Banca Popolare di Sondrio and the ECB report: we have long since initiated the required actions and remedial measures

Sondrio, 13 May 2025 - After the report and the reprimand from the ECB on the credit risk of Popolare di Sondrio, the bank's response has arrived

"The inspection activity - reads a note - was conducted between October 2022 and April 2023 and therefore refers to that period. The inspection and its developments were reported both in the financial statements for the financial year ended 31 December 2023 and in the financial statements for the financial year ended 31 December 2024 , as well as in the interim management report at 31 March 2025 , which states that, on 29 April 2025, the ECB sent the Bank the final decision imposing certain requirements and making recommendations, which also concern the effectiveness of the board of directors, the strengthening of the structure and functioning of the management level and the risk management and internal audit functions.

“As reported in the press release issued on 6 May 2025 in relation to the interim management report as of 31 March 2025, following the inspection activity, which concerned credit and counterparty risk with specific reference to the Corporate & Large and SME segments for a gross value originally equal to 15.5 million euros, a request emerged to proceed with the reclassification of only certain credit positions for the purposes of prudential supervisory reporting (as of 31 March 2025 , the positions for which reclassification was requested were 27 and had a gross cash value of 158 million euros and a net value of approximately 113 million euros) with respect to which discussions are underway with the ECB”.

The note then continues: " If , at the end of these discussions, the credit positions were to be reclassified as impaired loans , this circumstance would not in any case lead to the recognition of significant additional effects on the income statement compared to those already accounted for, given that the Bank has already increased the related credit risk during the 2023 financial year in line with the requests of the Supervisory Authority. As represented in the interim management report at 31 March 2025 and in the related press release issued on 6 May 2025, as a result of the potential reclassifications, the incidence of net Non-Performing Loans (net NPL ratio) on total loans would vary, at 31 March 2025, from 1.04% to 1.36% (the gross NPL ratio would go from 2.9% to 3.3%). With reference to each of the aforementioned findings , the Bank has long since initiated remedial actions and measures which it will complete within the expected timeframes and which the ECB has reserved the right to evaluate over time based on their concrete effectiveness and implementation".