Banca Ifis

Investor Presentation • Nov 5, 2020

6 November 2020

Index

• 1. 3Q 20 results
• 1. Appendices
• 2.1 Segment results
• 2.2 Consolidated financial data
• 2.3 La Scogliera: implications of CRD IV
• 2.4 Focus on PPA

3Q 20 results

• Confirmed our 2020 guidance. We expect a 2020 net income in the upper range of our €50-65mln guidance despite 2° wave of Covid-19
• Resilient profitability: all 2020 quarters profitable 2
• 3Q20 net income of €16mln
• 9M20 net income of €52mln
• Prudent provisions for Covid-19

3

4

• 3Q20 Covid-19 provisions for moratoriums of €11mln
• 9M20 Covid-19 total provisions of €47mln

• CET1 at 11.7% (+0.7% since 31 Dec 2019) calculated excluding 2019 dividends suspended in accordance with the Bank of Italy's recommendations and prudently excluding 9M 20 net income. In 4Q 20, we expect a negative impact of ca. -21bps due to the acquisition of Farbanca

€47mln direct provisions due to Covid-19

Prudent Covid-19 direct provisions

	47
3Q20	11	Prudent provisions for moratoriums and sectors most impacted by Covid-19
1H 20	7	Funds write offs, mainly NPL of former Interbanca
1H 20	11	Provisions to reflect longer timeframes/slightly lower cash recoveries in the NPL portfolio
1H 20	17	77.1 Loan loss provisions and other provisions for a single position of former Interbanca
	9M 20

Illustrative impact of Covid-19

• In addition to €47mln provisions/write offs, there are other direct and indirect impacts of Covid-19 mainly due to the slowdown in judicial and extrajudicial Npl workouts driven by the lockdown and the court shut down
• Including the other direct and indirect effects of Covid-19, the preliminary estimate of Covid19's impact in 9M 20 is ca. -€60mln (pre tax)

Prudent approach vs. Covid19: €47mln direct provisions in 9M 2020 +73bps CET1 vs. Dec. 2019

Resilient NPL cash collection

• +13% NPL cash collection in July-Sept. 2020 vs. July-Sept. 2019
• NPL cash collection flat in Jan-Sept. 2020 vs. Jan-Sept. 2019
• This reflects ~40% of order of assignments in the face of public employees and retirees and portfolio diversification of ~ 1.3m borrowers
• Since the beginning of the year, until the end of October, Banca Ifis has purchased 16 portfolios of NPLs for ca. €1.7bn (€1.4bn as at 30 Sept 2020), which will provide a contribution to the Bank's profitability next year

Customer loans: Commercial & Corporate banking*

Banca Ifis's Commercial & Corporate banking portfolio includes €0.8bn towards PA; the remaining portfolio is well diversified in terms of sector, geography and size to face the potential impact of the current macroeconomic slowdown

(€ bn)	3Q20	Description
Lending and large NHS/PA to corporations
Factoring and other loans towards public administration	0 8	The quality risk limited , while there on the the timeframe of is are uncertainties asset payment
guaranteed by Loans 80% State (MCC)	0 3	Loans SMEs 80% guaranteed by MCC/State to
Factoring towards chemists	0 1	(Credifarma) Factoring towards chemists
towards large Italian Factoring (Revenue >€500mln) Corporations	0 5	(revenue > €500mln) The debtors are the large/top Italian with a sound advantage duration of months corporations competitive Average ca. 3-6
Lending SMEs to
towards Factoring SMEs	1 3	Strong and borrower diversification Average duration of ca. 3-6 months Exposures towards ca. 7k , with an average ticket of €200k sector customers (usually corporate) The exposures are towards debtors medium , with ratings well above the ones of the sellers of the credits
Leasing towards SMEs	1 4	diversification of exposures (escluding rental) Strong and borrower Average duration ca. 4Y Leasing 38k , with an average ticket sector to customers of for €30k There are remarketing all the repossessed which mitigate quality risk agreements assets asset
Lending towards chemists	0 1	(Credifarma) Medium/long lending towards chemists term
Structured finance	0 5	exposures (average ca. €12mln) Lending towards of ticket of towards non-cyclical track record Private equity consisting ca. 55 corporations Strong , with no significant default the last in 10Y
Total loans customer	5 0	Total loans of Commercial Banking & Corporate customer

* Source: management accounting data

Quarterly and nine months results

(€ mln)	2Q 20	3Q 20	9M 19	9M 20	Net banking income impacted by the slowdown in 1
Net interest income	78.3	91.1	324.6	260.8	judicial and extrajudicial Npl workout and lower
Net commission income	18.7	15.7	68.7	55.5
Trading and other revenues	2 9.9	2.1	(2.1)	5.4	volumes/net banking income in Commercial &
Net banking income	1 106.8	108.9	1 391.2	321.7	Corporate Banking
Loan loss provisions (LLP)	(14.8)	(14.5)	(49.0)	(47.9)
					~Includes trading gains mainly on Government bonds 2

~Includes trading gains mainly on Government bonds

• ~€7mln provisions to solidarity fund for voluntary exits and ~ 4.3mln in other administrative expenses mainly due to provisions to a single position on a financial guarantee of former Interbanca 3
• Capital gain due to the disposal of real estate in Milan 4
• Due to tax benefits (ACE/accelerated depreciation) 5

Net interest income	78.3	91.1	324.6	260.8
Net commission income	18.7	15.7	68.7	55.5
Trading and other revenues	2 9.9	2.1	(2.1)	5.4
Net banking income	1 106.8	108.9	1 391.2	321.7
Loan loss provisions (LLP)	(14.8)	(14.5)	(49.0)	(47.9)
Net banking income – LLP	92.0	94.4	342.2	273.8
Personnel expenses	(28.7)	(28.6)	(95.7)	(89.3)
Other administrative expenses	(41.5)	(40.9)	(158.1)	(123.0)
Other net income/expenses	3 (11.8)	(4.4)	40.6	(17.1)
Operating costs	(82.0)	(73.9)	(213.2)	(229.4)
Gains (Losses) on disposal of investments	-	-	(0.4)	4 24.2
Pre tax profit	10.1	20.5	128.6	68.6
Taxes	5 0.3	(4.8)	(44.5)	(16.1)
Net income	10.3	15.6	84.0	52.3
Customer loans	8,034	7,957	7,118	7,957
- of which Npl Business	1,307	1,325	1,189	1,325
Total assets	11,252	11,199	10,249	11,199
Total funding	9,171	9,153	8,233	9,153
- of which customer deposits	4,864	4,916	5,257	4,916
- of which TLTRO	2,000	1,997	694	1,997

In these financial statements, net impairment losses/reversals on receivables of the Npl Segment were entirely reclassified to interest receivable and similar income as they represent an integral part of return on investment

3Q 20 Results: P&L break-down by business unit*

			banking	Commercial & Corporate
Data in € mln	Npl	Factoring	Leasing	Corp. Banking & Lending	Non core & G&S	Consolidated
Net interest income	41	22	9	5	13	91
Net commission income	1	13	2	0	0	16
Trading & other revenues	2	0	0	1	(1)	2
Net banking income	44	35	12	7	12	109
-Of which PPA	0	0	0	0	7	8
Loan loss provisions	0	(1)	(7)	1 (2)	(4)	(15)
Operating costs	(34)	(19)	(6)	(2)	(12)	2 (74)
Gains (Losses) on disposal of investments	0	0	0	0	0	0
Net income	7	11	(1)	2	(4)	16
Net income (%)	46%	74%	(6%)	11%	(24%)	100%
Customer Loans	1,325	2,629	1,394	987	1,622	3 7,957
RWA1	2,102	2,243	1,292	906	996	7,539
2 Allocated capital	246	262	151	106	116	882

• Provisions for moratoriums and sectors most impacted by Covid-19 1
• Includes €4.5mln of accruals of Italian Central Fund on Deposits 2
• Breakdown of customer loans in Non Core & G&S 3
• o G&S: includes €1.0bn of Italian Government bonds at amortized costs
• o Non Core: includes €0.3bn of performing loans mainly ex Interbanca, €0.1bn retail mortgages and €0.1bn of Npl (former Interbanca + Banca IFIS)

(1) RWA Credit and counterparty risk only. It excludes RWA from operating, market risks and CVA (€1bn);

(2) RWA (Credit and counterparty risk only) x CET1 3Q20.

* Source: management accounting data

1Q 20 results* Source: Seasonality in Npl and PPA and effect of Covid-19

Net interest income in Npls*

3Q 20 pre tax reversal PPA at €8mln Variability due to reversal of PPA depending on the prepayment / disposal of ex-Interbanca's loans

Capital gains from Npl disposal

3Q 20 gains at €1mln

Variability on the disposal of Npls already worked out by Ifis Npl to specialized operators

*Source: management accounting data

Capital structure

B IFIS scope*	15.45%					15.64%
La Scogliera	11.58%	0.11%	0.05%	0.09%	-0.14%	11.69%
scope*		RWA Decrease	Realization of DTAs	Other valuation reserves	Lower minorities due to RWA decrease		SREP** 8.12%
	2Q 20 CET1					3Q 20 CET1
	Data in €bn
Banca	Ifis	Group Scope			2Q 20		3Q 20
RWA					8.5		8.5
CET1					1.3		1.3

Total Capital	1.7	1.7
Total Capital %	20.15%	20.38%
La Scogliera Group scope	2Q 20	3Q 20
RWA	8.6	8.5
CET1	1.0	1.0
Total Capital	1.3	1.3
Total Capital %	15.33%	15.45%
Excess CET1 not inc. in La Scogliera	0.3	0.3

• CET1 of 11.69% (+0.12% QoQ and +0.73% since 31 Dec 2019) and other capital ratios calculated
• o Excluding 2019 dividends suspended in accordance with the Bank of Italy's recommendations
• o Prudentially excluding 9M 20 net income

Capital evolution in future quarters

• Completion of the acquisition of Farbanca, expected in 4Q20 (negative ~21bps)

• Progressive use of DTAs against future profits (~€78mln as at 30 Sep 20) currently fully deducted from CET1 (~91bps)

• Ordinary winding down of former Interbanca customer loans (€0.3bn as at 30 Sep 20)

*The application of the 2013/36/EU (CRD IV) Directive and EU Regulation 575/2013 (CRR) envisages that only 50.8% of the excess capital of Banca Ifis Group Scope is included in the CET1 of La Scogliera Group Scope. Excess Capital of €0.3bn is not included in CET1 of La Scogliera Group Scope. ** SREP received by the Bank of Italy to be applied in 2019 and to be applied also for 2020

Appendices 2

2.1 Segment results

Factoring*

Data in €mln	1Q 19	2Q 19	3Q 19	1Q 20	2Q 20	3Q 20
Net banking income	39	42	42	38	35	35
Net banking income / average customer loans	4.9%	5.2%	5.3%	4.9%	4.6%	4.8%
Loan loss provisions	(7)	(12)	(4)	(5)	(1)	(1)

• Factoring net loans –8.2% QoQ and –10.3% YoY due to August seasonality. Banca Ifis was disciplined to factoring clients/debtors to meet payment deadlines
• o Ca. 50% of Banca Ifis's clients were open in lockdown as operating in critical sectors as defined by Law
• Factoring loans of €2.6bn included €0.8bn exposure to the Public Administration
• Net banking income / average customer loans at 4.8%
• Loan loss provisions in 1Q 19 and 2Q 19 included write offs on a few large positions towards construction companies

Leasing*

New business - €mln

• New leasing -27% YoY due to commercial activity slowdown driven by Covid-19 outbreak
• In 3Q 20, customer loans amounted to € 1,394mln stable QoQ (-0.2% QoQ)
• The impact of Covid-19 on loan loss provisions is mitigated by strong sector and borrower diversification (ca. 38k customers, average ticket of ca. €30k**) and by the remarketing agreements for repossessed assets
• Moratorium envisaged by Italian banking association and by Decree 18/2020 (Decreto Cura Italia):
• ~17k*** total moratoriums approved, on ~ €480mln*** outstanding loans and ~ €80mln*** instalments postponed
• The vast majority is according to Decreto Cura Italia

*Data based on management accounting

** data for leasing excluding rental *** Data as at 30 September 2020

loans

Npl Business*: portfolio evolution

Npl portfolio evolution

NBV** €mln	1,305			1,324
GBV €bn	18.2	+ 0.8	-0.2	18.9

Key numbers*

• 1.9mln tickets, #1.3mln borrowers
• Extensive portfolio diversification by location, type and age of borrower

NPLs acquired in 3Q: €0.8bn GBV

• In 3Q 20, Banca Ifis purchased €0.8bn (mainly consumer and banking NPLs) which will provide a solid contribution to the Bank's profitability next year
• Since the beginning of the year, until the end of October, Banca Ifis purchased 16 portfolios of NPLs for approximately €1.7bn (€1.4bn as at 30 Sept 20), within a market that offers attractive income opportunities
• The Bank is currently participating in sales processes for a total of ca. €2.4bn GBV

NPLs disposed in 3Q: €0.2bn GBV

• NPLs disposed in 3Q20: €0.2bn GBV (disposal price €3.6mln, capital gain €1.5mln)

Npl Business*: ERC

ERC: €2.6bn

ERC breakdown

Data in €mln	GBV	NBV	ERC
Waiting for workout - At cost	1.9	0.1	0.2
Extrajudicial positions	10.6	0.4	0.6
Judicial positions	6.4	0.9	1.8
Total	18.9	1.3	2.6

ERC assumptions

• ERC based proprietary statistical models built using internal historical data series and homogeneous clusters of borrowers
• o Type of borrower, location, age, amount due, employment status
• o Time frame of recovery
• o Probability of decay
• ERC represents Banca Ifis's expectation in terms of gross cash recovery. Internal and external costs of positions in nonjudicial payment plans (GBV of €0.4bn in 3Q 20), court injunctions ["precetto"] issued and order of assignments (GBV of €1.3bn in 3Q 20) have already been expensed in P&L
• €1.3bn cash recovery (including proceeds from disposals) in 2014 – 3Q20

Npl Business*: GBV and cash recovery

Ongoing

jan 18

Judicial recovery

Judicial recovery (€ mln)	GBV	%
Freezed**	2,518	39%
Court injunctions ["precetto"] and foreclosures	642	10%
Order of assignments	677	11%
Secured and Corporate	2,590	40%
Total	6,428	100%

Non judicial recovery – Voluntary plans

Judicial recovery – Order of Assignments

Npl Business*: cash recovery and P&L contribution

P&L Contribution

• Significant increase in P&L contribution despite court shut down in August as Banca Ifis was efficient in capturing the effects of the court reopening after lockdown

Cash collection

• In 3Q 20, cash collections revamped after court shutdown in 2Q20

Data in € mln (excluding disposals)	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20	3Q 20	2017 YE	2018 YE	2019 YE
Cash collection	40	41	45	55	57	67	59	76	65	52	66	128	181	258
Contribution to P&L**	67	56	46	69	66	60	44	78	50	34	48	162	238	248
Cash collection / contribution to P&L	60%	73%	98%	79%	87%	112%	132%	97%	132%	153%	137%	79%	76%	104%

*Source: management accounting data

** It includes only interest income, excludes cost of funding and some minor items (i.e. net commission income and the gains on sales of receivables)

Npl Business*: stock by recovery phase

Cluster	GBV 3Q20 €mln	% total	Description	Average time frame**	Accounting valuation	Cash proceeds
Waiting for workout - Positions at cost	1,885	10%	Recently acquired, under analysis to select the best recovery strategy, to be assigned either to extrajudicial or to judicial recovery	6 months	Acquisition cost
Extrajudicial positions	10,579	56%
-Ongoing attempt at recovery	10,182	54%	Managed by internal and external call centres and recovery networks. The purpose is the transformation into voluntary payment plans (or into judicial recovery if conditions arises)	NA	Statistical model (collective valuation)	No
- Non-judicial payment plans	398	2%	Sustainable cash yields agreed with debtors through call centres and collection agents	5 years	Increase in value (P&L), with valuation based on agreed plan, net of historical delinquency rate, discounted at the IRR used for acquisition	Yes
Judicial positions	6,428	34%
- Freezed***	2,518	13%	Judicial process has started; but the court injunction ["precetto"] has not been issued	6-12 months	Acquisition cost	No
- Court injunctions ["precetto"] issued and foreclosures ("pignoramento")	642	3%	Court injunction ["precetto"] already issued; legal actions continue to get the order of assignment	8-12 months	#1 increase in value at court injunction ["precetto"] and #2 increase in value at foreclosure ["Pignoramento"]. Part of the legal costs are expensed in P&L	No
- Order of assignments	677	4%	Enforcement order already issued. The cash repayment plan is decided by the court and starts afterwards	2-4 months	#3 increase in value. The remaining legal costs are expensed in P&L	Yes
- Secured and Corporate	2,590	14%	Ongoing execution of real estate collaterals	4 years	Analytical valuation (expected time frame and amount to be recovered)	Yes
Total	18,893	100%

Npl Business*: GBV and NBV evolution

	E-MARKET $\overline{\text{SDIR}}$
·Banca	CERTIFIED

GBV - €mln	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20	3Q 20
Waiting for workout - Positions at cost	2,298	2,014	1,840	3,472	2,864	1,598	1,783	1,794	1,440	1,709	1,885
Extrajudicial positions	8,050	8,145	9,667	8,956	9,745	9,862	9,574	10,378	10,619	10,257	10,579
- Ongoing attempt at recovery	7,725	7,817	9,332	8,617	9,393	9,491	9,194	9,975	10,206	9,850	10,182
- Non-judicial payment plans	325	328	335	340	352	371	380	403	413	407	398
Judicial positions	2,664	2,738	3,170	3,327	4,015	4,913	5,226	5,669	5,720	6,278	6,428
- Freezed**	1,515	1,435	1,712	1,692	1,822	1,931	2,192	2,521	2,533	2,627	2,518
- Court injunctions ["precetto"] issued and foreclosures	253	336	376	411	464	487	511	543	571	595	642
- Order of assignments	388	462	476	536	561	609	612	639	640	672	677
- Secured and Corporate	508	505	606	689	1,167	1,886	1,911	1,965	1,975	2,384	2,590
Total	13,011	12,897	14,676	15,756	16,624	16,373	16,583	17,841	17,779	18,244	18,893

NBV - €mln	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20	3Q 20
Waiting for workout - Positions at cost	61	57	96	225	174	148	160	109	65	96	*** 104
Extrajudicial positions	287	285	302	291	306	313	308	356	364	355	353
- Ongoing attempt at recovery	160	154	167	153	162	164	154	190	193	184	185
- Non-judicial payment plans	127	131	135	138	144	149	154	166	171	171	169
Judicial positions	484	509	547	577	643	711	720	813	840	854	867
- Freezed**	222	194	203	188	205	207	215	274	298	304	292
- Court injunctions ["precetto"] issued and foreclosures	52	80	94	107	118	118	118	128	120	132	148
- Order of assignments	148	174	183	209	227	244	245	259	270	265	264
- Secured and Corporate	62	61	67	73	94	142	142	152	152	153	162
Total	832	851	945	1,093	1,123	1,172	1,188	1,278	1,269	1,305	1,324

*Source: management accounting. **Other Judicial positions ***Does not include customer loans (invoices to be issued) related to Ifis NPL Servicing third parties servicing activities

Npl Business*: P&L and cash evolution

Banca	E-MARKET SDIR TIFIED

P&L - €mln	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20	3Q 20
Waiting for workout - Positions at cost
Extrajudicial positions	21	13	13	17	19	19	19	20	17	10	11
- Ongoing attempt at recovery	2	(3)	(3)	(4)	(3)	(2)	(1)	4	(4)	(3)	(5)
- Non-judicial payment plans	19	16	16	21	22	21	20	17	21	13	15
Judicial positions	46	43	33	53	46	42	26	58	33	24	37
- Freezed**	0	0	0	0	0	0	0	0	0	0	0
- Court injunctions and foreclosures + Order of assignments	44	41	26	42	37	28	18	40	26	24	32
- Secured and Corporate	3	2	7	11	9	14	7	18	6	0	6
Total	67	56	46	69	66	60	44	78	50	34	48
Cash - €mln	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20	3Q 20
Waiting for workout - Positions at cost
Extrajudicial positions	21	21	22	26	27	32	27	38	30	23	33
- Ongoing attempt at recovery	4	4	3	3	4	6	4	10	4	3	4
- Non-judicial payment plans	17	17	19	23	23	26	23	28	26	20	29
Judicial positions	19	20	23	29	30	35	32	38	35	29	33
- Freezed**	0	0	0	0	0	0	0	0	0	0	0
- Court injunctions and foreclosures + Order of assignments	15	17	19	22	24	25	25	27	29	23	26

• Secured and Corporate 4 3 4 7 6 11 7 11 7 5 7 Total 40 41 45 55 57 67 59 76 65 52 66

Npl Business*: portfolio diversification

2.2 Consolidated financial data

Customer loans

Customer loans (€ mln)

• In 3Q 20, customer loans were substantially flat QoQ
• In 3Q 20, Commercial and Corporate banking loans were down 3.0% QoQ mainly due to August seasonality
• The QoQ increase in customer loans in Corporate Banking is driven by medium term lending guaranteed by the Government through MCC

Commercial and Corporate banking ²⁵

Funding

4,894 4,864 4,916 1,474 1,104 1,104 1,085 933 888 791 2,000 1,997 223 271 249 1Q 20 2Q 20 3Q 20 Customer deposits Bonds Factoring Securitization TLTRO Other Funding (€mln) 8,468 9,171 9,153

	1Q 20	2Q 20	3Q 20
LCR*	>1,900%	>1,600%	>1,300%
NSFR*	>100%	>100%	>100%

• Retail deposit base proved to be resilient. Ongoing diversification into German deposits. Lengthened the duration of Rendimax deposits
• Reached the target of 50% balance between retail customer deposits vs wholesale funding
• Banca Ifis has €2bn TLTRO (of which €1.9bn expiring in June 2023) out of a maximum capacity of €2.5bn (80% of maximum allowed)
• The factoring securitization decreased reflecting lower factoring volumes
• In July, Banca Ifis appointed Equita Sim as specialist/liquidity provider for the quotation of the senior preferred bonds issued by the Bank on the secondary market
• Significant decrease in average cost of funding to 1.10% in 3Q 20 from 1.45% in 2019

* Source: management accounting data

Proprietary portfolio*

Strategy

• Long term «fundamental» view with opportunistic trading approach
• Efficient management of excess cash (ECB deposits) / Low Duration level
• Use of enhancing and hedging strategies coupled with both risk and expected credit loss control
• Low cumulative RWA level and relevant ECB / funding eligibility

3Q 20 results

• In 3Q 20, the proprietary portfolio reported a net banking income of €3.8mln (€10.8mln YTD)

During 3Q 20, Banca Ifis adopted the mechanism offsetting unrealized gains/losses measured through the FVOCI method on government assets

		Bonds
Type of asset - Data in €mln as at 30/9/20	Government	Financial	Corporate	Equity	Securitization	Total
Held to collect/amortized cost	985	75	8		42	1110
Held to collect and sell (FVOCI)	1094	16	2	37		1149
Total (HTC and HTC&S)	2079	91	10	37	42	2259
Held for trading						2
Total portfolio at market value	2079	91	10	37	42	2261
Percentage of total	92%	4%	0%	2%	2%	100%
Held to collect/amortized cost Duration	3,1	4,1	2,1	-	0,1	3,1
Held to collect and sell (FVOCI) Duration	1,5	4,2	6,4	NA	-	1,6
Average duration (HTC and HTC&S) - YEARS	2,2	4,1	3,1	NA	0.1	2,3
* Source: management accounting data

Asset quality – 3Q 20

Asset quality (€ mln)

Commercial & Corporate Banking	Gross	Coverage %	Net
Bad loans	205	80%	42
UTPs	187	52%	90
Past dues	65	10%	59
Total NPEs	458	58%	191

Non core & G&S	Gross	Coverage %	Net
Bad loans	55	19%	45
UTPs	88	52%	42
Past dues	4	26%	3
Total NPEs	147	39%	90

	1Q 20	2Q 20	3Q 20
Gross NPE ratio*	9.3%	9.1%	8.6%
Net NPE ratio*	4.8%	4.5%	3.8%

• Npl Business not included in this analysis
• NPE ratios in Commercial & Corporate Banking reported a slight decrease QoQ, due to the increase in customer loans:
• o Gross NPE: 8.6% (9.1% as at 30 Jun 2020)
• o Net NPE: 3.8% (4.5% as at 30 Jun 2020)
• Gross NPEs in Commercial and Corporate Banking include ~€20mln factoring technical past due mainly from the PA which does not represent a significant asset quality risk
• NPEs in Non Core & G&S that arose from the acquisition of former Interbanca, in accordance with IFRS 9 are qualified as POCI ("purchased or originated credit-impaired") and are booked net of provisions

* Commercial & Corporate Banking

Consolidated operating costs

Operating costs (€mln)

Personnel expenses (€mln)

• 3Q 20 operating costs ~ -€8mln vs. 2Q 20, mainly driven by:
• ~ -8mln in other administrative expenses and other income / expenses mainly due to:
  • o ~-7mln of provisions to solidarity fund for voluntary exits accrued on previous quarter,
  • o ~-€6mln of lower accrual for credit risk on "Commitments & Collaterals"
  • o +€4.5mln of accruals of Italian Central Fund on Deposits contribution estimated to be paid next quarter

Other adm. expenses and other income / expenses (€mln)

2.3 La Scogliera: implications of CRD IV

La Scogliera: implications of CRD IV

• The application of the 2013/36/EU (CRD IV) Directive and EU Regulation 575/2013 (CRR) envisages that 49.2% of the excess capital of the Banca Ifis Group Scope is not included in the CET1 of La Scogliera Group Scope. CET1 excess capital of €0.4bn is not included in La Scogliera Group Scope

50.8%** Banca Ifis S.p.A.

Data in €billion

Data as at 30 Sep 2020	Banca Ifis Group Scope	Capital requirements*	Excess Capital	Minority stake of La Scogliera	Excess capital not included	La Scogliera Group Scope
CET1	1.3		0.7	49.2%	0.4	1.0
Total Capital	1.7		0.8	49.2%	0.4	1.3
CET1 %	15.6%	7.0%		49.2%		11.7%
Total Capital %	20.4%	10.5%		49.2%		15.4%
RWA	8.5					8.5

*Capital requirements at parent company level. At group level capital requirements are: CET1 8.12%, Total Capital 12.5% **Net of Treasury shares

La scogliera: Focus on DTA regulatory implications

E-MARKE I SDIR
CERTIFIED

Convertible DTAs	• DTAs related to write downs of loans convertible into tax credits (under Law 214/2011) • Their recovery is certain regardless of the presence of future taxable income and is defined by fiscal law (range ca. 5%-12% per annum, with full release by 2026) • No time and amount limit in the utilization of converted DTA • Capital requirements: 100% weight on RWA	Data in €/mln 218.5
DTAs due to tax losses (non - convertible)	• DTAs on losses carried forward (non-convertible) and DTAs on ACE (Allowance for Corporate Equity) deductions can be recovered in subsequent years only if there is positive taxable income • No time limit to the use of fiscal losses against taxable income of subsequent years • Capital requirements: 100% deduction from CET1	77.7
Other non-convertible DTAs	• DTAs generated due to negative valuation reserves and provisions for risks and charges • Capital requirements: deduction from CET1 or weighted in RWA depending on certain thresholds**. For Banca Ifis they would be weighted at 250% but they are partially offset by DTL (~€31.9mln as of 30 Sep 2020)	46.4*

*Includes prudentially €5.9mln of DTAs related to Ifis Rental and Ifis Real Estate not included in the Banking Group as not a regulated entity

** As stated by CRR (article 48), these kind of DTAs are subjected to a double threshold mechanism: if their amount is less than 10% of the CET1 Capital, they are weighted at 250%; if their amount added to the total investments in financial sector subjects is less than 17.65% they are weighted. If the amount of DTAs is greater than of the first or the second threshold, the amount in excess is deducted from CET1 Capital. 32

2.4 Focus on PPA

Focus on ex-Interbanca PPA*

• In 2016, following the acquisition of former Interbanca, Banca Ifis valued the performing and non performing loans of Interbanca by applying a market discount and a liquidity discount to reflect purchase price
• The purchase price allocation (PPA) is written back with the progressive maturity or the disposal of Interbanca's loans
• As at 30 Sep 20, the residual amount of pre-tax PPA was €104mln

Net customer loans and PPA - €mln

Net customer loans PPA

1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20	3Q 20	Outstanding 3Q 20
22	22	17	31	17	21	10	23	9	11	8	104
FY 18: €92mln				FY 19: €70mln. o/w: - €3mln Corp. Banking & Lending - €67mln Non core & G&S				9M 20: €27mln. o/w: -€1mln Corp. Banking & Lending -€26mln Non core & G&S			3Q 20 Outstanding, o/w: - €4mln Corp. Banking & Lending - €100mln Non core & G&S

PPA reversal in P&L- €mln

Disclaimer

• This Presentation may contain written and oral "forward-looking statements", which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, projections and provisional data concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the control of Banca Ifis (the "Company"). There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus such forward-looking statements are not a reliable indicator of future performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. The information and opinions contained in this Presentation are provided as at the date hereof and are subject to change without notice. Neither this Presentation nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with, any contract or investment decision.
• The information, statements and opinions contained in this Presentation are for information purposes only and do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. None of the securities referred to herein have been, or will be, registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state or other jurisdiction of the United States or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would be unlawful (the "Other Countries"), and there will be no public offer of any such securities in the United States. This Presentation does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States or the Other Countries.
• Mariacristina Taormina, Manager charged with preparing the financial reports of Banca Ifis S.p.A., pursuant to the provisions of Art. 154 bis, paragraph 2 of Italian Legislative Decree no.58 dated 24 February 1998, declares that the accounting information included into this document corresponds to the related books and accounting records.
• Neither the Company nor any member of Banca Ifis nor any of its or their respective representatives directors or employees accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it.