The UBI Banca Group Consolidated Results as at 30 th September th November 2016

Transcription

1 The UBI Banca Group Consolidated Results as at 30 th September th November 2016

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 Business Plan activities well under way Focus on AUM and Bancassurance confirmed, significant growth and market share gain recorded Clean up of EVA negative credit positions under way, to sustain ongoing profitability and with a positive impact on CET1 Ongoing reduction and re-composition of the proprietary securities portfolio Tests for the first IT migrations completed, further Single Bank costs booked in 3Q16 ( 4.5 million net) Improving credit quality confirmed, with lower stocks, lower inflows and higher coverage 3

4 3Q16 take-aways CET1 up compared to June 2016, including dividend accrual. Solid Liquidity and Leverage ratios 3Q16 profit to 32.5 million including the absorption of a higher contribution to DGS by 10 million net, comparing favourably with 37.6 million recorded in 3Q15. The Group has still not booked the benefit from TLTRO2 New inflows from performing to non performing comparable to pre-crisis levels. 4

5 CET1 ratio at 11.68% phased in and 11.28% fully loaded: +25 bps vs June 16 CET 1 ratio PHASED IN CET 1 ratio FULLY LOADED 12.07% +25 bps 11.43% 11.68% +26 bps 11.73% 11.02% 11.28% 11.95% 12.8% Mar '16 Jun '16 Sep '16 Mar '16 Jun '16 Sep ' E Business Plan Target June 16 figure impacted by upfronting of 95% Business Plan costs (overall 1.3 bln/ gross and 835 net) ** Positive impact from the reduction of EVA negative corporate loan positions TOTAL CAPITAL RATIO PHASED IN 13.87% +8bps 14.47% 14.55% B3 Leverage: phased in 5.86% fully loaded 5.68% LCR and NSFR > 100% Mar '16 Jun '16 Sep '16 * As from 30 Sep 2016, LCR is calculated according to the new methodology envisaged by EU Delegated Regulation n. 61/2015 ** For further detail please see annex 2 5

6 Loan book: growth in M/L term component compared to Dec 2015 (notwithstanding almost 200 mln/ per quarter of loans in run off ) In 3Q16: launch of selection and elimination of EVA negative positions Amounts in mln Jun '15 Sep '15 Dec '15 Jun '16 Sep '16 TOTAL NET LOAN BOOK 85,340 83,834 84,586 83,907 82,011 NET PERFORMING EXPOSURES 75,689 73,963 74,898 75,395 73,677 o/w repos with CCG 1, , o/w other Net Performing Exposures 74,597 73,307 73,664 74,630 73,435 o/w ML term 55,400 55,200 54,900 55,800 55,700 o/w Short term 19,200 18,100 18,800 18,800 17,700 Decrease in performing loans Sept 16 / June bln in repos with CCG -1.1 bln in Short term lending (mostly due to elimination of EVA negative positions (no impact on NII, lower RWA and lower collective provisioning) NET NON PERFORMING EXPOSURES 9,651 9,872 9,689 8,512 8,333 Sep 2016 / Dec 2015 increase in M/L term lending: higher origination (9.3 bln/, +6.3% vs Dec 2015, of which 2.5 bln/ to retail customers (+16.8%) and 6.9 to corporates (+3%) 6

7 Direct funding: continued growth in sight deposits and shift of retail bonds investments to AuM and Bancassurance products IAS amounts in bln Sep '15 Dec '15 Jun '16 Sep '16 Continuing growth in sight deposits DIRECT FUNDING FROM ORDINARY CUSTOMERS Reduction in retail bonds issued by the Group on captive customers, as indicated in the Business Plan Current accounts and deposits Positive influence on the evolution Term deposits, other payables and repos of AuM+Bancassurance (up to Securities in issue: nearly 53 bln/ ): Bonds issued by Network banks + UBI % vs Dec 15 Bonds distributed on Extra-captive customers* % vs Jun 16 Other (mainly customer CDs) DIRECT FUNDING FROM INSTITUTIONAL CUSTOMERS Covered Bonds EMTN CD and ECP Repos with CCG TOTAL DIRECT FUNDING Reduction in institutional funding impacted by the resizing in repos with the CCG, after taking up the TLTRO2 (the latter is not accounted for in direct funding but in debt towards banks ). Overall 1 bln/ of Covered Bonds and EMTN issued in October 2016 TOTAL DIRECT FUNDING FROM ORDINARY CUSTOMERS AND AUM * Bonds placed by Centrobanca on third party banks networks, progressively expiring. Subordinated bonds: ~3.3 bln/ as at 30 Sep 16 (of which 750 mln/ on institutional investors) corresponding to less than 4% of total direct funding 7

8 Bond maturities well planned and distributed over time R E T A I L B O N D S I N S T I T U T I O N A L B O N D S Maturities profile (Nominal amounts in bln, net of bond repurchases, 30 Sep 16) 4Q16 3Q16 2Q16 1Q16 COVERED BONDS FRENCH CD Q16 3Q16 2Q16 1Q16 EMTN* COVERED BONDS** and following Maturities profile (Nominal amounts in bln, 30 Sep 16) and following In line with Business Plan strategy, as from 4Q16 retail bonds issuances are limited to Welcome editions (acquisition of new customers) Issuances in 9M16 Sept 16: 1bln/ covered bond issue (10y maturity, 0.375% coupon, spread of 19 bps over 10y mid swap rate) June 16: reopening of Oct 15 issue of covered bonds for 250 mln/ (maturity Jan 2023, spread 13 bps) May 16: 750 mln/ subordinated Tier 2 issue (10y maturity, callable after 5 years, 4.25% coupon, spread of 4.182% over the swap rate) Latest issuances after 30 Sep 16 Oct 16: reopening of Oct 15 issue of covered bonds for 250 mln/ (maturity Jan 2023, spread 6 bps) Oct-Nov 16: 810 mln/ puttable EMTN (1-2 year maturity) * EMTN: in 1H16, 0.1 bln/ EMTN expired, further 0.07 bln/ puttable expected to mature in 4Q ** Inclusive of original 0.5 bln/ of private placement with BEI expiring within Retained issues not included 8

9 Net Financial Assets: the downsizing and recomposition of the proprietary portfolio proceeds in line with Business Plan targets Total Financial Assets Other Financial Assets Italian Govies % 90.6% Target 2020 for Italian Gov. 81.9% 81.5% Bonds portfolio: approx. 50% of Financial Assets Sep '15 Dec '15 Jun '16 Sep '16 Focus on the Italian Govies Portfolio Composition (bln/ ) AFS HFT HTM TOTAL Sep ' Dec ' Jun ' Sep ' % Maturity (bln/ ) AFS HFT HTM from 2021 and over 9

10 Total eligible assets at 29.3 bln/, of which 16.6 bln/ unencumbered. Eligible assets represent over 55% of current accounts and deposits Eligible Assets 29.3 bln/ Composition (%) (net of haircut, as at 30 th Sep 2016) Usage (bln/ ) Other (mainly ABACO), 18% Retained covered bonds, 16% Retained securitisations, 15% Foreign Govies, 3% Italian Govies, 48% Unencumbered 16.6 Pledged to ECB* 10 CCG Repos 2.7 Increased capacity to generate eligible assets, both in terms of ABACO (currently at approx. 75% of the end of Business Plan target) and of retained securitisations (not expected to increase further), a significant effort and success in terms of digitalisation enhancement Loan to Deposit ratio = 97.0% * 10 bln/ TLTRO 2, expiring in June

11 P&L isolating Business Plan impacts Figures in mln 9M15 9M16 % change 9M16 vs 9M15 3Q15 2Q16 3Q16 % change 3Q16 vs 3Q15 % change 3Q16 vs 2Q16 Net interest income 1, ,133.1 (9.0%) (7.8%) (2.8%) Net commission income % % (2.7%) Dividends and similar income % (67.0%) (85.9%) Profits of equity-accounted investees (18.2%) % 4.3% Net result from finance (23.5%) (14.6%) (64.5%) Other income items (4.7%) % (3.0%) Operating income 2, ,334.0 (5.4%) (1.7%) (8.6%) Staff costs (972.7) (953.8) (1.9%) (318.0) (319.3) (314.7) (1.0%) (1.4%) Including 26.4 mln/ Other administrative expenses (454.6) (493.4) 8.5% (141.6) (155.5) 17.3% 6.8% contribution to DGS (166.1) Net impairment losses on property, equipment and (114.7) (106.0) (7.6%) (in 9M plus 31.9 mln/ (37.0) (35.7) (34.3) (7.3%) (4.0%) investment property and intangible assets contribution to SRF* Operating expenses (1,542.1) (1,553.2) 0.7% booked in 1Q16) (496.6) (510.5) (515.0) 3.7% 0.9% Net operating income (15.6%) (11.9%) (24.4%) Net impairment losses on loans (557.6) (522.8) (6.2%) (168.5) (200.1) (167.4) (0.7%) (16.4%) Net impairment losses on other financial assets and One-off elimination of (6.4) n.s. (3.1) (0.4) (87.4%) (99.2%) liabilities (50.9) residual credit risk (50.7) Net provisions for risks and charges (47.8) (30.2) (36.8%) connected with (18.6) (20.3) (3.5) (81.0%) (82.5%) financial instruments Profits (losses) from disposal of equity investments n.s % (71.8%) resulting from one Pre-tax profit from continuing operations (43.0%) NPE position (16.9%) 70.1% (43.4 mln/ ) Taxes on income for the period from continuing operations (127.8) (72.3) (43.4%) (28.6) (23.2) (14.7) (36.6%) Profits/losses for the period attributable to noncontrolling interests (22.6) (21.4) (5.5%) (5.5) (6.3) (7.7) 23.3% Profit for the period before Business Plan impacts (47.8%) (1.1%) n.s. Net impairment losses on loans with shortfall (586.0) n.s. (586.0) 2019/2020 Business Charges for exit incentives (1.2) (207.9) n.s. Plan impacts for (207.2) (0.2) Brands impairment (37.9) n.s. 840 mln/ (37.9) Charges for Single Bank project (7.9) n.s. (net of taxes) (3.4) (4.5) 29.7% Profit (loss) for the period (754.5) n.s. corresponding to 97% of total costs 37.6 (829.0) 32.5 (13.5%) n.s. * In 2015 the two contributions had been temporarily booked in the item Net provisions for risks and charges 11

12 Net Interest Income trends TLTRO2 benefit not included NII from Financial Assets & Interbank Exposure NII from Business with Customers Net Interest Income trend ( mln) 1, % -24.3% Net Interest Income quarterly trend ( mln) 1, , % Sept '15 30 Sept '16 Avg 1 Month Euribor (in bps) Securities portfolio contribution (net of interbank) down by approx. 52 mln/ in 9M16 vs 9M15 following the progressive downsizing of the Italian Govies portfolio (-3.2 bln/ yoy), in accordance with the reduction and recomposition strategy confirmed in the 2019/2020 Business Plan Contribution from business with customers down by 60 mln/ : - flat average loan volumes (approx bln/ notwithstanding clean up of EVA negative positions) - lower UTP volumes reduce contribution to interest income by 34.9 mln/ - impact of lower market rates NII from Financial Assets & Interbank Exposure NII from Business with Customers TLTRO2 would represent 10 mln/ in the quarter, bringing NII back to 2Q16 level 1Q15 2Q15 3Q15 1Q16 2Q16 3Q16 Avg 1 Month Euribor (in bps) For further detail please see annex 3 12

13 Net Commission Income significantly up, sustained by strong AUM activity mln/ +1.9% Net commission income up 1.9% vs 9M15 thanks to strong increase of AUM (+8.8% vs Dec 15) M 15 9M % MANAGEMENT, TRADING AND ADVISORY SERVICES TOTAL NET COMMISSION INCOME - quarterly trend +18.6% Q15 3Q15 2Q16 3Q16 AUM up by +11.9% vs Sep 15 BANKING RELATED COMMISSIONS* Of which Up-front fees -4.6% Banking related 2Q15 3Q15 2Q16 3Q commissions substantially flat vs 2Q16, even 12% 9% 15% 13% considering seasonality impact 2Q15 3Q15 2Q16 3Q16 * Includes FX negotiations For further detail please see annex 5 13

14 Strong commitment on AuM and Bancassurance products: stocks up by 4.2% and 2.9% respectively vs June 16. In progress the recomposition of the Asset mix INDIRECT FUNDING EVOLUTION bln/ Dec '15 Jun '16 Sep '16 % change vs Jun '16 % change vs Dec '15 AuM % 7.7% Bancassurance % 11.6% AuC % -12.1% Performance effect approx -2.6 bln/ in the period Dec 15 - Jun 16 Total Indirect Funding % 0.7% UBI PRAMERICA SGR AUM composition FY09 Sept 16 22% 59% 45% 78% 55% Target 2020 for Asset Mix: 59% of total AUM invested in Equity, Balanced and Flexible classes 2020 BP Target Equity, Balanced and Flexible Bond and Others* * Bond, Money Market, Hedge Funds and Cash 14

15 Focus on UBI Pramerica and Zhong Ou in Sep 2016 Bln/ UBI PRAMERICA SGR VS ITALIAN MARKET BANKING GROUPS I T A L Y % % market share considering the Italian market Banking Groups perimeter % AUM Dec 15 Inflows 9M16 AUM Sep 16 AUM Dec 15 Inflows 9M 16 AUM Sep 16 Bln/ ZHONG OU (Parent) VS CHINESE MARKET +25% C H I N A % It does not include institutional AuM 2, ,544 Volumes* Dec 15 Inflows 9M16 Volumes* Dec 16 Volumes* Dec 15 Inflows 9M 16 Volumes* Dec 16 * Volumes = Mutual funds + Managed Accounts Exchange rate: 1 =

16 Operating costs continue to reflect strict monitoring measures: -4.3% in 9M16 excluding contribution to DGS and SRF Staff costs keep on decreasing due to the reduction in: the number of headcounts (-285 avg. resources in latest 12 months) other cash-outs compensated by forms of agreed labour flexibility (e.g. part-time) % change % change % change mln/ 9M15 9M16 3Q15 2Q16 3Q16 9M16 vs 9M15 3Q16 vs 3Q15 3Q16 vs 2Q16 Staff costs % % -1.4% Other Adm. Expenses excluding contribution to Funds % % -10.2% Deposit Guarantee Scheme* Single Resolution Fund* 32 D&A (including PPA) % % -4.0% Total operating costs incl. contribution to funds Total operating costs excl. contribution to funds 1,542 1, % % 0.9% 1,542 1, % % -4.3% Lower depreciation and amortisation on real estate (following branches closures) and on IT components (hardware and software) Savings have been registered almost in all the items Reduction attributable to QoQ seasonality and assisted by savings in projects expenses, advertising and promotional initiatives * In 2015, 22.8 mln/ were booked as a first estimate for SRF contribution (2Q15) and 11.4 mln/ for DGS (3Q15) in the line net provisions for risk and charges 16

17 9M16 new inflows to non performing loans represent a decrease of over 69% since the 9M peak in 2013 and are virtually back to FY2007 levels Further progress in de-risking: performing loan portfolio risk profile* Low risk performing loans as the premise to lower inflows to NPEs Unrated High risk Medium risk Low risk 6.7% 5.9% 3.9% 3.8% 6.6% 4.5% 4.5% 4.5% 16.0% 15.2% 14.6% 21.2% 65.5% 73.6% 76.4% 77.1% Sep '13 Dec '15 Jun '16 Sep '16 9M gross peak since Group inception NPEs: inflows from performing Gross inflows Net inflows** Outflows 3,064 Group inception: -69.4% pre-crisis levels 799 1, % 1,211 2, , FY2007*** 9M13 9M15 9M Q % Q16 * Perimeter: Network Banks + UBI Banca (IRB perimeter); ** Net inflows from performing = inflows from performing - outflows to performing *** 1Q BL data estimated, as data in FY2007 included the full year for BPU and 9 months for BL (merger on ) Note: starting from June 16, data are exposed by customer relationships 17

18 Within the NPEs aggregate, the significant decreases of transfers from performing to past due and from other NPEs to Unlikely to pay, represent the premise for gradually lower transfers to Bad Loans Transfer to Past Due from Performing Transfer to UTP from other NPEs Transfer to Bad Loans from other NPEs -22.8% -2.8% 1, , % % % -40.9% M14 9M15 9M16 9M14 9M15 9M16 9M14 9M15 9M16 18

19 Confirmed decrease in Gross NPEs even in virtual absence of loan disposals* -3.1% vs Figures in mln/ Gross exposure Sep 15 Net exposure Sep '15 Dec '15 Jun '16 Sep '16 Sep '15 Dec '15 Jun '16 Sep '16 Total loan book 88,027 88,748 89,086 87,307 83,834 84,586 83,907 82,011 of which: Non performing exposures 13,651 13,434 13,280 13,231 9,872 9,689 8,512 8,333 - Bad loans ("Sofferenze") 6,920 6,988 7,216 7,491 4,244 4,288 3,849 3,913 - Unlikely to pay loans 6,324 6,180 5,862 5,569 5,241 5,147 4,470 4,258 - Past due loans % vs Sep 15 * Overall, approx.25 mln/ euro were sold in 9M16 19

20 Growing trend for NPE coverage, driven both by a decreasing stock of NPEs (-1.5% vs Dec 15) and by higher provisioning (+9.14 pp) Coverage by type of NPEs TOTAL NPEs coverage Including write-offs Stated 44.31% 45.10% 37.20% 37.64% 35.90% 37.02% 27.88% 28.34% Dec '15 Mar '16 Jun '16 Sep '16 Changes vs Dec pp pp B A D L O A N S U N L I K E L Y Including write-offs Stated 58.25% 58.55% 52.25% 52.41% 46.66% 47.77% 38.64% 38.97% Dec '15 Mar '16 Jun '16 Sep '16 Stated 16.71% 17.02% 23.75% 23.54% Dec '15 Mar '16 Jun '16 Sep '16 Changes vs Dec pp pp Changes vs Dec pp Impairment losses on NPEs (mln/ ) 3Q15 2Q16 3Q16 Quarterly LLPs 169 1, o/w shortfall reabsorption 851 o/w ordinary LLPs P A S T D U E Stated 4.88% 3.64% 4.63% 4.97% Dec '15 Mar '16 Jun '16 Sep '16 Changes vs Dec pp 20

21 Outlook for ordinary operations (net of non recurring items) The overall trend for operating income is forecast to grow compared with the third quarter, with an improvement in core revenues and a smaller contribution from trading and hedging activity The actions undertaken starting from 2015 allow us to confirm the objective of containing recurring operating expenses for the year 2016 in line with those of the previous year, absorbing the increase in costs relating to the ordinary contributions to the Resolution Fund and the Deposit Guarantee Scheme The particularly low risk attaching to the performing portfolio and the continuation of the reduction in inflows of new non-performing loans, should confirm the expected reduction in loan losses in the fourth quarter of 2016 compared with the same period in

22 Annexes 22

23 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) 19,595 20,239 19,741 18, % -6.7% Loans to customers 83,834 84,586 83,907 82, % -2.3% Property, equipment and investment property 1,744 1,744 1,660 1, % -0.4% Intangible assets 1,752 1,757 1,685 1, % 0.2% of which: goodwill 1,465 1,465 1,465 1, % 0.0% Tax assets 2,727 2,815 3,007 2, % -0.8% Other assets 960 1,172 1, % -23.0% Total assets 115, , , , % -2.8% MAIN LIABILITIES AND EQUITY ITEMS Figures in millions of euro % annual change % quarterly change Net interbank position* 7,239 6,960 9,761 9, % -0.7% Due to customers 50,760 55,264 55,460 53, % -3.0% Securities issued 38,262 36,248 32,065 30, % -4.0% Tax liabilities % 0.9% Net worth attributable to the Parent 9,911 9,865 9,629 9, % 0.2% Non-controlling interests % 1.5% Profit for the period (787) (755) n.s. -4.1% Total liabilities and equity 115, , , , % -2.8% * Including 8.1 bln TLTRO1 replaced with 10 bln TLTRO 2 taken in June 16 23

24 Capital Ratios (Phased in, Basel 3) as at Sep 16: Common Equity Tier 1 Ratio at 11.68%, Total Capital Ratio at 14.55% Annex 2 mln/ Dec '15 Jun '16 Sep '16 Common Equity Tier 1 Capital (before filters and transitional provisions) 8, , ,905.1 mln/ Dec '15 Jun '16 Sep '16 Transitional provisions (minority interest) Risk weighted assets 61, , ,378.8 Transitional provisions (AFS Reserves) Transitional provisions (loss of the period) Total prudential requirements 4, , ,830.3 Transitional provisions (DTA) Common Equity Tier 1 Capital filters Credit risk 4, , ,469.4 Italian Govies filters CVA (Credit Value Adjustment) risk Mark et risk Common Equity Tier 1 8, , ,104.0 (after filters) Operational risk Common Equity Tier 1 regulatory adjustments: negative elements for deduction excess of expected losses over impairment losses Common Equity Tier 1 Capital (CET1) 7, , ,049.8 Additional Tier 1 before deductions Additional Tier 1 regulatory adjustments: negative elements for deduction excess of expected losses over impairment losses Additional Tier CET 1 PHASED IN TOTAL CAPITAL PHASED IN Tier 1 Capital 7, , ,049.8 Tier 2 Capital before transitional provisions 1, , ,747.8 Tier 2 instruments grandfathering Tier 2 Capital after transitional provisions 1, , ,747.8 Tier 2 capital regulatory adjustments of which: negative elements for deduction excess of expected losses over impairment losses % 14.55% 12.08% 13.93% 11.68% 11.43% Dec '15 Jun '16 Sep '16 Dec '15 Jun '16 Sep '16 Tier 2 Capital 1, , ,735.2 TOTAL OWN FUNDS 8, , ,

25 Net Interest Income Consolidated Customer Spread Details Annex 3 CUSTOMER SPREADS Do not include the effects of TLTRO2 volumes and costs in bps on avg. STOCK* 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 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) 25

26 Over 95% of one-off costs relating to the simplification in the baseline organisational structure of the Group and to the Business Plan recognised in 2Q16 accounts. Further 5 mln/ related to Single Bank project recognised in 3Q16 All the items booked in 2Q16, unless otherwise stated ONE-OFF INCOME STATEMENT IMPACTS M Annex 4 Net Impact Tax and minorities Impact Gross Impact ,249 Shortfall reabsorption Redundancy fund contribution Brands Write-off Single Bank project expenses net in 3Q in 3Q16 (tax and minorities) 26

27 Detail of Net Commission Income at 321 mln/ Annex 5 Net Commission Income ( mln) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 MANAGEMENT, TRADING & ADVISORY SERVICES of which: 3Q16 vs 2Q16 3Q16 vs 3Q % 18.6% Portfolio management % 9.9% Placement of securities % 65.6% Third party services distribution % 4.0% BANKING RELATED COMMISSIONS* % -4.6% of which: Guarantees (bank ing activity) % -2.5% Collection and payment services % -7.4% Services for factoring transactions % -14.8% Current accounts management % -3.6% Other services % -4.2% TOTAL NET COMMISSION INCOME % 7.0% of which UP-FRONT FEES** as a % on total net commission income 15% 12% 9% 8% 18% 15% 13% * Includes FX negotiations. ** Funds&sicav, insurance products, other third party products 27

28 Strong track record in cost management from 2007 to 2015, confirmed in 2016 (Amounts net of non-recurring items) Annex 6 TOTAL OPERATING COSTS ( mln, net of PPA) 2,599 2,069 2,102 1,553 Inclusive of new ordinary contribution to Resolution Fund and Deposit Guarantee Scheme FY07 FY15 FY15 9M16 STAFF COSTS 1,590 ( mln) OTHER ADM. EXPENSES ( mln) 1, Inclusive of new ordinary contribution to Resolution Fund and Deposit Guarantee Scheme FY07 FY15 9M16 STAFF HEADCOUNTS FY07 FY15 FY15 9M16 NUMBER OF DOMESTIC BRANCHES 21,700 17,716 17,573 1,970 1,554 1,532 1st Apr '07 Dec '15 Sep '16 1st Apr '07 Dec '15 Sep '16 Note: staff headcounts at the end of the period 28