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Banca Lombarda e Piemontese S.p.A. Via Cefalonia 74 - BRESCIA

RREEPPOORRTT OONN CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE (Please note that the original Report is in Italian; in case of doubt the Italian version prevails)

INTRODUCTION The Board of Directors at Banca Lombarda has accepted the recommendations on corporate governance contained in the Code of Conduct for Listed Companies prepared by Borsa Italiana, as a further sign of openness and fairness toward the market. Banca Lombarda e Piemontese has always been sensitive to corporate governance issues, and had already set up an organisational structure in keeping with the best practices recommended in the Code of Conduct. More specifically, it has always observed a complex set of rules and regulations designed to ensure the good management of the bank, concerning, for example, the duties and limitations of the Board of Directors as established by the Bank of Italy, and the professional and ethical qualifications that the Treasury requires of bank officers. The Bank took steps to comply with the remaining principles in the Code of Conduct, to which it in any case aspired, thus completing the internal regulations which already governed the operations of its units in keeping with the Code and with current legislation for listed banks. For example, the Board of Directors was already responsible for setting the Bank's strategic and structural orientation, and for making sure that proper controls were in place for monitoring the Bank's performance. The Board of Directors has also acknowledged the changes made to the Code in July 2002 by the Committee for Corporate Governance. In addition, in March 2006 the Italian Stock Exchange issued a new Code of Conduct; issuers have been invited to apply the new Code by the end of 2006, informing the market that this has been done in a report on corporate governance to be published in 2007.

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PART I - THE COMPANY'S GOVERNANCE STRUCTURE The Banca Lombarda e Piemontese Group was set up on the basis of the so-called “Federal Model”, which the Bank adopted as its own. Adopting this model was meant as recognition of the particular role that the various companies and their Boards of Directors have to play in the success of the Group. This entailed implementing an effective and mutually beneficial relationship with the territory in which they operate, sustaining Group companies' brand names and fulfilling a propositive function and providing synergetic cooperation versus the Parent Bank, in order to enhance the operating and earning potential of the individual companies and of the Group as a whole. Within the ambit of this model, Banca Lombarda e Piemontese represents the governance centre of the Group, providing management policy, coordination and control of the various Group companies in compliance with the provisions of art. 2497-ter of the Italian Civil Code; it also provides central operating and support functions in accordance with the Federal Model, so as to reinforce the organisation and make the overall management of the Group more effective, maximising synergies and pursuing efficiency and effectiveness in the sales and marketing campaigns of the individual companies. The main regulatory sources of the Banca Lombarda Group are: Articles of Association of the Parent Bank and Group companies Corporate Governance Regulations Code of Conduct for Listed Companies (Preda Code) Group and Parent Bank Regulations Individual Group Companies' Regulations Regulations on the granting of credit, finance, the provision of goods

and services, expenses Parent Bank's and other Group Companies' Operating Regulations

(circulars)

* * * Banca Lombarda e Piemontese S.p.A., is the Parent Bank of the Banca Lombarda e Piemontese Banking Group. Pursuant to art. 15 of the Articles of Association, the Board of Directors

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consists of between 15 and 21 members, who are appointed by the stockholders' meeting with a relative majority, once it has been decided how many there should be. The directors remain in office for three years, up to the date of the stockholders' meeting called to approve the financial statements for their last year of office, and can be re-elected. The Board appoints from among its members the Chairman and two Vice Chairmen, one of whom is considered the Senior Vice Chairman. Currently, the Board of Directors of Banca Lombarda e Piemontese consists of 21 members appointed by the stockholders' meeting. Pursuant to art. 24 of the Articles of Association, the Stockholders appoint the Board of Statutory Auditors consisting of 3 acting and 2 alternate auditors, in compliance with current legislative requirements. The statutory auditors remain in office for three years, up to the date of the stockholders' meeting called to approve the financial statements for their third year of office, and can be re-elected. Stockholders' meetings can be ordinary or special, as permitted by law, and are properly called with a quorum and able to pass resolutions in accordance with legal requirements. Resolutions concerning amendments to the Articles of Association have to have the approval of two-thirds of the capital represented at the meeting, except in cases where a higher majority is required by law or by the Articles of Association. Stockholders' meetings are to be chaired by the Chairman of the Board of Directors. In the event of his absence or impediment, meetings are to be chaired by the Chairman's deputy; otherwise, by the eldest Director present at the meeting. It is up to the Chairman to establish whether meetings have been properly called and have a quorum; he also has to ascertain the right of stockholders to attend, direct and regulate the debate, establish the rules for voting and announce the results thereof.

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Capital stock The capital stock of Banca Lombarda e Piemontese S.p.A. at the date of this report is as follows:

Subscribed and paid-in Euro 322,292,258

split into 322,292,258 ordinary shares with a par value of Euro 1 each. Syndicate agreements The syndicate agreement involves a share block and the concerted exercise of voting rights solely at extraordinary stockholders' meetings called to approve changes to the Articles of Association. The syndicate has 301 members who have committed 157,025,888 shares to this agreement, representing 48.72% of the Bank's capital stock. The agreement expires on 31/12/2007.

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PART II - INFORMATION ON IMPLEMENTATION OF CODE OF CONDUCT PROVISIONS Board of Directors The Board of Directors plays a central role in the company's organisation; the Board generally meets once a month, whereas special meetings can be held any time the need arises in the Chairman's opinion, or if at least three Directors request a meeting, as well as in those cases where a meeting is required by law. It is up to the Chairman of the Board of Directors to set the agenda, coordinate proceedings and ensure that adequate information about the matters on the agenda are provided to all directors. The Board of Directors is responsible for the ordinary and extraordinary administration of the Company. To this end, it has the widest possible powers, except for those that by law must be exercised by the Stockholders in General Meeting. The following types of decisions are the exclusive responsibility of the Board of Directors: 1. Passing resolutions concerning mergers in the circumstances envisaged in

articles 2505 and 2505-bis of the Italian Civil Code; 2. Opening or closing branch offices; 3. Deciding which other directors can sign on behalf of the Company, without

prejudice to the rules governing legal representation contained in art. 22; 4. Reducing the capital stock in the event of withdrawal on the part of a

stockholder; 5. Amendments to the Articles of Association to bring them into line with

regulatory requirements. The Board of Directors plays a central role in the organisation, being responsible for all of the functions involving corporate strategy and policy-making, as well as for ensuring that all the necessary controls are in place to monitor the Company's results. The following matters in particular are the exclusive responsibility of the Board of Directors: a) strategic lines of management; b) approval and amendment of internal regulations; c) methods to be used in the coordination and management of group

companies; d) how Bank of Italy instructions are to be applied; e) opening, transferring and closing branches and representation offices; f) the acquisition and sale of equity investments, without prejudice to the

power of the ordinary stockholders' meeting in the circumstances

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envisaged in art. 2361.2 of the Italian Civil Code g) the nomination and revocation of members of Senior Management h) deciding on donations to be allocated in accordance with art. 4 of the

Articles of Association. Such allocations are to be decided annually and the amounts involved are to be paid out and booked as expenses for the year, for a total amount not exceeding 6% of the earnings distributed to the stockholders for the previous year.

For matters involving lending and day-to-day management, decision-making power can also be granted to Company employees within the limits laid down on the basis of their respective functions. Decisions taken by those to whom powers have been delegated are subsequently brought to the Board's attention in ways laid down by the Board, generally at the next Board meeting. Delegated bodies are required to report quarterly to the Board of Directors and the Board of Statutory Auditors on the general trend in operations, future developments and particularly significant transactions in terms of their size or characteristics carried out by the Company or its subsidiaries, with particular reference to atypical, unusual or related party transactions. In the event of specific, individual matters of ordinary and extraordinary administration, the Board can delegate signature power to one or more of its members; and for certain categories of acts and matters of ordinary administration, it can even grant proxies to people who are not employed by the Bank. To facilitate the Bank’s normal operations, the Board can authorise employees to sign individually in relation to transactions decided upon by the Board. Pursuant to art. 21 of the Articles of Association, the Board of Directors can appoint an Executive Committee with 8 members, and delegate powers to it in accordance with art. 19 of the Articles of Association. The Board of Directors has attributed to the Executive Committee all powers for the ordinary administration of the Bank, except for some that are the exclusive responsibility of the Board. In urgent cases, the Executive Committee can take certain decisions that are normally the responsibility of the Board of Directors. Any such decisions must be reported to the Board at its next meeting. Pursuant to art. 22 of the Articles of Association, without prejudice to the power of the Board of Directors as foreseen in art. 18.3.3 to decide which other directors can sign on behalf of the Company, the Chairman, or his deputy, legally represents the Company versus third parties and in court, at

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any level, with the right to appoint legal counsel. On a recommendation from the Chief Executive Officer, if appointed, the Chairman can take decisions in an emergency that would normally be the responsibility of the Board or of the Executive Committee. Any such decisions must be reported to the Board at its next meeting. The Chairman allocates and distributes the amounts set aside for donations, according to the indications and manner decided by the Board of Directors. The Board of Directors has delegated to the Chief Executive Officer the power to supervise the ordinary administration of the Bank and coordination of the activities of Banca Lombarda, the Parent Bank, with those of the subsidiaries, in compliance with the policies laid down the Board of Directors and with the assistance of the General Manager. With regard to the Parent Bank's consent to the resolutions taken by Group companies in accordance with art. 136 of Legislative Decree 385/93, the Board of Directors has given the Chairman, Mr. Trombi, the two Vice Chairmen, Mr. Folonari and Mr. Bazoli, and the Chief Executive Officer. Mr. Faissola, the power to give such consent, with separate signing power, with the exception of resolutions taken by Banco di Brescia. In view of the fact that Messrs. Folonari, Bazoli and Faissola are directors of Banco di Brescia, powers to grant the above consent in relation to that bank have been delegated individually to the Chairman and to the following directors: Mario Cattaneo, Giovanni Minelli and Pierfrancesco Rampinelli Rota. Pursuant to art. 23 of the Articles of Association, the Senior Management is made up of the General Manager and any other managers that the Board decides to appoint as members of Senior Management. They are responsible for implementing all of the decisions taken by the Board, the Executive Committee and the Chief Executive Officer. The General Manager and the other managers who form part of Senior Management and Central Management, can be called upon to take part in meetings of the Board of Directors and of the Executive Committee, without a vote. The Board of Directors is periodically informed about the activities performed by persons to whom it has granted powers.

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Composition of the Board of Directors The composition of the Board of Directors (for the three-year period 2005-2007) is given below with an indication of the other offices that each Director holds as either a director or statutory auditor of other companies listed on organised markets in Italy or abroad, in finance or insurance companies, banks, or other large companies:

Chairman: Gino Trombi (*) Chairman: Fondazione Banca San Paolo di

Brescia, Director: Banca Intesa S.p.A., Risparmio e Previdenza S.p.A., Fondo Interbancario di Tutela dei Depositi.

Senior Vice Chairman: Alberto Folonari (*)

Chairman: Fondazione CAB - Ist. Di Cultura Giovanni Folonari; Director: Banco di Brescia S.p.A., Editoriale Bresciana S.p.A., Centro Stampa Quotidiani S.p.A., Fondazione Iniziative Zooprofilattiche e Zootecniche.

Vice Chairman: Giovanni Bazoli (*)

Chairman: Banca Intesa S.p.A., Mittel S.p.A; Vice Chairman: Editrice La Scuola S.p.A.; Director: Banco di Brescia S.p.A., Alleanza Assicurazioni S.p.A., ABI, Assonime.

Chief Executive Officer:Corrado Faissola (*)

Senior Vice Chairman: Banca Regionale Europea S.p.A., Director: Banco di Brescia S.p.A., Banco di San Giorgio S.p.A., ABI, Assbank.

Director and Secretary to the Board: Mario Cera (*)

Chairman: Grifogest SGR S.p.A.; Vice Chairman: Banca Regionale Europea S.p.A..

Directors: Luigi Bellini

Chairman: Nationale Suisse-Comp. Italiana di Assicurazioni S.p.A., Nationale Suisse Vita-Compagnia Italiana di Assicurazioni S.p.A., Director: Sagittario S.p.A., Bonetti Acciai S.p.A., Sole Director: Cepro srl, Innocenzo S.p.A. Piero Bertolotto (*) Chairman: Banca Regionale Europea S.p.A.; Director: Banca Lombarda International.

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Sergio Borlenghi Chairman: La Difesa – Compagnia di Assicurazioni S.p.A., BYCSA S.p.A., BYCSA S.A. Giuseppe Camadini (*) Chairman: Società Cattolica di Assicurazione, Director: Banco di Brescia S.p.A., Banca Regionale Europea S.p.A., Banca di Valle Camonica S.p.A., La Scuola S.p.A., Nuova Editoriale Italiana S.p.A., Istituto Atesino di Sviluppo, San Giuseppe S.p.A., Verfin S.p.A., Editrice Studium S.p.A. Mario Cattaneo (*) Chairman: CBI Factor S.p.A., Director: Bracco S.p.A., Luxottica Group S.p.A. , Finanziaria Bansel S.p.A., Chairman of the Board of Statutory Auditors: Sara Assicurazioni S.p.A., Intesamediofactoring S.p.A. Virginio Fidanza Sole Director: Veafin S.p.A., Condor Trade srl. Pietro Gussalli Beretta Vice Chairman and Chief Executive Officer: Beretta Holding S.p.A.; Chairman: SBS Leasing S.p.A. Giuseppe Lucchini Chairman: Lucchini S.p.A., Vice Chairman Hopa S.p.A. Holding di Partecipazioni Aziendali, Director: GIM Generale Industrie Metallurghiche S.p.A., Beretta Holding S.r.l.; Sole Director: Gilpar S.p.A.; Chairman and member of the Supervisory Board Ascometal S.A., TIM Italia S.p.A. Federico Manzoni Chairman: Intesa Leasing S.p.A.; Intesa Renting S.p.A.; Director: Sesaab S.p.A.; Board member: Fondazione Cariplo; Statutory Auditor: Cassa di Risparmio di San Miniato, Banca Sintesi. Felice Martinelli Chairman: Lombarda Vita S.p.A., Director: Società Cattolica Assicurazioni, Credito Artigiano

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S.p.A.: Chairman of the Board of Statutory Auditors: Intesa Leasing S.p.A., Intesa Renting S.p.A., Italtel S.p.A., Italtel Holding S.p.A., Librerie Feltrinelli S.p.A. Giovanni Minelli Vice Chairman: SBIM S.p.A. Luigi Nocivelli Chairman: Eptafin S.p.A., Epta S.p.A., Director: Costan S.p.A., George Barker & Co. Ltd. (Great Britain), Vice Chairman: EL.FI. ElettroFinanziaria S.p.A; Director: Luceat S.p.A., EL.FI. Cold Investments N.V. (Netherlands), Intercold Tief GmbH (Austria). Pierfrancesco Rampinelli Rota Chairman: Corporation Financière Européenne S.A. (Luxembourg), Chief Executive Officer: Multiasset Management S.A (Switzerland), Director: Beretta S.A. (Luxembourg), Solterra Fotovoltaico S.A. (Switzerland), Arco S.p.A. (Italy), Fedra BV (Netherlands), Cavagna Group International BV (Netherlands), Fingas S.A. (Luxembourg). Adriano Rodella Chairman: Pompea S.p.A., ZGZ S.p.A., Glory & Pompea s.a., Pompea USA, Pompea Comercio de Vestuario L.d.A.; Sole Director: Torcitura di Atri srl. Matteo Viglietta Chairman: Viglietta Matteo S.p.A.; Ferr. Sardopiemontese S.p.A.; Chief Executive Officer: Vuemme srl; Director: Fingranda S.p.A. Romain Zaleski

Chairman: Metalcam S.p.A., Energia e Servizi srl, Carlo Tassara Finanziaria S.p.A., Vice Chairman: Mittel S.p.A.; Chief Executive Officer: Carlo Tassara S.p.A.; Director: Duomo Previdenza S.p.A., Managing Director Maaldrift B.V. (Netherlands), Feropar sarl (France).

(*) Members of the Executive Committee. The Executive Committee met four times in 2005.

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Sufficient time prior to board meetings, all members are provided with the documentation and information needed to give them adequate background knowledge so that they can express an opinion on the issues on the agenda and vote on them. The Board of Directors met fourteen times in 2005 and the same frequency is expected in 2006. Non-executive and independent directors The Board of Directors consists of a majority of non-executive directors (as they have no operating powers or management functions within the organisation) so as to guarantee, in terms of their number and prestige, that their opinion can make a significant contribution to Board decision making. Of the 21 directors currently in office, only the chief executive officer is to be considered an executive director. The Board of Directors is currently made up of a majority of independent directors insofar as they:

a) do not have nor had in the recent past, directly, indirectly or on behalf of third parties, any financial relationships with the Company, its subsidiaries, the executive directors, of such importance as to condition their independence;

b) do not hold, directly, indirectly or on behalf of third parties, equity interests allowing them to control or to have a significant influence over the Company, nor do they form part of stockholders' agreements to control the Company;

c) are not close relatives of the Company's executive directors or of individuals who are in the situations described in a) and b) above.

Related party transactions The Board of Directors has approved "Internal Regulations for Related Party Transactions" as recommended by the Code of Conduct. The rules laid down in these Regulations are as follows: Art. 1 – Identification of related parties The Regulations adopted in accordance with the recommendation contained in the Code of Conduct for Listed Companies defines guidelines and methods for

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the identification of related party transactions pertaining to the Board of Directors, as well as transactions that have to be communicated to the Board if carried out by the bodies or structures that have been delegated powers by the Board. The regulations also define behavioural guidelines for carrying out such transactions to ensure that they are correct in substance and in line with procedures. For the identification of "related parties", the Bank has adopted the definition contained in Consob's Communication 2064231 of 30 September 2002. To implement the regulations, the Company prepares a list of "related parties" and keeps it constantly updated, making it known to central and peripheral structures and to subsidiary companies. Art. 2 – Significant related-party transactions for the purposes of art. 71-bis of CONSOB Resolution 11971/99 and subsequent amendments The Board of Directors is exclusively responsible for those transactions that in terms of the object, amount, conditions and timing could jeopardise the company's assets or the completeness and fairness of accounting and other disclosures regarding Banca Lombarda (these transactions have to be reported to the market in the terms and with the methods laid down in art. 71-bis of CONSOB Regulation 11971/99 and subsequent amendments). In any case, the following are to considered significant transactions for the purposes of art. 71-bis:

The granting of credit lines exceeding 10% of consolidated capital for supervisory purposes, excluding intercompany transactions;

real estate and financial transactions, excluding intercompany transactions, exceeding 20 million euro, unless they are routine transactions, i.e. they are not operations typically carried out by the Company at normal market conditions.

In order to calculate this threshold, account also has to be taken of transactions that are individually less than this amount, but which cumulatively are over it, if in some way they are linked to each other. Art. 3 – Related party transactions subject to prior authorisation by the Board of Directors In addition to the transactions that law or the Articles of Association make the exclusive responsibility of the Board of Directors, related party transactions, including intercompany transactions, also have to be submitted for advance Board approval if they have a significant impact on the results, assets and liabilities, or the financial position, such as:

the purchase or sale of property; the purchase or sale of equity investments (even if they do not involve

changes in the Banking Group), firms or businesses; partnership or joint venture agreements; financial or commercial transactions, exceeding Euro 5 million, unless

they are routine transactions, i.e. of a kind usually carried out by the Company at normal market conditions applied to customers.

long-term framework agreements governing intercompany services;

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the granting to the banking group companies of: (i) credit lines to be used for purposes other than the company's core

business, (ii) subordinate loans and other such assets that can be included in the

company's capital for supervisory purposes, if the amount exceeds 25% of the company's Tier 1 capital;

(iii) loans and guarantees directly or indirectly linked to acquisitions of control of other companies or to interventions involving capital stock (payments for future increases in capital stock, coverage of losses, etc.), unless such credit lines are related to operations already authorised at Board level by Banca Lombarda;

granting credit lines of more than 2.5% of capital for supervisory purposes to related parties not belonging to the Banking Group;

non-performing loans, problem loans, loans being restructured or restructured loans with related parties.

Art. 4 – Related party transactions not subject to prior authorisation by the Board of Directors Related party transactions other than those mentioned in arts. 2 and 3 carried out by delegated bodies or structures and not included among those considered routine and at normal conditions, if of significant amount, have to be reported to the Board of Directors periodically (at least quarterly) by the Chief Executive Officer. Art. 5 – Guidelines for conduct in related party transactions In the circumstances mentioned in arts. 2 and 3, the Board of Directors has to receive adequate information regarding the nature of the relationship between the parties, on the way the transaction was carried out, on the economic and other conditions at which it was carried out, on the way in which the proceeds were calculated, on the interest and the motivations underlying the transaction, the effects on the balance sheet and income statement and any risks for the Company. If the relationship is with a Director or a Director has in any case a direct, indirect or even potential interest in the transaction, he has to give full details to the Board on a timely basis; he also has to leave the Board Meeting when the matter is voted, but without prejudice to the procedure to be applied in certain circumstances in accordance with art. 136 of Decree 385/93. If the nature, value and other characteristics of the transaction require it, in order to avoid the transaction being concluded at different conditions from those that probably would have been negotiated between unrelated parties, the Board of Directors has to take care that the transaction is closed with the assistance of independent experts who can value the assets and provide financial, legal and technical advice. The experts to be chosen will have proven professionalism and skill in the matters concerned, and a careful assessment will be made of their independence and lack of conflict of interest. When reporting transactions as per art. 4 to the Board, the Chief Executive

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Officer will have to provide information on the characteristics of the transactions, the nature of the relationship, the way in which the proceeds were calculated, the interest and the motivations underlying the transaction and any risks for the Company For related party transactions, including intercompany transactions, that are not submitted for Board approval neither before nor after the event, in accordance with arts. 2, 3 and 4, the Chief Executive Officer or whoever else is responsible for carrying out the transaction has to keep the relevant documentation on file. Art. 6 – Related party transactions carried out by subsidiary companies If they are not in the normal run of business and at standard market conditions, related party transactions carried out by subsidiaries:

have to be approved by the Board of Directors of the subsidiary company and carried out in accordance with the guidelines mentioned in art. 5 above;

have to be communicated immediately to the Parent Bank, so that its Board of Directors can be informed at the next meeting (or, if not significant, at least quarterly) and any compulsory disclosures required by current regulations can be complied with.

Art. 7 - Final instructions The Chief Executive Officer is responsible for applying the regulations, taking all the steps that are necessary, useful or opportune for the purpose, taking care above all that Banca Lombarda and its subsidiaries comply with the guidelines contained therein. In the event of an emergency, the functions of the Board of Directors can be performed by the Executive Committee, in accordance with art. 21 of the Articles of Association, or by the Chairman or his deputy, in accordance with art. 22, providing they report back at the next Board meeting.

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Transactions subject to art. 136 of the Banking Consolidation Act The Board of Directors has issued suitable instructions at Group level with reference to the problems involved in applying art. 136 of the Banking Consolidation Act as part of the federal-type organisational structure adopted by the Group, with particular reference to the concept of an obligation contracted indirectly by company officers. Given that it is up to the Board of Directors in any event to evaluate case by case whether or not the conditions exist for these rules to be applied, based on the information provided by the person concerned or any other elements that may be available, the Board of Directors has identified certain situations where particular attention should be paid by the Board of Directors, even if technically the rules do not apply under such circumstances. When this is the case, even if it is merely for prudence sake, the matter has to be approved as required by art. 136 of the Banking Consolidation Act, in other words with the favourable vote of all members of the Board of Statutory Auditors.

* * * Law 262 of 28 December 2005, which took effect on 12 January 2006, introduced a radical reform of the rules designed to safeguard small investors and the regulations governing financial markets. In particular, the list of counterparties that have to follow the procedure in art. 136 of the Banking Consolidation Act has been extended. In fact, the reporting requirements now also cover obligations with: - companies where officers act as directors, managers or statutory

auditors, - as well as with companies controlled by them or which control them or

which are affiliates; With reference to the above, the Official Gazette of 11 March 2006 published Law 80 of 9 March 2006, effective the next day, which postponed application of these rules to 17 May 2006. Steps have been taken to make the procedural changes that are needed to comply with the new rules on a timely basis.

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Committees Nominations Committee It was decided not to set up a Nominations Committee as the nomination of directors is done directly by the stockholders at the Stockholders' Meeting. Reference should be made to a paragraph on the procedures for nominating directors. Compensation committee A Directors' Compensation Committee has been set up as part of the Board, consisting primarily of Non-Executive Directors. It is currently made up of:

- Gino Trombi - Alberto Folonari - Giovanni Bazoli - Corrado Faissola (*) - Giuseppe Camadini - Giuseppe Lucchini - Giovanni Minelli (*) executive director

The above Committee met three times in 2005. The Committee makes proposals to the Board for the compensation of Directors who hold particular offices. When the Committee makes decisions, the persons directly concerned abstain. With input from the Chief Executive Officer, the Committee also makes proposals regarding the compensation of the Company's Senior Management. In order to achieve a stronger sense of sharing the company's strategies by means of a direct form of participation in the company's results, there is a stock option plan in favour of the managers of the Bank and its subsidiaries and another stock option plan reserved for the subsidiaries' chief executive officers and the Bank's financial consultants. Purpose of the plan: - To focus the staff’s attention on the creation of value for the bank

and for its stockholders, to align management’s objectives with those of the stockholders.

- To encourage corporate loyalty by providing incentives for key resources to stay with the companies.

- To improve competitiveness on the compensation market. The assignment of options has a vesting period of 3 years.

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The vesting period runs from the grant date, being the date on which the Board of Directors approved the grant of options to each beneficiary, in accordance with powers delegated by the stockholders. Internal control committee As a bank, the internal control system and the structure assigned to handle it are in line with the Bank of Italy's instructions, which are even more detailed than those foreseen by the Code of Conduct. This system has, among other things, the task of checking compliance with all internal operating and administrative procedures adopted to ensure a healthy, prudent and efficient operation, as well as to identify, prevent and manage, as far as possible, all risks of a financial, credit and operational nature as well as any cases of fraud that could damage the Bank. Those in charge of internal control do not report to any of the heads of operating departments, but directly to the Board, Senior Management and the Statutory Auditors. The Board of Directors has set up an Internal Control Committee, which is currently made up of the following Directors:

- Luigi Bellini - Mario Cattaneo - Mario Cera - Felice Martinelli - Federico Manzoni.

The Committee is regulated by rules that provide for (in brief): - the Committee's function is to help the Board of Directors by carrying out

investigations, making proposals and offering advice, and is carried out on a collegiate basis.

- the Internal Control Committee has to evaluate the Group's internal control systems, examine the methodology used to draw up the financial statements, verify the procedures for identifying potential conflicts of interest involving company officers, evaluate fee proposals by the Independent Auditors, verify the efficiency of the IT system and report any matters worthy of note to the Board of Directors.

- The Committee usually meets every two months, unless there are exceptional circumstances.

The Committee met nine times in 2005. As part of its checks, in 2005 the Internal Control Committee paid particular attention to evaluating the Group's internal control systems, above all as regards credit risk management and the system for measuring and monitoring operating risk, as well as assessing the problems involved in drawing up the

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financial statements, including the effects of Legislative Decree 37 of 6 February 2004 and certain aspects regarding the Bank's regulatory structure. Internal Dealing In order to adopt the rules issued by Borsa Italiana, which became effective on 1 January 2003, Banca Lombarda prepared a code of conduct which was approved by the Board of Directors during the meeting of 11/12/2002. Following Italy's implementation of the Market Abuse Directive 2004/72/EC and CONSOB's adoption of the corresponding rules, the law introduced an obligation to communicate to the market all transactions in the company's financial instruments carried out by "relevant persons" and by those closely associated with them. As a result, as mentioned by Borsa Italiana, the internal dealing rules issued by it were abrogated from the date the new provisions became effective, that is 1 April 2006. In order to adopt the new rules, on 22 March 2006 the Board of Directors approved, with effect from 1 April 2006, the new “Regulations for transactions carried out by relevant persons and persons closely associated with them” in accordance with current law. The new regulations reiterate Borsa Italiana's rules on internal dealing. The "Relevant Persons" needing to report have been identified as the directors, statutory auditors, members of senior management and the head of the finance department of Banca Lombarda e Piemontese S.p.A. and the persons closely associated with them. The following do not have to be disclosed: a) transactions totalling less than 5,000 euro in any one year; if derivatives

are involved, the amount is calculated on the underlying shares; b) transactions between relevant persons and those closely associated with

them; c) transactions carried out by the same listed issuer and by companies

controlled by it.

* * * For the purpose of ensuring proper control over privileged information relating to Banca Lombarda e Piemontese S.p.A. and its subsidiaries, the Board of Directors has also approved a set of new regulations called: "Internal Regulations for managing and handling privileged information and communicating documents and information externally"

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These Regulations identify the persons in charge of managing this information, define the conduct to be adopted by directors, statutory auditors and employees of Banca Lombarda and its subsidiaries, as well as the procedures for communicating documents and information externally, with particular reference to “price sensitive” information. In order to have a suitable tool to help identify the people with access to privileged information, as foreseen by art. 115 bis of Decree 58/98 and related implementing rules, a "Register of persons with access to privileged information on Banca Lombarda and its financial instruments" has been set up centrally at Group level, indicating the following: 1. the identity of the persons who have access to privileged information

because of their job or profession, i.e. because of the activities carried out on behalf of the entity required to maintain the Register

2. the reason for which the person is listed in the Register 3. the date each time the Register is updated

The person concerned is promptly informed that this information has been recorded.

* * *

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Board of Statutory Auditors The composition of the Board of Statutory Auditors (for the three-year period 2005-2007) is given below with an indication of the other offices that each Statutory Auditor holds in other listed companies: Chairman Sergio Pivato

Chairman of the Board of Statutory Auditors: Edison S.p.A., Reno de Medici S.p.A.

Acting auditors Angelo Coen Filippo Rovetta Alternate auditors Vincenzo Broli Marco Confalonieri The Board of Statutory Auditors met twelve times during 2005. It is up to the Board of Statutory Auditors to report to the Bank of Italy any deeds or situations that might constitute an operational irregularity or a breach of the rules governing banking activities. The Board of Statutory Auditors has to meet at least every 60 days. The procedure for nominating directors and statutory auditors Directors Nominations for the position of director are proposed directly by the stockholders during the Stockholders' Meeting. Given that the Articles of Association do not provide for a system of list voting, there is no procedure for Stockholders to deposit candidates' names in advance, along with detailed information on the persons being proposed. It should also be emphasised that the personal and professional characteristics of the candidates are normally known to all of the stockholders, given that the persons being nominated are usually renowned and authoritative.

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Statutory Auditors In accordance with Ministerial Decree 162 of 30.3.2000, the Statutory Auditors are to be chosen from among people with the professional qualifications laid down in art. 1.1 of the said Decree, as well as in art. 1.2 letters a), b) and c), bearing in mind solely for the purpose of checking whether candidates have the professional requisites and with reference to letters b) and c), that the sectors strictly related to the Company's activity are those involved in banking, finance and insurance. The entire Board of Statutory Auditors is appointed on the basis of lists presented by the stockholders, with candidates numbered consecutively. These lists have to be deposited at head office and published in at least two national daily newspapers, one of which financial, at least 5 days prior to the date of the stockholders' meeting at first calling. Each stockholder can present or participate in the presentation of only one list. A list will be considered invalid if its presentation quorum can only be reached by counting one or more stockholders who have presented or participated in the presentation of another list as well. Lists can only be presented by stockholders who individually or with other stockholders represent at least 1% of the shares with a right to vote at ordinary stockholders' meetings. To prove that they own enough shares to present lists, stockholders at the same time have to present at head office a copy of the admission tickets issued by the custodians of their shares. Together with each list, and within the deadline for its presentation, all candidates have to file declarations at head office stating that they accept to stand as a candidate and attesting under their own responsibility that there are no reasons why they cannot be elected, that there is no incompatibility, and that they fulfil current legal requirements to act as a Statutory Auditor. Each person with a right to vote can only vote for one list. Similarly, the following stockholders have to vote for the same list: (i) stockholders restricted in how they can vote by one of the agreements foreseen by art. 122 of Legislative Decree 58 of 24 February 1998, or participants in syndicates of any kind whose purpose or effect is to exert a dominant influence over the Company, (ii) stockholders who together find themselves in the situation of being able to exert a dominant influence over the Company in one of the circumstances provided for in art. 23, para. 2 of Legislative Decree 385 of 1 September 1993. The members of the Board of Statutory Auditors are elected as follows: a) 2 Acting Auditors and 1 Alternate Auditor are taken in order from the list that wins the highest number of votes from the stockholders;

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b) the third Acting Auditor and the second Alternate Auditor are taken from the list that wins the next highest number of votes after the list in a), with the first candidate listed becoming the acting auditor and the next listed becoming the alternate auditor. In the event that only one list is presented or only one list gets voted, all of the auditors are to be taken from that list, with the first three being elected acting auditors and the next two alternate auditors, in the same order in which they were listed. The first person listed in the list that obtained the highest number of votes is appointed Chairman of the Board of Statutory Auditors. If an auditor drawn from the list that won the highest number of votes has to be replaced, he is replaced by the alternate auditor that belonged to the same list. If it is an auditor drawn from another list that is to be replaced, he is replaced by the alternate auditor that belonged to the same list. In the event that no list has been presented or voted, the stockholders have to vote according to the majorities laid down by law. The above rules for statutory auditors' elections are not to be applied in stockholders' meetings that have to proceed in accordance with the law in the appointment of acting and/or alternate auditors and of the Chairman, required to integrate the Board of Statutory Auditors following a replacement or retiral, while still maintaining the principle that one auditor is to be elected by the minority stockholders. The members of the Board of Statutory Auditors cannot hold more than five positions as acting auditor in other quoted companies that are not part of the Banca Lombarda Banking Group. The internal control system Banca Lombarda has adequate internal control and risk management systems, which comply with the supervisory instructions issued by the Bank of Italy. Checking that operations are carried on as they should be is specifically delegated to the Internal Auditing department. It has the task of evaluating the functionality of the overall system of internal controls which are designed to guarantee the efficiency and effectiveness of corporate processes, the safeguarding of asset values and protection against losses, the reliability and integrity of accounting and management information. As mentioned above, the Internal Control Committee, a body set up at part of the Board of Directors, is also responsible for checking that the activities of the Internal Auditing Department are designed to ascertain compliance with all internal operating and administrative procedures adopted to ensure a healthy, prudent and efficient operation, as well as to identify, prevent and manage, as

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far as possible, all risks of a financial, credit and operational nature as well as any cases of fraud that could damage the Bank. The Investor Relations function The Company takes steps to encourage stockholders to take part in Stockholders' Meetings, which undoubtedly represent the key moment for dialogue between the Company and investors, who are always provided with timely information. Stockholders' meetings The Bank makes every effort to facilitate participation at Stockholders' Meetings, in accordance with the law and with the Articles of Association. It was felt unnecessary to prepare separate Regulations for Stockholders' Meetings as art. 11.3 of the Articles of Association already state that "it is up to the Chairman to establish whether meetings have been regularly called and have a quorum; he also has to ascertain the right of stockholders to attend, direct and regulate the debate, establish the rules for voting and announce the results thereof"; experience of Stockholders' Meetings to date has demonstrated that it is always possible to ensure that meetings take place properly. Organisational model as per Legislative Decree 231/2001 At the meeting held on 12 May 2004, the Board of Directors approved the structure of the organisation, management and control model as per Decree 231/2001 (on the management liability of companies), appointing in Banca Lombarda a "collegiate body" made up of the heads of the Corporate and Legal Secretariat, Human Resources and Auditing Departments of the Group, coordinated by an independent Director.

This initiative was taken in the conviction that adopting this Model - quite apart from the Decree, which says that it is voluntary and not obligatory - should constitute a valid tool for raising the awareness of everyone working at the Parent Bank and for Group companies in the hope that they will always adopt fair conduct when performing their duties and prevent the crimes foreseen in the decree. In accordance with the corporate governance guidelines adopted by the Group, Banca Lombarda has taken steps to make this Model known to Group companies, proposing that they implement it, making any adjustments that may be needed to bring the Model into line with local circumstances. During 2005, to ensure constant updating and effective implementation of the

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model in line with legislative changes, particularly with reference to the question of market abuse and the protection of small investors, the Parent Bank's Control Unit initiated a project to verify and update the Model with the support of KPMG Audit, who are also able to give an independent evaluation of the work carried out. In particular, the mapping of activities at risk of abuse and their related supervision has been reviewed and updated. Risk areas have been recognised, internal controls and procedures evaluated, and action plans identified and classified on a priority basis. A plan has also been prepared to integrate the organisational model by means of specific rules designed to regulate conduct and controls within each sensitive process and activity, so as to reinforce organisational supervision. As part of this project, the Organisational Model was updated with reference to the rules by which the Control Unit functions, together with the related information flows, regulatory system, the system for reporting violations and training/information, all of which was reviewed by the Board of Directors on 14 March 2006. In this context, the Board also discussed the adoption of the Group's Code of Ethics, which forms an integral part of the organisational model. Particular attention is paid to training/information on this matter. Training sessions involving the entire management of Banca Lombarda were held during the fourth quarter of 2005 in order to integrate the IT supports that already formed part of the corporate regulatory system.

Committee for the Social Responsibility Report On 9 April 2003, the Board of Directors set up a committee consisting of: - Gino Trombi - Chairman - Alberto Folonari - Vice Chairman - Mario Cattaneo - Giuseppe Camadini - Felice Martinelli with the participation of the General Manager Victor Massiah and of the Deputy General Manager, Ettore Medda, with a view to contributing towards the preparation of the Social Responsibility Report. Social Responsibility Report In recent years, Banca Lombarda has started publishing a Group Social Responsibility Report, adding a new communication tool through which it can illustrate, once a year, the social activities and strategies pursued vis-à-vis the various categories of stakeholders (customers, stockholders, employees,

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institutional investors, local communities, public administration, banking counterparties and suppliers). This tool has given rise to a document that describes the qualitative and quantitative relationships that the Group maintains with its stakeholders, being well aware of the importance of the role played by banks in the pursuit of balanced and sustainable economic growth and explicitly adopting a sense of social consciousness. The Group Social Responsibility Report is prepared in accordance with the guidelines drawn up by GBS - Gruppo di Studio per la Statuizione dei Principi di Redazione del Bilancio Sociale e Ambientale and with the standards issued by ABI (the Italian Banking Association) for the preparation of social responsibility reports in the banking sector. Banca Lombarda has also had its Social Responsibility Report certified by the Independent Auditors. This reinforces the value of the information provided, which is needed to obtain the ethical ratings required by those increasingly numerous specialist institutional investors that consider the ethical variable as a positive discriminating factor in the allocation of the funds that they manage. Copies of the Social Responsibility Report are available on the website. Brescia, 5 April 2006 The Board of Directors

TABLE 1 STRUCTURE OF THE BOARD OF DIRECTORS AND COMMITTEES OF BANCA LOMBARDA E PIEMONTESE SPA - 2005BOARD OF DIRECTORS INTERNAL CONTROL COMPENSATION NOMINATIONS EXECUTIVE

COMMITTEE COMMITTEE (if any) # COMMITTEE (if any)@ COMMITTEE

POSITION MEMBERSEXECUTIV

E

NON EXECUTIV

E INDEPENDENT ****

NUMBER OF OTHER

APPOINTMENTS ** *** **** *** **** *** **** *** ****Chairman Gino Trombi X X 100,00 3 X 66,67 X 100,00 Senior Vice Chairman Alberto Folonari X X 92,86 3 X 100,00 X 100,00 Vice Chairman Giovanni Bazoli X X 78,57 5 X 66,67 X 75,00 Chief Executive Officer Corrado Faissola X 100,00 3 X 100,00 X 100,00 Director/Secretary to the Board Mario Cera (D) X X 92,86 4 X 66,67 X 100,00 Director Mario Cattaneo X X 78,57 6 X 100,00 X 75,00 Director Luigi Bellini X X 78,57 8 X 100,00 Director Piero Bertolotto X X 92,86 4 X 100,00 Director Sergio Borlenghi (B) X X 90,00 3Director Giuseppe Camadini X X 92,86 9 X 100,00 X 100,00 Director Virginio Fidanza X X 100,00 1Director Attilio Franchi (A) X X 100,00 3Director Ugo Gussalli Beretta (A) X X 50,00 12Director Pietro Gussalli Beretta (B) X X 70,00 2Director Giuseppe Lucchini X X 57,14 8 X 66,67 Director Federico Manzoni (B) / (E) X X 100,00 5 X 100,00 Director Felice Martinelli X X 85,71 8 X 100,00 Director Giovanni Minelli ( C) X X 92,86 1 X 100,00 X 100,00 Director Luigi Nocivelli X X 85,71 11Director Francesco Passerini Glazel (A) / (F) X X 75,00 15 X 33,33 Director Pierfrancesco Rampinelli Rota X X 92,86 13Director Adriano Rodella X X 92,86 3Director Antonio Spada (A) X X 100,00 5Director Matteo Viglietta (B) X X 90,00 4Director Romain Zaleski X X 92,86 10§ Summary of reasons for the lack of such a Committee or a different composition compared with the Code's recommendations: ==# Summary of reasons for the lack of such a Committee or a different composition compared with the Code's recommendations: == @ Summary of reasons for a different composition compared with the Code's recommendations: The nomination of directors is done directly by the stockholders at the Stockholders' Meeting.Number of meetings during the year. BoD: 14 INTERNAL CONTROL COMMITTEE: 9 REMUNERATION COMMITTEE: 3 NOMINATIONS COMMITTEE: EXECUTIVE COMMITTEE: 4NOTES* Indicates whether the statutory auditor was nominated through lists presented by the minority** This column shows the number of positions as director or statutory auditor that were held by the person concerned in other companies listed on organised markets, in Italy or abroad, in finance companies, banks, insurance companies or companies of a certain size.*** This column indicates with an “X” the director's membership of the committee in question.**** This column shows in percentage terms the level of attendance by directors at Board and committee meetings. (A) = members who expired at the meeting on 29/4/05. Board of Directors meeting from 1/1/05 to 28/4/05: no. 4 - The attendance record has been calculated on the basis of 4 meetings (B) = members appointed at the stockholders' meeting of 29/4/05. Board of Directors meeting from 29/4/2005 to 31/12/2005: no. 10 - The attendance record has been calculated on the basis of 10 meetings (C) = member appointed to the "Compensation Committee" by the Board of Directors on 29/4/05. No. of Compensation Committee meetings from 29/4/05 to 31/12/05: 2 - The attendance record has been calculated on the basis of 2 meetings Expired as member of the "Executive Committee" at the AGM on 29/4/2005. No. of Executive Committee meetings from 1/1/05 to 28/4/05: 1 - The attendance record has been calculated on the basis of 1 meeting. (D) = appointed member of the Executive Committee by the Board of Directors on 29/4/05. No. of Executive Committee meetings from 29/4/2005 to 31/12/2005: 3 - The attendance record has been calculated on the basis of 3 meetings. (E) = appointed member of the "Internal Control Committee" by the Board of Directors on 29/4/05. No. of meetings of the Internal Control Committee from 29/4/05 to 31/12/05: 6 - The attendance record has been calculated on the basis of 6 meetings. (F) = expired as member of the "Internal Control Committee" at the AGM on 29/4/05. No. of meetings of the Internal Control Committee from 1/1/05 to 28/1/05: 3 - The attendance record has been calculated on the basis of 3 meetings.

TABLE 2 BOARD OF STATUTORY AUDITORS OF BANCA LOMBARDA E PIEMONTESE SPA - 2005

POSITION MEMBERS ATTENDANCE AT BOARD MEETINGSNUMBER OF OTHER APPOINTMENTS **

Chairman Sergio Pivato 100,00 2

Acting Auditor Angelo Coen 83,33 ==

Acting Auditor Filippo Rovetta 100,00 ==

Alternate Auditor Vincenzo Broli == ==

Alternate Auditor Marco Confalonieri == ==Number of meetings during the calendar year: 12Indicate the quorum required for minorities to present lists for the election of one or more acting auditors (pursuant to art. 148 of the Finance Consolidation Act): 1%

NOTES* indicates whether the statutory auditor was nominated through lists presented by the minority** This column indicates the number of other appointments as a director or statutory auditor held by this person in other companies listed on organised markets in Italy

TABLE 3 OTHER PROVISIONS OF THE CODE OF CONDUCT

YES NOSUMMARY OF REASONS FOR ANY VARIANCE FROM THE CODE'S

RECOMMENDATIONS

SYSTEM OF DELEGATED POWERS AND RELATED PARTY TRANSACTIONSHas the Board of Directors granted powers, establishing their:a) limits Xb) how they are to be exercised Xc) and frequency of reporting? XHas the Board of Directors reserved for itself the examination and approval of transactions with a significant impact on the company's income statement, balance sheet and financial situation (including related-party transactions)? XHas the Board of Directors established guidelines and principles for identifying "significant" transactions? XAre these guidelines and criteria explained in the report? X

Are the procedures for examining and approving related-party transactions described in the report? X

Are the procedures for approving related party transactions explained in the report? X

Procedures for the latest appointment of directors and statutory auditors

Were the names of candidates for the office of director filed at least ten days in advance?

The most recent nominations for the position of director were proposed directly by the stockholders during the Stockholders' Meeting. Given that the Articles of Association do not provide for a system of list voting, there is no procedure for

Were the nominations for the office of director accompanied by full and sufficient information?

see side note Stockholders to deposit candidates' names in advance, along with detailed information on the persons being proposed.

Were the nominations for the office of director accompanied by an indication of their suitability to qualify as independent directors?

It should also be emphasised that the personal and professional characteristics of the candidates are normally known to all of the stockholders, given that the persons being nominated are usually renowned and authoritative.

Were the name of candidates for the office of statutory auditor filed at least ten days in advance? X

Under the Articles of Association, these lists have to be deposited at head office and published in at least two national daily newspapers, one of which financial, at least 5 days prior to the date of the stockholders' meeting at first calling.

Were the statutory auditors' candidatures accompanied by adequate information? X

Stockholders' meetings

Has the company approved a set of Stockholders' Meeting Regulations? X

It was felt unnecessary to prepare separate Regulations for Stockholders' Meetings as art. 11.3 of the Articles of Association already state that "it is up to the Chairman to establish whether meetings have been regularly called and have a quorum; he also has to ascertain the right of stockholders to attend, direct and regulate the debate, establish the rules for voting and announce the results thereof".

Are the Regulations annexed to the report (or is it stated where they may be obtained/downloaded)? = =

Internal ControlHas the Company appointed the people who are in charge of internal control? XAre these people independent from those in charge of the operating areas? XOrganisational unit in charge of internal control (pursuant to art. 9.3 of the Code) X Group Internal Audit Department

Investor relationsHas the Company appointed someone to be in charge of investor relations XOrganisational unit and references of person responsible for investor relations (address/tel/fax/e-mail)

Research Dept. Via Cefalonia 74, Brescia - tel 030/2473318 - fax 030 2433809 - damiano.mattei@bancalombarda.it