Banca Generali S p A : Illustrative report on the authorisation to buy back and dispose of treasury shares

This document has been translated from that issued in Italy, from the Italian into the English language, solely for the convenience of international readers. The Italian version remains the definitive version.

ILLUSTRATIVE REPORT

OF THE BOARD OF DIRECTORS OF BANCA GENERALI S.P.A. CONCERNING ITEM 10 ON THE AGENDA OF THE ORDINARY SHAREHOLDERS' MEETING

"Authorisation to buy back and dispose of treasury shares pursuant to Articles 2357 and 2357-ter of Italian Civil Code, as well as Article 132 of TUF and the related implementing provisions, in service of the 2021 Network Loyalty Plan, 2021 Long-term Incentive Plan and 2021 Incentive system as per the foregoing items on the agenda: granting of powers; relevant and ensuing resolutions"

(Prepared pursuant to Article 125-ter of Legislative Decree No. 58 of 24 February 1998, as subsequently amended and extended, and pursuant to Article 84-ter of the Regulation adopted with Consob Resolution No. 11971 of 14 May 1999, as subsequently amended and extended)

Illustrative Report of the Board of Directors to the General Shareholders' Meeting

Authorisation to buy back and dispose of treasury shares in service of remuneration policies; assignment of powers; relevant and ensuing resolutions.

Shareholders,

This illustrative report (the "Report") was prepared in compliance with Annex 3, Layout 4, of Consob Regulation adopted through resolution No. 11971 of 14 May 1999, as further amended and extended ("Rules for Issuers"), and was approved by the Board of Directors of Banca Generali S.p.A. ("Banca Generali" or the "Company"). Pursuant to Articles 2357 and 2357-ter of the Italian Civil Code and Article 132 of Legislative Decree No. 58/1998, as further amended and extended ("TUF"), the Board submits to you for

examination and approval a motion for authorisation to buy back (in any event, conditional upon the Bank of Italy's authorisation being obtained pursuant to Articles 77 and 78 of Regulation "CRR" No. 575/2013) no

more than 700,000 ordinary shares in Banca Generali, and the subsequent disposal of the same, following the revocation of the previous authorisation dated 23 April 2020. At present, the aforesaid shares represent 0.599% of the Company's share capital.

1.

FOREWORD

The Board of Directors first points out that, pursuant to the provisions set forth in Articles 2357 and 2357-ter of the Italian Civil Code, as well as those under Article 132 of TUF, the Shareholders' Meeting held on 23 April 2020 authorised the buy-back, in one or more tranches, of a maximum of 491,000 ordinary shares for a period of 18 months, commencing on the date of the aforementioned Meeting (ending on 23 October 2021).

The previous authorisation called for, inter alia, the disposal of the treasury shares for the following purposes:

• ‒ the share-based payment of a portion of Key Personnel's variable remuneration, in accordance with applicable laws and regulations, in particular the Supervisory Provisions issued by the Bank of Italy on 23 October 2018 concerning remuneration and incentive policies and procedures (cf. Bank of Italy Circular No. 285 of 17 December 2013, Supervisory Provisions for Banks, Title IV, Chapter 2, "Remuneration and Incentive Policies and Procedures"; or the "Circular");

• ‒ the assignment to the beneficiaries of Banca Generali's Network Loyalty Plan of a bonus upon the achievement of pre-set objectives, to be paid in shares for a portion not exceeding 50%;

• ‒ the assignment to the beneficiaries of the long-term incentive plan, based exclusively on shares, called "2021 LTI Plan", of a number of Banca Generali shares upon achievement of pre-set objectives related both to the Banking Group and the Assicurazioni Generali Insurance Group.

The Board of Directors announces that the aforementioned authorisation has been fully executed by buying back the maximum amount of 491,000 shares throughout 2020.

In light of the above, and considering the shares needed to implement the Bank's remuneration policies and incentive plans in 2021, the Board of Directors deems it appropriate to propose that the Shareholders' Meeting issue a new authorisation (in any event, conditional upon the Bank of Italy's authorisation being obtained pursuant to Articles 77 and 78 of Regulation "CRR" No. 575/2013), for a period of 12 months, commencing on the date in which the aforesaid authorisation is granted.

The following is an overview of the terms and conditions of the buy-back and disposal of treasury shares of the Company, which the Board of Directors submits to you so that the relevant authorisation can be issued by the Ordinary Shareholders' Meeting convened on 22 April 2021 (first call) and, if need be, on 23 April 2021 (second call).

2.

GROUNDS UNDERLYING THE MOTION FOR AUTHORISATION TO BUY BACK AND DISPOSE OF TREASURY SHARES

The Remuneration Policies of the Banking Group headed by Banca Generali (the "Banca Generali Group"), which were drawn up in compliance with the Supervisory Provisions set forth in the Circular and will be submitted to the Shareholders' Meeting for approval, require a portion of the variable component of remuneration, including any emolument to be granted in view or in the event of early termination of the professional relationship or the position held, be paid by assigning financial instruments in service of the following.

Share-based incentive system

The Banking Group's remuneration and incentive policies require that the remuneration package for the personnel identified by the Bank as key personnel ("Key Personnel") pursuant to applicable regulations be made of fixed and variable components and that, in accordance with applicable regulatory provisions and principle of proportionality, 25% of the accrued variable remuneration be paid by assigning Banca Generali's ordinary shares.

This provision also applies to subjects, other than those mentioned above, who are identified as Key Personnel by subsidiaries that are required to adopt specific remuneration policies in compliance with local and/or industry regulations.

Early severance package

Within the framework of remuneration policies, early severance packages can be defined in case of early termination of the professional relationship or the position held. With regard to Key Personnel, the Circular mainly subjects this mechanism to the regulatory provisions governing the variable component of remuneration and, in particular, envisages, inter alia, that a portion of the consideration to be granted in view or in the event of early termination of the professional relationship or the position held be paid by assigning financial instruments.

Banca Generali S.p.A. has opted to implement this provision through assignment of its ordinary shares.

Long-term incentive plan called 2021 LTI Plan

In implementation of remuneration policies, it has also been decided to submit for approval to the Shareholders' Meeting the adoption of a long-term incentive plan, based exclusively on shares, called 2021 LTI Plan, which provides for the assignment to the beneficiaries of a number of Banca Generali shares upon the achievement of certain objectives.

2021 Network Loyalty Plan as part of Banca Generali S.p.A.'s Framework Loyalty Programme

In implementing the Framework Loyalty Programme for Financial Advisors and Relationship Managers, approved by the Shareholders' Meeting on 20 April 2017, which governs the 2021 Network Loyalty Plan to be also submitted to the Shareholders' Meeting, it is provided that a part of the accrued bonus, not exceeding 50%, be settled in Banca Generali shares.

In short, this authorisation is therefore aimed solely at endowing the Company with the resources necessary to implement the aforesaid short- and long-term incentive plans and loyalty plans (the "Plans"), as well as the payment, in compliance with the applicable legislation, of the compensation agreed upon in view or in the event of early termination of the professional relationship.

3.

MAXIMUM NUMBER, CATEGORY AND NOMINAL VALUE OF THE SHARES COVERED UNDER THE MOTION FOR AUTHORISATION, IN LIGHT OF THE PROVISIONS OF ARTICLE 2357, PARAGRAPH 3, OF THE ITALIAN CIVIL CODE

The buy-back for which authorisation is requested may be effected in one or more tranches, and refers to Company's ordinary shares of a nominal value of 1.00 euro each.

In light of the maximum number of shares that could potentially be allotted within the above-mentioned Plans (equal to 855,000 shares), and considering the number of shares already held by the Company and purchased in previous years (1,767,676 treasury shares, of which 1,612,676 currently restricted for use for prior years' remuneration policies and loyalty plan, and 155,000 currently available), the maximum number of ordinary shares in respect of which the Board of Directors requests the said authorisation stands at 700,000 shares of a nominal value of 1.00 euro each.

The buy-back will be carried out within the limits of distributable profits and unrestricted reserves, as per the latest duly approved Financial Statements.

Pursuant to Article 2357-ter of the Italian Civil Code, as per Legislative Decree No. 139/2015, and to Bank of Italy Circular No. 262/2015, the value of the treasury shares purchased will be recognised in the Financial Statements as a reduction to net equity in Item 170 of Net equity and Liabilities.

It must be also borne in mind that as at 31 December 2020, Banca Generali held 1,767,676 treasury shares, or 1.513% of the Company's share capital, and that Banca Generali's subsidiaries hold no shares in their Parent Company. As a result, even if the authorisation is availed of to the fullest extent, the number of treasury shares held by the Company would, in any event, fall well within the limit imposed under Article 2357, paragraph 3, of the Italian Civil Code.

4.

TERM OF THE AUTHORISATION

Authorisation to buy back treasury shares, conditional upon the Bank of Italy's authorisation being obtained pursuant to Articles 77 and 78 of Regulation No. 575/2013 (CRR), is sought for a period of twelve months following the date on which the notice of the aforementioned authorisation is received.

Authorisation to dispose of treasury shares, whether already held by the Company or to be purchased for the purposes detailed above, is sought without any limitation whatsoever in terms of time, given that there are no regulatory constraints in such regard, and that it appears well-advised to afford management the freest hand possible, including in terms of time, with regard to the disposal of treasury shares.

5.

MINIMUM AND MAXIMUM PRICE

The minimum purchase price of ordinary shares cannot be lower than the nominal value of the share, equal to 1.00 euro. The maximum purchase price cannot exceed 5% of the reference price of the stock on the trading day preceding the day on which each buy-back is made.

However, in order to assess the maximum impact of the buy-back of treasury shares on Own Funds, the Company will buy back the aforementioned shares at a price not exceeding 45.077 euros per share, corresponding to the closing price of Banca Generali S.p.A.'s stock on 24 March 2021, prudentially increased by 50%.

With regard to the grounds underlying the motion for authorisation, and in particular with reference to the disposal of shares, the said disposal will entail the assignment of treasury shares, free of charge, to Key Personnel of Banca Generali and its subsidiaries as payment - provided that all regulatory requirements and conditions have been met - of the variable component of remuneration, and as settlement, pursuant to applicable legislation, of the compensation agreed upon in view or in the event of early termination of the professional relationship or the position held, and to the beneficiaries of the 2021 LTI Plan and the beneficiaries of the 2021 Network Loyalty Plan, provided, obviously, that any and all conditions, whether regulatory or imposed under the plans, have been met. It must be pointed out that the aforesaid assignment can be also made by granting treasury shares already held by the Company.

6.

BUY-BACK AND DISPOSAL PROCEDURES