Intesa Sanpaolo : consolidated results at 30 June 2015

Performance del periodo

PRESS RELEASE

INTESA SANPAOLO: CONSOLIDATED RESULTS AS AT 30 JUNE 2015

STRONG GROWTH IN PROFITABILITY, ABOVE THE BANK'S 2014-2017 BUSINESS PLAN TARGETS.

A STRONG CAPITAL BASE, WELL ABOVE REGULATORY REQUIREMENTS: THE PRO-FORMA COMMON EQUITY RATIO ON A FULLY LOADED BASIS IS 13.3%, NET OF ACCRUED DIVIDENDS.

NET INCOME FOR H1 2015 WAS OVER €2BN, ABOVE THE BANK'S DIVIDEND COMMITMENT FOR 2015.

NET FEE AND COMMISSION INCOME GREW AT A SUSTAINED PACE (THE HIGHEST HALF-YEARLY FIGURE SINCE THE CREATION OF INTESA SANPAOLO), WHILE ASSETS UNDER MANAGEMENT PERFORMED STRONGLY.

PROVISIONS WERE REDUCED IN THE SEMESTER, REFLECTING AN IMPROVING CREDIT TREND.

HALF-YEARLY GROSS NPL INFLOW FROM PERFORMING LOANS WAS AT ITS LOWEST SINCE 2007.

INTESA SANPAOLO CONTINUES TO OPERATE AS AN ACCELERATOR FOR THE GROWTH OF THE REAL ECONOMY IN ITALY. IN THE SEMESTER, THE BANK GRANTED €19BN OF MEDIUM/LONG-TERM NEW LENDING TO ITALIAN FAMILIES AND BUSINESSES (UP 41% VS H1 2014), GROWING TO €11BN IN Q2 FROM €8BN IN Q1. MOREOVER, THE BANK HELPED 8,400 COMPANIES GET BACK TO PERFORMING STATUS IN THE FIRST HALF OF THE YEAR, GROWING TO 4,900 IN Q2 FROM 3,500 IN Q1, MAKING A TOTAL OF 17,400 SINCE 2014.

NET INCOME IN H1 2015 ALREADY ABOVE THE DIVIDEND COMMITMENT FOR 2015, THE HIGHEST HALF-YEARLY NET INCOME SINCE H1 2008: STRONG GROWTH IN PRE-TAX INCOME, THE HIGHEST HALF-YEARLY FIGURE SINCE H1 2008: SIGNIFICANT INCREASE IN OPERATING MARGIN, THE HIGHEST HALF-YEARLY FIGURE SINCE THE CREATION OF INTESA SANPAOLO: • €2,004M VS €720M IN H1 2014 • €3,317M, UP 54.2% VS H1 2014 • €5,165M, UP 16.7% VS H1 2014

SUSTAINED GROWTH IN NET FEES AND COMMISSIONS, THE HIGHEST HALF-YEARLY FIGURE SINCE THE CREATION OF INTESA SANPAOLO: • €3,794M, UP 14.6% VS H1 2014

CONTINUED COST MANAGEMENT: OPERATING COSTS AT €4,235M IN H1 2015, UP 2.1% VS H1 2014

REDUCTION IN PROVISIONS, REFLECTING AN IMPROVING CREDIT TREND COUPLED WITH AN INCREASE IN COVERAGE, DESPITE CHARGES RELATING TO THE DEPOSIT GUARANTEE SCHEME AND THE EUROPEAN RESOLUTION FUND: LOAN LOSS PROVISIONS IN H1 2015 AT THEIR LOWEST LEVEL SINCE H1 2011: €1,614M, DOWN 28.8% VS H1 2014 GROSS NPL INFLOW FROM PERFORMING LOANS IN H1 2015 AT ITS LOWEST SINCE 2007; NPL INFLOW DOWN 28% NET AND 27% GROSS VS H1 2014 NPL CASH COVERAGE RATIO INCREASED TO 47.3% (47% AT YEAR-END 2014) ABOUT €140M SET ASIDE IN H1 2015 CONCERNING ESTIMATED CHARGES FOR FULL-YEAR 2015 RELATING TO THE DEPOSIT GUARANTEE SCHEME AND THE EUROPEAN RESOLUTION FUND

A STRONG CAPITAL BASE WHICH IS WELL ABOVE REGULATORY REQUIREMENTS. THE COMMON EQUITY RATIO, NET OF €1BN DIVIDENDS ACCRUED IN H1 2015, IS: 13.4% ON A TRANSITIONAL BASIS FOR 2015(1) ("PHASED IN") 13.3% ON A FULLY LOADED BASIS(2)

1. Includes H1 2015 net income after the deduction of accrued dividends.

2. Estimated by applying the fully loaded parameters to the financial statements as at 30 June 2015 considering the total absorption of deferred tax assets (DTAs) related to the goodwill realignment, the expected absorption of DTAs on losses carried forward, the expected distribution of H1 2015 net income of insurance companies, and the effect of the Danish compromise (under which insurance investments are risk weighted instead of being deducted from capital, with a benefit of six basis points).

   
   

   HIGHLIGHTS:
   OPERATING INCOME:	H1 2015 Q2 2015	+9.7% AT €9,400M VS €8,572M IN H1 2014; -2.2% AT €4,648M VS €4,752M IN Q1 2015
   OPERATING COSTS:	H1 2015 Q2 2015	+2.1% AT €4,235M VS €4,148M IN H1 2014; +0.5% AT €2,123M VS €2,112M IN Q1 2015
   OPERATING MARGIN:	H1 2015 Q2 2015	+16.7% AT €5,165M VS €4,424M IN H1 2014; -4.4% AT €2,525M VS €2,640M IN Q1 2015
   INCOME BEFORE TAX FROM CONTINUING OPERATIONS:	H1 2015 Q2 2015	+54.2% AT €3,317M VS €2,151M IN H1 2014; -12.2% AT €1,551M VS €1,766M IN Q1 2015
   NET INCOME:	H1 2015 Q2 2015	€2,004M VS €720M IN H1 2014; €940M VS €1,064M IN Q1 2015
   CAPITAL RATIOS:	COMMON EQUITY RATIO AFTER ACCRUED DIVIDENDS:

3. % PRO-FORMA FULLY LOADED(3) ;

4. % PHASED IN(4)




Turin - Milan, 31 July 2015 - At its meeting today, the Management Board of Intesa Sanpaolo approved the consolidated half-yearly report as at 30 June 2015(5).

In the first half of 2015, the Group has achieved a strong improvement in profitability - above the 2014-2017 Business Plan targets - despite prolonged market challenges, and has confirmed that its balance sheet remains solid, as the figures below show:

• net income already above the dividend commitment for 2015, up to €2,004m in H1 2015 from €720m in H1 2014, the highest half-yearly result since H1 2008. The net income for Q2 2015 declined only marginally, to €940m from €1,064m in Q1 2015, in spite of the severe effects of the Greek crisis on the financial market performance

  
  

  
  

5. Estimated by applying the fully loaded parameters to the financial statements as at 30 June 2015, considering the total absorption of deferred tax assets (DTAs) related to the goodwill realignment, the expected absorption of DTAs on losses carried forward, the expected distribution of H1 2015 net income of insurance companies, and the effect of the Danish compromise (under which insurance investments are risk weighted instead of being deducted from capital, with a benefit of six basis points).

6. Includes H1 2015 net income after the deduction of accrued dividends.

7. Methodological note on the scope of consolidation on page 22.

• strong growth in pre-tax income to €3,317m in H1 2015, the highest half-yearly figure since H1 2008, up 54.2% versus H1 2014

  
  

• significant increase in operating margin to €5,165m in H1 2015, the highest half- yearly figure since the creation of Intesa Sanpaolo, up 16.7% versus H1 2014

  
  

• positive and increasing pre-tax income from all business units: in H1 2015, Wealth Management generated €1,494m pre-tax income (up 42.5% vs H1 2014) deriving from contributions of €615m from Private Banking (up 45.4% vs H1 2014), €302m from Asset Management (up 61.5% vs H1 2014) and €577m from Insurance (up 31.7% vs H1 2014). Banca dei Territori contributed €1,218m (up 4% vs H1 2014), Corporate and Investment Banking reached €1,210m (up 12.7% vs H1 2014), and International Subsidiary Banks generated €373m (up 20.3% vs H1 2014)

  
  

• strong growth in assets under management of approximately €23bn in H1 2015, with net inflow of approximately €22bn, of which approximately €9bn switched from assets previously held under administration. Since year-end 2013, assets under management have increased by approximately €66bn, with net inflow of approximately €52bn, of which approximately €27bn switched from assets previously held under administration




• support to the real economy with approximately €22bn of medium/long-term new lending in H1 2015. Approximately €19bn of these loans were granted in Italy (up 41% vs H1 2014) - the rate of lending accelerated in Q2 reaching €11bn, compared with €8bn disbursed in the previous quarter - and of which more than €15bn were granted to families and SMEs, representing an increase of more than 70% on the same period in 2014. In the semester, the Bank helped 8,400 Italian companies return to performing status from non-performing positions - growing to 4,900 in Q2, compared with 3,500 in the previous quarter - making a total of 17,400 since 2014




• sustained growth in net fees and commissions to €3,794m in H1 2015, the highest half-yearly figure since the creation of Intesa Sanpaolo, up 14.6% versus H1 2014

  
  

• high efficiency, highlighted by a cost/income ratio of 45.1% in H1 2015, a figure that places Intesa Sanpaolo in the top tier of its European peers

  
  

• continued cost management with operating costs up 2.1% versus H1 2014

  
  

• improving credit trend with half-yearly gross NPL inflow from performing loans at its lowest since 2007. Net inflow was €3bn in H1 2015, from €4.1bn in H1 2014 (down 28%). Gross inflow was €4.6bn in H1 2015, from €6.3bn in H1 2014 (down 27%)