SANPAOLO IMI GROUP

NEWS RELEASE

Results to June 30, 2006 approved

·                  NET INCOME: 1,140 million euro (+27.5% against first half 2005)

·                  CURRENT OPERATING INCOME: 1,769 million euro (+23.5% against first half 2005)

·                  GROSS OPERATING INCOME: 4,354 million euro (+10.3% against first half 2005)

·                  ANNUALIZED RoE: 17.8% (15.7% in first half 2005, 17.2% in 2005)

·                  COST INCOME RATIO: 53.1% (56.4% in first half 2005). In the second quarter the ratio was 52.4%.

·                  ASSET QUALITY: ratio of non-performing loans to loans to customers 0.7% (0.8% at the end of June 2005); ratio of doubtful loans to total net loans 2.09% (2.5% at the end of June 2005)

·                  35,000 NEW RETAIL CUSTOMERS IN THE SIX MONTHS

·                  MEDIUM- & LONG-TERM LOANS: 3,700 million euro in personal loans and domestic mortgages by the commercial banks (+27% on the first half of 2005).

More than 4,000 million euro in medium- & long-term loans to companies by the commercial banks (+34% on the first half of 2005)

Principal profit margins and business volumes grew compared with the first half of 2005:

·                  Gross operating income was 4,354 million euro (+10.3%), thanks to positive development in all areas: the net interest income rose to 2,019 million euro (+8.3%), net commissions were 1,709 million euro (+9.3%), dividends and results from other financial assets and liabilities rose to 325 million euro (+49.8%) and the result of the insurance business rose to 203 million euro (+11.5%).

·                  Loans to customers rose 11.2% from June 2005 and 5.6% from the beginning of the year, with further improvements in credit quality. Doubtful loans fell 6.8% from June 2005 and 7.4 % from the beginning of the year.

·                  Financial assets of customers also grew: +5.7% from June 2005 and +2.7% on the end of 2005. The positive trend in direct deposits (+5.4% on the 12

2

months and +4% from December 2005) and indirect deposits (+5.5% on the 12 months and +1.4% from the end of December) continued.

In the second quarter of 2006 the level of earnings was the highest of the previous six quarters: gross operating income was 2,239 million euro (+5.9% against the first quarter of 2006, with the creation of 124 million euro in new revenues) and net interest and other banking income reached 2,102 million euro. Net income in the second quarter was 621 million euro, up 19.7% on the first quarter of 2006. Average net income calculated for the first two quarters of 2006 was up 15% compared to the 2005 quarterly average.

Turin, September 12, 2006 – The Board of Directors of SANPAOLO IMI today approved the results of the Group at  June 30, 2006, prepared according to IAS/IFRS accounting principles.

The results show a positive development in the principal profit margins compared to the same period of 2005. The Group achieved a decisive improvement in gross operating income (+10.3%), to 4,354 million euro, thanks to strong revenues: net interest income rose to 2.019 million euro (+8.3%), net commissions to 1,709 million euro (+9.3%), insurance business to 203 million euro (+11.5%). Net interest and other banking income rose to 4,121 million euro (+10.9%) and current operating income was 1,769 million euro (+23.5%).

Credit quality remained high, thanks to the selective criteria used in loan disbursement and strict provisioning polices, as demonstrated by the total of doubtful loans, down 7.4% on the end of 2005.

Net income was thus 1,140 million euro against 894 million in the same period of 2005 (+27.5%).

The Group acquired 35,000 new retail customers and 450 corporate clients in the period; in the second quarter alone more than 21,000 new retail customers joined the bank.

The performance in the half is in line with the objectives of the Three-Year Plan, which envisages RoE of 18% and a cost/income ratio of 52% in 2008.

***

Consolidated results at June 30, 2006(1).

Group gross operating income was 4,354 million euro (+10.3% on the first half of 2005), thanks to a positive performance in ordinary business areas.

Net interest income in 2006 was 2,019 million euro, with an increase of 8.3% on the first half of 2005 and accelerating compared to the growth of 7.8% recorded in the first quarter of 2006. The principal growth factor came from customer business. Average

(1) Consolidation note

Note that, for consistent comparison, the first half 2005 figures have been restated to take account of changes made by the European Commission on certain international accounting principles subsequent to the publication of the 2005 Report. In terms of consolidation, therefore, the figures for the first six months and full year 2005 include the consolidation of the grouping of  Fideuram Wargny and Gest Line among income from discontinuing operations net of taxes in line with IFRS 5.

3

interest-earning assets rose by 13.3% on the first half of 2005, total average spread fell by 13 basis points, as did customer spreads (16 basis points), as a result of excess supply in the system causing mark-up pressures.

Loans to customers at the end of June were 147.3 billion euro, significantly up on December 2005 (+5.6%), and on the 12 months (+11.2%). Performance benefited from both long- and medium term and short-term financing: the latter grew 10.6% in the 12 months. The total shows good progress in retail (5.5 billion euro drawn down by the commercial banks with 2.8 billion euro in domestic mortgages and 0.9 million in personal loans, up 25.6% on the same period of 2005) and corporates (financings of more than 4 billion euro, +34.3% on the first half of 2005); however, loans to public works and infrastructure fell 7.3% from the beginning of the year (Banca OPI’s loan book at the end of the period was 19.2 billion euro).

Direct deposits were 171.9 billion euro, up 4% from the beginning of the year and 5.4% in the 12 months.

At the end of June the Group’s domestic market share was 10.1% in loans and 10.7% in direct deposits.

Group net commissions in the first half of 2006 were 1,709 million euro, up 9.3% on the end of June 2005. The growth was driven by management, trading and consultancy (+15.2%), thanks above all to the performance in asset management (+13.4%) which represents more than half of total commissions. Again in asset management, trading and consultancy, the good results in trading and custody (+29.9%), which benefited from commissions relating to Wind and structured finance securities, should be noted. The sector was affected by uncertainties in financial markets; furthermore the tendency of rising interest rates took interest from fixed income securities. Customer preferences turned towards more flexible products such as flexible funds and management.

Financial assets of customers at the end of June were 412.7 billion euro, up 2.7% from the end of December 2005 and 5.7% in the 12 months.

The stock of indirect deposits reached 265.8 billion euro, up 1.4% from the beginning of the year and 5.5% on the 12 months, largely because of asset management. From December 2005, there was a change in composition of customer assets from actively managed to funds under administration and direct deposits. Asset management was affected by the second quarter’s negative performance in financial markets and expectations of further rises in interest rates, reflected in the outflow of funds and fall in value)of managed funds. Asset management volumes were thus 155.8 billion euro, up 2.6% in the 12 months, but down 1.4% from the beginning of the year. Mutual funds and fund-based management were 104.4 billion euro (+3.3% in the12 months and –1.7% from the beginning of the year): in this context the greater weight in flexible funds, up since June by 3 percentage points should be noted. The new “Absolute Return” funds attracted savers and achieved net inflows in the half of approximately 3.3 billion euro.

4

The SANPAOLO IMI Group continues to occupy the number one position in mutual funds, with a domestic market share of 18.1% calculated on the new and broader Assogestioni definitions, which included funds promoted in Italy by foreign law Sicavs.

Total assets under administration at the end of June 2006 were 110 billion euro (+9.9% in the 12 months and +5.5% from the beginning of the year).

Life technical reserves and financial liabilities showed an increase in the 12 months (+0.7%) and a fall on the levels at the end of 2005 (-1.3%), standing at 45.3 million euro: the progressive maturity of the portfolio was not counterbalanced by new written policies in the first half. Against this negative trend at system level, a review of life products is under way to support the development of the business and its effect will be clear from the second half of the year.

The insurance result was 203 million euro (+11.5% against the same period in 2005). This result was achieved during a slowdown  related to the transitional phase and relaunch of the Eurizon group, thanks to positive results in financial management.

Dividends and results from other financial assets and liabilities were 325 million euro (+49.8% against June 2005). The increase is due to Banca IMI’s traditional activities. A substantial contribution came from financial markets business and securities, foreign exchange and commercial bank derivatives: in particular, interest and exchange rate derivatives generated consolidated revenues of 78 million euro, exceeding the total for the whole of 2005. The results also include more than 12 million euro profit on the sale of FIAT securities resulting from the FIAT Convertible Facility and 30 million euro from the sale of certain minority interests available for sale.

Profits from shareholdings, 59 million euro, were down by 24.4% on the same period of 2005, which had benefited from significant capital gains resulting from private equity investments.

Net interest and other banking income was 4,121 million euro, up 10.9% on an annual basis.

Net value adjustments for loan deterioration amounted to 233 million euro, in line with the 229 million euro in the first half of 2005, confirming the satisfactory risk profile of the Group’s loan portfolio. Coverage of doubtful loans remains high and such as to cover a substantial guarantee of recoverability. The valuation of the inherent risk in the performing loan portfolio led to a general provision 92 million euro, down 36.1% on the first half of 2005. The Group general reserve was 1,171 million euro, 0,8% of the performing loan portfolio, in line with the results at 31 December 2005.

Non-performing loans fell by 3.3% (1,044 million euro against 1,080 as of end-December and 1,109 at June 2005), while problem and restructured loans (1,188 million euro) rose by 1.7%; the coverage ratios were respectively 76.1% and 31.4%.

Asset quality, thanks to selective criteria in loan disbursement and a strict provisioning policy, remains high and the credit risk indices of the Group were, there, always at good levels: ratios of non-performing loans/loans to customers and problem and restructured

5

loans/loans to customers were respectively 0.7% and 0.8%. The ratio of doubtful loans to total net loans at the end of June was 2.09% (2.5% at the end of June 2005).

Current operating income was 1,769 million euro (+23.5% against June 2005), benefiting from the strong revenue performance.

Operating expenses were 2,313 million euro, up 3.8% on the first half of 2005 compared to 1.8% in the first quarter of 2005: personnel expenses (1,398 million euro) grew by 4.9% against an average rise of 1.3% in numbers as a result of investments in the commercial network and insurance business. Personnel expenses were further influenced by contractual salary increases due to the renewal of the national labor contract (CCNL) renewed in February 2005, provisions for the possible renewal of the CCNL at the end of 2005 and increase in variable remuneration. The last factor grew because of medium-term incentives to support the Three-year Plan, the wider shareholding scheme and increased provision for the incentive scheme related to the positive results of the Group in the opening months of 2006.

Other administrative expenses were 733 million euro (+5.6% on the first half of 2005): the increase was largely due to promotional costs for the Winter Olympic Games Torino 2006, of which SANPAOLO IMI was Principal Sponsor and property maintenance charges.

The cost/income ratio fell to 53.1%, an improvement of 3.3 percentage points on the same period of 2005.

Net income, after deduction of income taxes and minority interests, was 1,140 million euro (+27.5%).

The tax rate was 36.1%, slightly higher than in the corresponding period of 2005.

Net shareholders’ funds of the Group at  June 30, 2006 were 13,949 million euro (13,483 million euro at  December 31, 2005). The changes in the first half of 2006 were due principally to income at the end of the period, net of dividends paid for 2005, accounting for stock options and change in valuation reserves, thanks to the fair value revaluation of certain shareholding interests (289 million euro), including SCH, Fiat, Ixis Asset Management and Ixis Corp & Investment Bank.

At the end of June 2006 the solvency ratios of the Group were 7.7% (tier 1 ratio) and 10.4% (total risk ratio).

At  June 30, 2006 the SANPAOLO IMI Group had a total network of 3,186 branches in Italy, with a market share 10%, 131 branches abroad, 19 representative offices, 42,647 employees and 4,199 financial salespeople.

***

6

Second quarter 2006 consolidated results.

The second quarter showed improved profit margins compared to the first, benefiting from good progress in revenues with best results for six quarters.

The gross operating income in the second quarter was 2.239 million euro, up 5,9% on the first: the increased revenues (124 million euro) were in all areas and come largely from structural changes in current operating performance.

The increase in operating expenses in the second quarter (1,174 million euro against 1,139 million euro in the first quarter of 2006) is due to various factors: personnel expenses (to support the Three-Year Plan), professional expenses related to commercial initiatives and rationalization and net value adjustments for tangible and intangible assets, which discounted seasonal adjustments to the investment timetable.

Net income in the second quarter was 621 million euro, up 19.7% on the previous quarter. Average net income for the two quarters of 2006 was 15% more than the 2005 quarterly average.

***

2006 first half consolidated results by business sectors.

Banking.

Banking is the core business of the Group and represents the point of reference for the definition, development and coordination of the commercial strategies of all the Group’s networks. The sector employs 80% of Group personnel, generated 83% of dealings, and contributed 81% of consolidated revenues and 81% of consolidated net income. Net of tax, net income for the first half of 2006 was 918 million euro, against 703 million in the same period of 2005 (restated pro forma), +30.6%. Together with a growth of 12.3% in capital absorbed, this means an increase in annualized RORAC of more than three percentage points (24.6%) compared to the same period in the previous year. This was accompanied by a reduction of 3.4 percentage points in the cost/income ratio, following the development of revenues and contained growth of operating expenses. The sector was marked by positive performance in all profit margins, helped by the increase in financial assets of customers (+5.6%) and net loans to customers (+11%). Net interest income showed an increase of 8.8% which, together with the recovery in other commercial banking revenues and greater income from Wholesale, led to an increase in gross operating income of 10.6%. Revenue performance thus led to an increase in current operating income of +25.9%, with a slight fall in value adjustments and growth of 3.8% in operating costs compared to the first half of 2005.

The Retail & Private business line works with families, small business and private clients and also includes Neos Banca (consumer credit) and Farbanca (remote banking in health services). Volumes, almost half of the Group’s Business, showed a growth of 5.1% on the end of June 2005, thanks to increased loans to customers (+15.3%) and, slightly less, in financial assets (+3.2%). The gross banking income of Retail & Private showed a growth of 9.6% against the same period of the preceding year, thanks to increases in interest income and net commissions. Revenue performance led to an increase of 20.7% in net income of 431 million euro. Capital absorbed was 16%, down, in terms of relative weight, against the same period of the preceding year. Annualized

7

profitability, up to 42.7% from 35.8% in the first six months 2005, reflected the increase in net income.

Corporate includes Sanpaolo Leasint (leasing). Business volumes followed the growth trend of the previous year, with an increase of 13.2% (annual), due to lending (+15.3%) and deposits (+7.6%). The lending performance was particularly pleasing in a period of strong market supply and increased competitiveness, reducing credit spreads. Revenues rose by 11.8% on the first half of 2005, thanks mainly to the increase in commissions and results from other financial assets and liabilities, which benefited from the development of interest rate and exchange rate derivatives for corporates. Net interest income rose by 6.2%, led by positive operating volumes, which effectively matched the downturn in mark-up. Operating expenses were largely stable while current operating income reached 293 million euro against 223 million in the first six months of 2005. Net income was 166 million euro, up 33.9% on the same period of the previous year. Greater capital absorption, due to higher lending, was amply compensated for by the increase in income which led to an improvement of almost two percentage points in annualized profitability in RORAC, up to 11.4%. Equally significant was progress in terms of efficiency: the cost/income ratio (38.9%) fell by more than four percentage points against the same period in the previous year.

Savings and Pensions.

Eurizon Financial Group comprises EurizonVita, the sales networks of Banca Fideuram and, from January, Sanpaolo IMI Asset Management. The gross operating income in the first half of 2006 grew by 9.4% compared to the same period in 2005 (pro forma). The progress was generated above all by greater revenues from EurizonVita and higher net commissions from Fideuram and Sanpaolo Imi Asset Management. Net commissions were 416 million euro (+11.2%) and the insurance result was 193 million euro (+13.5%). The contribution to consolidated net income, which represents about 22% of Group income, was 251 million euro (+20.7%). Performance was influenced by the increase in operating expenses (+9.9%) related to both Eurizon start-up costs, and to new projects and marketing by Banca Fideuram. Operating data show a significant growth in asset management in the 12 months (+3.8%), thanks to positive progress in mutual funds and asset management. Capital absorbed was 11% of Group capital (+6.7% against the first half of 2005). Annualized profitability grew from 31.9% at 36.1%.

***

The results are reported in detail in the statement of income and consolidated balance sheet included in the Report approved by the Board of Directors and attached to this news release. Note that these tables have not been audited by PricewaterhouseCoopers and the auditors have still not completed their limited audit of the half-year results. The half-year report at June 30, 2006 is available to shareholders and the market pursuant to art.82, comma 2, Delibera Consob  May 14, 1999 11971 and successive modifications, in place of the information regarding the second quarter of 2006.

8

IMPORTANT INFORMATION

In connection with the proposed business combination, the required information document will be sent to Commissione Nazionale per le Società e la Borsa (“CONSOB”) and, to the extent that the shares issued in connection with the proposed business combination will be required to be registered in the United States, a registration statement on Form F-4, which will include a prospectus, may be filed with the United States Securities and Exchange Commission (“SEC”).  If an exemption from the registration requirements of the U.S. Securities Act of 1933 (the “Securities Act”) is available, the shares issued in connection with the proposed business combination will be made available within the United Sates pursuant to such exemption and not pursuant to an effective registration statement on Form F-4.  Investors are strongly advised to read the documents that will be sent to CONSOB, the registration statement and prospectus, if and when available, and any other relevant documents sent to CONSOB and/or the SEC, as well as any amendments or supplements to those documents, because they will contain important information.  If and when filed, investors may obtain free copies of the registration statement, the prospectus as well as other relevant documents filed with the SEC, at the SEC’s web site at www.sec.gov and will receive information at an appropriate time on how to obtain these transaction-related documents for free from the parties involved or a duly appointed agent.

This communication does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities, nor shall there be any purchase, sale or exchange of securities in any jurisdiction in which such offer, solicitation or sale or exchange would be unlawful prior to the registration or qualification under the laws of such jurisdiction.  The distribution of this communication may, in some countries, be restricted by law or regulation.  Accordingly, persons who come into possession of this document should inform themselves of and observe these restrictions.  To the fullest extent permitted by applicable law, the companies involved in the proposed business combination disclaim any responsibility or liability for the violation of such restrictions by any person.

The shares to be issued in connection with the proposed business combination may not be offered or sold in the United States except pursuant to an effective registration statement under the Securities Act or pursuant to a valid exemption from registration.

9

Reclassified  consolidated statement of income

1)              The consolidated reclassified statement of income is designed to reflected operational management. In particular, the contribution op the Group’s insurance companies to “Total operating income” is conventionally cited in the specific line item “Result of insurance operations”

10

Quarterly analysis of reclassified consolidated statement of income (1)

(1) The consolidated reclassified statement of income is designed to reflected operational management. In particular, the contribution of the Group’s insurance companies to “Total operating income” is conventionally cited in the specific line item “Result of insurance operations”.

11

Reclassified consolidated balance sheet

12

Quarterly analysis of reclassified consolidated balance sheet

13

Group Business Sectors Results

(1) Including reversals and consolidation postings.

(2) Excluding Banca IMI.

14

Parent Bank Statement of Income

15

Parent Bank Balance Sheet