Consolidated Results as at December 31 st 2016 Consolidated results - PowerPoint PPT Presentation

Consolidated Results as at December 31 st 2016 Consolidated results as at 31 December 2016 1

Agenda 1. Executive summary 2. Credit policies and asset quality 3. Funding, liquidity and securities portfolio 4. Capital ratio 5. Revenues development 6. Cost management and Net profit development 7. Annexes Consolidated results as at 31 December 2016 2

Executive summary � Asset Quality: Net NPEs decreasing (-6% YTD), including disposals of NPEs • Disposals of NPEs for approx. Euro 557 mn • Increase in impairments on loans and receivables with the objective to lift up the coverage levels of total NPEs • NPEs proforma* Coverage ratio at 45.2% (41.5% stated) • Sound Capital position : � CET1 ratio at 11.8% “phased-in” • � Liquidity position Total Counterbalancing capacity of Euro 5 billion, of which Euro 3 billion unencumbered (at 27 December • 2016) LCR and NSFR well above the minimum regulatory levels set for 2018 • � Economic Trend: Net interest income and net fee and commission income growing q-o-q, despite the pressures from the • extremely expansive monetary policy and weakness in loans demand Operating costs - net of extraordinary contribution -2.4% • * Non- performing exposures Coverage including write-off on bad loans and NPE disposals Consolidated results as at 31 December 2016 3

Extraordinary items € mn (Gross of taxes) 31/12/2016 Sale of Anima 21,437 Sale of other investment (Earn Out Visa) 33,896 Solidarity Fund -60,995 DTA Fees -4,200 SRF - extraordinary contribution -5,421 Sale of NPL's -81,564 Write-off Goodwill (CGU CS) -68,797 Write-off of Investments (Atlante Fund and others) -24,810 EXTRAORDINATY ITEMS -190,454 * (Coverage Dec. 2016 – Coverage March 2016) * (NPL Dec. 2016) Consolidated results as at 31 December 2016 4

Executive summary - Strengthening “Customer base” 982 k customers (+0.3% YoY) Cross selling ~ 4.19 Retention rate** ~ 94.8% Active Internet Banking Users + 2.9 % YoY 273,551 265,958 ~ 170,000 downloaded apps* 243,557 +75 % YoY 12.14 12.15 12.16 **Source: customer satisfaction survey - households *As at 31/12/2016; source: internal data Consolidated results as at 31 December 2016 5

Agenda 1. Executive summary 2. Credit policies and asset quality 3. Funding, liquidity and securities portfolio 4. Capital ratio 5. Revenues development 6. Cost management and Net profit development 7. Annexes Consolidated results as at 31 December 2016 6

Credit policies and asset quality - Loans to customers analysis Quarterly trend (€mn) Commercial Loans * (gross amounts) Including 557 mn NPE disposals 23,107 23,064 21,279 20,074 20,099 20,062 20,146 20,106 19,825 19,741 19,315 18,990 12.11 12.12 12.13 12.14 03.15 06.15 09.15 12.15 03.16 06.16 09.16 12.16 * Total gross loans to customers net of exposures with institutions, mainly CCG (Cassa Compensazione e Garanzia) and CDP (Cassa Depositi e Prestiti) Total gross loans by asset class** Performing loans by sector (ATECO classification) ** Households Households Other 23.8% 37.4% 3.2% Construction 8.4% ~ 73% of total loan book to SMEs Retail 16.8% Real estate 10.8% SME Services Corporate 11.9% 40.0% � SME corporate: revenue or total assets < 25 mn Industrial Commercial Corporate � Corporate: revenue or total asset ≥ 25 mn 20.3% 11.2% 16.2% � Retail: Small Retail exposure ≥ 100k, Micro Retail < 100k exposure **Source: internal data Consolidated results as at 31 December 2016 7

Credit policies and asset quality - Focus on new loans ~ 2,453 mn of newly granted loans (Individuals and SMEs/Corporate) over the period + 14% YoY Expected Loss performing portfolio -23 bps since December 2015 Amount Chg % % Fixed Average Expected Loss new YoY Rate* INDIVIDUALS performing exposures disbursed in the period Individuals 796 mn 2.66 % - 3 % 33.6 % Of which substitutions («surroghe»): 93.6 mn 32 bps Amount Chg % Expected Loss new YoY performing exposures disbursed in the period SME & CORPORATE Mortgage 311 mn -17 % Average Rate Corporate: 60 bps Other secured 439 mn +20 % Retail: 55 bps 2.28 %* Unsecured 907 mn +54 % Positive results of the outstanding remix Total amount 1,657 mn +25 % Individuals + 3% YoY Real Estate - 12% YoY *Average rate from the beginning of the year Source: internal data Consolidated results as at 31 December 2016 8

Credit policies and asset quality - Loan portfolio diversification Gross loan book breakdown by geography (%) • ~ 84% of loans in North / Center Italy, of which ~ 55.1% in Lombardy • Average loan granted to real estate and construction sectors (“ATECO”) ~ 197k€ • Conservative LTV ( ̴ 54% ), both for households and SMEs Average EUR 86,000 per loan Source: internal data Source: internal data % Total Loans Loan Concentration 31/12/2015 31/03/2016 30/06/2016 30/09/2016 31/12/2016 Top 20 exposures 5.9% 6.1% 5.8% 5.1% 5.0% % LTV (as at 31/12/2016) Retail – Secured on real estate property 53.6% Retail – Secured on real estate property of which SME 50.4% Retail – Secured on real estate property of which non SME 54.6% Consolidated results as at 31 December 2016 9

Credit policies and asset quality - Non performing exposures (Gross amount) Mn € Bad loans Unlikely to pay -300 mn 2,811 2,787 2,643 2,684 2,597 2,601 2,494 2,463 2,418 2,384 31/12/2015 31/03/2016 30/06/2016 30/09/2016 31/12/2016 31/12/2015 31/03/2016 30/06/2016 30/09/2016 31/12/2016 Including the effect of Bank of Italy audit Non-performing exposures Lowest amount from the start of the crisis +261 -183 -229 -82 Past due 5,620 5,391 5,570 5,387 5,309 346 299 289 244 216 31/12/2015 31/03/2016 30/06/2016 30/09/2016 31/12/2016 31/12/2015 31/03/2016 30/06/2016 30/09/2016 31/12/2016 -233mn Consolidated results as at 31 December 2016 10

Credit policies and asset quality – Asset quality (1/2) Mn € Net NPEs ̴ -203 mn to December 2015 3,392 3,357 3,304 3,324 3,154 274 315 222 264 198 1.880 1.885 1.835 1.811 1.684 1.238 1.229 1.272 1.207 1.217 31/12/2015 31/03/2016 30/06/2016 30/09/2016 31/12/2016 Net Bad loans Net Unlikely to pay Net Past due Consolidated results as at 31 December 2016 11

Credit policies and asset quality – Asset quality (2/2) Mn € 60.2% proforma including write off (2.5%) and Coverage Ratios 31/12/2015 31/12/2016 disposal (3.4%) effect Bad loans 57.1% 54.4% Unlikely to pay 25.5% 29.4% Past due 9.0% 8.2% Non-performing exposures Coverage Coverage Bonis 0.73% 0.73% 0.68% 0.61% 0.58% 45.2% 43.1% 40.3% 40.3% 41.5% 37.8% 37.1% December March 2016 June 2016 September December 2015 2016 2016 December March 2016 June 2016 September December December December 2015 2016 2016 2016 including 2016 proforma* Annual trend in line with the portfolio write-off improvement effect and new credit policy * Non- performing exposures Coverage including write-off on bad loans and NPE disposals. Consolidated results as at 31 December 2016 12

Agenda 1. Executive summary 2. Credit policies and asset quality 3. Funding, liquidity and securities portfolio 4. Capital ratio 5. Revenues development 6. Cost management and Net profit development 7. Annexes Consolidated results as at 31 December 2016 13

Funding, liquidity and securities portfolio - Direct deposits Quarterly trend (€mn) Retail funding * 19,480 19,654 19,028 19,041 18,534 18,312 18,097 18,532 18,239 18,376 17,867 17,794 12.11 12.12 12.13 12.14 03.15 06.15 09.15 12.15 03.16 06.16 09.16 12.16 * Total funding net of CCG, CDP and institutionals (mn €) 31/12/2015 31/12/2016 Chg. % Composition of Direct Funding Saving Deposits 519 503 -3.1% Time deposits 1,413 1,528 8.2% -2.7% Current accounts 13,073 13,118 0.3% Securities issued Securitizations 471 304 -35.6% Wholesale bonds (senior + subordinated) 107 133 24.8% Senior retail bonds 2,695 2,090 -22.5% 81% +2.4% 85% Subordinated retail bonds 642 375 -41.6% Deposit certificates 111 110 -1.3% Deposits CCG & CDP 2,481 2,754 11.0% -24.7% Other 183 194 6.1% 19% 15% DIRECT FUNDING 21,695 21,109 -2.7% 31/12/2015 31/12/2016 Consolidated results as at 31 December 2016 14

Funding, liquidity and securities portfolio - Bonds by maturities and ECB funding Wholesale bonds (€ mn) Retail bonds senior + subordinated (€ mn) -872 mn 30 1.232 360 Issues 2016 Maturities 2016 Issues 2016 ECB funding Creval December 2016 (€ mn) 2017 – 2018 Maturities* Retail + Wholesale (€ mn) TLTRO TLTRO 2: • Residual callable amount: 1,500 952 858 686 estimated EUR 3.1 bn 2017 2018 Beyond 2018 2016 * As at 27 December 2016, residual maturities Source : internal data Consolidated results as at 31 December 2016 15