Banca Generali S p A : Interim report at 31 March 2024

INTERIM REPORT AT 31 MARCH 2024

INTERIM REPORT

AT 31 MARCH 2024

Board of Directors 9 May 2024

This Document has been translated from that issued in Italy, from the Italian into the English language, solely for the convenience of international readers. The Italian version remains the definitive version.

BANCA GENERALI S.P.A.

REGISTERED OFFICE

VIA MACHIAVELLI 4 - 34132 TRIESTE

SHARE CAPITAL

Authorised 119,378,836 euros

Subscribed and paid-up 116,851,637 EUROS

TAX CODE AND TRIESTE REGISTER

OF COMPANIES

NO. 00833240328

VAT NO. 01333550323

BANK WHICH IS A MEMBER OF THE INTERBANK DEPOSIT PROTECTION FUND

REGISTRATION WITH THE BANK REGISTER OF THE BANK OF ITALY UNDER No. 5358

PARENT COMPANY OF THE BANCA GENERALI BANKING GROUP REGISTERED IN THE BANKING GROUP REGISTER

ABI CODE 3075.9

COMPANY MANAGED AND COORDINATED BY ASSICURAZIONI GENERALI S.P.A.

ADMINISTRATION AND CONTROL BODIES

BOARD OF DIRECTORS

CHAIRMAN

CANGERI ANTONIO

CHIEF EXECUTIVE OFFICER AND GENERAL MANAGER

MOSSA GIAN MARIA

DIRECTORS

CALTAGIRONE AZZURRA

CAPRIO LORENZO

CIOCCA PAOLO

COCCO ROBERTA

DE FALCO ALFREDO MARIA

SIMIONI ANNA

ZUNINO CRISTINA

BOARD OF STATUTORY AUDITORS

FREDDI NATALE (CHAIRMAN)

CARRARA PAOLA

GAREGNANI GIOVANNI

MANAGER IN CHARGE OF PREPARING THE COMPANY'S FINANCIAL REPORTS

DI RUSSO TOMMASO

CONTENTS
Group Economic and Financial Highlights	3
Consolidated Financial Statements	5
	Consolidated Balance Sheet	5
	Consolidated Profit and Loss Account	6
	Consolidated Statement of Comprehensive Income	6
1.	Summary of Operations for the First Three Months of 2024	7
2.	Macroeconomic Context	9
3.	Banca Generali's Competitive Positioning	11
4.	Operating Result	17
5.	Balance Sheet and Net Equity Aggregates	31
6. Performance of Group Companies	44
7.	Basis of Preparation	47
Declaration pursuant to Article 154-bis, Second Paragraph, of Legislative Decree No. 58
of 24 February 1998	50

2

Group Economic and Financial Highlights

Group economic and financial highlights (€ million)	31.03.2024	31.03.2023	Change %
Net interest income	79.4	71.0	12.0
Net financial income	83.9	74.9	12.0
Net fees	172.7	118.3	46.1
Net banking income	256.6	193.2	32.9
Net operating expenses (d)	-68.3	-63.7	7.2
of which: staff expenses	-32.2	-29.7	8.3
Operating result	188.4	129.5	45.5
Provisions and charges related to the banking system (d) and other one-off charges	-29.0	-16.2	78.8
Adjustments to non-performing loans	1.4	1.2	23.5
Profit before taxation	161.0	114.4	40.7
Net profit	122.0	83.1	46.8
Performance indicators	31.03.2024	31.03.2023	Change %
Cost/income ratio (d)(f)	26.6%	33.0%	-19.3
Operating Costs/Total Assets - annualised (e)	0.28%	0.30%	-4.9
EBITDA (d)	198.2	138.9	42.7
ROE (a)	38.2%	29.9%	28.0
ROA (b)	0.50%	0.39%	30.3
EPS - Earnings per share (euros)	1.07	0.72	47.9
Net inflows (€ million) (Assoreti data)	31.03.2024	31.03.2023	Change %
Funds and Sicavs	-57	226	-125.2
Financial wrappers	286	156	83.3
Insurance wrappers	-44	-49	-10.2
Managed solutions	185	333	-44.4
Traditional insurance products	83	-655	-112.7
Assets under administration	1,381	1,846	-25.2
Total	1,649	1,524	8.2
Total client assets (€ billion)	31.03.2024	31.12.2023	Change %
Funds and Sicavs (c)	22.9	22.0	4.0
Financial wrappers (c)	11.1	10.5	5.6
Insurance wrappers	10.9	10.6	2.9
Managed solutions	44.9	43.1	4.1
Traditional insurance products	14.5	14.3	1.2
Assets under administration	37.4	35.4	5.7
Total (c)	96.8	92.8	4.3
Net Equity	31.03.2024	31.12.2023	Change %
Net equity (€ million)	1,340.1	1,213.3	10.5
Own funds (€ million)	864.8	839.7	3.0
Excess capital (€ million)	363.1	294.8	23.2
Total Capital Ratio	21.2%	19.0%	11.9

1. Ratio of net result to the arithmetic average of net equity, including net profit, at the end of the period and at the end of the previous year.
2. Ratio of net result for the period to year-end exact total client assets within Assoreti scope and of BG Valeur, annualised.
3. Total Assoreti assets were increased by BG Valeur's assets not included in Assoreti's scope.
4. For a greater understanding of operating performance, mandatory contributions (of both an ordinary and extraordinary nature) paid to the Italian Interbank Deposit Protection Fund, the European Single Resolution Fund and Italian National Resolution Fund have been reclassified from the administrative expenses aggregate to a separate item. The restatement better represents the evolution of the costs linked to the Bank's operating structure by separating them from the systemic charges incurred.
5. Ratio of operating expenses, gross of non-recurring components, to year-end exact total client assets within Assoreti's scope and of BG Valeur, annualised.
6. The cost/income ratio measures the ratio of operating expenses to net operating income.

3

4

Consolidated Financial Statements

Consolidated Balance Sheet

Assets	31.03.2024	31.12.2023	Change
(€ thousand)			Amount	%
Financial assets at fair value through profit or loss	509,334	509,407	-73	0.0%
Financial assets at fair value through other comprehensive income	1,075,503	1,000,936	74,567	7.4%
Financial assets measured at amortised cost	12,475,402	12,905,455	-430,053	-3.3%
a) loans to banks (*)	2,665,196	2,846,425	-181,229	-6.4%
b) loans to customers	9,810,206	10,059,030	-248,824	-2.5%
Hedging derivatives	178,060	161,955	16,105	9.9%
Equity investments	2,126	1,975	151	7.6%
Property, equipment and intangible assets	285,549	292,054	-6,505	-2.2%
Tax receivables	107,003	108,113	-1,110	-1.0%
Other assets	556,185	537,267	18,918	3.5%
Total assets	15,189,162	15,517,162	-328,000	-2.1%
(*) Demand deposits with banks and demand deposits with the ECB have been reclassified among loans to banks.
Liabilities and net equity	31.03.2024	31.12.2023	Change
(€ thousand)			Amount	%
Financial liabilities measured at amortised cost	13,061,788	13,503,015	-441,227	-3.3%
a) due to banks	300,285	231,684	68,601	29.6%
b) due to customers	12,761,503	13,271,331	-509,828	-3.8%
Financial liabilities held for trading and hedging	122,340	132,821	-10,481	-7.9%
Tax liabilities	74,839	46,088	28,751	62.4%
Other liabilities	321,516	353,037	-31,521	-8.9%
Special purpose provisions	268,571	268,936	-365	-0.1%
Valuation reserves	-303	-797	494	-62.0%
Equity instruments	50,000	50,000	0	0.0%
Reserves	1,083,262	752,749	330,513	43.9%
Share premium reserve	52,992	52,992	0	0.0%
Share capital	116,852	116,852	0	0.0%
Treasury shares (-)	-85,005	-85,005	0	0.0%
Net equity attributable to minority interests	343	338	5	1.5%
Net profit (loss) for the period (+/-)	121,967	326,136	-204,169	-62.6%
Total liabilities and net equity	15,189,162	15,517,162	-328,000	-2.1%

5

Consolidated Profit and Loss Account

(€ thousand)	31.03.2024	31.03.2023	Change
			Amount	%
Net interest income	79,447	70,952	8,495	12.0%
Net income (loss) from trading activities and dividends	4,467	3,956	511	12.9%
Net financial income	83,914	74,908	9,006	12.0%
Recurring fee income	256,829	238,113	18,716	7.9%
Fee expense	-138,522	-124,856	-13,666	10.9%
Net recurring fees	118,307	113,257	5,050	4.5%
Variable fee income	54,424	5,007	49,417	n.a.
Net fees	172,731	118,264	54,467	46.1%
Net banking income	256,645	193,172	63,473	32.9%
Staff expenses	-32,191	-29,713	-2,478	8.3%
Other general and administrative expenses (net of duty recoveries)	-28,461	-26,100	-2,361	9.0%
Net adjustments of property, equipment and intangible assets	-9,861	-9,400	-461	4.9%
Other operating expenses/income	2,256	1,541	715	46.4%
Net operating expenses	-68,257	-63,672	-4,585	7.2%
Operating result	188,388	129,500	58,888	45.5%
Net adjustments to non-performing loans	1,426	1,155	271	23.5%
Net provisions for liabilities and contingencies	-18,660	-10,229	-8,431	82.4%
Contributions and charges related to the banking system	-10,350	-6,000	-4,350	72.5%
Gains (losses) from equity investments valued at equity	151	-3	154	n.a.
Operating profit before taxation	160,955	114,423	46,532	40.7%
Income taxes for the period	-38,988	-31,389	-7,599	24.2%
Net profit attributable to minority interests	0	-37	37	-100.0%
Net profit	121,967	83,071	38,896	46.8%

Consolidated Statement of Comprehensive Income

(€ thousand)	31.03.2024	31.03.2023	Change
			Amount	%
Net profit	121,967	83,034	38,933	46.9%
Other income, net of income taxes:
With transfer to Profit and Loss Account:
Exchange differences	-2,097	61	-2,158	n.a.
Financial assets measured at fair value through other comprehensive income	1,698	1,817	-119	-6.5%
Without transfer to Profit and Loss Account:
Financial assets measured at fair value through other comprehensive income	844	-13	857	n.a.
Actuarial gains (losses) from defined benefit plans	55	-208	263	-126.4%
Total other income, net of taxes	500	1,657	-1,157	-69.8%
Comprehensive income	122,467	84,691	37,776	44.6%
Consolidated comprehensive income attributable to minority interests	6	-61	68	-110.3%
Consolidated comprehensive income attributable to the Group	122,460	84,752	37,709	44.5%

6

1. Summary of Operations for the First Three Months of 2024

Banca Generali Group closed the first quarter of 2024 with a consolidated net profit of 122.0 million euros, sharply up compared to the first quarter of 2023 (+46.8 %), driven both by constantly growing recurring net profit, which reached 82.0 million euros (+6.5%), and by the sharp rise in non-recurringnet profit, which stood at 40.0 million euros, spurred by the recovery of performance fees.

Recurring profitability continued to benefit from the positive contribution of net interest income, attributable to the gradual upwards revisions of the Bank's asset yields following interest rate rises, the success of the numerous initiatives undertaken to diversify fee income and the cost containment policy pursued in a context of persistent inflation pressure.

Net profit growth was also supported by a further business expansion, with total client assets at an all-timehigh of 96.8 billion euros, up by 4.3% compared to the end of 2023 and by 12.6% compared to the same period of the previous year, and by the ongoing strengthening of capital and liquidity ratios, already well above regulatory requirements.

Net banking income stood at 256.6 million euros compared to 193.2 million euros for the first quarter of 2023. The significant increase was driven by the higher net financial income (83.9 million euros; +12.0%), the good performance of net recurring fees (118.3 million euros; +4.5%) and the sharp rise of variable fees, which amounted to 54.4 million euros, thanks to the excellent performance of the UCITS managed by the Banking Group.

Despite the inflationary pressures, operating expenses amounted to 68.3 million euros (+7.2% on an annual basis), including 1.5 million euro one-off charges, thus confirming the Bank's operational efficiency. Core1 operating expenses totalled 61.0 million euros, up 6.3% in line with the Plan's projections. This aggregate included 2.9 million euros charges generated by the launch of BG Suisse (1.5 million euros in 2023), net of which core expenses would have increased by 3.9%.

Operating efficiency indicators remained at excellent levels: the ratio of total costs to total assets stood at 28 bps, down thanks to the performance of total assets; the cost/income ratio, adjusted for non-recurring items, decreased slightly to 33.0% compared to 33.2% for the same period of the previous year.

Provisions, contributions and charges related to the banking system and net adjustments amounted to 27.6 million euros, up compared to 15.1 million euros for the first quarter of 2023, as a result of higher provisions for liabilities and contingencies (+8.4 million euros) and the effect of the end of the initial period for the constitution of the deposit protection funds that required to bring forward to the first quarter of the year the recognition of the last annual contribution to the Italian Interbank Deposit Protection Fund (FITD).

The change in this item was mainly attributable to the increase in provisions for contractual indemnities for the Financial Advisor Network (+6.4 million euros), which were mainly impacted by the alignment of discount rates used to measure actuarial provisions, with a net impact of 4.5 million euros.

Operating profit before taxation was 161.0 million euros, up 46.5 million euros compared to the same period of the previous year (+40.7%).

Core loans totalled 14.1 billion euros, decreasing by 0.4 billion euros (-2.5%) compared to the end of 2023.

The banking book financial assets stood at 10.6 billion euros (-1.1% compared to the end of 2023). Nearly 95% of the assets were invested in bonds with a duration of 1.1 years and 51% in floating-rate securities; this allowed to fully benefit from the current uptrend of interest rates.

1 Operating expenses, net of non-recurring items, amounting to 1.5 million euros (1.1 million euros in 2023), and of costs related to sales personnel, including BG Suisse's sales personnel, amounting to 5.7 million euros (5.1 million euros in 2023).

7

Exposures composed of loans to customers reached 2.2 billion euros (-6.3% compared to 2023).

The interbank position, net of the bond component, declined to 0.7 billion euros, markedly decreasing compared to the previous year (-21.2%), mainly as a result of the decline in deposits with the ECB and the increase in repurchase agreement transactions.

With reference to capital requirements, the Bank confirmed the soundness of its regulatory aggregates. CET1 ratio was 20.0% and Total Capital ratio was 21.2%. These ratios were above the specific requirements set by the Bank of Italy for the Group (i.e., CET1 ratio at 8% and Total Capital Ratio at 12.3%) for the SREP - Supervisory Review and Evaluation.

Net inflows amounted to 1.6 billion euros (+8.2% compared to the first quarter of 2023) owing to the impact of market volatility and the interest rate dynamics that continued to penalise some categories of managed solutions, offset by an increase in Assets under Administration, with a rise in assets under custody - driven by BTP - against a decline in current account liquidity.

Managed solutions therefore declined to 0.2 billion euros, accounting for 11.2% of total net inflows compared to 21.9% for the first quarter of 2023.

However, in-house products, funds and financial wrappers reported positive results, with 0.4 billion euros net inflows, up sharply compared to the first quarter of 2023 (+51.2%).

At the end of March, Assets under Advisory reached 10.1 billion euros, markedly up (+28%) and with a 10.3% ratio to total client assets.

The Group's total client assets stood at 96.8 billion euros, including the around 1.0 billion euro contribution deriving from the assets managed by BG Valeur. In addition, managed assets also included 1.2 billion euros in Assets under Administration of the Generali Group companies and 4.3 billion euros in funds and Sicavs distributed directly by BGFML, for an overall total of 102.3 billion euros.

8

2. Macroeconomic Context

In the first quarter of the year, the main global equity indexes recorded positive performances, with S&P 500 and NASDAQ reaching all-time highs.

These results were achieved in a macroeconomic scenario in which central banks' interest rate hiking cycle had already peaked and growth, particularly in the United States, proved resilient, with GDP growth above 2%. Within this context, characterised by declining inflation data compared to 2023, but still above the target set by central banks, there has been a shift in investors' expectations with regard to the future moves of the Federal Reserve and the ECB. In particular, since the beginning of the year, the rate cuts priced in by the market have declined from six to less than three for the Federal Reserve and from six to less than four for the European Central Bank.

The rate trajectory thus seems clear, though there continues to be uncertainty regarding the timing and amount of the cuts.

In this scenario, there have been upwards movements in the main global yield curves, which retraced following the rally of the end of 2023. In detail, the yield on the ten-year Bund rose from approximately 2% at the beginning of the year to 2.30% at the end of March. The U.S. Treasury yields retraced by approximately 30 bps from 3.87% to 4.20% in the period.

The BTP-Bund spread narrowed by around 30 bps, from 167 bps to 138 bps at the end of March.

With regard to spread-based products, corporate bonds have been favoured thus far by economic conditions that remain solid overall and by expectations of future rate cuts by central banks. In particular, since the beginning of the year, spreads on European investment grade and high yield corporate bonds have narrowed by 25 bps and 40 bps, respectively. Spreads on AT1 (Additional Tier 1) bonds narrowed by around 80 bps, with a positive performance in terms of price of about 2%. Returns on European investment grade and high yield corporate bonds amounted to approximately 3.5% and 6%, respectively, at the end of March. It bears remarking that returns on European high yield bonds are above the historical average for the last ten years.

In the first quarter of the year, the equity market saw positive returns across almost all the main global indexes. Developed countries, with returns of around 10%, outperformed emerging countries. The strongest-performing indexes were the Nikkei (+15% in euros) and the FTSE MIB (+15%), which outperformed both the U.S. and the European index (+13% and +7% in euros, respectively). After a 2023 characterised by a double-digit negative performance, China has remained essentially unchanged since the beginning of the year, while continuing to underperform the other emerging countries, particularly India (approximately +8.5% in euros), preferred by international investors, who appreciate its low volatility and political stability.

At the sector level, the technology and telecommunications industries recorded the strongest performances, driven by artificial intelligence companies.

The European financial sector also delivered double-digit returns (+14%), with banks continuing to benefit from higher interest rates than in the past, with a positive impact on their net interest margin. The utilities (+3%) and materials (+5%) sectors underperformed, albeit with positive returns in absolute terms.

With regard to currencies, over the first quarter of the year the dollar strengthened against the euro (+2%), with the euro/dollar exchange rate at 1.08 at the end of March. This change was due to the less dovish attitude by the Federal Reserve than expected, which led investors to price in more interest rate cuts in the Eurozone than in the United States in 2024.

Over the period, the yen lost around 7% against the dollar, reaching its low of the last 30 years. This shift was due to the rhetoric of the Bank of Japan, which, despite ending its ultra-loose monetary policy by raising the cost of money into positive territory for the first time since 2007, nonetheless remained particularly cautious with regard to future rate hikes, with a chilling effect on investors' speculations. In the coming weeks, it will be necessary to pay attention to any measures by the Japanese Ministry of Finance to stabilise the exchange rate.

In the first quarter of 2024, the general commodities index rallied moderately.

The results of the agricultural commodities sector were particularly weak, significantly weighted down by cereals and industrial commodities.

The precious metals sector was positive, including in relative terms, supported by expectations of future interest rate cuts. Overall, energy commodities also delivered positive returns, with oil prices driven by OPEC's output cut policy still underway.

9