An overview on the Italian NPLs market Madrid, 23 September 2016

The peculiarity of the Italian NPLs market SUMMARY The peculiarity of the Italian NPLs market 1 2 Banca IFIS: the Group and its DRL Division

THE PECULIARITY OF THE ITALIAN NPLs MARKET The Macro Scenario Italian Stock Banking Assets Trend ∆ month/month € Billion Key Points Decreasing Assets In just 3 years there was a 4,6% decrease (June 2016: 1.796 bln Dec. 2015: 1.884 bln) June 2013 3 years June 2016 Source: ABI

THE PECULIARITY OF THE ITALIAN NPLs MARKET European Market Overview NPL ratio and Coverage ratio in EU Members Source: EBA Risk Dashboard (March 2016)

THE PECULIARITY OF THE ITALIAN NPLs MARKET NPL trend Italian Gross NPL In the last 8 years values of Gross NPLs have increased rapidly Approximately, half of the Italian Gross NPLs in represented by RE secured loans About 80% of loans are towards SME and Corporate € Billion Breakdown of Italian Gross NPL by asset class Breakdown of Italian Gross NPL by debtor Source: The Italian NPL market – PwC (June 2016), Deleveraging Europe 2016 - Deloitte, (June 2016)

In 2015, volumes of disposals have more than doubled compared to 2014 THE PECULIARITY OF THE ITALIAN NPLs MARKET NPL transactions in the Italian market Key Points High growing ‘market’ In 2015, volumes of disposals have more than doubled compared to 2014 In 2016, the growing trend continues with a relevant increase in the “secured” segment The market is still also very focused on the consumer and retail Unsecured loans. € Billion Source: The Italian NPL market – PwC (June 2016), Deleveraging Europe 2016 - Deloitte, (June 2016)

The peculiarity of the Italian NPLs market SUMMARY The peculiarity of the Italian NPLs market 1 2 Banca IFIS: the Group and its DRL Division

INTRODUCTION Banca IFIS – Group Overview Banca IFIS is a specialty finance Italian player, focused on trade receivable financing, distressed retail loans (DRL) and tax receivables Founded in 1983 by Sebastien Egon Furstenberg, the current chairman, as a financial company focused on offering factoring to SMEs Listed on the Milan Stock exchange (STAR segment) since 2003, with a current market capitalization of around Eu 1.0 bn Over the years, the bank diversified both its trade receivable activity and its funding sources: On the asset side: in 2011, Banca IFIS entered distressed retail loans and tax receivables and started, on an occasional basis, a carry trade strategy, building up a large portfolio of Italian government bonds financed through Repos, which after a peak in 2013 has been gradually reduced (around Eu 2,2 bn of govies sold in 1H15) and partially replaced by a new portfolio of floating-rate or inflation-indexed bonds On the funding side with the launch of Rendimax (high-yield online savings account) in 2008 and Contomax (low-cost/high-return online current account) in 2013 Successful track record of acquisition: Toscana Finanza Interbanca S.p.A (Lending) and its Factoring and Leasing (financial & operational) businesses Shareholder structure as of 30 June 2016 The group has a strong and diversified business model which allows it to reach outstanding results in terms of profitability and credit quality Business Overview B2B Trade finance Focus on SMEs & micro companies and Public Administration DRL Investment in retail Unsecured Distressed Loan portfolios Over 1,000,000 positions Tax receivables Purchase of tax receivables arising from insolvency proceedings Source: Banca IFIS

FINANCIAL HIGHLIGHTS Banca IFIS – A diversified income generation Net Banking Income (Eumn) breakdown by segment 1H2016 Asset structure A strong and well diversified business model Banca IFIS stock price Trade Receivables Trade receivable financing in B2B, with focus on SMEs and micro companies (around 80% of which with a Turnover < Eu 10mn) and Public Administration segments (with focus on the Pharma segment) BANCA IFIS Leasing Financial and operating leasing through two distinct legal entities, GE Capital Servizi Finanziari (“Financial Leasing”), 106 TUB and GE Capital Services (“Operating Leasing”), which offers only operating leasing, in the Equipment Finance segment GE Capital Italia Source: Banca IFIS

DISTRESSED RETAIL LOANS NPL Area DRL DIVISION AUM 1H 2016 Banca IFIS is one of the most important players in the Italian NPLs market, finalizing, over the years, several successfull acquisitions of non performing portfolios. The Division manages internally the acquired portfolios workout, through the brand CrediFamiglia The DRL Division story has been built on the unsecured retail segment, becoming the reference player for the NPL market while making it a profitable business As part of the bank growing strategy, in the last year, the DRL Division started to expand its activities also in the acquisition and management of banking assets PORTFOLIO GBV € 10 billion # positions 1 million Gross Book Value purchased during years 2013 2014 2015 1H 2016

DISTRESSED RETAIL LOANS NPL Area – The process Banca IFIS is a unique financial institution characterized by a strong entrepreneurial approach, a dynamic and result’s based culture Deal Selection, Portfolio Valuation and Investment decision Closing and Portfolio Onboarding Workout Management Strategy Collection Back office and Monitoring Scouting of new opportunities; Participation to auction and beauty contest processes; Portfolio valuation; Investment committee decision Contract negotiations; Signing and Closing; Portfolio onboarding Loans’ assignment to the workout management teams (Call Center, Internal and External Collection agents, Legal Departments) Recoveries from call center, internal and external recovery departments and Judicial activities (from wage assignments to RE judicial mortgages) Back office support to call center, internal and external recovery departments; Valuation and approval of proposed plans; Performance and cost monitoring

1.500 mln of incoming payment plans DISTRESSED RETAIL LOANS NPL Area – Workout Management Strategy and Collection The Portfolio management is processed in-house by the NPL Area in accordance with the highest standards of ethics, transparency and respect. In this direction, Credifamiglia was born: this trademark focuses on ethical and sustainable collection of non performing loans. Internal Recovery Department 500 mln of payment plans 114 collection agents which operate throughout Italy by an home collection activity External Recovery Department 14 call centers which conduct a phone collection activity 32 DCA which perform an home collection activity Legal Recovery Department 70 external lawyers that, operating through Italy, support the Internal Legal Factory (45) in order to obtain Order of Assignment Wage 1.500 mln of incoming payment plans

DISTRESSED RETAIL LOANS NPL Area – The Portfolio 30/06/2016 Collection NPL Gross Portfolio Book Value Book Value/NPL Portfolio Internal and External Recovery Department Non Judicial Payment Plans 424 mln 71 mln 17% Order of Assignment Wage Legal Recovery Department 140 mln 32 mln 23% Judicial ongoing workout 1.200 mln 138 mln 12% To be processed 8.236 mln 241 mln 3% 25% of the Gross Book Value “to be processed” is waiting for the workout process due to the recent acquisitions (staging). 10 bln 482 mln Source: Banca IFIS

Contacts: www.bancaifis.it Andrea Clamer andrea.clamer@bancaifis.it Head of NPL Area, Banca IFIS andrea.clamer@bancaifis.it www.bancaifis.it