INTESA SANPAOLO

THE RESULTS FOR 2022 CONFIRM THAT INTESA SANPAOLO IS ABLE TO GENERATE SOLID PROFITABILITY AND CREATE VALUE FOR ALL ITS STAKEHOLDERS EVEN IN COMPLEX CONTEXTS THANKS TO ITS WELL-DIVERSIFIED AND RESILIENT BUSINESS MODEL, WITH NET INCOME - DRIVEN BY NET INTEREST INCOME - OF €5.5 BILLION WHEN EXCLUDING RUSSIA/UKRAINE DE-RISKING.

IN THE SECOND HALF OF 2022, EXPOSURE TO RUSSIA WAS REDUCED BY 68% (AROUND €2.5 BILLION) TO BELOW 0.3% OF THE GROUP’S TOTAL CUSTOMER LOANS.
NET INCOME FOR 2022 WAS €5,499 MILLION WHEN EXCLUDING €1.4 BILLION PROVISIONS / WRITE-DOWNS FOR RUSSIA AND UKRAINE, EXCEEDING THE 2022-2025 BUSINESS PLAN NET INCOME TARGET OF OVER €5 BILLION FOR 2022. STATED NET INCOME WAS €4,354 MILLION.
€1.6 BILLION REMAINING DIVIDENDS HAVE BEEN PROPOSED FOR 2022, WHICH ADD TO €1.4 BILLION INTERIM DIVIDENDS FOR 2022 ALREADY PAID IN NOVEMBER 2022. THE EXECUTION OF THE BUYBACK FOR THE REMAINING AMOUNT OF €1.7 BILLION AUTHORISED BY THE ECB HAS BEEN APPROVED.

INTESA SANPAOLO IS FULLY EQUIPPED TO CONTINUE SUCCEEDING IN THE FUTURE GIVEN THE GROUP’S KEY STRENGTHS, NOTABLY RESILIENT PROFITABILITY, A SOLID CAPITAL POSITION, THE “ZERO-NPL” BANK STATUS AND HIGH FLEXIBILITY IN MANAGING OPERATING COSTS.
THE IMPLEMENTATION OF THE 2022-2025 BUSINESS PLAN IS PROCEEDING AT FULL SPEED, WITH THE KEY INDUSTRIAL INITIATIVES WELL UNDERWAY. THE BUSINESS PLAN FORMULA AND, SPECIFICALLY, THE 2025 NET INCOME TARGET OF €6.5 BILLION ARE CONFIRMED, WITH ADDITIONAL POTENTIAL UPSIDE DERIVING FROM INTEREST RATE INCREASE.
VALUE GENERATION FOR ALL STAKEHOLDERS IS ALSO GROUNDED IN INTESA SANPAOLO’S STRONG ESG COMMITMENT WHICH IN 2022 TRANSLATED, AMONG OTHER ACTIONS, INTO A ONE-OFF CONTRIBUTION OF AROUND €80 MILLION TO THE GROUP’S PEOPLE (EXCLUDING THE MANAGERS) TO MITIGATE THE IMPACT OF INFLATION, AS WELL AS INTO SEVERAL HUMANITARIAN INITIATIVES TO SUPPORT PEOPLE OF THE GROUP’S SUBSIDIARY PRAVEX BANK AND THE UKRAINIAN POPULATION.

THE CAPITAL POSITION WAS SOLID AND WELL ABOVE REGULATORY REQUIREMENTS: FULLY LOADED COMMON EQUITY TIER 1 RATIO WAS 13.5% AFTER DEDUCTING FROM CAPITAL €1.4 BILLION OF INTERIM DIVIDENDS FOR 2022 ALREADY PAID IN NOVEMBER 2022, €1.6 BILLION OF PROPOSED REMAINING DIVIDENDS FOR 2022 AND THE €3.4 BILLION BUYBACK, AND NOT TAKING INTO ACCOUNT A BENEFIT OF AROUND 125 BASIS POINTS DERIVING FROM THE ABSORPTION OF DEFERRED TAX ASSETS (DTAs), OF WHICH OVER 30 BASIS POINTS IN THE PERIOD 2023-2025.
GROSS INCOME WAS UP 11.5% ON 2021 AND OPERATING MARGIN WAS UP 7.4% ON 2021, WITH OPERATING INCOME UP 3.3% AND OPERATING COSTS DOWN 0.4%.

CREDIT QUALITY IMPROVED:
- GROSS NPLs WERE REDUCED BY 30.2% ON YEAR-END 2021;
- NPL RATIO WAS 2.3% GROSS AND 1.2% NET, RESPECTIVELY 1.9% AND 1% ACCORDING TO THE EBA METHODOLOGY;
- COST OF RISK IN 2022 STOOD AT 70 BASIS POINTS, 30 BASIS POINTS WHEN EXCLUDING ADJUSTMENTS FOR THE EXPOSURE TO RUSSIA AND UKRAINE, FOR OVERLAYS AND TO FAVOUR DE-RISKING, NET OF THE PARTIAL RELEASE OF GENERIC PROVISIONS WHICH WERE SET ASIDE IN 2020 FOR FUTURE COVID-19 IMPACTS.

INTESA SANPAOLO CONTINUES TO OPERATE AS A GROWTH ACCELERATOR IN THE REAL ECONOMY IN ITALY: IN 2022, MEDIUM/LONG-TERM NEW LENDING GRANTED BY THE GROUP TO ITALIAN HOUSEHOLDS AND BUSINESSES AMOUNTED TO AROUND €58 BILLION. IN 2022, THE GROUP FACILITATED THE RETURN TO PERFORMING STATUS OF AROUND 4,000 COMPANIES, THUS SAFEGUARDING AROUND 20,000 JOBS. THIS BROUGHT THE TOTAL TO OVER 137,000 COMPANIES SINCE 2014, WITH AROUND 690,000 JOBS SAFEGUARDED OVER THE SAME PERIOD.

• NET INCOME OF €5,499M IN 2022 WHEN EXCLUDING PROVISIONS / WRITE-DOWNS OF €1.4BN FOR THE EXPOSURE TO RUSSIA AND UKRAINE (UP 31.4% VS €4,185M IN 2021). STATED NET INCOME OF €4,354M (UP 4% ON 2021)
• GROSS INCOME UP 11.5% ON 2021
• OPERATING MARGIN UP 7.4% ON 2021
• OPERATING INCOME UP 3.3% ON 2021
• OPERATING COSTS DOWN 0.4% ON 2021
• IMPROVEMENT IN CREDIT QUALITY TREND:
• DECREASE IN NPLs:
- GROSS NPL REDUCTION OF AROUND €54BN SINCE THE SEPTEMBER 2015 PEAK
- NPL STOCK DOWN 30.2% GROSS AND 22.3% NET ON YEAR-END 2021
- NPL RATIO OF 2.3% GROSS AND 1.2% NET, RESPECTIVELY 1.9% AND 1% ACCORDING TO THE EBA METHODOLOGY
• COST OF RISK IN 2022 TO 70 BASIS POINTS (FROM 59 BASIS POINTS IN 2021), 30 BASIS POINTS WHEN EXCLUDING ADJUSTMENTS FOR THE EXPOSURE TO RUSSIA AND UKRAINE, FOR OVERLAYS AND TO FAVOUR DE-RISKING, NET OF THE PARTIAL RELEASE OF GENERIC PROVISIONS WHICH WERE SET ASIDE IN 2020 FOR FUTURE COVID-19 IMPACTS (FROM 25 BASIS POINTS IN 2021 WHEN EXCLUDING PROVISIONS TO ACCELERATE NPL DELEVERAGING)
• A SOLID CAPITAL POSITION, WELL ABOVE REGULATORY REQUIREMENTS:
• COMMON EQUITY TIER 1 RATIO AS AT 31 DECEMBER 2022, AFTER DEDUCTING FROM CAPITAL (*) €1.4BN OF INTERIM DIVIDENDS FOR 2022 ALREADY PAID IN NOVEMBER 2022, €1.6BN OF PROPOSED REMAINING DIVIDENDS FOR 2022 AND THE €3.4BN BUYBACK (°):
- 13.8 % PHASED-IN (1)
- 13.5% FULLY LOADED (2) (3) WITHOUT TAKING INTO ACCOUNT THE BENEFIT OF AROUND 125 BASIS POINTS DERIVING FROM THE ABSORPTION OF DEFERRED TAX ASSETS (DTAs), OF WHICH OVER 30 BASIS POINTS IN THE PERIOD 2023-2025
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(*) Deducting from capital also the coupons accrued on the Additional Tier 1 issues.
(°) Amount, approved by the Shareholders’ Meeting and authorised by the ECB, equivalent to the suspended 2019 dividend.
(1) Calculated including the mitigation of the impact of the first time adoption of IFRS 9.
(2) Calculated excluding the mitigation of the impact of the first time adoption of IFRS 9.
(3) Estimated pro-forma fully loaded Common Equity Tier 1 ratio of 14.9%, taking into account the total absorption of deferred tax assets (DTAs) related to goodwill realignment, loan adjustments, the first time adoption of IFRS 9 and the non-taxable public cash contribution of €1,285m covering the integration and rationalisation charges relating to the acquisition of the Aggregate Set of Banca Popolare di Vicenza and Veneto Banca, as well as the expected absorption of DTAs on losses carried forward and DTAs related to the acquisition of UBI Banca and the agreement with the trade unions of November 2021, and the expected distribution on the 2022 net income of insurance companies.

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Turin - Milan, 3 February 2023 – At its meeting today, the Board of Directors of Intesa Sanpaolo approved both parent company and consolidated results for the year ended 31 December 2022.

The results for 2022 confirm that the Intesa Sanpaolo Group is able to generate solid profitability and create value for all its stakeholders even in complex contexts thanks to its well-diversified and resilient business model, with net income - driven by net interest income - of €5.5bn when excluding Russia/Ukraine de-risking. In the second half of 2022, exposure to Russia was reduced by 68% (around €2.5bn) to below 0.3% of the Group’s total customer loans (°°).

Value generation for all stakeholders is also grounded in the strong ESG commitment of Intesa Sanpaolo. In 2022, this translated, among other actions, into a one-off contribution of around €80m to the Group’s people (excluding the managers) to mitigate the impact of inflation, as well as into several humanitarian initiatives to support people of the Group’s subsidiary Pravex Bank and the Ukrainian population.

The Group’s net income for 2022 was €5,499m when excluding provisions / write-downs of €1.4bn for Russia and Ukraine (°°°), exceeding the 2022-2025 Business Plan net income target of over €5bn for 2022. Stated net income amounted to €4,354m. Cross-border loans to Russia were largely performing and classified in Stage 2.