Obbligazione Banca BPM 0.75% ( IT0005090516 ) in EUR

Emittente Banca BPM
Prezzo di mercato 100 EUR  ▼ 
Paese  Italia
Codice isin  IT0005090516 ( in EUR )
Tasso d'interesse 0.75% per anno ( pagato 1 volta l'anno)
Scadenza 31/03/2022 - Obbligazione è scaduto



Prospetto opuscolo dell'obbligazione Banco BPM IT0005090516 in EUR 0.75%, scaduta


Importo minimo 100 000 EUR
Importo totale 1 000 000 000 EUR
Descrizione dettagliata Banco BPM è un istituto di credito italiano nato dalla fusione tra Banco Popolare e Banca Popolare di Milano, operante nel settore bancario commerciale con una vasta rete di filiali sul territorio nazionale.

The Obbligazione issued by Banca BPM ( Italy ) , in EUR, with the ISIN code IT0005090516, pays a coupon of 0.75% per year.
The coupons are paid 1 time per year and the Obbligazione maturity is 31/03/2022







Base Prospectus Dated 28 September 2015
BANCO POPOLARE SOCIETÀ COOPERATIVA
(a bank incorporated as a limited co-operative company (società cooperativa) in the Republic of Italy)
5,000,000,000 Covered Bond Programme
unconditionally and irrevocably guaranteed as to payments of interest and principal by
BP COVERED BOND S.r.l.
(incorporated as a limited liability company (società a responsabilità limitata) in the Republic of Italy)
The 5,000,000,000 Covered Bond Programme (the "Programme") described in this base prospectus (the "Base Prospectus") has been established by Banco Popolare Società Cooperativa ("Banco Popolare"
or the "Issuer") for the issuance of covered bonds (the "Covered Bonds", which term includes, for the avoidance of doubt and as the context requires, Registered Covered Bonds, as defined below) guaranteed
by BP Covered Bond S.r.l. (the "Guarantor") pursuant to Article 7-bis of law of 30 April 1999, No. 130, as implemented and supplemented ("Law 130") and the relevant implementing measures set out in the
Decree of the Ministry of Economy and Finance of 14 December 2006, No. 310, as amended and supplemented (the "MEF Decree") and the supervisory guidelines of the Bank of Italy set out in Part III,
Chapter 3 of the "Disposizioni di vgilanza per le banche" (Circolare No. 285 of 17 December 2013), as amended and supplemented from time to time (the "BoI Regulations" and, together with the Law 130
and the MEF Decree, jointly the "OBG Regulations"). The aggregate nominal amount of the Covered Bonds outstanding under the Programme will not at any time exceed 5,000,000,000 (or its equivalent in
other currencies calculated as described herein).
The Covered Bonds constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer, guaranteed by the Guarantor, and will rank pari passu without preference among themselves and
(save for any applicable statutory provisions) at least equally with all other present and future unsecured and unsubordinated obligations of the Issuer from time to time outstanding. In the event of a compulsory
winding-up (liquidazione coatta amministrativa) of the Issuer, any funds realised and payable to the Covered Bondholders will be collected, received or recovered by the Guarantor on their behalf in accordance
with Law 130.
This Base Prospectus has been approved by the Commission de Surveillance du Secteur Financier (the "CSSF"), which is the Luxembourg competent authority for the purposes of Directive 2003/71/EC (the
"Prospectus Directive") and relevant implementing measures in Luxembourg which includes the amendments set out under Directive 2010/73/EU (the "2010 PD Amending Directive"), to the extent such
amendments have been implemented on a relevant Member State, as a base prospectus issued in compliance with the Prospectus Directive and relevant implementing measures in Luxembourg for the purposes
of giving information with regard to the issue of Covered Bonds under the Programme during the period of 12 months after the date hereof. Approval by the CSSF relates only to the Covered Bonds and does
not include the Registered Covered Bonds.
By approving this Base Prospectus, the CSSF assumes no responsibility as to the economic and financial soundness of the transaction and the quality and solvency of the Issuer in accordance with the provisions
of article 7(7) of the Luxembourg law on prospectuses for securities.
This Base Prospectus constitutes a base prospectus for the purposes of Article 5.4 of the Prospectus Directive.
Application has been made for Covered Bonds issued under the Programme (other than the Registered Covered Bonds) to be admitted during the period of 12 months from the date of this Base Prospectus to
listing on the official list (the "Official List") and trading on the regulated market of the Luxembourg Stock Exchange, which is a regulated market for the purposes of Directive 2004/39/EC of the European
Parliament and of the Council on markets in financial instruments. References in this Base Prospectus to Covered Bonds being "listed" (and all related references) shall mean that such Covered Bonds (other
than the Registered Covered Bonds) have been admitted to the Official List and admitted to trading on the Luxembourg Stock Exchange's regulated market. In addition, the Issuer and each relevant Dealer
named under the section "Subscription and Sale" below may agree to make an application to list a Series or Tranche on any other stock exchange. The Programme also permits Covered Bonds to be issued on an
unlisted basis. The relevant Final Terms (as defined in the section "Terms and Conditions of the Covered Bonds" below) in respect of the issue of any Series will specify whether or not such Series will be listed
on the Official List and admitted to trading on the Luxembourg Stock Exchange's regulated market (or any other stock exchange).
Where Covered Bonds issued under the Programme are admitted to trading on a regulated market within the European Economic Area or offered to the public in a Member State of the European Economic Area
in circumstances which require the publication of a prospectus under the Prospectus Directive, such Covered Bonds (other than the Registered Covered Bonds) will not have a denomination of less than
100,000 (or, where the Covered Bonds are issued in a currency other than euro, the equivalent amount in such other currency).
Under the Programme, the Issuer may issue Covered Bonds denominated in any currency, including Euro, GBP, CHF, Yen and USD. Interest on the Covered Bonds shall accrue monthly, quarterly, semi-
annually, annually or on such other basis as specified in the relevant Final Terms, in arrear at a fixed or floating rate, increased or decreased by a margin. The Issuer may also issue Covered Bonds at a
discounted price with no interest accruing and repayable at nominal value (zero-coupon Covered Bonds).
The terms of each Tranche will be set forth in the Final Terms relating to such Tranche prepared in accordance with the provisions of this Base Prospectus and, if the relevant Covered Bonds are listed, to be
delivered to the regulated market of the Luxembourg Stock Exchange on or before the date of issue of such Tranche.
The Covered Bonds (other than Registered Covered Bonds) will be issued in bearer form and dematerialised form (emesse in forma dematerializzata) and will be held in such form on behalf of their ultimate
owners, until redemption or cancellation thereof, by Monte Titoli S.p.A., whose registered office is in Milan, at Piazza degli Affari, No. 6, Italy, ("Monte Titoli") for the account of the relevant Monte Titoli
Account Holders. The expression "Monte Titoli Account Holders" means any authorised financial intermediary institution entitled to hold accounts on behalf of their customers with Monte Titoli (and includes
any Relevant Clearing System which holds account with Monte Titoli or any depository banks appointed by the Relevant Clearing System). The expression "Relevant Clearing Systems" means any of
Clearstream Banking, société anonyme ("Clearstream") and Euroclear Bank S.A./N.V. ("Euroclear"). Each Covered Bond issued in dematerialised form will be deposited with Monte Titoli on the relevant
Issue Date (as defined in the section "Terms and Conditions of the Covered Bonds" below). The Covered Bonds (other than Registered Covered Bonds) will at all times be held in book entry form and title to the
Covered Bonds will be evidenced by book entries in accordance with article 83-bis of Italian legislative decree No. 58 of 24 February 1998, as amended and supplemented (the "Financial Law") and
implementing regulations and with the joint regulation of the Commissione Nazionale per le Società e la Borsa ("CONSOB") and the Bank of Italy dated 22 February 2008 and published in the Official Gazette
No. 54 of 4 March 2008, as subsequently amended and supplemented. No physical document of title is and will be issued in respect of the Covered Bonds (other than the Registered Covered Bonds).
The Covered Bonds may also be issued in registered form as German law governed registered covered bonds (Namensschuld verschreibungen) (the "Registered Covered Bonds"). The terms and conditions of
the relevant Registered Covered Bonds (the "Registered CB Conditions") will specify the minimum denomination for the relevant Registered Covered Bonds, which will not be listed.
Before the Maturity Date, the Covered Bonds will be subject to mandatory and optional redemption in whole or in part in certain circumstances, as set out in Condition 7 (Redemption and Purchase).
Each Series of Covered Bonds may be assigned, on issue, a rating by Moody's Investors Service Limited ("Moody's") which expression shall include any successor thereof) or may be unrated as specified in the
relevant Final Terms. Where a Tranche or Series of Covered Bonds is to be rated, such rating will not necessarily be the same as the rating assigned to the Covered Bonds already issued. Whether or not a rating
in relation to any Series of Covered Bonds will be treated as having been issued by a credit rating agency established in the European Union and registered under Regulation (EC) No 1060/2009 on credit rating
agencies (the "CRA Regulation") will be disclosed in the relevant Final Terms. The credit ratings included or referred to in this Prospectus have been issued by Moody's which is established in the European
Union and registered under the CRA Regulation as set out in the list of credit rating agencies registered in accordance with the CRA Regulation published on the website of the European Securities and Markets
Authority ("ESMA") pursuant to the CRA Regulation (for more information please visit the ESMA webpage http://www.esma.europa.eu/page/List-registered-and-certified-CRAs). In general, European
regulated investors are restricted from using a rating for regulatory purposes if such rating is not issued by a credit rating agency established in the European Union and registered under the CRA Regulation
(and such registration has not been withdrawn or suspended).
A security rating is not a recommendation to buy, sell or hold Covered Bonds and may be subject to revision, suspension or withdrawal by Moody's and each rating shall be evaluated independently
of any other.
An investment in Covered Bond issued under the Programme involves certain risks. Prospective investors should have regard to the risk and other factors described under the section headed "Risk
Factors" in this Base Prospectus.
Arranger
Banco Popolare
Dealer
UBS Investment Bank


RESPONSIBILITY STATEMENTS
This Base Prospectus comprises a base prospectus for the purposes of Article 5.4 of the Prospectus
Directive and for the purposes of giving information which, according to the particular nature of the
Covered Bonds, is necessary to enable investors to make an informed assessment of the assets and
liabilities, financial position, profit and losses and prospects of the Issuer and the Guarantor and of the
rights attaching to the Covered Bonds.
The Issuer accepts responsibility for the information contained in this Base Prospectus. To the best of the
knowledge of the Issuer (having taken all reasonable care to ensure that such is the case), the information
contained in this Base Prospectus is in accordance with the facts and contains no omission likely to affect
the import of such information.
The Guarantor has provided the information under the section headed "Description of the Guarantor" and
any other information contained in this Base Prospectus relating to itself and, together with the Issuer (the
"Responsible Persons"), accepts responsibility for the information contained in those sections. To the best
of the knowledge of the Guarantor (having taken all reasonable care to ensure that such is the case), the
information and data in relation to which it is responsible as described above are in accordance with the
facts and do not contain any omission likely to affect the import of such information and data.
This Base Prospectus is to be read in conjunction with any supplement thereto and with all documents
incorporated herein by reference (see the section headed "Documents incorporated by reference", below).
Full information on the Issuer, the Guarantor and any Series or Tranche of Covered Bonds is only available
on the basis of the combination of this Base Prospectus, any supplements, the relevant Final Terms and the
documents incorporated by reference.
Subject as provided in the applicable Final Terms, the only persons authorised to use this Base Prospectus
(and, therefore, acting in association with the Issuer) in connection with an offer of Covered Bonds are the
persons named in the applicable Final Terms as the relevant Dealer(s).
Copies of the Final Terms will be available from the registered office of the Issuer and the specified office
of the Principal Paying Agent (as defined below) and on the website of the Luxembourg Stock Exchange
(www.bourse.lu).
Capitalised terms used in this Base Prospectus shall have the meanings ascribed to them in the
section headed "Terms and Conditions of the Covered Bonds" below, unless otherwise defined in the
specific section of this Base Prospectus in which they are used. For ease of reference, the section
headed "Glossary" below indicates the page of this Base Prospectus on which each capitalised term is
defined.
No person is or has been authorised to give any information or to make any representation not contained in
or not consistent with this Base Prospectus or any other information supplied in connection with the
Programme or the Covered Bonds and, if given or made, such information or representation must not be
relied upon as having been authorised by the Issuer, the Seller, the Guarantor, the Arranger or any of the
Dealers, the Representative of the Covered Bondholders or any party to the Transaction Documents.
Neither the delivery of this Base Prospectus nor any sale made in connection therewith shall, under any
circumstances, create any implication that there has been no change in the affairs of the Issuer or the
Guarantor since the date hereof or the date upon which this Base Prospectus has been most recently
supplemented or that there has been no adverse change in the financial position of the Issuer or the
Guarantor since the date hereof or the date upon which this Base Prospectus has been most recently
supplemented or that any other information supplied in connection with the Programme is correct as of any
time subsequent to the date on which it is supplied or, if different, the date indicated in the document
containing the same.
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This Base Prospectus is valid for 12 months following its date of approval and it and any supplement
hereto, as well as any Final Terms filed within these 12 months, reflects the status as of their respective
dates of issue. The offering, sale or delivery of any Covered Bonds may not be taken as an implication that
the information contained in such documents is accurate and complete subsequent to their respective dates
of issue or that there has been no adverse change in the financial condition of the Issuer or the Guarantor
since such date or that any other information supplied in connection with the Programme is accurate at any
time subsequent to the date on which it is supplied or, if different, the date indicated in the document
containing the same.
To the fullest extent permitted by law, none of the Dealers, the Representative of the Covered Bondholders
or the Arranger accept any responsibility for the contents of this Base Prospectus or for any other
statement, made or purported to be made by the Arranger, the Representative of the Covered Bondholders
or a Dealer or on its behalf in connection with the Issuer, the Guarantor, or the issue and offering of the
Covered Bonds. The Arranger, the Representative of the Covered Bondholders and each Dealer
accordingly disclaims all and any liability whether arising in tort or contract or otherwise (save as referred
to above) which it might otherwise have in respect of this Base Prospectus or any such statement.
Neither the Arranger nor any Dealer nor the Representative of the Covered Bondholders has independently
verified the information contained herein. Accordingly, no representation, warranty or undertaking,
expressed or implied, is made and no responsibility or liability is accepted by the Arranger, the Dealers and
the Representative of the Covered Bondholders or any of them as to the accuracy or completeness of the
information contained in this Base Prospectus or any other information provided by the Issuer and the
Guarantor in connection with the Covered Bonds or their distribution.
None of the Dealers or the Arranger makes any representation, express or implied, nor accepts any
responsibility, with respect to the accuracy or completeness of any of the information in this Base
Prospectus. Neither this Base Prospectus nor any other financial statements are intended to provide the
basis of any credit or other evaluation and should not be considered as a recommendation by any of the
Issuer, the Guarantor, the Arranger, the Representative of the Covered Bondholders or the Dealers that any
recipient of this Base Prospectus or any other financial statements should purchase the Covered Bonds.
Each potential purchaser of Covered Bonds should determine for itself the relevance of the information
contained in this Base Prospectus and its purchase of Covered Bonds should be based upon such
investigation as it deems necessary. None of the Dealers, the Arranger or the Representative of the Covered
Bondholders undertakes to review the financial condition or affairs of the Issuer or the Guarantor during
the life of the arrangements contemplated by this Base Prospectus nor to advise any investor or potential
investor in Covered Bonds of any information coming to the attention of any of the Dealers or the
Arranger.
The distribution of this Base Prospectus, any document incorporated herein by reference and any Final
Terms and the offering, sale and delivery of the Covered Bonds in certain jurisdictions may be restricted by
law. Persons into whose possession this Base Prospectus or any Final Terms come are required by the
Issuer and the Dealers to inform themselves about and to observe any such restrictions.
This Base Prospectus contains industry and customer-related data, as well as calculations taken from
industry reports, market research reports, publicly available information and commercial publications. It is
hereby confirmed that (a) to the extent that information reproduced herein derives from a third party, such
information has been accurately reproduced and (b) insofar as the Responsible Persons are aware and are
able to ascertain from information derived from a third party, no facts have been omitted which would
render the information reproduced inaccurate or misleading. The source of third party information is
identified where used.
For a description of certain restrictions on offers, sales and deliveries of Covered Bonds and on the
distribution of this Base Prospectus or any Final Terms and other offering material relating to the Covered
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Bonds, see the section headed "Selling Restrictions" below. In particular, the Covered Bonds have not been
and will not be registered under the United States Securities Act of 1933 (the "Securities Act") and include
Covered Bonds in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions,
Covered Bonds may not be offered, sold or delivered within the United States of America or to U.S.
persons. There are further restrictions on the distribution of this Base Prospectus and the offer or sale of
Covered Bonds in the European Economic Area, including the United Kingdom, the Republic of Ireland,
Germany, the Republic of Italy, and in Japan. For a description of certain restrictions on offers and sales of
Covered Bonds and on distribution of this Base Prospectus, see the section headed "Subscription and
Sale" below.
Neither this Base Prospectus, any supplement thereto, nor any Final Terms (or any part thereof) constitutes
an offer, nor may they be used for the purpose of an offer to sell any of the Covered Bonds, or a solicitation
of an offer to buy any of the Covered Bonds, by anyone in any jurisdiction or in any circumstances in
which such offer or solicitation is not authorised or is unlawful. Each recipient of this Base Prospectus or
any Final Terms shall be taken to have made its own investigation and appraisal of the condition (financial
or otherwise) of the Issuer and the Guarantor.
Each initial and subsequent purchaser of a Covered Bond will be deemed, by its acceptance of the purchase
of such Covered Bond, to have made certain acknowledgements, representations and agreements intended
to restrict the resale or other transfer thereof as set forth therein and described in this Base Prospectus and,
in connection therewith, may be required to provide confirmation of its compliance with such resale or
other transfer restrictions in certain cases.
In this Base Prospectus, references to "" or "euro" or "Euro" or "EUR" are to the single currency
introduced at the start of the Third Stage of European Economic and Monetary Union pursuant to the
Treaty establishing the European Community, as amended; references to "U.S.$" or "U.S. Dollar" are to
the currency of the United States of America; references to "CHF" are to the currency of Switzerland;
references to "Yen" are to the currency of Japan; references to "£" or "UK Sterling" are to the currency of
the United Kingdom; references to "Italy" are to the Republic of Italy; references to laws and regulations
are, unless otherwise specified, to the laws and regulations of Italy; and references to "billions" are to
thousands of millions.
Certain figures included in this Base Prospectus have been subject to rounding adjustments; accordingly,
figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which
preceded them.
The language of this Base Prospectus is English. Certain legislative references and technical terms have
been cited in their original language in order that the correct technical meaning may be ascribed to them
under applicable law.
The Arranger is acting for the Issuer and no one else in connection with the Programme and will not be
responsible to any person other than the Issuer for providing the protection afforded to clients of the
Arranger or for providing advice in relation to the issue of the Covered Bonds.
In connection with the issue of any Tranche under the Programme, the Dealer or Dealers (if any)
named as the stabilising manager(s) (the "Stabilising Manager(s)") (or any person acting for the
Stabilising Manager(s)) in the applicable Final Terms may over-allot Covered Bonds or effect
transactions with a view to supporting the market price of the Covered Bonds at a level higher than
that which might otherwise prevail. However, there is no assurance that the Stabilising Manager(s)
(or any person acting on behalf of any Stabilising Manager) will undertake stabilisation action. Any
stabilisation action may begin on or after the date on which adequate public disclosure of the terms
of the offer of the relevant Tranche is made and, if begun, may be ended at any time, but it must end
no later than the earlier of 30 days after the issue date of the relevant Tranche and 60 days after the
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date of the allotment of the relevant Tranche. Any stabilisation action or over-allotment must be
conducted by the relevant Stabilising Manager(s) (or any person acting on behalf of any Stabilising
Manager(s)) in accordance with all applicable laws and rules.
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TABLE OF CONTENTS
Page
RESPONSIBILITY STATEMENTS..............................................................................................................2
RISK FACTORS............................................................................................................................................7
DOCUMENTS INCORPORATED BY REFERENCE ...............................................................................36
GENERAL DESCRIPTION OF THE PROGRAMME...............................................................................41
STRUCTURE DIAGRAM ..........................................................................................................................76
DESCRIPTION OF THE ISSUER ..............................................................................................................77
DESCRIPTION OF THE GUARANTOR.................................................................................................146
DESCRIPTION OF THE ASSET MONITOR...........................................................................................149
DESCRIPTION OF THE COVER POOL ­ CREDIT AND COLLECTION POLICIES .........................150
CREDIT STRUCTURE.............................................................................................................................163
DESCRIPTION OF THE TRANSACTION DOCUMENTS ....................................................................172
SELECTED ASPECTS OF ITALIAN LAW .............................................................................................195
TERMS AND CONDITIONS OF THE COVERED BONDS...................................................................205
RULES OF THE ORGANISATION OF THE COVERED BONDHOLDERS.........................................248
FORM OF FINAL TERMS .......................................................................................................................273
KEY FEATURES OF REGISTERED COVERED BONDS (NAMENSSCHULD VERSCHREIBUNGEN)
...........................................................................................................................................................282
TAXATION IN THE REPUBLIC OF ITALY ...........................................................................................284
LUXEMBOURG TAXATION...................................................................................................................293
SUBSCRIPTION AND SALE...................................................................................................................296
GENERAL INFORMATION.....................................................................................................................300
GLOSSARY...............................................................................................................................................304
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RISK FACTORS
The Issuer and the Guarantor believe that the following factors may affect their ability to fulfil their
obligations under the Covered Bonds issued under the Programme. All of these factors are contingencies
which may or may not occur and neither the Issuer nor the Guarantor is in a position to express a view on
the likelihood of any such contingency occurring.
Factors which the Issuer and the Guarantor believe may be material for the purpose of assessing the
markets risks associated with Covered Bonds issued under the Programme are also described below.
The Issuer and the Guarantor believe that the factors described below represent the principal risks
inherent in investing in Covered Bonds issued under the Programme, but the Issuer or the Guarantor may
be unable to pay interest, principal or other amounts on or in connection with any Covered Bond for other
reasons and the Issuer and the Guarantor do not represent that the statements below regarding the risks of
holding any Covered Bonds are exhaustive. Prospective investors should also read the detailed information
set out elsewhere in this Base Prospectus (including any documents incorporated by reference herein) and
reach their own views prior to making any investment decision.
Factors that may affect the Issuer's ability to fulfil its obligations under or in connection
with the Covered Bonds issued under the Programme
Liquidity risks and risks associated with the European sovereign debt crisis
The Banco Popolare Group's businesses are subject to risks concerning liquidity which are inherent in its
banking operations and could affect the Banco Popolare Group's ability to meet its financial obligations as
they fall due or to fulfil commitments to lend. In order to ensure that the Banco Popolare Group continues
to meet its funding obligations and to maintain or grow its business generally, it relies on customer savings
and transmission balances, as well as ongoing access to the wholesale lending markets. The ability of the
Banco Popolare Group to access wholesale and retail funding sources on favourable economic terms is
dependent on a variety of factors, including a number of factors outside of its control, such as liquidity
constraints, general market conditions and confidence in the Italian banking system.
In recent years, the dislocation in the global and Italian capital markets and credit conditions has led to the
most severe examination of the banking system's capacity to absorb sudden significant changes in the
funding and liquidity environment in recent history, and has had an impact on the wider economy.
Individual institutions have faced varying degrees of stress. Should the Banco Popolare Group be unable to
continue to source a sustainable funding profile which can absorb these sudden shocks, the Banco Popolare
Group's ability to find its financial obligations at a competitive cost, or at all, could be adversely affected.
The global financial system still has to overcome some of the difficulties which began in August 2007 and
which were intensified by the bankruptcy of Lehman Brothers in September 2008.
Credit quality has generally declined, as reflected by the downgrades suffered by several countries in the
Euro-zone, including Italy, since the start of the sovereign debt crisis. The large sovereign debts and/or
fiscal deficits in certain European countries, including Italy, have in turn raised concerns regarding the
financial condition of Euro-zone financial institutions and their exposure to such countries, which may in
turn have an impact on Euro-zone banks' funding. In the last few years, several European countries
including Greece, Cyprus, Ireland and Portugal have requested financial aid from European authorities
such as the European Central Bank ("ECB") and from the International Monetary Fund and are currently
pursuing an ambitious programme of reforms. Concern has grown since the maturity of a portion of
Greece's bail-out funding in 2015 without replacement funding secured. Uncertainty around Greece's
ability to find a long-term solution to its funding needs, with a consequent liquidity crisis and/or exit from
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the Eurozone, has led to increased market volatility affecting the banking system and has increased
concerns about potential economic stagnation in Europe more generally.
Lingering market tensions might affect negatively the global economy and hamper the recovery of the
Euro-zone. Any deterioration of the Italian economy would have a material adverse effect on the Banco
Popolare Group's business, in light of the Banco Popolare Group's significant exposure to the Italian
economy. In addition, if any of the countries in which the Banco Popolare Group operates witnessed a
significant deterioration in economic activity, the Banco Popolare Group's results of operations, business
and financial condition would be materially and adversely affected.
The Issuer's financial performance is affected by borrower credit quality and general economic
conditions, in particular in Italy and Europe
The results of the Issuer may be affected by global economic and financial conditions. During recessionary
periods, there may be less demand for loan products and a greater number of the Issuer's customers may
default on their loans or their obligations. Interest rates rises may also have an impact on the demand for
mortgages and other loan products. Fluctuations in interest rates in Italy and in the Euro-zone and in the
other markets in which the Issuer operates may influence its performance.
The Issuer monitors credit quality and manages the specific risk of each counterparty and the overall risk
of the respective loan portfolios, and the Issuer will continue to do so, but there can be no assurance that
such monitoring and risk management will suffice to keep the Issuer's exposure to credit risk at acceptable
levels. Any deterioration of the creditworthiness of significant individual customers or counterparties, or of
the performance of loans and other receivables, as well as wrong assessments of creditworthiness or
country risks may have a material adverse effect on the Issuer's business, financial condition and results of
operations.
Governmental and central banks' actions intended to support liquidity may be insufficient or
discontinued
In response to the financial markets crisis, the reduced liquidity available to market operators in the
industry, the increase of risk premiums and the capital requirements demanded by investors, intervention
with respect to the level of capitalisation of banking institutions has had to be further increased. In many
countries, this has been achieved through support measures for the financial system and direct intervention
by governments in the share capital of the banks in different forms. In order to technically permit such
government support, financial institutions were required to pledge securities deemed appropriate by
different central financial institutions as collateral.
The unavailability of liquidity through such measures, or the decrease or discontinuation of such measures
by governments and central authorities could result in increase difficulties in procuring liquidity in the
market and/or result in higher costs for the procurement of such liquidity, thereby adversely affecting the
Banco Popolare Group's business, financial condition and results of operations.
Competition
In recent years the Italian banking sector has been characterised by ever increasing competition which,
together with the level of interest rates, has caused a sharp reduction in the difference between borrowing
and lending rates and subsequent difficulties in maintaining a positive growth trend in interest rate
margins.
In particular, such competition has had two main effects:
(a)
a progressive reduction in the differential between lending and borrower interest rates, which may
result in the Issuer facing difficulties in maintaining its actual rate of growth in interest rate
margins; and
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(b)
a progressive reduction in commissions and fees, particularly from dealing on behalf of third parties
and orders collection, due to competition on prices.
Both of the above factors may adversely affect the Issuer's financial condition and result of operations.
In addition, downturns in the Italian economy could add to the competitive pressure through, for example,
increased price pressure and lower business volumes for which to compete.
Impact of events which are difficult to anticipate
The Banco Popolare Group 's earnings and business are affected by general economic conditions, the
performance of financial markets, interest rate levels, currency exchange rates, changes in laws and
regulation, changes in the policies of central banks, particularly the Bank of Italy and the ECB, and
competitive factors, at a regional, national and international level. Each of these factors can change the
level of demand for the Banco Popolare Group's products and services, the credit quality of borrowers and
counterparties, the interest rate margin of the Banco Popolare Group between lending and borrowing costs
and the value of the Banco Popolare Group's investment and trading portfolios.
Credit risk
The Banco Popolare Group's business depends to a substantial degree on the creditworthiness of its
customers. Notwithstanding its detailed controls including customer credit checks, it bears normal lending
risks and thus may not, for reasons beyond its control (such as, for example, fraudulent behaviour by
customers), have access to all relevant information regarding any particular customer, their financial
position, or their ability to pay amounts owed or repay amounts borrowed. Any failure of customers to
accurately report their financial and credit position or to comply with the terms of their agreements or other
contractual provisions could have an adverse effect on the Banco Popolare Group's business and financial
results. During a recession, there may be less demand for loan products and a greater number of Banco
Popolare Group customers may default on their loans or other obligations. Interest rate rises may also have
an impact on the demand for mortgages and other loan products. The risk arising from the impact of the
economy and business climate on the credit quality of the Banco Popolare Group's borrowers and
counterparties can affect the overall credit quality and the recoverability of loans and amounts due from
counterparties. In addition, the continued liquidity crisis in other affected economies may create difficulties
for the Banco Popolare Group's borrowers to refinance or repay loans to the Banco Popolare Group loan
portfolio and potentially increase the Banco Popolare Group non-performing loan levels.
Market risk
To the extent that any of the instruments and strategies used by the Banco Popolare Group to hedge or
otherwise manage its exposure to credit or market risk are not effective, the Banco Popolare Group may
not be able to mitigate effectively its risk exposure in particular market environments or against particular
types of risk. The Banco Popolare Group's trading revenues and interest rate risk are dependent upon its
ability to identify properly, and mark to market, changes in the value of financial instruments caused by
changes in market prices or interest rates. The Banco Popolare Group's financial results also depend upon
how effectively the Banco Popolare Group determines and assesses the cost of credit and manages its own
credit risk and market risk concentration.
Changes in interest rates
Fluctuations in interest rates in Italy influence the Banco Popolare Group's financial performance. The
results of the Banco Popolare Group's banking operations are affected by the Banco Popolare Group's
management of interest rate sensitivity and, in particular, changes in market interest rates. Interest rate
sensitivity refers to the relationship between changes in market interest and changes in net interest income.
A mismatch of interest-earning assets and interest-bearing liabilities in any given period, which tends to
accompany changes in interest rates, may have a material effect on the Banco Popolare Group's financial
condition or results of operations.
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Rising interest rates in line with the yield curve can increase the Banco Popolare Group's cost of funding at
a higher rate than the yield on its assets, due, for example, to a mismatch in the maturities of its assets and
liabilities that are sensitive to interest rate changes or a mismatch in the degree of interest rate sensitivity of
assets and liabilities with similar maturities. At the same time, decreasing interest rates can also reduce the
yield on the Banco Popolare Group's assets at a rate which may not correspond to the decrease in the cost
of funding.
Market decline and volatility
The results of the Banco Popolare Group are affected by general economic, financial and other business
conditions. During a recession, there may be less demand for loan products and a greater number of the
Banco Popolare Group's customers may default on their loans or other obligations. Interest rate rises may
also have an impact on the demand for mortgages and other loan products. The risk arising from the impact
of the economy and business climate on the credit quality of the Banco Popolare Group's borrowers and
counterparties can affect the overall credit quality and the recoverability of loans and amounts due from
counterparties.
Protracted market decline and reduced liquidity in the markets
In some of the Banco Popolare Group's businesses, protracted adverse market movements, particularly the
decline of asset prices, can reduce market activity and market liquidity. These developments can lead to
material losses if the Banco Popolare Group cannot close out deteriorating positions in a timely way. This
may especially be the case for assets that were initially in an illiquid market. The value of assets that are
not traded on stock exchanges or other public trading markets, such as derivatives contracts between
banks, may be calculated by the Banco Popolare Group using models other than publicly quoted prices.
Monitoring the deterioration of the prices of assets like these is difficult and failure to do so effectively
could lead to unanticipated losses. This in turn could adversely affect the Banco Popolare Group's results
of operations and financial condition. In addition, protracted or steep declines in the stock or bond markets
in Italy and elsewhere may adversely affect the Banco Popolare Group's securities trading activities and its
asset management services, as well as the Banco Popolare Group's investments in and sales of products
linked to the performance of financial assets.
Soundness of financial institutions
The Banco Popolare Group is exposed to many different industries and counterparties in the normal course
of its business, but its exposure to counterparties in the financial services industry is particularly
significant. This exposure can arise through trading, lending, deposit-taking, clearance and settlement and
many other activities and relationships. These counterparties include brokers and dealers, commercial
banks, investment banks, mutual and hedge funds, and other institutional clients. Many of these
relationships expose the Banco Popolare Group to credit risk in the event of default of a counterparty or
client. In addition, the Banco Popolare Group credit risk may be exacerbated when the collateral it holds
cannot be realised or is liquidated at prices not sufficient to recover the full amount of the loan or
derivative exposure it is due. Many of the hedging and other risk management strategies utilised by the
Banco Popolare Group also involve transactions with financial services counterparties. The potential of
insolvency of these counterparties may impair the effectiveness of the Banco Popolare Group's hedging
and other risk management strategies.
Value of financial instruments recorded at fair value
Under IFRS, the Banco Popolare Group recognises at fair value: (i) financial instruments classified as
"held-for-trading" or "designated as at fair value through profit or loss", (ii) financial assets classified as
"available for sale" and (iii) derivatives, each as further described in "Accounting Policies" in the notes to
the audited consolidated annual financial statements of the Issuer for the years ended 31 December 2013
and 31 December 2014, which are incorporated by reference in this Prospectus. Generally, in order to
establish the fair value of these instruments, the Banco Popolare Group relies on quoted market prices or,
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