Milano, 30 May 2005

●  A cash consideration of 2,045 million euro from the sale without recourse and a capital gain of 36 million;

●   net doubtful loan/loan ratio down to 0.6%;

●   Gruppo Intesa will sell 81% of the loan servicing business of Intesa Gestione Crediti receiving 49 million euro, with a capital gain of 49 million, and long-term servicing. 


The Board of Directors of Banca Intesa, which met today, approved the sale to Fortress and Merrill Lynch of a portfolio of the Group’s gross book value of doubtful loans (sofferenze) equal to 9,067 million euro (as at 31st December 2004) and 81% of the loan servicing business of Intesa Gestione Crediti (IGC) which manages doubtful loans.


This sale - without recourse - of doubtful loans involves over 70% of Gruppo Intesa’s total doubtful loans including the following portfolios as at 31st December 2004: a 5,968 million euro portfolio held by IGC, a 2,368 million euro portfolio by Banca Intesa SpA, a 543 million euro portfolio by Intesa Mediocredito and a 188 million euro portfolio by Cariparma.


Based on the figures as at 31st December 2004, Gruppo Intesa will receive 2,045 million euro as a cash consideration, with a capital gain of 36 million euro on the net book value at 2004 year-end resulting from the first-time adoption of IAS/IFRS.


The Group’s net doubtful loan/loan ratio as at December 31st 2004, restated after the sale, drops to 0.6 % from 1.9% as at the same date restated after the first-time adoption of IAS/IFRS and from 2.7% reported in the 2004 financial statements before IAS/IFRS.


Gruppo Intesa will receive a cash consideration of 49 million euro from the sale of 81% of the loan servicing business of IGC, based on a 100% valuation equal to 60 million euro, and realise a capital gain of 49 million euro.


This sale enables Gruppo Intesa to improve asset quality, reduce risk by eliminating any impact from future losses in relation to these loans and liberate financial and managerial resources to devote to core business. The Tier 1 ratio of the Group improves by around 10 basis points compared to 31st December 2004 restated after IAS/IFRS.


The transaction marks the completion of the programme designed to optimise the processes of recovery of doubtful loans, implemented by Gruppo Intesa at the end of the Nineties with the setting up of IGC. IGC has become a specialist player which now enables the formation of a joint-venture with two leading international partners, where Gruppo Intesa will hold a 19% stake. The resulting servicing company will enhance value creation in the management of Gruppo Intesa’s retained stock and future inflows of doubtful loans, under the terms of a ten-year servicing contract providing mechanisms aimed at maintaining standards in line with best market practises.


The closing of the transaction - where Banca Intesa was advised by Bain & Company for technicalities - is expected to take place within the end of the year.

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