Banca Ifis — Earnings Release 2020

Feb 11, 2021

2020 Preliminary results

11 February 2021

Index

1. 2020 and 4Q 20 results

2. Appendices

• 2.1 Segment results
• 2.2 Consolidated financial data
• 2.3 La Scogliera: implications of CRD IV
• 2.4 Focus on PPA
• 2.5 Farbanca key figures

2020 and 4Q 20 results

4

• 2020 net income of €69mln above our €50-65mln guidance despite 2° wave of Covid-19

• Resilient profitability: all 2020 quarters profitable despite provisions and adjustments for Covid-19 2
• 2020 Covid-19 total direct provisions and adjustments of €76mln* (€29mln* in 4Q 20)
• Significant reduction in asset quality ratios with ~€120mln GBV Npl disposals (mainly ex-Interbanca) 3
• Gross Npe* ratio**: 6.4% in Dec20 (vs. 9.8% in Dec 19); Net Npe* ratio**: 3.2% in Dec 20 (vs. 5.4% in Dec 19)
• CET1 at 11.29% (+0.33% since 4Q 19) net of dividends 4

• 2019 dividends of €59mln*** were booked as debt to shareholders and 2020 dividends of €25mln**** will be proposed to the AGM scheduled on 22 April 2021 5

* Source: management accounting data.

** Includes customer loans in Commercial Banking, Non Core and G&S. It excludes Npl business and €1.1bn Government bonds at amortized costs in G&S

*** €1.1 per share

**** €0.47 per share . The dividend was defined in compliance with the parameters set by the Bank of Italy's recommendation of 16 December 2020 in which the latter expects that dividends and buy-backs of treasury shares remain below 15% of the accumulated net profits for 2019- 20 and not exceeding 20 bps of the Common Equity Tier 1 (CET1) ratio, depending on which of the two parameters is the lower

€76mln further provisions and adjustments due to Covid-19*

Covid-19 further provisions and adjustments - €mln

76	Description
31	• Additional provisions for loan losses in factoring, leasing and structured finance on sectors most impacted by Covid-19 and moratoriums
5	• Funds with negative fair value valuation, mainly Npls of former Interbanca**
23	• Provisions to reflect longer timeframes/slightly lower cash recoveries in the NPL portfolio especially in extrajudicial workout and secured Npls
17	77.1 • Loan loss provisions and other provisions for a single position of former Interbanca
2020

Covid19: €76mln further provisions and adjustments in 2020 (€29mln in 4Q20)

Resilient Npl cash collection*

• €259mln Npl cash collection in 2020, stable vs. 2019 despite Covid-19 and lockdown, mainly due to the strengthening of phone collection
• This reflects ~40% of order of assignments in the face of public employees and retirees and portfolio diversification of ~1.4mln borrowers
• In 2020, Banca Ifis posted €23mln additional provisions** to reflect potential longer timeframes/slightly lower cash recoveries in the Npl portfolio due to Covid-19
• In 2020, Banca Ifis has purchased €2.7bn Npls, which will provide a solid contribution to the Bank's profitability next year

Npl cash collection - €mln

Improving asset quality ratios

• Discipline in payments: in 2020, Banca Ifis was disciplined to factoring clients/debtors to meet payment deadlines. The technical past due in factoring decreased from €90mln in 4Q 19 to €10mln in 4Q 20
• Npl disposals: in 4Q 20, Banca Ifis disposed of ~€120mln GBV of NPLs (NBV of ~€60mln) through several transactions to decrease NPE ratios and better face the impact of Covid-19 2
• The Npl disposed had a high vintage (ca. 8Y), were highly provisioned, already worked out by Banca Ifis and mainly originated by former Interbanca
• No significant P&L impact from Npl disposals
• The Npl disposals were performed according to art 55 of the Cura Italia Decree, allowing the transformation of €27mln DTA (fully deducted from CET1) into tax credit (no CET1 deduction)

Decrease in Gross and Net Npe ratios*

Quarterly and year results

(€ mln)	3Q 20	4Q 20	FY 19	FY 20
Net interest income	91.1	120.9	458.9	381.7
Net commission income	15.7	19.4	94.1	74.9
Trading and other revenues	2.1	5.8	5.4	11.2
Net banking income	108.9	146.1	558.3	467.8	1
Loan loss provisions (LLP)	(14.5)	(43.5)	(87.2) 2	(91.4)
Net banking income – LLP	94.4	102.6	471.1	376.4
Personnel expenses	(28.6)	(34.1)	(130.0)	(123.4)
Other administrative expenses	(40.9)	(67.8)	(214.3)	(190.8)
Other net income/expenses	(4.4)	23.3	3 49.3 4	6.2
Operating costs	(73.9)	(78.6)	(294.9)	(308.0)
Goodwill impairment	-	(0.7)	-	(0.7)
Gains (Losses) on disposal of investments	-	-	(0.4)	24.2	5
Pre tax profit	20.5	23.3	175.8	91.9
Taxes	(4.8)	(6.6)	(52.6)	(22.7)
Net income - attributable to the Parent company	15.6	16.5	123.1	68.8
Customer loans	7,957	9,135	7,651	9,135
- of which Npl Business	1,325	1,406	1,280	1,406
Total assets	11,199	12,026	10,526	12,026
Total funding	9,153	9,908	8,463	9,908

• of which customer deposits 4,916 5,472 5,286 5,472

• of which TLTRO 1,997 1,995 792 1,995 Shareholders Equity 1,512 1,550 1,539 1,550

• Net banking income impacted by the slowdown in judicial and extrajudicial Npl workout and lower volumes/net banking income in Commercial & Corporate Banking 1

• 2020 net banking income included +€57mln write back of PPA (+€30mln in 4Q 20) and -€22mln of provisions to reflect longer timeframes/slightly lower cash recoveries in the NPL portfolio
• It included €20.4mln additional provisions for potential loan losses on Covid-19 2
• It included +€16.8mln of Farbanca bargain and +€12mln on the Npl business, mainly portfolio indemnities from sellers 3
• 2019 operating costs included the closing of a tax proceeding of former Interbanca which impacted Other Administrative Expenses (-€30.9mln) and Other net income (+€46.2mln) 4

8 Capital gain due to the disposal of real estate in Milan

In these In the above numbers, net impairment losses/reversals on receivables of the Npl Segment were entirely reclassified to Interest receivable and similar income to present more fairly this particular business and because they represent an integral part of the return on the investment

5

4Q 20 Results: P&L break-down by business unit*

				Commercial & Corporate banking
Data in € mln	Npl	Factoring	Leasing	Corp. Banking & Lending	Tot. Commercial & Corporate banking	Non core & G&S	Consolidated
Net interest income	42	28	10	7	44	34	121
Net commission income	1	14	3	2	19	(1)	19
Trading & other revenues	3	(0)	0	(0)	(0)	3	6
Net banking income	46	42	13	9	63	37	146
-Of which PPA	0	0	0	0	0	30	30
Loan loss provisions	0	(23)	1 0	(19)	2 (42)	(1)	(44)
Operating costs	(39)	(27)	(6)	(3)	(36)	(4)	3 (79)
Gains (Losses) on disposal of investments	-	-	-	-	-	-	-
Net income	5	(7)	5	(10)	(12)	23	17
Net income attributable to non-controlling interests							0.2
Net income attributable to							16
the Parent company
Net income (%)	31%	(39%)	30%	(61%)	(70%)	139%	100%
Customer Loans	1,406	2,854	1,414	1,724	5,993	1,737	4 9,135
RWA1	2,212	2,428	1,309	1,408	5,145	916	8,272
2 Allocated capital	250	274	148	159	581	103	934

(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 4Q20.

* Source: management accounting data

• Including €14mln additional provisions on potential loan losses due to Covid-19 1
• Including €6mln additional provisions on potential loan losses due to Covid-19 2
• It including +€16.8mln of Farbanca bargain in Non core & G&S and +€12mln on the Npl business, mainly portfolio indemnities from sellers 3
• Breakdown of customer loans in Non Core & G&S 4
• o G&S: includes €1.1bn of Italian Government bonds at amortized costs
• o Non Core: includes €0.3bn of performing loans mainly ex Interbanca, €0.1bn retail mortgages and €0.05bn of Npl (former Interbanca + Banca Ifis)

9

Seasonality in Npl and PPA and effect of Covid-19

Net interest income in Npls*

Capital gains from Npl disposal

Capital structure

Data in €bn
Banca Ifis Group Scope	3Q 20	4Q 20
RWA	8.5	9.2
CET1	1.3	1.4
Total Capital	1.7	1.8
Total Capital %	20.38%	19.87%
La Scogliera Group scope	3Q 20	4Q 20
RWA	8.5	9.2

CET1	1.0	1.0
Total Capital	1.3	1.4
Total Capital %	15.45%	14.85%
Excess CET1 not inc. in La Scogliera	0.3	0.4

• CET1 of 11.29% (-0.41% QoQ and +0.33% since 31 Dec 2019) and TCR calculated net of dividends
• 2019 dividends of €59mln were booked as debt to shareholders and 2020 dividends of €25mln will be proposed to the AGM scheduled on 22 April 2021

Key items of capital ratios evolution in 4Q 20

• • 91bps due to business growth in Npl and Commercial banking and the acquisition of Farbanca (+€414mln RWA)
• +23bps due to the transformation of €27mln DTA into tax credit ex-art 55 of the Cura Italia Decree

11 *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 €0.4bn 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

Customer loans: Commercial & Corporate banking*

14

Banca Ifis's Commercial & Corporate banking portfolio includes €0.6bn 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)	4Q20	Description
Lending and large NHS/PA to corporations
Factoring and other loans public to administration	0 6	The quality risk limited , while there on the timeframe of is are uncertainties asset payment
Loans 80% guaranteed by State (MCC)	0 4	SMEs 80% guaranteed by MCC/State Loans to
Factoring chemists to	0 1	(Credifarma) Factoring in the face of chemists
Factoring large Italian Corporations to (Revenue >€500mln)	0 6	The debtors are the large/top Italian (revenue > €500mln) with a sound advantage duration of months corporations competitive Average ca. 3-6
Lending SMEs to
Factoring SMEs to	1 5	(usually and borrower diversification duration of months ticket of €300k The debtors medium Strong Average ca. 4 Average sector exposures are to corporate) , with well above the ones of the sellers of the credits ratings
Leasing SMEs to	1 4	exposures (escluding rental) Strong and borrower diversification duration of Leasing 38k , with an average ticket sector Average ca. 4Y to customers of €30k There are remarketing for all the repossessed which mitigate quality risk agreements assets asset
Lending chemists to	0 7	(Credifarma Farbanca) Medium/long lending chemists term to +
Structured finance	0 6	exposures (average Lending of ticket of ca. €12mln) towards non-cyclical track record , with Private equity consisting ca. 55 corporations Strong to no significant default in the last 10Y
Total loans customer	6 0	of Total loans Commercial & Corporate Banking customer
* Source: management accounting data

Factoring*

Data in €mln	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20	3Q 20	4Q 20
Net banking income	39	42	42	41	38	35	35	42
Net banking income / average customer loans	4.9%	5.2%	5.3%	5.1%	4.9%	4.6%	4.8%	5.8%
Loan loss provisions	(7)	(12)	(4)	(13)	(5)	(1)	(1)	(23)

• Factoring net loans +8.6% QoQ due to seasonality and –11.6% YoY due to Covid-19
• Factoring loans of €2.9bn included €0.6bn exposure to the Public Administration
• The short term nature of the factoring (average maturity 3-6 months) coupled with the know how of the Bank allows greater flexibility
• Banca Ifis can quickly adapt commercial coverage and volumes to the macroeconomic conditions, performance of corporate/sectors and on level of liquidity and risk targeted by the Bank
• Net banking income / average customer loans at 5.8% driven by the positive performance in Pharma (+4mln QoQ) impacts by a few positions
• In 4Q20, loan loss provisions included €14mln additional provisions for Covid-19

Leasing*

New business - €mln

Loan loss provisions (2) (3) (4) (2) (4) (4) (7) 0

• New leasing -23% YoY due to commercial activity slowdown driven by Covid-19 outbreak
• In 4Q 20, customer loans amounted to €1,414mln, +1.5%QoQ
• The impact of Covid-19 on loan loss provisions is mitigated by strong sector and borrower diversification (~ 38k customers, average ticket of ~ €30k**) and by the remarketing agreements for repossessed assets
• As at 31 Dec 2020, moratorium envisaged by Italian banking association and by Decree 18/2020 (Decreto Cura Italia):
• o ~17k total moratoriums approved, on ~ €480mln outstanding loans and ~ €80mln instalments postponed

* Source: management accounting data

** data for leasing excluding rental

Npl Business*: portfolio evolution

Npl portfolio evolution

Key numbers*

• 2.0mln tickets, #1.4mln borrowers
• Extensive portfolio diversification by location, type and age of borrower Npls acquired in 4Q: €1.3bn GBV
• In 4Q 20, Banca Ifis purchased €1.3bn (mainly consumer and banking Npls both unsecured and secured) which will provide a solid contribution to the Bank's profitability over the next years
• In 2020, Banca Ifis purchased 26 Npl portfolios for ~€2.7bn (~€2.3bn and ~€0.4bn in the primary and secondary market, respectively) and 236k debt positions
• Pipeline to remain strong: in 1H 2021, we are participating /expect to participate in NPL disposal processes with €3bn GBV

Npls disposed of in 4Q: €0.4bn GBV

• Npls disposed of in 4Q20: €0.4bn GBV (disposal price €20.6mln, capital gain €2.3mln). The disposals include ~€37mln GBV of payment plans already worked out by Banca Ifis at a price in line with book value

Npl Business*: ERC

ERC: €2.8bn
		1.3	2.8
	1.5

ERC breakdown

Data in €mln	GBV	NBV	ERC
Waiting for workout - At cost	2.1	0.2	0.3
Extrajudicial positions	10.3	0.3	0.6
Judicial positions	7.4	0.9	1.9
Total	19.8	1.4	2.8

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 4Q 20), court injunctions ["precetto"] issued and order of assignments (GBV of €1.4bn in 4Q 20) have already been expensed in P&L
• €1.4bn cash recovery (including proceeds from disposals) in 2014 – 2020

Npl Business*: GBV and cash recovery

Judicial recovery

Judicial recovery (€ mln)	GBV	%	Ongoing
Freezed**	3,299	45%	processing
Court injunctions ["precetto"] and foreclosures	713	10%	Towards ODA or
Order of assignments	676	9%	secured and corporate /
Secured and Corporate	2,686	36%	future cash flows
Total	7,374	100%

Non judicial recovery – Voluntary plans

Non-judicial payment plans

Judicial recovery – Order of Assignments

Actual vs. cash repayments

Judicial + non judicial recovery, data in €mln

Cash repayments > internal model estimates

jul 18 aug 18 sep 18 oct 18 nov-18 dec-18 jan-19 feb-19

mar-19 apr-19 may-19 jun-19 jul-19 aug-19 sep-19 oct 19 nov-19 dec-19 jan-20 feb-20 mar-20 apr-20 may-20

Actual cash repayments Expected cash repayments

jun-20 jul-20 aug-20 sep-20 oct-20 nov-20 dec-20

Cash collections (mainly secured) postponed due to court shutdown

*Source: management accounting data

** Including the disposal of ^~€37mln GBV of payment plans at ^a price substantially in line with book value ¹⁹

P&L Contribution

• In 4Q 20, P&L contribution included €11mln additional provisions to reflect longer timeframes/slightly lower cash recoveries in the Npl portfolio due to Covid-19 consequences

Cash collection

• In 4Q 20, Npl cash collections were +€10mln vs. 3Q 20 despite the second wave of Covid-19

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	4Q 20	2018 YE	2019 YE	2020 YE
Cash collection	40	41	45	55	57	67	59	76	65	52	66	76	181	258	259
Contribution to P&L**	67	56	46	69	66	60	44	78	50	34	48	50	238	248	182
Cash collection / contribution to P&L	60%	73%	98%	79%	87%	112%	132%	97%	132%	153%	137%	152%	76%	104%	143%

*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

	r – m. a SDIR
Banca	п

Cluster	GBV 4Q20 €mln	% total	Description	Average time frame**	Accounting valuation	Cash proceeds
Waiting for workout - Positions at cost	2,140	11%	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	10,273	52%
-Ongoing attempt at recovery	9,896	50%	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	378	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	7,374	37%
- Freezed***	3,299	17%	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")	713	4%	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	676	3%	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	2,686	14%	Ongoing execution of real estate collaterals	4 years	Analytical valuation (expected time frame and amount to be recovered)	Yes
Total	19,787	100%

** Data before Covid-19.

***Other Judicial positions

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	3Q 20	4Q 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	2,140
Extrajudicial positions	8,050	8,145	9,667	8,956	9,745	9,862	9,574	10,378	10,619	10,257	10,579	10,273
- 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	9,896
- Non-judicial payment plans	325	328	335	340	352	371	380	403	413	407	398	378
Judicial positions	2,664	2,738	3,170	3,327	4,015	4,913	5,226	5,669	5,720	6,278	6,428	7,374
- Freezed**	1,515	1,435	1,712	1,692	1,822	1,931	2,192	2,521	2,533	2,627	2,518	3,299
- Court injunctions ["precetto"] issued and foreclosures	253	336	376	411	464	487	511	543	571	595	642	713
- Order of assignments	388	462	476	536	561	609	612	639	640	672	677	676
- Secured and Corporate	508	505	606	689	1,167	1,886	1,911	1,965	1,975	2,384	2,590	2,686
Total	13,011	12,897	14,676	15,756	16,624	16,373	16,583	17,841	17,779	18,244	18,893	19,787
NBV - €mln	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20	3Q 20	*** 4Q 20
Waiting for workout - Positions at cost	61	57	96	225	174	148	160	109	65	96	104	170
Extrajudicial positions
	287	285	302	291	306	313	308	356	364	355	353	339
- Ongoing attempt at recovery	160	154	167	153	162	164	154	190	193	184	185	174
- Non-judicial payment plans	127	131	135	138	144	149	154	166	171	171	169	165
Judicial positions	484	509	547	577	643	711	720	813	840	854	867	894
- Freezed**	222	194	203	188	205	207	215	274	298	304	292	296
- Court injunctions ["precetto"] issued and foreclosures	52	80	94	107	118	118	118	128	120	132	148	160
- Order of assignments	148	174	183	209	227	244	245	259	270	265	264	280
- Secured and Corporate	62	61	67	73	94	142	142	152	152	153	162	158

*Source: management accounting data

**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	3Q 20	4Q 20
Waiting for workout - Positions at cost
Extrajudicial positions	21	13	13	17	19	19	19	20	17	10	11	7
- Ongoing attempt at recovery	2	(3)	(3)	(4)	(3)	(2)	(1)	4	(4)	(3)	(5)	(5)
- Non-judicial payment plans	19	16	16	21	22	21	20	17	21	13	15	12
Judicial positions	46	43	33	53	46	42	26	58	33	24	37	43
- Freezed**	0	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	43
- Secured and Corporate	3	2	7	11	9	14	7	18	6	0	6	0
Total	67	56	46	69	66	60	44	78	50	34	48	50
Cash - €mln	1Q 18	2Q 18	3Q 18	4Q 18	1Q 19	2Q 19	3Q 19	4Q 19	1Q 20	2Q 20	3Q 20	4Q 20
Waiting for workout - Positions at cost
Extrajudicial positions	21	21	22	26	27	32	27	38	30	23	33	37
- 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	6 31 40 0 29 11

*Source: management accounting data

**Other Judicial positions

Npl Business*: portfolio diversification

from 5k to 20k 29%

from 20k to 100k 34%

26%

2.2 Consolidated financial data

Customer loans

• In 4Q 20, customer loans amounted to €9,135mln (+€1,178mln or +14.8% vs 3Q 20):
• o +€737mln in Corporate Banking & Lending mainly due to the acquisition of Farbanca (+€614mln)
• o +€104mln lending in corporate banking guaranteed by State (MCC), as Banca Ifis offered to his SMEs medium-term loans, efficient in terms of capital absorption
• o +€80mln in Npl following the acquisitions carried out in 4Q 20
• o +€115mln in G&S mainly due to the purchase of Government bonds at amortized costs
• o +€225mln in Factoring due to seasonality

Commercial and Corporate banking ²⁶

Funding

• The increase in customer deposits is driven by the acquisition of Farbanca (~+€365mln), corporate deposits (~+€110mln) and German retail deposits (~+€50mln), pursuing funding diversification

• The factoring securitization increased reflecting higher factoring volumes

• Banca Ifis has €2bn TLTRO (of which €1.9bn expiring in June 2023) out of a maximum capacity of €2.8bn
• Significant decrease in average cost of funding to 1.01% in 4Q 20 from 1.45% in 4Q 19

	2Q 20	3Q 20	4Q 20
LCR*	>1,600%	>1,300%	>900%
NSFR*	>100%	>100%	>100%

* Source: management accounting data

Proprietary portfolio*

Strategy

• Long term «fundamental» view coupled 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

4Q 20 results

• In 4Q 20, the proprietary portfolio reported a net banking income of €4.2mln (€15mln in 2020) of which ~€3.5mln in FVOCI bond trading During 3Q 20, Banca Ifis adopted the mechanism offsetting unrealized gains/losses measured through the FVOCI method on government assets

	Bonds
Government	Financial	Corporate	Equity	Securitization	Total
1123	82	8		112	1326
709	10	2	43		764
1832	92	10	43	112	2090
					13
1832	92	10	43	112	2103
87 1% ,	4 4% ,	0 5% ,	2 1% ,	5 3% ,	100 0% ,
3 2 ,	3 1 ,	1 9 ,	NA	0 3 ,	3 1 ,
1 5 ,	4 2 ,	6 3 ,	NA	-	1 6 ,
2 5 ,	3 2 ,	2 8 ,	NA	0 3 ,	2 6 ,

Asset quality (€ mln)

Consolidated ratios	4Q19	3Q20	4Q20
Gross Npe**	9.8%	10.0%	6.4%
Net Npe**	5.4%	5.0%	3.2%

Commercial & Corporate Banking	Gross Coverage	Net
Bad loans	158	73%	43
UTPs	177	51%	87
Past dues	36	14%	30
Total Npes	370	57%	161

Non Core & G&S	Gross	Coverage %	Net
Bad loans	22	29%	16
UTPs	51	38%	32
Past dues	3	22%	3
Total Npes	77	35%	50

• Npl Business not included in this analysis
• Npe ratios (excluding Npl Segment and Italian Government Bonds at amortized costs included in customer loans) reported:
• o Gross Npe Ratio**: 6.4% (9.8% in 4Q19)
• o Net Npe Ratio**: 3.2% (5.4% in 4Q19)
• Gross Npes in Commercial and Corporate Banking include ~€10mln factoring technical past due mainly loans to 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 creditimpaired") and are booked net of provisions

*Source: management accounting data

**Includes commercial loans in Commercial Banking, Non Core and G&S. It excludes Npl business and €1.1bn Government bonds at amortized costs in G&S.

Consolidated operating costs

Operating costs (€mln)

Personnel expenses (€mln)

• 4Q 20 operating costs ~ +€ 4.7mln vs. 3Q 20:
• o ~ +€5.4mln QoQ in personnel expenses
• o ~ -€0.8mln QoQ in administrative expenses and other income/expenses:
• -€30.3mln of "other operating income": €16.8mln of Farbanca bargain purchase, +€12mln of Npl income mainly related to portfolio indemnities from sellers and €1.5mln of leasing income
• +€29.3mln of "administrative expenses and risk provisions": €15mln higher Npl recovery expenses, +€3mln higher IT costs, +€1.8mln higher advisory services, +€7mln provisions on contractual guarantees and +€2 higher other costs

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 31 Dec 2020	Banca Ifis Group Scope	Capital requirements*	Excess Capital	Minority stake of La Scogliera	Excess capital not included	La Scogliera Group Scope
CET1	1.4		0.8	49.2%	0.4	1.0
Total Capital	1.8		0.9	49.2%	0.4	1.4
CET1 %	15.5%	7.0%		49.2%		11.3%
Total Capital %	19.9%	10.5%		49.2%		14.8%
RWA	9.2					9.2

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 DTAs • Capital requirements: 100% weight on RWA	Data in €/mln 219.4
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	56.2
	• Capital requirements: 100% deduction from CET1
Other non-convertible DTAs	• DTAs generated due to negative valuation reserves and provisions for risks and charges (~€36.8 mln as of 31 Dec 2020) • 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 (~€29.5 mln as of 31 Dec 2020)	7.2
*Includes prudentially €5.7mln 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 or the first or the second threshold, the amount in excess is deducted from CET1 Capital. 33

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 31 Dec 20, the residual amount of pre-tax PPA was €56mln

Net customer loans and PPA - €mln

Net customer loans PPA

PPA reversal in 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	4Q 20	Outstanding 4Q 20
	22	22	17	31	17	21	10	23	9	11	8	30**	56
		FY 18: €92mln			- -	FY 19: €70mln. o/w: €3mln Corp. Banking & Lending €67mln Non Core & G&S				FY 20: €57mln. o/w: -€56mln Non Core & G&S	-€2mln Corp. Banking & Lending		4Q 20 Outstanding, o/w: - €4mln Corp. Banking & Lending - €52mln Non Core & G&S

*Source: management accounting data **In 4Q 20, the write back of PPA was mainly driven by loans and Npls disposals and prepayments

2.5 Farbanca Key Figures

Farbanca - 2020 Preliminary Key Figures

E-MARKET SDIR CERTIFIED

P&L €/mln	December 2020 (1 month only)	2020 FY
Net interest income	1.2	14.5
Net commission income	0.2	2.7
Trading and other revenues	-	(0.1)
Total Revenues	1.4	17.1
Loan loss provisions	(0.3)	(2.4)
Revenues -Loan loss provisions	1.1	14.8
Personnel expenses	(0.3)	(3.3)
Other administrative expenses	(0.2)	(4.7)
Other net income/expenses	0.1	0.0
Operating costs	(0.4)	(8.0)
Pre tax profit	0.6	6.8
Taxes	(0.3)	(2.3)
Net income	0.4	4.5
Balance Sheet €/mln		2020
Customer loans		614.1
Total assets		686.9
Total funding		590.7
- of which customer deposits		365.7
Shareholders Equity		70.0
Capital Structure		2020
RWA		413.6

• On November 27th , Banca Ifis completed the acquisition of Farbanca, which became part of the Group
• Banca Ifis acquired 70.77% of the capital of Farbanca S.p.A. held by Banca Popolare di Vicenza, whilst the remaining 29.23% is owned by approximately 450 shareholders, mainly pharmacists
• The consideration paid by Banca Ifis for the 70.77% stake was €32.5mln
• Farbanca contributed to Banca Ifis's consolidated P&L for only one month (December 20)
• Farbanca's bargain on purchase** was equal to €16.8mln and it was included in the "other operating income/expenses" in the consolidated P&L

* It doesn't include 2020 net income

** IFRS 3 Farbanca Purchase price allocation (PPA) has been finalized at 31 December 2020

CET1 %* 15.85%

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.