Banco di Desio e della Brianza : The Board of Directors of Banco di Desio e della Brianza S.p.A. has approved this "Consolidated Quarterly Report as at 30 September 2017 "

PRESS RELEASE CONSOLIDATED RESULTS AS AT 30 SEPTEMBER 2017

The Board of Directors of Banco di Desio e della Brianza S.p.A. has approved this "Consolidated Quarterly Report as at 30 September 2017 - Press Release"

 PROFIT (LOSS) FROM OPERATIONS BEFORE TAX ON THE RISE (+17.0%) to Euro 51.7 million1

(formerly Euro 44.2 million), benefiting from the positive trend in net commission income, which came to Euro 120.2 million (formerly Euro 112.2 million), and from the fall in the cost of credit to Euro 44.1 million (formerly Euro 61.2 million), while maintaining high levels of coverage of both non-performing and performing loans:

Coverage ratio2 of doubtful loans at 57.3% and gross of write-offs at 61.6% (56.3% and 60.9% as at 31.12.2016) Coverage ratio2 of total non-performing loans at 48.1% and gross of write-offs at 51.7% (formerly 46.2% and 50.0%)

Coverage of performing loans 0.48% (formerly 0.54%)

 CONSOLIDATED NET PROFIT (attributable to the Parent Company) Euro 26.9 million (Euro 36.4 million at 30 September 2016) due to significant non-recurring items, mainly due to components linked to support of the banking system

 HIGH AND STABLE CAPITAL ADEQUACY WITH AN AMPLE MARGIN OVER AND ABOVE WITH THE MINIMUM CET1 REQUIREMENT

Capital ratios	Reported as at 30.09.2017			SREP3 from instructions dated 4 April 2017 [B]	SREP Buffer [A] - [B]
	Banco Desio Brianza	Banca Popolare di Spoleto	Banco Desio Group [A]
CET 1	16.96%	9.70%	11.33%	6.0%	+ 5.33%
TIER 1	17.03%	9.70%	11.47%	7.6%	+ 3.87%
Total Capital Ratio	20.00%	10.48%	13.56%	9.75%	+ 3.81%

Shareholders' equity of Euro 888.9 million (formerly Euro 868.1 million)

Own funds of Euro 1,070.9 million4 (CET1 + AT1 Euro 905.6 million + T2 Euro 165.3 million) (formerly Euro 1,085.0 million)

1. If the Banco Desio Group manages to achieve the Eurosystem's benchmark net increase in lending, which it has committed to do as part of the "TLTRO II" operation, this would give it the right to earn negative interest at a rate of 0.40%. To date, no benefit has been recognised for accounting purposes, though Banco Desio Group has implemented lending policies with a view to achieving this benchmark.

2. Also considering non-performing loans of the subsidiary Banca Popolare di Spoleto S.p.A., shown gross of write-downs.

3. Based on the Bank of Italy's instructions sent to the Parent Company on 4 April 2017, which contained the minimum capital requirements to be met at consolidated level following completion of the Supervisory Review and Evaluation Process (SREP): CET1 of 6%, binding - pursuant to art. 67-ter TUB - for 4.8% (minimum regulatory requirement of 4.5% and additional requirements of 0.3%) with the difference represented by the capital conservation buffer, Tier1 ratio of 7.6%, binding - pursuant to art. 67-ter TUB - for 6.4% (minimum regulatory requirement of 6.0% and additional requirements of 0.4%) with the difference represented by the capital conservation buffer, and Total Capital Ratio of 9.75%, binding - pursuant to art. 67-ter TUB - for 8.5% (minimum regulatory requirement of 8% and additional requirements of 0.5%) with the difference represented by the capital conservation buffer.

4. After a pay out of 40%.

www.bancodesio.it

 INCREASE IN LOANS TO ORDINARY CUSTOMERS: Euro 9.7 billion, up since the end of the prior year (+1.7%)

"Gross doubtful loans/Gross loans" ratio of 10.83% (formerly 10.45%) "Net doubtful loans/Net loans" ratio of 5.02% (formerly 4.95%)

"Net non-performing loans/Net loans" ratio of 8.90% (formerly 9.36%)

 TOTAL CUSTOMER DEPOSITS HAVE RISEN SINCE 31 DECEMBER 2016: Euro 24.9 billion (+5.4%),

of which DIRECT DEPOSITS Euro 10.7 billion (+5.7%), with a ratio of Ordinary customer loans to Direct deposits of 90.2% (previously 93.8%) and INDIRECT DEPOSITS of Euro 14.2 billion (+5.1%)

***

The Board of Directors of Banco di Desio e della Brianza S.p.A., which met on 9 November 2017, approved the "Consolidated quarterly report on operations as at 30 September 2017 - Press release" (hereinafter "Report"), which has been prepared on a voluntary basis given that interim reports, additional to the annual and half-yearly reports, are not required by the new wording of art. 154-ter, paragraph 5, of Legislative Decree no. 58/1998 ("Consolidated Finance Act" or "TUB") added by Legislative Decree no. 25/2017 implementing Directive 2013/50/EU.

This Report has also been prepared in order to determine the result for the period, so that own funds and prudential coefficients can be calculated.

As regards the criteria for recognition and measurement, this Report has been prepared, by applying the IAS/IFRS in force at the reference date as follows.

The amounts of the tables and charts of the Report are expressed in thousands of Euros.

The Report is subject to a limited audit by Deloitte & Touche S.p.A. in order to calculate the portion of the interim result to be included in own funds.

Results of the period Key figures and ratios Table 1 - Balance sheet

30.09.2017	31.12.2016	Change amount %
Total assets	13.765.412	12.365.903	1.399.509	11,3%
Financial assets	2.778.476	1.870.808	907.668	48,5%
Due from banks	701.060	112.838	588.222	521,3%
Loans to customers	9.678.217	9.720.108	-41.891	-0,4%
Property, plant and equipment	179.837	181.201	-1.364	-0,8%
Intangible assets	17.913	17.843	70	0,4%
Due to banks	1.735.257	962.245	773.012	80,3%
Due to customers	9.094.784	8.729.591	365.193	4,2%
Debt securities in issue and Financial liabilities designated at fair value through profit and loss	1.622.708	1.409.792	212.916	15,1%
Shareholders' equity (including Net profit/loss for the period) (1)	888.934	868.120	20.814	2,4%
Own Funds	1.070.943	1.084.987	-14.044	-1,3%
Total indirect deposits	14.160.193	13.474.129	686.064	5,1%
of which: Indirect deposits from ordinary customers	8.940.100	8.415.302	524.798	6,2%
of which: Indirect deposits from institutional customers	5.220.093	5.058.827	161.266	3,2%

Table 2 - Income statement (2)

30.09.2017	30.09.2016	Change amount %
Operating income	310.367	317.725	-7.358	-2,3%
of which: Net interest income	171.206	178.808	-7.602	-4,3%
Operating costs	209.693	209.231	462	0,2%
Result of operations	100.674	108.494	-7.820	-7,2%
Profit (loss) from operations after tax	34.390	32.266	2.124	6,6%
Non-recurring profit (loss) after tax	-6.872	5.155	-12.027	n.s.
Profit for the period (1)	26.860	36.408	-9.548	-26,2%

(1) pertaining to the Parent Company;

(2) from the reclassified income statement.

Table 3 - Key figures and ratios

30.09.2017	31.12.2016	Change amount
Capital/Total assets		6.5%	7.0%	-0.5%
Capital/Loans to customers		9.2%	8.9%	0.3%
Capital/Due to customers		9.8%	9.9%	-0.1%
Capital/Debt securities in issue and Financial liabilities designated at fair value through profit and loss		54.8%	61.6%	-6.8%
Common Equity Tier 1 (CET 1) / Risk-weighted assets (Common Equity Tier 1 ratio)		11.3%	10.9%	0.4%
Core Tier 1 capital (T1) / Risk-weighted assets (Tier 1 ratio)		11.5%	11.0%	0.5%
Total Own Funds / Risk-weighted assets (Total capital ratio)		13.6%	13.5%	0.1%
Financial assets/Total assets		20.2%	15.1%	5.1%
Due from banks/Total assets		5.1%	0.9%	4.2%
Loans to customers/Total assets		70.3%	78.6%	-8.3%
Loans to customers/Direct customer deposits		90.3%	95.9%	-5.6%
Due to banks/Total assets		12.6%	7.8%	4.8%
Due to customers/Total assets		66.1%	70.6%	-4.5%
Debt securities in issue and financial liabilities designated at fair value through profit and loss / Total assets		11.8%	11.4%	0.4%
Direct customer deposits / Total assets		77.9%	82.0%	-4.1%
30.09.2017	30.09.2016	Change amount
Cost/Income ratio	67.6%	65.9%	1.7%
Net interest income/Operating income	55.2%	56.3%	-1.1%
Result of operations/Operating income	32.4%	34.1%	-1.7%
Profit (loss) from operations after tax / Capital (3) - annualised (4)	5.4%	4.5%	0.9%
ROE (3) - annualised (4) ( 5)	4.6%	3.0%	1.6%
Profit (loss) from operations before tax/Total assets (ROA)- annualised	(4)	0.5%	0.4%	0.1%
30.09.2017	31.12.2016	Change amount
Net doubtful loans/Loans to customers		5.0%	4.9%	0.1%
Net impaired loans/Loans to customers		8.9%	9.4%	-0.5%
% Coverage of doubtful loans		57.3%	56.3%	1.0%
% Coverage of doubtful loans, gross of cancellations (6)		61.6%	60.9%	0.7%
% Total coverage of non-performing loans ( 6)		48.1%	46.2%	1.9%
% Coverage of non-performing loans, gross of cancellations (6)		51.7%	50.0%	1.7%
% Coverage of performing loans		0.48%	0.54%	-0.05%

Table 4 - Structure and productivity ratios

30.09.2017	31.12.2016	Change amount %
Number employees (7) Number of branches	2.348 266	2.356 271	-8 -5	-0,3% -1,8%
Loans and advances to customers per employee (8) Direct deposits from customers per employee (8)	4.115 4.557	4.113 4.290	2 267	0,0% 6,2%
30.09.2017	30.09.2016	Change amount %
Operating income per employee (8) - annualised (4)	176	179	-3	-1,7%
Result of operations per employee (8) - annualised (4)	57	62	-5	-8,1%

(3) equity excluding ne t pro fit (lo s s ) fo r the perio d;

(4) the amo unt repo rte d a t 30.09.2016 is the final figure a t the end o f 2016;

(5) the annualis ed ROE a t 30.09.2017 do es no t ta ke into co ns ideratio n the annualis atio n o f the Net no n-recurring o perating pro fit;

(6) als o co ns ide ring no n-perfo rming lo a ns o f the s ubs idia ry Ba nca P o po lare di Spo le to S.p.A., repo rted gro s s o f write -do wns ;

(7) num ber o f emplo ye es at the refere nce date ;

(8) bas ed o n the number o f emplo ye es calc ula ted a s a s traight avera ge between the end o f the pe rio d a nd the e nd o f the prece ding pe rio d.