Banco di Desio e della Brianza S p A : Financial Statements and Reports at 31 december 2023

20

23

Financial Statements and Reports

at 31 December 2023

This document is a courtesy translation into English, for the convenience of international readers, of the "Relazione Finanziaria Annuale 2023" of Banco Desio Group in PDF format; this PDF document, prepared in Italian language, is a courtesy copy which is not compliant with the provisions of the Commission Delegatebd Regulation (EU) 2019/815 (European Single Electronic Format - ESEF) but consistent with the official annual consolidated financial Statements prepared in compliance with the Directive 2004/109/EC (so-called Transparency Directive) in Italian language and published in the new format (ESEF) within the legal deadlines. In case of any discrepancies or doubts between the English and the Italian versions of the Report, the Italian version prevails

Consolidated Financial Statements

of the Banco Desio Group

at 31 December 2023

Financial Statements of

Banco di Desio e della Brianza S.p.A.

at 31 December 2023

Banco di Desio e della Brianza S.p.A.

Registered office: Via Rovagnati, 1 20832 Desio (MB)

Tel. [phone]

[e-mail]

www.bancodesio.it

Share Capital Euro 70,692,590.28 fully paid up

Registered with the Metropolitan Chamber of Commerce of Milan, Monza and Brianza and Lodi

R.E.A. No. MB-129094

Fiscal Code No. 01181770155 - VAT No. 10537880964

Member of Fondo Interbancario di Tutela dei Depositi (Interbank Fund for Deposit Protection) and the Fondo

Nazionale di Garanzia (National Guarantee Fund)

Registered with the Register of Banks Code ABI No. 3440/5

Parent Company of the Banking Group Banco di Desio e della Brianza, registered with the Order of Banking

Groups under No. 3440/5

1

Officers

Board of Directors

Chairman		Stefano Lado
Chief Executive Officer and General Manager	Alessandro Maria Decio*
Directors		Graziella Bologna*
		Valentina Maria Carla Casella
		Paola Bruno
		Agostino Gavazzi*
		Tito Gavazzi
		Alessandra Maraffini
		Laura Tulli
		Gerolamo Gavazzi*
* Members of the Executive Committee

Board of Statutory Auditors

Chairman	Emiliano Barcaroli
Statutory Auditors	Rodolfo Anghileri
	Stefania Chiaruttini
Alternate Auditors	Stefano Antonini
	Silvia Re
	Erminio Beretta

General Management

Chief Executive Officer and General Manager	Alessandro Maria Decio

Financial Reporting Manager as per Article 154-bis TUF

Financial Reporting Manager

Mauro Walter Colombo

Independent Auditors

Independent Auditors

KPMG S.p.A.

2

Contents

CONSOLIDATED FINANCIAL STATEMENTS OF THE BANCO DESIO GROUP

Consolidated Report on Operations	5
Consolidated Financial Statements	81
Consolidated Balance Sheet	82
Consolidated Income Statement	84
Consolidated Statement of Comprehensive Income	85
Statement of Changes in Consolidated Equity	86
Consolidated Cash Flow Statement	88
Consolidated Notes	90
Part A - Accounting policies	91
Part B - Information on the Consolidated Balance Sheet	143
Part C - Information on the Consolidated Income Statement	198
Part D - Consolidated Comprehensive Income	223
Part E - Information on risks and related hedging policies	224
Part F - Information on Consolidated Equity	301
Part G - Business combinations involving businesses or business units	304
Part H - Related party transactions	311
Part I - Payment agreements based on own equity instruments	314
Part L - Segment reporting	318
Part M - Lease disclosure	320

Certification of the Consolidated Financial Statements pursuant to Article

154-bis of Legislative Decree 58/98	323
Report of the Independent auditors to the Consolidated Financial
Statements	325
Public Disclosure State by State	334

3

FINANCIAL STATEMENTS OF BANCO DI DESIO E DELLA BRIANZA S.P.A.
Report on Operations	336
Company Financial Statements	402
Balance Sheet	403
Income Statement	405
Statement of Comprehensive Income	406
Statement of Changes in Equity	407
Cash Flow Statement	409

Notes	411
Part A - Accounting policies	412
Part B - Information on the Balance Sheet	457
Part C - Information on the Income Statement	515
Part D - Comprehensive Income	540
Part E - Information on risks and related hedging policies	541
Part F - Information on equity	609
Part G - Business combinations involving businesses or business units	612
Part H - Related party transactions	618
Part I - Payment agreements based on own equity instruments	622
Part M - Lease disclosure	626
Certification of the Separate Financial Statements pursuant to Article
154-bis of Legislative Decree 58/98	629
Report of the Independent Auditors to the Annual Financial Statements	631
Report of the Board of Statutory Auditors	639
Meeting Resolution	662

4

Consolidated Report on Operations

5

The Banco Desio Group

The scope of consolidation of the Banco Desio Group at 31 December 2023 includes the following companies:

100.00%	60.00%

Also included in the scope of consolidation is the securitisation vehicle Coppedè SPV S.r.l. insofar as through Fides S.p.A., pursuant to IFRS 10 Consolidated Financial Statements, the Banco Desio Group has a position of substantial control of the SPV itself.

6

1 - Introduction

The figures and ratios presented in this Report on Operations, as well as comments on the composition of items and changes where applicable, refer to the Balance Sheet in the Financial Statements as well as the Reclassified Income Statement prepared from the Financial Statements.

The balances shown in the financial statements and in the relevant tables for the reporting period include the effects arising from the acquisition of the branches unit from the BPER Group, realised on 20 February 2023, including those arising from the Purchase Price Allocation (PPA) process definitively determined at the reporting date pursuant to IFRS 3 Business Combinations.

In defining the contents of the explanatory notes, account was also taken of the indications contained in the 8th update of 17 November 2022 of the Bank of Italy's Circular 262 "Banks' financial statements: formats and rules for preparation", as well as Consob Note of 27 October 2023 relating to the ESMA document "European common enforcement priorities for 2023 annual financial reports" of 25 October 2023, insofar as applicable.

7

2 - Alternative Performance Indicators (APIs)

The alternative performance indicators (APIs) presented in this Report on Operations have been identified to facilitate understanding of the Banco Desio Group's performance. APIs are not required by international accounting standards, represent supplementary information with respect to the measures defined under IAS/IFRS, and are in no way a substitute for them.

For each API, evidence of the calculation formula is provided, and the quantities used can be inferred from the information contained in the relevant tables and/or reclassified financial statements contained in the "Results" section of this Report.

These indicators are based on the European Securities and Markets Authority (ESMA) guidelines of 5 October 2015 (ESMA/2015/1415), incorporated in Consob Communication No. 0092543 of 3 December 2015. Adhering to the indications contained in the update of document "ESMA32_51_370 - Question and answer - ESMA Guidelines on Alternative Performance Measures (APMS)", published on 17 April 2020, no changes were made to the APIs and no new ad hoc indicators were introduced to separately highlight the effects resulting from ongoing war conflicts and the Covid-19 epidemic.

Summary data and relevant balance sheet, income statement, risk and structure ratios

Balance sheet values

							31.12.2023	31.12.2022		Changes
Amounts in Euro thousands					abs.	%
Total assets						18,555,255	17,541,324	1,013,931	5.8%
Financial assets						3,957,354	4,018,411	-61,057	-1.5%
Cash and cash equiv alents	(1)		1,655,187	879,593	775,594	88.2%
Loans with banks	(2)				343,818	260,345	83,473	32.1%
			(2)				11,653,626	11,480,616	173,011	1.5%
Loans to customers
Tangible assets	(3)					230,994	220,934	10,060	4.6%
Intangible assets					41,619	19,963	21,656	108.5%
Non-current assets and groups of assets held for sale		0	1	-1	n.s.
Payables to banks				1,950,065	3,381,350	-1,431,285	-42.3%
Payables to customers	(4) (5)			12,277,411	11,110,366	1,167,045	10.5%
Securities issued					2,509,819	1,536,151	973,668	63.4%
Equity (including Profit for the period)		1,354,015	1,122,454	231,561	20.6%
Own Funds						1,366,391	1,132,852	233,539	20.6%
Total indirect inflows				20,075,207	17,082,615	2,992,592	17.5%
of which Indirect inflows from ordinary customers		12,683,669	10,135,327	2,548,342	25.1%
of which Indirect inflows from institutional customers		7,391,538	6,947,288	444,250	6.4%
( 1)
At 31December 2023, Cash and cash equivalents included the current accounts, demand deposits and the amount on demand of Euro 1.5 billion relating to cash in excess of the commitment to maintain
the compulsory reserve, invested in overnight deposits (Euro 765 million at the end of the previous period).
( 2)	pursuant to Circular 262, the balance of the financial statements item includes Held- to- collect (HTC) debt securities recognised at amortised cost, which are shown under financial assets in these
summaries, and does not include current accounts and demand deposits recognised under Cash and cash equivalents.
( 3)	the balance of the item at 31December 2023 includes the right of use (RoU Asset) amounting to Euro 57.3 million in respect of operating leases falling under the scope of IFRS16 Leases, which came into
effect as of 1January 2019.
( 4)	the balance of the item does not include the liability recognised in the item Payables to customers in the financial statements in respect of operating leases falling within the scope of IFRS16.
( 5)	including inflows repurchase agreements with institutional customers in the amount of Euro 608 million (Euro 503 million at 31December 2022).

8

Income statement values (6)

Amounts in Euro thousands Operating income of which Net interest income Operating expenses Result from operations Charges related to the banking system Current result after taxes Non-recurringresult after taxes Profit (loss) for the period

1. from Reclassified Income Statement.

31.12.2023

581,073 358,523 320,840 260,233 13,945 111,266 129,095 240,361

31.12.2022		Changes
	abs.	%
486,100	94,973	19.5%
273,855	84,668	30.9%
273,016	47,824	17.5%
213,084	47,149	22.1%
14,481	-536	-3.7%
90,575	20,691	22.8%
-9,112	138,207	n.s.
81,463	158,898	195.1%

Equity, economic and risk ratios

	31.12.2023	31.12.2022	Changes
			abs.
Equity/Total assets	7.3%	6.4%	0.9%
Equity/Loans to customers	11.6%	9.8%	1.8%
Equity/Payables to customers	11.0%	10.1%	0.9%
Equity/Securities issued	53.9%	73.1%	-19.2%
Common Equity Tier1 (CET1)/Risk-weighted assets (7) (8)	17.2%	14.8%	2.4%
Total Tier 1 capital (T1)/Risk-weighted assets (7) (8)	17.2%	14.8%	2.4%
Total Own funds/Risk-weighted assets (Total capital ratio) (7) (8)	18.0%	14.8%	3.2%
Financial assets/Total assets	21.3%	22.9%	-1.6%
Loans with banks/Total assets	1.9%	1.5%	0.4%
Loans to customers/Total assets	62.8%	65.4%	-2.6%
Loans to customers/Direct inflows from customers	78.8%	90.8%	-12.0%
Payables to banks/Total assets	10.5%	19.3%	-8.8%
Payables to customers/Total assets	66.2%	63.3%	2.9%
Securities issued/Total assets	13.5%	8.8%	4.7%
Direct inflows from customers/Total assets	79.7%	72.1%	7.6%

	31.12.2023	31.12.2022	Changes
			abs.
Operating expenses/Operating income (Cost/Income ratio)	55.2%	56.2%	-1.0%
(Operating expenses + Banking-related expenses)/Operating income (Cost/Income ratio)	57.6%	59.1%	-1.5%
Net interest income/Operating income	61.7%	56.3%	5.4%
Result from operations/Operating income	44.8%	43.8%	1.0%
Current result after taxes/Equity (9)	10.0%	8.7%	1.3%
Profit for the year/Equity (9) (R.O.E.)	21.6%	7.8%	13.8%
Current result before taxes/Total assets (R.O.A.)	0.9%	0.8%	0.1%

	31.12.2023	31.12.2022	Changes
			abs.
Net bad loans/Loans to customers	0.4%	0.5%	-0.1%
Net non-performing loans/Loans to customers	1.7%	1.7%	0.0%
% Cov erage of bad loans	69.6%	67.3%	2.3%
% Cov erage of bad loans before write-offs	69.9%	67.6%	2.3%
% Total cov erage of non-performing loans	48.8%	49.6%	-0.8%
% Cov erage of non-performing loans before write-offs	49.0%	49.9%	-0.9%
% Cov erage of performing loans	0.97%	0.88%	0.09%

1. Consolidated equity ratios calculated for Banco Desio. The ratios referred to the prudential supervisory scope of Brianza Unione at 31 December 2023 are: Common Equity Tier1 12.3%; Tier 1 13.2%; Total Capital Ratio 15.0%.
2. Equity ratios at 31.12.2023 are calculated in application of the transitional provisions introduced by EU Regulation 2017/2395; ratios calculated without application of these provisions are as follows: Common Equity Tier1 17.0%; Tier 1 17.0%; Total capital ratio 17.7%.
3. net of the result for the period.

9