Prospectus - Notowania

Information on Risks
The Group monitors and manages its risks through rigorous methodologies and procedures proving to be effective through all
phases of the economic cycle. The control and steering of Group risks are exerted by the Holding Company Risk Management
function (Group CRO), to which the following tasks have been assigned:
� optimize asset quality and minimize the cost of the relevant risks, in line with the risk/return targets assigned to each
business area;
� determine, in concert with the CFO, the Group’s risk appetite and evaluate its capital adequacy and the cascading to the
business Areas / Legal Entities;
� define the Group risk managerial rules, methodologies, guidelines, policies and strategies;
� set up a credit and concentration risk control system both of single counterpart / economic groups and significant clusters
(e.g. as geographical areas / economic sectors), monitoring and reporting the limits defined beforehand;
� define and provide to the business Areas and to the Legal Entities the valuation, managerial, monitoring and communication
criteria of the aforesaid risks and ensure the consistency of systems and control procedures both at Group and Legal Entity
level;
� create and spread a risk culture across the whole Group;
� support the business Areas to achieve their targets, contributing to product and business development;
� verify, by means of the initial and on going validation process, the adequacy of the risk measurement systems adopted by
the Group Entities, steering the methodological choices towards increasingly high and uniform qualitative standards, and
control the consistency of the usage of the above systems within the processes;
� set up an adequate system of preventive risk analysis, in order to quantify the impacts on the Group’s economic- financial
structure due to a quick worsening of the economic cycle or to other shock factors (i.e. Stress Test).
Credit market turmoil has affected the global banking system since the second half of 2007, contributing to a sharp slowing of the
world economy. This macroeconomic scenario has entailed an increase in the cost of credit risk, a decrease in asset values, as well
as higher costs deriving from write-downs and depreciation of some assets combined with a decrease in profitability. Although the
Group has an adequate level of portfolio diversification, it is nevertheless exposed to risks if loan counterparties become insolvent or
are unable to meet their obligations. Difficulties could arise in the recovery process of asset values proving inconsistent with current
appraisals.
Furthermore, recessionary conditions have worsened in almost all Countries where the Group operates and signs of deteriorating
economic conditions are still present even though at different degrees. Despite there being signs that the recession may be slowing,
the timing of a sustained economic recovery nevertheless remains uncertain. In light of the still challenging macroeconomic
environment a sound and effective risk management has highest priority within the Group and the new Group CRO governance
model consequently emphasizes this guiding principle.
CONSOLIDATED INTERIM REPORT
AS AT SEPTEMBER 30, 2009
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