BPER Group’s preliminary 2017 consolidated results approved

Net profit for the year of € 176.4 million compared to € 14.3 million in 2016. The 2017 result has been hit by the expected loss generated by Nuova Carife joining the group and non-recurring items for € 169.9 million, substantially offset by the recognition of badwill for € 190.9 million.

Proposal for a cash dividend of € 11 cents per share, significantly up on € 6 cents in 2016.

Strong capital solidity confirmed with a Fully Phased CET1 ratio of 13.7%, among the best in the Italian banking system. Considerable excess capital of € 1.9 billion compared with the SREP requirement for 2018.

The significant improvement in asset quality is continuing with a gross NPE ratio of 19.8%, down for the sixth quarter running from 23.5% in June 2016 thanks to the strategic measures taken in recent years to protect the Group's asset quality:

• a default rate of 2.1% (4.2% in 2016) with transfers from performing to non-performing loans more or less halved (-46.2% y/y);

• a cure rate of 11.5% (8.3% in 2016) with a significant increase in the flows of NPEs back to performing (+32.9% y/y);

• a danger rate reduced to 16.1% (17.6% in 2016) with inflows to bad loans falling by 12.1% y/y;

• an NPE coverage ratio of 48.7%, a significant increase from 44.5% at the end of 2016;

• a Texas ratio[ii] improving considerably to 101.9% from 111.6% in 2016, which is now close to falling below 100%

Positive growth in commercial activity with loans to customers rising to € 47.8 billion, 5.1% up y/y and more than 2% up net of Nuova Carife. There have also been significant increases in total deposits, which including the Bancassurance segment exceed the threshold of € 90.0 billion, compared with € 85.0 billion in 2016, with a significant increase also net of Nuova Carife's deposits.