Slide 1: 4Q17 and FY17 Results
4Q17 and FY17 Results Milan, 8 February 2018
Slide 2: Disclaimer
Disclaimer This Presentation may contain written and oral “forward-looking statements”, which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, p
Slide 3: Agenda
Agenda 1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Annex 3
Slide 4: Strong underlying performance supporting Transform 2019 – All first year targets achieved
Strong underlying performance supporting Transform 2019 – All first year targets achieved 1 2 3 4 5 6 7 Executive Summary – FY17 Group underlying financial performance strong with net operating profit at 5.7bn up 74% FY/FY. Adjusted net profit(1) of 3.7bn. FY17 adjusted RoTE(1) at 7.2%. FY19 RoTE ta
Slide 5: Robust 4Q17 – Strong commercial dynamics in all divisions
Robust 4Q17 – Strong commercial dynamics in all divisions 1 2 3 4 5 6 7 Executive Summary – 4Q17 Strong commercial dynamics help deliver the best fourth quarter since 2007. Stated 4Q17 net profit of 801m, adjusted net profit(1) of 708m 4Q17 revenues of 4.8bn, up 4.2% Q/Q and 7.4% Y/Y. Main drivers w
Slide 6: Group – FY17 adjusted net profit at 3.7bn
Group – FY17 adjusted net profit at 3.7bn 1 2 3 4 5 6 7 Executive Summary ∆ % vs. 4Q16 ∆ % vs. ∆ % vs. Group key figures FY16 adj. FY17 FY16 adj. adj. 3Q17 4Q17 3Q17 4Q16 adj. Total revenues, m 19,295 19,619 +1.7% 4,509 4,646 4,842 +4.2% +7.4% Operating costs, m -11,827 -11,350 -4.0% -2,930 -2,813 -
Slide 7: Transform 2019 update
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Annex 7
Slide 8: Transform 2019 achievements (1/2)
Transform 2019 achievements (1/2) 1 2 3 4 5 6 7 Transform 2019 update • 13bn rights issue, Pioneer and Pekao disposals completed Rights issue, Pioneer STRENGTHEN • CET1 ratio at 13.02% pro forma of IFRS9(1) and FINO(2) and Pekao AND • Successfully issued 1bn AT1 in December 2017 and the inaugural 1.
Slide 9: Transform 2019 achievements (2/2)
Transform 2019 achievements (2/2) 1 2 3 4 5 6 7 Transform 2019 update Commercial engine • FY17 AuM CB Italy net sales of 11bn, three times higher than FY16, with AuM-related running commissions up 28% FY/FY • New "Smart" or "Cashless" branch formats with higher degree of automation implemented in Ne
Slide 10: Group results highlights
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Annex 10
Slide 11: Group – FY17 3.7bn adjusted Group net profit
Group – FY17 3.7bn adjusted Group net profit Very good performance across all business divisions 1 2 3 4 5 6 7 Group results highlights Net profit, m Net profit by division FY17, m 3.7bn adjusted(1) RoAC(2) CB Italy 1,231 12% 5,473 838m adjusted(1) CB Germany 639 14% 708m adjusted(1) 2,820 CB Austri
Slide 12: Group – Net operating profit up 73.7% FY/FY
Group – Net operating profit up 73.7% FY/FY thanks to strong underlying commercial performance and strict cost and risk discipline 1 2 3 4 5 6 7 Group results highlights Main drivers Data in m FY16 adj. FY17 ∆ % vs. FY16 adj. 4Q16 adj. 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 adj. • Resilient NII at 10.3
Slide 13: Group Core – FY17 adjusted net profit 4.4bn, adjusted RoTE of 9.1%
Group Core(1) – FY17 adjusted net profit 4.4bn, adjusted RoTE of 9.1% Gross NPE ratio at 4.9%, down 73bps Y/Y 1 2 3 4 5 6 7 Group Core - results highlights Main drivers Data in m FY16 adj. FY17 ∆ % vs. FY16 4Q16 adj. 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 adj. Total revenues 19,567 19,770 +1.0% 4,640 4
Slide 14: Group – Resilient 4Q17 net interest mainly thanks to lower funding costs
Group – Resilient 4Q17 net interest mainly thanks to lower funding costs 1 2 3 4 5 6 7 Group results highlights Net interest(1) Q/Q, m +3.3% 2,500 2,504 2,583 +4 +3 -3 -8 +8 +41 +8 +36 -4 Average Commercial dynamics: +47m Euribor 3M -0.33% (flat Q/Q) 3Q17 FX effect 3Q17 Loans Deposits Loans Deposits
Slide 15: Group Core loan volumes up 1.8bn Q/Q, customer rates down
Group – Group Core loan volumes up 1.8bn Q/Q, while Group customer rates down 1bp in 4Q17 Customer spreads stabilising across all divisions 1 2 3 4 5 6 7 Group results highlights Avg. commercial loans(1) and rates Customer spreads(2) 4Q17 2.78% 2.69% 2.68% At const. FX Cust. Q/Q Q/Q Y/Y rates +1.8bn
Slide 16: Group Core customer loans and deposits
Group – End-of-period Group Core customer loans up 9.6bn(1) Y/Y 1 2 3 4 5 6 7 Group results highlights Customer loans (end-of-period)(2), bn Customer deposits (end-of-period)(2), bn Q/Q Y/Y Q/Q Y/Y CB Italy 138.4 +0.9% +2.6% CB Italy 142.0 +3.1% +5.6% CB Germany 80.9 -0.7% +0.5% CB Germany 91.6 +6.1
Slide 17: Group – Fees up 12.3% Y/Y
Group – Fees up 12.3% Y/Y. Investment fees up 11.2% Q/Q 1 2 3 4 5 6 7 Group results Annex highlights – P&L Fees Q/Q, stated figures(1) m +6.0% Q/Q Y/Y 1,688 1,683 +5.7% +12.3% 1,592 +23 +1 -5 +71 1,499 709 709 +11.2% +27.0% Investment 638 559 fees Financing 396 419 414 397 +4.6% +4.3% fees Transacti
Slide 18: Group – Strong commercial dynamics drove AuM
Group – Strong commercial dynamics drove AuM. Up 21.4bn, 10.9% Y/Y 1 2 3 4 5 6 7 Group results highlights Main drivers Group TFAs(1) 4Q17, bn +32.7bn (+4.1%) Q/Q Y/Y +20.1bn (+2.5%) +20.1bn +32.7bn • TFAs up 20.1bn Q/Q to 824.0bn: (+2.5%) (+4.1%) 803.8 824.0 Assets under Management at 218.4bn, up
Slide 19: Group – Trading income up 3.5% FY/FY
Group – Trading income up 3.5% FY/FY, client activity picking up in 4Q17 1 2 3 4 5 6 7 Group results highlights Trading income, m Dividends(1), m +3.5% Client driven Other dividends and Turkey (at equity) equity investments 1,818 Other trading 1,756 -21.9% 817 638 1,321 -16.4% 1,422 439 -19.1% +0.8%
Slide 20: Group – Costs 4.0% lower FY/FY, ahead of schedule
Group – Costs 4.0% lower FY/FY, ahead of schedule FY18 11.0bn and FY19 10.6bn total cost targets confirmed 1 2 3 4 5 6 7 Group results highlights Main drivers Costs, m FTEs (eop) -6,352 • Execution of Transform 2019 progressing well: -2,113 Q/Q 64% of FTE reduction target -4.0% 98,304 94,066 91,95
Slide 21: Group – Cost reduction on track with HR and Non HR costs down
Group – Cost reduction on track with HR and Non HR costs down FY/FY, thanks to disciplined cost control and no 4Q17 cost seasonality 1 2 3 4 5 6 7 Group results highlights Staff expenses, m Non HR costs(1), m -3.1% -5.5% 7,124 6,905 4,703 CEE 713 4,445 741 CEE 783 +2.2% 803 -13.6% Benefitting from 1
Slide 22: Group – FY17 CoR of 58bps in line with guidance
Group – FY17 CoR of 58bps in line with guidance. 4Q17 CoR of 69bps driven by models impact 1 2 3 4 5 6 7 Group results highlights Main drivers(1) Loan loss provisions, m • FY17 LLPs down 38.1% FY/FY to 2,605m, with CoR at -38.1% 58bps, of which 5bps impact from models 4,207 -48.1% • Group gross NPE
Slide 23: Divisional results highlights
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Annex 23
Slide 24: CB Italy – Transform 2019 driving business turnaround
CB Italy – Transform 2019 driving business turnaround, FY17 net operating profit of 2.0bn up 1.2bn FY/FY thanks to strong fees and significantly lower LLPs 1 2 3 4 5 6 7 Divisional results highlights Main drivers Data in m FY16 FY17 ∆ % vs. FY16 4Q16 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 Total revenue
Slide 25: CB Germany – Strong commercial dynamics
CB Germany – Strong commercial dynamics with revenues up 6.7% FY/FY excluding 90m one-off in 2Q17. Net operating profit up 27.9% FY/FY despite normalisation of LLPs 1 2 3 4 5 6 7 Divisional results highlights Main drivers Data in m FY16 FY17 ∆ % vs. FY16 4Q16 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 Tota
Slide 26: CB Austria – Net operating profit up 34.0% FY/FY
CB Austria – Net operating profit up 34.0% FY/FY driven by cost reductions and net write- backs 1 2 3 4 5 6 7 Divisional results highlights Main drivers Data in m FY16 FY17 ∆ % vs. FY16 4Q16 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 Total revenues 1,639 1,550 -5.4% 401 385 397 +3.3% -0.8% • Stated revenue
Slide 27: CEE – Outperformance leading to net operating profit of 2.1bn
CEE – Outperformance leading to a net operating profit of 2.1bn in FY17 Substantial de-risking with gross NPE ratio down 200bps Y/Y 1 2 3 4 5 6 7 Divisional results highlights Main drivers Data in m (1) ∆ % vs. ∆ % vs. ∆ % vs. FY16 FY17 FY16 4Q16 3Q17 4Q17 3Q17 4Q16 • Stated revenues resilient at 4.
Slide 28: CIB – Net operating profit up 13.2% FY/FY
CIB – Net operating profit up 13.2% FY/FY driven by sustained client activity 1 2 3 4 5 6 7 Divisional results highlights Main drivers Data in m (1) FY16 FY17 ∆ % vs. FY16 4Q16 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 Total revenues 4,233 4,066 -3.9% 968 890 995 +11.8% +2.8% • Commercial NII resilient re
Slide 29: Fineco – Strong AuM growth
Fineco – Strong AuM growth, up 15.6% Y/Y. Net operating profit up 6.0% FY/FY 1 2 3 4 5 6 7 Divisional results highlights Main drivers Data in m FY16 FY17 ∆ % vs. FY16 4Q16 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 Total revenues 558 586 +4.9% 138 148 156 +5.1% +12.6% • Strong revenue generation, up 4.9% F
Slide 30: Group Corporate Centre – Bottom line affected by Pioneer and Pekao gains
Group Corporate Centre – Bottom line affected by capital gains from Pioneer and Pekao disposals, adjusted net loss at 1.1bn in FY17 1 2 3 4 5 6 7 Divisional results highlights Main drivers Data in m FY16 FY17 ∆ % vs. FY16 4Q16 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 Total revenues -633 -761 +20.2% -263
Slide 31: Non Core – Net loss reduced mainly thanks to lower LLPs
Non Core – Net loss reduced mainly thanks to lower LLPs Continued de-risking of Non Core with net NPEs down 17.0% FY/FY to 11.4bn 1 2 3 4 5 6 7 Divisional results highlights Main drivers(1) Data in m FY16 FY17 ∆ % vs. FY16 4Q16 3Q17 4Q17 ∆ % vs. 3Q17 ∆ % vs. 4Q16 Total revenues -273 -151 -44.5% -130
Slide 32: Asset quality
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Annex 32
Slide 33: Group Core – Ongoing de-risking, gross NPEs down 11.7% Y/Y
Group Core – Ongoing de-risking, gross NPEs down 11.7% Y/Y with improving coverage ratio 1 2 3 4 5 6 7 Asset quality Non performing exposures(1), bn o.w. Gross bad loans, bn -15.7% -11.7% -4.2% -2.2% 12.7 11.2 10.7 24.9 22.5 22.0 Net bad 4.1 3.4 3.4 loans 4Q16 3Q17 4Q17 Coverage Net NPEs 67.9% 69.5%
Slide 34: Group Core – Inflows impacted by seasonality and some single names
Group Core – Inflows impacted by seasonality and some single names 1 2 3 4 5 6 7 Asset quality Group Core – net flows to NPEs, m Group Core – Loan evolution drivers, m Net flows 1,391 1,402 Flow from 438 Inflows 700 UTP to 246 202 to NPEs 1,956 1,823 Bad loans 1,132 -432 -420 473 528 Outflows to -56
Slide 35: CB Italy – Stable gross NPEs at 9.6bn
CB Italy – Stable gross NPEs at 9.6bn, with coverage ratio at 52.2% 1 2 3 4 5 6 7 Asset quality Non performing exposures(1), bn o.w. Gross bad loans, bn -0.6% -0.6% -4.1% -0.7% 4.5 4.6 4.5 9.6 9.6 9.6 1.3 1.6 1.5 4Q16 3Q17 4Q17 Coverage Net NPEs 70.5% 65.8% 65.7% 4.6 4.6 ratio 4.5 4Q16 3Q17 4Q17 o.w
Slide 36: CB Italy – Net flows down 25.5% Y/Y
CB Italy – Despite seasonality in 4Q17, net flows were down 25.5% Y/Y Sound trend of recoveries Q/Q and Y/Y 1 2 3 4 5 6 7 Asset quality CB Italy – Net flows to NPEs, m CB Italy – Loan evolution drivers, m Net flows 476 742 Flow from 239 UTP to 223 554 467 Bad loans Inflows to NPEs 1,001 643 776 171
Slide 37: Non Core – FINO transaction successfully closed in January 2018
Non Core – FINO transaction successfully closed in January 2018 Gross loans reduced by 7.3bn Y/Y 1 2 3 4 5 6 7 Asset quality Actions of Non Core run down(1) Gross loans, bn FINO FINO phase 2 closed in January 2018 -7.3bn 37.1 -2.7bn Repayments 0.2bn in 4Q17 32.5 29.8 Disposals 1.2bn in 4Q17, 2.4bn i
Slide 38: Non Core – 2017 net NPE target of 11.4bn achieved
Non Core – 2017 net NPE target of 11.4bn achieved with a stable coverage ratio of 57% 1 2 3 4 5 6 7 Asset quality Non performing exposures(1), bn o.w. Gross bad loans, bn -10.5% -15.9% -6.1% -8.1% 31.5 28.8 19.1 18.2 17.1 26.5 17.2 6.9 6.5 6.1 4Q16 3Q17 4Q17 Coverage Net NPEs 13.7 12.4 11.4 ratio 64
Slide 39: Capital
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Annex 39
Slide 40: Group – CET1 ratio at 13.60%, 13.02% pro forma
Group – CET1 ratio at 13.60%, 13.02% pro forma of the IFRS9 and FINO impact 1 2 3 4 5 6 7 Capital Fully loaded Common Equity Tier 1 ratio, % 13.81% +23bps 13.60% 13.02% -7bps -5bps -24bps -8bps -58bps AFS: -1bps Regulation, models and FX: -5bps procyclicality: -24bps DBO: +1bps 3Q17 stated Net profi
Slide 41: Group – RWA up 6.1bn Q/Q
Group – RWA up 6.1bn Q/Q, mainly driven by regulation, models and procyclicality 1 2 3 4 5 6 7 Capital Main drivers of RWA transitional(1), bn Credit RWA +9.1bn Q/Q Credit Market & operational 3Q17 350.0 • Business evolution: +3.6bn, seasonal business growth (e.g. GTB, Business evolution +3.6 Factor
Slide 42: Group – Transitional capital ratios well above MDA levels
Group – Transitional capital ratios well above MDA levels SREP Pillar 2 requirement lowered by 50bps to 200bps, effective from 2018 1 2 3 4 5 6 7 Capital CET1 transitional(1) Tier 1 transitional(1) Total capital transitional(1) 2016 Basel 3 2017 Basel 3 2016 Basel 3 2017 Basel 3 2016 Basel 3 2017 Ba
Slide 43: Group – Leverage ratio fully loaded at 5.55%
Group – Leverage ratio fully loaded at 5.55%, up 13bps Q/Q and 89bps Y/Y 1 2 3 4 5 6 7 Capital Basel 3 leverage ratio fully loaded(1) Basel 3 leverage ratio transitional(1) 2016 Basel 3 2017 Basel 3 phase-in 60% phase-in 80% +89bps +79bps +13bps +13bps 5.42% 5.55% 5.60% 5.73% 4.66% 4.94% 4Q16(2) 3Q1
Slide 44: Concluding remarks – 2018: in-depth operational execution of Transform 2019 Plan
Concluding remarks – 2018: in-depth operational execution of Transform 2019 Plan 1 2 3 4 5 6 7 Concluding remarks Transform 2019 is fully on track delivering tangible results in its first full year of execution: Adjusted net profit (1) of 3.7bn, stated net profit of 5.5bn Strong commercial dynamics
Slide 45: Annex
1 Executive summary 2 Transform 2019 update 3 Group results highlights 4 Divisional results highlights 5 Asset quality 6 Capital 7 Annex 45
Slide 46: Group – 2016 non recurring items
Group – 2016 non recurring items 1 2 3 4 5 6 7 Annex – Non recurring items 2016(1) Post tax, bn Post tax, 4Q16 Transform 2019 non recurring items bn • Restructuring cost 1Q -0.2 Additional loan loss provisions -8.1 • DBO Austria • BTP trading gain Integration costs related to Italy, Germany and Aust
Slide 47: Group – 2017 non recurring items
Group – 2017 non recurring items 1 2 3 4 5 6 7 Annex – Non recurring items Net profit, m 1Q none Pekao Disposal -310 Group CC 2Q Atlante 1 impairment -135 Release of tax provision +170 CB Germany Pioneer disposal (Parent) +2.1bn Group CC One-off charge in Non Core -80 Non Core 2017 Capital gain +38
Slide 48: Monitoring KPIs for Group and Group Core
Monitoring KPIs for Group and Group Core 1 2 3 4 5 6 7 Annex – KPIs Group Group, bn 2017 2018(1) 2019(1) 2017 2018(1) 2019(1) Revenues, bn 19.6 20.1 20.6 Loan volumes(3) 422 444 Cost/income, % 57.9% <55% <52% Deposit volumes(3) 414 404 Cost of Risk +58bps +68bps +55bps Gross NPE stock, bn 48.4 n.a.
Slide 49: Divisional monitoring KPIs for CB Italy, Germany, Austria
Divisional monitoring KPIs for CB Italy, Germany, Austria 1 2 3 4 5 6 7 Annex – KPIs CB Italy CB Germany CB Austria 2017 2019(1) 2017 2019(1) 2017 2019(1) Revenues, m 7,415 7,521 2,726 2,516 1,550 1,583 Costs, m -4,438 -3,956 -1,835 -1,685 -1,085 -1,002 Cost/income 59.9% 52.6% 67.3% 67.0% 70.0% 63.3
Slide 50: Divisional monitoring KPIs for CEE and CIB
Divisional monitoring KPIs for CEE and CIB 1 2 3 4 5 6 7 Annex – KPIs CEE CIB 2017 2019(1) 2017 2019(1) Revenues, m 4,188 4,372 4,066 3,922 Costs, m -1,544 -1,615 -1,627 -1,575 Cost/income 36.9% 36.9% 40.0% 40.2% Cost of Risk +95bps +102bps +22bps +21bps Loans(2), m 60,042 68,180 79,234 78,664 RWA,
Slide 51: Divisional monitoring asset quality KPIs for CB Italy and Non Core
Divisional monitoring asset quality KPIs for CB Italy and Non Core 1 2 3 4 5 6 7 Annex – KPIs CB Italy Non Core(1) 2017 2019(2) 2017 2019(2) Gross loans, bn 144.2 154.6 29.8 17.2 Gross NPE, bn 9.6 8.3 26.5 17.2 Net NPE, bn 4.6 4.2 11.4 7.4 NPE coverage 52.2% >52% 56.9% >57% UTP coverage 41.2% >38% 4
Slide 52: CB Italy – Main drivers
CB Italy – Main drivers 1 2 3 4 5 6 7 Annex – Country details Main drivers Costs, m Loans to corporates(1), m -1.5% -1.3% 1,115 1,108 1,091 37,561 40,439 39,906 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 • Costs down 1.5% Q/Q. C/I ratio down 1.7p.p. to 59.9% in FY17 below FY17 61% target FTEs Loans to retail(1),
Slide 53: CEE – Main drivers
CEE – Main drivers 1 2 3 4 5 6 7 Annex – Country details Main drivers 23.0% EU related Russia Revenues(1) in CEE, 4Q17 14.5% Turkey • EU related countries representing the major component 62.5% • RoAC of 14.0% in FY17. Higher margin business in CEE confirmed • Customer spreads Q/Q are: up 3bps in EU
Slide 54: Turkey – Resilient commercial performance and positive asset quality trends
Turkey – Resilient commercial performance and positive asset quality trends 1 2 3 4 5 6 7 Annex – Country details Data in m (2) ∆ % vs ∆ % vs. ∆ % vs. Main drivers(1) FY16 FY17 FY16 constant 4Q16 3Q17 4Q17 3Q17 4Q16 constant constant Total revenues 1,335 1,157 +6.3% 304 275 285 +11.9% +17.0% Operati
Slide 55: Russia – Continued strong performance
Russia – Continued strong performance 1 2 3 4 5 6 7 Annex – Country details Data in m (1) ∆ % vs ∆ % vs. ∆ % vs. Main drivers FY16 FY17 FY16 constant 4Q16 3Q17 4Q17 3Q17 4Q16 constant constant Total revenues 712 773 -3.4% 185 191 180 -6.2% -1.7% o/w Net interest 608 626 -8.5% 172 148 160 +6.5% -7.2%
Slide 56: Group – Resilient NII FY/FY thanks lower funding costs
Group – Resilient NII FY/FY thanks lower funding costs, compensating lower loan dynamics 1 2 3 4 5 6 7 Annex – P&L Net interest(1) FY/FY, m -0.1% 10,307 10,357 +225 10,299 +49 -150 -480 10,209 -33 +90 +513 +139 -656 Average +292 Euribor 3M -0.33% Commercial dynamics: +192m (-7bps Y/Y) FY16 Day FY16
Slide 57: Group – Fees up 7.1% FY/FY
Group – Fees up 7.1% FY/FY. Investment fees up 15.8% FY/FY 1 2 3 4 5 6 7 Annex – P&L Fees FY/FY, stated figures(1) m FY/FY +6.9% +7.1% 6,698 6,708 6,263 +10 +381 +130 -76 +15.8% Investment 2,792 2,792 2,411 fees Financing -3.7% 1,768 1,692 1,702 fees Transactional 2,213 2,213 2,083 +6.3% fees FY16 s
Slide 58: Systemic charges – Breakdown by division
Systemic charges – Breakdown by division 1 2 3 4 5 6 7 Annex – P&L o/w bank FY17, m Systemic charges o/w SRF o/w DGS levies CB Italy -103 -34 -69 0 CB Germany -67 -28 -40 0 CB Austria -91 -29 -18 -43 CEE -163 -77 -60 -26 CIB -119 -92 -13 -14 Fineco -11 0 -11 0 Group CC -12 -22 0 10 Non Core -23 -23
Slide 59: FTEs and branches by division
FTEs and branches by division 1 2 3 4 5 6 7 Annex – Staff & branches FTE(1) breakdown 4Q17 Branches(2) breakdown 4Q17 Q/Q Y/Y Q/Q Y/Y CB Italy 32,372 -1159 -2850 -205 -819 Retail Italy 2,663 -121 -391 CB Germany 10,091 -233 -520 CB Austria 4,966 Retail Germany 341 0 0 -45 -213 CEE 24,089 CIB 3,316 -
Slide 60: TFAs – Division breakdown
TFAs – Division breakdown 1 2 3 4 5 6 7 Annex – Balance sheet Main drivers 4Q17 TFAs(1) divisional breakdown, bn • Group TFAs amounted to 824.0bn in 4Q17, increasing by 4.1% Y/Y 67.2 824.0 and 2.5% Q/Q: 92.7 CB Italy: TFAs up by 1.0% Q/Q to 345.5bn driven by AuMs 76.0 up 4.2bn in 4Q17, up 10.6% Y/
Slide 61: Group – Balance sheet
Group – Balance sheet 1 2 3 4 5 6 7 Annex – Balance sheet Loans minus Deposits(1), bn RWA on total assets, % Tangible equity, eop, bn -2.5p.p. +15.3% -63.2% +0.2p.p. +1.0% 45.0 -64.1% 42.3 42.6 50.8 51.3 44.5 21.9 22.4 8.1 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 4Q16(2) 3Q17 4Q17 (1) Loans and deposits exclud
Slide 62: Group – Tangible book value per share. Adjusted earnings per share
Group – Tangible book value per share. Adjusted earnings per share 1 2 3 4 5 6 7 Annex – EPS Tangible book value per share(1) Adj. Earnings(2) per share(1) +61.0% Group Group Core 23.16 +27.4% +232.6% 1.89 1.58 14.39 1.49 0.47 FY16 FY17 FY16 FY17 FY16 FY17 (1) End of period tangible book value per s
Slide 63: Group – Tier 1 and total exposure transitional
Group – Tier 1 and total exposure transitional 1 2 3 4 5 6 7 Annex – Balance sheet Tier 1 and total exposure for Basel 3 leverage ratio transitional, bn 1.0 0.5 Tier 1 55.9 0.7 -0.2 0.3 -0.7 0.3 54.7 54.4 -0.5 -0.2 -0.3 -0.4 -0.3 Tang. equity Net profit AT1 AFS, FX, Tang. equity Filter on Dividend A
Slide 64: Group – RWA breakdown
Group – RWA breakdown 1 2 3 4 5 6 7 Annex – Capital Credit RWA, bn Market RWA, bn Operational RWA, bn -7.1% -15.6% -7.9% +3.1% -13.1% +13.2% 331.2 17.4 38.5 37.4 298.4 307.5 16.1 14.2 32.5 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 64
Slide 65: Asset quality – CB Germany and CB Austria
Asset quality – CB Germany and CB Austria 1 2 3 4 5 6 7 Annex – Asset quality CB Germany, bn CB Austria, bn -21.6% -15.0% -1.2% +0.6% 2.3 2.5 1.8 1.8 2.1 2.1 Net NPEs 1.4 0.8 0.7 Net NPEs 0.9 0.8 0.9 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Gross NPE Gross NPE 2.8% 2.2% 2.2% ratio 4.9% 4.4% 4.4% ratio Net NPE
Slide 66: Asset quality – CEE and CIB
Asset quality – CEE and CIB 1 2 3 4 5 6 7 Annex – Asset quality CEE, bn CIB, bn -20.7% -13.1% -11.4% +6.3% 6.4 4.3 5.7 3.7 5.1 3.5 Net NPEs 2.6 2.2 Net NPEs 2.0 1.7 2.0 1.9 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Gross NPE Gross NPE 9.9% 8.9% 7.9% 3.9% 3.1% 3.4% ratio ratio Net NPE Net NPE 4.3% 3.7% 3.1% 1.9%
Slide 67: Asset quality – Across all divisions
Asset quality – Across all divisions 1 2 3 4 5 6 7 Annex – Asset quality CB CB Group(1), 4Q17 CB Italy CEE CIB Non Core Germany Austria Gross Loans, m 476,982 144,168 82,357 Gross Loans 47,454 63,970 110,189 29,789 Gross NPE ratio 10.2% 6.6% 2.2% Gross NPE ratio 4.4% 7.9% 88.9% 3.4% Bad loans ratio
Slide 68: Asset quality – Forborne exposures by region
Asset quality – Forborne exposures by region 1 2 3 4 5 6 7 Annex – Asset quality Forborne loans(1), bn GROUP 23.8 22.5 22.9 ITALY 14.7 14.4 15.3 17.0 16.5 16.6 10.6 10.8 11.1 6.8 5.9 6.4 4.1 3.6 4.1 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Coverage 33.9% Coverage 32.6% 34.7% 32.1% 35.2% 34.1% ratio ratio AUSTR
Slide 69: Asset quality – 4Q17 Group EL stock at 38bps
Asset quality – 4Q17 Group EL stock at 38bps with new business contribution at 32bps 1 2 3 4 5 6 7 Annex – Asset quality Main drivers CB Italy o/w 10bps CB Germany models impact 0.68% 0.18% 0.51% 0.14% Group EL stock at 38bps with new origination contribution at 32bps New Business Stock New Business
Slide 70: Asset quality – NPE dynamics CB Germany, CB Austria, CEE and CIB
Asset quality – NPE dynamics(1) CB Germany, CB Austria, CEE and CIB 1 2 3 4 5 6 7 Annex – Asset quality Net flows to NPEs, recoveries and write-offs – 4Q17, m Migrations from Unlikely-to-pay to Bad loans – 4Q17, m Recoveries 403 429 913 737 317 Write-off 265 214 520 487 1,024 Inflow 426 101 to NPEs
Slide 71: Asset quality – CB Italy and Non Core gross loans and NPE ratio by industries
Asset quality – CB Italy and Non Core gross loans and NPE ratio by Industries 1 2 3 4 5 6 7 Annex – Asset quality CB ITA 4Q17 – Gross loans breakdown by Nace Classification 69 Gross NPE 48.5% of ratio % 23 total loans 15 7 6 3 3 2 2 2 2 1 1 3 Non Fin. Corp. Manufacturing Wholesale and Real estate Co
Slide 72: Asset quality – CB Italy and Non Core collateralization level
Asset quality – CB Italy and Non Core collateralization level 1 2 3 4 5 6 7 Annex – Asset quality CB Italy(1) - NPE Cash + Collateral coverage ratio walk (%) 85.4 85.4 +30 bps -30 bps 52.3 33.1 33.4 52.0 Cash coverage 2Q17 Collateral ratio 2Q17 Total coverage ratio 2Q17 Delta Collateral Delta Cash c
Slide 73: Asset quality – Non Core gross NPEs breakdown by origination date
Asset quality – Non Core gross NPEs breakdown by origination date 1 2 3 4 5 6 7 Annex – Asset quality Non Core NPEs stock by origination year as of 3Q17 15% 65% 20% 28.8 1.1 0.7 0.5 0.5 0.6 1.4 0.9 1.7 1.9 4.5 4.7 3.6 2.2 4.4 older 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Tot
Slide 74: Asset quality – CB Italy gross NPEs breakdown by origination date
Asset quality – CB Italy gross NPEs breakdown by origination date 1 2 3 4 5 6 7 Annex – Asset quality CB Italy NPEs stock by origination year as of 3Q17 13% 47% 40% 9.6 0.4 0.4 0.5 0.6 0.7 0.5 0.7 0.8 0.5 1.4 0.8 0.6 0.4 1.3 older 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Tota
Slide 75: 2019 CET1 ratio target confirmed whilst anticipating additional regulatory headwinds
Strengthen and optimise capital 2019 CET1 ratio target confirmed whilst anticipating additional regulatory headwinds 1 2 3 4 5 6 7 Annex – CMD 2017 Fully loaded CET1 ratio evolution to 2019, % 9M17 4Q17 2018 2019 Regulation, models and -0.4 -0.3(1) -0.3 -0.1 procyclicality IFRS9(2) -0.4 EBA guidelin
Slide 76: Post 2019 dividend payout to increase from 30% up to 50%
Cumulative organic capital generation above estimated regulatory impacts post 2019 1 2 3 4 5 6 7 Annex – CMD 2017 Regulatory Headwinds post 2019 – CET1 ratio impact (managerial estimates) Estimated % of cumulative phase-in CET1 impact, % 2020 2021 2022 2023 2024 2025 up to 2027 EBA guidelines (remai
Slide 77: Line adjustments from accounting changes (1/2)
Line adjustments from accounting changes (1/2) 1 2 3 4 5 6 7 Annex – CMD 2017 Accounting change(1) Description Impact Net effect Combined effect New Bank of Italy regulation requires to NII in 2019 NPEs time value account for Time value release as NII and no bn accounting(2) longer as LLP write-back
Slide 78: Line adjustments from accounting changes (2/2)
Line adjustments from accounting changes (2/2) 1 2 3 4 5 6 7 Annex – CMD 2017 2015 Transform 2019 targets Previous Delta Restated Previous Delta Restated P&L, €bn Revenues 19.9 0.5 20.4 20.4 0.2 20.6 of which NII 10.9 0.5(1) 11.5 10.9 0.2(1) 11.1 LLPs -4.0 -0.5(1) -4.5 -2.4 -0.2(1) -2.6 Net income 1
Slide 79: Group – P&L and volumes
Group – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ % vs. ∆ % vs. FY16 FY17 ∆ % vs. 3Q17 4Q16 FY16 Total revenues 4,890 5,464 4,835 4,405 5,055 5,076 4,646 4,842 +4.2% +9.9% 19,595 19,619 +0.1% Operating costs -2,976 -2,982 -2,940 -3,555 -
Slide 80: Group Core – P&L and volumes
Group Core – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ % vs. ∆ % vs. FY16 FY17 ∆ % vs. 3Q17 4Q16 FY16 Total revenues 4,901 5,530 4,902 4,536 5,096 5,124 4,674 4,876 +4.3% +7.5% 19,868 19,770 -0.5% Operating costs -2,929 -2,961 -2,902 -3,
Slide 81: Commercial Banking Italy – P&L and volumes
Commercial Banking Italy – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ % vs. ∆ % vs. FY16 FY17 ∆ % vs. 3Q17 4Q16 FY16 Total revenues 1,931 1,990 1,835 1,678 1,856 1,927 1,759 1,873 +6.5% +11.7% 7,434 7,415 -0.2% Operating costs -1,168 -1,1
Slide 82: Commercial Banking Germany – P&L and volumes
Commercial Banking Germany – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ % vs. ∆ % vs. FY16 FY17 ∆ % vs. 3Q17 4Q16 FY16 Total revenues 653 606 597 616 701 731 660 635 -3.7% +3.1% 2,472 2,726 +10.3% Operating costs -480 -480 -474 -469 -475
Slide 83: Commercial Banking Austria – P&L and volumes
Commercial Banking Austria – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ % vs. ∆ % vs. FY16 FY17 ∆ % vs. 3Q17 4Q16 FY16 Total revenues 381 446 412 401 366 402 385 397 +3.3% -0.8% 1,639 1,550 -5.4% Operating costs -313 -319 -295 -309 -284 -
Slide 84: Central and Eastern Europe – P&L and volumes
Central and Eastern Europe – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ const ∆ const FY16 FY17 ∆ const % 3Q17 % 4Q16 % FY16 Total revenues 942 1,169 1,057 998 1,070 1,074 1,040 1,004 -3.5% +1.6% 4,166 4,188 -0.3% Operating costs -362 -38
Slide 85: Corporate & Investment Banking – P&L and volumes
Corporate & Investment Banking – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ % vs. ∆ % vs. FY16 FY17 ∆ % vs. 3Q17 4Q16 FY16 Total revenues 1,074 1,131 1,061 968 1,155 1,026 890 995 +11.8% +2.8% 4,233 4,066 -3.9% Operating costs -425 -439 -
Slide 86: Fineco – P&L and volumes
Fineco – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ % vs. ∆ % vs. FY16 FY17 ∆ % vs. 3Q17 4Q16 FY16 Total revenues 140 149 132 138 142 141 148 156 +5.1% +12.6% 558 586 +4.9% Operating costs -60 -58 -53 -55 -61 -60 -54 -59 +9.4% +5.9% -226
Slide 87: Group Corporate Centre & Other – P&L and volumes
Group Corporate Centre & Other – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ % vs. ∆ % vs. FY16 FY17 ∆ % vs. 3Q17 4Q16 FY16 Total revenues -220 40 -191 -263 -194 -176 -207 -185 -10.6% -29.6% -633 -761 +20.2% Operating costs -121 -132 -122
Slide 88: Non Core – P&L and volumes
Non Core – P&L and volumes 1 2 3 4 5 6 7 Annex – Financials Data in m (1) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ∆ % vs. ∆ % vs. FY16 FY17 ∆ % vs. 3Q17 4Q16 FY16 Total revenues -10 -65 -67 -130 -41 -49 -28 -33 +18.5% -74.4% -273 -151 -44.5% Operating costs -47 -22 -37 -54 -44 -21 -53 -8 -85.6% -85.
Slide 89: Glossary
Glossary 89
Slide 90: Glossary (1/9)
Glossary(1) (1/9) Glossary Adj. Data adjusted for non recurring items AFS Available for Sale AT1 Additional Tier 1 Capital AuC Assets under Custody AuM Assets under Management AVA Additional Value Adjustment Avg. Average Exposures to borrowers in a state of insolvency or in an essentially similar si
Slide 91: Glossary (2/9)
Glossary (2/9) Glossary BTP "Buoni poliennali del tesoro" Multiannual Treasury Bond issued by Italy CB Commercial Banking (previously defined CBK) CC Corporate Centre Central Eastern Europe includes: Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Bosnia and Herz., Serbia, CEE Russia, Romania,
Slide 92: Glossary (3/9)
Glossary (3/9) Glossary CoR Cost of Risk calculated as LLPs of the period annualised / Average loans volume Coverage ratio Stock of LLPs on NPEs on Gross NPEs Cure rate Back to performing (annualised) on stock of NPEs at the beginning of the period Cust. Customer Customer spread Rate on customer loa
Slide 93: Glossary (4/9)
Glossary (4/9) Glossary DVA Debt Value Adjustment E2E End-to-End EL Expected Loss EMEA Europe, Middle East and Africa EoP End of Period EPS Earning per Shares Euribor 3M Daily reference rate, published by the European Money Market Institute FICC Fixed Income Currencies and Commodities FINO Failure I
Slide 94: Glossary (5/9)
Glossary (5/9) Glossary FTA First Time Adoption FTEs Full Time Equivalent FTEs related to industrial legal entities (non financial and non instrumental) fully consolidated within the FTEs Industrial Group FX Foreign Exchange FY/FY Current full year vs previous full year Group Corporate Corresponding
Slide 95: Glossary (6/9)
Glossary (6/9) Glossary IPO Initial Public Offering KPIs Key Performance Indicators JVs Joint Ventures LCR Liquidity Coverage Ratio (amount of liquidity available for a bank to meet its short term liquidity needs) The leverage ratio is defined as Tier 1 capital divided by a non-risk-based measure (e
Slide 96: Glossary (7/9)
Glossary (7/9) Glossary Outflows (collections and flows from gross impaired loans back to gross performing loans) minus inflows (from Net Outflows gross performing loans to gross impaired loans) NII Net Interest Income Non-Performing Exposures including the following: Bad Loans (“Sofferenze”), Unlik
Slide 97: Glossary (8/9)
Glossary (8/9) Glossary Q/Q Current quarter vs previous quarter NPE exposure reduction (gross Book Value) due to recovery activity on stock of NPEs at the beginning of the Recovery rate period Repos Repurchase agreements Return on Allocated Capital (Annualised net profit / Allocated Capital), Alloca
Slide 98: Glossary (9/9)
Glossary (9/9) Glossary SRT Significant Risk Transfer Tangible equity Tangible equity excluding AT1 TFAs Total Financial Assets, commercial figures sum of AuM, AuC and Deposits TLTRO Targeted Long Term Refinancing Operation Unlikely To Pay: the classification in this category is the result of the ju