3kLD0237_screenshow_english.ppt

MPS Presentation

Antonio VigniGeneral Manager

Merrill Lynch – Banking & Insurance CEO Conference

London07 – 09 Oct 2008

pag. 2

How MPS is dealing with market turmoil

Reinforced committment on cost restructuring

Working to anticipate the impact of 2009E cost synergies (50% of € 476mln

of total cost synergies)

Tight control on loans and confirmed good retail

funding growthRetail funding: +8% annualized

3Q08 vs 2Q08*

Delivery on asset disposal well on track

Confident in the closing of the branches disposal in the short term

* Figure at end September, referred to commercial network

pag. 3

GMPS key figures

€ 522 mln+2.6%

Reported net profit(MPS 6M + BAV 1M) +5.7%

Basic Income (MPS 6M + BAV 6M)

-2.0%Costs

(MPS 6M + BAV 6M) € 476 mlnCost Synergies

(Expected)

Well on track with BP target

+9.7%Direct Deposits

€ 7 bnNew Saving Inflows

+200,000Net New Clients (4% customer base)

25%Integration cost

already done

pag. 4

Pro-forma results* vs Business Plan target before synergies

5.7

Results

NII + Fees(6M BMPS+ 6M BAV)

1H08/1H07 (%) 2Q08/2Q07 (%)

7.95.8

-2Costs(6M BMPS+ 6M BAV)

-3.5

7.87.7

1H08/1H07 BP target

Loans (%) Direct Funding (%)

-1.8

BP targets

* Includes BAV for 6 months** Ex BAV: Inclusive of BAV: Loans +7.5%; direct funding +8.5%

Indirect Funding (%)

**9.7

5.6

1H08/1H07 BP target

**

-8

5

1H08/1H07 BP target

Synergies not included!Expected to contribute 30% of GOP growth in 2008/2011

Cost synergies expected €476mln

Cost of risk: 50 bps

vs 53bps avg in 2008-2011 BP

GMPS* Average**

NII +12.9% +11.2%

Net fees -3.8% -8.2%

Basic Income +7.3% +3.9%

Revenues -2.5% -2.1%

Costs -0.5% +3.3%

Net op.income -5.3% -7.8%

LLP +16.5%*

**+13.1%

Net Income +2.6% -6.2%

*Stand- alone, with IFRS5**Competitors are UCI, ISP, BAPO, UBI Pop Mi

1H08/1H07 2Q08/2Q07

1H08 and 2Q08 GMPS Results* versus Competitors**

GMPS* Average**

+14.6% +10.2%

-4.4% -9.9%

+8.3% +2.7%

+1.3% -0.5%

-0.7% +6.8%

+4.1% -8.1%

+17% *** +10.5%

+31.1% +8.5%

*** Net of Hopa/Fingruppo: Including these: +39.8% 1H08/1H07; 61.5% 2Q08/2Q07; LLP 50 bps

GMPS* Average**

Loans +7.8% +4.7%

Direct Funding +9.7% +5.1%

GMPS* Average**

Cost/Income 58.3% 57.3%

LLP 50bps*** 35.6 bps

1H08/200730/06/08

pag. 4

1,017 1,051

1,1441,193 1,207

2005 Qavg

2006 Qavg

2007 Qavg**

1Q08*** 2Q08***

* 4th quarters net of Junior notes / Banking book** Including Biverbanca in

Basic Income* (€

mln)

-2.2%

-1.5% -1.3%

1.9%

-0.2%

-2.0%

2003 2004 2005 2006 2007 1H08

Costs YoY evolution (€ mln)

Includes €95mln of

one-off

Our results confirm our focus on recurring revenues and cost containment

The basis of our

credibility

****

*** Only GMPS (ex BAV)**** Pro-forma MPS 6M + BAV 6M

Mln.€

+5.5%

pag. 6

pag. 7

Driven by a world-class franchise network

Market shares**vs Dec 07

Net New

Clients*

44,500

83,000

109,000129,000

161,000

197.000

31.03.07 30.06.07 30.09.07 31.12.07 31.03.08 30.06.08

4% Increase in GMPScustomer base

+290 bps

+50 bps

+130 bps

+40 bps

+20 bps

Mutual funds ConsumerCredit

Factoring Leasing Bancassurance

3,520

2,621

1,773 1,902

3,4063,590

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08Mln.€

WMGross Flows New

Savings inflows €7bn

in 1H08

*Active customers of BMPS, BAM , BT and B. Personale; ex BAV.** Not comparable with other figures reported: Mutual funds calculations are based on the new methodology and include foreign funds; Direct funding and Bancassurance were restated to include the sale of Banca Depositaria; loans include Consumit loans.

pag. 8

Jun-07 Jun-08

Short term deposits M/L term deposits

97,044106,487

Direct funding*

Loans*

Performance of direct funding and loans

€ mln

Jun-07 Jun-08

Short term loans M/L term loans

91,04598,182

* Commercial network, ex BAV. GMPS (stand alone) growth calculated on average balance: Direct funding +10%, Loans +11.8%

43,960

26,650

51,040

34,430

Jun-07 Jun-08Retail Corporate

€ mln

€ mln

+9.7%YoY

+11.7%YoY

+6.7%YoY

+7.8%YoY

+11.9%YoY

+0.1%YoY

Retail +16.1% YoY

Corporate +29.2% YoY

38,540

52,270

43,750

54,310

Jun-07 Jun-08Retail Corporate

Retail +13.5% YoY

Corporate +3.9% YoY

€ mln

pag. 9

Focus on:

BAV (Banca Antonveneta

stand alone)

BAV (Banca Antonveneta

stand alone)

Recurring revenues: +1.1% vs 1H07, +7.6% 2Q08 vs 1Q08

Costs well under control: -6.0% YoY and -1.1% 2Q vs 1Q

Direct funding: +9.7% YoY

Recurring revenues: +1.1% vs 1H07, +7.6% 2Q08 vs 1Q08

Costs well under control: -6.0% YoY and -1.1% 2Q vs 1Q

Direct funding: +9.7% YoY

Tier 1 and TCR (E)

Tier 1 and TCR (E)

Tier 1 at 5.1% in 1H08, 5.4% with B2 advanced full impact*

Total capital at 9.4%, 9.8% with B2 advanced full impact*

B2 standard for BAV and product companies

Asset disposals well on track

Tier 1 at 5.1% in 1H08, 5.4% with B2 advanced full impact*

Total capital at 9.4%, 9.8% with B2 advanced full impact*

B2 standard for BAV and product companies

Asset disposals well on track

SynergiesSynergies FY08 staff reduction planned already completed

FY08 Admin costs savings targets already met

BAM integration approved and to be completed by 3Q08

FY08 staff reduction planned already completed

FY08 Admin costs savings targets already met

BAM integration approved and to be completed by 3Q08

* Estimates including expected benefit from asset disposal in accordance with IFRS5 (Banca Monte Parma and MPS Sgr)

Asset Quality and Liquidity position

Asset Quality and Liquidity position

Asset quality under control, with increasing coverage in BAV

Good liquidity position, with a counterbalancing capacity

amounted to € 12 bn at mid September

Asset quality under control, with increasing coverage in BAV

Good liquidity position, with a counterbalancing capacity

amounted to € 12 bn at mid September

Branches ~2,000 ~3,000

o/w in Northern Italy 30% 43%

Market share 6% 9%

Customers (m) ~4.8 ~6.4

SME customers ~50,000

~80,000

Direct funding (€ bn) 113 138

Loans (€ bn) 106 137

from... ...to

“The New Group”*

* 2007

402, 6.4%

39, 4.1%

188, 7.2%

72, 7.8%

363, 10.5%

103, 8.8%

65, 11.8%

6,

0.6%

215, 6.3%

609, 25.6%

239, 9.2%

63, 9.4%

11, 11.2%

17,

12.1%

200,

11.4%

66,

12.5%

12,

1.8%

15, 6.0%

145, 9.1%

181, 13.0%

402, 6.4%

39, 4.1%

188, 7.2%

72, 7.8%

363, 10.5%

103, 8.8%

65, 11.8%

6,

0.6%

215, 6.3%

609, 25.6%

239, 9.2%

63, 9.4%

11, 11.2%

17,

12.1%

200,

11.4%

66,

12.5%

12,

1.8%

15, 6.0%

145, 9.1%

181, 13.0%

Market share by region

MS 10% -25%

MS 6% - 10%

MS 2% - 5%

MS < 2%

MS > 25%

Positioning (by branches) Italy: #3 North-West: #5 North-East: #3 Centre: #2 South & Islands: #3

BAV: The Acquisition Bolstering GMPS Competitive Positioning

8th November: Deal announcement30th May: BAV acquisition

2nd June: IT integrationFULLY INTEGRATED

IN A RECORD TIME

BAV BAV

pag. 10

pag. 11

389409 405

385

415

2Q07 3Q07 4Q07 1Q08 2Q08

First evidence of the commercial pick up in 2Q together with cost control

Basic income

1.0%

8.3%9.7%

5.4%4.7%4.0%

Jan-08 Mar-08 Jun-08*

Direct funding Loans

BAV network:

Direct funding and

loans YoY

performance

* Including Key clients positions

+6.7%

+7.8%

Mln.€

+3,000 new current account in June

+1,000 new retail customers in July

Costs

Mln.€

550517

1H07 1H08

-6.0%

BAV BAV

pag. 12* BMPS Group (pre BAV). **Figures refer to Banca MPS

Asset Quality Under Control*

Doubtful loans/Loans per Geographical Area**

123115

222

127

199

2Q07 3Q07 4Q07 1Q08 2Q08

Hopa

GMPS Loan Loss provisions

144

105

68

123

81

93

Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08

GMPS NPL flows

145 (ex Hopa)

Provisioning55 bps

(50bps ex Hopa)

Asset Quality

Asset Quality

GMPS

BAV111

204

126

1H07 2H07 1H08

Mln.€

-38% Loan Loss provisions

166179

118

2Q07 1Q08 2Q08

NPL flows

Mln.€Mln.€

•Provision/loans*80 bps (1H08 annualized)50 bps (2Q08 annualized) •NPL Coverage at 69% •+€100 mln of generic provisions (at 0.5% of performing loans, in line with GMPS) through PPA

Jun080.5%

Dec070.5%

Mar08 0.4%

Total:

Dec070.4%

Mar080.4%

Jun08 0.9%

Dec070.8%

Mar08 0.8%

Dec070.9%

Mar08 0.8%

Dec071.4%

Mar081.6%

Dec071.0%

Mar080.9%

Dec072.4%

Mar082.3%

Dec070.9%

Mar080.8%

Dec070.9%

Mar08 0.8%

Dec070.7%

Mar080.6%

Jun080.5%

Jun080.6%

Jun080.8%

Jun080.9%

Jun080.8%

Jun082.3%

Jun081.7%

Jun08 0.9%

29.9%

19.5% 19.1%

6.0%

-4.4%-5.2%

Mercosur OPEC C. Russia EU USA Japan

Italy exportgrowth 6M08

vs 6M07

Unemployment Rate (%)

4.03.2

3.8 3.5

4.94.3

6.86.0

Veneto Lombardy Tuscany Italy

2006 2007

Our core market macro scenario

GDP Growth

(2Q08/2Q07)

Core BAV

market

Core BMPS

market

Asset Quality

Asset Quality

pag. 13

50%

5%25%

20%

Agricolture Industry Building Services

+6.9%

+0.2%

flat

+0.6%

Families debt*: low leverage vs Europe

5,2%

10,6%

2,0%

3,6%

6,0%

9.4%

12.9%

0,6%

14,9%

Pension Funds

Mutual Funds

Insurance premium

Derivatives

Listed companies(n.)

Retail loans

Corporate loans

Total Loans

GDP

46

9363 54

25

12496 91

7047

Spain Germany Euro Area France Italy

1996 2007/Last available

*Source: ABI, data at 2006, Bank of Italy

Financial debt/disposable income (%)

Italy % of EU 25

Asset Quality

Asset Quality

pag. 14

pag. 15

The Counterbalancing capacity is the total amount of the assets immediately disposable in order to face liquidity needs

Funding

Breakdown

* Reported figures, including BAV

56%

34%

10%

Jun-08

Due to costumers SecuritiesFinanc.liabilities at FV

Wholesale Securities <15% total funding

c€5bn wholesale maturity in 2009

Maturity Ladder

1day 2days 5days 1month 3months

Liquidity

(€bn)14,785 14,193 14,429 12,734 11,823

Liquidity position

Liquidity position Liquidity Position under control

Loan / Deposit ratio

0.950.98

0.94

0.991.00

dec-05 Dec-06 Dec-07 Mar-08 Jun 08*

CD Programme and Counterbalancing Capacity (€/000)

Counter-balancing capacity:+€12bn

Loan/Dep Ratio post BAV at 1x

Liquidity and maturity ladder in the short term

-1,900

100

2,100

4,100

6,100

8,100

10,100

12,100

14,100

18-o

tt-0

7

1-no

v-07

15-n

ov-0

7

29-n

ov-0

7

13-d

ic-0

7

27-d

ic-0

7

10-g

en-0

8

24-g

en-0

8

7-fe

b-08

21-f

eb-0

8

6-m

ar-0

8

20-m

ar-0

8

3-ap

r-08

17-a

pr-0

8

1-m

ag-0

8

15-m

ag-0

8

29-m

ag-0

8

12-g

iu-0

8

26-g

iu-0

8

10-lu

g-08

24-lu

g-08

7-ag

o-08

21-a

go-0

8

4-se

t-08

18-s

et-0

8

Counterbalncing CD

Excess liquidity is invested in collateralized transactions

pag. 16

First 6 months of 2008 with many extraordinary activities

Right issue/Tier 1: € 5 bn + € 1 bn

Upper Tier II: € 2.2 bn

Asset disposal: € 850 mln cash inflows

(€ 1,420 mln at 30/09/08)

BAV IT integration: completed on June 2nd

BAM incorporation

Integration costs: € 138 mln*

Staff rationalization: 980 exits

Staff requalification (from BO to FO): 260

Admin costs synergies: € 33 mln of savings

Fund- raising

Group restructuring

Efficiency improvement

47% (77% at 30/09/08) of expected cash inflows

4 months earlier than expected

Approved on 28th Augustby Shareholders

25% of integration costs planned

82% of 2008 planned exits

35% of requalifications planned in BP

2008 target met ahead of schedule

Completely subscribed

Better than expected(planned amount € 2 bn)

*Pro-forma GMPS 6M + BAV 6M

SynergiesSynergies

pag. 17

2007* Incentivatedexits

Natural exits Hiring on thenetwork

1H08 (Anteasset

disposal)

Cost synergies

* FTE. Includes Antonveneta (9383) and Biver (696)

~ 34,200

~ 33,640~ 420~ 350

~ 630

560 net exits

82% of 2008 Target

~980 exits28% of planned exits

SynergiesSynergies

2008

2009

2010

2011

10% 100%50% 80%Reached in 1H08

Planned

2008 BP TARGET

ALREADY MET

€ 332 mln

10%

IT integration planned for Sep 08 but executed in June 08

P&L impact first expected in 3Q08

HR: Headcount reduction

Admin Costs:

ahead of schedule

2007Personnelexpenses

(net of one-off)

Inertialgrowth

Personnelmanoeuvre

2011EStructuralcost base

Personnel expenses evolution (€ bn) (pre-asset disposal)

2.47

0.20 0.14 2.52

Headcount reduction

pag. 18

Integration Charges highlights

57

81 138

GMPS BAV Total integrationcharges

25% of planned

integration charges

Mln.€

Integration charges

IT integration

and the size of a

“Big Bang solution”

65

676 138

IT integration Early retirement Consultancy andadvisory fees

and other

Total integrationcharges

Mln.€

Record integration time:

4.5 months (17 Jan – 31 May)

Roll out date: 2 June

Size:

994 branches

11,000 workstations

1,100 ATMs

65,000 POS

9,000 employees

Training:49,000 training hours To 7,000 employees1,400 resources supporting BAV staff in the first 2 months after integration

Customer care: Extraordinary Help DeskCost:

€ 65 mln

SynergiesSynergies

pag. 19

5.1% 5.4%

9.4% 9.8%

Tier 1 Tier 1** Total capital Totalcapital**

Tier 1 and TCR evolution

* Estimates include expected benefit from asset disposal in accordance with IFRS5 (Banca Monte Parma and MPS Sgr)

Tier1 and

Total Capital*

Further improvement from:

1. RWA optimization 2008 vs 2007

Asset disposal MPSimmobiliareReal Estate

BAV

BAVoptimization

Capital Mgmtactions

Optimizationactions

-5.1

-2.1-1.0 -4.0

-2.4

€ 1.0 bn € 1.2 bn € 3.0 bn20%

of expectedamount

30% of expected amount

125% of expected

amount

BETTER

THAN

EXPECTED

Results achieved (June 08)

€ bn

2. Asset disposal

** B2 advanced full impact; B2 standard for BAV and product companies

Tier 1 and TCR

Tier 1 and TCR

pag. 20

Assets dismissed in 9M08 and to be dismissed in 4Q08

90

255147 44

98

192 30

570

Fontana fredda

Finsoe Quadrifoglio Vita

Portinari Salvati

Valorizzazionimobliliari

BMParma*

MPS Gest.Crediti

MPS SGR

Assets dismissedin 9M08 …

… and to be

dismissedin 4Q08

Asset Status

Marinella Exclusive agreement with CCC-Unieco

Via Normanni (Rome) 2 binding offers received

Branches (125-150) Non binding offers received; binding offers expected in October

MPS Immobiliare In progress

Mln.€

€ 1,420 mln cash inflow

* Subject to regulatory approval

Tier 1 and TCR

Tier 1 and TCR

Cash inflows (€ mln)

Structural growth: confirmed in GMPS and starting in BAV

1H08 Results: Good results notwithstanding the macro environment and in line with Business Plan

Asset quality and liquidity position: under control

Cost synergies: already reached the 2008 BP target

Capital: Tier 1>6%, also thanks RWA optimization and asset disposal

Conclusion

pag. 22

Contacts

Contacts

Investor RelationsPiazza Salimbeni, 3

53100 Siena

Tel:+39 0577-296477

Investor Relations Team:

Alessandro Santoni (Head)

Simone Maggi

Elisabetta Pozzi

Email: Investor.Relations@banca.mps.it

Declaration

In accordance with section 2, Article 154- bis of the Consolidated Law on Finance (TUF), the Financial Reporting Manager Daniele Pirondini, declares that the accounting information contained in this press release corresponds to documentary records, ledgers and accounting entries.

pag. 23

This document has been prepared by Gruppo Monte dei Paschi di Siena solely for information purposes and for use in presentations of the Group’s strategies and financials. The information contained herein has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the company, its advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, actual results may vary.

This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsover.

The information herein may not be reproduced or published in whole or in part, for any purpose, or distributed to any other party. By accepting this document you agree to be bound by the foregoing limitations.

Disclaimer