OBANCA GROUP OUP - MEDI DIOBANCA EEN AND ND SUSTA BLE GREE STAINA NABL ND FRAM RK BOND AMEW EWORK I NAUGUR AL G REEN B OND T RANSA ION URAL SACTIO August 2020
A GENDA DA Section 1 Mediobanca at a Glance Our Sustainability and CSR Positioning Impact on People, Environment and Community Section 2 Mediobanca Green and Sustainable Bond Framework Section 3 Inaugural Green Bond Transaction Appendix Impact on People, Environment and Community
MEDIOBAN BANCA CA OVE VERVIE VIEW W AND ES ESG ST STRATEG ATEGY Section 1
IOBANCA GROUP OUP : : AN AN INTEG RATED BUSINE SS MODEL EL … MEDIOBANCA TEGRATE SINESS Mediobanca at a Glance Section 1 HIGH SYNERGIC BUSINESS Capital light Labour intensive Corporate & Wealth Fee driver Fee driver Management Inv.Banking Recurrent Cyclical REALLOCATION OPPORTUNITY DIVERSIFICATION OPPORTUNITY EPS/DPS accretive Capital intensive Principal Consumer Revenue driver NII driver Investing Banking Source of capital Anti-cyclical HIGH RETURN BUSINESS 4
… WITH SOLID ID FEATU RE AND STABL BLE PROFITABIL ITY TURE OFITABILITY Mediobanca at a Glance Section 1 Revenues 1 Key financial information 1 RWAs 1 Revenues: € 2.5bn CETI : 16.1%, Tot. Cap: 18.8% Net profit: € 600m Moody’s rating 3 : Baa1 WM WM ROTE adj: 10% S&P rating 3 : BBB 10% 23% Consumer C/I ratio: 47% Fitch rating 3 : BBB- CIB 25% Consumer CIB 42% Total assets: € 79bn DPS: € 0 4 43% 23% Loan book: € 47bn Stated payout: 0% Other Other 23% 11% TFA: € 64bn Loan/funding ratio: 85% No. of staff: 4.9k Market cap. 3 : € 5.9bn Revenues ( € m) Net profit ( € m) ROTE adjusted 2 2,525 2,513 10% 10% 10% 2,419 Net profit 2,196 adj.: 887 864 823 750 8% One-off includ. Covid 600 June17 June 18 June19 June20 June17 June18 June 19 June 20 June17 June18 June19 June 20 1) Figures referred to FY20 period (June-end 2020 annual period) 2) Excluding items stemming from Covid emergency, systemic fund provisions, impairments on equity stakes and securities, and other 5 positive/negative one-off items 3) As at 5 August 2020 4) In accordance with ECB guidance on Covid crisis
IOBANCA DELIV RED SIGNIFICANT NIFICANT GROWTH TH IN IN LAST 3 Y BUSINE SINESS PLAN AN … MEDIOBANCA LIVERED Mediobanca at a Glance Section 1 In last 3 years business plan we have significantly enlarged and reshaped the Group Business positioning enhanced, Growth in Growth in revenues (up 7%¹), investing in people revenue-generating assets: profit (EPS adj. up 13%¹), (headcount up 6%¹) TFAs up 25%¹, AUM up 31%,¹ and distribution and dividend (DPS up 20%¹) loans up 9%,¹ funding up 3%¹ incl. through M&A Growth in profitability Operational gearing & asset Growth in capital generation quality preserved distinctive Banking² and Group ROTE € 1.1bn dividend distributed @10% cost/income ratio @46%, gross doubled vs previous 3Y (up 3pp in 3Y) NPE/Ls <4% 1) 3Y CAGR 2016-19 6 2) Banking business defined as Group activities excluding Assicurazioni Generali contribution
… KEEP ING AN AN OUTSTAN ING RISK SK PROF ILE AT AT EU EU LEV EL … EPING STANDIN OFIL EVEL Mediobanca at a Glance Section 1 Stronger in capital… …stronger in asset quality… MB buffer over SREP: ~600bps, among the highest in EU Stage 3 2 - MB vs ITA and EU 10% 60,0% 54% Avg. 9.9% 8% 47% 8.25% 45% 50,0% 6% 40,0% 4% 30,0% 2% 3.9% 3.4% 6.7% Bank 1 Bank 2 MB Bank 3 Bank 4 Bank 5 Bank 6 Bank 7 Bank 8 Bank 9 Bank 10 Bank 11 Bank 12 Bank 13 Bank 14 Bank 15 Bank 16 Bank 17 Bank 18 Bank 19 Bank 20 Bank 21 Bank 22 Bank 23 Bank 24 Bank 25 Bank 26 Bank 27 0% 20,0% MB EU avg. IT avg. ITA banks SREP 1 EU banks SREP 1 ….better leverage ratios… …with lower exposure to Govies... 2020 EU-wide transparency exercise Leverage ratio 3 - MB vs EU (figures as at Dec. 2019) 279% 268% 283% 269% 10% 247% 8.2% 218% 204% 205% 8% 169% 116% 163% 5.3% 6% 240% 137% 236% 138% 160% 161% 31% 4% 131% 114% 106% 105% 2% 66% 58% 44% 39% 33% 0% MB Bank 1 Bank 2 Bank 3 Bank 4 Bank 5 Bank 6 Bank 7 Bank 8 MB EU avg. Domestic govies/CET1 Other govies/CET1 1) SREP before any changes from the application of CRD V Article 105 brought forward by the ECB in March 2020 7 2) Source: EBA Risk Dashboard – Data as of Mar.20 - %of loans (histogram) and coverage ratio (dots) 3) Source: EBA Risk Dashboard – Data as of Mar.20
… ABLE LE TO TO ABSORB ORB C OVID OVID IMPACT PACT MAINTAININ NTAINING EXCELLEN CELLENT ASSET ET QUAL ITY ALITY AND CONSER TIVE PROV ING NSERVATIV OVISION ISIONING Mediobanca at a Glance Section 1 Mediobanca: coverage ratios remain rigorous post-Covid-19, with increase in stage 2 largely due to moratoria “Performing” - Stage 1 2 “Performing” - Stage 2 2 NPLs - Stage 3 2 o/w Bad Loans 2 14,0% 20,0% 120% 1,0% 8,0% 70,0% 12,0% 0.55% 15,0% 0.47% 0.46% 10.6% 10.5% 10.2% 55.3% 54.8% 55.1% 110% 4,0% 90,0% 60,0% 10,0% 82% 0,5% 81% 80% 10,0% 6,0% 85,0% 100% 50,0% 8,0% 3,0% 80,0% 0,0% € 0.5bn 90% 5,0% 75,0% 4,0% 40,0% 6,0% moratoria 80% 2,0% 70,0% -0,5% 0,0% reclassified 30,0% 4,0% 65,0% 70% 89% 90% 88% 7.0% 2,0% 6.5% 4.1% 5.9% 3.8% -1,0% .3,9% 1,0% 60,0% -5,0% 20,0% 60% 2,0% 0.9% 0.8% 0.9% 55,0% 50% -1,5% 0,0% 10,0% 0,0% 50,0% 0,0% -10,0% June19 Mar20 June20 June19 Mar20 June20 June19 Mar20 June20 June19 Mar20 June20 …and Consumer increasing “Performing” coverage …with CIB reducing UTPs Gross UTPs, € m, CIB division Performing loans coverage, Consumer division 1200 3.2% 1000 3.0% New DoD 1 642 800 2.8% 545 519 2.7% 2.7% 600 400 200 0 June19 Sept19 Dec19 Mar20 June20 June19 Mar20 June20 1) Following the introduction of the new definition of default (DoD), as of September 2019 ~ € 170m of gross exposure (90% of which in Consumer Banking) was moved from stage 2 to stage 3 8 2) Figures in the graphs in upper part of the slide refer to Customers Loan Book and therefore may differ from EBA Dashboard. In particular EBA includes NPLs purchased and treasury balances that are excluded in MB classification
IN THE LAST ST 3 Y CSR HAD A SIGNI FICANT EVOL UTION TOO … IN NIFICAN OLUTIO Our CSR and Sustainability Positioning Section 1 Key steps of our strategy 2016-2017 2017-2018 2018-2019 2019-2020 Group Sustainability unit CSR objectives included Directive on responsible Group Policy on set up reporting directly investing in the 2019-2023 responsible lending and to CEO Strategic Plan investing 1 Materiality matrix Group Sustainability updated via a multi- Online training course CSR Committee within Management stakeholder forum the Board of Directors on Sustainability and Committee Human Rights Group Sustainability Signatory to UN Global Group Sustainability Compact Policy update 2 ESG indexes Policy First Consolidated Non- Multi-stakeholder online PRI – Principles for First Group materiality Financial Statement Responsible Investments questionnaire to update matrix the Materiality Matrix subscription Group sustainability reporting drawn up for the first time 1) https://www.mediobanca.com/static/upload/gro/group_esg_policy_bod_24-october-2019.pdf 9 2) https://www.mediobanca.com/static/upload/csr/csr-001-17_group-sustainability-policy.pdf
… RELY ING ON ON OUR DISTINCTIV TINCTIVE CUL TURE AND POSITIONIN SITIONING … LYING ULTURE Our CSR and Sustainability Positioning Section 1 Stable Board and Responsible business Specialization and Strong positioning management in the last approach Innovation in businesses whose 15Y growth is driven by long-term trends Private-Investment Bank Indepth knowledge of Strong brand value of choice for Italian business environment Leading investment bank in Reputable, trusted, high- entrepreneurs Southern Europe Long-term approach to quality player Innovative, long-standing business One of top 3 operators in Talent-driven profitable consumer bank Italian Consumer Banking Strong risk management as organization Unique human-digital part of DNA Distinctive player in WM bank for affluent customers High capital generation, Limited exposure to ITA Governance Comprehensive ESG high asset quality macro and adverse progressively evolving approach content regulation Low exposure to Italian Free float at 100%, CSR involving the whole spread and govies CET1@16% institutional investors at 75% organization Last capital increase in 1998 Low NII sensitivity Board quality steadily Remuneration policy fully Unrivalled asset quality to interest rates and GDP improved/improving in aligned with stakeholders’ number, mix of interests Low operational gearing Solid loan book/TFAs growth competences, over the whole cycle independence 10
… AND ON ON THE SUSTAINABI ITY PRINCIP LES WE WE EMBRACE RACE TAINABILITY INCIPLE Our CSR and Sustainability Positioning Section 1 Mediobanca Group has based its Sustainability policy on the following principles Universal Declaration of Human Rights Ten principles of the UN Global Compact SUSTAINABILITY POLICY UN Sustainable Development Goals (SDGs) UN- supported Principles for Responsible Investment (“PRI”) 11
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