Intesa Sanpaolo S p A : 2021 First-Quarter Results

1Q21 Results

An Excellent Start to the Year

Merger with UBI Banca Successfully

Completed Enabling Additional Value

Creation

A Strong Bank for a Digital World

May 5, 2021

ISP Delivered an Excellent Start to the Year with €1.5bn Net Income…

€1.5bn Net income (+32% vs 1Q20), the best quarter since 2008, and

€2.6bn Gross income (+22% vs 1Q20(1)), the best quarter ever

Strong acceleration of Operating income and Operating margin in Q1(2) (+9% and +38% vs 4Q20(1))

Insurance income up 17% vs 4Q20(1), with non-motor P&C revenues up 27%

The best Q1 ever for Commissions (+9% vs 1Q20(1))

~€13bn growth in Customer financial assets in Q1 to fuel Wealth Management engine

Strong decrease in Operating costs (-2.6% vs 1Q20(1))

Annualised Cost of risk down to 35bps(2) coupled with the lowest-ever Gross NPL inflow

Lowest NPL stock and NPL ratios since 2007, with Gross NPL ratio at 4.4%

(3.5% according to EBA definition) and Net NPL ratio at 2.3%

Common Equity ratio up at 15.7%(3)

Excellent performance despite multiple lockdowns and while successfully merging UBI Banca, firmly

on track to deliver a Net income well above €3.5bn in 2021

1. Data restated - where necessary and material - considering the changes in the scope of consolidation following the inclusion of UBI Banca and, on the basis of management accounts, the reallocation of the contribution of branches sold in 1Q21 and those to be sold in 2Q21 to Income (Loss) from discontinued operations
2. Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1Q21 and those to be sold in 2Q21 to Income (Loss) from discontinued operations
3. Pro-formafully loaded Basel 3 (31.3.21 financial statements considering the total absorption of DTA related to IFRS9 FTA, goodwill realignment/adjustments to loans/non-taxable public cash contribution of €1,285m covering the integration and rationalisation charges relating to the acquisition of the operations of the two former Venetian banks, the expected absorption of DTA on losses carried forward and DTA related to the combination with UBI Banca arising from PPA, integration charges and the disposal to BPER Banca of a portion of branches and related assets and liabilities and the expected distribution of 1Q21 Net income of insurance companies)

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… and Is Ready to Succeed in the Future…

Common Equity ratio(1) well above regulatory requirements (~+710bps(2)) coupled with a strong liquidity position,

with LCR and NSFR well above 100% and €302bn in Liquid assets

Over €6bn(3) out of 2020 pre-tax profit allocated to succeed in the coming years and further strengthen the

sustainability of our results

The lowest NPL stock and NPL ratios since 2007, with 2018-21 NPL deleveraging target exceeded one year ahead of plan

Distinctive proactive credit management capabilities (Pulse)

coupled with strategic partnerships with leading NPL industrial players (Intrum, Prelios)

High operating efficiency with Cost/Income ratio at 46.5%(4)

Over €1bn yearly synergies from the combination with UBI Banca

Successful evolution towards a "light" distribution model, with ~1,100 branches

rationalised since 2018 and significant room for further branch reduction

A Wealth Management and Protection company with €1.2 trillion in Customer financial assets

Strong digital proposition, with ~11.6m multichannel clients and ~7m clients using our Apps

1. Pro-formafully loaded Basel 3 (31.3.21 financial statements considering the total absorption of DTA related to IFRS9 FTA, goodwill realignment/adjustments to loans/non-taxable public cash contribution of €1,285m covering the integration and rationalisation charges relating to the acquisition of the operations of the two former Venetian banks, the expected absorption of DTA on losses carried forward and DTA related to the combination with UBI Banca arising from PPA, integration charges and the disposal to BPER Banca of a portion of branches and related assets and liabilities and the expected distribution of 1Q21 Net income of insurance companies)
2. Calculated as the difference between the Fully Loaded CET1 Ratio vs requirements SREP + Combined Buffer
3. €2.2bn provisions for future COVID-19 impacts, €2.1bn additional provisions on UBI Banca NPL and Performing loans and €2bn integration charges
4. Considering, on the basis of management accounts, the reallocation of the contribution of branches sold in 1Q21 and those to be sold in 2Q21 to Income (Loss) from discontinued operations

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… and to Continue Delivering Best-In-Class Performance

Profitability

Dividend payout

Capital

Net income well above €3.5bn in 2021

• 75% total cash payout ratio(1)(2) (dividends and reserves distribution) for
  2020 €3.5bn adjusted Net income(3):
• • €694m(4) cash dividends to be paid in May 2021
  • Additional cash distribution from reserves to reach a total payout ratio of 75%(2) possibly by 4Q21, subject to ECB approval
• 70% cash dividend payout ratio(1)(2) for 2021 Net income, partially distributed as interim dividend in 2021 (€1.1bn already accrued in Q1)

Maintain a solid capital position with a minimum Common Equity ratio(5) of 13% (12% fully phased-in)

The integration with UBI Banca adds significant value by

delivering synergies above €1bn per year with no social costs

1. Subject to ECB indications to be announced in respect of dividend policy after 30.9.21, the deadline for the recommendation of 15.12.20
2. Envisaged in the 2018-21 Business Plan
3. Excluding from 2020 stated Net income the items related to the combination with UBI Banca (effect of PPA - including negative goodwill - and integration charges) and the goodwill impairment related to the Banca dei Territori Division
4. The maximum distributable amount according to the ECB recommendation dated 15.12.20 on dividend policy in the aftermath of the COVID-19 pandemic
5. Pro-formafully loaded Basel 3 (considering the total absorption of DTA related to IFRS9 FTA, goodwill realignment/adjustments to loans/non-taxable public cash contribution of €1,285m covering the integration and rationalisation charges relating to the acquisition of the operations of the two former Venetian banks, the expected absorption of DTA on losses carried forward and DTA related to the combination with UBI Banca arising from PPA, integration charges and the disposal to BPER Banca of a portion of branches and related assets and liabilities)

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Q1 still Impacted by COVID-19, but Italian Fundamentals will Facilitate the Recovery

1Q21 still impacted by COVID-19 but GDP expected to strongly recover in 2021

The Italian economy is resilient thanks to strong fundamentals and can leverage on Government interventions and EU financial support

Italian GDP YoY and QoQ evolution(1)		YoY Italy
%		QoQ Italy

20			15.9
15
10
5
0					-0.4
-5				-1.9
-5.5
-10
-15		-13.0
-20	1Q	2Q	3Q	4Q	Q1
			2020		2021

▪ After multiple lockdowns in 2020 and

1Q21, restrictions due to COVID-19 are

now easing and the vaccination

campaign is gathering pace

Households

Corporates

Banking system

Government

Support

• Strong Italian household wealth at €10.7tn, of which €4.4tn in financial assets
• Low level of household debt
• Manufacturing companies have stronger financial structures than pre-2008 crisis levels
• Export-orientedcompanies highly diversified in terms of industry and size, Italian exports have outperformed Germany's by over 4pp over the past 5 years(2)
• Banking system far stronger than pre-2008 crisis levels
• Extensive packages worth more than €200bn in 2020-21
• National Recovery and Resilience Plan(4) providing Italy with more than €200bn in grants and loans, of which ~€27bn in 2021
• • Mostly funded by EU financial support (Next Generation EU)
  • Strongly focused on investments and reforms to boost GDP growth

		▪ GDP is expected to grow by 3.9% in
		2021(3) and by 4.1% in 2022(3), after the
		8.9% contraction in 2020
(1)	Source: Bloomberg, ISTAT
(2)	Monthly data at current prices from December 2015 to February 2021
(3)	Source: Consensus Economics, as of mid-April 2021
(4)	Piano Nazionale di Ripresa e Resilienza, presented to Consiglio dei Ministri on 23.4.21

ISP to provide more than €400bn in medium-long term lending to businesses and households in support of Italy's Recovery and Resilience Plan(4)

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