Banca Popolare di Sondrio S p A : Consolidated interim report on operations at 31 March 2024

CONSOLIDATED INTERIM REPORT ON OPERATIONS

AT 31 MARCH 2024

CONSOLIDATED INTERIM REPORT ON OPERATIONS AT 31 MARCH 2024

Joint-stock company

Head Office and General Management: I - 23100 Sondrio SO - Piazza Garibaldi 16 Tel. [phone] - Fax [phone]

Websites: https://www.popso.it - https://istituzionale.popso.it

E-mail: [e-mail] - Certified e-mail (PEC): [e-mail] Sondrio Companies Register No. 00053810149 - Official List of Banks No. 842 Parent Company of the Banca Popolare di Sondrio Banking Group,

Official List of Banking Groups No. 5696.0 - Member of the Interbank Deposits Protection Fund Tax code and VAT number: 00053810149

Share capital: € 1,360,157,331 - Reserves: € 1,564,088,615 (Figures approved at the Shareholders' meeting of 27 April 2024)

Rating:

• Rating issued to Banca Popolare di Sondrio by S&P Global Ratings on 26 February 2024:
• • Stand alone credit profile: BBB-
  • Long-termIssuer Credit Rating: BBB-
  • Short-TermIssuer Credit Rating: A-3
  • Long-termResolution Counterparty Rating: BBB
  • Short-termResolution Counterparty Rating: A-2
  • Outlook: Stable
• Rating issued to Banca Popolare di Sondrio by Fitch Ratings on 24 April 2024: ˗ Long-term Issuer Default Rating (IDR): BBB-
  ˗ Short-term Issuer Default Rating (IDR): F3
  ˗ Viability Rating: bbb-
  ˗ Government Support Rating: n.a.
  ˗ Long-term Deposit Rating: BBB
  ˗ Short-term Deposit Rating: F3
  ˗ Senior Preferred Debt: BBB-
  ˗ Tier 2 Subordinated Debt: BB
  ˗ Outlook: Stable
• Rating issued to Banca Popolare di Sondrio by Morningstar DBRS on 13 November 2023:
• • Long-TermIssuer Rating: BBB (low)
  • Short-TermIssuer Rating: R-2 (middle)
  • Intrinsic Assessment: BBB (low)
  • Support Assessment: SA3
  • Long-TermDeposit Rating: BBB
  • Short-TermDeposit Rating: R-2 (high)
  • Long-termSenior Debt: BBB (low)
  • Short-termDebt: R-2 (middle)
  • Subordinated Debt: BB
  • Trend: Positive
• Rating issued to Banca Popolare di Sondrio by Scope Ratings on 17 April 2024:
• • Issuer rating: BBB
  • Outlook: Stable

CONTENTS

Corporate offices

Interim management report as at 31 March 2024

Certifications

Certification of the Manager responsible for preparing the Company's accounting documents

3

5

34

Consolidated financial statements

Consolidated balance sheet	36
Consolidated income statement	38
Consolidated statement of other comprehensive income	39
Consolidated statement of changes in equity	40

CORPORATE OFFICES

BOARD OF DIRECTORS

Chair	FRANCESCO VENOSTA
Deputy Chair	LINO ENRICO STOPPANI*
Managing Director	MARIO ALBERTO PEDRANZINI**
Directors	NICOLA CORDONE
	LORETTA CREDARO*
	ANNA DORO
	FEDERICO FALCK*
	ROBERTO GIAY
	MARIA CHIARA MALAGUTI
	PIERLUIGI MOLLA
	SÉVERINE MÉLISSA HARMINE NEERVOORT
	GIUSEPPE RECCHI
	SERENELLA ROSSI
	SILVIA STEFINI
	ROSSANA ZAMBELLI
BOARD OF STATUTORY AUDITORS
Chair	CARLO MARIA VAGO
Statutory Auditors	MASSIMO DE BUGLIO
	LAURA VITALI
Alternate Auditors	MARCO FABIO CAPITANIO
	PAOLO VIDO
GENERAL MANAGEMENT
General Manager	MARIO ALBERTO PEDRANZINI
Deputy General Managers	MARIO ERBA
	MILO GUSMEROLI
	CESARE POLETTI
Manager responsible for preparing the
Company's accounting documents	MAURIZIO BERTOLETTI

* Members of the Executive Committee

** Member of the Executive Committee and Secretary of the Board of Directors

INFORMATION

ON OPERATIONS

Note. The amounts contained in this interim management report are represented using the euro as the accounting currency; comparisons in percentage terms refer for the balance sheet part to the homogeneous data at the end of 2023 and for the income statement part to the homogeneous data at 31 March 2023; any exceptions are explained. Because most of the figures in the text and tables are rounded to the nearest million or thousand euro, the percentages may differ marginally from those that would result from a comparison of the same amounts expressed in different units.

Consolidated interim report

31 March 2024

INTRODUCTION

Legislative Decree No. 25 of 15 February 2016, which amended the Consolidated Law on Finance, abolished the disclosure requirements for the first and third quarters of the year to which issuers were subject, without prejudice to the possibility given to Consob to provide for additional periodic disclosure obligations for issuers.

Consob has provided the option for listed companies to choose whether or not to publish additional periodic financial information.

Our Group decided to give priority to market disclosure and therefore, in continuity with the past, this consolidated interim report as at 31 March 2024 has been prepared in accordance with the recognition and measurement criteria set forth in the IAS/IFRS adopted by the European Community at present.

This consolidated interim report has not been independently audited.

BASIS OF PREPARATION

The financial statements included in the consolidated interim report conform to the mandatory financial statement formats provided for by Bank of Italy Order No. 262 of 22 December 2005, 8th update of 17 November 2022.

In the reporting period, the accounting standards adopted remained essentially unchanged from the previous year.

For detailed information concerning the application of accounting standards, please refer to the consolidated financial statements as at 31 December 2023.

In the financial statements, values are expressed in thousands of euro.

The balance sheet is compared with the balance sheet in the financial statements as at 31 December 2023.

The income statement is compared with the income statement for the period ended 31 March 2023.

The preparation of the consolidated interim report usually requires a more extensive use of estimation methods than the annual report with respect to both asset and liability items and income statement items.

5

Consolidated interim report

31 March 2024

THE BANCA POPOLARE DI SONDRIO BANKING GROUP

The Banca Popolare di Sondrio Banking Group comprises:

Parent Company:

Banca Popolare di Sondrio spa - Sondrio.

Group Companies:

• Banca Popolare di Sondrio (SUISSE) SA - Lugano CH.
  The Parent Company holds all the capital of Banca Popolare di Sondrio (SUISSE) SA, amounting to 180,000,000 CHF.
• Factorit spa - Milan.
  The Parent Company holds the entire capital of Factorit spa, 85,000,002 euro.
• Sinergia Seconda srl - Milan
  The Parent Company holds all the capital of Sinergia Seconda Srl, 60,000,000 euro.
• Banca della Nuova Terra spa - Sondrio
  The Parent Company holds all the capital of Banca della Nuova Terra spa, 31,315,321 euro.
• PrestiNuova srl - Agenzia in Attività Finanziaria - Rome.
  Banca della Nuova Terra spa holds all the capital of PrestiNuova srl - Agenzia in Attività Finanziaria, 100,000 euro.
• Popso Covered Bond srl - Conegliano (Tv).
  The Parent Company holds 60% of the capital of Popso Covered Bond srl, 10,000 euro.

SCOPE OF CONSOLIDATION AND METHODOLOGY

The interim report presents the economic and financial position as at 31 March 2024 of the Banca Popolare di Sondrio Banking Group, which comprises the Parent Company, Banca Popolare di Sondrio (SUISSE) SA, Factorit spa, Sinergia Seconda srl, Banca della Nuova Terra spa, PrestiNuova srl - Agenzia in Attività Finanziaria and Popso Covered Bond srl and the entities that are controlled by the Group pursuant to IFRS 10.

6

Consolidated interim report 31 March 2024

The following companies have been consolidated on a line-by-line basis:

EQUITY INVESTMENTS CONSOLIDATED LINE BY LINE

	Company Name		Head office			Share capital (in			% holding
				thousands)
	Banca Popolare di Sondrio (SUISSE) SA		Lugano		(CHF) 180,000	100
	Factorit spa		Milan	85,000	100
	Sinergia Seconda srl		Milan	60,000	100
	Banca della Nuova Terra spa		Sondrio	31,315	100
	Pirovano Stelvio spa (1)		Sondrio	2,064	100
	Servizi Internazionali e Strutture Integrate 2000 srl (1)		Milan	75	100
	PrestiNuova srl - Agenzia in Attività Finanziaria		Rome	100(3)	100
	Immobiliare Borgo Palazzo srl (1)		Tirano	10(2)	100
	Immobiliare San Paolo srl (1)		Tirano	10(2)	100
	Rent2Go srl (1)		Monza	12,050	100
	Popso Covered Bond srl		Conegliano	10	60
	Centro delle Alpi SME srl (1)		Conegliano	10	-
	Residence Nuova Dogana srl (1)		Milan	10(4)	100

1. equity investments not included in the banking group
2. held by Sinergia Seconda srl
3. held by Banca della Nuova Terra spa
4. held by Immobiliare Borgo Palazzo srl

The scope of the companies consolidated on a line-by-line basis expanded compared to 31 December 2023 as a result of the inclusion of Residence Nuova Dogana Srl, formed on 22 March 2024 through the demerger by Immobiliare Borgo Palazzo Srl of a portion of its assets, consisting of the business unit responsible for management of hotel tourist complexes and related real estate assets.

The Parent Company holds 100% of Fondo Immobiliare Centro delle Alpi Real Estate and consolidates it line by line.

The scope of consolidation also includes the investees where the Parent Company exercises a significant influence in that the shareholding is between 20% and 50%; or, even if it has an interest of less than 20%, if one or more of the following circumstances apply:

• the Bank has a representative on the Board of Directors or the equivalent body of the affiliate;
• the Bank takes part in the decision-making process, including decisions regarding dividends;
• there are significant transactions between the parent company and the subsidiary;
• there is an exchange of managers;
• essential technical information is being provided.

These holdings are valued using the equity method, except for insignificant interests which are valued at cost.

The equity method involves initial recognition of the investment at cost and its subsequent remeasurement based on the portion of equity held. The portion of the subsidiary's net result for the year attributable to the bank is shown in a specific item in the income statement.

Any change in the other components of comprehensive income relating to these subsidiaries is presented as part of the Group's comprehensive income. Furthermore, in the event that an associate or joint venture recognises a change with direct allocation to equity, the Group

7

Consolidated interim report

31 March 2024

recognises its share, where applicable, in the statement of changes in equity. Unrealised profits and losses deriving from transactions between the Group and associates or joint ventures are eliminated in proportion to the shareholding in the associates or joint ventures.

Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not subject to a separate impairment test.

After applying the equity method, the Group assesses whether it is necessary to recognise an impairment loss on its investment in associates or joint ventures. At each reporting date, the Group assesses whether there is objective evidence that the investments in associates or joint ventures have suffered impairment. In this case, the Group calculates the amount of the impairment as the difference between the recoverable value of the associate or joint venture and its carrying amount in its financial statements, recognising this difference in the profit or loss for the year under the heading "portion pertaining to the result of associates and joint ventures".

Any subsequent write-backs cannot exceed the impairment losses recorded previously. Upon loss of significant influence over an associated company or joint control over a joint venture, the Group assesses and recognises the residual shareholding at fair value. The difference between the carrying amount of the investment at the date of the loss of significant influence or of the joint control and the fair value of the residual investment and the amount received is recognised in the income statement. The ownership percentages are specified in the following table:

EQUITY INVESTMENTS MEASURED USING THE EQUITY METHOD

	Company Name		Head office			Share capital (in		% holding
				thousands)
	Alba Leasing spa		Milan	357,953	19.264
	Arca Vita spa		Verona	208,279		14.837
	Arca Holding spa		Milan	50,000		34.715
	Unione Fiduciaria spa		Milan	5,940		24.000
	Polis Fondi Sgrpa		Milan	5,200		19.600
	Rajna Immobiliare srl (1)		Sondrio	20		50.000

(1) joint control

For more details on how equity investments are presented in the financial statements, please refer to the notes under "Scope and methods of consolidation".

8

Consolidated interim report

31 March 2024

TRANSLATION OF FINANCIAL STATEMENTS IN CURRENCIES OTHER THAN THE EURO

The quarterly situation of Banca Popolare di Sondrio (SUISSE) SA is translated into euro at the official year-end exchange rate for balance sheet assets and liabilities, while costs and revenues are translated into euro at average exchange rate. Differences arising on translation of financial statement figures are booked in the statement of comprehensive income.

SUBSEQUENT EVENTS

No events have taken place between the reference date for this consolidated interim report and the date of its approval by the Board of Directors on 7 May 2024 that would require the adjustment of such approved information, and nothing of significance has occurred that would require additional disclosures.

INTERNATIONAL CONTEXT

The first quarter of the year saw the continuation of the very serious situation of geopolitical uncertainty related to the conflicts in Ukraine and the Middle East. An expansion of crisis areas is unfortunately a concrete possibility, and the absence of actors capable of steering the parties to the conflict towards a peace process is becoming increasingly apparent.

Nonetheless, the world economy showed signs of improvement in early 2024, especially in the service sector. According to the latest forecasts, global GDP growth is expected to exceed 3% this year, in line with last year.

Global trade, while heavily conditioned by the insecurity burdening one of its most important hubs - the Red Sea - also seems to have continued the moderate expansion already seen at the end of 2023.

The decline in inflation has not yet been reflected in the policies of the monetary authorities, which have remained cautious on the rate front.

In addition, oil prices were driven higher by demand that outpaced expectations, as well as, of course, by the severe geopolitical tensions mentioned at the outset.

At the beginning of the year, the Euro Area - which is particularly close and sensitive to the ongoing conflicts in Ukraine and Israel - was unable to pull out of the substantial stagnation in which it has been mired for some time. The continuing weakness of the manufacturing sector was offset by some positive signals from the services sector, but without resulting in any real dynamism of GDP, which is expected to grow by only 0.6% this year.

Inflation seems to be on a downward path, which should bring it around the crucial 2% threshold by next year. The European Central Bank kept its rate level unchanged, leaving financing conditions restrictive. Expectations that a rate-cutting phase is about to begin have grown.

Turning to the Italian economy, the slightly positive GDP performance in late 2023 seems to be confirmed for the first quarter of the year.

The decline in consumption, conditioned by household spending capacity penalised by price growth not adequately reflected in wage increases, was at least partly offset by the increase in investments. While industrial activity was affected by, inter alia, the difficulties of the German economy, the construction sector remained dynamic, despite struggling with the adjustment of

9