A bank of excellence in support of the real economy

Figures as at 30 September 2024

The results for the first nine months of 2024 highlight that the Intesa Sanpaolo Group is able to generate solid sustainable profitability, with net income of €7.2bn and expected to exceed €8.5bn in full-year 2024, taking into account managerial actions in Q4 2024 to further strengthen future sustainability of the Group’s results, contributing to 2025 net income expected at around €9bn.
The aforementioned managerial actions include the acceleration in generational change in the context of the technological transformation, with a resilient business model in the digitalisation and artificial intelligence scenario. Specifically, in October, the Bank and trade unions signed the agreement which envisages 4,000 voluntary exits by 2027 and 3,500 hires of young people, 1,500 of which as Global Advisors for the Network commercial activities, specifically in Wealth Management & Protection, by the first half 2028, with related charges in the region of €500 million before tax and €350 million net of tax to be booked in fourth quarter 2024.

Intesa Sanpaolo is fully equipped to continue operating successfully in the future thanks to:

• the Group’s key strengths, notably resilient profitability, a solid capital position, the zero-NPL bank status, significant investment in technology and high flexibility in managing operating costs (9,000 people leaving the Group by 2027) also due to acceleration in technological transformation (55% of applications already cloud-based);
• its leadership in Wealth Management, Protection & Advisory with around €100bn in customer financial assets identified⁽¹⁾ to fuel growth.

Technology is a further key factor to succeed, generating additional contribution to 2025 gross income of around €500m not envisaged in the 2022-2025 Business Plan⁽²⁾:

• new cloud-native technological platform (isytech), already available to mass market retail customers with the new digital bank, Isybank, and to be progressively extended to the entire Group: €3.5bn in IT investments already deployed and around 2,250 IT specialists already hired, with an additional contribution to 2025 gross income of around €150m not envisaged in the Business Plan;
• new digital channels:
  
  • Isybank, the Group’s digital bank with a lower-than-30% cost/income business model and around one million new customers by 2025 - with an additional contribution to gross income of around €200m by 2025 - not envisaged in the Business Plan: over 400,000 new non-Intesa Sanpaolo customers already acquired and around 350,000 Intesa Sanpaolo customers already migrated;
  • Fideuram Direct, the digital Wealth Management platform for Private Banking, with around 150,000 customers in 2025 (around 20% of the current customer base of Fideuram): already around 74,200 customers and €2.84bn in customer financial assets as at 30 September 2024;
• artificial intelligence, with around 150 Apps and 300 specialists in 2025 (already 80 Apps and 184 specialists as at 30 September 2024) and an additional contribution to 2025 gross income of around €100m not envisaged in the Business Plan, not including further potential upside from the adoption of Generative AI solutions.
  

As regards the leadership in Wealth Management, Protection & Advisory:

• top-notch digital tools, distinctive advisory networks with around 17,000 people dedicated⁽³⁾, growing to around 20,000 by 2027, fully owned product factories (asset management and insurance) and around €1,400bn in the Group’s customer financial assets empower Intesa Sanpaolo with a unique set of enablers for revenue growth from Wealth Management, Protection & Advisory;
• customer financial assets, managed through the 360-degree advisory services provided by the Banca dei Territori Division and the Private Banking Division, amounted to €134bn as at 30 September 2024, increasing by €27bn compared with 30 September 2023;
• in the first quarter of 2024, a Wealth Management Divisions structure was established, to which the pre-existing Private Banking, Asset Management and Insurance divisions report, providing a single unit overseeing the wealth management activities, with the aim of accelerating growth and increasing the integration of product factories;
• furthermore, in the first quarter of 2024, a “Fees & Commissions” Steering Committee was established, chaired directly by the Managing Director and CEO, focused on monitoring, overseeing and coordinating strategies to increase revenues from commissions across all the Group’s Divisions.

The solid performance of income statement and balance sheet in the first nine months of the year translated into significant value creation for all stakeholders, which is also grounded in the Group’s strong ESG commitment. Specifically:

• significant cash return to shareholders: €5bn of dividends accrued in 9M 2024 (in addition to the buyback of €1.7bn concluded in October 2024), €3bn of which will be distributed in November as interim dividends;
• €4.6bn taxes generated and increased by €0.7bn on 9M 2023 as a consequence of the growth in net interest income which drove the increase of €1.3bn in gross income;
• expansion of the food and shelter programme for people in need (over 48.2 million interventions in the period 2022 - 9M 2024);
• enhancement of initiatives to fight inequalities and foster financial, social, educational and cultural inclusion (€18.7bn of social lending and urban regeneration in the period 2022 - 9M 2024);
• an amount equal to around €1.5bn total costs to be contributed in the five-year period 2023-2027 to support initiatives addressing social needs (over €0.5bn already included in the results for 2023 and 9M 2024 and the remaining portion included, on a pro-rata basis, in the outlook for net income for full-year 2024 and for 2025), with around 1,000 people devoted to supporting these initiatives.

Significant ESG commitment, with a world-class position in social impact and a strong focus on climate and reinforcement of the ESG governance with:

• the Risks Committee which in April 2022 became the Risks Sustainability Committee with enhanced ESG responsibilities;
• the appointment, in April 2024, of a Chief Sustainability Officer to head a governance area created to consolidate ESG activities and enhance ESG business steering, with a strong commitment to social matters and the fight against inequalities, a continuous support for culture and a significant contribution to sustainability through innovation projects and investment in startups.

Intesa Sanpaolo is the only Italian bank listed in the Dow Jones Sustainability Indices, ranks first bank in Europe and second worldwide in the 2024 Corporate Knights “Global 100 Most Sustainable Corporations in the World Index” and first among the banks of the peer group by Sustainalytics. Furthermore, Intesa Sanpaolo:

• has been recognized in the FTSE Diversity & Inclusion Index - Top 100 as first bank and seventh company in the world and the only bank in Italy among the 100 most inclusive and diversity-conscious workplaces;
• has ranked first in the global ESG Corporate Award ranking, in the Best Company for Diversity Equity & Inclusion category, among large cap companies;
• has been the first major Italian banking group to obtain the certification for gender parity “Prassi di Riferimento (PDR) 125:2022” envisaged by the National Recovery and Resilience Plan, thanks to its commitment to diversity and inclusion;
• has been the first bank in Italy and among the first banks in Europe to obtain the Gender Equality European & International Standard (GEEIS) - Diversity certification.

Intesa Sanpaolo has a strong liquidity position and funding capability, with liquid assets of €285bn and high available unencumbered liquid assets of €209bn at end of September 2024. Regulatory requirements for the Liquidity Coverage Ratio (at 162%⁽⁴⁾) and the Net Stable Funding Ratio (at 122%⁽⁵⁾) have been comfortably complied with.

Minimum Requirement for own funds and Eligible Liabilities (MREL) comfortably complied with: at end of September 2024⁽⁵⁾, calculated on risk-weighted assets, the total MREL ratio was 40.7% and the subordination component was 23.6% (40.5% and 23.3%, respectively, not including in capital any net income accrued in Q3 2024⁽⁶⁾), compared with requirements of 25.7% and 18%, respectively, comprising a Combined Buffer Requirement of 4%.

Intesa Sanpaolo continues to operate as a growth accelerator in the real economy: with around €48bn of medium/long-term new lending in 9M 2024. Loans amounting to around €30bn were granted in Italy, of which around €27bn was granted to households and SMEs. In 9M 2024, the Group facilitated the return from non-performing to performing status of around 2,250 Italian companies thus safeguarding over 11,000 jobs. This brought the total to around 143,000 companies since 2014, thus safeguarding over 715,000 jobs over the same period.

⁽¹⁾ Out of direct deposits and assets held under administration
⁽²⁾ Additional contribution to 2025 gross income from isytech, Isybank, Fideuram Direct and Artificial Intelligence, which offsets the impact from higher inflation and the renewal of the labour contract
⁽³⁾ Financial advisors, Private Bankers, Global Advisors (with hybrid contract, employed with part-time indefinite-term contract and on a self-employed basis), relationship managers for Exclusive customers, relationship managers for Affluent customers and Digital Branch relationship managers
⁽⁴⁾ Average for the last twelve months
⁽⁵⁾ Preliminary management figures
⁽⁶⁾ In compliance with the ECB’s recent guidance, which specifically states that a supervised entity is not allowed to include any interim or year-end profits in Common Equity Tier 1 in case it adopts a distribution policy that does not specify any upper limit for cash dividends and any share buybacks, and it does not commit not to distribute neither via cash dividends nor via share buybacks the profits that it wants to include in Common Equity Tier 1