Credito Valtellinese banking Group adopts consolidated draft balance sheet as at December 31, 2003

Consolidated results

Sondrio, March 16, 2004 - At today's meeting, the Board of Directors of Credito Valtellinese Scarl, parent company of the banking Group with the same name, has examined and adopted the consolidated draft balance sheet and the balance sheet of the bank for the year ended December 31, 2003.

The year recorded very positive performances of all balance-sheet aggregates and economic indicators. Particularly, assets under administration and proceeds recorded significant increases.

Below is an outline of consolidated operating results as at December 31, 2003.

• the Group recorded increases of 10.7 percent in direct deposits, of 10.9 percent in indirect deposits, of 11.5 percent in sums receivable from customers;
• the Group's ordinary profit stood at € 65 million (+2.9%), while net profit amounted to 15.8 million euros (+ 6.8%);
• the number of branches was increased up to 308
• the number of banc@perta users, i.e. customers being able to access online banking services offered by the Creval Group, is now over 150,000

During the year, the Group has been committed to improving the range of services for its clientele by adopting a multi-channel strategy, which combines the traditional channel used to reach customers (i.e. branch network) with the new channels and new products made available by the Internet.

As at December 31, 2003, direct deposits from customers amounted to 8,699.8 million euros while indirect deposits stood at 9,426.3 million euros, of which 4, 648 million pertinent to assets administrations (+ 5.5%), 3,912.1 million pertinent to funds (+ 13.8%) and 866.2 million to insurance deposits (+ 33.1%).
Total deposits amounted to 18,126.1 million euros, posting a growth of 1,769.5 million euros (+ 10.8%) over the previous year.

Investments - typically consisting of credit facilities provided to small and medium-sized enterprises and individuals - recorded a growth of 11.5 percent. As a result, sums receivable from customers increased from 6,664.5 million end of December 2002 to 7,432.6 million euros end of December 2003.

Below are details of the consolidated profit and loss account of the Creval Group as at December 31, 2003.

The interest margin was up 1.4 percent, from 247.2 million to 250.7 million euros.

Proceeds from services - consisting of net commissions and other net income - recorded an increase of 9.9 percent, from 155.3 million to 170.7 million euros. Profit on financial transactions amounted to 13.8 million euros (+ 11.6%).

Such positive performances resulted in an increase also in the operating margin, which was up 3.8 percent, from 428.3 million to 444.7 million euros.

Operating costs recorded an increase of 2.4 percent, totalling 340.6 million euros. Particularly, personnel expenses increased from € 168 million to € 174.2 million (+ 3.7%) due to an increase in the number of employees in the staff (3,000 people working with the Group at the end of the year). Other administrative expenses increased to € 118.2 million (+ 0.7%). Value adjustments in respect of tangible and intangible fixed assets were increased to € 48.1 million (+ 2.1%).

The gross operating income rose by 8.8 percent to € 104.2 million compared with € 95.7 million end of 2002.

Value adjustments and provisions rose by 20.2 percent to € 39.2 million, of which 32.9 million pertinent to value adjustments in respect of credits.

The amount of extraordinary profits was € 1 million, compared with € -0.5 million end of the previous year. Gross profit for the year ended December 31, 2003 totalled € 66 million, compared with € 62.7 million for the previous year (+5.3%).

Taking account of taxes (€ 43.6 million), profit due to third parties (€ 4.5 million) and an increase in the provision for covering risks associated with banking activities (€ 2 million), consolidated net profit for the year amounted to € 15.8 million, posting a growth of 6.8 percent over the previous year .

RESULTS OF THE PARENT COMPANY CREDITO VALTELLINESE:
INCREASES IN ASSETS UNDER MANAGEMENT AND ECONOMIC INDICATORS. DIRECT DEPOSITS: + 11.5%; INVESTMENTS: + 9.9%; NET PROFIT: + 21.7%; DIVIDEND: 0.40 EUROS PER SHARE; DIVIDEND YIELD: 4.68%

Also for the parent company Credito Valtellinese, the year ended December 31, 2003 recorded strong increases in all balance-sheet aggregates, as well as in the main economic indicators, and a further increase in profitability.

Below is an outline of operating results as at December 31, 2003.

• net profit was up 21.7 percent over the previous year;
• direct deposits and investments increased by 11.5 percent and 9.9 percent respectively;
• indirect deposits were up 9.2 percent;
• the number of banc@perta users is now over 45,000 (+22%)

End of December 2003, direct deposits amounted to 3,401.2 million euros, compared with 3,051.2 million at the end of the previous year (+11.5%)
Indirect deposits increased from € 3,299.1 million to € 3,601.4 million, posting a growth of 9.2 percent over the previous year. This aggregate was made up of assets administrations (50.5%), funds (39.3%) and insurance deposits (10.2%)

Total deposits amounted to 7,002.6 million euros, posting a significant increase of 10.3 percent over the previous year (€ 6,350.3 million).

Sums receivable from customers amounted in all to 2,955.4 million euros (+9.9%).

Below are details of the profit and loss account of Credito Valtellinese as at December 31, 2003.

The interest margin was up 3.9 percent, to 87.9 million euros.

Proceeds from services - consisting of net commissions and other net income - recorded an increase of 5 percent, attaining 43.9 million euros. Profit on financial transactions amounted to 13.8 million euros (+ 11.6%).
The operating margin - being the sum total of the interest margin, proceeds from services , dividends collected over the year and profit on financial transactions - amounted to 168.6 million euros (+ 8.9%).

Administrative expenses amounted in all to 91.3 million euros, with an increase of 8.9 percent mainly due to an increase in the number of branches. Particularly, personnel expenses amounted to 41.8 million euros (+ 6.9%) Other administrative expenses were up 10.7% percent.

The gross operating income rose by 9.8 percent to € 70.1 million.

Taking into account provisions and value adjustments for € 12.2 million (substantially unchanged over the previous year), ordinary profits amounted to 57.8 million euros (+ 15.8).

The amount of extraordinary profits was € 1.6 million. Taking into account taxes on income (€ 27.3 million), net profit for the year amounted to 32.1 million euros, posting a growth of 21.7 percent over the previous year.

The Board of Directors also resolved on the distribution of profits by allocating € 9.4 million to reserved surplus, € 800,000 to a provision for charity and by fixing a dividend of 0.40 euros per share, the same amount as last year but referring to a greater number of shares (54,577,884 compared with 51,418,213 shares making up the capital base of Credito Valtellinese as at December 31, 2002); the dividend yield is 4.68%.

The combined ordinary and extraordinary meeting of Credito Valtellinese shareholders will be held on April 17, 2004. Among the other things to be submitted to approval by the shareholders there are changes in the Articles of Association of the company.

The share will be quoted ex-coupon as from April 26, 2004, while the dividend will be paid with effect from April 29, 2004.

Consolidated draft balance sheet and profit and loss account of the Creval Group and of the parent company Credito Valtellinese as at December 31, 2003.
(Both are currently being audited)