Milano, 20 April 2006

• Consolidated net income at 3 billion euro, the Parent Company’s net income  exceeds 1.5 billion euro. 
• Dividends: 22 euro cents to ordinary shares and 23.1 euro cents to saving shares for a total amount of 1,532 million euro.
• Georges Pauget confirmed Director.
• Conferred to Reconta Ernst & Young the appointment for the audit for the years 2006 through to 2011.
• Approved   the purchase plan of own shares and their subsequent assignment, for free, to employees.

 

Banca Intesa’s Ordinary Shareholders’ Meeting, held today under the chairmanship of Giovanni Bazoli, acknowledged the Group’s financial statements as at 31^st December 2005, which registered a consolidated net income of 3,025 million euro, and approved the Parent Company’s financial statements for 2005 which closed with a net income of 1,564 million euro. The distribution of a dividend per share of 22 euro cents to ordinary shares and 23.1 euro cents to saving shares for a total amount of 1,532 million euro (with respect to 729 million for 2004) was also resolved upon. Payments of dividends will take place starting from 27^th   April 2006, with coupon presentation on 24^th April 2006.

The results for 2005 highlighted an improvement in profitability in line with the targets set forth in the 2003-2005 and 2005-2007 Business Plans. The consolidated statement of income for 2005 registered operating income of 10,167 million euro, up 8.5% with respect to the 9,372 million of 2004 restated under IAS/IFRS and above the 7.4% annual average increase targeted in the Business Plan for the 2005-2007 period. Operating costs equalled 5,593 million euro, up 0.2% with respect to the 5,582 million of the previous year and below the 1.1% annual average increase set out in the Business Plan for the 2005-2007 period (operating costs would decrease by 0.9% excluding the 63 million euro charges related to the purchase plan of own ordinary shares and their assignment, for free, to employees).

 

Consequently, operating margin rose to 4,574 million euro, up 20.7% on the 3,790 million of the previous year and higher than the 15.6% annual average growth target set out in the Business Plan for the 2005-2007 period. The cost/income ratio showed a marked improvement, down from 59.6% to 55%.

 

Total provisions and net value adjustments equalled 1,190 million euro, down 1.3% from 1,206 million in 2004 although in 2005 allowance for risks and charges was prudentially strengthened by 250 million euro. Profits/losses on investments held to maturity and on other investments registered a positive balance of 834 million euro compared to the 219 million for 2004 mainly due to the capital gain of 682 million euro resulting from the sale of 65% of Nextra as part of the strategic agreement for asset management activities with Crédit Agricole. Income before tax from continuing operations was up 50.3% to 4,212 million euro from 2,803 million in 2004.

 

In 2005, consolidated net income rose to 3,025 million euro, up 64.3% compared to the 1,841 million in the previous year after the registration of income taxes for 1,089 million, income after tax from discontinued operations for 33 million and minority interests for 131 million. The Parent Company’s net income increased to 1,564 million euro compared to net income of 1,234 million for 2004 (the difference in performance between the Parent Company’s net income and consolidated net income is mainly attributable to the 682 million capital gain registered by Intesa Asset Management, the Group’s company which sold 65% of Nextra).

 

As regards the consolidated balance sheet figures, as at 31^st December 2005 loans to customers amounted to 169 billion euro, up 6.3% on the figure as at 31^st December 2004 restated to take into account IAS/IFRS and the items related to the sale of doubtful loans accounted for on a consistent basis. Customer deposits under administration amounted to 475 billion euro, with a 5.1% rise compared to 31^st December 2004, restated on a consistent basis due to the exit of Nextra from the full consolidation area at year-end 2005 after the finalisation of the agreement for asset management activities with Crédit Agricole. As part of it, assets under management, which in the wake of the finalisation of the above-mentioned agreement no longer register mutual funds, reached 59 billion euro, with a 15.7% rise over the figure at the end of 2004 due to both individual portfolio management schemes (up 12.8%) and bancassurance (in 2005, Gruppo Intesa placed life insurance policies amounting to approximately 8.3 billion euro).

 

As at 31^st December 2005, capital ratios resulted in: Core Tier 1 ratio at 7.1% (6.7% at 31^st December 2004), Tier 1 ratio at 7.9% (7.6% at 31^st December 2004) and total capital ratio at 10.3% (11% at 31^st December 2004).

* * *

The Shareholders’ Meeting set to 20 the number of Board Directors and confirmed, as Director, Georges Pauget, already co-opted by the Board of Directors on 24^th January 2006 in substitution of Director Jean Laurent who had resigned from his post in the Company. The other resigning Directors, Jorge Manuel Jardim Gonçalves, Mariano Riestra and Eric Strutz, were not replaced.

 

Furthermore, the Shareholders’ Meeting conferred to Reconta Ernst & Young the appointment for the audit for the years 2006 through to 2011.

* * *

The Shareholders’ Meeting approved the purchase plan of own shares and their subsequent assignment, for free, to employees (“free stock granting plan”). The reasons and main features of the free stock granting plan as well as details of the purchase plan of own shares are illustrated below pursuant to Legislative Decree 58 of 24^th February 1998 (Combined Regulations on Financial Intermediation) and Art. 144 bis of Consob Resolution 11971/1999 (Regulation on Issuers). Herewithin, Banca Intesa also provides information on behalf of its subsidiaries which must comply with above-mentioned regulations.

The 2003-2005 Business Plan enabled Gruppo Intesa to recover high levels of efficiency and profitability and return to being competitive on the market. The achievement of such objectives was possible also thanks to the strong commitment of all collaborators, which enabled the rapid realisation of the necessary reorganisation interventions to improve efficiency.

To enact the commitment made as part of the Programme of 5^th December 2002, on 18^th May 2005 Banca Intesa signed an agreement with Trade Unions, conditional upon the approval of the Board of Directors (which occurred on 20^th December 2005) and of the Shareholders' Meeting, which sets out an extraordinary bonus for employees to be realised via the free assignment of Banca Intesa ordinary shares for a total countervalue of 2,000 euro per capita.

The features of the free stock granting plan and those of the purchase plan are illustrated below.

Assignees will be the employees of Banca Intesa with an indefinite term contract, even part-time, who, hired within 31^st December 2005, are on the payroll as at 1^st June 2006.

Banca Intesa freely transferable ordinary shares for a maximum countervalue of 2,000 euro will be assigned, for free, to each of the employees identified above. The aforementioned amount may be reduced in consideration of the lower service rendered for part-time contracts or of a shorter period of service.

The “value of the Banca Intesa share” to be assigned will be equal to the simple arithmetic average of the official stock prices struck in the period from 1^st May to 1^st June 2006 included.

The number of shares (which have a face value of 0.52 euro) to which the employee will be entitled will be determined using the following formula: 2,000 euro / value of the Banca Intesa share (determined as set out above), rounded down to the lower multiple of ten.

The overall number of shares to be assigned will be determined on the basis of the number of employees on 1^st June 2006 and the value of the share determined as indicated above. Therefore, for the purpose of considering any variation in the number of beneficiaries between the date of the resolution and the aforementioned assignment date, as well as oscillations in the value of the share in the same period, the Shareholders' Meeting authorised the purchase of Banca Intesa shares up to a maximum number of 18,000,000 (equal to approximately 0.30% of ordinary share capital) and a maximum consideration of 63 million euro.

The purchases of shares to be assigned for free will be carried out in compliance with provisions set forth by Articles 2357 and the following ones of the Italian Civil Code within the limits of retained earnings and available reserves as recorded in the last approved financial statements. Pursuant to Art. 132 of Combined Regulations on Financial Intermediation and Art. 144 bis of Consob Regulation on Issuers, the purchases will be carried out on regulated markets according to the operating methods set out in the regulations providing for the organisation and management of such markets.

According to the authorisation of the Shareholders' Meeting, which will be effective for a period of three months from today’s date, purchases can be made at a unit price no lower than the face value of the share (0.52 euro) and no higher than 5% above the reference price struck by the Banca Intesa share in the stock exchange trading day preceding each purchase.  

The purchases will be carried out in June this year, in average daily volumes not higher than 25% of the average daily volume of the Banca Intesa ordinary shares traded in March 2006 which was  30.5 million shares.

The free stock granting plan also involves the employees of Italian subsidiaries; the latter’s   Shareholders' Meetings, held in the last few days, approved the respective purchase plan of the Parent Company ordinary shares up to a total number of 2,511,240, as detailed hereafter. These purchase plans are similar in terms of subject and method to that approved by the Parent Company’s Shareholders’ Meeting. 

 

SUBSIDIARIES	MAXIMUM NUMBER   OF SHARES	MAXIMUM    AMOUNT  (IN EURO)	SHAREHOLDERS’   MEETING DATE
BIVERBANCA	171,000	600,000	31.03.2006
SIREFID	10,000	35,000	11.04.2006
INTESA LEASING	64,000	224,000	11.04.2006
INTESA MEDIOFACTORING	85,000	300,000	10.04.2006
CR PARMA E PIACENZA	400,000	1,350,000	07.04.2006
MEDIOCREDITO	59,500	208,250	11.04.2006
BANCA DI TRENTO E BOLZANO	140,000	490,000	13.04.2006
BANCA CABOTO	180,000	620,000	12.04.2006
BANCA CIS	16,740	75,330	04.04.2006
CR TERNI E NARNI	30,000	105,000	12.04.2006
CR VITERBO	124,000	424,000	19.04.2006
CR RIETI	145,000	505,000	14.04.2006
CR ASCOLI	100,000	355,000	13.04.2006
CR FOLIGNO	64,000	230,000	17.04.2006
CR SPOLETO	52,000	181,000	18.04.2006
CR CASTELLO	52,000	183,000	11.04.2006
FRIULADRIA	333,000	1,165,000	08.04.2006
ESATRI	225,000	796,000	11.04.2006
ETR	260,000	930,000	11.04.2006
TOTAL	2,511,240	8,776,580

 

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