Banco BPM S p A : 19 Notes to the consolidated financial statements (Part M -- Disclosure on leases)

__________________________________________________________________________________________ NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 495

PART M - DISCLOSURE ON LEASES

Section 1 - Lessee

QUALITATIVE INFORMATION

The IFRS 16 scope of Banco BPM Group includes the lease contracts on the property units mainly intended for commercial activities (branches), which account for more than 99% of the rights of use relating to leases. There was a marginal amount of other contracts, relating to the hiring of the company car fleet and a small number of contracts containing rights of use of technological equipment.

Short-term or low value lease contracts are recorded according to that set out in par. 6 of IFRS 16. The related costs are indicated in table 12.2 "Other administrative expenses: breakdown".

QUANTITATIVE INFORMATION

According to that set out in Bank of Italy Circular 262, the information required by accounting standard IFRS 16, relating to contracts in which the Group is the lessee, contained in these Notes to the consolidated financial statements, in the sections indicated below:

• the information on rights of use acquired through leases is contained in Part B, Assets - Section 9, Table 9.1 "Property, plant and equipment used in operations: breakdown of assets at cost" and in Table 9.6 bis "Property, plant and equipment used in operations - Rights of use acquired through leases: annual changes";
• the information on lease payables is contained in Part B, Liabilities - Section 1, Table 1.6 "Lease payables";
• the information on interest expense on lease payables is contained in Part C - Section 1 - Table 1.3 "Interest and similar expense: breakdown";
• the information on the depreciation of the rights of use and the related asset classes is contained in Part B, Assets - Section 9, Table 9.6 bis "Property, plant and equipment used in operations - Rights of use acquired through leases: annual changes", under item C.2 "Depreciation".

At the reporting date, the Group does not have any significant commitments in place for lease contracts that will start in 2022.

Section 2 - Lessor

QUALITATIVE INFORMATION

The Group has both finance lease contracts and operating lease contracts in force. Finance lease operations, which include the contracts of the former Banca Italease (transferred to the Parent Company Banco BPM), as well as the contracts of Release, are in run-off as a result of the Group's decision to no longer directly disburse that type of financing.

Operating lease operations mainly regard commercial leases connected with properties acquired through datio in solutum (acceptance in lieu) in relation to previous credit exposures.

QUANTITATIVE INFORMATION

1. Information on the balance sheet and income statement

1. Information on the balance sheet and income statement

According to that set out in Bank of Italy Circular 262, the information required by accounting standard IFRS 16, relating to contracts in which the Group is the lessor, contained in these Notes to the consolidated financial statements, in the sections indicated below:

• the information on loans for leases is contained in Part B, Assets - Section 4, Table 4.1 "Financial assets at amortised cost: breakdown by product for loans to banks" and Table 4.2 "Financial assets at amortised cost: breakdown by product for loans to customers";

496 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS __________________________________________________________________________________________

• the information on assets granted through operating leases is contained in Part B, Assets - Section 9, at the bottom of Table 9.4 "Property, plant and equipment held for investment purposes: breakdown of assets at fair value through profit and loss", with the related specifics provided at the bottom of that table;
• the information on interest income on loans for leases is contained in Part C - Section 1 - Table 1.1 "Interest and similar income: breakdown";
• the information on income from operating leases is contained in Part C - Section 16, Table 16.2 "Other operating income: breakdown".

2. Finance leases

2.1 Classification of payments to be received by time band and reconciliation with loans for leases posted under assets

			Total		Total
	Time bands		31/12/2021	31/12/2020
		Lease payments		Lease payments
			to be received		to be received
	Up to 1 year		448,402		351,883
	From over 1 year to 2 years		150,384		429,165
	From over 2 years to 3 years		150,998		260,118
	From over 3 years to 4 years		99,806		139,593
	From over 4 years to 5 years		94,950		87,617
	Over 5 years		364,456		336,604
	Total lease payments to be received		1,308,996		1,604,980
	Reconciliation with loans
	Financial profits not accrued (-)		(85,600)		(100,071)
	Residual non-guaranteed value (-)		-		-
	Loans for leases		1,223,396		1,504,909

Loans for leases recorded a gradual decrease, in relation to the Group's decision to no longer directly disburse that type of financing.

2.2 Other information

There is no other information to report.

3. Operating leases

3.1 Classification by time band of payments to be received

			Total		Total
	Time bands		31/12/2021		31/12/2020
		Lease payments		Lease payments
			to be received		to be received
	Up to 1 year		33,331		22,027
	From over 1 year to 2 years		22,517		18,518
	From over 2 years to 3 years		19,147		12,770
	From over 3 years to 4 years		14,224		8,566
	From over 4 years to 5 years		13,395		6,096
	Over 5 years		54,939		22,099
	Total		157,553		90,076

3.2 Other information

There is no other information to report.

__________________________________________________________________________________________ NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 497

OTHER INFORMATION

Disclosure regarding public disbursements pursuant to Art. 1, paragraph 125 of Law 124 of 4 August 2017 ("Annual market and competition law")

In compliance with that stated in Art. 1, paragraph 125 of Law 124 of 4 August 2017, below there are the amounts received by the Parent Company and its subsidiaries during 2021, in the form of "subsidies, contributions, paid positions and in any case economic advantages of any type".

						Amounts received
	Group company		Type of contributions		Granting authority	in 2021
						(figures in euro)
	Banco BPM	Aid for personnel training (*)		FBA (Bank and Insurance Fund)	4,347,000
	Banco BPM	Aid for personnel training (*)		ANPAL (National Agency for Active Labour	414,718
		Policies)
	Terme Ioniche Società				Disbursed by the European Union through
		Agricultural aid (***)		ARCEA (Agency of the Region of Calabria	177,227
	Agricola S.r.l.
				for Agricultural Aid), as the paying body
	Sagim S.r.l. Società				Disbursed by the European Union through
		Agricultural aid (***)		ARTEA (Tuscan Regional Agency for	291,134
	Agricola
				Agricultural Aid), as the paying body

1. Aid for personnel training requested in 2018 and paid in March 2021. (**) Aid for personnel training requested and paid in May 2021.
   (***) In particular, these are public resources from EU sources, in which the Italian public administration takes on the role of payer.

To that end, note that in the table, in line with the provisions of the law in question, economic advantages of less than the threshold of 10,000 euro are not stated. This threshold should be understood to refer to all the advantages that the Parent Company or each company in the Group received from the same authority in 2021, whether the benefit was disbursed in one tranche or in several tranches.