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INTESA SANPAOLO:

CONSOLIDATED RESULTS AS AT 31 DECEMBER 2021

THE RESULTS FOR 2021 HAVE CONFIRMED INTESA SANPAOLO’S ABILITY TO RESPOND EFFECTIVELY TO THE COMPLEXITIES BROUGHT ABOUT BY THE PANDEMIC AND GENERATE VALUE FOR ALL STAKEHOLDERS, ACHIEVING A NET INCOME OF €4.2 BILLION WHILE ALLOCATING - OUT OF THE PRE-TAX PROFIT - €2.2 BILLION IN 2021, OF WHICH €1.7BN IN THE FOURTH QUARTER, TO FURTHER STRENGTHEN THE FUTURE SUSTAINABILITY OF THE GROUP’S RESULTS.
PROPOSED CASH RETURN TO SHAREHOLDERS OF €4.9 BILLION, CONSISTING OF €1.5 BILLION REMAINING DIVIDENDS FOR 2021 - WHICH ADD TO THE €1.4 BILLION INTERIM DIVIDENDS FOR 2021 PAID IN NOVEMBER 2021 - AND A €3.4 BILLION BUYBACK.


THE RESULTS FOR 2021 HAVE BEEN ACHIEVED BY SUCCESSFULLY MITIGATING THE COVID-19 IMPACT:
- CARE FOR GROUP PEOPLE AND CUSTOMERS;
- SUPPORT TO HEALTHCARE INITIATIVES WITH MORE THAN €100 MILLION DONATED;
- €150 MILLION FROM THE FUND FOR IMPACT (EQUAL TO 50%) TO REDUCE SOCIO-ECONOMIC DISTRESS;
- FIRST BANK IN ITALY TO SUSPEND MORTGAGE AND LOAN INSTALMENTS EVEN BEFORE THE SPECIFIC REGULATION CAME INTO FORCE (SUSPENSIONS OF PAYMENTS FOR €115 BILLION APPROVED TO DATE), AND TO SIGN THE COLLABORATION PROTOCOL WITH SACE, THUS PROVIDING IMMEDIATE SUPPORT TO ENTERPRISES UNDER THE LIQUIDITY DECREE (€43 BILLION INCLUDING THE SME FUND GRANTED TO DATE);
- UP TO €50 BILLION IN NEW LOANS MADE AVAILABLE TO ENTERPRISES AND PROFESSIONALS TO PROTECT JOBS AND MANAGE PAYMENTS DURING THE EMERGENCY;
- STRONG VALUE PROPOSITION ON DIGITAL CHANNELS.
VALUE GENERATION FOR ALL STAKEHOLDERS IS ALSO GROUNDED ON THE ROLE OF INTESA SANPAOLO AS AN ENGINE FOR SUSTAINABLE AND INCLUSIVE GROWTH, WITH ESG AND CLIMATE INITIATIVES:
- LEADERSHIP IN INCLUSION IN SUSTAINABILITY INDICES AND ESG INTERNATIONAL ASSESSMENTS;
- COMMITMENT TO ACHIEVING NET-ZERO EMISSIONS BY 2050 - FOR OWN EMISSIONS, LOAN AND INVESTMENT PORTFOLIOS, ASSET MANAGEMENT AND INSURANCE - AS PART OF THE GROUP’S INVOLVEMENT IN THE NETZERO BANKING ALLIANCE (NZBA), THE NET ZERO ASSET MANAGERS INITIATIVE (NZAMI), THE NET ZERO ASSET OWNER ALLIANCE (NZAOA) AND THE NET ZERO INSURANCE ALLIANCE (NZIA).


THE CAPITAL POSITION WAS SOLID AND WELL ABOVE REGULATORY REQUIREMENTS: PRO-FORMA FULLY LOADED COMMON EQUITY TIER 1 RATIO WAS 15.2% AFTER DEDUCTING FROM CAPITAL €1.9 BILLION OF RESERVES DISTRIBUTED IN OCTOBER 2021, €1.4 BILLION OF INTERIM DIVIDENDS FOR 2021 PAID IN NOVEMBER 2021 AND €1.5 BILLION OF PROPOSED REMAINING DIVIDENDS FOR 2021; THE RATIO WOULD BE 14.2% DEDUCTING ALSO €3.4 BILLION OF PROPOSED BUYBACK.
NET INCOME WAS €4,185 MILLION, UP 19.4% COMPARED ON 2020 EXCLUDING THE ITEMS RELATED TO THE ACQUISITION OF UBI BANCA, WHICH CONSISTED OF THE EFFECT OF THE PURCHASE PRICE ALLOCATION (INCLUDING NEGATIVE GOODWILL) AND INTEGRATION CHARGES, AND THE ACCOUNTING IMPACT OF THE RELATED GOODWILL IMPAIRMENT OF THE BANCA DEI TERRITORI DIVISION.
GROSS INCOME WAS UP 7.3% ON 2020.
OPERATING MARGIN WAS UP 5.4% ON 2020.


CREDIT QUALITY IMPROVED:
- GROSS NPLs WERE REDUCED BY 27% ON YEAR-END 2020 AND BY AROUND €37 BILLION SINCE THE END OF 2017 EXCEEDING BY AROUND €11 BILLION THE €26 BILLION DELEVERAGING TARGET OF THE 2018-2021 BUSINESS PLAN. THE REDUCTION ON A PRO-FORMA BASIS - TAKING INTO ACCOUNT THE PLANNED REDUCTION IN 2022 DUE TO DISPOSALS ALREADY PROVISIONED FOR IN Q4 2021 - WAS 50.2% ON YEAR-END 2020 AND OF AROUND €42 BILLION SINCE THE END OF 2017 EXCEEDING BY AROUND €16 BILLION THE DELEVERAGING TARGET OF THE 2018-2021 BUSINESS PLAN;
- NPL RATIO WAS 3.2% GROSS AND 1.5% NET, RESPECTIVELY BELOW 2% AND 1% ACCORDING TO THE EBA METHODOLOGY AND TAKING INTO ACCOUNT THE PLANNED REDUCTION IN 2022 DUE TO DISPOSALS ALREADY PROVISIONED FOR IN Q4 2021;
- COST OF RISK IN 2021 STOOD AT 59 BASIS POINTS, 25 BASIS POINTS WHEN EXCLUDING PROVISIONS TO ACCELERATE NPL DELEVERAGING.
INTESA SANPAOLO CONTINUES TO OPERATE AS A GROWTH ACCELERATOR IN THE REAL ECONOMY IN ITALY: IN 2021, MEDIUM/LONG-TERM NEW LENDING GRANTED BY THE GROUP TO ITALIAN HOUSEHOLDS AND BUSINESSES AMOUNTED TO AROUND €66 BILLION. IN 2021, THE GROUP FACILITATED THE RETURN TO PERFORMING STATUS OF AROUND 10,000 COMPANIES, THUS SAFEGUARDING AROUND 50,000 JOBS. THIS BROUGHT THE TOTAL TO AROUND 133,000 COMPANIES SINCE 2014, WITH AROUND 665,000 JOBS SAFEGUARDED OVER THE SAME PERIOD. THE GROUP HAS MADE AVAILABLE MORE THAN €400 BILLION IN MEDIUM/LONG TERM LENDING TO BUSINESSES AND HOUSEHOLDS TO SUPPORT ITALY’S RECOVERY AND RESILIENCE PLAN.
THE GROUP’S SOCIAL AND CULTURAL RESPONSIBILITY HAS TRANSLATED, IN ITALY, INTO:
- INITIATIVES TO REDUCE CHILD POVERTY AND SUPPORT PEOPLE IN NEED, DELIVERING, SINCE 2018, AROUND 24.8 MILLION MEALS, 1.5 MILLION DORMITORY BEDS, 296,250 MEDICINE PRESCRIPTIONS AND 249,200 ITEMS OF CLOTHING;
- THE FUND FOR IMPACT, WITH AROUND €162 MILLION GRANTED, SINCE ITS LAUNCH, BY “PER MERITO” (THE FIRST LINE OF CREDIT WITHOUT COLLATERAL DEDICATED TO ALL UNIVERSITY STUDENTS RESIDING IN ITALY), THE LAUNCH, IN JULY 2020, OF “MAMMA@WORK” (A SUBSIDISED LOAN TO BALANCE MOTHERHOOD AND WORK, WITH AROUND €1 MILLION GRANTED SINCE LAUNCH) AND, IN AUGUST 2020, OF “XME STUDIOSTATION” (LOANS TO FAMILIES TO SUPPORT DISTANCE LEARNING, WITH AROUND €1.7 MILLION GRANTED SINCE LAUNCH);
- A CIRCULAR ECONOMY CREDIT PLAFOND TO SUPPORT SUSTAINABLE DEVELOPMENT, WITH AROUND €7.7 BILLION ALREADY DISBURSED; S-LOANS TO IMPROVE SMEs’ SUSTAINABILITY PROFILE (A €2 BILLION PLAFOND ALLOCATED, WITH AROUND €1.3 BILLION GRANTED SINCE LAUNCH);
- IN 2021, AROUND 780 START-UPS EVALUATED (AROUND 3,420 SINCE 2018) IN SEVEN ACCELERATION PROGRAMMES WITH 209 COACHED START-UPS (AROUND 600 SINCE 2018);
- “GIOVANI E LAVORO” PROGRAMME AIMED AT INTRODUCING 5,000 YOUNG PEOPLE TO THE ITALIAN LABOUR MARKET: IN 2021, AROUND 9,000 YOUNG PEOPLE APPLIED TO THE PROGRAMME (OVER 24,000 SINCE 2019), OVER 1,600 STUDENTS WERE INTERVIEWED AND AROUND 750 STUDENTS TRAINED / IN TRAINING THROUGH 29 COURSES, WITH OVER 2,000 COMPANIES INVOLVED SINCE THE LAUNCH OF THE PROGRAMME (OVER 5,200 STUDENTS INTERVIEWED AND OVER 2,200 TRAINED / IN TRAINING SINCE 2019);
- GALLERIE D’ITALIA: 14 NEW EXHIBITIONS OPENED IN 2021; MUSEUM FOR ALL, AMONG THE INITIATIVES DEDICATED TO SOCIAL INCLUSION, SET UP AT GALLERIE D’ITALIA IN VICENZA; 166 ARTWORKS FROM OWNED COLLECTIONS WERE ON DISPLAY IN 44 TEMPORARY EXHIBITIONS IN NATIONAL AND INTERNATIONAL MUSEUMS; IMPORTANT PARTNERSHIPS WITH PUBLIC AND PRIVATE ENTITIES.


• NET INCOME TO €4,185M IN 2021, UP BY 19.4% VERSUS €3,505M IN 2020 EXCLUDING THE ITEMS RELATED TO THE ACQUISITION OF UBI BANCA, CONSISTING OF THE EFFECT OF THE PURCHASE PRICE ALLOCATION (INCLUDING NEGATIVE GOODWILL) AND INTEGRATION CHARGES, AND THE ACCOUNTING IMPACT OF THE RELATED GOODWILL IMPAIRMENT OF THE BANCA DEI TERRITORI DIVISION.
• GROSS INCOME UP BY 7.3% ON 2020
• OPERATING MARGIN UP BY 5.4% ON 2020
• NET FEE AND COMMISSION INCOME UP BY 9.3% ON 2020
• OPERATING COSTS DOWN BY 1.1% ON 2020
• IMPROVEMENT IN CREDIT QUALITY TREND:
• DECREASE IN NPLs:
 GROSS NPL REDUCTION OF AROUND €37BN SINCE DECEMBER 2017 AND AROUND €50BN SINCE THE SEPTEMBER 2015 PEAK, A REDUCTION OF AROUND €42BN AND €54BN, RESPECTIVELY, ON A PRO-FORMA BASIS TAKING INTO ACCOUNT THE PLANNED REDUCTION IN 2022 DUE TO DISPOSALS ALREADY PROVISIONED FOR IN Q4 2021;
 NPL STOCK DOWN 27% GROSS AND 34.1% NET ON YEAR-END 2020, DOWN 50.2% GROSS AND 48% NET ON A PRO-FORMA BASIS TAKING INTO ACCOUNT THE PLANNED REDUCTION IN 2022 DUE TO DISPOSALS ALREADY PROVISIONED FOR IN Q4 2021;
 NPL TO TOTAL LOAN RATIO OF 3.2% GROSS AND 1.5% NET; ACCORDING TO THE EBA METHODOLOGY, THE RATIO WAS 2.4% GROSS AND 1.2% NET, RESPECTIVELY BELOW 2% AND 1% ON A PRO-FORMA BASIS TAKING INTO ACCOUNT THE PLANNED REDUCTION IN 2022 DUE TO DISPOSALS ALREADY PROVISIONED FOR IN Q4 2021;
 COST OF RISK IN 2021 DOWN TO 59 BASIS POINTS (FROM 97 BASIS POINTS IN 2020), 25 BASIS POINTS WHEN EXCLUDING PROVISIONS TO ACCELERATE NPL DELEVERAGING (FROM 48 BASIS POINTS IN 2020 WHEN EXCLUDING ADJUSTMENTS FOR FUTURE COVID-19 IMPACTS)
• SOLID CAPITAL POSITION, WELL ABOVE REGULATORY REQUIREMENTS:
• COMMON EQUITY TIER 1 RATIO AS AT 31 DECEMBER 2021, AFTER DEDUCTING FROM CAPITAL €1.9BN OF RESERVES DISTRIBUTED IN OCTOBER 2021, €1.4BN OF INTERIM DIVIDENDS FOR 2021 PAID IN NOVEMBER 2021 AND €1.5BN OF PROPOSED REMAINING DIVIDENDS FOR 2021 (*):
 14.5% PHASED-IN (1)
 14% FULLY LOADED (2)
 15.2% PRO-FORMA FULLY LOADED (3)
• COMMON EQUITY TIER 1 RATIO AS AT 31 DECEMBER 2021, AFTER DEDUCTING FROM CAPITAL ALSO €3.4BN OF PROPOSED BUYBACK (°):
□ 13.4% PHASED-IN (1)
 12.9% FULLY LOADED (2)
 14.2% PRO-FORMA FULLY LOADED (3)
____________
(*) Deducting from capital also the coupons accrued on the Additional Tier 1 issues.
(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 by applying the fully loaded parameters to the financial statements as at 31 December 2021, 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 new agreement with the trade unions of November 2021, and the expected distribution on the 2021 net income of insurance companies.
(°) Subject to ECB approval. Amount equivalent to the suspended 2019 dividend.

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