In all business companies, especially if they’re listed at the stock exchange, drawing up the strategic plan and submitting it for approval to the Board of Directors is always a pivotal moment. What it means, in fact, is explaining to investors (whether private or institutional) on the one hand, and to the corporate structure on the other, what course the company and/or the group will be taking in the following three years, what targets will be aimed at, and what guidelines should be followed in order to reach those targets. Clearly, therefore, all corporate functions must be involved in laying out the plan, because each of them will bear a part of responsibility for its implementation.

The plan approved by Banca di Roma represents a decisive moment for the Rome-based institute because it defines the course and the initiatives to be taken for a radical transformation of the Group, designed to pursue new growth strategies for strengthening its role and position as a primary national banking group, in step with the objective of creating wealth for shareholders.” The project to aggregate Banca di Roma and Bepop-Carire has to be examined from this point of view, and it contemplates: · The de-merger of the traditional banking activity of Bipop-Carire into Banca di Roma, with the compensation to Bipop shareholders made in the form of Banca di Roa newly issued shares; · The simultaneous merger by incorporation in Bipo-Carire of the “Consumer Bank” activities of Banca di Roma after the abovementioned de-merger. The process of aggregation will give rise to a banking group, which will have: · The entire capital fo the retail banks Banca di Roma, Banco di Sicilia and Bipop-Carire; · 44% of the share capital of the new consumer bank Bipop-Carire, with the activities of asset management, bank assurance, direct banking, networks of financial promoters and the other participations, including Fineco Leasing and Fineco Sim; · the activities of investment banking, through Mediocredito Centrale. The new holding will supply strategic management and governance to all the Group’s commercial banks and product-companies, which shall preserve their identity and operating autonomy.” Consolidating Banca di Roma’s existing divisional system, the Group will be restructured by business areas: traditional banking activities will be concentrated in the two commercial banks, Banca di Roma, Banco di Sicilia and Bippop Carire, that are entirely controlled by the holding; special financial activities, corporate and investment banking will be handled by Mediocredito Centrale; while operations of asset management, bankassurance, leasing, etc. will be carried out by the new consumer bank Bipop Carire. As well as providing governance and strategic leadership, the holding will perform traditional financial services for all the Group’s companies, and will also, as decided last November, establish a new wealth-management division dedicated to the operational coordination and strategic development of financial services for the savings-management sector. Creating a parent holding company responds to the need for more effective centralization and coordination of the various business sectors, and will be beneficial in facilitating efficiency and economies of scale. The new structure, in fact, will substantially rationalize procedures within the Group by simplifying the decision-making process while optimizing intra-Group relations. In particular, all activities concerning asset liability management (ALM) will be concentrated in a single organization, following the best market practices, providing positive fallout for wealth-development mechanisms. Another important element in the plan is the merger by incorporation of Banco di Sicilia in Banca di Roma, that should take place July 1st, 2002. It must be pointed out, however, that in order for the Sicilian institute to maintain its roots in the local society, Banco di Sicilia’s banking organization will concurrently be parcelled out to an ad-hoc company, with the exception of financial activities which will revert to the new structure. As mentioned, Mediocredito Centrale (MCC) will be given a new mission as a specialized independent merchant bank that will however benefit from being part of a large banking corporation. As a matter of fact, in step with the recent shake-up and reinforcement of Mediocredito Centrale (MCC), the Industrial Plan calls for selling off a portion of capital while still maintaining control over the company. The new company make-up is intended to express economic interests towards developing and consolidating a merchant bank capable of offering business investors a complete range of services and products both in the small and medium-business sector (through investment credit, subsidized credit and venture capital) and in big business (by providing consulting services and access to bond and share markets). Another remerkable aspect of the Industrial Plan involves structural operations. With the intention of making all activities converge on the core business and reducing low-performance activities, the guidelines outline a number of structural operations such as property spin-offs and selling part of the share portfolio, as well as the above-mentioned program of divesting participation interests. These measures will lead to a re-balancing of the Group on the interbank market and to a raise in free capital. One element that is often overlooked, but whose importance is duly acknowledged by Banca di Roma, is human resources. In order to reach the goals put forth by the Strategic Guidelines and the Industrial Plan, Gruppo Bancaroma has already appointed new executive managers in the holding and in the traditional and investment banking divisions. Furthermore, following widespread market practices, the Group intends to set up a long-term incentive plan based on stock options and directed at executive managers and key-role figures. The plan, due for approval within the next two months, is consistent with the new strategic goals and intends to raise competitiveness with the foreign market while ensuring maximum motivation and loyalization of the resources involved, which in the initial stages of the project should number around 500. The vesting period is expected to last three years, and the options’ striking price will be determined, as provided for by law, on the shares’ mean value in the month preceding the allocation. On the basis of these and other interventions, Banca di Roma counts on achieving the following results by 2004: Return on average equity: 9.8%; Considerable increase of tier-one capital: 7%; Total capital: 10%; Substantial improvement of cost/income ratio, also thanks to an outsourcing scheme: 55%; Group’s free capital back to positive numbers as early as the next fiscal year. Thanks to results like these, the Rome-based institute will be looking to consolidate its competitive position on the Italian market, and not only there.

(Translated by Interpres)