Credito Valtellinese banking Group DOUBLES CONSOLIDATED PROFIT FOR THE FIRST HALF OF THE YEAR.

During its last meeting, Credito Valtellinese Board of Directors examined and confirmed the Group consolidated half-year report and the Parent Bank operating accounts on June 30 1998.

Credito Valtellinese banking Group half-year consolidated results show a considerable improvement in the company performance. Credits to customers amounted to L. 4, 658 billion (+10.5%), direct incomes from customers attained L. 6, 980 billion (+10.7%), while indirect incomes attained L. 8, 842 billion (+9.3%), 4, 181 of which (+44.7%) concern savings management.

As regards the profit and loss account, on June 30 1998 the intermediation margin attained L. 363 billion, increasing by 12 per cent in comparison with June 1997. In particular, net commissions amounted to L. 57 billion (+58.3%). As regards negative nominal elements, staff expenses remained essential unchanged, while the other operating costs increased by 2.9 per cent, from L. 54.6 billion to L. 56.2 billion.

Profit from ordinary activities - after entering value adjustments in respect of fixed assets amounting to L. 133.7 billion and value adjustments in respect of credits and appropriations amounting to L. 22.7 billion - totalled L. 51.6 billion, increasing by 98.3 per cent in comparison with the first half of 1997. Net profit for the period, after deducting taxes on income amounting to L. 35.4 billion, totalled L. 15.2 billion (+115.7%). The consolidated profit is inclusive of Banca Popolare di Rho's results.

As regards Credito Valtellinese operating accounts, the half-year results of the Parent Bank were much influenced by the commercial network reorganization, which involved with it the transfer of 14 counters from Credito Valtellinese to the controlled company Credito Artigiano and the acquisition of 4 Credito Artigiano branches.

Direct incomes from customers attained L. 3, 503 billion, in comparison with L. 3, 563 billion in the first half of 1997, with a slight decrease of 1.7 per cent, while investments attained L. 2, 460 billion (-7.2%). Indirect incomes amounted to L. 4, 174 billion, thanks to the positive performance of savings administrations (L. 2, 343 billion), decreasing however by 7 per cent after the commercial network reorganization. After the successful bond issue "Credito Valtellinese 7% 1995-1998 convertible" cum warrant, the Bank capital increased by 25.1 per cent, attaining L. 728 billion.

Bank commissions from services positively influenced the intermediation margin. The intermediation margin, in fact, increased by 4 per cent and the interest margin incidence on it decreased from 63.2 to 58.9 per cent.

Operating costs decreased by 5.1 per cent. As a result, profit from ordinary activities increased by 37.6 per cent, attaining L. 42.1 billion. Net profit for the period, after deducting taxes on income for L. 25.9 billion, totalled 15.7 billion (+30.1%).

We mention also brilliant results obtained through Banca Popolare Santa Venera take-over bid, which led Credito Valtellinese banking Group administered stock to L. 18, 000 billion, and the domestic and international rating, which were conferred on Credito Valtellinese last December.