Merger of Banca Intesa and Panonska banka in the final phase

The Managing Boards of Banca Intesa ad Beograd and Panonska banka ad at separate meetings adopted the draft of the Merger Agreement and convoked meetings of Shareholders’ Assembly of both banks for December 17th 2007 for the purpose of final adoption of the Agreement and completion of the integration process.

When the shareholders’ assemblies of both Banks reach the decision on adoption of the Merger Agreement and the National Bank of Serbia gives its approval, the process will be concluded with the registration with the Agency for Business Registers. The plan of the integration process anticipates that from January 1st 2008 the two banks will start to operate as a uniform legal entity, under the name of Banca Intesa ad Beograd.

The Draft Agreement envisages the integration model through absorption of Panonska banka ad on the part of Banca Intesa. The head office of Banca Intesa will remain in Belgrade, whereby a part of business functions will be based in Novi Sad. Successful integration of Panonska Banka in the environment of Banca Intesa will be provided through the merger of resources, knowledge and talents of both banks, by applying the existing business model, organization and IT system of Banca Intesa.

Economic aspect of the integration

Through the merger with Panonska banka Banca Intesa will furtherly consolidate market position of the leading bank in Serbia according to all most significant business parameter: amount of balance sheet assets, total placements and deposits, as well as total capital amount.

According to the consolidated data from September 30th2007, the total assets at the level of both banks amount 179,999 billion dinars (2,3 billion euros), out of which the total placements amount 86,901 billion dinars (1,1 billion euros), meanwhile the total deposits at the level of the two banks amount 127,120 billion dinars (1,6 billion euros). Apart from the amount of balance sheet assets, total placements and deposits, upon finalization of the merger process, Banca Intesa will become a first-rated bank even in terms of the level of equity capital, which will reach the amount of 28,184 billion dinars (356,4 million euros).

Through the absorption of Panonska banka, Banca Intesa will furtherly consolidate its market share in all relevant segments of business operations, especially on the territory of Vojvodina on which Panonska banka based its business operations. According to the latest available data for the third quarter, the two banks together realize the share of 13.5% in total loans of corporate clients and 17.9% in total deposits. In the retail segment, after merging with Panonska banka, Banca Intesa will have a market share of 10.4% in total loans and 14.3% in total deposits.

Apart from consolidation of the leading position, after the merger, Banca Intesa will have more than million clients and even better market coverage with a significantly enlarged presence in Vojvodina and total business network of 220 branches.

Positive effects of the merger for the clients of both banks reflect in the integrated offer of modern banking products, which will become even more available through expanded network of branches. Corporate clients will have more possibilities for financing their development needs, meanwhile the credit lines of Banca Intesa, intended for the development of small and medium enterprises and municipalities, will be available also to all clients of Panonska banka.

Taking into consideration the development potential of the Serbian market, future business mission of Banca Intesa assumes a continuous improvement of the existing and development of new sophisticated banking products, hence, a constant enhancement of the service quality for the purpose of creating the greatest possible value for the clients, employees, shareholders and complete social country environment.