Locat's Board of Directors approves the draft financial statements as of 31 December 2004

Locat S.p.A.'s Board of Directors, chaired by Francesco Mezzadri Majani, today approved the draft financial statements as of 31 December 2004.

During 2004, Locat once again confirmed itself as leader of the Italian leasing market with a share of 13.1% (last year 12.9%), stipulating new transactions for Euro 4,970.5 million, up 19.7% on the previous year, a result which compares with the rise of 18.1% reported by the market.

With regards to earnings, the interest margin amounted to Euro 214.5 million (+ 11.9% compared with the previous year). The increase of Euro 22.9 million reflects the growth in average lending.

Overheads amounted to Euro 57.9 million (- 1.6% with respect to 2003). In particular, the rise in payroll and related costs (+ 1.8%) was accompanied by a drop in other administrative expenses (- 1.5%) and in the amortization and depreciation charges on intangible and tangible fixed assets (- 12.9%). The cost/income ratio improved once again, dropping at the end of 2004 under the threshold of 25% (24.8% compared with 28.5% in 2003).

Provisions, adjustments and value writebacks on loans came in total to Euro 42.6 million, down by Euro 4.4 million on December 2003 (- 9.4%). The positive performance of value writebacks in particular reflects the collection of an important amount (Euro 1.6 million) against items struck off in previous accounting periods.

Positive and negative extraordinary items presented a positive balance of Euro 10.6 million which is made up of income of Euro 10.2 million, reflecting the booking of deferred tax assets.

Pre-tax income amounted to Euro 143.7 million, up by 43.5% on 2003, while income taxes increased by Euro 12.6 million (+ 32.6%).

The rise in net income from Euro 61.6 million to Euro 92.5 million (+ 50.3%) is attributable to both the afore-mentioned extraordinary items and the significant rise in the contribution margin (+13.3%), due to the increase in average lending, compared to the decrease in overheads (- 1.6%).

Taking into account the need to align the equity endowment of the Company to the level necessary for financing the rise in lending, the Board of Directors will propose to the Ordinary Meeting of the Shareholders, called for the 15th of April 2005 in first calling and the day after in second calling, that the economic results for the 2004 accounting period be allocated to reserves for euros 71,499,790 and to dividends for euros 21,041,604 corresponding to a euro 0.038 (unchanged) per share.
The Board of Directors has co-opted Elisabetta Magistretti and Ranieri De Marchis, heads - respectively - of UniCredito Italiano S.p.A.'s Administration Governance Division and Planning and Finance Division. The new Directors have taken the place of the resigning Pietro Modiano and Giorgio Guazzaloca. The Board also appointed Luigi Marino as Deputy Chairman of the Company, an office which had remained vacant following the resignation of Giorgio Guazzaloca.

Locat has also been authorized by the Parent Bank, subject to the approval of the Bank of Italy, to establish a NewCo in Bosnia Herzegovina, under joint-venture with UniCredit Zagrebacka Banka, for the performance of leasing activities in said country. This initiative joins Locat Leasing Croatia d.o.o., (already operative in Croatia) and that being set up in Russia (ZAO Locat Leasing Russia ) for which registration with the Moscow Court has already been obtained.

For greater disclosure on the operating results achieved during the accounting period, the income statement and balance sheet schedules have been attached. The documentation has been delivered to the Board of Statutory Auditors.

LOCAT S.p.A.