Group’s Results 1H 2016 5 August 2016
1H16 Highlights � The Group continued to pursue its growth strategy, by further consolidating the trend already ongoing in the 1Q16: � 2Q16 Net Inflows increased at €1.160 million vs €840 million in 1Q16 (+38%). The YoY performance in the semester was €2 billion, up by 16% in comparison with €1.7 billion in 1H15. AUM growth accelerates: inflows reached €1 billion in 1H16 compared to €260 million at the end of 1Q16 � Loans grew by 3.7% QoQ and by 4.6% YoY, in comparison with an industry’s performance still negative � Operating Income, net of Trading and Performance Fees, was €251 million in 1Q16, up by 2.3% QoQ and by 4.7% YoY � Annualized cost of risk at 28 bps , in conjunction with quarterly inflows of gross impaired loans and coverages substantially stable. Cost of Risk, net of non recurrent facts landed at 32 bps vs 39 in 1H15 � Fully-phased CET1 ratio was 12.2%* (13.6% on Credem Group perimeter only), down by 20 bps compared to 1Q16 figure as a result of lower Valuation Reserves � 1H16 Net Consolidated Profit was €70.4 million (-41% YoY), because of a lower Trading contribution Loans to Customers are net of Repos with Institutional sand Loans to Group’s SPVs . (*) Capital ratio related to the new group’s statutory perimeter that includes Credemholding 2
Income Statement % 2Q16 Operating Income 2Q15 1Q16 2Q16 1H15 1H16 Euro, Million vs 2Q15 (net of Trading and Performance Fees) Operating Euro, million 0.0% 260 257.9 284.4 257.9 611.1 542.3 Income 248.8 248.2 247.7 250 Operating Income net of 4.7% 240 239.8 245.4 251.0 492.8 496.4 234.0 Trading and Perf. Fees 230 224.4 4.2% 220 Operating Costs -173.7 -179.3 -181.0 -349.2 -360.3 15.0% D&A -10.0 -10.8 -11.5 -19.5 -22.3 210 Net Operating 200 -11.9% 74.2 94.3 65.4 242.3 159.7 Avg 2012 Avg 2013 Avg 2014 Avg 2015 Avg 1H16 Profit -22.7% Net Adj. To Loans -27.3 -10.4 -21.1 -64.1 -31.5 • Core revenues (net of Trading and Performance Fees) grew both YoY Prov. for Risks n.s. 0.0 -1.1 -4.3 -9.4 -5.4 (+4.7%) and QoQ (2.3%) and Charges • Net Adjustments to Loans Extraordinary n.s. improvement was confirmed (- -2.6 -12.7 -5.0 3.1 -17.7 Income/Expenses 22,7% YoY) -21.0% • 2Q16 Net Profit reached €23.8 Pre Tax Profit 44.3 70.1 35.0 171.6 105.1 million , decreasing in comparison 25.8% with previous quarter as a result of Taxes/Minorities -8.9 -23.5 -11.2 -52.2 -34.7 the lower contribution provided by Net Profit for the -32.8% 35.4 119.4 70.4 Trading 46.6 23.8 Period
P&L non recurrent events Statutory P&L Reclassified P&L Non recurrent events (Euro, million) Non recurrent events (Euro, million) -1.9: financial charges related to a • -1.4: residual provision to Single Prov. for risks • fiscal agreement with the Italian Resolution Fund and charges Revenue Agency (regarding Interest Margin Transfer Pricing between Euromobiliare SGR and Credemlux) -3.6: penalties related to the above • Other operating mentioned agreement with the 11.2: capital gain from Visa • income/charges Italian Revenue Agency Europe disposal Extraordinary -17.3: fiscal agreement with the • 11.2: capital gain from Visa Europe Income/ Profit/Loss from • Italian Revenue Agency disposal Expenses Equity investm. 0.0: offsetting of Tercas • contribution -5.2: contribution to Tercas Other admin. • transaction expenses -1.4: residual provision to Single Prov. for risks • Resolution Fund and charges • 2Q16 is affected by several non recurrent events, totalling a gross negative impact 5.2: writeback from Tercas Net value adj./ • of about €7.5 million transaction writebacks • Within the reclassified P&L, the only 2 lines affected are Provisions for risks and charges -11.8: taxation related to the above • and Extraordinary Income/Expenses mentioned agreement with the Taxes on income Italian Revenue Agency 4
Interest Margin (1/3) Quarterly Interest Margin � Interest rates drop penalized Interest Margin in 1Q16 (-3.3% QoQ) , that was only partially Euro Million 120 sustained by the Loans’ growth occurred in 2Q16 117 as it was mostly concentrated in the final 115 110 month of the quarter 111 111 106 100 � Customers’ 104 Spread was understandably in contraction , only slightly helped by the keen 90 activity oriented to the reduction of cost of funding 80 70 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Euribor and BTP/Bund: Quarterly Customers’ Spread (Credem SpA management accounting) spread evolution bps 2.92 150 2.76 127 131 3.0 116 2.62 121 2.51 116 2.45 0.1% 130 2.34 103 2.5 2.14 2.12 2.07 2.04 2.02 1.95 110 0.05% 2.0 0.0% 90 0.01% -0.09% 1.5 -0.03% 70 -0.1% 0.78 50 1.0 0.64 -0.18% -0.22% 0.55 0.47 0.42 0.39 30 0.5 -0.2% 10 3 month Euribor Spread BTP vs. Bund (10 years) 0.0 -0.3% -10 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Spread Average Loans rate Average Deposits rate 5
Interest Margin (2/3) Evolution of Average Loan Rate Evolution of Average Deposit Rate (Credem SpA management accounting) (Credem SpA management accounting) % % 2,40 3.79 3.79 4.00 - 0,46 - 0,61 3.42 1,96 3.33 - 0,72 3.18 - 0,74 3.07 1,68 1,80 3.00 2.70 2.34 - 0,76 1,30 1,22 1,08 1,20 2.00 - 0,73 - 0,69 0,92 - 0,69 0,61 0,60 1.00 0,39 - - 2013 2014 2015 2Q2016 2013 2014 2015 2Q2016 Credem: Average Loans rate Industry: Average Loans rate Credem: Tasso medio depositi Sistema: Tasso medio depositi Evolution of Average Customers’ Spread � Customers’ Spread descent in 2Q16 is in (Credem SpA management accounting) line with current industry’s trends : despite 2.26 % 2.11 2.10 2.12 2.09 the growth strategy pursued by the Group, the 1.99 2.40 1.95 1.82 gap with the average loan rate showed by 0,16 - 0,03 the sector remained stable - 0,04 1.80 0,29 � Similarly, the reduction of cost of funding 1.20 continued, even if current values are now extremely difficult to decrease furtherly. 0.60 Difference between the Group and the industry remained stable on 2015 year-end 0.00 2013 2014 2015 2Q2016 level Credem: Spread Industry: spread Source: ABI Monthly Outlook July 2016 6
Interest Margin (3/3) Securities’ Portfolio Breakdown � 1H16 figures showed an increase of (Credem SpA management accounting) securities’ portfolio amounting to circa 800 million in comparison to the 100% end of 1Q16, mostly due to the purchase 13% 90% of Italian and European securities 10% 80% 39% � The exposure to «Italian risk» 44% 45% remained percentually stable , while 56% 70% 62% other aggregates showed only minor 60% adjustments 9% 8% 7% 50% 60% Duration and breakdown by rating 40% (Credem SpA management reporting) 11% 10% 38% 32% 32% 6.0 30% 3% 100% 4.9 18% 10% 5.0 16% 20% 80% 4.0 10% 17% 16% 16% 15% 14% 13% 60% 58% Other 3.0 0% BBB 2013 2014 1Q15 2015 1Q16 2Q16 40% 2.0 A Other non-Italy Other Govies/ EFSF/ BEI Other Italy Italian Govies 20% AAA/AA 1.0 29% Banking Group 0% 0.0 securities’ 7,065 5,902 6,219 6,154 6,420 6,180 Avg Maturity Rating portfolio(€ mln) Distribution 7
Non Interest Income Non Interest Income: Quarterly Evolution 246.9 250 Performance Fees 200 97.1 150.8 169.5 Trading 154.1 146.8 n 7.9 137.0 o i l 150 l 38.8 i 15.9 6.5 6.4 2.9 Other M € 49.3 46.6 48.9 52.2 48.6 46.0 100 Banking Fees 24 12.2 7.6 8.6 11.5 10.4 50 Insurance Fees 74.1 74.8 71.2 69.1 68.5 67.8 Asset Management Fees 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 NII (net of Trading and Perform. Fees) 146.8 136.0 133.4 136.4 130.5 139.9 � Non Interest Income, net of most volatile components, went back to growth (+8.2% QoQ), mainly thank to management and brokerage fees, paired with the increase of AUM volumes as well as some placements. Despite the pressure induced by the competition, banking fees were marginally up in the quarter (+1.3%) after the1Q16 reduction due to regulatory changes � Insurance revenues showed a very good performance, up by 17.3% QoQ � Trading performance in the quarter did not replicate the (non recurrent) 1Q16’s one, even though it took advantage from a capital gain realized by Credem Private Equity amounting to circa €8 million 8
AUM and Insurance Reserves Third Parties’ Products Breakdown by Asset AUM and Insurance Reserves Evolution Class (Group management reporting) 30,000 100% 20% 21% 5,991 22% 24% 5,513 25,000 5,748 80% 4,409 20,000 3,236 60% 40% 45% 51% 51% 15,000 40% 22,875 22,543 22,252 20,208 17,687 10,000 20% 39% 33% 26% 24% 0% 1% 1% 1% 2% 5,000 2013 2014 2015 1H16 2013 2014 2015 1Q16 1H16 Insurance Reserves AUM Money Market Bonds Balanced/ Flexible Equity Mutual Funds and SICAVs Breakdown by Asset � The growth of AUM and Insurance Reserves Class (Group management reporting) was very relevant in the quarter , bringing 100% 6% 6% 7% 7% volumes above 2015 year-end balance, even though financial markets performances was 80% 33% 35% 37% 42% certainly not helpful in stimulating customers’ 60% action 40% � The breakdown by asset class did not show 49% 49% 49% 44% significant changes , with the sole exception 20% of a slight reduction in the Equity incidence on 12% 9% 7% 8% 0% Third Parties products, supposingly linked to 2013 2014 2015 1H16 the recent market volatility Money Market Bonds Balanced/ Flexible Equity 9
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