H. 10.43 - UBI Banca: disposal of bad loans portfolios

PRESS RELEASE

Disposal of €416.2 million of unsecured bad loans completed, with a gross profit of approximately €9 million and no impact on LGD

Bergamo, 14th December 2018 - Consistent with the information given in the press release dated 1st August 2018, UBI Banca informs that it has completed ahead of schedule, favoured by interest shown by investors, the second operation announced for the disposal of bad loans of the Group.

As already reported, the first operation consisting of the securitisation backed by a GACS guarantee of €2.75 billion of bad loans - of which 53.4% unsecured - and the disposal of the relative mezzanine and junior tranches, was concluded on 28th September 2018, which allowed its recognition in the accounts for the period ended the 30th September 2018.

In this second operation, UBI Banca sold - to international institutional investors - portfolios of bad loans composed almost exclusively of unsecured loans for a total gross book value of €416.2 million1. This operation consisted of direct sales on the market; on completion of an auction the portfolios were sold with a gross profit for the Group of approximately €9 million.

UBI Banca will therefore proceed to deconsolidate the bad loans disposed of from the accounts as at 31st December 2018.

On a pro forma basis on figures as at 30th September 2018, with account taken of the operation just concluded, the ratio of gross non-performing loans is down from 11.1% to 10.8%.

In capital terms, as occurred with the previous operation, this operation will contribute to the reduction in RWAs relating to the bad loans disposed of. The two operations do not involve any negative impacts on capital ratios even if future updates to LGD are factored in.

Finally, in terms of the qualitative composition of the stock of gross bad loans, the disposals, which consisted mainly of unsecured loans, allow an increase of over 3 percentage points in the incidence of bad loans backed by collateral, which are more likely to generate high credit recovery rates.

For further information:

UBI Banca - Investor Relations - tel.[phone]. E-mail:[e-mail];

UBI Banca - Media Relations - tel.[phone] - 4936 - 4938. E-mail:[e-mail]. Copy of this press release is available on the websitewww.ubibanca.it

1 As at 30th August 2018. The gross balance sheet exposure as at that same date was €353 million.