the bank of italy promptly notified the suspension of voting rights to the persons indicated in the consob resolution and initiated the administrative sanction procedure against them for violations of the provisions concerning the notification of shareholders ’ agreements to the bank of italy and the authorization to acquire major shareholdings. furthermore, judging that there had been instances of non - compliance with the rules on credit management, the bank of italy initiated an additional sanction procedure against bpl. the consob resolution, which was transmitted to the bank of italy in a letter dated 11 may, substantially modified the information available to the bank ; the obligation to make a tender offer, with a further outlay of cash, altered the overall context of the supervisory evaluations. on 17 may bpl, conforming with the obligations resulting from consob ’ s finding, applied to the bank of italy to authorize the mandatory cash tender offer as well and transformed the exchange tender offer for which it had applied for authorization on 5 may into a cash and exchange tender offer basically similar in content to the exchange tender offer. at the same time bpl executed a shareholders ’ agreement among the persons indicated in the consob resolution, which was notified pursuant to article 20 of the consolidated law on banking. on 2 june the shareholders ’ meeting of banca popolare di lodi approved a €1. 5 billion capital increase ; on the same occasion the name of the bank was changed to banca popolare italiana ( bpi ). the offering terminated on 15 july with an acceptance rate of 99 per cent, which took the capital ratios well above the regulatory minimums. in view of the uncertainties regarding the transactions for the capital cover of the mandatory tender offer, on 8 june the bank of italy asked bpi to submit documents on the actions intended to ensure that the 8 per cent requirement would continue to be satisfied after the acquisition. in addition, the bank formalized some especially stringent guidelines that bpi was to follow in order to ensure that the bank ’ s capital base could sustain the mandatory tender offer. bpi responded to the requests by providing updates and documents on the capital strengthening needed to sustain the acquisition of control of banca antonveneta. 6 / 14 lastly, on 20 june the bank of italy initiated an inspection of a general nature at bpi, inter alia with the aim of checking, in connection with the acquisitions, the bank ’ s capital ratios, its credit disbursement and management procedures and

to the documents produced by bpl at the beginning of may, it was found that the acquisitions had been effected with less recourse to securities lending and pledges of shares than originally proposed ; moreover, it appeared that the timetable for the sale of minority shareholdings had not been respected. as a consequence, from april of this year the capital ratios were briefly out of line, although the shortfall was subsequently removed. these circumstances have no bearing on the effects of the authorization already granted by the bank of italy, as confirmed by the recent decision of the lazio administrative court dated 13 - 19 july and filed on 9 august, but they are relevant for sanctions. the relative investigations, which began immediately, concluded with a formal notice issued on 29 july to the members of bpl ’ s board of directors and board of auditors. 5 / 14 2. 5 bpl ’ s takeover bids for antonveneta on 22 april banca popolare di lodi gave the bank of italy prior notification of a plan to acquire control of banca antonveneta by means of an exchange tender offer. the formal application was filed on 5 may. preliminary estimates showed that bpl ’ s capital ratios after the acquisition would have been above the regulatory minimum regardless of the amount of shares tendered. moreover, the planned capital increase of €1. 5 billion would have further increased the capital surpluses. in april consob, with which the bank of italy had begun cooperating in february with regard to the transactions involving antonveneta ’ s capital, intensified its checks. among other matters, consob informed the bank of italy of the acquisition of antonveneta shares by bpl on behalf of a number parties. consob investigated this activity on the basis first of information requested from bpl and then of inspections and the central credit register data it requested on two occasions from the bank of italy. the requests for central credit register data were transmitted on 20 april and 4 may and satisfied by the bank of italy in six and two working days respectively. with a resolution dated 10 may consob, proceeding on its own authority, found that an undeclared shareholders ’ agreement existed between bpl and other antonveneta shareholders for the concerted acquisition of antonveneta shares and the exercise, individually or jointly, of a dominant influence over antonveneta ; the resolution also drew attention to the manner in which loans had been granted for the purchase of antonveneta shares.