BMPS 1Q20 Results 7 May 2020 Highlights of 1Q20 Results - PowerPoint PPT Presentation

BMPS 1Q20 Results 7 May 2020

Highlights of 1Q20 Results Pre-provision profit Cost of Co of ris isk Ne Net income EUR 181mln EUR 315mln c. 60bps EUR -244mln Ordinary component BANKIN ING INDUSTRY NII : essentially stable net of “calendar effect” of which EUR 193mln ln Including non-opera ratin ing co costs sts for c. 83bps Fe Fees: strong WM performance before Covid-19 additio ad ional l pro rovis visio ions related to EUR 112mln ln. Quarterly the impact of more adverse Including additional reassessment of DTAs from fiscal Co Cost sts: constantly under strict control macroeconomic forecasts* provisions losses prudentially not booked Gross NP Gr NPE ratio CE CET1 Liquidit Li ity ind ndicato tors 13.6% (transitional) 11.8% >150% LCR 11.9% (fully loaded)*** (vs 12.4% in Dec-19) >100% NSFR 11.1% (EBA definition)** BANKIN ING INDUSTRY Tot Total Cap Capital EUR 21.7bn Ne Net NP NPE ratio 16.2% (transitional) Unencumbered Counterbalancing Capacity 6.4% 14.5% (fully loaded)*** (c.16% of total assets) * In analogy with what had already been done in 1Q19, additional provisions for c. EUR 193 million prudentially booked in the quarter to account for the updated macroeconomic scenario, which anticipates a cumulative 3.4% drop in GDP in 2 2020-21. See slide 17. ** As per EBA guidelines, ratio between gross impaired loans to customers and banks, net of assets held for sale, and total gross loans to customers and banks, net of assets held for sale. As at 31 December 2019 the ratio stood at 11.3%. *** Ratios calculated considering the full deduction of IFRS9 FTA.

Covid-19 immediate response Smart working: Branch access & digital channel drive: Sustaining the economy: 90 90% of of staff able to promptly & Only 1. 1.6% of of branches clo closed during Timely rol Tim ollout t of of fin financia ial rel elief me measures ▪ ▪ ▪ efficiently work from home, thanks to pandemic introduced by the government**: extensive investments in IT moratorium and guarantees Since mid March, branches open 3 3 ▪ infrastructure and security. Weekly mornings a week, accessible by mo Launch of ad ad-hoc init itiativ ives ▪ average of employees working appointment, with new health protection He Helping clie clients ts acc ccess rel elief me measures: ▪ remotely surpassing 85% protocols introduced*. Ongoing contact dedicated area on the Bank’s website , BANKIN ING INDUSTRY Corporate VPN perimeter greatly with clients through digital channels ▪ providing information and forms needed strengthened and expanded (peaks of Dig igital Ret Retail Ba Banking transactions to activate public and BMPS financial ▪ c. 19 19,000 000 remotely connected users increased from 25% in 2019 to 40% relief measures, Covid-19 toll-free reached) number ATM deposit it transact ctions increased from ▪ Dail ily updates on new national and ▪ 55% to over 60% Free offer of 1,200 vouchers to access ▪ corporate rules, FAQs and live “ UG UGO ” caregiving services*** Web Collaboration increased 10 10x (>10k ▪ streaming meetings with top online deals in April vs. <1k in January AXA XA MPS hospitalisation allowance ▪ management and February), thanks to extension to doubled for insurance holders Affluent market in addition to Private Standing by St by our our cus customers, pr protecting our our em employees and and sa safeguarding bus business co continuity * Starting from May 5th, the 1,100 largest branches are open all day, five days a week; 300 more branches are open all day, three days a week. Access to all branches only by appointment, to ensure smooth operations and social distancing. 3 ** Law Decrees no. 18 of 17 March 2020 (“ Decreto Cura Italia “) and no. 23 of 8 April 2020 (“ Decreto Liquidità “) . ***UGO start-up won the 2019 Officina MPS competition. At the beginning of the Covid-19 lockdown, its caregiving services were extended from Milan to Florence and Siena.

Supporting the economy - Moratorium Moratorium Applications received*  c. 90k moratorium applications received, for a total GBV of EUR 10.2bn Applications Exposure (#) (€/bn)  c. 25 25% applicatio ions per ertain to to GM GMPS ad-hoc initia iatives, mainly in favour of households Total 90k 10.2  Go Good qua uality cu customers applying for for mo moratorium: only 7% of retail c. 15% Corporates 48k 6.1 portfolio and 15% of corporate portfolio classified as High risk** High risk portfolio** % on total  Loans suspended in the framework of "Covid-19" relief measures c. 30 % c. 21% corporate portfolio are no not aut utomatic ically cla classified as s "fo "forborne" (no automatic migration between risk stages) but are clearly identified for c. 7% Households 42k 4.1 High risk portfolio** monitoring purposes % on total  The automatic classification as NPEs of past due forborne c. 4% c.13% household portfolio exposures has been temporarily suspended  Ea Early warning dete etectio ion sy system activated on all Covid-19 relief measures, including new indicators of potential financial difficulties 4 * Figures related to MPS Group. Latest update: 30 April 2020 for MPS and 24 April 2020 for subsidiaries. ** High Risk portfolio: portfolio with average PD >8%, included in stage 2 bucket.

Supporting the economy - Guarantees Guarantees Applications received**  Applications for loans up to EUR 25k, 100% guaranteed by  New facilities introduced by the “ Cura Italia” and “ Liquidità ” Fondo Garanzia Imprese***: decrees* are entering in the decision-making framework, being factored into strategies and credit standards Applications Exposure (#) (€/ bn) c. 6% 21.8k 0.45 market share on application sent  The intensified use of loans guaranteed by the SME Fund to MCC and by SACE, which entail reduced RWAs and cost of credit, c. 12 % High risk portfolio**** will allow the Bank to provide greater liquidity to businesses  Granting process started for other forms of guaranteed loans (loans 90% guaranteed by Fondo Garanzia Imprese, loans to tourist sector, debt renegotiations, … ) * See Annex for guarantee schemes introduced by Government with “ Cura Italia” and “ Liquidità ” decrees. 5 ** Latest update: 4 May 2020. *** Liquidità decree, art 13 par 1m. ****High Risk portfolio: portfolio with average PD >8%, included in Stage 2.

Good commercial performance before Covid-19 crisis Wealth management gross inflows* ( €/ mln) Good performance in the first months of the year, confirming franchise solidity  Pos osit itiv ive co commercial dyn ynamics in in 1Q20 20: 1,332 1,278 978 872 616 WM gross flows at EUR 3.2bn, c. +22% YoY and +8% QoQ, driven ✓ 840 818 449 by WM product placement Jan Feb Mar April New mortgage flows at EUR 1.9bn, +13% YoY and c. -5% QoQ 2019 2020 ✓ BANKIN ING New mortgage flows** ( €/ mln)  Covid id-19 19 impacts: March and April il flows show a slowdown due to to implemented lockdown measures and to the volatility of the financial 698 637 600 markets on WM product placements 541 546 496 520 521 Jan Feb Mar April 2019 2020 Market confidence restored despite the Covid-19 crisis Current accounts & time deposits (€/ bn) 68.7 65.6 64.1  Commercial dir irect funding: positive quarterly trend (current accounts BANKIN ING and time deposits increased by c. EUR 3.1bn vs. Dec-19 and by c. EUR 4.7bn vs. Mar-19), also sustained by higher preference of clients for liquid products considering current emergency Mar-19 Dec-19 Mar-20 6 * Bancassurance + pension funds + mutual funds/sicav + individual portfolios under management. ** New mortgage flows: closings.

Widiba's first quarter 2020: no impact from Covid-19 Bank’s, current Customers’ and Advisors’ acti tiviti ties es did d not not com ome to o a ha halt, showing on the contrary an incr ncrease thr hrougho hout all bus usiness fiel elds vs. the same period of last year Transa sactional Platform Banking Inve vestments* s* First quarter 2020 characterised by Cov ovid id-19 19 im impact, but no no Bus usiness (#/mln) (#/mln) (#/k) +32% +13% +80% Con onti tinuity ty setb tback cks on business or 6.8 4.7 209.9 innovation 4.2 5.2 116.6 As a native Digital Bank, Widiba WIP IP YTD YTD YTD YTD YTD YTD kept on working by means of April ‘19 April ‘20 April ‘19 April ‘20 April ‘19 April ‘20 100% pap aperl rless processes with (*) Advisory + execution smart work rkin ing & remote adviso isory enabled for all The innovation plan remains the main focu cus of of the e Bank nk, despite the contingency, employees and financial with relevant features for customers and advisors launched during the Covid-19 pandemic advisors Open Banking Op Mobile Platform Rob Robo for Advi visor In April the acceleration contin inues through all ll economic ic Connection with other banks completed Technology and use ser ex experience Fu Fully digi gital transactions in place Inno nnova vati tion and main com commerc rcia ial metri trics: and mu multi-account solution launched upg pgraded, with the launch of the for Widiba Advisors, Con onti tinuity ty new conversa sational tool including insu surance pr products ✓ c.EUR +230mln ln net direct and indirect flows YTD ✓ c. c.EUR +20k +20k new customers YTD 7