Board of Directors meeting of 9 November 2021: approval of consolidated interim results as at 30 September 2021

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(Co-operative Society by shares - founded in 1871

Head office and general management: I - 23100 Sondrio So - Piazza Garibaldi 16

Registered in the Register of Companies of Sondrio at no. 00053810149

Registered in the Register of Banks under no. 842.

Parent Bank of the Banca Popolare di Sondrio Banking Group, registered in the Register of Banking Groups under no. 5696.0

Registered in the Register of Cooperative Societies under no. A160536

Member of the Interbank Deposit Protection Fund

Tax code and VAT number: 00053810149

Share Capital € 1,360,157,331 - Reserves € 1,253,388,214 (data approved by the Shareholders' Meeting of 11/5/2021

PRESS RELEASE

Board of Directors meeting of 9 November 2021:

approval of consolidated interim results as at 30 September 2021

Positive consolidated net result for the period of € 201.5 million (+212.6% y/y)

Strong growth in core banking business (+9.7% y/y), with net interest income up

+7.8% and net fee and commission income up +12.7%.

High efficiency: cost-income at 53.4%.

Strong capital position: CET1 ratio phased-in at 16,53%1

Expected year-end ROE in the 8% area

"The excellent results for the first nine months of 2021 that were approved today by the Board of Directors confirm the Banca Popolare di Sondrio Group's ability to generate significant and resilient income. We were able to successfully overcome the heavy economic fallout from the pandemic emergency and now we are contributing with conviction to the country's recovery phase, particularly in its most productive areas where we boast the most significant presence of our network. In the face of a very positive and higher than expected GDP trend, Popolare di Sondrio has further expanded its pool of loans to businesses and households with growth rates above those of the system. The strength of our network is reflected in the solid generation of revenues from our core banking business, which, together with the excellent contribution of financialactivities, largely determines the very positive overall result achieved.

I would like to emphasise that what has been achieved is the result of assiduous work aimed at building lasting relationships with our customers, inspired by the philosophythat has distinguished the Bank since its foundation 150 years ago.

At the same time, in the current economic context that increasingly focuses attention on environmental issues and digital innovation, the Bank is identifying new opportunities for growth and support for its customers, both to facilitate the current recovery and to support the medium-termstructural transitiondetermined by the objectives of the Next Generation EU and the National Recovery and Resilience Plan. In particular, we are ready to do our part to encourage development paths linked to the evolution of agrifood supply

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Banca Popolare di Sondrio

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chains, the 4.0 transition of industry, renewable energy and energy efficiency in public and private buildings. In this last area, thanks also to the experience we have gained so far on superbonus, ecobonus and other building bonuses, we have demonstrated ourability to stand out for our concreteness and speed in assisting clients.

Never before have we been so firmly convinced that nothing restores more value to the history and experience of Banca Popolare di Sondrio than a renewed commitment tosustainable banking, capable of facing the challenges of the times even in the delicate phase of social and economic transformation, always with the aim of generating long-term wealth for all stakeholders."

[Mario Alberto Pedranzini CEO and General Manager of Banca Popolare di Sondrio]

The Board of Directors of Banca Popolare di Sondrio co-operative joint stock company, which met today under the chairmanship of Prof. Avv. Francesco Venosta, examined and approved the consolidated interim report as of September 30, 2021.

In 2021, the signs of recovery in the Italian economy have been gradually consolidating and, according to the most reliable macroeconomic forecasts, the annual GDP growth rate will exceed 6%. The latest surveys on the future expectations of businesses, especially in the manufacturing sector, confirm that the current phase of economic vitality is set to continue.

In this macroeconomic context, the Banca Popolare di Sondrio Group posted a net profit for the period of 201.5 million euro, confirming its commercial strength in the areas where it operates and a high level of management efficiency.

Below are some considerations on the most important aspects, summary tables containing the main income statement and balance sheet aggregates as well as some performance indicators for the period:

• the net result for the period, € 201.5 million, reflects the strong increase in core business, which stands at € 649.2 million (+9.7% compared with 30 September 2020; net interest income: +7.8% and net commissions: +12.7%) and the positive contribution of financial activities (€ 100.7 million compared with € 4 million at 30 September 2020). The result includes adjustments to loans of € 91.2 million and significant charges for stabilisation of the banking system of € 34.7 million;
• capital ratios 1 remain at particularly high levels with a large margin compared to regulatory requirements. In the phased-in version, the CET1 Ratio stands at 16.53%, the Tier1 Ratio at 16.57% and the Total Capital Ratio at 18.33%;
• the important support provided to the real economy to counteract the negative effects of the pandemic crisis and encourage the relaunch of activities continued through new loans to households and businesses amounting to over € 3.3 billion (of which € 840 million with state guarantees). With regard to the moratoria

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applied under the "Cura Italia" decree and ABI agreements, as at 30 September 2021 there was still around € 1.1 billion of outstanding principal, compared with around € 4.2 billion as at 31 December 2020. The punctual resumption of payments on loans no longer under moratoria by the vast majority of customers results in a particularly low default rate, even compared with the average figure for the entire loan portfolio;

• the incidence of gross impaired loans, as summarised by the NPL ratio which stood at 6.99% from 7.45% at the end of 2020 and 9.03% at 30 September 2020, has dropped;
• the credit coverage ratios, inspired by a provisioning policy characterised by high values, are further increasing. The coverage ratio of total non-performing loans stood at 58.1% (from 52.4% at 31 December 2020), that of bad loans alone was 71.2% (from 67.9% at 31 December 2020), and that of unlikely to pay was 47.1% (from 39.8% at 31 December 2020). The coverage ratio for performing loans fell to 0.43% (from 0.62% as at 31 December 2020), mainly as a result of releases recorded in the first half of the year and the improvement in the macroeconomic environment;
• the cost of risk stood at 0.40%, down from 0.65% as at 30 September 2020. The figure takes into account the favourable update of the effects of the pandemic on asset quality, the expected impacts of the massive disposals under the NPL strategy and the regulatory framework;
• the Texas ratio, the ratio of total net impaired loans to tangible equity, decreased further to 29.8% from 36.8% at the end of December 2020;
• direct customer deposits amounted to € 37,415 million compared to € 35,559 million at the end of 2020 (+5.2%); indirect deposits amounted to € 39,099 million compared to € 34,797 million at the end of last year (+12.4%), of which over € 6,600 million related to assets under management (+11.4%). Insurance premiums totalled € 1,870 million, up from € 1,717 million at 31 December 2020 (+8.9%);
• loans to customers stood at € 30,602 million, up (+4.2%) from € 29,380 million at the end of 2020;
• liquidity indicators, both short-term (Liquidity Coverage Ratio) and medium- term (Net Stable Funding Ratio), are well above the minimum regulatory requirements. In particular, the Liquidity Coverage Ratio stood at 219% at the end of September;
• the contribution made to the Group's net result by subsidiaries and associates was positive and growing.

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Accounting data (in millions of euros)

Income statement results	30/09/2021	30/09/2020	Change
Interest margin	390.4	362.2	+7.8%
Net fees and commissions income	258.9	229.6	+12.7%
Result on financial activities	100.7	4.0	n/a
Intermediation margin	754.6	600.0	+25.8%
Net adjustments to loans and fin. assets *	91.2	140.6	-35.1%
Operating costs *	402.7	384.4	+4.8%
Result before tax	286.2	93.4	+206.3%
Net result	201.5	64.4	+212.6%

• At 30 September 2021, € 19 million of releases on net provisions for credit risk for commitments and guarantees, initially included in the income statement in net provisions for risks and charges, were restated and shown under net value adjustments. Similarly, for the results as at 30 September 2020, € 6.7 million of net provisions were restated. For the comparison period, losses on disposal of € 45.1 million were reclassified under the aggregate return on financial assets, as well as € 2.7 million of charges, also related to the disposal transaction, under other operating income/costs, and shown under net impairment losses on loans.

Balance sheet results	30/09/2021	31/12/2020	Change
Direct customers deposits	37,415	35,559	+5.2%
Indirect customers deposits	39,099	34,797	+12.4%
Insurance deposits from customers	1,870	1,717	+8.9%
Total customer deposits	78,385	72,074	+8.8%
Loans to customers	30,602	29,380	+4.2%
Performance indicators	30/09/2021	30/09/2020
Cost-income ratio	53.4%	64.1%
Cost of risk	0.40%	0.65%
Gross NPL ratio	6.99%	9.03%
CET 1 ratio1 - phased in	16.53%	16.34%
Total capital ratio1 - phased in	18.33%	18.74%

1. Capital ratios are shown without taking into account the portion of the profit realised in the third quarter that can be allocated to self-financing. If included, the benefit would have been approximately 20 basis points.

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The comments that follow refer to the data shown in the attached "Reclassified consolidated income statement summary".

The Group's economic performance

Consolidated net income was € 201.5 million at 30 September 2021, up from € 64.4 million in the same period of the previous year. This result comes from consolidated gross profit of € 286.2 million, after deducting minority interests of € 4.6 million and taxes of € 80.1 million, corresponding to a tax rate of 28%.

Net interest income amounted to € 390.4 million, an increase of 7.8% compared with 30 September 2020. In line with what was seen in the first half of the year, the contribution from the proprietary securities portfolio increased, thanks to its greater size, as did the contribution from funding obtained from refinancing operations with the ECB (TLTRO III). Margins from customers were substantially stable.

Net commissions from services amounted to € 258.9 million, up sharply (+12.7%) from

• 229.6 million in the comparison period. The collection and payment services component benefited from the return of customer operations to pre-pandemic levels. Commissions from the placement of insurance and asset management products, as well as those relating to the management of current accounts and guarantees issued, also increased compared to the comparison period.

Dividends received amounted to € 4.7 million, compared with € 4.1 million at 30 September 2020. The result from financial activities, reflecting the favourable conditions on the financial markets, was a positive € 100.7 million, compared with € 4 million in the comparison period, which was particularly impacted by the pandemic crisis.

The intermediation margin therefore amounted to € 754.6 million from € 600 million in the comparison period (+25.8%).

Net adjustments amounted to € 91.2 million, compared with € 140.6 million in the comparison period (-35.1%). The result was affected by significant releases related to better-than-expected performance on loans subject to moratoria and guarantees.

For an easier understanding of the amount of net impairment losses, please note the following:

• item 130 of the income statement, which relates to exposures to customers and banks in the form of both loans and securities, amounts to € 104.8 million and consists almost entirely of adjustments relating to financial assets measured at amortised cost;
• Item 140, which includes gains/losses on contractual amendments without cancellations arising from changes in contractual cash flows, was negative for € 5.4 million during the period;
• The aggregate of the aforementioned items thus amounts to € 110.2 million; if we take into account the € 19 million release of net provisions for credit risk for commitments

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