Strategic Plan 2019-2021

Summary of the Strategic Directives and Main Objectives

The Board of Directors approved the revision of the Bank’s strategic business plan on the 18^th of December 2018.

The Plan will generate net profits of 99 million euro over the three-year period 2019-2021, compared with 82 million euro foreseen over the same period in the previous Plan, an increase of 17 million euro.

It is based on the following strategic guidelines:

Sustainable commercial growth
Renewal of the operating model
NPE active management and reduction
Reduction of risks and strengthening of controls
Full implementation of the structure

The main changes in the implementation of the Strategic Levers are as follows:

Implementation of the recent Bancassurance Partnership
Investments in technological developments
Selective reinforcement of territorial presence

The strategic levers mentioned above will enable reaching the following quantitative objectives in 2021:

Growth in net interest and other banking income since the beginning of the plan (2017) of 18%.
26% growth in volumes of investment funds premiums and insurance premiums since the beginning of the plan (2017)
Improvement of the Cost Income Ratio of 6 p.p. (64% in 2021)
Reduction of the NPL Ratio to 5.8%
Liquidity Coverage Ratio greater than 150%
Significant improvement in the bank’s solidity with a CET1 at the end of the period greater than 13.5%.

Strategic Directives	Principal Objectives	2017	2021
Sustainable commercial growth	Net interest and other banking income Revenue growth, in % Investment Products Growth of managed funds and insurance based investment products, in %		18% (2017-2021) 26% (2017-2021)
Renewal of the operative model	Cost lncome Ratio CIR, in %	70%	64%
Reduction and management of bad loans...	NPL Ratio NPL/Loans , in %	13,30%	5,80%
...For a solid Balance Sheet	LCR Liquidity Coverage Ratio, in % CET1 Common Equity Tier 1 Ratio, in %	129% 11,4%	> 150% > 13,5%

Current Results projection 2019	2018	Projection 2019
Bank net Profit	25,4 mlm	≥ 26 mlm
NPL Ratio gross consolidated	8,7 %	< 8,0 %
CET1 Ratio consolidated	12,3 %	~ 12,6 %

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