AI Terminal

MODULE: AI_ANALYST
Interactive Q&A, Risk Assessment, Summarization
MODULE: DATA_EXTRACT
Excel Export, XBRL Parsing, Table Digitization
MODULE: PEER_COMP
Sector Benchmarking, Sentiment Analysis
SYSTEM ACCESS LOCKED
Authenticate / Register Log In

Intesa Sanpaolo

Quarterly Report Jul 29, 2022

4465_ip_2022-07-29_f3154734-9fd8-4c19-9747-4186d177a678.pdf

Quarterly Report

Open in Viewer

Opens in native device viewer

A strong bank for a sustainable world

1H22 Results

An excellent first half in a challenging environment

Fully focused on executing the 2022-2025 Business Plan

July 29, 2022

MIL-BVA362-03032014-90141/VR ISP delivered excellent operating performance, thanks to a well-diversified and resilient business model

€3.3bn H1 Net income excluding €1.1bn provisions/writedowns for Russia-Ukraine exposure, the best first half since 2008

€2,354m H1 stated Net income (€1,330m in Q2), thanks to the highest-ever Operating income and Operating margin

Strong acceleration of Net interest income in Q2 (+6.9% vs Q1)

Q2 the best quarter ever for Insurance income, coupled with resilient Commissions despite negative market performance

Solid performance in financial market activities, once again a natural hedge to the impact from volatility on our fee-based business

Strong decrease in Operating costs (-2.5% vs 1H21(1)) with Cost/Income ratio down to 47.5%

€4.1bn gross NPL stock reduction in H1 (€3.2bn in Q2)

Lowest-ever NPL stock and ratios, with gross NPL ratio at 1.8% and net NPL ratio at 1.0%(2)

Zero-NPL Bank status driving low underlying Cost of risk (27bps(3))

Execution of the 2022-2025 Business Plan proceeding at full speed, with key industrial initiatives well underway: fully equipped to continue succeeding in the future

(2) According to EBA definition

(3) Annualised excluding €1.1bn provisions for Russia-Ukraine exposure and €0.3bn release of part of generic provisions conservatively booked in 2020 for COVID-19 impacts (€0.4bn still available)

(1) Data redetermined considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

1H22: excellent operating performance

2022-2025 Business Plan proceeding at full speed

ISP is well equipped for a challenging environment

Final remarks

MIL-BVA362-03032014-90141/VR 1H22: the best H1 Net income since 2008 when excluding provisions/writedowns for Russia-Ukraine exposure

MIL-BVA362-03032014-90141/VR H1: €3.3bn Net income when excluding provisions/writedowns for Russia-Ukraine exposure

1H22 P&L € m

Note: figures may not add up exactly due to rounding

(1) Data redetermined considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

(2) Net provisions and net impairment losses on other assets, Other income (expenses), Income (Loss) from discontinued operations

(3) Excluding managers/manager equivalents

(4) Charges (net of tax) for integration and exit incentives, Effect of purchase price allocation (net of tax), Levies and other charges concerning the banking industry (net of tax), Impairment (net of tax) of goodwill and other intangible assets, Minority interests

(5) Including charges for the Resolution Fund: €362m pre-tax (€248m net of tax), our estimated commitment for the year

MIL-BVA362-03032014-90141/VR Q2: €1.6bn Net income when excluding provisions/writedowns for Russia-Ukraine exposure

Note: figures may not add up exactly due to rounding

(1) Data redetermined considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

(2) Net provisions and net impairment losses on other assets, Other income (expenses), Income (Loss) from discontinued operations

(3) Excluding managers/manager equivalents

(4) Charges (net of tax) for integration and exit incentives, Effect of purchase price allocation (net of tax), Levies and other charges concerning the banking industry (net of tax), Impairment (net of tax) of goodwill and other intangible assets, Minority interests

Net interest income: strong acceleration in Q2

(1) €312m benefit from hedging on core deposits in 1H22, of which €181m in 2Q22

(2) Data redetermined considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

Over €1.2 trillion in Customer financial assets

Customer financial assets(1)

Decline due to negative market performance

Valore Insieme(2): €8.2bn Customer financial assets inflow in H1

Note: figures may not add up exactly due to rounding

(1) Net of duplications between Direct Deposits and Indirect Customer Deposits

(2) Advanced advisory service for Affluent and Exclusive clients

Continued strong reduction in Operating costs while investing for growth

  • ~2,470 headcount reduction on a yearly basis, of which ~1,000 in H1
  • Further ~1,000 voluntary exits in July-December 2022 and an additional ~4,350 by 1Q25, already agreed with Labour Unions and already fully provisioned
  • ~900 hires in 2021 and H1, with an additional ~3,700 hires by 2025

(1) Data redetermined considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

One of the best Cost/Income ratios in Europe

(1) Sample: Barclays, Credit Suisse, Deutsche Bank, Lloyds Banking Group, Nordea, Santander, UBS and UniCredit (30.6.22 data); BBVA, BNP Paribas, Commerzbank, Crédit Agricole S.A., HSBC, ING Group, Société Générale and Standard Chartered (31.3.22 data)

MIL-BVA362-03032014-90141/VR

Zero-NPL Bank status driving low underlying Cost of risk

NPL stock Loan loss provisions (LLP) Cost of risk
€ bn Net NPL x
Gross NPL ratio(1)
, %
x
Net NPL ratio(1)
, %
€ m Provisions for Russia-Ukraine
exposure (net of release of part
of generic provisions booked in
2020 for COVID-19 impacts)
bps; annualised Additional provisions on
NPL portfolios to accelerate
NPL deleveraging
3.1
1.6
1.8
1.0
Provisions for Russia-Ukraine
exposure (net of release of part
of generic provisions booked in
2020 for COVID-19 impacts)
19.3 11.1 1,001 1,432 59 61
9.7 6.2 646 25 27
30.6.21(2) 30.6.22(3) 1H21(5) 1H22 FY21(5) 1H22


historical low(4)
€8.2bn gross NPL stock reduction on a
yearly basis, of which €3.2bn in Q2
€1.6bn NPL inflow in H1 (€0.9bn in Q2) at

for Russia-Ukraine exposure

Strong decrease in LLP excluding provisions
Out of the residual €0.7bn generic provisions
overlay booked in 2020 for COVID-19:
€0.3bn released in Q1

Zero-NPL Bank status

outstanding(6)
Low underlying Cost of risk in line with
€44.7bn expired moratoria, only €0.3bn still
  • (1) Based on EBA definition
  • (2) Excluding €5.2bn gross NPL (€1.5bn net) booked in Discontinued operations
  • (3) Excluding €4.1bn gross NPL (€1.0bn net) booked in Discontinued operations
  • (4) Excluding Russia-Ukraine exposure

€0.4bn still available

(6) As at 30.6.22

(5) Data redetermined considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

  • (3) Excluding €4.5bn gross NPL (€1.2bn net) booked in Discontinued operations
  • (4) Excluding €5.3bn gross NPL (€1.3bn net) booked in Discontinued operations
  • (5) Excluding €4.1bn gross NPL (€1.0bn net) booked in Discontinued operations
  • (6) Data as at 30.6.22 taking into account 2022 NPL disposal (€0.8bn gross, €0.4bn net) already funded in 4Q21 and still booked in NPL as at 30.6.22

MIL-BVA362-03032014-90141/VR

… positioning ISP among the best banks in Europe for NPL stock and ratios

(1) Including only banks in the EBA Transparency Exercise. Sample: Deutsche Bank, Nordea, Santander and UniCredit as at 30.6.22; BBVA, Commerzbank, Crédit Agricole Group, ING Group and Société Générale as at 31.3.22; BNP Paribas as at 31.12.21

(2) According to EBA definition. Data as at 30.6.21

Source: EBA Transparency Exercise, Investor presentations, press releases, conference calls and financial statements

MIL-BVA362-03032014-90141/VR

Exposure to Russia limited to ~1% of Group customer loans

Not considering H1 provisioning, € bn Local presence(1)
Russia
(Banca Intesa)
Ukraine
(Pravex
Bank)
Cross-border exposure to
Russia(2)
Loans to customers 0.7(3) ~-0.3bn vs
0.16(3)
31.3.22 at
3.85(4)
ECA(5)
guarantees
constant
-
-
exchange
0.9(6)
Due from banks rate
0.4
0.06 n.m.(7)
Bonds 0.05 0.05 0.10(8)
Derivatives - - 0.01
RWA 2.25(9) 0.2 6.1
Total assets 1.5 0.3 n.a.
Intragroup funding 0.4

-
Exposure before €1.1bn H1 provisions/writedowns
Decreasing exposure vs 31.3.22 at constant exchange rate
n.a.

(1) Data as at 31.12.21 for Ukraine updated using exchange rate as at 30.6.22 and management data as at 30.6.22 for Russia (exchange rate as at 30.6.22 +7% and +60%, respectively vs 31.3.22)

(2) Management accounts as at 30.6.22, Cross-border exposure to Ukraine not meaningful

  • (3) There is also an off-balance for Russia of €0.2bn (of which €0.1bn undrawn committed lines) and not significant for Ukraine
  • (4) Net of Export Credit Agencies guarantees. There is also an off-balance of €0.3bn (of which €0.04bn undrawn committed lines)
  • (5) Export Credit Agencies
  • (6) There are also Export Credit Agencies guarantees against an off-balance of €0.5bn (entirely against undrawn committed lines)
  • (7) There is also an off-balance of €0.2bn (no undrawn committed lines)
  • (8) Including insurance business (concerning policies where the total risk is not retained by the insured)
  • (9) Data as at 31.3.22 updated using exchange rate as at 30.6.22

MIL-BVA362-03032014-90141/VR

13

€1.1bn provisions/writedowns for Russia/Ukraine exposure in H1

MIL-BVA362-03032014-90141/VR

145 801 292 147 647 1,126 21 12 304 822 794 299(3) 1,093 33 … already significantly provisioned in H1 Limited and decreasing exposure to Russia… ▪ ISP exposure to Russia limited to ~1% of H1 Loan loss provisions/writedowns, € m Group customer loansExposure to Russia reduced by more than €0.4bn(1) (not considering H1 provisioning), with no new financing or new investments since the beginning of the conflict ▪ Exposure to Russian counterparties included in the SDN lists of names to which sanctions apply is equal to €0.4bn(2) ▪ Over two-thirds of loans to Russian customers refer to top-notch industrial groups with:

LLP on local presence Russia-Ukraine

154

  • Long-established commercial relationships with customers part of major international value chains
  • Significant portion of client income deriving from commodity exports
  • Limited local lending to Russian clients (<0.2% of Group customer loans) and a small footprint in Russia (~25 branches)

Conservative provisioning in H1 notwithstanding cross-border Russia exposure is almost entirely performing and classified as Stage 2

Total LLP

Russia-Ukraine securities/real estate writedowns

Total LLP/ writedowns

Q2 Q1

LLP on crossborder exposure Russia

Solid capital base, well above regulatory requirements

(2) 30.6.22 financial statements considering the total absorption of DTA related to IFRS9 FTA, DTA convertible in tax credit related to goodwill realignment and adjustments to loans, DTA related to non-taxable public cash contribution of €1,285m covering the integration and rationalisation charges relating to the acquisition of operations of the two former Venetian banks, as well as the expected absorption of DTA related to the combination with UBI Banca and to the new agreement with trade unions signed on 16.11.21 and DTA on losses carried forward, and the expected distribution on 1H22 Net income of insurance companies

(3) Including exposures with the ECB

MIL-BVA362-03032014-90141/VR

15

All stakeholders benefit from our solid performance

(1) Direct and indirect (2) Booked in Q2 in Other income (expenses). Excluding managers/manager equivalents

(3) Deriving from Non-performing loans outflow 16

MIL-BVA362-03032014-90141/VR

1H22: excellent operating performance

2022-2025 Business Plan proceeding at full speed

ISP is well equipped for a challenging environment

Final remarks

2022-2025 Business Plan proceeding at full speed

Our People are our most important asset

Massive upfront de-risking, slashing Cost of risk

MIL-BVA362-03032014-90141/VR

Key highlights

Massive deleveraging with €4.1bn gross NPL stock reduction in H1, reducing Net NPL ratio to 1%(1)
and anticipating
Business Plan target

Focus on modular approach and sectorial forward looking –
factoring in the macroeconomic scenario –
and on proactive
credit management
Massive upfront
Focus on dedicated Banca dei
Territori
Division action plan, with strong management of underlying Cost of risk, NPL
inflows from Performing loans and new solutions for new needs arising in the current scenario
de-risking, slashing
Cybersecurity anti-fraud protection extended to new products and services for retail customers, including the use of
Artificial Intelligence; adoption of Open Source Intelligence solutions to empower Cyber Threat
Intelligence capability
Cost of risk
Set up of the Anti Financial Crime (AFC) Digital Hub, aimed at becoming a national and international centre open to other
financial institutions and intermediaries in the system, with the goal of combating money laundering and terrorism through
new technologies and Artificial Intelligence, based on a public-private collaboration model which
enables
the introduction
of innovation
(applied
research) in business processes

Set up of the new AFC model based on an international platform and competence centres specialised in Transaction
Monitoring and Know Your Customers

The Active Credit Portfolio Steering (ACPS) unit continued to broaden the scope of synthetic credit risk protection
schemes, completing three new transactions for a total of €4bn in Q2, including residential mortgages and leasing
contracts, in addition to the first Italian credit-risk-transfer transaction on a portfolio of commercial real estate loans
(€1.9bn) finalised
in Q1

The ACPS unit has further strengthened capital efficiency initiatives and in H1 enhanced the credit strategy framework,
shifting €11bn in new lending towards economic sectors with the best risk/return profiles

Scale up of the Originate to share business model, increasing the distribution capabilities to optimise
the return on capital

Structural Cost reduction, enabled by technology

Key highlights
Structural Cost
reduction, enabled by
technology

New Digital Bank (Isybank
) setup well underway: Delivery Unit "Domain Isy
Tech" already
operational with ~230 dedicated specialists, contract with Thought Machine finalised and overall
technological masterplan defined

New head of Isybank
, new head of Domain Isy
Tech and new head of Sales & Marketing Digital
Retail hired and operational

Defined the Isybank
offering structure and functionalities

Insourcing of core capabilities in IT ongoing with the first ~270 people already hired

AI Lab in Turin already operating (setup of Centai Institute)

~500 branches closed in 4Q21/1H22 in light of Isybank
launch

Digital platform for analytical cost management up and running, with more than 20 efficiency initiatives
already identified

Carried out the selection of tools to support the negotiation and scouting activities of potential suppliers

Rationalisation of real estate in Italy in progress, with a reduction of ~260k sqm in 4Q21/1H22

~1,000 voluntary exits in H1(1)

Implementation of digital functions and services in Serbia and Hungary ongoing

Alignment of digital channels to the new core banking system in Egypt

Started functional and technical analysis activities in Slovakia and Albania for the adoption of the new core
banking system target platform
The Intesa Sanpaolo Mobile App was again recognised
by Forrester as "Overall Digital Experience Leader" and this year
ranked first among all EMEA banking Apps and cited as best practice in several European Banking App categories

Growth in Commissions, driven by Wealth Management, Protection & Advisory

Key highlights
Growth in
Commissions,
driven by Wealth
Management,
Protection & Advisory

New dedicated service model for Exclusive clients fully implemented

Enhancement of the product offering (new AM/Insurance products) and further growth of the advanced advisory service "Valore Insieme" for Affluent and
Exclusive clients: 26,000 new contracts and €8.2bn in Customer financial asset inflows in H1

Introduction of new functionalities of Robo4Advisor by BlackRock to generate investment advice on selected products (funds, insurance products and
certificates) to support relationship managers

Adoption of the BlackRock Aladdin Wealth and Aladdin Risk platforms for investment services: Aladdin Wealth module for BdT
and Fideuram
(first
release), Aladdin Risk and Aladdin Enterprise module for FAM/FAMI(1)
for investment services

New features for UHNWI(2)
client advisory tools; strengthening of service model for family offices and an ongoing project to embed ESG principles in the
advisory model and reporting

Released new features of Fideuram's
online investment and trading platform enabling clients to independently open accounts and subscribe to asset
management products

Launched multiple new asset management and insurance products (e.g. dedicated offer for clients with excess liquidity and capital protection funds)

Continued enhancement of ESG product offering for asset management and insurance

Launched digital platform "IncentNow" for enterprises to provide information to Italian companies and institutions on the opportunities offered by public
(3)
tenders related to the "Piano Nazionale di Ripresa e Resilienza"

Launched webinars and workshops with clients aimed at educating and sharing views on key topics (e.g. digital transition)

Developed commercial initiatives to support clients in different sectors (e.g. Energy, TMT, Infrastructure) to optimise
the incorporation of European and
Italian post-pandemic recovery plans

Go live of Cardea, an innovative and digital platform for financial institutions

Strengthening the corporate digital platform (Inbiz) in the EU with focus on Cash & Trade, leveraging the partnership approach with Fintechs

Ongoing upgrade of Global Markets IT platforms (e.g. Equity)

Launched an ESG value proposition initiative for the corporate and SME segments of Group banks in Slovakia, Hungary, Croatia,
Serbia and Egypt

Development of synergies between IMI C&IB and Group banks in Slovakia, Czech Republic, Hungary and Croatia underway

Expansion of digital services in Serbia and Hungary underway

Accelerated ESG advisory to corporates to steer the energy transition through a scalable approach, with a focus on energy, infrastructure and the
automotive & industrial sectors

Finalised
agreement with a leading insurance group to distribute bancassurance products in Slovakia, Croatia, Hungary, Serbia and Slovenia

Further development in the protection and health insurance business through the establishment of "InSalute
Servizi," a new third-party administrator in
partnership with Reale
Group, for the specialised
management of health and welfare benefits, with a push towards digital services

(1) Fideuram Asset Management / Fideuram Asset Management Ireland

(2) Ultra High Net Worth Individuals

(3) National Recovery and Resilience Plan

Significant ESG commitment, with a world-class position in Social Impact and strong focus on climate (1/3)

  • Expanding food and shelter program for people in need to counter poverty by providing concrete aid throughout the Italian territory and abroad supporting the humanitarian emergency in Ukraine. In H1 more than 6m interventions carried out with 5.8 million meals, over 300,000 dormitory spaces, 73,000 medicine prescriptions, ~35,000 articles of clothing
  • Employability and inclusive education:

Unparalleled support to address social needs

Strong focus on financial inclusion

  • "Giovani e Lavoro" program aimed at training and introducing more than 3,000 young people to the Italian labour market in the 2022-2025 Business Plan horizon. Over 5,500 students (aged 18-29) applied for the program in H1: ~1,000 interviewed and more than 400 trained/in-training through 17 courses (over 2,600 trained/in-training since 2019). Over 2,200 companies involved since its inception. The second edition of the "Generation4Universities" program started in May, offering internships to ~100 talented senior year university students from 36 universities, involving 31 top-tier Italian corporations as potential employers —Inclusive education program: strengthened partnerships with main Italian universities and schools (~600 schools and
  • ~1,900 students in H1) to promote educational inclusion, supporting merit and social mobility. In H1, the School4Life project was launched to combat early school abandonment, with companies and schools working together with students, teachers and families. Among the projects for the enhancement of talent and merit, the Tesi in Azienda initiative aims at orienting students towards the most recent issues in the work environment (~70 students in H1)
  • Social housing: setup of the project underway (developing 6-8k social housing units for youth and seniors)
  • Granted > €5bn in social lending (€25bn cumulative flows announced in the Business Plan)
  • Lending to the third sector: in H1, granted loans supporting non-profit organisations for a total of €170m
  • Fund for Impact: in H1, €21m made available to support the needs of people and families to ensure wider and more sustainable access to credit, with dedicated programs such as: per Merito (credit line without guarantees to be repaid in 30 years dedicated to university students, studying in Italy or abroad), mamma@work (loan to discourage new mothers from leaving work and supporting motherhood in the first years of life of the children), per Crescere (funds for the training and education of school-age children dedicated to fragile families), per avere Cura (lending to support families taking care of non self-sufficient people) and other solutions (e.g. Obiettivo Pensione, per Esempio, XME Studio Station)

Lending for Urban Regeneration: in H1, committed €500m in new loans to support investments in student housing, services and sustainable infrastructure, in addition to the most important urban regeneration initiatives underway in Italy. Promotion of academic initiatives to define ESG evaluation methodologies for the impact of urban regeneration

MIL-BVA362-03032014-90141/VR

MIL-BVA362-03032014-90141/VR

Significant ESG commitment, with a world-class position in Social Impact and strong focus on climate (2/3)

Continuous
commitment

2
new
museums
opened
in
May,
doubling
the
number
of
the
Gallerie
d'Italia
venues
to
4
(Turin
and
Naples
in
addition
to
Milan
and
Vicenza).
Important
projects
for
the
transformation
of
owned
buildings:
in
Turin,
a
museum
dedicated
to
photography,
the
digital
world
and
ESG
topics
(currently,
among
others,
2
exhibition
projects
dedicated
to
climate
change);
the
Naples
museum
houses
680
artworks
from
the
Bank's
collections,
from
archaeology
to
a
Caravaggio
masterpiece,
up
to
19th
modern
and
contemporary
art
(currently
open
to
the
public
is
the
Restituzioni
exhibition
and
231
works
of
public
heritage
restored
in
the
edition
of
the
program,
curated
by
the
Bank
with
the
Ministry
of
Culture)

Almost 185,000 visitors to the Gallerie
d'Italia
in H1. 587 workshops for school groups with 12,600 participating students, 129 tours for visitors with special needs
with 1,800 participants, free of charge
to culture
In the Sanctuary of Monte Berico in Vicenza, the official launch of the restoration of the important painting by Paolo Veronese,
Dinner of San Gregorio Magno
(40
sqm), a masterpiece of the Venetian Renaissance, as part of the Restituzioni
programme

155 artworks from the owned collections on loan to 34 temporary exhibitions hosted in Italian and foreign locations

Important partnerships with public and private, national and international players, including Miart
of Milan, the Turin Book Fair, Archivissima
of Turin and the
National Archaeological Museum of Naples

Innovation projects: 139 innovation projects launched in H1

Development of multi-disciplinary applied research projects, of which 12 in progress in the fields of AI, robotics, neuroscience

Initiatives for startup growth and the development of innovation ecosystems:

Turin: completed 3rd
class of "Torino Cities of the Future" program managed by Techstars; the 4th class is underway. Since 2019, 35 accelerated
startups (11 Italian teams), >30 proofs of concept with local stakeholders, €48m in capital raised and over 180 new resources
hired after acceleration
Florence: completed 1st

class of the three-year "Italian Lifestyle Accelerator Program" managed by Nana Bianca; 6 Italian startups accelerated (>210
candidates, 85% Italian); >€2m in capital raised
Promoting
innovation

Naples: launched 1st
acceleration program "Terra Next" (Bioeconomy), for 8 startups (~130 candidates, 83% Italian), with Cassa
Depositi
e Prestiti,
Cariplo Factory and local scientific partners; obtained the patronage of the Ministry of Ecological Transition

UP2Stars
initiative aimed at 40 startups on four vertical pillars (Digital/Industry 4.0; Bioeconomy, focus on Agritech
and Foodtech; Medtech/Healthcare;
Aerospace). 1st
program completed in May (>230 candidates); 2nd
program finishing in July (>150 candidates), the application phase for the 3rd
has begun

2 startup acceleration programs for clients in progress, with coaching and mentoring activities

Business
transformation:
>20
corporates
involved
in
open
innovation
programs
and
ongoing
support
to
Compagnia
di
San
Paolo
and
Cariplo
Foundations
on
their
"Bando
Evoluzioni"
related
to
the
digitisation
of
the
non-profit
sector

Diffusion
of
innovation
mindset/culture:
Launched
podcast
series
on
innovation
("A
prova
di
futuro")
for
the
spread
of
the
culture
of
innovation;
25
match-making(1)
positioning
and
events
held
(with
more
than
1,700
participants)
and
6
innovation
reports
on
technologies
and
trends
released

Neva
SGR
investments
in
startups:
invested
>€20m
in
Israel
in
IT,
Quantum
Computing,
Agri-Foodtech
and
Cybersecurity

(1) Positioning event: event in which a leading player illustrates innovation topics; match-making event: event which fosters a match between supply and demand of innovation

2022-2025 Business Plan proceeding at full speed

Significant ESG commitment, with a world-class position in Social Impact and strong focus on climate (3/3)

Following the Group's adherence to Net-Zero alliances(1), in April 2022 ISP's commitment to the SBTi validation was published on the SBTi website
-------------------------------------------------------------------------------------------------------------------------------------------------------- --
  • Net zero targets implemented in all Business Units
  • Ongoing active engagement in various GFANZ(2) and Net-Zero Alliance taskforces

Accelerating commitment to Net-Zero

  • In June 2022, GFANZ published an interim report for consultation "Financial Institution Net-zero Transition Plans", where in the Metrics and Targets chapter, ISP was cited as a best practice for its target setting announced in the 2022-2025 Business Plan
  • Group Guidelines for the governance of ESG risks revised in April 2022 in line with regulatory developments and climate and environmental initiatives underway

▪ Already active in derivatives linked to CO2 emission allowances under the European Emission Trading Scheme (ETS). Regarding the voluntary market, a new service model focused on forest management activities is under development, with an initial proposition focused on SME lending and advisory

▪ In June 2022, ISP became an investor signatory of CDP, further fostering corporate environmental transparency

  • ~€24bn disbursed in 2021 and H1 out of the €76bn in new lending available for the green economy, circular economy and green transition in relation to the "2021-2026 Piano Nazionale di Ripresa e Resilienza" (3)
  • €8bn circular economy credit facility announced in the 2022-2025 Business Plan; in 1H, 192 projects assessed and validated for an amount of €5.3bn; granted €2.3bn in 82 transactions (of which €1.2bn related to green finance) and €933m disbursed (of which €584m related to green finance); Renewed partnership with Ellen McArthur Foundation
  • Activated the first three ESG Laboratories (in Venice, Padua and Brescia), a physical and virtual meeting point to support SMEs in approaching sustainability, and evolution of the advisory services offered by partners (e.g. Circularity, Nativa, CE Lab and others)

Supporting clients through the ESG/climate transition

  • Continued enrichment of the S-Loan product range dedicated to SMEs to finance projects aimed at improving their sustainability profile (5 product lines: S-Loan ESG, S-Loan Diversity, S-Loan Climate Change; S-Loan Agribusiness and S-Loan Tourism). ~€2.9bn granted since launch, of which ~€1.5bn in H1
  • In October 2021, launch of Digital Loans (D-Loans) aimed at improving the digitalisation of companies: €17.4m disbursed since launch (€16m in H1)
  • In March 2022, ISP won the Milano Finanza Banking Awards for its S-Loan product and for the dedicated ESG training platform for corporate clients (Skills4ESG)
  • Accelerated ESG advisory to corporates to steer the energy transition through a scalable approach
  • Launched an ESG value proposition initiative for the corporate and SME segments of Group banks in Slovakia, Hungary, Croatia, Serbia and Egypt
  • Enhancement of ESG investment products both for asset management and insurance with penetration increasing to 49% of total AuM(4)

▪ Revised the Fideuram Advisory model to embed ESG principles in need-based financial planning and launched a comprehensive training program for the ESG certification of bankers with more than 25,000 hours already provided in H1

Reinforced ISP ESG governance, with the Risks Committee becoming the Risks and Sustainability Committee with enhanced ESG responsibilities from April 2022

(1) Net-Zero Banking Alliance, Net-Zero Asset Managers Initiative, Net-Zero Asset Owner Alliance and Net-Zero Insurance Alliance (2) Glasgow Financial Alliance for Net-Zero (3) 2021-2026 National Recovery and Resilience Plan (4) Eurizon perimeter – Funds pursuant to art. 8 and 9 SFDR 2088

Confirmed leading ESG position in the main sustainability indexes and rankings

The only Italian bank listed in the Dow Jones Sustainability Indices

Ranked first among peer group by Bloomberg (ESG Disclosure Score), Sustainalytics and MSCI

In January 2022, ISP was confirmed in the Bloomberg Gender-Equality Index

In February 2022, ISP received the S&P Global Sustainability Award – Bronze Class

In 2021 ranking by Institutional Investor, ISP was Europe's Best Bank and Italy's Best Company for ESG aspects and in 2022 has been confirmed as Italy's Best Company in ESG (Large Cap)(1)

74 A AAA 99 17.1
64 A AAA 99 19.3
62 A AAA 97 20.1
62 A AA 94 20.6
62 A AA 94 21.3
60 A AA 94 22.0
60 A AA 93 22.5
59 B AA 92 22.5
59 B AA 92 22.5
56 B AA 81 22.7
56 B AA 79 23.9
54 B AA 78 24.3
54 B AA 71 24.9
53 B AA 70 25.0
52 B A 70 25.9
51 B A 69 29.0
45 F A 65 30.5

Top ranking(2) for Sustainability

(1) European ranking results expected in September

(2) ISP peer group

Source: Bloomberg ESG Disclosure Score (Bloomberg as at 30.6.22), CDP Climate Change Score 2021 (https://www.cdp.net/en/companies/companies-scores); MSCI ESG Score (https://www.msci.com/esg-ratings) data as at 30.6.22; S&P Global (Bloomberg as at 30.6.22); Sustainalytics score (https://www.sustainalytics.com/esg-ratings; as at 30.6.22)

Our People are our most important asset

Key highlights

Our People are our most

important asset

▪ ~900 professionals hired throughout 2021 and H1

  • ~850 people reskilled in H1
  • ~4.5m training hours delivered in H1
  • Over 100 talents have already completed their training as part of the International Talent Program, still ongoing for other ~200 resources
  • Identified ~430 key people among Middle Management for dedicated development and training initiatives
  • Live webinars, podcasts, video content and other ongoing initiatives to foster employee wellbeing
  • Implemented the new Long-Term Incentive Plan to support the 2022-2025 Business Plan goals and foster individual entrepreneurship
  • Completed the creation of the new leading education player in Italy through the combination between ISP Formazione and Digit'Ed, a Nextalia Fund company
  • Defined and shared 2022 Diversity & Inclusion goals for every organisational unit, including the implementation of the new commitment related to equal gender access to senior leadership roles; monitoring of the 2022 goals for each Division and Governance Area launched

▪ ISP recognised as Top Employer 2022(1) and ranked at the top of LinkedIn's Top Companies 2022 list

€48m one-off contribution to ISP People(2) to mitigate the impact from inflation

MIL-BVA362-03032014-90141/VR

ISP has implemented multiple humanitarian projects to support the Ukrainian population and Pravex Bank colleagues

  • The Extraordinary Fund for the donation of €10m in support of the humanitarian emergency in Ukraine has been fully utilised: 60% for initiatives abroad (in Ukraine and at its borders) and 40% in Italy (for arriving refugees) thanks to collaboration agreements signed with important humanitarian organisations:
  • ‒ Agreements have been signed with UNHCR(1) , Caritas, CESVI(2) , Banco Farmaceutico, Consiglio Italiano per i Rifugiati, Vicariato di Roma, Confederazione Nazionale delle Misericordie d'Italia, European Food Banks Federation, AVSI(3) , Azione Contro la Fame, Robert F. Kennedy Human Rights Italia and Bambini nel Deserto Onlus to support projects for humanitarian protection, housing, direct economic support, health and psychological assistance, distribution of basic necessities and the integration of Ukrainian refugees in Italy
  • − Concluded the fundraising in favour of UNHCR(1) , through ISP ForFunding crowdfunding platform, collecting €1.1m; the Bank has doubled the amount collected
  • Fundraising:
  • through ForFunding, to support Fondazione RAVA for children's hospitals in Ukraine (total amount collected: €354k) with a direct donation from ISP
  • through the Group International Subsidiaries in 5 Eastern European countries, to support different local NGOs (total amount collected: €255k)
  • The ISP Charity Fund has guaranteed support to two organisations directly operating in Ukraine: Doctors Without Borders and Fondazione Soleterre for the distribution of emergency medical supplies to hospitals, training for health facility staff, the reception and continuity care of children with oncological pathologies

Donations and other support initiatives for

Key support initiatives for Pravex Bank colleagues

Ukraine

  • Donated(4) 6,300 hours of paid leave to employees willing to volunteer to host refugees or to cooperate outside Italy with NGOs and non-profit organisations for humanitarian and social purposes. ISP people can contribute by donating their time, increasing the hours already provided by ISP ▪ Agreed concession, with free loan for use, of IMMIT building in Bergamo to the Ukrainian Zlaghoda Association to collect donated goods
  • >260 people (95 families) have been welcomed by the International Subsidiary Banks Division outside Ukraine
  • Arrangements to host ~210 Pravex Bank colleagues and their family members in Italy in apartments, residences and other accommodations Use of a Bank building to host ~35 workstations for Pravex Bank colleagues
  • Contribution by ISP Onlus of €3,000 to each Pravex Bank colleague fleeing with children <18 years old (total of €250k)

27

  • Identified additional initiatives to support and facilitate the integration of Pravex Bank colleagues' families (e.g. sports activities, support for administrative activities, ensure school access by providing devices for distance learning with Ukrainian schools)
  • Partnership with Caritas to provide services (e.g. healthcare), linguistic and cultural assistance

(1) United Nations High Commissioner for Refugees (2) Cooperazione e Sviluppo (3) Associazione Volontari per il Servizio Internazionale (4) Agreed with Labour Unions

The 2022-2025 Business Plan formula

Massive upfront
de-risking, slashing
Cost of risk
Structural Cost reduction,
enabled by technology
Our People are our most important asset
Growth in Commissions,
driven by Wealth Management,
Protection & Advisory
Significant ESG commitment,
with a world-class position in
Social Impact and strong
focus on climate
~1% net NPL ratio(1) €2bn Cost savings ~€100bn growth in AuM ~€25bn in social
lending/contribution to society
~40bps Cost of risk(1) €5bn investments in technology
and growth
~57% of Revenues from fee
based business(2)
~€90bn in new loans to support
the green transition
€6.5bn Net income target for 2025 confirmed, with potential upside from an interest rate increase, high flexibility in managing Costs and Zero-NPL Bank status already achieved

Our People are our most important asset

(1) Throughout the entire Business Plan horizon

(2) Commissions and Insurance income

1H22: excellent operating performance

2022-2025 Business Plan proceeding at full speed

ISP is well equipped for a challenging environment

Final remarks

MIL-BVA362-03032014-90141/VR ISP is entering a challenging environment with a stronger Balance sheet compared to the last downturn…

(1) €1.7bn to be executed subject to the approval of the Board of Directors by the time the FY22 results are approved

  • (2) Basel 3
  • (3) According to EBA definition

…and a more resilient and efficient business model with additional benefit from an interest rate increase

ISP is far better equipped than its peers to tackle the challenges ahead

Note: figures may not add up exactly due to rounding

  • (1) Fully phased-in CET1. Sample: Barclays, Credit Suisse, Deutsche Bank, Lloyds Banking Group, Nordea, Santander, UBS and UniCredit (30.6.22 data); BBVA, BNP Paribas, Commerzbank, Crédit Agricole S.A., HSBC, ING Group, Société Générale and Standard Chartered (31.3.22 data)
  • (2) Total illiquid assets include net NPL stock, Level 2 assets and Level 3 assets. Sample: Barclays, Deutsche Bank, Lloyds Banking Group, Nordea and UBS (30.6.22 data); Santander and UniCredit (net NPL 30.6.22 data and Level 2 and Level 3 assets 31.12.21 data); BBVA, Commerzbank, Crédit Agricole S.A., Credit Suisse, HSBC, ING Group, Société Générale and Standard Chartered (net NPL 31.3.22 data and Level 2 and Level 3 assets 31.12.21 data; BNP Paribas (31.12.21 data)
  • (3) €1.7bn to be executed subject to the approval of the Board of Directors by the time the FY22 results are approved
  • (4) Calculated as the difference between the Fully phased-in CET1 ratio, including extraordinary cash dividend distributed and share buyback approved by the ECB, vs requirements SREP + combined buffer
  • (5) Sample: Deutsche Bank, Nordea, Santander and UniCredit (30.6.22 data); BBVA, BNP Paribas, Commerzbank, Crédit Agricole S.A, ING Group and Société Générale (31.3.22 data)
  • (6) Sample: Barclays, Credit Suisse, Deutsche Bank, Lloyds Banking Group, Nordea, Santander, UBS and UniCredit (30.6.22 data); BBVA, BNP Paribas, Commerzbank, Crédit Agricole S.A., HSBC, ING Group, Société Générale and Standard Chartered (31.3.22 data)

The Italian economy is also stronger than in the past…

  • (1) Source: ISP estimates
  • (2) Data as at 31.3.11
  • (3) Data as at 31.12.11
  • (4) Data as at 31.3.22
  • (5) Data as at 30.4.22
  • (6) Source: Bank of Italy; Financial debt net of liquidity / (Financial debt net of liquidity + Shareholders' equity) 33

… with 2022 expansion supported by solid fundamentals

Italian GDP YoY evolution The Italian economy is resilient thanks to solid fundamentals
% Households
Strong Italian household wealth at €11,000bn, of which €5,000bn in financial
assets, coupled with low household debt

Significant growth in household savings (in terms of currency and deposit stock)
since the start of the COVID-19 pandemic, with 8% deposit growth on average in
2020-21 vs 4% in the previous eight years
6.6
~3
Corporates
Very resilient Italian SMEs, quickly recovering after the COVID-19 emergency
with historically low default rates maintained after the end of moratoria

Export-oriented companies highly diversified in terms of industry and size, Italian
exports have outperformed Germany's by almost 20% over the past 5 years(3)

High trade balance surplus (€89.5bn net of energy in 2021)
2021(1)
2022
forecast(2)
Banking
system

Banking system played an important role in mitigating the economic impact of the
COVID-19 emergency on households and companies
Italian
Government
and EU
support

Extensive support to the economy from the Italian Government, with measures
worth ~€33bn already approved since September 2021 (~2% of GDP)

EU financial support (Next Generation EU) to fund the National Recovery and
Resilience Plan, providing Italy with more than €200bn in grants and loans, of
which €25bn in 2021 and €42bn expected in 2022

(1) Source: ISTAT (2) Source: ISP estimates

(3) At current prices (May 2022 vs May 2017)

1H22: excellent operating performance

2022-2025 Business Plan proceeding at full speed

ISP is well equipped for a challenging environment

Final remarks

MIL-BVA362-03032014-90141/VR ISP is fully equipped to succeed in challenging environments, as demonstrated during the COVID-19 emergency and previous crises

  • €3.3bn Net income when excluding provisions for Russia-Ukraine exposure
  • Strong acceleration of Net interest income in Q2 (+6.9% vs 1Q22)
  • Highest-ever Operating income and Operating margin
  • Strong decrease in Operating costs (-2.5% vs 1H21(1))
  • Further significant NPL reduction and lowest-ever NPL stock and ratios

ISP delivered excellent H1 operating performance… … and is fully equipped to succeed in challenging environments

  • Solid capital position, low leverage and strong liquidity
  • Zero-NPL Bank with net NPL ratio at 1%(2) and low underlying Cost of risk
  • Well-diversified and resilient business model
  • High strategic flexibility in managing Costs, with Cost/Income ratio at 47.5%
  • €1.1bn already provisioned in H1 for Russia-Ukraine exposure with €0.4bn in COVID-19 related generic provisions still available

Execution of the 2022-2025 Business Plan proceeding at full speed, with key industrial initiatives well underway: fully equipped to continue succeeding in the future

(1) Data redetermined considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group (2) According to EBA definition

ISP outlook

  • 2022-2025 Business Plan industrial initiatives well underway
  • €6.5bn Net income target for 2025 confirmed
  • Best-in-class profitability in 2022 with:
  • ─ >€4bn Net income assuming no critical changes to commodity/energy supplies
  • ─ Well above €3bn Net income even with the very conservative assumption of ~40% coverage on Russia-Ukraine exposure implying the move to Stage 3 for most of the exposure
  • Solid capital position: Basel 3/Basel 4 fully phased-in CET1 ratio target >12% through the 2022-2025 Business Plan horizon
  • Strong value distribution:
  • ─ 70% dividend payout in each year of the Business Plan (€1.65bn dividends already accrued in H1 for 2022, with a minimum €1.1bn envisaged as an interim dividend(1))
  • ─ Additional €3.4bn capital return to Shareholders through buyback(2) , of which €1.7bn already underway and €1.7bn to be executed subject to the approval of the Board of Directors by the time the FY22 results are approved
  • ─ Any additional distribution to be evaluated year-by-year from 2023

2022 outlook to be fine-tuned in the coming months based on the evolution of the Russia-Ukraine conflict

1H22 Results

Detailed information

Key P&L and Balance sheet figures

€ m
1H22 30.6.22
Operating
income
10,756 Loans to customers 471,649
Operating
costs
(5,111) Customer financial assets(1) 1,213,795
Cost/Income ratio 47.5% of which Direct deposits from banking business 549,360
Operating margin 5,645 of which Direct deposits from insurance
business and technical reserves
180,788
Gross income (loss) 4,233 of which Indirect customer deposits 662,784
Net income 2,354 -
Assets under management
436,493
-
Assets under administration
226,291
RWA 325,341

Total assets 1,032,315

Detailed consolidated P&L results

Liquidity, Funding and Capital base

Asset quality

Divisional results and other information

MIL-BVA362-03032014-90141/VR 1H22 % 1H22 vs 1H21: €3.3bn Net income when excluding provisions/writedowns for Russia-Ukraine exposure

1H21
stated(1)
[ A ]
redetermined(2)
[ B ]
[ C ] [ C ] / [ B ]
Net interest income 4,013 3,947 4,047 2.5
Net fee and commission income 4,764 4,670 4,529 (3.0)
Income from insurance business 811 854 867 1.5
Profits on financial assets and liabilities at fair value 1,140 1,139 1,323 16.2
Other operating income (expenses) 65 51 (10) n.m.
Operating income 10,793 10,661 10,756 0.9
Personnel expenses (3,324) (3,273) (3,181) (2.8)
Other administrative expenses (1,354) (1,361) (1,307) (4.0)
Adjustments to property, equipment and intangible assets (606) (608) (623) 2.5
Operating costs (5,284) (5,242) (5,111) (2.5)
Operating margin 5,509 5,419 5,645 4.2
Net adjustments to loans (1,007) (1,001) (1,432) 43.1
Net provisions and net impairment losses on other assets (351) (354) (123) (65.3)
Other income (expenses) 191 191 143 (25.1)
Income (Loss) from discontinued operations 0 58 0 (100.0)
Gross income (loss) 4,342 4,313 4,233 (1.9)
Taxes on income (921) (922) (1,456) 57.9
Charges (net of tax) for integration and exit incentives (107) (107) (39) (63.6)
Effect of purchase price allocation (net of tax) (34) (34) (101) 197.1
Levies and other charges concerning the banking industry (net of tax) (292) (279) (3)
(278)
(0.4)
Impairment (net of tax) of goodwill and other intangible assets 0 0 0 n.m.
Minority interests 35 52 (5) n.m.
Net income 3,023 3,023 2,354 (22.1)

Including €1.1bn provisions for Russia-Ukraine exposure in 1H22

€3,276m, +8.4% excluding provisions/writedowns for Russia-Ukraine exposure in 1H22

Note: figures may not add up exactly due to rounding

(1) Including the contribution of branches sold in 1H21 and the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni from the effective date of their acquisition and REYL Group from 1.1.21

(2) Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not

considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

(3) €400m pre-tax of which Charges for the Resolution Fund: €362m pre-tax (€248m net of tax), our estimated commitment for the year

MIL-BVA362-03032014-90141/VR 1Q22 % Q2 vs Q1: €1.6bn Net income when excluding provisions/writedowns for Russia-Ukraine exposure

€ m

2Q22
Net interest income 1,956 2,091 6.9
Net fee and commission income 2,281 2,248 (1.4)
Income from insurance business 402 465 15.7
Profits on financial assets and liabilities at fair value 767 556 (27.5)
Other operating income (expenses) 3 (13) n.m.
Operating income 5,409 5,347 (1.1)
Personnel expenses (1,572) (1,609) 2.4
Other administrative expenses (612) (695) 13.6
Adjustments to property, equipment and intangible assets (315) (308) (2.2)
Operating costs (2,499) (2,612) 4.5
Operating margin 2,910 2,735 (6.0)
Net adjustments to loans (702) (730) 4.0 Including €0.8bn in Q1 and €0.3bn in Q2
provisions for Russia-Ukraine exposure
Net provisions and net impairment losses on other assets (60) (63) 5.0
Other income (expenses) (4) 147 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 2,144 2,089 (2.6)
Taxes on income (781) (675) (13.6)
Charges (net of tax) for integration and exit incentives (16) (23) 43.8
Effect of purchase price allocation (net of tax) (54) (47) (13.0)
Levies and other charges concerning the banking industry (net of tax) (266) (12) (95.5)
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests (3) (2) (33.3)
Net income 1,024 1,330 29.9

€1,670m and €1,606m respectively when excluding provisions/writedowns for Russia-Ukraine exposure

Net interest income: strong acceleration in Q2

Note: figures may not add up exactly due to rounding

(1) €312m benefit from hedging on core deposits in 1H22, of which €181m in 2Q22

(2) Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

  • Commissions from Commercial banking activities up 9.8% (+€60m) vs 1Q22
  • -2.3% vs 2Q21 excluding performance fees

  • Commissions from Commercial banking activities up 4.5% (+€56m)

  • -0.7% excluding performance fees
  • +€10.7bn in AuM net inflow on a yearly basis

(1) Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

Profits on financial assets and liabilities at fair value: excellent performance

Contributions by activity

2Q21
redetermined(1)
1Q22 2Q22 1H21
redetermined(1)
1H22
Customers 72 88 84 157 172
Capital markets 97 (11) (78) 415 (89)
Trading and Treasury 173 694 568 560 1,262
Structured credit products 2 (4) (18) 7 (22)

Note: figures may not add up exactly due to rounding

(1) Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

MIL-BVA362-03032014-90141/VR

Operating costs: further significant reduction while investing for growth

Other administrative expenses increase vs Q1 mainly due to seasonal effects

  • Adjustments up due to investments for growth (IT +9%), while rationalising real estate and others (-8%)
  • ~2,470 headcount reduction, of which ~1,000 in 1H22

(1) Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

MIL-BVA362-03032014-90141/VR Net adjustments to loans: strong decrease on a yearly basis when excluding provisions for Russia-Ukraine exposure

  • Twenty-seventh consecutive quarterly reduction in NPL stock
  • Strong reduction (-26.9%) vs 2Q21 when excluding provisions for Russia-Ukraine exposure
  • €3.2bn gross NPL reduction in Q2

  • Annualised Cost of credit at 27bps when excluding €1.1bn provisions for Russia-Ukraine exposure and €0.3bn release of part of generic provisions conservatively booked in 2020 for COVID-19 impacts

  • €8.2bn gross NPL reduction on a yearly basis (€9.0bn(2) on a pro-forma basis)

(1) Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

(2) Taking into account 2022 NPL disposals already funded in 4Q21 and still booked in NPL as at 30.6.22 (€0.8bn gross, €0.4bn net)

Detailed consolidated P&L results

Liquidity, Funding and Capital base

Asset quality

Divisional results and other information

More than €1.2 trillion in Customer financial assets

% 30.6.22 vs 30.6.21, 31.12.21 and 31.3.22

Note: figures may not add up exactly due to rounding

(1) Net of duplications between Direct deposits and Indirect customer deposits

Funding mix

Retail funding represents 84% of Direct deposits from banking business

Note: figures may not add up exactly due to rounding

(1) Including Senior non-preferred

(2) Certificates of deposit + Commercial papers

(3) Including Certificates

Strong funding capability: broad access to international markets

Note: figures may not add up exactly due to rounding (1) ISP stand-alone

High liquidity: LCR and NSFR well above regulatory requirements

Refinancing operations with the ECB: ~€115bn(3) consisting entirely of TLTRO III, out of a maximum allowance of ~€133bn

Loan to Deposit ratio(4) at 86%

MIL-BVA362-03032014-90141/VR

(1) Stock of own-account eligible assets (including assets used as collateral and excluding eligible assets received as collateral) and cash & deposits with Central Banks

(2) Eligible assets freely available (excluding assets used as collateral and including eligible assets received as collateral) and cash & deposits with Central Banks

(3) June 2022: early repayment of €17bn, the amount taken under the TLTRO III on 18.12.19 (maturity 21.12.22)

(4) Loans to customers/Direct deposits from banking business

Solid Capital base

  • 12.5% fully phased-in CET1 ratio(1), not including ~110bps additional benefit from DTA absorption (of which ~40bps in the 2022-2025 Business Plan horizon) and including ~100bps impact from the entire €3.4bn buyback, authorised by the ECB: €1.7bn underway and €1.7bn second tranche to be executed subject to Board of Directors approval by the time FY22 results are approved (13.0% fully phased-in CET1 ratio not including the second tranche)
  • ~10bps impact on CET1 ratio from regulatory headwinds (out of the total ~60bps expected in the 2022-2025 Business Plan horizon) and ~20bps impact from Russia-Ukraine RWA inflation in H1
  • 5.3%(2) leverage ratio

(1) 13.6% pro-forma fully loaded Basel 3 (30.6.22 financial statements considering the total absorption of DTA related to IFRS9 FTA (€1.0bn as at 30.6.22), DTA convertible in tax credit related to goodwill realignment (€5.6bn as at 30.6.22) and adjustments to loans (€2.8bn as at 30.6.22), DTA related to non-taxable public cash contribution of €1,285m covering the integration and rationalisation charges relating to the acquisition of operations of the two former Venetian banks (€0.1bn as at 30.6.22), as well as the expected absorption of DTA related to the combination with UBI Banca and to the new agreement with trade unions signed on 16.11.21 (€0.4bn as at 30.6.22) and DTA on losses carried forward (€2.1bn as at 30.6.22), and the expected distribution on 1H22 Net income of insurance companies) (2) Including exposures with the ECB

Detailed consolidated P&L results

Liquidity, Funding and Capital base

Asset quality

Divisional results and other information

Non-performing loans: massive deleveraging

x
Gross NPL ratio, %
x
Net NPL ratio, %
x
Gross and net NPL ratio based on EBA definition, %
Gross NPL

bn
30.6.21(1) 31.12.21(2) 31.3.22(3) 30.6.22(4)
bn
30.6.21(1) 31.12.21(2) 31.3.22(3) 30.6.22(4)
Bad loans 9.3 7.2 7.3 3.4 Bad loans 3.7 2.1 2.1 1.2
-
of which forborne
1.9 1.5 1.5 0.7 -
of which forborne
0.8 0.5 0.5 0.3
Unlikely to pay 9.4 7.3 6.5 7.0 Unlikely to pay 5.5 4.3 4.2 4.4
-
of which forborne
3.9 2.9 3.1 3.1 Of which -
of which forborne
2.7 2.1 2.1 2.1 Of which
Past due 0.6 0.8 0.6 0.7 €0.4bn
related to
Russia
Past due 0.5 0.6 0.4 0.5 €0.2bn
related to
Russia
-
of which forborne
- 0.2 0.1 0.1 Ukraine
exposure
-
of which forborne
- 0.1 - 0.1 Ukraine
exposure
Total 19.3 15.2 14.4 11.1 €10.3bn
pro-forma(5)
Total 9.7 7.1 6.8 6.2 €5.7bn
pro-forma(5)
4.1 3.2 3.0 2.3 2.2%
(5)
pro-forma
2.1 1.5 1.4 1.3 1.2%
pro-forma(5)
3.1 2.4 2.3 1.8 1.7%
pro-forma(5)
1.6 1.2 1.1 1.0 1.0%
pro-forma(5)

Lowest-ever NPL stock and ratios with twenty-seventh consecutive quarterly reduction in NPL stock

Note: figures may not add up exactly due to rounding

  • (1) Not including €5.2bn gross (€1.5bn net) NPL booked in Discontinued operations
  • (2) Not including €4.5bn gross (€1.2bn net) NPL booked in Discontinued operations
  • (3) Not including €5.3bn gross (€1.3bn net) NPL booked in Discontinued operations

(4) Not including €4.1bn gross (€1.0bn net) NPL booked in Discontinued operations

(5) Taking into account 2022 NPL disposals already funded in 4Q21 and still booked in NPL as at 30.6.22 (€0.8bn gross, €0.4bn net)

Non-performing loans coverage

MIL-BVA362-03032014-90141/VR

Cash coverage; %

(1) Bad loans (Sofferenze), Unlikely to pay (Inadempienze probabili) and Past due (Scaduti e sconfinanti)

(1) Bad loans (Sofferenze), Unlikely to pay (Inadempienze probabili) and Past due (Scaduti e sconfinanti)

(2) 2012 figures recalculated to take into consideration the regulatory changes to Past due classification criteria introduced by the Bank of Italy (90 days since 2012 vs 180 days up until 31.12.11)

Non-performing loans gross inflow

€ m

Note: figures may not add up exactly due to rounding

(1) Bad loans (Sofferenze), Unlikely to pay (Inadempienze probabili) and Past due (Scaduti e sconfinanti)

Non-performing loans net inflow

€ m

Note: figures may not add up exactly due to rounding

(1) Bad loans (Sofferenze), Unlikely to pay (Inadempienze probabili) and Past due (Scaduti e sconfinanti)

MIL-BVA362-03032014-90141/VR

Loans to customers: a well-diversified portfolio

  • Low risk profile of residential mortgage portfolio
  • Instalment/available income ratio at 31%
  • Average Loan-to-Value equal to ~59%
  • Original average maturity equal to ~24 years
  • Residual average life equal to ~19 years

Non-retail loans of the Italian banks and companies of the Group Breakdown by economic business sector Breakdown by business area (data as at 30.6.22)

30.6.22
Public Administration 5.0%
Financial companies 7.7%
Non-financial companies 45.4%
of which:
UTILITIES 4.8%
SERVICES 4.3%
REAL ESTATE 3.6%
DISTRIBUTION 3.4%
CONSTRUCTION AND MATERIALS FOR CONSTR. 3.3%
METALS AND METAL PRODUCTS 2.6%
FOOD AND DRINK 2.6%
ENERGY AND EXTRACTION 2.4%
FASHION 2.2%
INFRASTRUCTURE 2.2%
TRANSPORTATION MEANS 2.0%
MECHANICAL 1.8%
CHEMICALS, RUBBER AND PLASTICS 1.8%
TOURISM 1.7%
AGRICULTURE 1.6%
TRANSPORT 1.5%
PHARMACEUTICAL 0.9%
ELECTRICAL COMPONENTS AND EQUIPMENT 0.9%
FURNITURE AND WHITE GOODS 0.8%
MEDIA 0.6%
WOOD AND PAPER 0.5%
OTHER CONSUMPTION GOODS 0.2%

Moratoria volumes

Moratoria stock as at 30.6.22
Segments # Clients (k) Volumes (€ bn) % of total net loan
portfolio
Households 1.5 0.2 0.03%
Enterprises 0.5 0.1 0.03%
Total 2.0 0.3(1) 0.06%

€44.7bn expired moratoria with ~3%(2) default rate

Detailed consolidated P&L results

Liquidity, Funding and Capital base

Asset quality

Divisional results and other information

Divisional financial highlights

Data as at 30.6.22

Divisions
Banca dei
Territori
IMI
Corporate &
Investment
Banking
International
Subsidiary
Banks(1)
Private
Banking(2)
Asset
Management(3)
Insurance
(4)
Corporate
Centre /
(5)
Others
Total
Operating income (€ m) 4,380 2,563 1,045 1,135 495 824 314 10,756
Operating margin (€ m) 1,302 1,898 527 708 395 648 167 5,645
Net income (€ m) 656 404 166 514 302 437 (125) 2,354
Cost/Income (%) 70.3 25.9 49.6 37.6 20.2 21.4 n.m. 47.5
RWA (€ bn) 88.7 118.5 34.6 13.1 1.9 0.0 68.6 325.3
Direct deposits from banking business (€ bn) 290.5 92.5 52.5 55.9 0.0 0.0 57.9 549.4
Loans to customers (€ bn) 254.9 153.2 39.8 14.6 0.3 0.0 8.8 471.6

Note: figures may not add up exactly due to rounding

(1) Excluding the Russian subsidiary Banca Intesa which is included in the IMI C&IB Division

(2) Fideuram, Intesa Sanpaolo Private Banking, Intesa Sanpaolo Private Bank (Suisse) Morval, REYL Group, and Siref Fiduciaria

(3) Eurizon

(4) Cargeas Assicurazioni, Fideuram Vita, Intesa Sanpaolo Assicura, Intesa Sanpaolo Insurance Agency, Intesa Sanpaolo Life, Intesa Sanpaolo RBM Salute, and Intesa Sanpaolo Vita

(5) Treasury Department, Central Structures and consolidation adjustments

Banca dei Territori: 1H22 vs 1H21

1H21 1H22 %
redetermined
Net interest income 1,964 1,938 (1.3)
Net fee and commission income 2,388 2,377 (0.5)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 51 59 15.7
Other operating income (expenses) 5 6 20.0
Operating income 4,408 4,380 (0.6)
Personnel expenses (1,736) (1,672) (3.7)
Other administrative expenses (1,443) (1,405) (2.6)
Adjustments to property, equipment and intangible assets (3) (1) (66.7)
Operating costs (3,182) (3,078) (3.3)
Operating margin 1,226 1,302 6.2
Net adjustments to loans (666) (259) (61.1)
Net provisions and net impairment losses on other assets (24) (38) 58.3
Other income (expenses) 0 11 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 536 1,016 89.6
Taxes on income (178) (333) 87.1
Charges (net of tax) for integration and exit incentives (16) (7) (56.3)
Effect of purchase price allocation (net of tax) (15) (18) 20.0
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests (1) (2) 100.0
Net income 326 656 101.2

Banca dei Territori: Q2 vs Q1

1Q22 2Q22 %
Net interest income 958 979 2.2
Net fee and commission income 1,192 1,185 (0.6)
Income from insurance business 0 0 71.0
Profits on financial assets and liabilities at fair value 30 29 (2.3)
Other operating income (expenses) 2 4 172.6
Operating income 2,182 2,198 0.8
Personnel expenses (826) (846) 2.4
Other administrative expenses (695) (710) 2.2
Adjustments to property, equipment and intangible assets (1) (1) 13.6
Operating costs (1,521) (1,557) 2.3
Operating margin 660 641 (2.9)
Net adjustments to loans 141 (400) n.m.
Net provisions and net impairment losses on other assets (15) (24) 61.9
Other income (expenses) 0 11 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 787 229 (70.9)
Taxes on income (261) (72) (72.3)
Charges (net of tax) for integration and exit incentives (2) (5) 130.1
Effect of purchase price allocation (net of tax) (8) (10) 23.6
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests (1) (1) 3.5
Net income 515 141 (72.6)

IMI Corporate & Investment Banking: 1H22 vs 1H21

€ m

1H21 1H22 %
redetermined
Net interest income 1,104 968 (12.3)
Net fee and commission income 556 569 2.3
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 840 1,027 22.3
Other operating income (expenses) 1 (1) n.m.
Operating income 2,501 2,563 2.5
Personnel expenses (234) (235) 0.4
Other administrative expenses (403) (421) 4.5
Adjustments to property, equipment and intangible assets (11) (9) (18.2)
Operating costs (648) (665) 2.6
Operating margin 1,853 1,898 2.4
Net adjustments to loans (55) (1,072) n.m. Including €947m provisions for
Russia-Ukraine exposure in 1H22
Net provisions and net impairment losses on other assets 2 (59) n.m.
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 1,800 767 (57.4)
Taxes on income (563) (353) (37.3)
Charges (net of tax) for integration and exit incentives (10) (10) 0.0
Effect of purchase price allocation (net of tax) 20 0 (100.0)
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 0 0 n.m. €1,179m, (5.5)% excluding
Net income 1,247 404 (67.6) provisions/writedowns
for Russia
Ukraine exposure in 1H22

Note: figures may not add up exactly due to rounding

IMI Corporate & Investment Banking: Q2 vs Q1

€ m

1Q22 2Q22 %
Net interest income 475 494 4.0
Net fee and commission income 296 273 (7.9)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 624 402 (35.5)
Other operating income (expenses) (0) (0) 53.0
Operating income 1,395 1,169 (16.2)
Personnel expenses (115) (120) 4.2
Other administrative expenses (198) (222) 12.2
Adjustments to property, equipment and intangible assets (5) (4) (16.5)
Operating costs (318) (346) 8.9
Operating margin 1,076 822 (23.6)
Net adjustments to loans (723) (349) (51.8)
Net provisions and net impairment losses on other assets (25) (35) 41.0
Other income (expenses) 0 (0) n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 328 438 33.5
Taxes on income (153) (199) 29.8
Charges (net of tax) for integration and exit incentives (5) (5) (0.9)
Effect of purchase price allocation (net of tax) 0 0 n.m.
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 0 0 n.m.
Net income 170 234 37.7

Including €679m in Q1 and €268m in Q2 provisions for Russia-Ukraine exposure

€689m and €488m respectively when excluding provisions/writedowns for Russia-Ukraine exposure

Note: figures may not add up exactly due to rounding

International Subsidiary Banks: 1H22 vs 1H21

€ m

1H21 1H22 %
redetermined
Net interest income 649 708 9.1
Net fee and commission income 263 290 10.3
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 73 79 8.2
Other operating income (expenses) (18) (32) 77.8
Operating income 967 1,045 8.1
Personnel expenses (264) (268) 1.5
Other administrative expenses (183) (190) 3.8
Adjustments to property, equipment and intangible assets (59) (60) 1.7
Operating costs (506) (518) 2.4
Operating margin 461 527 14.3
Net adjustments to loans (78) (188) 141.0 Including €146m provisions for
Russia-Ukraine exposure in 1H22
Net provisions and net impairment losses on other assets (16) (14) (12.5)
Other income (expenses) 4 2 (50.0)
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 371 327 (11.9)
Taxes on income (84) (118) 40.5
Charges (net of tax) for integration and exit incentives (19) (19) 0.0
Effect of purchase price allocation (net of tax) 0 0 n.m.
Levies and other charges concerning the banking industry (net of tax) (17) (24) 41.2
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 0 0 n.m. €311m, +23.7% excluding
Net income 251 166 (33.9) provisions/writedowns
for Russia
Ukraine exposure in 1H22

Note: figures may not add up exactly due to rounding. Excluding the Russian subsidiary Banca Intesa which is included in the IMI C&IB Division

International Subsidiary Banks: Q2 vs Q1

€ m

1Q22 2Q22 %
Net interest income 343 366 6.9
Net fee and commission income 140 150 7.4
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 30 49 62.1
Other operating income (expenses) (13) (19) 47.7
Operating income 500 546 9.3
Personnel expenses (134) (134) (0.4)
Other administrative expenses (92) (99) 7.5
Adjustments to property, equipment and intangible assets (30) (30) (2.5)
Operating costs (256) (262) 2.2
Operating margin 243 284 16.9
Net adjustments to loans (136) (52) (62.1)
Net provisions and net impairment losses on other assets (5) (9) 93.1 exposure
Other income (expenses) 1 1 (33.0)
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 103 224 116.9
Taxes on income (50) (68) 37.3
Charges (net of tax) for integration and exit incentives (9) (10) 18.4
Effect of purchase price allocation (net of tax) 0 0 n.m.
Levies and other charges concerning the banking industry (net of tax) (10) (14) 43.6
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 0 0 n.m.
Net income 35 131 274.4

Including €122m in Q1 and €24m in Q2 provisions for Russia-Ukraine

€155m and €155m respectively when excluding provisions/writedowns for Russia-Ukraine exposure

Note: figures may not add up exactly due to rounding. Excluding the Russian subsidiary Banca Intesa which is included in the IMI C&IB Division

Private Banking: 1H22 vs 1H21

1H21 1H22 %
redetermined
Net interest income 106 99 (6.6)
Net fee and commission income 1,030 1,009 (2.0)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 32 19 (40.6)
Other operating income (expenses) 14 8 (42.9)
Operating income 1,182 1,135 (4.0)
Personnel expenses (215) (212) (1.4)
Other administrative expenses (170) (177) 4.1
Adjustments to property, equipment and intangible assets (36) (38) 5.6
Operating costs (421) (427) 1.4
Operating margin 761 708 (7.0)
Net adjustments to loans 1 (3) n.m.
Net provisions and net impairment losses on other assets (17) 14 n.m.
Other income (expenses) 194 0 (100.0)
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 939 719 (23.4)
Taxes on income (287) (179) (37.6)
Charges (net of tax) for integration and exit incentives (10) (16) 60.0
Effect of purchase price allocation (net of tax) (11) (10) (9.1)
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 0 0 n.m.
Net income 631 514 (18.5)
1Q22 2Q22 %
Net interest income 47 52 9.1
Net fee and commission income 503 505 0.4
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 11 8 (29.5)
Other operating income (expenses) 3 6 127.8
Operating income 565 571 1.1
Personnel expenses (103) (108) 5.1
Other administrative expenses (87) (90) 3.3
Adjustments to property, equipment and intangible assets (19) (19) (1.0)
Operating costs (209) (217) 3.8
Operating margin 355 353 (0.5)
Net adjustments to loans 2 (5) n.m.
Net provisions and net impairment losses on other assets 4 10 162.2
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 361 358 (0.6)
Taxes on income (103) (75) (26.9)
Charges (net of tax) for integration and exit incentives (8) (8) 8.8
Effect of purchase price allocation (net of tax) (5) (5) (7.7)
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 1 (1) n.m.
Net income 245 269 9.8

Asset Management: 1H22 vs 1H21

1H21 1H22 %
redetermined
Net interest income 0 0 n.m.
Net fee and commission income 595 472 (20.7)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value (2) (15) 650.0
Other operating income (expenses) 40 38 (5.0)
Operating income 633 495 (21.8)
Personnel expenses (50) (48) (4.0)
Other administrative expenses (51) (49) (3.9)
Adjustments to property, equipment and intangible assets (4) (3) (25.0)
Operating costs (105) (100) (4.8)
Operating margin 528 395 (25.2)
Net adjustments to loans 0 0 n.m.
Net provisions and net impairment losses on other assets 0 0 n.m.
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 528 395 (25.2)
Taxes on income (141) (89) (36.9)
Charges (net of tax) for integration and exit incentives (1) (1) 0.0
Effect of purchase price allocation (net of tax) 0 (2) n.m.
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests (10) (1) (90.0)
Net income 376 302 (19.7)
1Q22 2Q22 %
Net interest income (0) (0) (49.4)
Net fee and commission income 241 231 (4.2)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value (5) (10) (86.6)
Other operating income (expenses) 17 21 20.2
Operating income 253 242 (4.4)
Personnel expenses (23) (25) 8.1
Other administrative expenses (25) (24) (1.9)
Adjustments to property, equipment and intangible assets (2) (1) (8.1)
Operating costs (49) (51) 2.5
Operating margin 204 191 (6.1)
Net adjustments to loans 0 (0) n.m.
Net provisions and net impairment losses on other assets 0 0 (456.5)
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 204 191 (6.1)
Taxes on income (57) (33) (42.4)
Charges (net of tax) for integration and exit incentives (1) (0) (48.3)
Effect of purchase price allocation (net of tax) (1) (1) 0.0
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests (0) (0) (3.9)
Net income 145 157 8.3

Insurance: 1H22 vs 1H21

1H21 1H22 %
redetermined
Net interest income 0 0 n.m.
Net fee and commission income 1 1 0.0
Income from insurance business 825 830 0.6
Profits on financial assets and liabilities at fair value 0 0 n.m.
Other operating income (expenses) (5) (7) 40.0
Operating income 821 824 0.4
Personnel expenses (72) (68) (5.6)
Other administrative expenses (108) (99) (8.3)
Adjustments to property, equipment and intangible assets (10) (9) (10.0)
Operating costs (190) (176) (7.4)
Operating margin 631 648 2.7
Net adjustments to loans 0 0 n.m.
Net provisions and net impairment losses on other assets (132) (9) (93.2)
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 499 639 28.1
Taxes on income (110) (166) 50.9
Charges (net of tax) for integration and exit incentives (7) (4) (42.9)
Effect of purchase price allocation (net of tax) (12) (32) 166.7
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 69 0 (100.0)
Net income 439 437 (0.5)

Insurance: Q2 vs Q1

1Q22 2Q22 %
Net interest income (0) (0) 4.0
Net fee and commission income 1 1 21.2
Income from insurance business 388 442 14.0
Profits on financial assets and liabilities at fair value (0) (0) (631.8)
Other operating income (expenses) (3) (4) (12.9)
Operating income 385 439 14.0
Personnel expenses (33) (34) 2.6
Other administrative expenses (46) (53) 15.3
Adjustments to property, equipment and intangible assets (5) (5) 5.8
Operating costs (84) (92) 9.7
Operating margin 301 347 15.2
Net adjustments to loans 0 0 n.m.
Net provisions and net impairment losses on other assets (8) (2) (77.7)
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 294 345 17.5
Taxes on income (73) (93) 27.6
Charges (net of tax) for integration and exit incentives (2) (3) 53.6
Effect of purchase price allocation (net of tax) (17) (15) (10.8)
Levies and other charges concerning the banking industry (net of tax) 0 0 n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests (1) 1 n.m.
Net income 201 236 17.0

Quarterly P&L

€ m 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
redetermined(1)
Net interest income 1,952 1,995 1,999 1,954 1,956 2,091
Net fee and commission income 2,309 2,361 2,315 2,508 2,281 2,248
Income from insurance business 398 456 365 410 402 465
Profits on financial assets and liabilities at fair value 795 344 378 108 767 556
Other operating income (expenses) 32 19 25 16 3 (13)
Operating income 5,486 5,175 5,082 4,996 5,409 5,347
Personnel expenses (1,625) (1,648) (1,633) (1,820) (1,572) (1,609)
Other administrative expenses (651) (710) (693) (845) (612) (695)
Adjustments to property, equipment and intangible assets (307) (301) (302) (338) (315) (308)
Operating costs (2,583) (2,659) (2,628) (3,003) (2,499) (2,612)
Operating margin 2,903 2,516 2,454 1,993 2,910 2,735
Net adjustments to loans (402) (599) (543) (1,222) (702) (730)
Net provisions and net impairment losses on other assets (134) (220) (82) (415) (60) (63)
Other income (expenses) 198 (7) 63 78 (4) 147
Income (Loss) from discontinued operations 48 10 (0) (0) 0 0
Gross income (loss) 2,613 1,700 1,892 434 2,144 2,089
Taxes on income (837) (85) (619) (82) (781) (675)
Charges (net of tax) for integration and exit incentives (52) (55) (41) (291) (16) (23)
Effect of purchase price allocation (net of tax) (16) (18) (51) 46 (54) (47)
Levies and other charges concerning the banking industry (net of tax) (196) (83) (210) (22) (266) (12)
Impairment (net of tax) of goodwill and other intangible assets 0 0 0 0 0 0
Minority interests 4 48 12 94 (3) (2)
Net income 1,516 1,507 983 179 1,024 1,330

Note: figures may not add up exactly due to rounding

(1) Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

Net fee and commission income: quarterly development breakdown

€ m

Net fee and commission income
1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
redetermined(1)
Guarantees given / received 42 51 57 52 47 54
Collection and payment services 137 139 138 138 139 164
Current accounts 344 352 352 364 345 348
Credit and debit cards 61 106 108 89 83 108
Commercial banking activities 584 648 655 643 614 674
Dealing and placement of securities 290 283 207 227 225 152
Currency dealing 3 3 3 4 2 3
Portfolio management 729 772 754 872 701 673
Distribution of insurance products 406 383 401 417 403 421
Other 58 50 58 109 73 53
Management, dealing and consultancy activities 1,486 1,491 1,423 1,629 1,404 1,302
Other net fee and commission income 239 222 237 236 263 272
Net fee and commission income 2,309 2,361 2,315 2,508 2,281 2,248

Note: figures may not add up exactly due to rounding

(1) Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1H21 to Income (Loss) from discontinued operations, the full line-by-line consolidation of Assicurazioni Vita (former Aviva Vita), Lombarda Vita and Cargeas Assicurazioni (not considering, on the basis of management accounts, the contribution of branches sold in 1H21), and the effects of the acquisition of the REYL Group

Market leadership in Italy

Note: figures may not add up exactly due to rounding

  • (1) Excluding Corporate centre
  • (2) Data as at 30.6.22
  • (3) Including bonds
  • (4) Mutual funds; data as at 31.3.22
  • (5) Data as at 31.3.22

International Subsidiary Banks by country

Data as at 30.6.22

Total
CEE
Total % of the
Group
Hungary Slovakia Slovenia Croatia Bosnia Serbia Albania Romania Moldova Ukraine
(*)
Egypt
Operating income (€ m) 147 236 37 211 22 152 21 22 8 856 181 1,037 9.6%
Operating costs (€ m) 53 107 22 92 11 57 11 16 5 374 78 452 8.8%
Net adjustments to loans (€ m) 12 22 5 10 2 20 (1) 0 1 70 8 78 5.4%
Net income (€ m) 25 64 5 82 8 54 5 3 3 248 61 309 13.1%
Customer deposits (€ bn) 5.1 18.5 3.1 11.9 0.9 4.8 1.4 1.0 0.2 46.8 5.1 51.9 9.5%
Customer loans (€ bn) 3.3 16.7 2.2 8.0 0.8 4.4 0.4 0.9 0.1 36.8 2.8 39.6 8.4%
Performing loans (€ bn)
of which:
3.3 16.7 2.2 7.8 0.8 4.4 0.4 0.8 0.1 36.4 2.7 39.1 8.4%
Retail local currency 50% 60% 42% 28% 33% 23% 21% 14% 56% 45% 53% 45%
Retail foreign currency 0% 0% 0% 22% 13% 29% 14% 13% 0% 9% 0% 8%
Corporate local currency 18% 34% 57% 25% 19% 7% 16% 49% 19% 29% 37% 29%
Corporate foreign currency 31% 7% 0% 25% 35% 42% 49% 23% 25% 18% 10% 17%
Non-performing loans (€ m) 60 94 6 208 15 45 7 21 3 459 65 524 8.5%
Non-performing loans coverage 43% 72% 79% 50% 55% 64% 53% 56% 25% 59% 60% 59%
Annualised Cost of credit (1) (bps) 74 27 42 24 47 89 n.m. 6 100 38 54 39

Note: figures may not add up exactly due to rounding. Excluding the Russian subsidiary Banca Intesa which is included in the IMI C&IB Division

(*) Considering the limited operations of Pravex Bank in H1 and, more in general, its not-material size, its income statement has not been consolidated; the consolidated financial statements recognised the effect on the income statement of the valuations regarding this subsidiary carried out by central functions. The subsidiary's balance sheet has been consolidated on the basis of the countervalue of 2021 year-end figures at the exchange rate as at 30.6.22

(1) Net adjustments to loans/Net customer loans

MIL-BVA362-03032014-90141/VR

Total exposure(1) by main countries

€ m

DEBT SECURITIES
Banking Business
LOANS
AC FVTOCI FVTPL(2) Total(3)
EU Countries 43,924 42,206 518 86,648 429,773
Austria 795 453 41 1,289 1,342
Belgium 2,932 1,641 224 4,797 993
Bulgaria 5 0 -6 -1 19
Croatia 294 1,180 89 1,563 7,979
Cyprus 0 0 0 0 14
Czech Republic 138 0 1 139 950
Denmark 73 56 -4 125 32
Estonia 0 0 0 0 5
Finland 288 66 9 363 281
France 7,166 3,811 -179 10,798 7,667
Germany 920 1,718 190 2,828 6,490
Greece 0 314 56 370 16
Hungary 365 1,125 36 1,526 3,219
Ireland 983 831 170 1,984 523
Italy 22,920 21,492 -718 43,694 363,873
Latvia 0 0 0 0 27
Lithuania 0 0 18 18 1
Luxembourg 549 1,018 310 1,877 7,987
Malta 0 0 0 0 125
The Netherlands 1,136 707 152 1,995 2,477
Poland 295 110 2 407 1,108
Portugal 535 986 -64 1,457 141
Romania 128 358 42 528 942
Slovakia 0 568 2 570 14,312
Slovenia 37 287 0 324 2,135
Spain 4,328 5,249 136 9,713 6,593
Sweden 37 236 11 284 522
Albania 115 474 3 592 451
Egypt 229 1,528 1 1,758 3,515
Japan 97 2,913 -1 3,009 464
Russia 0 55 15 70 4,991
Serbia 7 571 -8 570 4,645
United Kingdom 945 656 105 1,706 13,023
U.S.A. 2,103 6,827 263 9,193 7,815
Other Countries 2,481 6,272 431 9,184 28,947
Total 49,901 61,502 1,327 112,730 # 493,624

Note: management accounts. Figures may not add up exactly due to rounding

(1) Exposure to sovereign risks (central and local governments), banks and other customers. Book Value of Debt Securities and Net Loans as at 30.6.22

(2) Taking into account cash short positions

(3) The total of debt securities from Insurance business (excluding securities in which money is collected through insurance policies where the total risk is retained by the insured) amounts to €76,724m (of which €52,228m in Italy)

Exposure to sovereign risks(1) by main countries

€ m DEBT SECURITIES
Banking Business LOANS
AC FVTOCI FVTPL(2) Total(3)
EU Countries 30,639 33,928 -2,145 62,422 11,164
Austria 685 321 40 1,046 0
Belgium 1,907 1,573 198 3,678 0
Bulgaria 0 0 -1 -1 0
Croatia 152 1,180 84 1,416 1,436
Cyprus 0 0 0 0 0
Czech Republic 0 0 0 0 0
Denmark 0 0 -4 -4 0
Estonia 0 0 0 0 0
Finland 279 0 -9 270 0
France 6,265 2,242 -375 8,132 33
Germany 367 824 50 1,241 0
Greece 0 180 54 234 0
Hungary 162 1,078 33 1,273 117
Ireland 586 373 -19 940 0 Banking business government bond
duration: 6.7y
Italy 14,680 18,631 -2,450 30,861 9,140 Adjusted duration due to hedging: 0.6y
Latvia 0 0 0 0 23
Lithuania 0 0 0 0 0
Luxembourg 462 704 247 1,413 0
Malta 0 0 0 0 0
The Netherlands 861 60 86 1,007 0
Poland 25 64 0 89 0
Portugal 389 977 -76 1,290 0
Romania 53 329 7 389 4
Slovakia 0 542 2 544 170
Slovenia 0 280 2 282 195
Spain 3,766 4,564 -14 8,316 46
Sweden 0 6 0 6 0
Albania 115 474 1 590 1
Egypt 228 1,528 0 1,756 467
Japan 0 2,346 0 2,346 0
Russia 0 55 0 55 0
Serbia 7 545 0 552 97
United Kingdom 0 126 10 136 0
U.S.A. 1,079 5,475 175 6,729 0
Other Countries 1,742 3,687 -62 5,367 5,243
Total 33,810 48,164 -2,021 79,953 # 16,972

Note: management accounts. Figures may not add up exactly due to rounding

(1) Exposure to central and local governments. Book Value of Debt Securities and Net Loans as at 30.6.22

(2) Taking into account cash short positions

(3) The total of debt securities from Insurance business (excluding securities in which money is collected through insurance policies where the total risk is retained by the insured) amounts to €59,904m (of which €49,387m in Italy). The total of FVTOCI and AFS reserves (net of tax and allocation to insurance products under separate management) amounts to -€1,616m (of which -€595m in Italy)

Exposure to banks by main countries(1)

€ m

DEBT SECURITIES
Banking Business
AC FVTOCI FVTPL(2) Total(3) LOANS
EU Countries 2,400 4,434 1,243 8,077 19,291
Austria 108 56 1 165 84
Belgium 12 58 18 88 98
Bulgaria 3 0 -6 -3 0
Croatia 58 0 5 63 46
Cyprus 0 0 0 0 0
Czech Republic 0 0 0 0 0
Denmark 32 15 0 47 15
Estonia 0 0 0 0 0
Finland 9 25 12 46 29
France 355 909 46 1,310 4,588
Germany 358 490 94 942 2,904
Greece 0 87 0 87 3
Hungary 134 47 -1 180 163
Ireland 143 31 47 221 212
Italy 793 1,568 891 3,252 7,656
Latvia 0 0 0 0 0
Lithuania 0 0 0 0 0
Luxembourg 63 252 39 354 940
Malta 0 0 0 0 91
The Netherlands 149 346 26 521 204
Poland 0 40 2 42 2
Portugal 0 0 1 1 0
Romania 19 0 -4 15 15
Slovakia 0 26 0 26 0
Slovenia 0 7 -4 3 2
Spain 164 337 77 578 2,203
Sweden 0 140 -1 139 36
Albania 0 0 2 2 1
Egypt 1 0 0 1 140
Japan 62 242 -1 303 23
Russia 0 0 2 2 129
Serbia 0 0 -8 -8 26
United Kingdom 169 271 37 477 2,383
U.S.A. 306 741 26 1,073 247
Other Countries 129 1,575 257 1,961 5,620
Total 3,067 7,263 1,558 11,888 # 27,860

Note: management accounts. Figures may not add up exactly due to rounding

(1) Book Value of Debt Securities and Net Loans as at 30.6.22

(2) Taking into account cash short positions

(3) The total of debt securities from Insurance business (excluding securities in which money is collected through insurance policies where the total risk is retained by the insured) amounts to €8,020m (of which €1,298m in Italy)

Exposure to other customers by main countries(1)

DEBT SECURITIES
Banking Business LOANS
AC FVTOCI FVTPL(2) Total(3)
EU Countries 10,885 3,844 1,420 16,149 399,318
Austria 2 76 0 78 1,258
Belgium 1,013 10 8 1,031 895
Bulgaria 2 0 1 3 19
Croatia 84 0 0 84 6,497
Cyprus 0 0 0 0 14
Czech Republic 138 0 1 139 950
Denmark 41 41 0 82 17
Estonia 0 0 0 0 5
Finland 0 41 6 47 252
France 546 660 150 1,356 3,046
Germany 195 404 46 645 3,586
Greece 0 47 2 49 13
Hungary 69 0 4 73 2,939
Ireland 254 427 142 823 311
Italy 7,447 1,293 841 9,581 347,077
Latvia 0 0 0 0 4
Lithuania 0 0 18 18 1
Luxembourg 24 62 24 110 7,047
Malta 0 0 0 0 34
The Netherlands 126 301 40 467 2,273
Poland 270 6 0 276 1,106
Portugal 146 9 11 166 141
Romania 56 29 39 124 923
Slovakia 0 0 0 0 14,142
Slovenia 37 0 2 39 1,938
Spain 398 348 73 819 4,344
Sweden 37 90 12 139 486
Albania 0 0 0 0 449
Egypt 0 0 1 1 2,908
Japan 35 325 0 360 441
0 0 13 13 4,862
Russia
Serbia 0 26 0 26
United Kingdom 776 259 58 1,093 4,522
10,640
U.S.A.
Other Countries
718
610
611
1,010
62
236
1,391
1,856
7,568
18,084

Note: management accounts. Figures may not add up exactly due to rounding

(1) Book Value of Debt Securities and Net Loans as at 30.6.22

(2) Taking into account cash short positions

(3) The total of debt securities from Insurance business (excluding securities in which money is collected through insurance policies where the total risk is retained by the insured) amounts to €8,800m (of which €1,543m in Italy)

"The manager responsible for preparing the company's financial reports, Fabrizio Dabbene, declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting records".

* * *

This presentation includes certain forward looking statements, projections, objectives and estimates reflecting the current views of the management of the Company with respect to future events. Forward looking statements, projections, objectives, estimates and forecasts are generally identifiable by the use of the words "may," "will," "should," "plan," "expect," "anticipate," "estimate," "believe," "intend," "project," "goal" or "target" or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts, including, without limitation, those regarding the Company's future financial position and results of operations, strategy, plans, objectives, goals and targets and future developments in the markets where the Company participates or is seeking to participate.

Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements as a prediction of actual results. The Group's ability to achieve its projected objectives or results is dependent on many factors which are outside management's control. Actual results may differ materially from (and be more negative than) those projected or implied in the forward-looking statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results and is based on certain key assumptions.

All forward-looking statements included herein are based on information available to the Company as of the date hereof. The Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.

Talk to a Data Expert

Have a question? We'll get back to you promptly.