Group’s Results – 1Q2015
1Q15 Highlights � The Group continued to develop its business with Total Customers’ Deposits (Direct Deposits, AUM, Insurance Reserves and AUC) growing by 2.5 billion (+5.0%) in the quarter only and by €6 billion (+11.8%) YoY. In particular AUM was up by 1.7 billion in the quarter (+8.5%) and by €3.5 billion YoY (+18.7%) � Loan to Customers , penalized by the usual seasonality (-3.1% QoQ), confirmed to be strong YoY (+6.6% corresponding to an increase of €1.3 billion) � Balanced expansion of Loans and Deposits ( LtD ratio at 1.01 further down from 1.06 at the end of 2014 and 1.10 at the end of 2013*) and sustainable capital position ( CET1 ratio a 11.3% including the result of the period**) � Sharp reduction in the exposure to Italian Government Bonds that moved in the quarter from 56% to 13% in the banking group total securities’ portfolio , with a switch in revenues from Net Interest Income to Trading. Such a choice is coherent with the scenario that materialized after the beginning of the QE, where it is rated unlikely the possibility of a future appreciation of government bonds’ yields � Increase of the coverage related to Unlikely to Pay aggregate with a Coverage Ratio on Total Impaired Loans that reached 42.3% compared to 40.7% at the end of 2014 � Provisioned €5.1 million for the initial contribution to the Single Resolution Fund (*) Loans to Customers are net of Repos with Institutional sand Loans to Group’s SPVs . Deposits include Bonds issued to Institutional (**) Capital ratio related to the new group’s statutory perimeter that includes Credemholding 2
Income Statement % vs. % vs. Operating Income (net of Trading 1Q14 4Q14 1Q15 Euro. million 1Q14 4Q14 and Performance Fees) 23.2 35.2 Operating Income 286.7 261.1 353.1 Euro, Million 253 Operating Income 260 250 250 net of Trading 248 248 247.5 247.7 253.0 2.2 2.1 and Performance 244 250 Fees Operating Costs -166.7 -167.1 -175.5 5.3 5.0 240 232 231 230 229 Gross Operating 48.0 88.9 120.0 94.0 177.6 225 Profit 223 230 219 D&A -9.2 -9.9 -9.5 3.3 -4.0 220 Net Operating 51.7 99.9 110.8 84.1 168.1 Profit 210 Net Adj. To Loans -13.5 -37.0 -36.8 172.6 -0.5 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 Provision for Risks -2.3 -3.3 -9.4 n.a. n.a. and Charges • The Profit for the Period was Extraord. remarkably up in the quarter, mainly -1.6 0.2 5.4 n.a. n.a. Income/Expenses because of Trading performance 36.3 189.3 Pre Tax Profit 93.4 44.0 127.3 • «Core Revenues» components Taxes/Minorities -36.4 -20.7 -43.3 19.0 109.2 however confirmed the growth trend thank to increasing commissions Profit for the 47.4 260.5 57.0 23.3 84.0 Period 3
Net Interest Income (1/3) � Net Interest Income was down by 11% QoQ Net Interest Income following the choice of disposing a significant Euro, Million 130 portion of the Italian BTPs portfolio. Such decision was taken deeming unlikely a future 120 125.6 123.6 122.2 119.4 appreciation of government bonds’ yields given 110 the persisting downward trend interest rates and 106.2 100 of the btp-bund spread 90 � In terms of Customers’ Spread, 1Q15 level was slightly up, over the 4Q14 low . The movement 80 was driven by a reduction of cost of funding that 70 was able to compensate the continuous decrease 1Q14 2Q14 3Q14 4Q14 1Q15 of the average loans’ rate Quarterly Customers’ Spread Euribor and BTP/Bund spread evolution (Credem SpA management accounting) 280 bps 0.4% 300 259 236 0.30%0.31% 250 4.0 3.35 3.38 3.28 3.30 3.31 0.3% 3.5 3.12 2.96 2.92 200 159 154 3.0 146 2.38 2.36 196 2.22 2.22 0.2% 116 150 2.5 2.14 0.21% 0.23% 0.24% 2.11 2.09 2.03 2.0 100 0.17% 1.26 1.24 1.5 0.1% 1.08 0.05% 1.00 0.94 0.90 0.85 0.78 50 1.0 0.08% 0.5 0.0% 0 0.0 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 spread average loan rate average deposit rate Euribor 3 months Spread BTP vs. Bund (10 years) 4
Net Interest Income (2/3) Variazione degli impieghi alla clientela Securities’ Portfolio Breakdown (Credem SpA management accounting) � The re-mix of the securities' portfolio is 100% quite evident by looking at the 13% 90% comparison with FY2013 and FY2014 situations: the exposure to Italian 80% govies moved from 56% to 13% in a 56% 70% 62% quarter while the size of the overall portfolio remained substantially 60% 60% unchanged 50% � «Total exposure to Italy» moved from 40% 67% to 23% in the quarter paired with 18% 30% 16% a strong increase in the exposure to EFSF, BEI and Northern European 10% 20% 11% 10% countries’ government bonds 10% 17% 15% � Credem’s strategy is explained by 13% 0% financial context where the QE had 2013 2014 1Q15 the effect of reducing massively rates Other non-Italy Other Italy in some countries (Italy among Gov. Other/ EFSF/ EIB Gov. Italy those), making it marginal the possibility of a further appreciation of treasury Banking Group* bonds issued by such countries securities’ 5,902 6,219 6,154 portfolio(€ mln) (*) Excluding Credemvita 5
Net Interest Income (3/3) Evolution of Average Loan Rate Evolution of Average Deposit Rate (Credem SpA management accounting) (Credem SpA management accounting) 2.50 4.50 % % 3.96 3.79 3.79 2.09 4.00 3.65 3.60 3.52 1.96 3.33 0.80% 2.00 3.18 3.50 1.68 0.74% 2.96 2.92 -0.44% 1.53 3.00 -0.62% -0.46% 1.41 -0.69% -0.68% 0.76% 0.68% 1.50 1.29 2.50 1.22 0.63% 2.00 0.92 0.85 1.00 0.78 1.50 1.00 0.50 0.50 - - 2012 2013 2014 4Q14 1Q15 2012 2013 2014 4Q14 1Q15 Credem: Average loan rate Industry: Average loan rate Credem: Average deposit rate Industry: Average deposit rate Evolution of Average Customers’ Spread � Even if slightly up, the spread’s comparison (Credem SpA management accounting ) with the Industry is still penalizing for Credem 2.26 2.23 2.19 2.14 2.11 2.10 2.11 2.12 % 2.50 1.87 � Group’s commercial strategy, more oriented 1.82 2.00 0.14% to loans’ growth, had the effect of -0.05% -0.02% 0.36% 0.29% increasing the differential with the Industry 1.50 in terms of average loan rate to ~68/69 bps 1.00 compared to the historical ~45bps . On the 0.50 other hand, the already very low cost of funding is difficult to be pushed down further 0.00 2012 2013 2014 4Q14 1Q15 Credem: spread Industry: spread Source: ABI Monthly Outlook April 2015 6
Non Interest Income (1/2) Non Interest Income: Quarterly Evolution 246.9 Performance Fees 250 3 Trading 200 97.1 € Million 163.1 145.8 141.7 Other 138.9 136.8 133.8 150 127.7 5 39.1 118.7 10 27.6 10.7 3.4 13.2 3.4 5.4 11.8 4.3 4.9 3.8 4.5 5.6 49.3 5 4 4.5 Banking Services Comm. 4.5 100 47.9 52.5 48.4 49.5 52.5 51.3 49.2 49.9 24 13.4 11.6 9.7 Insurance Income 11.8 9.7 10.5 9.9 7.3 50 68.5 61.2 60.9 61.8 58.1 54.9 52 51.9 51.9 Management & Brokerage 0 Comm. 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 NII net of Trading and Performance Fees 117.8 115.5 113.6 122.7 123.9 127.4 124.7 128.3 146.8 � The disposal of a substantial portion of the securities’ portfolio, had a significant impact on Non Interest Income because of the Trading performance � Even net of such non recurrent event, the component of revenues related to commissions continued to grow, as a result of the excellent performance of Management & Brokerage Commissions and the consistent trend showed by Banking Commissions 7
Non Interest Income (2/2) Mutual Funds & SICAVs Breakdown by Asset Evoluzione AUM and Insurance Reserves Class (Credem SpA management accounting) Euro, Million 100% 30,000 6.0% 6.9% 7.3% 26,866 80% 33.1% 35.2% 38.4% 24,616 +28% 25,000 60% 20,923 40% 49.3% 49.2% 20,000 46.8% 20% 11.5% 8.7% 7.5% 0% 15,000 2013 2014 1Q15 2013 2014 1Q15 Money Market Bonds Balanced/ Flexible Equity � The progressive growth of Management & Brokerage Commissions was once again driven by the continuous volumes’ expansion: AUM and Insurance Reserves were up by 28% compared to FY2013 and by 10% QoQ � The overall growing trend is paired with a positive « mix effect » showed by a breakdown privileging the most remunerating asset classes in term of risk/reward, obviously associated to the highest fee’s levels 8
Operating Costs Operating Costs: Quarterly Evolution Distribution Networks Euro, Million Employees 200 175.5 166.7 164.2 167.1 6,200 5,993 156.8 6,000 5,7635,792 5,740 5,800 150 5,5445,5195,6045,609 55 45 54 52 5,600 48 5,400 100 5,200 2008 2009 2010 2011 2012 2013 2014 1Q15 122 121 113 113 109 50 Financial Advisers 1,500 0 1,0021,006 885 1Q14 2Q14 3Q14 4Q14 1Q15 795 785 799 1,000 770 750 500 Personnel costs Other administrative costs 0 � Operating Costs evolution (+5.3% YoY) mirrors Creacasa and Salary Backed Loans Agents the Group’s investment strategy with Other Administrative Costs substantially stable YoY and Personnel Costs growing significantly (+6.9% 600 YoY) 394 394 359 353 400 272 � The focus on distribution strengthening is evident by 217 158 200 looking at the continuous expansion of all networks 0 9
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