banking in cee and the role of international players

BANKING IN CEE AND THE ROLE OF INTERNATIONAL PLAYERS

July 2006

2

EXECUTIVE SUMMARY

All around the CEE region, the banking sector is characterised by widespread relevance of foreign capital. A limited number of international players considers the region as a second home market. Such international players are among the top players in several countries of the region and profit from a widespread cross-regional network.

While structural transformation is almost completed in most of the traditional destinations, additional markets are gradually opening and represent the new opportunity for international players. In particular, we view Russia, Turkey, Ukraine as the new frontiers of a regional strategy. The consolidation process at the international level represents another significant driver for structural transformation in the region, like in the case of the UniCredit-HVB merger, which brought to the creation of the by far largest player at the regional level and to a renewed process of consolidation at the single country level.

The CEE region represents a fast growing market of more than 1,000 billion euro of total banking assets, with still bright prospects for growth, given the persistently favourable macroeconomic environment and relative under-penetration compared to Eurozone countries

Loans financial deepening is increasing, fuelled by both demand and supply factors, resulting in a significant increase of loans over GDP ratio from 24% to 32% in the 2000-2005 period (CEE12). Lending growth has been particularly fast in SEE countries and Russia followed by Turkey. Fast lending expansion is expected to continue, driven by the retail segment and sustained by favourable corporate lending performance. The fastest dynamic is expected in Russia, Serbia, Turkey and Romania.

Increasing financial deepening on the lending side has been accompanied by substantially stable pattern in deposits. In the years to come, acceleration of investment activities and portfolio diversification are expected to lead to a reduction in the deposit over GDP ratio in Central Europe (Poland, the Czech R., Hungary, Croatia and Slovakia) while still a good dynamic is expected in the rest of the region

Overall, the banking profitability outlook remains positive

3

AGENDA

Evolution of banking systems in CEE

Presence and ranking of international banking groups in the region

Relevance and positioning of international players at single country level

4

MORE THAN 1,000 € BLN MARKET IN TERMS OF TOTAL ASSETS, WITH LARGELY INTERNATIONAL BANKS AND STILL IMPORTANT GROWTH OPPORTUNITIES

2005i

No. of banks(1)Market share Total Assets(3) Total Gross Loans Total Deposits

Foreign banks TOP 3(2) € bln % of GDP € bln % of GDP € bln % of GDP

EU Members

Poland 61(4) 70%(4) 37%(4) 152 60% 77 30% 99 39%

Hungary 34 84%(5) 38% 75 87% 46 53% 37 43%

Czech Republic 36 85%(6) 56% 102 99% 40 39% 65 63%

Slovakia 23 98% 47% 37 96% 14 36% 21 55%

Slovenia 22(6) 19%(6) 50% 29 107% 15 56% 16 57%

Estonia 13 99% 88% 12 112% 6 56% 5 47%

Latvia 23 58% 54% 16(7) 123% 7 55% 4 31%

Lithuania 12 86%(8) 67% 13 63% 7 32% 6 28%

EU Candidates

Croatia 34 91% 54% 35 114% 21 68% 19 61%

Bulgaria 34 76% 34%(9) 17 78% 9 43% 10 49%

Romania 39 88%(10) 50%(11) 35(7) 45% 17 22% 22 28%

Turkey 31 19% 45% 249 81% 96(16) 31% 152 50%

Others

Russia 1,205(15) 9% 39% 285(7) 45% 159 25% 156 25%

Serbia 40(12) 66% 36% 9 48% 5 27% 5 25%

Bosnia-Herzegovina 33 89%/98%(13) 54%(14) 6(7) 81% 4 51% 4 47%

Ukraine 165 n.a. n.a. 36 50% 23 32% 18 25%

Total CEE 17 1,805 46%(17) 50%(18) 1,108 66% 545 33% 638 38%

Euro Area 6,403(6) 25%(6) - 17,895 224% 9,141(16) 115% 7,395 93%

Sources: local Central Banks, ECB, Banking Associations and Supervisory Authorities and Unicredit-NE Research Network(i) All banking systems’ figures converted using eop exchange rates vs €; nominal GDP converted using avg exchange rates

(1) Including commercial and savings banks, foreign bank branches while excl. cooperatives; (2) Based on unconsolidated figures unless otherwise stated; market shares are based on net assets figures according to local accounting standards; (3) Figures are expressed as net values unless otherwise stated; (4) As of Q3 2005; (5) Based on gross assets; (6) As of 2004; (7) Gross figures; (8) Based on share capital of Lithuanian Banks owned by foreign investors; (9) Based on IAS results; (10) Including BCR; (11) Including HVB Tiriac & UCR proforma; (12) Excluding OFIs; (13) Data refer to Rep of Srpska; (14) For Hypo Alpe Adria, market share based on Group’s results; (15) Excluding non-bank credit organisations; (16) Based on net figures; (17) Excluding Ukraine; (18) Unweighted average

5

DEMAND AND SUPPLY FACTORS (BOTH STRUCTURAL AND CYCLICAL) BEHIND LENDING GROWTH

Evolution of banking loans in CEE-12(1)

(% of GDP)

24% 24%22%

25%28%

32%35%

37%

40%

0%

10%

20%

30%

40%

50%

2000 2001 2002 2003 2004 2005 2006f 2007f 2008f

Total loans’ volumes growth(2)

(2000 =100, in € terms)

0

500

1,000

1,500

2000 2001 2002 2003 2004 2005 2006f 2007f 2008f

Central Europe (Poland,Czech R.,Hungary,Slovakia)

SEE (Croatia,Slovenia,Serbia,Bosnia,Romania,Bulgaria)

Russia

Turkey

Russia39% p.a.

Sources: Unicredit-NE Research Network based on local Central Banks’ data(1) Including Poland, Czech R., Hungary, Slovakia, Slovenia, Romania, Bulgaria, Croatia,

Bosnia-Herzegovina, Serbia, Russia and Turkey; excl. Ukraine and the baltics;(2)Total loans include general govt, non-financial corporations and retail and where

available non-profit institutions serving households (NPISHs) and Non-MFIs

Turkey12% p.a.

SEE 21% p.a.

CE12% p.a.

CAGR ’00-’08

6

TWO DIGITS LENDING GROWTH LEADING TO FAST INCREASES IN BANKING PENETRATION ON THE ASSETS SIDE (+2.7% OF GDP ON AVERAGE PER YEAR), HOWEVER WITH STRONG CROSS COUNTRIES DIFFERENCES

Sources: Unicredit-NE Research Network based on local Central Banks’ data(1) Total loans include general govt, non-financial corporations, households

and where available NPISHs and Non-MFIs

32

42

79

36

5046

62

31

42

63

78

42 40

68

53

3227

56

51

36

22

3943

25

3130

0

20

40

60

80

100

Poland Turkey Croatia Russia Bulgaria Czech R. Hungary Romania Slovakia Bosnia Slovenia Serbia CEE-12

2005 2008

Evolution of banking loans1 by country (% of GDP)% country over

CEE loansTotal loans

2008CAGR '05-'08

(loc. currency)Poland 11% 10%Turkey 16% 27%Croatia 3% 13%Russia 45% 34%Bulgaria 2% 16%Czech Republic 6% 14%Hungary 7% 13%Romania 4% 25%Slovakia 2% 14%Bosnia 1% 17%Slovenia 3% 19%Serbia 1% 34%CEE-12 - 24%

7

RETAIL LENDING TO REMAIN THE MAIN DRIVER OF VOLUMES GROWTH, WITH GOOD MACRO PROSPECTS SUPPORTING A FAVOURABLE CORPORATE LENDING PERFORMANCE

Expected evolution of retail loans1

(CAGR ’05-’08, local currency)

Sources: Unicredit-NE Research Network based on local Central Banks’ data(1) Including households and (when available) NPISHs

0% 10% 20% 30% 40% 50% 60%

Serbia

Slovenia

Bosnia

Slovakia

Romania

Hungary

Czech R.

Bulgaria

Russia

Croatia

Turkey

Poland

CEE-12

Expected evolution of corporate loans(CAGR ’05-’08, local currency)

0% 10% 20% 30% 40%

Serbia

Slovenia

Bosnia

Slovakia

Romania

Hungary

Czech R.

Bulgaria

Russia

Croatia

Turkey

Poland

CEE-12

8

RELATIVELY STABLE BANKING PENETRATION ON THE LIABILITIES SIDE, …

Evolution of banking deposits in CEE-12(1)

(% of GDP)

32%35% 34% 34%

36%39% 39% 39%

41%

0%

20%

40%

60%

2000 2001 2002 2003 2004 2005 2006f 2007f 2008f

Total deposits’ volumes growth(2)

(2000 =100, in € terms)

0

500

1,000

2000 2001 2002 2003 2004 2005 2006f 2007f 2008f

Central Europe (Poland,Czech R.,Hungary,Slovakia)

SEE (Croatia,Slovenia,Serbia,Bosnia,Romania,Bulgaria)

Russia

Turkey

Sources: Unicredit-NE Research Network based on local Central Banks’ data(1) Including Poland, Czech R., Hungary, Slovakia, Slovenia, Romania, Bulgaria, Croatia,

Bosnia-Herzegovina, Serbia, Russia and Turkey; excluding Ukraine and the baltics;(2) Total deposits include general govt, non-financial corporations, households and when

available NPISHs and Non-MFIs

Russia32% p.a.

Turkey11% p.a.

SEE17% p.a.

CE9% p.a.

CAGR ’00-’08

9

Sources: Unicredit-NE Research Network based on local Central Banks’ data(1) Total deposits include general govt, non-financial corporations, households and where available NPISHs and Non-MFIs

61

49

63

43

57

39

55

33

55

3235

50

25 2528

55

47

39

58

53

58

43

54

38

60

41

0

20

40

60

80

100

Poland Turkey Croatia Russia Bulgaria Czech R. Hungary Romania Slovakia Bosnia Slovenia Serbia CEE-12

2005 2008

Evolution of banking deposits by country (% of GDP)1

… WITH DIFFERENT PATTERNS AMONG COUNTRIES

% country over CEE deposits

Total deposits

2008CAGR '05-'08

(loc. currency)Poland 13% 7%Turkey 20% 19%Croatia 2% 7%Russia 41% 32%Bulgaria 2% 16%Czech Republic 8% 4%Hungary 5% 7%Romania 4% 16%Slovakia 3% 7%Bosnia 1% 14%Slovenia 2% 7%Serbia 1% 29%CEE-12 - 17%

10

Expected evolution of retail deposits1

(CAGR ’05-’08, local currency)

Sources: Unicredit-NE Research Network based on local Central Banks’ data(1) Including households and (when available) NPISHs

0% 10% 20% 30% 40%

Serbia

Slovenia

Bosnia

Slovakia

Romania

Hungary

Czech R.

Bulgaria

Russia

Croatia

Turkey

Poland

CEE-12

Expected evolution of corporate deposits(CAGR ’05-’08, local currency)

0% 10% 20% 30% 40%

Serbia

Slovenia

Bosnia

Slovakia

Romania

Hungary

Czech R.

Bulgaria

Russia

Croatia

Turkey

Poland

CEE-12

GOOD PROFITABILITY OF THE CORPORATE SECTOR EXPECTED TO SUSTAIN GROWTH IN DEPOSITS’ VOLUMES AT THE REGIONAL LEVEL WITH RETAIL PLAYING A SIGNIFICANT ROLE IN RUSSIA, ROMANIA, BULGARIA, SERBIA, BOSNIA AND TURKEY

11

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2004 2005 2006f 2007f 2008f

WE EXPECT THE REGION TO CONTINUE TO DELIVER GOOD RESULTS IN TERMS OF BANKING PROFITABILITY

€21.0bn

CAGR 2005-08: +15.2%

€32.0bn

NET PROFITSBefore tax / extr items

€16.5bn

€28.4bn

€25.4bn

Sources: Central Banks and Unicredit-NE Research Network(1)Net Profit for the Banking Sector is before tax and extraordinary items.

CAGR ’05-’08

(local currency)

Net InterestIncome

Net non-interest income

Net revenues

Net profit(1)

Poland 10% 9% 9% 10%

Turkey 5% 10% 7% 14%

Croatia 4% 9% 6% 10%

Russia 24% 24% 24% 21%

Bulgaria 12% 14% 12% 13%

Czech R. 5% 9% 7% 7%

Hungary 7% 12% 9% 8%

Romania 10% 19% 15% 11%

Slovakia 1% 16% 7% 9%

CEE-9 13% 14% 13% 15%

Bulgaria2%

Czech R.7%

Poland13%

Romania3%Hungary

7%

Russia35%

Croatia3%

Turkey26%

Slovakia3%

% country over CEE-9 NetProfit(1) (2005)

€ bn

12

AGENDA




13

5

5

5

7

9

15

17

530

608

556

301

490

460

1,325(1)

1,744

1,545

1,928

1,083

1,435

1,898

4,379(1)

19.0

39.4

42.7

20.1

26.9

40.7

86.2(1)

Proforma 2005, as of perimeter May 2006i

Source: Unicredit-NE Research Network; numbers converted using avg and eop ex. rates from UIC for P&L and BL figures, respectively

(i) 100% of total assets, revenues and profit after tax (before min.interests) for controlled Companies (stake > 50%) and share owned for non controlled companies; proforma results include also banks acquired during 2005 and 2006;

(ii) After tax, before minority interest(iii) Including direct and indirect presence in the 21 CEE countries, excluding representative offices

(1) Excluding Splitska Banka, Vienna Profit Center and other UCI’s minorities (Unicredit Securities&Unicredit leasing BG) while including proforma Nova Banjalucka Banka (full year), Hypo Stavebni Sporitelna and 50% of KFS-Yapi combined entity (full 2005 normalised for Yapi); BankTiriac, Hebros and Eksimbanka consolidated proforma for the full year; (2) Including Azerbaijan; (3) Including proforma Erste Serbia; (4) Including proforma BCR; (5) Including proforma Impexbank; Bank Aval fully consolidated since 1st Oct 2005; (6) Excluding Kosovo; (7) Including proforma Splitska Banka; (8) Including proforma KMB and Intesa Beograd; (9) Including proforma Ukrsotsbank and UPI Banka (as of Sep ’05); (10) Revenues for KMB and UPI Banka n.a.; (11) Including proforma Niska Banka and Zepter Banka; profits are before tax; P&L of OTP Hrvatska doesn’t include Q1 2005

Consol. Assets (€ bln)i Total Revenues (€ mln) Net Profit before min.int. (€ mln)ii Countries of presenceiii

Erste

Unicredit

48.7(4) 2,406(4) 711(4)

RZB

KBC

42.3(5) 2,026(5) 481(5)

SocGen

Intesa

OTP19.1(11)

22.1(9)

30.1(7)

1,561(11)

1,212(9)(10)

1,551(7)

609(11)

326(9)

531(7)

9(9)

10(7)

6(4)

6(11)

(3) (3)(3)

(8) (8) (8)

(2)

A SMALL NUMBERS OF INTERNATIONAL PLAYERS DOMINATING THE MARKET WITH ROUGHTLY 26% MARKET SHARE IN TERMS OF ASSETS…

(6)

14

Privately&State owned54%

Foreign-owned46%

INTERNATIONAL PLAYERS PREVAIL ALL OVER THE REGION WITH STRUCTURAL TRANSFORMATION STILL ONGOING IN RUSSIA, TURKEY AND SLOVENIA

86%

58%

99%

66%

19%

89%98%88%84%85%

76%

9%

91%

19%

70%

36%(3)

Po

lan

d

Tu

rke

y

Cro

atia

Ru

ssia

Bu

lga

ria

Cze

ch R

.

Hu

ng

ary

Ro

ma

nia

Slo

vaki

a

Bo

snia

Slo

ven

ia

Se

rbia

Est

on

ia

La

tvia

Lith

ua

nia

Market share of foreign-owned banks1 (% of total banking system assets, 2005)CEE Total assets2 by ownership, 2005*

Sources: Unicredit-NE Research Network based on local Central Banks’ data(1) For Czech R. and Slovenia figures refer to end of 2004; for Lithuania, figures refer to share capital of Lithuanian

Banks owned by foreign investors; the ratio is computed considering 100% of assets when shareholding > 50% (2) Excluding Ukraine;(3) Including total assets controlled by non-residents with less than 50% of management rights

*Excl. Russia and Turkey foreign ownership 78%

15

Branches Employees (ths)

Erste

RZB

SocGen

Intesa

OTP

UniCredit

KBC

… AND STRONG FINANCIAL PENETRATION AND CEE FRANCHISE WITH AROUND 12,000 BRANCHES AND 230,000 EMPLOYEES

(1) Excluding Splitska Banka while including Nova Banjalucka Banka, Eksimbanka (employees as of Sep ’05) and 100% of KFS-Yapi branches and employees; including Splitska, branches and employees would be 3,068 and 66.3 ths, respectively; figures as of dec 2005 recasted end of March; figures for loans and deposits do not include Vienna Profit Center; (2) Including proforma BCR and Erste Bank Serbia; (3) Including proforma Impexbank; (4) Including proforma Splitska banka; employees of SG Yugoslav bank n.a. (5) Including proforma KMB, Intesa Beograd, Ukrsotsbank and UPI banka; (6) Including proforma Niska banka, Zepter banka and OTP Hrvatska; (7) Employees of Zepter banka n.a.

Source: Unicredit-NE Research Network(i) 100% of branches (excluding representative offices) and employees; for Unicredit, figures on employees are FTE;(ii) Only loans/deposits to/from customers (excluding amounts to/from banks); figures for loans are net values

1,668(2)

2,633(3)

1,027(4)

1,286(5)

1,000(6)

2,956(1) 65.0(1)

32.2(2)

48.7(3)

16.7(4)

24.9(5)

14.7(6)(7)

Proforma 2005, as of perimeter May 2006 i

1,237 28.6

Loans+Deposits (€ bln)ii

99.7(1)

55.3(2)

51.1(3)

34.5(4)

27.1(5)

22.1(6)

46.1

16

INTERNATIONAL PLAYERS IN THE FIELD WITH DIFFERENT BACKGROUND AND MARKET APPROACH

PL TK HR CZ RU BG HU RO SK BiH SI FRY (1) UA AL AJ(2) KZ(3) MK BY(4) BLT(5)

R Representative Office Among the top 5 banks in the country in terms of total assets

I Indirect presence Minority stakeM

Note: (1) Serbia & Montenegro (2) Azerbaijan (3) Kazakhstan (4) Belarus; (5) Estonia, Latvia and Lithuania; (6) LithuaniaSource: Banks’ Annual Report and Investor Relations

ERSTE

KBC M

OTP

CITIGROUP

RZB M R(6)

INTESA I R IR

UNICREDIT R

Presence

SOCGEN I R RR

Perimeter as of May 2006

17

0

2

4

6

8

10

12

0 5 10 15 20

Source: Unicredit-NE Research Network(i) Including both direct and indirect presence

STRATEGIC POSITIONING OF INTERNATIONAL GROUPS IN THE CEE REGION – FOCUSED VS WIDESPREAD STRATEGY

Number of countries of active presence(i)

Nu

mb

e r o

f T

op

5Strategic positioning: country of operation and size in each market

(size = total assets controlled in the region)

18

AGENDA




19

TOP BANKS IN BOSNIA & HERZEGOVINA

0,2

0,5

0,7

0,7

0,8

1,3

1,5

UPI banka

Hypo Alpe-Adria Banja Luka

Hypo Alpe-Adria Mostar

HVB Central Profit Banka

UniCredit Zagrebačka Banka

Raiffeisen Bank BiH

UniCredit ZagrabačkaBanka+HVB Central Profit

Banka (proforma)

Total Assets1, market share and ownership

Majority shareholder

(Unicredit Group)

(Unicredit Group)

(Hypo Alpe-Adria-Group)


(Unicredit Group)

(Raiffeisen International)

(Intesa Group)

Total Assets LAS (€bn)

Source: Unicredit-NE Research Network based on local banks’ financial statements and press releases(1) Total assets according to local accounting standards based on unconsolidated results; for Nova Banjalucka Banka (NBB) figures are

according to IFRS and expressed as gross values thus the overall market share may be overestimated due to the different standard(2) Based on net unconsolidated figures for total banking system’s assets according to local accounting standards;(3) Including proforma Nova Banjalucka Banka

Market share2

25%

21%

13%

12%

11%

4%

8%

(3)

(3)

20

TOP BANKS IN CROATIA

1,0

1,2

2,6

3,2

3,9

4,1

6,4

8,6

Slavonska banka

OTP Hrvatska

Hypo Alpe-Adria-Bank

HVB Splitska

Raiffeisenbank Austria

Erste & Steiermarkische Bank

Privredna Banka Zagreb

Zagrebačka Banka



(Erste Group)

(Unicredit Group until June ’06 Société Générale Group as of July)


(Unicredit Group)

(Intesa Group)


(OTP Group)



Source: Unicredit-NE Research Network based on Banka Magazine figures(1) Total assets according to local accounting standards based on unconsolidated results; (2) Based on net unconsolidated figures for total banking system’s assets according to local accounting standards

Market share2

24%

18%

12%

11%

9%

7%

3%

3%

21

TOP BANKS IN BULGARIA

0,9

1,3

1,4

1,6

1,7

1,8

2,3

3,5

Bulgarian Post Bank

First Investment Bank

Raiffeisen Bulgaria

UBB

HVB Bank Biochim & Hebros Bank

Bulbank

DSK bank

Bulbank+HVB BankBiochim+Hebros Bank (proforma)



(Unicredit Group)

(NBG)


(Unicredit Group)

(Unicredit Group)

(OTP Group)

(Majority private capital)

(EFG Eurobank)

Total Assets IAS (€bn)

Source: Unicredit-NE Research Network based on local banks’ financial statements and BNB(1) Total assets according to international accounting standards based on consolidated results; for DSK bank, figures are

according to hungarian IAS(2) Based on net unconsolidated figures for total banking system’s assets according to international accounting standards;

Market share2

21%

14%

11%

10%

9%

5%

10%

8%

22

TOP BANKS IN ESTONIA

0,04

0,20

0,90

1,06

2,54

6,94

TallinnaÄripanga

EestiKrediidipank

Sampo Pank

Nordea Bank

Eesti Ühispank

Hansapank

Source: Unicredit-NE Research Network based on local banks’ financial statements and Central Bank(1) Total assets according to international accounting standards based on unconsolidated results; for Nordea Bank

figures are consolidated and thus overall market share may be overestimated due to different standard (2) Based on net unconsolidated figures for total banking system according to international accounting standards



(SEB)

(Latvian Business Bank)

(Majority private local capital)

(Sampo Group)

(Swedbank)

Total Assets IAS (€bn) Market share2

59%

21%

~9%

8%

0.3%

2%

(Nordea Group)

23

TOP BANKS IN THE CZECH REPUBLIC

2,7

3,6

5,7

7,4

17,8

22,6

25,4

Raiffeisenbank

Commerzbank

HVB Bank Czech Rep.

HVB Bank Czech Rep.-Živnostenská Banka (proforma)

Komercni Banka

Česká Spořitelna

CSOB



(Société Générale Group)

(Commerzbank)

(Unicredit Group)

(KBC Group)

(Erste Group)



25%

22%

17%

6%

4%

7%

3%

(Unicredit Group)

Source: Unicredit-NE Research Network based on local banks’ financial statements and CNB(1) Total assets according to international accounting standards based on consolidated results (except for

Commerzbank whose figures are unconsolidated according to local accounting standards;(2) Based on net unconsolidated figures for total banking system’s assets according to local accounting standards

24

4,0

5,0

5,7

5,8

6,5

7,5

14,2

HVB BankHungary

RaiffeisenHungary

Erste

CIB

MKB

K&H

OTP

TOP BANKS IN HUNGARY



(Bayerische Landesbank)

(Erste Group)

(Intesa Group)

(Majority foreign capital)

(KBC Group)


(Unicredit Group)


Source: Unicredit-NE Research Network based on local banks’ financial statements and MNB(1) Total assets according to local accounting standards based on unconsolidated results;(2) Based on net unconsolidated figures for total banking system’s assets according to local accounting standards

Market share2

19%

10%

9%

8%

8%

5%

7%

25

TOP BANKS IN LATVIA

0.8

1.0

1.1

2.6

2.8

3.2

Nordea Bank

Rietumu banka

NORD/LBLatvija

Parex Bank

SEB Unibanka

Hansabanka



(SEB)

(DnB Nord Bank ASA)


(Swedbank)


(Majority private capital)

(Nordea Group)

Source: Unicredit-NE Research Network based on local banks’ financial statements and Central Bank(1) Total assets according to international accounting standards based on consolidated results;(2) Based on gross unconsolidated figures for total banking system’s assets according to local accounting standards

Market share2

20%

17%

17%

7%

5%

6%

26

TOP BANKS IN LITHUANIA

0.8

0.9

1.3

1.5

3.5

4.4

Nordea Bank

Sampo bankas

Bankas Snoras

NordLB (DnBNord Bank)

AB BankasHansabankas

Vilniaus Bankas



(SEB)

(DnB Nord Bank ASA)

(Swedbank)


(Conversgroup - LUX)

Source: Unicredit-NE Research Network based on local banks’ financial statements and Central Bank(1) Total assets according to international accounting standards based on consolidated results;(2) Based on net unconsolidated figures for total banking system’s assets according to local accounting standards

(Sampo Bank Plc.)

Market share2

34%

27%

12%

10%

6%

7%

(Nordea)

27

TOP BANKS IN POLAND

7,7

8,5

8,6

10,9

15,0

16,1

23,8

31,0

Bank ZachodniWBK

Citibank Handlowy

BRE Bank

ING Bank Slaski SA

Bank BPH

Bank Pekao

PKO BP

Bank Pekao-BankBPH (proforma)

Source: Unicredit-NE Research Network(1) Total assets according to international accounting standards based on consolidated results;(2) Based on net unconsolidated figures for total banking system’s assets according to local accounting standards


Total Assets IAS (€bn) Majority shareholder

(State)

(ING Group)

(Commerzbank)

(CitiGroup)

(AIB Ltd)

(Unicredit Group)

(Unicredit Group)

(Unicredit Group)

Market share2

20%

16%

11%

10%

7%

6%

6%

5%

28

TOP BANKS IN RUSSIA

5.9

6.5

6.7

6.8

12.7

18.4

73.7

Rosbank

Bank ofMocow

Uralsib bank

Alfa-bank

Gazprombank

Vneshtorgbank

Sberbank



(Gazprom – State3)


(State)

(State)


(Moscow City Government)


Source: Unicredit-NE Research Network based on Interfax Rating Agency(1) Total assets according to local accounting standards based on unconsolidated results;(2) Based on gross figures for total banking system’s assets;(3) In the end of 2005 Dresdner bank acquired ~33% stake

(Private local capital)

Market share2

26%

6%

4%

2%

2%

2%

2%

29

1,4

2,0

2,8

3,4

4,8

4,9

6,0

6,8

UniBanka

HVB Bank Slovakia

ING Bank

HVB BankSlovakia+UniBanka

(proforma)

CSOB

Tatra Banka

VUB

SlovenskáSporitelna




(Unicredit Group)

(KBC Group)

(Erste Group)

(Intesa Group)

(ING Group)

(Unicredit Group)


TOP BANKS IN SLOVAKIA

(Unicredit Group)

Source: Unicredit-NE Research Network based on local banks’ financial statements and NBS(1) Total assets according to international accounting standards based on consolidated results except for ING (unconsolidated and LAC) and CSOB (unconsolidated);(2) Based on total banking system’s assets according to harmonised statistics (IAS)

Market share2

18%

16%

13%

13%

9%

7%

4%

5%

30

TOP BANKS IN ROMANIA

1,5

1,6

1,8

2,6

3,0

3,1

5,2

9,0

Casa de Economii si Consemnaiuni

Banc Post

ING Barings Romania

HVB Bank Romania+ Banca Tiriac(proforma)

Raiffeisen Bank (Romania)

UniCredit Romania+HVB BankRomania+Banca Tiriac (proforma)

Banca Romana Pentru Dezvoltare

Banca Comerciala Romana



(Unicredit Group)

(Unicredit Group)

(ING Group)


(Erste Group)


(EFG Eurobank)

(State)

Total Assets LAS (€bn) Market share2

26%

15%

9%

7%

5%

4%

9%

4%

Source: Unicredit-NE Research Network based on local banks’ financial statements and BNR(1) Total assets according to local accounting standards based on unconsolidated results;(2) Based on unconsolidated net figures for total banking system’s assets according to local accounting standards

31

TOP BANKS IN SLOVENIA

1,7

1,8

1,9

2,0

2,5

3,0

9,2

Banca Celje

Banka Koper

Bank AustriaCreditanstalt

SKB banka

Abanka Vipa

Nova kreditnabanka Maribor

Nova Ljubljanskabanka




(Unicredit Group)

(SanPaolo IMI Group)


(State & KBC)

(State)

(Nova Ljubljanska banka)


Source: Unicredit-NE Research Network based on local banks’ financial statements and Central Bank(1) Total assets according to local accounting standards based on unconsolidated results;(2) Based on net unconsolidated figures for the total banking system’s assets according to local accounting standards

Market share2

31%

10%

9%

7%

6%

6%

6%

32

TOP BANKS IN SERBIA AND MONTENEGRO

0,9

0,8

1,0

1,4

0,5

0,5Vojvodanska

banka Novi Sad

HVB bankBeograd

Hypo Alpe-Adria-Bank

Beograd

Komercijalnabanka Beograd

Banca IntesaBeograd

RaiffeisenbankBeograd

Source: Unicredit-NE Research Network based on local banks’ financial statements and NBS(1) Total assets according to international accounting standards based on consolidated results;(2) Based on net unconsolidated assets for the overall banking system according to local accounting standards



(Intesa Group)


(Unicredit Group/BA-CA)

(State)

(State)



16%

11%

10%

9%

5%

6%

33

TOP BANKS IN TURKEY

9,3

15,0

17,0

20,3

22,9

25,2

32,9

40,0

40,9

Koç

YKB

Halk

Vakif

Garanti

Koç+YKB(proforma)

Ak

Is

Ziraat

Source: Unicredit-NE Research Network based on Bankers’ Association figures and BRSA(1) Total assets according to local accounting standards based on unconsolidated results; for the Koc-YKB combined entity figures

refer to proforma results including only Q4 of YKB P&L data;(2) Based on net unconsolidated figures for total banking system’s assets according to local accounting standards



(Sabanci Group)

(Doğuş Group & GE)

(State)

(Unicredit & Koc Group)

(State)

(IsBank Pension fund)

(State)



Total Assets LAS (€bn) Market share2

16%

16%

13%

10%

9%

8%

7%

6%

4%

34

METHODOLOGY

The comparison covers the following 16 countries: Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Serbia and Montenegro, Slovakia, Slovenia, Ukraine and Turkey;

In the ranking of international players, the CEE region includes the above mentioned 16 countries plus Albania, Azerbaijan, Belarus, Kazakhstan and Macedonia;

Banking results’ in the first part of the comparison (up to slide 17) are according to local IAS (with the exception of SKB and SG Vostok – owned by SocGen – UPI Banka – owned by Intesa – Niska Banka and Zepter Banka – owned by OTP – in local accounting standards). For Erste Bank Croatia and RZB figures are according to austrian IAS while for OTP according to hungarian IAS and may thus slightly differ from the local IAS;

Data are proforma 12M including deals closed as of May 2006. Only in a few cases proforma 12M results are not available (for details see notes on the slides);

Data refer to consolidated results of the bank (with the exception of OTP Hungary);

Data correspond to the sum of stand-alone results of CEE subsidiaries considering 100% of total assets, revenues and net profits (after tax and before minority interests) if shareholding > 50%. If < 50%, figures are shown proquota; for employees and branches, we consider 100%; only for RZB figures refer to overall results of Raiffeisen international as no data were available for most of its subsidiaries. This implies some underestimation of 2005 performance given that some banks are not fully owned (i.e. Tatra Banka, Priorbank, Raiffeisen Croatia, Raiffeisen Czech R., Raiffeisen Hungary, Raiffeisen Serbia, Raiffeisen Bosnia and Raiffeisen Krekova Banka);

Figures may differ from those published in Groups’ results due to differences in the accounting standards (local vs home country ones), number of quarters consolidated (as we include where available full year results) and consolidation effects;

The comparison among top banks at single country level (from slide 18) is based on a variety of different data which not always correspond to international accounting standards. Moreover, results will be/were published in individual countries only after this report was prepared. Market shares have been calculated based on data reported to the national banks on unconsolidated basis and according to LAS. Therefore in some countries (Bulgaria, Czech R., Latvia, Lithuania, Poland, Serbia and Slovakia) the numerator and the denominator do not have the same delineation and may thus overestimate the overall size of each bank in the market. The comparison nonetheless gives a picture of the relative sizes and trends in the single banking markets of the region.

Closing date Mid June 2006

banking in cee and the role of international players

Documents

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international banking

international banks

banking systems figures

banking associations

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