Bper Banca — Governance Information 2018

Feb 28, 2018

Optimal quali-quantitative composition of the Board of Directors

Modena, 27 February 2018

1		FOREWORD 3
2		CHARACTERISTICS OF THE BANK. COMPOSITION AND FUNCTIONING OF THE BOARD OF DIRECTORS 3
	2.1	CHARACTERISTICS OF THE BANK 3
	2.2	TOTAL NUMBER OF DIRECTORS 4
	2.3	ROLES WITHIN THE BOARD OF DIRECTORS 4
	2.3.1 2.3.2	Chairman 4 Executive Directors 5
	2.3.3	Non-executive Directors 5
	2.3.4	Independent Directors 5
	2.4	BOARD COMMITTEES 5
	2.4.1	Executive Committee (EC) 5
	2.4.2	Nominations Committee (NC) 6
	2.4.3	Remuneration Committee (RC) 6
	2.4.4	Control and Risk Committee (CRC) 6
	2.4.5	Independent Directors' Committee (IDC) 6
	2.4.6	Strategy Committee (SC) 6
3		SUMMARY OF THE REGULATORY AND STATUTORY REQUIREMENTS FOR MEMBERS OF THE BOARD OF DIRECTORS 6
	3.1	GOOD REPUTE AND INTEGRITY 7
	3.2	PROFESSIONALITY AND COMPETENCE 8
	3.3	TIME COMMITTEMENT 9
	3.4	NUMBER OF DIRECTORSHIPS 10
	3.5	INDEPENDENCE 10
	3.6	INCOMPATIBLE OFFICES 12
	3.7	DIVERSIFICATION AND GENDER QUOTAS 12
4		OUTGOING BOARD OF DIRECTORS' ORIENTATION ON THE COMPOSITION OF THE NEW
		MANAGEMENT BODY AND RECOMMENDATIONS TO THE SHAREHOLDER, FOR THE FORMATION OF THE LISTS 12
	4.1	QUANTITATIVE COMPOSITION OF THE BOARD OF DIRECTORS 12
	4.2	QUALITATIVE COMPOSITION OF THE BOARD OF DIRECTORS 13
5		ANNEXES 16

1 Foreword

The current corporate governance regulation for banks¹ pays particular attention to the adequacy of the composition of the strategic supervision and management bodies. Within this framework, in order to assure suitable governance and control over the business and its correlated risks, the Regulatory Provisions of the Bank of Italy² require that the above bodies shall be composed of members who:

• are fully aware of the powers and obligations inherent in the functions which they are called to perform;
• possess adequate professional requirements for the role to be covered which are in line with the bank's size and operational characteristics;
• have adequate, appropriately widespread and diversified skills and experiences so that each member can contribute, among other things, to the identification and pursuance of suitable strategies and assure effective risk governance in all areas of the operations of the bank and, where necessary, of the Group;
• can dedicate adequate time and resources to their assigned position;
• direct their actions to the pursuance of the overall interests of the bank, irrespective of who voted for them or of the list in which they appeared, exercising their independence of mind.

The above-mentioned Supervisory Regulations regarding corporate governance require, furthermore, that the bodies themselves identify their "optimal quali-quantitative composition", taking into account the size and complexity of the companies and groups to which they belong, and that, in the event of nominations, the results of this analysis shall be made known to the Shareholders in time for the candidates' selection.

Given the forthcoming election of the members of the Board of Directors of BPER Banca S.p.A. (hereinafter also "BPER Banca", "BPER" or "Bank"), during the Shareholders' Meeting to approve the financial statements for 2017, its optimal quali-quantitative composition is made known to the Shareholders by the Board of Directors in office, so that the selection of the candidates can be taken into account.

On this occasion and for this purpose, it is considered useful to recall the regulatory and statutory requirements for the Board of Directors' members.

2 Characteristics of the bank. Composition and functioning of the Board of Directors

2.1 Characteristics of the Bank

The Bank is a joint stock company with registered offices in Modena (Italy), which originated from mergers of various centuries-old banks, including Banca Popolare di Modena, which was incorporated on 12 June 1867.

The Issuer is listed on the Mercato Telematico Azionario (MTA) organised and managed by Borsa Italiana and contributes to the formation of the Dow Jones STOXX 600 Index. BPER stock is also included in the

¹ During 2017, the regulatory context underwent multiple updates. At a European level to be noted are on 26 September 2017 the enactment by EBA (European Banking Authority) and ESMA (European Securities and Markets Authority), of the "Joint Guidelines on the assessment of the suitability of members of the management body and key function holders under Directive 2013/36/EU and Directive 2014/65/EU" (hereinafter also "Joint Guidelines EBA/ESMA"), and the publication, on 15 May 2017, of the "Guide to fit and proper assessments" (hereinafter also "ECB Guide") by the European Central Bank (hereinafter also "ECB"). On the national side, the Ministry of Economy and Finance made available for consultation the draft of the Ministerial Decree implementing art. 26 of Leg. Decree no. 385 of 1 September 1993 (hereinafter also "Consolidated Banking Law" or "CBL") containing the regulations related to suitability requirements and criteria for the performance of the roles of the corporate exponents of banks, financial intermediary companies, Confidi associations, electronic money institutions, payment institutions and deposit guarantee systems. This consultation was concluded on 22 September 2017 and the enactment of the provision is pending.

² "Supervisory provisions for banks", Bank of Italy, Circular no. 285 of 17 December 2013 (hereinafter also "Supervisory Provisions"), Part One, Title IV (hereinafter also "Supervisory Provisions on corporate governance").

FTSE MIB index, which means that it is traded on the After Hours (TAH) market of the Multilateral Trading Facility (MTF).

Since its inception, BPER has adopted the standard system of administration and control described in paragraphs 3 and 4 of Section VI-bis, Chapter V, Title V, Book V of the Civil Code, founded on the existence of a Board of Directors and a Board of Statutory Auditors.

As from the date of implementation of the European Single Supervisory Mechanism (4 November 2014), BPER has been subject to prudential supervision by the European Central Bank, given that it is a "significant bank" pursuant to art. 6, paragraph 4 of (EU) Regulation 1024/2013.

Due to the foregoing and to the fact that it is a listed bank, BPER falls within the category of "larger and more complex banks" indicated by the Supervisory provisions for Banks, Bank of Italy Circular no. 285/2013, Part I, Title IV, Chapter 1.

In compliance with Decree Law 3/2015 ("Urgent measures for the banking system and investment") converted into Law 33/2015, following a resolution passed by the Bank's Shareholders' Meeting on 26 November 2016 the legal form was transformed from a cooperative company to a joint stock company and the company name was changed from "Banca popolare dell'Emilia Romagna società cooperativa" to "BPER Banca S.p.A."

BPER Banca is the parent of the Banking Group of the same name (hereinafter also the "Group" or the "BPER Group") that was formed in 1992. Group companies are subject to management control and coordination also pursuant to art. 61 of CBL by the Parent Company, which provides guidelines for the implementation of the instructions issued by the Bank of Italy in the interests of the Group and its stability.

The Bank has adhered to the Corporate Governance Code for listed companies promoted by the Corporate Governance Committee constituted by Business Associations (ABI, ANIA, Assonime, Confindustria) and professional investors (Assogestioni), as well as by Borsa Italiana S.p.A (hereinafter also "Corporate Governance Code").

2.2 Total number of Directors

The Supervisory Provisions on corporate governance prescribe, for larger and more complex banks like BPER, that the total number of Directors cannot exceed fifteen, except under very particular, well-justified circumstances.

The current number of members of the Board of Directors of BPER, as defined in art. 17, paragraph 1, of the Articles of Association, consists of fifteen Directors, in line with the mentioned provision.

On the occasion of the Shareholders' Meeting called to approve the financial statements for 2017, which sees the conclusion of the transitional phase for ending the system of appointing Directors with mandates which expire on different dates (so-called "staggered board") adopted until the Shareholders' Meeting held in April 2017, the term of office of the entire Board of Directors will expire, pursuant to art. 45 of the Articles of Association.

The Shareholders' Meeting will therefore be called upon to appoint, pursuant to art. 17, paragraph 1, of the Articles of Association, fifteen Directors, with a three-year term of office.

2.3 Roles within the Board of Directors

Different roles can be identified within the management body: Chairman, Chief Executive Officer, Executive Directors, Non-executive Directors and Independent Directors.

2.3.1 Chairman

The Chairman of the Board of Directors, elected by the Board of Directors from among its members,

performs an important function aimed at promoting internal debates and assuring a balance of powers, also through the performance of tasks attributed to her/him in relation to the organization of Board activities and the transmission of information; as prescribed by the mentioned Supervisory Provisions on corporate governance, (s)he has a non-executive role and performs no managerial functions, not even de facto.

2.3.2 Executive Directors

Executive Directors are intended as Directors who in BPER or in any of the Group's companies:

• a) are members of the Executive committee or have been delegated with executive individual mandates (Chief Executive Officer) or perform, also if merely de facto, functions pertaining to management of the company;
• b) they hold management positions, or have the task of supervising specific company management areas.

In particular, the role of the Chief Executive Officer is envisaged in art. 30 of the Articles of Association. In this respect, it should be noted that, in line with the recommendations set out in the Corporate Governance Code, the Chief Executive Officer cannot perform the role of Director of other entities not belonging to the same Group, whose Chief Executive Officer is a Director of the Bank.

2.3.3 Non-executive Directors

Non-executive Directors participate in the decisions taken by the entire Board and are called to perform a dialectical and monitoring role on the choices made by the executive Directors and by the management of the Bank, also within the Board Committees of which they are members.

2.3.4 Independent Directors

Within the Board and its Committees, Independent Directors are called to oversee the management, contributing towards assuring that it is performed in the social interest and in a manner consistent with the principles of sound and prudent management. They constitute a control over the risk of conflicts of interest, to avoid possible distortions in the resources allocation process. The independent Directors must have such professional capabilities and authority as to assure a high level of dialectics within the body to which they belong and to provide a significant contribution to shaping its will. The minimum number of Directors who must meet the independence requirement is determined by the Articles of Association³ as five.

2.4 Board Committees

The Board of Directors has set up some internal Committees, establishing their composition, competencies and functioning. The activities of the Committees are coordinated by the relative Chairman, appointed by the Board. An overview of the Committees in force at the date of this document is provided below, based on the respective "Operating rules" approved by the Board of Directors. For further details reference should be made to the annual Report on Corporate Governance and ownership structure, published in the institutional area of the Bank's website, in the Governance/Documents section.

2.4.1 Executive Committee (EC)

Composed of a minimum of three, up to a maximum of five Directors, including the Chief Executive Officer by right; it is the body vested – together with the Chief Executive Officer – through delegation by the Board of Directors in compliance with art. 29, paragraph 3, of the Articles of Association, for current management

³ See art. 21, paragraph 2, of the Articles of Association of BPER Banca. This minimum threshold is in line with the requirements of: (i) Supervisory Provisions, Part One, Title IV, Chapter 1, Section IV, which establish that in a body with strategic supervisory functions at least a quarter of its components must meet independence requirements; (ii) art. 147-ter, paragraph 4, of the Legislative Decree no. 58/1998 (hereinafter "Consolidate Financial Act" or "CFA"), which provides that, for Boards of Directors of more than seven members, the presence of at least 2 independent directors is necessary; (iii) art. 3 of the Corporate Governance Code which provides that for issuers belonging to the FTSE MIB index at least one third of the Board of Directors must be composed of independent directors.

of the Company and the implementation of the strategic guidelines authorized by the Board of Directors. In 2017, 21 EC meetings were held, with an average duration of 1 hour and 34 minutes.

2.4.2 Nominations Committee (NC)

Composed of three non-executive Directors, the majority of whom meet the independence requirements, it performs advisory, investigative and propositive functions to support the activities of the Board of Directors, in matters pertaining to nominations, the quali-quantitative composition, the self-assessment of the Board, and the suitability of Directors. In 2017, 13 NC meetings were held, with an average duration of 46 minutes.

2.4.3 Remuneration Committee (RC)

Composed of three non-executive Directors, the majority of whom meet the independence requirements, at least one of whom has adequate knowledge and experience in finance matters or remuneration policies; it performs advisory, investigative and propositive functions to support the activities of the Board of Directors, in matters pertaining to remuneration, and in particular to the definition and implementation of remuneration policies and incentive schemes as well as the determination of the remuneration granted to the Directors and to key personnel. In 2017, 19 RC meetings were held, with an average duration of approximately 1 hour and 15 minutes.

2.4.4 Control and Risk Committee (CRC)

Composed of a minimum of three, up to a maximum of five non-executive Directors, the majority of whom have to meet the independence requirements, at least one of whom has adequate knowledge and experience in accounts and finance or risk management matters; it performs advisory, investigative and propositive functions to support the activities of the Board of Directors, in relation to the determination of the RAF ("Risk Appetite Framework") and risk governance policies and the internal control system. Furthermore it is responsible for the supervision of sustainability matters related to the company's activities and to the dynamics of interaction with the stakeholders. In 2017, 20 CRC meetings were held, with an average duration of approximately 3 hours and 40 minutes.

2.4.5 Independent Directors' Committee (IDC)

Composed of three non-executive Directors who have to meet the independence requirements, including at least one chosen from the Directors elected by minorities, if any; it performs the tasks and exercises the powers attributed to the independent Directors by the legislative and regulatory requirements in force related to correlated parties and connected counterparties (including CONSOB Regulation no. 17221/2010 related to provisions on Correlated Parties and the Bank of Italy Circular no. 263 of 27 December 2006). In 2017, 14 IDC meetings were held, with an average duration of approximately 46 minutes.

2.4.6 Strategy Committee (SC)

Composed of a minimum of three, up to a maximum of five Directors, including, by right, the Chairman of the Board of Directors and the Chief Executive Officer; it performs advisory, investigative and propositive functions to support the activities of the Board of Directors, in general, planning and strategic matters in relation to strategic transactions, business and finance plans. In 2017, 8 SC meetings were held, with an average duration of approximately 46 minutes.

3 Summary of the regulatory and statutory requirements for members of the Board of Directors

The suitability of the members of the management body to cover the role is assessed on the basis of a wide range of requirements and criteria related to: good repute and integrity; professionality, competences and experience; time committement; number of directorships; independence; incompatibility of roles; diversity.

The fit and proper assessment is part of the ordinary supervisory activities performed by the ECB on the governance of credit institutions. For the performance of its function, the ECB can use all the powers

envisaged by the relative regulations in force – in particular, in this respect, reference is made to the requirements of (EU) regulation no. 1024/2013 of 15 October 2013 (so-called "MVU Regulation") – including, for example, the imposition of conditions or obligations as well as recommendations regarding decisions on the professionality and good repute requirements, up to the removal of members who do not meet the envisaged requirements.

It should be noted that the examination of the adequacy of Directors will be one of the first tasks facing the newly appointed Board of Directors.

The Bank recommends to Shareholders, who intend to present a list for the election of the Board of Directors, to choose candidates who are suitable for the role as set out in the requirements and criteria in force.

The following paragraphs illustrate the national regulations concerning the above-mentioned aspects together with the guidelines issued at a European level by the European Banking Authority (the already mentioned Joint Guidelines EBA/ESMA) and the criteria effectively applied by the ECB in the assessments within its competence, contained in the ECB Guide of May 2017. It is recalled that the Guide and the attached documents also provide information which the Supervisory Authorities expect to receive in order to assess the suitability of themember. Furthermore, attention is drawn to the principles contained in the Corporate Governance Code. It should also be noted that, at the date of this document, the Decree, implementing the provisions of art 26 of the CBL, has not yet been enacted by the Ministry of the Economy and Finance (hereinafter also "MD MEF"), the draft of which was made available for consultation in August 2017. Although this document is not in force and may be subject to modification when it is adopted, it is considered appropriate to draw attention to the principles contained therein.

Notwithstanding the fact that it is the responsibility of the presenters of the lists to ensure the suitability of the candidates contained therein with respect to the applicable pro-tempore regulations and the provisions of the Articles of Association, the Board of Directors reserves the right to publish integrations and/or modifications to this document and to its annexes, in the event – before the deadline for the submission of lists – of significant regulatory changes deriving, for example, from the issuance of the Legal Decree MD MEF, on this subject.

The indications on the principles and the criteria envisaged by the EBA/ESMA guidelines, by the ECB Guide, and by the Corporate Governance Code are highlighted, in the following paragraphs, on a grey background.

3.1 Good repute and integrity

At the date of this document, in relation to good repute and integrity requirements, the provisions which apply are shown in articles 4 and 5 of Ministerial Decree no. 161/1998 ("Regulation governing the identification of good repute and professionality of bank exponents and the reasons for suspension") together with, under art. 147-quinquies, paragraph 1, of CFA, the provisions of art. 2 of the Ministerial Decree no. 162/2000 "Regulation on the professionality and good repute requirements of members of the board of statutory auditors of listed companies to be enacted on the basis of article 148 of legislative decree no. 58 of 24 Februrary 1998), to which reference should be made. The lack of the requirements envisaged determines the impossibility of assuming the role or the removal from office. Attention is also drawn to the reasons for suspension from the office of director envisaged by art. 6 of the above-mentioned Ministerial Decree no. 161/1998.

In addition to the good repute requirements pursuant to the above-mentioned provisions, the exponents must satisfy high standards of integrity in their personal and professional conduct carried out in previous years, so as to leave no doubt whatsoever on their ability to guarantee sound and prudent management of the credit institution. For this purpose a series of other elements are considered which are indicated in the Joint Guidelines EBA/ESMA and in the ECB Guide, to which reference should be made.

In particular, elements of assessment are represented by all factors pertaining to reputation and to correct behavior, such as, for example: pending criminal or administrative proceeding (e.g. concerning financial banking issues); refusal of registration, authorisation, membership or license to carry out a trade, business or profession; or the withdrawal, revocation or termination; disciplinary actions, also pending ones.

3.2 Professionality and competence

At the date of this document, the requirements in force are related to the professional requisites provided in art. 1 of the above-mentioned Ministerial Decree no. 161/1998, to which reference should be made. A lack of the requirements envisaged determines the impossibility of assuming the role or the removal from office.

It is, therefore, necessary to remember that the professionality of the Directors is also subject to specific consideration in the Joint Guidelines EBA/ESMA and in the ECB Guide, which envisage that the members of the management body must possess the knowledge, the competence and the experience necessary in order to perform the functions attributed to them.

In this respect both the theoretical knowledge – acquired through education and training courses – and the practical experience, gained through the performance of previous or current work experience are taken into consideration.

The ECB, in its Guide, has provided an expected adequacy criteria for exponents, under the abovementioned profiles, based on differentiated experience thresholds according to the role covered:

Chief Executive Officer:	10 years of recent pratical experience(a) in areas releated to banking or financial services. This should include a significant proportion ofsenior level managerial positions(b)
Executive Director:	5 years of recent pratical experience(a) in banking or areas related to financial services in senior-level managerial positions(b)
Non-executive Chairman:	10 years of recent relevant(c) practical experience. This should include a significant proportion of senior level managerial positions and significant theoretical experience in banking or a similar relevant field.
Non-executive Director:	3 years three years of recent relevant practical experience at high level managerial positions(d) (including theoretical experience in banking). Practical experience gained in the public or academic sector could also be relevant depending on the position held.

(a) Not dating back more than 12 years.

(b) This is understood as at least one level below the management body in its management function.

(c) In assessing relevance, the degree of similarity in the size and complexity of the institutions where previous experience was

obtained should be considered.

(d) One or two levels below the management body in its management function.

Notwithstanding the need for all the members of the management body to possess, as a minimum requirement, a basic technical knowledge of the banking sector which allows the understanding of the activities and the main risks of the institution, in the event that the above mentioned thresholdsare not met, the member can however be considered suitable as the result of a supplementary assessment on the knowledge, competence and experiences in his/her possession, which takes into account the need of a sufficient degree of diversity and the wide range of experience in the management body as a whole.

The areas of competence considered necessary for the correct and effective performance of the functions of the Board of Directors⁴ are the following:

▪ Dynamics of the economic-financial system

The knowledge/competence pertaining to the main economic variables and their interdependence such as, for example, the level and growth rate of GDP, interest rates, unemployment and inflation as well as knowledge of the monetary and financial markets and the set of instruments, institutions, mechanisms which ensure the creation and the movement of means of payments and the transfer of financial balances.

▪ Legal requirements and regulatory framework

The knowledge/competence pertaining to the main regulations in the sector (e.g. financial markets, governance, fiscal, anti-money-laundering, usury, transparency in banking operations, privacy, etc.).

▪ Strategic planning

⁴ In particular reference should be made to Chapter 4.

The knowledge/competence pertaining to the identification and the definition of strategic guidelines and the consequent assessment of the measures necessary in order to guarantee the sustainability of the bank's business (e.g. definition of the business plans, assessment of the budget processes, etc.).

▪ Corporate governance and business management processes

The knowledge/competence pertaining to: corporate governance, law, relations with stakeholders, human resources management; corporate social responsibility; levels of performance planned and reached; remuneration and incentive systems; management of conflict of interest.

▪ Organizational framework and IT systems

The knowledge/competence pertaining to: corporate organization; outsourcing policies; management mandates; information e communication technology (so-called ICT) and the related processes; business continuity and disaster recovery; data quality management.

▪ Risk management and control

The knowledge/competence pertaining to: methodology for identifying, measuring and managing the risk of an institution, risk management processes and tools (e.g. ICAAP, ILAAP, RAF, etc.); models for assessing the company's activities; management of non-performing loans; stress testing models.

▪ Internal control systems

The knowledge/competence pertaining to the definition and structure of the internal controls system with particular reference to the company's second and third-level control functions: Compliance; Anti-moneylaundering; Risk Management; Validation; Internal Audit.

▪ Banking and financial markets

The knowledge/competence pertaining to the main processes related to the subject, inter alia, to: customer services; payment systems; credit; investment services, consultancy and asset brokerage; treasury and liquidity management; management of the assets belonging to the Bank.

▪ Accounting and financial disclosures

The knowledge/competence pertaining to financial statements and disclosures of a financial nature.

In addition to the professionality requirements shown above (so-called "hard skills"), the personal characteristics and abilities of the members are also taken into consideration (so-called "soft skills", indicated in the Joint Guidelines EBA/ESMA and illustrated in annex 1).

3.3 Time committement

In order to assure the correct and effective performance of their duties, Directors must be able to commit sufficient time to performing their functions in the Bank. This availability must be greater for the Directors who have been assigned specific executive duties and/or who are involved in the Board's Committees.

For information purposes – it should be noted that in 2017, 22 meetings of the Board of Directors were held at BPER Banca's headquarters⁵ , with an average duration of approximately 5 hours and 35 minutes. In relation to the frequency and duration of the Board Committees, reference should be made to paragraph 2.4.

Furthermore in 2017, 4 training sessions were held with an average duration of approximately 5 hours and 30 minutes each, in addition to induction sessions for newly appointed Directors for a total of approximately 10 hours. Bearing in mind the importance that BPER Banca pays to professional training, it

⁵ The Bank's headquarters is located in Modena, in Via San Carlo 8/20. According to the Articles of Association, it should be noted that the meetings of the Board of Directors can also be held through remote communication systems, as long as the conditions specified therein are met (see art. 24, paragraph 3).

is likely that training activities will also proceed over the following years with time consumption that is the same or higher than the one indicated above.

3.4 Number of directorships

In relation to the number of directorships, it is worth drawing the attention of Shareholders to the specific provisions of art. 91 of the Directive so-called "CRD IV"⁶ , which will be formally transposed into national law through MD MEF.

It should be noted that in compliance with CRD IV, each component of larger and more complex banks cannot assume a total number of directorships⁷ in banks or in other commercial companies which is higher than one of the following alternative combinations, including the role covered in the Bank in the calculation:

• a) 1 executive directorship and 2 non-executive directorships;
• b) 4 non-executive directorships.

For the purposes of the above calculation, the directorships covered are considered as a single directorship in each of the following cases: i) if they are within the same group; ii) if they are in banks belonging to the same institutional protection scheme; iii) if they are in companies, which do not belong to the same group, in which the Bank has a qualified shareholding as defined in regulation (EU) no. 575/2013, article 4(1), point 36⁸ .

3.5 Independence

All the Directors must act with independence of mindand must be aware of the duties and rights related to their role, in the interest of sound and prudent management of the Bank and in respect of the laws and regulations in force.

Given the above, the Board must comprise an adequate number of non-executive Directors qualified as "independent", as they do not hold or have not recently held relations that would condition their independent judgment (see also paragraph 2.3.4).

In the absence of further regulatory provisions – which could be produced by the enactment of MD MEF – at the date of this document the independence requirements of the Directors, pursuant to art. 18, paragraph 2, of the Articles of Association, should be assessed in the same manner as the combined provisions of articles 147-ter and 148, paragraph 3, of the CFA, which establish the reasons for ineligibility and disqualification of the statutory auditors of companies which are listed on regulatory markets.

In application of the mentioned provisions, the Board of Directors, in accordance with the requirements of art. 21, paragraph 2 of the Articles of Association, has established parameters on which to put these provisions in practice, in order, in particular, to identify the suitability, from an economic and professional point of view, of the relationships maintained by the Directors which are likely to compromise their independence. More specifically, the Board has established that:

⁶ Directive 2013/36/EU of the European Parliament and the Council of 26 June 2013 on the access to the activities of credit institutions and on the prudential supervision of credit institutions and on investment companies.

⁷ "Appointment" is intended as appointments, however described: i) on Boards of Directors, on Supervisory Boards, Management Boards; ii) Board of Statutory Auditors, iii) as General Manager; for foreign companies, appointments are considered equivalent to those in sub i), ii) e iii) on the basis of the law applicable to the company; the role of alternate member does not constitute an appointment, up to the moment of becoming a serving member.

⁸ Article 4(1), point 36 of (UE) regulation no. 575/2013 defines "qualified holding": a direct or indirect participation in the undertaking which represents at least 10% of the capital or of the voting rights or makes it possible to exercise a significant influence over the management of that undertaking.

• with reference to cash or endorsement facilities or other financial transactions with the BPER Group, regardless of the relative technical form, the independence requirements are considered no longer met if even only one of the following conditions is confirmed:
• (i) the total loan amount granted by the Group to a Director who qualifies him/herself as independent – is equal to or over Euro 400.000,00;
• (ii) when the total loan amount granted by the Group to a Director who qualifies him/herself as independent – is equal in absolute terms to Euro 200.000,00 and represents an amount equal to or above 50% of his/her total credit exposure on the Italian banking system resulting from the data provided by Bank of Italy's Credit Bureau;
• (iii) when the Director who qualifies him/herself as independent is the holder of accounts with the Group reported in the "non-performing" status for Supervisory purposes;
• with reference to self-employment or professional activities or other relations of a financial nature, when the overall annual income of the Independent Director received from the BPER Group and/or from Directors of the BPER Group and/or spouses, relatives or persons with a similar relationship up to the forth degree with a Director of the BPER Group, is equal to at least 30% of the overall annual income of the interested party. The calculation excludes all remuneration and reimbursement of expenses deriving from the activities as Director within the Group as well as income from banking/company relationships at market or standard terms.

For the purposes of the above, indirect interests in companies, bodies or entities owned by or in which the Director who qualifies him/herself as independent has an interest are also considered, as well as professional associations, of which he/she a member.

The Board of Directors, by means of a justified resolution, may consider that, despite the presence of relations of a financial or professional nature which fall into the above categories, a Director is however in possession of the independence requirements when, in the light of all the possible circumstances ascertained, it arises that these situations are not suitable, in a concrete and individual manner, to prejudice his/her independence. At the same time, the Board of Directors, by means of a justified resolution, may consider that, even in the absence of the above situations, a Director no longer meets the independence requirements, when in the light of all the circumstances, they recognize the presence of other significant situations which, in a concrete and individual manner, compromise his/her independence.

The Board of Directors verifies the independence requirements of the Directors who qualify themselves as such and ensures, over time, compliance with the minimum number of independent Directors prescribed by the Articles of Association and by Supervisory Provisions.

The verification of compliance with the independence requirements is carried out after the appointment of the Directors, within the terms prescribed by the regulations in force, and is repeated, subsequently, upon the occurrence of modifying circumstances that affect independence and otherwise at least once a year.

It should be noted that art. 21, paragraph 3 of the Articles of Association envisages that if a Director no longer meets the independence requirements this does not automatically lead to his forfeiture, if there is still the required minimum number of Directors on the Board who meet them.

The importance of the independent judgment of the members of the management body, in order to guarantee sound and prudent management of the institution, is highlighted in the Joint Guidelines EBA/ESMA, which prescribe, in this regard, specific provisions implementing art. 91 of CRD IV⁹ . Consequently, in addition to the regulatory and statutory requirements illustrated above, the assessment of the independence of the Directors should also be conducted in the light of the further criteria therein described, to which reference should be made.

Furthermore, BPER Banca, having adhered to the Corporate Governance Code, when performing the verification of independence requirements, will carry out a supplementary assessment, aimed at ascertaining the presence of the specific independent requirements provided for in art. 3 of the abovementioned Corporate Governance Code.

⁹ More specifically, Section 9 "Independence of mind and independent members".

3.6 Incompatible offices

In accordance with art. 36 of Law Decree no. 201 of 6 December 2011, converted into Law no. 214/2011, which provides that in relation to "crossed personal participation in credit and financial markets" and with the prescribed prohibition for "office holders in the management, supervision and control bodies and for top-level officers of companies or groups of companies operating in credit, insurance and financial markets to assume or exercise similar offices in competitor companies or groups of companies", as well as art. 2390 of the Civil Code ("Non-competition obligation") it is recommended to Shareholders to include, in the lists to be presented for the appointment of the members of the management body, candidates for whom the current and future absence of reasons for incompatibility was assessed beforehand.

Without prejudice to the above-mentioned regulations, it should be remembered that, pursuant to art. 23 of the Articles of Association, the following parties cannot be members of the Board of Directors: employees of the company, unless they are members of General Management, as well as, not only the directors, and the members of the control bodies of competitor banks (also specified in art. 36 of the mentioned Law Decree no. 201/2011), but also employees and members of committees and commissions of competitor banks, unless they are credit institutions in which the BPER Group holds investments whether directly or through companies that are members of the banking Group.

3.7 Diversification and gender quotas

Art. 147-ter, paragraph 1-ter, of the CFA, as amended by Law no. 120 of 12 July 2011, which introduced in Italy gender quotas in the corporate bodies of listed companies, requires compliance with a gender balance in the composition of the Board of Directors. The least represented gender must be at least one third of the Directors appointed, also in the forthcoming election.

For this purpose, art. 18, paragraph 2, of the Articles of Association prescribes that each list must contain a number of candidates equal or higher than three, must present a number of the less represented gender that ensures, within the same list, the respect of the gender quotas at least in the minimum measure required by current regulations, rounding it up to the next unit in the event of a fractional number.

Attention is drawn to the fact that, more in general, CRD IV (art. 91) and the Joint Guidelines EBA/ESMA (section 12) attach an important role to the diversification of the composition of the Board of Directors, not only from a gender balance point of view but also in relation to the age profile, the geographic representation, educational-professional background and personal qualities and skills, with a view to promoting the independent opinions and the critical sense of Directors, thus contributing to a more effective governance of the Bank.

4 Outgoing Board of Directors' orientation on the composition of the new management body and recommendations to the Shareholder, for the formation of the lists

The election of the Board of Directors is reserved to the Ordinary Shareholders' Meeting which is governed by the Articles of Association, on the basis of the lists presented by the Shareholders and/or by the outgoing Board of Directors (articles 18 and 19 of the Articles of Association).

4.1 Quantitative composition of the Board of Directors

In the opinion of the Board the number of fifteen Directors prescribed by the Articles of Association allows the full and effective performance of the tasks conferred upon it by law, by the Supervisory Provisions and by the Articles of Association. This assessment, performed in view of the characteristics of the Bank and the Group, took into account the following factors:

• the size and operational complexity of the Bank and the Group which require the presence on the Board of a number of Directors which is suitable in order to effectively govern the entire company operations, also in relation to the performance of activities for the guidance and co-ordination of the Group companies;

• the need to have such a number of components available so as to assure the efficient operation of the Board Committees, also taking into account the need to assure the adequate balance of the skills contained therein;
• the advisability of maintaining a size that promotes debates and improves the collective efficiency of the Board of Directors.

4.2 Qualitative composition of the Board of Directors

When compiling the lists of candidates it is necessary for the presenters to verify compliance with all the requirements contained in all of the applicable provisions, as summarized in Chapter 3 of this document, and with the Articles of Association.

In this respect, the Board recommends that:

• a) all the candidates must be in possession of the good repute requirements indicated in paragraph 3.1; they must satisfy honesty and integrity standards of past correct personal and professional conduct so as not to leave any doubt whatsoever to their reputation and ability to guarantee sound and prudent management of the credit institution; do not find themselves in situations which constitute, pursuant to applicable regulations, reasons for the suspension of the function of Director;
• b) all the candidates must be in possession of the professionality and competence requirements indicated in paragraph 3.2, each in line with the role to be covered. Furthermore, in the opinion of the Board, the candidates destined in future to cover the roles of Chairman and of Chief Executive Officer of the Board of Directors, considering the functions connected to the above-mentioned roles, should ideally correspond to the following profiles:
• i. the Chairman of the Board of Directors is expected to have the following characteristics and personal abilities:
  • leadership, high reputation and the ability to balance discussions;
  • ability to perform strategic analysis and a forward-looking approach;
  • ability to dialogue with Shareholders, with stakeholders, with institutional investors, and the Authorities, including the Supervisory Authorities;
  • experience in corporate governance matters and guidance of the activities of a Board of Directors, gained in companies with a size and complexity comparable to those of the Bank;

• ii. the Chief Executive Officer should be expected to have the know-how, the experience and the personal capacities indicated below:

  • proven experience as Chief Executive Officer or General manager of a bank which is the parent company of a Banking Group, with a size and characteristics which are comparable to those of BPER;
  • ability to perform strategic analysis and has a forward-looking approach, as well as to align the business in function of strategic priorities, governing the operational complexity;
  • ability to guide and co-ordinate the management of the Group (first line reporting) through the transmission of clear objectives, which are achievable and in line with the overall strategic mission;
  • excellent communication skills and ability to carry out constructive discussions with other members of the Board of Directors, with Shareholders, with stakeholders, with institutional investors, with the Authorities, including the Supervisory Authorities;
  • high reputation and recognized leadership skills;

• c) all the candidates must guarantee a time committment for the performance of the mandate, considering:

• i. the minimum time estimated¹⁰ by the Bank as necessary for the performance of the role, as shown

¹⁰ The estimate is made taking into account the number of meetings held by each body in the last year. In order to express the data in days/years, in a conventional way – considering the average duration of the meetings, in the same period (see paragraphs 2.4 and 3.3 of this document) – a time consumption was considered equal to: i) and entire day for each Board meeting, and ii) half a working day for each Board Committee meeting.

below:

Non-executive members of the BoD	22 days/year
Chairman of the BoD	2/3 days/week
Chief Executive Officer	full time
Members of the Executive Committee	11 additional days/year
Members of the Nominations Committee	7 additional days/year
Members of the Remuneration Committee	10 additional days/year
Members of the Control and Risk Committee	10 additional days/year
Members of the Strategy Committee	4 additional days/year
Members of the Independent Directors Committee	7 additional days/year
Members of the Supervisory Body ex Leg. Decree no. 231/01	5 additional days/year
Chairman of a Board Committee	Indicative increase of 50% with respect to the time estimated by the relative component

It is necessary to add to the above the time needed for the preparation of the meetings and the relative transfers, the quantification of which is subject to individual assessment, bearing in mind the situation of each Director;

• ii. training sessions which the Bank will define during the three-year period as well as induction sessions;
• iii. the time dedicated by each candidate to other work or professional activities and to positions covered in other companies, as well as all other items which could have a significant impact on the availability of time;
• d) all the candidates take account of the limitation on the number of directorships illustrated in paragraph 3.4;
• e) all the candidates be able to act in full independence of judgment and be aware of the duties and the rights inherent in their role, in the interest of the sound and prudent management of the Bank and in respect of the law and of all current regulations;
• f) the list contain an number of candidates in possession of the independence requirements defined in paragraph 3.5 even above the minimum number prescribed in art. 18, paragraph 2, of the Articles of Association (equal to one third of the candidates), in order to enable the efficient composition of the Board Committees;
• g) in the event that, when the nomination is accepted, the candidates find themselves in one of the circumstances of incompatibility mentioned in paragraph 3.6, they must take into account the need to forfeit the directorships and positions which give rise to such incompatibility.

It should be noted that the Shareholders must present in the list a number of candidates belonging to the less represented gender equal to at least the minimum number prescribed by art. 18, paragraph 2, of the Articles of Association (pursuant to which, in the lists composed of a number of candidates equal to or more than three, at least one third of the candidates must belong to the less represented gender, rounding up to the next unit, if necessary).

Shareholders are, moreover, also invited to prepare the lists with a view to ensuring that the composition of the Board of Directors shall be adequately diversified – under the profile of age, geographic representation, educational-professional background and personal characteristics and skills of the Directors – in order to:

• promoting exchanges of opinion and debates within the body;
• encourage the emergence of a plurality of approaches and points of view in the analysis of themes and in the decision-making process;
• effectively support the company processes for preparing strategies, managing activities and risks, controlling the work of top management;
• take into account the multiple interests which contribute to the sound and prudent management of the

Bank.

In this respect, the Board of Directors, in consideration of the high level of complexity that characterizes the management of the Bank, considers – and recommends that the Shareholders consider it when composing the lists – that, from a qualitative point of view, the composition of the Board of Directors can be deemed optimal if, with reference to the areas of professional competence identified in paragraph 3.2:

• each of the nine areas of competence are adequately covered on an overall basis and show specific professional skills which are able to ensure management in an effective and conscious manner;
• the professional areas of competence referred to above are distributed within the body, also among the non-executive members, and that, in particular, on a diversified assessment scale according to the levels of competence (more precisely: excellent; more than adequate; adequate; partially adequate; inadequate), there are at least three Directors assessed as "more than adequate" for each of the areas indicated.

Lastly, in compliance with the requirements of the Bank of Italy in the Supervisory Provisions in matters pertaining to corporate governance¹¹, it is appropriate – and recommended – that the disclosures on the personal and professional characteristics of each candidate for the office of member of the Board of Directors, to be submitted – in accordance with the Articles of Association – concurrently with the presentation of the candidacies, should include a curriculum vitae in order to identify for which theoretical profile each of the candidates is suited, having regard to the indications related to the "optimal quali-quantitative composition" provided by the Board of Directors in this document.

In this respect, it is recommended that all the necessary information shall be detailed and comprehensive, preferably using or, at least, taking as a reference the format prepared by the Bank (annex 2).

Shareholders may assess their optimal composition of the Board of Directors and may present candidacies that are consistent therewith, explaining the reasons for any differences between their assessments and the analyses carried out by the Board.

¹¹ "Supervisory provisions for banks" Circular no. 285 of 17 December 2013, Part One, Title IV, Chapter 1, Section IV, Par. 2.1.

5 Annexes

• Annex 1: Annex II to "Joint Guidelines EBA/ESMA" describing the characteristics and the personal abilities of the exponent (so-called "soft skills"), in English (original version) and in Italian (courtesy translation);
• Annex 2: format of Curriculum vitae, prepared in order to present candidacies for the renewal of the Board of Directors of BPER Banca S.p.A. and verify the requirements in relation to professionality, competence and experience envisaged by current regulations.

to the document "Optimal quali-quantitative composition of the Board of Directors" as at 27 February 2018

FINAL REPORT ON GUIDELINES ON THE ASSESSMENT OF THE SUITABILITY OF MEMBERS OF HE MANAGEMENT BODY AND KEY FUNCTION HOLDERS

Annex II – Skills

This is the non-exhaustive list of relevant skills, referred to in paragraph 61, that institutions should consider using when performing their suitability assessments:

• a. Authenticity: is consistent in word and deed and behaves in accordance with own stated values and beliefs. Openly communicates his or her intentions, ideas and feelings, encourages an environment of openness and honesty, and correctly informs the supervisor about the actual situation, at the same time acknowledging risks and problems.
• b. Language: is able to communicate orally in a structured and conventional way and write in the national language or the working language of the institution'slocation.
• c. Decisiveness: takes timely and well-informed decisions by acting promptly or by committing to a particular course of action, for example by expressing his or her views and not procrastinating.
• d. Communication: is capable of conveying a message in an understandable and acceptable manner, and in an appropriate form. Focuses on providing and obtaining clarity and transparency and encourages active feedback.
• e. Judgement: is capable of weighing up data and different courses of action and coming to a logical conclusion. Examines, recognises and understands the essential elements and issues. Has the breadth of vision to look beyond his or her own area of responsibility, especially when dealing with problems that may jeopardise the continuity of the undertaking.
• f. Customer and quality-oriented: focuses on providing quality and, wherever possible, finding ways of improving this. Specifically, this means withholding consent from the development and marketing of products and services and to capital expenditure, e.g. on products, office buildings or holdings, in circumstances where he or she is unable to gauge the risks properly owing to a lack of understanding of the architecture, principles or basic assumptions. Identifies and studies the wishes and needs of customers, ensures that customers run no unnecessary risks and arranges for the provision of correct, complete and balanced information to customers.
• g. Leadership: provides direction and guidance to a group, develops and maintains teamwork, motivates and encourages the available human resources and ensures that members of staff have the professional competence to achieve a particular goal. Is receptive to criticism and provides scope for critical debate.

to the document "Optimal quali-quantitative composition of the Board of Directors" as at 27 February 2018

FINAL REPORT ON GUIDELINES ON THE ASSESSMENT OF THE SUITABILITY OF MEMBERS OF HE MANAGEMENT BODY AND KEY FUNCTION HOLDERS

• h. Loyalty: identifies with the undertaking and has a sense of involvement. Shows that he or she can devote sufficient time to the job and can discharge his or her duties properly, defends the interests of the undertaking and operates objectively and critically. Recognises and anticipates potential conflicts of personal and business interest.
• i. External awareness: monitors developments, power bases and attitudes within the undertaking. Is well-informed on relevant financial, economic, social and other developments at national and international level that may affect the undertaking and also on the interests of stakeholders and is able to put this information to effective use.
• j. Negotiating: identifies and reveals common interests in a manner designed to build consensus, while pursuing the negotiation objectives.
• k. Persuasive: is capable of influencing the views of others by exercising persuasive powers and using natural authority and tact. Is a strong personality and capable of standing firm.
• l. Teamwork: is aware of the group interest and makes a contribution to the common result; able to function as part of a team.
• m. Strategic acumen: is capable of developing a realistic vision of future developments and translating this into long-term objectives, for example by applying scenario analysis. In doing so, takes proper account of risks that the undertaking is exposed to and takes appropriate measures to control them.
• n. Stress resistance: is resilient and able to perform consistently even when under great pressure and in times of uncertainty.
• o. Sense of responsibility: understands internal and external interests, evaluates them carefully and renders account for them. Has the capacity to learn and realises that his or her actions affect the interests of stakeholders.
• p. Chairing meetings: is capable of chairing meetings efficiently and effectively and creating an open atmosphere that encourages everyone to participate on an equal footing; is aware of other people's duties and responsibilities.

Curriculum vitae

For the purposes of the presentation of candidacies for the renewal of the Board of Directors of BPER Banca SpA and the verification of the requirements related to professionalism, competence and experience envisaged by the regulations in force

PERSONAL INFORMATION

Name and surname: Date and place of birth: Residence: Domicile: (to be compiled only if different from residence) Tax code: Home tel. no.: Mobile phone no.: E-mail address: Qualification:

SUMMARY

Provide below a brief summary of about 15-20 lines, of your curriculum vitae illustrating the most significant items. This summary can be used as a supporting document in the event of the need to publish the curricula on internet sites, in disclosures, in articles, etc.

***

***

PROFESSIONAL EXPERIENCE

Provide below a list, in decreasing chronological order (from the most recent to the oldest date) of the main professional experiences covered in your career (administration or control activities or executive or management roles in companies or entities, or professional activities, performed both individually or in partnership with others) specifying:

(i) if it relates to a role covered in companies or entities:

• the name of the company (indicating the size and recent qualitative data to allow an understanding of the level of operational complexity of the company) and the relative specific activity sector (banking, finance, insurance, industry branch, other services);
• the role (or roles) covered (title, hierarchical reporting and intermediary levels with respect to the body with a management function, member of any Board Committees or internal Committees) with a description of the areas of responsibility assigned, concretely linking the experience gained to one or more of the skills indicated in the document "Optimal quali-quantitative composition of the BoD";

if a member of the Board of Directors, any powers attributed and/or participation in Board Committees;

(ii) if it is related to a professional activity:

• the area of specialization, concretely linking the experience gained to one or more of the skills indicated in the document "Optimal quali-quantitative composition of the BoD";
• if performed in partnership with others, details of the firm (indication of size and recent qualitative information which allow an understanding of the range and complexity of the advisory activities provided and the sectors served) and the level of seniority (partner, founder partner, etc.);

(iii) the period of time in which each activity was performed and each role was covered.

Examples:

COMPANY NAME (A)

Company active in the xxx sector, with registered offices in ……………, annual turnover in the year aaaa of € …………, ..…employees, ….branches/subsidiaries, access to regional/national/international markets ……………………, or other useful information

• role 1 from …………… (to the present) description of hierarchical reporting, whether member of any Board Committees or internal committees, area of responsibility assigned, no. of resources coordinated, and any other significant information skill/s, with reference to those indicated in the document "Optimal quali-quantitative composition of the BoD"; acquired through the role of :………….
• role 2 from …………… to ………… description of hierarchical reporting, whether member of any Board Committees or internal Committees, areas of responsibility assigned, no. of resources coordinated and any other significant information skill/s, with reference to those indicated in the document "Optimal quali-quantitative composition of the BoD";

COMPANY NAME (B)

Company active in the xxx sector, with registered offices in ……………, annual turnover in the year aaaa of € …………, ….employees, ….branches/plants, access to regional/national/international markets ……………………, or other information considered useful

• role 1 from …………… to ………… description of hierarchical reporting, whether member of any Board Committees or internal committees, area of responsibility assigned, no. of resources coordinated, and any other significant information skill/s, with reference to those indicated in the document "Optimal quali-quantitative composition of the BoD"; acquired through the role of:………….
• role 2 from …………… to ………… description of hierarchical reporting, whether member of any Board Committees or internal committees, area of responsibility assigned, no. of resources coordinated, and any other significant information skill/s, with reference to those indicated in the document "Optimal quali-quantitative composition of the BoD"; acquired through the role of:…………. …………………………………

***

ACADEMIC EXPERIENCE

Provide below a list, in decreasing chronological order (from the most recent to the oldest date) of the main academic and teaching experiences, concretely linking the experience gained to one or more of the skills indicated in the document "Optimal quali-quantitative composition of the BoD";

***

EDUCATION AND TRAINING

Provide below a list of the education received, starting from university qualifications, specifying:

• type of qualification (degree, Masters degree, PHD);
• university/equivalent institution;
• date.

Provide, furthermore, a list in decreasing chronological order (from the most recent to the oldest date) of other accredited post degree training programs attended, useful to increase in a concrete manner the appreciation of the in-depth analyses performed and the specialized studies carried out, concretely linking them to one or more of the skills indicated in the document "Optimal quali-quantitative composition of the BoD", providing all the information useful for this purpose, including, at least:

• title of the training program;
• providers and organisers;
• date.

PUBBLICATIONS

Books and reports:

Provide below a list, in decreasing chronological order (from the most recent to the oldest date) of any books and/or reports published.

***

Articles and other publications:

Provide below a list, in decreasing chronological order (from the most recent to the oldest date) of any articles or other publications published.

***

LANGUAGES

Provide below a list of the foreign languages known and the relative level (mother tongue, level written and spoken).

***

SOFT SKILLS AND ADDITIONAL INFORMATION

Provide all other information you consider deserves to be included and is useful in order to assess the characteristics and the abilities of the exponent and the skills necessary in order to prove his/her suitability for the position, bearing in mind the tasks inherent in the role to be covered and the dimensional and operational characteristics of BPER Banca, in compliance with the criteria established by the regulations in force.

***

I authorise the use of my personal data, including data considered as sensitive, pursuant to Law Decree no. 196/2003.

Place and date ______________________

Signature

LIST OF THE ADMINISTRATION AND CONTROL POSITIONS COVERED IN OTHER COMPANIES BELONGING TO THE BPER BANCA BANKING GROUP

Provide a list below of any other administration and control¹ positions held in other Companies belonging to the BPER Banca banking Group, specifying:

Company	Position(*)	Date the position was assigned	Average number of annual meetings	Average duration of meetings	Overall time dedicated

(*): Chairman, Deputy Chairman, Chief Executive Officer, Director, General Manager, member of Committees, Chairman del Board of Statutory Auditors, Serving Auditor, Alternate auditor, liquidator, etc.

Place and date ______________________

Signature

¹ Please take note: you are reminded of the incompatibility of roles under art. 2399 of the Civil Code, paragraph 1, letter b), pursuant to which the same party cannot at the same time be auditor of a company and director of the relative parent company.

LIST OF THE ADMINISTRATION AND CONTROL POSITIONS HELD IN OTHER COMPANIES NOT BELONGING TO THE BPER BANCA BANKING GROUP

Provide a list below of any other administration and control positions held in other Companies NOT belonging to the BPER Banca banking Group, specifying:

Company	Name of Group, if applicable	Position(*)	Date the position was assigned	Average number of annual meetings	Average duration of meetings	Overall time dedicated

(*): Chairman, Deputy Chairman, Chief Executive Officer, Director, General Manager, member of Committees, Chairman del Board of Statutory Auditors, Serving Auditor, Alternate auditor, liquidator, etc.

Place and date ______________________

Signature

DECLARATION IN RELATION TO THE AREAS OF PROFESSIONAL SKILL

Given the above, having taken into account the indications regarding the optimal quali/quantitative composition provided by the Board of Directors, please note that the areas of professional competence in which the undersigned is able to make qualified contributions are the following² :

• • Dynamics of the economic-financial system understood as the knowledge/competence in matters pertaining to the main economic variables (e.g. the level and growth rate of GDP, unemployment, inflation, the creation and the movement of means of payment)
• • Legal requirements and regulatory framework (e.g. financial markets, governance, fiscal, antimoney-laundering, usury, transparency in banking operations, privacy, etc.)
• -Strategic planning
• • Corporate Governance and business management processes (e.g. corporate governance systems, relations with stakeholders, human resources management; corporate social responsibility; levels of performance planned and achieved; remuneration and incentive systems)
• • Organizational framework and IT systems (e.g. organization; outsourcing policies; organizational framework, management mandates; ICT and company processes, business continuity)
• • Risk management and control (e.g. RAF, ICAAP, risk measurement systems, assessment of activities)
• • Internal control systems (e.g. compliance, risk management, audit, credit control, anti-moneylaundering)
• • Banking and financial markets (e.g. credit, finance, treasury, payment systems, brokerage, customer services)
• -Accounting and financial disclosures (e.g. financial statement)

Place and date ______________________

Signature

² For a description of each skill, reference should be made to the following page.

Description of the skills necessary for the correct and effective performance of the functions of a Director

▪ Dynamics of the economic-financial system

The knowledge/competence pertaining to the main economic variables and their interdependence such as, for example, the level and growth rate of GDP, interest rates, unemployment and inflation as well as knowledge of the monetary and financial markets and the set of instruments, institutions, mechanisms which ensure the creation and the movement of means of payments and the transfer of financial balances.

▪ Legal requirements and regulatory framework

The knowledge/competence pertaining to the main regulations in the sector (e.g. financial markets, governance, fiscal, anti-money-laundering, usury, transparency in banking operations, privacy, etc.).

▪ Strategic planning

The knowledge/competence pertaining to the identification and the definition of strategic guidelines and the consequent assessment of the measures necessary in order to guarantee the sustainability of the bank's business (e.g. definition of the business plans, assessment of the budget processes, etc.).

▪ Corporate governance and business management processes

The knowledge/competence pertaining to: corporate governance, law, relations with stakeholders, human resources management; corporate social responsibility; levels of performance planned and reached; remuneration and incentive systems; management of conflict of interest.

▪ Organizational framework and IT systems

The knowledge/competence pertaining to: corporate organization; outsourcing policies; management mandates; information e communication technology (so-called ICT) and the related processes; business continuity and disaster recovery; data quality management.

▪ Risk management and control

The knowledge/competence pertaining to: methodology for identifying, measuring and managing the risk of an institution, risk management processes and tools (e.g. ICAAP, ILAAP, RAF, etc.); models for assessing the company's activities; management of non-performing loans; stress testing models.

▪ Internal control systems

The knowledge/competence pertaining to the definition and structure of the internal controls system with particular reference to the company's second and third-level control functions: Compliance; Anti-moneylaundering; Risk Management; Validation; Internal Audit.

▪ Banking and financial markets

The knowledge/competence pertaining to the main processes related to the subject, inter alia, to: customer services; payment systems; credit; investment services, consultancy and asset brokerage; treasury and liquidity management; management of the assets belonging to the Bank.

▪ Accounting and financial disclosures

The knowledge/competence pertaining to financial statements and disclosures of a financial nature.