve Groups
Operations
Empower BPER Services
A
Strengthening the
“Sardinian Hub”
2
Free up commercial time at branch
level by centralizing administrative
activities
B
Creation of
“Middle Office Structures”
3
Bring in-house activities currently
outsourced
Page | 20
Not-ordinary actions - personnel turnaround
(#)
| Strettamente riservato e confidenziale
 470 to strengthen the Group “Operational Machine”, of which about
50% to free up commercial time at branch level
 100 to strengthen business functions
 100 to strengthen Governance, Control and Staff functions
 80 to support branch network expansion
11,996
~ -1,200
11,546
Personnel turnaround guidelines:
~ +750
 Activation of legal and
contractual instruments
~ -450
Group leavers
 Release of resources with
pension rights
 Opportunities and
requirements for professional
flexibility
BPER Group
personnel
“as-is”
Released
personnel
Operational
requirements
BPER Group
personnel
“to-be”
 Geographical and/ or
intergroup mobility
Page | 21
Investment portfolio rationalization
Interventions and main expected results
Investment portfolio rationalization
| Strettamente riservato e confidenziale
Possible further simplification options
CURRENT SITUATION
230
Equity investments (#)
Book value (mn €)
1,003
Leasing
# Investments
with a high
probability of
being sold
# Investments
that could be
sold, but with
some difficulties
# Investments
involved in
simplification of
Group structure
32
44
5
TARGET SITUATION
Equity investments
(#, Δ # vs. current portfolio)
Book value
(mn €, Δ mn € vs. current portfolio)
Impact on capital
149
(-81)
Real estate
assets
 Further leasing sector
rationalization
 Valorisation of real
estate assets by
establishing a Group
property fund
953
(~ -50 mn €)
+2 bps on
Core Tier 1
Page | 22
Ordinary actions: 5 areas, 17 tracks and 36 projects
Master Plan
| Strettamente riservato e confidenziale
Areas
BUSINESS PLAN 2012-2014
Tracks
1
2
Commercial
3
Capital and Risk
4
Human resources
5
Operations
Business
governance
Commercial
performance
optimization
Basel II
HR
development
BPER Services
evolution
Group
harmonization
Business model
evolution
Efficient
management of
Group NPLs
Training and
communication
Paperless
(Green Bank)
Internal control
system
Multi-channel
strategy
enhancement
New Risk
Adjusted logics
and tools
Personnel and
cost
management
Cost reduction
Other projects
Sustainability
and innovation
strengthening
Liquidity
management
11 projects
7 projects
5 projects
4 projects
9 projects
Page | 23
1) “Commercial” area
4 tracks and 11 projects: ~28 mn € of investments1
| Strettamente riservato e confidenziale
Major initiatives
Commercial
performance
optimization
Commercial
Business model
evolution
Multi-channel
strategy
enhancement
Sustainability
and innovation
strengthening
 New advanced pricing logics and tools
 Group‟s commercial offer development through:
o extension of value proposition to non-banking solutions and services
o rationalization of the Group's current products catalogue




Implementation of the new customers service model
CRM strengthening and introduction of segmentation models based on customers value
Development of high value-added services
Customer satisfaction improvement by adopting rules for experience and service
excellence
 Implementation of the new integrated multichannel model:
o new direct channels renewal
o introduction of new advanced ATMs
o creation of new Group Contact Center (inbound and outbound)
o introduction of logic and tools for proactive commercial proposals
o strengthening Marketing & Digital Communication to support acquisition
 Branches rationalization and new concept introduction
 Enhancement of existing customer base by applying “lifetime value”
profitability models
 Acquisition of new customer targets
 Set up of the “Innovation Factory” to sustain Group renewal
 Brand, Identity and Reputation
+1.2 pips
acquisition rate at 2014
+0.8 pips
retention rate at 2014
+7%
mass market cross
selling at 2014
~250 FTEs
to strengthen
branches network
1) Total direct costs and amortization charges for the 3 years (2012-2014)
Page | 24
1) “Commercial” area
Branches optimization/ rationalization
Branch Network “as-is”
| Strettamente riservato e confidenziale
“2 x 1” Programme
Branch Network “to-be”
 25 new branches opening primarily on 12
provincial capitals
 50 potential closures of non-performing
branches, ~2 for every new branch opening
New openings
Peninsula rationalization
 Spin-off of Lazio branches from Banca della
Campania to BPER
 Transfer to BPER of part of Banco di Sardegna
and Banca di Sassari's peninsula branches
 Relaunch/ optimization of 15% of the actual
network
“Island” Mission
 ~15% of non-performing branches
# branches
% on total
Openings
20-25
~2%
 ~30 peninsula provinces not covered
 Branch swaps between Banco di Sardegna and
Banca di Sassari
 Branches of Banco di Sardegna and Banca
di Sassari overlaps in the Sardinian
provinces
 Organization efficiency programme aimed at
branches with high operating costs
Closures
40-50
~4%
 Potential closure of overlapping branches
Swap/Transfer
40-50
~4%
150-200
10-15%
 35 Sardinian banks branches in the
peninsula
Optimization
Note: Branch plan subject to authorization by the Bank of Italy
BPER
BPRA
BPAP
CRAQ
BPLS
BPMZ
BCAM
BSAR and/or BSSS
BPLS + CRAQ
BPER + BPAP + BSAR +
CRAQ + BSSS + BCAM
Not present
Page | 25
1) “Commercial” area
New customer Business Model
| Strettamente riservato e confidenziale
New customer Business Model
1.
PROCESSES
PROCESSES
3.
RELATIONSHIP
Shift from a
transactional approach
Client
2.
to a relational
approach
PRODUCTS
Enabling elements
 Enhance branch Manager centricity
 New branch roles
 Commercial behaviour “best of breed”
boost
 New branch organizational models:
o 4 dimensional clusters (small,
medium, large, “extra”)
1
PROCESSES
2
3
 Definition and introduction of new customer service models
differentiated by type of needs
 Creation of branch micro-portfolios and assignment of
specific commercial relationship Managers
PRODUCTS
 Identification, for each business model, of the best set of
products to serve the client
RELATIONSHIP
 Definition of roles and activities required to boost client
relationship
o segment differentiation
 New portfolio criteria based on
branch size
Page | 26
1) “Commercial” area
The new multi-channel strategy in 7 pillars
| Strettamente riservato e confidenziale
New Internet Banking for Individuals and
SME customers renewed and upgraded with
advanced features
INTERNET
BANKING
x2 number of features
New commercially-oriented sites of all
Group banks, in addition to the Group's
new institutional site
New Mobile Banking
platform
available
INSTITUTIONAL
SITES
MOBILE BANKING
Group institutional website
commercially-oriented
websites
9
16 features, 3 new Apps
Multichannel
approach
ONLINE OFFER
CONTACT
CENTRE
~20 dedicated specialists
15+ new inbound and
+40%
3 new products managed
expected increase in
operations through
direct channels
completely online
outbound functionalities
New Group’s online offer to exploit
the potential of new direct channels
and enable customer acquisition
New Group Contact Centre,
integrated with CRM to manage
inbound and outbound contacts
BRANCH
CONCEPT
ADVANCED ATMs
50 branches involved
100 new advanced ATMs in
~
New branch concept (new layout, more
automation, branch as a “shop”, ...)
the next 3 years
New advanced ATMs to push
self-service activities
Page | 27
2) “Capital and Risk” area
4 tracks and 7 projects: ~10 mn € of investments1
| Strettamente riservato e confidenziale
Major initiatives
 Activation of validation process of internal models for credit risk within the
time horizon of the Plan
Basel II
 Evolution of the calculating method for the operational risk capital
requirement (TSA)
Capital and Risk
 Activation of a framework to manage reputational risk
~80 bps CT1
adoption of credit risk
and TSA internal models
 Industrialization and informatization of non performing loans management
Efficient
management of
Group NPLs
 Analysis and implementation of potential specific initiatives / not-ordinary actions
to reduce non performing loans stock
 Direct costs optimization related to non performing management loans
(internal and external legal fees)
New Risk
Adjusted logics
and tools
Liquidity
management
~6 mn €
lower legal expenses
 New framework to assess consolidated and individual risk propensity
 Risk Adjusted metrics evolution
 New department/office to ensure continuous RWA optimization
~2.3 bn €
RWA lower absorption
 Strengthening rules and processes for Group liquidity management
1) Total direct costs and amortization charges for the 3 years (2012-2014)
Page | 28
2) “Capital and Risk” area
Focus on efficient management of Group NPLs
| Strettamente riservato e confidenziale
Non performing loan management “to be” model
Non performing loan amount
A “SMALL” NON PERFOMING
Objectives
■ Improve management by:
o improving recoveries efficacy
o improving handling efficiency
o reducing stock
■ Contain external legal
assistance costs
■ Release personnel thanks to
the centralization of stock
management and specialization
by loan type
LOANS < 25 k€
BPER
Group
Outside
companies
B NON PERFOMING LOANS
BETWEEN 25 k€ AND 1 mn €
Bank/Division
Litigation offices
Group
Litigation
Function
C “LARGE” NON PERFOMING
LOANS > 1 mn €
Group
banks
Service
Action
 Non performing loans
sale/outsourcing
 New Group Litigation
function to coordinate
local Litigation Offices
activities
 Non performing loans
ownership transfer to an
internal vehicle company
and centralization of non
performing loans
management at a Group
service company
 Standardization
Litigation management
 Group-wide
standardized criteria
definition
 Litigation management
process standardization
and industrialization
 Portfolio segmentation
 Employees
professionals
specialisation
Expected Benefits
 Internal structures
streamline
 Closing times reduction
 % recovery increase
Page | 29
3) “Human Resources” area
3 tracks and 5 projects: ~5 mn € of investments1
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Major initiatives
 Identification and exploitation of “high potential” profiles
 Values, behaviors and competencies standardization
 Development of excellent competencies on high responsibility roles
 “Personnel engagement” improvement trough:
Human Resources
HR
Development
o enhancement of Corporate Welfare policies by developing an employees
dedicated offer
~5 mn €
lower personnel
accessory costs in three
years
o improvement in working conditions of female staff also through Work life
Balance and Diversity Management policies
o reinforcement of the relationship with Unions inspired by principles of fairness
and respect
o specific training for personnel reconversion/ requalification
Training &
Communication
 Development of internal communication tools in order to increase
employees involvement/ alignment to corporate objectives
 New Group Intranet as a unique access point for all corporate information
~1,200
employees to relocate/
re-qualify
~5%
personnel gross cost
synergies2
Personnel &
cost
management
 Activation of specific program for the management of Employees turnaround
 Personnel management and cost control enhancement
1) Total direct costs and amortization charges for the 3 years (2012-2014)
2) Net value without considering costs generated by employees turnaround
Page | 30
4) “Operations” area
3 tracks and 4 projects: ~5 mn € of investments1
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Major initiatives
Operations
BPER Services
evolution
Paperless
(Green Bank)
Cost reduction
 Branch processes additional streamlining and “commercial time” release:
o operational processes simplification
o technology infrastructure upgrade
o administrative activities centralization
 Expansion of scope of activities in charge of BPER Services' Operations
Division
 “Paperless” solutions development:
o biometric autographed signatures recognition device introduction in
branches
o negotiated cheques dematerialization
o Headquarters‟ paper-intensive processes dematerialization
o development of advanced knowledge management/ authentication
o common processes rationalization (e.g. PEC, ...)
 Cost Reduction initiatives:
o strengthening the expenditure management at Group level
o Suppliers rationalization
o Group-wide long-term partnerships definition
o specific products prices renegotiations
~400 FTE
commercial time release
~30 branch
processes
to be streamlined
~13 expense
categories
to be focused on
specific initiatives
~-20 mn €
target other
administrative expenses
reduction
1) Total direct costs and amortization charges for the 3 years (2012-2014)
Page | 31
4) “Operations” area
Focus on Cost Reduction track
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Consulting and professional services
 New selection and suppliers
assessment criteria
 Legal consultants rationalization
 New criteria for the adoption of
external consultants
-8.0%
costs in 2014
Procurement office
 Group-wide suppliers prices
renegotiation
 Standardization and creation of a
Group-wide catalogue for procured
products and promotional materials
Facilities service
“Cost Reduction”
programme
 Suppliers rationalization trough the
definition of long-term partnerships
 Standardization of logos/ furnishings
used among branches and definition of
regulations for standard equipment
-7.4%
-5.4%
costs in 2014
costs in 2014
Other expenses1
 Long-term contracts definition
 Number of suppliers rationalization
Maintenance and properties rental
 Office space and properties
rationalization, considering investments/
disposals opportunities
 Rental contracts market value
realignment
-8.1%
-5.7%
costs in 2014
costs in 2014
1) Includes: information and enquiries, security, transportation and counting of cash, information assets, computer services and advertising
Page | 32
5) “Business governance” area
3 tracks and 9 projects: ~7 mn € of investments1
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Business Governance and Supervision
Major initiatives
Group
harmonization
 Group-wide documents harmonization (Knowledge Management) and IT
tools improvement
 Centre/Network right-sizing models evolution in order to rationalize costs
and branches organization
Internal control
system
 AML (Anti Money Laundering) internal control systems empowerment through
detection tools introduction
 Remote control systems empowerment
 Operating limits monitoring systems empowerment
Other projects
 Compliance development (proactive and preventive approach)
 Activation of a new IT platform to monitor and control Group's financial
information
1) Total direct costs and amortization charges for the 3 years (2012-2014)
Page | 33
Actions plan for Banco di Sardegna and Banca di Sassari
| Strettamente riservato e confidenziale
Actions plan for Banco di Sardegna and Banca di Sassari
1
Banks
streamlining and
Operational
Machine
empowerment
2
Branches
rationalization
 Interventions to rationalize the organizational structure
of Banco di Sardegna and Banca di Sassari
 BPER Services' “Sardinian Hub” strengthening
 “Peninsula” Mission:
o Partial transfer of the “peninsula” branches to BPER
 “Island” Mission:
o branches “swap” between Banco di Sardegna and
Banca di Sassari (apx. 10% of Sardinia branches), in
order to reduce/eliminate overlaps
o local areas re-definition
o “new branch” concept introduction to enable small
branches efficiency
BSAR Business Plan
minimum objective
Net profit
2014
>50 mn €
3
Operating costs significant
reduction
 Administrative costs containment interventions
 Property assets enhancement/rationalization
Page | 34
Agenda
| Strettamente riservato e confidenziale
1. Outlook for the Group and main results
2. Business Plan 2012-2014

Cornerstones and actions

Economic and financial targets
Page | 35
Forecast 2012/ 2014: economic scenario
| Strettamente riservato e confidenziale
2012e
2009
2010
2014e
2013e
2011
Prometeia Confindustria O.E.C.D. Prometeia Confindustria O.E.C.D.
Prometeia
Change in %
GDP
-5.1
1.4
0.3
-1.7
-1.6
-0.5
0.2
0.6
0.5
1.5
Inflation
0.8
1.5
2.8
2.6
2.2
1.9
2.7
2.1
1.2
1.6
General prod. price index
-5.4
3.1
5.0
2.6
-
-
1.0
-
-
0.8
Industrial production
-18.2
6.5
0.1
-4.1
-
-
0.8
-
-
2.7
Unemployment rate
7.8
8.4
8.2
8.9
8.9
8.3
9.2
9.0
8.6
8.8
Household consumption
-2.0
1.1
0.3
-2.2
-1.0
0.2
-1.0
0.4
0.2
1.2
Exports of goods and
services
-19.1
12.0
6.2
1.2
0.2
1.7
3.6
3.6
4.2
4.0
BCE interest rate1
1.2
1.0
1.3
0.8
-
-
0.5
-
-
0.5
3m Euribor interest rate
1.2
0.8
1.4
1.0
-
-
1.0
-
-
1.2
10y BTPs interest rate
4.3
3.9
5.3
5.6
-
-
5.6
-
-
5.5
527
~300
-
-
~300
-
-
~300
Year-end figures (%, bps)
10y BTP-Bund spread
Forecast figures
1) Finance Department forecast
2) Source: Prometeia “Rapporto di Previsione”, January 2012; Confindustria “Scenari economici”, December 2011; O.E.C.D. “Economic Outlook”, December 2011
Page | 36
Forecast 2014/ 2016: P&L and main KPIs
(€ mn, %, pips)
| Strettamente riservato e confidenziale
2011
Ordinary
Gross margin (NII + NCI)
Not-ordinary
items
2014e
Cagr2 (%)/
Δ (pips)
2011-2014
2016e
Cagr (%)/
Δ (pips)
2014-2016
Total
2,024
2,024
2,197
2.8%
2,336
3.1%
Dividends & net profit from fin. activities
77
77
38
-21.0%
65
31.2%
Net interest & other banking income
2,101
2,101
2,234
2.1%
2,401
3.7%
Net provisions
-350
-350
-364
1.3%
-295
-10.1%
Operating costs
-1,260
18
-1,243
-1,270
0.3%
-1,277
0.3%
Non-operating result
-1
-107
-109
0
n.s.
0
n.s.
Profit before taxes
489
-90
400
600
7.0%
829
17.6%
Net profit
272
-35
237
348
8.5%
481
17.6%
Minorities
-23
-23
-32
12.3%
-44
17.6%
Net profit - Parent Bank
249
215
315
8.2%
436
17.6%
-35
Cost/income ratio1
62.3%
61.4%
57.8%
-4.5 pips
54.7%
-3.1 pips
Cost of credit
0.71%
0.71%
0.67%
-0.04 pips
0.50%
-0.17 pips
ROE - Parent Bank
7.5%
6.4%
7.7%
0.2 pips
9.5%
1.8 pips
ROTE - Parent Bank
8.5%
7.3%
8.5%
0.0 pips
10.4%
1.9 pips
Loans
48,186
54,577
4.2%
58,910
3.9%
Direct deposits
48,580
53,830
3.5%
57,702
3.5%
Forecast figures
1) Operating costs/ gross margin
2) Calculated considering 2011 ordinary results base year
Page | 37
Forecast 2014: direct deposits and loans
| Strettamente riservato e confidenziale
Direct deposits (mn €, %)
CAGR 2011/2014
+ 3.5%
+1,300
53,830
+4,950
48,580
-1,000
2011
Public treasuries
shortfall required
by “Manovra
Monti”
■ Direct deposits and loans balanced
growth (not considering public
treasuries shortfall due to “Manovra
Monti”)
Inertial
growth
BP 12-14
growth
2014e
■ The 2014 expected loans/ deposits
ratio is apx. 101.3% compared with
99.2% at the end of 2011
■ Coverage of non performing and
watch list loans expected to grow
slightly
Loans (mn €, %)
CAGR 2011/2014
+ 4.2%
+5,791
+600
54,577
Inertial
growth
BP 12-14
growth
2014e
■ Without considering specific actions to
reduce NPL stock, the weight of non
performing/ watch list loans to total
loans will remain still high at the end
of the 3 years
48,186
2011
Page | 38
Forecast 2014: main economic figures (1 of 2)
Focus on revenues and cost of credit
| Strettamente riservato e confidenziale
NII + NCI (mn €, %)
CAGR 2011/2014
+ 2.8%
+80
2,197
■ Good growth in NII and NCI leveraging revenue
synergies expected from the Business Plan
initiatives, which could almost double the inertial
growth
■ Gradual release, with a negative sign, of the
Fair Value Option, which had generated a
significant benefit in 2011
+93
2,024
■ Slight improvement in the cost of credit in 2014
2011
Inertial
growth
Revenue
synergies
2014e
Finance (mn €, %)
Cost of credit (%)
CAGR 2011/2014
+ 20.6%
Dividends
76
+7
+146
Δ 2011/ 2014
- 0.04 pips
FVO
Trading, plus,
minus
0.71%
0.72%
0.71%
2011
2012e
2013e
0.67%
38
+5
+63
-30
-77
2011
2014e
2014e
Page | 39
Forecast 2014: main economic figures (2 of 2)
Focus on costs and cost/ income
| Strettamente riservato e confidenziale
Other administrative costs (mn €, %)
■ Decrease in administrative costs despite the
efforts required by the Business Plan 2012-14
CAGR 2011/2014
- 0.33%
+20
-45
■ Slight increase in payroll costs due to one-off
costs and turnover incentives
+20
501
2011
496
Inertial
growth
BP 12-14
growth
Cost
synergies
■ Improvement in cost/income ratio by 4.5 pips in
the three years (expected 3.1 pips additional
reduction by 2016)
2014e
Payroll costs (mn €, %)
Cost/income ratio1 (%)
CAGR 2011/ 2014
+ 0,97%
+30
Δ 2011/ 2014
- 4.5 pips
-40
+33
62.3%
63.1%
62.1%
20112
2012e
2013e
57.8%
809
786
2011
Inertial growth
Personnel
turnaround
costs
Cost
synergies
2014e
2014e
1) Operating costs/gross margin
2) Data for 2011 is based on ordinary P&L
Page | 40
Forecast 2014: “Gross” and “Net” synergies
Breakdown by type and enabling action (mn €)
| Strettamente riservato e confidenziale
Synergies in 2014 by type and enabling actions
Ordinary actions
40
Not-ordinary actions
165
20
30
45
115
32
80
13
Revenue
synergies
Cost
synergies
Personnel cost
synergies
Total Gross
synergies
BP 12-14
projects
implementation
costs
Personnel
turnaround costs
Total Net
synergies
Page | 41
Forecast 2014: Revenue and Cost synergies
Breakdown by project (€ mn, %, values in 2014)
| Strettamente riservato e confidenziale
Revenue Gross synergies in 2014
80
19
%
17
Impact on
Net interests and
other banking
income 2011
16
10
Total revenue
synergies
8
10
Business model
evolution
Multi-channel
strategy
enhancement
Development of high
value-added services
Advanced pricing
management
Enhancement
of existing
customer base
+0.93%
+0.81%
+0.76%
+0.47%
+0.38%
+3.81%
Other
+0.46%
Cost Gross synergies in 2014
85
40
%
Impact on
Operating Costs
2011
18
13
6
Total cost
synergies
-6.84%
Personnel
cost synergies
-3.22%
3
2
2
1
Paperless
Cost Reduction
New Group
structure
Efficient
management of
Group NPLs
Network
rationalization
HR Cost
Management
Evolution of
Group
Operations
-1.46%
-1.06%
-0.49%
-0.20%
-0.16%
-0.12%
-0.11%
Page | 42
Investments and direct costs in the 3-year period 2012-14
Breakdown by year and area (mn €)
| Strettamente riservato e confidenziale
Breakdown costs/ investments1 by year and area
Costs/ investments by year
Costs/ investments by area
144
50
89
70
28
10
5
Capital
and Risk
Human
Resources
24
2012e
2013e
2014e
Total
2012-2014
Not-ordinary Commercial
actions
5
7
Operations
Business
governance
1) Costs + amortization charges per year
Page | 43
Forecast 2014: Core Tier 1 Ratio
| Strettamente riservato e confidenziale
Core Tier 1 Ratio evolution (%)
0.80
0.21
7.83
0.13
0.21
9.18
8.38
8.40
7.60
7.10
2011
Inertial
Not-ordinary
actions
Ordinary
actions
Sub-total
2014e
Basel II
2014e
Common equity ratio (%)
Page | 44
Contacts for Investors and Financial Analysts
| Strettamente riservato e confidenziale
Gilberto Borghi
Alessandro Simonazzi
Head of Investor Relations
Head of Planning & Control
Via San Carlo, 8/20
Via San Carlo, 8/20
41100 Modena - Italy
41100 Modena - Italy
Ph. +39 059 2022194
Ph. +39 059 2022014
e-mail: gilberto.borghi@bper.it
e-mail: alessandro.simonazzi@bper.it
Page | 45