In the absence of non-controlling interests, equity attributable to the parent company at 31 December 2010 was 206,613 thousand Euro compared to 155,839 thousand Euro at the end of the previous year. The changes in equity are explained in detail in the following table:

EQUITY CHANGES (in thousands of Euro)

2010

Equity at 31/12/2009

155,839

Increases:

81,616

Share capital increase

49,892

Profit for the year

18,626

Sale of treasury instruments

13,098

Decreases:

(30,842)

Purchase of treasury instruments

(13,447)

Dividends

(11,893)

Change in valuation reserve:

(5,238)

- AFS securities

(6,074)

- exchange differences

836

Other changes

(264)

Equity at 31/12/2010

206,613

Increases relating to the share capital increase refer to the capital increase against payment which was completed in July 2010. The amount also includes the income from the sale of unopted shares of 41 thousand Euro which, in compliance with IAS/IFRS, have been taken to equity.

Dividends distributed were paid as cash dividends (3,820 thousand Euro) and scrip dividends of Banca IFIS shares entirely taken from the treasury shares held (8,073 thousand Euro) (the relevant change in treasury shares was conventionally included in the item “sale of treasury instruments”.

The change in the valuation reserve refers mainly to exchange differences deriving from the consolidation of the subsidiary IFIS Finance Sp. Z o.o.

CAPITAL ADEQUACY RATIOS(in thousands of Euro)

YEAR

31.12.2010

 

31.12.2009

Regulatory capital

 

Tier 1 capital

206,510

152,066

Tier 2 capital

(3,784)

(4,314)

Deductibles

-

-

Total capital

202,726

 

147,752

Regulatory minimum requirements

 

Credit risk

129,716

120,186

Market risk

1,893

1,892

Operational risk

12,144

10,108

Total minimum requirements

143,753

 

132,186

Solvency ratios

 

Tier 1 capital/total weighted assets

11.5%

9.2%

Total capital/total weighted assets

11.3%

 

8.9%

Capital surplus (in excess of minimum requirements)

58,973

 

15,566

Pursuant to Bank of Italy’s Regulation dated 18 May 2010, the Banca IFIS Group calculated its regulatory capital at 31 December 2010 by adopting the so-called “symmetric filter”, which allows to neutralize both gains and losses on securities issued by the Central Administrations of EU Member States included among available for sale financial assets, as if they were valued at cost.