1 / 33

NEW EUROPE: UCIs SECOND HOME MARKET Paolo Fiorentino Head of New Europe Division

NEW EUROPE: UCIs SECOND HOME MARKET Paolo Fiorentino Head of New Europe Division. ING EMEA Financials Conference 2004 London - April, 20 th 2004. AGENDA. UCI Group and New Europe Division Highlights Why New Europe Strategy and Business Model Recent Results and 2004 Outlook.

grady-yang
Télécharger la présentation

NEW EUROPE: UCIs SECOND HOME MARKET Paolo Fiorentino Head of New Europe Division

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. NEW EUROPE: UCIs SECOND HOME MARKETPaolo FiorentinoHead of New Europe Division ING EMEA Financials Conference 2004 London - April, 20th 2004

  2. AGENDA UCI Group and New Europe Division Highlights Why New Europe Strategy and Business Model Recent Results and 2004 Outlook

  3. UCI AT A GLANCE FY2003 KEY FIGURES MKT CAP. Euro 25.4 bn1 NET INCOME Euro 1,961 mln REVENUES Euro 10,465 mln TOTAL ASSETS Euro 238 bn DIRECT DEPOSITS Euro 135 bn BRANCH NETWORK 4,6373 ROE2 17.7% C/I RATIO 54.5% 1 As of 15 April 2004 3 KFS: 100% 2 Calculated on end of period net equity, excluding 2003 net income

  4. TODAY THE NEW EUROPE DIVISION ACCOUNTS FOR 16% OF THE GROUP’S TOTAL REVENUES Weight on 2003 Group revenues pre Corporate Centre and elisions 44.6% 29.6% 10.1% 15.7% Corporate division Private & AM division New Europe division Retail division Pekao Zagrebacka Clarima UBM Pioneer Bulbank UBCasa Xelion BMC KFS Locat UniBanka UC Romania • Branches (Dec 2003) • o/w Italy • o/w New Europe • o/w other countries • 4,637 • 3,275 • 1,355 • 7 • Employees (Dec 2003) • o/w Italy1 • o/w New Europe • 70,851 • 40,982 • 29,869 Zivnostenska 1 Including other countries ex-New Europe

  5. Warsaw Prague Bratislava 40.1% 26.5% Zagreb Bucarest Sofia 6.6% Istanbul 18.4% 2.7% 1.5% UCI ACQUIRED A LEADING ROLE IN NEW EUROPE BEING AMONG THE TOP PLAYERS IN THE MOST RELEVANT MARKETS Group Pekao - Poland UniBanka - Slovakia 77.1%, acquired in October 2000 53.0%, acquired in May 1999 Total assets (Euro mln) Market share on Loans Market share on Deposits Net income (Euro mln) Branches 940 6% 4% 7 68 Total assets (Euro mln) Market share on Loans Market share on Deposits Net income (Euro mln) Branches 12,915 11% 15% 195 801 UniCredit – Romania 99.9%, acquired inMay 2002 Zagrebacka Group-Croatia Bosnia-Herzegovina 81.9%, acquired in March 2002 Total assets (Euro mln) Market share on Loans Market share on Deposits Net income (Euro mln) Branches 174 2% 1% 3 28 Total assets (Euro mln) Market share on Loans Market share on Deposits Net income (Euro mln) Branches 7,627 25% 31% 114 193 Bulbank - Bulgaria 85.2% acquired in October 2000 Total assets (Euro mln) Market share on Loans Market share on Deposits Net income (Euro mln) Branches 1,444 10% 18% 47 91 Pioneer Zivnostenska Banka Czech Rep. Total AuM in New Europe of Euro 2.3 billion (as at 31.12.03) Koç Fin. Serv. - Turkey 97.7%, acquired in February 2003 50%, acquired in October 2002 Total assets (Euro mln) Market share on Loans Market share on Deposits Net income (Euro mln) Branches 5,226 4% 5% 116 148 Total assets (Euro mln) Market share both on loans and on dep. Net income (Euro mln) Branches 1,492 2% 6 26 3.7% End of 2003 data Other presences: Pekao Ukraina, Koc Azerbaijan Weight of the bank Total Revenues on Division Total Revenues – only UCI’s portion; balance due to Demir Romlease,Demir Securities, ZBT, ZBAM, and Xelion Poland

  6. AGENDA UCI Group and New Europe Division Highlights Why New Europe Strategy and Business Model Recent Results and 2004 Outlook

  7. NEW EUROPE: A LARGE MARKET WITH HIGH GROWTH POTENTIAL Weight of country’s GDP on Total NE area GDP in 2003 (%) Total EU NE(12) Year 2003 data Turkey 28.9 Population, mln 176 552 377 • 47% of current EU population • 8% of EU GDP 25.5 Poland GDP, Euro bn 728 10,035 9,307 Czech Rep. 11.0 24,686 4,135 18,179 Per Capita GDP, Euro Hungary 10.3 6.9 Romania 17,919 561 18,480 Loans +Deposits, Euro bn Slovakia 4.0 193% 70% 183% Loans+Deposits/GDP % 3.4 Croatia Slovenia 3.3 GDP Growth 4.4 Bulgaria 3.9 2.4 3.5 3.8 2.8 2.8 Baltics 4.4 1.9 NE GDP (bn) 1.6 728 0.9 0.4 • UCI is present in the most relevant NE countries (82% of GDP in the area) 2000 2001 2002 2003e 2004-06** New Europe Excl Turkey EU* Note: NE (12) including all countries which already started a more or less advanced process for EU convergence. In particular, those set for enlargement in May 2004, plus Bulgaria, Romania, Turkey and Croatia. *EU only for this figures is referred to EU12; **2004-2006 CAGR

  8. STILL UNDERDEVELOPED RETAIL MARKET BANKING PENETRATION in 2003 Breakdown of retail financial assets (Loans+Deposits)/GDP Share loans retail over total loans 9% 193% 7% 50% Life Insuran. 34% 11% 33% 70% 18% Pension Funds 73% 15% Mutual Funds New Europe1 EU EU New Europe1 33% Retail Bank Deposits Non Interest Income/Total revenues in 2003 (%) Cards per ths inhabitants2 New Europe4 EU3 1,280 54.3 • Lower weight of Asset Management, expected to partially substitute deposits • Mortgages and consumer credit expected to be the key retail products 35.6 349 UCI’s 3 Italian Banks UCI’s NE banks New Europe1 EU 1 Poland, Hungary, Slovenia, Czech Rep., Slovakia, Estonia, Latvia, Lithuania, Bulgaria, Romania, Croatia, Turkey, 2 2001 figures 4 Countries with UCI’s presence 3 2001 data considering France, Germany, Italy, Spain and UK as proxy for EU

  9. DECREASING RISKS AND GROWING STABILIZATION Countries with UCI presence EU entry date Moody’s Rating Upgrade Apr 03-Mar 04 Spread SUEMI* 31 Mar 04 • NE declining risk represented by fast decreasing country spread compared to Euro area yield curve May 2004 A3/stable 13.43 SK May 2004 A1/stable - CZ May 2004 A2/stable 44.09 PL 2007 Ba2/stable ++ 131.21 BG 20071 Baa3/stable 107.10 HR 2007 Ba3/stable + 169.04 RO Not defined yet B1/stable 248.80 TK *Spread over Euro yield Interest Rates Curve - SUEMI

  10. AGENDA UCI Group and New Europe Division Highlights Why New Europe Strategy and Business Model Recent Results and 2004 Outlook

  11. NEW EUROPE DIVISION: STRATEGIC OBJECTIVES • Clear N.1 Banking Group in New Europefor profitability, value creation, cost/income and AUMs • Different strategic focus with: • “Leading Banks” in 3-4 countries: N.1 player in the market, focused on constant improvement of bottom line while maintaining market shares and fulfilling their institutional role within local communities • “Emerging Leaders” in 3-4 countries: banks focused on growth through enlargement of Golden Customer’s base (customer acquisition program) with final goal of being in the “top 5” in the market • Future growth driven mainly by organic growth (with some potential acquisitions) • Best risk manager in the New Europe region • Focus on building a long term sustainable franchise and on assuring higher customer loyalty, through a superior quality of services • Possible completion of geographic coverage in New Europe, also leveraging on “managerial hubs” (eg. Zaba, Pekao)

  12. UCI’s COMMERCIAL PRESENCE IS RELEVANT IN THE REGION: 1.355 BRANCHES IN 8 COUNTRIES AND ALMOST 18,300 FRONT OFFICE STAFF … Slovakia FO staff ~600 Branches 68 Poland FO staff ~11,800 PFAs¹ ~ 125 Branches 801 Romania FO staff ~350 Branches 28 Czech Republic FO staff ~400 Branches 26 Pekao Bulgaria FO staff ~950 Branches 91 Zivno UniBanka UCR Croatia & Bosnia Herzegovina FO staff ~2,400 Branches 193 Bulbank Turkey FO staff ~1,750 Branches 148 KFS • 18,300 Front-office staff • 1,355 Branches 1 79 operative PFAs + 45 PFAs on training in Xelion Polska

  13. … SUPPORTED BY SPECIALISED SERVICE MODELS BY SEGMENT SERVING AROUND 6,6 MILLION CLIENTS IN THE AREA • Each Bank has a specific divisionalised organisation: • Pekao has 4 business divisions (Family, VIP-SME, Private, Corporate) • KFS and Zivno have 3 business divisions (Retail, Private, Corporate) • Zaba, Bulbank, UCR and UniBanka have 2 business divisions (Retail, Corporate) Family Banking SB/Affluent Private Corporate ~1 mln Golden clients ~60.000 ~5,5 mln N° of Clients N° of dedicated Salesforce 14.200 1.100 • Accumulation plans • Pension Funds • Packages • Credit cards • Mortgages • For Affluent: AUM, Life insurance, Packages, Credit cards Mortgages • For SB: Packages Lending • Cash Management • Trade finance • Structured and Project Finance • Leasing • AUM • Packages • Credit cards Target Products

  14. KNOW HOW TRANSFER THROUGH CROSS BORDER PROJECTS AND UCI MANAGEMENT’S COMMITMENT (PARTNERSHIP COMMITTEE) Projects People • A team of ~45 expatriates covering key positions in 7 countries (Commercial and Control functions) • A team of ~70 people in NE Division supporting the banks in their key strategic projects • Planning & Development • Retail & Corporate • Credit risk & processes • Organisation & HR • IT Strategy • Legal issues • A group of ~20 people in UCI Holding dedicated to NE banks • Around 100 projects launched during 2003 in NE banks • Cross Border projects UCI/New Europe • Cross border transfer of niches of excellence in New Europe banks • A variety of areas of intervention • Launch of new products • Client acquisition • Network expansion • Sales performance culture • Credit processes and tools

  15. AGENDA UCI Group and New Europe Division Highlights Why New Europe Strategy and Business Model Recent Results and 2004 Outlook

  16. RESULTS SO FAR Total Revenues Operating Income Net Profit for the Group (Euro mln) (Euro mln) (Euro mln) CAGR +19.8% CAGR +30.8% 1,619 CAGR +69.7% 307 715 786 244 37 1999 2003 1999 2003 1999 2003 ROE Cost/Income Branches +635 Branches +13.2 pp -13.1 pp 17.4% 69.0% 1,355 55.9% 720 4.2% 1999 2003 1999 2003 1999 20031 1 Including KFS 100% Perimeter for 1999: Group Pekao only; for 2000 and 2001: Group Pekao, Bulbank, Unibanka and Splitska (sold in Apr. 02); for 2002: Group Pekao, Zagrebacka Banka, Bulbank, UniBanka, UniCredit Romania; for 2003: Group Pekao, Zagrebacka Banka, KFS, Zivnostenska, Bulbank, UniBanka, UniCredit Romania At Current FX

  17. 2003 RESULTS SHOW A GOOD GROWTH OF NET INCOME THANKS TO HIGHER NET COMMISSIONS, COST CONTROL AND LOWER PROVISIONS NEEDS FY03 (Euro mln) y/y % ch. At unchanged FX • NET INCOME FOR THE GROUP up 45.5% y/y • Net interest income -3.6% y/y mainly hit by Pekao results, acceleration in 4Q03 (+3.7% on 3Q03) primarily thanks to Pekao and Zaba • Higher growth in net commissions benefiting from development of AUM3 products (stock: +54.1% y/y) • Operating costs +3.6% linked to IT investments and variable staff compensation • Decreased cost of risk (117 bp), improved NPL and Doubtful loans coverage ratios • VOLUMES: • Customer loans up 3.2% supported by higher growth in Croatia, Bulgaria and Turkey negatively impacted by Poland • Further switch from deposits to AUM Total revenues -3.2 1,619 -3.6 - o/w net interest income1 1,036 - of which commissions +26.9 418 Operating income 715 -10.7 Net write-downs of loans -139 -61.5 Attr. Net Income 307 +45.5 ROE 17.4% +3.8 pp Cost of Risk 117 bp -72 bp2 Cost/Income +3.7 pp 55.9% FY03 (Euro mln) y/y % ch. At unchanged FX Loans 11,848 +3.2 Deposits 20,555 +0.5 AUM3 +54.1 2,346 1 Excluding dividends 2 Deducting extraordinary provisions from 2002 stated figure ITAS 3 New Europe business area of Pioneer

  18. NE BANKS POSITIONING IN KEY RETAIL PRODUCTS IS IMPROVING … Achievements/Positioning Key issues • Leverage on Pioneer expertise • Segment-tailored AUM products • Development of innovative structured products with TLab and UBM • Leaders in MFs: Pekao ~ 30% market share1, Zaba ~49% and Bulgaria ~40%,Other NE banks are in top five competitors list2 • Leading position in Structured Time Deposits • Bulbank and Zaba: first movers in structured products (Bulbank also in MFs) AUM • Enrichment of product offer (Mortgage + Life Insurance) • Cross selling commercial campaigns (Pekao) • Development of cooperation agreements with external partners (real estate agents) • Sales process optimization: fast and easy process, highly skilled salesforce and dedicated location (Pekao, Bulbank, Unibanka) • High credit quality, thanks to the implementation of application processing system and the adoption of sound credit policies • Launch of mortgages in UCR Mortgages 1 Pioneer Market Share in Poland 2 In Romania MFs are going to be launched

  19. … THANKS TO A NUMBER OF PRODUCT INNOVATION PROJECTS RUNNING … Key issues Achievements/Positioning • Completion of distribution agreements (Allianz1, Aviva2) and product innovation (Unit Linked for Bulbank and Zaba as first movers in 2004) • Zaba and Pekao leaders in 2003 new business (life) to be considered good starting point Bancassurance • Implementation of complete product offer based on client segmentation across NE Banks • New distribution channels • Adequate risk management and organisation • UCI / NE Banks treated as Key Global Client by MasterCard • Launch of revolving cards in all NE Banks • Launch of card business in UCR • Instalment payment option launched for all KOC Credit Card (400 K – EOP 2003) • Massive Visa Electron issuing at ZABA (500 K - in 9 months) Cards (Debit and Credit) • First movers in launch of dedicated packages • Specific credit product offer • Dedicated SB leasing offer in Pekao and Zaba • Implementation of CPA tool - Client Profile Assessment • Dedicated service model with Relationship managers with micro/ small business portfolios assigned • Joint service model (SB + owner) to cross capture opportunities Small Business 1Life: Bulgaria, Croatia, Poland (pre JV agreement), Slovakia,Turkey. Non Life: Romania 2 Life: Czech Republic.

  20. … ALSO IN CORPORATE BANKING Key issues Achievements Cash Management • Specialised cash management units in all NE banks: • Focus on upgrading the product shelf • Introduction of new value added products (cash pooling, direct debit, etc.) • Same training to specialists for supporting sales • Offer completed and marketed • Sales started • KPIs inserted in all RM targets • Interfactoring agreement with UCI Factoring for cross-border factoring • Refocusing of sales force for trade finance products • Successful completion • Volumes increased in Zivno and Koc • Sales force refocus already completed in Pekao Trade finance • Strenghtened teams in Bank Pekao, Zaba and Koc • Prestigious transactions already won in Poland (KHGM, Simoldes, SSN, others) and in Croatia • Increasing capabilities in Project Finance in key markets (Poland, Croatia, Bulgaria, Turkey) Structured and Project Finance

  21. Ow: Pekao 4.7 12.9 +0.9 +1.6 2.2 4.6 Ow: Zaba -0.7 -0.8 CAREFUL RISK MANAGEMENT 2002-2004 CREDIT EXCELLENCE PROGRAM, GOOD RESULTS IN 2003 Net Doubtful/Loans % Dec03 Coverage ratios Cost of risk1 Net NPL/ Loans % Dec03 ch. on Dec02 (pp) ch. on Dec02 (pp) (bp, annualised) At unchanged FX 81.3 79.9 64.1 Total NE 62.6 -0.2 3.3 -0.1 8.6 -38.1% 1892 117 2002 2003 • Total provisions on Performing Loans to 168 mln (+82.8% on Dec02) with an increase in the coverage ratio (+0.6 pp to 1.5%) On Gross Doubtful Loans On Gross NPLs 2002 2003 • Learning organisation (3,800 people involved throughout New Europe) • 5 credit modules designed, set-up and implemented (corporate underwriting, management and workout, individuals and small business underwriting) • UCI Group credit corporate governance defined and introduced (i.e. large exposure management, credit tableau de bord, …) • Skill assessments and training prepared and launched for roles involved in credit activities • Tactical actions: credit diagnostics and contingency plan actions 1 Calculated as Net Loan Loss Provisions on Net customers Loans at period-end 2 Data obtained deducting extraordinary provisions from stated figure

  22. 2004 DIVISIONAL OUTLOOK IS VERY POSITIVE WITH SIGNIFICANT REVENUE GROWTH EXPECTED MAINLY DUE TO AN INCREASE IN COMMISSIONS • Further macroeconomic improvement all over the New Europe area • Reduction of country risk • Significant revenue growth with strong push on net commissions • Volumes growth both in loans and in Assets under Management • Improvement in cost/income ratio and bottom line results • Implementation of relevant strategic projects to support future growth • Salesforce management program • Client acquisition and development project throughout New Europe • Network expansion in Turkey and Czech Republic • Customer and employee satisfaction project in Poland and Croatia • Reengineering projects to improve operational efficiency • Credit learning program • Decrease in cost of risk, with improvement of NPL ratio and increase of the coverage ratio

  23. Annex

  24. UNICREDITO ITALIANO: FY03 CONSOLIDATED INCOME STATEMENT y/y % ch. % ch. on 3Q03 % ch. on 4Q02 (Euro mln) FY03 4Q03 Net interest income (incl. div.) -3.8 +3.1 -4.6 5,088 1,235 - of which Dividends +35.6 n.m. +68.0 293 84 Net non interest income +7.7 +0.2 +7.0 5,377 1,306 10,465 2,541 Total revenues +1.8 +1.6 +1.0 Administrative costs (incl. depr.) +1.6 +10.3 +2.7 -5,703 -1,510 4,762 1,031 +2.0 -8.9 -1.2 Operating income Goodwill depr. +7.8 -11.8 +1.7 -264 -60 Provisions on loans -2.5 n.m. +32.5 -1,001 -440 Other net provisions* -49.0 n.m. -75.4 -236 -76 Net extraordinary income -41.1 n.m. -27.2 215 160 Taxes +4.0 -37.7 +18.2 -1,386 -216 -129 -19 Minorities -22.3 -44.3 -34.0 1,961 380 Net income +8.9 -15.4 +8.0 * Net write-downs of financial investments, provisions for risks and charges and provisions to reserve for general banking risk

  25. NEW EUROPE DIVISION: RESULTS BREAKDOWN BY BANK (Euro mln) Group PEKAO (53.0%) UNI BANKA (77.1%) Group ZABA (81.9%) UniCredit Romania (99.9%) BULBANK (85.2%) KFS2 (50.0%) Zivno (97.7%) TOTAL1 (UCI stake) 1,042 Interest margin (incl. div.) 510 50 27 257 7 162 26 Net non interest income 577 344 37 13 108 10 46 16 1,619 853 87 40 365 17 208 43 Total revenues -904 -490 -34 -29 -201 -12 -94 -35 Operating costs (incl. dep.) -446 -243 -14 -13 -112 -6 -40 -15 - of which: Staff costs -336 -182 -15 -13 -65 -5 -40 -13 - of which: Other costs 715 363 53 11 164 5 114 7 Net operating income -177 -107 +6 -7 -27 -2 -39 -2 Net provisions -139 -103 +5 -5 -4 -1 -29 -2 - o/w: Net write-down of loans 427 195 47 7 114 3 58 6 Net income 307 104 40 5 93 3 58 6 Net income (UCI’s portion) ROE 17.4% 14.9% 20.2% 10.1% 21.7% 10.5% 28.6% 7.0% 55.9% 57.5% 39.1% 73.4% 55.1% 71.4% 45.1% 82.9% Cost/income 1 Balance due to roundings and other small companies Banks’ data net of consolidation adjustment 2 Consolidated with proportional method (50%) ITAS

  26. PEKAO 2003 KEY HIGHLIGHTS: IMPROVED PROFITABILITY THANKS TO HIGHER COMMISSIONS AND LOWER PROVISIONS NEEDS AND DESPITE PRESSURE ON NET INTEREST INCOME • MACROECONOMIC TREND IN POLAND: • Economic strenghtening (GDP+4.7% 4Q03/4Q02, +3.7% FY03/FY02) reverting the upward trend in NPLs ratio, started in 1996 • 150 bp cut of interest rate creating pressure on net interest income • Recovery in households savings and change in customer behaviour supported sale of mutual funds • IMPROVED PROFITABILITY thanks to commissions growth and reduced Cost of Risk • Net interest income down 19.0% y/y mainly impacted by decreased spread on deposits (from 2.6% to 1.7%) and debt securities (from 2.4% to 1.5%) • Net commissions up 30.5% y/y benefiting from increased AUM2 (stock +85.5%, mkt share +6.5 pp to 30.4%) and from quality upgrade of C/A • Increased coverage ratio on doubtful loans (64.5% in Dec03 from 62.1% in Dec02) and on NPL (82.3% vs. 81.4%) • SPECIAL PROJECTS: • Development of credit scoring system • New IT implementation allowing further optimisation of staff level: headcount -6.4% to 16,641 and -6.3% to 15,826 at bank level • VOLUMES: • Customer loans down 12.6% y/y: decreased corporate lending and FX mortgages partially counterbalanced by a good increase in local currency retail mortgages flow FY03 (Euro mln) y/y % ch. At unchanged FX Total revenues -16.3 853 -19.0 - o/w net interest income1 512 - of which commissions +30.5 234 Operating income 363 -34.5 Net write-downs of loans -67.1 -103 Attr. Net Income 104 +14.8 ROE 14.9% +2.2 pp Cost of Risk 198 bp -3.3 pp Cost/Income 57.5% +11.8 pp FY03 (Euro mln) y/y % ch. At unchanged FX Loans -12.6 5,192 Deposits 10,071 -5.2 AUM2 2,146 +85.5 Data net of consolidation adjustment 1 Excluding dividends 2 PPIM ITAS

  27. 2004 PRODUCT FOCUS, LEVERAGING ON ECONOMIC GROWTH, SALESFORCE AND BRANCH MODEL MACROECONOMIC SCENARIO 2004 PRODUCT FOCUS • Continued economic recovery: • GDP:+4.2% in 04E(+3.7% in 03) cagr 04/06 4.8% • Loans: +10.2% in 04E(+8.1% in 03) cagr 04/06 +9.8% • Deposits: +5.0% in 04E(+3.7% in 03) cagr 04/06 +6.5% • Push on mortgages: • Strong market growth +29% in 2004e • Shorter granting process, enriched product offer, new distribution channels through alliances • Selective focus on lending to SME and Mid corporate Evolving households preferences in terms of saving products (AUM/Total deposits1 from 10.3% in 2003 to 12.1% in 2004) • Leader in mutual funds: • Product enrichment, leveraging on Pioneer expertise • Increased client penetration and new clients acquisition • Accumulation Plans (PAK) offer Stabilisation of interest rates, still with pressure on margins • Focus on commissions generating products: • Massive charge/credit cards campaign • Continued upgrade of current accounts • New cash management offer Positive impact of economic recovery on loan portfolio quality and on cost of risk • Decreased NPL ratio • Improvement in NPL portfolio management and workout activity 1 Including AUM

  28. GOOD RESULTS IN 2003 FOR ZABA, KOC AND ZIVNO; PROMISING FORECAST FOR 2004 2003 RESULTS3 2003 MAIN ACTIONS 2004 STRATEGIC PRODUCTS AND FORECAST • Strong increase in operating income (+28.2% y/y) • Good cost control (-2.7% y/y) • Higher loans mkt sh. (to 25.2%, +1.2 pp), mkt sh. in AUM at 49% • Cross selling and retention activities • Further efficiency improvement after the merger of VABA1 in ZABA and of the two Bosnian banks • Market Shares consolidation • Divisionalisation and segment based product innovation • Credit process optimisation • Preparation activity for Integration of VABA1 in Zaba Zagrebacka • Implementation of new organisational model and reinforcement of management team • Improved service model and credit process • Strong contribution of net commissions (+79.2% y/y) driven by AUM (mkt sh. 13%) • Significant revenue growth (+45.8% y/y) • Costs under control (-1.2% y/y) • Strong acquisition of new clients • Network expansion (+20 branches) • Launch of new products (C/A packages, Pioneer funds, PAC2) • Increase in net commissions with strong push on AUM, package products and credit cards KFS • Strong acquisition of new clients • Network expansion: around +100% in n° of branches • Improvements in efficiency • Increase in market shares • Increase in revenues with flat costs • Strong improvement in bottom line results • Repositioning of local Brand 1 Varazdinska Banka 3 at unchanged FX excluding for KFS Data net of consolidation adjustment ITAS 2 Capital Accumulation Plans

  29. TREND IN VOLUMES AND COMMERCIAL INDICATORS VOLUMES (at unchanged FX) Loans (Euro bn) Deposits (Euro bn) Assets under Management1(Euro bn) +3.2% +0.5% +54.1% +1.0% +1.7% +14.7% 2.3 11.8 11.7 20.4 2.0 20.6 11.5 20.2 1.5 Dec02 Jun03 Dec03 Dec02 Jun03 Dec03 Dec02 Jun02 Dec03 COMMERCIAL INDICATORS Branches2 Front Office Staff/ Tot. Staff2 Active Customers2 (mln) 6.6 6.0 61.1% 1,355 1,347 other 59.7% golden 15% 15% Dec02 Dec03 Dec02 Dec03 Dec02 Dec03 ITAS 1 New Europe business area of Pioneer 2 KFS is included at 100%

  30. 2003 SUCCESSFUL COMMERCIAL ACHIEVEMENTS SUPPORT THE REVENUE GENERATION IMPROVEMENT IN MARKET SHARES PEKAO BULBANK • Corporate Loans +61% on Dec02, mkt share +1.3 pp (to 11.7%) • Flow of new mortgage +68.5%(to 10.3 mln) • +66.000 clients (+24.3% on Dec02) • Euro 1.7 bn AUM in Mutual Funds1(+112% on Dec02) • Market Share in Mutual Funds2 +6.5 pp (to 30.4%) • Euro 154 mln AUM in Pension Funds (+39.6% on Dec02) • Euro 95 mln AUM in Accumulation Plans UNIBANKA • Euro 12.2 mln AUM (from 3.1 mln in 2002) • +30% Affluent clients (to 19,500) • +40 bp mkt share on Deposits ZABA • Euro 82 mln AUM in Mutual Funds (+36.8% on Dec02) • Euro 10 mln in Life Insurance (+97.4% y/y) • +110,000 C/A in 2003 (to 1.7 mln) • Flow of new mortgage +33.8% (to 340 mln) • Total loans mkt share +1.2 pp (to 25.2%) UCROMANIA • Loans +105% (to Euro 110 mln) • Deposits +110% (to Euro 99 mln), mkt sh. +50bp (to 1,1%) • New retail C/A +90% (to 13,000) KFS ZIVNO • Euro 1,6 bn AUM (+91.8% on Dec02) • +1,000 new active Private clients (+21.6%) • 1° in leasing, among top 3 in AM • Credit and Debit Cards +33% 1 Mutual funds distributed by Pekao 2 Total PPIM Mutual Funds

  31. PGAM GROUP: QUARTERLY EVOLUTION OF 2003 NET SALES AND DEC02-FEB04 AUM TREND AuM as of 31.12.2002 AuM as of 30.12.20031 AuM as of 29.02.20042 2003 Quarterly Net Sales (Euro mln) 1Q03 2Q03 3Q03 4Q03 Italy 80,759 632 1,253 -126 372 90,237 85,876 3,741 226 566 253 915 6,170 5,878 International (ex-Italy)3 US 17,665 962 1,149 703 993 23,480 21,884 US in USD 18.525 1,035 1,299 794 1,177 29,157 27,639 1,522 284 362 331 69 2,659 2,347 New Europe 103,687 2,104 3,330 1,161 2,349 122,546 115,985 TOTAL PIONEER 1,517 107 191 256 411 2,710 2,449 Alternative Investments3 More than 80% through UCI NE Banks 1 Balance due to market and FX effects 2 Provisional figures including ING (not included in 2003 data). ING AUM as of 29.2.2004: 2,867 mln 3 Including Momentum

  32. THE 2002-2004 “REACHING CREDIT EXCELLENCE IN NE” PROGRAM: DECREASING COST OF RISK IN EACH PHASE OF THE PROCESS FOR ALL THE CUSTOMER SEGMENTS Underwriting Management Workout Cross-bank project • Electronic underwriting tool • Credit rating system 4. Credit management system 6. Workout systemt Corporate 8. Credit corporate governance 9. Credit Tableau de Bord 10. Learning organisation (3,800 people involved throughout New Europe) 3. Application processing system 5. Anomalies management system Small Businesses 7. Collection system Retail

  33. Module 2:Underwriting Module 1:Credit organization, strategy and policies • Provide a hands-on experience of UCIs most advanced credit underwriting methodologies and processes • Provide a broad perspective of the entire credit system, illustrating the logics behind the definition of credit strategies and policies Module 3:Specialized lending Module 5:Workout and debt restructuring • Provide an overview of the main specialized lending products and services Module 4:Credit monitoring and management • Illustrate UCI most advanced logics and methodologies for the workout of Corporate and Retail not performing loans • Provide an understanding of UCIs most advanced logics, methodologies and processes for Corporate and SB credit monitoring STRUCTURE OF THE REACHING CREDIT EXCELLENCE DIPLOMA

More Related