Highlights on BancoPosta

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2 Highlights on BancoPosta 2 Strong market position >370 bln Total Customer Assets (>10% market share) ~ Post Offices (~ 30% market share, >2x vs banking leader) >23 mln. Customers (>2x vs banking leader) of which more than 10 mln cards holders: 4,6 mln PostePay (50% market share prepaid cards) 6,1 mln Postamat (16% market share debit cards) Low cost approach keeps BancoPosta immune from price competition Main Weaknesses 70% of > 23 mln. Customers are monoproduct or near BancoPosta is not the relationship bank for ~50% of its 6,5 mln. Customers with current account Marginal penetration in key Retail Products (Mutual Funds, Consumer Lending, Credit Cards)

3 BancoPosta regulatory framework 3 Set-up of BancoPosta Division Release of BancoPosta Government regulatory framework (DPR n. 144/2001) BancoPosta turns into a Business Unit, with full ownership of control system Poste Italiane turned from Government body into a joint stock company owned by: 65% Government 35% CDP Launch of Conto BancoPosta Release of BoI rules for BancoPosta activities BancoPosta is not a legal entity, but a Business Unit BancoPosta has no balance sheet and no capital allocated BancoPosta can take no credit risk and limited market and operational risks

4 Group structure and revenue split by BU 4 Poste Italiane 9,1 bln 0,2bln 4,1 bln 4,8 bln Territorial Network BU Express and Parcels BU Mail and Philately BU BancoPosta ~ P.O. One, single, generalist distribution infrastructure, supporting all Poste Italiane Business Units BancoPosta Fondi SGR PosteVita Poste Tributi BancoPosta s revenues represent > 50% of Poste Italiane total revenues As of YE 08

5 BancoPosta s revenue breakdown 5 Total Revenues FY08: 4,8 bln Pension Payments 3,9% Lending 1,5% Money Transfer 1,7% 10,4% Investment Products 0,6% Others 28,9% Courrent Account Deposits 15,7% Bill Payments 8,7% Current Account Payment Services 28,5% Postal Savings As of YE 08

6 BancoPosta s product positioning 6 Asset Gathering Payments Postal Products Interest-Bearing Postal Certificates Postal Saving Books Bill Payments Pension Payments Postal Money Transfer Banking Products Current Account Deposits Structured Bonds Mutual Funds Bank insurance Current Account Payment Services Debit/Credit Cards Prepaid Cards International Money Transfer Banking Products account for >50% of total revenues, as a result of the ongoing innovation and up-selling strategy

7 BancoPosta s revenue split by Product 7 By Postal vs Banking financial products (mln ) By Product category (mln ) % % 54% CAGR +4,5% CAGR +4,5% % 1% 1% 1% CAGR 53% +7,5% CAGR +5,6% 66% 67% 68% 66% 52% 47% 46% 47% CAGR +1,4% 33% 33% 32% 31% CAGR +2,5% Y05 Y06 Y07 Y08 Y05 Y06 Y07 Y08 Postal products Banking products Payments Asset gathering Other

8 Key Success Factors: 1. Distribution Channels 8 Post Offices (~14.000) Staff Contact Center (1.200 HR) Consumer Specialists SME Specialists Cashiers Product Distribution Transactional Product Bonds Banca insurance Personal Loans all all Internet Banking (> users) Mutual Funds Mortgages Poste Mobile (~ SIM)

9 Key Success Factors: 2. Customer Base 9 Consumer: 23,2 mln. Retail Individuals Business & P.A.: Companies Affluent Corporate SME & SOHO Associations Mass Market Public Administration As of FY08

10 Key Success Factors: 2. Customer Base 10 Penetration Rates of Fully Banked Customers (with Current Account) Debit Cards (Postamat) 84,6% Postal Saving Books 47,2% Salary/Pension payment 35,7% Insurance Prepaid Cards (PostePay) Structured Bonds 14,0% 12,8% 9,0% Home Banking 9,2% Personal Loans 4,7% Mutual Funds 3,3% Postal products Banking products Asset under Custody (Treasury Bonds, Equities) 2,7% Credit Cards 2,7% Revolving Cards 1,1% As of FY07 Mortgages 0,4%

11 11 Focus on the BancoPosta success in launching a diversified portfolio of prepaid cards

12 Postepay: key figures PostePay today is the leading prepaid product in Italy and in Europe: Italian market share: 65% European market share : 40%

13 The Postepay top up channels 13 Post offices Internet ATM Mobile phone Cash Debit card or Bank account Credit cards Postepay

14 The key functionalities and the multi-channel approach 14 ATM (other banks) Cash withdrawals (VISA Electron) ATM (domestic) cash withdrawals SIM & card top up card account information POS (Post Office) cash withdrawals payments (charging services) card account information INTERNET e-commerce (VISA) bill payments on internet card account information MOBILE m-commerce money-transfer through pre-paid top up SIM top up Card account informations MERCHANTS Paying goods and services (VISA Electron MasterCard)

15 The Launch November Target Young people Positioning Easy Travellers Convenient Net surfers Strategy Unique Offer an easy product to all the customers going daily to the Post offices and to everyone that hasn t a credit card or a bank account Results 1ml card in 13 months 2,4ml cards in 3 years High cross selling rate

16 The key success drivers 16 D Product Features Flexible Easy Accepted ATL Key Drivers B C Top up Network Communication BTL Direct Marketing 14k Branches 5000 ATM Web Site Retailers A Distribution Network Branches Success

17 Cardholder demographics 17 Card holders customers 5.5 million cards in 6 years Postepay is still a young product but not only for young people 48% Male 63% / 37% Female are under the age of 30 30% are between the ages of 31 and 50 65% Italian mkt share Customers under the age of 30 account for over 55% off all transactions

18 Cardholder demographics 18 Card holders customers 30% of all transactions are abroad 10% of customers are non-italian transactions that take place on the web 54% Postepay is steal perceived as the secure way to buy online 46% are on a physical POS 52% of prepaid customers have another Poste Italiane product The market itself found new way to use the card abroad from travel card to money transfer card

19 Diversification Co-branding 19 Prepaid Corporate platform An online platform to enable all the companies that need a co-branded prepaid card to for their customers to: Personalize the card design Request the card on-demand Reload the cards

20 Diversification Product Innovation 20 The mobile represent a new channel for the Postepay 35% of mobile subscribers have their sim linked to a PostePay Value Added Services 1,3 MILION Sim Card Card Enquiry (all mobile operators) Reload other postepay Reload sim Postemobile Telegram Bill Payments urgent money transfer

21 Diversification Product Innovation 21 In 2007 we launched the first a Contactless pilot on prepaid in Italy Launched to test the customer appeal on the contactless technology active card today on the market result The : innovative customers appreciate using userfriendly payment sistems Future evolution mobile NFC payments

22 Diversification The Money Transfer 22 Postepay TWIN Postepay Twin is specifically targeted on the remittances market Easy, two prepaid cards to send and receive money and in all the world Cheep, no other Money Transfer product is so convenient Fast, buy the card in one of the branches and send money in real time

23 Diversification The New Markets 23 Transit Lunch Access Lunch