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Intesa Sanpaolo

Investor Presentation May 6, 2022

4465_ip_2022-05-06_14844466-2236-4a48-b6f5-ac16b581e512.pdf

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A strong bank for a sustainable world

1Q22 Results

Solid operating performance in a challenging environment

Fully focused on executing the 2022-2025 Business Plan

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

Execution of the 2022-2025 Business Plan proceeding at full speed, with key industrial initiatives well underway

€1.7bn Net income excluding €0.8bn provisions/writedowns for Russia-Ukraine exposure, the best quarter since 2008 (+10.2% vs 1Q21(1))

€1,024m stated Net income

Strong acceleration of Operating income and Operating margin (+7.8% and +46.0% vs 4Q21)

Net interest income up 1.3% vs 4Q21 when adjusting for the different number of days in the two quarters

Second-best Q1 ever for Commissions and Insurance income, despite impact from Russia-Ukraine conflict

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

Strong decrease in Operating costs (-3.2% vs 1Q21(1)) with Cost/Income ratio down to 46.3%

€4.8bn gross NPL stock reduction considering the €3.9bn disposal finalised in April

Lowest-ever NPL stock and ratios, with gross NPL ratio at 1.6% and net NPL ratio at 0.9% on a pro-forma basis(2)(3)

2022-2025 Business Plan well underway and Q1 performance fully in line with 2022 Net income target of >€5bn when excluding provisions/writedowns for Russia-Ukraine exposure

(2) According to EBA definition

(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

(3) Taking into account 2022 NPL disposals already funded in 4Q21 and still booked in NPL as at 31.3.22, of which €3.9bn gross (€0.9bn net) finalised in April

2022-2025 Business Plan proceeding at full speed

1Q22: solid operating performance

Final remarks

2022-2025 Business Plan proceeding at full speed…

Our People are our most important asset

Key highlights

1

2

Massive upfront
de-risking, slashing
Cost of risk

Massive deleveraging with €4.8bn gross NPL stock reduction in the first 4 months, equal to the amount of Russia-Ukraine exposure,
reducing Net NPL ratio below 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

Focus on dedicated Banca dei
Territori
Division action plan, with strong control of underlying Cost of risk, NPL inflows from Performing loans
and new solutions for new needs arising in the current scenario

Extension of cybersecurity anti-fraud protection to new products and services for retail customers, including the use of Artificial Intelligence

Completion of the first Italian credit-risk-transfer transaction on a portfolio of commercial real estate loans (€1.9bn). In addition, the Active
Credit Portfolio Steering unit has strengthened capital efficiency initiatives and enhanced credit strategies, shifting €5bn in new lending
towards lower risk/higher return sectors in Q1
Structural Cost
reduction, enabled
by technology

New Digital Bank (Isybank) setup well underway with ~190 dedicated specialists and a finalised contract with Thought Machine

New head of Isybank
and new head of Sales & Marketing Digital Retail hired and operational

Insourcing of core capabilities in IT ongoing with the first ~100 people already hired

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

>450 branches closed in 4Q21/1Q22 in light of the launch of Isybank

Digital platform for analytical cost management up and running

Rationalisation of real estate in Italy in progress, with a reduction of ~250k sqm in 4Q21/1Q22

~900 voluntary exits in Q1(2)

MIL-BVA362-03032014-90141/VR

Key highlights

Growth in

Advisory

  • New dedicated service model for Exclusive clients fully implemented
  • Further growth of the advanced advisory service "Valore Insieme" for Affluent and Exclusive clients: 14,000 new contracts and €4.7bn in Customer financial asset inflows in Q1
  • Enhancement of the product offering to Valore Insieme clients with new asset management and insurance products
  • Introduction of new functionalities of Robo4Advisor by BlackRock to generate investment advice on selected products (funds and certificates) to support relationship managers
  • Adoption of the BlackRock Aladdin Wealth and Aladdin Risk platforms for investment services
  • New features for UHNWI(1) client advisory tools, strengthening of service model for family offices and ongoing project to embed ESG principles in the advisory model and reporting
  • Successfully integrated and already fully operational investment and trading online platform (ex IW Bank) in Fideuram
  • Launched multiple new asset management and insurance products (e.g. dedicated offer for clients with excess liquidity)
  • 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 tenders related to the "Piano Nazionale di Ripresa e Resilienza" (2)
  • Launched commercial initiatives with a focus on infrastructure, TMT and energy corporate clients linked to selected themes and postpandemic recovery plans
  • Go live of Cardea, an innovative and digital platform for financial institutions
  • 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 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 automotive & industrial sectors

MIL-BVA362-03032014-90141/VR

Commissions, driven by Wealth Management, Protection & 3

Key highlights


Reinforced ISP ESG governance, with the Risks Committee becoming the Risks and Sustainability Committee with enhanced ESG
responsibilities from April 2022
Significant ESG
Net-Zero targets being implemented in all Business Units; in April 2022, ISP's commitment to the SBTi validation was published on the SBTi
website
4 commitment, with a
world-class

~€20bn disbursed in 2021 and Q1 out of the €76bn of new lending available for the green economy, circular economy and green transition in
(1)
relation to the "2021-2026 Piano Nazionale di Ripresa e Resilienza"
position in Social
Enhancement of ESG investment products both for asset management and insurance with penetration increasing to 48% of total AuM(2)
Impact and strong
Granted >€2bn in social lending (€25bn cumulative flows announced in the Business Plan)
focus on climate
Renewed partnership with Ellen McArthur Foundation. In Q1, granted €0.8bn (€0.4bn disbursed) as part of the €8bn circular economy credit
facility

Revised the advisory model to embed ESG principles in need-based financial planning and launched a comprehensive training program for
ESG certification of Fideuram
bankers

~700 professionals hired in 2021 and Q1

~375 people reskilled in Q1

~1.7m training hours delivered in Q1

Over 100 talents have already completed their training as part of the International Talent Program, still ongoing for other ~200 resources

Identified ~380 key people among Middle Management for dedicated development and training initiatives
5 Our People are our
Live webinars, podcasts, video content and other ongoing initiatives to foster employee wellbeing
most important asset
Defined the new Long-Term Incentive Plan to support the 2022-2025 Business Plan goals and foster individual entrepreneurship

Approved by the Board of Directors 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

as Top Employer 2022(3)
ISP recognised
and
ranked at the top of LinkedIn's Top Companies 2022 list

(1) 2021-2026 National Recovery and Resilience Plan

(2) Eurizon perimeter – Funds pursuant to art. 8 and 9 SFDR 2088

(3) By Top Employers Institute

MIL-BVA362-03032014-90141/VR

MIL-BVA362-03032014-90141/VR Massive deleveraging with ~€5bn gross NPL stock reduction in the first 4 months of the year… 1

(6) Data as at 31.3.22 taking into account the disposal of €3.9bn gross (€0.9bn net) finalised in April and an additional €0.8bn gross (€0.4bn net) 2022 NPL disposal already funded in 4Q21 and still booked in NPL as at 31.3.22

… positioning ISP among the best banks in Europe for NPL stock and ratios 1

8.6 19.6 34.2 7.7 7.5 12.4 8.5 7.9 5.9 10.1 4.6 2.5 2.1 Net NPL stock for the main European banks(1) € bn x Net NPL ratio(2), % x Gross NPL ratio(2), % 31.12.25 Peer 1 30.9.15 3.0 2.5 1.6 1.2 1.0 1.9 1.3 0.8 1.5 1.1 2.3 1.1 0.8 0.5 30.4.22(3) 1.7 1.0 4.0 2.2 1.5 1.1 3.2 1.4 1.8 0.8 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10

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

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

(3) Data as at 31.3.22 taking into account the disposal of €3.9bn gross (€0.9bn net) finalised in April

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

Continued structural Cost reduction while investing for growth… 2

(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

MIL-BVA362-03032014-90141/VR

… with the new Digital Bank setup well underway… 2

  • New head of Isybank and new head of Sales & Marketing Digital Retail hired and operational Q1
  • Designed Isybank target offering and go-to-market, defined roadmap for the migration of ISP clients
  • AI Lab in Turin already operating (setup of Centai Institute)
  • Created new delivery unit for Isybank development (Isy Tech) with ~190 dedicated specialists
  • Ongoing IT development on Thought Machine platform, contract agreement finalised

MIL-BVA362-03032014-90141/VR … and Mooney Enel tech infrastructure progressively extended to the entire Group, including the international network 2

First wave: 2022-2024 Second wave: 2024 and beyond
Creation of a new Digital Bank
for domestic mass
market retail clients, working in
partnership with leading Fintech
Tech infrastructure extension to serve other
ISP individual client segments
beyond mass market retail clients
(e.g. Affluent)
New customer acquisition and business
expansion (e.g. electric mobility)
through
Development of a single international core
banking/digital front-end system(1)
with set
partnerships
Consolidation of the model at Group level,
including main European International
Subsidiary Banks
up in line with the new Digital Bank
  • Deployment of digital functions and services in Serbia and Hungary underway
  • Alignment of digital channels to the new core banking system in Egypt
  • Completed preparation of banks in Slovakia and Albania for the adoption of the new core banking system target platform

Customer financial assets(1)

Note: figures may not add up exactly due to rounding

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

… to fuel the Wealth Management engine 3

Dedicated service model for
Exclusive clients
Strengthened leadership in Private Banking Continuous focus on fully owned product
factories (Asset management and Insurance)
Dedicated commercial organisation
and tools
~4,200 highly-specialised
Relationship Managers
in ~470 dedicated advisory centers, leveraging
advanced financial planning tools
Upgraded commercial proposition in Italy
Continuous enhancement of commercial
proposition in Italy through tailored advisory
services and new product offer (e.g. ESG focus,
alternative investments, Lombard lending)
Asset management
Innovative product offering (e.g. liquidity conversion,
alternative investments, ESG), international
expansion and end-to-end digitalisation
Distinctive Banca dei
Territori
Investment Center
Banca dei
Territori
Investment Center
empowered by fully-owned product factories
New omnichannel strategy
Development of an investment and trading
platform dedicated to high-tech/low-touch clients
around IW Bank and evolution of the digital
service model
Life insurance
Enhanced Life offer to address specific needs
(e.g. generational transition, wealth protection),
client segments (e.g. Silver generation,
Millennials, HNWI(1)) and digital attitude
State-of-the-art investment platform
Top-notch investment and advisory services, in
partnership with leading asset managers
Scale-up of international presence
Strengthening of European leadership in Wealth
Management, through recruitment of Private
Banking teams and selective small acquisitions
in strategic geographies
P&C insurance
Development of innovative ecosystems for
individuals (e.g. "Caring program", Healthcare
Initiatives) and dedicated offering to corporates

Q1
Dedicated service model for Exclusive clients fully implemented


support relationship managers
Adoption of the BlackRock Aladdin Wealth and Aladdin Risk platforms for investment services
Introduction of new functionalities of Robo4Advisor by BlackRock to generate investment advice on selected products (funds and certificates) to
  • Several new products launched in Asset Management and in Insurance and continued enhancement of ESG offering
  • New features introduced for UHNWI(2) client advisory tools, strengthening of service model for family offices and ongoing project to embed ESG principles in the advisory model and reporting

(1) High Net Worth Individuals (2) Ultra High Net Worth Individuals

13

MIL-BVA362-03032014-90141/VR Accelerating our support to address social needs and also mitigate the impact of the Russia-Ukraine conflict 4

Supporting people in need

  • Expanding food and shelter program for people in need distributing:
  • Meals
  • Bed places
  • Medicines
  • Clothes

Food and shelter program interventions # of interventions(1), m

2022-2025 ~50

Fostering youth education and employability Assisting senior population

  • Launch of employability programs for more than 3,000 young people (e.g. Giovani e Lavoro and Generation4Universities) and involvement of more than 4,000 schools and universities in inclusive education programs (e.g. WeBecome project)
  • Promoting social housing for youth in Italy (e.g. students, young workers)

  • Creating ~30 senior community hubs to provide, at the local level, social and leisure activities and dedicated health and social assistance services

  • Promoting senior social housing development in Italy (e.g. seniors with low income, living alone)

Q1

  • Ongoing renewal and signing of new partnership with the aim of doubling yearly interventions to support people in need
  • Increased support to youth education and employability:
  • Over 3,600 students applied for employability programs in Q1
  • Strengthened partnerships with main Italian universities and schools
  • Setup of the social housing project underway

ISP has implemented multiple humanitarian projects to support the Ukrainian population and Pravex Bank colleagues 4

Donations and other support initiatives for Ukraine

  • €10m donation supporting initiatives abroad (within Ukraine and at its borders) and in Italy (for arriving refugees) through leading humanitarian organisations for both immediate interventions and medium-term refugee needs
  • The first collaboration agreements are with the domestic and international humanitarian organisations UNHCR(1) , Caritas, CESVI, Banco Farmaceutico and Consiglio Italiano per i Rifugiati 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
  • Additional beneficiary organisations being shortlisted for the remaining part of the donation with the evaluation of new projects related mainly to vulnerable people, children, families, refugees, life-saving drugs, transport and logistics
  • Launched a fundraising campaign through ISP For Funding crowdfunding platform, with a 1:1 matching mechanism(2), currently collecting an average of ~€22,500 daily, >€800,000 collected in total(3)

  • Agreed concession, with free loan for use, of IMMIT building in Bergamo to 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, in residences and other accommodations
  • Use of a former UBI 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 €250,000)

  • Identified additional initiatives to support and facilitate the integration of Pravex Bank colleagues' families in Bergamo such as 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) Contributions collected to be doubled by the Bank

(3) As at 30.4.22

(4) Agreed with Labour Unions

Business Plan targets enabled by very significant investments in our People


"Next way of working" at large-scale (hybrid
physical-remote) guaranteeing maximum
flexibility to all employees while upgrading IT
equipment and workplace layouts

Reskilling/upskilling program, tailored to employee needs,
to
deploy excess capacity towards Business Plan priorities (e.g.
ESG, digital, credit initiatives)

Creation of the leading education player in Italy, leveraging on
Next way
of working

Large-scale employee wellbeing and safety
initiatives (e.g. new office spaces, gyms,
healthy food, business trip safety)
ISP innovative learning infrastructure, to:

Position itself as an aggregator of best Italian players in the
industry

New incentive plans (including Long Term
Incentives)
to foster individual
entrepreneurship
Learning
ecosystem

Offer ISP People best-in-class training on critical capabilities
for both the digital (i.e. cybersecurity, digital data, cloud) and
ecological transition (i.e. sustainability, circular economy)

"Future leaders" program targeting ~1,000
talents and key people at Group level

Invest in top-notch learning technologies (e.g. AI) to provide
an increasingly more effective learning experience
Innovative
talent
strategy

International footprint reinforcement
with
distinctive capabilities in key markets (e.g. IMI
C&IB, Wealth Management) and insourcing

New "job communities", clusters of professionals with
homogeneous skillsets, learning paths and titles, aimed at defining
a coherent development model throughout the Group
of core capabilities in the digital space
Cloud infrastructure enabling a new Group "HR platform"
Diversity
Promotion of an inclusive and diverse
Tech-enabled
process

Organisational
streamlining to improve efficiency and time-to
market (e.g. aggregation of selected activities)
& Inclusion environment thanks to a set of dedicated
initiatives and a focus on gender equality
streamlining
Innovative organisational
models in selected areas of the
Group, enhancing agility and entrepreneurship

Q1

~700 professionals hired in 2021 and Q1 and ~375 people reskilled in Q1
Over 100 talents have already completed their training as part of the International Talent Program, still ongoing for other ~200
Identified ~380 key people among Middle Management for dedicated development and training initiatives
resources
  • 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
  • Defined the new Long-Term Incentive Plan to support the 2022-2025 Business Plan goals and foster individual entrepreneurship

The 2022-2025 Business Plan formula

Our People are our most important asset
Massive upfront
de-risking, slashing
Cost of risk
Structural Cost reduction,
enabled by technology
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

(1) Throughout the entire Business Plan horizon

(2) Commissions and Insurance income

2022-2025 Business Plan proceeding at full speed

1Q22: solid operating performance

Final remarks

1Q22 highlights

  • MIL-BVA362-03032014-90141/VR
  • Solid economic performance despite the impact from the Russia-Ukraine crisis, thanks to a well-diversified and resilient business model:
  • €1.7bn Net income excluding provisions/writedowns for Russia-Ukraine exposure, the best quarter since 2008 (+10.2% vs 1Q21(1))
  • €1,024m stated Net income
  • Strong acceleration of Operating income and Operating margin (+7.8% and +46.0% vs 4Q21)
  • Net interest income up 0.1% vs 4Q21, +1.3% when adjusting for the different number of days in the two quarters
  • Second-best Q1 ever for Commissions and Insurance income
  • Strong performance in financial market activities once again was a natural hedge to the impact from volatility on our fee-based business
  • Strong decrease in Operating costs (-3.2% vs 1Q21(1)) with Administrative costs down 6.0%
  • Cost/Income down to 46.3% (-0.8pp vs 1Q21(1))
  • ❑ Annualised Cost of risk at 18bps excluding €0.8bn 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
  • Low NPL inflow (gross NPL inflow down 42% vs 4Q21), coupled with solid NPL coverage (52.8%)

Strong balance sheet:

  • Fully phased-in CET1 ratio at 13.6%, well above regulatory requirements even under the EBA stress test adverse scenario, not including in the CET1 ratio ~110bps additional benefit from DTA absorption and the ~100bps impact from the €3.4bn buyback(2)
  • €4.8bn gross NPL stock reduction considering the €3.9bn disposal finalised in April, equal to the amount of Russia-Ukraine exposure
  • Lowest-ever NPL stock and ratios, with gross NPL ratio at 1.6% and net NPL ratio at 0.9% on a pro-forma basis(3)(4)
  • Best-in-class leverage ratio: 6.4%
  • Strong liquidity position: LCR and NSFR well above 100%; €360bn in Liquid assets

(2) Subject to ECB approval. Buyback amount equivalent to 2019 suspended dividend

(3) According to EBA definition

(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

(4) Taking into account 2022 NPL disposals already funded in 4Q21 and still booked in NPL as at 31.3.22, of which €3.9bn gross (€0.9bn net) finalised in April

1Q22: the highest quarterly Net income since 2008 when excluding provisions/writedowns for Russia-Ukraine exposure

MIL-BVA362-03032014-90141/VR 1Q22: €1.7bn Net income when excluding provisions/writedowns for Russia-Ukraine exposure

1Q22 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) 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

(4) Including charges for the Resolution Fund: €365m pre-tax (€251m net of tax), our estimated commitment for the year

MIL-BVA362-03032014-90141/VR Net interest income: +1.3% vs 4Q21 when adjusting for the different number of days in the two quarters

>€0.9bn Net interest income growth for every 50bps increase in rates

Note: figures may not add up exactly due to rounding

(1) ~€132m benefit from hedging on core deposits in 1Q22

(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

22

Operating costs

  • 3,575 headcount reduction on a yearly basis, of which 1,017 in Q1
  • Further ~900 voluntary exits in April-December 2022 and an additional ~4,600 by 1Q25, already agreed with Labour Unions and already fully provisioned
  • ~700 hires in 2021 and Q1 and an additional ~3,900 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, BBVA, BNP Paribas, Crédit Agricole S.A., Credit Suisse, Deutsche Bank, HSBC, Lloyds Banking Group, Nordea, Santander, Société Générale, Standard Chartered, UBS and UniCredit (31.3.22 data); Commerzbank and ING Group (31.12.21 data)

Low NPL inflow and reduction of Cost of risk when excluding provisions for Russia-Ukraine exposure

(1) Inflow to NPL (Bad Loans, Unlikely to Pay and Past Due) from Performing loans

(2) Inflow to NPL (Bad Loans, Unlikely to Pay and Past Due) from Performing loans minus outflow from NPL into Performing loans

(3) 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

(4) As at 31.3.22

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

Not considering Q1 provisioning, € bn Local presence(1)
Russia
(Banca Intesa)
Ukraine
(Pravex
Bank)
Cross-border exposure to
Russia(2)
Loans to customers 0.6(3) 0.15(3) 3.85(4)
ECA(5)
guarantees
- - 0.9(6)
Due from banks 0.3(7) 0.05(7) n.m.(8)
Bonds 0.03 0.04 0.09(9)
Derivatives - - 0.02
RWA 1.4 0.2 7.5
Total assets 1.0 0.3 n.a.
Intragroup funding 0.3 - n.a.

Exposure before €0.8bn Q1 provisioning

(1) As at 31.12.21 for Ukraine and as at 31.3.22 for Russia

(2) Management accounts as at 31.3.22, Cross-border exposure to Ukraine not meaningful

(3) There is also off-balance: for Russia €0.2bn (of which €0.1bn undrawn committed lines) and not significant for Ukraine (no undrawn committed lines)

(4) Net of Export Credit Agencies guarantees. There is also off-balance of €0.6bn (of which €0.4bn undrawn committed lines)

(5) Export Credit Agencies

(6) There are also Export Credit Agencies guarantees against off-balance of €0.8bn (of which €0.8bn against undrawn committed lines)

(7) There is also €1m off-balance for Russia (no off-balance for Ukraine)

(8) There is also off-balance: €0.3bn (no undrawn committed lines)

(9) Including insurance business (concerning policies where the total risk is not retained by the insured)

26

MIL-BVA362-03032014-90141/VR

€0.8bn provisions/writedowns for Russia/Ukraine exposure in Q1

… already significantly provisioned in Q1 Limited and decreasing exposure to Russia…

  • ISP exposure to Russia limited to ~1% of Q1 Loan loss provisions/writedowns, € m Group customer loans
  • Exposure to Russia reduced by ~€0.2bn 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(1)
  • Over two-thirds of loans to Russian customers refer to top-notch industrial groups with:
  • 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 small footprint in Russia (~25 branches)

Conservative provisioning in Q1 with all cross-border Russia exposure performing and classified as Stage 2

Solid capital base, well above regulatory requirements

Best-in-class leverage ratio: 6.4%

(2) 14.7% pro-forma fully loaded Basel 3 (31.3.22 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 1Q22 Net income of insurance companies)

MIL-BVA362-03032014-90141/VR

(1) €3.4bn buyback subject to ECB approval. Buyback amount equivalent to 2019 suspended dividend

All stakeholders benefit from our solid performance

(1) Direct and indirect (2) Deriving from Non-performing loans outflow MIL-BVA362-03032014-90141/VR

Significant ESG commitment, with a world-class position in Social Impact and strong focus on climate (1/2)

  • Expanding food and shelter program for people in need: ~28m interventions(1) since the beginning of the program (2019), with a strong commitment to achieve an additional 50m interventions over the 2022-2025 Business Plan horizon. Ongoing renewal and signing of new partnerships to support the program
  • Employability and inclusive education:

Unparalleled support to address social needs

"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 3,600 students (aged 18-29) applied for the program in Q1: ~500 interviewed and ~125 trained/in-training through 5 courses (over 2,300 trained/intraining since 2019). Over 2,100 companies involved since its inception

  • Inclusive education program: strengthened partnerships with main Italian universities and schools (~300 schools and over 600 students in Q1) to promote educational inclusion, supporting merit and social mobility. In Q1, the School4Life project was launched to combat early school abandonment, with companies and schools working together with students, teachers and families
  • Social housing: setup of the project underway (developing 6-8k social housing units for youth and seniors)
  • Granted >€2bn in social lending (€25bn cumulative flows announced in the Business Plan)
  • Lending to third sector: continuous support to non-profit organisations to fund energy costs in the short term, and PNRR(2) -related investment projects in the medium/long-term

Strong focus on financial inclusion

  • Fund for Impact: direct support to individuals and families (over 4m) to grant wider and more sustainable access to credit, with dedicated programs such as per Merito (line of credit without collateral to be reimbursed over 30 years dedicated to university students, studying in Italy or abroad), mamma@work (loan to discourage new mothers from leaving work and support motherhood in children's early years of life), per Crescere (resources for the training and education of school-age children dedicated to low-income families), and other solutions (e.g. Obiettivo Pensione, per avere Cura, XME Studio Station)
  • Lending for Urban Regeneration: supporting investments in hospitals, smart mobility, broadband networks, education and service and sustainable infrastructure
  • New sites of Intesa Sanpaolo's Gallerie d'Italia in Turin and Naples nearly completed, opening in May
  • Partnerships with public and private players, e.g. Palazzo Strozzi Foundation in Florence: Donatello exhibition; Municipality of Padua and CR Padova and Rovigo Foundation: presentation of the restoration and expansion project of spaces available to the Conservatory Pollini of Padua; support for the creation of the dossier "Bergamo and Brescia Capital of Italian culture 2023" (presentation at the Gallerie d'Italia in the presence of Minister Dario Franceschini)

Continuous commitment to culture

  • Cultural diplomacy: Intesa Sanpaolo's artwork "Tobia gives sight to his father" by Flemish painter Hendrick De Somer, on loan to the Italian Embassy in Brussels on the occasion of the Italy-Belgium bilateral consultations

Inauguration of the museum Palazzo degli Alberti Gallery in Prato, in a building owned by the Bank, allowing the city to enjoy an important identity heritage

Gallerie d'Italia Academy: launch of the second edition of the Executive Course in "Management of artistic-cultural heritage and corporate collections": 30 participants, 8 scholarships

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


~60 innovation projects launched in Q1

Initiatives for the development of innovation ecosystems:

Turin: closed third class of the "Torino Cities of the Future" program managed by Techstars. Since its inception in 2019, there have been 35 accelerated startups
(11 Italian teams), >20 proofs of concept with local stakeholders, €30m in capital raised and over 180 new resources hired after
acceleration
Promoting
innovation

Florence: new three-year "Italian Lifestyle" program launched on 15.3.22 for the first class of 6 Italian startups; 8 Corporates involved and participating through an
Advisory board, with a view to open innovation and support for the business development of startups

Naples: new three-year Bioeconomy program "Terra Next", promoted with Cassa
Depositi
e Prestiti
and with the support of various local scientific partners, aimed
at 10 startups a year, presented in February 2022, call closed on 30.3.22 (130 candidates, of which 97% Italian). Corporates involved

2 startup acceleration courses launched at the request of companies, over 60 applications received so far

UP2Stars
initiative aimed at 40 startups on four vertical pillars (Digital/Industry 4.0; Bioeconomy, focus on Agritech
and Foodtech; Medtech/Healthcare; Aerospace).
Over 230 applications received for the first course

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
Accelerating Active engagement in various GFANZ(2)

taskforces to support target setting for banking, asset management and insurance businesses
commitment to
Group's Guidelines for the governance of ESG risks revised in line with regulatory developments and climate and environmental initiatives underway
Net-Zero
Already active in the regulated carbon markets with a dedicated product catalogue. Launched a project to develop a service model focused on afforestation
and
reforestation activities, in line with the Business Plan commitment aimed at planting over 100 million trees, together with corporate clients

~€20bn disbursed in 2021 and Q1 out of the €76bn of 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 Q1, 84 projects assessed and validated for an amount of €2.3bn; granted
€844m in 36 transactions (of which €391m related to green finance) and €395m disbursed (of which €320m related to green finance). Renewed partnership with the
Ellen McArthur Foundation
Supporting
clients through

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)
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). ~€1.9bn granted since launch, of which ~€0.6bn
in Q1

In October 2021, launch of Digital Loans (D-Loans) aimed at improving the digitalisation
of companies: €9.1m disbursed since launch (€7m in Q1)

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)
Enhancement of ESG investment products both for asset management and insurance with penetration increasing to 48% of total AuM(4)

Revised the Advisory model to embed ESG principles in need-based financial planning and launched a comprehensive training program for the ESG certification
of
Fideuram
bankers
Reinforced ISP ESG governance, with the "Risks Committee" becoming the "Risks and Sustainability Committee" with enhanced ESG responsibilities from April 2022

31 (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 peers by Bloomberg (ESG Disclosure Score), Sustainalytics and MSCI

In January 2022, ISP was confirmed in the Bloomberg GEI 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

71 A AAA 99 16.8
63 A AAA 99 19.3
62 A AAA 97 20.2
61 A AA 94 20.6
61 A AA 94 20.6
60 A AA 94 20.7
59 A AA 93 22.5
56 B AA 92 22.6
56 B AA 92 22.7
55 B AA 81 23.8
54 B AA 79 23.9
52 B AA 78 24.1
52 B AA 71 24.3
50 B A 70 24.9
50 B A 70 27.4
49 B A 69 27.9
44 F A 65 28.2

Top ranking(1) for Sustainability

(1) ISP peer group

Source: Bloomberg ESG Disclosure Score (Bloomberg as at 31.3.22), 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 31.3.22; S&P Global (Bloomberg as at 31.3.22); Sustainalytics score (https://www.sustainalytics.com/ ESG Risk Rating as at 31.3.22)

2022-2025 Business Plan proceeding at full speed

1Q22: solid operating performance

Final remarks

ISP is far better equipped than European peers to succeed in the future

Note: figures may not add up exactly due to rounding

  • (1) Fully phased-in CET1. Sample: Barclays, BBVA, BNP Paribas, Crédit Agricole S.A., Credit Suisse, Deutsche Bank, HSBC, Lloyds Banking Group, Nordea, Santander, Société Générale, Standard Chartered, UBS and UniCredit (31.3.22 data); Commerzbank and ING Group (31.12.21 data)
  • (2) Total illiquid assets include net NPL stock, Level 2 assets and Level 3 assets. Sample: Barclays, BBVA, BNP Paribas, Crédit Agricole S.A., Credit Suisse, Deutsche Bank, HSBC, Lloyds Banking Group, Nordea, Santander, Société Générale, Standard Chartered, UBS and UniCredit (net NPL 31.3.22 data); BNP Paribas, Commerzbank and ING Group (net NPL 31.12.21 data). Level 2 and Level 3 assets 31.12.21 data
  • (3) Calculated as the difference between the Fully phased-in CET1 ratio vs requirements SREP + combined buffer
  • (4) €3.4bn buyback subject to ECB approval. Buyback amount equivalent to 2019 suspended dividend
  • (5) Sample: Barclays, BBVA, BNP Paribas, Crédit Agricole S.A., Credit Suisse, Deutsche Bank, HSBC, Lloyds Banking Group, Nordea, Santander, Société Générale, Standard Chartered, UBS and UniCredit (31.3.22 data); Commerzbank and ING Group (31.12.21 data)

Expansion in Italy expected in 2022 supported by solid fundamentals

The Italian economy is resilient thanks to solid fundamentals

  • Strong Italian household wealth at €10,000bn, of which €4,800bn in financial assets, coupled with low household debt
  • High level of savings for both households and companies since the start of the COVID-19 pandemic
  • Manufacturing companies have stronger financial structures than pre-2008 crisis levels with Italian SMEs very resilient and 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 15% over the past 5 years(3)
  • Banking system is far stronger than pre-2008 crisis levels and played an important role in mitigating the economic impact of the COVID-19 emergency on households and companies
  • Extensive support from the Italian Government, with measures worth ~€30bn 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

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

  • €1.7bn Net income when excluding provisions for Russia-Ukraine exposure
  • Acceleration of Operating income and Operating margin (+7.8% and +46.0% vs 4Q21)
  • Strong decrease in Operating costs (-3.2% vs 1Q21(1))
  • Further significant NPL reduction (€4.8bn including the disposal finalised in April) and lowest-ever NPL stock and ratios

ISP delivered solid operating performance in Q1… … and is fully equipped to succeed in challenging environments

  • Solid capital position, low leverage and strong liquidity
  • Zero-NPL Bank with net NPL ratio <1%(2) and very low underlying Cost of risk
  • Well-diversified and resilient business model
  • High strategic flexibility in managing Costs, with Cost/Income ratio at 46%
  • €0.8bn already provisioned in Q1 on Russia-Ukraine exposure with €0.4bn COVID-19 related generic provisions still available

2022-2025 Business Plan well underway and Q1 performance fully in line with 2022 Net income target of >€5bn when excluding provisions/writedowns for Russia-Ukraine exposure

(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. Pro-forma taking into account 2022 NPL disposals already funded in 4Q21 and still booked in NPL as at 31.3.22, of which €3.9bn gross (€0.9bn net) finalised in April

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
  • ─ Additional €3.4bn capital return to Shareholders through buyback(1), subject to ECB approval
  • ─ 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

1Q22 Results

Detailed information

Key P&L and Balance sheet figures

€ m 1Q22 31.3.22
Operating
income
5,414 Loans to customers 468,366
Operating
costs
(2,504) Customer financial assets(1) 1,247,434
Cost/Income ratio 46.3% of which Direct deposits from banking business 549,325
Operating margin 2,910 of which Direct deposits from insurance
business and technical reserves
195,093
Gross income (loss) 2,144 of which Indirect customer deposits 696,472
Net income 1,024 -
Assets under management
459,910
-
Assets under administration
236,562
RWA 330,514
Total assets 1,073,244

Detailed consolidated P&L results

Liquidity, Funding and Capital base

Asset quality

Divisional results and other information

1Q22 % 1Q22 vs 1Q21: €1bn Net income, €1.7bn when excluding provisions/writedowns for Russia-Ukraine exposure

€ m

1Q21
stated(1)
[ A ]
redetermined(2)
[ B ]
[ C ] [ C ] / [ B ]
Net interest income 2,013 1,952 1,956 0.2
Net fee and commission income 2,395 2,313 2,286 (1.2)
Income from insurance business 373 398 402 1.0
Profits on financial assets and liabilities at fair value 796 795 767 (3.5)
Other operating income (expenses) 49 32 3 (90.6)
Operating income 5,626 5,490 5,414 (1.4)
Personnel expenses (1,678) (1,629) (1,577) (3.2)
Other administrative expenses (648) (651) (612) (6.0)
Adjustments to property, equipment and intangible assets (306) (307) (315) 2.6
Operating costs (2,632) (2,587) (2,504) (3.2)
Operating margin 2,994 2,903 2,910 0.2
Net adjustments to loans (408) (402) (702) 74.6 Including €0.8bn provisions for
Russia-Ukraine exposure in 1Q22
Net provisions and net impairment losses on other assets (133) (134) (60) (55.2)
Other income (expenses) 198 198 (4) n.m.
Income (Loss) from discontinued operations 0 48 0 (100.0)
Gross income (loss) 2,651 2,613 2,144 (17.9)
Taxes on income (839) (837) (781) (6.7)
Charges (net of tax) for integration and exit incentives (52) (52) (16) (69.2)
Effect of purchase price allocation (net of tax) (16) (16) (54) 237.5
Levies and other charges concerning the banking industry (net of tax) (209) (196) (3)
(266)
35.7
Impairment (net of tax) of goodwill and other intangible assets 0 0 0 n.m.
Minority interests (19) 4 (3) n.m. €1,670m, +10.2% excluding
Net income 1,516 1,516 1,024 (32.5) provisions/writedowns
for
Russia-Ukraine exposure in 1Q22

Note: figures may not add up exactly due to rounding

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) €384m pre-tax of which Charges for the Resolution Fund: €365m pre-tax (€251m net of tax), our estimated commitment for the year

(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

Q1 vs Q4: strong growth in profitability

€ m

4Q21 1Q22
%
Net interest income 1,954 1,956 0.1
Net fee and commission income 2,532 2,286 (9.7)
Income from insurance business 410 402 (2.0)
Profits on financial assets and liabilities at fair value 108 767 610.2
Other operating income (expenses) 16 3 (81.3)
Operating income 5,020 5,414 7.8
Personnel expenses (1,844) (1,577) (14.5)
Other administrative expenses (845) (612) (27.6)
Adjustments to property, equipment and intangible assets (338) (315) (6.8)
Operating costs (3,027) (2,504) (17.3)
Operating margin 1,993 2,910 46.0
Net adjustments to loans (1,222) (702) (42.6)
Net provisions and net impairment losses on other assets (415) (60) (85.5)
Other income (expenses) 78 (4) n.m.
Income (Loss) from discontinued operations (0) 0 n.m.
Gross income (loss) 434 2,144 394.0
Taxes on income (82) (781) 852.4
Charges (net of tax) for integration and exit incentives (291) (16) (94.5)
Effect of purchase price allocation (net of tax) 46 (54) n.m.
Levies and other charges concerning the banking industry (net of tax) (22) (1)
(266)
n.m.
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 94 (3) n.m.
Net income 179 1,024 472.1

Including €0.8bn provisions for Russia-Ukraine exposure in 1Q22

€1,670m excluding provisions/writedowns for Russia-Ukraine exposure

Note: figures may not add up exactly due to rounding

(1) €384m pre-tax of which Charges for the Resolution Fund: €365m pre-tax (€251m net of tax), our estimated commitment for the year

MIL-BVA362-03032014-90141/VR Net interest income: +1.3% vs 4Q21 when adjusting for the different number of days in the two quarters

Note: figures may not add up exactly due to rounding

(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

(1) ~€132m benefit from hedging on core deposits in 1Q22

Net fee and commission income: second-best Q1 ever despite the impact from the Russia-Ukraine conflict

  • Decrease largely due to the decline in performance fees
  • €3.8bn in AuM net inflow in Q1

  • +1.0% excluding performance fees

  • Commissions from Commercial banking activities up 5.1% (+€30m)
  • €16.5bn in AuM net inflow on a yearly basis

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

Note: figures may not add up exactly due to rounding

Operating costs: further significant reduction while investing for growth

  • Strong decrease vs Q4, a quarter affected by seasonal year-end effect
  • 1,017 headcount reduction in Q1

  • Strong reduction (-6.0%) in Other administrative expenses

  • Cost/Income ratio down to 46.3% (vs 47.1% in 1Q21(1))
  • 3,575 headcount reduction

Net adjustments to loans: strong decrease when excluding provisions for Russia-Ukraine exposure

  • Twenty-sixth consecutive quarterly reduction in NPL stock
  • €4.8bn gross NPL reduction in Q1 considering the €3.9bn disposal finalised in April
  • Low NPL inflow (-42% vs 4Q21)

  • Annualised Cost of credit at 18bps when excluding €0.8bn provisions for Russia-Ukraine exposure and €0.3bn release of part of generic provisions conservatively booked in 2020 for COVID-19 impacts

  • €10.3bn gross NPL reduction on a yearly basis considering the €3.9bn disposal finalised in April (€11.1bn(2) on a pro-forma basis)
  • NPL coverage at 52.8% (vs 49.4% in 1Q21)

(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 the disposal of €3.9bn gross (€0.9bn net) finalised in April and an additional €0.8bn gross (€0.4bn net) 2022 NPL disposal already funded in 4Q21 and still booked in NPL as at 31.3.22

Detailed consolidated P&L results

Liquidity, Funding and Capital base

Asset quality

Divisional results and other information

~€1,250 billion in Customer financial assets to fuel the Wealth Management engine

% 31.3.22 vs 31.3.21 and 31.12.21

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 83% 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

Main wholesale issues

2020(1)

GBP350m senior unsecured, €3bn AT1 and €1.25bn senior unsecured placed. On average 85% demand from foreign investors; orderbooks average oversubscription ~3.5x

2021(1)

  • €1.75bn senior non-preferred, €1.25bn green bond and \$1.5bn Tier 2 placed. On average 92% demand from foreign investors; orderbooks average oversubscription ~3.9x
  • February: inaugural €1.75bn dual-tranche 5/10y senior non-preferred, the coupons represent the lowest-ever of any Italian SNP in their respective maturity buckets
  • March: €1.25bn 7y senior unsecured green bond, confirming ISP's aim of fostering its ESG profile and its role as a regular player in the green and sustainable bond market
  • May: \$750m 11NC10 and \$750m 21NC20 Tier 2 issue, first ever dual-tranche \$ structure with 1y MREL-style call

2022

March: €1bn Additional Tier 1 placed. 89% demand from foreign investors and orderbooks ~2.6x oversubscribed. The deal was the first AT1 from ISP since the dual tranche priced in August 2020 and marked the re-opening of the EUR AT1 primary market for 2022

High liquidity: LCR and NSFR well above regulatory requirements

Liquid assets(1) Unencumbered eligible assets with Central Banks(2) (net of haircuts) 192 189 31.3.21 169 31.12.21 31.3.22

Refinancing operations with the ECB: ~€132bn(3) consisting entirely of TLTRO III, out of a maximum allowance of ~€133bn

  • Loan to Deposit ratio(4) at 85%
  • (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) In 2021: €36bn borrowed in March (settlement date 27.3.21), €11bn borrowed in June (settlement date 24.6.21), €1.5bn borrowed in September (settlement date 29.9.21) and €0.5bn borrowed in December (settlement date 22.12.21)

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

MIL-BVA362-03032014-90141/VR

Solid Capital base

  • 13.6% fully phased-in CET1 ratio(1), not including in the CET1 ratio ~110bps additional benefit from DTA absorption by 2029 (of which ~40bps in the 2022-2025 Business Plan horizon) and the ~100bps impact from the €3.4bn buyback(2)
  • ~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 Q1

6.4% leverage ratio

(1) 14.7% pro-forma fully loaded Basel 3 (31.3.22 financial statements considering the total absorption of DTA related to IFRS9 FTA (€1.1bn as at 31.3.22), DTA convertible in tax credit related to goodwill realignment (€5.7bn as at 31.3.22) and adjustments to loans (€2.8bn as at 31.3.22), 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 31.3.22), 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 (€0.6bn as at 31.3.22) and DTA on losses carried forward (€2.1bn as at 31.3.22), and the expected distribution on 1Q22 Net income of insurance companies)

(2) Subject to ECB approval. Buyback amount equivalent to 2019 suspended dividend

Detailed consolidated P&L results

Liquidity, Funding and Capital base

Asset quality

Divisional results and other information

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)

MIL-BVA362-03032014-90141/VR

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)

Non-performing loans stock and ratios

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

bn
31.3.21(1) 31.12.21(2) 31.3.22(3)
bn
(5)
31.3.21
31.12.21(6) 31.3.22(7)
Bad loans
-
of which forborne
9.8
1.8
7.2
1.5
7.3
1.5
Bad loans
-
of which forborne
4.0
0.8
2.1
0.5
2.1
0.5
Unlikely to pay
-
of which forborne
10.4
4.5
7.3
2.9
6.5
3.1
Unlikely to pay
-
of which forborne
6.1
3.0
4.3
2.1
4.2
2.1
Past due
-
of which forborne
0.5
-
0.8
0.2
0.6
0.1
Past due
-
of which forborne
0.4
-
0.6
0.1
0.4
-
Total 20.7
4.4
3.5
15.2
3.2
2.4
14.4
€9.6bn pro-forma(4)
2.0 pro-forma(4)
3.0
2.3
1.6 pro-forma(4)
Total 10.5
2.3
1.8
7.1
1.5
1.2
6.8
1.4
1.1
€5.5bn pro-forma(4)
1.2 pro-forma(4)
0.9 pro-forma(4)
Lowest-ever NPL stock and ratios

Note: figures may not add up exactly due to rounding

  • (1) Not including €3.8bn gross NPL booked in Discontinued operations
  • (2) Not including €4.5bn gross NPL booked in Discontinued operations
  • (3) Not including €5.3bn gross NPL booked in Discontinued operations

(4) Taking into account the disposal of €3.9bn gross (€0.9bn net) finalised in April and an additional €0.8bn gross (€0.4bn net) 2022 NPL disposal already funded in 4Q21 and still booked in NPL as at 31.3.22

(5) Not including €1.1bn net NPL booked in Discontinued operations

(6) Not including €1.2bn net NPL booked in Discontinued operations

(7) Not including €1.3bn net NPL booked in Discontinued operations

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 ~60%
  • 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 31.3.22)

31.3.22
Public Administration 3.8%
Financial companies 8.4%
Non-financial companies 47.1%
of which:
UTILITIES 5.1%
SERVICES 4.5%
REAL ESTATE 3.7%
CONSTRUCTION AND MATERIALS FOR CONSTR. 3.3%
DISTRIBUTION 3.2%
FOOD AND DRINK 2.6%
METALS AND METAL PRODUCTS 2.6%
TRANSPORT 2.6%
INFRASTRUCTURE 2.3%
TRANSPORTATION MEANS 2.3%
FASHION 2.3%
ENERGY AND EXTRACTION 2.2%
MECHANICAL 1.8%
TOURISM 1.8%
AGRICULTURE 1.7%
CHEMICALS, RUBBER AND PLASTICS 1.5%
ELECTRICAL COMPONENTS AND EQUIPMENT 0.9%
PHARMACEUTICAL 0.8%
FURNITURE AND WHITE GOODS 0.7%
MEDIA 0.6%
WOOD AND PAPER 0.5%
OTHER CONSUMPTION GOODS 0.2%

Moratoria volumes

Moratoria stock as at 31.3.22
Segments # Clients (k) Volumes (€ bn) % of total net loan
portfolio
Households 3 0.3 0.07%
Enterprises 1 0.3 0.06%
Total 4 0.6(1) 0.13%

€48bn expired moratoria with 2.9%(2) default rate

Note: figures may not add up exactly due to rounding (1) €0.1bn according to EBA criteria (2) Italian perimeter

Detailed consolidated P&L results

Liquidity, Funding and Capital base

Asset quality

Divisional results and other information

Divisional financial highlights

Data as at 31.3.22

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) 2,194 1,394 499 570 253 385 119 5,414
Operating margin (€ m) 673 1,076 243 355 204 301 58 2,910
Net income (€ m) 528 168 35 245 145 201 (298) 1,024
Cost/Income (%) 69.3 22.8 51.3 37.7 19.4 21.8 n.m. 46.3
RWA (€ bn) 91.1 119.7 34.2 12.1 1.8 0.0 71.7 330.5
Direct deposits from banking business (€ bn) 291.4 91.8 51.4 56.7 0.0 0.0 58.0 549.3
Loans to customers (€ bn) 253.6 150.9 38.7 13.7 0.4 0.0 11.1 468.4

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: 1Q22 vs 1Q21

1Q21 1Q22 %
redetermined
Net interest income 991 971 (2.0)
Net fee and commission income 1,199 1,190 (0.8)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 29 30 3.4
Other operating income (expenses) 7 3 (57.1)
Operating income 2,226 2,194 (1.4)
Personnel expenses (876) (828) (5.5)
Other administrative expenses (715) (692) (3.2)
Adjustments to property, equipment and intangible assets (2) (1) (50.0)
Operating costs (1,593) (1,521) (4.5)
Operating margin 633 673 6.3
Net adjustments to loans (285) 141 n.m.
Net provisions and net impairment losses on other assets (17) (15) (11.8)
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 331 799 141.4
Taxes on income (109) (265) 143.1
Charges (net of tax) for integration and exit incentives (2) (2) 0.0
Effect of purchase price allocation (net of tax) (2) (3) 50.0
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 (1) n.m.
Net income 218 528 142.2

Banca dei Territori: Q1 vs Q4

4Q21 1Q22 %
Net interest income 998 971 (2.7)
Net fee and commission income 1,227 1,190 (3.0)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 29 30 5.2
Other operating income (expenses) 1 3 108.9
Operating income 2,255 2,194 (2.7)
Personnel expenses (920) (828) (10.0)
Other administrative expenses (767) (692) (9.8)
Adjustments to property, equipment and intangible assets (1) (1) 52.9
Operating costs (1,688) (1,521) (9.9)
Operating margin 566 673 18.8
Net adjustments to loans (219) 141 n.m.
Net provisions and net impairment losses on other assets (68) (15) (78.0)
Other income (expenses) (41) 0 n.m.
Income (Loss) from discontinued operations (0) 0 n.m.
Gross income (loss) 238 799 235.8
Taxes on income (79) (265) 234.8
Charges (net of tax) for integration and exit incentives (160) (2) (98.8)
Effect of purchase price allocation (net of tax) (12) (3) (74.2)
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) 17.6
Net income (14) 528 n.m.

IMI Corporate & Investment Banking: 1Q22 vs 1Q21

1Q21 1Q22 %
redetermined
Net interest income 563 475 (15.6)
Net fee and commission income 271 296 9.2
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 577 624 8.1
Other operating income (expenses) 1 (1) n.m.
Operating income 1,412 1,394 (1.3)
Personnel expenses (110) (115) 4.5
Other administrative expenses (197) (198) 0.5
Adjustments to property, equipment and intangible assets (5) (5) 0.0
Operating costs (312) (318) 1.9
Operating margin 1,100 1,076 (2.2)
Net adjustments to loans (66) (723) 995.5 Including €679m provisions for
Russia-Ukraine exposure in 1Q22
Net provisions and net impairment losses on other assets (3) (25) 733.3
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 1,031 328 (68.2)
Taxes on income (325) (155) (52.3)
Charges (net of tax) for integration and exit incentives (5) (5) 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. €689m, (4.4)% excluding
Net income 721 168 (76.7) provisions/writedowns
for Russia
Ukraine exposure in 1Q22

IMI Corporate & Investment Banking: Q1 vs Q4

4Q21 1Q22 %
Net interest income 528 475 (10.0)
Net fee and commission income 311 296 (4.8)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 139 624 348.8
Other operating income (expenses) 2 (1) n.m.
Operating income 979 1,394 42.4
Personnel expenses (149) (115) (22.7)
Other administrative expenses (223) (198) (11.2)
Adjustments to property, equipment and intangible assets (6) (5) (11.4)
Operating costs (378) (318) (15.8)
Operating margin 602 1,076 78.8
Net adjustments to loans 59 (723) n.m. Including €679m provisions for
Russia-Ukraine exposure in 1Q22
Net provisions and net impairment losses on other assets (45) (25) (44.1)
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 616 328 (46.8)
Taxes on income (171) (155) (9.1)
Charges (net of tax) for integration and exit incentives (9) (5) (44.3)
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. €689m, +57.8% excluding
Net income 437 168 (61.5) provisions/writedowns
for Russia
Ukraine exposure in 1Q22

International Subsidiary Banks: 1Q22 vs 1Q21

€ m

1Q21 1Q22 %
redetermined
Net interest income 323 342 5.9
Net fee and commission income 122 140 14.8
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 30 30 0.0
Other operating income (expenses) (7) (13) 85.7
Operating income 468 499 6.6
Personnel expenses (129) (134) 3.9
Other administrative expenses (92) (92) 0.0
Adjustments to property, equipment and intangible assets (29) (30) 3.4
Operating costs (250) (256) 2.4
Operating margin 218 243 11.5
Net adjustments to loans (47) (136) 189.4 Including €122m provisions for
Russia-Ukraine exposure in 1Q22
Net provisions and net impairment losses on other assets (7) (5) (28.6)
Other income (expenses) 2 1 (50.0)
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 166 103 (38.0)
Taxes on income (44) (49) 11.4
Charges (net of tax) for integration and exit incentives (9) (9) 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) (9) (10) 11.1
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 0 0 n.m. €155m, +49.0% excluding
Net income 104 35 (66.3) provisions/writedowns
for Russia
Ukraine exposure in 1Q22

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: Q1 vs Q4

€ m

4Q21 1Q22 %
Net interest income 349 342 (1.9)
Net fee and commission income 138 140 1.5
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 23 30 31.1
Other operating income (expenses) (9) (13) 41.0
Operating income 500 499 (0.2)
Personnel expenses (153) (134) (12.3)
Other administrative expenses (113) (92) (18.6)
Adjustments to property, equipment and intangible assets (32) (30) (6.4)
Operating costs (298) (256) (14.1)
Operating margin 202 243 20.1
Net adjustments to loans (39) (136) 245.1 Including €122m provisions for
Russia-Ukraine exposure in 1Q22
Net provisions and net impairment losses on other assets (51) (5) (90.1)
Other income (expenses) 2 1 (55.9)
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 115 103 (10.1)
Taxes on income (26) (49) 88.6
Charges (net of tax) for integration and exit incentives (14) (9) (36.8)
Effect of purchase price allocation (net of tax) 0 0 n.m.
Levies and other charges concerning the banking industry (net of tax) (5) (10) 113.1
Impairment (net of tax) of goodwill and other intangible assets 0 0 n.m.
Minority interests 0 0 n.m. €155m, +122.6% excluding
Net income 70 35 (49.8) provisions/writedowns
for Russia
Ukraine exposure in 1Q22

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: 1Q22 vs 1Q21

1Q21 1Q22 %
redetermined
Net interest income 52 47 (9.6)
Net fee and commission income 522 509 (2.5)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 20 11 (45.0)
Other operating income (expenses) 7 3 (57.1)
Operating income 601 570 (5.2)
Personnel expenses (110) (109) (0.9)
Other administrative expenses (79) (87) 10.1
Adjustments to property, equipment and intangible assets (18) (19) 5.6
Operating costs (207) (215) 3.9
Operating margin 394 355 (9.9)
Net adjustments to loans 0 2 n.m.
Net provisions and net impairment losses on other assets (7) 4 n.m.
Other income (expenses) 194 0 (100.0)
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 581 361 (37.9)
Taxes on income (181) (104) (42.5)
Charges (net of tax) for integration and exit incentives (4) (8) 100.0
Effect of purchase price allocation (net of tax) 0 (5) 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 (1) 1 n.m.
Net income 395 245 (38.0)

Private Banking: Q1 vs Q4

4Q21 1Q22 %
Net interest income 51 47 (8.0)
Net fee and commission income 539 509 (5.5)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value 5 11 134.0
Other operating income (expenses) 1 3 172.7
Operating income 596 570 (4.3)
Personnel expenses (140) (109) (22.0)
Other administrative expenses (96) (87) (9.3)
Adjustments to property, equipment and intangible assets (19) (19) (1.0)
Operating costs (255) (215) (15.6)
Operating margin 341 355 4.2
Net adjustments to loans 4 2 (44.4)
Net provisions and net impairment losses on other assets (9) 4 n.m.
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 335 361 7.6
Taxes on income (92) (104) 13.1
Charges (net of tax) for integration and exit incentives (25) (8) (68.2)
Effect of purchase price allocation (net of tax) (6) (5) (17.6)
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 (25.0)
Net income 213 245 15.0

Asset Management: 1Q22 vs 1Q21

1Q21 1Q22 %
redetermined
Net interest income 0 0 n.m.
Net fee and commission income 286 241 (15.7)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value (1) (5) (400.0)
Other operating income (expenses) 16 17 6.3
Operating income 301 253 (15.9)
Personnel expenses (23) (23) 0.0
Other administrative expenses (26) (25) (3.8)
Adjustments to property, equipment and intangible assets (2) (1) (50.0)
Operating costs (51) (49) (3.9)
Operating margin 250 204 (18.4)
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) 250 204 (18.4)
Taxes on income (68) (57) (16.2)
Charges (net of tax) for integration and exit incentives 0 (1) n.m.
Effect of purchase price allocation (net of tax) 0 (1) 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) 0 (100.0)
Net income 172 145 (15.7)

Asset Management: Q1 vs Q4

4Q21 1Q22 %
Net interest income (0) 0 n.m.
Net fee and commission income 395 241 (39.0)
Income from insurance business 0 0 n.m.
Profits on financial assets and liabilities at fair value (2) (5) (165.9)
Other operating income (expenses) 12 17 36.4
Operating income 406 253 (37.6)
Personnel expenses (42) (23) (45.0)
Other administrative expenses (32) (25) (22.7)
Adjustments to property, equipment and intangible assets (2) (1) (43.8)
Operating costs (76) (49) (35.5)
Operating margin 330 204 (38.1)
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) 330 204 (38.1)
Taxes on income (91) (57) (37.3)
Charges (net of tax) for integration and exit incentives (6) (1) (84.3)
Effect of purchase price allocation (net of tax) (1) (1) 0.3
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) 0 n.m.
Net income 230 145 (37.1)

Insurance: 1Q22 vs 1Q21

1Q21 1Q22 %
redetermined
Net interest income 0 0 n.m.
Net fee and commission income 0 0 n.m.
Income from insurance business 386 388 0.5
Profits on financial assets and liabilities at fair value 0 0 n.m.
Other operating income (expenses) (3) (3) 0.0
Operating income 383 385 0.5
Personnel expenses (34) (33) (2.9)
Other administrative expenses (48) (46) (4.2)
Adjustments to property, equipment and intangible assets (5) (5) 0.0
Operating costs (87) (84) (3.4)
Operating margin 296 301 1.7
Net adjustments to loans 0 0 n.m.
Net provisions and net impairment losses on other assets (3) (7) 133.3
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 293 294 0.3
Taxes on income (80) (73) (8.8)
Charges (net of tax) for integration and exit incentives (1) (2) 100.0
Effect of purchase price allocation (net of tax) (5) (17) 240.0
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 18 (1) n.m.
Net income 225 201 (10.7)

Insurance: Q1 vs Q4

4Q21 1Q22 %
Net interest income (0) 0 n.m.
Net fee and commission income 1 0 (100.0)
Income from insurance business 397 388 (2.4)
Profits on financial assets and liabilities at fair value 0 0 n.m.
Other operating income (expenses) (6) (3) 48.5
Operating income 392 385 (1.8)
Personnel expenses (40) (33) (17.7)
Other administrative expenses (70) (46) (34.4)
Adjustments to property, equipment and intangible assets (5) (5) 4.3
Operating costs (115) (84) (26.9)
Operating margin 277 301 8.6
Net adjustments to loans 0 0 n.m.
Net provisions and net impairment losses on other assets (179) (7) (96.1)
Other income (expenses) 0 0 n.m.
Income (Loss) from discontinued operations 0 0 n.m.
Gross income (loss) 98 294 200.3
Taxes on income (37) (73) 94.8
Charges (net of tax) for integration and exit incentives (24) (2) (91.5)
Effect of purchase price allocation (net of tax) (37) (17) (53.5)
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 95 (1) n.m.
Net income 96 201 109.9

Quarterly P&L

€ m

1Q21 2Q21 3Q21 4Q21 1Q22
redetermined(1)
Net interest income 1,952 1,995 1,999 1,954 1,956
Net fee and commission income 2,313 2,370 2,325 2,532 2,286
Income from insurance business 398 456 365 410 402
Profits on financial assets and liabilities at fair value 795 344 378 108 767
Other operating income (expenses) 32 19 25 16 3
Operating income 5,490 5,184 5,092 5,020 5,414
Personnel expenses (1,629) (1,657) (1,643) (1,844) (1,577)
Other administrative expenses (651) (710) (693) (845) (612)
Adjustments to property, equipment and intangible assets (307) (301) (302) (338) (315)
Operating costs (2,587) (2,668) (2,638) (3,027) (2,504)
Operating margin 2,903 2,516 2,454 1,993 2,910
Net adjustments to loans (402) (599) (543) (1,222) (702)
Net provisions and net impairment losses on other assets (134) (220) (82) (415) (60)
Other income (expenses) 198 (7) 63 78 (4)
Income (Loss) from discontinued operations 48 10 (0) (0) 0
Gross income (loss) 2,613 1,700 1,892 434 2,144
Taxes on income (837) (85) (619) (82) (781)
Charges (net of tax) for integration and exit incentives (52) (55) (41) (291) (16)
Effect of purchase price allocation (net of tax) (16) (18) (51) 46 (54)
Levies and other charges concerning the banking industry (net of tax) (196) (83) (210) (22) (266)
Impairment (net of tax) of goodwill and other intangible assets 0 0 0 0 0
Minority interests 4 48 12 94 (3)
Net income 1,516 1,507 983 179 1,024

€1,670m excluding provisions/writedowns for Russia-Ukraine exposure

Note: figures may not add up exactly due to rounding

Net fee and commission income: quarterly development breakdown

€ m

Net fee and commission income
1Q21 2Q21 3Q21 4Q21 1Q22
redetermined(1)
Guarantees given / received 42 51 57 52 47
Collection and payment services 137 139 138 138 139
Current accounts 344 352 352 364 345
Credit and debit cards 61 106 108 89 83
Commercial banking activities 584 648 655 643 614
Dealing and placement of securities 290 283 207 227 225
Currency dealing 3 3 3 4 2
Portfolio management 733 781 764 896 706
Distribution of insurance products 406 383 401 417 403
Other 58 50 58 109 73
Management, dealing and consultancy activities 1,490 1,500 1,433 1,653 1,409
Other net fee and commission income 239 222 237 236 263
Net fee and commission income 2,313 2,370 2,325 2,532 2,286

Note: figures may not add up exactly due to rounding

Market leadership in Italy

Note: figures may not add up exactly due to rounding

  • (1) Excluding Corporate centre
  • (2) Data as at 31.3.22
  • (3) Including bonds
  • (4) Mutual funds; data as at 31.12.21
  • (5) Data as at 31.12.21

International Subsidiary Banks by country

Data as at 31.3.22

Total Total % of the
Hungary Slovakia Slovenia Croatia Bosnia Serbia Albania Romania Moldova Ukraine
(*)
CEE Egypt Group
Operating income (€ m) 71 115 18 97 11 74 10 11 4 410 89 499 9.2%
Operating costs (€ m) 27 53 11 45 6 28 5 8 2 185 39 224 8.9%
Net adjustments to loans (€ m) 2 11 4 4 2 20 (1) 1 0 42 4 46 6.6%
Net income (€ m) 23 25 2 34 3 17 4 (0) 1 108 27 136 13.2%
Customer deposits (€ bn) 5.5 18.3 2.9 11.1 0.9 4.8 1.4 0.9 0.2 45.9 4.9 50.8 9.2%
Customer loans (€ bn) 3.4 16.4 2.1 7.6 0.8 4.2 0.4 0.9 0.1 35.9 2.6 38.6 8.2%
Performing loans (€ bn)
of which:
3.3 16.3 2.1 7.4 0.8 4.2 0.4 0.9 0.1 35.4 2.6 38.0 8.2%
Retail local currency 49% 61% 42% 30% 33% 23% 22% 13% 56% 45% 62% 47%
Retail foreign currency 0% 0% 0% 21% 14% 29% 14% 14% 0% 8% 0% 8%
Corporate local currency 21% 33% 58% 25% 18% 7% 13% 50% 19% 28% 27% 28%
Corporate foreign currency 30% 7% 0% 25% 36% 41% 51% 23% 25% 18% 12% 17%
Non-performing loans (€ m) 66 99 7 207 15 44 8 21 1 468 57 525 7.7%
Non-performing loans coverage 42% 71% 75% 49% 55% 65% 53% 60% 54% 58% 61% 59%
Annualised Cost of credit (1) (bps) 18 27 79 22 79 188 n.m. 38 120 47 56 48

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 Q1 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 31.3.22

(1) Net adjustments to loans/Net customer loans

MIL-BVA362-03032014-90141/VR

Total exposure(1) by main countries

€ m

Banking Business
AC FVTOCI FVTPL(2) Total(3) LOANS
EU Countries 49,069 44,243 -1,882 91,430 430,274
Austria 807 181 -39 949 1,446
Belgium 2,220 1,961 311 4,492 772
Bulgaria 0 0 1 1 16
Croatia 275 1,104 104 1,483 7,501
Cyprus 0 0 0 0 23
Czech Republic 103 0 0 103 972
Denmark 30 23 5 58 39
Estonia 0 0 0 0 5
Finland 271 79 -34 316 292
France 7,221 4,691 -1,853 10,059 12,380
Germany 1,504 2,107 -342 3,269 5,878
Greece 25 0 12 37 16
Hungary 376 959 50 1,385 3,283
Ireland 804 1,321 644 2,769 659
Italy 26,575 20,928 -309 47,194 362,929
Latvia 0 0 0 0 29
Lithuania 0 0 0 0 1
Luxembourg 463 756 151 1,370 7,515
Malta 0 0 0 0 146
The Netherlands 1,101 896 130 2,127 2,486
Poland 199 124 0 323 1,155
Portugal 627 561 -53 1,135 146
Romania 66 380 14 460 954
Slovakia 0 754 0 754 14,122
Slovenia 1 251 -17 235 2,109
Spain 6,377 6,894 -660 12,611 5,065
Sweden 24 273 3 300 335
Albania 145 443 3 591 438
Egypt 129 1,526 0 1,655 3,293
Japan 109 3,430 6 3,545 578
Russia 8 39 0 47 4,846
Serbia 7 600 0 607 4,427
United Kingdom 684 570 66 1,320 13,760
U.S.A. 2,330 7,010 433 9,773 8,482
Other Countries 2,432 7,063 250 9,745 26,377
Total 54,913 64,924 -1,124 118,713 # 492,475

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 31.3.22

(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 €84,064m (of which €58,030m in Italy)

MIL-BVA362-03032014-90141/VR

Exposure to sovereign risks(1) by main countries

€ m

DEBT SECURITIES
Banking Business LOANS
AC FVTOCI FVTPL(2) Total(3)
EU Countries 35,833 35,976 -4,303 67,506 10,892
Austria 614 98 -51 661 0
Belgium 2,163 1,893 314 4,370 0
Bulgaria 0 0 0 0 0
Croatia 149 1,104 104 1,357 1,220
Cyprus 0 0 0 0 0
Czech Republic 0 0 0 0 0
Denmark 0 0 0 0 0
Estonia 0 0 0 0 0
Finland 256 14 -36 234 0
France 6,585 2,980 -1,930 7,635 3
Germany 509 1,195 -351 1,353 0
Greece 0 0 7 7 0
Hungary 179 931 50 1,160 128 Banking business government bond
Ireland 426 252 10 688 0 duration: 6.6y
Italy 17,489 18,644 -1,754 34,379 9,098 Adjusted duration due to hedging: 0.5y
Latvia 0 0 0 0 25
Lithuania 0 0 0 0 0
Luxembourg 124 437 131 692 0
Malta 0 0 0 0 0
The Netherlands 880 54 7 941 0
Poland 52 66 0 118 0
Portugal 436 551 -70 917 0
Romania 66 380 14 460 5
Slovakia 0 727 0 727 164
Slovenia 1 244 -17 228 205
Spain 5,904 6,393 -731 11,566 44
Sweden 0 13 0 13 0
Albania 145 443 3 591 0
Egypt 129 1,526 0 1,655 450
Japan 0 3,020 0 3,020 0
Russia 0 39 0 39 0
Serbia 7 600 0 607 69
United Kingdom 0 183 2 185 0
U.S.A. 1,342 5,507 288 7,137 0
Other Countries 1,990 4,715 163 6,868 5,161
Total 39,446 52,009 -3,847 87,608 # 16,572

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 31.3.22

(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 €67,307m (of which €55,214m in Italy). The total of FVTOCI/AFS reserves (net of tax and allocation to insurance products under separate management) amounts to -€545m (of which -€19m in Italy)

Exposure to banks by main countries(1)

€ m

DEBT SECURITIES
Banking Business
AC FVTOCI FVTPL(2) Total(3) LOANS
EU Countries 2,318 4,175 968 7,461 20,821
Austria 175 45 11 231 127
Belgium 12 49 -3 58 95
Bulgaria 0 0 0 0 0
Croatia 43 0 0 43 41
Cyprus 0 0 0 0 0
Czech Republic 0 0 0 0 16
Denmark 17 8 2 27 24
Estonia 0 0 0 0 0
Finland 9 26 -2 33 47
France 344 1,037 16 1,397 9,890
Germany 278 505 0 783 3,433
Greece 0 0 5 5 5
Hungary 125 28 0 153 161
Ireland 7 27 0 34 330
Italy 835 1,374 880 3,089 5,220
Latvia 0 0 0 0 0
Lithuania 0 0 0 0 0
Luxembourg 126 189 8 323 268
Malta 0 0 0 0 90
The Netherlands 96 343 -13 426 181
Poland 0 50 0 50 3
Portugal 0 0 0 0 1
Romania 0 0 0 0 11
Slovakia 0 27 0 27 0
Slovenia 0 7 0 7 7
Spain 233 306 63 602 853
Sweden 18 154 1 173 18
Albania 0 0 0 0 6
Egypt 0 0 0 0 103
Japan 80 190 0 270 15
Russia 0 0 0 0 101
Serbia 0 0 0 0 58
United Kingdom 176 233 50 459 3,121
U.S.A. 311 684 86 1,081 356
Other Countries 142 1,662 64 1,868 4,948
Total 3,027 6,944 1,168 11,139 # 29,529

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

(1) Book Value of Debt Securities and Net Loans as at 31.3.22

(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 €6,759m (of which €1,113m in Italy)

Exposure to other customers by main countries(1)

DEBT SECURITIES
Banking Business LOANS
AC FVTOCI FVTPL(2) Total(3)
EU Countries 10,918 4,092 1,453 16,463 398,561
Austria 18 38 1 57 1,319
Belgium 45 19 0 64 677
Bulgaria 0 0 1 1 16
Croatia 83 0 0 83 6,240
Cyprus 0 0 0 0 23
Czech Republic 103 0 0 103 956
Denmark 13 15 3 31 15
Estonia 0 0 0 0 5
Finland 6 39 4 49 245
France 292 674 61 1,027 2,487
Germany 717 407 9 1,133 2,445
Greece 25 0 0 25 11
Hungary 72 0 0 72 2,994
Ireland 371 1,042 634 2,047 329
Italy 8,251 910 565 9,726 348,611
Latvia 0 0 0 0
Lithuania 0 0 0 0
Luxembourg 213 130 12 355 7,247
Malta 0 0 0 0 56
The Netherlands 125 499 136 760 2,305
Poland 147 8 0 155 1,152
Portugal 191 10 17 218 145
Romania 0 0 0 0 938
Slovakia 0 0 0 0 13,958
Slovenia 0 0 0 0 1,897
Spain 240 195 8 443 4,168
Sweden 6 106 2 114 317
Albania 0 0 0 0 432
Egypt 0 0 0 0 2,740
Japan 29 220 6 255 563
Russia 8 0 0 8 4,745
Serbia 0 0 0 0 4,300
United Kingdom 508 154 14 676 10,639
U.S.A. 677 819 59 1,555 8,126
Other Countries 300 686 23 1,009 16,268
Total 12,440 5,971 1,555 19,966 # 446,374

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

(1) Book Value of Debt Securities and Net Loans as at 31.3.22

(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 €9,998m (of which €1,703m 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.

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