Montepaschi Group: a positive third quarter

Good recovery in income from banking activities ( 4.2%) driven by growing interest income ( 7%)

Loan loss provisions down (-8%)

Tier 1 at 11.1% (vs. 8.9% in June)

Direct funding 4.1% YoY

Group consolidated results for first 9 months of the year:

• Net Profit holds firm at EUR 304 mln (-15% YoY) despite difficult economic scenario (42.2 mln in third quarter)
• EUR 773.6 mln in Net Operating Profit ( 2.2% YoY)
• Revenues at EUR 4,239 mln, up 1.8% YoY
• Operating expenses 2 down 2.2% and cost/income at 59.7% vs. 61.6% at end of 2010
• Cost of credit continues to improve (provisioning rate at 72 bps vs. 74 bps at end of 2010) as does impaired loan coverage ( 20 bps in the quarter)
• Over 41,000 new customers acquired as of the beginning of the year
• Total funding up 0.7% YoY, thanks to increased direct funding ( 4.1%) Lending up ( 2.1% YoY), with positive input from new inflows of special-purpose loans
• Pre-funding of bonds maturing in 2012 continues: over 20% of institutional bonds and over 50% of retail bonds (vs. 20% in June) already funded
• Tier 1 at 11.1% vs. 8.9% in June. Capital benefits arising from the transaction for value creation from part of the Group's real estate properties (40 bps) were recognised in the quarter. I
• nitiatives aimed at reducing the capital needs estimated by the European Banking Authority (EBA) have been put in place.

The Board of Directors of Banca Monte dei Paschi di Siena SpA has today approved the Montepaschi Group's results for the first nine months of 2011 which are illustrative of how, in a market environment rendered more complex by the escalating sovereign debt crisis, the Group could consolidate its capital base and confirm the sustainability of its revenues, while continuing to improve cost of credit and operating efficiency.

Net profit for the period stood at EUR 303.5 mln and Net Operating Income (EUR 773.6 mln) was up 2.2% YoY, driven by growing revenues ( 1.8% YoY), lower loan loss provisions (-3.6% YoY) and substantially stable operating expenses ( 0.8% YoY).

Funding / lending results were also positive, with direct funding and Loans and advances to customers up respectively by 4.1% and 2.1% YoY. "Core banking" indicators are improving as well, with approximately 41,400 new customers since the beginning of 2011 and a retention rate of 96.9%.

Strengthening of the capital base continues, with Tier 1 now at 11.1% as compared to 8.9% in June.