ILLIMITY APPROVES ITS 2021-25 STRATEGIC PLAN

SIGNIFICANT AND SUSTAINABLE PROFITABILITY

ROBUST CAPITAL BASE INCLUDING DIVIDEND FLOW

• SHAREHOLDERS' EQUITY 1 BILLION EURO IN 2023, 1.4 BILLION IN 2025
• CET1 RATIO CONSTANTLY ABOVE 15%
• CUMULATED DIVIDENDS OF CA. 180 MILLION EURO OVER THE PLAN HORIZON2

STRATEGIC ALLIANCE WITH THE ION GROUP

LICENSE AGREEMENT SIGNED FOR ILLIMITY'S IT PLATFORM WHICH WILL GENERATE REVENUE OF 90 MILLION EURO BY 2025

WIDE-RANGING COLLABORATION AGREEMENT ALSO INCLUDING AN OVERALL INVESTMENT OF UP TO 9.99% IN ILLIMITY'S SHARE CAPITAL TO BE ACHIEVED THROUGH A CAPITAL INCREASE RESERVED TO THE ION GROUP FOR 5.75 MILLION ORDINARY SHARES AND WARRANTS FOR A FURTHER 2.4 MILLION SHARES

RESOLVED TO CONVENE THE EXTRAORDINARY SHAREHOLDERS' MEETING ON 29 JULY 2021 TO ADOPT RESOLUTIONS ON CAPITAL INCREASES

B-ILTY IS BORN, THE FIRST DIRECT BANK AT THE SERVICE OF SMALL CORPORATES: LAUNCH BY THE FOURTH QUARTER OF 2021

NEW HYPE: LAUNCH BY THE THIRD QUARTER OF 2021

1. Ratio between net profit for the year and average net equity. Annualised. Rounded figures.
2. On the assumption that the ECB's current restrictions on dividend payments for the period through 30 September 2021 are not confirmed.

1

Milan, 22 June 2021 - Chaired by Rosalba Casiraghi, the Board of Directors of illimity Bank S.p.A. ("illimity" or the "Bank") yesterday approved the illimity Group's 2021-25 Strategic Plan (the "Plan").

THE PLAN IS BASED ON THE SOLID RESULTS ACCOMPLISHED, FIRST AND FOREMOST THE

ALREADY ACHIEVED RETURN ON EQUITY (ROE3) OF AROUND 8% FOR THE FIRST QUARTER OF 2021 AND EXPECTED AT 10% FOR THE YEAR 2021 AS A WHOLE, WITH A FORECAST NET PROFIT OF BETWEEN 60 AND 70 MILLION EURO WHILE MAINTAINING A LOW RISK PROFILE AND A ROBUST CAPITAL BASE

The results achieved are based on a series of strategic decisions that have proved to be correct:

• illimity has focussed on loans to SMEs and specifically in three segments of significant interest:
• • performing loans to corporates: a market worth 700 billion euro4 where in two years of activity, illimity has succeeded in becoming a reference player, disbursing corporate loans of around 1 billion euro and gaining a key position also in the Acquisition Finance sector;
  • unlikely to pay ("UTP") corporate loans: a rapidly growing market where transactions of over 35 billion euro5 are expected to take place between 2021 and 2025 and where illimity is already positioned as one of the leading operators;
  • corporate NPLs: a market where transactions of over 140 billion euro6 are forecast to take place between 2021 and 2025 and where illimity has already succeeded in becoming one of the largest private investors over the past two years.
• illimity has built up a team of over 650 professionals with significant expertise that is not always available in the banking sector. In fact, the illimiters come from over 200 different organisations. With 70% of illimiters coming from non-banking entities, particular importance has been given to experience in the various business sectors, with Tutors - experts in industries and districts - playing a central role in the SME investment and lending process;
• illimity has placed considerable focus on technology in all its sectors of activity, and among other things has developed proprietary software architecture with features unique of its kind: fully digital, modular, in cloud and therefore highly flexible and totally scalable, capable of continually integrating innovations and new fintech;
• illimity has built ESG principles into its various activities from the very beginning and has already achieved important goals with a strong commitment to going beyond, also by including qualitative and quantitative objectives in management's medium-long term incentive scheme:

1. Ratio between net profit for the year and average net equity, annualised.
2. Bank of Italy figures - "Banks and financial institutions: loans and funding by sector and local area" - December 2020.
3. 6 Source: Estimates based on various market sources (including, inter alia, the Bank of Italy and PwC). Estimates relate to the entire market of transactions in non-performing loans, as accurate projections for the SME segment alone are not available.

2

• on Environmental matters: in 2020 illimity achieved carbon neutrality at a Group level, uses electricity produced 100% from renewable sources, and is committed to extending the adoption of ESG metrics when assessing all its lending positions over the duration of the Plan;
• on Social matters: illimity makes people its strength and this is reflected in a system of corporate welfare and training that is one of the best in Italy, in enhancing the values of Diversity & Inclusion at all levels of the organisation. Thanks to this approach, the Bank has obtained Great Place to Work® certification for two consecutive years. With the creation of Fondazione illimity, the Bank has gone beyond the boundaries of its organisation, fostering an ecosystem of partnerships which, starting from the regeneration of real estate assets, will give rise to projects with a social impact;
• on Governance matters: right from the start, membership of the Board of Directors has been fairly balanced and illimity has already consolidated important processes by setting up a Sustainability Committee and publishing a Voluntary Non-Financial Statement for 2020 as well as the illimity way policy. illimity's commitment on this front is to enhance the value of and improve its direct and indirect ESG profile in all its areas of activity.

***

THE PLAN'S ECONOMIC AND FINANCIAL TARGETS PLACE ILLIMITY AT THE TOP OF ITS INDUSTRY

High and sustainable profitability and capital base:

2020 reclassified data. 1 Ratio between net profit for the year and average net equity. Rounded figures.

3

2020 reclassified data. 1 Ratio between net profit for the year and average net equity. Rounded figures.

7 8 Ratio of value adjustments on average customer loans for the following areas: Factoring, Cross-over & Acquisition Finance, High Yield Bonds classified as HTC, former BIP, Senior Financing, the B-ILTY project and going concern UTPs (both organic and inorganic).

4

• Net profit of approximately 60-70million euro as early as 2021, rising to approximately 140 million euro in 2023 and to over 240 million euro in 2025, corresponding to an average annual increase of 51% in the period 2020-25;
• Revenue increasing by an annual average of over 30% in the period 2020-25, reaching over 450 million euro in 2023 and approximately 660 million euro in 2025. A gradual rebalancing of the net interest income contribution, from 59% in 2020 to 55% in 2025, is forecast over the duration of the Plan, following the progressive increase in fees and commissions and other income items. Contributing to this latter dynamic are the development of new initiatives - neprix Sales, B-ILTY, capital markets to SMEs, illimity SGR - the recurring profits deriving from the sales and extra- judicial workout activities of the Distressed Credit Division and the increase in the income component arising from credit revaluation events in the Turnaround business;
• Operating costs are expected to rise proportionately less than revenues, at an average annual growth rate of 14% in the period 2020-25, with an initial target of operating costs, including depreciation and amortisation, of approximately 216 million euro in 2023 and approximately 255 million euro in 2025. The dynamic of the costs over the duration of the Plan reflects investments in new initiatives and the rise in business volumes, in a context of significant scalability of the current operating structure of the divisions and central functions. The increase in costs is expected to be more marked in the period 2020-23 (at an average annual growth rate of 18%) due to the initial investments in new initiatives, and more contained (at an average annual growth rate of 9%) over the final years of the Plan. Similarly, it is expected that the hiring of new staff in the period will mostly be concentrated on the development of new initiatives, with a target workforce of approximately 1,100 members of staff by the end of the Plan;
• A progressive and significant improvement in operating leverage: the cost Income ratio is forecast to fall from 76% in 2020 to less than 50% in 2023, with a further drop to below 40% by 2025. The scalability of the Bank's operating structure will already be visible in 2021, as confirmed by the decrease in the cost income ratio to 67% in the first quarter of the year;
• Cost of credit is expected to rise over the duration of the Plan compared to the starting figures for the first quarter of 2021 which benefit from a significant component of state-backed loans, to approximately 90-100bps9 in 2023 and approximately 90bps10 in 2025. This is based on prudent assumptions in terms of the probability of default ("PD") and danger rate of the loan and investment components and on a coverage rate of the organic non-performing components, including the Turnaround activity, at a level of the best industry benchmarks;
• Cumulated business origination in the period 2021-25 expected of approximately 11 billion euro, balanced between the three business Divisions. Performing loans expected to contribute approximately 60% to loans and investments new business origination over the duration of the Plan;
• Net customer loans expected at over 5 billion euro in 2023 and more than 7 billion euro by 2025, corresponding to an average annual growth rate of over 25% between 2020 and 2025. All three of the Bank's divisions are expected to make a significant contribution to growth;
• Total assets are expected to exceed 7 billion euro in 2023 and rise to around 10 billion euro

9 10 Ratio of value adjustments on average customer loans for the following areas: Factoring, Cross-over & Acquisition Finance, High Yield Bonds classified as HTC, former BIP, Senior Financing, the B-ILTY project and going concern UTPs (both organic and inorganic).

5

This is an excerpt of the original content. To continue reading it, access the original document here.