unicredito italiano group 1 st half 2003 results

UNICREDITO ITALIANO GROUP1st Half 2003 Results

London - September, 16th 2003

2

EXCELLENT INCREASE IN NET INCOME AND GOOD EFFIENCY LEVELS AFTER SIX MONTHS FROM THE THREE SEGMENT BANKS START-UP

Excellent capital ratios confirmed: Core Tier 1 at 7,07%, Total Capital Ratio 11,40%

Net Income up 12.3% 1H03/1H02 (19.8% 2Q03/1Q03)

Good revenue generation (Total Revenues up 2.1% 1H03/1H02, +3,5% 2Q03/1Q03) supported by different Divisional drivers:

Retail: substantial increase in sales of high value added products (bancassurance and structured bonds)

Corporate: excellent increase of revenues from corporate derivatives sales (474 mln, +29% y/y)

Private & AM: record net sales of Pioneer (5.4 bn), more than doubled vs. 1H02

New Europe: positive results from the launch of new products (2 bn AUM, +98% y/y)

Improvement of profitability and efficiency ratios (ROE from 17.2% in Dec02 to 20.2% in 1H03; Cost/Income from 54.6% in Dec02 to 52.1% in 1H03)

3

AGENDA

1H03 Group Highlights

Divisional Reporting

Retail Division

Corporate Division

Private & AM Division

New Europe Division

4

VERY GOOD NET INCOME GROWTH (+12.3% on 1H02) SUPPORTED BY AN INCREASE IN OPERATING INCOME (+0.9% on 1H02) AND LOWER PROVISIONS’ NEEDS. HIGH PROFITABILITY AND EFFICIENCY LEVELS RECONFIRMED (ROE at 20.2%, C/I at 52.1%)

1,0081,132

1H02 1H03

NET INCOME (Euro mln)

515 617520

1Q03 2Q032Q02

+19.8%

+18.7%

ROE (1) %

17.220.219.3

+3 pp+0.9 pp

FY02 1H031H02

(1) Calculated on end of period net equity excluding profit for the period

2,576 2,599

1H02 1H03

OPERATING INCOME (Euro mln)

1,258 1,3411,272

1Q03 2Q032Q02

+6.6%

+5.4%

COST/INCOME RATIO %

54.6 52.151.5

-2.5 pp+0.6 pp

FY02 1H031H02

+12.3%

+0.9%

5

WELL BALANCED BUSINESS PORTFOLIO SUPPORTS GOOD PROFITABILITY AND EFFICIENCY IN 1H03 …

(1) Balance due to the Parent Company, other Group companies and elisions

1H03 RESULTS

(Euro mln)

Total revenues 2,461 1,663 444 813 5,423

Operating costs -1,503 -478 -310 -453 -2,824

Operating income 958 1,185 134 360 2,599

Loan-loss provisions -96 -213 -3 -72 -363

Net income for the Group 464 565 85 153 1,132

Retail Division

Corporate Division

Priv.& AM Division

NE Division

Total Group1

C/I Ratio 61.1% 28.6% 69.8% 55.7% 52.1%

Employees2 25,799 6,072 3,122 30,128 70,356

(2) Including all the employees of Koc Financial Services (3,564 as at 30.6.2003)

6

2Q03 RESULTS

(Euro mln) Retail Division

Corporate Division

Priv.& AM Division

NE Division

Total Group1

Total revenues 1,242 809 234 427 2,758% Change vs 1Q032 +1.9% -5.3% +11.4% +10.4% +3.5%

Operating costs -765 -246 -161 -233 -1,417

Operating income 477 563 73 194 1,341

Loan-loss provisions -50 -157 -2 -31 -199

Net income for the Group 225 240 40 86 617

C/I Ratio 61.6% 30.4% 68.8% 54.6% 51.4%

% Change vs 1Q032 +3.7% +6.0% +8.1% +6.0% +0.7%

% Change vs 1Q032 -0.8% -9.5% +19.7% +16.2% +6.6%

% Change vs 1Q032 +8.7% n.m. n.m. -24.5% +21.3%

% Change vs 1Q032 -5.9% -26.2% -11.1% +26.9% +19.8%

Change in bp vs 1Q032 +105 bp +324 bp -215 bp -226 bp -142 bp

(1) Balance due to the Parent Company, other Group companies and elisions

… AS WELL AS IN 2Q03

(2) Calculated on data at end of period FX

7

GOOD GROWTH OF TOTAL REVENUES (+3.5 Y/Y AT CONSTANT FX), HELPED BY THE STRONG PERFORMANCE OF INCOME FROM FINANCIAL TRANSACTIONS AND HIGHER DIVIDENDS MORE THAN OFFSETTING THE SLIGHT DECREASE IN NET INTEREST INCOME AND NET COMMISSIONS

TOTAL REVENUES(Euro mln)

TOTAL GROUP

At constant FX

% ch. on 2Q022Q03

% ch. on 1Q03 1H03

% ch. on 1H02

Net interest income (incl. Dividends)

Net commissions

Income from financial transactions

Other net income

1 3 mln in 1Q03

At constant FX

At constant FX

At constant FX

At constant FX

+5.0

+4.6

2,758

2,760

+3.5

+3.6

5,423

5,423

+2.1

+3.5

1,387 +9.4 +2.12,655 -1.8

830 +5.2 -1.01,619 -1.8

349 -20.0 +37.9785 +27.6

192 +11.6 +9.7364 +6.1

1,387 +9.3 +1.42,655 -0.4

832 +5.7 -0.61,619 -0.6

349 -19.9 +37.8785 +28.9

192 +11.8 +7.3364 +7.4

8

CUSTOMER LOANS UP 2.1% ON DEC02 MAINLY DRIVEN BY DOMESTIC LENDING BOTH IN RETAIL AND CORPORATE

TOTAL CUSTOMER LOANS*BREAKDOWN BY DIVISION

* Excl. Repos

Retail Division up +2.9% on Dec02 supported by a positive contribution of residential mortgages to households (+6.4% on Dec02)

Corporate Division up 2.1% on Dec02 also thanks to increased volumes to SMEs (+6.7%** 1H03/1Q03)

New Europe Division down 3.1% on Dec02 (+2.8% at unchanged FX) mainly hit by Zloty devaluation (-10.2% on Dec02) and decreased lending in Poland (-6.3% at unchanged FX)

bn

Dec02 1Q03

111.4112.8

Retail

New Europe

Corporate

41.4

12.52.9

41.6

12.23.1

-2.5%

+0.5%

Other

-2.7%56.0 54.5

+6.3%

115.2

42.6

12.13.2

-0.6%

+2.4%

+5.0% 57.2

+5.6%

1H03

+2.1%

% ch 01Q03/Deco2

% ch. 1H03/1Q03

** Corporate Bank

9

TOTAL DEPOSITS (incl. repos) UP 3.6% ON DEC02 DUE TO AN INCREASE IN BOTH ADMINISTERED AND MANAGED FUNDS

CUSTOMER DEPOSITS**: BREAKDOWN BY DIVISION(bn)

TOTAL DEPOSITS*

(bn)

Dec02 1Q03

341.3

Dec02 1Q03

77.480.5

Retail

New Europe

Corporate

38.6

22.08.0

39.0

20.48.8

-7.4%

+1.1%

Other

Direct deposits down 1.7% on Dec02 due to a decrease in repos (-18.2% on Dec02) while customer deposits (excl. repos) grow by 0.7% on Dec02; stable trend in securities in issue (+0.3% on Dec02).

Indirect deposits up 6.9% on Dec02 (+5.4% on 1Q03) due to an increase both on administered (approx. 4.5 bn securities placed by Retail and Private banks, +7.9% on Dec02) and on managed funds (+5.9% on Dec02) driven by strong net inflows and positive market performance (MSCI World: +10% on Dec02) but negatively hit by $ devaluation (-8.2% on Dec02)

Direct

Indirect

-22.4%

211.8 215.3

-5.2%

+1.7%

129.5 122.8

338.1

11.9 9.2

* Incl. Repos

Retail Division up 1,5% on Dec02 Corporate Division down approx. 11% on

Dec02 but up 15% on 1Q03 hit by seasonal corporate fiscal payments

New Europe Division down 7.4% on Dec02 mainly impacted by Zloty devaluation (-1.7% at unchanged FX) and switch into managed funds

+9.4%

1H03

39.2

20.4

10.8

10.6

0%

+0.4%

+24.1%

+14.8%

81.0

1H03

226.5

+3.6%

+5.4%

127.2

353.7

% ch 01Q03/Deco2

% ch. 1H03/1Q03

+3.6%

+0.7%

% ch 1Q03/Dec02

% ch. 1H03/1Q03

** Excl. Repos

10

18.9%

STRONG INCREASE OF TOTAL AuMs (+6.4% ON END OF MARCH) DRIVEN BY EXCELLENT SALES AND POSITIVE INVESTMENT PERFORMANCE IN 2Q03

(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, Euro 64.3 bn as at 31.6.2003 vs Euro 62.6 bn as at 31.12.2002, +2.8% - Source: Assogestioni)

UCI TOTAL AuM(Euro bn)

Mutual & Hedge Funds1

Segregated Accounts

Insurance

Strong recovery of Total AuMs (despite a less favourable Asset Mix) lead by positive market performance …

… and excellent sales of high value added products indeed

Italy US, New Europe & Intl.

PGAM AuM: Evolution by Asset Class

Equities

Balanced

Hedge Funds

Bonds

Money Market 15.3%

29.0%

13.1%

41.9%

0.7%

1Q03 Avg.2002 Avg. 2Q03 Avg.

38.3%

13.4%

27.8%

1.6%

19.5%

40.8%

12.5%

25.6%

1.6%

BANCASSURANCE (Italy) 2Q03 Total New Premiums written: Euro 1,932 mln

(+9.4% on 1Q03); 1H03 Total New Premiums written: Euro 3,698 mln (+24.8% YoY)

HEDGE FUNDS (Worldwide) 2Q03 Net Sales Euro 191 mln vs Euro 107 mln in

1Q03, +78.5%; 1H03 Net Sales Euro 298 mln vs Euro 155 mln in the whole 2002

Reinforced leadership in the segment: 18.6% mkt share in bancassurance (17.6% in 2002); 14.6% mkt share on total market (11.7% in 2002)

Euro 140 mln Recurring Premiums written in 1H03 (+65.0% YoY); Recurring Premiums/Total Premiums written ratio from 2.9% in 1H02 to 3.8% in 1H03

31.12.’02 31.03.’03

23.7

36.9

24.8

16.4

101.8

+3.5% vs 31.03.’03

30.06.’03

38.3

24.4

18.3

27.4

108.4

+3.8%

-2.0%

+11.3%

+16.1%

+6.4%

23.5

37.6

26.0

15.3

102.4

-2.0%

-4.4%

+7.3%

+0.7%

-0.6%

AM PRODUCTS in US, NEW EUROPE and in the INTERNATIONAL business areas

2Q03 Total Net Sales of Asset Management products in the foreign business areas increasing by 41.1% on 1Q03 (Euro 2,077 mln vs Euro 1,472 mln)

1H03 Net Sales (Euro 3,549 mln) representing around 75% of Total 2002 Net Sales

11

INVESTMENTS AND STAFF COSTS INCREASING AGAINST A GOOD COST CONTROL OF THE OTHER COSTS

TOTAL GROUPAt constant FX

OPERATING COSTS BREAKDOWN(Euro mln)

Depreciation

Other Costs

Staff Costs

% ch. 2Q02

+7.5

-1.0

2Q03

831

472

% ch. on 1Q03

+2.8

-3.7

1H03

1,639

962

% ch. on 1H02

+4.1

+0.8

114 +4.6 +10.7223 +7.2

1,419 +0.9 +4.42,824 +4.7

1,417 +0.7 +4.72,824 +3.2

First half 03 total group costs impacted by the “in progress” reorganisation and investments (depreciation +7.2% mainly due to the New Europe Division – IT and network investments)

C/I at 52.1% decreases to 51.5% net of one-off S3 costs

Staff costs’ increase vs. 1H02 (+4.1%) is mainly attributable to the new labour contract (weights 2.5%). More accruals for the variable part of some companies (UBM, TradingLab) due to the brilliant results achieved weight for 0.8%

12

Tax Rate at 40.5%

Euro 363 mln Net loan loss provisions (of which write-downs for Euro 670 mln and write-backs for Euro 307 mln), down 27.7% vs. 1H02 mainly due to lower net write-downs (152 mln) in New Europe

Disposal of Investments for Euro 31 mln

Euro 58 mln of release of reserves previously created

Net Write-downs of Financial Investments Euro -2 mln

Provisions for risks & charges Euro -134 mln

NON OPERATING ITEMS CHARACTERISED BY LOWER PROVISIONS’ NEEDS AND BY DECREASED NET EXTRAORDINARY INCOME vs. 1H02

(Euro mln)

Operating income

Goodwill amort.

Net loan loss prov.

Other net prov1

Net extr. income

Taxes Minorities

2,599 -136-363

-136 +70 -825

-771,132

Net Income

1 Net write-downs of financial investments, Provisions for risks and charges, Provision to Reserve for General Banking risks

13

ASSET QUALITY IMPACTED BY THE WEAK ECONOMIC CYCLE IN ITALY BUT IMPROVING IN NEW EUROPE; STRONG YoY REDUCTION OF GROSS NPLs ENTRY FLOWS AND SIGNIFICANT GROWTH OF COLLECTIONS

Strong YoY reduction of gross NPLs entry flows from “in bonis” (Euro 252 mln in 1H03 vs Euro 418 mln in 1H02, -39.8%) and decreasing entry flows of other gross doubtful loans from “in bonis” (Euro 913 mln in 1H03 vs 937 in 1H02, -2.6%), mainly thanks to New Europe

Net NPLs and Doubtful Loans as % of Total Net Loans

3.73%

30.06.’03

3.71%

1.87% 1.92%

60.6% 60.0%

48.0% 47.7%

Coverage ratios

Net Doubtful Loans/ Total Net Loans

Net NPLs/ Total Net Loans

On Gross Doubtful Loans

On Gross NPLs

31.12.’02 30.06.’0331.12.’02

+24.2% YoY growth of total collections (Euro 656 mln in 1H03 vs Euro 528 mln in 1H02) thanks to effective workout activities

64 73

+9 bp

Cost of risk1

63

1H03

-1 bp

(bp, annualised)

200221H022

1 Calculated as Net Loan Loss Provisions on Net customers Loans at period-end; half-year data annualised on a daily basis (Total Net Loan Loss Provisions in the period / Number of days of the period x 365)

2 Data net of extraordinary provisions posted in 2002 (Bank Pekao and UniCredit Banca)

Cost of risk1 in line with 1H022

14

CONFIRMED OUTSTANDING SOLVENCY RATIOS, WITH CORE TIER 1 RATIO ABOVE 7%.RISK ADJUSTED PROFITABILITY STILL AT HIGH LEVELS

1,184

4,507

2,832Retail Division

Corporate Division

New Europe Division

CAPITAL ABSORPTION

334

28

346

VALUE CREATION

9,460Group Total(3) 595

NOPAT

464

153

565

1,132

RARORAC %

23.6

4.8

15.3

12.6

(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 -136 for NOPAT, 466 for Capital absorption and -83 for

Value Creation

MARGINAL RARORAC %

24.1

18.1

15.4

16.5

(Euro mln)

NOPAT(a)

Risk taken(1)

(b)

Shareholder’s value added(c) =(a)-COE(2)

Value added per unit of risk taken

(c)/(b)

From 7.21% (Dec 02)to 7.07% (Jun 03)

CORE TIER 1 RATIO(considering all RWA)

From 11.89% (Dec 02)to 11.40% (Jun 03)

TOTAL CAPITAL RATIO(considering all RWA) From Euro 135.9 bn

(Dec 02) to Euro 144.4 bn (Jun 03), +6.25%

TOTAL RWA

471Private & AM Division -3085 -12.9 27.0

15

AGENDA



Retail Division

Corporate Division


New Europe Division

16

RETAIL DIVISION : GOOD PERFORMANCE OF TOTAL REVENUES, OPERATING COSTS GROWTH DUE TO MARKETING EXPENSES AND TRAINING PROJECTS, 500 HEADCOUNT REDUCTION IN UNICREDIT BANCA VS. YEAR END

1Q03

Net interest income (incl. div.)

Net non interest income

Total revenues

Administrative costs (incl. depr.)

Operating income

Net write-down of loans

Net extraordinary income

Net income

Other net provisions

Taxes

Net income for the Group

RETAIL DIVISIONBREAKDOWN OF1H03 REVENUES

5.8%

86.5%

0.2%

0.2%

2.6%Other

companies Cost Income ratio, %

3.5%

2Q03% ch. on

1Q03

1.2%

628

591

1,219

-738

481

-46

-4

242

-9

-180

239

60.5

677

565

1,242

-765

477

-50

-3

224

-14

-186

225

61.6

+7.8

-4.4

+1.9

+3.7

-0.8

+8.7

-25.0

-7.4

+55.6

+3.3

-5.9

+105bp

17

INCREASED LENDING VOLUMES NOT COUNTERBALANCING THE SHRINKING DEPOSIT SPREAD, BRINGING TO A REDUCTION OF NET INTEREST INCOME (EXCL. DIVIDENDS) VS. 1Q03 (-6.1% Q/Q)

SB loans (1)

Residential mortgages (2)

Cons. creditOther loans

Good flow of new residential mortgages(2), 1.6 bn in 2Q03 vs. 1.3 bn in 1Q03, +23%

EOP LOANS, Euro bn UniCredit Banca: avg. lending spread from 5.81% in 1Q03 to 5.98% 2Q03, up 17bp

Other deposits

Households c/accounts

Bonds

Decrease of volumes mainly explained by bond, from 17.1 bn (Dec 02) to 14.2 bn (Jun 03), -17%

EOP DEPOSITS, Euro bn

UniCredit Banca: avg. deposit spread from 2.07% in 1Q03 to 1.81% in 2Q03, down 26bp

2Q031Q03

2Q031Q03

2002

2002

42.641.6

55.558.0

41.4

59.4

20.920.119.6 Clarima: 81,000 cards actively used, +60% on Dec 02. 1.7mln transactions, +70% on full year 2002

+2.4%

-4.3%14.216.017.1

13.113.212.9

2.01.91.8

6.76.57.0

(1) Includes short term and m/l term loans(2) Includes only households mortgages

15.616.816.5

25.725.325.8

+2.2%

+1.6%

+1.6%-6.7%

+4.1%

-0.8%

+5.0%+2.7%

-6.7%

+1.4%

-2.1%

-11.0%

-6.9%

+1.7%

18

GROWTH OF NET COMMISSIONS (+1.1% Q/Q), DRIVEN BY THE GOOD PERFORMANCE OF BANCASSURANCE AND SECURITIES IN CUSTODY...

RETAIL DIVISION: NET COMMISSIONS

(Euro mln) 1Q03 2Q03% Ch.

on 1Q03

Securities in custody

TOTAL RETAIL DIVISION

Total Commissions from Wealth Management

- Mutual funds 1

- Segregated Accounts 2

Other services

- Insurance Products 2

Breakdown by nature

1 Includes subscription and management fees from Plain Vanilla Mutual Funds and management fees from Mutual Funds in Segregated Accounts and in Unit Linked

2 Management fees related to Mutual Funds underlying Segregated Accounts and Unit Linked not included (see note 1)

- Commissions paid back to Pioneer 3

3 Management commissions paid back to Pioneer from the SGR of the division for the management of funds

60 80 +31.6

378 383 +1.3

212 213 +0.8

158 149 -5.7

21 20 -5.6

106 90 -15.1

97 107 +10.0

-64 -63 n.m.

19

... AND BY A GOOD INCREASE IN INDIRECT DEPOSITSSUSTAINED BY EXCELLENT SALES OF VALUE ADDED PRODUCTS

Structured bonds

Jan-Aug 2002

Jan-Aug 2003

Bancassurance single premiums

Jan-Aug 2002

Jan-Aug 2003

Bancassurance recurring premiums

Jan-Aug 2002

Jan-Aug 2003

= share of total insurance sales

INDIRECT DEPOSITS(1), Euro bn

2Q031Q03

MAIN TRENDS IN STOCKS OF AUMs

Total assets invested in Funds(2) from 44.7 bn to 46.0 bn, +2.8% Q/Q

Total Insurance policies(3) from 4.0 bn to 4.3 bn, +6.3% Q/Q

97.796.5

AUMs

Administered assets 46.046.2

51.750.3

+1.2%

-0.4%

+2.8%

(1) Management accounts, including only deposits of private customers(2) Plain vanilla mutual funds + Segregated accounts invested in funds +

Unit Linked invested in funds(3) Unit Linked not invested in funds + traditional policies

104 mln

154 mln+48%

3.4%

3.9%

3.0 bn

4.4 bn+50%

2.9 bn

3.8 bn+31%

20

COST OF RISK OF THE DIVISION IN LINE WITH THE PREVIOUS YEAR, EVEN AFTER A SUBSTANTIAL INCREASE OF GENERIC PROVISIONS LEADING TO AN IMPROVED COVERAGE RATIO ON PERFORMING LOANS


3.89%

30.06.’03

3.94%

1.99% 2.07%

48.8% 48.2%37.7% 37.8%

Coverage ratios




On Gross NPLs

31.12.’02 30.06.’0331.12.’02

48 bp

Cost of risk(1)

45 bp

1H03

-3 bp

(bp, annualised)

2002

Increased coverage ratio on Performing Loans, from 56 bp as at Dec 2002 to 67 bp at end of June, +11 bp

Increased coverage ratio on Gross Doubtful Loans Cost of risk in line with the previous year(2)

Effective workout activities, resulting in total collections of Euro 29 mln

(1) Calculated as Net Loan Loss Provisions on Net customers Loans at period-end; half-year data annualised on a daily basis (Total Net Loan Loss Provisions in the period / Number of days of the period x 365)

(2) Pro-forma, net of extraordinary provisions

21

KEY HIGHLIGHTS ON OTHER COMPANIES OF THE DIVISION

Good revenue growth (+3.4% y/y) coming from

stable Net Interest Income (+0.2% y/y)good Net Non Interest income growth

(+9.0%), driven by 15.5% increase in net commissions

Excellent efficiency improvement, cost/income ratio from 57.8% in 1H02 to 55.9% in 1H03

BANCA DELL’UMBRIA TRADINGLAB

Total revenues from Euro 99 mln to Euro 141 mln, + 42.4% y/y

1H03 non captive revenues representing 62.3% of total revenues (59.2% in FY2002)

Excellent performance of DLN(1) Origination business, with growing volumes (+58% y/y) and margins (+94% y/y)

2Q avg. Daily VaR: Euro 2.9mln, -6.1% vs. avg. 2002

Good increase in the number of cards issued (136,000, +49% vs. Dec 02)

Good increase in the number of partnerships, from 17 in Dec 02 to 23 at end of June

Increased number of employees to strengthen call centre

CLARIMA

Set-up of the operating platform almost completed

Good increase in the flow of new mortgages, from Euro 130 mln in 1Q to Euro 160 mln in 2Q, +23% q/q

UNICREDIT BANCA PER LA CASA

(1) Derivative Linked Notes

22

AGENDA



Retail Division

Corporate Division


New Europe Division

23

THE CORPORATE DIVISION SHOWS A VERY GOOD EFFICIENCY WITH A COST/INCOME AT 30.4% IN 2Q03 (AT 28.6% IN 1H03) AND A GOOD PROFITABILITY (1H03 RARORAC AT 15.3%)

1Q03

Net interest income (incl. div.) 376

Net non interest income 478

Total revenues 854

Operating costs (incl. depr.) -232

Operating income 622

Net write-downs of loans -56

Net extraordinary income 4

Net income 327

Other net provisions -15

Taxes -228

Net income for the Group 325

CORPORATE DIVISIONBREAKDOWN OF 1H03 REVENUES

29.7%

56.4%

2.7%

5.5%

Cost Income ratio, % 27.2%

5.7%

2Q03

368

441

809

-246

563

-157

16

243

-10

-169

240

30.4%

% ch.

-2.1

-7.7

-5.3

+6.0

-9.5

+180.4

n.m.

-25.7

-33.3

-25.9

-26.2

+324bp

Other Companies

(Euro mln)

24

UNICREDIT BANCA D’IMPRESA RESULTS SHOW NETINTEREST INCOME IN 2Q03 ALMOST IN LINE WITH 1Q03 AND THE EXPECTED DETERIORATION IN ASSET QUALITY DUE TO THE ECONOMIC CYCLE

(Euro mln)

Net interest income

Net income


Cost Income RATIO, %

1Q03

294

165

165

27.1%

Net interest income: –1.1% vs. March03 as result of the recovery in 2Q03 vs. 1Q03 in both loans (avg. loans +2.96%) and deposits (avg. deposits +3.87%) coupled with an avg. short term spread decreasing from 3.99 in 1Q03 to 3.79 in 2Q03

2Q03

291

109

109

29.4%

-1.1

-33.6

-33.6

+230bp

% ch. on1Q03

Provisions: the 2Q/1Q03 increase is due to NPLs’ growth explained by cyclical reasons and by the adoption of a cautious policy of higher coverage on the in bonis loans due to the tough macroeconomic cycle

Net non interest income: -1.7% vs. March03 mainly due to the seasonal decrease of the revenues from corporate derivatives (-15% 2Q/1Q03)

Net non interest income 178 175 -1.7

Total revenues

Operating costs

Operating income

472

-128

344

466

-137

329

-1.3

+7.2

-4.5

Net write-downs of loans

Other net provisions

-48

-15

-130

-6

+174.2

-57.6

Of which:74 82 +11.2

- trading profits 102 88 -13.3- commissions

25

FIRST HINTS OF INCREASE IN LENDING MARKET SHARE.LOANS TO SMEs GROWING SLIGHTLY FASTER THAN THESYSTEM. VOLUMES IMPACTED BY SOME DEALS TO LARGE CORPORATE

Source: Credit Bureau* With turnover > 50 mln

System’s data show an increase in loans from Dec02 to Jun03 of 2.6% and from Mar03 to Jun03 of 1.0% against respectively +3.3% and +6.7% of UBI loans to SMEs

(Euro mln)

Largest 42 groups

SMEs

Public sector and others

Total

Mar03

6,077

6,477

20,802

4,130

37,486

Dic02

4,990

21,489

5,174

39,103

7,450

Jun03

6,545

7,532

22,203

4,754

41,034

% ch.Jun03/Dec02

+31.2

+1.1

+3.3

-8.1

+4.9

% ch. Jun03/Mar03

+7.7

+16.3

+6.7

+15.1

+9.5

Other corporates*

LOANS

Largest 42 groups: increase mainly due to the “Autostrade”and Fidis deals

26

EXCELLENT RESULTS OF UBM IN BOTH TOP AND BOTTOM LINE ALSO RECOGNISED BY STANDARD AND POOR’S RATING “AA-”

Revenue increase driven by good performance of derivatives and by the investment banking activities

Excellent efficiency thanks to the consistent revenue growth and a less than proportional increase in costs

(Euro mln)

Financial ProductsSales and Trading

Investment Banking

Total revenues

Staff costs

Other costs (incl. depr.)

Operating income

Net income

C/I Ratio

of which derivatives

1H03

495

-58

-37

400

234

19.1%

431

64

390

y/y% ch.

+29.9

+17.9

+2.5

+35.2

+41.8

-318 bp

+25.0

+76

+24.7

Strong and efficient risk control with an avg daily VAR of 3.8 mln in 1H03 vs. 4.1 in 1H02.

2Q03y/y

% ch.

213 +28.8

-27 +4.4

-21 +5.0

165 +38.3

92 +44.3

22.6% -530 bp

190

23

+31.2

+11.8

172 +28.3

Rating based on recognition of central role of UBM within the Group and top level quality of risk management

27

SYNERGIES BETWEEN UBI AND UBM: CONSOLIDATION IN THE CORPORATE DERIVATIVES BUSINESS AND REPLICATION OF THE SAME JOINT BUSINESS MODEL IN THE CORPORATE FINANCE ACTIVITY

(Euro mln)

UBI

UCI TOT. REVENUESFROM SALES

UBM

Other companies

Total Captive

% ch.on 1H02

1H03 2Q03

189 87

474 204

281 114

4 3

+28.8

+29.3

+27.7

n.a.

341 152 +27.7

non captive 133 52 +33.8captive 148 62 +22.7

Corporate Derivatives

Thanks to the successful joint actionof UBM and UBI the Group revenuesfrom corporate derivatives show anexcellent growth 1H03/1H02 (+29%).Moreover, focus on sales qualitythrough the implementation of dailymonitoring tools strengthens longterm business sustainability

Busy pipeline of deals with UBM acting as structurer and advisor and UBI dynamically managing its greatly diversified credit portfolio and booking power

Corporate FinanceUBI and UBM are implementing common operating business processes able to deliver sophisticated corporate finance deals and techniques to Italian SMEs

One of the first example of the potential synergies is the structuring of guaranteed district bonds (e.g.: Neafidi bond)

28

CAUTIOUS PROVISIONING POLICY OF THE CORPORATE DIVISION TAKING ACCOUNT OF THE ECONOMIC ENVIRONMENT


2.42%

30.06.’03

2.50%

1.49% 1.53%

45.5% 45.9%40.6% 41.0%

Coverage ratios




On Gross NPLs

31.12.’02 30.06.’0331.12.’02

1 Calculated as Net Loan Loss Provisions on Net Customers Loans at period-end; half-year data annualised on a daily basis (total Net Loan Loss Provisions in the period / number of days of the period x 365)

Cost of risk1

48 bp73 bp

1H03

+25 bp

2002

Deterioration of business cycle causing a slight worsening of net NPLs and net Doubtful Loans on the total net loans (+4 bp and +8 bp respectively from Dec02 to Jun03)

Increased provisioning levels (from 48 to 73 bp) to take into account the financial deterioration of specific industrial sectors

Improved coverage ratios on Gross Doubtful Loans and Gross NPLs (+40 bp both)

+10 bp on coverage ratio on Performing Loans

29

AGENDA



Retail Division

Corporate Division


New Europe Division

30

UPB subsidiaries2

SIGNIFICANT QoQ IMPROVEMENT OF REVENUES AND OPERATING INCOME; NET INCOME PENALISED BY HIGHER PROVISIONS AND TAXES AND LOWER EXTRAORDINARY INCOME

1Q03

Net interest income 18


Total revenues 210

Operating costs (incl. depr.) -149

Operating income 61

Net write-downs of loans -1

Net extraordinary income +5

Net income 46

Other net provisions -1

Taxes -18


Cost/Income ratio, % 71.0%

2Q03

20

214

234

-161

73

-2

+1

42

-5

-25

40

68.8%

% ch.on 1Q03

+11.1

+11.5

+11.4

+8.1

+19.7

n.m.

n.m.

-8.7

n.m.

+38.9

-11.1

-215 bp

PRIVATE BANKING & AM DIVISION1H03 TOTAL REVENUES1

(Euro mln – Data at end of period FX)

(1) % contribution of the single companies to Division Total Revenues pre infra-group elisions(2) BAC S. Marino, BAC S. Marino Fiduciaria, UPAM, Cordusio Fiduciaria, FRT Sim, UniCredit Consulting, UniCredit Suisse Bank,

Banque Monegasque de Gestion.

56.5%

30.5%

4.6%

(Stand alone)

8.4%

http://www.pioneerinvestments.it/it/index.jhtml

31

INCREASED TOTAL FINANCIAL ASSETS WITH IMPROVED MIX; SALES GAINING MOMENTUM DRIVEN BY HEDGE FUNDS AND INSURANCE PRODUCTS

AUMs

Securities in Custody2

(Euro mln)

16,974

17,000

TOTAL UPB

- Mutual Funds 6,000

36,599

1Q03Net Sales

-47

-473

56

-9

-51

-413

-85

154

17,418

16,912

6,048

37,286

Fin. Assets as of

31.12.2002

- Hedge Funds 81 20 75 179

2Q03Net Sales

Fin. Assets as of

30.06.2003

- Segregated Accounts

- Insurance Products 2,558 1201 2601 3,159

Deposits 2,625 853 2463 2,956

8,335 -243 -300 8,032

Dec. 2002 Jun. 2003

Asset Mix Gross Sales monthly trend (AM Products4 + Structured Bonds) – Euro mln

Total Financial Assets 1.9% up on Dec. ’02, with increased weight of AUMs (from 46.4% to 46.7%, +30 bp)

Turnaround of Total Net Sales of AM products in June (+Euro 55 mln), after 4 months of negative net sales

(2) Including Repos

(1) New Premiums written

(3) Absolute delta (including market performance for Securities in Custody)

(Stand alone)

AUMs

Deposits

Securities in Custody

7.2%

46.4%

46.4%

7.9%

45.4%

46.7%

+70 bp

-100 bp

+30 bp

Jan. Feb. Mar. Apr. May Jun.

(4) Mutual Funds, Hedge Funds, Segregated Accounts and Insurance Products

280

461

583467 513

629

Positive trend of Gross Sales of AM products and Structured bonds: from Euro 280 mln in January to Euro 629 in June; weight of Hedge Funds on gross sales from 1.8% in January to 6.8% in June

Strong QoQ growth of Net Sales of Hedge Funds (Euro 75 mln vs Euro 20 mln) and Insurance Products (Euro 260 mln vs Euro 120 mln)

Around Euro 800 mln inflows from 2nd Tax Amnesty5

(5) The figure relates to UniCredit Private Banking together with its subsidiaries

32

% Ch.

+37.4

+33.9

+2.1

-428 bp

+15.1

+16.5

+12.6

2Q03

32.0

-13.5

12.2

57.2%

-42.9

-25.9

-16.9

STRONG OPERATING PERFORMANCE; NET INCOME NEGATIVELY AFFECTED BY ONE-OFF PROVISIONS

1Q03

Operating income 23.3

Taxes -10.1

Net income for the Group 12.0

Cost/Income ratio, % 61.5%

Operating costs (incl. depr.) -37.3of which:

- Staff costs

- Administrative expenses

-22.3

-15.0

(Euro mln)

Net Income including subsidiaries1: Euro 16.6 mln, in line with 1Q

-0.715.0Net interest income 15.1

+31.859.9Net non interest income 45.4

+23.774.9Total revenues 60.6

n.m.-5.3Net provisions -1.5

of which:

+29.256.944.0- Net commissions

Good resilience of Net interest income, thanks to increasing average deposits offsetting lower spreads

Strong +29.2% growth of Net commissions driven by increased sales of high value added products (Hedge Funds and Insurance) and the improvement of the Asset Mix

Return on Average Financial Assets from 0.68% in 1Q to 0.81% in 2Q

Operating costs increase due to higher average staff (1,099 in 2Q vs 1,022 in 1Q), non-competition agreements with Private Bankers and other expenses for the development of the new bank

(1) BAC S. Marino, BAC S. Marino Fiduciaria, UPAM, Cordusio Fiduciaria, FRT Sim, UniCredit Consulting, UniCredit Suisse Bank, Banque Monegasque de Gestion.

Increase of Provisions mainly due to Euro 3.4 mln posted in 2Q to face operational risks (one-off cost, not fiscally deductible)

(Stand alone)

33

LEADERSHIP IN ITALY BY TOTAL NET SALES IN 1H03, THANKS TO AN EXCELLENT +77% YoY GROWTH;ING PROVIDING ADDITIONAL SALES CAPACITY AND PERFECTLY FITTING WITH THE COMPANY STRATEGY

31.12.2002Pro-forma1

30.6.2003

1,833 1,610

-223

PFAs

~2,360

30.6.2003 Pro-forma with ING

ING

Net Sales

1H02Pro-forma1

1H03

5701,008

+77%

1H03Pro-forma with ING

ING

(1) Pro-forma including data of “former Xelion”, UniCredit Banca and OnBanca

~1,300(Euro mln)

Total Fin. Assets

31.12.2002Pro-forma1

30.6.2003

4,883 5,988

+23%~9,600

30.6.2003 Pro-forma with ING

ING

(Euro mln)

Streamlining of the Network:

750 PFAs, reinforcing Xelion’s 5th position among Italian PFAs networks

ING ADDS:

Net sales 77% up YoY, ranking Xelion 1st in Italy for Total Net Sales in 1H03 (around 15% market share) and 2nd for Net sales per PFA2

Improving QoQ trend (Euro 521 mln in 2Q vs Euro 487 mln in 1Q), with increasing weight of AM products3 (83.2% in 2Q vs 67.8% in 1Q)

ING ADDS:

Important additional sales capacity (~Euro 300 mln in 1H03)

(2) Among top-players for Total AUMs as at 30.6.2003; 5th taking into account all the Italian players

Total Financial Assets 23% up vs 31.12.2002; Total Financial Assets per PFA from Euro 2.7 mln as of 31.12.2002 to Euro 3.7 mln as of 30.6.2003 (+39.7%)

Weight of AM products3 from 70.5% as at end of March to 71.1% as at end of June (+68 bp)

(3) AM Products: Mutual Funds + Sicav + Segregated Accounts + Insurance products

ING ADDS: ~Euro 3.6 bn Financial Assets (of which more than 90% in AM

products3), making Xelion the 5th asset gatherer in Italy by Fin. Assets

Exit of “marginal” PFAs (Euro 1.36 mln Average Tot. Financial Assets of lost PFAs)

Recruitment of 125 new PFAs, generating on average Euro 2.9 mln net sales in 1H03

34

EXCELLENT NET SALES IN ALL THE BUSINESS AREAS;NEW HIGH FOR TOTAL AUMs AT THE END OF AUGUST,HIGHER THAN 11 bn VS YEAR END 2002

(3) Including Momentum

(1) Balance due to market and FX effects

(4) Data already included in the other business areas

Strong QoQ Net Sales trend: Italy +98%, International ex-Italy +150%, US +19% (+25.5% in USD), New Europe +27%

Italy

New Europe

(Euro mln)

80,759

1,523

TOTAL PIONEER

- Captive 65,693

Alternative Investments 3

103,688

1,517

1Q03

632

284

268

2,104

107

84,090

2,046

67,985

110,770

1,812

Jul.+Aug. 03Net Sales2

442

260

574

1,333

172

AuMs as of 31.08.20031

85,351

US 17,665 962 20,053 427 22,042

International (ex-Italy)3 3,741 226 4,581 204 5,064

2,413

69,342

114,870

2,064

AuMs as of 30.06.20031

AuMs as of 31.12.2002

- Non captive 15,066 364 16,105 -132 16,009

2Q03

1H03 Net Sales

1,253

362

940

3,330

191

1,149

566

313

US in USD 18.525 1,035 22.915 485 24,0851,299

Increased market shares on total AUMs in US5 (from 1.36% as of Dec. 2002 to 1.5% as of end of June) and in Poland (from 24.7% to 26.6%)

(5) Calculated on Non-proprietary funds

Excellent +19.4% growth of Hedge Funds vs Dec. 2002

(2) Provisional figures, susceptible to small changes

35

AGENDA



Retail Division

Corporate Division


New Europe Division

36

3.0%1

1.4%1

NEW EUROPE: ACCELERATION OF REVENUES GENERATION IN 2Q03 DRIVEN BY FEES AND COMMISSIONS. GOOD PROFITABILITY (NET INCOME UP 39.1% y/y, +28.4% on 1Q03) IN A CONTEXT OF IMPROVING CREDIT RISK.

(Euro mln)1H03

Net interest income2 530


Total revenues 813

Operating Costs3 -453

Operating income 360

Net write-down of loans -72

Net extraordinary income 20

Net income 220

Other net provisions4 -4

Taxes -84

4 Including provisions to reserve for general banking risk

2 Including dividends3 Including depreciations

%ch. at unchanged FX

6.5%1

42.8%1

17.6%1

24.6%1

1 Weight of the bank Total Revenues on Division Total Revenues – only UCI’s portion; balance due to Demir Romlease (weight: 0.2%)


Cost/Income ratio (%) 55.7

y/y % ch.

-3.3

+0.7

-1.9

+4.6

-9.1

-64.7

-52.4

+37.5

+91.1

+16.7

+39.1

2Q03

270

156

427

-233

194

-31

4

119

-6

-42

86

54.6+3.4 pp

NEW EUROPE DIVISION % ch. on 1Q03

% ch. on 2Q02

+5.2

+18.5

+9.7

+12.2

+6.8

-79.2

-88.2

+154.5

n.m.

+119.7

+149.0

+1.2 pp

4.0%1

BREAKDOWNOF REVENUES

+4.6

+24.6

+11.2

+5.9

+18.2

-20.0

-66.7

+17.8

n.s.

-0.0

+28.4

-2.2 pp

37

TREND IN VOLUMES AND COMMERCIAL INDICATORS

VOLUMES (at unchanged FX)

COMMERCIAL INDICATORS

Front Office Staff/ Tot. Staff2

60.1%60%

Dec02 1H03

Branches2

1,3501,347

Dec02 1H03

Active Customers2 (mln)

6.36.0

Dec02 1H03

15% 15% golden

other

2 KFS is included at 100%

Deposits (Euro bn)Loans (Euro bn) Assets under Management1 (Euro bn)

Dec02 1H03 1H02

2.01.51.0

+34.4%

+97.9%

Dec02 1H03 1H02

12.211.811.7

+3.1%

+4.5%

Dec02 1H03 1H02

21.021.121.1

-0.5%

-0.3%

1 New Europe business area of Pioneer

38

OPERATING INCOME +1% y/y, +25% excluding exceptional items

NET INCOME +85.7% y/y

All figures at unchanged FX, Data net of infragroup items

VOLUMES: Customer loans -6.3% on Dec02: thanks to a selective lending policy asset quality remained stable with

a slight increase in coverage ratio on Doubtful loans (62.7% in 1H03 from 62.2% in Dec02) Direct deposits down -3.5% on Dec02 more than offset by a strong increase in investment funds

VOLUMES: Customer loans +13.5% on Dec02 in a context of improving structural macroeconomic conditions Direct deposits +3.2% on Dec02 with higher loans/deposits ratio (to 64.6% from 58.7% in Dec02)

TOTAL REVENUES -11.7% y/y Net interest income down 18.9% mainly impacted by deposits spread (–1.1 pp vs. June 02) and debt

securities spread reduction (-1 pp vs. June 02) Net commissions up 18.5% benefiting from a re-pricing on C/A packages and increased AUM

OPERATING COSTS +4.8% y/y Higher depreciation (+21.6%) mainly due to IT investments

TOTAL REVENUES +0.2% y/y, +9.4% excluding exceptional items Net interest income up 22.7% y/y despite margin pressure in a context of growing volumes Trading profits down –66.8% y/y, -24% excluding exceptional items, mainly impacted by mark to market

evaluation of Pliva shares (Euro -5 mln in 1H03, Euro +17 mln in 1H02) OPERATING COSTS -0.5% y/y

Higher depreciation (+26.1%) linked to IT investments and branch network restructuring Increased staff costs (+5.1%) despite headcount reduction (-1.5% y/y, to 5,296), mainly due to incentives Lower administrative costs (-17.8%) due to tight cost control policies

PEKAO IMPROVES PROFITABILITY THANKS TO SUCCESSFUL HIGH VALUE ADDED PRODUCT SALES AND REDUCED COST OF RISK.ZABA: GOOD OPERATING INCOME GROWTH THANKS TO HIGHER NET INTEREST INCOME (DRIVEN BY INCREASED VOLUMES) AND TIGHT COST CONTROL

39

+100,000 Credit Cards (+32%), mkt share +50 bp (to 2.5%)

+500 new active Private clients (+12%) 1° in leasing, among top 3 in AM

KFS PEKAO

Euro 1.4 bn AUM in Mutual Funds1 (+87% on Dec02)

Market Share in Mutual Funds1 +270 bp (to 26.6%)

Euro 138 mln AUM in Pension Funds (+19% on Dec02)

Euro 50 mln AUM in Accumulation Plans Staff decreasing 4.9% (-866 on Dec02)

Euro 82 mln AUM in Mutual Funds (+34%on Dec02)

+140,000 Cards in 1H03 (to 1.9 mln), mkt share +49 bp (to 33.7%)

+64,000 Retail C/A in 1H03 (to 1.7 mln) Retail loans mkt share +60bp (to 24.1%)

ZABA

UNIBANKA

+14% AUM, +13% AUC +20% Affluent clients +33 bp mkt share on Deposits

Loans +37% (to Euro 81 mln), mkt sh. +20bp (to 1.5%)

Deposits +47% (to Euro 75 mln), mkt sh. +33bp (to 0.9%)

New retail C/A +24%

UCROMANIA

Total loans +6% Credit and Debit Cards +31%

ZIVNOBULBANK

Corporate Loans +33% on Dec02, mkt share +130 bp (to 11.7%)

+26,000 total clients

SUCCESSFUL COMMERCIAL ACHIEVEMENTS IN THE FIRST HALFIMPROVEMENT IN MARKET SHARES

1 Mutual funds distributed by Pekao

40

GOOD ASSET QUALITY IN NEW EUROPE IMPACTED BY PRUDENT LENDING POLICY IN PEKAO


79.8

2002 1H03

79.9

62.5 62.5

Coverage ratios


On Gross NPLs

Net NPL/ Loans %

1H03

Total NE +0.13.5

ch. on Dec02 (pp)

Net Doubtful/Loans %

1H03

ch. on Dec02 (pp)

8.9+0.0

At unchanged FX

Zaba -0.62.2 4.8-0.7

Unibanka +1.83.9 7.1-0.5

Pekao +1.14.5 12.5+0.7

Bulbank 1.1 -1.61.6+0.9

KFS -1.45.0 8.3+0.0

Stable coverage ratios both on NPL and on Doubtful loans

1632 1882

+15%

Cost of risk1

119

1H03

-27%(bp, annualised)

20021H02

1 Calculated as Net Loan Loss Provisions on Net customers Loans at period-end; half-year data annualised

2 Data obtained deducting extraordinary provisions from stated figure

Zivno 0.7 -0.96.5-0.8

Decreasing cost of risk thanks to stable asset quality and lower provisions’ needs

Stable Net NPL/Net Loans ratio and slight increase of Net Doubtful/Loans ratio

Net NPL/Loans and Net Doubtful/Loans ratios increase in Pekao mainly due to prudent lending policy (Net loans –6.3% on Dec02)

Strong decrease of gross NPLs entry flows from in Bonis -70.5% on 1H02, good increase of collections (+19% y/y)

41

Annex

42



Total revenues

Operating income


Administrative costs (incl. depr.)

Net income

Other net provisions*

Goodwill depr.

(Euro mln)

Minorities

Taxes

% ch. on 1Q03 2Q03

1,371

2,758

-1,417

1,341

-199

50

617

-81

-70

-36

-388

(*)Net write-downs of financial investments, provisions for risks and charges, provisions for possible loan losses and provisions to reserve for general banking risk

% ch. on 2Q02

1H03 CONSOLIDATED INCOME STATEMENT

y/y % ch.

+12.3

+6.2

+2.1

-27.7

-51.4

+3.2

+0.9

-9.9

+10.6

1H03

Net interest income (incl. div.) 1,387-1.82,655

2,768

5,423

-2,824

2,599

-363

70

1,132

-136

-136

-10.5-77

-1.7-825

- of which Dividends 182+33.1185

+19.8

-1.9

+3.5

+21.3

+150.0

+0.7

+6.6

+47.3

+6.1

-12.2

-11.2

+18.7

+8.3

+5.1

-36.8

-67.9

+4.7

+5.4

-40.9

+29.6

n.s.

-1.3

+9.4 +2.1

n.s. +64.0

43

DIVISIONAL CONTRIBUTION TO THE GROUP OPERATING INCOME

(Euro mln)

36.3%

5.1%

13.7%

100%

44.9%

(1) Parent Company, USI, UPA, Audit, other companies and elisions

134

360

958

2,5992,637

Retail Division

Private & AM

Division

New Europe Division

Corp. Centre and elisions(1)

Group Total

Total pre-Corp. Centre

-38

1,185

Corporate Division

Weight of the division on Total pre Corporate Centre

OPERATING INCOME: COMPOSITION BY DIVISION

44

(Euro mln)

45.8%

7.9%

14.1%

100%

32.2%

(1) Parent Company, USI, UPA, Audit, other companies and elisions

444

813

2,461

5,4235,381

Retail Division

Private & AM

Division

New Europe Division

Corp. Centre and elisions(1)

Group Total

Total pre-Corp. Centre

+42

1,663

Corporate Division

Weight of the division on Total pre Corporate Centre

REVENUE COMPOSITION BY DIVISION

DIVISIONAL CONTRIBUTION TO THE GROUP TOTAL REVENUES

45

ASSET QUALITY: DETAILS BY DIVISIONS

Coverage ratios

-on total gross NPL, %

-on tot. Gross doubtful loans, %

Total gross doubtful loans

Retail Banking

Dec. 02 Jun. 03

Gross NPL

% change on Dec. ‘02

Gross NPL/Tot. Gr. Loans,%

Net NPL/Tot. Net Loans,%

1,608 1,5832,18

05,487

-2.3% +1.9%

3.77% 2.66% 14.94% 4,56%

1.99% 1.49% 3.46% 1,87%

2,585 2,360 3,027 8,288-3.9% -0.4%

48.8% 45.5% 80.0% 60.6%

37.7% 40.6% 48.0%

(1) Balance due to other Group companies (mainly Parent Company)

Net Doubtful Loans/Tot. Net Loans,% 3,73%3.89% 2,42% 8.99%

62.6%

(Euro mln - Data at end of period FX)

1,698

3.87%

2.07%

2,696

48.2%

37.8%

3.94%

+5.6%

+4.3%

+4.3%

+4.7%

1,651

2.75%

1.53%

2,471

45.9%

41.0%

2,50%

2,129

15.07%

3.50%

2,910

79.9%

8.94%

62.5%

5,589

4,60%

1,92%

8,254

60.0%

47.7%

3,71%


Corporate Banking

NE Banking Total Group 1

Dec. 02 Jun. 03 Dec. 02 Jun. 03 Dec. 02 Jun. 03

Gross Doubtful Loans/Tot. Gr. Loans,% 6,89%6.07% 3.97% 20.75%6.14% 4,11% 20.61% 6,79%

Net NPL


824 862 436 2,161

-2.1% +3.5%

880

+6.9% +3.7%

894 427 2,238

Total net doubtful loans 1,611 1,402 1,132 4,310-3.7% +0.2%

1,678+4.2% +4.0%

1,459 1,091 4,317% change on Dec. ‘02

46

Interest income (incl. div.)


Total revenues

Operating costs (incl. dep.)

Net operating income

Net income

Cost/income ratio, %

TOTAL (2)Other banks (1)

UniCredit Banca

Net provisions

(2) Balance due to roundings

(Euro mln)


TradingLab

- of which: Staff costs

- of which: Other costs

Other companies

RETAIL DIVISION: RESULTS BREAKDOWN BY BANK

- o/w: Net write-down of loans

1,144

984

2,128

1,346

782

363

63.2

363

719

574

83

103

72

44

116

65

51

24

56.2

22

35

28

8

9

71

71

141

40

102

66

28.2

66

15

22

-

-

18

57

76

51

24

14

n.m.

14

10

39

5

7

1,305

1,156

2,461

1,503

959

467

61.0

464

780

662

96

120

(1) CR Carpi, Banca dell’Umbria

47(1) Balance due to roundings

CORPORATE DIVISION: RESULTS BREAKDOWN BY BANK

Interest margin (incl. div.)


Total revenues



Net income

TOTALLocatUnicredit

Banca d’Impresa

UBM

Net provisions

(Euro mln)

Net income (UCI’s portion)



Other companies

(1)

- o/w: Net write-downs of loans

585

353

938

673

117

148

265

274

274

28.20%Cost/income

178

199

24

471

495

400

37

58

95

234

234

19.10%

106

-11

95

27

15

12

68

15

14

32

28

28.70%

31

106

137

91

42

49

46

12

9

31

31

744

919

1663

478

263

215

1185

238

212

570

565

28.8%

11

11

48

UNICREDIT BANCA D’ IMPRESA: BREAKDOWN OF DEPOSITS AND LOANS

VOLUMES(Euro bn)

Source: Bank of Italy Matrix data

1H03

Current Accounts 8.5

Savings Accounts 0.2

DEPOSITS 9.0

Repos 0.3

Current Accounts 11.2

Other short term loans 14.7

LOANS 42.3

Mortgages 8.1

Other m/l term loans 8.3

1H03

49Source: UBI estimates on Centrale dei Bilanci data

UBI RISK PROFILE COMPARED TO THE SYSTEM

0%

5%

10%

15%

20%

25%

1 2 3 4 5 6 7 8 9

Banking system (weightedaverage of ratings: 5.1)

UBI (weighted average ofratings: 5.0)

50

UBM Daily VAR(1) and P&L (June 2002 – June 2003)Euro mln

Daily P&L

VaR

(1) Figure are calculated with a 98-99% asymmetric double tail confidence interval.

1H03 avg. daily VAR at Euro 3.8 mln vs 4.1 in 1H02 and 2Q03 avg. daily VAR at Euro 4.2 vs. 3.9 in 2Q02

UBM VAR CHANNEL

(€8)

(€6)

(€4)

(€2)

€ 0

€ 2

€ 4

€ 6

€ 8

03/0

6/20

02

17/0

6/20

02

01/0

7/20

02

15/0

7/20

02

29/0

7/20

02

12/0

8/20

02

26/0

8/20

02

09/0

9/20

02

23/0

9/20

02

07/1

0/20

02

21/1

0/20

02

04/1

1/20

02

18/1

1/20

02

02/1

2/20

02

16/1

2/20

02

30/1

2/20

02

13/0

1/20

03

27/0

1/20

03

10/0

2/20

03

24/0

2/20

03

10/0

3/20

03

24/0

3/20

03

07/0

4/20

03

21/0

4/20

03

05/0

5/20

03

19/0

5/20

03

02/0

6/20

03

16/0

6/20

03

30/0

6/20

03

51

Net interest income


Total revenues


Operating income

Net income

Cost/Income Ratio

Tax Rate

Net provisions

(1) Balance due to roundings




PRIVATE & AM DIVISION 1H03 INCOME STATEMENT –BREAKDOWN BY COMPANY

- o/w: Net write-downs of loans

(Euro mln - Data at end of period FX)


TOTAL DIVISION1

38

406

444

-310

-154

-141

134

-9

-3

88

85

69.8%

32.8%

+6

UPB subsidiaries

12

25

37

-22

-10

-10

15

-1

-1

10

9

59.5%

n.a.

0

-7

258

251

-166

-91

-68

85

0

0

76

74

66.3%

16.9%

7

3

17

20

-41

-5

-31

-21

-1

0

-22

-22

n.m.

n.a.

0

30

105

135

-80

-48

-32

55

-7

-2

24

24

59.2%

49.3%

-1

(stand alone)

52

Data as at 30.06.03

1 Calculated on average PFAs2 AUMs, Securities in Custody, Bancassurance and liquidity3 Ranking taking into account only the 10 major Italian players by Total Financial Assets as at 30.6.2003

Net Inflows per PFA1:2nd among Top-

Players and 5th in Italy

Net Inflows:Euro 1,008 Mln,

1st in Italy

1,610 PFAs,5th in Italy

Tot. Fin. Assets:Euro 6.0 bn,

9th in Italy

ASSET GATHERING – RANKINGS OF THE ITALIAN PLAYERS AS AT 30.6.2003 (XELION AND OTHER COMPANIES STAND ALONE)

NUMBER OF PFAs

Mediolanum 4,130

Fideuram 3,406

Rasbank 3,170

Fineco 1,711

Xelion 1,610

Banca Primavera 1,562

Finanza & Futuro 1,393

Banca 121 1,301

Banca S.Paolo Invest 1,147

Banca Generali 1,125

TOTAL FINANCIAL ASSETS

Fideuram 47,712

Mediolanum 18,211

Rasbank 12,764

Banca S.Paolo Invest 8,257

Finanza & Futuro 8,152

Banca Generali 6,923

Credit Suisse 6,740

Azimut 6,313

Xelion 5,988

Banca Primavera 5,538

TOTAL NET INFLOWS2

Xelion 1,008

Mediolanum 965

Credit Suisse 679

Fideuram 430

Azimut 377

Banca Primavera 342

Bipielle 302

Rasbank 295

ING Sviluppo 274

Banca della Rete 232

NET INFLOWS PER PFA2 & 3

Credit Suisse 2.05

Xelion 0.60

Azimut 0.52

Mediolanum 0.23

Banca Primavera 0.22

Banca Generali 0.16

Fidueram 0.13

Rasbank 0.09

Banca S.Paolo Invest 0.03

Finanza & Futuro -0.03

Data as at 30.06.2003 – Euro mlnData as at 30.06.2003 – Euro mln Data as at 30.06.2003 – Euro mln

Source: Assoreti data as at 30.6.2003

53

Data as at 30.06.03

1 Mergers: Banca Generali + Banca Primavera. Acquisitions: ING by Xelion, Commerzbank by Rasbank, Zurigo by Finanza & Futuro, Banca Idea by Pop. Vicenza2 Calculated on average PFAs3 AUMs, Securities in Custody, Bancassurance and liquidity4 Ranking taking into account only the 10 major Italian players by Total Financial Assets as at 30.6.2003

Net Inflows per PFA2:2nd among Top-

Players and 5th in Italy

Net Inflows:Euro 1,283 Mln,

1st in Italy

2,360 PFAs,5th in Italy

Tot. Fin. Assets:Euro ~9.6 bn,

5th in Italy

ASSET GATHERING – POR-FORMA RANKINGS OF THE ITALIAN PLAYERS BY GROUP AS AT 30.6.2003 (AFTER RECENTLY ANNOUNCED MERGERS AND ACQUISITIONS1)

NUMBER OF PFAs

Fideuram + SPI 4,553

Mediolanum 4,130

Rasbank + Commerz 3,374

Generali + Primavera 2,687

Xelion + ING 2,360

Fineco + B.ca Rete 2,163

F&F + Zurigo 1,736

Banca 121 1,301

Euromob. + Credem 1,063

Banca SAI 1,038

TOTAL FINANCIAL ASSETS

Fideuram + SPI 55,969

Mediolanum 18,211

Rasbank + Commerz 13,462

Generali + Primavera 12,461

Xelion + ING ~9,600

F&F + Zurigo 8,316

Credit Suisse 6,740

Fineco + B.ca Rete 6,403

Azimut 6,313

Euromob. + Credem 6,284

TOTAL NET INFLOWS3

Xelion+ING 1,283

Mediolanum 965

Credit Suisse 679

Generali + Primavera 525

Fideuram + SPI 462

Fineco + B.ca Rete 434

Euromob. + Credem 415

Azimut 377

Rasbank + Commerz 318

Bipielle Network 302

NET INFLOWS PER PFA3 & 4

Credit Suisse 2.05

Xelion 0.53

Azimut 0.52

Euromob. + Credem 0.41

Mediolanum 0.23

Fineco + B.ca Rete 0.19

Generali + Primavera 0.19

Fideuram + SPI 0.10

Rasbank + Commerz 0.09

F&F + Zurigo -0.02

Data as at 30.06.2003 – Euro mlnData as at 30.06.2003 – Euro mln Data as at 30.06.2003 – Euro mln

Source: Assoreti data as at 30.6.2003 and UCI data for Xelion+ING pro-forma figures

54

Interest margin (incl. div.)


Total revenues



Net income

ROE

Cost/income

TOTAL (1)

530

283

813

453

360

220

17%

55.7%

Net provisions 76

(1) Balance due to roundings and Demir Romlease

(Euro mln)

(UCI stake)

Net income (UCI’s portion) 153

- of which: Staff costs 227

- of which: Other costs 164

NEW EUROPE DIVISION: RESULTS BREAKDOWN BY BANK

- o/w: Net write-down of loans 72

UNI BANKA (76.3%)

15

7

22

15

7

4

11.0%

66.7%

4

3

6

7

4

BULBANK (85.2%)

25

18

43

16

27

20.1%

37.6%

-2

23

20

7

7

-2

Group PEKAO (53.2%)

272

179

451

256

195

16.4%

56.5%

113

54

61

129

93

53

119

48

168

96

73

53

19.2%

56.8%

9

42

Group ZABA

(81.9%)

57

27

9

3

4

8

6

2

2

25%

72.7%

3

2

0

2

0

82

17

99

48

50

21

19.1%

49.0%

18

22

12

21

KFS(2) (50.0%)

9

(2) Consolidation with proportional method (50%)

13

9

22

17

5

4

10.2%

75.7%

7

6

-1

4

Zivno (95.0%)

-1

UniCredit Romania (99.8%)

Data net of infragroup items (dividends and extraordianry items)

55

CONSOLIDATED INCOME STATEMENT: PEKAO



4 At unchanged FX

(Euro mln)

Net interest income1


Total revenues

Operating costs2

Operating income



Net income

Other net provisions3

Taxes


2Q031H03

272

179

451

-256

195

-53

16

113

-1

45

y/y % ch.4

61

-18.9

+2.0

-11.7

+4.8

-26.9

-73.25

-51.8

+82.6

-53.6

+9.4

+85.7

127

88

215

-126

89

-11

1

55

-1

-22

30

% ch.4 on 1Q03

-9.2

-1.7

-6.3

-0.1

-13.8

-70.4

-93.7

-1.6

n.m.

-2.9

% ch.4 on 2Q02

-1.3

-16.9

-1.9

-11.4

+8.2

-29.4

-92.4

-97.0

n.m.

-14.9

n.m.

n.m.

5 –38% excluding extraordinary provisions in 1H02


56



4 At unchanged FX

CONSOLIDATED INCOME STATEMENT: ZAGREBACKA

(Euro mln)

Net interest income1


Total revenues

Operating costs2

Operating income



Net income

Other net provisions3

Taxes


2Q031H03

119

49

168

-96

73

-9

1

53

0

-12

y/y % ch.4

42

+22.7

-30.9

+0.2

-0.5

+1.0

n.m.

-58.2

-23.7

-76.0

-26.2

-25.4

67

31

98

-53

45

-10

1

28

-2

-5

23

% ch.4 on 1Q03

+22.7

+65.3

+33.2

+19.6

53.7

n.m.

n.m.

+9.1

n.m.

-44.5

% ch.4 on 2Q02

+12.6

+19.8

+36.0

+24.5

+4.2

+61.8

n.m.

-67.7

-22.0

n.m.

-46.9

-23.4


unicredito italiano group 1 st half 2003 results

Documents

1h02 net

change vs 1q032

bp vs 1q032

strong performance of

end of period net equity

record net sales of

good profitability

operating costs