Obligation Banco BPM SpA 1% ( IT0005321663 ) en EUR

Banco BPM SpA

100 % ▲

Italie

IT0005321663 ( en EUR )

1% par an ( paiement annuel )

23/01/2025 - Obligation échue

Prospectus brochure de l'obligation Banco BPM S.p.A IT0005321663 en EUR 1%, échue

Banco BPM S.p.A. est une banque italienne, issue de la fusion de Banco Popolare et Banca Popolare di Milano, offrant une large gamme de services bancaires aux particuliers, entreprises et institutions publiques, opérant principalement en Italie.

L'Obligation émise par Banco BPM SpA ( Italie ) , en EUR, avec le code ISIN IT0005321663, paye un coupon de 1% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 23/01/2025

Base Prospectus Dated 7 September 2017
BANCO BPM S.P.A.
(a bank incorporated as a joint stock company (società per azioni) in the Republic of Italy)
10,000,000,000 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 10,000,000,000 Covered Bond Programme (the "Programme") described in this base prospectus (the "Base Prospectus") has been established by Banco BPM S.p.A. ("Banco BPM" 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 amended and supplemented (the "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 vigilanza 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 10,000,000,000 (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 the OBG Regulations.
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"), 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 headed "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 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 headed "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 as specified in the relevant Final Terms by one or more of DBRS Ratings Limited ("DBRS") or Moody's Investors Service ("Moody's"
and, together with DBRS to the extent that at the relevant time they provide ratings in respect of the then outstanding Covered Bonds, the "Rating Agencies"). Covered Bonds to be issued under the
Programme, if rated, are expected to be rated "A1" by Moody's and/or "A" by DBRS, to the extent each such agency is one of the Rating Agencies. 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 Tranche or 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 as amended (the "CRA Regulation") will
be disclosed in the relevant Final Terms or in the Registered CB Conditions (as applicable). The credit ratings included or referred to in this Base Prospectus have been issued by DBRS or Moody's, each
of 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 suspension, revision or withdrawal by the assigning Rating Agency 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.
Important EEA Retail Investors. If the Final Terms in respect of any Covered Bond include a legend entitled "Prohibition of Sales to EEA Retail Investors", the Covered Bonds are not intended, from
1 January 2018, to be offered, sold or otherwise made available to and, with effect from such date, should not be offered, sold or otherwise made available to any retail investor in the European Economic
Area ("EEA"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU ("MiFID II"); (ii) a customer
within the meaning of Directive 2002/92/EC ("IMD"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as
defined in the Prospectus Directive. Consequently no key information document required by Regulation (EU) No. 1286/2014 (the "PRIIPs Regulation") for offering or selling the Covered Bonds or
otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Covered Bonds or otherwise making them available to any retail investor in the EEA
may be unlawful under the PRIIPS Regulation.

Arranger and 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, 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.
The Issuer and the Guarantor are collectively referred to as the "Responsible Persons".
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 (as
defined in the Conditions).
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
A33396626/8.0/07 Sep 2017
3

supplemented or that there has been no adverse change in the financial position of the Issuer, the Seller
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.
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 Seller 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 Seller, 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, the
Seller 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.
A33396626/8.0/07 Sep 2017
4

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 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"). 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, 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, the Seller 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.
A33396626/8.0/07 Sep 2017
5

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 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.
A33396626/8.0/07 Sep 2017
6

TABLE OF CONTENTS
Page
RESPONSIBILITY STATEMENTS.................................................................................................................. 3
RISK FACTORS ................................................................................................................................................ 8
GENERAL DESCRIPTION OF THE PROGRAMME ................................................................................... 55
STRUCTURE DIAGRAM ............................................................................................................................ 106
DESCRIPTION OF THE ISSUER ................................................................................................................ 107
DESCRIPTION OF THE GUARANTOR ..................................................................................................... 153
DESCRIPTION OF THE ASSET MONITOR............................................................................................... 157
DESCRIPTION OF THE COVER POOL COLLECTION AND RECOVERY PROCEDURES .............. 158
CREDIT STRUCTURE ................................................................................................................................. 173
ACCOUNTS AND CASH FLOWS............................................................................................................... 184
DESCRIPTION OF THE TRANSACTION DOCUMENTS ........................................................................ 188
SELECTED ASPECTS OF ITALIAN LAW ..................................................................................................211
TERMS AND CONDITIONS OF THE COVERED BONDS....................................................................... 223
RULES OF THE ORGANISATION OF THE COVERED BONDHOLDERS............................................. 273
FORM OF FINAL TERMS............................................................................................................................ 298
KEY FEATURES OF REGISTERED COVERED BONDS (NAMENSSCHULD VERSCHREIBUNGEN)
............................................................................................................................................................... 308
TAXATION IN THE REPUBLIC OF ITALY................................................................................................ 310
LUXEMBOURG TAXATION....................................................................................................................... 319
SUBSCRIPTION AND SALE ....................................................................................................................... 321
GENERAL INFORMATION......................................................................................................................... 325
DOCUMENTS INCORPORATED BY REFERENCE.................................................................................. 331
SELECTED CONSOLIDATED FINANCIAL DATA ................................................................................... 338
GLOSSARY................................................................................................................................................... 342
A33396626/8.0/07 Sep 2017
7

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.
1
Factors that may affect the Issuer's ability to fulfil its obligations under or in connection
with the Covered Bonds issued under the Programme
Risks related to the Merger
Risks related to the Merger between BPM and Banco Popolare
The merger between Banca Popolare di Milano S.c. a r.l. ("BPM" and, together with its subsidiaries, the
"BPM Group") and Banco Popolare Società Cooperativa ("Banco Popolare" and, together with its
subsidiaries, the "Banco Popolare Group") to create Banco BPM Società per Azioni ("Banco BPM" or
the "Issuer", and, together with its subsidiaries, the "Banco BPM Group") came into effect on 1
January 2017 (the "Merger").
Merger transactions in general involve risks that include, inter alia: loss of customers; legal risks; risks
related to the integration of IT systems, which can be implemented in times and manners different from
those envisaged; and risks related to the integration of the existing structures and services of the banks.
These risks could have adverse effects on the operations and synergies in the production, distribution,
and commercial expectations of the Banco BPM Group. There may also be consequent negative effects
on the business, financial condition and results of the operations of the entity resulting from the Merger.
Risks related to the Merger and failure to generate synergies
The Merger involves the risks which are inherent in any merger of a corporate group, i.e: risks relating
to the management and personnel coordination, integration of businesses and services offered,
information systems, structures, as well as the possible loss of customers and key personnel by the
companies participating in the Merger. The Merger involves, inter alia, the need for the convergence of
information systems and the operating models into a single model of reference. This process presents
risks related to the aggregation of companies.
Banco BPM believes that, as the entity resulting from the Merger between BPM and Banco Popolare, it
will benefit from the synergies arising from, inter alia, lower costs and higher revenues. The
achievement of such synergies will depend, among others, on the ability to integrate various companies,
to reduce the existing agency network, whilst preserving the customer portfolio, and increasing
productivity whilst reducing costs.
A33396626/8.0/07 Sep 2017
8

There is a risk that failure to implement, in whole or in part, the aforementioned synergies could have
negative effects in terms of, inter alia, higher cost and lower revenue growth. The Merger may also give
rise to unforeseen negative events, unexpected costs or liabilities, or reductions in revenues deriving,
among others, from negative synergies, and as a result could require an extraordinary management
attention from Banco BPM which could have material negative effects on the business, financial
condition and/or results of operations of the Banco BPM Group.
Risks related to the effects of the Merger
In accordance with the provisions of applicable law, and, in particular, Article 2504-bis of the Italian
Civil Code, as a result of the Merger, Banco BPM succeeded BPM and Banco Popolare in all their rights
and obligations that arose or accrued to the two banks participating in the Merger prior to its completion.
Therefore, as of 1 January 2017 (the date on which the Merger became fully effective) Banco BPM has
taken over all the rights, obligations, assets, liabilities and risks of both BPM and Banco Popolare.
Risks arising from pending legal proceedings of the BPM Group and Banco Popolare Group
Following the Merger, the legal proceedings in which the BPM Group and Banco Popolare Group were
involved have been transferred to the Banco BPM Group.
Although management of the Banco BPM Group believes that the provisions that have been made in the
respective financial statements are appropriate, a worse than expected outcome of any legal proceedings
may render such provisions insufficient to cover the Banco BPM Group's liabilities and have a material
adverse effect on the financial condition and results of operations of the Banco BPM Group.
Risks associated with the withdrawal of the shareholders and members who have not agreed to the
Merger resolution
The transaction consisting in the merger by incorporation of the Issuer resulted in the conversion of
Banco Popolare and BPM from cooperative companies into a joint-stock company.
For this reason, the shareholders and members of Banco Popolare and BPM that have not agreed to the
shareholders' resolution approving the Merger could exercise the right of withdrawal referred to in
Article 2437, paragraph 1 of the Italian Civil Code. Following the Merger approval by the shareholders'
meetings of Banco Popolare and BPM on 15 October 2016, the right of withdrawal was exercised, in
accordance with the terms indicated by the Italian Civil Code: (i) as to Banco Popolare, for a total of
37,757,849 shares (equal to about 4.56% of its share capital), for a total value (considering the unit value
of liquidation, equal to Euro 3.156 per share) of Euro 119,163,771.44; (ii) as to BPM, for a total of
179,153,607 shares (equal to about 4.08% of the share capital), for a total value (considering the unit
value of liquidation, equal to Euro 0.4918 per share) of Euro 88,107,743.92.
On 25 November 2016, pursuant to Article 2437-quater, paragraph 1 of the Italian Civil Code, Banco
Popolare and BPM launched their respective option offers for the shares in respect of which the
withdrawal right has been exercised (and to the benefit of their respective shareholders and members
that have not exercised the withdrawal right); both option offers ended on 27 December 2016. The
option offer concerning the Banco Popolare shares closed with the exercise of the option rights for
178,859 shares (with the remaining no. 37,578,990 Banco Popolare shares still to be cashed and
liquidated). The option offer concerning the BPM shares closed with the exercise of the option rights for
2,195,630 shares with the remaining 176,957,977 BPM shares still to be cashed and liquidated).
The 65,289,263 shares in respect of which the shareholders and members option rights have not been
exercised during the option offers (and resulting from the exchange, on 1 January 2017 - date on which
the Merger was effective - of the no. 37,578,990 Banco Popolare shares and the no. 176,957,977 BPM
A33396626/8.0/07 Sep 2017
9

shares, for which the option rights have not been exercised, with Banco BPM shares) were subsequently
offered under Article 2437-quater, fourth paragraph of the Italian Civil Code on the Mercato Telematico
Azionario organised and managed by Borsa Italiana S.p.A. (the "MTA"), between 27 February 2017 and
3 March 2017. None of the shares of Banco BPM offered on the MTA has been purchased (the
remaining 65,289,263 Bank's ordinary shares, the "Residual Shares").
On 11 May 2017, the Board of Directors of Banco BPM resolved to limit partially the reimbursement of
the shares for which the right of withdrawal has been exercised following the Merger. In particular, the
Board of Directors has resolved to limit the reimbursement of the Residual Shares to the total amount of
Euro 14,571,850.27 to be used in order to purchase a part of the abovementioned Residual Shares
pursuant to Article 2437-quarter, paragraph 5 of the Italian Civil Code.
The decision to limit partially the reimbursement of the Residual Shares has been taken by comparing
the fully loaded CET1 ratio of Banco BPM on 31 March 2017 (calculated including first quarter 2017
net income, subject to the provisions of Article 26, paragraph 2, of the Regulation (EU) No. 575/2013 of
26 June 2013), as adjusted in order to take into account further non-recurring charges estimated in the
exercise to pursue the 2016-2019 Strategic Plan objectives and a minimum floor, equal to 10.88%,
determined taking into consideration the average between the fully loaded CET1 ratio values of a
representative sample of the major European banks (source EBA) and the CET1 ratio for the 2017
required by the ECB within the SREP process concerning Banco BPM.
The partial reimbursement of the Residual Shares may be performed only upon condition of obtaining,
from the ECB, the required authorisation for the reduction of own funds, pursuant to Articles 77 and 78
of Regulation (EU) No. 575/2013 of 26 June 2013 ("CRR") and to the applicable provisions set in
Chapter IV, Section 2, of the Commission Delegated Regulation (EU) No. 241/2014 of 7 January 2014.
Therefore the Bank, subject to the required ECB's authorisation, will reimburse, 4,627,461 Residual
Shares for a consideration of Euro 14,571,850.27 while the 60,661,802 Residual Shares of which the
reimbursement has been limited, already returned to the former Banco Popolare and BPM's
shareholders.
With respect to the above, investors should note that: (i) pursuant to paragraph 2-ter of Article 28 of the
Italian Banking Act, the right of repayment in respect of the shares in the event of withdrawal, including
where following a conversion, is subject to conditions set by the Bank of Italy, which may derogate from
law, where it is necessary to include the shares in the regulatory Common Equity Tier 1 (CET1) ratio of
the bank; (ii) the implementing regulations issued by the Bank of Italy (BoI Regulations, Part Three,
Chapter 4, introduced with the 9th update of 9 June 2015), by virtue of the powers conferred upon it by
law, clarified that the bodies vested with strategic supervisory duties typical of a bank, having heard the
supervisory body, have the power to restrict or defer, in whole or in part and without time limits, the
redemption of shares and other equity instruments of the outgoing withdrawing shareholder, including in
the case of transformation, as required by the applicable prudential rules and subject to the legal
authorisation for the reduction of the bank's own funds; (iii) by order published on 2 December 2016, the
Italian Council of State(Consiglio di Stato) among other things, ordered the precautionary suspension
(sospensione in via cautelare) of the effectiveness of the provisions of the Bank of Italy which set out
the terms and conditions of the right to limit, in whole or in part, the redemption of the shares in respect
of which the right of withdrawal has been exercised (in particular, the Italian Council of State has
suspended Section III of Chapter 4, Part Three of Bank of the BoI Regulations) ; and (iv) on 15
December 2016, the Italian Council of State referred the matter on constitutional legitimacy, among
other things, of Article 28, paragraph 2-ter of the Italian Banking Act (which sets forth the right to limit
the reimbursement of the shares in case of withdrawal) to the Constitutional Court (Corte
A33396626/8.0/07 Sep 2017
10

Document Outline

Prospectus_BP CB Residential_rinnovo 2017_FINAL.docx