Banca Ifis

Investor Presentation • Aug 6, 2020

1H 2020 results

6 August 2020

• 1. 1H 20 summary results and preliminary 2020 guidance
• 1. Focus on 2Q 20 results
• 1. Appendices
• 3.1 Segment results
• 3.2 Consolidated financial data
• 3.3 La Scogliera: implications of CRD IV
• 3.4 Focus on PPA

1H 20 summary results and preliminary 2020

1H 20 summary results

• 1H 20 net income of €37mln, after 36mln (pre tax) provisions/write offs due to Covid 19

• o In addition to €36mln provisions/write offs, there are other direct and indirect impacts of Covid-19 mainly due to the slowdown in judicial and extrajudicial NPL workouts. Including a preliminary estimate of these other direct and indirect effects, the impact of Covid19's in 1H 20 is ca. -€50mln (pre tax)
• CET1 at 11.58% (+0.62% since 31 Dec 2019) calculated excluding 2019 dividends suspended in accordance with the Bank of Italy's recommendations and prudently excluding 1H 20 net income 2
• Funding: retail deposit base proved to be resilient, started diversification into German deposits. Raised TLTRO to €2bn (80% of maximum allowed) 3
• Purchase of €1.3bn NPL (in terms of GBV) as at 31 July 20 which will provide a solid contribution to the Bank's profitability next year 4

Preliminary 2020 guidance

• The slowdown in commercial activity due to Covid-19 impacted all business units
• Prudently, the Board of Directors suspended the economic and financial objectives included in the 2020- 22 Industrial Plan
• The updated preliminary guidance for 2020 assume the progressive improvement of the macroeconomic environment. We will update the Industrial Plan as soon as the situation stabilizes
• Banca Ifis's economic, equity and financial position proved to be resilient
• During one of the worst crisis of the last decades Banca Ifis expected a 2020 net income in the range of €50-65mln

(€ mln)	Min	Max
banking Net income	420	440
(LLP) loss Loan provisions	100 -	85 -
income Net	50	65

Main assumptions underlying the guidance

• Progressive improvement and stabilization of the macroeconomic environment, excluding further worsening of the macroeconomic context
• No macroeconomic shocks triggered by new lockdowns in US/Europe or Italy involving the whole country or some regions. Proactive and effective management of new Covid-19 infections. No further major shutdown in courts
• Continuous macroeconomic support of the Governments and Central Banks
• Recognition of Farbanca's badwill in P&L

Preliminary 2020 guidance: net banking income

Commercial & Corporate Banking, Non core & G&S

• Progressive improvement of workout in Npl

• o In 4Q 20, courts open for the entire quarter, after having been hut down in March, April and May due to lockdown and in August due to seasonality
• o Cash collection in Npl portfolio estimates substantially stable vs. 2019
• Net banking income in Commercial & Corporate Banking slightly declining due to lower volumes and margins
• o Factoring loans are expected to slightly decline in 3Q 20 and pick up in 4Q 20 as market environment stabilizes

Preliminary 2020 guidance: loan loss provisions

Loan loss provisions (Commercial & Corporate Banking, Non core & G&S)

Commercial & Corporate Banking, Non core & G&S

Further provisions to a single position booked in risks and charges (operating costs)

• In 4Q 20, potential asset quality deterioration in commercial, corporate and non core
• o Expiring of the moratoriums envisaged by Italian banking association and by Decree 18/2020 (Decreto Cura Italia)
• o Asset quality impact will be company/sector specific
• The Commercial & Corporate Banking portfolio is diversified in terms of borrower and sector
• o €0.8bn in the face of public administration, NHS and government entities
• o €0.2bn are loans guaranteed by MCC, €0.1bn factoring towards chemists, €0.6bn factoring for which the debtors are large corporations (revenues >€500mln)
• 7 o €1.4bn factoring towards ca. 7k SMEs and €1.4bn leasing towards ca. 38k clients. Banca Ifis has remarketing agreements for repossessed leasing assets

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)	2Q 20	Description
Lending to NHS/PA and large corporations
Factoring and other loans towards public administration	0.8	The asset quality risk is limited, while there are uncertainties on the the timeframe of payment
Loans 80% guaranteed by State (MCC)	0.2	Loans to SMEs 80% guaranteed by MCC/State
Factoring towards chemists	0.1	Factoring towards chemists (Credifarma)
Factoring towards large Italian Corporations (Revenue >€500mln)	0.6	The debtors are the large/top Italian corporations (revenue > €500mln) with a sound competitive advantage. Average duration of ca. 3-6 months
Lending to SMEs
Factoring towards SMEs	1.4	Strong sector and borrower diversification. Average duration of ca. 3-6 months. Exposures towards ca. 7.2k customers, with an average ticket of €200k. The exposures are towards debtors (usually medium corporate), with ratings well above the ones of the sellers of the credits
Leasing towards SMEs	1.4	Strong sector and borrower diversification. Average duration of ca. 4Y. Exposures towards 38k customers, with an average ticket of €30k. There are remarketing agreements for all the repossessed assets which mitigate asset quality risk
Lending towards chemists	0.1	Medium/long term lending towards chemists (Credifarma)
Structured finance	0.6	Lending towards Private equity consisting of ca. 50 exposures (average ticket of ca. €12mln) towards non-cyclical corporations. Strong track record, with no significant default in the last 10Y
Total customer loans	5.2	Total customer loans of Commercial & Corporate Banking

* Source: management accounting data

Focus on 2Q 20 results

2Q 20 results - Significant improvement in CET1

✓ 2Q 20 net income of €10.3mln:

• o ~ -€21mln (pre tax) provisions/write offs due to the Covid 19 in 2Q 20. Further direct and indirect impacts of Covid-19 mainly due the slowdown in judicial and extrajudicial NPL workouts
• o ~ -€7mln (pre tax) provisions to solidarity fund for voluntary exits
• o ~ +€11mln (pre-tax) reversal of PPA ex-IB (~ +€9mln in 1Q 20)
• ✓ CET1 at 11.58% (+0.46% QoQ) calculated excluding 2019 dividends suspended in accordance with the Bank of Italy's recommendations and prudently excluding 1H 20 net income
• ✓ In 2Q 20, purchase of €0.6bn GBV of Npl which will provide a solid contribution to the Bank's profitability next year
• ✓ Ongoing recovery in NPL business: in July, cash recovery came in at ~ €25mln, well above the monthly average of 2Q of ~€17mln
• ✓ In 2Q 20, Banca Ifis completed the acquisition of the 70.77% stake in Farbanca, which will be integrated with Credifarma, creating the leading player in financial services for pharmacies

Quarterly and half year results

(€ mln)	1Q 20	2Q 20	1H 19	1H 20
Net interest income	91.4	78.3	233.6	169.7
Net commission income	21.1	18.7	46.5	39.8
Trading and other revenues	(6.6)	2 3 9.9	(0.9)	3.3
1 Net banking income	106.0	106.8	279.2	212.8
Loan loss provisions (LLP)	(18.5)	(14.8)	(35.0)	(33.3)
Net banking income – LLP	87.4	92.0	244.2	179.5
Personnel expenses	(32.0)	(28.7)	(64.2)	(60.7)
Other administrative expenses	(40.5)	(41.5)	(114.4)	(82.1)
Other net income/expenses	(0.9)	4 (11.8)	39.3	(12.7)
Operating costs	(73.5)	(82.0)	(139.3)	(155.5)
Gains (Losses) on disposal of investments	24.2	5 -	(0.4)	24.2
Pre tax profit	38.1	10.1	104.5	48.2
Taxes	(11.7)	0.3	(36.2)	6 (11.3)
Net income	26.4	10.3	68.3	36.8
Customer loans	7,601	8,034	7,344	8,034
- of which Npl Business	1,271	1,307	1,174	1,307
Total assets	10,493	11,252	9,888	11,252
Total funding	8,468	9,171	7,953	9,171
- of which customer deposits	4,894	4,864	5,069	4,864
- of which TLTRO	791	2,000	694	2,000
Shareholders Equity	1,542	1,497	1,472	1,497

• Net banking income impacted by the slowdown in judicial and extrajudicial Npl workout and lower volumes/net banking income in Commercial & Corporate Banking. 2Q 20 results include €11mln lower net banking income to prudently reflect longer timeframe/slightly lower cash recovery in the Npl portfolio
• ~€7mln of write offs mainly on ex Interbanca funds 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 4
• Capital gain due to the disposal of real estate in Milan 5
• Due to tax benefits (ACE/accelerated depreciation) 6

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

1

3

Illustrative impact due to Covid-19 in 1H 20*

Provisions/write offs due to Covid19: -€36mln (pre tax)

(€ mln) Provisions/write offs due Covid -19 to	1H20
1 portfolio Lower baking income NPL net to	-11
2 (mainly Interbanca) Fund offs write NPL ex	-7
3 (LLP) loss single ex-Interbanca Loan provisions position on a	-11
Provisions single position financial of to guarantee a on a ex 4 Interbanca	-6
Total offs due Covid-19 provisions/write to	-36

• Lower net baking income to prudently reflect longer recovery timeframe and slightly lower cash recovery in 2020 in Npl portfolio 1
• Fund write offs, mainly Npl funds of former Interbanca 2
• Loan loss provision of €11mln due to a single position of ex-Interbanca 3
• Provisions booked in operating costs due to a single position of ex-Interbanca (same position as point 3) 4

Covid19 impact including provisions/write offs and other direct and indirect effects: ca. -€50mln (pre tax)

• In addition to €36mln 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 1H 20 is ca. - €50mln (pre tax)

2Q 20 Results: P&L break-down by business unit*

$\blacktriangleright$ Banca Ifis

			banking	Commercial & Corporate
Data in € mln	Npl	Factoring	Leasing	Corp. Banking & Lending	Non core & G&S	Consolidated
Net interest income	27	22	10	5	15	78
Net commission income	1	13	3	1	0	19
Trading & other revenues	1	0	0	(1)	10	2 10
Net banking income	30	1 35	13	5	25	107
-Of which PPA	-	-	-	-	10	11
Loan loss provisions	-	(1)	(4)	(3)	(6)	(15)
Operating costs	(32)	(19)	(8)	(2)	(21)	3 (82)
Gains (Losses) on disposal of investments	-	-	-	-	-	-
Net income	(1)	12	0	(1)	0	10
Net income (%)	(11)%	112%	2%	(6)%	3%	100%
Customer Loans	1,307	2,862	1,397	906	1,562	4 8,034
RWA1	1,987	2,395	1,284	976	959	7,601
2 Allocated capital	230	277	149	113	111	880

• Npl workout was impacted by the courts shut down 1
• Mainly trading gains on proprietary portfolio 2
• Includes €4.3mln provision booked in risk and charges (operating costs) due to a single position on a financial guarantee of former Interbanca 3
• Breakdown of customer loans in Non Core & G&S 4
• o G&S: includes €0.9bn of Italian Government bonds at amortized costs
• o Non Core: includes €0.3bn of performing loans mainly ex Interbanca, €0.1bn retail mortgages and €0.2bn of Npl (former Interbanca + Banca IFIS)

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

Net interest income in Npls*

Reversal of PPA ex-IB (pre-tax)*

2Q 20 pre tax reversal PPA at €11mln Variability due to reversal of PPA depending on the prepayment / disposal of ex-Interbanca's loans

Capital gains from Npl disposal

2Q 20 gains at €1mln

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

Capital structure

15.45%
11.58%
SREP** 8.12%
2Q 20 CET1
2Q 20
8.5
1.3
1.7
20.15%
2Q 20
8.6
1.0
1.3
15.33%

• CET1 +0.46% QoQ mainly due to RWA decrease driven by new SME supporting factor (+0.29%) and lower commercial activity
• CET1 of 11.58% and other capital ratios calculated
• o Excluding 2019 dividends suspended in accordance with the Bank of Italy's recommendations
• o Prudentially excluding 1H 20 net income

Capital generation in future quarters

• Progressive use of DTAs against future profits (~€80mln as at 30 Jun 20) currently fully deducted from CET1 (~96bps)
• Ordinary winding down of former Interbanca customer loans (€0.3bn as at 30 Jun 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

3.1 Segment results

Factoring*

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

• Factoring net loans -3.7% QoQ and -10.8% YoY due to commercial activity slowdown driven by Covid-19 outbreak
• o Stripping out 2 positions whose businesses were temporarily stopped due to Covid-19, the factoring net loans would be down 6.4% YoY
• o Ca. 50% of Banca Ifis's clients were open in lockdown as operating in critical sectors as defined by Law
• Factoring loans of €2.9bn included €0.8bn exposure to the Public Administration
• Net banking income / average customer loans at 4.6%
• Loan loss provisions in 1Q 19 and 2Q 19 included write offs on a few large positions towards construction companies

Leasing*

New business - €mln

average customer loans 3.8% 3.9% 3.3% 3.7% Loan loss provisions (2) (3) (4) (4)

• New leasing -48% YoY due to commercial activity slowdown driven by Covid-19 outbreak
• In 2Q 20, customer loans amounted to €1,397mln (-0.5% QoQ) due to lower volumes
• 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 ~ €486mln** outstanding loans and ~ €83mln** instalments postponed
• The vast majority is according to Decreto Cura Italia

Net banking income /

Npl Business*: portfolio evolution

Npl portfolio evolution

NBV** €mln	1,269			1,305
GBV €bn	17.8	+0.6	-0.2	18.2

Key numbers*

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

NPLs acquired in 2Q: €0.6bn GBV

• In 2Q 20, Banca Ifis purchased €0.6bn (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 July, Banca Ifis has purchased 11 portfolios of NPLs for approximately €1.3bn, within a market that offers attractive income opportunities
• The Bank is currently participating in 15 sales processes for a total of ca. €1.9bn GBV

NPLs disposed in 2Q: €0.2bn GBV

• NPLs disposed in 2Q20: €0.2bn GBV (disposal price €2mln, capital gain €1.2mln)

Npl Business*: ERC

ERC: €2.6bn

ERC breakdown

Data in €mln	GBV	NBV	ERC
Waiting for workout - At cost	1.7	0.1	0.2
Extrajudicial positions	10.3	0.4	0.6
Judicial positions	6.3	0.9	1.7
Total	18.2	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 2Q 20), court injunctions ["precetto"] issued and order of assignments (GBV of €1.3bn in 2Q 20) have already been expensed in P&L
• €1.2bn cash recovery (including proceeds from disposals) in 2014 – 2Q20

Npl Business*: GBV and cash recovery

Judicial recovery

Judicial recovery (€ mln)	GBV	%
Freezed**	2,627	42%
Court injunctions ["precetto"] and foreclosures	595	9%
Order of assignments	672	11%
Secured and Corporate	2,384	38%
Total	6,278	100%

Non judicial recovery – Voluntary plans

Judicial recovery – Diversification into secured

*Source: management accounting data; **Other Judicial positions ²²

Npl Business*: cash recovery and P&L contribution

P&L Contribution

• In 2Q 20, the new issues of court injunctions ("precetto"), foreclosures ("pignoramento") and order of assignments were temporarily stopped due to court shut down. During lockdown, judicial Npls did not increase in value, providing no P&L contribution

Cash collection

• In 2Q 20, cash collections were impacted by court shutdown mainly in corporate and secured

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	2017 YE	2018 YE	2019 YE
Cash collection	40	41	45	55	57	67	59	76	65	52	128	181	258
Contribution to P&L**	67	56	46	69	66	60	44	78	50	34	162	238	248
Cash collection / contribution to P&L	60%	73%	98%	79%	87%	112%	132%	97%	132%	153%	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 2Q20 €mln	% total	Description	Average time frame**	Accounting valuation	Cash proceeds
Waiting for workout - Positions at cost	1,709	9%	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	10,257	56%
-Ongoing attempt at recovery	9,850	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	407	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	6,278	34%
- Freezed***	2,627	14%	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")	595	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	672	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	2,384	13%	Ongoing execution of real estate collaterals	4 years	Analytical valuation (expected time frame and amount to be recovered)	Yes
Total	18,244	100%

Npl Business*: GBV and NBV evolution

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

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

*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

P&L - €mln	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20
Waiting for workout - Positions at cost
Extrajudicial positions	21	13	13	17	19	19	19	20	17	10
- Ongoing attempt at recovery	2	(3)	(3)	(4)	(3)	(2)	(1)	4	(4)	(3)
- Non-judicial payment plans	19	16	16	21	22	21	20	17	21	13
Judicial positions	46	43	33	53	46	42	26	58	33	24
- Freezed**	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
- Secured and Corporate	3	2	7	11	9	14	7	18	6	0
Total	67	56	46	69	66	60	44	78	50	34

Cash - €mln	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20
Waiting for workout - Positions at cost
Extrajudicial positions	21	21	22	26	27	32	27	38	30	23
- Ongoing attempt at recovery	4	4	3	3	4	6	4	10	4	3
- Non-judicial payment plans	17	17	19	23	23	26	23	28	26	20
Judicial positions	19	20	23	29	30	35	32	38	35	29
- Freezed**	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
- Secured and Corporate	4	3	4	7	6	11	7	11	7	5
Total	40	41	45	55	57	67	59	76	65	52

Npl Business*: portfolio diversification

3.2 Consolidated financial data

Customer loans

Customer loans (€ mln)

• In 2Q 20 customer loans in G&S increased by ca. €0.5bn due to the purchase of short term Government bonds booked at amortized cost
• In 2Q 20, Commercial and Corporate banking loans were down 1.7% QoQ due to the slowdown in commercial activity driven by Covid-19 outbreak. However, the decrease is mainly driven by a few clients which businesses were temporarily stopped due to Covid-19

Commercial and Corporate banking ²⁹

Funding

Funding (€mln)
8,463		8,468	9,171
			271
167 792		223 791	2,000
1,150		1,085	933
1,068		1,474	1,104
5,286
		4,894	4,864
4Q 19		1Q 20	2Q 20
Customer deposits	Bonds	Factoring Securitization	TLTRO	Other
	4Q 19	1Q 20	2Q 20

1,100% >1,900% >1,600%

100% >100% >100%

• Retail deposit base proved to be resilient. Ongoing diversification into German deposits. Lengthened the duration of Rendimax deposits: more than 80% of total term deposits with duration >2Y
• 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
• The bond decreased mainly due to the repayment of €0.3bn bond in May 2020 (replacement of €0.4bn already issued in February 2020)
• 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
• 30 • Significant decrease in average cost of funding to 1.15% in 2Q 20

* Source: management accounting data

LCR*

NSFR*

Proprietary portfolio*

Strategy

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

2Q 20 results

• In 2Q 20, the proprietary portfolio reported a net banking income of €6.6mln

of - Data in €mln 30/6/20 asset at		Bonds			Securitization	Total
Type as	Government	Financial	Corporate	Equity
Held collect/amortized to cost	899	62	7		45	1013
(FVOCI) Held collect and sell to	1078	25	1	42		1146
(HTC HTC&S) Total and	1977	87	8	42	45	2159
Held for trading						3
Total portfolio market value at	1977	87	8	42	45	2162
of total Percentage	91%	4%	0%	2%	2%	100%
(HTC HTC&S) duration and Average - YEARS	2 4	4 1	2 7	NA	0 1	2 5

Asset quality – 2Q 20

Asset quality (€ mln)

Commercial & Corporate Banking	Gross Coverage	Net
Bad loans	203	80%	40
UTPs	193	49%	98
Past dues	102	10%	92
Total NPEs	498	54%	230

Non core & G&S	Gross	Coverage %	Net
Bad loans	53	19%	43
UTPs	97	51%	48
Past dues	3	25%	3
Total NPEs	154	39%	93

• 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: 9.1% (9.3% as at 31 Mar 2020)
• o Net NPE: 4.5% (4.8% as at 31 Mar 2020)
• Gross NPEs in Commercial and Corporate Banking include ~€45mln 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

Consolidated operating costs

Banca Ifis employees

1,745

• 2Q 20 operating costs ~ +€8.5mln vs. 1Q 20, mainly driven by:
• ~ -3.4mln in cost of personnel due to lower expected variable compensations
• ~ +11.8mln in other operating costs mainly due to ~€7mln provisions to solidarity fund for voluntary exists and ~ 4.3mln on risk provisions due to a single position on a financial guarantee of former Interbanca

1,793 1,759 1,753 1,750

2Q 19 3Q 19 4Q 19 1Q 20 2Q 20

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

3.3 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

Banca Ifis Group Scope	Capital requirements*	Excess Capital	Minority stake of La Scogliera	Excess capital not included	La Scogliera Group Scope
1.3		0.7	49.2%	0.4	1.0
1.7		0.8	49.2%	0.4	1.3
15.5%	7.0%		49.2%		11.6%
20.1%	10.5%		49.2%		15.3%
8.5					8.6

*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

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 218.4
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	82.0
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 (~€33.9mln as of 30 June 2020)	48.0*

* 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

3.4 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 Jun 20, the residual amount of pre-tax PPA was €113mln

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	Outstanding 2Q 20
22	22	17	31	17	21	10	23	9	11	113
FY 18: €92mln				FY 19: €70mln. o/w: - €3mln Corp. Banking & Lending - €67mln Non core & G&S				1H 20: €20mln. o/w: -€1mln Corp. Banking & Lending -€19mln Non core & G&S		2Q 20 Outstanding, o/w: - €5mln Corp. Banking & Lending - €109mln 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.