1

2011 ANNUAL REPORT Individual Financial Statements

2

BANCA ANTONVENETA S.p.A., Sole Partner Bank

Subject to the management and co-ordination of Monte dei Paschi di Siena S.p.A.

Fully paid up share capital EUR 1,006,300,00

Registered office: 35131 Padova – Piazzetta Filippo Turati, 2

Register of Companies of Padua

Taxpayer and VAT Code 04300140284

Member of the Interbank Deposit Protection Fund

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CORPORATE OFFICERS

BOARD OF DIRECTORS

Chairman RABIZZI, Ernesto

Deputy Chairmen CALTAGIRONE Francesco

MARCHI Enrico

Directors

ANCILLI Riccardo

BERLINGUER Aldo

CARRARO Massimo

DESTRO Nereo

MONTINARI Dario

PERICCIOLI Moreno

QUERCI Carlo

ROSATI Mauro

ZANI Ezio

Board of Statutory Auditors

Chairman FABRETTI Pietro

Acting Auditors DALLA LIBERA Alberto

SCHIAVONE Carlo

Alternate Auditors ROSSI CHAUVENET Leopoldo

HEAD OFFICE

Chief Executive Officer MENZI Giuseppe

Deputy Chief Executive Officer CHIAVISTELLI Cesare

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BALANCE SHEET

(EUR)

Assets 31 12 2011 31 12 2010

10 Cash and cash equivalents 87.150.242 94.270.392

20 Financial assets held for trading 168.810.871 140.302.352

40 Financial assets available for sale 13.977.978 15.190.394

60 Due from banks 2.960.240.747 3.999.637.120

70 Due from customers 13.610.747.151 13.629.573.958

80 Hedging Derivatives 4.533.204

100 Equity investments 116.265 39.022

110 Tangible assets 254.989.825 260.929.490

120 Intangible assets 190.205.115 1.622.875.280

of which: goodwill 91.616.715 1.382.918.576

130 Tax assets 514.728.833 524.353.262

a) current 1.025.735 2.405.949

b) advanced 513.703.098 521.947.313

150 Other assets 211.417.921 384.765.046

Total assets 18.016.918.152 20.671.936.316

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BALANCE SHEET

(EUR)

Total liabilities and shareholders' equity 31 12 2011 31 12 2010

10 Due to banks 4.721.277.932 5.480.283.975

20 Due to customers 7.237.177.238 7.766.832.346

30 Outstanding securities 1.164.797.932 431.928.229

40 Financial l iabil ities held for trading 124.946.786 100.923.862

50 Financial l iabil ities valued at fa ir value 2.106.177.837 2.487.604.232

100 Other l iabilities 427.301.185 721.685.035

110 Staff severance indemnity pay 27.098.673 29.395.564

120 Provision for risks and charges: 74.017.490 74.071.555

a) pension funds and similar obligations - -

b) other funds 74.017.490 74.071.555

130 Valuation reserves 1.076.259 526.249

160 Reserves 259.862.857 243.087.320

170 Share premium 2.162.596.312 2.166.000.002

180 Capital 1.006.300.000 1.006.300.000

200 Profit (Loss) of the year (+/-) (1.295.712.349) 163.297.947

Total liabilities and shareholders' equity 18.016.918.152 20.671.936.316

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INCOME STATEMENT

EUR)

Accounts 31 12 2011 31 12 2010

10 Interest and similar income 545.527.438 424.253.408

20 Interest and similar expense (205.271.967) (114.395.208)

30 Interest margin 340.255.471 309.858.200

40 Commissions receivable 205.064.647 216.388.736

50 Commissions payable (21.820.942) (23.184.621)

60 Net commissions 183.243.705 193.204.115

70 Dividends and similar income 57.327 30.694

80 Net result of trading 2.842.950 2.986.888

90 Net hedging results (642.045)

100 Profit (loss) from sale or repurchase of: 1.376.503 5.397

(b) financial assets available for sale 1.348.494

(d) other financial liabilities 28.009 5.397

110 Net result of financial assets and liabilities valued at fair value 81.496 (658.042)

120 Intermediation margin 527.215.407 505.427.252

130 Value adjustments/recoveries for impairment of: (80.017.223) (75.752.421)

a)      Loans (81.106.072) (76.005.841)

b)      Financial assets available for sale - (922.296)

d)      Other financial transactions 1.088.849 1.175.716

140 Net result of financial activities 447.198.184 429.674.831

150 Administrative expenses (307.792.648) (332.863.052)

a)      Staff expenses (198.703.316) (203.194.775)

b)      Other administrative expenses (109.089.332) (129.668.277)

160 Net provisions to risk and charge funds (8.283.082) 3.350.902

170 Net value adjustments/recoveries on tangible assets (10.104.498) (9.569.981)

180 Net value adjustments/recoveries on intangible assets (141.368.304) (28.824.083)

190 Other operating income/charges 22.803.349 23.847.232

200 Operating costs (444.745.183) (344.058.982)

210 Profit (loss) of equity investments - (361.150)

230 Net value adjustments on goodwill (1.291.301.861) -

240 Profit (Loss) from investment sale 32.620 35.106

250 Profit (loss) of the current trading assets before tax (1.288.816.240) 85.289.805

260 Income tax for the period of the current trading assets (6.896.109) 78.008.142

270 Profit (loss) of the current trading assets after tax (1.295.712.349) 163.297.947

290 Profit (loss) for the period (1.295.712.349) 163.297.947

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STATEMENT OF CONSOLIDATED PROFITABILITY

(in euro)

Items 31 12 2011 31 12 2010

10

Profit (loss) for the year (1.295.712.349) 163.297.947

Other income components after tax

20 Financial assets available for sale 550.010 192.461

110 Total other income components after tax 550.010 192.461

120

Overall profitability (Item 10 + 110)

(1.295.162.339)

163.490.408

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(EUR)

Issue of new

shares

Purchase of

own shares

Extraordinary

distribution of

dividends

Capital

instrument

change

Derivatives on

own shares

Stock

option

Capital:

a) ordinary shares 1.006.300.000 - 1.006.300.000 - - - - - - - - - - 1.006.300.000

b) other shares - - - - - - - - - - - - - -

Share premium 2.166.000.002 - 2.166.000.002 - - (3.403.690) - - - - - - - 2.162.596.312

Reserves:

a) of profits 5.115.494 - 5.115.494 13.371.847 - 3.403.690 - - - - - - - 21.891.031

b) other 237.971.826 - 237.971.826 - - - - - - - - - - 237.971.826

Valuation reserves 526.249 - 526.249 - - - - - - - - - 550.010 1.076.259

Capital instruments - - - - - - - - - - - - - -

Own shares - - - - - - - - - - - - - -

Profit (Loss) for the year 163.297.947 - 163.297.947 (13.371.847) (149.926.100) - - - - - - - (1.295.712.349) (1.295.712.349)

Net Equity 3.579.211.518 - 3.579.211.518 - (149.926.100) - - - - - - - (1.295.162.339) 2.134.123.079

TABLE OF THE CHANGES IN NET EQUITY

Allocation result for previous year

Net equity transactions Outstanding as at

31 12 10

Opening

balance

change

Net equity as at

31 12 11

Outstanding as at

01 01 11Reserves

Dividends and

other allocations

Changes in

reserves

Changes for the year

Profit (Loss) for

31 12 11

(EUR)

Issue of new

shares

Purchase of

own shares

Extraordinary

distribution of

dividends

Capital

instrument

change

Derivatives on

own shares

Stock

option

Capital:

a) ordinary shares 1.006.300.000 - 1.006.300.000 - - - - - - - - - - 1.006.300.000

b) other shares - - - - - - - - - - - - - -

Share premium 2.200.000.000 - 2.200.000.000 - - (33.999.998) - - - - - - - 2.166.000.002

Reserves:

a) of profits (131.555) - (131.555) 5.247.049 - - - - - - - - - 5.115.494

b) other - - - - - 237.971.826 - - - - - - - 237.971.826

Valuation reserves 333.788 - 333.788 - - - - - - - - - 192.461 860.037

Capital instruments - - - - - - - - - - - - - -

Own shares - - - - - - - - - - - - - -

Profit (Loss) for the year 101.459.249 - 101.459.249 (5.247.049) (96.212.200) - - - - - - - 163.297.947 163.297.947

Net Equity 3.307.961.482 - 3.307.961.482 - (96.212.200) 203.971.828 - - - - - - 163.490.408 3.579.211.518

TABLE OF THE CHANGES IN NET EQUITY

Allocation result for previous year

Net equity transactions Outstanding as at

31 12 09

Opening

balance

change

Net equity as at

31 12 10

Outstanding as at

01 01 10Reserves

Dividends and

other

allocations

Changes in

reserves

Changes for the year

Profit (Loss) for

31 12 10

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CASH FLOW STATEMENT

(EUR)

A. OPERATING ASSETS 31 12 2011 31 12 2010

1. Cash flow from operations 283.383.583 64.876.898

net income (+/-) (1.295.712.349) 163.297.947

capital gains/losses on financial assets held for trading and on assets/liabilities v alued at fair v alue (-/+) 7.937.780 658.042

capital gains/losses on hedging assets (-/+) 642.045 -

net v alue adjustments/recov eries for impairment (+/-) 1.382.752.375 88.344.374

net v alue adjustments/recov eries on tangible and intangible assets (+/-) 151.472.802 38.394.064

net prov isions to risk and charge funds and other costs/rev enues (+/-) 8.283.082 (3.350.902)

tax and duties to be settled (+/-) 22.040.204 (196.231.882)

net v alue adjustments/recov eries of groups of assets being sold after tax (+/-) - -

other adjustments 5.967.644 (26.234.745)

2. Liquidity generated/absorbed by financial assets 1.126.636.311 (3.833.100.811)

financial assets held for trading (28.680.598) (50.607.054)

financial assets held at fair v alue - -

financial assets av ailable for sale 1.762.426 (12.384)

due from banks: at sight 775.175.447 (104.340.708)

due from banks: other loans 264.220.926 (2.886.656.755)

customer loans (73.712.556) (741.344.943)

other assets 187.870.666 (50.138.967)

3. Liquidity generated/absorbed by financial liabilities (1.263.036.520) 3.874.333.177

due to banks: at sight 824.810.591 706.463.011

due to banks: other loans (1.583.816.634) 1.572.654.413

due to customers (529.655.108) 319.559.488

outstanding securities 727.694.454 140.394.440

financial liabilities held for trading 24.022.924 26.398.783

financial liabilities held at fair v alue (389.364.175) 1.136.536.009

other liabilities (336.728.572) (27.672.967)

Net liquidity generated/absorbed by operating assets 146.983.374 106.109.264

B. INVESTMENTS

1. Liquidity generated by: - 87.692

sale of shareholdings - 87.692

div idends collected on shareholdings - -

sale/repay ment of financial assets held to maturity - -

sale of tangible assets - -

sale of intangible assets - -

sale of subsidiaries and company branches - -

2. Liquidity absorbed by (4.242.076) (940.717)

purchase of shareholdings (77.243) -

purchase of financial assets held to maturity - -

purchase of tangible assets (4.164.833) (5.973.915)

purchase of intangible assets - 5.033.198

purchase of subsidiaries and company branches - -

Net liquidity generated/ absorbed by investments (4.242.076) (853.025)

C. FUNDING

issue/purchase of ow n shares - -

issue/purchase of capital instruments - -

distribution of div idends and other purposes (149.926.100) (96.212.200)

Net liquidity generated/absorbed by funding (149.926.100) (96.212.200)

NET LIQUIDITY GENERATED/ABSORBED DURING THE YEAR (7.184.802) 9.044.039

Reconciliation

Accounts 31 12 2011 31 12 2010

Cash and cash equiv alens at y ear opening 94.270.392 85.061.134

Total net liquidity generated/absorbed during the y ear (7.184.802) 9.044.039

Cash and cash equiv alents resulting from forex floating 64.652 165.219

Cash and cash equiv alents at y ear closing 87.150.242 94.270.392

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KPMG INDEPENDENT AUDITORS’ REPORT

pursuant to articles 14 and 16 of Italian Civil Code of 27 Jan 2010, no. 39,

and 165 of Italian Civil Code of 24 February 1998, no. 58

(Translation from the original Italian text)

To the Shareholder of Banca Antonveneta S.p.A

1. We have audited the consolidated financial statements of Banca Antonveneta S.p.A. as of

December 31, 2011 comprising the balance sheet, the income statement, the statement of

changes in shareholders’ equity, the cash flow statement and the related explanatory notes.

The responsibility of preparing these consolidated financial statements in conformity with

International Financial Reporting Standards adopted by the European Union and the

standards issued in accordance with article 9 of Legislative Decree no. 38/05 are those of the

director’s of Banca Antonveneta S.p.A. Our responsibility is to express an opinion on these

consolidated financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards and procedures

recommended by Consob. In accordance with such standards and procedures, we planned

and performed our audit to obtain the information necessary to determine whether the

consolidated financial statements are materially misstated and if such consolidated financial

statements, taken as a whole, may be relied upon. An audit includes examining, on a sample

basis, evidence supporting the amounts and disclosures in the financial statements, as well as

assessing the appropriateness of the accounting principles and the reasonableness of the

estimates made by the directors. We believe that our audit provides a reasonable basis for

our opinion.

For our opinion relating to the financial statements of the previous year, for which the data is

presented for comparative purposes, please refer to our audit report dated 1 April 2011.

3. In our opinion the consolidated financial statements of Banca Antonveneta S.p.A. for the

year ended December 31, 2011 comply with International Financial Reporting Standards as

adopted by the European Union and the standards issued in accordance with article 9 of

Legislative Decree n° 38/05; accordingly, they present clearly and give a true and fair view of

the consolidated financial position, result of operations, changes in shareholders’ equity and

cash flows of Banca Antonveneta S.p.A. for the year then ended.

4. The Bank, as required by law, has included in its notes to the consolidated accounts, essential

data pertaining to the last balance sheet of the company that on its behalf, exercised

management and coordination activities. The opinion given on the balance sheets of Banca

Antonveneta S.p.A does not take into consideration this data.

5. The responsibility of preparing the report on management in conformity and as prescribed by

law pertain to the directors of Banca Antonveneta S.p.A. It is our competence to express our

opinion on the reporting of the balance sheet, as required by law. To such end, we have

performed the procedures as indicated under audit principle no. 001 emanated by the

National Board of Commerce and Accounting Experts as recommended by Consob. In our

opinion, the balance sheet is coherent with the annual report of Banca Antonveneta S.pA.

for the year ended 31 December 2011.

Padova, 4 April 2012

KPMG SpA

Vito Antonini, Partner

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“REPORT OF THE BOARD OF STATUTORY AUDITORS FOR THE SHAREHOLDERS MEETING CALLED TO

APPROVE THE ANNUAL REPORT OF BANCA ANTONVENETA S.P.A. AS AT 31 DECEMBER 2011,

PURSUANT TO ARTICLE 2429, COMMA 2 OF THE ITALIAN CIVIL CODE”

Dear Shareholder,

During the period that ended on 31 December 2011, the Board of Statutory Auditors performed

supervisory activities as required by law based on behavioral principles recommended by the Consiglio

Nazionale dei Dottori Commercialisti (National Board of Accountants) and accounting professionals,

taking into account supervisory instructions received from the Bank of Italy and deliberations from

Consob.

As a first point of reference, this Board of Statutory Auditors was nominated in the Shareholder’s Meeting

of 29 July 2011.

The Board of Statutory Auditors, as foreseen by art. 2403 of the Italian Civil Code and Legislative Decree

n. 39/2010, organized their supervisory activities based upon the observance of laws and the Statute, in

respect of principles for correct administration, and in particular, the adequacy of the organization’s

structure, internal controls , and the accounting administration system, adopted by the Bank and on the

independence of the external auditor.

From the stated activity and their results, the Board of Statutory Auditors responds with the present

report.

The Board of Statutory Auditors emphasizes to have adhered to the request made by the President of

the Board of Directors on 20 March 2012, to waive the terms as per art 2429 of the Italian Civil Code,

that foresee making the annual report available by the Board of Directors.

The Board of Statutory Auditors has verified and determined that the annual report as of 31 December

2011, as restated in conformity with IAS-IFRAS (International Accounting Standards and International

Financial Reporting Standard) is in observance of dispositions from the Bank of Italy currently in effect,

correctly represents the income, shareholder’s equity, and financial situation of the Bank and its

management performance.

Net income for the current period, excluding the effects of PPA (Purchase Price Allocation),

amortization of intangibles with relative tax effect, impairment on intangibles, and value adjustments on

impairment, amount to Euro 160.7 million.

With respect to IAS 36, testing was performed on the impairment value and on the defined useful life of

the intangible assets, effected by the competent divisions of the Bank in collaboration and together

with the Group Head of Banca Monte dei Paschi di Siena S.p.A., and the annual report results

evidence a loss of Euro 1.295.712.349,73.

The Board of Statutory Auditors retains that the transactions effected by the Bank have been

conducted with respect to principles of correct administration, were deliberated and initiated in

conformity with the laws and social statute. They do not appear to have imprudent, risky manifestations,

with potential conflicts of interest or are in contrast with the deliberations assumed by the Assembly or

such so that compromise the integrity of the shareholder’s equity.

The Board of Statutory Auditors participated in 2 Assemblies, 3 Supervisory Board Meetings ex Leg.

Decree 231/01, and 13 Board of Director’s meetings, that have taken place during the year, and have

obtained by the Directors during the course of the aforementioned gatherings, periodic information on

the general performance of management and its predictable evolution, as well as on the delegated

faculties, and on operations of greater economic importance, finance, and equity effected by the

Bank.

The information received did not evidence the existence of atypical and or unusual operations, and

during the course of the year, transactions were initiated with related parties traceable to ordinary

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intergroup banking activities, for which, in accordance with regulatory provisions in force, information

has been provided in the report on management.

With regards to operations carried out with the entities that perform the functions of administration,

management, and control, they were deliberated with respect to art. 136 of the Cumulative Text

relating to banking and finance, and by supervisory instructions received from the Bank of Italy,

notwithstanding the obligations foreseen by art. 2391of the Italian Civil Code, in matters dealing with

the directors.

The Board of Statutory Auditors, in the course of 2011, was called upon to express their opinion on the

following matters:

- conformity of the operation for the issuing of bank bonds guaranteed by Banca Monte dei

Paschi di Siena S.p.A., as foreseen by law, supervisory regulations and dispositions, as well as the

impact of the activity on the bank’s economic-equity equilibrium;

- remuneration of the directors vested with special duties pursuant to art. 2389 of the Italian Civil

Code.

The Board of Statutory Auditors has acquired knowledge and supervises the adequacy and the

function of the organizational systems adopted by the Bank, that attribute clear tasks and responsibility,

and define the Bank’s decision making process, taking into account both the dimension of the Bank

and the activities outsourced to the Group Head and other specialized divisions of the Group on the

basis of special service contracts.

In addition, the Board of Statutory Auditors has:

- supervised the adequacy and the functioning of internal control systems and the administrative-

accounting system by obtaining information and data from the respective Bank division heads

and the external auditors. Retaining that the structure realized is adequate for the necessary

efficient monitoring of risk factors and that the operations carried out respect prescribed internal

and external regulations;

- examined the semi-annual summary reports on the internal review activity and the inspection

results performed during the course of the year by the Internal Audit of the Bank and Group

Head on the various departments, of which no particular anomalies emerged, and in fact the

presence of improvement in certain areas;

- verified, through periodic reports issued by the Compliance Office, the realization of the

foreseen project activity for guarantying the overseeing of non-conformity risk in the banking

activity;

- oversaw, the activity of correct accounting processes, auditing of the accounts and the

independence of the auditor, on the basis of information and documentation exchanged

during the course of periodic encounters with KPMG S.p.A, entrusted with the revision of

accounts during the ordinary Shareholder’s Meeting held 26 June 2009. No additional duties,

other than those determined by law, have been conferred to KPMG S.p.A. or their related

associates.

With regards to supervising the adequacy of the administrative-accounting system , the participation in

the meetings of the Board of Director’s and the information collected has permitted The Board of

Statutory Auditors to ascertain that the Bank is operating with respect to laws and the Statute, no

omissions or reprehensible issues or irregularities have emerged nor any significant issues that are in

contrast with the principles of the correct administration.

Within the course of 2011, no charges pursuant to ex art 2408 of the Italian Civil Code were made, given

that the social capital is entirely held by the stakeholder Banca Monte dei Paschi di Siena S.p.A.

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The Board of Statutory Auditors has read the report issued by KPMG S.p.A dated the 4 April 2012 on the

annual reports of Banca Antonveneta S.p.A as of 31 December 2011 pursuant to art. 14 and 16 of L.D.

39/2010, and art. 165 of L.D. 58/98, and take note that:

- they were drafted in conformity with the principles of art. 11 under the aforementioned decree;

- have provided an opinion on the annual report in conformity with the norms that discipline the

drafting;

- have expressed an opinion without any findings on the coherence between the Director’s

Report and the annual report;

- did not indicate the presence of any inconsistent information.

Taking into account, even the results of the activities performed by the company entrusted with the

revision of accounts, and taking note of the attesting letter issued by the Local Representative to the

Managing Provost for the drafting of financial statements of the Bank Group, the Board of Statutory

Auditors does not indicate any critical grounds on the approval of the Balance Sheets of Banca

Antonveneta S.p.A, closed on 31 December 2011, formulated by the Board of Directors that provide for

the covering of the loss for the period of Euro 1.295.712.349,73 in terms of the following:

Loss for the period € - 1.295.712.349,73

Reserves utilized:

-Residual profits brought to new € 755.909,66

-split surplus € 173.689.659,93

-Share premium € 1.121.266.780,14

Padova, 4 April 2012

THE BOARD OF STATUTORY AUDITORS

Pietro Fabretti, President

Alberto Dalla Libera, Auditor

Carlo Schiavone, Auditor