Message from the Chairman and General Manager

A company's raison d'être - and at the same time its No.1 responsibility, also social - continues to be that of good entrepreneurship, i.e. of conducting its elective business well. This is in the primary interest of shareholders but also with obvious positive knock-on effects in terms of "collective interest". It in fact contributes to good performance of the economy in general and to the creation of wealth and job opportunities.

For us too, this is the way of combining the general interest and proper business management, without pretending to be the holders of any all-embracing mandate. At the same time, any economic player must be able to take its country's interests to heart, interpreting this keenness in accordance with its actual role. In our case this translates into awareness that - if the effort is fully implemented in what, for the sake of convenience, we can define as the "general interest" - it is possible to commit the energy of thousands of people to making the financial system and, at the same time, the entrepreneurial fabric of Italy more modern.

To be up to this task it is necessary to innovate and grow continuously in terms of efficiency and profitability. It is with legitimate satisfaction that we are able to state that, in the last year, in this respect the MPS Group has once again certainly done its part.

Pre-empting change to be front-stage players now and in future - this is in fact the philosophy with which our new 2006-2009 Business Plan has been conceived.

In 2006 the need to upgrade our levels of organisational efficiency and commercial capability required us to make many additional and burdensome efforts. These - and it is important to highlight this - were handled with great professionalism by management and by all Group staff.

This is clearly demonstrated by the results achieved - record earnings and dividends - which, we believe, fully meet our shareholders' expectations. Moreover, the strategic insurance joint venture and the asset benefits yielded by careful capital management also enable us to look ahead with positive growth prospects in terms of business and size.

The key strategic guidelines on which the Business Plan is developed - enhancement of the customer's value as a "stakeholder with needs and requirements" and the quest for "sustainable growth" - fit perfectly with a corporate vision featuring awareness of the Group's social responsibility.

With the 2006-2009 Business Plan, the concept of the "customer is king" as the lynchpin of MPS' strategy receives further, concrete confirmation. We will in fact never tire of repeating that the reduction of the time and space separating the customer from our bank and, in particular, from a proposition of outright top quality, is the yardstick against which we will measure our progress.

The quest for sustainable growth in turn expresses our will to assess results also in a medium- and long-term perspective. This is the only perspective in which it is possible to conjugate the need to assure adequate remuneration of capital on an ongoing basis with awareness of the interdependence, in future, between consideration of the various stakeholders' needs and business performance.

The customer as core focus and sustainable growth: these are growth routes that require leverage of qualified and motivated human assets. Because of this the Business Plan envisages - alongside a major personnel manoeuvre aiming to streamline central organisation and enhance the front-line organisation in contact with the market and customers - ongoing training and development of human resources and achievement of a transparent system for enhanced use and recognition of skills and commitment.

Aiming for sustainable growth also implies being aware of the environment as the element in which, at the end of the day, the interests of all us meet, regardless of the stakeholder categories to which we belong. An environment that sometimes admonishes us - also via devastating events - for the debts that we are accumulating both with the environment itself and with future generations.

It is therefore essential that every economic player, in defining its objectives and the means for achieving them, find - albeit without betraying its fundamental vocational task - the determination and ability to honour the social and environmental responsibility, with which it is in any case vested, in a tangible fashion

As regards this, our Social Responsibility Report - the last edition of which helped MPS to win the Italian "Oscar" for the best "economic, social, and environmental communication" - reports exhaustively and transparently on how our dialogue with our shareholders evolved and on the actions qualifying MPS' commitment in the corporate social responsibility field, from the strategic, governance, organisational, and operational standpoint.

A merit that we have to share with each and every person who contributed to achievement of our major 2006 results - and a tangible sign of how the sensibility and culture of truly aware social responsibility is gaining increasing ground and taking increasingly deep root in our Group.