1H23 results

3 August 2023

Index

1. Appendices
2. 2.1 Segment results
3. 2.2 Consolidated financial data
4. 2.3 Company overview

2Q23 results summary

Net income in 2Q23 of €45mln (substantially stable QoQ and +20% YoY). 1H23 net income at €91mln (+26% YoY) 1

Loan loss provisions at €6mln, of which €9mln provisions against macroeconomic risk and -€3mln (due to write backs) of ordinary cost of risk. Total prudential management overlay now at €65mln 2
2023 net income updated guidance increased to €160mln (vs. guidance of €150mln in Feb. 23 and Business Plan target of €137mln) 3
CET1 at 15.01% excluding 1H23 net income 4
New dividend policy approved by the Board which increases the payout ratio: distribution of 50% of the consolidated net profit attributable to Banca Ifis up to €100mln and of 100% of the profit in excess of €100mln 5

Net revenues accelerating

Quarterly Revenues

First 6 months Revenues

+8% Net revenues at €173mln (substantially stable QoQ and +8% YoY)
- 2Q23 net revenues breakdown:
  - o Commercial banking revenues at €87mln (€88mln in 1Q23 and €68mln in 2Q22). 1Q23 included €8mln capital gains on direct and indirect PE investments due to the disposals of equity stakes
  - o Npl revenues* prove highly resilient at €67mln (€69mln in 1Q23 and €65mln in 2Q22)
  - o Non Core & G&S at €19mln providing a recurrent and stable contribution to revenues

Very robust commercial activity continues

Factoring turnover (€bn)

* Factoring turnover +7% YoY excluding factoring vs. PA for which Ifis has reviewed its business model following the application of the new DoD

New leasing business (€mln)

Excellent commercial productivity in SME lending
Digitalization and new product development delivering results
No change in small ticket focus
Acceleration in equipment and tech leasing
No real estate/nautical leasing

Changing the Bank: digitalization projects in Commercial Banking

CLIENT ORIGINATION AND PARTNERSHIPS

CLIENT ONBOARDING AND PARTNERSHIPS

CLIENT MANAGEMENT & COMMERCIAL DEVELOPMENT

RISK & CREDIT ASSESSMENT

Multi-channel lead origination approach (Direct, Digital Marketing and Campaigns, Partnerships)
Full digital rental, with ecommerce capability, ready for Q3
New digital origination tools (specifically tailored for sales workforce) to boost x-selling and cooperation among business lines
Selling processes innovation both in the Full-digital experiences ("Next Self" platform) and intermediated use-cases ("Next Partner" platform)
Fully digital end-to-end sales process for lending, transportation leasing and rental tech
New Digital Onboarding Tool for Corporate and Retail
70% contracts digitally signed in 1H23
Ifis4business platform extended to serve all customer needs (interaction, transaction and crossselling) for all core banking products
~100% of factoring customers with access to the platform are also actively using it, generating more than 100k/year online transactions
In Q3 the online platform will be customized and extended to Leasing & Rental (focus on 70k clients)
Digital credit risk assessment and decisioning for all Bank's products (efficiency and "time to yes") through completely new digitalized workflow & decision support
Leasing/rental: reached >60% automated digital decisions. Approval in <4 days for leasing < €200k
Factoring: launched the new platform for credit assessment (including fullydigital decisioning for credit lines renewal)
Activated new digital anti-fraud controls 7

Npl portfolio performance resilient and well-positioned*

Revenues from judicial and extrajudicial recovery** (€mln)

Track record in quarterly cash collection (€mln)

• Negligible apparent impact from interest rate or inflation (in 2022, Banca Ifis booked upfront reserves against inflation impact)

The bank keeps monitoring new voluntary plans in the face of a potential economic slowdown
In 2Q23, tails of NPL portfolios were sold for modest profits (GBV of €0.7bn)
Revalea integration costs will be booked upfront in 2H 2023

*Source: management accounting data and risk management 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)

Changing the Bank: digitalization projects in NPL

RECOVERY STRATEGY	DOCUMENT CLASSIFICATIONS	PAYMENTS TO PA	PAYMENT RECONCILIATION AND MONITORING
▪ Enhancement of portfolio performance monitoring ▪ Data-enrichment of NPL positions	▪ Document classification through a new semantic document reading engine based on AI	▪ Automation of payments to the Public Administration for judicial recovery through the "PagoPA" portal	▪ Expansion of the RPA solution for the automatic reconciliation of payments ▪ Introduction of payment and debt position monitoring functions on the "Pagachiaro" portal
▪ Direct routing to best outcome strategy ▪ Prioritization of positions by expected performance potential ▪ Operations management at full-capacity in each collection channel	▪ Reduction of dependence from external suppliers on document classification activities ▪ 75k documents automatically classified in last 18 months (process accuracy: 99.7%)	▪ 46k payments performed since Nov 22 (process accuracy: 99.9%) ▪ Direct integration of Banca Ifis systems with the Italian Minister of Justice in order to maintain fully automatic payments to all PA	▪ 207k credit transfers reconciled automatically in the last 18 months (~78% of the total) ▪ 61k payments performed on Pagachiaro portal by 11k active users in the last 18 months

Inflation impact countered by efficiency, translating into solid cost control

Operating costs*	98	91	105	▪ FITD&SRF €4mln in 2Q23 (€6mln provisions in 1Q23 – totally released in 2Q23 – with 2€mln P&L benefit)
Exposed to Inflation	5 33	31	4 31	▪ Other operating costs*: impact of inflation and volume growth more than offset by contract renegotiation. Includes ca. €15mln IT investment YTD, which remained substantially stable YoY/QoQ in the last 2Y as per key business plan projects in innovation and digitalization
Revenues related	23	20	28	▪ Costs directly linked to Npl recovery: +€8mln QoQ due to positive one off in 1Q23 and pick up in activity in 2Q23
	37	40	41	▪ Cost of personnel increase QoQ driven by collective contract renegotiation accruals (reserves for impacts expected in 2H2023)
	2Q22	1Q23	2Q23
FITD & SRF Other provisions	-5 -5	6 1	-6 0
Operating costs + provisions	88	97	99	10 *including other administrative expenses and other net income/expenses excluding Npl recovery costs

Asset quality confirmed and overlay fully expresses Bank's prudence

Ordinary cost of risk: €5mln in 1Q23 and -€3mln due to write backs in 2Q23
Increase in management overlay against performing loans
- 1Q23 +€5mln
- 2Q 23: +€9mln
Total management overlay now: ca. €65mln (>1% of EAD)
Gross and Net Npe Ratio of 4.5% and 2.4% excluding loans in past due vs. Italian public health system
The application of the New DoD led to the reclassification mainly into past due a total of ca. €103mln loans vs. the Italian public health system (historically, a late payer with limited asset quality risk)

*Figures include "Net provisions for unfunded commitments and guarantees and Profit (loss) from sale of loans measured at amortised cost (excluding Npl Segment)"

No signs of macro-risks materializing in Banca Ifis's commercial business

Example: payment days in factoring

Example: ratings migration in credit book* Example: probability of default*

Source: management accounting

* Data refer only to customer loans to rated companies (ca. €4.6bn)

CET1 actual of 15.01% at 30 June 23, excluding 1H23 net income

Key items of CET1 evolution in 2Q23

-0.15% mainly due to factoring seasonality (+€133mln RWA)
-0.07% mainly due to increase of exposure under calendar provisioning framework (-€8mln)

2023 updated net income guidance

Banca Ifis 2023 net income - €mln

2023 net income guidance increased to €160mln

Key assumption:

• No geopolitical shocks, or significant deterioration in macroeconomic and financial markets conditions, or relevant regulatory changes

Main drivers of the update

- €91mln net income in 1H23 (ca. 60% of previous guidance)
- Cost of risk below expectations reflecting resilient asset quality and betterthan-expected macroeconomic environment
- Historically prudent provisioning: the Bank has ca. €65mln management overlays against macroeconomic risks
Expected increase in cost of funding fully considered
Revalea acquisition/integration costs will be accounted for upfront in 2H ²³ (ca. €10mln)

New dividend policy of Banca Ifis

Illustrative: 2023 dividends

New dividend policy

Progressive payout ratio, upon exceeding the threshold of earnings necessary to satisfy the Bank's capital requirements, taking into account (i) the evolution of the macroeconomic environment, (ii) the regulatory framework and (iii) the growth targets of the 2022-24 Business Plan
- o Distribution of 50% of the consolidated net income up to €100mln
- o Distribution of 100% of the consolidated net income > €100mln

Conditions

Exceed the supervisory capital requirements by a significant margin
Maintain CET1 Ratio > 14% over the Business Pan period (as stated in 2022-24 Business Plan)
Provide capital for the growth rate of the 2022-24 Business Plan
Meet the 2023 net income guidance

Funding plan to reimburse TLTRO expiring in Sept 2024

Management actions to reimburse €2bn TLTRO due in Sept. 2024: comfortable liquidity allows for a possible partial early repayment

✓Ca. €400mln: re-marketing of senior leasing securitization notes to ^a primary Italian bank proving the sound asset quality of the Bank leasing portfolio

✓Ca. €400mln: ramp-up of the securitization of an unsecured NPL portfolio created in ²⁰²¹

NPL portfolio made of positions in judicial recovery and in voluntary payment plans
Senior notes to be refinanced on the institutional investors' market. Mezzanine and junior notes to be entirely subscribed by Ifis Npl Investing and not be transferred
Confirms Banca Ifis's ability to finance itself innovatively through leveraging its specific types of assets

✓Ca. €700mln: proprietary portfolio maturing by Sept. ²⁰²⁴ and not to be reinvested

➢ Senior bond issues in coming quarters
➢ Further increase of retail funding through different channels and maturities
➢ Repos with institutional counterparties

Quarterly results

Reclassified Consolidated Income Statement - (€ mln)	1Q23	2Q23	1H22	1H23	1
Net interest income	139.4	135.2	264.4	274.7
Net commission income	23.3	27.0	42.2	50.3
Trading and other revenues	1 13.1	10.5	17.4	1 23.5
Total Revenues	175.8	172.7	324.0	348.5	2
Loan loss provisions	(10.0)	(6.4)	(33.7)	2 (16.3)
Total Revenues - LLP	165.9	166.3	290.3	332.2
Personnel expenses	(39.7)	(40.7)	(73.6)	(80.4)
Other administrative expenses	(53.8)	3 (65.4)	(114.6)	(119.2)	3
Other net income/expenses	2.4	1.5	2.7	3.9
Operating costs	(91.1)	(104.7)	(185.5)	(195.8)
Net provisions for risks and charges	(6.4) 4	5.8 5	3.1	(0.5)
Value adjustments of goodwill		-	(0.8)	-
Gains (Losses) on disposal of investments		-	0.1	-	4
Pre tax profit	68.4	67.5	107.2	135.9
Taxes	(22.1)	(21.8)	(34.4)	(43.9)
Net income - attributable to the Parent company	45.9	45.1	72.5	91.0	5

Customer loans 9,834 10,114 9,869 10,114 - of which Npl Business 1,495 1,476 1,528 1,476 Total assets 13,300 13,352 12,588 13,352 Total funding 11,112 11,142 10,396 11,142 - of which customer deposits 5,091 5,461 5,376 5,461 - of which TLTRO and LTRO 2,035 2,051 2,021 2,051 Shareholders Equity 1,650 1,675 1,592 1,675 Includes €8mln capital gains on PE investments due to the disposals of some equity stakes

Includes €5mln in 1Q23 and €9mln in 2Q23 add-on provisions against macroeconomic risk

Main drivers of QoQ increase: +8mln in costs directly linked to Npl recovery and +€4mln of FITD&SRF costs

Includes €6mln FITD&SRF costs booked as provisions for risks and charges

Released of FITD&SRF provisions booked in 1Q23

In the above statements, net impairment losses/reversals on receivables of the Npl Segment were reclassified to interest receivable and similar income to the extent to which they represent the operations of this business and are an integral part of the return on the investment. In addition:

• Operating costs exclude "Net allocations to provisions for risks and charges"

• Loan loss provisions include: "Net provisions for unfunded commitments and guarantees"; "Profit (loss) from sale of loans measured at amortised cost (excluding Npl Segment)"

2.1 Segment results

2Q23 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	€9mln add-on provisions against 1 macroeconomic risk
Net interest income	64	27	12	20	59	13	135	€4mln FITD&SRF operating costs 2
Net commission income	1	17	3	5	25	1	27	reclassified from provisions for
Trading & other revenues	2	(0)	0	3	3	5	10
Net revenues	67	44	15	28	87	19	173	risks and charges
-Of which PPA	0	0	0	0	0	3	3
Loan loss provisions	0	1	(1)	(8)	(8)	1	1 (6)	Released of FITD&SRF provisions 3
Operating costs	(50)	(24)	(9)	(9)	(41)	(13) 2	(105)	booked in 1Q23
Net allocations to provisions for risks and charges	0	0	(1)	0	(0)	6 3	6
Gains (Losses) on disposal of investments	0	0	0	0	0	0	0,0	4 Breakdown of customer loans in Non Core & G&S
Net income	11	14	4	8	26	9	46
Net income attributable to non controlling interests							1	o G&S: includes €1.7bn of
Net income attributable to the Parent company							45	Government bonds at amortized costs
Net income (%)	25%	32%	8%	17%	56%	19%	100%
Customer Loans	1,476	2,558	1,499	2,327	6,384	4 2,255	10,114	o Non Core: includes €0.1bn of performing loans mainly ex
RWA1 2 Allocated capital	1,729 259	2,469 371	1,306 196	1,682 252	5,456 819	1,766 265	8,950 1,343	Interbanca, €0.1bn retail

mortgages and €0.04bn of Npl (former Interbanca + Banca Ifis) 20

Factoring

Turnover - €bn

Data in €mln	1Q22	2Q22	3Q22	4Q22	1Q23	2Q23
Net revenues	40	39	44	48	43	44
Net revenues / avg. customer loans	5.7%	5.7%	6.8%	7.4%	6.6%	3 7.0%
Loan loss provisions*	(9)	(1)	(4)	(0)	(3)	1

2Q23 factoring turnover +7% YoY excluding factoring vs. PA, for which Banca Ifis is reviewing its business model, following the full application of the New DoD 1
The reduction of the factoring loans YoY (-7%) is due the revision of the business model of the factoring vs. the public administration 2

Net revenues / average customer loans at 7.0% 3

Loan loss provisions include:

"Net provisions for unfunded commitments and guarantees";
"Profit (loss) from sale of loans measured at amortised cost (excluding Npl Segment)"

Leasing

New business - €mln

	127	150	149	221	155	1 164	1
				38			2
		24	22	101	28	29
	24 42	53	54		50	56	3
	61	73	73	82	77	79
	1Q22 Autolease	2Q22	3Q22 Equipment	4Q22	1Q23 Technology	2Q23
Net customer loans - €mln	1,378	1,390	1,396	1,472	1,475	1,499
Data in €mln	1Q22	2Q22	3Q22	4Q22	1Q23	2Q23
Net revenues		15	14 14	17	15	15
Net revenues / avg customer loans	4.5%	4.0%	3.9%	4.6%	4.2%	2 4.1%
Loan loss provisions*		(1)	1 (2)	(1)	(1)	3 (1)

New leasing +9% YoY, proving resilient commercial activity
Net revenues / average customer loans at 4.1% in 2Q23 2
Asset quality risk is mitigated by strong sector and borrower diversification and by the remarketing agreements for repossessed assets 3

Loan loss provisions include:

• "Net provisions for unfunded commitments and guarantees";

• "Profit (loss) from sale of loans measured at amortised cost (excluding Npl Segment)"

Npl Business*: portfolio evolution

Npl portfolio evolution

Key numbers*

2.1mln tickets, #1.5mln borrowers
Extensive portfolio diversification by location, type and age of borrower

Npls acquired in 2Q23: €0.1bn GBV

Acquisition of Revalea from Mediobanca. As at 31 Dec 2022, Revalea had a portfolio of unsecured small ticket NPLs of €6.8bn in terms of GBV (NBV of €256mln)
Banca Ifis achieved the NPL purchase targets of the 2022-24 Business Plan 1Y in advance, allowing for rigorous selectivity going forward
Revalea transaction expected to be completed in 4Q23

Npls disposals and others in 2Q23: €1.0bn GBV

• The disposals generated a capital gain of €2.7mln. "Others" includes cash collection on the existing portfolio

Npl Business*: ERC

ERC: €2.8bn

2.5

ERC breakdown

Data in €bn	GBV	NBV	ERC
Waiting for workout - At cost	1.1	0.1	0.2
Extrajudicial positions	13.5	0.5	0.8
Judicial positions	7.3	0.9	1.9
Total	22.0	1.5	2.8

ERC assumptions

ERC based on 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 €0.5bn in 2Q23), court injunctions ["precetto"] issued and order of assignments (GBV of €1.9bn in 2Q23) have already been expensed in P&L
€2.3bn cash recovery (including proceeds from disposals) was generated in the years 2014 –2Q2023

Npl Business*: GBV and cash recovery

Judicial recovery

Judicial recovery (€ mln)	GBV	%
Frozen	1,609	22%
Court injunctions ["precetto"] and foreclosures	1,073	15%
Order of assignments	837	11%
Secured and Corporate	3,819	52%
Total	7,338	100%

Non judicial recovery – Voluntary plans

Non-judicial payment plans

Judicial recovery – Order of Assignments

⁷⁰² ⁷³⁶ ⁷⁴⁴ ⁷⁵⁷ ⁷⁶³ ⁷⁸⁶ ⁷⁹⁸ ⁸²² ⁸³⁸ ⁸³⁷ 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 ODA GBV, data in €mln

Actual vs. model cash repayments

Judicial + non judicial recovery, data in €mln

jan-21

*Source: management accounting data 25

feb-21

mar-21

apr-21

may-21

jun-21

jul-21

aug-21

sep-21

oct-21

nov-21

dec-21

jan-22

feb-22

mar-22

In May/June 2020 cash collections (mainly secured) were postponed due to court shutdown

apr-22

Actual cash repayments Model cash repayments

may-22

jun-22

jul-22

aug-22

sep-22

oct-22

nov-22

dec-22

jan-23

feb-23

mar-23

apr-23

may-23

jun-23

In 2Q22 cash collections in secured and corporate were impacted by longer auction timeframes due to court shutdown in 2020-21

Cash collection

Npl cash collection at €98mln. As planned in the 3Y Business Plan, the Bank is expecting a slight increase of settlements ("saldi e stralci") to reduce timeframe of collections 1

Data in € mln (excluding disposals)	1Q21	2Q21	3Q21	4Q21	1Q22	2Q22	3Q22	4Q22	1Q23	2Q23	2021 YE	2022 YE
Cash collection	81	89	82	94	91	91	101	100	97	1 98	345	384
Contribution to P&L**	64	70	66	74	73	71	67	84	73	69	273	295
Cash collection / contribution to P&L	127%	128%	124%	127%	125%	128%	152%	120%	134%	141%	127%	130%

*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*: GBV and NBV evolution

GBV - €mln	1Q21	2Q21	3Q21	4Q21	1Q22	2Q22	3Q22	4Q22	1Q23	2Q23
Waiting for workout - Positions at cost	1,147	107	1 203	3,409	2 3,850	4,193	1,571	1,284	1,096	1,149
Extrajudicial positions	10,987	11,280	11,657	10,804	11,155	11,379	13,386	14,302	14,196	13,510
- Ongoing attempt at recovery	10,578	10,846	11,196	10,321	10,670	10,896	12,914	13,831	13,720	13,035
- Non-judicial payment plans	409	434	461	483	485	483	471	471	476	475
Judicial positions	7,546	7,896	7,183	7,618	7,245	7,323	7,498	7,478	7,539	7,338
- Freezed**	3,243	3,644	2,883	2,010	1,662	1,715	1,725	1,627	1,708	1,609
- Court injunctions ["precetto"] issued and	686	700	727	771	818	858	913	978	1,018	1,073
foreclosures
- Order of assignments	702	736	744	757	763	786	798	822	838	837
- Secured and Corporate	2,915	2,816	2,830	4,080	4,002	3,963	4,062	4,051	3,975	3,819
Total	19,680	19,282	19,043	21,831	22,250	22,895	22,455	23,065	22,831	21,996

NBV - €mln	1Q21	2Q21	3Q21	4Q21	1Q22	2Q22	3Q22	4Q22	1Q23	2Q23
Waiting for workout - Positions at cost	112	15	31	136	148	159	77	114	86	*** 92
Extrajudicial positions	368	393	413	425	436	438	464	470	468	460
- Ongoing attempt at recovery	188	198	200	202	208	208	237	238	230	222
- Non-judicial payment plans	180	195	213	223	228	230	227	232	238	239
Judicial positions	916	961	930	917	898	908	929	921	929	913
- Freezed**	300	330	295	271	240	235	229	208	211	194
- Court injunctions ["precetto"] issued and foreclosures	162	161	166	172	181	187	200	207	209	216
- Order of assignments	292	305	306	310	320	333	335	346	355	355
- Secured and Corporate	162	165	163	164	157	154	164	160	154	149
Total	1,396	1,369	1,375	1,478	1,483	1,505	1,469	1,505	1,483	1,465

*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 1 The decrease in GBV of waiting for workout/positions at costs is due the beginning of the workout of a few large portfolios acquired in 2020 Acquisition of €3.4bn GVB in 4Q21 2

Npl Business*: P&L and cash evolution

Cash - €mln	1Q21	2Q21	3Q21	4Q21	1Q22	2Q22	3Q22	4Q22	1Q23	2Q23
Waiting for workout - Positions at cost
Extrajudicial positions	42	47	43	51	49	49	52	51	50	52
- Ongoing attempt at recovery	6	9	5	6	5	6	11	8	6	7
- Non-judicial payment plans	36	39	38	46	44	44	41	43	44	45
Judicial positions	39	42	39	42	42	42	49	49	48	45
- Freezed**	-	-	-	-	-	-	-	-	-	-
- Court injunctions and foreclosures + Order of assignments	30	30	31	32	33	32	35	37	36	34
- Secured and Corporate	9	12	7	11	9	10	14	13	12	11
Total	81	89	82	94	91	91	101	100	97	98

Npl Business*: portfolio diversification

Consumer

Other

Breakdown of GBV by type Breakdown of GBV by borrower age

*Source: management accounting data and risk management data (i.e. data refer only to property portfolio)

Binding offer to acquire Revalea from Mediobanca

(€mln) Revalea	2022
loans Customer	256
Other assets	28
Total assets	284
Payables due banks to	157
Other liabilities	11
Equity	117
Total liabilities and equity	284

Revalea Portfolio NPL	2022
(€/mln) GBV	6 837
Number of debtors /000	460
(€/000) debtor GBV per	9 14 ,
(€/mln) NBV	256

Binding offer to acquire from Mediobanca the entire equity of Revalea, subject to regulatory approval, for a consideration of €100mln. The €17mln badwill will be booked as PPA
As at 31 Dec 22, Revalea had a portfolio of unsecured small ticket NPLs of €6.8bn in terms of GBV (NBV of €256mln) bought by Mediobanca primarily from financial institutions in 2017-21. Mediobanca will continue to act as servicer to Revalea's NPL portfolio
The binding offer for Revalea has a strong strategic rationale for Banca Ifis:
- o Achieving the NPL purchase targets of the 2022-24 Business Plan, 1Y in advance at an attractive IRR, allowing for rigorous selectivity going forward
- o Negligible impact of calendar provisioning and benefits of Mediobanca financing
- o Good quality / knowledge of Revalea NPL portfolio, as Banca Ifis acted as bidder in most of the competitive processes in which Mediobanca/Revalea participated
- o Strengthening the partnership with Mediobanca with servicing capabilities and the purchase of consumer credit NPLs from Compass (wholly owned by Mediobanca)
The transaction confirms Banca Ifis's ability to execute complex and landmark NPL transactions, following the acquisition from Cerberus of a €2.8bn NPL portfolio
30 • The impact of the transaction is estimated ca. 40bps in terms of CET1 relative to the Business Plan

2.2 Consolidated financial data

Customer loans

• 2Q23 customer loans at €10,114mln (+3% QoQ) driven by:

o Normal seasonality in factoring (+4% QoQ) healthy YoY growth (excluding factoring vs. PA)
o Purchase of Government bonds in G&S (+€154mln QoQ)

Asset quality – 2Q23

Asset quality (€ mln)

Consolidated ratios	4Q22	1Q23	2Q23
Gross Npe*	5.9%	6.1%	5.9%
Net Npe*	4.0%	4.1%	3.9%

Commercial & Corporate Banking	Gross	Coverage %	Net
Bad loans	95	75%	24
UTPs	145	43%	83
Past dues	131	5%	125
Total Npes	371	38%	232

Non Core & G&S**	Gross	Coverage %	Net
Bad loans	12	52%	6
UTPs	35	23%	27
Past dues	8	35%	5
Total Npes	55	31%	38

• Asset quality ratios in 2Q23

o Gross Npe Ratio*: 5.9% (6.1% in 1Q23); 4.5% excluding loans in past due vs. Italian public health system
o Net Npe Ratio*: 3.9% (4.1% in 1Q23); 2.4% excluding loans in past due vs. Italian public health system
Gross and Net Npe in Commercial & Corporate Banking came in at €371mln (€378mln in 1Q23) and €232mln (€243mln in 1Q23), respectively
The New Definition of Default led to the reclassification mainly into past due of €103mln loans vs. the Italian public health system

*Includes commercial loans in Commercial Banking, Non Core and G&S. It excludes Npl business and €1.7bn Government bonds at amortized costs in G&S.

** 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

Funding

Funding (€mln)

Customer deposits +7% QoQ due to increase in repurchase agreements
Securitizations: €1,054mln of factoring and €400mln of Banca Credifarma securitizations
New bond issue of €300mln in Jan 2023 with 4Y maturity. In April 2023, Banca Ifis reimbursed €300mln senior bond
"Other" includes €796mln banking repo with underlying property portfolio
Average cost of funding at 2.76% in 2Q23 (2.24% in 1Q23)
Banca Ifis has €2.0bn TLTRO expiring in Sept. 2024
MREL at 12.15% of TREA. The requirement of ca. €1.2bn is entirely covered by equity

Proprietary portfolio: resiliency and positive contribution to P&L

Long term «fundamental» positioning strongly focused on investment grade bond area/high dividend equity stocks coupled with opportunistic trading approach
Low duration level
Use of enhancing and hedging strategies coupled with both risk and expected credit loss control
Strategic use (at around 76% of total assets (*) in 1H23) of HTC to reduce proprietary portfolio volatility
Low RWA density and relevant ECB / funding eligibility

1H2023 proprietary portfolio gross revenues at €46.1mln (),** +€16.5mln (+55% vs. 1H22)

€ 37mln gross interest revenues
€9.1mln trading and other income of which €8.8mln from dividends

of in €mln end of Type - Data asset at as (*) quarter	Bonds					total assets in 1H23)
	Government	Financial	Corporate	Equity	Total	floater bonds (more
Held collect/amortized to cost	1668	641	100		2409	27% of total assets
(FVOCI) Held collect and sell to	469	130	51	102	751	1H23) in case of further
Total (HTC and HTC&S)	2137	771	151	102	3160	inflation and short
Held for trading/Funds		7			8	rate increase
Total portfolio	2137	778	151	102	3168
of total Percentage	67 4% ,	24 6% ,	4 8% ,	3 2% ,	100 0% ,
Held collect/amortized Duration to cost	2 1 ,	3 3 ,	2 6 ,	NA	2 4 ,
(FVOCI) Held collect and sell Duration to	2 8 ,	2 9 ,	2 6 ,	NA	2 8 ,
FVTPL Duration		12 0 ,			12 0 ,
duration Average - YEARS	2 3 ,	3 3 ,	2 6 ,	NA	2 6 ,
(*) Evaluation HTC: amortized cost

Expected 2023 further revenues upside:

Estimated additional dividend flows at around €2mln
Gradually increasing interest income, potentially improved by inflation linked instruments (4,8% of total assets in 1H23) and floater bonds (more than 27% of total assets in 1H23) in case of further inflation and short term rate increase

Evaluation HTCS & HFT/Funds: market value

(**) Data excluding cost of funding

Reclassified consolidated operating costs*

Operating costs (€mln)

Personnel expenses (€mln)

*Figures exclude "Net allocations to provisions for risks and charges"

2Q23 operating costs

Banca Ifis employees

HR costs increase due to collective contract renegotiation accruals
+€13mln QoQ in other operating costs:
- o €4mln related to SRF payments in 2Q23 (€6mln provisions in 1Q23 released in 2Q23 – with 2€mln P&L benefit)
- o €8mln of NPL recovery expenses due to sizeable one-off in 1Q23 and pick up in activity in 2Q23

⁶¹ ⁵⁵ 72 51 64 2Q22 3Q22 4Q22 1Q23 2Q23

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

2.3 Company overview

A challenger, but with 40 years of track record

Commercial and Corporate Banking NPL

► Specialised player for SMEs, with a broad range of credit products (factoring, lending, leasing, and rental)
► Market leader in profitable businesses (e.g., SME factoring, Tech Rental, Pharmacies)
► "Light" commercial network (without cash services) rooted in the most industrialized areas of the country
► Customer interaction based on a high-performance service model and a reputation for efficiency
► Investor and servicer specialized in small ticket NPEs, with a distinctive vertically integrated business model
► Execution track record with originators, investors, and other servicers, supported by pricing capabilities and proprietary debtors' database
► Proven collection strategy with distinctive skip tracing¹ capabilities and internal "legal factory" team

1H23 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 revenues	137	86	31	58	175	37	349
% of total	39%	25%	9%	17%	50%	11%	100%
Loan loss provisions	0	(1)	(2)	(17)	(20)	3	(16)
Operating costs + risks and charges	(92)	(47)	(17)	(18)	(82)	(23)	(196)
Net income	30	26	8	16	49	12	92
Net income attributable to non controlling interests	0	0	0	0	0	0	1
Net income attributable to the Parent company							91
Net income (%)	33%	28%	9%	17%	54%	13%	100%

Customer Loans	1,476	2,558	1,499	2,327	6,384	2,255	10,114
RWA1	1,729	2,469	1,306	1,682	5,456	1,766	8,950
2 Allocated capital	259	371	196	252	819	265	1,343

(1) RWA Credit and counterparty risk only. It excludes RWA from operating, market risks and CVA (€1bn) (2) RWA (Credit and counterparty risk only)

Consistent "core net income" growth, driven by our capabilities, with a low risk profile

*Updated 2023 guidance well above 2023 Business Plan target of €137mln ** 2022 actual net income well above 2022 target of €118mln

Banca Ifis' risk profile

Structurally protected liquidity position (maturities)
Marginal contribution of extraordinary revenues
Diversification
Fragmentation of exposures and prudent credit policies
Progressive cost/income reduction through resource reskilling

Banca Ifis's superior risk-return trade-off (1/3)

* Loans mainly related to financial bonds portfolio 5Y (€0.3bn) and residual retail mortgages (€0.1bn).

Banca Ifis's superior risk-return trade-off (2/3)

Factoring	€ bn 2.6	Average Duration in Y 0.21*	Average ticket size €350k*
Leasing	1.3	2.7	€45k auto €60k equipment
Rental	0.2	2.0	€6k
Medium term lending	0.7	3.0	€300k
Loans to pharmacies	0.8	7.5	€400k
Structured finance	0.7	4.0	€12mln
NPLs	1.5	4.0	€12k
Government bonds	1.7	2.5	Government bonds classified as HTC
Other	0.7	-	€0.3bn financial bonds portfolio 5Y €0.1bn retail mortgages
*Excluding factoring to PA, taxed

incentives ("superbonus 110%") and VAT credit

Customer loans: >70% of Banca Ifis's customer loan book has a duration shorter than 3Y

Banca Ifis's superior risk-return trade-off (3/3)*

Very limited corporate deposits Customer deposit breakdown

Rendimax deposits: 83% protected by FITD