Banca Ifis

Investor Presentation • May 12, 2020

1Q 2020 RESULTS 12 MAY 2020

Table of contents

01 Summary results
02 1Q 20 results
03 Appendices
Segment results 3.1
Consolidated financial data 3.2
La Scogliera: implications of CRD IV 3.3
Focus on DTAs and PPA 3.4

1Q 20 key facts and Covid-19

• 1Q 20 Banca IFIS's results were impacted by Covid-19 pandemic, although January and February results were in line with budget

• In 1Q 20, we completed the disposal of a Milan real estate property with pre-tax capital gain (net of transaction cost) of €24mln, we issued a €400mln senior bond, and reorganized the NPL segment. The new digital platform for SMEs proceeded according to the Industrial Plan

• Management actions implemented in order to face Covid-19

• Banca IFIS's financial strengths to face Covid-19 challenge

• CET1 of 11.12% (+0.16% QoQ)*
• Cash reserves at €1.4bn (stable QoQ)

• Given the macroeconomic uncertainty, we suspended the financial objectives included in the 2020-22 Industrial Plan, which will be updated once the macroeconomic context stabilizes

Covid-19 response

Business continuity

• ~93% of employees around Italy working remotely. Organizing Phase 2
• Continuous contacts with over 5,000 SME clients in April despite lockdown
• No operating discontinuity in any banking activity
• Strengthening of the IT network in terms of security and data protection
• Capitalization of current experience: smart learning to internal and external networks to manage digital/online client relationships (i.e. ature, digital platform for the issue of Government guaranteed loans)

Employee security

• Enforcement of all security measures envisaged by the law
• Extended employee insurance for free to COVID-19 related treatments
• Extra cleaning and protective measures put in place at our headquarters and branches, and staff training on preventive actions
• Promoting of smart working and minimizing of people movements

Client support

• Continue to responsibly lend to qualified customers: ca. 300# new customers in March and April despite lock down
• SMEs support through:
• o Moratorium envisaged by Italian banking association and by Decree 18/2020 (Decreto Cura Italia)
• o Loans Government guaranteed ex Decree 18/2020 (Decreto Cura Italia) and ex Decree 23/2020 (Decreto liquidità)

BANCA IFIS Banca IFIS is here for its customers, employees and communities in good and bad times. The COVID-19 pandemic is an extraordinary occurance –with economic and health consequences – and we are ready to help with our resources, professional experience and capital

Commercial & corporate banking

Potential impact of Covid-19

• Commercial activity reduction
• Asset quality deterioration
• Margin pressure on new loans

Banca IFIS business mitigation

• Client, sector and product diversification on outstanding portfolio
• Limited exposure to the sectors more impacted by Covid-19 (tourism, retail sale, restaurants) and €0.4bn exposure towards NHS / Public Administration
• Flexibility due to short term lending (average maturity 3-6months for factoring)
• Ca. 50% of Banca IFIS's clients (~ 3k in factoring and ~ 19k in leasing) were open in lockdown as operating in critical sectors as defined by Law
• Based on a survey carried out in April on ~5,300 factoring clients ~50% do not expect a significant decrease in 2020 revenues and only ~10% of clients expect a decrease in 2020 revenues > 25%

New management actions

• Careful analysis of sector and company specific in new lending. Focus on existing and well known clients
• Accelerating IT/digital investments included in the Business Plan
• Moratorium envisaged by Italian banking association and by Decree 18/2020 (Decreto Cura Italia).
• o ~18k* moratoriums approved, on ~ €0.7bn* outstanding loans with ca. 0.1bn* instalments postponed
• Government guaranteed loans ex Decree 18/2020 (Decreto Cura Italia) and ex Decree 23/2020 (Decreto liquidità)
• o ~ 60% of Banca IFIS's clients are included in the definition of SMEs on Decree 18/2020 for Government loan support

NPL business

Potential impact of Covid-19

• Court shut down
• Longer recovery timeframe
• Lower recovery amount

Banca IFIS business mitigation

• Portfolio diversification: ~ 1.3m borrowers
• ~40% of order of assignments towards public employees and retired persons
• Long timeframe of recovery: ~ 5.5Y weighted average recovery timeframe of the acquired portfolio; ~ 7Y recovery duration on new acquisitions
• Low average borrower instalments
• The court shut down impacts only the timeframe of the legal recovery process; borrowers are still legally bound to their payment obligations

New management actions

• Confirmed interest in purchasing new NPL portfolios and actively participating in disposal processes
• Careful risk assessment in new purchases. Focus on NPL asset classes on which Banca IFIS has 10Y+ track record
• NPL recovery is across the economic cycle: NPLs acquired today may be recovered when macroeconomic conditions have improved
• Accelerating IT/digital investments included in the Business Plan
• Strengthening of phone collection to temporarily replace home collection

Covid-19. Net banking income monthly evolution*

1Q 20, Banca IFIS's results were impacted by Covid-19 pandemic, although Jan. and Febr. results were in line with budget

• In NPL, the impact was mainly on the judicial recovery. New court injunctions ("precetto"), foreclosures ("pignoramento") and order of assignments were temporary stopped by the court shut down in March 20
• In 1Q 20, the impact in judicial and extrajudicial recovery was ~€9mln and ~€4mln, respectively. In 1Q 20, the Bank posted ~ -€3mln lower recovery variable costs in NPL

in thousands Data - 1Q 20	Budget	Actual
order of assignments New	6 8	3 9
injunctions New court	10 0	7 4
foreclosures New	9 1	8 0

• Commercial and Corporate banking, Non Core and G&S included €7mln write offs, mainly on some NPL funds of former Interbanca

Covid-19: suspension of 2020-22 Industrial Plan guidances

• Currently, the economic impacts on the various Group companies of the COVID-19 pandemic are characterized by strong uncertainty. The Group's economic, equity and financial situation is solid and allows the Bank to face the ongoing crisis
• However, given the uncertainty of the evolution of the emergency, in the interests of prudence the Board of Directors has resolved to suspend the economic and financial objectives included in the 2020-22 Industrial Plan, which will be reviewed and updated once the macroeconomic context stabilizes
• The results for the first quarter of 2020 include the impacts resulting from Covid-19 reasonably foreseeable as of 31 March 2020. It is possible that Covid-19 does not exhaust its negative impacts in the first quarter 2020 but has further negative impacts in the coming quarters, not foreseeable now in terms of timeframe and amount
• In accordance with the Bank of Italy's recommendation of 27 March 2020 on dividend policy during the Covid-19 pandemic, the Board of Directors of Banca IFIS decided to act responsibly by following the guidance provided by the Supervisory Authorities, and therefore propose that the distribution of dividends for the 2019 financial year be postponed until at least 1 October 2020 and, therefore, to proceed to the payment after this date if no regulatory provisions or recommendations from the Supervisory Authorities will be issued against this
• The solid capital position of the Group and the organization ability demonstrated also during the Covid-19 emergency, will allow Banca IFIS, excluding further worsening of the macroeconomic context which, considering the exceptional nature and current uncertainty cannot be ruled out, to continue, as in the previous years, to provide its shareholders with a sustainable remuneration
• In any case, the Board of Directors, the control bodies and the management of the Company continue to constantly monitor the evolution of the emergency resulting from the spread of COVID-19, and to take all the decisions and measures necessary to deal with it

Table of contents

01 Summary results
02 1Q 20 results
03 Appendices
Segment results 3.1
Consolidated financial data 3.2
La Scogliera: implications of CRD IV 3.3
Focus on DTAs and PPA 3.4

Summary results

• €26mln net income

Net income Net banking income Operating costs LLPs

• €106mln (€130mln in 1Q 19, €167mln in 4Q19) impacted by Covid-19

• €73mln (€74mln in 1Q 19, €82mln in 4Q19)

• Cost of risk of €19mln, including €6mln on a single Interbanca position

STOCK

Customer loans NPL business Funding CET1

• €7.6bn (-€0.1bn QoQ) due to decrease in commercial activity in all business units following Covid-19 pandemic

• ERC €2.5bn

• In 1Q 20: €65mln cash collection vs. €50mln P&L contribution due to court shut down in March *

• €4.9bn customer deposits (- €0.4bn QoQ) to reflect lower credit demand and reduce cost of funding

• In Feb. 2020, issue of €0.4bn senior bond

• 11.12%** La Scogliera Group Scope, well above the 8.12% SREP

• 14.59%** Banca IFIS Group Scope
• Dividend at €1.1 per share suspended

Quarterly results

(€ mln)	1Q 19	4Q 19	1Q 20
Net interest income	115.3	134.2	91.4 1
Net commission income	23.8	25.3	21.1
Trading and other revenues	(9.0)	7.5	(6.6) 2
Net banking income	130.1	167.1	106.0
Loan loss provisions (LLP)	(13.1)	(38.2)	(18.5) 3
Net banking income – LLP	117.0	128.9	87.4
Personnel expenses	(31.4)	(34.3)	(32.0)
Other administrative expenses	(43.3)	(56.2)	(40.5)
Other net income/expenses	0.4	8.8	(0.9)
Operating costs	(74.4)	(81.7)	4 (73.5)
Gains (Losses) on disposal of
investments	-	-	24.2 5
Pre tax profit	42.7	47.2	38.1
Taxes	(12.7)	(8.1)	(11.7)
Net income	29.9	39.1	26.4
Customer loans	7,322	7,651	7,601
- of which NPL Business	1,125	1,280	1,271
Total assets	9,864	10,526	10,493
Total funding	7,822	8,463	8,468
- of which customer deposits	5,021	5,286	4,894
- of which TLTRO	694	792	791
Shareholders Equity	1,489	1,539	1,542

1Q 20 results

1

2

3

• Covid-19 impact, of which ca. €9mln* in NPLs due to court shut down and ca. €4mln* due to extrajudicial workout
• Write off of some equity and NPL funds of former Interbanca
• ~ €6.1mln LLP due to a single position of former Interbanca. In addition, ~ €1.5mln further charges on that position are booked in other net income/expenses. Loan loss provisions include the impacts resulting from Covid-19 reasonably foreseeable as at March 20. It is possible that Covid-19 does not exhaust its negative impacts in 1Q 20 but has further negative impacts in the coming quarters, not foreseeable, now in terms of timeframe and amount
• Operating costs ~ -8.2mln QoQ, due to ~ -2.2mln in cost of personnel and ~-€5.9mln in other administration expenses and other net income/expenses (of which ~ -€3mln lower recovery variable costs in NPL business) 4

€24mln pre-tax capital gain (net of transaction cost) on the disposal of the Milan headquarters 5

Seasonality in NPL and PPA and effect of Covid-19

Net interest income in NPLs*

Capital structure

CET1 0.16% QoQ: driven by RWA decrease due to lower commercial activity (mainly in factoring)

CET1 of 11.12% and other capital ratios calculated net of 2019 dividends suspended in accordance with the Bank of Italy's Other recommendation of 27 March 2020

Capital generation in future quarters

• Progressive use of DTAs against future profits (~€90mln as at 31 Mar 20) currently fully deducted from CET1 (~102bps)
• Ordinary winding down of former Interbanca customer loans (€0.3bn as at 31 Mar 20)

¹³ BANCA IFIS *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

Table of contents

01 Summary results
02 1Q 20 results
03 Appendices
Segment results 3.1
Consolidated financial data 3.2
La Scogliera: implications of CRD IV 3.3
Focus on DTAs and PPA 3.4

1Q 20 Results: P&L break-down by business unit*

				Commercial & Corporate banking
Data in € mln	NPL	Factoring	Leasing	Corp. Banking & Lending	Non core & G&S	Consolidated
Net interest income	43	23	9	4	13	91
Net commission income	1	15	3	2	0	21
Trading & other revenues	(1)	0	0	(2)	(4)	(7)
Net banking income	43	38	12	4	9	106
-Of which PPA	1 (1)	0	0	0	9	8
Loan loss provisions	0	(5)	(4)	(2)	(7)	(19)
Operating costs	(33)	(21)	(5)	(2)	(12)	(73)
Gains (Losses) on disposal of investments	0	0	0	0	24	24
Net income	7	9	2	(0)	9	26
Net income (%)	26%	32%	9%	0%	33%	100%
Cost / income (%)	77%	55%	42%	54%	N.S.	69%
Customer Loans	1,271	2,974	1,404	879	1,073	7,601
RWA2	2,000	2,638	1,318	1,013	991	7,960
3 Capital allocation	222	293	147	113	110	885

• Corporate banking and lending: includes structured finance, commercial medium long term lending guaranteed by MCC and lending towards pharmacies
• Non Core: former Interbanca performing and non performing portfolios. In 1Q 20, results were impacted by 1 former Interbanca position (total negative impact of ca. €7.6mln, of which ca. €6.1mln booked in loan loss provisions)
• G&S: central services, treasury and costs not allocated to other business units. In 1Q 20, it included €24mln pre tax capital gain on a real estate disposal

• Loan loss provisions include the impacts resulting from Covid-19 reasonably foreseeable as of March 20. It is possible that Covid-19 does not exhaust its negative impacts in 1Q 20 but has further negative impacts in the coming quarters, not foreseeable now in terms of timeframe and amount

BANCA IFIS (1) Negative PPA of €0.9mln due to IFIS Servicing goodwill allocated to NPL portfolio, which is amortized with the recovery/winding down of IFIS Servicing property portfolio. The residual negative PPA of IFIS Servicing amounts to €5.2mln as at 31 Mar 2020; (2) RWA Credit risk only. It excludes RWA from operating, market risks and CVA (€1bn); (3) RWA (Credit risk only) x CET1 1Q20. * Source: management accounting

	Commercial & corporate banking: Facing Covid-19	Commercial & Corporate banking
1 Identification of most impacted sector	• We will not avoid any specific sectors, we will just monitor than other, we will just monitor some sectors more carefully	some sectors more carefully than other
2 Careful assessment one by-one of clients and debtors	• There is not a clear metric to define which businesses are We regard high flexibility, low fixed costs and sound cash flows • Detailed assessment of direct and indirect effects of Covid-19	going to overcome this crisis. as key indicators on each position
3 Use of government guaranteed loans ex Decree 18/2020 (Decreto Cura Italia)	• 60% of Banca IFIS's clients are potentially eligible • We expect asset quality and capital relief, but lower interest	income
4 Avoidance of excessive margin pressure	• Focus on good rating SMEs that due to their specific/size/positioning by large banks • We expect strong competition on good medium sized enterprises	are not well covered
5 Accelerating of investment in IT/AI	• Covid-19 is going to accelerate some long term trends: smart • Banca IFIS wants to be at the forefront in innovation • New digital platform to issue Government guaranteed loans	working, digitalization, AI

On May 11th, Banca IFIS was granted exclusivity for the negotiations of the potential acquisition of 70.77% of the shareholders capital of Farbanca from Banca Popolare di Vicenza. The remaining 29.23% is owned by ca. 450 shareholders, mainly chemists. The exclusivity will expire on May 29th

Commercial & corporate banking: sector breakdown*

Factoring – Client breakdown Leasing– Client breakdown

- data in €mln Macro sector	loans Customer	%
Manufacturing	350 1	45%
Of which healthcare manufacturing	278	9%
Of which metal equipment and goods manufacturing	148	5%
Of which vehicle manufacturing	123	4%
Of which metallurgy manufacturing	126	4%
Of which food	95	3%
Wholesale trade	533	18%
Construction	191	6%
Services	175	6%
Transport	132	4%
Agriculture	54	2%
Healthcare	33	1%
Other sectors	507	17%
Total	2 974	100%

Macro sector - data in €mln	Customer loans	%
Manufacturing	355	25%
Of which metal equipment and good manufacturing	104	7%
Of which special equipment manufacturing	41	3%
Of which food	27	2%
Print and production of registered support	23	2%
Of which machine manufacturing	18	1%
Wholesale trade	237	17%
Transport	207	15%
Construction	147	10%
Services	159	11%
Healthcare	47	3%
Agriculture	18	1%
Other activities	235	17%
Total	1.404	100%

Sector diversification, limited client concentration, short term maturity

Commercial & Corporate banking

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

• Factoring turnover -8% YoY due to commercial activity slowdown driven by Covid-19 outbreak. Further impacts expected in 2Q 20 due to lockdown
• Factoring included €0.4bn exposure towards NHS / Public Administration
• Ca. 50% of Banca IFIS's clients were open in lockdown as operating in critical sectors as defined by Law
• Net banking income / average customer loans at 4.9% stable vs 1Q 19
• Loan loss provisions include the impacts resulting from Covid-19 reasonably foreseeable as of March 20. It is possible that Covid-19 does not exhaust its negative impacts in 1Q 20 but has further negative impacts in the coming quarters

Leasing*

Data in €mln	1Q 19	1Q 20
Net banking income	13	12
Net banking income / average customer loans	3.8%	3.3%
Loan loss provisions	(2)	(4)

Highlights

• New leasing -37% YoY due to Covid-19 outbreak. Further impacts expected in 2Q 20 driven by activity slowdown
• Net banking income / average customer loans at 3.3% (3.8% in 1Q 19) mainly due to the new cost of funding allocation implemented from 4Q 19
• Loan loss provisions include the impacts resulting from Covid-19 reasonably foreseeable as of March 20. It is possible that Covid-19 does not exhaust its negative impacts in 1Q 20 but has further negative impacts in the coming quarters
• Moratorium envisaged by Italian banking association and by Decree 18/2020 (Decreto Cura Italia):
• o ~16k** total moratoriums approved, on ~ €460mln** outstanding loans and ~ €80mln** instalments postponed. The vast majority is according to Decreto Cura Italia

NPL Business*: portfolio evolution

NPL portfolio evolution				Key numbers*
** NBV 1,278 €mln			1,269	• 1.8mln tickets, #1.3mln borrowers • Extensive portfolio diversification by location, type and age of borrower
GBV 17.8 €bn	0.05	0	17.8	Limited NPLs acquired in 1Q
				• Confirmed interest in purchasing new NPL portfolios and actively participating in disposal processes. We will be disciplined in acquisition prices
				• In 1Q 20, some NPL transactions were postponed by a few weeks due to Covid-19 outbreak. In 1Q 20, Banca IFIS bought ca. €50mln NPL
				• In 2Q 20 and 3Q 20 Banca IFIS is participating/expected to participate in ca. €1.5-2bn NPL disposal processes
4Q 19	Purchases	Disposals	1Q 20	No NPLs disposed in 1Q 20

• No NPL disposals in 1Q 20

NPL Business*: ERC

ERC breakdown

Data in € bn	GBV	NBV	ERC
Waiting for workout - At cost	1.4	0.1	0.1
Extrajudicial positions	10.6	0.4	0.6
Judicial positions	5.7	0.8	1.7
Total	17.8	1.3	2.5

• 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 non-judicial payment plans (GBV of €0.4bn in 1Q 20), court injunctions ["precetto"] issued and order of assignments (GBV of €1.2bn in 1Q 20) have already been expensed in P&L
• €1.1bn cash recovery (including proceeds from disposals) in 2014 – 1Q20

NPL Business*: GBV and cash recovery

Judicial recovery

Judicial recovery (€ mln)	GBV	%
Freezed**	2,533	44%
Court injunctions ["precetto"] and foreclosures	571	10%
Order of assignments	640	11%
Secured and Corporate	1,975	35%
Total	5,720	100%

Non judicial recovery – Voluntary plans

Judicial recovery - Growth of ODA and secured Actual cash repayments > expected cash repayments ***

GBV, data in €mln Judicial + non judicial recovery, data in €mln

set-19 oct 19 nov-19 dic-19 gen-20 feb-20 mar-20

22

NPL Business*: cash recovery and P&L contribution

• Banca IFIS continued to cash in from collections on existing NPL portfolios
• Extrajudicial recovery (P&L contribution): in 1Q 20, new voluntary plan activations were higher than expected and new voluntary plan deactivation were lower than expected
• Judicial NPL recovery (P&L contribution): in 1Q 20, the new issues of court injunctions ("precetto"), foreclosures ("pignoramento") and order of assignments were temporarily stopped due to court shut down. In March 20, judicial NPLs did not increase in value, providing no P&L contribution

Data in € mln (excluding disposals)	1Q 17	2Q 17	3Q 17	4Q 17	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2017 YE	2018 YE	2019 YE
Cash collection	25	29	30	44	40	41	45	55	57	67	59	76	65	128	181	258
** Contribution to P&L	35	36	32	58	67	56	46	69	66	60	44	78	50	162	238	248
Cash collection / contribution to P&L	70%	80%	93%	75%	60%	73%	98%	79%	87%	112%	132%	97%	132%	79%	76%	104%

In 1Q 20, cash collections came in at €65mln, well above the P&L contribution of €50mln mainly due to court shut down in March 20

NPL Business*: stock by recovery phase

Cluster	GBV 1Q20 €mln	% total	Description	Average time frame**	Accounting valuation	Cash proceeds
Waiting for workout - Positions at cost	1,440	8%	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	10,619	60%
-Ongoing attempt at recovery	10,206	57%	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	413	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	5,720	32%
- Freezed***	2,533	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")	571	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	640	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	1,975	11%	Ongoing execution of real estate collaterals	4 years	Analytical valuation (expected time frame and amount to be recovered)	Yes
Total	17,779	100%

BANCA IFIS

*Source: management accounting. Please note that the presentation of this table has been improved compared to the past in order to better highlight the correlation regarding both the operating and financial impacts of transferring positions between different categories. ** Data before Covid-19 ***Other Judicial positions

24

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

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

BANCA IFIS

*Source: management accounting. Please note that the presentation of this table has been improved compared to the past in order to better highlight the correlation regarding both the operating and financial impacts of transferring positions between different categories.

**Other Judicial positions ***Does not include customer loans (invoices to be issued) related to IFIS 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
Waiting for workout - Positions at cost
Extrajudicial positions	21	13	13	17	19	19	19	20	17
- Ongoing attempt at recovery	2	(3)	(3)	(4)	(3)	(2)	(1)	4	(4)
- Non-judicial payment plans	19	16	16	21	22	21	20	17	21
Judicial positions	46	43	33	53	46	42	26	58	33
- Freezed**	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
- Secured and Corporate	3	2	7	11	9	14	7	18	6
Total	67	56	46	69	66	60	44	78	50

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

*Source: management accounting. Please note that the presentation of this table has been improved compared to the past in order to better highlight the correlation regarding both the operating and financial impacts of transferring positions between different categories. **Other Judicial positions

NPL Business*: portfolio diversification

Breakdown of Gross Bad Loans by ticket size Gross NPL breakdown by region

BANCA IFIS

* Source: management accounting, risk management data Excluding IFIS Servicing (i.e. data refer only to property portfolio)

Table of contents

01 Summary results
02 1Q 20 results
03 Appendices
Segment results 3.1
Consolidated financial data 3.2
La Scogliera: implications of CRD IV 3.3
Focus on DTAs and PPA 3.4

Customer loans

Highlights

• In 1Q 20, there was a slowdown in commercial activity due to Covid-19 outbreak. Covid-19 impacted all the business units of the Bank: factoring, leasing, structured finance, corporate banking and lending
• NPL stable QoQ due to very few acquisitions. In 2Q 20 and 3Q 20 Banca IFIS is participating/expected to participate in ca. €1.5-2bn NPL disposal processes

• Non core & G&S increase is driven by the purchase of Italian government bonds included in treasury/property portfolio

Funding

	1Q 19	4Q 19	1Q 20
LCR*	>1,000%	>1,100%	>1,900%
NSFR*	>100%	>100%	>100%

• 1Q 20 customer deposits came in at € 4,894mln (-392mln QoQ) reflecting lower funding requirements. The Bank reduced its most expensive deposits expecting lower credit demand. The average cost of funding of Rendimax is equal to 1.55% in March 20*
• The factoring securitization decreased reflecting lower factoring volumes
• The average duration of retail funding is 2Y as at 1Q 20 (€0.5bn term deposits expiring in 2024-25). Cash reserves stable QoQ at €1.4bn
• In 1Q 20, the Bank issued a €400mln senior bond (1.8% yield) to replace the €300mln senior bond with maturity in May

Asset quality – 1Q 20

Asset quality (€ mln)

Commercial & Corporate Banking	Gross	Coverage %	Net
Bad loans	211	80%	43
UTPs	176	50%	87
Past dues	132	8%	122
Total NPEs	519	51%	252

Non core & G&S	Gross	Coverage %
Bad loans	51	16%	43
UTPs	104	42%	60
Past dues	3	24%	2
Total NPEs	159	33%	106

Highlights

• NPL Business not included in this analysis
• NPE ratios in Commercial & Corporate Banking reported a slight increase QoQ, due to the decrease in customer loans:
• o Gross NPE %: 9.3% (8.5% as at 31 Dec 2019)
• o Net NPE %: 4.8% (4.2% as at 31 Dec 2019)
• Gross NPEs in Commercial and Corporate Banking include ~€85mln 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 Interbanca, in accordance with IFRS 9 are qualified as POCI ("purchased or originated credit-impaired") and are booked net of provisions

Consolidated operating costs

Personnel expenses (€mln)

• 1Q 20 operating costs ~ -€8.2mln vs. 4Q 19, mainly driven by:
• o ~ -2.2mln in cost of personnel
• o ~ -€5.9mln in other adm. expenses and other income / expenses, of which ~ -€3mln lower recovery variable costs in NPL business
• o 1Q 20 includes ~ -€3mln accrued provisions to the Resolution Fund to be paid next quarter
• 1Q 20 cost / income ratio at 69.4% (57.2 % at 1Q 19)

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

Table of contents

01 Summary results
02 1Q 20 results
03 Appendices
Segment results 3.1
Consolidated financial data 3.2
La Scogliera: implications of CRD IV 3.3
Focus on DTAs and PPA 3.4

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

Data in €billion

Data as at 31 Mar 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 %	14.6%	7.0%		49.2%		11.1%
Total Capital %	19.1%	10.5%		49.2%		14.8%
RWA	8.9					8.9
						34

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

Table of contents

01 Summary results
02 1Q 20 results
03 Appendices
Segment results 3.1
Consolidated financial data 3.2
La Scogliera: implications of CRD IV 3.3
Focus on DTA and PPA 3.4

Focus on DTAs

Data in €/mln

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	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	90.2 (72.9+17.4*)

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

BANCA IFIS • Includes €17.4mln of net tax credits booked as loans towards La Scogliera as part of the consolidated fiscal accounts. The tax credit stemmed from Interbanca's PPA in fiscal year 2017, following the merger of Interbanca into Banca IFIS

• ** 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

42.5**

Focus on ex-Interbanca PPA*

Description

• In 2016, following the acquisition of 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
• o As at 31 Mar 20, the residual amount of pretax PPA is €123mln

PPA Reversal in
	FY 18: €92mln					FY 19: €70mln. o/w:

	1Q 19 2Q 19 3Q 19 4Q 19
21	10	23

• €3mln Corp. Banking & Lending
• €67mln Non core& G&S

Net customer loans and PPA - €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.