Banco di Desio e della Brianza S p A : Consolidated results as at 30 June 2023

PRESS RELEASE

BANCO DESIO: CONSOLIDATED RESULTS AS AT 30 JUNE 2023

Consolidated net profit for the first half of 2023 of Euro 193.3 million (annualised ROE of 22.7%), up on

the same period of 2022 (+257.3%), supported by extraordinary items amounting to Euro 134.2

million1

Solid operating performance supported by revenue growth (+14.3%) with net interest income (+28.0%) and net fee and commission income (+2.2%) on the rise; operating margin of Euro 125.2 million, an improvement over H1 2022 (+16.1%)

Cost income ratio at 56.8% and NPE ratio (3.3%) stable Further strengthening of all equity and liquidity ratios

Desio, 3 August 2023 - The Board of Directors of Banco di Desio e della Brianza S.p.A. approved the "Consolidated Half-Year Financial Report as at 30 June 2023". The main income statement and balance sheet indicators for the period are summarised in the table below.

PROFITABILITY

SUPPORTING THE ECONOMY AND GROWTH

RELIABILITY

CAPITAL SOUNDNESS3

• Consolidated net profit up sharply to Euro 193.3 million (+257.3%)
• Increasing profitability (annualised ROE at 22.7%) with stable operating expenses and cost of risk under control
• Operations improved (+16.1%) due to growth in income (+14.3%)
• Cost income ratio at 56.8% (58.0% at H1 2022)
• Net interest income +28.0% influenced by positive interest rate dynamics
• Net commissions +2.2% due to the contribution of revenues mainly related to payment services
• Loans to ordinary customers at Euro 12.1 billion (+5.5%) with additional disbursements to households and companies during the half-year amounting to Euro 0.86 billion.
• Direct deposits increased to Euro 13.9 billion (+10.3%)2
• Indirect deposits of Euro 19.6 billion (+14.5%, of which ordinary customers up 20.8%)
• Stable incidence of impaired loans: Gross NPL ratio at 3.3% (3.3% as at YE2022) and net at 1.9%
• Solid coverage levels on impaired loans at 44.5% (48.4% net of government guarantees) and on performing loans at 0.87%
• Further strengthening of liquidity ratio with point LCR indicator at 199.10% (152.43% as at YE2022) and NSFR at 130.66% (128.40% as at YE2022).

 Capital solidity of Banco Desio Group confirmed with CET1 at 16.52%

Coefficients4	Banco Desio Brianza	Banco Desio Group	Brianza Unione Group5
CET 1	17.87%	16.52%	11.99%
TIER 1	17.87%	16.52%	12.83%
Total Capital	17.87%	16.52%	13.92%

TC pro-forma6

18.69%

17.29%

14.69%

• Gross badwill of Euro 53.3 million1 from the branches unit acquired from BPER and gross income of Euro 98.5 million from the acquiring unit sold.
  2 Including funding repurchase agreements with institutional customers in the amount of Euro 899 million (Euro 503 million as at 31 December 2022).
  3 Based on the Bank of Italy's "SREP" measure communicated to the market on 12 April 2023, which ordered the Brianza Unione "CRR" Group to adopt the following new capital ratios at the consolidated level, starting from the own funds report of 30 June 2023: CET1 ratio of 7.60%, binding - pursuant to art. 67-ter TUB - to the extent of 5.10% (of which 4.50% for minimum regulatory requirements and 0.60% for additional requirements) and the remainder by the capital conservation buffer component, Tier1 ratio of 9.30%, binding to the extent of 6.80% (of which 6.00% for minimum regulatory requirements and 0.80% for additional requirements) and the remainder by the capital conservation buffer component and Total Capital ratio of 11.50%, binding at 9.00% (of which 8.00% against minimum regulatory requirements and 1.00% against additional requirements) and the remainder from the capital conservation buffer component.
  4 Pursuant to the transitional provisions introduced by Regulation (EU) 2017/2395 of 12 December 2017 as amended.
  5 The consolidated ratios at the level of Brianza Unione di Luigi Gavazzi e Stefano Lado S.A.p.A., the parent company of 50.41% of Banco di Desio e della Brianza S.p.A., were calculated in accordance with the provisions of articles 11(2) and (3) and 13(2) of the CRR Regulation.
  6 Pro-forma ratio calculated assuming the issuance of the 60 million Tier 2 Subordinated PO on 3 July 2023 as at 30 June 2023.

Approval of the Consolidated Half-Year Financial Report as at 30 June 2023 | Page 1

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The Board of Directors of Banco di Desio e della Brianza S.p.A., which met on 3 August 2023, approved the "Consolidated Half-Year Financial Report as at 30 June 2023" (hereinafter also referred to as the "Report"), prepared pursuant to Article 154-ter of Legislative Decree 58/1998 ("Testo Unico della Finanza" - Consolidated Law on Finance), implementing Legislative Decree No. 195 of 6 November 2007 (so-called "Transparency Directive") and prepared in accordance with the applicable international accounting standards recognised in the European Community pursuant to EU Regulation No. 1606 of 19 July 2002, and in particular IAS 34 - Interim Financial Reporting, as well as with the provisions of the Bank of Italy issued in Circular No. 262 of 17 November 2022 (8th update).

The Report was also prepared for the purposes of determining the result for the period for the calculation of own funds and prudential ratios.

As far as the recognition and measurement criteria are concerned, the Report is prepared in accordance with the IAS/IFRS in force at the reporting date, as shown below in the section "Basis of Preparation".

Please refer to the specific disclosure dedicated to the description of the reference context in which this financial disclosure was prepared, which is still conditioned by the pandemic context, as well as the significant uncertainties and risks related to this, which may also have a significant impact on the expected results that depend on many factors beyond management's control.

The amounts in the tables and statements of the Report are expressed in euro thousands.

The financial statements in this Report are subject to a limited audit by KPMG S.p.A. for the inclusion of the interim result in own funds.

Approval of the Consolidated Half-Year Financial Report as at 30 June 2023 | Page 2

Information on the impacts of the war in Ukraine

The armed conflict between Russia and Ukraine, which has negatively influenced the global socio-economic scenario, continues to persist, constituting a major element of uncertainty and instability.

As for the Banco Desio Group in particular, on the basis of the analyses conducted to date, there are no direct exposures to the Russian and Ukrainian markets, and customer exposure is rather limited; however, continued monitoring of counterparties belonging to sectors potentially susceptible to the Russia-Ukraine conflict will ensure careful and timely management of the loan portfolio over time.

Monitoring the indirectly most exposed positions is one of the first drivers of attention in order to ensure the best quality of the credit portfolio over time and, at the same time, to identify the best solutions to enable companies to continue their business. In continuity with the actions taken in the Covid context, the Group adopted the so- called Temporary Crisis Framework (TCF) that will allow SMEs to apply for access to MCC-guaranteed financing to address liquidity needs related to the economic and financial turmoil caused by the ongoing conflict.

Banco Desio close to families and customers for protection from high mortgages

Banco Desio supports families and customers in dealing with the current economic situation, offering the possibility of rescheduling loan repayment plans. The initiative aims to mitigate the increase in variable-rate mortgage payments, allowing customers to extend the duration of the loan up to 5 years without increasing costs.

Customers with variable rate mortgages, who have seen an increase of at least 100 Euro in installments, will benefit from this measure and will be contacted directly by their reference branch.

In addition, Banco Desio will offer a ceiling for further options for diluting payments over time or converting variable rate mortgages into fixed rates, depending on the needs of its customers.

For more information https://www.bancodesio.it/it/content/caro-mutui

Approval of the Consolidated Half-Year Financial Report as at 30 June 2023 | Page 3

Results of the period

Consolidated balance sheet data

Total customer assets under administration as at 30 June 2023 amounted to about Euro 33.5 billion, an increase of about Euro 3.8 billion (+12.7%) compared to the balance at year-end 2022, attributable to the performance of indirect (+14.5%) and direct (+10.3%) deposits. This change was affected by the positive effect of the acquisition of the business units from the BPER Group.

Direct deposits at the end of the first half of 2023 amounted to about Euro 13.9 billion and showed an increase of 10.3%, which resulted from the growth in amounts due to customers of about Euro 1.2 billion (+10.4%) and in securities issued (+9.7%).

Indirect deposits increased by +14.5% to Euro 19.6 billion as at 30 June 2023 compared to the previous year-end balance. In particular, the trend was attributable to both deposits from institutional customers (+5.2%) and deposits from ordinary customers (+20.8%), the latter due to the performance of the asset management segment (+15.3%) and assets under administration (+33.3%).

The total value of loans to customers as at 30 June 2023 amounted to approximately Euro 12.1 billion, up 5.5% compared to the balance at year-end 2022, and included loans arising from the acquisition of business units from the BPER Group valued according to the criteria defined by the provisional purchase price allocation (PPA) process.

As at 30 June 2023, the Bank's total financial assets amounted to approximately Euro 4.0 billion, substantially in line with the previous year-end figure. The investment policy of the Held to Collect ("HTC" - "primary" investment portfolio for the support of the interest margin and the collection of cash flows, with the possibility of selling only in case of need and according to the limits of the relevant Business Model) and Held to Collect and Sell ("HTCS"

• Portfolio where securities are held for treasury needs) is characterised by a significant exposure in Italian government securities. Specifically, 71.4% of it consists of government bonds, 13.3% of bonds of leading bank issuers, and the remainder of other issuers.

The Group's net interbank position as at 30 June 2023 was a debit position of about Euro 2.9 billion, compared to an always debit balance of about Euro 3.1 billion at the end of the previous year.

Equity attributable to the Parent Company at 30 June 2023, including the profit for the period, totalled Euro 1,296.7 million, compared to Euro 1,122.5 million in 2022. The positive change of Euro 174.3 million is mainly attributable to the positive effect on the result for the period deriving from (i) the acquisition of the BPER Group's business units and (ii) the sale of the merchant acquiring business unit to Worldline Italia.

With reference to the Banco Desio Banking Group, Own Funds, after pay out forecasts, as per dividend policy, amounted to Euro 1,271.8 million as at 30 June 2023, entirely attributed to CET1 + AT1, compared to Euro 1,132.9 million at the end of the previous year. The Common Equity Tier1 capital ratio was 16.5% (14.8% at 31 December 2022). The Tier1 ratio was 16.5% (14.8% as at 31 December 2022), the Total Capital ratio was also 16.5% (14.8% as at 31 December 2022).

The calculation of the Consolidated Own Funds and prudential requirements that are subject to submission to the Bank of Italy as part of the Prudential Supervisory Reporting (COREP) and Statistical Reporting (FINREP) is performed with reference to Brianza Unione di Luigi Gavazzi e Stefano Lado S.A., which, according to European regulations, is the financial parent company of the banking group. Consolidated own funds calculated on the financial parent company Brianza Unione amounted to Euro 1,071.6 million at 30 June 2023 (CET1 + AT1 at Euro

987.7 million + T2 at Euro 83.9 million) compared to Euro 989.7 million at the end of the previous year. The Common Equity Tier1 capital ratio was 12.0% (11.0% at 31 December 2022). The Tier1 ratio was 12.8% (11.8% as at 31 December 2022), while the Total Capital ratio was also 13.9% (12.9% as at 31 December 2022).

The Bank of Italy ordered with "SREP" measure, communicated to the market on 12 April 2023, that starting from the reporting on own funds as at 30 June 2023, the Brianza Unione "CRR" Group should adopt the new capital ratios at consolidated level as follows:

• CET 1 ratio of 7.60%, comprising a binding measure of 5.10% (of which 4.50% against the minimum regulatory requirements and 0.60% against the additional requirements determined as a result of the SREP) and the remainder from the capital conservation buffer component;
• Tier 1 ratio of 9.30%, comprising a binding measure of 6.80% (of which 6.00% against the minimum regulatory requirements and 0.80% against the additional requirements determined as a result of the SREP) and the remainder from the capital conservation buffer component;
• Total Capital ratio of 11.50%, comprising a binding measure of 9.00% (of which 8.00% against the minimum regulatory requirements and 1.00% against the additional requirements determined as a result of the SREP) and the remainder from the capital conservation buffer component.

Approval of the Consolidated Half-Year Financial Report as at 30 June 2023 | Page 4

The soundness of the Group with respect to the requirements was confirmed.

Consolidated Income Statement

Profit for the period increased by about Euro 139.3 million (+ 257.3%), mainly benefiting from the positive non- recurring effects of the acquisition of the BPER Group's business units with the recognition of the provisional gross badwill of Euro 53.3 million resulting from the purchase price allocation (PPA) process, and from the sale to Worldline Italia of the merchant acquiring business unit with the recognition of a gross gain of Euro 98.5 million.

The main cost and revenue components of the reclassified income statement are analysed below.

Operating income

The core revenue items from operations increased by approximately Euro 34.2 million (+14.3%) compared to the comparison period, amounting to Euro 274.0 million. The performance is mainly attributable to the growth in net interest income of Euro 36.9 million (+28.0%) and net commissions of Euro 2.1 million (+2.2%), partially offset by the reduction in the net result from financial assets and liabilities of Euro 4.5 million (-53.2%) and other operating income and expenses of Euro 0.2 million (-18.8%).

Finally, dividends amounted to Euro 0.6 million, in line with the comparison period.

Operating expenses

The aggregate of operating expenses, which includes personnel expenses, other administrative expenses and net value adjustments on tangible and intangible assets, amounted to approximately Euro 148.8 million (Euro

131.9 million in the comparison period), showing an increase compared to the comparison period of respectively Euro 9.1 million (+10.7%), Euro 7.5 million (+18.2%) and Euro 0.3 million (+5.7%).

Result from operations

As a result, the result from operations as at 30 June 2023 amounted to Euro 125.2 million, an increase of over the comparison period (+16.1%).

Result after taxes

The result from operations of Euro 125.2 million led to the current result after tax of Euro 59.2 million, up 27.2% from Euro 46.5 million in the comparison period, mainly due to:

• the cost of credit (given by the balance of net value adjustments for impairment of financial assets at amortised cost and by profits (losses) from the sale or repurchase of loans), equal to approximately Euro 26.7 million (approximately Euro 27.7 million of the previous period);
• net value adjustments on securities owned for Euro 0.6 million (Euro 2.1 million in the comparison period);
• net allocations to provisions for risks and charges negative for Euro 2.8 million (negative for Euro 1.1 million in the comparison period);
• charges related to the banking system of approximately Euro 6.8 million (Euro 7.3 million in the comparison period);
• income taxes on current operations of Euro 29.1 million (formerly Euro 23.1 million).

Non-recurring operating result after taxes

As at 30 June 2023, there was a non-recurring operating profit after tax of Euro 134.2 million (positive for Euro 7.6 million in the comparison period). The item essentially consists of:

• the income of Euro 98.5 million, net of the related administrative costs, following the completion of the transfer transaction to Worldline Italia of the merchant acquiring business of Banco Desio (so-called "Aquarius Operation");
• the provisional badwill of Euro 53.3 million resulting from the purchase price allocation (PPA) process relating to the acquisition of 48 bank branches from BPER Banca S.p.A. (formerly Carige S.p.A.) and by Banco di Sardegna S.p.A. with effect from 20 February 2023 (so-called "Lanternina Operation");
• expenses amounting to Euro 2.4 million relating to consultancy and IT migration costs associated with the above-mentioned Lanternina Operation;
• after the related negative tax effect of Euro 15.2 million.
• In the comparison period, the item Non-recurring operating result after tax included:

Approval of the Consolidated Half-Year Financial Report as at 30 June 2023 | Page 5