CREDITO VALTELLINESE: NET PROFIT INCREASE AND DIVIDEND CONFIRMATION

During the next General Meeting, a capital increase in Euro will be suggested to the shareholders.

Net profit increased by 4.1 per cent and attained 26.1 billion - thanks to an increase in net incomes from services (54.4 billion, +23.4%), which compensate the spread-cut - and the dividend was confirmed in L.630 per share. Dividends will be paid on 35,040,510 outstanding securities at the end of the year. Outstanding securities saw a 10.5 % increase, namely 3.3 million securities, as a result of "Credito Valtellinese 7% 1995-1998" bond issue nearly total conversion and a considerable exercise of the warrants.

Such are the most important results of Credito Valtellinese's 1997 asset and liability statement, which the Board of Directors approved during the last meeting.

In order to exactly interpret 1997 final data, we report that Credito Valtellinese transferred its 14 counters in the provinces of Milan and Rome to Credito Artigiano, while the parent bank acquired four Credito Artigiano counters in the provinces of Como, Lecco and Varese.

According to such considerations, we point out that data provided are not comparable to 1996 results, because the above-mentioned transaction meant, for both banks, exchanging assets and liabilities that are very different from one another, as regards quantity.

Direct incomes from customers, in spite of the counter transfer, increased by 1.6 per cent, attaining 3,468 billion; economic input decreased by 8.9 per cent, totalling 2,313 billion while indirect incomes decreased by 5.4 per cent, totalling 3,798 billion.

As far as the profit and loss account is concerned, the positive performance of net incomes allowed the bank to maintain an intermediation margin substantially similar to 1996 (256.8 billion), making a recovery for the interest margin decrease (155.2 billion; -4.7% if compared to 1996).

The careful policy aimed at reorganizing the business production processes, consequently recovering and improving the operating performance and the organizing flexibility, allowed to keep the administrative costs increase around 3.9 per cent (159.3 billion).

Profit from ordinary activities decreased by 3.3 per cent and total 62.5 billion. Profit before taxes - calculated after entering extraordinary incomes amounting to 68 billion (65 of which concerning profits from the counter transfers to Credito Artigiano) and extraordinary charges amounting to 4.2 billion - totalled 126.3 billion (+ 102.5 %). After deducting taxes on income amounting to 50.2 billion (+34.6 %) and after appropriating surplus reserves for general banking risks amounting to 50 billion, net profit totals 26.1 billion (+4.1%).

After deducting taxes on income amounting to 50.2 billion (+34.6%) and appropriating 50 billion lire for general banking risks, net profit increased by 4.1 per cent, attaining 26.1 billion.

In compliance with the Consob instructions, dividends will be paid starting from May 4 1998.

The General Meeting second convocation will be called on April 18 (the first convocation will be called the day before). In addition to approving the 1997 asset and liability statement, it will also deliberate the capital conversion into Euro, a capital increase through a subordinate convertible bond issue in Euro and a few changes in its articles of association.

The Board of directors also approved Credito Valtellinese banking Group's consolidated balance sheet.

The Group both direct and indirect incomes from customers increased by 10 per cent in comparison with 1996 and touched to 15,000 billion lire (exactly 14,980).

In particular, direct incomes totalled 6,797 billion (+11.4%), while the customers' financial savings attained 8,183 billion (+8.9%), 3,206 of which concerned assets administrations (+41.9%).

At the end of the year, the Group's economic input totalled 4,301 billion. Economic input also include Bancaperta's financial leasing, which totalled 981 billion (+7.2%) at the end of 1997.

The general contraction of the spreads and the income and input progress allowed to keep the interest margin decrease around 5.2 per cent (229 billion), while the intermediation margin - thanks to an increase in net commissions from services (12.5%, from 74.9 to 84.3 billion) - decreased by 0.9 per cent (698.3 billion).

Profit from ordinary activities decreased by 21.5 per cent (67.5 billion), gross profit - obtained after entering 0.3 billion concerning the extraordinary management (-1.7 billion in 1996) - totalled 67.8 billion (-19.6%), while net profit increased by 30.7 per cent, attaining 22.7 billion.