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NOVO BANCO GROUP ACTIVITY AND RESULTS FIRST QUARTER 2021 PRESS RELEASE Lisbon , 31 May 2021 ( unaudited financial information ) HIGHLIGHTS FIRST QUARTER OF POSITIVE PROFITABILITY • • • • • NOVO BANCO announces net profit of € 70.7mn in the first quarter of 2021 ( vs - € 179.1mn in 1Q20 ) with the conclusion of the restructuring plan in 2020 leading to a turn - around in profitability , despite the current pandemic ; Net interest income increased 12.0 % YoY , contributing to an improvement in commercial banking income ( 1Q21 : € 208.5mn ; + 5.3 % vs 1Q20 ) , as a result of the measures to reduce average deposit rates , lower cost of long - term financing and maintaining pricing discipline ; The Bank's core operating income ( commercial banking income - operating costs ) increased to € 105.8mn ( + 17.8 % ; + € 16.0mn YoY ) , driven by improved commercial banking income and lower operating costs ( -5.1 % ; - € 5.5mn YoY ) ; Cost to Income , excluding markets and other operating results , maintained its trajectory of improvement reaching 49.3 % in the period ( FY20 : 52.2 % ; 1Q20 : 54.7 % ) ; Impairments for credit totalled € 54.9mn , including € 21.8mn impairments for Covid - 19 related risks , a YoY reduction of -60.5 % or - € 84.0mn ; The cost of risk , excluding the impairments related with Covid - 19 accounted in the quarter , was 53bp . SOLID BUSINESS MODEL WITH RESILIENT LENDING AND DEPOSITS GROWTH • • Net customer loans at € 23.5bn , broadly stable across corporate ( adjusted for NPL disposal ) , mortgage and consumer books ; Total customer funds increased by € 356mn ( + 1.1 % YTD ) , with customer deposits increasing by 0.5 % ( € 141mn ) , reflecting the continued confidence of clients in NOVO BANCO ; Growth in the digital segment with 51 % of active digital customers ( + 5 % YoY ) and a significant increase in product units sold in digital , reaching 9 % share of digital sales ( excluding deposits ) ; Continued reduction of the non - performing loans ( NPL ) ratio to 8.0 % ( Dec / 20 : 8.9 % ) , as a result of Project Wilkinson signed in 1Q21 , while increasing a coverage ratio of 77.0 % ( Dec / 20 : 74.1 % ) , demonstrating the continued de - risking of the balance sheet and efforts to match the European average ratio in the medium - term . STABLE CAPITAL RATIOS AND LIQUIDITY RATIO • • The Bank is well positioned to support retail and corporate customers , with CET 1 ratio at 11.3 % ( total solvency ratio at 13.3 % ) , liquidity ratio ( LCR ) of 140 % and NSFR of 111 % . Disclaimer : During 2020 , NOVO BANCO transferred the Spanish Branch to discontinued operations , in line with the strategy to discontinue the Spanish business . Thus , for comparison purposes , 1Q20 is presented pro - forma . • With the completion of the restructuring process in 2020 , the 1Q21 results are disclosed only in a consolidated format . NOVO BANCO , SA I Av . da Liberdade , n . 195 Lisbon , Portugal I Share Capital : 5 900 000 000.00 euro Commercial and Tax identification number : 513 204 016 I LEI : 5493009W2E2YDCXY6S81 Email : investidor@novobanco.pt I investor.relations@novobanco.pt | Phone : ( +351 ) 21 359 73 90