The Italian NPL market - PwC€¦ · Source: PwC publication “Real Estate Market Overview –...

The Italian NPL marketPositive Vibes

December 2016www.pwc.com/it/npl

Foreword

The Italian banking market continues to experience challenges surrounding asset quality, capital adequacy and profitability. In July 2016, the European Banking Authority stress tests results highlighted Italy’s banking problems and the recent events have highlighted the overall fragility of the system.

The Government has implemented several reforms to address the high level of NPEs, including the GACS and the sponsorship of Atlante fund. Delayed implementation of such reforms and uncertainties connected to the Italian Constitutional Referendum and eligibility to access the Atlante fund resulted in true sales volume being lower than expected. However, 2016 total volume of disposed Bad Loans portfolios is foreseen to increase due to portfolio securitizations assisted by GACS.

Now the deleveraging path is more clear.

In October, Banca Popolare di Bari closed the first GACS sponsored securitization. Senior state guaranteed notes equal to 88% of total proceeds from the issuance, creating a precedent for more issuances to come.

Given the successful close of the Bari transaction, many other banks are considering GACS sponsored securitizations. Among these, MPS has come to market with a €27.6bn securitization. Senior notes will benefit from the GACS, while part of the mezzanine with sub investment grade ratings is expected to be placed in the market.

It has also become clear that Atlante will not be accessible to all banks, at least in the short term. Therefore most players are now formalizing their deleverage plans without Atlante.

Other banks like Unicredit and Intesa have come to market with mixed secured and unsecured portfolio sales.

We expect 2017 transactions volume to be some €50bn. Transactions are likely to include Bad Loans as well as other NPEs, such as Unlikely to Pay and foreborne. Secured loans and loans to SMEs and Corporates are also expected to represent a significant portion of the assets sold.

Fedele [email protected]

Pier Paolo [email protected]

Vito RuscignoCo-Head [email protected]

Lucia De VecchiSenior [email protected]

Foreword & ContentContent

Macroeconomic Scenario

Italian Real Estate Market

Legal and regulatory framework update

Italian NPL Market

Italian Banks overview

The Servicing Market

Recent market activity and outlook

Appendix

04

07

11

14

18

25

30

33

4 | The Italian NLP market - Positive Vibes

Macroeconomic Scenario

Key Message: In 2016, the government budget balance is expected to decline slightly and the debt-to-GDP ratio is estimated to remain stable, before starting to decrease in 2017. Domestic demand should pick up, contributing to GDP growth. The moderate economic recovery underpins a modest rise in employment growth. Inflation will remain subdued, also due to limited labour cost pressures.

PwC | 5

The European and Italian economies are gradually recovering from the economic crisis. Low inflation and a weak euro along with sustained fiscal and monetary policies should contribute to support their moderate growth.

In Italy, domestic demand is supporting the recovery with limited help from exports. Household consumption benefited from an increase in disposable income and an improvement in labour market conditions, with investments continuing to increase mostly from the incentives introduced by the recent Stability Laws.

Overall, GDP is set to grow by 0.9% in 2016 and by 1.0% in 2017 in Italy, and by 1.9% (2016) and 2.0% (2017) in the EU.

Inflation was dragged down by the sharp fall in energy prices and it is expected to remain low until 2017, when it is expected to step up to 1.6% in the EU and 1.1% in Italy impacted by higher real wages and domestic demand combined with a moderate projected rise in oil prices.

Unemployment rates in Italy are set to continue their gradual decline and fall from 11.9% in 2015 to 11.4% in 2016 and 11.3% in 2017. Nevertheless, it continues to be higher than the average European level.

Current account surplus in Italy is foreseen to be slightly above the average for the European member states in 2017 (respectively 2.1% and 2.0%).

Additional measures taken by the ECB aimed at improving financing conditions and access to credit resulted in an increase in investment expectations for 2017 (an increase of 4.8% in Italy and 4.3% in the EU).

Chart 1: EU main economic drivers

Chart 2: Italian main economic drivers

-4

GDP (%) Inflation Current Account (% GDP)

Unemployment rate(% total labour force)

Budget Balance(% GDP)

2015 2016F 2017F

1.9 1.9 2.0

0.00.5

1.6

9.59.0 8.7

2.1 2.1 2.0

-2.5 -2.2-1.8

-4

GDP (%) Inflation Current Account (% GDP)

Unemployment rate(% total labour force)

Budget Balance(% GDP)

2015 2016F 2017F

0.6 0.9 1.0

0.10.2

1.1

11.911.4 11.3

2.2 2.1 2.1

-2.6 -2.5-1.5

Source: PwC analysis on European Economic Forecast Winter 2016. Unemployment rate as a % of total labour force, current account balance and budget balance as a % of GDP

Source: PwC analysis on European Economic Forecast Winter 2016 and PwC Global Economic Watch October 2016. Unemployment rate as a % of total labour force, current account balance and budget balance as a % of GDP


Chart 3: Total investments volume trend

Table 1: Government gross debt ratio per country

Source: PwC analysis on European Economic Forecast Winter 2016

Source: PwC analysis on European Economic Forecast Winter 2016

2012 2013 2014 2015 2016F 2017F

EU

% change

Italy

-1.71.7-2.5

2.7 3.0 3.84.84.8

4.34.3

-6.6

-9.3

-3.51.01 0

3.23.2

Despite these figures, there are still many threats to the Italian economic recovery. Among these, the economic effects of the UK referendum for Brexit and the Italian Constitutional Referendum of December 4th. Italian voters rejected constitutional changes to reform the appointment and powers of the Italian Parliament, as well as the partition of powers of State, Regions and administrative entities backed by the Government, prompting Prime Minister Matteo Renzi to resign. From the first results, the market seems to appreciate the speed with which the Government crisis has been settled.

Government gross debt ratio (% GDP)

2012 2013 2014 2015 2016F 2017F Trend 2016-2017F

Italy 123.2 128.8 132.3 132.8 132.4 130.6

EU 91.3 93.4 94.5 93.5 92.7 91.3

Spain 85.4 93.7 99.3 100.7 101.2 100.1

France 89.6 92.3 95.6 96.2 96.8 97.1

UK 85.3 86.2 88.2 88.6 89.1 88.2

Germany 79.7 77.4 74.9 71.6 69.2 66.8

PwC | 7

Italian Real Estate Market

Key Message: In Q2 2016, the Italian Real Estate market registered a 22% growth compared to the same period in 2015, mainly driven by transactions related to non-residential assets. Rome and Milan continue to be the main city markets, representing ca 68% of total transactions. Investments in Real Estate reached €3.4bn in Q1 2016, with offices continuing to represent the major asset class for investment.


Volume of Real Estate transactions in 2016

In Q2 2016, the Italian real estate market recorded double digit growth, driven mainly by sales of residential properties and appurtenances (which include garages, basements and parking spots). This remarkable jump, which similarly occurred in Q1 2016 (+20.6%), is taking the market to transaction levels previously recorded before the severe crisis of 2012.

The most significant percentage growth, compared to the previous six-month period, was recorded in the industrial building sector, a 28.7% increase. See Table 2.

Residential sales in Q2 2016 have increased throughout each region of Italy. The North showed the greatest positive results, with a 24.9% increase over Q2 2015, which was followed by the South and Centre with 20.8% and 20.7% growth, respectively. See Table 3.

During Q2 2016, non residential asset classes showed double digit increases, accounting for growth of 16.4% compared to the same period in 2015. While continuing to account for a small proportion of the total, the industrial segment is the sector registering the highest growth rate, at 28.7%. See Table 4.

Table 2: Italian NTN1 comparison by sector

Source: PwC publication “Real Estate Market Overview – Italy 2016” 1. NTN is the number of standardized real estate units sold, taking into account the share of the property transferred 2. Appurtenances comprehend properties such as basements, garages or parking spots 3. The sector “Other” includes hospitals, clinics, barracks, telephone exchanges and fire stations

Asset type Q1 2015

Q2 2015

Q3 2015

Q4 2015

Total 2015

Q1 2016

Q2 2016

Total H1 2016

Delta (%) Q2 15-16

Residential 95,454 116,514 105,104 127,553 444,625 115,135 143,245 258,380 22.9%

Office 1,997 2,100 1,913 2,831 8,841 2,024 2,409 4,433 14.7%

Retail 5,915 6,719 5,829 7,765 26,228 6,774 7,593 14,367 12.9%

Industrial 1,981 2,249 2,058 2,954 9,242 2,118 2,895 5,013 28.7%

Appurtenances2 74,638 89,249 80,178 100,825 344,890 87,525 109,973 197,498 23.2%

Other3 28,424 33,322 30,175 38,188 130,109 30,818 38,671 69,489 16.1%

Total 208,409 250,153 225,257 280,116 963,935 244,394 304,786 549,180 21.8%

PwC | 9

Table 3: Residential NTN by geographic area

Source: PwC publication “Real Estate Market Overview – Italy 2016”

Area Region Q4 2015 Q1 2016 Q2 2016 Delta (%) Q4 14-15

Delta (%) Q1 15-16

Delta (%) Q2 15-16

NorthProvinces 20,617 19,813 24,949 11.5% 29.0% 26.9%

No Provinces 46,146 40,151 51,737 10.1% 21.8% 23.9%

Total 66,763 59,963 76,686 10.5% 24.1% 24.9%

CenterProvinces 13,245 11,253 14,161 10.7% 17.0% 18.2%

No Provinces 14,148 12,680 15,606 11.5% 19.8% 23.1%

Total 27,393 23,933 29,767 11.1% 18.5% 20.7%

SouthProvinces 9,332 9,037 10,676 9.6% 18.0% 21.3%

No Provinces 24,066 22,201 26,116 4.7% 15.2% 20.6%

Total 33,398 31,238 36,792 6.1% 16.0% 20.8%

Italy

Provinces 43,194 40,103 49,786 10.9% 22.9% 23.1%

No Provinces 84,360 75,032 93,459 8.7% 19.4% 22.9%

Total 127,553 115,135 143,245 9.4% 20.6% 22.9%

Table 4: Non residential NTN by geographic area


NTN 2016 Office Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Delta (%) Q2 15-16

North 1,134 1,241 1,173 1,185 1,185 1,413 13.7%

Center 422 452 359 417 417 504 11.6%

South 422 406 382 422 422 491 20.9%

14.7%

NTN 2016 Retail Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Delta (%) Q2 15-16

North 2,859 3,244 2,826 3,824 3,308 3,617 11.5%

Center 1,300 1,562 1,310 1,824 1,450 1,698 8.5%

South 1,756 1,912 1,693 2,117 2,016 2,278 18.9%

12.9%

NTN 2016 Industrial Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Delta (%) Q2 15-16

North 1,321 1,507 1,401 2,029 1,395 1,866 23.9%

Center 316 419 330 496 364 429 1.8%

South 343 323 327 430 359 600 85.9%

28.7%


Chart 5: Investments in the non residential Real Estate industry – Asset type

Source: PwC publication “Real Estate Market Overview – Italy 2016” *”Other” includes banks, public administration and sovereign funds

Tourist

Mixed

Other*

Retail

Offices

Industrial

Q1 2016€3,378 mln

2015€8,100 mln

40%

54%

13%

7%

10%

6%

10%

18%2%

8%

6%

26%

2015€8,100 mln

Q1 2016€3,378 mln

Investments in the non residential Real Estate market

Investments in the non residential Real Estate industry in Q1 2016 amounted to €3.4bn, about 9% lower than Q1 2015. Excluding the Porta Nuova transaction in Milan (which accounted for €900m in Q1 2015) investments increase by +20% compared to the same quarter in 2015.

The strong growth was driven by a 58% increase in the Office sector, which continues to represent the lion’s share of the investments, with ca 55% of the total volumes of transactions. Conversely, the Retail sector registered a decrease by 23% over the same period. Hotels and industrial estates (+18% and +122% respectively) are growing fast, but the lack of supply across the country obliges the investors to widen their areas of interest and to concentrate on value added operations.

Rome and Milan still represent key markets for investments, representing ca 68% of all transactions.

Chart 4: Investments in the non residential Real Estate industry – Investor type


2010 2011 2012 2013 2014 2015 Q1 20160

20

40

60

80

100

73%

27%

74%

26%

30%

70%

22%

78%

27%32%

73%68%

83%

17%

413

4,383

1,744

5,130 5,221

8,100

3,378

Italian investors Foreign investors Total investments (€ mln)

PwC | 11

Legal and regulatory framework update

Key Message: 2016 has seen the Government implementing a number of measures to improve the current status of the Italian banks and in particular liquidity of the Bad Loans market. Implementation has taken longer than expected therefore most of the benefits are expected to be seen in 2017.


Main initiatives taken

In recent months, the Italian authorities have introduced new measures aimed at improving the efficiency and speed of judicial and extrajudicial insolvency procedures in order to enhance the reduction of Bad Loans on bank balance sheets.

Among the initiatives activated, the Italian government has introduced/sponsored:

• State-backed guarantee on senior tranches of securitized Bad Loans (“GACS”);

• two Atlante funds aimed at supporting capital raising and acquisitions of mezzanine and equity tranches in securitizations of Bad Loans;

• amendments on bankruptcy and foreclosure proceedings aimed at accelerating recovery of Bad Loans;

• beneficial tax treatments of banks’ loans provisions.

GACS: a deal with GACS successfully closed

In October 2016, Banca Popolare di Bari successfully closed the first Italian securitization transaction with GACS. The portfolio comprised retail and corporate Bad Loans for a total GBV of €480m. Ca €304m were loans mainly secured by residential and commercial properties, with the remainder being unsecured.

The issuer issued 3 classes of notes for a total of €150.5m, ca 31% of the portfolio GBV:

1. a senior investment grade tranche of €126.5m (advance rate 26% of GBV), with a coupon of 3mEuribor +50bps, rated by Moody’s and DBRS as BBB(high)/Baa1, allowing it to benefit from the State guarantee scheme;

2. a mezzanine tranche of €14m (3% of GBV), with a coupon of 3mEuribor +6%, B (high)/B2 rated by Moody’s and DBRS;

3. a junior, unrated tranche, of €10m (2% of GBV), with a coupon of 3mEuribor +15%.

Pre-enforcement waterfall allowed for interest on the mezzanine to be paid prior to the repayment of the senior notes principal.

While the senior notes were retained by the originator, the mezzanine and junior notes were sold to Davidson Kempner at discount for a total of €17.5m, making total proceeds for the originator €144m, or 30% of GBV. Net of two cash reserves for €6.7m, the total proceeds to GBV equaled 29%.

Capital structure shows senior investment grade notes GACS guaranteed reaching 84% of total issuance and 88% of total proceeds.

GACS released with law decree n. 18/2016

14 February 2016

8 April 2016

25 October 2016

GACS converted into law n. 49/2016

3 August 2016GACS converted with amendments decree n. 188/2016

October 2016Davidson Kempner bought the mezzanine and junior notes of the Banca Popolare di Bari’s NPLs securitization

12 August 2016After almost 10 years from the last rated Italian NPLs securitisation transaction,

Moody’s and DBRS assigned investment grade

rating to the senior tranche of the Banca Popolare di

Bari’s NPLs securitization. This allowed for the senior

notes to be eligible for state guarantee under the GACS

MPS announced rescue plan with disposal of

€27.6bn Bad Loans via securitisation with GACS

PwC | 13

Atlante – usage of funds so far

After the EU-wide stress test in July which marked Monte dei Paschi di Siena (“MPS”) as the most fragile bank in Europe, the bank announced a plan to dispose its GBV €27.6bn of gross Bad Loans and leases. In this context, MPS is planning to securitize its entire stock of Bad Loans for a total estimated sale price of €9.1bn (32.8%).

The capital structure of the securitization is expected to be as follows:

• up to €5bn of senior bridge facility underwritten by investment banks and eventually rated investment grade and placed in the market with GACS;

• ca €1bn of senior mezzanine facility underwritten by MPS and later placed in the market, probably without GACS, at below investment grade ratings;

• ca €1.6bn of junior mezzanine underwritten by the Atlante fund;

• ca €1.6bn of junior underwritten by existing MPS shareholders.

As per MPS, Veneto Banca and Banca Popolare di Vicenza, both bailed out by the Atlante fund with recapitalizations of €1.0bn and €1.5bn respectively, are envisaged to execute a securitization with GACS and the Atlante fund intervention for their Bad Loans stock.

New initiatives

ECB guidelines on NPLsIn October, the ECB released a public consultation of “Guidance to Banks on Non Performing Loans” which addresses all NPEs as well as foreclosed assets and performing exposures with elevated risk of turning non-performing. The guidance is a supervisory tool requiring banks with high NPE ratios to reduce them within a time horizon to a level to be defined by the regulator. It is focused on the following core aspects regarding NPE management:

• Strategy • Governance• Operations

Moreover, all banks are also requested to implement and disclose NPE strategies, adopting proper organizational/ IT infrastructures. These guidelines are set to have a big impact on Italian banks, fostering portfolio disposals as well as outsourcing or JV with servicers for collection activities.

Additional measuresOne additional measure being considered is the assessment of the asset quality of smaller banks that have not been subject to the ECB Comprehensive Assessment held in 2014 and for which there is less information available.

* Atlante 2’s current capital endowment derives from Atlante 1

Au

gust

201

6

Capital Investors Action implemented

€ 4.2 bn

~€ 1.5 bn

~€ 1.0 bn

~€ 1.7 bn

€ 1.7 bn*Atlante 2

• Banks (€3bn)

• Banking Foundations (€500m)

• Cassa Depositi e Prestiti (€250m)

• Others (€450m)

• Financial institutions (Ongoing subscription)

Investments in Junior and Mezzanine tranche of NPL secuitisations.

Objective to reach a target of €3.5 bn by July 2017

Planned to start with MPS scheme

Apr

il 2

016

Atlante 1

Banca Popolare di Vicenza

Veneto Banca

Atlante 2


Italian NPL Market

PwC | 15

Asset Quality

As shown in Chart 6, after reaching its maximum at YE-2015, total NPE stock has finally registered a small reduction in June 2016, to €331bn. Gross Bad Loans, which account for 60% (€197bn) of total gross NPE were down by €3bn from YE-2015. Similarly, net Bad Loans registered a €5bn reduction from YE-2015 level.

Bad Loans’ coverage ratio continues to improve (57.6% in H1-2016) highlighting a greater incidence of provisions over gross Bad Loans stock.

The declining trend of Unlikely to Pay and Past Due - which started in 2015 - is an indication of an improving quality of underwriting.

Chart 6: Gross NPE and Bad Loans trend

Chart 7: Net Bad Loans Trend

4259

78

201020092008 2011 2012 2013 2014 2015 H1-2016

107 12533

9 5766

7491

156184 200

109

131127

197

123

16

12

13

21

18

12 14 10

2.5%

4.9%

3.5%

7.8%

4.6%

9.3%

6.3%

11.3%

7.5%

14.3%

9.8%

17.8%

11.8%

21.0%

12.9%

22.0%

12.8%

21.4%

Gross NPE / Loans to Customers (%)

Gross Bad Loans / Loans to Customers (%)

Bad Loans (€ bn)

Unlikely to Pay (€ bn)

Past Due (€ bn)

331341326

283

237

194

157132

85

Source: PwC analysis data of Bollettino Statistico di Banca d’Italia and ABI Monthly Outlook

Source: PwC analysis data of ABI Monthly Outlook

Net Bad Loans (€ bn)

Net Bad Loans/Loans to Customers (%)

Bad Loans coverage ratio (%)

201020092008 2011 2012 2013 2014 2015 H1-2016

24 3947 60

62

80

84 8984

1.4%

42.9%

34.0%

39.7%43.7%

50.3% 48.7%

2.3% 2.8% 3.5% 3.8% 5.0% 5.4% 5.7% 5.4%

54.0% 55.6%57.6%


Looking at the Bad Loans stock composition:

• “Corporate & SME” continue to represent the greatest share of total Bad Loans increasing by 67% in 2008 to 74% in H1-2016;

• the Lombardy (21.1%) and Lazio (11.9%) regions have the highest concentration of stock;

• the percentage of secured Bad Loans is increasing from 36% in 2008 to 47% in H1-2016.

Chart 8: Breakdown of Gross Bad Loans by region* (H1-2016)

Chart 9: Breakdown of Gross Bad Loans by counterparty (H1-2016)

Source: PwC analysis on data of “Bollettino Statistico” of Bank of Italy * Unique percentage for 1) Valle d’Aosta and Piemonte, 2) Abruzzo and Molise, 3) Puglia and Basilicata

Source: PwC analysis on data of “Bollettino Statistico” of Bank of Italy ** “Other” includes PA and financial institutions

12%

1%

20%

2008 2009 2010 2011 2012 2013 2014 2015 H1-2016

67%

11%

1%

20%

69%

10%

1%

20%

70%

9%

1%

20%

70%

9%

1%

19%

71%

8% 8% 7% 7%

1% 2% 2% 2%

18% 16% 16% 17%

73% 75% 74% 74%

Corporate & SME Small family business Consumer Other**

1.7%

2.0%

21.1%

9.8%

1.7%

9.7%

2.1%

8.3%

6.0%

3.1%

11.9%

2.5%

6.1%

5.0%

1.7%5.7%

1.7%

>5-10%

<2%

>10%

>3-5%

PwC | 17

Chart 10: Secured Gross Bad loans trend (% on total Bad loans)

Source: PwC analysis on data of “Bollettino Statistico” of Bank of Italy ** “Other” includes PA and financial institutions

2008

36% 36%

38% 38%39%

42%45%

47%47%

69%

22%

8%

2%

2009 2010 2011 2012 2013 2014 2015

Corporate & SME

Counterparty

Consumer

Family business

Other**

H1-16


Italian Banks Overview

Key Message: Italian banks continue to face significant challenges. Headline capital is fully absorbed by NPEs and the traditional banking model underpins poor profitability. The legacy branch networks result in high fixed costs.

PwC | 19

Recent Events

Unicredit is disposing €18bn Bad Loans portfolio and has planned a €13bn capital increase that should be launched in February 2017.

MPS is looking to restore its capital position via a €5bn capital increase and is proceeding with the sale of a €27bn Bad Loans portfolio.

Banco BPM SpA - Banco Popolare and BPM shareholders approved a merger plan, with registered office in Milan and administrative headquarters in Verona. Last June, Banco Popolare completed a €1bn capital increase.

Veneto Banca and Banca Popolare di Vicenza are considering a merger and the disposal of their Bad Loans portfolios.

The sale of the four local troubled banks (Banca Marche, CariChieti, CariFerrara and Banca Etruria) rescued by the Government is still ongoing. UBI is among the preferred bidders for Banca Marche, Banca Etruria and CariChieti and got the ECB greenlight for the acquisition.

Other banks such as Carige and Credito Valtellinese are considering the disposal of their Bad Loans portfolios for a GBV of €1.9bn and €1.5bn respectively.

Chart 11: Net Bad Loans and Equity for the Top 10 Italian Banks

Chart 12: Gross NPE and Texas ratio for the Top 10 Italian Banks

Source: Financial Statements as of H1-2016. BNL data as of YE-2015. Data affected by different write-off policies

Source: Financial Statements as of H1-2016. BNL data as of YE-2015. Data affected by different write-off policies * Texas ratio defined as the ratio between total Gross NPE and the sum of CET1 and provisions

5978

MPSISPUCG BancoPopolare

UBI BNL BPER Cariparma BPM

3.8 3.0

57

41%

32%59

3.1 1.2 1.6

69%

103%

44%

0.4

Net Bad Loans (€ bn)Net Bad Loans/Equity Ratio (%)

20.4

15.2

6.110.2

Credem

52%62%

25% 15%34%

5978



13.3 12.9

95%

94%

11.66.1

153%147%

112%

1.5

Gross NPE (€ bn) Texas Ratio (%)

78.9

61.3

20.2

45.3

Credem

111%119%

107%

60%

92%

5.2


Chart 13: Recoveries/Gross Bad Loans for the Top 10 Italian Banks

Chart 14: Sales Proceeds/Gross Bad Loans for the Top 10 Italian Banks

Chart 15: Sales Proceeds/ (Sales Proceeds + Losses on disposals) for the Top 10 Italian Banks

Source: Financial Statements as of YE-2015. Data affected by different write-off policies



0.09 0.10



4.8%

3.5% 3.8%

2.2%

5.7%

Recoveries (€ bn) Recoveries/Gross Bad Loans (%)

Credem

3.4%

4.7%5.0%

3.2%2.60

0.380.24 0.31 0.04

1.33

0.400.50

3.4%

0.02 0.02



1.2%

0.5%0.6%

1.1%

Sales Proceeds (€bn) Sales Proceeds/Gross Bad Loans (%)

Credem

0.7% 0.8% 0.8%0.8%0.67

0.07 0.05 0.05 0.01

0.18

0.070.12

0.6%0.5%

0.02 0.02



88.2%

73.9%

83.9%

62.0%

Sales Proceeds (€ bn) Sales Proceeds/(Sales Proceeds + Losses on disposals) ( (%)

Credem

28.5%

58.1%

100.0%

48.4%

0.67

0.07 0.05 0.05 0.01

0.18

0.070.12

50.7%

62.3%

0.09 0.06 0.07 0.01 0.050.13 0.04 0.01 0.03

0.00

Losses on disposals (€ bn)

PwC | 21

Chart 16: Top 10 Italian Banks – NPE Peer Analysis as of H1-2016

Chart 17: Top 10 Italian Banks – Bad Loans Peer Analysis as of H1-2016

Source: Financial statements as of H1-2016. BNL data as of YE-2015. Data affected by different write-off policies


Chart 16 illustrates the Top 10 Italian banks’ positioning in terms of NPE ratio (average 18.2%) and coverage ratio (average 44.0%). As shown, a material variance among the Top 10 banks exists; in terms of Gross NPE ratio, MPS is the highest extreme (34.9%) and Credem the lowest one (6.7%). When considering the NPE coverage ratio, Unicredit is at 52.1% while Banco Popolare stands at 33.0%. However, we note that the coverage ratio is not directly comparable as it is influenced by several factors which vary among the different banks (such as policies on write-offs, level of collateralization of the loans, vintage of the portfolio).

Chart 17 provides a snapshot of the Top 10 Italian banks’ Bad Loans ratio and coverage, which once again provides a fairly diversified picture with similar trends compared to those described above. Average Bad Loans ratio stands at 10.8%, while the Bad Loans coverage ratio is equal to 56.7%.

0% 5% 10% 15% 20% 25% 30% 35% 40%10%

20%

30%

40%

50%

60%Gross NPE Ratio (%)

Average= 44.0%

CariparmaCredem

UBI

BPM

UCG

BNL

BPER

Banco Popolare

MPS

Average= 18.2%

NPE

Cov

erag

e R

atio

(%

)

ISP

Bubble size:Gross NPE

0% 5% 10% 15% 20% 25%35%

40%

45%

50%

55%

60%

65%

70%Gross Bad Loans Ratio (%)

Average= 56.7%

Cariparma

Credem

UBI

BPM

UCGBNL

BPER

Banco Popolare

MPS

Average= 10.8%

Bad

Loa

ns C

over

age

Rat

io (

%)

ISP

Bubble size:Gross Bad Loans


Chart 18 illustrates Unlikely to Pay ratio and coverage for the Top 10 Italian banks, with averages equal to 7.0% and 25.4% respectively. Unicredit shows a coverage ratio 1.4x higher than the average, and Credem 0.6x lower than the average. Banco Popolare and MPS register a greater incidence of Unlikely to Pay ratio than their peers. Comparisons among banks need to consider the underlying type of borrower and credit concern, probability of default estimate and rating of the borrower as well as criteria / policy used to grant a restructuring and the type of restructuring.

Chart 19 provides a snapshot of the Top 10 Italian banks’ Past Due ratio and coverage (average 0.4% and 15.1% respectively). Little variance exists among the banks, with the exception of MPS which records the highest gross Past Due Ratio compared to its peers (1.6%). Adjusted average (without MPS) would be 0.3% and 14.4% for ratio and coverage respectively.

Chart 18: Top 10 Italian Banks – Unlikely to Pay Peer Analysis as of H1-2016

Chart 19: Top 10 Italian Banks – Past Due Peer Analysis as of H1-2016



0% 2% 4% 6% 8% 10% 12% 14% 16%10%

15%

20%

25%

30%

35%

40%Gross Unlikely to Pay Ratio (%)

Average= 25.4%

Cariparma

Credem BPM

BNL

UBI

BPER Banco Popolare

MPS

Average= 7.0%

Unl

ikel

y to

Pay

Cov

erag

e R

atio

(%

)

ISP

UCG

Bubble size:Gross Unlikely to Pay

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8%0%

5%

10%

15%

20%

25%

30%

35%Gross Past Due Ratio (%)

Average= 15.1%

Cariparma

Credem

UBI

BPM

UCG

BPER

Banco Popolare

MPS

Average= 0.4%

Past

Due

Cov

erag

e R

atio

(%

)

c

ISP

Bubble size:Gross Past Due

PwC | 23

Compared to YE-2015, the H1-2016 snapshot indicates that UBI (+21%) and Banco Popolare (+7%) have both increased their Bad Loans coverage level whereas MPS’s gross Bad Loans ratio worsened compared to YE-2015 (+6%). No material change has been recorded for other banks.

General trend observed over the period YE -2015 and H1-2016 for the Top Italian banks is a decrease in gross Unlikely to Pay ratio. In addition, all the banks with the exception of MPS (-1%), Banco Popolare (-3%) and Credem (-4%) registered a slight growth in their coverage level, with UBI recording the highest improvement over the period (+42%).

Chart 20: Top Italian Banks – Bad Loans movements (YE-2015 vs H1-2016)

Chart 21: Top Italian Banks – Unlikely to Pay movements (YE-2015 vs H1-2016)

Source: Financial Statements as of YE-2015 and H1-2016. BNL not included as data H1-2016 not available. Data affected by different write-off policies


0% 5% 10% 15% 20%35%

40%

45%

50%

55%

60%

65%Gross Bad Loans Ratio (%)

Average= 56.0%

Credem

UBI

BPM

CariparmaBPER

Banco Popolare

MPS

Average= 10.7%

Bad

Loa

ns C

over

age

Rat

io (

%)

ISPUCG

YE - 2015

YE - 2015

H1 - 2016

H1 - 2016

0% 2% 4% 6% 8% 10% 12% 14%0%

15%

30%

Gross Unlikely to Pay Ratio (%)

Average= 24.6%

CredemUBI

BPM

CariparmaBPER Banco Popolare

MPS

Average= 7.0%

Unl

ikel

y to

Pay

Cov

erag

e R

atio

(%

)

ISP

UCG


Overall trend for period YE-2015 and H1-2016 appears to be driven by a reduction in Past Due ratio, with MPS recording the most significant change over the period (-39%) followed by BPER (-32%) and Banco Popolare (-27%).

Chart 22: Top Italian Banks – Past Due movements (YE-2015 vs H1-2016)


YE - 2015 H1 - 2016

0% 1% 2% 3% 4%0%

15%

30%Past Due Ratio (%)

Average= 14.8%Credem

UBI

BPM

Cariparma

BPER

Banco PopolareMPS

Average= 0.4%

Past

Due

Cov

erag

e R

atio

(%

)

ISP

UCG

PwC | 25

The Servicing Market


The Italian servicing market is continuing to experience solid growth, thanks to portfolio sales as well as an increasing number of financial institutions outsourcing their Bad Loans management.

The interest of international players in the acquisition of servicing platforms remains high, with 14 acquisitions completed in the last 4 years. Additionally, consolidation within the servicing industry gained momentum with the acquisition of 100% shares of Italfondiario by doBank in July 2016.

In November, MPS announced it has reached a binding agreement with Cerved Group to sell its special servicing unit, which will come with (i) asset managers, (ii) a contract for servicing of ca €9bn of its Bad Loans stock to be securitized, and (iii) a flow agreement to manage the bank’s future Bad Loans. Closing is expected in Q1 2017.

Table 5: Main Servicers’ figures (H1-2016)

Source: PwC analysis on data provided by Servicers as of H1-2016, # Employees as of YE-2015 Financial Statements. Please note that for the same loan(s) the company might perform master and/or special servicing and/or due diligence activity. * Full banking license ** # Employees includes 274 people dedicated to call center activity *** CRIF counts ca 2,000 employees o/w 57 dedicated to servicing activity **** Parr Credit has a call center in Albania with ca 1,000 people

ServicerSpecial

Servicing AUM (€m)

Master Servicing AUM (€m)

Due Diligence AUM (€m)

# Employees

# "Loyalty" Lawyers (with

exclusivity agreement)

# External Lawyers

# Debt Coll.

AgenciesRating Fitch

Rating S&P

doBank* 43,837 - - 658 - 631 99 RSS1-; CSS1- Strong

Italfondiario 41,265 257 61,385 464 - ca 300 1 RSS1-; CSS1- Strong

Cerved 12,893 - 6,845 647 32 330 135 RSS1-; CSS1- n.a.

Guber 7,431 - - 98 50 250 13 RSS2+; CSS2+; ABSS2

n.a.

FBS 7,416 - - 82 36 115 30 ABSS2; RSS2+; CSS2+

Above Average

Caf 7,389 - - 83 13 30 32 n.a. Above Average

Fire 3,687 - 1,925 111 66 190 225 n.a. n.a.

Primus Capital

2,930 - - 6 6 30 2 n.a. n.a.

AT** 2,901 - 503 392 10 250 55 n.a. n.a.

Prelios 2,788 6,891 - 62 - < 400 450 RSS2+; CSS2+ Above Average

Creditech 2,730 1,835 - 191 - 90 360 n.a. n.a.

Officine CST 2,605 - 398 31 55 361 - n.a. n.a.

Securitisation Services

1,711 20,587 - 92 1 6 32 n.a. Strong

Finint Revalue 1,323 - 1,643 51 18 100 120 n.a. n.a.

CRIF*** 1,411 - 28,000 57 14 128 45 n.a. n.a.

Parr Credit**** 1,216 - - n.a 3 - - n.a. n.a.

Credito Fondiario*

1,037 3,818 1,751 92 - 31 5 RPS2-; CPS2- Average

CS UNION 162 - - 97 - - - n.a. n.a.

PwC | 27

Chart 23: : Recent main servicing platform disposal transactions

Hoist Finance

Italfondario

Fortress

Cerved Group

Unicredit

LoneStar Investment Advisor

Banca Sistema

Axactor

Cerved Group

Lindorff

Cerved Group

Dea Capital

doBank

Palamon

Cerved Group

CAF Banca Sistema

Recus

Cross FactorSPC Credit

Management

Italfondario

Dea Capital

Monte dei Paschi di Siena

Acquisition of 100% of TRC from private

shareholders. Specialized in

consumer finance

Acquisition of a minority stake

in BCC Gestione crediti from

ICCREA

Acquisition of Unicredit captive

servicing platform (UCCMB) from

Acquisition of Tarida, specialized

in consumer finance collections

vith 1.9bn AuM and 250k tickets

Acquisition of CAF a servicing

platform with €7bn AuM from private

shareholders

Acquisition of 2 servicing platform (Candia & Sting)

from private shareholders and

merger (CS Union)

Acquisition of CS Union from Banca

Sistema

Acquisition of 80% of Recus. Specialized in small tickets

collection for telcos and utilities

Acquisition of CrossFactor, a

small factoring and credit

servicing platform

Acquisition of 100% of

Finanziaria San Giacomo S.p.A. part of Credito

Valtellinese group

Acquisition of 66.3% of SPC Credit

Management

Acquisition of 100% of

Italfondiario

Disposal of SiCollection (currently on-hold)

Acquisition of 100% of Juliet,

MPS credit servicing Platform

Source: PwC analysis on public data

2013 2014 2015 2016


Chart 24: Type of AUM (Mix in %)

Chart 25: Borrowers Geographical Breakdown (Mix in %)

Chart 26: Type of Non-performing loans managed by GBV (Mix in %)

97%

doBank Italfondario

Performing Sub-performing Non-performing

Cerved PreliosCafGuber FBS CreditoFondario

Creditech Parr Credit

OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital

doBank Italfondario Cerved PreliosCafGuber FBS CreditoFondario


OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital

3%

95%

5% 9%7%

19%

84% 100% 100% 100%99%

1%

97%

3%2% 16%12%

1%

98% 100%

100%100%100%

100%

69%

n.a.

n.a.

n.a.

n.a. n.a. n.a.n.a. n.a.

84%

30%

70%

13%

49%

44%

86%

28% 34%

1%

45% 20% 41% 45% 41%46% 23% 32%

34%

26% 20%20%

39%21%

35%17%

21%45% 35%37%

46% 46%

64%

36%

56%

43%

3%

76%

21%

8%

25%

67%

20%

35%

45%

12%

62% 100%

26%

15%

30%

55%

10%

49%

41%

4%

28%

68%

35%

65%

21%

79%

21%

79%

37%

63%

64%

36%

47%

53%

65%

35%

84%

16%

77%

23%

44%

56%

62%

38%

94%

6%

35%

49%

25%

26%

27%

40%

33%41%

28%

39%

33%

37%

1%

30%

32%38% 20% 42%

45%

20%

35%32%32% 33%

29%16%

29%

55%

48%52%

66%52%48%

34%

25%

75%

100%

7%

2%

20%

68%

North Centre South - Islands Other



OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital



OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital

Secured Unsecured

Judicial Extrajudicial Loan Sale

97%

doBank Italfondario




OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital



OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital

3%

95%

5% 9%7%

19%

84% 100% 100% 100%99%

1%

97%

3%2% 16%12%

1%

98% 100%

100%100%100%

100%

69%

n.a.

n.a.

n.a.


84%

30%

70%

13%

49%

44%

86%

28% 34%

1%

45% 20% 41% 45% 41%46% 23% 32%

34%

26% 20%20%

39%21%

35%17%

21%45% 35%37%

46% 46%

64%

36%

56%

43%

3%

76%

21%

8%

25%

67%

20%

35%

45%

12%

62% 100%

26%

15%

30%

55%

10%

49%

41%

4%

28%

68%

35%

65%

21%

79%

21%

79%

37%

63%

64%

36%

47%

53%

65%

35%

84%

16%

77%

23%

44%

56%

62%

38%

94%

6%

35%

49%

25%

26%

27%

40%

33%41%

28%

39%

33%

37%

1%

30%

32%38% 20% 42%

45%

20%

35%32%32% 33%

29%16%

29%

55%

48%52%

66%52%48%

34%

25%

75%

100%

7%

2%

20%

68%




OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital



OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital

Secured Unsecured


97%

doBank Italfondario




OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital



OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital

3%

95%

5% 9%7%

19%

84% 100% 100% 100%99%

1%

97%

3%2% 16%12%

1%

98% 100%

100%100%100%

100%

69%

n.a.

n.a.

n.a.


84%

30%

70%

13%

49%

44%

86%

28% 34%

1%

45% 20% 41% 45% 41%46% 23% 32%

34%

26% 20%20%

39%21%

35%17%

21%45% 35%37%

46% 46%

64%

36%

56%

43%

3%

76%

21%

8%

25%

67%

20%

35%

45%

12%

62% 100%

26%

15%

30%

55%

10%

49%

41%

4%

28%

68%

35%

65%

21%

79%

21%

79%

37%

63%

64%

36%

47%

53%

65%

35%

84%

16%

77%

23%

44%

56%

62%

38%

94%

6%

35%

49%

25%

26%

27%

40%

33%41%

28%

39%

33%

37%

1%

30%

32%38% 20% 42%

45%

20%

35%32%32% 33%

29%16%

29%

55%

48%52%

66%52%48%

34%

25%

75%

100%

7%

2%

20%

68%




OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital



OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital

Secured Unsecured


PwC | 29

Chart 27: Type of Loan Resolution - Secured (Mix in %)

Chart 28: Type of Loan Resolution - Unsecured (Mix in %)

Source: PwC analysis on data provided by Servicers as of H1-2016

97%

doBank Italfondario




OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital



OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital

3%

95%

5% 9%7%

19%

84% 100% 100% 100%99%

1%

97%

3%2% 16%12%

1%

98% 100%

100%100%100%

100%

69%

n.a.

n.a.

n.a.


84%

30%

70%

13%

49%

44%

86%

28% 34%

1%

45% 20% 41% 45% 41%46% 23% 32%

34%

26% 20%20%

39%21%

35%17%

21%45% 35%37%

46% 46%

64%

36%

56%

43%

3%

76%

21%

8%

25%

67%

20%

35%

45%

12%

62% 100%

26%

15%

30%

55%

10%

49%

41%

4%

28%

68%

35%

65%

21%

79%

21%

79%

37%

63%

64%

36%

47%

53%

65%

35%

84%

16%

77%

23%

44%

56%

62%

38%

94%

6%

35%

49%

25%

26%

27%

40%

33%41%

28%

39%

33%

37%

1%

30%

32%38% 20% 42%

45%

20%

35%32%32% 33%

29%16%

29%

55%

48%52%

66%52%48%

34%

25%

75%

100%

7%

2%

20%

68%




OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital



OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital

Secured Unsecured


n.a. n.a.n.a.

71%

29%

93%

7%

93%

7%

31%

36%

65%

30%

80%

20%

68%

32%

67%

25%

95%90%

5%

5%

78%

11%

11%

85%

15%

95%

2%

3% 5%

33%

65%

30% 15%

85%

15%

85%

100%

8%

doBank Italfondario Cerved PreliosFBSGuber Caf CreditoFondario


OfficineCST

Fire AT CSUNION

FinintRevalue

Securitiz. Services

CRIFPrimusCapital



Recent market activity and outlook Key Message: 2016 volumes are expected to

reach ca €43bn, mainly driven by the huge MPS securitization. Our expectation for 2017 is for some other €50bn, with transactions likely to include Bad Loans, leases, as well as other NPE, such as Unlikely to Pay and foreborne. Secured and SME/Corporate loans are expected to represent a greater proportion of the assets sold.

PwC | 31

Volumes

Banks continue to reduce the volume of Bad Loans on their balance sheets.

We expect 2016 to close with some €43bn of sales the majority of which related to the significant MPS securitization. The latter has to be set up before YE 2016 as for BCE indications but could be postponed to beginning 2017.

Our expectation for 2017 are for some other €50bn, which include, among other transactions in the pipeline, the sale of the Unicredit’s €18bn portfolio, and other transactions which may come to market via securitizations with GACS technology but contemplate the sale of the junior / equity.

The stock of GBV €8.5bn of Bad Loans and €3.7bn of Unlikely to Pay and Past Due of the four bad banks rescued by the government last year are also expected to come to market in 2017, via two separate transactions.

These volumes remain modest compared to banks’ total stocks of Bad Loans, but we expect portfolio disposals to further increase. As mentioned earlier, the new ECB guidelines are set to have a big impact on the banks NPEs’ deleverage programme.

Disposal through GACS securitization

After the closure of its first transaction, Banca Popolare di Bari is planning a further ca €350m securitization of its Bad Loans.

Carige, Iccrea, Credito Valtellinese and Unicredit are among other banks working on Bad Loans securitization with GACS. In particular:

• Unicredit is well placed to complete the sale of a portfolio of ca €18bn Bad Loans in multiple tranches;

• Credito Valtellinese is to carry out a securitization of a GBV €1.5bn of Bad Loans;

• Carige is expected to dispose ca €1.8bn of Bad Loans through a securitization processes, €900m by the end of 2016 and other €900m in 2017;

• Banca Popolare di Vicenza and Veneto Banca are planning to securitize part of their NPLs using GACS.

Chart 29: NPL transactions trend in the Italian market (€ bn)

2.1

2012

45

43

19

2013 2014 2015 2016 YTD

2.60.2 0.2

3.8 4.4

2.60.6

1.86.5

3.7

3.81.7 1.4

0.2

28.9

6.70.8

1.21.2

5.48

Consumer Unsecured Secured Mixed Secured/Usecured Mainly Usecured Other Expected closing YE -2016 Total GBV

This number includes the significant MPSsecuritization whichis expected to be closed by YE-2016 or thebeginning of 2017

Source: PwC market analysis


Source: PwC market analysis

Table 6: Closed NPL transactions in 2016

Date Seller Volume (€m) Macro asset class Buyer Securitization

2016 Q4 Banca IFIS 71 Mixed Secured/Unsecured Confidential No

2016 Q4 Banca Popolare di Bari 480 Mixed Secured/Unsecured Davidson Kempner Yes (GACS)

2016 Q4 Cassa Centrale Banca 338 Mixed Secured/Unsecured Locam No

2016 Q4 Confidential 76 Consumer Banca IFIS No

2016 Q4 Sorgenia 131 Other Davis and Morgan No

2016 Q4 Banco Popolare 600 Mixed Secured/Unsecured Hoist Finance No

2016 Q4 Unicredit 1,300 OtherPimco, GWM, Finance Roma

No

2016 Q3 Confidential 260 Mixed Secured/Unsecured Confidential No

2016 Q4 Confidential 100 Unsecured Banca IFIS No

2016 Q4 Banca IFIS 861 Unsecured Confidential No

2016 Q4 Unicredit 940 Mixed Secured/Unsecured Kruk No

2016 Q3 BPER 450 Mixed Secured/Unsecured Algebris/Cerberus No

2016 Q3 Findomestic 384 Consumer Banca IFIS No




2016 Q3 Unicredit 570 Unsecured Balbec No

2016 Q2 Cariparma 22 Secured IDea NPLs No

2016 Q3 Cariparma 54 Mixed Secured/Unsecured IDea NPLs No

2016 Q2 Banco Popolare 152 Unsecured Banca IFIS No

2016 Q2 Banca IFIS 226 Consumer Confidential No

2016 Q2 Suedtiroler Sparkasse 320 Mixed Secured/Unsecured Algebris No

2016 Q2 MPS 290 Consumer Kruk No

2016 Q2 Banca IFIS 45 Mixed Secured/Unsecured Locam No

2016 Q2 Locam 466 Consumer Banca IFIS No


2016 Q2 CreVal 103 Other Credito Fondiario No

2016 Q2 Unicredit 417 Consumer Anacap No

2016 Q1 Banca Carim 35 Secured Confidential No

2016 Q1 Confidential 223 Consumer CS UNION No

2016 Q1 Deutsche Bank Spa 240 Consumer Banca IFIS No


2016 Q1 Confidential 1,000 Consumer Banca IFIS No

2016 Q1 Multiple sellers BCC 300 Mixed Secured/UnsecuredBayview Fund Management

No

2016 Q1 RBS & GE 2,500 Mixed Secured/Unsecured Anacap & Confidential No

2016 Q2 CreVal 21 Mixed Secured/Unsecured Algebris No

2016 Q1 CreVal 302 Mixed Secured/Unsecured Credito Fondiario No

2016 Q1Multioriginator (Banche Pop)

n.a. Mixed Secured/Unsecured CRC for senior No

PwC | 33

Appendix Classification and definitions used in this documentThe commonly used term “non-performing loans” (NPL) is based on different definitions across Europe.

To overcome problems, EBA has issued a common definition of non-performing exposures (NPE) which is used for supervisory reporting purposes. Other non-performing definitions exist: CCR defines non-performing exposures and IAS39 identifies impaired exposures.

In Italy financial institutions are strongly encouraged to use the NPE definition also in their internal risk management and public financial reporting as well as in several relevant supervisory exercises such as Asset Quality Review (AQR), EBA stress test and transparency exercises.

In addition to the EBA classification, in Italy banks are required to distinguish between different classes of NPE: (i) Bad Loans, (ii) Unlikely to Pay and (iii) Past Due; the total of these categories corresponds to the aggregate “Non-Performing Exposures” referred to in the EBA ITS;

The previously applicable concepts of doubtful and restructured exposures are eliminated while the EBA introduces the qualification exposures subject to forbearance measures or “forborne”.

Old Italy New Europe New Italy Definition of risk category

• Exposure to any borrower whose loans are not included in other categories and who, at the date of the balance sheet closure have Past Due amounts or unauthorized overdrawn position of more than 90 days.

• A sub-segment is now represented by the Forborne Non Performing Exposures (“FNPE”), credits granted to a counterparty in financial difficulties and which are not classified differently (Bad Loans/Unlikely to Pay) and have been subject to the modification of the terms and conditions of the contract or refinancing.

• The classification of loans in this category is the result of the judgment of the bank about the debtors’ unlikelihood to fulfil its credit obligations. This category substitutes the old substandard loans (“Incagli”) and restructured loans (“Crediti Ristrutturati”).

• A sub-segment of the Unlikely to Pay is now represented by the FNPE, if not classified in other classes.

• Exposure to a borrower in a position of insolvency (not necessarily recognized by a court) or a substantially similar situation, irrespective of the presence of any collateral. Same as previous classification of Bad Loans or “Sofferenze”.

• A sub-segment of the Bad Loans is now represented by the FNPE, if not classified in other classes.

Past Due - Esposizioni

scadute > 90 giorni

Past Due more than 90

days loans (debt) –

Esposizioni scadute

Including FNPE*

Restructured - Crediti

ristrutturati

Unlikely to Pay – Inadempienze

probabili

Including FNPE*

NPE (Unlikely to

Past Due and including

FNPE)

Watchlist - Incagli

NPLs - Sofferenze

Bad Loans - Sofferenze

Including FNPE*


Appendix Top 10 Banks peer analysis

-

10.0

20.0

30.0

40.0

50.0

60.0

UCG ISP MPS Banco Popolare UBI BNLn.a

BPER Cariparma BPM Credem

YE - 2013 YE - 2014 YE - 2015

49.0 53

.9

52.6

53.2

34.6 38

.2

38.6

39.2

21.6 24

.3 27.3

26.6

8.9

10.5

10.3

10.5

5.9

6.6

7.2

7.0

5.5

6.5

7.4

7.1 2.

22.

6

2.8

2.7

2.5 3.1

3.4

3.3

0.7 0.8

0.9

0.9

5.8 7.1 8.1

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0

UCG ISP MPS UBI BNL BPER Cariparma BPM Credem

YE - 2013 YE - 2014 YE - 2015

18.7 20

.4

20.4

20.8

13.0 14

.2 15.2

15.0

8.9

8.4 10

.2

9.7

5.5 6.0 6.1

6.5

3.4 4.0

3.84.3

2.5

2.8

3.1

3.0 1.

01.

1

1.2

1.2

1.1 1.3

1.6

1.5

0.3 0.3

0.4

0.4

2.4

2.7 3.0

H1 - 2016

-

20.0

40.0

60.0

80.0


YE - 2013 YE - 2014 YE - 2015

61.8

62.2

61.2

61.0

62.5

62.8

60.7

61.8

58.8

65.3

62.6

63.4

38.0 43

.0

41.0

38.3 41

.638

.8

46.7

38.6

55.0

56.5 58

.5

58.2

55.0

56.5

57.3

57.6

55.5

55.9

54.5

54.6 58

.258

.6 61.1

60.8

59.1 62

.0

63.3

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

8.9 10

.4

9.9

10.3

9.3 10

.3

9.9

10.3

14.7 17

.0

21.0

19.8

9.7

12.0

12.0

12.3

6.4 7.3 8.

2

7.9

10.9

13.3 15

.0

14.5

5.6 6.

7 7.1

7.1

7.2 8.

8 9.2

8.9

3.6 3.6 4.1

3.8

8.4 10

.4 12.0

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

-

10.0

20.0

30.0

40.0

50.0

60.0



YE - 2013 YE - 2014 YE - 2015

49.0 53

.9

52.6

53.2

34.6 38

.2

38.6

39.2

21.6 24

.3 27.3

26.6

8.9

10.5

10.3

10.5

5.9

6.6

7.2

7.0

5.5

6.5

7.4

7.1 2.

22.

6

2.8

2.7

2.5 3.1

3.4

3.3

0.7 0.8

0.9

0.9

5.8 7.1 8.1

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

18.7 20

.4

20.4

20.8

13.0 14

.2 15.2

15.0

8.9

8.4 10

.2

9.7

5.5 6.0 6.1

6.5

3.4 4.0

3.84.3

2.5

2.8

3.1

3.0 1.

01.

1

1.2

1.2

1.1 1.3

1.6

1.5

0.3 0.3

0.4

0.4

2.4

2.7 3.0

H1 - 2016

-

20.0

40.0

60.0

80.0


YE - 2013 YE - 2014 YE - 2015

61.8

62.2

61.2

61.0

62.5

62.8

60.7

61.8

58.8

65.3

62.6

63.4

38.0 43

.0

41.0

38.3 41

.638

.8

46.7

38.6

55.0

56.5 58

.5

58.2

55.0

56.5

57.3

57.6

55.5

55.9

54.5

54.6 58

.258

.6 61.1

60.8

59.1 62

.0

63.3

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

8.9 10

.4

9.9

10.3

9.3 10

.3

9.9

10.3

14.7 17

.0

21.0

19.8

9.7

12.0

12.0

12.3

6.4 7.3 8.

2

7.9

10.9

13.3 15

.0

14.5

5.6 6.

7 7.1

7.1

7.2 8.

8 9.2

8.9

3.6 3.6 4.1

3.8

8.4 10

.4 12.0

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

-

10.0

20.0

30.0

40.0

50.0

60.0



YE - 2013 YE - 2014 YE - 2015

49.0 53

.9

52.6

53.2

34.6 38

.2

38.6

39.2

21.6 24

.3 27.3

26.6

8.9

10.5

10.3

10.5

5.9

6.6

7.2

7.0

5.5

6.5

7.4

7.1 2.

22.

6

2.8

2.7

2.5 3.1

3.4

3.3

0.7 0.8

0.9

0.9

5.8 7.1 8.1

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

18.7 20

.4

20.4

20.8

13.0 14

.2 15.2

15.0

8.9

8.4 10

.2

9.7

5.5 6.0 6.1

6.5

3.4 4.0

3.84.3

2.5

2.8

3.1

3.0 1.

01.

1

1.2

1.2

1.1 1.3

1.6

1.5

0.3 0.3

0.4

0.4

2.4

2.7 3.0

H1 - 2016

-

20.0

40.0

60.0

80.0


YE - 2013 YE - 2014 YE - 2015

61.8

62.2

61.2

61.0

62.5

62.8

60.7

61.8

58.8

65.3

62.6

63.4

38.0 43

.0

41.0

38.3 41

.638

.8

46.7

38.6

55.0

56.5 58

.5

58.2

55.0

56.5

57.3

57.6

55.5

55.9

54.5

54.6 58

.258

.6 61.1

60.8

59.1 62

.0

63.3

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

8.9 10

.4

9.9

10.3

9.3 10

.3

9.9

10.3

14.7 17

.0

21.0

19.8

9.7

12.0

12.0

12.3

6.4 7.3 8.

2

7.9

10.9

13.3 15

.0

14.5

5.6 6.

7 7.1

7.1

7.2 8.

8 9.2

8.9

3.6 3.6 4.1

3.8

8.4 10

.4 12.0

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Gross Bad Loans volume (€ bn)

Net Bad Loans volume (€ bn)

Bad Loans Coverage ratio (%)

Source: Financial Statements as of H1-2016, YE-2015, YE-2014, YE-2013

PwC | 35

-

10.0

20.0

30.0

40.0

50.0

60.0



YE - 2013 YE - 2014 YE - 2015

49.0 53

.9

52.6

53.2

34.6 38

.2

38.6

39.2

21.6 24

.3 27.3

26.6

8.9

10.5

10.3

10.5

5.9

6.6

7.2

7.0

5.5

6.5

7.4

7.1 2.

22.

6

2.8

2.7

2.5 3.1

3.4

3.3

0.7 0.8

0.9

0.9

5.8 7.1 8.1

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

18.7 20

.4

20.4

20.8

13.0 14

.2 15.2

15.0

8.9

8.4 10

.2

9.7

5.5 6.0 6.1

6.5

3.4 4.0

3.84.3

2.5

2.8

3.1

3.0 1.

01.

1

1.2

1.2

1.1 1.3

1.6

1.5

0.3 0.3

0.4

0.4

2.4

2.7 3.0

H1 - 2016

-

20.0

40.0

60.0

80.0


YE - 2013 YE - 2014 YE - 2015

61.8

62.2

61.2

61.0

62.5

62.8

60.7

61.8

58.8

65.3

62.6

63.4

38.0 43

.0

41.0

38.3 41

.638

.8

46.7

38.6

55.0

56.5 58

.5

58.2

55.0

56.5

57.3

57.6

55.5

55.9

54.5

54.6 58

.258

.6 61.1

60.8

59.1 62

.0

63.3

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

8.9 10

.4

9.9

10.3

9.3 10

.3

9.9

10.3

14.7 17

.0

21.0

19.8

9.7

12.0

12.0

12.3

6.4 7.3 8.

2

7.9

10.9

13.3 15

.0

14.5

5.6 6.

7 7.1

7.1

7.2 8.

8 9.2

8.9

3.6 3.6 4.1

3.8

8.4 10

.4 12.0

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Gross Bad Loans ratio (%)

Net Bad Loans ratio (%)

Gross NPE volume (€bn)

-

2.0

4.0

6.0

8.0

10.0


YE - 2013 YE - 2014 YE - 2015

3.7 4.

3

4.2

4.4

3.8 4.

2

4.2

4.3

6.8 7.

1

9.5

8.7

6.4

7.5 7.78.

2

3.9

4.7

4.65.

1 5.3

6.4 7.

0

6.8

2.7 3.

1

3.2

3.2 3.4

4.2 4.5

4.4

1.6

1.5 1.6

1.5

3.7 4.

4 4.9

H1 - 2016

-

20.0

40.0

60.0

80.0

100.0


YE - 2013 YE - 2014 YE - 2015

85.5

87.2

78.982

.9

57.6 63

.0

61.3

63.4

36.1

45.3

45.3

46.9

19.2 21.8

20.2

20.8

12.7

13.1

13.3

13.5

10.3

11.0

11.6

11.4 3.9

5.0

5.2

5.2

5.3

5.9

6.1

6.0

1.3

1.3

1.5

1.4

11.0

12.3

12.9

H1 - 2016

-

10.0

20.0

30.0

40.0

50.0


YE - 2013 YE - 2014 YE - 2015

41.1

42.6

37.840

.5

31.1 33

.6

32.4

33.3

21.0 23

.1

23.2

24.2

14.1

14.3

13.5

14.1

9.3

9.5

8.59.7

6.4

6.5

6.4

6.4 2.

3 3.0 3.0

3.1

3.4

3.6

3.6

3.6

0.8

0.8

0.8

0.8

6.2

6.4

6.3

H1 - 2016

-

10.0

20.0

30.0

40.0

50.0

60.0


YE - 2013 YE - 2014 YE - 2015

51.9

51.1 52

.1

51.1

46.0

46.7 47

.3

47.5

41.8

48.9

48.9

48.5

27.0

34.2

33.0

31.9

26.5

27.3

35.9

27.8

37.3 40

.7 45.0

44.2

39.6

38.6 41

.7

40.5

36.1 38

.7 40.5

39.7

38.7 40

.7 44.7

44.6

43.7 48

.1 51.5

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

-

2.0

4.0

6.0

8.0

10.0


YE - 2013 YE - 2014 YE - 2015

3.7 4.

3

4.2

4.4

3.8 4.

2

4.2

4.3

6.8 7.

1

9.5

8.7

6.4

7.5 7.78.

2

3.9

4.7

4.65.

1 5.3

6.4 7.

0

6.8

2.7 3.

1

3.2

3.2 3.4

4.2 4.5

4.4

1.6

1.5 1.6

1.5

3.7 4.

4 4.9

H1 - 2016

-

20.0

40.0

60.0

80.0

100.0


YE - 2013 YE - 2014 YE - 2015

85.5

87.2

78.982

.9

57.6 63

.0

61.3

63.4

36.1

45.3

45.3

46.9

19.2 21.8

20.2

20.8

12.7

13.1

13.3

13.5

10.3

11.0

11.6

11.4 3.9

5.0

5.2

5.2

5.3

5.9

6.1

6.0

1.3

1.3

1.5

1.4

11.0

12.3

12.9

H1 - 2016

-

10.0

20.0

30.0

40.0

50.0


YE - 2013 YE - 2014 YE - 2015

41.1

42.6

37.840

.5

31.1 33

.6

32.4

33.3

21.0 23

.1

23.2

24.2

14.1

14.3

13.5

14.1

9.3

9.5

8.59.7

6.4

6.5

6.4

6.4 2.

3 3.0 3.0

3.1

3.4

3.6

3.6

3.6

0.8

0.8

0.8

0.8

6.2

6.4

6.3

H1 - 2016

-

10.0

20.0

30.0

40.0

50.0

60.0


YE - 2013 YE - 2014 YE - 2015

51.9

51.1 52

.1

51.1

46.0

46.7 47

.3

47.5

41.8

48.9

48.9

48.5

27.0

34.2

33.0

31.9

26.5

27.3

35.9

27.8

37.3 40

.7 45.0

44.2

39.6

38.6 41

.7

40.5

36.1 38

.7 40.5

39.7

38.7 40

.7 44.7

44.6

43.7 48

.1 51.5

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a



-

2.0

4.0

6.0

8.0

10.0


YE - 2013 YE - 2014 YE - 2015

3.7 4.

3

4.2

4.4

3.8 4.

2

4.2

4.3

6.8 7.

1

9.5

8.7

6.4

7.5 7.78.

2

3.9

4.7

4.65.

1 5.3

6.4 7.

0

6.8

2.7 3.

1

3.2

3.2 3.4

4.2 4.5

4.4

1.6

1.5 1.6

1.5

3.7 4.

4 4.9

H1 - 2016

-

20.0

40.0

60.0

80.0

100.0


YE - 2013 YE - 2014 YE - 2015

85.5

87.2

78.982

.9

57.6 63

.0

61.3

63.4

36.1

45.3

45.3

46.9

19.2 21.8

20.2

20.8

12.7

13.1

13.3

13.5

10.3

11.0

11.6

11.4 3.9

5.0

5.2

5.2

5.3

5.9

6.1

6.0

1.3

1.3

1.5

1.4

11.0

12.3

12.9

H1 - 2016

-

10.0

20.0

30.0

40.0

50.0


YE - 2013 YE - 2014 YE - 2015

41.1

42.6

37.840

.5

31.1 33

.6

32.4

33.3

21.0 23

.1

23.2

24.2

14.1

14.3

13.5

14.1

9.3

9.5

8.59.7

6.4

6.5

6.4

6.4 2.

3 3.0 3.0

3.1

3.4

3.6

3.6

3.6

0.8

0.8

0.8

0.8

6.2

6.4

6.3

H1 - 2016

-

10.0

20.0

30.0

40.0

50.0

60.0


YE - 2013 YE - 2014 YE - 2015

51.9

51.1 52

.1

51.1

46.0

46.7 47

.3

47.5

41.8

48.9

48.9

48.5

27.0

34.2

33.0

31.9

26.5

27.3

35.9

27.8

37.3 40

.7 45.0

44.2

39.6

38.6 41

.7

40.5

36.1 38

.7 40.5

39.7

38.7 40

.7 44.7

44.6

43.7 48

.1 51.5

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

-

2.0

4.0

6.0

8.0

10.0


YE - 2013 YE - 2014 YE - 2015

3.7 4.

3

4.2

4.4

3.8 4.

2

4.2

4.3

6.8 7.

1

9.5

8.7

6.4

7.5 7.78.

2

3.9

4.7

4.65.

1 5.3

6.4 7.

0

6.8

2.7 3.

1

3.2

3.2 3.4

4.2 4.5

4.4

1.6

1.5 1.6

1.5

3.7 4.

4 4.9

H1 - 2016

-

20.0

40.0

60.0

80.0

100.0


YE - 2013 YE - 2014 YE - 2015

85.5

87.2

78.982

.9

57.6 63

.0

61.3

63.4

36.1

45.3

45.3

46.9

19.2 21.8

20.2

20.8

12.7

13.1

13.3

13.5

10.3

11.0

11.6

11.4 3.9

5.0

5.2

5.2

5.3

5.9

6.1

6.0

1.3

1.3

1.5

1.4

11.0

12.3

12.9

H1 - 2016

-

10.0

20.0

30.0

40.0

50.0


YE - 2013 YE - 2014 YE - 2015

41.1

42.6

37.840

.5

31.1 33

.6

32.4

33.3

21.0 23

.1

23.2

24.2

14.1

14.3

13.5

14.1

9.3

9.5

8.59.7

6.4

6.5

6.4

6.4 2.

3 3.0 3.0

3.1

3.4

3.6

3.6

3.6

0.8

0.8

0.8

0.8

6.2

6.4

6.3

H1 - 2016

-

10.0

20.0

30.0

40.0

50.0

60.0


YE - 2013 YE - 2014 YE - 2015

51.9

51.1 52

.1

51.1

46.0

46.7 47

.3

47.5

41.8

48.9

48.9

48.5

27.0

34.2

33.0

31.9

26.5

27.3

35.9

27.8

37.3 40

.7 45.0

44.2

39.6

38.6 41

.7

40.5

36.1 38

.7 40.5

39.7

38.7 40

.7 44.7

44.6

43.7 48

.1 51.5

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Net NPE volume (€ bn)

NPE Coverage ratio (%)

Gross NPE ratio (%)

-

10.0

20.0

30.0

40.0


YE - 2013 YE - 2014 YE - 2015

15.6 16

.9

14.816

.0

15.4 17

.0

15.7

16.6

24.5

31.7 34

.9

34.8

21.0

24.8

23.324

.3

13.7

14.6

15.1

15.2

20.3 22

.6

23.5

23.3

10.2 12

.6

13.0

13.3 15

.0 17.0

16.4

16.4

6.3

6.0 6.4

6.0

15.9 18

.0 19.2

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

8.2 9.

1

7.78.5 9.0 9.

9

9.09.

5

16.0

19.3

21.6

21.7

16.3 18

.0

17.018

.0

10.5 11

.1

10.111

.5 13.9 14

.9

14.5

14.5

6.4 8.

2

8.0

8.4 10

.2 11.2

10.5

10.6

4.0

3.7

3.7

3.4

9.7

10.3

10.4

H1 - 2016

-

1.0

2.0

3.0

4.0

5.0

6.0


YE - 2013 YE - 2014 YE - 2015

2.5

0.8

0.3

0.8

1.8

1.1

0.7

0.7

1.9

5.5

1.11.

5 1.8

4.0

2.3

1.0

1.0 1.0

2.7

0.9

1.5 1.7

1.11.

4

1.3

1.0

0.70.8

1.6

1.2

0.80.9

0.6

0.5

2.1

0.5

1.3 1.

51.

2

H1 - 2016

-

50.0

100.0

150.0

200.0


YE - 2013 YE - 2014 YE - 2015

40.1

41.3

40.7

42.0

29.1

31.9

31.9

31.3

144.

514

1.6

102.

6

101.

4

67.6 74

.4

68.780

.1

33.2 41

.1

43.0

43.5 61

.0 69.9

61.6

59.2

21.0

23.9

25.2

23.5

31.2

29.6 34.0

32.2 14

.414

.1

15.1

14.4

42.4 48

.652

.4

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a


PwC | 37

Net NPE ratio (%)

Cost of Risk (%)

Net Bad Loans/Equity (%)

-

10.0

20.0

30.0

40.0


YE - 2013 YE - 2014 YE - 2015

15.6 16

.9

14.816

.0

15.4 17

.0

15.7

16.6

24.5

31.7 34

.9

34.8

21.0

24.8

23.324

.3

13.7

14.6

15.1

15.2

20.3 22

.6

23.5

23.3

10.2 12

.6

13.0

13.3 15

.0 17.0

16.4

16.4

6.3

6.0 6.4

6.0

15.9 18

.0 19.2

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

8.2 9.

1

7.78.5 9.0 9.

9

9.09.

5

16.0

19.3

21.6

21.7

16.3 18

.0

17.018

.0

10.5 11

.1

10.111

.5 13.9 14

.9

14.5

14.5

6.4 8.

2

8.0

8.4 10

.2 11.2

10.5

10.6

4.0

3.7

3.7

3.4

9.7

10.3

10.4

H1 - 2016

-

1.0

2.0

3.0

4.0

5.0

6.0


YE - 2013 YE - 2014 YE - 2015

2.5

0.8

0.3

0.8

1.8

1.1

0.7

0.7

1.9

5.5

1.11.

5 1.8

4.0

2.3

1.0

1.0 1.0

2.7

0.9

1.5 1.7

1.11.

4

1.3

1.0

0.70.8

1.6

1.2

0.80.9

0.6

0.5

2.1

0.5

1.3 1.

51.

2

H1 - 2016

-

50.0

100.0

150.0

200.0


YE - 2013 YE - 2014 YE - 2015

40.1

41.3

40.7

42.0

29.1

31.9

31.9

31.3

144.

514

1.6

102.

6

101.

4

67.6 74

.4

68.780

.1

33.2 41

.1

43.0

43.5 61

.0 69.9

61.6

59.2

21.0

23.9

25.2

23.5

31.2

29.6 34.0

32.2 14

.414

.1

15.1

14.4

42.4 48

.652

.4

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

-

10.0

20.0

30.0

40.0


YE - 2013 YE - 2014 YE - 2015

15.6 16

.9

14.816

.0

15.4 17

.0

15.7

16.6

24.5

31.7 34

.9

34.8

21.0

24.8

23.324

.3

13.7

14.6

15.1

15.2

20.3 22

.6

23.5

23.3

10.2 12

.6

13.0

13.3 15

.0 17.0

16.4

16.4

6.3

6.0 6.4

6.0

15.9 18

.0 19.2

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

8.2 9.

1

7.78.5 9.0 9.

9

9.09.

5

16.0

19.3

21.6

21.7

16.3 18

.0

17.018

.0

10.5 11

.1

10.111

.5 13.9 14

.9

14.5

14.5

6.4 8.

2

8.0

8.4 10

.2 11.2

10.5

10.6

4.0

3.7

3.7

3.4

9.7

10.3

10.4

H1 - 2016

-

1.0

2.0

3.0

4.0

5.0

6.0


YE - 2013 YE - 2014 YE - 2015

2.5

0.8

0.3

0.8

1.8

1.1

0.7

0.7

1.9

5.5

1.11.

5 1.8

4.0

2.3

1.0

1.0 1.0

2.7

0.9

1.5 1.7

1.11.

4

1.3

1.0

0.70.8

1.6

1.2

0.80.9

0.6

0.5

2.1

0.5

1.3 1.

51.

2

H1 - 2016

-

50.0

100.0

150.0

200.0


YE - 2013 YE - 2014 YE - 2015

40.1

41.3

40.7

42.0

29.1

31.9

31.9

31.3

144.

514

1.6

102.

6

101.

4

67.6 74

.4

68.780

.1

33.2 41

.1

43.0

43.5 61

.0 69.9

61.6

59.2

21.0

23.9

25.2

23.5

31.2

29.6 34.0

32.2 14

.414

.1

15.1

14.4

42.4 48

.652

.4

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

-

10.0

20.0

30.0

40.0


YE - 2013 YE - 2014 YE - 2015

15.6 16

.9

14.816

.0

15.4 17

.0

15.7

16.6

24.5

31.7 34

.9

34.8

21.0

24.8

23.324

.3

13.7

14.6

15.1

15.2

20.3 22

.6

23.5

23.3

10.2 12

.6

13.0

13.3 15

.0 17.0

16.4

16.4

6.3

6.0 6.4

6.0

15.9 18

.0 19.2

H1 - 2016

-

5.0

10.0

15.0

20.0

25.0


YE - 2013 YE - 2014 YE - 2015

8.2 9.

1

7.78.5 9.0 9.

9

9.09.

5

16.0

19.3

21.6

21.7

16.3 18

.0

17.018

.0

10.5 11

.1

10.111

.5 13.9 14

.9

14.5

14.5

6.4 8.

2

8.0

8.4 10

.2 11.2

10.5

10.6

4.0

3.7

3.7

3.4

9.7

10.3

10.4

H1 - 2016

-

1.0

2.0

3.0

4.0

5.0

6.0


YE - 2013 YE - 2014 YE - 2015

2.5

0.8

0.3

0.8

1.8

1.1

0.7

0.7

1.9

5.5

1.11.

5 1.8

4.0

2.3

1.0

1.0 1.0

2.7

0.9

1.5 1.7

1.11.

4

1.3

1.0

0.70.8

1.6

1.2

0.80.9

0.6

0.5

2.1

0.5

1.3 1.

51.

2

H1 - 2016

-

50.0

100.0

150.0

200.0


YE - 2013 YE - 2014 YE - 2015

40.1

41.3

40.7

42.0

29.1

31.9

31.9

31.3

144.

514

1.6

102.

6

101.

4

67.6 74

.4

68.780

.1

33.2 41

.1

43.0

43.5 61

.0 69.9

61.6

59.2

21.0

23.9

25.2

23.5

31.2

29.6 34.0

32.2 14

.414

.1

15.1

14.4

42.4 48

.652

.4

H1 - 2016

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Banco Popolaren.a

Source: Financial Statements as of H1-2016 YE-2015, YE-2014, YE-2013


Richard Thompson+44 20 7213 [email protected]

Jaime Bergaz+34 915 684 [email protected]

AustriaJens Roennberg+49 69 9585 [email protected]

Bernhard Engel+43 150 188 [email protected]

CEEJonathan Wheatley+40 212 253 645 [email protected]

CyprusStelios Constantinou+357 [email protected]

Czech Republic and SlovakiaPetr Smutny+420 251 151 [email protected]

DenmarkBent Jørgensen+45 3945 [email protected]

FranceHervé Demoy+33 156 577 [email protected]

FinlandHarri Valkonen+35 840 539 [email protected]

GermanyChristopher Sur+49 699 585 [email protected]

Thomas Veith+49 699 585 [email protected]

GreeceEmil Yiannopoulos+30 210 687 [email protected]

HungaryMiklos Fekete+36 1461 [email protected]

IrelandAidan Walsh+353 1792 [email protected]

ItalyFedele Pascuzzi+39 02 8064 [email protected]

Pier Paolo Masenza+39 06 57025 [email protected]

Vito Ruscigno+39 02 8064 [email protected]

The NetherlandsPeter Wolterman+31 88 792 5080 [email protected]

Joris van de Kerkhof+31 88 792 [email protected]

NorwayLars Johansson+47 (0) 4816 1792 [email protected]

PolandLukasz Bystrzynski+48 22 523 [email protected]

PortugalAntonio Rodrigues+35 12 1359 [email protected]

RomaniaCornelia Bumbacea+40 212 253 [email protected]

SpainJaime Bergaz+34 9156 [email protected]

Guillermo Barquin++34 915 685 [email protected]

Pablo Martinez-Pina+34 9156 [email protected]

Richard Garey+34 915 684 [email protected]

Antonio Fernandez+34 915 684 [email protected]

SwedenPer Storbacka +46 8555 [email protected]

TurkeyAykut Tasel+90 212 355 [email protected]

UkraineVladimir Demushkin+380 444 906 [email protected]

United KingdomRichard Thompson+44 20 7213 [email protected]

Robert Boulding+44 20 7804 [email protected]

Ben May+44 20 7212 [email protected]

Panos Mizios +44 (0)20 7804 [email protected]

Natasha Firman+44(0)20 721 [email protected]

Christina Zarifi+44 20 7213 [email protected]

North AmericaMitchell Roschelle+1 646 471 [email protected]

Jeff Nasser +1 267 330 1382 [email protected]

Asia PacificTed Osborn+852 2289 [email protected]

Anthony Boswell+61 8266 2551 [email protected]

Latin AmericaNico Malagamba [email protected]

JapanMasahiro Komeichi +81 (0)90 4137 [email protected]

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