The UBI Banca Group Consolidated Results as at 30 th September th November 2015

Transcription

1 The UBI Banca Group Consolidated Results as at 30 th September th November 2015

2 Disclaimer This document has been prepared by Unione di Banche Italiane Spa ("UBI") for informational purposes only and for use in the presentation of November It is not permitted to publish, transmit or otherwise reproduce this document, in whole or in part, in any format, to any third party without the express written consent of UBI and it is not permitted to alter, manipulate, obscure or take out of context any information set out in the document. The information, opinions, estimates and forecasts contained herein have not been independently verified and are subject to change without notice. They have been obtained from, or are based upon, sources we believe to be reliable but UBI makes no representation (either expressed or implied) or warranty on their completeness, timeliness or accuracy. Nothing contained in this document or expressed during the presentation constitutes financial, legal, tax or other advice, nor should any investment or any other decision be solely based on this document. This document does not constitute a solicitation, offer, invitation or recommendation to purchase, subscribe or sell for any investment instruments, to effect any transaction, or to conclude any legal act of any kind whatsoever. This document contains statements that are forward-looking: such statements are based upon the current beliefs and expectations of UBI and are subject to significant risks and uncertainties. These risks and uncertainties, many of which are outside the control of UBI, could cause the results of UBI to differ materially from those set forth in such forward looking statements. Under no circumstances will UBI or its affiliates, representatives, directors, officers and employees have any liability whatsoever (in negligence or otherwise) for any loss or damage howsoever arising from any use of this document or its contents or otherwise arising in connection with the document or the above mentioned presentation. For further information about the UBI Group, please refer to publicly available information, including Annual, Quarterly and Interim Reports. By receiving this document you agree to be bound by the foregoing limitations. Please be informed that some of the managers of UBI involved in the drawing up and in the presentation of data contained in this document either participated in a stock option plan and were therefore assigned stock of the company or possess stock of the bank otherwise acquired. The disclosure relating to shareholdings of top management is available in the annual reports. Methodology The notes on the reclassified financial statements contained in the periodic financial reports of the Group may be consulted for a fuller comprehension of the rules followed in preparing the reclassified financial statements. 2

3 Executive Summary Balance sheet indicators confirm high quality in terms of capital, liquidity and leverage 9M15 Net Profit at 162 mln/, up by +8.1% vs. 9M14, notwithstanding the estimated contribution to the Single Resolution Fund and to the Deposit Guarantee Scheme (21 mln/ net) Core profitability (NII + Fees & Commissions - LLPs - Operating costs) up by +20.8% 9M15/9M14 Right of withdrawal exercised by 1,103 shareholders for a total of 35,409,477 shares. Second phase of the procedure: offer of the shares coming from the exercise of the withdrawal right to the other shareholders: from 12 November 2015 to 12 January

4 Strength of capital ratios confirmed, CET1 phased in at 13% CET 1 PHASED 9.5% IN CET 1 FULLY 9.5% LOADED 12.94% 13.00% +6 bps vs June 15 and +350 bps vs 9.5% (Feb 15 SREP CET1 requirement) 3Q15 profit not included 12.33% 12.56% +23 bps vs June 15 No profit included, either related to 3Q15 and for future years June '15 Sept '15 June '15 Sept '15 Camille.Lemercier@exanebnpparibas.com TOTAL CAPITAL PHASED IN 9.5% Basel 3 LEVERAGE RATIO 15.62% June '15 Sept '15-31 bps vs June % and +431 bps vs 11% (Feb 15 SREP TC requirement) 3Q15 profit not included 6.14% 6.22% 5.88% Sept June June 15 Phased in 6.04% Sept 15 Fully loaded See annex 2 As usual, in 4Q14, the Group will update the credit risk parameters included in internal rating model to fully include

5 Best in class portfolio, strong de-risking leading to lower deterioration 9.5% PERFORMING LOAN PORTFOLIO RISK PROFILE High risk 4.8% vs 5.5% in Dec 14 vs 6.4% in Dec 13 vs 8.4% in Dec 12 Unrated 5.7% vs 5.8% in Dec 14 vs 5.7% in Dec 13 vs 5.7% in Dec 12 MARCH 15 Medium Risk 15.8% vs 17.7% in Dec 14 vs 20.7% in Dec 13 vs 27.6% in Dec 12 MARCH 15 Low Risk 73.7% vs 71% in Dec 14 vs 67.2% in Dec 13 vs 58.3% in Dec 12 September 2015 vs previous years Perimeter: Network Banks + UBI Banca (IRB perimeter) TOTAL PORTFOLIO CONCENTRATION 9.5% OF RISK GEOGRAPHICAL DISTRIBUTION 9.5% as at June 15 THE LOWEST RATIO OF TOTAL GROSS 9.5% DETERIORATED LOANS/TOTAL GROSS LOANS Customers or Groups Largest % 2.9% Largest % 4.8% Largest % 6.1% Largest % 7.2% Largest % 8.1% Largest customers or groups as a percentage of total loans and guarantees 67.3% 6.4% 5.6% 4.2% 2.8% 2.7% 2.4% 2.3% 1.9% 1.8% 0.7% 0.7% 1.2% Lombardy Piedmont Latium Marches Liguria Campania Emilia Romagna Apulia Calabria Veneto Umbria Abruzzo Other* 73.7% As at 30 Sept % 23.5% 17.1% 17.0% 15.6% 15.5% Bank A Bank B Bank C Bank D Bank E UBI Banca * Other: includes the market shares of Basilicata, Friuli Venezia Giulia, Molise, Tuscany, Valle d Aosta and Trentino Alto Adige Peer Group: UCG, ISP, BP, BPER, BPM 5

6 Lending Market Share unvaried YoY Long term lending stable notwithstanding competitive pressure Decrease in short term lending, also net of CCG TOTAL GROSS LOANS: STABLE MARKET SHARE* LENDING COMPOSITION (bln/ ) Total Lending of which % 5.67% 5.67% Sept'14 June'15 Sept'15 Run-off (mainly ML term) Active - Short term Active - Medium/Long term Active - Medium/Long term Dec '14 Mar '15 June '15 Sept '15 * Net of Bad Loans, referred to households, corporate and financial companies. It does not include loans to CCG Source: Bank of Italy Of which CCG: 1 bln/ in Dec 14, 0.8 bln/ in Mar 15, 1.1 bln/ in June 15 and 0.7 bln/ in Sept 15 See annex 6 Management data 6

7 Network Banks confirm improvement in medium/long term lending originations NEW ORIGINATIONS IN MEDIUM/LONG TERM LENDING - NETWORK BANKS 9M14 vs 9M13 9M15 vs 9M14 of which 121.1% TLTRO 8.1bln/ taken in Dec 14/Mar 15/Sept 15 As at 31 Oct 15: Financing requests received: 7.7 bln/ Loans either granted or disbursed: 4.7 bln/ 24.9% 54.8% 32.0% 30.0% 24.0% 16.8% 15.6% Total Corporate Retail - Private Retail - Small business 7

8 Non value customers Value customers Dynamics of customers in the UBI Group (detail of value customers ) January September 2015 Total number of new customers 162,600 ~79,300 (48.8%) ~ 68,200 (46.8%) Total number of customers lost 145,700 Note: Value customers, e.g.: Retail customers with a Medium long term loan or with wealth > 25,000 euro or with three products of which one is a current account Private banking customers with wealth > 100,000 euro (for new customers wealth as at Sept 15, for lost customers wealth as at Dec 14)... ~ 83,300 (51.2%) ~ 77,500 (53.2 %) ~ 11,100 (65.8%) Tot net new customers +16,800 ~ 5,700 (34.2%) New Customers Customers Lost Net flows 8

9 Strong improvement in new Medium to Long Term new lending origination in 9M15, leads to a replacement rate of 119% in Network Banks, and of 71% in Product Companies, significantly higher than in previous periods FOCUS ON MEDIUM / LONG TERM LENDING* (74% of total lending) NETWORK BANKS** 41.1 bln/ (39.9 bln/ in Dec 14) New origination Reimbursement = in 9M15 119% vs. 96% in 9M14 101% in FY14 TOTAL MLT STOCK** 57.4 bln/ (57.5 bln/ in Dec 14) PRODUCT COMPANIES 10.3 bln/ (10.9 bln/ in Dec 14) New origination Reimbursement = in 9M15 71% vs. 48% in 9M14 54% in FY14 RUN-OFF PORTFOLIO 6.0 bln/ (6.6 bln/ in Dec 14) The portfolio in run off accounts for a decrease in lending of 0.6 bln/ in 9M15 NOTE: Numerator includes new disbursements, denominator includes reimbursements and exits to non performing. * Management accounts, excluding Bad Loans and IAS effect ** Excludes UBI Banca Private Investment (merged with IW Bank in May 2015) 9

10 The Group s solid liquidity position (NSFR and LCR >1, loan to deposit ratio 94.2%, eligible assets 26bln ) allows optimal management and flexibility of funding mix IAS amounts in bln Dec '14 June '15 Sept '15 % change vs. Dec '14 DIRECT FUNDING FROM ORDINARY CUSTOMERS % Current accounts and deposits % Term deposits, other payables and repos % Securities in issue: Network banks + UBI % Extra-captive customers* % Other (mainly customer CDs) % DIRECT FUNDING FROM INSTITUTIONAL CUSTOMERS % Covered Bonds % EMTN % CD and ECP % Repos with CCG % TOTAL DIRECT FUNDING % Ordinary customers partially shifting to more profitable investment products within the Group, with consequent growth in AUM stocks Group liquidity position is confirmed solid In October 2015 a New Long 7 Year Covered Bond issuance for 750 mln/ (coupon at 1.00 % equivalent to a spread of 36 basis points above the interpolated mid swap rate (7y and 3 months)) See annex 3 * Bonds placed on third party banks networks 10

11 AuM +11% and Bancassurance products +13.7% vs Sept 14, drive +10.6% increase in securities related commissions Indirect Funding Evolution bln/ Sept '14 Dec '14 June '15 Sept '15 % change vs Sept '14 % change vs June '15 AuM % -2.1% Bancassurance % 1.2% AuC % 2.0% Positive impact on commission income from securities, moving to 523 mln/ in 9M15 from 473 in 9M14 UBI Pramerica SGR AUM composition: room for improvement in the mix Sept 15 Total Indirect Funding % 0.1% 10% 4% Market effect Sept 15 vs June 15 on Total indirect funding: -1.7 bln/ (of which AuM: -1.4 bln/ ) 11% 26% 49% Bond Balanced Equity Flexible Cash 11

12 Progressive recomposition and downsizing of Italian Govies Portfolio: -3.6 bln vs Dec 2014 Dec '14 June '15 Sept '15* SIZE OF TOTAL ITALIAN GOVIES PORTFOLIO in bln/ COMPOSITION OF ITALIAN GOVIES PORTFOLIO in bln/ IAS value Nominal value IAS value Nominal value IAS value Nominal value AFS HTM HFT As at 30 Sept 15, modified rate duration of whole Italian Govies Portfolio: 1.23 Average Maturity: 5.74Y Ongoing de-risking of the portfolio to reach an average maturity of 5.22Y at year end AFS RESERVE AS AT 30/09/2015: 193 mln/ * Nominal value at Sept 14: 18.8 bln/ 12

13 Confirmed sound liquidity position framework NSFR and LCR > 1 Loan to Deposit ratio = 94.2%...Total eligible assets at 25.8 bln/, 59% of current accounts and deposits Eligible Assets 25.8 bln/ Composition (%) (net of haircut, as at 28 th October 2015) Usage (bln/ ) 10% 8% 13% 69% Italian Govies Retained securitisations Retained covered bonds Other (ABACO) Unencumbered 14.6 Pledged to ECB* 8.1 CCG Repos 3.1 * TLTRO for 8.1 bln/ expiring Sept

14 In 9M15, net profit at 162 /mln (+8.1% YoY) MAIN INCOME STATEMENT ITEMS Figures in mln 9M14 9M15 % change 9M15 vs 9M14 3Q14 2Q15 3Q15 % change 3Q15 vs 3Q14 % change 3Q15 vs 2Q15 Net interest income 1,376 1,246 (9.5%) (14.8%) (4.3%) Net commission income % % (8.4%) Net result from finance 151 A 139 (7.7%) % (47.6%) Profits of equity-accounted investees B (19.6%) (56.1%) (73.3%) Other income items (8.6%) (24.9%) (2.4%) Operating income 2,558 2,467 (3.5%) (7.7%) (10.1%) Staff costs (977) (973) (0.4%) (329) (320) (318) (3.3%) (0.6%) Other administrative expenses (458) (455) (0.8%) (147) (165) (142) (3.7%) (14.2%) Net impairment losses on property, equipment and investment property and intangible assets (128) (115) (10.2%) (42) (39) (37) (13.0%) (5.9%) Operating expenses (1,563) (1,542) (1.3%) (518) (524) (497) (4.2%) (5.3%) Net operating income (7.0%) (13.8%) (17.9%) Net impairment losses on loans (626) (558) (10.9%) (197) (199) (169) (14.5%) (15.3%) Net impairment losses on other financial assets and liabilities (2) (6) n.s. (0) (2) (3) n.s. 28.2% Net provisions for risks and charges (4) C (48) n.s. (1) (25) C (19) C n.s. (24.9%) Profits (losses) from disposal of equity investments (0) 0 n.s n.s. n.s. Pre-tax profit from continuing operations (13.4%) (31.7%) (22.9%) Taxes on income for the period from continuing operations (187) (128) (31.8%) (52) (37) (29) (45.1%) (22.9%) Profits for the period attributable to non-controlling interests (25) (23) (9.3%) (9) (7) (6) (40.1%) (25.2%) Charges for exit incentives (net of tax and non-controlling interests) (1) n.s Profit for the period % (14.0%) (22.6%) Profit for the period NET OF NON-RECURRING ITEMS % (10.3%) (26.2%) Notes: A Net result from finance includes ~89 mln/ from AFS disposals - Govies and other - in 9M15 (vs. ~109 mln/ in 9M14) B C Profits from equity-accounted investees, include: mln/ from Zhong Ou in 9M15 (vs. 1.6mln/ in 9M14) thanks to strong growth in AuM reaching 21.5 bln at end Sept mln/ from Lombarda Vita in 9M15 (vs. 5.7 mln/ in 9M14) mln/ from Aviva Vita in 9M15 (10.1 mln/ in 9M14) Net provisions for risk and charges include the estimated annual contribution to the Single Resolution Fund for 22.8 mln/ (accounted in 2Q15) and to the Deposit Guarantee Scheme for 11.3 mln/ (accounted in 3Q15) PPA allocated line by line 14

15 NII mainly impacted by reduction/recomposition of the financial portfolio (also following expiry of high yield securities in 4Q14), customer margin pressure (mainly on short-term), decreasing volumes (short term) and portfolio in run-off See annex 7 9M evolution Quarterly evolution Net Interest Income ( mln) 1,376 1, NII from Financial Assets & Interbank Exposure Reduction/recomposition of the financial portfolio: expiry of 4.9 bln high yield securities in 4Q14, reduction of the portfolio in 9M15, etc NII from Business with Customers 1, ,027 Main Drivers 1. M/L term portfolio in run-off: approx. -23 mln y/y 2. Short term: strong decrease in short term volumes and price war M14 9M15 3Q14 2Q15 3Q15 15

16 Net Commission Income at 970 mln/ : +6.8% YoY. 3Q15 vs 2Q15 trend affected by usual seasonality and lower placement of indirect funding products See annex 8 9M evolution Quarterly evolution ( mln) ( mln) Net commission income from: % Securities Management, Trading & Advisory Services* % 523 Volumes YoY: +11% AuM % Bancassurance Banking Services Commissions % M14 9M15 3Q14 2Q15 3Q15 mln 9M14 9M15 3Q14 2Q15 3Q15 Upfront fees*** % on total commissions 12.4% 12.3% 10.3% 12.3% 8.9% Lower placement of indirect funding products** (1.5 /bln in 3Q15 vs 2.1 /bln in 2Q15) mainly due to summer break * Includes FX negotiations. ** State Guaranty Bonds: first reimbursement 3 bln/ value 7 th March 14 and remaining 3 bln/ value 7 th August 14 *** Funds&sicav, insurance products, other third party products 16

17 Lowest quarterly level of operating costs since 2007 % change % change % change mln/ 9M14 9M15 3Q14 2Q15 3Q15 9M15 vs 9M14 3Q15 vs 3Q14 3Q15 vs 2Q15 Staff costs % % -0.6% Other Adm. Expenses excluding IW Bank-UBI PI integration costs % % -11.2% IW Bank-UBI PI integration costs* - 8 n.s n.s. n.s. D&A (including PPA**) % % -5.9% Total operating costs 1,563 1, % % -5.3% Total operating costs excl. IW Bank-UBI PI integration costs 1,563 1, % % -4.2% 9M15 vs 9M14 Stable evolution of staff costs: lower average number of headcount (on average -726 resources corresponding to -29 mln ) compensating increase in wages and lower recourse to reduction of working hours Relevant savings in Other Administrative Expenses thanks to ongoing cost control in all areas of activity Depreciation and amortisation down also following lower PPA (-5 mln ). High level of investments related to development projects (regulatory and business) confirmed (129 mln in 2015, up 11 mln compared to 2014) * Costs related to the integration between IW Bank and UBI Banca Private Investment effective 25 May 2015 ** PPA effect amounted to 14.8 mln/ in 9M14 and to 9.9 mln/ in 9M15 17

18 Increased coverage compared to Dec 2014 (stable vs June 15) See annex 4 TOTAL 9.5% COVERAGE GROSS DETERIORATED LOAN STOCKS ( mln) 8,589 10,958 12,674 13,049 13,368 13, % COVERAGE Dec '14 June '15 Sept'15 Performing loans 0.63% 0.58% 0.56% Total deteriorated loans 27.1% 27.8% 27.7% including write-offs 37.1% 37.6% 37.3% of which Bad Loans (Sofferenze) 38.6% 38.7% 38.7% including write-offs 53.4% 53.0% 53.0% Unlikely to pay 16.7% 17.1% 17.1% Past due loans 4.4% 5.4% 5.1% NET DETERIORATED LOAN STOCKS ( mln) 27.7% Cash Coverage 116.8% 144.5% Fair Value Real Estate Collateral* TOTAL COVERAGE Coverage unvaried notwithstanding disposal of 131 mln/ (of which 31 in 3Q15) of bad loans, provisioned 66% Dec '11 Dec '12 Dec '13 Dec '14 June '15 Sept'15 8,105 9,312 9,508 9,651 9, % 6,280 Dec '11 Dec '12 Dec '13 Dec '14 June '15 Sept'15 Note: the increase in 2012 vs 2011 deteriorated loans also reflects change in posting criteria for past due (from 180 to 90 days) *Source: FY14 Financial Report, table A.3.2, Notes to the accounts 18

19 New inflows from performing to deteriorated loans significantly lower in 3Q15 vs 3Q14 (overall -37.9% vs Sept 13) INFLOWS FROM PERFORMING TO DETERIORATED LOANS (NPE) ( /mln) TOTAL DETERIORATED LOANS (NPE) -37.9% 3,064 1,923 1,903-1% BAD LOANS ( Sofferenze ) UNLIKELY TO PAY 1, PAST DUE 1, M13 9M14 9M15 Sept '14 Sept '15 Sept '14 Sept '15 Sept '14 Sept '15 1,260 = 1, % 628 Potentially the non performing forborne exposures, for which the cure period (12 months) expires and which show overall a situation of regularity, may represent a return flow to performing status estimated at approximately 200 million per quarter (net of bad and restructured forborne exposures) 1H14 1H15 3Q14 3Q15 LLPs are significantly lower than in 9M14 LLPs ( /mln) LLPs ( /mln) - quarterly % % -13.7% -14.5% M14 9M15 1Q14 1Q 1Q15 2Q14 2Q 2Q15 3Q14 3Q 3Q15 19

20 Outlook The overall trend for operating income is forecast to be higher than in the third quarter although with differing contributions from the individual components: the pressure on net interest income may continue, although to a lesser extent than in the third quarter, in a background of limited growth in loans and strong competition on spreads at system level and following the continuation of the strategy to re-position the proprietary securities portfolio; net fee and commission income should benefit from the usual positive seasonal factors normally experienced in the last quarter of the year; a favourable environment for containing sovereign risk could allow better results to be achieved for trading and hedging activity than in the previous quarters. Actions undertaken in 2015 allow to confirm the objective of containing operating expenses in line with those for 2014, notwithstanding the additional costs related to the contribution to the European Resolution Fund and the Deposit Guarantee Scheme, estimated at over 30 million for the current year. Improvements in the macroeconomic environment, confirmed by the leading indicators, should allow loan losses to be contained at a level lower than in

21 Annexes 21

22 Main Reclassified Balance Sheet Items Annex 1 MAIN ASSETS ITEMS Figures in millions of euro % annual change % quarterly change Financial assets (AFS, HFT, FV, HTM) 22,617 23,746 21,870 19, % -10.4% Loans to customers 84,947 85,644 85,340 83, % -1.8% Property, equipment and investment property 1,741 1,729 1,756 1, % -0.7% Intangible assets 2,883 1,777 1,760 1, % -0.5% of which: goodwill* 2,512 1,465 1,465 1, % 0.0% Tax assets 2,567 2,992 2,753 2, % -0.9% Other assets , % -33.1% Total assets 120, , , , % -3.2% MAIN LIABILITIES AND EQUITY ITEMS Figures in millions of euro % annual change % quarterly change Net interbank position** 12,259 9,952 5,858 7, % 23.6% Due to customers 45,582 51,617 55,331 50, % -8.3% Securities issued 42,272 41,590 38,996 38, % -1.9% Tax liabilities % 15.9% Net worth attributable to the Parent 10,651 10,530 9,762 9, % 1.5% Non-controlling interests % -3.1% Profit for the period 150 (726) % 30.2% Total liabilities and equity 120, , , , % -3.2% * Goodwill impairment in 2014 ** Including 8.1 bln TLTRO 22

23 Capital Ratios (Phased in, Basel 3) as at Sept 15: Common Equity Tier 1 Ratio at 13%, Total Capital Ratio at 15.31% Annex 2 mln/ June '15 Sept '15 Common Equity Tier 1 Capital (before filters and transitional provisions) 8, ,319.1 Transitional provisions (minority interest) Transitional provisions (AFS Reserves) Common Equity Tier 1 Capital filters Italian Govies filters Common Equity Tier 1 (after filters) Common Equity Tier 1 regulatory adjustments: negative elements for deduction excess of expected losses over impairment losses 8, , mln/ June '15 Sept '15 Risk weighted assets 59, ,129.1 Total prudential requirements Credit risk 4, ,290.9 CVA (Credit Value Adjustment) risk Market risk Operational risk Common Equity Tier 1 Capital (CET1) 7, ,557.9 Additional Tier 1 before deductions Additional Tier 1 regulatory adjustments: negative elements for deduction excess of expected losses over impairment losses Additional Tier Tier 1 Capital 7, ,557.9 Tier 2 instruments grandfathering - - Tier 2 Capital after transitional provisions 1, ,623.0 Tier 2 capital regulatory adjustments of which: negative elements for deduction excess of expected losses over impairment losses Tier 2 Capital 1, ,343.5 CET 1 PHASED IN 12.94% 13.00% June '15 Sept '15 TOTAL CAPITAL PHASED IN 15.62% 15.31% June '15 Sept '15 TOTAL OWN FUNDS 9, , Q15 profit not included 23

24 Annex 3 Bond maturities well planned and distributed over time. New Covered Bond issuance in October 2015 RETAIL BONDS: NEW ISSUANCES Decreasing spreads vs. 6M Euribor (bps) FY12 FY13 FY14 9M15 RETAIL BONDS: Maturity Profile Retail Bonds 2015 Maturities 1Q 2Q 3Q (Nominal amounts in bln, net of bond repurchases) Q and following INSTITUTIONAL BONDS: Maturity Profile (Nominal amounts in bln) Bond maturities well planned and distributed over time EMTN COVERED BONDS* Including CB issue for 750 mln/ in Oct 15 In October 2015 a New Long 7 Year Covered Bond issuance for 750 mln/ (coupon at 1.00 % equivalent to a spread of 36 basis points above the interpolated mid swap rate (7y and 3 months)) EMTN 2015 Maturities Covered Bond 1Q 2Q Q Q and following * Inclusive of original 0.5 bln/ of private placement with BEI expiring within Further 0.7 bln/ retained issue not included (Oct 15) 24

25 Asset Quality details Annex 4 Days of arrears 0 90 PERFORMING LOANS PAST-DUE LOANS UNLIKELY TO PAY PERFORMING FORBORNE NON PERFORMING FORBORNE BAD LOANS ( Sofferenze ) t Figures in mln Gross exposure Net exposure Coverage June '15 Sept '15 June '15 Sept '15 June '15 Sept '15 Performing loans 76,127 74,376 75,689 73, % 0.56% of which forborne 2,342 2,263 2,307 2, % 1.50% Non performing exposures 13,368 13,651 9,651 9, % 27.69% of which forborne 2,483 2,734 2,104 2, % 15.21% - Bad loans ("Sofferenze" ) 6,829 6,920 4,187 4, % 38.67% - Unlikely to pay loans 6,150 6,324 5,096 5, % 17.13% - Former impaired loans 5,223 5,394 4,349 4, % 17.05% - Former restructured loans % 17.61% - Past due loans % 5.07% Total loan book 89,495 88,027 85,340 83, % 4.76% of which: forborne 4,825 4,997 4,411 4, % 9.00% % Incidence on total loans......in gross terms, Sept 15...in net terms, Sept 15 Unlikely to pay loans, 7.2% Bad loans, 7.9% Unlikely to pay loans, 6.3% Bad loans, 5.1% Past due loans, 0.4% Performing loans, 84.5% Past due loans, 0.4% Performing loans, 88.2% 25

26 Other key elements to assess the Group loan portfolio Annex 5 September 2015 Loan To Value* (Network banks + UBI): Performing loans: Retail: 46.2% (45.6% in Dec 14) Corporate: 38.6% (39.8% in Dec 14) Unlikely to pay and Past due loans: Retail: 55.7% (55.6% in Dec 14) Corporate: 47.4% (49.4% in Dec 14) % of secured (real estate + personal guarantees) positions as at Dec 14 (table A.3.2 of the notes to the accounts): Total: 77.5% Performing: 77.2% Total non performing exposure: 80.0% (over 66% assisted by real estate**) * Arithmetic mean, to allow comparison with Bank of Italy data ** Management data 26

27 Lending Portfolio: +0.9% vs Dec 14 in the core perimeter Annex 6 bln, end date Dec '14 June '15 Sept '15 % change vs Dec '14 June '15 RETAIL Private Customers % -0.2% Small business % -1.5% UBI Banca (former Banca 24/7)* % -3.4% IW Bank PI % -2.7% Prestitalia % -7.7% Total Retail % -1.4% CORPORATE Core corporate % -1.1% Large corporate % 0.7% UBI Banca (former Centrobanca) % 1.2% Total Corporate % -0.2% Stable core lending in Network banks at 58 bln/ (+0.9% vs Dec 14) PRIVATE % 4.4% OTHER** % -6.2% of which: UBI Leasing % -1.2% UBI Factor % -10.0% UBI Banca including CCG % -28.7% TOTAL NET LENDING BOOK % -1.8% Small business: turnover up to 15 mln Core Corporate: turnover from 15 to 250 mln Large Corporate: turnover > 250 mln * Following the merger of Banca 24/7 in UBI Banca, effective July 2012, UBI Banca is managing the remaining stock of non captive mortgages and personal and special purpose loans. Prestitalia is managing all salary backed loan operations, both stocks and new lending ** Minor companies, UBI Banca financial transactions, IAS adjustments, loans not segmented to commercial portfolios and intercompany eliminations 27

28 Net Interest Income Consolidated Customer Spread Details Annex 7 CUSTOMER SPREADS in bps on avg. STOCK* 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 1M Euribor Mark up vs 1M Euribor Short term Medium-long term Mark down vs 1M Euribor Sight deposits Term deposits Retail bonds Institutional bonds UBI Group - Customer spread of which UBI Network Banks cust. spread * Average period data referred to the whole consolidated Group (Network banks+ Product companies + UBI) 28

29 Net Commission Income details Annex 8 Net Commission Income ( mln) 9M14 9M15 9M15 / 9M14 (%) 3Q14 2Q15 3Q15 3Q15 / 3Q14 (%) 3Q15 / 2Q15 (%) MANAGEMENT, TRADING & ADVISORY SERVICES* % % -15.6% of which: Portfolio management % % -6.1% Placement of securities % % -34.7% Third party services distribution % % -14.4% BANKING RELATED COMMISSIONS % % 0.4% of which: Guarantees (banking activity) % % -7.4% of which for State guaranteed bonds (18) - n.s. (3) - - n.s. n.s. Collection and payment services % % -7.0% Services for factoring transactions % % -7.9% Current accounts management % % 2.9% Other services % % 4.0% TOTAL % % -8.4% * Includes FX negotiations 29

30 Transformation into Joint Stock Company. Right of withdrawal procedure Annex 9 2 Filing of the transformation resolution with the Company Registrar 4 Offer in option of the shares subject to withdrawal to the other shareholders 6 If the shares of the withdrawing shareholders are not purchased, either in whole or in part, by the other shareholders, the shares will be offered on regulated markets 8 Authorisation from the Bank of Italy to reduce the own funds of the bank 10 Oct Oct 2015 Within 27 October 2015 From 12 November 2015 To 12 January 2016 Within 90 days 1 Shareholders Meeting approves transformation of UBI Banca into Joint Stock Company 3 Deadline for withdrawal Shares are unavailable to the shareholder once the withdrawal right is exercised 5 Deadline for exercising the option right 7 9 Supervisory Board resolution also setting limit to redemption of the shares subject to withdrawal according the formula defined in due time. Authorisation request to Bank of Italy to consequently reduce the own funds of the bank Completion of the procedure for the payment of the shares subject to withdrawal may last a maximum period of six months from the date of communication of the withdrawal, with the consequent unavailability of the relative shares for the entire period. Redemption of the shares subject to withdrawal within limits defined and removal of the constraint of unavailability on the shares subject to withdrawal which have not been reimbursed 30