1 / 56

UNICREDITO ITALIANO GROUP 1 st Half 2004 Results Alessandro Profumo - CEO

UNICREDITO ITALIANO GROUP 1 st Half 2004 Results Alessandro Profumo - CEO. London - September, 14 th 2004. AGENDA. 1H04 Group Highlights Divisional Reporting Retail Division Corporate Division Private & AM Division New Europe Division. 2Q DELIVERY CONFIRMING STRATEGIC DIRECTION.

kimama
Télécharger la présentation

UNICREDITO ITALIANO GROUP 1 st Half 2004 Results Alessandro Profumo - CEO

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. UNICREDITO ITALIANO GROUP1st Half 2004 ResultsAlessandro Profumo - CEO London - September, 14th 2004

  2. AGENDA 1H04 Group Highlights Divisional Reporting Retail Division Corporate Division Private & AM Division New Europe Division

  3. 2Q DELIVERY CONFIRMING STRATEGIC DIRECTION • Continuous growth of lending activity, with market shares improvement in Retail and Corporate business and in Asset Management in Italy • Q/Q acceleration of Net Interest Income, supported by volume growth and pricing resilience • Net Commissions increase, even with a lower dependence from up-front • Reduction of flows of new doubtful loans and improvement in asset quality indicators • Growth of Net Income over the last two quarters

  4. NET INCOME UP 25.1% Q/Q BENEFITING FROM HIGHER CONTRIBUTION OF ALL REVENUE SOURCES. Y/Y DECREASE DUE TO DECLINE IN INTEREST RATES AND SLOWDOWN IN CORPORATE DERIVATIVES NET INCOME (Euro mln) ROE1 1,132 1,049 +25.1% 17.5% (-0.2 pp on Dec03) 583 466 -7.3% 380 1H03 1H04 1Q04 2Q04 4Q03 OPERATING INCOME (Euro mln) COST/INCOME RATIO 2,550 2,280 +13.1% 56.2% (+1.2 pp on Dec03) 1,210 1,070 1,026 -10.6% 1H03 1H04 2Q04 1Q04 4Q03 1 Calculated on end of period net equity excluding profit for the period

  5. GOOD IMPROVEMENT IN NET INTEREST INCOME (+1.7% Q/Q EXCL. DIVIDENDS) BOTH IN ITALY (BEST QUARTER SINCE 1Q03) AND IN NEW EUROPE, THANKS TO PRICING RESILIENCE … ITALY: TREND OF MARK-UP & MARK-DOWN NET INTEREST INCOME excl. Dividends Mark-up on short term(1) UBI vs. System, % 2.78% Avg. Euribor 2.46% 2.16% 2.14% 2.09% 2.09% 1,251 1,210 1,193 1,189 1,160 1,140 Mark-down(2) UCB vs. System, % Italy 988 925 910 886 929 940 New Europe 263 268 250 254 260 270 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 (1) Mark-up = Interest rate on short term loans - Euribor 1M. EOP data (2) Mark-down = Euribor 1M - Interest rate on deposits in current accounts. EOP data

  6. … AND GOOD VOLUME GROWTH CONTRIBUTED BY ALL DIVISIONS TOTAL CUSTOMER LOANS1 Breakdown By Division (bn) % ch. on Mar04 % ch. on Dec03 % ch. on Jun033 Jun04 Retail 52.4 +4.6 +7.5 +13.4 Corporate 63.0 +3.1 +0.3 +10.2 New Europe 12.7 +5.5 +7.6 +4.7 Other 3.1 -3.0 +21.3 -5.2 TOTAL GROUP 131.3 +3.8 +4.2 +10.5 • Retail Division: good performance, thanks to continued growth in households’ mortgages (+11% on Dec03) and to the pick-up of Small Business lending (+4.2% on Dec03) • Corporate Division: growing 2Q04 mainly driven by UBI, with a strong contribution of m/l term lending, up 4.8%2 on 1Q04 • New Europe Division up 4.1% at unchanged FX on Dec03, positive contribution of Pekao (+7.6% on Dec03, +3.5% at unchanged FX) 1 Excl. Repos 3 Incl. ANBI 2 Source: Bank of Italy Matrix

  7. UCI LOAN GROWTH IN ITALY OUTPERFORMS INDUSTRY WITH A MAJOR SHIFT TOWARDS M/L TERM CONTINUED MARKET SHARE GAINS IN 2003 Total Loans1, y/y % ch. Medium/Long Term Loans1, y/y % ch. UCI2 Italian industry UCI 2 Italian industry Widening of UCI positive gap vs industry on y/y total loans growth from Sep 03 (from +0.8% in Sep 03 to +6.4% in June 04) Constant increase in UCI total loans market share (+89 bp from 9,99% in Mar03 to 10,88% in Jun04) with a focus on m/l term, improving 29 bp Jun04 vs Mar04 UCI2 Market Share On total loans 1 On M/L term loans 1 1Source: Bank of Italy Matrix (Total Loans net of NPLs and Repos) 2 Proforma incl. ANBI

  8. NET COMMISSIONS INCREASE 7.1% ON 1Q04 (+2.0% 1H04/1H03) MAINLY DRIVEN BY HIGHER COMMISSIONS FROM LOANS GRANTED & RECEIVED (+23.4% ON 1Q04) • Net commissions (excluding up-front) continue to growth (+7.8% on 1Q04) benefiting from: • Corporate Finance (+19.7 mln on 1Q04) activity • Foreign Trade Services (+10.4 mln on 1Q04) • Trend of Up-front fees (+3% on 1Q04) due to higher sales of Bancassurance products; confirmed strategy of reduced emphasis onstructured bonds • Net commission mix further improvement (decreasing weight of up-front on total to 13.1% in 2Q04) • Commissions from Mutual Funds up 11.3% (1H04/1H03) driven by higher stock of AUM NET COMMISSIONS 1H04/1H03: +2.0% +7.1% 857 839 855 830 798 781 +7.8% Other 743 689 686 660 679 627 179 171 154 151 112 109 Up-front1 2Q04 1Q03 2Q03 3Q03 4Q03 1Q04 Weight of Up-front on Total 19.7% 21.3% 18.2% 20.0% 13.6% 13.1% 1 Related to UniCredit Banca and UniCredit Private Banking data restated on management accounts

  9. 4.9% AUM GROWTH VS DEC.03 DRIVING A STRONG INCREASE OF MARKET SHARE IN MUTUAL FUNDS IN ITALY; EXCELLENT PERFORMANCE OF HEDGE FUND NET SALES Focus on Sales of AM products UCI TOTAL AUM • MUTUAL FUNDS (Italy):in a very difficult environment for Mutual Funds in Italy, UCI strongly outperformed its main competitors for net sales in the first 8 months of 2004 … +4.9% vs Dec. 03 (bn) 123.1 123.0 +0.1% 117.4 +4.8% +11.8% vs Dec. 03 34.4 35.0 US, New Europe & International +10.1% +1.5% 31.3 UCI (Total)2 ITALIAN SYSTEM +578 22.0 +7.0% +2.9% 22.6 20.6 -118 Insurance UCI (ex ING)2 23.1 +1.6% -2.0% 22.6 22.7 Segregated Accounts +2.3% vs Dec. 03 Mutual & Hedge Funds1 43.5 +1.5% -1.4% 42.8 42.9 -5,264 … being the only Mkt. Share net gainer among the big players Dec. 03 Mar. 04 Jun. 04 Italy US, New Europe & Intl. DEC.03 MAR.04 JUN.04 AUG.04 ASSET MIX (PGAM) UCI 13.39% 13.49% 13.51% 13.61% Avg.2003 Avg.1Q04 Avg.2Q04 Equity + Hedge 27.3% 29.8% 30.0% • HEDGE FUNDS (Worldwide):record net sales in 1H04 (1,123 mln) coupled with a strong 2Q/1Q acceleration (699 mln in 2Q vs 424 mln in 1Q, +65%) Bond + Liquidity 62.7% 60.7% 60.9% Balanced + others 10.0% 9.5% 9.1% (1)Plain vanilla Mutual and Hedge Funds distributed in Italy (Total AuM in Mutual and Hedge Funds in Italy, including Mutual Funds in Segregated Accounts and Unit Linked, 70.0 bn as at 30.6.2004 vs 68.7 bn as at 31.12.2003, +1.9% - Source: Assogestioni) (2)UCI’s Total Net Sales of Mutual Funds were affected in the first 8 months of 2004 by outflows mainly deriving from ex-ING PFAs who did not sign Xelion’s mandate (-696 mln)

  10. INCOME FROM FINANCIAL TRANSACTIONS: STRONG REDUCTION OF THE Y/Y GAP VS 2003 (FROM -33% AS OF MARCH TO -25% AS OF JUNE), MAINLY DRIVEN BY RECOVERY OF CORPORATE AND DEVELOPMENT OF INSTITUTIONAL DERIVATIVES INCOME FROM FINANCIAL TRANSACTIONS • Acceleration of Corporate Derivatives (+31.7% 2Q/1Q), posting the best result in the last 4 quarters … (mln) 436 • … and reducing the Y/Y gap vs 2003 (-48% as of Jun.04 vs –61% as of Mar.04) 349 295 292 Institutional Derivatives 263 51 • Further development of Derivatives for Institutional customers (72 mln, +14.3% 2Q/1Q) … 239 42 72 Corporate Derivatives 63 • … and recovery of Derivatives for Retail customers (33 mln in 2Q vs 25 mln in 1Q, +30%) 268 47 45 204 139 105 105 97 • Lower 2Q/1Q contribution of New Europe and Parent Company 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04

  11. +2.7% 2,923 +6.1% 1,505 2,846 1,418 220 Depr. & amort. +7.5% -2.7% 226 114 106 1,014 Other adm. expenses 981 +3.4% 539 +13.5% 475 +3.1% 1,689 1,639 +1.8% Personnel costs 852 837 1Q04 2Q04 1H03 1H04 OPERATING COSTS UP 2.7% 1H04/1H03. QUARTERLY TREND +6.1% IMPACTED BY OTHER ADMINISTRATIVE EXPENSES OPERATING COSTS BREAKDOWN (Euro mln) PERSONNEL COSTS 2Q/1Q increasing by +1.8% (+15.1 mln), but +1.0% at constant fx OTHER ADMIN. EXPENSES 2Q/1Q +13.5% (+64.4 mln; 59.5 at constant fx) primarily linked to an increase in: • advertising (+8.6 mln of which 4.7 in New Europe) • postal tariffs (+18.7 mln) • special projects in UCB (+8.4 mln) • costs directly linked to increased business and partially recovered with higher revenues (+4.7 mlni.e. indirect taxes and credit information and searches) DEPRECIATION 2Q/1Q +7.5% (+8 mln) mainly impacted by investments in new branches layout and increase in IT investments 1 Varadinska Banka

  12. NON OPERATING ITEMS IN 2Q CHARACTERISED BY HIGHER NET WRITE-DOWNS OF LOANS AND NET EXTRAORDINARY INCOME AND BY LOWER TAX RATE vs. 1Q • -246 mln net write-downs of loans up 54 mln vs. 1Q04 due to higher net write-downs in Corporate division+38 mln (mainly due to write-down on a specific position) and in Retaildivision+17 mln (mainly due to write-down of one significant position and to write-off of some other small positions) 1Q04 2Q04 1H04 2,280 1,070 1,210 Operating income -143 -71 -72 Goodwill amort. Net write-downs of loans -438 -192 -246 • Net write-downs of financial investments -1 mln • Provisions for risks & charges -26 mln -36 -9 -27 Other net provisions1 102 2 100 Net extraord. income • 110 mln release ofreserves previously created o/w 67 mln write-back of provisions created for fiscal purposes “tax cleared accounts” -631 -296 -335 Taxes -85 -38 -47 Minorities • Tax Rate at 34.7% vs. 37.0% in 1Q04 benefiting from lower taxes in New Europe (mainly one-off in Pekao), substantially stable on 2Q03 (34.6%) 466 583 1,049 Net Income 1 Net write-downs of financial investments, provisions for risks and charges and provision to reserve for general banking risks

  13. SIGNIFICANT Q/Q REDUCTION OF NET FLOWS OF NEW DOUBTFUL LOANS1 WITH A SLIGHT IMPROVEMENT OF MAIN ASSET QUALITY RATIOS: LOWER GROSS DOUBTFUL LOANS AND INCREASED COVERAGE RATIOS • Strong 2Q/1Q reduction of net flows of New Doubtful Loans1(372 mln in 2Q vs 642 mln in 1Q, -42.1%) mainly driven by Corporate Division ch. on Mar. 04 mln, where not specified Jun. 04 • +2.5% increase of Gross NPLs vs Mar. 04 (mainly due to shift from Watchlist Loans) counterbalanced by a strong –6.7% reduction of Watchlist Loans (2,505 mln as of Jun.04) Gross Doubtful Loans 9,180 -0.4% Weight on Gross Loans 6.61% -33 bp Coverage ratio 47.2% +80 bp • Improved coverage ratios; coverage ratios adding back fiscal write-offs2 at 70.0% on NPLs (+48 bp Q/Q) and at 57.5% on Total Doubtful Loans (+130 bp Q/Q) Gross Non Performing Loans 6,259 +2.5% Weight on Gross Loans 4.51% -9 bp Coverage ratio • Increased collections of doubtful loans (386 mln in 2Q vs 379 mln in 1Q, +1.9%) thanks to effective workout procedures 59.3% +10 bp Provisions on performing loans 1,290 +5.2% • +5.2% increase of provision on performing loans vs Mar. 04, with coverage ratio reaching 1.00% Coverage ratio 1.00% +1 bp ch. on 2003 1H04 • 1H04 cost of risk at 66 bp, almost in line with FY03 net of extraordinary provisions on Parmalat 66 bp +2 bp3 Stated cost of risk (annualised) (1) Defined as: Flow from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans (2)Calculated adding back to total provisions the fiscal write-offs of UniCredit Banca and UniCredit Banca d’Impresa only (3)Calculated on FY03 cost of risk (76 bp) net of extraordinary provisions on Parmalat (12 bp)

  14. CONFIRMED OUTSTANDING SOLVENCY RATIOS, WITH CORE TIER 1 RATIO OF 7.4%.RISK ADJUSTED PROFITABILITY STILL AT HIGH LEVELS ESTIMATED CORE TIER 1 RATIO (considering all RWA) ESTIMATED TOTAL CAPITAL RATIO (considering all RWA) TOTAL RWA From Euro 146.1 bn (Dec 03) to Euro 147.4 bn (1H 04), +0.9% From 7.0% (Dec 03) to 7.4% (1H04) From 11.1% (Dec 03) to 11.5% (1H04) Shareholder’s value added (c) =(a)-COE(2) Value added per unit of risk taken (c)/(b) NOPAT (a) Risk taken(1) (b) CAPITAL ABSORPTION VALUE CREATION MARGINAL RARORAC % NOPAT RARORAC % mln 1,001 Group Total(3) 10,094 462 9.2 13.4 226 2,930 82 5.6 8.2 Retail Division 508 4,869 288 11.8 12.0 Corporate Division 96 866 21 4.9 26.5 Private & AM Division 132 New Europe Division 1,197 64 10.7 23.6 (1) Minimum regulatory capital, market risks, credit risks and operational risks (2) The Cost of Equity is related to the capital employed (Net equity for the Group and allocated capital for the business units) (3) Balance due to Corporate Center and Other companies, respectively +39 for NOPAT, 1,429 for Capital absorption and 7 for Value Creation

  15. AGENDA 1H04 Group Highlights Divisional Reporting Retail Division Corporate Division Private & AM Division New Europe Division

  16. RETAIL DIVISION: GOOD Q/Q PERFORMANCE, WITH TOTAL REVENUES UP 4.2% DRIVEN BY NET COMMISSIONS AND NET INTEREST INCOME • Goodgrowth of net interest income (+1.3% excl. dividends vs. 1Q04) sustained by volume growth in all segments % ch. on 1Q04 2Q04 • Spread on deposits at 1.55%, slightly upvs. 1Q04 (+1 bp) Net interest income (incl. div.) 579 +2.9 • Net non interest income growth sustained by the good performance of commissions (+7.3% vs. 1Q04), thanks to increased sales of bancassurance products and increased number of transactions of Small Business customers Net non interest income 479 +5.7 Total revenues 1,058 +4.2 Operating costs (incl. depr.) -748 +4.0 Operating income 310 +4.5 • Operating costs increase due to higher administrative expenses related to projects undergoing (advertising campaigns +6 mln vs. 1Q, other projects +8 mln) and higher postal costs (+13 mln vs. 1Q), while staff costs are substantially in line with 1Q04 (-0.2% Q/Q) Net income for the Group 131 +3.3 Cost Income ratio, % 70.7 -10 bp ch. on FY03 1H04 Cost of risk 49 bp -1 bp • Almost 40,000 net new customers acquired in 2Q04

  17. POSITIVE SIGNS FROM ALL KEY MARKETS WITH GROWTH TARGETS: EXCELLENT GROWTH IN STOCKS OF RESIDENTIAL MORTGAGES, CONSUMER FINANCING … VOLUMES RESIDENTIAL MORTGAGES • Good performance in the flow of new mortgages of both UCB (+26% y/y) and UBCasa (+30% y/y) STOCK, bn NEW FLOWS, bn mkt share(2) 17.68% • Growth coming mainly from partnership channel, with 49% y/y increase 17.48% 17.17% +27.4% +11.0% • Avg. amount of mortgage from 93,000 (2003 avg.) to 102,000 Euros (1H04 avg.), up 15.5% 4.3 29.2 27.5 26.2 3.4 PRICING • 2Q average spread on new mortgages(1) : • UCB at 1.28%, -1 bp vs. 1Q04 • UBCasa at 1.45%, slightly up vs. 1Q04 (+4 bp) DEC03 1Q04 1H04 1H03 1H04 VOLUMES CONSUMER FINANCING • Growth in stock (at 2.3 bn, +7.8% vs. Dec 03) thanks to good flows of revolving cards and personal loans NEW FLOWS OF PERSONAL LOANS TOTAL SPENDING(4) (+170,000 revolving cards in 1H04) • Excellent results of the focus on captive customers (more than 170,000 revolving sold in 6 months vs. 6,000 in FY03) +17.2% mkt share(3) 7.3% • Acceleration in flow of personal loans granted (277 mln in 2Q vs. 183 in 1Q) driven by the launch of Credit Express in May 04. Market share(3) from 9.3% in 1Q to 12.1% in 2Q 461 mln 2.4% 393 mln 155 mln PRICING 95 mln • 2Q average spread on new production(1) : • revolving cards at 9.02%, -52 bp vs. 1Q04 • personal loans at 5.43%, +1 bp vs. 1Q04 1H03 1H04 FY03 1H04 (1) Management accounts (3) Calculated on ASSOFIN data, related to revolving and pay-later credit cards (2) Related to mortgages to households as of Bank of Italy definition in table TDME0070 of the monthly bulletin (4) POS and ATM spending through revolving cards

  18. … AND SMALL BUSINESS LENDING, THANKS TO CONTINUED INCREASE IN CUSTOMER ACQUISITION RATE AND IN PRESENCE OF A RESILIENT SPREAD, WITH CLEAR POTENTIAL FOR FURTHER GROWTH Good results of the recent focus on Small Business already visible in good stock growth and in a growing number of transactions sustaining the good performance of commissions STOCK, bn SHORT TERM SPREAD(1) +4.2% • Stock growth mainly concentrated in 2Q04, +3.0% vs. 1Q04 12.6 12.1 8.71% 8.63% 8.40% • Resilience of short term spread(1), substantially in line with FY03 DEC03 1H04 1H03 FY03 1H04 UCB AVERAGE MONTHLY ACQUISITION RATE TOTAL BANK DEVELOPMENT REGIONS STRENGTHENING REGIONS +26% +38% +49% 1.28% 0.80% 0.51% 0.40% 0.58% 0.86% 0.70% 0.32% 0.49% 1Q04 2Q04 1Q04 2Q04 1Q04 2Q04 FY03 FY03 FY03 • Growth of acquisition rate mainly driven by development regions, also thanks to the implementation of the brand new network of Developers (675 developers up and running at the end of June) CLEAR FURTHER POTENTIAL • 37,000 new Small Business customers in 1H04 (~1% of total market) • Low usage-to-facilities ratio(2) (47% in SB vs. 52% mkt avg) due to “youth” of many customers. July best month ever in growth of new customers. Average time before taking up the cash loan is ~1,5 month after account opening. Customers arrive at full usage in ~2 years (1) Management accounts, includes also maximum overdraft charges (2) Ratio between the utilised credit line and the total credit line available for usage

  19. GOOD CUSTOMER SATISFACTION IMPROVEMENTS IN PRIVATE AND SMALL BUSINESS SEGMENTS, CONSISTENTLY OUTPERFORMING COMPETITION IN A CONTEXT OF GROWING MARKET SHARES PRIVATE CUSTOMERS, TRIM INDEX SMALL BUSINESS, TRIM INDEX UNICREDIT BANCA AVG. TOP 4 COMPETITORS UNICREDIT BANCA AVG. TOP 4 COMPETITORS 51 49 47 43 42 41 41 35 2003 July 04 2003 July 04 2003 July 04 2003 July 04 • Stability of front-end relationship with customers • Dedicated service model • Improved waiting time (shorter queues) • Improved advisory on lending products • Improved advisory on investment services, with room for further improvement • Focus on quality of sales Source: NFO Infratest, Customer satisfaction analyses

  20. DELIVERING ON STRATEGY IN RETAIL DIVISION  START OF VOLUME GROWTH  INCREASED MARKET SHARES IN KEY MARKETS  START OF GROWTH OF NET INTEREST INCOME  NET COMMISSIONS LESS DEPENDING FROM UP-FRONT DRIVEN SALES  GROWTH OF CUSTOMER ACQUISITION RATES  INCREASED CUSTOMER SATISFACTION

  21. AGENDA 1H04 Group Highlights Divisional Reporting Retail Division Corporate Division Private & AM Division New Europe Division

  22. CORPORATE DIVISION: VERY STRONG Q/Q PERFORMANCE, WITH TOTAL REVENUES UP 13.0% MAINLY DRIVEN BY NET NON INTEREST INCOME % ch. on 1Q04 2Q04 • Growth of net interest income (+1.8% excl. dividends vs. 1Q04) (mln) Net interest income (incl. div.) 384 +4.3 • Strong net non interest income growth (+21.2%), sustained by the excellent performance of commissions (+26.0%vs 1Q04, mainly thanks to Corporate Finance and Foreign Trade Services) and the strong recovery of profits from financial transactions (+23.6% vs 1Q04, basically thanks to derivatives) Net non interest income 477 +21.2 Total revenues 861 +13.0 Operating costs (incl. depr.) -258 +5.5 Operating income 603 +16.6 • Operating costs increase totally due to higher administrative expenses (+12.7%) related to the increase volume of services provided to the customers2; staff costs perfectly in line with 1Q04 (stable at 134 mln) Net write-downs on loans -144 +36.3 Net extraordinary income 64 n.s. Net income for the Group 308 +25.4 • 1H04 cost of risk (annualised) 10 bp up vs FY03 net of extraordinary provisions on Parmalat, mainly due to high provisions on a single position; cost of risk at 64 bp net of provisions on this “single position” Cost Income ratio, % 30.0 -214 bp ch. on FY03 1H04 • Net income up 25.4% Q/Q, benefiting also from 64 mln net extraordinary income (o/w 55 mln write-back of provisions created for fiscal purposes “tax cleared accounts” by UBM) Cost of risk (annualised) 78 bp +10 bp1 (1)Calculated on FY03 cost of risk (91 bp) net of extraordinary provisions on Parmalat (23 bp) (2)As these costs were strictly related to higher business volumes, they have often been partially recovered from the customers as fee income

  23. LOAN GROWTH CONCENTRATED IN THE CORE SMEs SEGMENT WHILE MAINTAINING SPREADS, … UBI CUSTOMER LOANS, bn UBI AVG. TOTAL LENDING SPREAD(1) • +3.8% Q/Q Loan growth, concentrated in the core SMEs customers (Share of Wallet from 12.2% to 12.7%, +44 bp) … +3.8% 47,648 47,477 45,747 2.32%1 2.32% 2.31% • … with a significant acceleration in Lazio+Lombardy (from 9,954 mln to 10,696 mln , +7.4%) … Dec. 03 Mar. 04 Jun. 04 2003 1Q04 2Q04 % ch. Jun04/ Mar04 (mln) Dec03 Mar04 Jun04 • … and a strong contribution of the LT component2(from 19.3 bn as of Mar.04 to 20.2 bn as of Jun.04, +4.8%) Largest groups 7,842 6,941 6,534 -5.9% SMEs 27,335 27,048 28,5163 +5.4% - Share of Wallet 12.3% 12.2% 12.7%3 +44 bp Financial companies 4,412 3,684 3,466 -5.9% • Average Lending Spread substantially in line with 1Q04 Public Sect. & Others4 7,418 7,484 8,486 13.4% TOTAL5 47,007 45,159 47,002 +4.1% (1) Management accounts; average quarterly figures, apart from 2003 (average yearly figure) (4) Including non-financial companies with Total Revenues lower than 1.5 mln (2) Source: BankIT Matrix data (5) Balance due to roundings; Source: Credit Bureau – differences with accounting figures due to different sources of data (3) Discount the securitisation of ~230 mln for Neafidi district bond and ~170 mln loans issued in conjunction with UniCredit Banca MedioCredito. Share of wallet at 12.9% adding back these amounts

  24. … FACING LOWER DEFAULT RATES AND LEVERAGING ON THE “REVENUE MULTIPLIER” CORPORATE DIVISION: REDUCTION OF NET FLOWS OF NEW DOUBTFUL LOANS1 (mln) 376.6 • Significant Q/Q reduction of net flows of new doubtful loans (-62.1%) … Of which: To Loans to be Restructured 152.0 -62.1% • … even netting 1Q of the exceptional flows of Loans to be Restructured (-40.6% net of Loans to be Restructured) 142.9 224.6 9.4 133.5 • 2Q Default Rate2 at 0.23% (vs 0.6% in 1Q) 1Q04 2Q04 CORPORATE DIVISION: NET COMMISSIONS BOOSTED BY “REVENUE MULTIPLIER” (mln) 176.0 +26.0% • Higher loans, higher share of wallet, deeper relation with the customers leading to more high value added services: +36.3 mln Net Commissions Q/Q, of which: 139.7 142.9 • +10.4 mln from foreign trade services (from 26.9 mln in 1Q to 37.3 mln in 2Q) • +19.7 mln from Corporate Finance3(from 16.1 mln in 1Q to 35.8 mln in 2Q) 1Q04 2Q04 (1) Defined as: Flow from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans (2) Defined as: (Flows from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans)/ Total Gross In Bonis Loans as of 31.12.2003 (3) UBI+UBM+Banca MedioCredito

  25. LOAN GROWTH …  … WITH FOCUS ON LONGER MATURITIES …  … AND CONCENTRATED IN CORE SMEs CUSTOMERS …  … LEADING TO HIGHER SHARE OF WALLET …  … WHILE MAINTAINING SPREADS  FEE INCOME BOOSTED BY “REVENUE MULTIPLIER” SUMMING UP: DELIVERING STRATEGY IN CORPORATE DIVISION

  26. AGENDA 1H04 Group Highlights Divisional Reporting Retail Division Corporate Division Private & AM Division New Europe Division

  27. PRIVATE & AM DIVISION: INCREASED CONTRIBUTION TO THE GROUP’S NET INCOME AND CONTINUED GROWTH OF TOTAL FINANCIAL ASSETS … • +1.1% Q/Q increase of Total Financial Assets, with higher weight of hedge funds (from 1.85% as of Mar.04 to 2.26% as of Jun.04) … % ch. on 1Q04 PRIVATE & AM DIVISION TOTAL FINANCIAL ASSETS 2Q04 +1.1% (mln - % Change at Fixed FX) 160.7 158.9 (bn) Net interest income (incl. div.) 23 -4.4 146.7 Net non interest income 263 +1.2 130.1 129.6 118.3 AUM Total revenues 286 +0.7 22.4 23.5 24.7 Securities in custody Operating costs (incl. depr.) -188 +1.6 Direct deposits1 5.8 5.9 6.0 Jun.03 restated Mar.04 Jun.04 Operating income 98 -1.1 Net extraordinary income 9 n.s. • … leading to 1.2% Q/Q growth of Net non interest income, despite the very difficult environment for Asset Management in Italy Net income for the Group 92 +36.9 • Significant +12.0% growth of Net non interest income in 1H04 vs 1H03, driven by the strong +10.5% increase of Total Financial Assets (at fixed FX) Cost Income ratio, % 65.7 +61 bp Tax Rate, % 10.4 • Stronger contribution to the Group’s net income (92 mln, +36.9% Q/Q) Vs 30.1% in 1Q • Lower taxes (from 30 mln in 1Q to 11 mln in 2Q), due to benefits of “fiscal consolidation” of PGAM and Xelion 1 Including Repos

  28. … THANKS TO PIONEER AUM INCREASE COUPLED WITH POSITIVE SALES IN ALL THE BUSINESS DIVISIONS … • AUM at new record high driven by market performance and positive net sales in all the business divisions, with excellent results in the International (ex Italy) business division and in alternative investments 1H04 Net Sales Net Sales breakdown: +4.4% (mln) 124,689 3,135 Italy 255 2,118 119,4361 +3.6% at fixed FX Italy ex ING-Pixel3 852 International (ex Italy) 1,264 US 352 New Europe 247 TOTAL PGAM 2,118 TOTAL PGAM ex ING-Pixel3 2,715 AUM Dec.03 1H04 Net Sales 1H04 Mkt. Perf.2 AUM Jun.04 Alternative Invest. 1,123 • Significant increase of market shares in Italy (from 13.39% as of Dec.03 to 13.51% as of Jun.04 and 13.61% as of Aug.04 – Mutual Funds, Assogestioni perimeter) and in Poland (from 30.36% as of Dec.03 to 32.25% as of Jun.04–Investment Funds) 1 Pro-forma including ING-Pixel, SGR New Europe and the Real Estate Fund incorporated at the end of 2003 2 Including FX effect 3Total Net Sales in Italy were affected in 1H04 by outflows mainly deriving from ex-ING/Pixel PFAs who did not sign Xelion’s mandate (-597 mln in 1H04)

  29. 1 … AND THE GOOD COMMERCIAL RESULTS OF UPB AND XELION • 39.9 bn Total Financial Assets, +2.7% Q/Q and +6.1% vs Dec.03, with higher weight ofHedge Funds (from 1.5% as of Mar.04 to 2.2% as of Jun.04) NET SALES, QUARTERLY TREND (mln) 1,088 +28.4% • 69.7 mln Total Financial Assets per client-manager, +1.9% Q/Q and +4.4% vs Dec03 848 142.9 • 1,088 mln net sales in 2Q04 (best quarter since inception), with strong contribution of hedge funds (219 mln, more than 20% on the total) 1Q04 2Q04 • ~11.0 bn Total Financial Assets (+3.9% Q/Q and +5.5 on Dec03) TOTAL FIN. ASSETS, QUARTERLY TREND (bn) +3.9% • Higher Financial Assets per PFA: from ~4.6 mln as of Dec.03 to~5.1 mln as of Jun.04, +10.9% 11.0 10.6 10.4 • Leadership for Net Sales in Italy (1,026 mln in 1H04), with a high24.4% market share and acceleration in 2Q (539 mln in 2Q vs 487 mln in 1Q, +10.7%) Dec.03 Mar.04 Jun.04 1 All data related to Total Financial Assets, Financial Assets per PFA, and Net Sales relate to Xelion+ING (2003 data are pro-forma), excluding figures related to ex-ING PFA who did not agree on Xelion’s mandate – Source: Assoreti

  30. AGENDA 1H04 Group Highlights Divisional Reporting Retail Division Corporate Division Private & AM Division New Europe Division

  31. - o/w net commissions -2.1 104 2Q04 KEY HIGHLIGHTS: NET INCOME UP 11.9% Q/Q, BENEFITING FROM REVENUE GROWTH, IMPROVED COST OF RISK AND LOWER TAXES. CONFIRMED GOOD PROFITABILITY AND EFFICIENCY LEVELS • Confirmed positive macroeconomic environment in all NE countries % ch. on 1Q04 2Q04 (Euro mln) At unchanged FX1 • Total Revenues up 2.1% (+5.2% incl. KFS at unch. FX) on 1Q04: • Net interest income -0.9% on 1Q04: Pekao +1.0%, Bulbank +12.9% offset by negative trend in Zaba and in KFS FX (incl. KFS at unch. FX NII of the division: +2.9% on 1Q) • Net commissions -2.1% on 1Q04 (+1.3% incl. KFS at unch.FX): increase in Zaba and Bulbank, negative impact of KFS FX • Other non operating income from 13 mln in 1Q04 to 41 mln in 2Q04 Total revenues +2.1 431 -0.9 264 - o/w net interest income2 - o/w other non oper. Inc. n.m. 41 Operating costs +5.3 -238 Operating income -1.5 193 Net write-downs of loans -30 -10.9 • Operating Costs up 5.3% on 1Q04 (+7.7% incl. KFS at unchanged FX), mainly due to higher costs in Zaba (approx. +7 mln o/w approx. 3 mln one-off4) Attributable Net Income +11.9 94 ROE (1H04 data, y/y % ch.) 19.1% +1.8 pp • Further improvement of Cost of Risk (-4 bp q/q) and higher coverageof Doubtful loans (to 68.5% from 66.0% in Mar04) Cost of Risk3 24 bp -4 bp Cost/Income 55.2% +1.6 pp • Attributable Net Income up 11.9% on 1Q04thanks to lower provision needs and taxes Tax Rate 11.1% -14.7 pp 4 Due to integration ofVaradinska Banka in Zaba and to the merge of two Bosnian banks in a new-co 1 Excluding for KFS (included at current FX) 2 Excluding dividends 3 Calculated as Net Loan Loss Provisions of 2Q04 on Net customers Loans at period-end ITAS

  32. -1.8 - o/w net commissions 54 PEKAO RESULTS IN 2Q04: IMPROVED PROFITABILITY AND EFFICIENCY THANKS TO TURNAROUND IN NET INTEREST INCOME, GOOD COST CONTROL, LOWER PROVISIONS AND TAXES • Confirmed strong GDP growth (> +6% y/y in 1H04),and tightening stance of monetary policy resulting in +1.25 pp of Central Bank’s interest rate from July up to now % ch. on 1Q04 2Q04 (Euro mln) At unchanged FX Total revenues +3.7 235 +1.0 124 • Total Revenues up 3.7% on 1Q,as a result of: • Increasing trend in net interest income (+1.0% on 1Q04), benefiting from slight recovery in deposit spread and stable spread on debt securities • Lower net commissions due to decreasing sale of Mutual Funds although improving its leadership position - o/w net interest income1 +42.5 - o/w other net oper. Inc. 42 Operating costs +1.6 -126 Operating income +6.9 109 Net write-downs of loans -14 -32.0 • Costs under control with improved efficiency (C/I to 53.7%) Attributable Net Income2 +31.5 45 • Further reduction of provisions alsothanks to better macroeconomic environment, increased coverage of doubtful loans (70.2% from 66.7% in Mar04) ROE (1H04 data, y/y % ch.) 21.0% +4.6 pp Cost of Risk3 26 bp -14 bp • Net Income for the Group up 31.5% on 1Q04 alsobenefiting from a one-off release of deferred tax provisions caused by the change in corporate tax rate (approx. 10 mln) Cost/Income 53.7% -1.1 pp Tax Rate 4.1% -18.1 pp 1 Excluding dividends Data gross of consolidation adjustment 2 Net of consolidation adjustment ITAS 3 Calculated as Net Loan Loss Provisions of 2Q04 on Net customers Loans at period-end

  33. INCREASING NET CUSTOMER LOANS DRIVEN BY PEKAO. TREND IN MUTUAL FUNDS AFFECTED BY LOWER SALES IN POLAND % ch. on Mar04 % ch. on Dec03 • NET CUSTOMER LOANS: Good growth (+2.6% on 1Q04) driven by acceleration of Pekao in 2Q04; further increase in KFS (+9.8% on 1Q04), consolidation in Zaba (+0.7% on 1Q04) Jun04 (Euro mln) At unchanged FX1 12,734 +2.6 +4.0 Net Customer Loans 5,572 +2.7 +3.2 - o/w Pekao • MORTGAGES further increasing: • Pekao: market share in new LC mortgages +3.9 pp on 1Q04 (to 23.6%) • Zaba: outstanding volume +5.2% on 1Q04, leadership confirmed with 41.2% market share (+20 bp on 1Q04) 1,817 +7.2 +12.5 Mortgages 383 +21.0 +35.8 - o/w Pekao LC 21,038 -0.8 -0.9 Deposits • MUTUAL FUNDS: • Improvement of market share: Pekao2: +40 bp on 1Q04 (to 32.3%), Zaba: +113 bp on 1Q04 (to 44.4%) • Higher share of equity and balanced funds in Pekao2 from 47%in 1Q04to 50% in 2Q04 10,235 -1.2 -2.2 - o/w Pekao 4,250 -0.1 +19.1 Mutual Funds3 2,493 -0.2 +11.7 - o/w Pekao2 Assets administr. for customers3 33,345 +0.2 +5.1 1 Excluding for KFS (included at current FX) ITAS 2 PPIM 3 New Europe Business Area of Pioneer is included at current FX

  34. Annex

  35. 2Q04 & 1H04 CONSOLIDATED INCOME STATEMENT (Euro mln) % ch. on 1Q04 % ch. on 2Q03 2Q04 1H04 y/y % ch. Net interest income (incl. div.) +11.2 -0.3 -2.5 1,327 2,520 - of which Dividends n.m. -15.2 -14.2 117 121 Net non interest income +7.2 -0.2 -4.6 1,388 2,683 2,715 5,203 Total revenues +9.1 -0.3 -3.6 Administrative costs (incl. depr.) +6.1 +5.4 +2.7 -1,505 2,923 2,280 +13.1 -6.5 -10.6 Operating income 1,210 Goodwill depr. -72 -143 +1.4 +2.9 +5.1 Provisions on loans -246 -438 +28.1 +23.0 +20.7 Other net provisions* n.m. -66.3 -73.5 -27 -36 Net extraordinary income n.m. +104.1 +47.8 100 102 Taxes +13.2 -2.6 -19.3 -335 -631 -47 -85 Minorities +23.7 +46.9 +21.4 583 1,049 Net income +25.1 -5.5 -7.3 * Net write-downs of financial investments, provisions for risks and charges, provisions for possible loan losses and provisions to reserve for general banking risk

  36. 1,058 861 286 443 2,715 -748 -258 -188 -244 -1,505 DIVISIONAL CONTRIBUTION TO CONSOLIDATED RESULTS IN 2Q04 Total Group1 2Q04 RESULTS Retail Division Corporate Division Priv.& AM Division NE Division (Euro mln - Data at end of period FX) Total revenues +4.2% +13.0% +0.9% +8.2% 9.1% % Change vs 1Q042 Operating costs +4.0% +5.5% +1.9% +11.6% +6.1% % Change vs 1Q042 Operating income 310 603 99 198 1,210 +4.5% +16.6% -0.9% +4.3% +13.1% % Change vs 1Q042 Net write-downs of loans -73 -144 -1 -31 -246 +31.0% +36.3% n.m. -4.9% +28.1% % Change vs 1Q042 Net income for the Group 131 308 92 98 583 +3.3% +25.4% +37.2% +18.9% +25.1% % Change vs 1Q042 C/I Ratio 70.7% 30.0% 65.7% 55.1% 55.4% -0.1 pp -2.1 pp +0.6 pp +1.7 pp -1.6 pp Change in pp vs 1Q042 Employees3 25,467 6,367 3,674 29,784 71,214 1Balance due to the Parent Company, other Group companies and elisions 3Including all the employees of Koc Financial Services (3,886as at 30.06.2004) 2Calculated on data at end of period FX

  37. 1,966 2,034 1,883 1,890 2,158 2,236 6,107 6,259 Gross NPL % change on Mar.04 +3.5% 0.4% 3.6% 2.5% Gross NPL/Tot. Gr. Loans,% 3.81% 3.77% 2.95% 2.83% 15.3% 15.0% 4.60% 4.51% Net NPL 1,013 1,047 1,054 1,096 394 375 2,493 2,549 % change on Mar.04 3.4% 3.9% -4.9% 2.2% Net NPL/Tot. Net Loans,% 2.02% 2.00% 1.70% 1.69% 3.27% 2.95% 1.96% 1.91% Total gross doubtful loans 3,321 3,390 2,895 2,798 2,827 2,837 9,215 9,180 % change on Mar.04 2.1% -3.3% 0.3% -0.4% Gross Doubtful Loans/Tot. Gr. Loans,% 6.43% 6.28% 4.54% 4.19% 20.0% 19.1% 6.94% 6.61% Total net doubtful loans 2,077 2,114 1,807 1,760 962 895 4,940 4,850 % change on Mar.04 1.8% -2.6% -7.0% -1.8% 4.14% 4.03% 2.92% 2.71% 7.97% 7.03% 3.88% 3.64% Net Doubtful Loans/Tot. Net Loans,% -on total gross NPL, % 48.5% 48.5% 44.0% 42.0% 81.7% 83.2% 59.2% 59.3% 37.4% 37.6% 37.6% 37.1% 66.0% 68.5% 46.4% 47.2% -on tot. Gross doubtful loans, % ASSET QUALITY: DETAILS BY DIVISIONS Retail Division Corporate Division NE Division Total Group 1 (mln - Data at end of period FX) Mar. 04 Jun. 04 Mar. 04 Jun. 04 Mar. 04 Jun. 04 Mar. 04 Jun. 04 Coverage ratios 1 Balance due to other Group companies

  38. RETAIL DIVISION: 1H04 RESULTS BREAKDOWN BY COMPANY mln UniCredit Banca Banca d. Umbria CR Carpi Clarima TOTAL(1) UBCasa Interest income (incl. div.) 993 51 56 50 19 1,141 Net non interest income 868 36 6 12 11 933 Total revenues 1,860 87 62 63 30 2,074 Operating costs (incl. dep.) -1,333 -48 -36 -32 -17 -1,468 - of which: Staff costs -714 -25 -13 -9 -9 -770 - of which: Other costs -619 -23 -23 -23 -8 -698 Net operating income 527 39 26 30 13 606 Net provisions -113 -8 -7 -16 -2 -145 - o/w: Net write-down of loans -101 -5 -7 -14 -2 -128 Net income 233 19 13 12 7 258 Net income for the Group(2) 196 18 16 12 7 258 Cost/income ratio, % 71.7 55.6 58.7 51.5 56.8 70.8 (1) Balance due to roundings and elisions of infragroup dividends and goodwill amortisation (2) Net of consolidation adjustmentS

  39. CUSTOMER LOANS AND CUSTOMER DEPOSITS BREAKDOWN AND DETAILS OF SHORT TERM SPREADS +4.6% EOP LOANS, Euro bn UCB AVG. MARK UP(5) (Small Business), % 52.4 50.1 48.8 +2.7% 5.99 5.95 5.93 5.69 5.60 5.47 8.3 Other loans 8.3 +0.8% 8.3 -0.2% 2.3 2.1 +8.3% Cons. credit 2.1 -0.5% 12.6 SB loans (1) 12.2 +3.0% 12.1 +1.2% 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 UCB AVG. MARK UP(5) (Households), % 7.33 27.5 29.2 Residential mortgages (2) 26.3 +6.1% 7.18 7.18 7.08 +4.5% 7.04 7.03 2003 pro-forma(3) 1Q04 2Q04 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 EOP DEPOSITS, Euro bn UCB AVG. MARK-DOWN(5) (Households), % 64.1 63.9 60.2 +6.5% 21.5(4) 21.0(4) 17.7 Bonds -0.3% +21.6% -2.8% 2.32 2.03 1.78 1.72 1.65 1.65 15.3 15.4 15.4 Other deposits +0.4% = Households c/accounts 27.2 27.6 27.2 +0.2% +1.4% 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 2003 1Q04 2Q04 (1) Includes short term and m/l term loans (2) Includes only households mortgages (3) Including ANBI (4) 1Q04 increase vs. December is due to the issue of bonds by UBCasa to fund mortgage book expansion (5) Source: Bank of Italy matrix data

  40. NET COMMISSIONS GROWTH COMING FROM INCREASED SALES OF BANCASSURANCE PRODUCTS AND HIGHER SMALL BUSINESS PAYMENT RELATED FEES. UP-FRONT FEES REPRESENTING 27.8% OF TOTAL COMMISSIONS IN 1H04, IN LINE WITH INTERNAL EXPECTATIONS RETAIL DIVISION: NET COMMISSIONS Breakdown by nature mln Q/q % ch. 1Q04 2Q04 TOTAL RETAIL DIVISION 302 324 +7.3 149 151 +1.8 Total Commissions from Wealth Management • Mutual funds 1 59 56 -5.9 • Segregated Accounts 2 11 11 -6.9 • Insurance Products 2 78 85 +8.9 Securities in custody 54 48 -10.5 Other services 100 125 +25.0 1 Includes subscription and management fees from Plain Vanilla Mutual Funds 2 Includes management fees related to underlying Mutual Funds

  41. RETAIL DIVISION - DETAILS ON ASSET QUALITY mln, where not specified Jun 04 ch. on 1Q04 • Significant reduction Q/Q of net flows of New Doubtful Loans(1), -14% Gross Doubtful Loans 3,390 +2.1% • Slight increase of Gross Doubtful Loans (+2.1% Q/Q), driven by increased Gross NPLs (+3.5%) while Gross Watchlist are flat vs. previous quarter (+0.1%) Weight on Gross Loans 6.28% -15 bp Coverage ratio 37.6% +19 bp Gross Non Performing Loans 2,034 +3.5% • Reduced weight of both Gross Doubtful Loans and Gross NPLs on Total Gross Loans, respectively -15 bp and -4 bp Weight on Gross Loans 3.77% -4 bp Coverage ratio 48.5% +2 bp • Coverage ratio on Gross Doubtful Loans slightly increased vs. 1Q04 (+19 bp) Provisions on performing loans 288 +3.4% Coverage ratio 0.57% -1 bp • Stability of coverage ratio on performing loans, with increase in provisions substantially reflecting good loan growth ch. on 2003 1H04 Cost of risk (annualised) 49 bp -1 bp • Cost of risk in line with previous year (1) Defined as flow from in bonis loans to any category of doutbtful loans - flow from any category of doubtful loans to in bonis loans

  42. CORPORATE DIVISION: 1H04 INCOME STATEMENT- BREAKDOWN BY COMPANY (Euro mln) TOTAL2 UBI UBM1 LOCAT Other companies Interest margin (incl. div.) 633 -6 97 27 751 Net non interest income 298 445 13 115 871 Total revenues 931 439 110 142 1,622 Operating costs (incl. dep.) -264 -116 -27 -96 -502 -151 -56 -15 -45 -267 - of which: Staff costs -112 -52 -10 -49 -223 - of which: Other admin. expenses 667 323 83 46 1,120 Net operating income -238 5 -17 -9 -259 Net provisions - o/w: Net write-downs of loans -234 7 -16 -7 -250 Net income 250 242 38 24 554 Net income for the group 250 242 38 23 553 28.3% 26.4% 24.2% 67.3% 30.9% Cost/income Ratio 1 Including TradingLab, merged in UBM starting from 1.7.2004 2 Balance due to roundings and elisions of infragroup dividends and goodwill amortisation

  43. CORPORATE DIVISION: 2Q04 AND 1H04 INCOME STATEMENT (Euro mln) 2Q04/1Q04 % ch. 2Q04/2Q03 % ch. 1H04/1H03 % ch. 2Q04 1H04 Net interest income (incl. div.) 384 +4.3 -4.5 751 -0.5 Net non interest income 477 +21.2 +3.5 871 -14.4 Total revenues 861 +13.0 -0.2 1,622 -8.5 Operating costs (incl. depr.) -258 +5.5 -3.9 502 -3.1 Operating income 603 +16.6 +1.5 1,120 -10.8 -151 +40.7 -9.7 -259 +8.8 Total net provisions 64 n.s. n.s. 65 n.s. Net extraordinary income -207 +26.0 +30.9 -372 -7.5 Taxes Net income 308 +25.2 +7.9 554 -12.8 Net income for the group 308 +25.4 +8.7 553 -12.2 30.0% -214 bp -115 bp 30.9% +171 bp Cost Income ratio, %

  44. CORPORATE DIVISION - DETAILS ON ASSET QUALITY • Very strong 2Q/1Q reduction of net flows of New Doubtful Loans1(143 mln in 2Q vs 377 mln in 1Q, -62.1%) ch. on Mar. 04 mln, where not specified Jun. 04 Gross Doubtful Loans 2,798 -3.3% • Reduction of Gross Doubtful Loans (-3.3% vs Mar.04) mainly due to a significant decrease of Gross Watchlist Loans (from 622 mln as of Mar.04 to 532 mln as of Jun.04, -14.3%), given the substantial stability of Gross NPLs (+0.4% vs Mar.04) Weight on Gross Loans 4.19% -35 bp Coverage ratio 37.1% -47 bp Gross Non Performing Loans 1,890 +0.4% • Drop of coverage on NPLs (-200 bp vs Mar.04) mainly due to the high fiscal write-downs accounted in 2Q (182 mln vs 103 mln in 1Q) Weight on Gross Loans 2.83% -12 bp Coverage ratio 42.0% -200 bp • +4.6% increase of provision on performing loans vs Mar. 04, also due to 21 mlnprovisions on the automotive sector. Coverage ratio on performing loans confirmed at an high 1.18% Provisions on performing loans 758 +4.6% Coverage ratio 1.18% -1 bp ch. on 2003 • 1H04 cost of risk (annualised) 10 bp up vs FY03 net of extraordinary provisions on Parmalat, mainly due to high provisions on a single position; cost of risk at 64 bp net of provisions on this “single position” 1H04 78 bp +10 bp2 Cost of risk (annualised) (1) Defined as: Flow from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans (2)Calculated on FY03 cost of risk (91 bp) net of extraordinary provisions on Parmalat (23 bp)

  45. UNICREDIT BANCA D’IMPRESA: 2Q04 AND 1H04 INCOME STATEMENT 2Q04/1Q04 % ch. 2Q04/2Q03 % ch. 1H04/1H03 % ch. (Euro mln) 2Q04 1H04 314 -1.7 +4.9 633 +6.2 Net interest income Net non interest income 161 +17.1 -8.7 298 -15.8 Of which: - Net commissions 96 +6.1 +15.4 186 +18.7 - Trading profits 63 +38.8 -28.8 108 -43.1 Total revenues 475 +3.9 -0.1 931 -2.0 -133 +1.0 -3.3 -264 -0.4 Operating costs Operating income 342 +5.1 +1.2 668 -2.6 -135 +35.6 +3.5 -234 +31.8 Net write-downs of loans Other net provisions -5 n.s. -43.8 -3.4 -85.2 -16.6 0.2 250 -10.7 Net income for the group 114 27.9% -80 bp -91 bp 28.3% 44 bp Cost Income RATIO, %

  46. UBM: 2Q04 AND 1H04 INCOME STATEMENT 2Q04/1Q04 % ch. 2Q04/2Q03 % ch. 1H04/1H03 % ch. 2Q04 1H04 (Euro mln) Financial Products Sales and Trading 211 +20.0 -23.1 386 -32.3 of which derivatives 183 +26.2 -20.6 328 -32.8 Investment Banking 38 +169.6 +54.0 52 -20.2 Total revenues 249 +31.2 -7.0 439 -27.5 Staff costs -28 -3.0 -22.5 -56 -23.5 Other costs (incl. depr.) -34 +28.8 -3.5 -60 -2.8 Operating income 188 +38.8 -4.8 323 -31.4 Net extraord. income 56 n.s. n.s. 57 n.s. Taxes -89 +65.4 +76 -143 -10.5 Net income 159 +93 +22.4 242 -18.0 C/I Ratio 24.6% -414 bp -174 bp 26.4% +415 bp

  47. 1H04 avg. daily VAR: 3.6 mln vs 3.8 mln in 1H03 UBM VAR CHANNEL UBM Daily VAR(1) and P&L (Jan 04 – Jun 04) Euro mln Daily P&L VaR 1 Calculated using a 98-99% asymmetric double tail confidence interval

  48. UPB + Subsidiaries UniCredit Xelion Banca Other Companies1 TOTAL DIVISION2 PGAM Group (Euro mln) Net interest income 44 5 7 1 49 129 360 26 7 521 Net non interest income Total revenues 173 365 33 8 570 -112 -191 -56 -12 -372 Operating costs (incl. dep.) -63 -90 -7 -5 -165 - of which: Staff costs -47 -95 -45 -6 -192 - of which: other admin. expenses 61 174 -23 -4 198 Operating income -1 -1 0 -2 -2 Total net provisions 3 7 0 48 9 Net extraordinary income Net income 40 104 -20 35 164 Net income for the group 39 100 -20 35 159 n.s. Cost/Income Ratio 64.9% 52.4% n.s. 65.3% PRIVATE & AM DIVISION: 1H04 INCOME STATEMENT – BREAKDOWN BY COMPANY 1 Mainly companies deriving from the acquisition of ING and not integrated in UniCredit Xelion Banca 2 Balance due to roundings and elisions of infragroup dividends and goodwill amortisation

  49. PRIVATE & AM DIVISION: 2Q04 AND 1H04 INCOME STATEMENT (Euro mln - Data at fixed FX) 2Q04/1Q04 % ch. 2Q04/2Q03 % ch. 1H04/1H03 % ch. 2Q04 1H04 Net interest income (incl. div.) 23 -4.4 -1.1 49 +4.0 Net non interest income 263 +1.2 +6.7 521 +12.0 Total revenues 286 +0.7 +6.0 570 +11.2 Operating costs (incl. depr.) -188 +1.6 +5.9 -372 +9.9 Operating income 98 -1.1 +6.1 198 +13.7 - n.s. n.s. -2 -79.6 Total net provisions 9 n.s. n.s. 9 -3.6 Net extraordinary income -11 -62.7 -62.7 -41 -21.3 Taxes Net income 96 +39.5 +61.5 164 +35.2 Net income for the Group 92 +36.9 +49.3 159 +27.3 65.7% +61bp -6 bp 65.3% -77 bp Cost Income ratio, %

  50. PGAM GROUP: DEC03-AUG04 NET SALES AND AUM TREND (Euro mln) AuM as at 31.12.2003 Net sales 1H04 Mkt. Perf. 1H04 AuM as at 30.06.20041 Net sales Jul-Aug04 AuM as at 31.08.20042 Italy 89,095 255 110 91,412 90,973 1,623 5,880 1,264 218 7,644 7,385 241 International (ex-Italy)3 US 21,884 352 -66 23,182 23,379 1,143 US in USD 27,639 456 322 28,417 -81 28,076 2,577 247 35 3,019 2,952 New Europe 128 119,436 2,118 297 125,257 124,689 3,135 TOTAL PIONEER 2,449 1,123 63 3,635 205 3,828 Alternative Investments3 1 Balance due to roundings 2 Provisional figures; balance due to Market Performance (including FX effect) 3 Including Momentum

More Related