Dovalue

Quarterly Report • May 13, 2019

CONSOLIDATED INTERIM REPORT AS AT MARCH 31, 2019

SERVICING | LENDING | SOLUTIONS

CONSOLIDATED INTERIM REPORT AS AT MARCH 31, 2019

Registered office: Piazzetta Monte, 1 – 37121 Verona

Share capital €41,280,000.00 fully paid-up

Bank registered in the Register of Banks - ABI code no. 10639

Parent Company of dobank Banking Group registered in the register of banking groups - code no.10639

Registered in the Company Register of Verona, Tax ID no. 00390840239 and VAT registration no. 02659940239

Member of the National Interbank Deposit Guarantee Fund

www.dobank.com

CONTENTS

GOVERNING AND CONTROL BODIES 4
GROUP STRUCTURE 5
NOTES TO THE CONSOLIDATED INTERIM REPORT 7
Basis of preparation 7
Scope and method of consolidation 7
Accounting policies 7
INTERIM REPORT ON OPERATIONS 10
Introduction 10
The Group's business 10
Group highlights 12
GROUP RESULTS AT MARCH 31, 2019 15
Performance 15
Segment Reporting 20
Group financial position 22
Shareholders' equity and capital ratios 27
Significant events during the period 29
Significant events after the end of the period 29
Outlook for operations 29
Disclosure on the opt-out option 30
FINANCIAL STATEMENTS 31
Consolidated Balance Sheet 32
Consolidated Income Statement 33
Consolidated statement of comprehensive income 34
Consolidated statement of changes in shareholders' equity 35
Consolidated cash flow statement 36
Statement reconciling the condensed consolidated income statement and the statutory consolidated income statement 37
Statement reconciling the reclassified consolidated balance sheet and the statutory consolidated balance sheet 38
CERTIFICATION OF THE FINANCIAL REPORTING OFFICER 39

GOVERNING AND CONTROL BODIES

BOARD OF DIRECTORS

Chairman	Giovanni Castellaneta (2) (4)
CEO	Andrea Mangoni
Directors	Francesco Colasanti (6)
	Emanuela Da Rin
	Giovanni Battista Dagnino (3) (2)
	Nunzio Guglielmino (4) (5)
	Giovanni Lo Storto (1) (6)
	Giuseppe Ranieri
	Marella Idi Maria Villa

BOARD OF STATUTORY AUDITORS

Alternate Auditors Sonia Peron

AUDIT FIRM EY S.p.A.

Financial Reporting Officer Elena Gottardo

Chairman Chiara Molon (7) Standing Auditors Francesco Mariano Bonifacio (8) Nicola Lorito (8) Roberta Senni

At the date this Consolidated Interim Report was approved

Notes

• (1) Chairman Appointments Committee
• (2) Member Appointments Committee
• (3) Chairman Risk and Operations with Affiliated Persons Committee
• (4) Member Risk and Operations with Affiliated Persons Committee
• (5) Chairman Remuneration Committee
• (6) Member Remuneration Committee
• (7) Chairman Supervisory Committee, pursuant to Legislative Decree 231/2001

(8) Member Supervisory Committee, pursuant to Legislative Decree 231/2001

GROUP STRUCTURE

The following chart shows the composition of the doBank Group as at March 31, 2019:

doBank was formed in from the combination, under the leadership of Fortress, of Italy's two largest independent servicers: UCCMB, later renamed doBank and originally part of the UniCredit Group, and Italfondiario.

In 2016, doBank acquired 100% of Italfondiario, one of Italy's leading managers of performing and non-performing receivables on an outsourcing basis. Following the acquisition, the doBank Group was born, a market leader with more than 18 years of experience in the sector in Italy.

In July 2017, the doBank stock debuted on the stock exchange with an offer of ordinary shares targeted at institutional investors, both Italian and international, which was concluded in advance due to the strong interest shown by investors. doBank shares are traded under ISIN IT0001044996 and ticker symbol DOB [Bloomberg: DOB IM].

In addition to confirming its leadership position in the credit management sector in Italy, 2018 marks the entry of doBank into international markets, first in Greece with a contract for the management of a €1.8 billion portfolio from four systemic banks in July, then in the wider market of southern Europe with the agreement to acquire Altamira Asset Management, a company present in Spain, Portugal, Cyprus and Greece, on December 31, 2018. The expansion in the Greek market and the agreement for the acquisition of Altamira represent important steps forward in the implementation of the 2018-2020 Business Plan presented by doBank in June 2018. doBank expects to close the acquisition of Altamira by the end of the first half of 2019.

NOTES TO THE CONSOLIDATED INTERIM REPORT

Basis of preparation

The Consolidated Interim Report as at March 31, 2019, has been prepared on a voluntary basis in order to ensure continuity with the previous quarterly report as at September 30, 2019, as Legislative Decree 25/2016 implementing Directive 2013/50/EU eliminated the requirement for periodic financial reporting in addition to the half-year and annual reports.

The schedules in this Consolidated Interim Report have been prepared in compliance with the applicable IAS/IFRS, from which no departures have been made.

The document has not been prepared in accordance with the international accounting standard applicable to interim reporting (IAS 34 – Interim Financial Reporting) in view of the fact that the doBank Group applies that standard in the preparation of its Consolidated Half-Year Report and not to its quarterly reporting.

Consistent with the previous periodic reports, and to ensure the full comparability of the quantitative information provided, the Consolidated Interim Report as at March 31, 2019 has been prepared in thousands of euros – unless otherwise indicated – and includes the reclassified financial statements and the consolidated financial statements prepared in compliance with the sixth update of Bank of Italy Circular 262/2005. In addition to amounts for the period under review, the latter present the corresponding comparative figures as at March 31, 2018 for the income statement and the cash flow statement and as at December 31, 2018 for the balance sheet.

The Consolidated Interim Report as at March 31, 2019 has been prepared on a goingconcern basis in compliance with the provisions of IAS 1, and on an accrual basis in accordance with the principles of the relevance and materiality of accounting information, the prevalence of economic substance over legal form and with a view to facilitating consistency with future presentations.

Scope and method of consolidation

As at March 31, 2019, the Group comprises the Parent Company doBank S.p.A., the whollyowned subsidiaries Italfondiario S.p.A., doData S.r.l., doSolutions S.p.A., New Bank SC S.p.A. (not yet operational) and doValue Hellas.

The methods used to account for the subsidiaries (line-by-line consolidation) and the associate (equity-method accounting) are the same as those adopted for the 2018 Annual Report of the doBank Group, which readers are invited to consult.

The financial statements of the Parent Company and the other companies used to prepare the Interim Report are those prepared as at March 31, 2019. Where necessary, the financial statements of consolidated companies that may have been prepared on the basis of different accounting policies have been adjusted to ensure their consistency with the Group's accounting policies.

Accounting policies

In application of Legislative Decree 38 of February 25, 2005, this Consolidated Interim Report as at March 31, 2019 has been prepared in accordance with the accounting standards

issued by the International Accounting Standards Board (IASB), including SIC and IFRIC interpretations, endorsed by the European Commission, as provided for in Regulation (EU) no. 1606 of July 19, 2002.

The accounting policies adopted in this Consolidated Interim Report for the recognition, measurement and derecognition of assets and liabilities and the recognition of costs and revenues have been updated from those adopted in the preparation of the consolidated financial statements as at December 31, 2018 following the entry into force as from January 1, 2019, of the new international accounting standards IFRS 16 "Leases".

Effects of first-time application of IFRS 16 – Leases

IFRS 16, applicable to annual accounting periods beginning on or after January 1, 2019, replaces IAS 17 and all related interpretations (IFRIC 4 Determining whether an arrangement contains a lease, SIC 15 Operating leases - Incentives, SIC 27 Evaluating the substance of the transactions involving the legal form of the lease).

The standard establishes that the recognition and presentation of items shall take account of the substance of the transaction or the contract.

Therefore, all leases shall be reported by the entity in the balance sheet as assets and liabilities and no longer off balance sheet as in the case of operating leases. At the time of initial recognition, the asset shall be measured on the basis of the cash flows associated with the lease, including, in addition to the present value of the lease payments, the initial direct costs associated with the lease and any costs necessary to restore the asset at the end of the lease. After initial recognition, the asset is measured on the same basis as property, plant and equipment. The standard requires the recognition in profit or loss of the depreciation on the asset and the separate recognition of the interest component of the lease payment.

A preliminary analysis of the impact of the application of IFRS 16 within the Group was carried out during 2018 with the involvement of various Group departments.

The Group will apply the modified retrospective approach envisaged in paragraph C.5 b) of IFRS 16, accounting for the cumulative effect of initial application of the standard at the transition date (January 1, 2019); consequently, no significant impacts are expected on the Group's shareholders' equity.

The Group has elected to use the two exemptions envisaged for first-time application of the standard for the following contracts:

• Short-term leases (term of less than or equal to 12 months);

• Low-value leases (less than €5,000).

Taking account of the extent to which the Group uses leases, the adoption of the new accounting standard has increased both assets and liabilities as a result of the recognition of the rights-of-use and the associated liabilities, the values for which are reported in the following table. (€/000)

Leasing category IFRS 16	Group legal entity	Liability	Right of Use	Provisions for risks and charges	number of assets
Office premises	doBank	10,661	10,812	151	20
Employee accomodation	doBank	467	467	-	6
Company cars	doBank	519	519	-	22
Total		11,647	11,798	151	48

The provisions for risks and charges exclusively report the discounted value of the charges expected to be incurred to restore office premises at the end of the leases.

Impact of the transition to IFRS 16 on the balance sheet

(€/000)
	AMOUNTS AT	Impact of	AMOUNTS AT
Assets	12/31/2018 (A)	transition to IFRS 16 (B)	01/01/2019 (C) = (A) + (B)
10 Cash and cash equiv alents	15	-	15
20 c) Other financial assets mandatorily measured at fair v alue through profit or loss	34,250	-	34,250
30 Financial assets measured at fair v alue through comprehensiv e income	999	-	999
40 Financial assets measured at amortised cost a) Loans and receiv ables with banks	73,527	-	73,527
40 Financial assets measured at amortised cost a) Loans and receiv ables with customers	1,964	-	1,964
90 Property, plant and equipment	2,810	11,798	14,608
100 Intangible assets	6,847	-	6,847
110 Tax assets	81,439	-	81,439
120 Non-current assets and disposal groups held for sale	710	-	710
130 Other assets	114,475	-	114,475
Total assets	317,036	11,798	328,834

	AMOUNTS AT	Impact of	AMOUNTS AT
Liabilities and shareholders' equity	12/31/2018 (A)	transition to IFRS 16 (B)	01/01/2019 (C) = (A) + (B)
10 Financial liabilities measured at amortised cost b) Due to customers	294	11,647	11,941
60 Tax liabilities	8,189	-	8,189
a) current	8,168	-	8,168
b) deferred	21	-	21
70 Liabilities associated with non-current assets and disposal groups held for sale	6,532	-	6,532
80 Other liabilities	38,901	-	38,901
90 Employee termination benefits	9,577	-	9,577
100 Prov isions for risks and charges	20,754	151	20,905
120 Valuation reserv es	591	-	591
150 Reserv es	140,324	-	140,324
170 Share capital	41,280	-	41,280
180 Treasury shares (-)	(246)	-	(246)
200 Net profit (loss) for the period (+/-)	50,840	-	50,840
Total liabilities and shareholders' equity	317,036	11,798	328,834

The impact on profit or loss of the transition to IFRS 16 is reported in the section on Group results at March 31, 2019: in order to enable a uniform comparison of the data, a restated income statement for the first quarter of 2018 has been prepared assuming the application of IFRS 16 as from January 1, 2018.

INTERIM REPORT ON OPERATIONS

Introduction

The summary results and performance-financial indicators are based on data draw from the accounts and are used in the monitoring of performance by management and in management reporting. They are also consistent with the most commonly used metrics in the sector, ensuring the comparability of the figures presented.

The Group's business

The doBank Group is a leader in Italy and Greece in the management of primarily nonperforming loans for banks, investors and public and private financial institutions (Servicing), with a portfolio under management of more than €81 billion in Italy and about €1.8 billion in Greece (Gross Book Value) at the end of the first quarter of 2019. The doBank Group also provides ancillary commercial, real estate and legal products and services (Ancillary Products).

Within the Group, doBank is specialised in Special Servicing and Real Estate activities, and its subsidiary Italfondiario primarily performs Master Servicing activities, while Ancillary Products connected with recovery activities are completed by doData and the internal Judicial Management unit.

In 2018 a significant corporate reorganisation was undertaken, which in the second quarter of 2019 will see doBank, subject to the issue of the required authorisations, take the form of a servicing company governed by Article 115 of the Consolidated Public Security Act (TULPS), thus ceasing to be a banking group. The reorganisation and debanking process that has been initiated is intended to make the Group's structure more coherent with the doBank business mix, which generates almost all of its revenues from servicing activities, with only residual banking activity and enable more optimal and flexible use of its financial resources, which are currently subject to the capital restrictions envisaged for banking groups.

Within the Servicing business, the services offered by the doBank Group include, among others:

• "Collection and Recovery": services comprising all loan administration, management and recovery activities, utilising in court and out-of-court recovery processes for and on behalf of third parties with regard to portfolios of performing, unlikely-to-pay (UTP) and non-performing loans (NPL, bad loans);
• "Due Diligence": services including the collection and organisation of information in data room environments as well as the analysis and assessment of loan portfolios for the preparation of business plans for collection and recovery activities;
• "Structuring": services including structuring securitisation transactions under Law 130/1999 as well as performing the role of authorized entity in securitisation transactions;

• "Co-investment": activities of co-investment in loan portfolios in partnership with major financial investors, where such activities are instrumental in obtaining servicing contracts. This business involves taking minority positions in securities issued by securitisation vehicles governed by Law 130/1999.

The Ancillary Products connected with recovery activities include, among others, the collection, processing and provision of commercial, real estate and legal information relating to debtors as well as the provision of legal services. Among the minor activities, until the end of the first quarter of 2019 the doBank Group also offered selected banking products, primarily linked to its servicing activities, such as granting mortgage loans, mainly in foreclosure auctions, and managing deposit accounts for selected clients, which together are designated Ancillary Products and Other Minor Activities. The provision of these banking products was suspended at the end of the first quarter as part of the corporate reorganisation process referred to above. Specifically, the Parent Company, doBank, closed current accounts with customers and, pursuant to Article 58 of the Consolidated Banking Act, transferred any residual assets connected with that banking activity to the subsidiary Italfondiario.

Both doBank and Italfondiario, in their capacity as special servicers, have been rated "RSS1-/CSS1-" by Fitch Ratings, and "Strong" by Standard & Poor's. The Servicer Ratings assigned to doBank and Italfondiario are the highest of those assigned to Italian operators in the sector. In addition, these ratings were assigned to doBank and Italfondiario back in 2008, before any other operator in the industry in Italy. In 2017, doBank was also assigned a Master Servicer rating of "RMS2/CMS2/ABMS2" by Fitch Ratings.

The doBank Group has long been a major partner of leading Italian and foreign financial institutions and institutional investors. The Group's customer base can be divided into two main categories that reflect the type of activity carried out: (i) Banks, for which the Group mainly performs "Collection and Recovery" activities and (ii) Investors, for which doBank also carries out "Due Diligence" and "Structuring" activities as well as "Collection and Recovery". doBank offers both groups of customers the entire range of Ancillary Products connected with Recovery activities.

Group highlights

(€/000)
Key data of the consolidated income statement		First Quarter	Change
		2018 RESTATED ⁽¹⁾	Amount	%
Gross Rev enues	54,355	46,385	7,970	17%
Net Rev enues	50,160	41,443	8,717	21%
Operating expenses	(34,987)	(29,885)	(5,102)	17%
EBITDA	15,173	11,558	3,615	31%
EBITDA Margin	28%	25%	3%	12%
Non-recurring items ⁽²⁾	(931)	-	(931)	n.s.
EBITDA excluding non-recurring items	16,104	11,558	4,546	39%
EBITDA Margin excluding non-recurring items	30%	25%	5%	19%
EBT	13,230	10,404	2,826	27%
EBT Margin	24%	22%	2%	9%
Net Profit (Loss) attributable to the Group	7,712	6,487	1,225	19%
Net Profit (Loss) attributable to the Group excluding non-recurring items	8,286	6,487	1,800	28%

⁽¹⁾ In order to enhance the comparability of the figures for 2019 with the figures in the income statement, the effects of the application of the new IFRS 16 Leases as from January 1, 2019 have been included. See also the separate reconciliation table.

⁽²⁾ Non-recurring items include the costs incurred for the Group reorganisation project and those connected with the acquisition of Altamira Asset Management S.A..

(€/000)

			Change
Key data of the consolidated balance sheet	3/31/2019	12/31/2018	€	%
Cash and liquid securities	62,125	74,443	(12,318)	(17)%
Financial assets	49,998	36,312	13,686	38%
Trade receiv ables	104,356	99,224	5,132	5%
Tax assets	84,098	87,355	(3,257)	(4)%
Total assets	332,922	317,036	15,886	5%
Trade payables	20,674	21,848	(1,174)	(5)%
Other liabilities	62,297	15,362	46,935	n.s.
Prov isions for risks and charges	23,003	20,754	2,249	11%
Shareholders' equity	204,539	232,789	(28,250)	(12)%

(€/000)

Regulatory Indicators - C.B.A.	3/31/2019	12/31/2018	Change		31/03/2019
			€	%	CRR Group
Own Funds	173,709	155,658	18,051	12%	122,478
RWA	612,070	595,006	17,064	3%	615,555
CET 1 capital ratio	28.38%	26.16%	2.22%	8%	19.90%
Total capital ratio	28.38%	26.16%	2.22%	8%	19.90%

In order to facilitate an understanding of the doBank Group's performance and financial position, a number of alternative performance measures ("Key Performance Indicators" or "KPIs") have been selected by the Group. They are summarised in the following table.

(€/000)

Key performance indicators	3/31/2019	3/31/2018 RESTATED ⁽¹⁾	12/31/2018
Gross Book Value Italy (Eop) - in millions of Euro -	81,404	87,523	82,179
Gross Book Value Greece (Eop) - in millions of Euro -	1,800	-	-
Collections for the period - in millions of Euro -	403	374	1,961
Collections for the Last Twelv e Months (LTM) - in millions of Euro -	1,990	1,817	1,964
LTM Collections/GBV (EoP)	2.4%	2.1%	2.4%
LTM Collections Stock/GBV Stock (EoP)	2.5%	2.4%	2.5%
Staff FTE/Total FTE	38%	37%	39%
LTM Collections/Serv icing FTE	2,766	2,523	2,668
Cost/Income ratio	70%	72%	61%
EBITDA	15,173	11,558	81,293
Non-recurring items	(931)	-	(2,712)
EBITDA excluding non-recurring items	16,104	11,558	84,005
EBT	13,230	10,404	80,202
EBITDA Margin	28%	25%	35%
EBITDA Margin excluding non-recurring items	30%	25%	36%
EBT Margin	24%	22%	34%
Earning per share (Euro)	0.10	8%	0.65
Earning per share excluding non-recurring items (Euro)	0.11	8%	0.67
EBITDA – Capex	14,368	11,119	75,885
Net Working Capital	83,682	82,427	77,376
Net Financial Position of cash/(debt)	62,125	48,335	67,911

⁽¹⁾ In order to enhance the comparability of the figures for 2019 with the figures in the income statement, the effects of the application of the new IFRS 16 Leases as from January 1, 2019 have been included. See also the separate reconciliation table.

Key

Gross Book Value Italy/Greece (EoP): Indicates the book value of the loans under management at the end of the reference period, gross of any potential write-downs due to expected loan losses.

Collections for the period: used to calculate commissions for the purpose of determining revenues from the servicing business, they illustrate the Group's ability to extract value from the portfolio under management.

Collections for last 12 months (LTM): collections in the twelve months prior to the reference date. The aggregate is used in interim periods to enable a like-for-like comparison with the annual figure.

LTM collections/GBV Italy (Gross Book Value): the ratio between total gross LTM collections and the period-end GBV of the total portfolio under management. This indicator represents another metric to analyse collections for the period and LTM in absolute terms, calculated in relation to the effectiveness rate of collections, i.e. the yield of the portfolio under management in terms of annual collections and, consequently, commission income from management activities.

LTM collections Stock/GBV Stock Italy (Gross Book Value): the ratio between total gross LTM collections on the portfolio at the start of the reference year and the end-period GBV of that portfolio. Compared with the previous indicator LTM collections/GBV, this metric represents the effectiveness rate of recoveries normalised for the entry of new portfolios during the reference year.

Staff FTE/Total FTE: the ratio between the number of employees who perform support activities and the total number of full-time employees of the Group. The indicator illustrates the efficiency of the operating structure and the focus on management activities.

LTM collections/Servicing FTE: the ratio between total LTM collections and the number of employees who perform servicing activities. The indicator provides an indication of the collection efficiency rate, i.e. the yield of each individual employee specialised in servicing activities in terms of annual collections on the portfolio under management.

Cost/Income ratio: calculated as the ratio between operating expenses and total operating revenues presented in the reclassified Income Statement. It is one of the main indicators of the Group's operating efficiency: the lower the value of the indicator, the greater the efficiency of the Group.

EBITDA and EBT: together with other relative profitability indicators, they highlight changes in operating performance and provide useful information regarding the Group's economic performance.

Non-recurring items: items generated in extraordinary operations such as corporate restructurings, acquisitions or disposals of entities, start-up of new businesses or entry into new markets.

EBITDA excluding non-recurring items: EBITDA attributable to core operations, excluding all items connected with extraordinary operations such as corporate restructurings, acquisitions or disposals of entities, start-up of new businesses or entry into new markets.

EBITDA Margin and EBT Margin: obtained by dividing EBITDA and EBT by Gross Revenues.

Earnings per share: calculated as the ratio between net profit for the period and the number of outstanding shares at the end of the period.

Earnings per share excluding non-recurring items: the calculation is the same as that for earnings per share, but the numerator is equal to net profit for the period excluding non-recurring items net of the associated tax effects. The latter is calculated using the normalised tax rate for the period, i.e. excluding the DTA charge.

EBITDA – Capex: calculated as EBITDA net of investments in fixed capital (including property, plant and equipment and intangible and financial assets) ("Capex"). Together with other relative profitability indicators, it highlights changes in operating performance and provides an indication on the Group's ability to generate cash.

Net Working Capital: this is represented by receivables for fees invoiced and accruing, net of payables to suppliers for invoices accounted for and falling due in the period.

Net Financial Position: this is calculated as the sum of cash, cash equivalents and highly-liquid securities, net of amounts due to banks for loans and due to customers for the current accounts opened with the Group.

GROUP RESULTS AT MARCH 31, 2019

Performance

The following table presents the reclassified income statement as at March 31, 2019 with comparative figures as at March 31, 2018 ("First quarter of 2018 Restated") restated to ensure comparability and therefore retrospectively reflect the impact of the application of the new IFRS 16 Leases.

As notes in the section on accounting policies, from January 1, 2019 the application of the new standard entails a different calculation and a different classification of lease payments, which until December 31, 2018 had been recognised under administrative expenses and therefore included in the calculation of EBITDA: they are now broken down into depreciation of property, plant and equipment and interest and fees on financial assets for the financial expense component.

In order to enable a comparison of the values, therefore, the first quarter of 2018 "restated" was determined as follows.

Restatement of the first quarter of 2018, with indication of the impact of IFRS 16 Leases

The following table provides a restatement of the income statement published in the Consolidated Interim Report for the first quarter of 2018, showing the impact of IFRS 16 as if it had been applied retrospectively as from January 1, 2018.

Please note that this restatement is not required by the standard and has been prepared on a voluntary basis for management income statement data only, in order to enable a comparison of the figures for 2019 with those for the corresponding period of the previous year.

The calculation of the impact of IFRS 16 is therefore an estimate based on outstanding leases in the first quarter of 2018.

(€/000)
Condensed consolidated income statement	First Quarter		First Quarter
	2018		IFRS 16 impact 2018 RESTATED
Serv icing rev enues	41,947	-	41,947
o/w Banks	27,052	-	27,052
o/w Investors	14,895	-	14,895
Co-inv estment rev enues	236	-	236
Ancillary and other rev enues	4,202	-	4,202
Gross Revenues	46,385	-	46,385
Outsourcing fees	(4,942)	-	(4,942)
Net revenues	41,443	-	41,443
Staff expenses	(22,498)	-	(22,498)
Administrativ e expenses	(7,944)	557	(7,387)
o/w IT	(2,765)	-	(2,765)
o/w Real Estate	(1,927)	528	(1,399)
o/w SG&A	(3,252)	29	(3,223)
Operating expenses	(30,442)	557	(29,885)
EBITDA	11,001	557	11,558
EBITDA Margin	24%	0%	25%
Impairment/Write-backs on property, plant, equipment and intangible assets	(559)	(635)	(1,194)
Net Prov isions for risks and charges	(211)	(1)	(212)
Net Write-downs of loans	8	-	8
Net income (losses) from inv estments	340	-	340
EBIT	10,579	(79)	10,500
Net financial interest and commissions	(46)	(50)	(96)
EBT	10,533	(129)	10,404
Income tax for the year	(3,960)	43	(3,917)
Net Profit (Loss) attributable to the Group	6,573	(86)	6,487

Condensed consolidated income statement	First Quarter		First Quarter	Change
	2019		2018 RESTATED ⁽¹⁾	Amount	%
Serv icing rev enues		48,457	41,947	6,510	16%
o/w Banks		30,698	27,052	3,646	13%
o/w Investors		17,759	14,895	2,864	19%
Co-inv estment rev enues		167	236	(69)	(29)%
Ancillary and other rev enues		5,731	4,202	1,529	36%
Gross Revenues		54,355	46,385	7,970	17%
Outsourcing fees		(4,195)	(4,942)	747	(15)%
Net revenues		50,160	41,443	8,717	21%
Staff expenses		(25,898)	(22,498)	(3,400)	15%
Administrativ e expenses		(9,089)	(7,387)	(1,702)	23%
Operating expenses		(34,987)	(29,885)	(5,102)	17%
EBITDA		15,173	11,558	3,615	31%
EBITDA Margin		28%	25%	3%	12%
Non-recurring items included in EBITDA ⁽²⁾	(931)		-	(931)	n.s.
EBITDA excluding non-recurring items	16,104		11,558	4,546	39%
EBITDA Margin excluding non-recurring items	30%		25%	5%	19%
Impairment/Write-backs on property, plant, equipment and intangible assets		(1,646)	(1,194)	(452)	38%
Net Prov isions for risks and charges		(266)	(212)	(54)	25%
Net Write-downs of loans		84	8	76	n.s.
Net income (losses) from inv estments		-	340	(340)	(100)%
EBIT		13,345	10,500	2,845	27%
Net financial interest and commissions		(115)	(96)	(19)	20%
EBT		13,230	10,404	2,826	27%
Income tax for the year		(5,518)	(3,917)	(1,601)	41%
Net Profit (Loss) attributable to the Group		7,712	6,487	1,225	19%
Non-recurring items included in Net Profit (Loss) attributable to the Group	(574)		-	(574)	n.s.
Net Profit (Loss) attributable to the Group excluding non-recurring items	8,286		6,487	1,800	28%
Earnings per share (Euro)		0.10	0.08	0.02	19%
Earnings per share excluding non-recurring items (Euro)	0.11		0.08	0.02	27%

⁽¹⁾ In order to enhance the comparability of the figures for 2019 with the figures in the income statement, the effects of the application of the new IFRS 16 Leases as from January 1, 2019 have been included. See also the separate reconciliation table.

⁽²⁾ Gli elementi non ricorrenti includono costi del progetto di riorganizzazione del Gruppo e oneri legati al progetto di acquisizione di Altamira Asset Management S.A.

The formation of EBITDA

EBITDA amounted to €15.2 million, up €3.6 million compared with the first three months of 2018 restated (+31%), reaching 28% of revenues, an improvement of 3 percentage points on the 25% posted in the first quarter of 2018. Excluding non-recurring charges of €931 thousand specified below, EBITDA increased by 39% to €16.1 million and 30% of revenues, up 5 percentage points on the year-earlier period. The restatement 2018 EBITDA in order to ensure the comparability with the figures for 2019 following the transition to IFRS 16 essentially regarded lease costs for real estate.

(€/000)
		First Quarter	Change
Net revenues	2019	2018 RESTATED	Amount	%
Serv icing rev enues	48,457	41,947	6,510	16%
o/w Banks	30,698	27,052	3,646	13%
o/w Investors	17,759	14,895	2,864	19%
Co-inv estment rev enues	167	236	(69)	(29)%
Ancillary and other rev enues	5,731	4,202	1,529	36%
Gross Revenues	54,355	46,385	7,970	17%
Outsourcing fees	(4,195)	(4,942)	747	(15)%
Net revenues	50,160	41,443	8,717	21%

The growth in EBITDA was driven by the performance of gross revenues, which at the end of the first quarter of 2019 amounted to €54.3 million, up 17% on March 31, 2018.

Servicing revenues amounted to €48.5 million, an increase of 16% on the year-earlier period, reflecting an increase in the volume of recoveries (+8%) and the consequent increase in performance fees as well as an increase in revenues from portfolio transfer indemnities. Note that the increase in the volume of recoveries was not influenced by the increase in portfolio transfer indemnities, exclusively reflecting core portfolio management activities.

The performance of base fees, despite the stability of average fees as a proportion of the GBV of assets under management, was affected by the reduction in the portfolio under management, which compared with the first quarter of 2018 contracted by 7% following recoveries and the assignment of loans by a number of customers.

Collections as a ratio of end-period Gross Book Value (expressed by the indicator "LTM Collections/GBV (EoP)") in the last 12 months amounted to 2.4%, an increase on the 2.1% posted in the first quarter of 2018 (and in line with the 2.4% seen at the end of 2018). Excluding new management contracts, the indicator "LTM Stock/GBV Stock (EoP)" would be 2.5%, also an improvement on the 2.4% registered for the first quarter of 2018 and in line with the end of December 2018.

Among revenues from co-investment, the contribution of revenues from the ABSs of the two securitisations Romeo SPV and Mercuzio Securitisation was broadly unchanged compared with the first quarter of 2018 (-€69 thousand). A more significant contribution came from revenues from ancillary products and minor activities, generated primarily by business information services, due diligence activities and administrative servicing. They represent 10.5% of total gross revenues for the period (9% at March 31, 2018), an increase of 36% on the same period of the previous year. The item includes the reimbursement of costs incurred in managing the contract with the four system banks, equal to more than €1 million.

Additional gains in net revenues are attributable to a contraction of 15% in fee and commission expense compared with 2018, the consequence of a decrease in use of the external network. As a proportion of revenues, fee and commission expense improved from 11% in the first quarter of 2018 to 8% this year.

(€/000)		First Quarter
Operating expenses	2019	2018 RESTATED	Amount	%
Staff expenses	(25,898)	(22,498)	(3,400)	15%
Administrativ e expenses	(9,089)	(7,387)	(1,702)	23%
o/w IT	(3,349)	(2,765)	(584)	21%
o/w Real Estate	(1,416)	(1,399)	(17)	1%
o/w SG&A	(4,324)	(3,223)	(1,101)	34%
Operating expenses	(34,987)	(29,885)	(5,102)	17%
Non-recurring items included in EBITDA	(931)	-	(931)	n.s.
EBITDA excluding non-recurring items	16,104	11,558	4,546	39%

Operating expenses amounted to about €35 million, an increase of 17% on the same period of 2018, a smaller rise than the 21% growth in net revenues. The performance reflects both a number of non-recurring items, which are discussed in greater detail below, and an increase in costs for IT activities connected with the development of applications and the increase in personnel involved in start-up activities, in particular in Greece and in the UTP business.

More specifically, staff expenses, which represent 74% of total operating expenses, increased by about €3 million as a result of an increase in the workforce (an increase of 6% in FTEs at the end of the period) and a slight rise in average costs. Note that the 2018-2020 Business Plan presented in June 2018 includes project to achieve efficiencies in staff expenses, which as planned will have their greatest effect as from 2020.

Administrative costs amounted to €9.1 million, compared with €7.4 million at March 31, 2018, an increase of 23%, mainly in the IT area (+21%) and other overheads (+34%). Specifically, the IT costs regarded developments in Italy and the Greek business, while overheads include nonrecurring costs connected with the acquisition of Altamira and other one-off expenses for the project to implement the new corporate structure of the Group.

As in 2018, operating expenses in the first quarter of 2019 included certain non-recurring items, which have been used to adjust EBITDA in order to facilitate a comparison between periods and clarify the Group's structural profitability.

These non-recurring items, which were not present in the first quarter of 2018, amounted to €931 thousand and include:

• (i) the Group reorganization project envisaged in the 2018-2020 Business Plan, which includes, among its primary lines of growth, a greater focus on UTP servicing; and
• (ii) part of the costs related to the agreement announced on December 31, 2018 to acquire the servicer Altamira Asset Management, a European leader in the management of loans and real estate assets, with assets under management of some €55 billion and a presence in the Spanish, Cypriot, Portuguese and Greek markets.

The formation of EBIT and EBT

Group EBIT amounted to €13.3 million, compared with €10.5 million at March 31, 2018 (+27%), while EBT was slightly lower at €13.2 million, compared with €10.4 million in the same period of 2018 (+27%), as detailed in the following table.

(€/000)

		First Quarter	Change
EBIT and EBT	2019	2018 RESTATED	Amount	%
EBITDA	15,173	11,558	3,615	31%
Impairment/Write-backs on property, plant, equipment and intangible assets	(1,646)	(1,194)	(452)	38%
Net Prov isions for risks and charges	(266)	(212)	(54)	25%
Net Write-downs of loans	84	8	76	n.s.
Net income (losses) from inv estments	-	340	(340)	(100)%
EBIT	13,345	10,500	2,845	27%
Net financial interest and commissions	(115)	(96)	(19)	20%
EBT	13,230	10,404	2,826	27%

Net impairment/write-backs on property, plant and equipment and intangible assets include the depreciation of rights of use identified under the new rules for accounting for leases following the introduction of IFRS 16. In the first quarter of 2019 this amounted to €777 thousand, while in the figures restated for 2018, it amounted to €635 thousand. The remainder of depreciation and amortization mainly regarded amortisation of software licences. The aggregate increased by 55% compared with 2018, reflecting the technology investments of the Group as part of the upgrading of the IT platform.

Net provisions for risks and charges were €266 thousand, broadly unchanged compared with the first quarter of 2018 (+€54 thousand).

Profit (loss) of equity investments for the quarter made no contribution to performance for the period, unlike the year-earlier period when the item reflected the measurement at equity of the investment in BCC Gestione Crediti S.p.A., which was sold in the third quarter of 2018.

The formation of net profit for the period

(€/000)
		First Quarter	Change
Net result for the period	2019	2018 RESTATED	Amount	%
EBT	13,230	10,404	2,826	27%
Income tax for the period	(5,518)	(3,917)	(1,601)	41%
Net Profit (Loss) attributable to the Group	7,712	6,487	1,225	19%
Earnings per share (in Euro)	0.10	0.08	0.02	19%
Non-recurring items included in Net Profit (Loss) attributable to the Group	(574)	-	(574)	n.s.
Net Profit (Loss) attributable to the Group excluding non-recurring items	8,286	6,487	1,800	28%
Earnings per share excluding non-recurring items (Euro)	0.11	0.08	0.02	27%

Income taxes for the period amounted to €5.5 million, for an overall tax rate of 42%. This amount includes the DTA charge for the quarter of €450 thousand. The tax rate excluding the DTA charge is equal to 38%.

Net profit for the year, which in the absence of profit pertaining to non-controlling interests, pertains entirely to the shareholders of the Parent Company, amounted to €7.7 million, up 19% compared with the same period of 2018. Excluding non-recurring items, taking account of the associated tax effects calculated at a tax rate of 38%, consolidated net profit came to €8.3 million, an increase of 28% compared with the first quarter of 2018.

Segment Reporting

The doBank Group's business model can be analysed in two main dimensions:

• Customers;
• Business Lines.

The doBank Group's customer base can be broken down into two main categories: Banks and Investors. The business lines represent the aggregation of products/services offered by the Group, and fall into two categories: Servicing and Ancillary Products and Minor Activities.

Based on these criteria, the following table reports the revenues and EBITDA of the business segments.

(€/000)
			First Quarter 2019
Condensed consolidated income statement	Banks	Investors	Total Servicing	%	Ancillary & other	%	Total
Serv icing rev enues	30,698	17,309	48,007		450		48,457
o/w Banks	30,698	-	30,698		-		30,698
o/w Investors	-	17,309	17,309		450		17,759
Co-inv estment rev enues	-	-	-		167		167
Ancillary and other rev enues	-	-	-		5,731		5,731
Gross Revenues	30,698	17,309	48,007	88%	6,348	12%	54,355
Outsourcing fees	(2,355)	(827)	(3,182)		(1,013)		(4,195)
Net revenues	28,343	16,482	44,825	89%	5,335	11%	50,160
Staff expenses	(14,465)	(8,368)	(22,833)		(3,065)		(25,898)
Administrativ e expenses	(5,107)	(2,954)	(8,061)		(1,028)		(9,089)
o/w IT	(1,882)	(1,089)	(2,971)		(378)		(3,349)
o/w Real Estate	(795)	(460)	(1,255)		(161)		(1,416)
o/w SG&A	(2,430)	(1,405)	(3,835)		(489)		(4,324)
Operating expenses	(19,572)	(11,322)	(30,894)		(4,093)		(34,987)
EBITDA	8,771	5,160	13,931	92%	1,242	8%	15,173
EBITDA Margin	29%	30%	29%		20%		28%
EBITDA Contribution	58%	34%	92%		8%		100%

(€/000)

	Banks	Investors	Total Servicing	Ancillary & other	Total
Servicing revenues
First Quarter 2019	30,698	17,309	48,007	450	48,457
First Quarter 2018	27,053	14,894	41,947	-	41,947
Change	3,645	2,415	6,060	450	6,510
Co-investment revenues, ancillary and other
First Quarter 2019	-	-	-	5,898	5,898
First Quarter 2018	-	-	-	4,438	4,438
Change	-	-	-	1,460	1,460
Staff expenses
First Quarter 2019	(14,465)	(8,368)	(22,833)	(3,065)	(25,898)
First Quarter 2018	(12,947)	(7,417)	(20,364)	(2,134)	(22,498)
Change	(1,518)	(951)	(2,469)	(931)	(3,400)
Administrative expenses
First Quarter 2019	(5,107)	(2,954)	(8,061)	(1,028)	(9,089)
First Quarter 2018	(4,264)	(2,442)	(6,706)	(681)	(7,387)
Change	(843)	(512)	(1,355)	(347)	(1,702)
EBITDA
First Quarter 2019	8,771	5,160	13,931	1,242	15,173
First Quarter 2018	7,122	4,071	11,193	365	11,558
Change	1,649	1,089	2,738	877	3,615
EBITDA Margin
First Quarter 2019	29%	30%	29%	20%	28%
First Quarter 2018	26%	27%	27%	8%	25%
Change	2%	2%	2%	11%	3%

In the first quarter of 2019, gross revenues (€44.8 million) and EBITDA (€13.9 million) of the Servicing segment represent 89% of their respective totals.

Ancillary products and minor activities posted an EBITDA Margin of 20%, 11 percentage points higher than in the first quarter of 2018.

Group financial position

Introduction

The balance sheet figures have been reclassified from a management perspective, which is more in line with the representation of the reclassified income statement and the net financial position of the Group.

In the financial statements section, in accordance with the same presentation approach for the income statement, we have included a reconciliation between the management balance sheet and the regulatory balance sheet provided for in the applicable Bank of Italy Circular 262/2005.

(€/000)
Condensed balance sheet	3/31/2019	12/31/2018	Change
			€	%
Cash and liquid securities	62,125	74,443	(12,318)	(17)%
Financial assets	49,998	36,312	13,686	38%
Tangible assets	13,755	2,810	10,945	n.s.
Intangible assets	8,338	8,327	11	0%
Tax assets	84,098	87,355	(3,257)	(4)%
Trade receiv ables	104,356	99,224	5,132	5%
Assets on disposal	10	710	(700)	(99)%
Other assets	10,242	7,855	2,387	30%
Total assets	332,922	317,036	15,886	5%
Trade payables	20,674	21,848	(1,174)	(5)%
Tax Liabilities	13,006	10,174	2,832	28%
Employee Termination Benefits	9,403	9,577	(174)	(2)%
Prov ision for risks and charges	23,003	20,754	2,249	11%
Liabilities on disposal	-	6,532	(6,532)	(100)%
Other liabilities	62,297	15,362	46,935	n.s.
Total Liabilities	128,383	84,247	44,136	52%
Share capital	41,280	41,280	-	n.s.
Reserv es	155,793	140,915	14,878	11%
Treasury shares	(246)	(246)	-	n.s.
Result for the period	7,712	50,840	(43,128)	(85)%
Total shareholders' equity	204,539	232,789	(28,250)	(12)%
Total liabilities and shareholders' equity	332,922	317,036	15,886	5%

Cash and liquid securities include the components shown in the table below. They decreased by 17% compared with December 31, 2018. The figure includes an outlay for an opportunistic, non-recurring short-term investment in a non-performing position for which a favourable settlement agreement has been reached.

(€/000)
Cash and liquid securities	3/31/2019	12/31/2018	Change
			€	%
Cash	26	15	11	73%
Financial assets at amortised cost - L&R with banks:
current accounts and demand deposits	61,098	73,429	(12,331)	(17)%
Financial assets at fair v alue through other comprehensiv e income:
liquid securities	1,001	999	2	0%
Total	62,125	74,443	(12,318)	(17)%

That investment amounted to €13.3 million and is included in the increase in financial assets, which at March 31, 2019 amounted to €50.0 million, compared with €36.3 million at December 31, 2018. The composition of financial assets is shown in the following table.

Financial assets	3/31/2019	12/31/2018	Change
			€	%
At fair value through profit or loss
Debt securities	4,995	5,240	(245)	(5)%
CIUs	27,995	28,963	(968)	(3)%
Equity instruments	47	47	-	n.s.
Total	33,037	34,250	(1,213)	(4)%
At amortized cost
L&R with banks other than current accounts and demand deposits	98	98	-	n.s.
L&R with customers	16,863	1,964	14,899	n.s.
Total	16,961	2,062	14,899	n.s.

Property, plant and equipment increased by €10.9 million, essentially reflecting the inclusion of rights of use following first-time application of IFRS 16, as described in the notes to this Interim Report in the section on Accounting policies.

Tax assets and liabilities at March 31, 2019 are summarised in the following table: (€/000)

					Change
Tax assets	3/31/2019	12/31/2018	€	%
Current tax assets
Paid in adv ance	-	192	(192)	(100)%
Tax liabilities	-	(159)	159	(100)%
Total	-	33	(33)	(100)%
Deferred tax assets
Write-down on loans	55,407	55,407	-	n.s.
Tax losses carried forward in the future	16,197	19,397	(3,200)	(16)%
Other assets / liabilities	282	205	77	38%
Prov isions	6,780	6,395	385	6%
Other items	2	2	-	n.s.
Total	78,668	81,406	(2,738)	(3)%
Other tax receivables	5,430	5,916	(486)	(8)%
Total tax assets	84,098	87,355	(3,257)	(4)%

Deferred tax assets decreased by €2.7 million, mainly reflecting the reversal of prior-year tax losses against taxable income for the period.

(€/000)

				Change
Tax liabilities	3/31/2019	12/31/2018	€	%
Current tax liabilities
Taxes for the period	22,441	19,936	2,505	13%
Net payments on account	(11,988)	(11,768)	(220)	2%
Total	10,453	8,168	2,285	28%
Deferred tax liabilities	21	21	-	n.s.
Other tax payables	2,532	1,985	547	28%
Total tax liabilities	13,006	10,174	2,832	28%

Provisions for risks and charges increased by €2.2 million from their balance at the end of 2018, mainly as a result of provisions for staff expenses, which include provisions to finance MBO bonuses to be paid in future years on the basis of existing remuneration policies.

The final residual component of provisions for risks includes provisions for disputes for which no litigation is currently under way.

(€/000)
			Change
Provision for risks and charges	3/31/2019	12/31/2018	€	%
Legal disputes	7,570	7,420	150	2%
Staff expenses	11,621	9,627	1,994	21%
Other	3,812	3,707	105	3%
Total	23,003	20,754	2,249	11%

Other liabilities at March 31, 2019 amounted to €62.3 million, an increase of €46.9 million on December 31, 2018, reflecting two developments: (i) the first is tied to the implementation of the resolution of the Shareholders' Meeting of April 17, 2019 concerning the distribution of dividends in the amount of €36.8 million, which led to the classification under amounts due to shareholders of that amount, which will be paid on May 27, 2019; (ii) the second regards the recognition of lease liabilities of €11.0 million following the introduction of IFRS 16, as described in the notes to this Interim Report in the section on Accounting policies.

Net working capital

The following table shows a breakdown of net working capital as at March 31, 2019, December 31, 2018 and March 31, 2018.

(€/000)
Net working capital	3/31/2019	12/31/2018	3/31/2018
Trade receiv ables	104,356	99,224	100,043
Trade payables	(20,674)	(21,848)	(17,616)
Total	83,682	77,376	82,427

The aggregate amounted to €83.7 million at the end of the period, and is broadly in line with the figure for the first quarter of 2018 (+2%), despite the sharp growth in revenues (net revenues up 21%). Reflecting the usual seasonal pattern, the aggregate was 8% greater than its level at December 31, 2018.

Net financial position¹

The following table shows a breakdown of the net financial position, which is positive in all the periods reported.

(€/000)
Net financial position	3/31/2019	12/31/2018	3/31/2018
A Cash	26	15	14
B Current bank accounts	61,098	73,429	55,535
CLiquid securities	1,001	999	1,002
D Liquidity (A)+(B)+(C )	62,125	74,443	56,551
E Current bank debts	-	-	-
F Deposits from customers	-	(6,532)	(8,216)
GOther current financial debts	-	-	-
H Net current financial position (D)+(E)+(F)+(G)	62,125	67,911	48,335
I Non-current bank debts	-	-	-
J Other non-current financial debts	-	-	-
K Net financial position (H)+(I)+(J)	62,125	67,911	48,335

The net financial position at March 31, 2019 shows a significant positive balance, with an increase of 29% on a seasonally comparable basis (March 31, 2018). The comparison with December 31, 2018 shows a decrease, essentially reflecting the non-recurring short-term investment referred to earlier and the divestment of customer deposits as part of the debanking process begun in 2018.

¹ The net financial position does not include lease liabilities recognised in the balance sheet under other liabilities as from 2019 following the introduction IFRS 16.

Operating cash flow

Cash generating capacity is detailed in the following table, which shows operating cash flow for the period compared with the same quarter of 2018.

(€/000)
Cash Flow	3/31/2019	3/31/2018
EBITDA	15,173	11,001
Capex	(805)	(439)
EBITDA-Capex	14,368	10,562
as % of EBITDA	95%	96%
Adjustment for accrual on share-based incentiv e system payments	1,308	1,607
Changes in NWC	(6,306)	(4,162)
Changes in other assets/liabilities	(1,118)	1,842
Operating Cash Flow	8,252	9,849
Tax paid (IRES/IRAP)	-	(46)
Free Cash Flow	8,252	9,803
(Inv estments)/div estments in financial assets	(14,038)	(73)
Equity (inv estments)/div estments	-	-
Div idend paid	-	-
Net Cash Flow of the period	(5,786)	9,730
Net financial Position - Beginning of period	67,911	38,605
Net financial Position - End of period	62,125	48,335
Change in Net Financial Position	(5,786)	9,730

Operating cash flow amounted to €8.2 million and reflects an increase of €2.1 million in cash absorbed in connection with net working capital as a result of the increase in revenues. Net cash flow in the first three months of 2019 was negative in an amount equal to 38% of EBITDA, in line with the seasonality typical of collection activities, where receipts tend to be concentrated in the final months of the year.

Shareholders' equity and capital ratios

Consolidated shareholders' equity as at March 31, 2019 amounted to €204.5 million, compared with €232.8 million at December 31, 2018. The composition and change in the aggregate compared with the end of the previous year are presented in the following tables.

(€/000)
Equity breakdown 3/31/2019			Change
	12/31/2018	€	%
Share capital	41,280	41,280	-	n.s.
Valuation reserv es	593	591	2	0%
Reserv es	155,200	140,324	14,876	11%
Treasury shares	(246)	(246)	-	n.s.
Net Profit (loss) for the period	7,712	50,840	(43,128)	(85)%
Shareholders' equity	204,539	232,789	(28,250)	(12)%

(€/000)

Changes in consolidated shareholders' equity
Shareholders' equity as at December, 31 2018	232,789
Increases:	9,022
Net profit for the period	7,712
Changes in v aluation reserv es (+)	2
Share payments	1,308
Decreases:	(37,272)
Div idends payed	(36,837)
Changes in other reserv es (-)	(435)
Shareholders' equity as at March, 31 2019	204,539

The change for the period in shareholders' equity is primarily attributable to the decrease in reserves as a result of the dividends authorised by the Shareholders' Meeting of April 17, 2019.

(€/000)

			Change
Own Funds and capital adequacy ratios - CRR	3/31/2019	12/31/2018	€	%
Common equity TIER 1 capital (CET 1)	122,478	115,987	6,491	6%
Own Funds	122,478	115,987	6,491	6%
Risk Weighted Assets	615,555	598,544	17,011	3%
CET 1 capital ratio	19.90%	19.38%	0.5%	3%
Total capital ratio	19.90%	19.38%	0.5%	3%

The above table reports the value of own funds, risk-weighted assets and consolidated capital ratios as at March 31, 2019 and December 31, 2018, which were calculated on the basis of the regulatory principles set out in Directive 2013/36/EU (CRD IV) and Regulation (EU) 575/2013 (CRR) as transposed in Bank of Italy Circulars no. 285 and no. 286 of December 17, 2013.

As from December 31, 2017, the scope of consolidation for the purpose of prudential supervision includes the holding company Avio S.à r.l. as the Group parent, which is not consolidated in shareholders' equity under accounting rules.

As at March 31, 2019, consolidated own funds amounted to €122.5 million, compared with risk-weighted assets of €615.6 million, most of which (62%) generated by operational risks and, to a lesser extent, credit risk.

As shown in the table, as at March 31, 2019, the doBank Group had a Total Capital Ratio of 19.90%, well above the minimum regulatory requirement for the period of 10.75%. The increase of €6.5 million in CET 1 capital compared with December 31, 2018 (+6%) mainly reflected the consolidation under Avio, in particular the increase in the equity of the doBank Group as a result of the allocation of part of 2018 profit to a special reserve.

For management purposes and to reconcile the figures with the accounting data given in this report, the following table shows Group own funds and capital ratios as calculated under the provisions of the Consolidated Banking Act (T.U.B.), indicating an improvement of 2 percentage points in the CET1 ratio compared with December 31, 2018.

(€/000)

			Change
Own Funds and capital adequacy ratios - C.B.A.	3/31/2019	12/31/2018	€	%
Common equity TIER 1 capital (CET 1)	173,709	155,658	18,051	12%
Own Funds	173,709	155,658	18,051	12%
Risk Weighted Assets	612,070	595,006	17,064	3%
CET 1 capital ratio	28.38%	26.16%	2.22%	8%
Total capital ratio	28.38%	26.16%	2.22%	8%

Significant events during the period

Start of management of new loan portfolios

In the first quarter 2019 doBank gradually began the onboarding and management of substantial new loan portfolios following management agreements reached in the second half of 2018. Specifically, the onboarded portfolios included those from agreements with the Iccrea Banking Group and with Banca Carige for the management of loan portfolios with a total value of about €2.3 billion.

In line with expectations and following the successful on-boarding and business planning carried out in the second half of 2018, in the first quarter del 2019 doBank also began management of the portfolio transferred by the four Greek systemic banks, the Group's first international contract, which is being managed by the team based in Athens. The portfolio comprises about 300 corporate positions with a Gross Book Value of about €1.8 billion.

New corporate structure for the Group and Extraordinary Shareholders' Meeting

The corporate reorganisation undertaken by doBank, which was announced at the presentation of the 2018-2020 Business Plan in June 2018, had a number of effects between the end of 2018 and the start of 2019. Specifically, the transfer of Italfondiario operations to doBank and the contribution of operations by doBank to Italfondiario took effect as from January 1, 2019. Likewise, the "debanking" process initiated by doBank in 2018 with the intention of further strengthening of servicing activities (which represent the Company's core business), and the consolidation of the Company's and the Group's position in its key market, saw the Extraordinary Shareholders' Meeting of March 5, 2019 approve the proposal formulated by the Board of Directors to change the corporate purpose of the Company. Please note that with the implementation of this project, pending the issue of the required authorisation by the regulator, doBank intends to achieve greater rationalisation and efficiency for the Group, as the project seeks to make its corporate structure consistent with its core business of managing and recovering non-performing loans.

Significant events after the end of the period

Ordinary Shareholders' Meeting

The Shareholders' Meeting of doBank S.p.A. met in ordinary session on April 19, 2019 and approved all items on the agenda, including:

• the separate financial statements of doBank S.p.A. for the year ended December 31, 2018, which closed with a net profit of €43,374,465. During the Meeting, the Group's consolidated financial statements for the ended December 31, 2018 were presented, showing a net profit excluding non-recurring items of €52.6 million, +17% on the €45.0 million posted in 2017 (net profit of €50.9 million, +13% on €45.0 million in 2017);
• the distribution of dividends for 2018 of €36,836,956, equal to €0.460, gross of taxes, for each ordinary share, corresponding to 70% of consolidated net profit excluding nonrecurring charges (70% payout);
• the annual Report on Remuneration and Incentives, the 2019 Incentive Plan based on financial instruments and the Termination Payment Policy.

Outlook for operations

Performance for the first quarter and 2019 and that achieved in 2018 confirms the objectives of the 2018-2020 Business Plan, presented in June 2018, which provides for the strengthening of doBank's leadership in the European credit servicing market.

In particular, the Group's revenues are forecast to grow between 8% and 9% on average between 2017 and 2020 (CAGR), with Group EBITDA increasing by over 15% a year on

average in the same period and earnings per share rising even faster than EBITDA, with a dividend payout ratio of at least 65% of consolidated profit.

In consideration of the importance of the agreement for the acquisition of Altamira Asset Management (press release of December 31, 2018), the Group plans to update the Business Plan targets following the completion of the acquisition, which is expected to close by May 2019.

Disclosure on the opt-out option

We inform you that doBank S.p.A. has adopted the simplified rules provided for in Articles 70, paragraph 8, and 71, paragraph 1-bis, of the Consob Issuers Regulation no. 11971/1999, subsequently amended, and has therefore exercised the option to derogate from compliance with the obligations to publish the information documents provided for in Articles 70, paragraph 6, and 71, paragraph 1, of that Regulation on the occasion of significant mergers, spin-offs, capital increases through the contribution of assets in kind, acquisitions and sales.

Rome – May 9, 2019 The Board of Directors

FINANCIAL STATEMENTS

Consolidated Balance Sheet

(€/000)

Assets		3/31/2019	12/31/2018
10	Cash and cash equiv alents	26	15
20	Financial assets measured at fair v alue through profit or loss	33,037	34,250
	c) Other financial assets mandatorily measured at fair v alue	33,037	34,250
30	Financial assets measured at fair v alue through comprehensiv e income	1,001	999
40	Financial assets measured at amortised cost	78,059	75,491
	a) Loans and receiv ables with banks	61,196	73,527
	b) Loans and receiv ables with customers	16,863	1,964
90	Property, plant and equipment	13,755	2,810
100	Intangible assets	6,943	6,847
	of which goodwill	-	-
110	Tax assets	78,668	81,439
	a) Current tax assets	-	33
	b) Deferred tax assets	78,668	81,406
120	Non-current assets and disposal groups held for sale	10	710
130	Other assets	121,423	114,475
	Total assets	332,922	317,036

	Liabilities and shareholders' equity	3/31/2019	12/31/2018
10	Financial liabilities measured at amortised cost	11,222	294
	b) Due to customers	11,222	294
60	Tax liabilities	10,474	8,189
	a) Current tax liabilities	10,453	8,168
	b) Deferred tax liabilities	21	21
70	Liabilities associated with non-current assets and disposal groups held for sale	-	6,532
80	Other liabilities	74,281	38,901
90	Employee termination benefits	9,403	9,577
100	Prov isions for risks and charges	23,003	20,754
	a) Commitments and guarantees issued	3	3.00
	c) Other prov isions	23,000	20,751
120	Valuation reserv es	593	591
150	Reserv es	155,200	140,324
170	Share capital	41,280	41,280
180	Treasury shares (-)	(246)	(246)
200	Net profit (loss) for the period (+/-)	7,712	50,840
	Total liabilities and shareholders' equity	332,922	317,036

Consolidated Income Statement

(€/000)
Items		3/31/2019	3/31/2018
10	Interest income and similar rev enues	183	250
	of which: interest income calculated with the effective interest method	-	-
20	Interest expense and similar charges	(62)	(5)
30	Net interest income	121	245
40	Fee and commission income	48,547	42,054
50	Fee and commission expense	(3,236)	(3,728)
60	Net fee and commission income	45,311	38,326
110	Gains and losses on financial assets/liabilities at fair v alue through profit or loss	-	2
	b) Other financial assets mandatorily measured at fair v alue	-	2
120	Gross income	45,432	38,573
130	Net losses/recov eries on impairment for credit risk:	23	(1)
	a) Financial assets measured at amortised cost	23	(1)
150	Net profit from financial activities	45,455	38,572
180	Net profit from financial and insurance activities	45,455	38,572
190	Administrativ e costs:	(36,917)	(32,379)
	a) Staff expense	(26,004)	(22,642)
	b) Other administrativ e expense	(10,913)	(9,737)
200	Net prov isions for risks and charges	(228)	(179)
	b) Other net prov isions	(228)	(179)
210	Impairment/write-backs on property, plant and equipment	(962)	(126)
220	Impairment/write-backs on intangible assets	(598)	(357)
230	Other operating expense and income	6,030	4,189
240	Operating costs	(32,675)	(28,852)
250	Profit (Loss) of equity inv estments	-	340
290	Profit (loss) before tax from continuing operations	12,780	10,060
300	Income tax expense from continuing operations	(5,068)	(3,487)
310	Profit (loss) after tax from continuing operations	7,712	6,573
330	Net profit (loss) for the period	7,712	6,573
350	Profit (loss) for the period attributable to shareholders of the Parent Company	7,712	6,573

Consolidated statement of comprehensive income

(€/000)
Items		3/31/2019	3/31/2018
10.	Net profit (loss) for the period	7,712	6,573
	Other comprehensive income after tax not recyclable to profit or loss	-	(39)
70.	Defined benefit plans	-	(39)
	Other comprehensive income after tax recyclable to profit or loss	2	(1)
140.	Financial assets (other than equity instruments) measured at fair v alue through comprehensiv e income	2	(1)
170.	Total other comprehensive income after tax	2	(40)
180.	Comprehensive income (item 10 + 170)	7,714	6,533
190.	Consolidated comprehensiv e income attributable to non-controlling interests	-	-
200.	Consolidated comprehensive income attributable to shareholders of the Parent Company	7,714	6,533

Consolidated statement of changes in shareholders' equity

(€/000)

				Allo cat ion	of fit pro			Cha	nge	s du ring	the ye ar
		e c		from vio pre	us y ear					Equ ity t	tion ran sac	s			of	g n
	8 01 /2 31 2/ t 1 a as e c n a al B	n a al b g n ni e p o n i es g n a h C	9 01 /2 /1 t 1 a as e c n a al B	es v er es R	er h ot d n a ds s n ut e d o y vi a Di p	es v er s re n i es g n a h C	es ar h s w e n of e su Is	y ur as e tr of n io sit es ui ar q c sh A	ds n e d vi di y of ar n n io di ut or ib ra str xt Di e	ty ui q e s nt in e e m g n ru a st h in C	es ar sh n w o n o es iv at iv er D	ns io pt o k c o St	ty ui q e n s nt i es e m g t n es a v h in C	at e m o c in e iv ns e 9 h e 01 pr /2 m 31 o 3/ C	s er d t ol a ty h as e ui ar y q n e h s' a s p to er m g d o 9 ol in C 01 h in nt /2 e ta ar e 31 er ar h 3/ p P S	lli ro 9 nt 01 o ty /2 c ui n- 31 q 3/ o e n s' t a to er g as d s ol in st h in e re ta ar te er h in p S
Sha api tal: re c
din sha - or ary res	41,2 80	-	80 41,2	-	- -		-	-	-	-	-	-	-	-	80 41,2	-
Res erv es:
- fro rofit m p s	13,9 93	-	93 13,9	-	-	-	-	-	-	-	-	-	-	-	93 13,9	-
- ot her	126 ,331	-	,331 126	03 14,0	-	-	-	-	-	-	-	8 1,30	) (435	-	,207 141	-
Val uat ion rese rv es	591	-	591	-	-	-	-	-	-	-	-	-	-	2	593	-
sha Trea sury res	(246 )	-	) (246	-	-	-	-	-	-	-	-	-	-	-	) (246	-
Net fit ( loss ) fo r th erio d pro e p	50,8 40	-	40 50,8	) (14, 003	) (36, 837	-	-	-	-	-	-	-	-	2 7,71	2 7,71	-
ity a ttrib of P Sha reh old ers' uta ble to sha reh old nt C equ ers are om pan y	,789 232	-	,789 232	-	) (36, 837	-	-	-	-	-	-	8 1,30	) (435	4 7,71	,539 204	-
Sha reh old ers' ity a ttrib uta ble to ntro lling int sts equ non -co ere	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-

d

Consolidated cash flow statement

(€/000)
Consolidated Cash Flow Statement (indirect method)	3/31/2019	3/31/2018
A. OPERATING ACTIVITIES
1. Operations:	15,538	15,164
- Profit (loss) for the period (+/-)	7,712	6,573
Capital gains/losses on financial assets held for trading and on other assets/liabilities measured at fair -	-	(2)
v alue through profit or loss (+/-)
- Net losses/recov eries on cerdit risk(+/-)	(23)	1
- Net write-offs/write-backs on property, plant and equipment and intangible assets (+/-)	1,645	484
- Prov isions and other income/expenses (+/-)	228	180
- Unpaid taxes and tax credits (+)	5,056	3,487
- Other adjustments (+/-)	920	4,441
2. Liquidity generated by/used in financial assets: - Other financial assets mandatorily measured at fair v alue	(7,712) 1,213	(4,985) 145
- Financial assets measured at fair v alue through comprehensiv e income	(2)	-
- Financial assets measured at amortised cost	(2,592)	(7,797)
- Other assets	(6,331)	2,667
3. Liquidity generated by/used in financial liabilities:	(7,010)	(9,747)
- Financial liabilities measured at amortised cost	(718)	(3,570)
- Other liabilities	(6,292)	(6,177)
Net liquidity generated by/used in operating activities - A (+/-)	816	432
B. INVESTMENT ACTIVITIES
1. Liquidity generated by:	-	-
- Sales of equity inv estments	-	-
- Div idends collected on equity inv estments	-	-
- Sales of property, plant and equipment	-	-
2. Liquidity used in:	(805)	(439)
- Purchases of property, plant and equipment	(110)	(21)
- Purchases of intangible assets	(695)	(418)
Net liquidity generated by/used in investment activities - B (+/-)	(805)	(439)
C. FUNDING ACTIVITIES
- Distribution of div idends and other	-	-
Net liquidity generated by/used in funding activities - C (+/-)	-	-
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DURING THE PERIOD - D=A+/-B+/-C	11	(7) -
RECONCILIATION
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD - E	15	21
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DURING THE PERIOD - D	11	(7)
CASH AND CASH EQUIVALENTS: EFFECT OF EXCHANGE RATE VARIATIONS - F	-	-
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD - G=E+/-D+/-F	26	14

Statement reconciling the condensed consolidated income statement and the statutory consolidated income statement (€/000)

Statement reconciling the reclassified consolidated income statement and the statutory		First Quarter
	income statement	2019	2018 RESTATED
	Servicing revenues	48,457	41,947
40	of which: fee and commission income	48,457	41,947
	Co-investment revenues	167	236
10	of which: interest income and similar rev enues	167	236
	Ancillary and other revenues	5,731	4,202
10	of which: interest income and similar rev enues	16	13
40	of which: fee and commission income	90	107
190b	of which administrativ e costs: b) other administrativ e expense	-	2
230	of which: other operating expense and income	5,625	4,080
	Gross Revenues	54,355	46,385
	Fee and commission expense	(4,195)	(4,942)
50	of which: fee and commission expense	(3,183)	(3,684)
190b	of which administrativ e costs: b) other administrativ e expense	(1,012)	(1,097)
230	of which: other operating expense and income	-	(161)
Net revenues		50,160	41,443
	Staff expenses	(25,898)	(22,498)
190a	of which administrativ e costs: a) staff expense	(25,898)	(22,498)
	Administrative expenses	(9,089)	(7,387)
190a	of which administrativ e costs: a) staff expenses	(106)	(123)
190b	of which administrativ e costs: b) other administrativ e expense	(9,451)	(7,613)
	o/w IT	(3,349)	-
	o/w Real Estate	(1,397)	-
	o/w SG&A	(4,705)	(7,613)
230	of which: other operating expense and income	468	349
	Operating expenses	(34,987)	(29,885)
EBITDA		15,173	11,558
	Impairment/Write-backs on property, plant, equipment and intangible assets	(1,646)	(1,194)
210	impairment / write-backs on property, plant and equipment	(962)	(760)
220	impairment / write-backs on intangible assets	(598)	(358)
230	of which: other operating expense and income	(86)	(76)
	Net Provisions for risks and charges	(266)	(212)
190a	of which administrativ e costs: a) staff expenses	-	(20)
200	net prov isions for risks and charges	(228)	(180)
230	of which: other operating expense and income	(38)	(12)
	Net Write-downs of loans	84	8
130	net losses / recov eries on credit risk	23	(1)
230	of which: other operating expense and income	61	9
	Net income (losses) from investments	-	340
250	profit (loss) of equity inv estments	-	340
EBIT		13,345	10,500
	Net financial interest and commission	(115)	(96)
20	of which: Interest expense and similar charges	(62)	(54)
50	of which: fee and commission expense	(53)	(44)
110	gains and losses on financial assets/liabilities at fair v alue through profit or loss	-	2
EBT		13,230	10,404
	Income tax for the period	(5,518)	(3,917)
190b	of which administrativ e costs: b) other administrativ e expense	(450)	(473)
300	income tax expense from continuing operations	(5,068)	(3,444)
	Net Profit (Loss) attributable to the Group	7,712	6,487

Statement reconciling the reclassified consolidated balance sheet and the statutory consolidated balance sheet (€/000)

	Statement reconciling the reclassified consolidated balance sheet and the statutory consolidated balance sheet	3/31/2019	12/31/2018
	Cash and liquid securities	62,125	74,443
10	Cash and cash equiv alents	26	15
30	Financial assets measured at fair v alue through comprehensiv e income	1,001	999
40a	Financial assets measured at amortised cost a) Loans and receiv ables with banks	61,098	73,429
	Financial assets	49,998	36,312
20	Financial assets measured at fair v alue through profit or loss	33,037	34,250
40a	Financial assets measured at amortised cost a) Loans and receiv ables with banks	98	98
40b	Financial assets measured at amortised cost a) Loans and receiv ables with customers	16,863	1,964
	Tangible assets	13,755	2,810
90	Property, plant and equipment	13,755	2,810
	Intangible assets	8,338	8,327
100	Intangible assets	6,943	6,847
130	of which: Other assets - improv ements on goods of third party	1,395	1,480
	Tax assets	84,098	87,355
110	Tax assets	78,668	81,439
130	of which: Other assets - tax items	5,430	5,916
	Trade receivables	104,356	99,224
130	of which: Other assets - trade receiv ables for inv oices issued and to be issued	104,356	99,224
	Assets on disposal	10	710
120	Non-current assets and disposal groups held for sale	10	710
	Other assets	10,242	7,855
130	of which: Other assets - accrued income, prepaid expenses and other residual	10,242	7,855
	TOTAL ASSETS	332,922	317,036
	Trade payables	20,674	21,848
80	of which: Other liabilities - trade payables for inv oices issued and to be issued	20,674	21,848
	Tax liabilities	13,006	10,174
60	Tax liabilities	10,474	8,189
80	of which: Other liabilities - tax items	2,532	1,985
	Employee termination benefits	9,403	9,577
90	Employee termination benefits	9,403	9,577
	Provisions for risks and charges	23,003	20,754
100	Prov isions for risks and charges	23,003	20,754
	Liabilities associated with non-current assets and disposal groups held for sale	-	6,532
70	Liabilities associated with non-current assets and disposal groups held for sale	-	6,532
	Other liabilities	62,297	15,362
80	of which: Other liabilities - debt to personnel and other residual	51,075	15,068
10b	Financial liabilities measured at amortised cost b) due to customers	11,222	294
	TOTAL LIABILITIES	128,383	84,247
	Share capital	41,280	41,280
170	Share capital	41,280	41,280
	Reserves	155,793	140,915
120	Valuation reserv es	593	591
150	Reserv es	155,200	140,324
	Trasury shares	(246)	(246)
180	Treasury shares (-)	(246)	(246)
	Net profit (loss) for the period	7,712	50,840
200	Net profit (loss) for the period (+/-)	7,712	50,840
	TOTAL SHAREHOLDERS' EQUITY	204,539	232,789
	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	332,922	317,036

CERTIFICATION OF THE FINANCIAL REPORTING OFFICER