Banca Ifis

Earnings Release • May 10, 2018

STRONG
FINANCIAL
PERFORMANCE

….WITH SOLID BALANCE SHEET

• Net banking income at 139,4 mio due to strong contribution of the NPL BU and double digit growth of Enterprises Segment
• Net profit at 37,9 mio with cost of credit at 73 b.p.
• Shareholder's equity at 1.413,0 with CET1 15,49

….AND STRONG LIQUIDITY POSITION

• Continued effort on diversification as well as lengthening maturity profile of funding position
• Funding position at 7.617,3 well balance between deposits, debt securities and due to banks

INSIGHTS FOR THE UNDERSTANDING OF THE RESULTS

MAIN
DISCONTINUTY
IN NUMBERS
REPORTED
2018-2017

• New segment reporting
• Valuation risk model metrics extended to a part of NPL positions included in the WIP process of the legal factory
• Reversal PPA
• IFRS9 first time adoption
• New funding structure
• Acquisition of Capitalfin

(Million Euro) –

NBI: 139,4

( 103,5 1Q2017) +34,6%

NPFA*: 128,4

(101,4 1Q2017) +26,7%

NBI 1Q 2018 by segment

	Data 1Q	Enterprises	Area NPL	G&S	Total
Enterprises segment includes: • Trade receivables &M/L term lending • Corporate banking • Leasing • Tax receivables	NBI 2018	78,6	65,1	-4,3	139,4
	NBI 2017	70,9	30,5	2,1	103,5
	% Change	10,9%	113,3%	NS	34,6%
	NPFA 2018	67,6	65,1	-4,3	128,4
	NPFA 2017	68,3	30,5	2,6	101,4
	% Change	-1,0%	113,3%	NS	+26,7%

TURNOVER € Bn

NET BANKING INCOME €m

NET PROFIT from FINANCIAL ACTIVITY €m

• Turnover 2,9 mln up 7,3% vs 1 Q 2017 due to increase in n. of clients (+3%)
• Outstanding 3,6 bn (+2,2%) vs 1 Q 2017
• Loans 3208 mn +5,6% vs 4 Q 2017 (LFL -5,1% due to seasonality)
• Strong growth of 18,0% at NBI level in 1Q 2018 vs 1 q 2017 driven by turnover & clients growth

• LFL growth up 5,5%, including M/L term lending

• 11,9% increase reported in NPFA vs 1 Q 2017

• 7 mln euro provisions in 1 Q with a cost of credit of 83** bp in this area
• LFL growth up 1,4%, including M/L term lending vs 1Q 2017

NET BANKING INCOME €m

NET PROFIT from FINANCIAL ACTIVITY €m

• New loans at 95,0 in 1Q 2018; loans up by 18% at LFL perimeter (M/L term lending not anymore included in this area)
• Outstanding loans at 736 m € up by 9% vs 4Q 2017
• M/L term lending not anymore included in this area
• Reversal PPA included in NBI at 19 mn in 1Q2018 vs 23 mn in 1Q2017 20,7 34,9 23,5

• LFL comparison 14,7%

• 1,5 mln euro provisions in 1 Q 2018

• In 1Q 2017 NPFA it is included a positive provision of 4 m€

LEASING

NET BANKING INCOME €m

NET PROFIT from FINANCIAL ACTIVITY €m

• #clients: 71.613

• New loans at 172 mn € (+13% vs 1 Q 2017)

• LFL leasing loans increased by 2,2%, excluding a real estate mortgage portfolio, riclassified in G&S.

• NBI affected by the reclassification of a real estate mortgage portfolio, riclassified in G&S, together with the reversal of PPA
• LFL comparison NBI grew by 31% driven by volumes increase and n. of clients
• No reversal of PPA
• Provisions 2,5m
• Cost of credit 74** bp
• LFL comparison NPFA grew by 11,5% driven by an increase in equip. volumes and n. of clients

TAX RECEIVABLES

GROSS BOOK VALUE Bn €)

NET BOOK VALUE Bn €)

ERC 15 yrs over 1,8 bn

• Total Positions: 1,5mln

• Average Ticket: 8k€

• Total Debtors: 1,1mln

YEAR/QUARTER CASH COLLECTED €m

CASH COLLECTED
	2016	2017	2018
1q	17.1	25,0	40,1

FOCUS ON OPERATING EXPENSES

NET PROFIT

1 Q 2018; Million Euro

BALANCE SHEET – ASSET STRUCTURE

ASSET QUALITY & NPE TREND in ENTERPRISES segment

1 Q 2018 mln €

31/03/2018 31/12/2017

	31/03/2018	31/12/2017
% Net NPL/ Loans	1,2%	1,1%
NPL Coverage	91,7%	91,7%
% Net NPE/ Loans	6,4%	6,3%	Restated
Cost of credit	73 bp	31 bp	Net of reelase of value 89 bp

FUNDING STRUCTURE

1 Q 2018 mln €

Flexible and diversified funding structure

The diversification has been achieved by:

• Reducing share of Repos with customers to zero
• Renewing focus and attractiveness of retail funding through the introduction of 3y, 4y, 5y maturities for Rendimax
• EUR 700m TLTRO
• tapping wholesale markets twice in 2017, with the inaugural issuance of a EUR 302m senior unsecured bond and a EUR 406m Tier 2 bond
• ✓ April 2018: 300 mln euro bond senior unsecured preferred issued

1Q 2018 mln €

Banca IFIS Group only KPIs	2018	2017
	31/03	31/12
Common Equity Tier 1 Ratio (CET1)	15,49%	15,64%
Tier 1 Capital Ratio (T1)	15,49%	15,64%
Total Own Fund Capital Ratio	20,91%	21,07%
Book value share	26,44	25,62

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. Pursuant the consolidated law on financial intermediation of 24 February 1998 (article 154-bis, paragraph 2) Mariacristina Taormina, in her capacity as manager responsible for the preparation of the Company's financial reports, declares that the accounting information contained in this Presentation reflects the Banca IFIS's documented results, financial accounts 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.