Banca Ifis

Earnings Release • Aug 3, 2018

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POSITIVE FINANCIAL PERFORMANCE	• Net banking income at 278,1 mio due mainly to strong contribution of the NPL Area • Non recurrent items in 1H2017 and 1H2018 make comparison difficult between the semesters • PBT adjusted at 50,5 mio in 1H18 vs 43,6 mio in 1H17
SOLID BALANCE SHEET	• Shareholder's equity at 1.373 with CET1 15,13%*
STRONG LIQUIDITY POSITION	• Continued effort on diversification as well as lengthening maturity profile of funding position • Funding position at 7.819,0 well balanced between

deposits, debt securities and due to banks

MAIN DISCONTINUTY IN NUMBERS REPORTED 2018-2017 BUT CONSISTENT WITH 1Q2018

• Segment reporting consistent with 1Q2018, but different versus 2017
• Valuation risk model metrics extended to a part of NPL as in 1Q2018 NPL data (WIP process of the legal factory)
• Reversal PPA significantly lower in 2Q2018 vs 2Q2017 (22 mio vs 38 mio)
• Highly Provisions in 2Q2018 due to one significant position
• IFRS9 first time adoption
• New funding structure
• Acquisition of Capitalfin

(Million Euro)

NBI: 278,1 ( 253,2 1H 2017) +9,8%

NPFA: 238,1 *

(265,3 1H 2017) -10,3%

NBI 1H 2018 by segment

Data 1H Enterprises Area NPL G&S Total NBI 2018 165,1 119,3 -6,2 278,1 NBI 2017 171,7 79,0 2,5 253,2 % Change -3,9% +51,1% n.s. 9,8% NPFA 2018 126,1 119,3 -7,3 238,1 NPFA 2017 183,2 79,0 3,1 265,3 % Change -31,2% 51,1% n.s. -10,3% • Trade receivables & M/L term lending

*NPFA= Net Profit from Financial Activities

Enterprises segment includes:

• Corporate banking

• Leasing • Tax receivables

TRADE RECEIVABLES* (Factoring + m/l term lending)

TURNOVER € Bn

NET BANKING INCOME €m

NET PROFIT from FINANCIAL ACTIVITY €m

1H 2017 1H 2018

51,7

• Turnover 6,1 €bn (+8,8% vs 1H 2017) due to the increase in nr. of factoring clients (+6,3%)

• Outstanding 3,8 €bn (+1,2% vs 2H 2017)

• Loans 3,4 €bn (+11,3% vs 2H 2017)

• 14,5% at NBI level in 1H 2018 vs 1H 2017 driven by turnover, clients and loans growth

• LFL growth up 1,9%, including M/L term lending

• -11,6% decrease reported in NPFA vs 1H 2017 due to

• 28,6 mln euro provisions vs 11,7 mln in 1H 2017. Provisions growth is related to a single relevant position.
• LFL -21,4%, including M/L term lending vs 1H 2017

58,5

NET BANKING INCOME €m

NET PROFIT from FINANCIAL ACTIVITY €m

• New Loans at 143,8 in 1H18: loans up by 4% at LFL perimeter (M/L term lending not anymore included in this area)

• Outstanding loans at 752 m € up by 11% vs 4Q17

• M/L term lending not anymore included in this area

• Reversal PPA included in NBI at 36 in 1H18 vs 48mn in 1H17 59,7

• LFL comparison -12%

• 1H18 provisions 5,3 mln euro

• In 1H17 it included a release of provision of 21 mln

LEASING

LOANS €m

29,0 26,2 NET BANKING INCOME €m 1H 2017 1H 2018

NET PROFIT from FINANCIAL ACTIVITY €m

• New loans at 333 mln € (+5,2% vs 1H 2017)

• LFL leasing loans increased by 4,6% (vs 2H 2017), excluding a real estate mortgage portfolio, riclassified in G&S.

• NBI affected by the reclassification of a real estate mortgage portfolio, reclassified in G&S, together with the reversal of PPA

• grew by 7,0% driven by volumes increase

• No reversal of PPA

• Provisions 5,0 mln
• LFL comparison NPFA

TAX RECEIVABLES

1 H 2017 1 H 2018

GROSS BOOK VALUE Bn €)

NET BOOK VALUE Bn €)

ERC 15 yrs over 1,8 bn

• Total Positions: 1,5 mln

• Average Ticket: 8k€

• Total Debtors: 1,1 mln

3,0% 3,3% 2,4% 4,3% 5,8% 6,1% 6,6% 2012 2013 2014 2015 2016 2017 1H2018 NBV/GBV

YEAR/QUARTER CASH COLLECTED €m

	2016	2017	2018
1Q	17	25	40
2Q	18	29	41
1H	35	54	81

NET BANKING INCOME/ NET PROFIT from FINANCIAL ACTIVITY €m

NET PROFIT

1H 2018; Million Euro

66,2 Mln 1H2018	-36,1%		103,7	Mln 1H2017
One off impacts (gross	amounts)	1H 2018	1H 2017
Capital gain sale of NPL portfolio		2	17,6
One off provisions		-14	0
Release of provisions		11,3	21
Reversal of PPA		44,1	63,7

BALANCE SHEET – ASSET STRUCTURE

(Million Euro) % change 1H2018 vs 01.01.2018

ASSET QUALITY & NPE TREND in ENTERPRISES segment

1H 2018 mln €

According to the IFRS9 with new POCI category, and new write off policy the amounts of gross NPE is significantly changed.

	30/06/2018	01/01/2018	31/12/2017
Gross NPE	615,7	564,3	1.323,1
Gross NPE/Loans	10,5%	9,9%	20,1%	220,5 mio of write off done
Net NPE	368,1	338,0	403,9	due to the new policy
% Net NPE/ Loans	6,6%	6,2%	7,2%
Cost of credit	138 bp	nd	31bp

FUNDING STRUCTURE

1H 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 300m senior unsecured bond and a EUR 400m Tier 2 bond
• April 2018: 300 mln euro bond senior unsecured preferred issued

1H 2018 mln €

Banca IFIS Group only KPIs	2018	2017
	30/06	31/12
Common Equity Tier 1 Ratio (CET1)	15,13%	15,64%
Tier 1 Capital Ratio (T1)	15,13%	15,64%
Total Own Fund Capital Ratio	20,28%	21,07%
Book value per share	25,69	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.

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