BPER Banca S p A : Group Results 1Q21.pdf

1Q21 consolidated results

Piero Luigi Montani, CEO

7 May 2021

1

Disclaimer

This document has been prepared by "BPER Banca" solely for information purposes, and only in order to present its strategies and main financial figures.

The information contained in this document has not been audited.

No guarantee, express or implied, can be given as to the document's contents, nor should the completeness, correctness or accuracy of the information or opinions herein be relied upon. BPER Banca, its advisors and its representatives decline all liability (for negligence or any other cause) for any loss occasioned by the use of this document or its contents.

All forecasts contained herein have been prepared on the basis of specific assumptions which could prove wrong, in which case the actual data would differ from the figures given herein.

No part of this document may be regarded as forming the basis for any contract or agreement.

No part of the information contained herein may for any purpose be reproduced or published as a whole or in part, nor may such information be disseminated.

The Manager responsible for preparing the Company's financial reports, Marco Bonfatti, declares, in accordance with art. 154- bis, para. 2, of the "Consolidated Financial Services Act" (Legislative Order No. 58/1998), that the accounting information contained in this document corresponds to documentary records, ledgers and accounting entries.

Marco Bonfatti

Manager responsible for preparing the Company's financial reports

BPER Banca S.p.A., head office in Modena, via San Carlo, 8/20 - Tax Code and Modena Companies Register no. 01153230360 - Company belonging to the BPER BANCA
GROUP VAT, VAT no. 03830780361 - Share capital Euro 2,100,435,182.40 - ABI Code 5387.6 - Register of Banks no. 4932 - Member of the Interbank Deposit Guarantee
Fund and of the National Guarantee Fund - Parent Company of the BPER Banca S.p.A. Banking Group - Register of Banking Groups no. 5387.6 - Tel. [phone] -	2
Telefax 059.2022033 - e-mail: [e-mail] - Certified e-mail (PEC): [e-mail] - bper.it - istituzionale.bper.it.

Important methodological note

Change in the scope of consolidation and Purchase Price Allocation

Change in the scope of consolidation

Q121 saw the completion of the integration in BPER Banca of the UBI Banca business unit1 (consisting of 455 bank branches and 132 operational units) acquired from Intesa Sanpaolo Group. The transaction took effect on 22 February 2021 for legal and accounting purposes, thereby the assets and liabilities of these units have been included in the scope of consolidation with an economic contribution to the P&L starting from the same date.

As a result, the accounting figures at 31 March 2021 are not comparable with the previous periods.

Provisional Purchase Price Allocation (PPA)

Q121 results included the impact of PPA carried out following the first provisional accounting for the acquisition of UBI going concern, in accordance with IFRS 3 "Business Combinations". The difference between the net equity and the purchase price attributable to the business unit acquired ("Badwill" or "Bargain Purchase") amounted to 928.5 €mln. The allocation process through the measurement at fair value of the assets and liabilities acquired as at the initial recognition date, led to the following PPA adjustments:

• -337.5€mln on non-performing loans;
• +220.1 €mln on performing loans;
• -19.9€mln on real estates;
• -10.0€mln on provisions for Risk and Charges.

The outcome of the provisional PPA was a Bargain Purchase booked in the Q121 P&L for 781.5 €mln.

1. Includes the going concern business operations of UBISS (consortium company controlled by UBI Banca).

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Agenda

BPER GROUP CONSOLIDATED RESULTS

Executive summary

Balance sheet structure

Profit and loss

Liquidity and Capital adequacy

Final remarks

ANNEXES

4

Executive summary

Significant

dimensional

growth

Increase in the

profitability

Steady

improvement in the asset quality

• Successful integration of 587 UBI branches acquired from ISP, which allowed to strengthen the Bank's competitive position in strong economic areas, previously only partially covered
• Customer base reached 4.1mln clients (+50% YTD)
• Significant volumes growth driven by UBI going concern acquisition and positive commercial performance:
• • Total funding up to 255 €bn (+38% YTD), of which indirect deposits1 161 €bn (+32% YTD)
  • Net customer loans increase to 75 €bn (+42% YTD)
• Net profit increased to 400.3 €mln, reflecting the contribution of UBI going concern and one-off items2, among which: badwill3 (+781.5 €mln), goodwill impairments (-230.4 €mln), integration costs (-83.4 €mln) and additional LLPs (-260.0 €mln)
• Strong operating income growth to 757.7 €mln
• Cost of risk annualized equal to 222bps (84bps excluding additional LLPs)
• Gross and net pro forma NPE ratios4 significantly reduced respectively to 5.9% and 3.1% (vs 7.8% and 4.0% in Dec.'20), the lowest level since 2007 financial crisis, thanks to the going concern acquisition and NPE disposal
• NPE cash coverage equal to 49.5%, kept at high level including NPE disposals and PPA effect
• Annualized default rate furtherly reduced to 0.7% from 1.0% in Dec. '20
• Texas ratio at 54.7% down from 55.4% in Dec.'20

Capital solidity

and robust

liquidity

Continuous

commitment in

supporting clients

• CET1 ratio Fully Phased pro-forma5 at 13.4% with a wide buffer vs. SREP (8.125%)
• LCR >200% well above the 100% regulatory threshold and liquidity buffer for nearly 28.7 €bn
• Moratoria on loans payment: total amount granted in terms of residual debt, equal to 16 €bn (of which 5 €bn UBI going concern). Moratoria still in place equal to 8.1 €bn
• State-guaranteedloans increased to 6.1 €bn (of which 1.9 €bn UBI going concern) from 3.5 €bn at end of 2020

1.	Including life insurance premiums.
2.	See slide 17.
3.	Excluding recovery of badwill taxation (296.4 €mln) as per contractual provisions with Intesa Sanpaolo.	5
4.	Including UTP disposal finalized in April 2021. The ratio does not include the UTP disposal for a GBV of 52 €mln still in the process of finalization.

5.The CET1 ratio Fully Phased pro-forma has been estimated excluding the effects of the transitional provisions in force and including the result of the period, thus simulating, in advance, the effects of the authorization issued by the ECB for the inclusion of these profits in Own Funds pursuant to art. 26, para. 2 of the CRR.