Page 1

novobanco GROUP ACTIVITY AND RESULTS FIRST NINE MONTHS 2021 PRESS RELEASE Lisbon , 28 October 2021 ( unaudited financial information ) " It is the third consecutive quarter of positive results . We are on course for profitability , growth and prepared to support companies and the Portuguese economy . This turnaround is also based on a new brand image . The positive results demonstrate a sustainable business growth with commercial banking income up 6.8 % , while operating costs are down 3.9 % . " António Ramalho , CEO HIGHLIGHTS THIRD QUARTER OF POSITIVE PROFITABILITY • • • novobanco announces third consecutive profitable quarter with net profit of € 154.1mn in the 9M21 ( vs - € 853.1mn in 9M20 ; 1Q21 : € 70.7mn ; 2Q21 : € 67.0mn ; 3Q21 : € 16.4mn ) . This performance includes one- off negative effect of - € 73.5mn ( in 3Q21 ) from the liability management exercise ( “ LME ” ) , which will generate future savings ; Net interest income and fees and commissions of € 213.2mn in 3Q21 increased by 7.3 % and 5.8 % YoY , respectively , which contributed to the 6.8 % YoY improvement in commercial banking income ( 1Q21 : € 208.5mn ; 2Q21 : € 216.3mn ; 3Q21 : € 213.2mn ) . The improvement in net interest income reflects the reduction in average deposit rates , the lower cost of long - term financing and the maintenance of the pricing discipline ; The Bank's core operating income ( commercial banking income - operating costs ) increased to € 332.3mn ( + 18.9 % ; + € 52.9mn YoY ) , driven both by improved commercial banking income and lower operating costs ( -3.9 % ; - € 12.4mn YoY ) ; Further improvement of Cost to Income , excluding markets and other operating results , reaching 47.9 % in the period ( 9M20 : 53.2 % ; FY20 : 52.2 % ; 1H21 : 48.1 % ) ; Impairments for credit totalled € 115.0mn , including € 40.2mn impairments for Covid - 19 related risks , a YoY reduction of -70.0 % or - € 268.3mn . The cost of risk year to date was 61bp , or 40 bps excluding the impairments related with Covid - 19 . 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 loan portfolio ; Total customer funds increased by + 3.2 % YTD , with customer deposits increasing by 1.6 % ( + € 415mn ) , reflecting the continued confidence of novobanco clients ; Continuous investment in the business , to provide a unique omnichannel customer experience , with the implementation of a new distribution model and the execution of digital transformation initiatives . Growth in the digital segment with 53.5 % of active digital customers ( + 6.5 % YoY ) ; Continued reduction of the non - performing loans ( NPL ) ratio to 7.3 % ( Dec / 20 : 8.9 % ) , while increasing the coverage ratio to 81.5 % ( Dec / 20 : 74.1 % ) , demonstrating the continued de - risking of the balance sheet reflecting progress towards European average NPL ratio in the medium - term . 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