Mediobanca S p A : BoD - Financial statements as at 31.03.2021 approved

MEDIOBANCA

BOARD OF DIRECTORS' MEETING

Financial statements as at 31/3/21 approved

Milan, 11 May 2021

9M results

Robust commercial activity in all business segments

Revenues growth (up 3% YoY1 to €1,964m), driven by record fees (€571m, up

17% YoY) and resilient NII (down 1% to €1,071m)

Fees up to around one-third of revenues, driven by CIB and WM

Cost of risk 51 bps, best ever credit asset quality levels

Moratoria reducing, NPLs down in relative terms;

coverage ratios for performing and non-performing loans increasing

in all divisions and at Group level (up 10 pp to 65%)

Cost/income ratio 46%, reflecting ongoing enhancement in distribution

Net profit up 9% to €604m

ROTE2 9%

CET1 16.3%3 (up 20bps vs June 2020)

including cash payout at 70% of net profit4

3Q results

Acceleration in all businesses

3Q retail new loans total €2.2bn, €0.6bn of which in mortgages

and €1.6bn in consumer credit (now approx. 85% of pre-Covid level)

TFAs up 5% to €69bn, with NNM5 at €1.4bn

Robust activity in CIB supporting top line and deal pipeline construction

Revenues stable at high levels (€663m, down 2% QoQ but up 14% YoY)

Cost of risk 53 bps (39 bps in 2Q FY 2020-21, 85 bps in 3Q FY 2019-20),

with strict staging criteria, no one-offs and no reversal of overlays set aside

prudentially at end-Dec. 2020

Net profit €193m, twice as high as last year (down 8% QoQ due to one-offs)

1. YoY chg.: 9M to end-March 2021 vs 9M to end-March 2020; QoQ chg.: 3M to end-March 2021 vs 3M to end-Dec. 2020.
2. ROTE/ROAC calculated using adjusted net profit (cf. footnote 6).
3. CET1 phase-in, CET1 FL @14.6% (without Danish Compromise, equal to 152 bps and with IFRS 9 fully-phased equal to approx. 13 bps). Internal calculation which differs from the figure reported as part of the Common Reporting (COREP) exercise due to the inclusion of the profit generated during the period (not subject to authorization under Article 26 of the CRR) and the estimate of a 70% dividend payout, subject to removal of the ECB ban in force until 30 September 2021. Retained earnings contribute 15 bps to the CET1 ratio.
4. Subject to removal of the ECB ban currently in force until 30 September 2021.
5. NNM in 3Q: €1.4bn in Affluent/Private segment, €1.1bn at Group level.

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The first nine months of FY 2020-21 have seen robust commercial performances in all business segments, driven by investments in people, technology and distribution which have enabled the Bank to come through the effects of lockdown in outstanding fashion and even speed up its growth path. Revenues, profit and financial solidity have all increased appreciably, with the growth borne out in 3Q as well.

The results reflect:

Robust commercial activity, with €3.6bn in net new money (NNM) generated in the Affluent/Private divisions (€1.4 bn of which in 3Q), €4.6bn of new loans in consumer credit (€1.6bn of which in 3Q, now back to 85% of pre-Covidlevels), and €1.7bn in new residential mortgages (€0.6bn of which in 3Q). CIB activity remains at high levels;

Growing revenues, which for the nine months total €1,964m, up 3% YoY, and in 3Q total €663m, up 14% YoY. Growth at the top-linelevel is even more pronounced without the equity-accountedcompanies' contribution (revenues down 32% YoY to €169m) which was impacted negatively by non-recurringitems:

Strong growth in fees (€571m, up 17% YoY), driven by CIB (€249m, up 43% YoY), with an increasing contribution from M&A, Capital Markets and Lending, and a solid performance in WM (€247m, up 5% YoY); 3Q fees of €188m match the high levels reported in the previous two quarters (2Q: €194m; 1Q: €189m);

Resilient net interest income (down 1% YoY, to €1,071m), despite lower average lending volumes and the diversified product mix in Consumer Banking, due to effective cost of funding management plus higher lending volumes in WM; the reduction in 3Q (to €351m) in part reflects the lack of positive one-offs(€5m in 2Q);

Strong improvement in net trading income (€152m, up 71% YoY), accelerating further still in 3Q FY 2020-21(€65m) due to the positive stock market trend.

Low cost of risk, at 51 bps for 9M (61 bps) and 53 bps for 3Q, the latter without writebacks and with no reversals of the overlays set aside on prudential grounds at end-December2020 (€50m). The decline in the cost of risk goes alongside the reduction in moratoria (which now represent just 1.7% of the Group's total loan book, 60% of which classified as Stage 2 or Stage 3) and the decrease in NPLs as a percentage of total loans (down from 4.1% to 3.4% gross, and from 1.9% to 1.2% net); conversely, the coverage ratios increased significantly, both for performing loans (from 1.25% to 1.34%) and non-performing loans, at Group level (up 10 pp to 65%) and at all divisions (CIB up 13 pp to 55%, Consumer Banking up 6 pp to 74%, WM up 3 pp to 49%, leasing up 5 pp to 41%).

Net profit up 9% to €604m (€193m of which in 3Q);

ROTE6 9% (both 9M and 3M).

CET17 (phase-in) 16.3%, 10 bps higher than at end-December and up 240 bps YoY, including a dividend payout of 70% of reported net profit, proposal subject to removal of the ECB ban

currently in force until September 2021.8

1. ROTE calculated using adjusted net profit (GOP net of loan loss provisions, minority interest and taxes, with taxation normalized at 33%, 25% for PB and AM, 2% for PI); Covid-related impacts also excluded for FY 2020 and 4Q 2020.
2. Cf. footnote 3.
3. The dividend proposal for the current year will be made within a timeframe consistent with submission for approval by shareholders at the Annual General Meeting scheduled to be held at end-October 2021.

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At the divisional level, CIB posted significant growth, with top and bottom line both near the highest levels seen in recent years, which offset the performances in Consumer Banking and Principal Investing, both of which reflect consolidation; while Wealth Management continues to improve in terms of positioning, revenues and profitability.

CIB: ROAC8 17%, net profit €232m (up 49% YoY), with revenues near their all-time highs (€537m), split equally across all three quarters. During the period under review, Mediobanca has strengthened its leadership position in its core segments and markets, participating in important M&A and Capital Market deals in Italy and France in particular. In 3Q fees from mid-corporatebusiness climbed to approx. one-thirdof advisory fee income. All revenue streams reflect increases, fee income in particular (up 43%, to €249m). The cost/income ratio declined to 42%, while the lower net profit for 3Q (€61m, vs €86m in 2Q) reflects the lack of positive one-offitems.

WM: ROAC9 22%, net profit €74m (up 11% YoY), on revenues of €464m (up 5% YoY). TFAs rose to €69bn, driven by strong gathering capability, in the Affluent and Private segment especially (€3.6bn in NNM in 9M and €1.4bn in 3Q), which reflects the ongoing enhancement of brand, offering and distribution (30 more bankers recruited to CheBanca! in 3Q, selective additions and expansion of the private markets offering in Private Banking), and leverages on the opportunities offered by the Group's unique business model.

Consumer Banking: ROAC8 28%, net profit €216m, down 13% YoY on lower revenues (€764m; down 5% YoY) due to lower average volumes and the diversified product mix which affects margins. Investments to facilitate remote operations allowed new business to return to 85% of pre-Covid levels despite the restrictions (approx. €1.6bn, higher than the €1.5bn reported in both 1Q and 2Q). The performance in terms of asset quality was again particularly impressive (cost of risk 206 bps for 9M and 174 bps for 3M), with all risk indicators returning to near all-timelow levels.

PI: ROAC8 12%, net profit €199m, the reduction being due to non-recurring items relating to asset disposals by Assicurazioni Generali, offset only in part by writebacks in seed capital.

Holding Functions: improvement at net result level, and higher funding in deposits and T- LTROs in particular, in a scenario characterized by high liquidity. In 3Q deposits increased from €24.6bn to €25.2bn, driven by CheBanca!, while use of the T-LTROincreased from €6.2bn to €7.0bn. The division reported improvement in net interest expense and lower central costs; the 3Q results also reflect payments made to the SRF (€43m). Indicators at comfortable levels: NSFR 109% and LCR 153%, CBC €11.2bn.

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9 ROAC: calculated as adjusted net profit (cf. footnote 5)/average allocated capital; allocated capital = 9% of

RWAs (for the PI division: 9% of RWAs + capital deducted from CET1).

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With Renato PAGLIARO in the Chair, the Directors of Mediobanca approved the Group's individual and consolidated financial statements for the period ended 31 March 2021, as illustrated by Chief Executive Officer Alberto NAGEL.

Consolidated results

The Mediobanca Group continues on its path to growth, reporting substantial increases in revenues, profits and financial solidity for the first nine months of FY 2020-21, a performance borne out in the third as well as the first two quarters.

The 9M results reflect total income of just under €2bn (up 3%), the cost/income ratio stable at 46%, and net profit of €603.9m, with the ROTE above 9%, helped by a 3Q performance - with revenues of €662.8m and net profit of €193.3m - among the best posted in recent years.

The last three months have seen continued robust commercial activity, with healthy new business in retail mortgage lending (€604m), acceleration in Net New Money (€1.1bn, with the Affluent/Private segment generating €1.4bn), and strong Corporate and Investment Banking activity, with fee income approx. 10% higher than the quarterly average in recent years. Conversely, new business in Consumer Banking continues to be impacted by the restrictions resulting from lockdown (€1,640m, approx. 85% of pre-Covid levels).

These results were helped by the accommodative monetary policy scenario, plus the reduced volatility levels and buoyant performances of stock market indexes generally which showed widespread increases (MSCI World: 4.5%; S&P: +5.8%; Eurostoxx 600: 7.7%; and FTSE MIB: +10.9%), and also fundamentally stable indexes for the highest-risk credit assets (European ITRAXX CDS around 250 bps). The BTP-Bund spread fell to below 110 bps.

Total income was up 3%, from €1,907.1m to €1,963.6m, Assicurazioni Generali, which reduced from €248.8m normal levels in the last two quarters (2Q €67.5m; performed as follows:

despite the reduced contribution from to €170.2m having returned to more 3Q €57.7m). The main income items

Net interest income resilient: NII decreased by 1%, from €1,081.7m to €1,071.4m, reflecting the reduced contribution from Consumer Banking (down 6.6%, from €711.3m to €664.4m, €216m of which in 3Q) only in part offset by the positive performances in CIB (up 8%, from €202.6m to €218.8m) and Holding Functions (where net interest expense reduced from €40.8m to €34.4m). The 3Q performance in Consumer Banking shows the effects of the lower average volumes plus the new business mix, with a growing contribution from special purpose loans, which has caused a slight reduction in profitability; in 9M the cost of funding (calculated as the difference versus Euribor) has remained basically unchanged, at 80 bps, despite the further reduction in market rates (approx. 20 bps);

Fee income continues to grow: up 17.2%, from €487.3m to €571.2m, now accounting for almost one-third of total income, and remaining near the very healthy level seen in 2Q (€188.4m); the contribution from Corporate and Investment Banking was 43.2% higher than last year (up from €174.2m to €249.4m, €77.2 of which generated in 3Q), whereas that of Wealth Management was 5.3% higher (up from €234.5m to €246.9m, €86.9m of which in 3Q);

Trading income came back strongly: net treasury income rose from €88.6m to €151.6m, returning to March 2019 levels. In 3Q the contribution from the proprietary portfolio increased (€44.7m), split equally between trading and banking books, which increased the contribution for 9M to €82.8m (approx. 55% of the total), with gains of €43m (€19m of which in 3Q) that do not affect the OCI valuation reserve (€75.7m, €41.1m of which Italian government securities); dividends and other income in Principal Investing more than doubled (from €8.1m to €20.4m); whereas client activity, down from €76m to €47.4m, continues to be penalized by market conditions, adding €15.4m for the quarter.

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