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BPM to transfer branch network to Banca Popolare di Mantova under merger plan

The management board of Banca Popolare di Milano Scarl and the board ofdirectors of Banca Popolare diMantova SpA approved the transfer of a business unit from theformer bank to BP Mantova, a part of the BPM banking group.

The transfer is contingent on the completion of themerger betweenBanco Popolare SocietàCooperativa and BPM and certain regulatory approvals.

The business unit being transferred consists of the entirenetwork of 637 branches owned by BPM and the assets and liabilities, excludingbonds, linked to these branches.

Following the completion of the transfer and merger, BP Mantova's namewill change to Banca Popolare di Milano – Società per azioni; it will becontrolled by the new parent company that will also have control of the mergedentity; and it will have a "light" organizational structure.

Within a reasonable period of time from the date ofcompletion of the transfer and, in any case, from the third year following theeffective date of the merger, BP Mantova will be absorbed by the new parentcompany.

The board also resolved to submit a proposal to anextraordinary shareholders' meeting, expected to be held by early December, fora cash increase in capital for a total of €4 billion in order to service thetransfer. BP Mantova's share capital will increase to€326.8 million from about €3.0 million by issuing 125,498,070 ordinary sharesof par value €2.58 each with a total share premium of €3.68 billion.

As a result of BP Mantova's capital increase beingimplemented in full, BPM, which currently holds 94.39% of BP Mantova, wouldcome to hold more than 99.95% of its share capital.