"Historically, BCI has always been a Co-operative bank and never really specialized in retail." explained Enrico Meucci, the bank's charismatic chief operating officer and general manager. "The reorganization of the bank is necessary to compete in the radically changing market and it will encourage growth of our international activities. BCI needs critical mass in both its retail and wholesale operations. The previous size of the bank made it difficult to integrate into Intesa . With the new strategy, we will continue to develop our full potential and help our clients with all their global needs."

The Group comprises 49 fully consolidated subsidiaries throughout Europe and South America. It is also the first Italian bank to open in Tokyo.

"This has always been one of the most profitable branches for the BCI Group." said Meucci. "Our clients are very loyal, and through our perseverance and diligence, we have been rewarded. The Italian and Japanese economic models are very similar in that both countries host many small- and medium-sized enterprises. Our goal is to help Italian entrepreneurs in their aim to become global, and also help our customers in Japan and the rest of the world with their ambition to come to Europe,"

As a participant in the new global economy, BCI has embraced reform and modernization well. The success of their overseas territories has been built with their reputation for sound administration, effective banking structure and stability.

Meucci pointed out, "This is important because these qualities provide reassurance to would-be investors and business partners."

Affiliations with the Argentine bank Banco Caja de Ahorro and the Croatian bank Privredna Banka of Zagabria are just two of the many recent take-overs and mergers which have taken place. And according to Meucci, "Bigger is better."

However, such strategies are not always easy for a large institution. When a company is involved in an acquisition, whether as an equal, senior or junior partner, problems can still arise.

Meucci explained, "Much internal negotiation is required to enable the organizations to mesh together effectively. Corporate and cultural philosophy is likely to be very different, especially with overseas acquisitions. Even with friendly take-overs, there are risks of resentment and self interest."

BCI overcomes these problems by making sure all members of the new organization understand the needs, desires and agenda of their colleagues.

Summing up the BCI strategy, Meucci stated, "Companies where there is genuine teamwork are more likely to win and satisfy customers. This is the philosophy that has led to BCI's success, and will continue to take us to an unparalleled level."

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Successful acquisition strategy creates a leading Italian regional bank For decades, Italian banks have operated in a highly fragmented domestic market with over 1,000 regional, cooperative and national banks serving the country. However, as financial markets turn increasingly global, Italian banks have found themselves divided and in the company of giant financial groups from Germany, the United States, and Japan.

Gino Trombi, president of Banca Lombarda

"Thriving in such a competitive environment is not easy. That is the driving force behind the current consolidation sweeping Italian banking today," said Dr. Gino Trombi, president of Banca Lombarda, Italy's third-largest regional bank.

Trombi is in a good position to know, as Banca Lombarda is itself the product of two recent consolidations. First was the 1999 merger between Credito Agrario Bresciano and Banca San Paolo di Brescia, the two largest banks in the Brescia area. Shortly after this merger, the group acquired 56.7 percent of Banca Regionale Europa, a prominent regional bank. The result is a geographically diversified group with more than 700 branches concentrated in Lombardy and Piedmont regions and $24 million in total assets.

"The addition of BRE will allow us to make a wider product mix available to our clients by adding up complementary business strengths in areas such as corporate finance, corporate lending, asset management, bank assurance, and consumer credit," asserted Trombi.

Banca Lombarda is based about 70 km east of Milan in Brescia, Lombardy region's second-largest city and a traditional center for industry. In Brescia, Banca Lombarda Group maintains a dominant 40 percent of the market share. Its presence in Lombardy, now about 7 percent, is expected to increase dramatically, as four-fifths of its branches are located in this region. Although the bank does have branches in northeast Italy as well as in the greater Rome area, its geographic focus is in the highly-productive and affluent northwest.

"Our goal is to be the number-one or two inter-regional bank in Italy," said Trombi. After the most recent consolidations, Banca Lombarda is already climbed to the spot of 13th-largest banking group in Italy.

Commenting on Banca Lombarda's recent success, Trombi explained, "We recognized the need for banks to consolidate quite early. Because of this, and also through our perseverance and diligence we have been rewarded. Our goal for the next five years is to continue this strategy. We will keep our competitive position by acquiring small-and medium-sized banks with strong roots, yet enable them to operate with their own autonomy. It is very important that their historical name and presence be maintained,"

Acquisitions, however, are only one of many plans for growth. Trombi also plans to expand the bank's international activities. Banca Lombarda has international branches in Luxembourg and has plans for further growth.

"We are looking for alliances for foreign banks. We have a couple strong ones going in France already, and would like to take this sort of cooperation beyond Europe," said Trombi. "So we must find banks in China, Japan, to strengthen our relationship with Asia. We have already had many meetings with banks abroad, and now we can say we can provide our customers with a strong appointment service."

A promotional tour in May and June, which included visits to Japan, China, and South Korea, was a step in this direction. "We are travelling throughout the world to increase our relationships on an international scale. We are now ready to show the world how strong we are."

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Banking on a global level The explosion of opportunities offered by the new economy has enabled Banca Popolare Commercio e Industria to revive its fortunes and implement a new growth strategy. The banking group's president and managing director, Dr. Giuseppe Vigorelli, confidently stated his faith in opportunities afforded by Internet technology and virtual banking: "In the next three years, we expect the bank to do as much business as it did in its first 100 years. This is the new economy, which is helping us work as a virtual bank on a global level."

Dr. Giuseppe Vigorelli, president of Banca Popolare Commercio e Industria

Vigorelli's plan is the latest of a raft of Internet projects by Italian banks over the last few months. Banca di Roma is launching an online bank with Telecom Italia SpA, while Sanpaolo IMI SpA signed an accord with Tiscali. Italy's largest bank, Banca Intesa, is also in an alliance with IBM. "In this day and age, you have to have these services. If you don't, you lose out," said Vigorelli.

"BPCI is very proud of being one of the first banks to introduce the new wave of technology," stresses Vigorelli. "Globalization and the Internet have reduced the confines of banking. We have changed with this wave, and we see ourselves as a partner of our customers. We can offer them joint ventures, and help them make deals with their foreign alliances."

Their Internet venture will allow the group to sell products to existing clients, as well as reel in new ones. It will also create home-banking services for Italian families, and launch a series of business-to-business initiatives in Europe, where BPCI has already started expanding.

To help them achieve this, they have sought out global partnerships with companies, such as AXA, Templito, Scottish Equity, American Express and Henderson. "We have invested a lot in new technology, and we believe this is a condition to make business," said Vigorelli. "We are creating a new culture to face the evolution of technology and harboring alliances with banks in Germany, France and Switzerland to name a few. We have 1,200 agents in Italy alone selling our products directly or through Home Banca, the online service. We believe we are the most advanced bank in the Italian system."

The Internet venture is meant to complement recent initiatives in expanding their external territory. Vigorelli explained, "The bank successfully acquired 17 branches of Banco di Napoli, located in central and northern Italy, reflecting the group's desire to concentrate its activities in the regions where its presence is strongest."

"The acquisition, in fact, includes 10 branches in Milan -- the historical headquarter city of the bank ---and two branches in Rome. As for the remaining five branches located in Bologna, Florence, Preugia and the province of Siena, they will offer the bank an expansion into new operating territory in provinces where it is not currently present,"

Vigorelli also has his eyes set on global expansion, "In light of this, we have increased our international profile through the formation of a Luxembourg subsidiary, Banque BPCI International S.A. This will help to further our development outside Italy."

BANCA COMMERCIALE ITALIANA Italian leading bank for international activities

www.bci.it

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