Capital increase of Credito Valtellinese: fixed rate of return on convertible bond issue

Sondrio, Tues. January 20, 2004 - Following the mandate received from the shareholders in the General Meeting held on November 15 last year, the Board of Directors of Credito Valtellinese has fixed the annual pre-tax nominal rate of return on convertible bond issue 'Credito Valtellinese 2004-2007' between 2.50% and 3.00% .

The precise rate of return on bonds will be fixed during the pre-flotation period and announced to investors in accordance with regulations in force.

The Extraordinary General Meeting of the Shareholders held on November 15, 2003 resolved on a capital increase plan through issue of new fully paid ordinary shares and a convertible bond issue.
The capital increase is scheduled approximately for March 1, 2004. The main terms of the share capital increase are as follows:

1. A new ordinary share is being offered to holders of Credito Valtellinese shares for every 8 shares held. Issue price is € 6.90, of which € 3.90 as paid-in surplus. Start of dividend entitlement on January 1, 2004.

2. As regards the bond issue, below are the main characteristics:
   Three-year convertible bond issue, of which total amount is around € 293,665,000. Bonds will be offered to holders of Credito Valtellinese shares on the basis of 1 bond (nominal value € 1,000) for every 200 shares held;

On November 15 last year, the shareholders of Credito Valtellinese also approved a further capital increase of € 293,665,000 through issue of 41,406,765 shares (nominal value € 3) to be offered to bondholders.

AMORTIZATION SCHEDULE FOR EACH CONVERTIBLE BOND (NOMINAL VALUE € 1,000)

Years	Tranche on maturity date	Number of newly issued shares
2005	€ 300	43
2006	€ 300	43
2007	€ 400	55
Total	€ 1,000	141