Section 1 – Interest - item 10 and 20

1,1 Interest and similar income: composition

 

Composition

Debt securities

Loans

Other assets

31.12.2011

31.12.2010

1

1.Financial assets held for trading

19

-

-

19

20

2

Financial assets at fair value

-

-

-

-

-

3

Available for sale financial assets

31.130

-

-

31.130

12.331

4

Financial assets held to maturity

-

-

-

-

-

5

Due from banks

2.186

981

2.997

6.164

2.726

6

Due from customers

-

53.177

15.121

68.298

48.932

7

Hedging derivatives

X

X

-

-

-

8

Other assets

X

X

481

481

75

 

Total

33.335

54.158

18.599

106.092

64.084

The increase recorded in the year is mainly attributable to interest income on debt securities classified as both available for sale financial assets and receivables due from banks, whose amount is significantly higher compared to the previous year.

Interest income relating to customers includes interest for late payment, which are likely to be recovered for around 1 million Euro, relating to some transactions to purchase outright receivables due from the Public Administration.

1.3 Interest and similar income: other information

1.3.1 Interest income on foreign currency financial assets

 

31.12.2011

31.12.2010

Interest income on financial assets in currency

1.510

1.662

1,4 Interest and similar expenses: composition

 

Composition

Debt

Loans

Other assets

31.12.2011

31.12.2010

1

Due to Central banks

-

X

(6.188)

(6.188)

(447)

2

Due to banks

(6.864)

X

(993)

(7.857)

(5.132)

3

Due to customers

(40.298)

X

(9.308)

(49.606)

(31.047)

4

Outstanding securities

X

-

-

-

(165)

5

Financial liabilities held for trading

-

-

-

-

-

6

Financial liabilities at fair value

-

-

-

-

-

7

Other liabilities and provisions

X

X

(109)

(109)

-

8

Hedging derivatives

X

X

(87)

(87)

-

 

Total

(47.162)

-

(16.685)

(63.847)

(36.791)

Interest expense on payables due to central banks, banks and customers concerning other operations refers to repurchase agreements put in place during the year.

1.5 Interest and similar expenses: spreads on hedging transactions

Items/Components

31.12.2011

31.12.2010

A. Premium spreads on hedging transactions:

 

 

B. Discounts spreads on hedging transactions:

(22)

-

C. Balance (A-B)

(22)

-

1.6 Interest and similar expenses: other information

1.6.1 Interest expense on foreign currency liabilities

 

31.12.2011

31.12.2010

Interest expense on liabilities in currency

(141)

(132)

1.6.2 Interest payable on liabilities for financial leasing

 

31.12.2011

31.12.2010

Interest payable on liabilities for financial leasing

(66)

-

Section 2 – Commission – items 40 and 50

2.1 Commission income: composition

Composition/Type

31.12.2011

31.12.2010

a) Guarantees granted

99

3

b) derivatives on loans

-

-

c) management. brokerage and consultancy services:

-

-

 

1. Trading of financial instruments

-

-

 

2. Trading in currency

-

-

 

3. Asset management:

-

-

 

 

3.1. Individual

-

-

 

 

3.2. Collective

-

-

 

4. Safe custody and management of securities

-

-

 

5. Depository bank

-

-

 

6. Placement of securities

-

-

 

7. Order collection and transmission

-

-

 

8. Consultancy

-

-

 

 

8.1 on investments

-

-

 

 

8.2 on financial structure

-

-

 

9. Third party services

-

-

 

 

9.1. Asset management:

-

-

 

 

 

9.1.1. Individual

-

-

 

 

 

9.1.2. Collective

-

-

 

 

9.2. Insurance products

-

-

 

 

9.3. Other products

-

-

d) services of collection and payment

1.124

1.145

e) servicing services for securitisation transactions

-

-

f) services for factoring transactions

78.695

66.677

g)Tax collection and payment

-

-

h)Management of multi-lateral trading systems

-

-

i)Current account holding and management

806

742

j) other services

1.900

1.976

 Total

82.624

70.543

Increase on the previous year is due in particular to the higher charges for the receivables management and guarantee service offered by the Group, owing to the management complexity involved and offsetting the increase in credit risk.

2.2 Commission expense: composition

Services/Values

31.12.2011

31.12.2010

a) Guarantees received

(199)

(118)

b) Derivatives on loans

-

-

c) Management, brokerage and consultancy services:

(119)

(149)

 

1. Trading of financial instruments

-

-

 

2. Trading in currency

-

-

 

3. Asset management:

-

-

 

 

3.1 treasury portfolio

-

-

 

 

3.2 third parties portfolio

-

-

 

4. Safe custody and management of securities

(119)

(149)

 

5. Placement of financial instruments

-

-

 

6. Off-site offer of financial instruments, services and products

-

-

d) Services of collection and payment

(299)

(70)

e) other services

(3.219)

(3.362)

Total

(3.836)

(3.699)

Section 3 – Dividends and similar income – item 70

3.1 Dividends and similar income: composition

 

Transactions/Types

31.12.2011

31.12.2010

dividends

income from O.E.I.C. units

dividends

income from O.E.I.C. units

A.

1.Financial assets held for trading

-

-

-

-

B.

Available for sale financial assets

161

-

17

-

C.

Financial assets at fair value

-

-

-

-

D.

Equity investments

-

X

-

X

 

Totale

161

-

17

-

Section 4 – Net profit (loss) from trading – item 80

4.1 Netprofit (loss) from trading: composition

Items/Return

Capital gain (A)

Profit from trading (B)

Capital loss (C)

Losses from trading (D)

Net result [(A+B) - (C+D)]

1. Financial assets held for trading

-

-

(105)

-

(105)

 

1.1 Debt securities

-

-

(105)

-

(105)

 

1.2 Equity instruments

-

-

-

-

-

 

1.3 O.E.I.C. units

-

-

-

-

-

 

1.4 Loans

-

-

-

-

-

 

1.5 – Other

-

-

-

-

-

2. Financial liabilities held for trading

-

-

-

-

-

 

2.1 Debt securities

-

-

-

-

-

 

2.2 Payables

-

-

-

-

-

 

2.3 – Other

-

-

-

-

-

3. Other financial assets and liabilities: exchange differences

X

X

X

X

50

4. Derivative instruments

-

-

(190)

-

(190)

 

4.1 Financial derivatives:

-

-

(190)

-

(190)

 

 

- on debt securities and interest rates

-

-

(190)

-

(190)

 

 

- on equity instruments and share indexes

-

-

-

-

-

 

 

- on currency and gold

X

X

X

X

 

 

 

- other

-

-

-

-

-

 

4.2 Derivatives on loans

-

-

-

-

-

 Total

-

-

(295)

-

(245)

Section 6 – Profit (losses) from sale/buybacks - item 100

6.1 Profit (losses) from sale/buybacks: composition

Items/Returns

31.12.2011

31.12.2010

Profit

Losses

Net result

Profit

Losses

Net result

Financial assets

 

 

 

 

 

 

1.

Due from banks

-

-

-

-

-

-

2.

Due from customers

-

-

-

-

-

-

3.

Available for sale financial assets

1.554

(1.050)

504

1.771

(1.277)

494

 

3.1 Debt securities

1.554

(1.050)

504

1.771

(1.277)

494

 

3.2 Equity instruments

-

-

-

-

-

-

 

3.3 O.E.I.C. units

-

-

-

-

-

-

 

3.4 Loans

-

-

-

-

-

-

4.

Financial assets held to maturity

-

-

-

-

-

-

 

Total assets

1.554

(1.050)

504

1.771

(1.277)

494

Financial liabilities

 

 

 

 

 

 

1.

Due to banks

-

-

-

-

-

-

2.

Due to customers

-

-

-

-

-

-

3.

Outstanding securities

-

-

-

-

-

-

 

Total liabilities

-

-

-

-

-

-

Net income from the transfer of available for sale financial assets arises from the sale of bank bonds held in the portfolio.

Section 8 – Impairment losses/reversals of impairment losses – item 130

8.1 Net impairment losses/reversals on loans and receivables: composition

Income items

Impairment losses (1)

Reversals of impairment losses (2)

Total 31.12.2011

Total 31.12.2010

Specific

Portfolio

Specific

Portfolio

Write-offs

Others

A

B

A

B

A. Due from banks

-

-

-

-

-

-

-

-

-

- loans

-

-

-

-

-

-

-

-

-

- debt securities

-

-

-

-

-

-

-

-

-

B. Due from customers

(594)

(28.408)

(9.952)

1.731

5.080

-

-

(32.143)

(24.209)

- loans

(594)

(28.408)

(9.952)

1.731

5.080

 

 

(32.143)

(24.209)

- debt securities

-

-

-

-

-

-

-

-

-

C. Total

(594)

(28.408)

(9.952)

1.731

5.080

-

-

(32.143)

(24.209)

Key

A= from interest

B= other reversals

This item must be assessed with reference to the specific market scenario that generated it, with strong constraints due to the economic situation and companies facing several problems.

The impairment losses and reversals include the ‘time value’ effect deriving from the process of discounting expected future cash flows.

8.2 Net impairment losses/reversals onavailable for sale financial assets: composition

Items/Return

Impairment losses (1)

Reversals of impairment losses (2)

Total 31.12.2011

Total 31.12.2010

Specific

Specific

Write-offs

Others

A

B

A. Debt securities

-

-

-

-

-

-

B. Equity instruments

-

-

X

X

-

(235)

C. O.E.I.C. units

-

-

X

-

-

-

D.Loans to banks

-

-

-

-

-

-

E. Loans to customers

-

-

-

-

-

-

F. Total

-

-

-

-

-

(235)

Key

A= from interest

B= other reversals

In relation to the previous year, net impairment losses and reverals on available for sale financial assets refer to the fair value adjustment of a non-controlling equity investment in the portfolio

Section 11 – Administrative expenses – item 180

11.1 Personnel expenses: composition

Type of expense/Sectors

Total

Total

31.12.2011

31.12.2010

1) Employees

(22.965)

(22.080)

 

a) salaries and wages

(17.023)

(16.231)

 

b) social security contributions

(4.651)

(4.255)

 

c) post-employment benefits

(1.003)

(1.049)

 

d) pension expense

-

-

 

e) allocations for post-employment benefits

(62)

(35)

 

f) allocations to pensions and similar provisions:

-

-

 

- defined contribution plans

-

-

 

- defined benefit plans

-

-

 

g) payments made to supplementary external funds

-

-

 

- defined contribution plans

-

-

 

- defined benefit plans

-

-

 

h) share-based payment agreements

-

-

 

i) other employee benefits

(226)

(510)

2) Other serving employees

(300)

(493)

3) Directors and Statutory Auditors

(3.970)

(2.603)

4) Retired personnel

-

-

 Totale

(27.235)

(25.176)

The increase in personnel expenses arises partly from the acquisition of the Toscana Finanza Group. The number of the Group’s employees – also following this acquisition – increased at the end of the year to 422 (compared to 345 at the end of 2010).

The sub-heading “post employment benefits” includes both the benefits the employees chose to maintain in-the company, which would then transfer it to the INPS Treasury Fund, and those allocated to supplementary pension plans; it also includes the effect of the application of the actuarial method as envisaged by IAS 19. The sub-heading “provision for post-employment benefits” refers to the revaluation of the provision for post-employment benefits accrued up to 31 December 2006 and kept in the company.

The sub-heading “Other benefits in favour of employees” includes costs sustained for personnel training courses.

11.2 Average number of employees by category

Employees:

31.12.2011

31.12.2010

Employees:

380,5

336,5

(a) Senior managers

13

9,5

(b) Middle managers

49

48

(c) remaining personnel

318,5

279

Other personnel

-

-

11.5 Other administrative expenses: composition

Expenses/Amounts

31.12.2011

31.12.2010

Expenses for professional services

(7.221)

(2.433)

Legal and consulting services

(4.688)

(1.577)

Auditing

(2.139)

(548)

Outsourcing services

(394)

(308)

Direct and indirect taxes

(3.344)

(2.361)

Expenses for purchasing non-professional goods and services

(10.962)

(9.108)

Property expenses

(2.832)

(2.430)

Customer information

(1.097)

(725)

Telephone and data transmission expenses

(938)

(698)

Postage of documents

(910)

(971)

Advertising and inserts

(898)

(835)

Software assistance and hire

(529)

(491)

Other sundry expenses

(3.758)

(2.958)

Total administrative expenses

(21.527)

(13.902)

Legal and consulting expenses include cost ssustained by the Parent Company for the acquisition of the Toscana Finanza Group, equal to 1,587 thousand Euro.

Pursuant to art. 2427, par. 16 bis of the Italian Civil Code, the following table shows the fees paid to independent auditors for auditing and other services pertaining to the year.

Type of services

Service provider

Beneficiary

Fees(in Euro)

Independent auditors’ fees

KPMG S.p.A.

Banca IFIS S.p.A.

189.059

Subsidiaries

16.452

Certification services

KPMG S.p.A.

Banca IFIS S.p.A.

265.775

Subsidiaries

-

Tax consultancy services

KPMG S.p.A.

Banca IFIS S.p.A.

-

Subsidiaries

-

Other services

KPMG S.p.A.

Banca IFIS S.p.A.

215.000

Subsidiaries

-

Total

 

 

731.190

Section 12 – Allocations to provision for risks and charges – item 190

12.1. Net allocations to provisions for risks and charges: composition

Expenses/Amounts

31.12.2011

31.12.2010

- Net allocations to provisions for risks and charges

(17)

-

Total

(17)

-

Section 13 – Net impairment losses/reversals of impairment losses on property, plant and equipment and investment property – item 200

13.1. Net impairment losses/reversals of impairment losses on property, plant and equipment and investment property: composition

Income items

Depreciation(a)

Impairment losses (b)

Reversals of impairment losses(c)

Net result (a + b - c)

A.

Property, plant and equipment and investment property

 

 

 

 

 

A.1 Owned

(1.304)

-

-

(1.304)

 

- for functional use

(1.304)

-

-

(1.304)

 

- for investment purposes

-

-

-

-

 

A.2 Acquired under finance leases

(71)

-

-

(71)

 

- for functional use

(71)

-

-

(71)

 

- for investment purposes

-

-

-

-

 

Total

(1.375)

-

-

(1.375)

Section 14 – Net impairment losses/reversals of impairment losses on intangible assets – item 210

14.1 Net impairment losses/reversals of impairment losses on intangible assets: composition

 

Income items

Amortisation (a)

Impairment losses (b)

Reversals of impairment losses(c)

Net result (a + b - c)

A.

Intangible assets

 

 

 

 

 

A.1 Owned

(1.573)

-

-

(1.573)

 

- Internally generated

 

 

 

-

 

- Other

(1.573)

 

 

(1.573)

 

A.2 Acquired under finance leases

 

 

 

-

 

Total

(1.573)

-

-

(1.573)

Section 15 – Other operating income and expenses – item 220

15.1 Other operating expenses: composition

Expenses/Amounts

31.12.2011

31.12.2010

a) Transactions with customers

(213)

(45)

b) Other expenses

(218)

(885)

Total

(431)

(930)

15.2 Other operating income: composition

Expenses/Amounts

31.12.2011

31.12.2010

a) Recovery of third party expenses

2.327

1.708

b) Receivable rental fees

93

97

c) Other income

2.263

561

Total

4.683

2.366

The item ‘Recovery of expenses by charging third parties” refers to charges on customers for legal and consulting expenses, as well as registration fees and stamp duties recognised under the item ‘Other administrative expenses’.

The item “other income” includes net income arising from the acquisition of the Toscana Finanza S.p.A. Group at a favourable price, equal to 1,887 thousand Euro.

Section 20 – Current tax expense– item 290

20.1 Current tax expense: composition

Income components/Sectors

31.12.2011

31.12.2010

1.

Current tax expense (-)

(17.576)

(12.357)

2.

Changes in current taxes of previous years (+/-)

90

(279)

3.

Reductions in current taxes for the year (+)

-

-

4.

Changes in deferred tax assets (+/-)

2.306

2.322

5.

Changes in deferred tax liabilities(+/-)

(120)

(921)

6.

Tax expense for the year (-)(-1+/-2+3+/-4+/-5)

(15.300)

(11.235)

20.2 Reconciliation between theoretical tax expense and effective tax expense for the year

Items/Amounts

31.12.2011

Pre-tax profit (loss) for the year from continuing operations

41.835

Corporate tax – theoretical tax charge (27.5%)

(11.505)

- Effect of income entirely or partially untaxable

665

- Effect of charges entirely or partially non deductible

(868)

- Benefits from the application of national tax consolidation

1.357

- Effect of other changes

62

- Non-current corporate tax (IRES)

111

- Deferred non-current corporate tax

-

Corporate tax – Effective tax charges

(10.178)

Regional tax on productivity (IRAP) – theoretical tax charges (4.82%)

(2.330)

- Effect of income/charges that are not part of the taxable base

(2.793)

- Effect of other changes

(5)

- Non-current regional tax on productivity (IRAP)

6

Regional tax on productivity (IRAP) – Effective tax charges

(5.122)

Substitute tax

 

-

Other taxes

-

Effective tax charges for the year

(15.300)

Section 23 – Other information

There is no other information, other than that already included in previous or following sections of the present notes to the consolidated financial statements.

Section 24 – Earnings per share

24.1 Average number of ordinary diluted shares

Services/Values

31.12.2011

31.12.2010

Consolidated profit for the year (in thousands of Euro)

26.535

18.626

Average number of outstanding shares

52.419.661

51.582.078

Average number of potentially dilutive shares

-

217.400

Average number of diluted shares

52.419.661

51.799.478

Earnings per share (Units of Euro)

0,51

0,36

Diluted earnings per share (Units of Euro)

0,51

0,36

With reference to the previous year, the fall in earnings per share and diluted earnings per share was due to the free and paid-up share capital increase which was completed on 30 July 2010.