The value of working together. For economic, civil and social development.
The identity of the BPM Group is the expression
of its way of being, meaning its business,
organisational characteristics, people who
work for it, the guiding principles behind its
management and cultural model.
This Identity reveals the Group’s distinguishing
traits that characterise its uniqueness.
BPM GROUP IDENTITY
13 Group ﬁgures
15 GROUP PROFILE
16 Evolution of the BPM Group: key dates
18 BPM Group structure
20 • Principal subsidiaries
22 • Principal equity investments
24 Distribution network
27 MISSION, GUIDING PRINCIPLES AND STRATEGIES
28 Guiding principles
30 BPM Group Strategic Plan
46 The Parent Bank’s system of co-operative governance
49 • General Meetings
52 • Board of Directors
56 • Other Governing and Supervisory Bodies
60 • Rules of Governance
62 • Management structure
66 Governance of the Group
68 System of Internal Controls over the Group
Individuals 1,166,000 1,176,000
Companies 143,000 143,600
Entities and Associations 13,000 10,500
(in thousands of Euros)
(in thousands of euro) Operating income 1,764,675 1,551,657
Volume of business Operating
2005 proﬁt 695,120 513,720
2006 Pro-forma Proﬁt from current
Loans 26,312,649 22,585,310 before tax 637,402 412,376
Direct deposits* 29,354,399 24,612,847 Net proﬁt for the year
Assets under management** 20,729,355 20,439,253 to the Parent Bank 398,680 258,980
Assets under administration 18,884,318 16,655,183
* include amounts due to Customers, debt securities in issue and The ﬁgures refer to a duly reclassiﬁed format of the income
ﬁnancial liabilities designated at fair value through proﬁt and statement so as to guarantee a clearer picture of performance and
loss. . full compliance with normal market practices. The line items have
** at market value and net of any duplications. been grouped or reclassiﬁed among the same.
Managers Ofﬁcials Other employees Total
2006 2005 2006 2005 2006 2005 2006 2005
Banca Popolare di Milano 97 108 2,334 2,346 3,884 3,947 6,315 6,401
Banca di Legnano S.p.A. 13 15 317 307 478 468 808 790
Cassa di Risparmio di Alessandria 10 7 160 162 406 411 576 580
Banca Akros S.p.A. 25 25 112 109 107 107 244 241
Bipiemme Gestioni SGR S.p.A. 9 10 43 42 58 58 110 110
We@Service S.p.A. 4 4 33 31 41 41 78 76
Bipiemme Private Banking SIM S.p.A. 4 4 43 41 19 9 66 54
BPM Ireland Plc. 1 1 0 1 6 6 7 8
Bipiemme Immobili S.p.A. 0 1 4 2 3 5 7 8
Other companies 2 1 6 5 58 57 66 63
Total 165 176 3,052 3,046 5,060 5,109 8,277 8,331
We point out that in order to take into account the changes in the scope of consolidation and to ensure better comparability of data, the
ﬁgures as at 31 December 2005 of the BPM Group have been restated on a pro-forma basis. In this respect, the companies Bipiemme Vita and
Ultramediass – which at 31 December 2005 were consolidated based on the line-by-line method – at 31 December 2006 were no longer within the
scope of consolidation line-by-line following:
• the conclusion of a bankinsurance agreement with Fondiaria-Sai Group whereby 50% of the share capital of Bipiemme Vita was transferred to
Milano Assicurazioni (see “Signiﬁcant events” - Directors’ Report of the Parent Bank);
• the merger through incorporation of Ultramediass (a company entirely controlled by Bipiemme Vita) into Bipiemme Vita.
The number of personnel per category refers to the situation at the end of the period. The ﬁgures only include employees and exclude workers
under different types of contracts (temporary and professional ongoing collaborators), which totalled 114 workers at the end of 2006.
BPM Group Identity
Evolution of the
BPM Group: key dates
1865 Group to offer Customers complete, professional,
Banca Popolare di Milano was founded in 1865, in multi-sector services, specialising in the more
the climate of renewal characterising the era in the important areas of ﬁnancial intermediation, asset
immediate aftermath of proclaiming the Uniﬁcation management and remote banking. In 1989 it
of Italy. Luigi Luzzatti, the great economist and acquired Banca Popolare di Apricena.
statesman, was Chairman from 1865 to 1870 and
Honorary Chairman until 1927. The Bank rapidly 1990s
established itself in the social and economic fabric The liberalisation of new openings resulted in the
of Milan thanks to its mutualistically inspired model rapid growth of the number of branches, especially
and its support for small businesses, craftsmen and in Milan and Lombardy. In the second half of the
tradesmen without access to adequate credit and 1990s the Group absorbed Banca Agricola Milanese,
easy prey to usury. Banca Briantea and Banca 2000 (ex Inabanca),
while obtaining control of Banca Akros.
Up until the Second World War BPM developed as 2001 - 2005
a typical local bank, enhancing its dominion in its In 2001, BPM acquired control of Banca di Legnano,
area of origin. expanding in areas of signiﬁcant economic interest
In the period immediately after the war the Bank and within the vicinity of the Milanese centre of
made a signiﬁcant contribution to reconstruction gravity. In 2003, as part of a growth strategy based
and economic recovery particularly fostering the on safeguarding its own identity, BPM signed
start-up of small and medium enterprises in the an important agreement with the Strasbourg
northern area of the Milan province. Federation of Crédit Mutuel, designed to develop
operating synergies between the BPM Group and
1950s Crédit Industriel et Commercial, a bank with strong
In the 1950s BPM’s growth strategy took it beyond roots in the French capital and a Crédit Mutuel
the borders of Lombardy: it completed its ﬁrst subsidiary. In the same year BPM reached an
merger (with Banca Popolare di Roma, 1957), agreement with Fondazione Cassa di Risparmio di
acquired control of Banca Briantea and obtained a Alessandria to acquire control of Cassa di Risparmio
major stake in Banca Agricola Milanese, becoming di Alessandria and subsequently to absorb it into
its principal shareholder. the BPM Group. In 2004 BPM acquired control
of 80% of Cassa di Risparmio di Alessandria and
1960s and 1970s executed the agreement to transfer 20% of Cassa
After a decade of consolidating its past growth, the di Risparmio di Asti to Banca di Legnano, a wholly-
1970s saw a considerable expansion in operations, owned BPM subsidiary. In 2005, BPM realized
taking BPM beyond its original territory with the the Private Equity project through a partnership
opening of branches in Turin and Florence and with Wise Venture SGR, developed a partnership
branches and representative ofﬁces abroad. It also in the property funds sector with AEDES S.p.A.,
continued its expansionary strategy, absorbing and concluded a bankinsurance agreement with
Banca Popolare Cooperativa Vogherese in 1979. Fondiaria-SAI Group.
1980s Signiﬁcant events in 2006
The 1980s conﬁrmed BPM’s great potential and In 2006 a series of measures contributed to the
solidity, with it taking a leading role in the rescue results achieved by the 2004-2006 Strategic
of Banco Ambrosiano (1982). In 1985 it obtained Plan and are at the root of the expected growth
control of Banca Agricola Milanese through a described in the new three-year plan.
hostile takeover bid – an unprecedented action in Among these are:
the Italian banking industry – demonstrating the BPM Group’s New 2007-2009 Strategic Plan
banking regulator’s conﬁdence in BPM and those The Plan continues from where the previous
ﬁrmly at its command. plan left off, adopting the following three main
In 1988 it absorbed Banca Popolare di Bologna e lines of strategy: development of Commercial
Ferrara. Banking, higher proﬁtability from the Corporate &
At the end of the 1980s it created the BPM Banking Investment Banking area, and greater efﬁciency
16 social responsibility report > group identity > proﬁle > evolution of the bpm group
in operating activities and platforms, completing Merger through incorporations of Bipiemme
the rationalisation process started in the last three Immobili into BPM
years. On 5 December 2006, BPM’s Board of Directors
approved the merger through incorporation of
Development of the bankinsurance agreement Bipiemme Immobili S.p.A. (a real estate company of
between BPM and Fondiaria-SAI Group the Group in which BPM holds a 90.89% interest)
Following the agreements signed on 21 December into BPM following the purchase of the residual
2005, Fondiaria-SAI Group acquired a 50% stake 9.11% of the capital currently in the hands of Banca
in Bipiemme Vita. Within the ambit of non-life di Legnano S.p.A.
insurance, the Group has been marketing Multi-risk
policies sold starting from last 12 March through Securitisation of performing real estate mortgage
the BPM network the distribution of car insurance loans worth approximately Euro 2 billion
policies is expected to start in 2008. The Group’s This operation entailled the pro-soluto transfer of a
entry into the non-life insurance sector is designed portfolio of performing real estate mortgage loans
to further increase Customer loyalty and expand the issued by BPM worth approximately Euro 2 billion
client portfolio. and backed by ﬁrst-level mortgage guarantees to
BPM Securitisation 2 S.r.l. To ﬁnance the purchase
Acquisition of a stake in Pitagora 1936 S.p.A. of the portfolio, BPM Securitisation 2 S.r.l. issued
In 2006, BPM Group purchased a 24% interest in a series of senior securities with limited recourse
Pitagora 1936 S.p.A., a special purpose vehicle (with AAA, AA and BBB ratings) in July 2006. The
holding 75% of Pitagora S.p.A., a ﬁnancial company securities were listed on the Luxembourg Stock
specialised in providing loans through salary and Exchange and distributed to institutional investors
mortgage assignments. This agreement will enable for a total amount of Euro 2,015.3 million.
BPM Group to widen its offering in the consumer
credit sector, ﬁnance Customers with difﬁcult access Adoption of the new code of governance for listed
to credit, and exploit the Pitagora network to market companies
other BPM products. In December 2006, BPM’s Board of Directors
approved the adoption of a new code of self-
Shareholding increase in SelmaBipiemme Leasing governance for listed companies. The version
In May 2006, as provided for in the Shareholders’ adopted is the one presented by the Italian Stock
Agreements, BPM increased its stake in Exchange on 14 March 2006 replacing the 1999
SelmaBipiemme Leasing from 38.35% to 40% version (amended in July 2002), which BPM had
after renewing the commercial agreement for the fully adopted.
distribution of products through BPM’s commercial
Completion of the framework agreement with
Crédit Industriel et Commercial
In February 2006, BPM and Crédit Industrielle et
Commercial (C.I.C.) mutually acquired an interest
in each other’s share capital, with BPM acquiring
from Crédit Mutuel Group 352,082 shares in C.I.C.
for a total of 55,276,874, equal to 1% of the French
bank’s share capital. This operation was carried out
to perform and complete the Framework Agreement
entered into with Crédit Industriel et Commercial
with regard in particular to the mutual purchase of
shares between the two banks.
Simultaneously, C.I.C. granted BPM a put option
on the sale of the aforementioned shares to be
exercised in the six months following the possible
date of transfer of the effects of the Framework
BPM Group BPM is a group serving a vast clientele. It supports
investment and lending projects for numerous
structure types of Customer (households, small and medium
enterprises, local authorities and associations)
and combines with its evident vocation in the retail
sphere constant attention to developing activities
displaying greater growth potential, such as asset
management and private and corporate banking.
BPM is therefore a full-service diversiﬁed banking
group, operating in all sectors of the ﬁnancial
The Group’s structure is accordingly organised into
the following business units:
Retail Banking: this serves the retail market
using different approaches according to Customer
segment and includes the traditional branch
network, as well as ﬁnancial consultants, private
banking and virtual banking with activities mainly
focusing on: raising funds, disbursing credit,
providing collection and payment services,
distributing products and services for investment,
retirement savings and risk hedging, providing
e-commerce and on-line services in general.
Corporate Banking: this serves the corporate
market by granting credit, supplying collection
and payment services, offering investment and
risk hedging services and identifying commercial
opportunities relating to extraordinary corporate
Investment Banking: this includes areas of
business such as dealing in ﬁnancial instruments,
both on own account and on account of third
parties, capital markets activities and primary
market subscription and placement services
(equities and bonds).
Wealth Management: this mostly serves the retail
market and includes all the activities associated with
asset management, such as mutual funds, portfolio
management schemes, insurance, products and
services for the purposes of retirement savings and
18 social responsibility report > group identity > proﬁle > bpm group structure
at 31 december 2006
Banca Popolare di Milano S.c.ar.l.
55.16% Bipiemme Gestioni SGR S.p.A. 40% Banca di Legnano S.p.A. Banca Akros S.p.A.
Milan Legnano (MI) Milan
51% Bipiemme Private
Banking SIM S.p.A. Akros HFR Alternative
Milan Investments SGR S.p.A.
90.89% Bipiemme Immobili S.p.A. 9,11%
Milan Akros Securities Inc.
50% Bipiemme Vita S.p.A.
100% BPM Capital 1 L.l.c.
Cassa di Risparmio 80%
di Alessandria S.p.A.
99.99% Bipiemme Ireland Plc.
100% Bipiemme Fund
Dublin Management Ltd.
100% Tirving Ltd.
99.99% We@Service S.p.A. 0.01%
100% Ge.Se.So S.r.L.
99% Retail banking
BPM Luxembourg S.A. 1%
50% Calliope Finance S.r.L.
NOTE - changes occured in 2007: Wealth Management
• January: BPM purchased 100% of Bipiemme Immobili S.p.A.
• June: Bipiemme Immobili S.p.A. was incorporated into Banca Popolare di Milano
• June: BPM transferred another portion of shareholdings in Bipiemme Vita S.p.A. to Gruppo Fondiaria-SAI.
BPM’s current shareholding amounts to 45.89%.
• July: Banca Akros S.p.A. acquired the residual 49% share capital of Akros Alternative Inv. from HFR Europe
Ltd., which changed its company name and is now only Europe Ltd.
The structure of the BPM Group is the result of a Bipiemme Gestioni SGR S.p.A.
process of acquisitions, equity investments and This is the Group’s most important asset
control of banks with distribution networks deeply management company. It offers a complete
rooted in the economy of areas neighbouring those range of asset management products, which is
of the Parent Bank and companies specialising in constantly updated and expanded to respond to
the development and offer of products capable the more diversiﬁed needs of Customers: mutual
of responding to the needs of a vast, diversiﬁed funds (active management, dynamic management,
clientele. management for companies), funds of funds,
pension funds and portfolio management schemes.
Within this context, for the purposes of adopting
Banca di Legnano S.p.A. the instructions issued by the Bank of Italy
This established bank joined the Group in 2001. It regarding collective asset management, and of
has deep roots in the North West of Lombardy with providing transparency and an ever better response
a network of over 100 branches. Given its strong to investor needs, during the ﬁrst half of 2006 the
local roots, its focus is on retail Customers and Company amended the regulations of the funds set
small and medium enterprises. It also operates up and/or managed by it.
actively in the leasing segment. It owns signiﬁcant
interests in the Group’s product companies.
Bipiemme Vita S.p.A.
An insurance company operating in the life and
Cassa di Risparmio di Alessandria S.p.A. health/accident insurance sector, Bipiemme Vita
This bank joined the Group in September 2004. S.p.A. offers one of the widest ranges of products
It is ﬁrmly established in the Alessandria area on the Italian insurance market, guaranteeing the
and surrounding provinces, neighbouring those best investment opportunities and protection for its
in which the Group is already present. Its main clientele.
business is with retail Customers and small and From a corporate standpoint, in performance
medium enterprises. It has around 80 branches. of the agreements signed in December 2005
by BPM Parent Bank and Fondiaria-SAI Group
to develop bankinsurance activity and possibly
Banca Akros S.p.A. forge a partnership in the non-life sector, in 2006
This bank provides investment and private banking Milano Assicurazioni, a company belonging in the
services to Italian and foreign institutional Fondiaria-SAI Group, purchased in two instalments
Customers, as well as to companies and high a total 50% stake in Bipiemme Vita. In the ﬁrst
net worth private clients. In 1999 it set up Akros half of 2007, Milano Assicurazioni exercised a call
Securities Inc. in the USA to act as a broker/dealer option on a further 1% of Bipiemme Vita thereby
on the American market. Together with HFR, its acquiring control of the company.
American partner, through HFR Europe Ltd., it also On 31 December 2006, the subsidiary Ultramediass
set up Akros HFR Alternative Investments SGR S.r.l was merged through incorporation into
S.p.A., a company that manages funds of hedge Bipiemme Vita in order to rationalise the
funds. In April 2007, Banca Akros exercised a call shareholding structure of this latter.
option on the purchase of the residual 49% of
the capital held by the partner HFR Europe Ltd. We@Service S.p.A.
The call option was granted under the Investment In IT, commercial and advisory terms, We@Service
Agreement entered into with its American partner develops the virtual banking initiatives of BPM
and expiring on 31 March 2007. Following the Group. The consolidation of We@bank, a website
operation, the acronym “HFR” became the dedicated to retail Customers, and of InlineaNet,
subsidiary’s company name. the portal designed for business, in 2006 was a
In 2006 Banca Akros acquired a holding in Promac, pivotal step in developing a multi-channel bank
a company promoting alternative capital markets that offers integrated services such as home
(listing in progress) and dedicated to giving small banking, on-line trading and other high added-
businesses easier access to capital markets. value services for its clientele.
20 social responsibility report > group identity > proﬁle > lprincipal subsidiaries
BPM Ireland Plc. Calliope Finance S.r.l.
A ﬁnance company based in Dublin active in the This ﬁnancial intermediary company is listed in
dealing on own account of securities, bonds the register as per Article 106 of Legislative Decree
and credit derivatives. It controls BPM Fund no. 385/1993 and since the latter half of 2006 has
Management Ltd. been operative thanks to the joint venture between
BPM and “LB UK RE Holdings Limited”, a company
within the Lehman Brothers Group.
BPM Fund Management Ltd. In particular, Calliope Finance grants mezzanine
A company incorporated under Irish law that loans for the acquisition and/or development of
manages harmonised funds, securities-backed real estate.
guarantees and the multi-sector mutual fund called The project aims to optimise the potential
“Dublin International Fund” (D.I.F.), distributed synergies existing between BPM and Lehman
in Italy through the network of ﬁnancial advisors Brothers within the ambit of property loans and
of the Group. The new sectors of the D.I.F. are to take advantage not only of Lehman Brothers’
be marketed in Ireland in order to increase the experience and client base within the sector of
ﬁnancial products present on the market. mezzanine lending, but also of BPM’s ﬁrm roots
within the territory.
Bipiemme Private Banking SIM S.p.A.
Set up in 2001, this company provides personalised
advisory services on investments in ﬁnancial
instruments and on wealth management to high net
worth individuals who are clients of the Group. The
company is distributed into 14 “Private Centres”
located mainly throughout the region of Lombardy.
In April 2007, the company obtained ISO 9001
certiﬁcation for all its in-house processes.
Bipiemme Immobili S.p.A.
This company holds the non-instrumental property
of the Group, in other words property to be sold
or leased within the medium-term. Bipiemme
Immobili has also headed the project for the
development and completion of BPM’s Service
Centre in viale Bezzi in Milan.
In 2006, it continued to transfer non-instrumental
assets. As this transferring activity was nearly
reaching its conclusion, in the ﬁrst half of 2007,
Bipiemme Immobili was incorporated into BPM.
The operation falls within the wider organisational
rationalisation project envisaged in the 2007-
2009 Strategic Plan of the Parent Bank to ensure
that this latter retains sole management of the
For further details on the banks and principal companies of the
Group, see the ﬁnal sections of this document.
Banca Popolare di Milano owns interests in certain Aedes BPM Real Estate SGR S.p.A.
other companies in order to enhance the range of (39% interest)
products and services offered to Customers and
Previously named Bipiemme Real Estate SGR, this
to support the respective local economies. The
company manages closed-end property funds,
network of alliances is structured on the basis of a
including “Investietico” – dedicated to retail clients
and listed on the Italian Stock Exchange – whose
equity is currently invested mostly in nursing and
1 To put the Group’s specialist expertise health care facilities and ofﬁces.
and speciﬁc product capability at the service of
SelmaBipiemme Leasing S.p.A.
Customers of other banking partners with strong
Set up as a collaboration between BPM Group and
The agreements with the following banks fall under Mediobanca Group within the leasing sector, this
this strategy: company is among the leading ten companies in the
Cassa di Risparmio di Asti S.p.A. sector. The company aims to satisfy the medium-
(20% interest held through the subsidiary Banca di term ﬁnancing needs of clients against ﬁxed
Legnano) capital investments. Following the subscription of
A historical bank with deep roots in the area of a capital increase reserved for payment, starting
Asti, this company is currently strengthening from January 2007 BPM has increased its interest in
its territorial network in the provinces of Turin, SelmaBipiemme Leasing from 38.35% to 40%.
Alessandria and Cuneo. Its commercial operations
are mostly directed at retail Customers and small Etica SGR S.p.A.
and medium enterprises. The bank aims to be an (27.50% interest)
interpreter of economic development in its own This company develops and sells mutual funds
particular territory. featuring a high degree of social responsibility
(Responsible Values Funds) and whose assets are
NordEst Banca S.p.A. invested in ﬁnancial instruments selected on the
(10% interest) basis of strict ethical-environmental criteria.
This local bank, set up in 2002, operates in the It serves investors wishing to invest their money in
provinces of Udine and Pordenone, positioning a more conscious fashion, based on the concept of
itself as a partner of reference for small and medium sustainable development. In 2006 the three existing
enterprises in the North East and for local investors. funds were joined by a new one under the name of
“Responsible Values Equity”, which mainly invests
2 To acquire additional specialist skills of In regards to deﬁning the social-environmental
excellence, possessed by external partners, in order criteria on which the investments of these funds
to put them at the service of Customers of BPM and are based, in 2007, the company switched from
of other banks in the BPM Group. the ethical advisor Ethibel to EIRIS, an English
company with a long-standing tradition in the
In this context we point out the partnerships with: ethical investment research sector. It is an active
Dexia Crediop S.p.A. shareholder in the companies in which it has
(10% interest) invested, meaning that it takes part in general
This bank is a leading provider of ﬁnance to public meetings and presents proposals relating to the
works and infrastructure projects and of ﬁnancial social and environmental responsibility of the
services to local communities. It is a point of companies themselves.
reference for project ﬁnancing involving local
authorities, leading public agencies and the most
important public-service companies.
The companies described do not fall within the scope of
consolidation of the Group
22 social responsibility report > group identity > proﬁle > principal equity investments
It supports microcredit in Italy, ensuring that 0.1% 3 To acquire interests in organisations that
of the amounts invested in the Responsible Values carry out socially relevant activities.
Funds is transferred to a speciﬁc fund that provides
small loans to the disadvantaged. Falling within this context are the following equity
Pitagora 1936 S.p.A.
(24% interest) Istituto Europeo di Oncologia (I.E.O.) S.r.l.
A special-purpose vehicle established in 2006 (3.53% interest)
by BPM and, among others, the “Wisequity II & This is a private non-proﬁt entity that provides
Macchine Italia” fund (managed by the subsidiary services under arrangement with the national health
Wise Venture SGR S.p.A.) for the purpose of service and otherwise. The institute, inaugurated in
acquiring a majority 75% shareholding in Pitagora May 1994, became an Institute of Hospitalisation and
S.p.A., a ﬁnance company specialised in granting Treatment for Scientiﬁc Purposes under a ministerial
mortgages and loans against salary assignments. decree dated January 1996. In keeping with the
Through this shareholding, BPM Group is, among standards of the most advanced international
other things, able to optimise its offering in the oncological centres, it carries out a complete range of
consumer credit sector, a market segment with activities in the ﬁght against cancer: prevention and
a great deal of potential thanks to the new laws diagnosis, health education and training, research
that now allow employees of private companies and treatment. In addition to BPM, its shareholders
and pensioners to obtain this form of ﬁnancing include Italy’s top banks (Mediobanca, Banca Intesa,
and companies to ﬁnance clients with a bad credit Unicredit, Capitalia), top insurance companies
history. (Fondiaria – Sai, Ras, Generali, Milano Assicurazioni)
and some of the country’s most important industrial
Wise Venture SGR S.p.A. groups (Fiat, Pirelli, Edison, Telecom, Italcementi).
This company, which operates in the private equity (4.37% interest)
sector, absorbed BPM Private Equity SGR during This company carries out research and development
2005. It currently manages three funds, among in the innovative sectors of biotechnology,
them “BPM Private Equity Fund”. biomedicine and the functional genomics. The
presence of biotechnology research centres
Banca Italease S.p.A. of excellence in Milan and the commitment of
(1.83% interest) respected scientists to making the city a national
This bank is run by a shareholder syndicate centre in this sector, have resulted in the decision
consisting of co-operative banks and mutual to make this investment also with a view to the
insurance companies. BPM’s interest is a result of provision of support by a local bank to an important
the 2005 merger through incorporation of Factorit local venture that involves not only a particularly
S.p.A. into Banca Italease. Banca Italease is the respected scientiﬁc and management team, but also
second-largest Italian bank operating in the sector institutional and private investors of high proﬁle
of ﬁnancial leasing. Its activity centres heavily on and visibility. In 2006 the company increased its
property and instrumental leasing. 31 December share capital in order to be able to acquire control
2006 marked the completion of the merger through of Intercept Pharmaceuticals, a U.S.-based company
incorporation of Leasimpresa S.p.A. (a leasing whose scientiﬁc endeavours complement those of
company of Banco Popolare di Verona e Novara Genextra.
Group) into Banca Italease.
Consorzio Idroenergia Soc. Consortile a r.l.
(subscription to one share)
This consortium generates electricity from
renewable sources. The support for this venture is
designed to achieve certiﬁcation as a user of energy
from renewable sources.
Distribution network The BPM Group uses a multi-channel distribution
model in order to provide an ever better response
to the demands for specialisation, quality and
accessibility to the services by the different types
The number of locations and types of access to
services is the result of concentrated investments
in technology, organisation and training of the
The commercial sector of the Parent Bank was
restructured in the ﬁrst half of 2006 and has led
Retail Branches - These represent the physical
location specially for individual customers,
professionals, and micro and small enterprises
(with up to Euro5 million in turnover).
Financial Consultants and Private Centres Corporate Segment - This is the BPM
Financial advisors (2 working for Bipiemme structure (4 corporate branches and 10 SME
Private Banking SIM, 35 for BPM and 14 for 710 retail branches units,) operating in areas where the Group
Banca Akros) comprise the network providing is particularly well established and created
personalised advisory and asset management to provide advice and a point of reference
services. Thanks to this network the Group is for medium and large enterprises.
also able to reach areas that have not
traditionally been served.
51 promotors 14 units in the
16 private centres corporate segment
pos (point of sales)
Equipment that allows
customers of traditional and BPM
mass market retailers to make around 20,000 pos
safe payments using their
credit and debit cards.
internet channel 832 atm points
Internet services - These allow ATMs - The Group's ATMs densely
information to be managed and populate the area thanks to the presence
transactions to be executed remotely, of over 800 machines.
including on-line trading. They are
managed by the company We@Service
S.p.A. and are directed at individual
customers and companies through the
We@bank and inLineaNet channels
call center - This provides customers with
remote access and includes phone banking
24 social responsibility report > group identity > proﬁle > distribution network
to changes in the organisational structure of the contact with Customers, consisting of 710 Retail
network, the closing of 18 corporate branches and Branches, plus the virtual branch of We@Bank, 4
the establishment of: new Large Company branches and 10 Small and
• four new Large Companies branches that manage Medium Company branches forming part of the
clientele that generates a turnover of more than operating structure of the Parent Bank, as well
Euro 50 million (divided into upper corporate as 16 Private Centres, of which 14 belonging to
from Euro 50 million to Euro 250 million and large Bipiemme Private Banking SIM and 2 to Banca
corporate over Euro 250 million); Akros.
• ten new Small to Medium Companies branches
There are 710 traditional branches spread out
in each territorial area that manage clientele that
over 13 regions throughout Italy. In 2006 10 new
generates a turnover from Euro 5 million to Euro 50
branches were opened, of which 6 are BPM, 2
Banca di Legnano and 2 Cassa di Risparmio di
At 31 December 2006, BPM Group’s distribution
Two branches, one belonging to BPM and the other
network was composed of a total of 741 points of
to Banca di Legnano, were closed.
BPM Group distribution network
Lombardy 465 462
Province of Milan 322 322
Other provinces in Lombardy
Banca Popolare di Milano 366 364
Banca di Legnano 96 95
Cassa di Risparmio di Alessandria 2 2
Banca Akros 1 1
Other regions 245 240
Emilia Romagna 31 30
Latium 58 57
Apulia 38 37
Piedmont 92 92
Other regions 26 24
Banca Popolare di Milano 152 149
Banca di Legnano 11 11
Cassa di Risparmio di Alessandria 82 80
Total Italy 710 702
Banca Popolare di Milano 518 513
Banca di Legnano 107 106
Cassa di Risparmio di Alessandria 84 82
Banca Akros 1 1
We@Bank – virtual branch 1 1
Total no. of branches 711 703
Large Company Branches 4 –
Small and Medium Company Branches 10 –
Corporate Branches* – 18
Private Centres (Bipiemme Private Banking SIM and Banca Akros) 16 –
Total distribution network 741 736
*In 2005 the Corporate Branches were replaced by Large Company Branches and Small and Medium Company Branches
BPM Group Identity
Principles and Strategies
Mission The BPM Group is committed to enhancing the value
of personal savings and to support the business
sector’s development with credit. It adopts a
responsible approach to the demands of everyone it
deals with and incorporates social and environmental
considerations in its actions, making them a
distinguishing feature of its activity as a bank and a
co-operative and hence of its competitiveness and
ability to create wealth.
In keeping with this approach the BPM Group’s
promoting and sustaining economic, civil, social
and environmental development in the areas in
which it is present, exercising to the best its role
as a banking group in respect of all sectors of the
economy represented therein:
• the private one - individual Customers and
businesses, with a particular focus on small and
• the public one - entities and institutions
representing the local authority sector;
• the civil one - associations and other
organisations representing the no-proﬁt sector.
Guiding principles 1HARMONIOUS BALANCE OF INTERESTS
The interests of Customers, Members and
Shareholders and Personnel ﬁnd a harmonious,
balanced composition in the Group’s mission
pursued to the beneﬁt of all its stakeholders.
To operate for the beneﬁt of Customers by ensuring
a quality, transparent service and for the beneﬁt
of Personnel by enhancing their professional skills
are closely interdependent goals and represent the
cornerstone of the Bank’s creation of value for its
In fact, the different interests involved only compete
against one another in a short-term, narrow sense,
which may and must be overcome with a far-sighted
vision of corporate interest, like that required in order
to pursue the Group’s mission.
The systemic, harmonious conception of value
creation, not just economic value, takes into
account the expectations for economic returns
of even the most demanding of Shareholders,
as a sure guarantee of commitment to meeting
the expectations of national and international
ﬁnancial markets with regard to the principles of fair
management conduct and transparent disclosure.
28 social responsibility report > mission, guiding principles and strategies
2 EFFICIENCY AND DEVELOPMENT • to generate the facts to be communicated.
The BPM Group has a permanent commitment
Efﬁciency and development represent an
to communicating not just in words but with
inseparable pair of values and goals, always to be
facts and work, reﬂected in its mission of social
accountability. The Social Responsibility Report
While efﬁciency, constantly and resolutely pursued is the systematic method of reporting the Group’s
in every area of operation, produces development strategies, actions taken and results achieved.
from solid, reliable basis, development itself is
what gives real meaning to the comprehensive
commitment to seeking ever greater efﬁciency.
This virtuous circle involves developing state-of-the
art processes and technology, enhances existing
professional skills and increases the ability to
attract top professionals from outside.
3 CO-OPERATIVE SPIRIT
The co-operative spirit is at the basis of joint action
for the beneﬁt of all Members, by fostering their
participation in the Bank’s affairs and decisions
and in the development of the local areas in which
This is an essential principle of the co-operative
model, which in this way fosters the achievement
of high standards of efﬁciency and social relations
and so is fully entitled to a place in an economic
system in which freedom of enterprise also signiﬁes
freedom to decide between different types of legal
and institutional form.
4 ACCOUNTABILITY AND TRANSPARENCY
The principle of accountability and transparency
requires every member of the business to perform
their function responsibly, independently and to the
best of their ability, answering for their activities
to their superiors and being accountable to their
The BPM Group views accountability and
transparency as being at the basis of its ability:
• to enact its values. It is a primary responsibility
of top management, but also of all Members
and Personnel, to enact the Group’s values and
mission, continuously generating a genuine spirit
of co-operation geared to achieving the mission
itself and building with the various parties, inside
and outside the business, fair and transparent
relationships based on respect and trust, supported
by professional competence.
BPM Group The three-year strategic plan embodies the
Company’s vision for the future, its positioning and
Strategic Plan objectives and strategies pursued through speciﬁc
policies and measures.
It is not merely a list of activities and measures, but
represents a vision for the future of the company
that contributes to the creation of a corporate
BPM Group’s Plan has been created and developed
around certain key notions that on the one side
stand as objectives to be achieved and on the other
as the guided values that characterise the Group
Improvements in economic performance and
in creating value for shareholders are brought
together not only by more efﬁcient internal work
processes, but also by a commercial policy that is
increasingly able to meet the needs of the changing
demographics and culture of society and the new
needs of the production system.
In terms of the internal process for creating the
Strategic Plan, the federal structure of BPM Group
has worked together with direct contributions from
all corporate functions and every Board of Directors
of the companies of the Group.
From this viewpoint, the Plan stands as a pact
between everyone operating within the various
corporate functions and clearly lays out the
commitments each is able to undertake, thereby
channelling human and economic resources to the
designated management areas.
Strategic planning process
The Plan was structured based on a plan organised
by business line in which the activities of BPM
Group are divided according to a scheme that
encompasses all the departments/companies of
Governance of this process was entrusted to an ad
hoc Guidance Committee composed of the Parent
Bank’s management, the general Directors of the
companies of the Group and a project team.
The progress of the Plan was monitored not only
by the ad hoc team set up within the Parent Bank
(Strategic Planning), but also by all the corporate
functions, each in relation to its own area of
competence. This phase involves monitoring
activities and entails further evaluation of the
activities in question, possibly leading to review
proposals on such activities.
30 social responsibility report > mission, guiding principles and strategies > strategic plan
The choice of appropriate indicators is particularly
important in monitoring the single strategic
actions, highlighting economic results as well as
qualitative results induced from the action itself.
Process of strategic planning
GUIDING Defines the guidelines,
COMMITTEE validates the intermediate and final results,
guides in strategic decisions.
Acts as the starting
point for the overall status
(Operational Programme Management)
of works, monitors, identifies
and points out any critical areas.
Analyse the issues
TASKFORCES assigned to them
and draw up economic forecasts.
Works with the taskforces
STRATEGIC to provide specialised advisory
PLANNING services in the drawing-up of strategic measures.
Gives support for the development
of economic forecasts.
MARKETING in processing marketing data.
OF PLAN IMPLEMENTATION AND CONTROL
PRELIMINARY STRATEGIES IDENTIFYING MONITORING
ACTIVITY AND SINGLE OBJECTIVES THE STATUS OF WORKS
COMMUNICATION THE OPERATIONAL
Reporting of the 2004-2006 During 2004 the BPM Group drew up a detailed
and ambitious Strategic Plan for the three years
Strategic Plan 2004-2006 with the primary objective of regaining
efﬁciency and consolidating proﬁtability as a result
of major revenue growth and targeted measures to
cut operating costs.
These goals have been achieved through a detailed
programme of measures and projects affecting
all functions across the Group; the efﬁciency
and proﬁtability goals have been achieved
through general improvement in services and the
variety of products offered to Customers, greater
accessibility to and integration of the distribution
channels, rationalisation of operating processes
and organisational structures and refocusing of
the business with regard to the economic sectors
with which the BPM Group has been traditionally
Objectives of the 2004-2006 Strategic Plan
• Optimisation of operating processes and release
• Plans for expanding volumes, revenues and Retail of "commercial time"
and Corporate customer base • Transfer of resources from the centre to the network
• Targeted expansion of the geographical • Actions regarding staff turnover and structural
and commercial network measures relating to payroll costs
• Excellent products and development of marketing • Management of costs
1. Commercial 3. Operational
Goal for end of 2006 Goal for end of 2006**
annual average growth Cost/Income ratio 61%
revenues +7.4% ROE* 12.4%
2. Organisational 4. Risk and capital
• Concentration/Rationalisation of the Financial
Operations desk and direct channels • Basel 2 project
(Internet and Phone banking) • Development of instruments and processes
• Organisational simplification for improving the disbursement and monitoring
• Elimination of overlapping structures within of credit
* Adjusted for goodwill and non-recurring items
** Objectives adjusted to apply IAS (originally 65% and 14.9%) and ITGAAP.
32 social responsibility report > mission, guiding principles and strategies > reporting of the 2004-2006 strategic plan
RACE Project +13.6%
of finance area
of foreign 67.7%
79.3% 11.7% ROE Adjusted
Starting point Results achieved during the three-year 2004-2006 Plan
* For the sake of consistent comparison, 2006 figures have been recalculated on a pro forma basis through an integral
consolidation of Bipiemme Vita instead of at equity.
Actions carried out
• Repositioned loan book on Retail and SME • Implemented RACE project (optimising
• Reduced concentration of loan book the operational processes of branches)
• Reduced financial assets component • Launched IT sector project to lower costs
• Opened 33 new sales points • Launched project to rationalise Back Office area
• Increased number of home mortgages
1. Commercial 3. Operational
2. Organisational 4. Risk and capital
• Restructured finance area • Implemented Basel 2 project (launched internal
• Closed foreign branches rating project to measure credit and market risks)
• Integrated BDL and launched the integration • Entered into agreement with Aedes for property
of CR Alessandria funds
• Set up new Corporate Banking organisational • Sold majority stake in BPM Private Equity
structure • Entered into bankinsurance agreement with
2004-2006 Strategic Plan
1 Commercial development
Volumes, revenues and clients1 the margin of institutional relationships with credit
The measures taken for Retail and Corporate companies.
clientele have resulted in signiﬁcant growth Consider in this sense employees of private
in Customer business and revenues, which companies who need temporary loans for amounts
exceeded targets thanks especially to the positive that are beyond their current means or pensioners.
performance of direct deposits and loans.
The positive trend of volumes and margins improved Bankinsurance
company proﬁtability and has enabled the Group to The agreement reached and concluded in 2006
increase its market share (the direct deposit market with Fondiaria-SAI Group, an Italian leader in
share rose from 1.87% at the end of 2004 to 2.04% bankinsurance activities, has enabled BPM Group
in December 2006). to further consolidate its presence in the life
sector and from 2007 market non-life products. By
integrating banking and insurance systems and
because they are complementary to one another,
BPM will be able to offer its Customers a complete
range of products aimed at satisfying needs that
During the course of the Plan, the BPM Group also today’s life conditions render more and more
worked on a large project to develop its business complex.
model in order to pursue objectives of qualitative
excellence and product variety, by seeking out Furthermore, the agreement with Fondiaria-SAI
alliances with specialist partners who were market Group will lead to production processes that are
leaders in complementary spheres to that of more efﬁcient and to Customer services offered at
traditional banking. BPM Group’s reorganisation competitive prices.
translated into important company events such
as the conclusion of agreements previously
reached with specialist partners (Pitagora SpA
and Fondiaria–SAI SpA Group) aimed at pursuing
strategic businesses such as Consumer Credit and
A ﬁrst transaction involved a partnership in the
sector of ﬁnancing against salary assignments
between BPM Group and Pitagora 1936 SpA, a
leader in the sector.
The transaction was carried out together with the
closed-end fund “Wisequity II & Macchine Italia”
managed by its subsidiary Wise Venture Sgr.
Through this partnership, BPM Group will have the
opportunity to strengthen its offering in the credit
consumer sector and, in the light of recent law
changes, reach client segments that before were at
Customer business and Clientele*
Objective 2006 % change
Strategic Plan 2004-2006
Direct and indirect deposits Euro 53 bn Euro 60.5 bn Euro 60 bn 14%
Loans Euro 20 bn Euro 24.5 bn Euro 23 bn 23%
Customer business Euro 73 bn Euro 85 bn Euro 83 bn 16%
Net interest and other banking income Euro 1,417 mn Euro 1,794 mn Euro 1,723 mn 27%
* Management reporting ﬁgures.
34 social responsibility report > mission, guiding principles and strategies > reporting of the 2004-2006 strategic plan
Expansion of the geographical and commercial
In the three-year period the Group continued to
open new branches in keeping with its policy
of making proximity to the Customer one of its
fundamental drivers of growth. The programme
of new openings mostly referred to BPM, in its
traditional areas (province of Milan, Rome and
Bari) and in places where citizens and businesses
meet (Viale Bezzi Service Centre with the recent
opening of a pilot branch with a self-service area
and the Lombard airport system with the opening
of the second Malpensa agency). All branches
opened in 2006 strive to realise the R.A.C.E. project
(Reengineerig and Commercial Excellence) – a
new commercial model of the retail network – in
order to improve their relations with Customers
(with new window displays and internal layouts)
and reengineer their internal processes so that
personnel working in the branches and the head
ofﬁce can reduce their paperwork and focus more
on their relationship with clients.
Under the new commercial model R.A.C.E., self-
service areas will be installed and new spaces will
be created so that clients can autonomously and
freely manage their time and transactions.
The geographical distribution of ATMs has also been
extended, making them more accessible (including
for the disabled), while use of the on-line channel
has grown signiﬁcantly.
More detailed information can be found in the section entitled
“Key ﬁnancial highlights” forming part of the Economic Report.
Detailed information on the development of the geographical
and commercial network can be found in the section entitled
“Stakeholders- Customers” forming part of the Social Policies
2004-2006 Strategic Plan 2004-2006 Strategic Plan
2 Organisational Structure 3 Operating efﬁciency
Rationalisation of the Financial Operations desk Optimisation of operating processes
and direct marketing channels (Internet and Phone The process of improving efﬁciency includes the
banking) measures to centralise and rationalise the central
2005 marked the conclusion of the reorganisation back ofﬁces, which have freed up “commercial
of BPM Group’s Financial Operations desk. The time” for branch personnel, thus ensuring better
foreign branches in London and New York were no Customer service.
longer operational and in 2006 were deﬁnitively The measures designed to make operating
closed. BPM Group’s presence abroad is guaranteed processes more efﬁcient have helped recover
through BPM Ireland, Akros Securities (U.S.), and more resources than expected in the Plan; in fact,
the operations desks in Paris and Barcelona, as the measures adopted have helped recover the
well as through the commercial correspondence equivalent of around 100 staff.
agreements in force with the groups Crédit Industriel
et Commercial, Caixa and Raiffeisen Mein Bank. Evolution of turnover
As for the rationalisation of direct channels (Internet The aforementioned operating rationalisation
and Phone banking), all the activities concerning measures have resulted in signiﬁcant changes
the Group’s virtual bank have been concentrated within the personnel structure: There were 8,277
under We@Service S.p.A. which develops them in employees at the end of 2006, which was 228 fewer
commercial, advisory and IT terms. than at the start of the planning period.
Sempliﬁcazione organizzativa ed eliminazione di Management of costs
strutture sovrapposte all’interno del Gruppo
The management and control of costs have
L’evoluzione dell’Area Finanza del Gruppo ha reso più allowed the BPM Group to meet the targets set in
efﬁcace il presidio centralizzato dei rischi ﬁnanziari the Strategic Plan. With regard to administrative
ed ha portato alla realizzazione delle necessarie expenses, these exceeded the plan’s ﬁnal target for
modiﬁche dei processi organizzativi. 2006 despite the costs for completing the Viale Bezzi
Le logiche sottostanti al processo di riorganizzazione Service Centre.
• elimination of operational overlaps within the
• allocation of functions by centre of specialisation;
• redeﬁnition of internal checks for market risks.
2004 Objective 2006
2006 2005 (without IAS 32-39) Strategic Plan
Group administrative expenses 291.6 289.6 290.5 320.0
Payroll costs 691.1 656.8 626.2 624.0
Lightning of Group headcount ** 8.277 8.336 8.505 8.296
Cost/Income 61.3% 67.7% 72.1% 61.0%
ROE adjusted 12.5% 11.7% 7.5% 12.4%
* Management reporting ﬁgures prepared under IAS
** Figures do not include Bipiemme Vita and Ultramediass
36 social responsibility report > mission, guiding principles and strategies > reporting of the 2004-2006 strategic plan
2004-2006 Strategic Plan
4 Risk and Capital Management
Between 2004 and 2006 BPM Group devoted
particular attention to assessing and managing
risks, in the knowledge that their careful controls
within the ambit of their core business would be
vital for steady growth.
In particular, top management took steps to:
– invest adequate resources in risk controls;
– create unity in terms of strategy, coordination and
control by centralising strategic decisions on risk
– pursue and obtain full awareness of total risk
proﬁles through analytic assessments of the risks
incurred in the business areas and by the single
– use a system to limit risk exposure, managed and
maintained by the Parent Bank for the business
areas and subsidiaries based on the type of risk.
The above measures were taken through the
• Basel 2: BPM Group has ofﬁcially decided to
employ an internal rating system to determine
The internal rating models developed by the Bank
are specialised according to type of clientele in
order to take into account speciﬁc size. Attention
is also given to “qualitative” data. In this way,
BPM Group’s “local bank” image is strengthened,
an image that it already promotes through its
commercial activity, and value is given in the rating
system to data that can be collected and interpreted
thanks to the Group’s local presence.
• Financial risks: with the goal of improving the
quality of risk-measuring systems, BPM has decided
to request formal approval from the Supervisory
Authority of the systems already in use.
• Operating risks: BPM has launched and started to
implement a project to improve the way it manages
operating risks, implementation which became
necessary due to the progressive complexity of the
From the 2004-2006 Strategic Plan
to the 2007-2009 Strategic Plan
The success of the 2004-2006 Plan has led BPM to draw up a 2007–2009 Strategic
Plan that, like the one before it, seeks to render the operating machine more
efﬁcient, but, unlike its predecessor, is more focused on ambitious proﬁtability and
efﬁciency objectives in terms of its commercial operations in order to ensure BPM
Group as a competitive player in the current banking scene.
Evolution of the activities of the 2004-2006/2007-2009 Strategic Plans
• 100 Activities
• of which 15 reconfirmed
from the previous Plan
15 activities reconfirmed
in the new Plan
• 11 Areas of implementation
• 60 Activities
01/01/2004 31/12/2006 31/12/2009
2007-2009 Strategic Plan
by increasing volume per sector
and making commercial operations more
effective and cost structures
2004-2006 Strategic Plan
Increase results and proﬁtability
by improving productivity, rationalising
stabilising cost structures.
38 social responsibility report > mission, guiding principles and strategies > from the 2004-2006 to the 2007-2009 strategic plan
2007-2009 Strategic Plan The 2007-2009 Strategic Plan takes up from where
the 2004-2006 Plan left off by:
• consolidating the lines of strategy identiﬁed in the
previous 2004-2006 Plan;
• completing the commercial and organisational
measures previously approved and in progress;
• developing new initiatives and measures aimed at
further reducing structural gaps by planning related
investments and the actions connected thereto.
The three pillars for development for BPM Group in 2007-2009
Development of BPM 2.
Customer Base Higher productivity
• Higher volumes and 3.
more Customers, • Improving profitability
leveraging the Retail and and risk profile of Better operational
Small Business segment Corporate and efficiency
• Expanding sales Investment Banking
network and channels • Developing selective restructuring started
• Launching new loan strategies in recent years
products • Optimising operational
• Optimising risk
• Controlling new profiles, human capital processes and ICT
attractive segments and capital allocation systems
Structural Net profit
Innovative actions measures with CAGR 14.3%
Focus on performance long-term benefits
on a medium- and revenues
Commercial Banking Corporate Banking Pay-out
Wealth Management Investment Banking Around 50%
Main objectives of 2007 - 2009 Strategic Plan
2006 2009 SP1 CAGR 06-092
(Millions of Euros)
Direct deposits 25,340 33,383 9.6%
Indirect deposits 38,640 45,298 5.2%
Loans 24,517 31,993 9.3%
Total Customer business 88,497 102,220 4.8%
(Millions of Euros)
Operating income 1,765 2,035 4.9%
Operating costs –1,070 –1,129 1.8%
Operating results 695 906 9.2%
Net proﬁt for the year* 302 443 13.6%
Cost Income 60.6% 55.5% 5.1
Roe Adjusted* 12.5% 16.1% 3.6
EPS* 0.73 1.07 0.34
Tier 1 (Annual average)** 7.1% 7.7% 0.6
EVA* 147 213 66
*2006 ﬁgures have been adjusted by excluding non-recurrent items. **2009 ﬁgures have been calculated taking into account the full application of Basel 2
S.P. Strategic Plan Objective CAGR Compound annual growth rate
2007-2009 Strategic Plan
1 Development of BPM
MAIN INITIATIVES FOR 2007-2009
Strengthen geographical presence, especially in the
business market in the Bank’s traditional territorial
roots, with the opening of 50 new branches.
Overall renovation plan
of the branch network
The Plan envisages signiﬁcant renovation to the
internal layout of BPM Group branches and all the
window displays. New windows - daytime
The new layout will make the areas more
comfortable for Customers.
The new window displays will showcase an image of
the Bank that is clear and easily distinguishable as
well as convey reliability and transparency so that
the Group’s long-standing institutional/relationship
values can emerge and be recognisable. By the end
of 2008, all 700 of the Group’s branches will change
the overall look of their window displays.
New windows - nighttime
• Branch plan
• BPM credit point
• New branch layout (internal/external)
• Development of Customer relations
• Direct channels
• Telesales Distribution
• Network of loan brokers
• Network of consultants
• Direct issue of credit cards
R.A.C.E.1 • Salary assignments
& CRM2 • Life bankinsurance
• Non-life bankinsurance
• Derivatives rates and exchange (sales)
• Hedge funds
• Loyalty program 2
• Emerging segments (young couples,
immigrants and atypical workers)
• Private Banking
R.A.C.E. – Reengineering and Commercial Excellence
CRM – Customer Relationship Management
40 social responsibility report > mission, guiding principles and strategies > 2007-2009 strategic plan
Credit Point evolving lifestyles and highly segmented consumer
BPM plans to establish a network of Credit Points behaviour. At the end of 2005, there were 2 million
operating in conjunction with branches that is young couples, approximately 3 million atypical
specialised in household credit (eg, mortgages, workers (17% residing in Lombardy) and 2.8 million
personal loans, salary assignments, revolving immigrants in Italy.
and non-revolving credit cards) and employs an In the light of this data, BPM Group proposes to
innovative format that is more ﬂexible and cost- guarantee a comprehensive offering that responds
effective. to the needs of this target Customer, and to this
Credit card issuance
• increase the immigrant Customer base for which
This project seeks to redeﬁne the role of BPM from
BPM plans to devote multimedia corners within
distributor to issuer of its own credit products.
its branches, increase the number of agreements
In this way, BPM would have the opportunity
with ethnic/trade associations and telephone
to establish a direct and efﬁcient relationship
companies, and employ native speakers to work in
with cardholders, while at the same time cutting
branches and call centres;
management costs for the beneﬁt of both BPM and
the Customer. • make more mortgages available to atypical
workers and young couples with special plafonds
Development and attention to new Customer and ﬂexible repayment methods.
segments (young couples, atypical workers and
immigrants) Consumer credit
Because of the economic hardships and deep BPM Group plans to complete its consumer credit
cultural differences that characterise this type of offering through a partnership with Pitagora 1936
Customer, attention must focus on their constantly to issue products and services linked to salary
Instruments supporting the 2007-2009 Strategic Plan: R.A.C.E. and CRM Project
The Plan will be backed by important commercial management instruments such as R.A.C.E. and CRM.
R.A.C.E. is a commercial model aimed at improving Customer service and results for the Bank.
CRM (Customer Relationship Management) is a tool used to identify the qualitative and behavioural traits of Customers.
• Segmentation of Customers and changes/redesign of portfolio
P (one manager per Customer) RACE and CRM
R • New Front End organisation model objectives
O • Final commercial plans at branch level
E • Structured and measurable sales processes Cutting
S • Redesign of operational processes with low added value Staff
S for activity rationalisation (release of time for resources) Defection Rate
S • Motivational leverages
• New internal layout
• Renewed platform
• Individuals • Creation of CRM instruments to support the RACE project
S • Changes to indicators: churn, potential products, risk level
R Overall Cross
U • Analysis Selling
M of Customers • Changes to and evolution of current platform
E financial position
T • Optimisation of interface for companies
S • Companies • Integrated segmentation of potential commercial/risk
• Prescreening of potential customers and preresolution of contact management system
assignments and other products and services Main bank project
marketed by BPM through the Pitagora network. Over time, BPM has become deeply rooted in Italy’s
entrepreneurial fabric, especially in the area of
Wider use of direct channels Lombardy where it has been historically present.
The Plan proposes to increase the use of Internet Thanks to BPM’s historical presence and attention
Banking by: to the needs of entrepreneurs over time it has
• widening the offer of on-line products (eg, recorded above-average increases in loans, while at
personal loans, virtual bank accounts for Small the same time ensuring a level of risk that is among
Business); the lowest on the market.
It is starting from these relationships forged over
• implementing innovative projects (eg, new access
the years that the Group’s banks aim to strengthen
methods, electronic invoicing).
their positioning and offer themselves as reference
partners to satisfy the ﬁnancial needs of companies.
BPM Group plans to offer non-life products through
its collaboration with Fondiaria–SAI to render the
bank-insurance offering more complementary
and integrative (eg, family protection products
– home insurance, head of family insurance, legal
assistance – and auto insurance).
This programme rewards Customers’ loyalty to BPM
products and services with collectable points.
Addition of Customer relations resources
BPM Group will add 80 professionals (between
developers and ﬁnancial brokers) to its network
with the task of focusing on the Retail segment and
the SME and Small Business market to enhance
CHIEDI DI PIÙ ALLA TUA BANCA E RICEVI UN MONDO DI PUNTI. CHIEDI DI PIÙ ALLA TUA BANCA E RICEVI UN MONDO DI PUNTI.
Scopri la facilità di regalarti tanti premi esclusivi. Scopri la facilità di regalarti tanti premi esclusivi.
PREPARATI A UN NUOVO PUNTO DI VISTA. PREPARATI A UN NUOVO PUNTO DI VISTA.
FOTOCAMERA DIGITALE. SERVIZIO POSATE.
42 social responsibility report > mission, guiding principles and strategies > 2007-2009 strategic plan
2007-2009 Strategic Plan 2007-2009 Strategic Plan
2 Greater productivity 3 Improve operating
and proﬁtability efﬁciency
Lines of strategy for development of In terms of its internal processes, BPM will continue
Risk and Capital Management to regain efﬁciency, as already developed in the
The Plan seeks to improve risk levels and optimise previous Plan.
The Group plans to strengthen its credit policy by:
Rationalisation of the operational mechanism
• strictly applying and carefully monitoring internal
management restrictions; • Render the central functions and
Organisational commercial network more efficient.
• developing operations with Private, Small measures
• Optimise property management.
Business and SMEs;
• limiting the level of concentration of the loan
• Consolidate and complete
portfolio. ICT IT sector restructuring measures.
By fully applying the new Basel 2 prudential rules,
BPM will have the opportunity to base its business
• Cut unit purchase costs
Customer relations on more transparent and stable Administrative and consumption of all Group
costs companies by:
foundations. – making the Group's Procurement
Lastly, by making its regulatory capital more Department fully operational;
– consolidating cost managment
efﬁcient, BPM can narrow the gap between capital practises initiatied during
invested by shareholders (net equity) and capital the previous plan.
allocated to business lines.
• Restore investment balance through
Investments progressive action ranging
from measures aimed at supporting
the operational mechanism
to investments geared towards
developing commercial relations.
The 2007-2009 Strategic Plan envisages approximately 100 activities, divided up by business line
(commercial banking, corporate banking, investment banking, wealth management, IT and
Corporate Centre) and involving all of the companies of the Group.
LE ATTIVITÀ MESSE A PIANO
Information Technology (9) Corporate Center (16)
Wealth Management (2)
Investment Banking (12)
Commercial Banking (55)
Corporate Banking (8)
BPM Group Identity
The Parent Bank’s system Governance of Co-operative Banks
The applicability of the company law reforms
of co-operative to co-operative banks1 and speciﬁcally the new
governance rules on co-operatives,2 conﬁrms the membership
of such banks in the diverse “family” of co-
operative institutes, including those that are not
In this way co-operative banks not only retain the
principal structural and functional characteristics of
co-operative entities, but they also offer a unique
model of mutuality at the service of their Members,
in support of the local economies of the areas in
which they operate (providing particular access
to credit for individual Customers and SMEs) and
through their original “democratic” method of
governance based on the equality of their Members.
This equality includes the following features:
• each shareholder-member is entitled to a single
vote, regardless of the number of shares held
• no one may hold more than 0.50% of share capital
(shareholding threshold), with the exception
Governance, in its widest sense, relates not only of undertakings for collective investment in
to the system of rules governing relationships transferable assets;
between shareholders, Directors, management • there must be at least two hundred members;
and other stakeholders, but also to the set of laws, • any earnings not allocated to the legal reserve,
market rules and methods of governance and other reserves, or other purposes speciﬁed in
management that allow the business to attract the articles of association or not distributed to
capital and to create an efﬁcient, effective and members, are allocated to charity or activities of
proﬁtable business. social beneﬁt;
• resolutions by the Board of Directors to approve
or reject applications by shareholders for admission
to membership must be taken bearing in mind the
company’s interests, the rules embodied in the
articles of association and the spirit of the
co-operative principle (approval clause).
Members are therefore those who not only own
shares but have also been approved by the Board
of Directors and so have been entered into the
Register of Members, thereby becoming entitled
to participate and vote in general meetings. Such a
right is not granted to Shareholders, who can only
exercise ownership rights.
The co-operative banking model’s one-man-one-
vote system and restrictions on share ownership
As established by Decree 310/04
Within the limits speciﬁed in the special rule set out in new article preventing the formation of pre-established
150bis of the Banking Act controlling syndicates fosters the presence of
In other words, the legislator allows the possibility of creating, within independent Directors on the Board of Directors
the standard co-operative model, corporate entities in which - like and its committees and is also the reason, since
co- operative banks - the mutualistic purpose may co-exist, in com-
pliance with the co-operative governance model, with a proﬁt-seeking each Member has equal status, for the active
purpose, as reﬂected in the possibility of distributing the full amount participation in decisions taken in general meetings.
of earnings, the grant of rights over the assets to shareholders who
are not Members, and the favour accorded to institutional investors in
the matter of share ownership limits.
46 social responsibility report > group identity > governance
Governance of Banca Popolare di Milano
As part of the reconﬁrmed validity of the co-
operative model, Banca Popolare di Milano has Governance thus conceived makes it possible
undertaken an extensive remodelling of its internal
to achieve a harmonious balance between the
governance system in recent years with the purpose
of optimising the rules of procedure and operation interests of Members/Shareholders, Customers
of its governing and supervisory bodies on the and Personnel.
basis of greater efﬁciency and representation of its
members. These interests, which in the long run ﬁnd their
BPM’s current model of governance is based on the natural reﬂection in the achievement of the Bank’s
following principles and goals:
mission to the beneﬁt of all the stakeholders, are
• to foster the representativeness of the general
meeting and the corporate bodies, through the protected in the short term by the transparency
defence of minority groupings and the presence of
and efﬁciency of operations, guaranteed by the
their representatives on corporate bodies;
• to ensure the independence and professionalism independence and professionalism of the Board
of members of the Board of Directors and the of Directors and management.
transparency of their decisions, these goals also
being behind the Bank’s adoption of the best
practice rules contained in the Code of Conduct for
Listed Companies (with the implementation of the
new edition of March 2006);
• to ensure effective rules of procedure and
suitable controls over roles and responsibilities,
through constant evaluation of the organisation
and efﬁciency of board committees (to which,
in accordance with the aforementioned Code
of Conduct, a special annual meeting is now
• to make subsidiary companies aware of their
responsibility for the speciﬁc mission concerning
clear, transparent rules, promoting their
appreciation and efﬁciency as part of a Group-wide
• to encourage the holding of shares by employees
in order to maximise participation;
• to encourage shareholders to become members of
the co-operative in order to foster their participation
in its operation and decisions, also ensuring greater
protection of their interests.
governing and supervisory bodies
This performs supervisory
activities, taking part in all
board meetings of the Board of
arbitration of statutory Directors and Executive
Committee and, in the person
committee board of of the Chairman or one of his
3 acting memebers and auditors nominees, meetings of the
2 alternate members
directors 5 acting members and Internal Control Committee.
20 directors, including the chairman, Members of the Board of
4 alternate members Statutory Auditors may attend
2 deputy chairmen and one director entrusted
with ensuring that the internal control system is functional meetings.
(as provided for in the new code of conduct)
7 members, including the Chairman
and two Deputy Chairmen
key: Board Financing
9 memebers, including the Chairman
and two Deputy Chairmen
5 memebers (who do not sit on the
Members Relaions’ Commission
6 memebers (of whom 4 do not sit on the
This assists the Board
of Directors in setting guidelines
Internal Control Committee for the system of internal
6 memebers (of whom 5 do not sit on the controls and periodically checks
Executive Committee) the adequacy thereof
In accordance with Decree 231/01
Supervisory Committee this committee evaluates the
adequancy of the organisational,
(Decree 231/01) operational and control models
4 memebers including the Technical and and of the COde of Ethics and
Operating Controls Manager monitors their operation and
general management Policy guidelines Results of reviews
of work programmes State-of-the-art
system of control
Oversees the process
of evaluating credit, Is not bound
market and operational risks risk management of to any operational
(measurement of exposure function and reports
to risk, review of scenarios) management internal auditing directly to the BoD.
Verifies Specific audits
limits Follow-up work Report on line controls
Monitoring Reporting of anomalies
Reporting of anomalies
individual Individuals departments and the networks carry
out specific controls on direct activities through netwotks
departments duly documented monitoring procedures (line controls)
48 social responsibility report > group identity > governance
General Meetings General meetings represent all the Bank’s
Members and its conduct is governed by the law,
the articles of association, the Regulations for
General Meetings and, unless otherwise provided,
by the Chairman.
General meeting may be attended by Members
listed in the Register of Members, in the manner
and terms stated in the articles of association, as
well as by the Directors, members of the Board
of Statutory Auditors and members of senior
General meetings can be attended, without
any right to speak or to vote, by professionals,
consultants, experts, ﬁnancial analysts, qualiﬁed
journalists and persons other than Members, if
expressly authorised by the Board of Directors or
by the meeting’s Chairman.
Regulations for General Meetings
Their purpose is to provide a full set of functional
rules for governing the proceedings of general
meetings, a key event in the corporate life of a
co-operative bank with widely-held shares.
These Regulations provide rules relating to:
• the procedures and conditions for taking part in
• the powers of the Chairman for running such
• how ballot papers should be arranged, how
voting should take place and how votes should be
List voting system
BPM encourages the presence of the various
member groups on the Board of Directors and
Board of Statutory Auditors and their aggregation
into associations representing like interests,
with a view to the Bank’s general interest and
in compliance with the co-operative model. The
adoption of the list voting system for appointing
Directors since the general meeting of April 2003
– now compulsory for listed companies 1 – has
given “minority members” a more direct say in the
running of the Bank, making its governing body
more representative and respected by the general
body of Shareholders.
Single ballot for the appointment of the entire
Board of Directors
As a result of adopting the “list voting system” in
the general meeting of April 2003, it has become
Based on new article 147-ter of Decree 58/98, as amended by more appropriate to re-elect the entire Board
Law 262/05 (known as the “Investment protection law”) and
subsequently by Legislative Decree no. 303/06 (the so-called of Directors in a single ballot (unlike the former
“Corrective Decree”) system which involved at least two ballots), in order
to ensure balance between the different member The mechanism of list voting involves:
groupings and to provide the Bank with a stable,
cohesive governing body for the entire three-year • the presentation of the lists of candidates by a group of not
less than 300 shareholders who have been included in the
Register of Members for at least 90 days, and who have a
Membership review right to attend and vote at the general meeting;
The Bank’s membership is reviewed through a
detailed examination of the entries contained in • a ﬁxed number of Directors nominated by the majority
the Register of Members and the cancellation of all members (16) and by any “minority” groups (up to 4 in total);
those names who no longer own the Bank’s shares.
The purpose is to provide Members and the market • the replacement of Directors, if necessary, during the
with correct information about the actual size of course of their three-year term in ofﬁce maintaining - where
membership; this is also needed for the purposes
of determining the quorum for the meeting’s valid possible - the proportion between the majority and any
formation and the quorum required for passing valid “minorities” as indicated above;
resolutions set out in the articles of association.
• the introduction of a “representative quorum” for lists
obtaining at least 150 f the votes validly expressed at the
General resolution concerning management of
relationshipswith Members general meeting (lists obtaining less than this minimum
This resolution deﬁnes the requirements and threshold are not taken into consideration for the purposes
procedures for admitting the candidate as a of board appointments);
Member, who must own at least 100 shares as a
guarantee of their effective interest in taking part in • appointment of the Chairman and the two Deputy
the co-operative and provide a statement that they
Chairmen, respectively, in the same order as the ﬁrst three
are committed to retaining these shares over time.
This resolution also establishes the requirements candidates shown on the list voted by the majority.
and procedures for cancelling membership and the
criteria for maintaining the Register of Members and
the Register of Shareholders
(see the subsequent section on “Members and
50 social responsibility report > group identity > governance
General Meeting held in 2006
Reappointment of the Board of Directors
Members – 54,478 (53.32%)
The general meeting of 6 May 2006
elected the new Board of Directors
using the list voting system, which
confirmed four directors as
representatives of "minority lists"
Shareholders – 47,691 (46.68%)
out of the total number of twenty.
Lists Represented on the Board
The Articles of Association have
allowed groupings of members to
transform themselves into
Friends of BPM Association
16 directors of whom one
representing the Partner C.I.C. -
Credit Mutuel Group and one
Fondazione Cassa di Risparmio di
membership analysis Alessandria.
Other Members – 39,438 (72.39%)
Institutional Investor Members – 6 (0.01%) Together for BPM Association
Partner Members* - 7 (0.01%)
Non-BPM Staff Members
Large Shareholder Members – 27 (0.05%) Committee
Associations** - 15,000 (27.53%) 2 directors
analysis of the 5,267 votes placed
List 3 - Friends of BPM Association - 2,160 (41.03%)
List 1 - Together for BPM Association - 1,605 (30.47%)
List 2 - Non-BPM Staff Members Committee - 1,421 (26.98%)
Blank ballots - 61 (1.15%)
Void ballots - 20 (0.37%)
* Partner Members: Fondazione Cassa di Risparmio di Alessandria and C.I.C. - Credit Mutuel Group – with whom there
are agreements which, amongst other things, make provision for involvement in the corporate bodies.
** Figures reported in declarations by the individual Member Associations.
List - Association
Votes gained % voters Directors
List 3 - Friends of BPM 2,160 41.03 16
List 1 - Together for BPM 1,605 30.47 2
List 2 - Non-BPM staff members
committee 1,421 26.98 2
Null and blank 81 (20+61) 1.52
Board The Bank’s Board of Directors consists of a
Chairman, two Deputy Chairmen and seventeen
of Directors Directors, all of whom are members of the Bank
in accordance with article 32 of the articles of
The Board is invested with powers of ordinary and
extraordinary administration and it usually meets
once a month.
It is called by the Chairman, who presents a
speciﬁc, detailed agenda at least one week
before the meeting, except in the case of more
urgent meetings. The members of the Board of
Directors and of the Board of Statutory Auditors are
normally sent in advance all of the documentation
and information needed to give them adequate
background knowledge of the matters being
discussed at board meetings.
As a result of the voting at the general meeting
in May 2006, four representatives of minority
members were elected to the Board out of a total
number of twenty.
Executivity and Independence
Following the adoption of the new Code of Conduct
for Listed Companies (March 2006 edition), the
Bank’s Board of Director’s met on 6 February 2007
to evaluate both the level of executivity (as per
Article 2.C.1 of the Code) and independence (as per
Article 3 of the Code) of Directors.
The results of the evaluation revealed that based
on the criteria set out in the Code of Conduct,
two out of the twenty Directors were “executive”
and therefore not independent (in particular the
Chairman of the Board of Directors and the new
Director charged with overseeing the functionality
of the internal control system), nine were non-
independent Directors in other areas (more
speciﬁcally, they are important representatives
of strategic subsidiaries or have held their ofﬁce
for more than nine years) and the remaining nine
Directors were independent in the sense that:
• they do not control the Bank either directly or
indirectly or even through subsidiaries, ﬁduciary
companies or interposition of persons, nor can
they exercise signiﬁcant control or inﬂuence over
the Bank; furthermore, they cannot participate in
shareholders’ agreements in which one or more
parties exercises control or a signiﬁcant inﬂuence
over the Bank;
• they are not, nor have been in the past three
ﬁnancial years, inﬂuential members of the
Bank, any of its strategic subsidiaries or jointly-
controlled companies, or of companies or entities
that, together with others through shareholding
agreements, control the Bank or have a signiﬁcant
inﬂuence over the same;
52 social responsibility report > group identity > governance
• they do not have, now or in the previous ﬁnancial been helped by its traditional roots in the retail
year, a directly or indirectly signiﬁcant commercial, and small and medium enterprise segments, which
ﬁnancial or professional inﬂuence over (eg, represent its most numerous class of shareholder.
through subsidiaries or companies of which they In this sense even the major strategic partnerships
are inﬂuential representatives or as partners of a entered into in recent years (speciﬁcally the
professional or consultancy ﬁrm): admission to membership of Crédit Industriel et
– the Bank, its subsidiaries or any of its inﬂuential Commercial and Fondazione Cassa di Risparmio di
representatives; Alessandria) are strictly in the banking and ﬁnancial
– any party that, even together with others through sector and are directly geared to developing the
a shareholders’ agreement, controls the Bank or, if a Bank both nationally and internationally.
company or entity, over inﬂuential representatives, It should also be stressed that no member of
in other words are not nor have been in the last “big industry” has an interest in BPM’s share
three ﬁnancial years employees of any of the above capital and so does not have any inﬂuence over its
parties. lending “philosophy”, or over company policy in
• they do not receive and in the past three general. Similarly, none of the current Directors is a
ﬁnancial years have not received from the Bank representative of “big industry”.
or its subsidiary or parent company substantial
remuneration in addition to the “ﬁxed” non-
executive Directors’ fee, including participation in
incentive plans linked to company performance,
even through shareholdings;
• they have not been Directors of the Bank for more
than nine years in the last twelve years;
• they are not executive Directors for another
company in which an executive Director of the Bank
holds an ofﬁce as Director;
• they are not members or Directors of a company
or entity belonging to the network of the audit ﬁrm
entrusted with auditing the Bank’s accounts;
• they are not directly related to a person in one of
the aforementioned conditions.
All the Directors are committed to exclusively
pursuing the interests of the Bank regardless of
those who put them up as candidates.
Experience and integrity
All the Directors meet the requirements of
experience and integrity demanded by the special
rules and regulations for the banking sector. The
experience of the Directors is also witnessed by the
professionalism, expertise and diligence displayed
when participating at board meetings.
Bank and industry separation and absence of
conﬂict of interests
The issues of Directors’ experience and
independence are linked to the delicate topic of
the relationship between banks and industry and
the consequent potential conﬂict of interests. The
restriction on share ownership in cooperative banks
- which prevents the formation of pre-established
controlling majorities - is on its own a guarantee
that bank/industry separation is maintained.
Banca Popolare di Milano has always paid the
utmost attention to this subject, in which it has
The complete list of current Directors appointed in a single ballot by the general meeting held on 6 May 2006 is reported
below, along with details of the board committees on which each sits and of other Directorships/corporate positions held.
Roberto Mazzotta Enrico Airaghi
Member of the Committees: Executive, Financing Member of the Committees: Executive, Internal
Director of Sogepar S.p.A. Control, Members’ Relations
Director of Crédit Industriel et Commercial
Director of Aedes S.p.A. Luca Caniato (2)
Director of Metalﬁn UK Director
Director of Carmiano SS. Member of the Committees: Remuneration
General Representative of Koelliker S.p.A.
Mario Artali Executive Deputy Chairman and Managing Director of Koelliker
Deputy Chairman Multimedia s.r.l. – Executive Deputy Chairman and Managing
Director of M.M. Automobili Italia S.p.A. – Executive Deputy
Member of the Committees: Executive, Financing
Chairman and Managing Director of Hyundai Automobili
Deputy Chairman of Banca Akros S.p.A. Italia Importazioni S.p.A. – Executive Deputy Chairman of
Chairman of Wise Venture SGR S.p.A. Kia Motors Italia S.p.A. – Executive Deputy Chairman and
Chairman of Sigma Tau America S.A. Managing Director of Symi S.p.A. – Executive Deputy Chairman
Director of Sigma Tau Finanziaria S.p.A. and Managing Director of Koelliker Gestioni S.p.A. – Executive
Deputy Chairman Sigma Tau Industrie Farmaceutiche Deputy Chairman and Managing Director of Koelliker Handling
Riunite S.p.A. S.p.A. – Chairman of Autotrade and Logistics S.p.A. – Chairman
Chairman of Sigma Tau International SA. of Ski Area Valchiavenna S.p.A. – Chairman of Koelliker
Automobili Torino s.r.l. – Chairman of Koelliker Automobili
Director of Sigma Tau Europe SA.
Padova s.r.l. – Chairman of Koelliker Automobili Roma s.r.l.
Director of Sigma Tau Healthscience S.p.A.
Chairman Sigma Tau Sudan Ltd.
Emilio Castelnuovo (1)
Director of Tecnogen S.p.A.
Director of Biofutura Pharma S.p.A.
Director of Biosint S.p.A. Member of the Committees: Executive,
Director of Avantgarde S.p.A. Financing, Remuneration
Director of Prassis S.p.A. Director of Bipiemme Immobili S.p.A.
Marco Vitale Giuseppe Coppini
Deputy Chairman Director
Member of the Committees: Executive, Financing Member of the Committees:
Financing, Members’ Relations
Chairman of Bipiemme Gestioni SGR S.p.A.
Deputy Chairman of Banca di Legnano S.p.A.
Director of Etica SGR S.p.A. Director of Nordest Banca S.p.A.
Chairman of Same Deutz Fahr Italia S.p.A. Director of Cassa di Risparmio di Asti S.p.A.
Director of Same Deutz Fahr S.p.A.
Director of A.S.M. Brescia S.p.A.
Director of Recordati Industria Chimica e Farmaceutica
Director of Ermenegildo Zegna HoldItalia S.p.A. Member of the Committees: Financing
Director of Pictet International Capital Management Chairman of BAS-Servizi Idrici Integrati S.p.A.
Director of Pictet & C. SIM S.p.A. Director of Multiservizi Nord Milano S.p.A.
Chairman of Vincenzo Zucchi S.p.A. Director of Trescore Infrastrutture S.r.l.
Member of the Supervisory Board Deutz AG – KOLN
Director of Snaidero R. S.p.A. Rocco Corigliano
Director of LU-VE S.p.A. Director
Director of Smeg S.p.A.
Chairman of Banca di Legnano S.p.A.
Chairman of Consiglio di Sorveglianza Mid Industry
Director of Vega Finanziaria S.p.A.
Capital S.p.A. Chairman of Bipiemme Vita S.p.A.
(1) Secretary to the Board of Directors Member of the Committees:
(2) Representing a “minority” (“Together for BPM” list ) Remuneration, Internal Control
(3) Representing a “minority” (“Non-BPM Staff Members Director of Banca di Legnano S.p.A.
Committee” list) Director of Bipiemme Immobili S.p.A.
N.B. The list representing the majority is known as
Friends of BPM.
Roberto Fusilli (3) Marcello Priori
Member of the Committees: Financing, Member of the Committees: Members’ Relations
Remuneration, Members’ Relations
Deputy Chairman of Bipiemme Gestioni SGR S.p.A.
Director of Banca di Legnano S.p.A.
Director of Bipiemme Gestioni SGR S.p.A. Chairman of the Board of Statutory Auditors of Etica
Chairman of the Board of Statutory Auditors of
Piero Lonardi (3) Carrefour Servizi Finanziari S.p.A.
Director Director of Monzino S.p.A.
Member of the Committees: Executive, Internal Auditor of Lucchini S.p.A.
Auditor of Reno De Medici S.p.A.
Auditor of Fomas Finanziaria S.p.A.
Director of Cassa di Risparmio di Alessandria S.p.A.
Director of L’Altra metà s.r.l. Auditor of IBI S.p.A.
Director of Spinarmony s.r.l.
Director of Siplast s.r.l. Jean-Jacques Tamburini
Director of Errepi S.p.A. Director
Sole Director of Fin-Arco s.r.l.
Director of Banca di Legnano S.p.A.
Sole Director of Cet s.r.l.
Managing Director and executive committee member
Sole Director of Immobiliare Alfredo Mario s.r.l.
of Credit Industriel et Commercial
Sole Director of Immobiliare Emanuela s.r.l.
Chairman and Managing Director of CIC Société Bordelaise
Sole Director of La Castagna s.r.l.
Chairman of Supervisory Board of CM-CIC Capital Privé
Sole Director of M.G. Enterprise s.r.l.
Chairman and Managing Director of CIC Participations SAS
Sole Director of Toscolano s.r.l.
Deputy Chairman of Supervisory Committee of CM-CIC
Sole Director of Vismaf s.r.l.
Chairman of the Board of Statutory Auditors of AMSA S.p.A.
Director of CIC Investissement
Chairman of the Board of Statutory Auditors of AMSA DUE s.r.l.
Director of CIC Finance
Chairman of the Board of Statutory Auditors of AMSA TRE s.r.l.
Director of Banque de Tunisie
Chairman of the Board of Statutory Auditors of A. De Pedrini S.p.A.
Member on the Board of Statutory Auditors of Banque
Chairman of the Board of Statutory Auditors of Medicaltraining S.p.A.
Marocaine du Commerc Extérieur
Auditor of GUT Edizioni s.r.l.
Director of CIC Banque CIAL
Auditor of Nitrol Chimica s.r.l.
Director of CIC SNVB
Director of CIC Lyonnaise de Banque
Director of Institut de Participation de l’Ouest (IPO)
Member of the Committees: Financing Graziano Tarantini
Chairman of Bipiemme Immobili S.p.A. Director
Deputy Chairman of Banca di Legnano S.p.A.
Director of R.C.S. Pubblicità S.p.A. Member of the Committees: Financing
Director of R.C.S. Investimenti S.p.A. Chairman of Banca Akros S.p.A.
Director of Class Editori S.p.A. Chairman of Akros Securities Inc.
Director of Milano Finanza Editori S.p.A. Director of ESN North America Inc.
Director of CUEIM-Consorzio Un.Ec.Ind. e Manageriale Director of Interservice Gestione Partecipazioni S.p.A
Chairman of the Board of Statutory Auditors of Director of Dexia Crediop S.p.A.
Member of the Committees: Executive, Internal
Member of the Committees: Executive Control, Members’ Relations
Managing Director of Coﬁfast S.r.l. Director of Banca di Legnano S.p.A.
Director of Cassa di Risparmio di Asti S.p.A.
Director Michele Zefferino
Director of Banca Akros S.p.A. Director
Director of Bipiemme Vita S.p.A. Member of the Committees: Internal Control,
Director of S.I.A.S. Società Iniziative Autostradali e Servizi
Director of Wise Venture SGR S.p.A.
Chairman of the Board of Statutory Auditors of A.C.E.A.C.R.I. s.r.l. Director of Cassa di Risparmio di Alessandria S.p.A.
Chairman of the Board of Statutory Auditors of Lombardi s.r.l. Director of Bipiemme Vita S.p.A.
Director of Soc. Immobiliare Ariosa s.r.l.
Chairman of Palazzo del Governatore s.r.l.
Director of Norman 95 S.p.A.
Director of Palazzo del Monferrato s.r.l.
Other Governing Further to the reform of the articles of association,
it is now compulsory for all the investigative
and Supervisory Bodies and/or proposal-making board committees and
commissions envisaged by the Code of Conduct
for Listed Companies to have the presence of
one Director elected on a minority list (there are
currently two “minority” representatives on the
Internal Control Committee). Similarly, a Director
representing each of the two “minorities” is also
present on the Executive Committee.
Board of Statutory Auditors
The Board of Statutory Auditors consists of a
chairman, four acting auditors and four alternate
auditors, who are elected from among the Bank’s
members. Currently, two acting auditors and
two alternate auditors representing the minority
shareholders serve on the Board.
In implementation of Law no. 262/05, the
extraordinary shareholders’ meeting of 21
April 2007 amended Article 41 of the articles
of association in order to ensure that the next
chairman of the Board of Statutory Auditors will be
one of the acting auditors representing the minority
shareholders, as currently set out in Article 148,
paragraph 2-bis of the Finance Act.
The Board of Statutory Auditors takes part in all
meetings of the Board of Directors and Executive
Committee and the Chairman (or one of the acting
auditors delegated by him) also takes part in
meetings of the Internal Control Committee.
The Board of Statutory Auditors also takes part
in person at meetings of the Board Financing
The main duties of this body1 consist of monitoring
compliance with the law and deeds of incorporation,
the observance of correct codes of management
conduct, the adequacy of the company’s
organisational structure (for the aspects falling
under its remit) and the systems of internal and
accounting-administrative control, as well as the
reliability of the latter for correctly representing the
Board of Statutory Auditors company’s performance. The Board of Statutory
Ofﬁce held Auditors also controls the way in which the rules
of corporate governance envisaged by codes
Antonio Ortolani Chairman of conduct adopted by the Bank are effectively
Marco Baccani Auditor implemented, and the adequacy of instructions
Enrico Castoldi Auditor passed down to subsidiaries.
Emilio Cherubini ** Auditor The complete list of current members of the Board
Paolo Troiano * Auditor
of Statutory Auditors appointed by the general
Salvatore Rino Messina ** Alternate auditor
meeting held on 6 May 2006 is reported below,
Enrico Radice Alternate auditor
Giuseppe Zanzottera Alternate auditor
along with details of any nomination by “minority”
Giorgio Zoia * Alternate auditor lists.
* Representing a “minority” (“Together for BPM” list )
** Representing a “minority” (“Non-BPM Staff Members Committee”
N.B.: The list representing the majority is the one known as “Friends See Legislative Decree no. 58/98, as now amended by Law
of BPM” 262/05
56 social responsibility report > group identity > governance
Executive Committee Internal Control Committee Internal Control
The Executive Committee, formed annually by Committee
resolution of the Board of Directors, currently Formed via a resolution of the Board of Directors of
consists of seven members, including the Chairman 13 November 2001, this Committee in 2006 widened
of the Board of Directors and the two Deputy and better deﬁned its investigative and proposal-
Chairmen. This body usually meets once a week making functions in light of the experience earned
with the participation of the General Manager in the last few years and of that contained in the
and the Board of Statutory Auditors. Executive Code of Conduct for Listed Companies (March 2006
Committee resolutions must be passed by edition).
unanimous vote of all of those present; otherwise, The Committee’s current functions are as follows:
the resolutions are referred to the Board of • to assist the Board of Directors in deﬁning the
Directors for decision. lines of action of the internal control system so that
For the 2006 ﬁnancial year, the Board of Directors the main risks of the Parent Bank and the Group
attributed the following powers and responsibilities companies can be adequately identiﬁed, assessed,
to the Executive Committee: managed and monitored, furthermore establishing
• to make proposals and identify lines of strategy the criteria on the basis of which these risks are
and general policy for the Bank and BPM Group and deemed compatible with the sound and correct
consequently make the most appropriate decisions, management of the company;
which are to be submitted for approval to the Board; • to evaluate the work of those in charge of internal
• to draw up the draft ﬁnancial statements, to be control and the periodical reports of these latter;
submitted to the Board for approval; • together with the auditors, to evaluate the head of
• to examine and express its opinions to the Board the Administrative Division of the Parent Bank and
of Directors on hiring plans, company organisation representatives of the Group companies, as well as
structures, training programmes, disciplinary identify how to correctly implement the accounting
measures that entail more than a two-day standards and ensure that they are consistent
suspension or dismissal; in the preparation of the consolidated ﬁnancial
• to examine the Bank’s budget, speciﬁcally statements;
expenses and investments, as well as proposals for • to express opinions on the main business risks
the purchase and sale of real estate and shares; and on how to plan, implement and manage the
• to resolve on ordinary expenses and out-of-budget internal control system;
investments of up to Euro 1.5 million per transaction • to evaluate the proposals of audit ﬁrms seeking
and up to an annual limit of 5% of the budget to be entrusted as external auditors as well as the
approved by the Board of Directors; work plans prepared and the results appearing in
• to carry out all the resolutions, in performance of the report and suggestion letter;
the duties speciﬁcally entrusted to the Executive • to oversee that the audits are being performed
Committee by the Board of Directors; effectively;
• to resolve on all particularly urgent and necessary • to evaluate the ﬁndings that emerge from the
actions in cases in which the Board cannot reports drawn up by Internal Auditing Department
immediately convene and without prejudice to this and Internal Control Functions of the Parent Bank
latter’s approval in the ﬁrst meeting thereafter. and Group companies;
• to report to the Board of Directors, at least on a
quarterly basis during the approval of the ﬁnancial
Board Financing Committee statements and quarterly reports, the activities
The Board Financing Committee is made up of the carried out and the adequacy of the Group’s system
high-ranking members and six Directors appointed of internal control;
speciﬁcally for this purpose by the Board of Directors • to perform any further tasks the Board of Directors
and by the General Manager (or one of his nominees). entrusts to it;
The Committee primarily decides on credit facilities and • to assist the Board of Directors in deﬁning the
lines that go beyond the authority of the Management methods for approving and performing transactions
Financing Committee, and those facilities whose with related parties and transactions in which it is
approval by the latter featured a favourable majority but presumed that there is a direct or indirect conﬂict of
with dissentions or abstentions (including for conﬂicts interest.
of interest). After appointing the Director charged with
overseeing the functional effectiveness of the
internal control system, the Committee, when
the Director so requests it, must then express its
opinion on speciﬁc aspects that relate to identifying
the main business risks as well as to planning, Legislative Decree no. 231/2001 in BPM
implementing and managing the internal control
system. The introduction of administrative responsibilities of
The Committee is currently composed of
ﬁve members (all non-executive and mostly entities into the Italian legal system (irrespective of the
independent, of which two elected in the two criminal responsibility of individuals for crimes materially
The Chairman of the Board of Auditors, or other committed) has had a signiﬁcant impact on the entire Italian
statutory Auditor appointed by the same, takes part economic system and more speciﬁcally on banks, which now
in the activities of the Committee.
The General Manager and, even disjointly, in (on the basis of guidelines issued by the Italian Banking
relation to speciﬁc issues, the head of Internal Association) must set up preventive internal rules speciﬁc
Auditing Department, the head of Service Risk
Management of the Parent Bank, members of to each bank in order to avoid any penalties that may arise
management of the Parent Bank and heads of the from the application of the Decree. Towards this end, BPM
Group companies may also be called upon to attend
the Committee’s meetings. has implemented a series of preventive measures, including
an Organisation, Management and Control Model and a
Code of Ethics. Furthermore, it has appointed a Supervisory
Supervisory Committee (as per Legislative
Decree no. 231/01) Committee and set up distance learning courses for
The Supervisory Committee, set up in accordance Personnel to whom the texts of the Legislative Decree, the
with Legislative Decree no. 231/01, assesses the
adequacy of the organisational/management/ Model and the Code of Ethics have been sent in hard copy
control models and Code of Ethics adopted by and electronic format. In any event, Personnel may consult
the Bank, and monitors how they work in order to
prevent the committing of the offences described in the texts simply by accessing the Bank’s General Regulation.
Legislative Decree no. 231/01. Personnel have also been advised that a penalty system has
This Committee has also implemented an
effective system of internal communication that, been introduced for violations committed against the Code of
by guaranteeing the utmost conﬁdentiality and Ethics and the Organisation Model. In fact, a special brochure
protection to the reporter, allows anyone learning of
unlawful acts, or situations that fail to comply with has been sent to all members of Personnel, regardless of the
the organisational/management/control models relevancy of the tasks assigned to them.
and Code of Ethics, to report these to the head
of their relevant departments and to provide the These measures have entailed a high level of commitment on
Supervisory Committee with every relevant fact for the part of the Bank as well as Personnel, who are required
the purposes of Legislative Decree no. 231/01.
In the course of 2006, in order to ensure greater to keep abreast of and comply with ever-evolving rules.
autonomy and independence of the Committee, However, this commitment has brought about important
parties external to the Bank and the head of Internal
Auditing were appointed to serve on the Committee. results in that on the one side the Bank and Its equity are
safeguarded against possibly signiﬁcant penalty risks and on
the other side the Bank’s organisational processes are fully
reviewed and any inherent risks that might arise in relation
to the new rule of law are analysed in detail.
No less important is the fact that the activities carried out by
the Bank to comply with the Legislative Decree have enabled
it to reinforce ethical values by which the Bank and everyone
operating on its behalf have always been inspired in the
performance of their activities.
58 social responsibility report > group identity > governance
Members’ Relations Commission
This reviews applications for the admission of
members and proposals to cancel members in
compliance with the law, the articles of association
and related resolutions by the Board of Directors,
as well as waivers on privileged guarantees on
This reviews and makes proposals concerning
the remuneration of Directors of the Bank holding
particular ofﬁces and Directors of subsidiaries as
well as top management remuneration policies
within the Group, with a view to fostering uniform
standards of evaluation that take account of the
different levels of risk/responsibility.
This was set up in accordance with article 42 of
the articles of association. It consists of three
acting and two alternate members elected for a
three-year period in general meeting from among
the Members. It reviews all the disputes referred
to it under the articles of association and seeks to
resolve disputes that might arise between Members
or between the Members and Directors concerning
the conduct of the business.
Frequency of board and board committee meetings (2006)
Number of whom Number %
of Directors representatives of meetings of attendance
Board of Directors 20 4 18 92
Executive Committee 7 2 39 90
Board Financing Committee 9 1 45 82
Internal Control Committee 5 2 12 95
Remuneration Committee 5 2 5 100
Members’ Relations Commission 6 2 10 91
(as per Legislative Decree no. 231/01) – – 7 97
Rules of governance Code of Conduct
In March 2006 Borsa Italiana S.p.A. presented the
new text of the Code of Conduct, which replaces the
edition drawn up in 1999 and reviewed in July 2002.
In the meeting held on 19 December 2006, the
Board of Directors of BPM resolved to voluntarily
adhere to the Code and set out a special calendar
of the measures taken to implement the Code’s
new provisions, to date fully enacted (in particular,
an executive Director to supervise the system of
internal control has been appointed, the executivity
and independence of Directors have been evaluated
based on new criteria, the limits of the tasks of
Directors and the self-evaluation of the Board of
Directors with respect to its size, composition and
functioning and its Committees have been deﬁned).
Code of Conduct on Internal Dealing
This Code1 strictly regulates the disclosure
requirements and any restrictions involving
dealings in listed ﬁnancial instruments issued by
BPM carried out by “Relevant Persons” (and their
close associates), meaning those persons, who, by
virtue of the position held in the Group (Director,
statutory auditor, senior manager with decision-
making powers such that can affect the issuer’s
future prospects), have regular access to price-
sensitive information regarding the Bank and the
The purpose of this Code is to ensure that dealings
by such “Relevant Persons” are reported to the
market in the most transparent, uniform way.
Guidelines on signiﬁcant operations
and with related parties
These guidelines (in the updated version approved
by the Board of Directors in the meeting of 13 March
2007) aim to identify the “signiﬁcant” operations
of the Bank (and of the entire BPM Group) and
more speciﬁcally those with related parties, as
well as provide all interested parties with the rules
of conduct to report to the Bank their status as a
“related party” in carrying out transactions with
the same and govern the authorisation process for
such transactions in order to guarantee that they
have been carried out correctly in substantial and
Revised and updated in the light of rules on “Market Abuse”
(Law no 62/2005, so-called “2004 Community Law”) and CONSOB
Regulation no 15232 of 29 November 2005.
60 social responsibility report > group identity > governance
Procedures for price-sensitive • to ensure uniform, fair representation of the
announcements price-sensitive information and prevent it from
This consists of a detailed set of procedures for the being disclosed in a selective fashion (meaning
Board of Directors and its committees regarding its disclosure to certain persons beforehand, like
the handling and external communication of price- shareholders, journalists or analysts), tardily or in
sensitive information regarding the Bank and the an incomplete or inadequate manner;
Group (ie, information that may affect the Bank’s • to ensure compliance with the rules on “market
share performance). In fact, the publication of such disclosure” contained in articles 114 and 181 of
information requires speciﬁc authorisation and Legislative Decree no 58/98.
must be communicated to the market and press
agencies in accordance with the related CONSOB
regulations. In the light of the legislative changes, Group Regulations
especially with reference to the Market Abuse The Group Regulations contain the organisational
Directive and in compliance with related CONSOB structure and rules for governing the companies
regulations (see CONSOB Regulation no 6027054 falling under the control of BPM, in line with Bank of
of 28 March 2006), with a meeting resolution of 25 Italy guidelines and the demands of strong, prudent
July 2006, the Bank implemented a new “Resolution management (see the subsequent paragraph on
of the BPM Group on reporting obligations as “Governance of the Group”).
per Article 114 of the Finance Act” regarding the
Group’s internal procedures aimed at guaranteeing
conﬁdentiality of price-sensitive information (as Code of Ethics
deﬁned in Article 181 of the Finance Act) during the This represents a clear statement of the values that
lapse of time from the start of the various activities the Bank recognises, accepts and espouses and
to when the market reporting obligations arise, the set of responsibilities that it assumes internally
as well as at ensuring a timely and non-selective and externally. The observance by employees of
disclosure of the information. the general standards of conduct contained therein
is fundamentally important for the Bank’s proper
operation, reliability and good reputation.
Register of insiders and related rules
In compliance with the provisions contained in
article 115-bis of Legislative Decree no. 58/98,
the Bank has created a Register of persons with
access to price-sensitive information relating to
BPM and any third-party issuers by virtue of their
employment or profession or the job carried out.
The Register has two main purposes:
1. to raise the awareness of those involved of the
value of information and hence to stimulate the
development of sufﬁcient internal procedures such
as to reduce the phenomenon of market rumours;
2. to assist the competent authorities (meaning
in this case CONSOB and the judicial system) in
carrying out investigations seeking to identify
market abuses (meaning both the abuse of insider
information and market manipulation).
The Bank has adopted a special set of internal
procedures for managing this Register, which, by
deﬁning roles, responsibilities and rules of conduct,
• to ensure the precise observance of the
requirements contained in article 115-bis of
Legislative Decree no 58/98;
• to control the circulation of price-sensitive
information, ensuring observance of the duty of
Management structure As part of its 2004-2006 Strategic Plan, BPM
remodelled its organisational structure. More
speciﬁcally, the new organisational structure has
• reorganise the Internal Auditing Department
structure (previously Technical and Operating
Controls Department) in order to improve the
selection of the activities referred thereto as a
consequence of the various legislative changes and
of the new controls deﬁned within the ambit of the
Internal Control Model. The role of the Department
was therefore strengthened to become the structure
entrusted with evaluating the overall functionality of
the control system at Group level and the deﬁnition
of the internal auditing methods and evaluation of
their application were increased;
• remodel the structure of the Information
Communication Technology Department, with
the aim to improve the level of efﬁciency and
effectiveness of the Group’s IT System, to develop
projects with high impact for the company and
to progressively integrate the IT functions of the
companies within the Group. These measures
called for stronger staff structures in order to better
control the development of the strategic projects
and improve line organisation and to respond
to the issue of “development” by regrouping IT
applications to better meet business needs and the
issue of “infrastructure” by separating the moment
when the service is provided from the study/
evolution of the systems;
• reorganise the central structures so that may be
more streamlined and rationalised by:
– reducing the number of Departments and Services
and therefore the number of direct dealings of
– optimising the results of the “Rationalisation of
central Back Ofﬁces” project within the ambit of
credit and litigation;
– regrouping certain functions in order to maximise
62 social responsibility report > group identity > governance
SERVICE BUYING SERVICE
AND BACK OFFICE
* Corporate * Financial LEGAL
Affairs Function reporting function DEPARTMENT
GENERAL AFFAIRS ACCOUNTING function
* Personnel function
Management Committee DEPUTY GENERAL MANAGER function
and Communication Committee MANAGEMENT OF
INTERNAL AUDITING AND CONTRACTUAL POLICIES
Projects Committee HUMAN
Management Financing Committee
Committee for Classification of RESOURCES
Non-performing loans STRATEGIC DEPARTMENT
Credit Policies Committee PLANNING
Personal data processing Committee
OF DIRECTORS MANAGER INFORMATION
EXECUTIVE CO-GENERAL TECHNOLOGY
COMMITTEE MANAGER DEPARTMENT * ICT
SUPERVISORY FINANCIAL CONTROL * Credit
COMMITTEE AND RISK MANAGEMENT function
DEPUTY GENERAL MANAGER
CORPORATE * Marketing
* Group governance function
General Manager Deputy General Manager - Business
This position is responsible for achieving the This function ensures that the Bank’s ﬁnancial and
strategic and proﬁtability goals established by the commercial policies are deﬁned in keeping the
Board of Directors, assisting with their deﬁnition. strategies set by the Board of Directors.
He is head of the company’s management team and It ensures the achievement of income statement/
exercises the functions of guidance, co-ordination balance sheet targets for the retail and corporate
and control over activities and resources in order markets by deﬁning speciﬁc commercial and
that all the transactions undertaken by the Bank marketing plans and overseeing international
meet economic and proﬁtable criteria. activities.
He prepares the reports designed to provide It guarantees the achievement of the Bank’s
the Board of Directors with full knowledge and ﬁnancial policy goals relating to the management
governability of the business. of securities, foreign exchange dealing and other
He drafts proposals relating to development currency transactions.
plans and budgets for submission to the Board of
He oversees the implementation of an adequate Commercial Division
system of internal controls, ensuring that due action This ensures that company strategies are achieved
is taken with regard to ﬁndings emerging from in relation to the retail and SME market by deﬁning
inspections by the internal control function and suitable commercial and marketing initiatives
ratiﬁed by the Board of Directors. designed to reach the expected economic/balance
He maintains relationships with the principal sheet goals.
national and international credit and ﬁnancial It is responsible for the overall deﬁnition of the
institutions, with the supervisory and regulatory portfolio of products and services for Customers,
authorities, with institutional investors and with the as well as for planning and implementing speciﬁc
Bank’s top Customers. marketing measures.
He chairs the Management Committee, whose job is It manages and develops the entire Division,
to co-ordinate policy and management and to pass monitoring the commercial performance of the
down instructions in line with the strategies and different Customer segments and identifying
goals established by the Board of Directors. any measures needed to correct the policies
It is responsible for achieving income statement/
Co-General Manager balance sheet goals and development goals
This position is responsible for speciﬁc areas relating to Customers that operate through “direct”
decided by the General Manager, at present distribution channels (namely the Internet, the call
credit and commercial operations, the latter with centre and ﬁnancial advisors).
particular reference to the subsidiary banks.
Deputy General Manager - Resources and
General Management Ofﬁce - Staff Contractual Policies
This function oversees external communications by This function ensures that human resources are
the Bank and Group. managed as a strategic part of the Group’s overall
It oversees Group-wide risk management activities design in accordance with the policies laid down by
relating to credit, market and operational risks. the Board of Directors.
It monitors and supervises the group system of Once a year it deﬁnes general or special personnel
internal controls. plans with reference to recruitment, terminations,
It provides the General Manager’s ofﬁce with internal transfers, training, remuneration and
support in planning and operational control of the incentives for submission, in agreement with the
Bank and the Group, ensuring effective monitoring General Manager’s ofﬁce, to Board approval.
of costs. It prepares, in conjunction with the Human
It assists the General Manager’s ofﬁce in deﬁning Resources Department, the related operating plans
the Group’s development strategies, in identifying in application of decisions taken by the Board.
the competitive positioning goals for the different It deﬁnes the next year payroll costs for each
areas of business and in deﬁning the mission of Department/Service.
subsidiary companies. In conjunction with the Human Resources
Department and through negotiation with the
trade unions, it deﬁnes company rules governing
64 social responsibility report > group identity > governance
personnel issues and problems. Credit and Information Communication
It ensures that contractual requirements and Technology Functions
disciplinary measures are applied. These functions report directly to the General
It ensures that internal notices and communications Manager’s ofﬁce.
are circulated. The Credit Function evaluates and approves all
At the command of the Board of Directors and in types of lending that go beyond local limits, and,
agreement with the General Manager’s ofﬁce, it using separate structures, it constantly monitors
co-ordinates and reviews the personnel policies of credit positions, ensuring the governance of credit
subsidiary companies. risk.
It acts as a liaison for the General Manager’s ofﬁce The ICT Function uses information technology as a
for deﬁning organisational development and means of innovation and change, by planning and
property management policies. managing the Group’s information system.
Administrative and Operational Support
This division provides support functions to the
General Manager’s ofﬁce and secretarial and
administrative support to the Board of Directors.
It sees to the Bank’s corporate compliance,
maintains institutional relationships with the
regulatory authorities and looks after requirements
needed prior to and subsequent to the Bank’s board
It sees to the corporate and legal co-ordination of
the Bank’s equity investments.
It proposes and agrees with the General Manager’s
ofﬁce the policies for efﬁcient ﬁnancial reporting
and control of all corporate events.
It is responsible for preparing the draft ﬁnancial
statements, overseeing the related administrative
and accounting process, and for compliance with
tax and statutory requirements.
It enacts the strategies announced by the Board of
Directors and the goals contained in the Strategic
Plan relating to the preparation of the annual
ﬁnancial report, including the Group’s consolidated
It oversees buying policies and expenditure in
accordance with the provisions contained in the
Budget Spending and Buying Regulations.
It is responsible for the management and custody of
It oversees the Group’s administrative co-ordination.
It provides operational and administrative services
to the network and the necessary support to credit
intermediation and securities administration
It oversees the recovery of non-performing loans
and the provision of the related legal advice.
Governance of the Group The enhancement of the value and the strategies
of the BPM Group, like those of its member
companies, are promoted by Banca Popolare di
Milano in its role as Parent Bank which:
• deﬁnisce gli obiettivi delle singole società,
che vengono recepiti dai rispettivi Consigli di
Amministrazione e Direzioni, della cui realizzazione
gli stessi diventano pienamente responsabili;
• presidia in modo coordinato gli speciﬁci mercati e
aree d’affari in cui il Gruppo opera;
• ottimizza il livello di redditività del capitale
sia delle singole società che del Gruppo nel suo
insieme e controlla le componenti di rischio
originate dalle diverse aree di attività del Gruppo;
• fornisce supporti operativi a livello di Gruppo
(informatica, processi ed acquisti) che per loro
natura, se accentrati, si prestano al conseguimento
di rilevanti economie di scala e di scopo.
The Group Regulations establish the model of
governance and control, setting out general rules of
conduct, the areas of competence and responsibility
and the means of co-ordinating the different
companies through instruments such as: Group
Directives, Prior Authorisations and Committees.
Among the latter, a central role is played by the
Parent Bank’s Management Committee – whose
job is to co-ordinate policy and management
and to hand down instructions in line with the
strategies and goals established by the Board of
Directors - and the Group Management Committee,
which required to provide effective control of the
entire Group’s exposure to risk and co-ordinated
management of the more important operating
In order to make co-ordination activities more
effective, subsidiary company representatives also
attend the Parent Bank’s management committees
working in speciﬁc areas, such as:
• the Commercial Policies and Communication
Committee, which co-ordinates the Bank’s
commercial policies with reference to channels,
products, communication, commercial promotion
• the Liquidity Committee, which decides operating
limits for the active management of assets and
liabilities with a view to maximising income, while
nonetheless seeking to minimise interest and
exchange rate risks;
• the Credit Policies Committee, which decides
the Bank’s lending policies and examines the loan
book in order to improve the quality of the risk
and determine the amount of provisions against
possible loan losses;
66 social responsibility report > group identity > governance
• the Projects Committee, which has the job of In fact, certain transactions or signiﬁcant
overseeing the budget and major projects for transactions by subsidiary companies – like for
change and innovation, as well as the principal example amending their articles of association
investments in Information and Communication and internal regulations – require speciﬁc “Prior
Technology (ICT); Authorisation” from the Parent Bank.
• the Personal Data Committee, which oversees
the related activities and co-ordinates the work
of company managers to ensure that company
applications comply with national and EC laws in
The Committee’s decisions must be adopted and
implemented by the Group’s individual companies.
The Parent Bank has issued a set of compulsory
“Group Instructions” for this purpose, under
which its central functions exercise operational
co-ordination and control in their speciﬁc areas of
System of Internal Controls In keeping with the general principles and
guidelines issued by the regulatory authorities,
over the Group speciﬁcally the Bank of Italy’s Supervisory
Instructions, the BPM Group’s “System of Internal
Controls” consists of the set of rules, procedures
and organisational structures that seek to
ensure compliance with company strategies and
achievement of the following goals:
• effectiveness and efﬁciency of processes
(administration, production, distribution);
• safeguarding asset values and providing
protection from losses;
• reliability and integrity in all accounting and
• compliance of transactions with the law,
supervisory requirements and the Group’s policies,
plans, rules and internal procedures.
The system is therefore based on the assumption
• control is an integral part of everyday operating
• persons are identiﬁed to be in charge of structures
and processes and they effectively monitor the
activities for which they are responsible;
• there is a clear separation of duties between
those involved in operations and those involved in
control activities, so as to ensure (both in form and
in substance) the right level of objective criticism
between manager and controller;
• the system is efﬁcient and effective.
Control activities are carried out at all hierarchical
and functional levels of the organisational
structure. All company functions and structures are
required to exercise control over the processes and
operations under their responsibility according to
the responsibilities and duties set out in the Bank’s
Functional Rules and Group Regulations.
Since BPM adopts rules and models that extend
to all its subsidiaries, this activity involves it
classifying risks at a group level, deﬁning limits
on their assumption (including on the basis of
risk-return analysis) and the criteria for their
measurement and assessment, always within a
These limits are then deﬁned and updated by the
Board of Directors of each company in such a way
that is in line with the Group’s risk management
policies as set out by the Parent Bank.
Within this ambit, the subsidiaries must implement
the directives handed down from the Parent Bank
68 social responsibility report > group identity > governance
with the goal to manage and monitor all the risks
within its remit, avoiding any action that is not
in line with the Group’s parameters. In addition,
the subsidiaries co-operate with and assist the
Parent Bank to ensure that all the directives and
procedures are properly carried out and complied
with by the subsidiaries.
In terms of the System of Internal Controls, the
Internal Auditing Department of the Parent Bank
makes sure that the subsidiaries behave in such a
way that is in line with the instructions received,
and performs periodic assessments on each
If the subsidiaries have autonomous internal control
structures, the Internal Auditing Department of the
Parent Bank will also co-ordinate and supervise
local internal audits.