Bper Banca — Share Issue/Capital Change 2019

Nov 11, 2019

BPER Banca S.p.A.

Registered office in Modena, via San Carlo n. 8/20

Share capital of Euro 1,542,925,305 fully paid-in

Registered with the Companies' Register of Modena under no. 01153230360

Illustrative report of the Board of Directors of BPER Banca S.p.A., with regard to the proposal for a resolution by the same Board of Directors – in exercise of the powers granted by the Extraordinary Shareholders' Meeting held on 4 July 2019 – to increase the share capital, in divisible form, without pre-emption rights pursuant to art. 2441, paragraph 4, first sentence, of the Italian Civil Code, for a maximum total amount of Euro 40,993,513.60, through the issuance of a maximum number of 7,883,368 BPER ordinary shares, with no par value, in connection with a voluntary public exchange offer on savings shares of Banco di Sardegna S.p.A.. Related and consequent resolutions.

This illustrative report (the "Report"), drafted pursuant to Article 2441, paragraph 6, of the Italian Civil Code and Article 70, paragraph 4, of the Issuers' Regulations adopted by Consob Resolution no. 11971 of 14 May 1999 and subsequent integrations and amendments (the "Issuers' Regulations"), illustrates the terms, conditions and reasons for the capital increase that the Board of Directors of BPER Banca S.p.A. ("BPER") intends to resolve in exercise of the powers granted by the Extraordinary Shareholders' Meeting of 4 July 2019 pursuant to Article 2443 of the Italian Civil Code.

1. DESCRIPTION OF THE TRANSACTION, REASONS AND PURPOSE OF THE CAPITAL INCREASE

The BPER ordinary shares to be issued in the context of the capital increase referred to in this Report will be subscribed to and paid in through the contribution to BPER of Banco di Sardegna S.p.A. ("BdS") savings shares without voting rights, listed on the Mercato Telematico Azionario organized and managed by Borsa Italiana S.p.A., held by third parties other than BPER (the "BdS Savings Shares").

The contribution of the BdS Savings Shares to BPER will take place as part of the public exchange offer (the "OPS") that the Board of Directors of BPER resolved to promote on 7 November 2019.

Since the newly issued shares shall be paid in through contribution in kind (the BdS Savings Shares), the preemption right shall be considered excluded pursuant to Article 2441, paragraph 4, first sentence, of the Italian Civil Code.

With regard to the reasons for the contribution in kind, as specifically required by Article 2441, paragraph 5, of the Italian Civil Code, it should be noted that the capital increase referred to in this Report, as well as the OPS itself, are functional to the achievement of the following purposes:

• simplify the capital structure of BdS, pursuing cost savings for such company and, indirectly, for BPER, through the delisting of BdS Savings Shares after the OPS (should the relevant conditions be met);
• benefit from positive effects on BPER's CET1 thanks to the reduction of minority shareholdings and the capital increase required for the exchange;
• facilitate the operational rationalization of the BPER Banking group;
• from the point of view of the owners of the savings shares of BdS, to allow them to liquidate their investment in a security characterized by a lack of liquidity, offering in exchange ordinary shares of BPER characterized by a higher liquidity on the market, lower volatility, and the related administrative rights.

On 7 November 2019, the Board of Directors of BPER resolved to launch, pursuant to Article 102 of Legislative Decree no. 58 of 24 February 1998 (the "Consolidated Financial Act"), the OPS on BdS Savings Shares, equal to no. 3,378,586, net of the savings shares already held by BPER, equal to no. 3,221,414. The possible launch of the OPS was disclosed to the market on 5 March 2019.

In the event that, as a result of the OPS, given the number of BdS savings shares tendered to the offer and taking into account, inter alia, the market conditions at that date, it is not possible to delist BdS savings shares, BPER BoD may consider proposing to the competent BdS corporate bodies, without prejudice to the decisions of those bodies, the optional conversion of BdS Savings Shares into unlisted BdS preference shares as well as the mandatory conversion.

Any further document required pursuant to the provisions of the applicable law and regulations in relation to the transaction briefly illustrated above will be made available at the terms and in the forms provided for by applicable law.

2. THE RESOLUTION OF THE EXTRAORDINARY SHAREHOLDERS' MEETING TO GRANT THE POWER FOR THE CAPITAL INCREASE TO SERVICE THE OPS

The Extraordinary Shareholders' Meeting of 4 July 2019 resolved, inter alia, to grant the Board of Directors, pursuant to Article 2443 of the Italian Civil Code, by 30 June 2020, the power to increase the capital in one or more tranches, in divisible form, with the exclusion of pre-emption rights pursuant to Article 2441, paragraph 4, first sentence, of the Italian Civil Code, for a maximum total amount of Euro 40,993,513,60 (the "Capital Increase to Service the OPS"), by issuing a maximum amount of 7,883,368 BPER ordinary shares, with no par value, with regular dividend rights and the same features as BPER ordinary shares outstanding at the date of issue, to service the OPS (the "BPER Shares to Service the OPS").

3. THE RESOLUTION OF THE BOARD OF DIRECTORS TO EXERCISE THE POWER

Following the resolution of the Extraordinary Shareholders' Meeting of 4 July 2019, BPER BoD, which resolved to promote the OPS, was also called in order to resolve – in exercise of the powers granted to it by the abovementioned Shareholders' Meeting – upon the Capital Increase to Service the OPS, subject to the determination of the issue price of BPER ordinary shares, as well as the amendment of Article 5 of the by-Laws.

4. CRITERIA FOR DETERMINING THE NUMBER OF BPER SHARES TO SERVICE THE OPS

The methodologies used to determine the exchange ratio for the purposes of the OPS are the following: (i) stock market prices; (ii) Premiums underlying the consideration of selected takeover bids/OPS; (iii) Premiums underlying the consideration for the conversion in the context of selected conversions of savings shares into ordinary shares.

As a result of the above, the maximum amount of BPER shares to be issued to service the OPS was determined in no. 7,883,368.

In consideration of the number of BdS Savings Shares tendered to the OPS, the exact number of BPER shares issued to Service OPS - without prejudice to the abovementioned maximum amount - may only be established following the conclusion of the OPS.

5. CRITERIA FOR DETERMINING THE ISSUE PRICE OF BPER SHARES TO SERVICE THE OPS

The Board of Directors, called upon to exercise the power to increase the share capital, has preliminarily determined the issue price of BPER Shares to Service the OPS, determining this value in Euro 3.53, of which Euro 3.0 to be allocated to share capital and Euro 0.53 to be allocated to share premium.

With reference to the provisions of Article 2441, paragraph 6 of the Italian Civil Code, the Board of Directors, also using the documentation prepared by Equita SIM S.p.A., which acted as advisor for BPER in the context of the OPS, decided to determine the price of the BPER Shares to Service the OPS mainly by analyzing the stock market prices of BPER shares, in accordance with the practice generally followed in this type of transactions, in any case taking into account,: i) the features of the shares offered and subject to the offer and ii) the nature and the purposes of the OPS. Therefore, this transaction, even if it is part of the extraordinary transactions involving BdS (part of which were finalized by BPER in July 2019), shall be independently considered and evaluated with respect to those transactions, due to the different purposes and of the features of the financial instruments involved in the transaction.

In the context of a market transaction, the stock market prices represent for the investors a reliable indicator of the company value, as they reflect their expectations in terms of profitability, financial strength, risk and prospective growth. In particular, investors' judgment on the company are based on the publicly available information, and, in particular, on its operating and financial data, both historical and expected.

Therefore, for the purposes of determining the issue price of BPER shares to service the OPS, also in consideration of the fact that both the securities offered and the object of the offer are listed on the Mercato Telematico Azionario organized and managed by Borsa Italiana S.p.A., reference was made to the market price of BPER shares, having regard to its trend in the months prior to the launch of the OPS (in line with the provisions of Articles 2441 and 2343-ter of the Italian Civil Code). In particular, the price of BPER Shares to Service the OPS has been established as the average price for the last 3 months, starting from 5 November 2019.

The decision to identify the reference period for determining the price of BPER Shares to Service the OPS in the last quarter is due to the high volatility and markets trend. A shorter reference period could reflect significant short-term fluctuations related to extraordinary or speculative events. Conversely, a longer period, such as 6 months or 12 months, could lead to the risk of not incorporating sufficiently updated information on the business environment and the underlying trends concerning the reference financial markets. With regard to the provisions of Article 2441 of the Italian Civil Code ("issue price determined taking into account the trend of stock market prices in the last semester"), both practice and scholars agree that it is not necessary to refer to an average of the prices for the six-month period, but it is also possible to use shorter reference periods, depending on the circumstances and features of the security, of the trend of the company and of the reference group, as well as the trend of the reference markets.

The table below summarizes the weighted average of the official prices of BPER shares.

Period	PMP BPER - €
5-nov-19	4,17
Last month	3,88
Last 3 months	3,53
Last 6 months	3,59

However, in this case, a control methodology and the stock market multiples method were also applied.

The stock market multiples method allows to determine the economic value of a company by applying - to certain financial statement values - multiples that the stock market expresses for comparable listed companies.

Following the application of the multiples Price/Net Income, Price/Net Worth and Price/Tangible Net Worth of a sample of Italian banks comparable to the respective financial statements data as at 30 September 2019 and BPER prospective data, the result is a valuation interval for BPER share which includes the issue price of the BPER Shares to Service the OPS determined by the Board of Directors. The following table summarizes the results of the application.

	Price/ Net Income		Price/ Net Equity	Price/ Net Tang Eq
Company	2020	2021	Last	Last
Banco BPM SpA	6,3x	5,6x	0,25x	0,29x
Unione di Banche Italiane SpA	7,0x	6,3x	0,31x	0,39x
Credito Emiliano S.p.A.	8,7x	8,9x	0,61x	0,73x
Credito Valtellinese SCARL	8,1x	6,0x	0,26x	0,27x
Average selected panel	7,5x	6,7x	0,36x	0,42x
Median selected panel	7,5x	6,1x	0,29x	0,34x
BPER Valuation	2020	2021	30.09.19
BPER Net Income (€ mln)	294	318
BPER Net Equity (€ mln)			5.256
BPER Net Tangible Equity (€ mln)				4.644
BPER valuation 100% - Average (€ mln)	2.212	2.122	1.894	1.931
BPER valuation 100% - Median (€ mln)	2.215	1.946	1.512	1.558
BPER n° shares outstanding (mln)	513,9		513,9
BPER value per share - Average (€)	4,3	4,1	3,7	3,8
BPER value per share - Median (€)	4,3	3,8	2,9	3,0
Price per share range (Min & Max of all results)	2,9	4,3

Note: Multiples calculated on the basis of the 3-month average of stock market prices as at 5 November 2019. Balance sheet data for the sample selected at 30.06.19. Source: Factset for prospective estimates of BPER Net Income and selected sample.

The decision to exclusively use market methods, with particular reference to stock market prices, is due to the features and the purpose of the transaction; in fact, the application and the results arising from the use of fundamental methods (such as, for example, the Dividend Discount Model, Excess Capital variant) may not be easily verified by market operators, recipients of the offer, who use the current stock market prices as an immediate reference to make economic/financial considerations. Furthermore, this approach is consistent with that used to estimate the exchange ratio between the BdS Savings Shares and the BPER Shares to Service the OPS, for which, in similarly, only market methods have been applied, and, in particular:

the stock exchange prices as the main methodology;

the takeover bid/OPS premiums method and the conversion premiums of savings shares into ordinary shares method as control methods.

The application of such methods has therefore made it possible to reach absolute and relative valuations of BPER Shares and BdS Savings Shares which are representative of the valuations currently made by the operators on the financial markets, in accordance with the nature and purpose of the OPS.

Indeed, the nature of the transaction and the peculiarity of the securities subject to the offer (listed savings shares), exclude the use of a wide range of methods, in particular:

• the fundamental methodologies, such as the DDM, which could lead to an estimate that would not be representative of the market value of the shares offered and subject to the offer, which is the only value that is considered by BdS savings shareholders in the context of the transaction;
• certain market methodologies, such as stock market multiples or multiples of comparable transactions, which are not applicable in the present case, since savings shares have completely different capital and administrative rights compared to ordinary shares, and therefore are not totally comparable. Moreover, there is almost no market evidence for the valuation of savings shares of banks (only Banco Desio has listed savings shares, but they carry different equity rights than those of the BdS shares).

6. FORESEEABLE OUTLOOK FOR OPERATIONS

During 2019, following the extraordinary corporate transactions disclosed in February 2019 (i.e. the Fondazione di Sardegna Transactions and the Unipol Group Transactions) and executed in July 2019, the growth path of the BPER Group accelerated significantly. The effects directly linked to the abovementioned corporate transactions are accompanied by the forecast of organic growth, characterized by a strong focus on the evolving needs of customers, mainly relating to products and services with high added value. In particular, the 2019-2021 Business Plan envisages:

• the acceleration of growth and development of the customer base, also as a result of extraordinary transactions (acquisition of approximately no. 500,000 new customers and expansion in territorial areas with high potential previously not served by BPER Group through the acquisition of Unipol Banca);
• the focus on customers' evolving needs through products/services with high added value arising mainly from the strengthening of the partnership on the Bancassurance segment with Arca Vita S.p.A. and Arca Assicurazioni S.p.A. and from the further development of the Wealth Management segment with Arca Fondi SGR, as well as through the enhancement of BPER International Sicav in multi-manager manner and the development and specialization of the distribution model by enhancing Unipol Banca's network of financial advisors.

7. GUARANTEE AND/OR PLACEMENT CONSORTIA AND ANY OTHER ENVISAGED FORMS OF PLACEMENT

Considering that the capital increase is exclusively made to service a public exchange offer, no guarantee and/or placement consortia are envisaged with reference to the execution of the proposed delegation.

8. SHAREHOLDERS WHO HAVE EXPRESSED THEIR INTENTION TO SUBSCRIBE BPER SHARES TO SERVICE THE OPS, AS WELL AS ANY UNEXERCISED OPTION RIGHTS

As at the date of this Report, there are no savings shareholders of BdS who have expressed their intention to subscribe BPER Shares to Service the OPS.

9. PERIOD FORESEEN FOR THE EXECUTION OF THE CAPITAL INCREASE

The delegation for the resolution concerning the Capital Increase to Service the OPS shall be exercised by the Board of Directors by 30 June 2020 and is expected to be exercised at the meeting called upon on 7 November 2019.

Without prejudice to the above, the market will be given timely and adequate information on the timing of the OPS.

10. INDICATION OF THE NUMBER, CATEGORY, ENJOYMENT DATE AND ISSUE PRICE OF BPER SHARES TO SERVICE THE OPS

As illustrated, a maximum of no. 7,883,368 BPER Shares to Service the OPS may be issued, which will have regular dividend rights and the same features as the shares outstanding at the issue date. The BPER OPS Shares issued in this way will be admitted to trading on the Mercato Telematico Azionario of Borsa Italiana.

The BPER Shares to Service the OPS will be offered at a price of Euro 3.53, as established by the Board of Directors, of which Euro 3.0 will be allocated to share capital and Euro 0.53 will be allocated to share premium. As a result, BPER share capital will be increased by a maximum amount of Euro 23,650,104.

Deloitte&Touche S.p.A., the company appointed to carry out the external audit of the financial statements, will issue an opinion, pursuant to Article 2441, paragraph 6, of the Italian Civil Code and Article 158 of the Consolidated Financial Act, on the fairness of the issue price of BPER shares to be offered in subscription to the participants in the OPS, as determined by the Board of Directors.

This opinion will be made available to the public in accordance with applicable law.

11. ECONOMIC, EQUITY AND FINANCIAL EFFECTS OF THE CAPITAL INCREASE TO SERVICE THE OPS AND DILUTING EFFECTS

Assuming the issue of the maximum number of BPER Shares to Service the OPS, equal to 7,883,368 shares, at the price per share of Euro 3.53, the Capital Increase to service the OPS is equal to Euro 23,650,104, in addition to a share premium equal to Euro 4,178,185, with a maximum dilutive effect on the outstanding shares equal to 1.51%.

In addition, an increase in CET1 equal to 14 bps can be estimated (fully loaded regime).

Assuming a result of the OPS different from 100% of tenders to the offer, linear variations can be assumed in relation to the percentage of tender to the offer.

12. EFFECTS OF THE TRANSACTION ON THE CONTRIBUTED ISSUER

The Capital Increase to Service the OPS, as well as the OPS itself, are functional to the pursuit of the following purposes with reference to the Issuer:

• simplify the capital structure of BdS, pursuing cost savings for such company and, indirectly, for BPER, through the delisting of BdS Savings Shares after the OPS (should the relevant conditions be met);
• from the point of view of the owners of the savings shares of BdS, to allow them to liquidate their investment in a security characterized by a lack of liquidity, offering in exchange ordinary shares of BPER characterized in general by a higher liquidity on the market, lower volatility, and the related administrative rights.

13. VALUE ATTRIBUTED TO THE SECURITIES TO BE CONTRIBUTED CONTAINED IN THE SWORN REPORT PURSUANT TO ARTICLES 2440 AND 2343, PARAGRAPH 1, OF THE ITALIAN CIVIL CODE

The valuation expert, appointed pursuant to Articles 2343-ter, paragraph 2, letter b) of the Italian Civil Code, is the company "EY Advisory S.p.A.".

The expert's report specifies that the total value attributable to BdS Savings Shares, namely the no. 3,378,586 shares that were tendered to the OPS, as at the reference date of 5 November 2019, can reasonably be estimated, pursuant to Article 2343-ter, paragraph 2, letter b) of the Italian Civil Code, in Euro 8.35 per share, corresponding to a total value of Euro 28.2 million.

The report of EY Advisory S.p.A. is available to the public pursuant to and in accordance with the procedures set out in current legislation.

14. TAX EFFECTS OF THE TRANSACTION ON THE CONTRIBUTED ISSUER

The contribution of the Savings Shares does not have any kind of tax effects on BPER.

15. SHAREHOLDING STRUCTURE OF THE CONTRIBUTED ISSUER AND OF ANY CONTROLLING PARTY PURSUANT TO ARTICLE 93 OF THE CONSOLIDATED FINANCIAL ACT FOLLOWING THE CAPITAL INCREASE IN KIND AND THE EFFECTS ON ANY MATERIAL SHAREHOLDERS' AGREEMENTS PURSUANT TO ARTICLE 122 OF THE CONSOLIDATED FINANCIAL ACT

With regard to the shareholding structure, on the basis of the notices made pursuant to applicable law and other information available to the Issuer, the shareholders who own equity investments in BPER, directly and/or indirectly, ordinary shares representing more than 3% of the share capital of BPER and who do not fall within the cases of exemption provided for in Article 119-bis of the Issuers' Regulations, are:

• "Unipol Gruppo S.p.A." 19.97%;
• "Fondazione di Sardegna" 10.60%;

The remaining portion of the share capital is distributed among numerous shareholders, none of whom, to the best of BPER knowledge, holds more than 3% of the share capital.

Within the shareholding structure, a shareholders' agreement called the "Historical Shareholders' Agreement" is currently in force, binding on certain matters, which provides for prior consultation obligations for the exercise of voting rights and limits on the transfer of shares. Such shareholders' agreement, which has been amended several times, currently binds, as per update notice received on 22 March 2019, no. 35 shareholders, who have bound to the agreement no. 10,898,537 BPER ordinary shares, equal to 2.264% of its share capital, and therefore the shareholding attributable to the shareholders' agreement is no longer relevant within the meaning of Article 122 of the Consolidated Financial Act and subsequent amendments.

Assuming that the maximum amount of the Capital Increase to Service the OPS is carried out with the subsequent issue of no. 7,883,368 BPER shares and that the shareholdings indicated above do not change, the shareholding of the abovementioned companies would be the following:

• "Unipol Gruppo S.p.A." 19.666%;
• "Fondazione di Sardegna" 10.451%.

16. AMENDMENTS TO THE BY-LAWS

The exercise of the delegation to increase the share capital proposed by the BoD requires the corresponding amendment of Article 5 of the by-laws.

We report below a comparison between the aforesaid Article 5 in its current wording and in the proposed one.

Article 5	Article 5
1. Share capital, fully subscribed and paid in, amounts to Euro 1,542,925,305 and is represented by 514,308,435 registered ordinary shares with no par value.	1. Share capital, fully subscribed and paid in, amounts to Euro 1,542,925,305 and is represented by 514,308,435 registered ordinary shares with no par value.
2. If a share becomes the property of several persons, the joint ownership rights shall be exercised by a common representative.	2. If a share becomes the property of several persons, the joint ownership rights shall be exercised by a common representative.
3. Within the limits established by current regulations, the Company, by resolution of the Extraordinary Shareholders' Meeting, may issue categories of shares carrying different rights with respect to ordinary shares, determining their content, and financial instruments with equity or administrative rights.	3. Within the limits established by current regulations, the Company, by resolution of the Extraordinary Shareholders' Meeting, may issue categories of shares carrying different rights with respect to ordinary shares, determining their content, and financial instruments with equity or administrative rights.
4. All shares belonging to the same category carry the same rights.	4. All shares belonging to the same category carry the same rights.
5. Until the expiry of the deadline provided for by art. 1, paragraph 2-bis of Law Decree no. 3 of 24 January 2015, converted into Law 33 of 24 March 2015, and any subsequent extensions and/or amendments, no one entitled to vote may vote, for any reason, for a quantity of the Company's shares in excess of 5% of the share capital with voting rights. To this end, account should be taken of the total shares held directly and indirectly, through subsidiaries, trust companies and intermediaries, and those for which the voting rights are assigned for any reason to someone other than the owner. Shareholdings included in the portfolios of mutual funds shall not be taken into account. For the purposes of these by-laws, control takes place, also with regard to parties other than companies, in the cases foreseen in art. 23 of Legislative Decree no. 385 of 1 September 1993. In the event of violation of these provisions, any shareholders' resolutions may be challenged pursuant to art. 2377 of the Italian Civil Code, if the required majority would not have been reached without such breach. The shares for which voting rights cannot be exercised are considered for the purpose of establishing whether there is a quorum to hold the Shareholders' Meeting.	5. Until the expiry of the deadline provided for by art. 1, paragraph 2-bis of Law Decree no. 3 of 24 January 2015, converted into Law 33 of 24 March 2015, and any subsequent extensions and/or amendments, no one entitled to vote may vote, for any reason, for a quantity of the Company's shares in excess of 5% of the share capital with voting rights. To this end, account should be taken of the total shares held directly and indirectly, through subsidiaries, trust companies and intermediaries, and those for which the voting rights are assigned for any reason to someone other than the owner. Shareholdings included in the portfolios of mutual funds shall not be taken into account. For the purposes of these by-laws, control takes place, also with regard to parties other than companies, in the cases foreseen in art. 23 of Legislative Decree no. 385 of 1 September 1993. In the event of violation of these provisions, any shareholders' resolutions may be challenged pursuant to art. 2377 of the Italian Civil Code, if the required majority would not have been reached without such breach. The shares for which voting rights cannot be exercised are not considered for the purpose of establishing whether there is a quorum to hold the Shareholders' Meeting.
6. At its meeting held on 11 July 2019, the Board of Directors, by virtue of the powers granted by the Extraordinary Shareholders' Meeting held on 4 July	6. At its meeting held on 11 July 2019, the Board of Directors, by virtue of the powers granted by the Extraordinary Shareholders' Meeting held on 4 July 2019, pursuant to Article 2420-ter of the

This is a translation into English of the original in Italian. The Italian text shall prevail over the English version.

Italian Civil Code, to be exercised by 31

2019, pursuant to Article 2420-ter of the Italian Civil Code, to be exercised by 31 December 2019, resolved to issue an Additional Tier 1 convertible bond, for a total nominal amount of Euro 150.000,000, to be entirely offered in subscription to Fondazione di Sardegna, and therefore with exclusion of the pre-emption right pursuant to Article 2441, paragraph 5, of the Italian Civil Code, at a subscription price higher than par value equal to total Euro 180.000,000, and consequently to increase the share capital against payment, in one or more tranches and in divisible form, for a total maximum amount of Euro 150,000,000, including a share premium equal to Euro 42,857,142, to service exclusively and irrevocably the conversion of such Additional Tier 1 bond through the issue of a maximum of no. 35,714,286 ordinary shares of the Company, with no par value, with regular dividend rights and the same features as the ordinary shares of the Company outstanding at the issue date.

1. The Extraordinary shareholders' meeting held on 4 July 2019 granted the Board of Directors, pursuant to Article 2443 of the Italian Civil Code, the power, to be exercised by 31 December 2019, to resolve a paid capital increase, in one or more tranches and in divisible form, with the exclusion of pre-emption rights pursuant to Article 2441, paragraph 4, first sentence, of the Italian Civil Code, for a maximum total amount equal to Euro 40,993,513.60, including any share premium to be determined pursuant to Article 2441, paragraph 6, of the Italian Civil Code also taking into account the exchange ratio between Banco di Sardegna S.p.A. saving shares and the newly issued ordinary shares of the Company through issuance of a maximum number of 7,883,368 ordinary shares of the Company, with no par value, whose issue value may also be lower than the accounting par value at the issue date, having regular dividend rights and the same features as the ordinary shares of the Company outstanding on the issue date, to service a public exchange offer on the saving shares of Banco di Sardegna S.p.A., which the Board of Directors may consider to launch after being granted the delegation.

December 2019, resolved to issue an Additional Tier 1 convertible bond, for a total nominal amount of Euro 150.000,000, to be entirely offered in subscription to Fondazione di Sardegna, and therefore with exclusion of the pre-emption right pursuant to Article 2441, paragraph 5, of the Italian Civil Code, at a subscription price higher than par value equal to total Euro 180.000,000, and consequently to increase the share capital against payment, in one or more tranches and in divisible form, for a total maximum amount of Euro 150,000,000, including a share premium equal to Euro 42,857,142, to service exclusively and irrevocably the conversion of such Additional Tier 1 bond through the issue of a maximum of no. 35,714,286 ordinary shares of the Company, with no par value, with regular dividend rights and the same features as the ordinary shares of the Company outstanding at the issue date.

1. The Extraordinary shareholders' meeting held on 4 July 2019 granted the Board of Directors, pursuant to Article 2443 of the Italian Civil Code, the power, to be exercised by 31 December 2019, to resolve a paid capital increase, in one or more tranches and in divisible form, with the exclusion of pre-emption rights pursuant to Article 2441, paragraph 4, first sentence, of the Italian Civil Code, for a maximum total amount equal to Euro 40,993,513.60, including any share premium to be determined pursuant to Article 2441, paragraph 6, of the Italian Civil Code - also taking into account the exchange ratio between Banco di Sardegna S.p.A. saving shares and the newly issued ordinary shares of the Company - through issuance of a maximum number of 7,883,368 ordinary shares of the Company, with no par value, whose issue value may also be lower than the accounting par value at the issue date, having regular dividend rights and the same features as the ordinary shares of the Company outstanding on the issue date, to service a public exchange offer on the saving shares of Banco di Sardegna S.p.A., which the Board of Directors may consider to launch after being granted the delegation.

7. The Board of Directors meeting held on 7 November 2019, by virtue of the powers granted by the Extraordinary Shareholders'

1. The Extraordinary Shareholders' Meeting of 4 July 2019 granted the Board of Directors, pursuant to Article 2443 of the Italian Civil Code, the power, for a period of five years from the date of the resolution, to increase the share capital against payment, in one or more tranches and in divisible form, with the exclusion of pre-emption rights pursuant to Article 2441, paragraph 4, and/or Article 2441, paragraph 5, of the Italian Civil Code, for a maximum total amount of Euro 13.000,000.00, including any share premium to be determined pursuant to Article 2441, paragraph 6, of the Italian Civil Code, through the issue of a maximum number of 2,500,000 ordinary shares of the Company, with no par value, whose issue value may also be lower than the accounting par value at the date of issue, having regular dividend rights and the same features as the ordinary shares of the Company outstanding at the issue date.

Meeting held on 4 July 2019, pursuant to Article 2443 of the Italian Civil Code, to be exercised by 30 June 2020, resolved a paid capital increase, to be exercised in one or more tranches and in divisible form by 30 April 2020, for a total maximum amount of Euro 23,650,104, in addition to a maximum share premium equal to Euro 4.178,185, with the exclusion of pre-emption rights pursuant to Article 2441, paragraph 4, first sentence, of the Italian Civil Code, through the issuance of a maximum of no. 7,883,368 ordinary shares of the Company, with no par value, with regular dividend rights and the same features as the ordinary shares of the Company outstanding at the date of issue, to service a public exchange offer on Banco di Sardegna S.p.A. savings shares.

1. The Extraordinary Shareholders' Meeting of 4 July 2019 granted the Board of Directors, pursuant to Article 2443 of the Italian Civil Code, the power, for a period of five years from the date of the resolution, to increase the share capital against payment, in one or more tranches and in divisible form, with the exclusion of pre-emption rights pursuant to Article 2441, paragraph 4, and/or Article 2441, paragraph 5, of the Italian Civil Code, for a maximum total amount of Euro 13.000,000.00, including any share premium to be determined pursuant to Article 2441, paragraph 6, of the Italian Civil Code, through the issue of a maximum number of 2,500,000 ordinary shares of the Company, with no par value, whose issue value may also be lower than the accounting par value at the date of issue, having regular dividend rights and the same features as the ordinary shares of the Company outstanding at the issue date.

17. RIGHT OF WITHDRAWAL

The proposed amendment to BPER's by-laws does not fall within any of the cases of withdrawal under the by-laws and the applicable legal and regulatory provisions.

18. PROPOSED RESOLUTIONS

The Board of Directors of BPER Banca S.p.A. :

This is a translation into English of the original in Italian. The Italian text shall prevail over the English version.

• having noted and approved the presentation made by the Chairman and heard the proposals of the Chief Executive Officer;
• having recalled the illustrative report drafted by the directors pursuant to art. 2441, paragraph 6, of the Italian Civil Code, approved by the Board;
• having acknowledged the opinion on the fairness of the issue price of the newly issued BPER Shares issued by "Deloitte&Touche S.p.A.", external auditing company, pursuant to Article 2441, paragraph 6, of the Italian Civil Code, and Article 158, of the Consolidated Financial Act, on 7 November 2019;
• having regard to the sworn report prepared by "EY Advisory S.p.A.", in its capacity as appointed expert pursuant to Article 2343-ter, paragraph 2, letter b) of the Italian Civil Code;
• having acknowledged the certification of the Chairman of the Board of Statutory Auditors that the subscribed share capital has been fully paid in;
• having recalled the powers granted by the Shareholders' Meeting held on 4 July 2019, and therefore in exercise of such delegation;

resolves:

• 1) to increase, in exercise of the power granted to the Board of Directors by resolution of the extraordinary shareholders' meeting held on 4 July 2019 pursuant to art. 2443 of the Italian Civil Code, the share capital against payment, in one or more tranches and in divisible form, with the exclusion of pre-emption rights pursuant to art. 2441, paragraph 4 of the Italian Civil Code for a maximum amount of Euro 23,650,104, in addition to a share premium of Euro 4,178,185 through the issue, by the deadline of 30 April 2020, of a maximum of no. 7,883.368 BPER ordinary shares, with no par value, with regular dividend rights and the same features as the ordinary shares of the Company outstanding at the issue date, at a price of Euro 3.53 per share, to be paid in through the contribution in kind of the shares tendered to the public exchange offer promoted by the Company for the 3,378,586 savings shares of Banco di Sardegna S.p.A. without voting rights and listed on the MTA organized and managed by Borsa Italiana S.p.A., held by third parties other than BPER Banca S.p.A.; it should also be noted that, pursuant to Article 2439 of the Italian Civil Code, if the aforesaid share capital increase is not fully subscribed by the deadline of 30 April 2020, it will remain valid within the limits of the subscriptions collected by that date, as a result of the savings shares tendered to such offer;
• 2) to establish and acknowledge that the subscription price of the newly issued shares is established in Euro 3.53 each, of which Euro 3 to be allocated to share capital and Euro 0.53 to be allocated to "Share premium reserve", and that such subscription price is fair and in compliance with the opinion issued by "Deloitte&Touche S.p.A.", pursuant to Article 2441, paragraph 6, of the Italian Civil Code, and Article 158 of the Consolidated Financial Act, which will be filed with the Companies' Register of Modena;
• 3) to amend Article 5 of the Articles of Association accordingly, replacing paragraph 7 with the following wording:

This is a translation into English of the original in Italian. The Italian text shall prevail over the English version. "The Board of Directors meeting held on 7 November 2019, by virtue of the powers granted by the Extraordinary Shareholders' Meeting held on 4 July 2019, pursuant to Article 2443 of the Italian Civil Code, to be exercised by 30 June 2020, resolved a paid capital increase, to be exercised in one or more tranches and in divisible form by 30 April 2020, for a total maximum amount of Euro 23,650,104, in addition to a maximum share premium equal to Euro 4.178,185, with the exclusion of pre-emption rights pursuant to Article 2441, paragraph 4, first sentence, of the Italian Civil Code, through the issuance of a maximum of no. 7,883,368 ordinary shares of the Company, with no par value, with regular dividend rights and the same features as the ordinary shares of the Company outstanding at the date of issue, to service a public exchange offer on Banco di Sardegna S.p.A. savings shares";

• 4) to grant the Chairman of the Board of Directors and the Chief Executive Officer of the Company, jointly and severally, a delegation and all the necessary powers to implement, including through special attorneys, the above resolutions, with the power to make any integrations, amendments and deletions as may be required by the competent supervisory authorities, the Companies' Register for the purposes of registration or that may be necessary for the legal completion of the same;
• 5) to grant to the Chairman of the Board of Directors and the Chief Executive Officer of the Company, jointly and severally, all the powers necessary to update, after the completion of the transaction, the text of Article 5 of the Articles of Association currently in force, deleting the seventh paragraph and amending the amount of share capital contained in the first paragraph of Article 5 in accordance with the requirements of applicable law, due to the execution, in whole or in part, of the share capital increase, and to file the updated by-laws with the Companies' Register;
• 6) to delegate to the Chairman and the Chief Executive Officer, jointly and severally, any and all powers, which are not reserved by applicable law to the exclusive competence of the collegial body, and all the broadest powers to carry out all the deliverables required, to carry out any deeds and transactions necessary and appropriate pursuant to the applicable law for the purposes of the capital increase to service the OPS, including the preparation, signing and filing of any declaration, deed or document useful and appropriate to such purpose, as well as any notice required by current legislation, including applicable regulations;
• 7) to grant, to the extent necessary for the timely execution of the OPS process, the broadest delegation of powers and scope of powers to the Chairman of the Board of Directors and to the Chief Executive Officer of the Company, jointly and severally, in order to issue and ensure that the declaration referred to in letters a), b), c), d) and e) of the aforesaid Article 2343-quarter is filed for registration at the Companies' Register, considering valid and ratified as of the date hereof their activity and acknowledging that, in relation to the declaration referred to under point (d), no exceptional or relevant event has occurred to date.

Modena, 7 November 2019

For the Board of Directors The Chairman