Board approves results as at 30 June 2017

Precautionary recapitalisation completed
Customer time deposits and current accounts continue to grow: EUR +3.8 billion in the second quarter, about EUR +9.4 billion from the beginning of the year

• Solid post-precautionary recapitalisation capital position, with EUR 11.3 billion book value and transitional CET1 at 15.4%
• Net result of the quarter negative for c. EUR 3.1 billion, impacted by c. EUR 4 billion non-recurring provisions related to the c. EUR 26 billion securitisation transaction, by the impairment of the stake held in Atlante (EUR -30 million), by gains for EUR 523 million on the disposal of the merchant acquiring business and by EUR 530 million from the partial reassessment of deferred tax assets, not booked previously
• Net interest income (-2.5% Q/Q) affected by the reduced rates and volumes of interest-bearing assets, only partially offset by the reduced cost of funding; net commissions up (+1.1% Q/Q) thanks to wealth management; costs (+1.8% Q/Q) impacted by non-recurring components, in particular the impairment of intangible assets
• Net of loans subject to disposal, classified as assets held for sale, all main asset quality indicators improve, with a gross NPE ratio at 19.8% (35.7% in March 2017), net NPE ratio at 11.7% (19.7% in March 2017), Texas ratio at 98% (146% in March 2017) and stock of net impaired loans at EUR 10.5 billion (EUR 20.2 billion in March 2017)
• Gross impaired loans are down by approximately EUR 0.5 billion compared with March 2017, due to reduced inflows from performing to default and to the growth of recoveries on impaired loans
• Unencumbered Counterbalancing Capacity at c. EUR 20 billion, up by c. EUR +4 billion from March 2017 (EUR +13 billion vs. December 2016), thanks to the increase in commercial funding and to the further downsizing of loans to customers, partly linked to the typical maturities of the semester. Liquidity coverage ratio ~226%, vs. 164% in March 2017; Net Stable Funding Ratio at ~98% (~95% in March 2017)