BANCA CR FIRENZE. Annual Report 2003

BANCA CR FIRENZE Annual Report 2003 Limited Liability Company Registered Office and Headquarters in Florence Share Capital 8 620,422,859.49 fully paid Reserves 8 255,956,237.64 Register of Companies, Fiscal and VAT Code 04385190485 Banking Register n 5120 Banca CR Firenze Group Banking Group Register n 6160.6

Table of Contents Annual Report 2003 Table of Contents Directors and General Management 5 Agenda for the Annual Shareholders Meeting 7 Chairman s Letter to the Shareholders 8 Banca CR Firenze SpA - Corporate profile 10 Historical outline 10 The Banca CR Firenze Group 11 Group structure at 31.12.2003 12 Summary consolidated data 13 Group area network 14 The rating 15 Share price performance 15 Shareholder composition 15 Banca CR Firenze SpA - Parent Company Annual Report 17 Directors Report on the Parent Company 23 Parent company financial statements 64 Notes to the parent company financial statements 68 Exhibits to the parent company financial statements 132 Statutory Auditors Report 179 Independent Auditors Report 183 Banca CR Firenze Group - Group Annual Report 185 Directors Report on the Group 191 Consolidated financial statements 218 Notes to the consolidated financial statements 222 Exhibits to the consolidated financial statements 287 Independent Auditors Report 292 Listing of Branches 294 3

Directors and General Management Annual Report 2003 Board of Directors Chairman Vice Chairman Directors Aureliano Benedetti Giampiero Busi Piero Antinori Pio Bussolotto Jean Clamon Francesco Corsi Alessio Colomeiciuc Ambrogio Folonari Lionardo Ginori Lisci Mario Manuli Pier Giovanni Marzili Massimo Mattera Giuseppe Morbidelli Giuseppe Spadafora Executive Committee Chairman Vice Chairman Members Aureliano Benedetti Giampiero Busi Pio Bussolotto Massimo Mattera Giuseppe Morbidelli Giuseppe Spadafora Board of Statutory Auditors Chairman Acting Auditors Substitute Auditors Vieri Fiori Franco Caleffi Marco Sacconi Francesco Maria Mancini Giuseppe Rogantini Picco* General Management General Manager Lino Moscatelli (*) Mr Rogantini Picco presented a letter of resignation on 11 December 2003, with effect from 1 January 2004. 5

Banca CR Firenze S.p.A. Historical outline Cassa di Risparmio di Firenze was formed in 1829 on the initiative of several of the most brilliant figures in Florentine society and its economic community who set the objective of founding a bank to promote the idea that saving was a valuable attribute. Since that time Cassa di Risparmio di Firenze has always played an important role in the development of Florence and Tuscany, also supporting it financially through the construction of important public works. During the years following the second world war the Bank participated actively in the reconstruction of the country and dedicated itself to supporting the economy and the social fabric, in particular by lending to small and medium-sized businesses which, still today, constitute the backbone for activities in the areas where it operates. In 1992 Cassa di Risparmio di Firenze which in the preceding years had set up innovative product companies such as Centro Leasing, Centro Factoring and Findomestic became an SpA-type limited company, and still continued on improving the quality of its business management criteria and organisational structure. In 1998 the Cassa di Risparmio di Firenze Banking Group was formed. In July 2000 the shares of the parent company Banca CR Firenze were listed on the Milan Stock Exchange. The Group, fortified by its traditions and attentive to the requirements of the public it serves, is facing the new millennium as a dynamic and pioneering enterprise, heavily oriented towards the creation of value. 10

Corporate profile Banca CR Firenze S.p.A. The Banca CR Firenze Group The Banca CR Firenze Group came into being formally in 1998 on the initiative of Cassa di Risparmio di Firenze. Its objective was to create a major banking pole formed by the principal Savings Banks located in central-north Italy. Since then the Group s activities have been widened, being able to count on the presence of the Civitavecchia, Mirandola, Orvieto, Pistoia and, shortly, La Spezia Savings Banks in addition to that of the parent company Banca CR Firenze. An alliance of banks was formed through the Group, each one being well rooted in its area of operation. This acted as a flywheel for economic, social and cultural growth The Group s strength is also based on a comprehensive assembly of specialist companies belonging to the Group (Findomestic Banca, Centrovita Assicurazioni, Centro Leasing, Centro Factoring and Arval) and the fact that its shareholders include international financial institutions such as Sanpaolo IMI and BNP Paribas. Significant synergies have been created in sales and strategic areas, with agreemens which have allowed the Group to offer its clientele a wide range of personalised solutions in banking, financial, insurance and commercial credit fields. The Banca CR Firenze Group presents itself today as one of the most complete Italian banking poles thanks to a widespread and penetrating branch network linked to a well-articulated financial organisation, which can provide customers with high quality, a dynamic approach and a complete range of products and services. The Banca CR Firenze Group can in fact count on an area network, considering also Cassa di Risparmio della Spezia, of over 500 branches (with a portfolio of around 1,000,000 customers). Over recent years, this network has been joined by new operational channels which allow customers to have access to financial activities in a manner which suits them best: the Private Banking and Business Customer Centres and, as from 2001, the Financial Promoters Network which is present in Lazio, Abruzzo, Emilia Romagna and the Marches. Having been the first bank in Italy to enable customers to operate over the Internet, Banca CR Firenze is now present on the Web with its own institutional site (www.bancacrfirenze.it) and two portals dedicated to private customers (liberamente.net) and business customers (io-impresa.it). 11

Banca CR Firenze S.p.A. Group structure at 31.12.2003 Banca CR Firenze - Parent company Group Companies Other subsidiaries Banking and financial companies held over 20% Other companies held over 20% CR Mirandola 99,9% Centrovita Assicurazioni 51,0% Findomestic Banca 50,0% Arval Service Lease Italia 30,0% CR Pistoia e Pescia 51,0% Centro di Telemarketing Centro Leasing 34,7% Et Group 42,7% CR Orvieto 73,6% Citylife 98,5% Centro Factoring 46,6% Beta 47,0% CR Civitavecchia 51,0% Il Nocciolo CFT Finanziaria 47,0% Ce.Spe.Vi. 20,0% CR Firenze Gestion International 80,0% Sviluppo Industriale Pistoia 30,0% Centro Riscossione Tributi Cerit Infogroup Info 2b Data Centro Distribution Product Perseo Finance 60,0% Service Mirafin Tebe Tours 90,0% 12

Corporate profile Banca CR Firenze S.p.A. Summary consolidated data millions of euros 31 December 2003 31 December 2002 Change % Total financial assets 27,837.8 26,296.4 5.9% Direct borrowing 13,294.5 12,340.2 7.7% Indirect borrowing Administered funds 5,700.2 5,758.0-1.0% Managed funds 8,843.1 8,192.2 7.9% - Asset management (assets managed with any destination - GPM ; - assets managed placed in open-end investment companies - GPS ; - assets managed placed only with funds run by related or associated - banks - GPF ) 2,347.4 1,948.4 20.5% - Funds 4,305.7 4,471.1-3.7% - Insurance (actuarial reserves) 2,190.0 1,778.7 23.1% Interest Margin 612.2 588.4 4.0% Net commissions and other operating income 347.3 323.6 7.3% Administrative expenses 614.7 593.8 3.5% Net provisions for and value adjustments to loans and non-current financial assets 106.8 97.1 10.0% Profit from ordinary activities 200.5 205.1-2.1% Net profit for the year 95.5 88.6 15.6% ROE (*) 10.2% 8.9% 1.3% Risk ratio on loans (**) 2.56% 2.66% -0.1% (*) Net profit / Average equity excluding net profit for the year (**) Net risk positions / net customers loans 13

Banca CR Firenze S.p.A. Group area network 14

Corporate profile Banca CR Firenze S.p.A. The rating Rating house Short-term debt Long-term debt Fitch F1 A- Moody's P1 A2 Share price performance 140 130 120 MIB BANKS MIDEX BANCA CR FIRENZE HISTORICAL MIB 110 100 90 80 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec '03 Shareholder composition Fondazione CR Pistoia 3,9% Gr. Fidelity Investments 5,0% Ente CR Firenze 41,7% BNP Paribas 6,8% Sanpaolo IMI 19,5% Other 23,1% 15