1h05 consolidated results alessandro profumo - ceo
DESCRIPTION
1H05 CONSOLIDATED RESULTS Alessandro Profumo - CEO. Milan - September, 13 th 2005. 1H05 and 2Q05 results in ITAS: strong performance of the Group. Transition to International Accounting Standards: no major impact on net income and shareholders’ equity for the Group. SUMMARY OF CONTENTS. - PowerPoint PPT PresentationTRANSCRIPT
1H05 CONSOLIDATED RESULTS
Alessandro Profumo - CEO
Milan - September, 13th 2005
2
SUMMARY OF CONTENTS
Transition to International Accounting Standards: no major impact on net income and shareholders’ equity for the Group
1H05 and 2Q05 results in ITAS: strong performance of the Group
3
2Q05 ACHIEVEMENTS
Strengthened competitive positioning in Italian banking (lending market share +20 bp3, mutual funds market share +35 bp vs Dec04)
Solid performance of operating income (+11.4% y/y) benefiting from top-line growth (+6.5% y/y) and cost control (+1.4% y/y1)
Continued headcount reduction, in advance of the plan: -1,159 vs Jun04 and -669 vs Dec04 in Italy
Continued volume growth (AuM: +6 bn, Loans2: +4.3 bn q/q), despite UCB mortgage securitisation (3 bn)
(2) Ex-repos
Net income at 608 mln in 2Q05 (+4.3% y/y) and at 1.3 bn in 1H05 (+24% y/y)
(3) Gross of UCB mortgage securitization
(1) Calculated on operating costs net of recovered taxes
4
STRONG RESULTS, FURTHER OPERATING INCOME IMPROVEMENT
Total Revenues
(mln)
5,604
1,301
58 bp
+7.7%
+24.0%
-5 bp
Operating Income
Net Income
1H05 Y/Y ch.
2,556 +12.1%
54.4%C/I Ratio, %
8.03% +9 bpTier I ratio
Cost of Risk, bp(2)
(2) 1H05 data annualised
Ch. on FY04
1H05
34.0%Tax Rate, %
-179 bp
-174 bp
2,892
608
2Q05
1,347
53.4%
36.1%
+6.6%
-12.1%
% ch. on 1Q05
+11.5%
-202 bp
+412 bp
+6.5%
+4.3%
% ch. on 2Q04
+11.4%
-203 bp
+143 bp
Deltas mainly due to tax free gain from disposal of “Serenissima” stake in 1Q05
53.3%C/I Ratio net of recovered taxes(1), % -206 bp 52.3% -211 bp -232 bp
(1) Calculated excluding, both from costs and revenues, taxes recovered and accounted in the “other net revenues” line
5
NET INTEREST INCOME UP BOTH Q/Q AND Y/Y
2Q04
New Europe
Italy
1,210
939
271
1Q05
1,274
986
288
NET INTEREST INCOME excl. Dividends (mln)
1,286
976
309
2Q05
Sustained volume growth in all divisions driving net interest income good performance Italy:
Negative impact of UCB mortgage securitisation on Italy contribution (~7 mln in 2 months) Slight margin compression (mainly in UBI) driving lending spread to 3.61% (-25 bp Q/Q) (2), in line
with system trend New Europe:
Good volume growth in all New Europe banks, both at current and unchanged FX Slight margin compression in major banks, with the exception of Pekao
1H04
2,399
1,869
530
2,560
1,963
597
1H05
+6.7%
+5.0%
+12.7%
+0.9%
-1.1%
+7.5%
+6.2%Q/Q % ch.
Underlying y/y growth(1) would be +8.4%
(1) Y/y % ch. adjusted for securitisations (Locat, District bonds and UCB)(2) End of period short term spread (UBI + UCB) towards non financial companies
6
3.112.7
2.7
16.215.02.9
DEC 04
10.83%
11.05%
INCREASED LENDING VOLUMES AND MARKET SHARE GAINS WHILE MAINTAINING PRICING PREMIUM
Retail: loan growth driven by mortgages, consumer credit and small business. 2Q05 impacted by 3 bn mortgage securitisation
Corporate: up 5.0% vs Mar 05 with m/l term still growing (+3.4%2)
New Europe: +6.4% at unchanged FX with q/q increases in all banks (Pekao +5.2%, Bulbank +1.5%, Zaba +5.2%, Koc +11.6%)
Good lending spread (3.61%) with pricing premium vs industry (37 bp)
1 Net of repos2 Source: Bank of Italy Matrix (Total Loans net of NPLs and Repos)3 Including 3 bn mortgages securitisation.
JUN 053
On total loans 10.79%
On M/L term loans 10.85%
MAR 05
10.88%
11.13%
MAR 05
139.6 143.9
Corporate
New Europe
JUN 04 JUN 05
131.3
Retail
63.0 63.8
57.9
66.9
+9.6%
Other
52.4 58.2
% ch. vs MAR 05
+3.0%
+8.4%
-0.7%
+5.0%
+7.9%
TOTAL CUSTOMER LOANS1 (bn)UCI LENDING MARKET SHARES2 IN ITALY
Excluding 3 bn mortgages securitisation, market shares would be:
11.03% (+20 bp on Dec 04) on total loans 11.23% (+18 bp on Dec 04) on M/L term
loans
7
NET COMMISSIONS DRIVEN BY SPECIFIC FOCUS ON ASSET MANAGEMENT PRODUCTS AND BY FURTHER DEVELOPMENT OF TRANSACTIONAL AND LENDING RELATED FEES
230212
(1) Up-front on AUM and AUC referred to UniCredit Banca, UniCredit Private Banking and Xelion
NET COMMISSIONS (mln)
+8.8%1,653
1,799
1,4231,587
1H04 1H05
+11.6%
-7.8%
98116 114
Up-front(1)
Other
928
2Q05
831
855
2Q04
739
1Q05
757
871+6.7%
-13.8%
+9.8%
Q/Q % ch.+8.7%
+12.7%
Y/Y % ch.
(2) Corporate finance + Equity capital market + Debt capital market
Key drivers of the growth: Strategic focus on recurring fees: segregated accounts & mutual funds fees (excl. up-
front) up 25 mln 2Q05/1Q05 and 95 mln 1H05/1H04 Corporate Division: foreign-trade (+7 mln 2Q/1Q, +9 mln 1H/1H), investment banking(2)
(+11 mln 2Q/1Q, +35 mln 1H/1H) and transaction services (+1 mln 2Q/1Q, +4 mln 1H/1H)
Trend of up-front fees impacted by lower emphasis on sales of third party structured bonds
8
Dec04
GROUP AUM REACHING NEW HEIGHTS: +18 BN IN ONE YEAR, +6 BN JUST IN THE LAST THREE MONTHS
(2) Calculated according to the “new” classification methodology adopted by Assogestioni since January 2005
(1) US + New Europe + International (ex Italy)
UCI TOTAL AUM(bn)
135
Jun05
141
Mar05Jun04
123
+4.4%
Italy
International1 35
4144
88 9497
+7.3%
+3.2%
+14.3%% ch. vs
Mar05
UCI mkt. share2 14.54%
… leading to continued gains in market share and # 2 ranking
4.6 bn net sales for Pioneer worldwide in 1H05 (vs 2.1 bn in 1H04)
UCI’s strong out-performance of the Italian market in mutual funds’ net sales: 3,421 mln out of 7,295 mln for the entire system as at end August 05…
A clear growth story based on Pioneer global presence: +18 bn AUM in 12 months, of which almost 9 bn in the international business units1 (+24.9% y/y)
Slight improvement of average pricing
14.89%
Aug05
15.17%
Jun05
Solid and consistent performance: 15 out of 47 US funds awarded 4 or 5 stars by Morningstar as well as 11 out of 65 Italian or Luxemburg funds
9
188
INCOME FROM FINANCIAL TRANSACTIONS(mln)
INCOME FROM FINANCIAL TRANSACTIONS SLIGHTLY AFFECTED BY LOWER CONTRIBUTION OF DERIVATIVES
2Q04
295
251
1Q05
287
159
2Q05
277
1H04 1H05
587564
450347
-3.9%
-22.9%
-6.5%
-4.0%
-15.4%
Lower contribution of derivatives to consolidated revenues (6.2% in 1H05 vs 8.6% in 1H04)
Of which: Derivatives
(Corporate + Institutional + Retail)
q/q % ch.
2H05: y/y trend of derivatives expected to improve, mainly thanks to development of Institutional Derivatives
Reduction of derivatives largely balanced by New Europe, benefiting also from positive mark-to-market of government bond portfolios in 2Q05
10
Quarterly trends (at constant FX and net of taxes recovered in the “other net revenues” line): Personnel costs under control: -0.5% Q/Q, mainly thanks to staff reduction in Italy Other adm. expenses: +4.3% Q/Q, mainly driven by advertising and marketing expenses in Retail division
COSTS GROWTH MAINLY DRIVEN BY SIGNIFICANT FX EFFECT
OPERATING COSTS BREAKDOWN (net of taxes recovered in the “other net revenues” line)(mln)
1H04 1H05
1,689 1,768
916
220936
2102,8252,914 +3.2%
+2.2%
+4.7%
-4.5%
Personnel costs
Other admin. expenses
Depr. & amort.
2Q05
883 885
455102 481
108
1Q05
852
488
114
2Q04
1,454 1,4401,474 +2.4%
+5.7%
+0.3%
+1.4%
+5.2%TOTAL COSTS
Q/Q % ch.
Half year results (at constant FX and net of taxes recovered in the “other net revenues” line): Total operating costs growing only by 1.7% Personnel costs increase +3.5% mainly due to higher staff in NE division, higher accruals for MBOs (mainly Retail
and NE Divisions) and bonuses linked to UCI labour agreement (VAP) Other admin. expenses almost in line with 1H04 (+0.6%)
Taxes recovered in the “other net revenues” line 51 63 71 98 134
11
GLOBAL BANKING SERVICES: WELL ON TRACK VS PLAN TARGETS
REAL ESTATE: rationalisation of real estate assets including 51 UCB branches closed in 1H05
LEGAL ENTITIES RATIONALISATION: de-merger of UBMC “core” banking and project finance activities respectively in favour of UBI and a new dedicated company (effective from January 2006); approved merger into UCI segment banks of C.R. Carpi and Banca dell’Umbria (effective from July 2005)
UPA ROMANIA: received authorization for activity transfer, 87 people hired (as of June 2005) partly still having training & partly already active
CALL CENTER: 3 largest call centres consolidated into 1 (same location and IT platform), ~250 people involved (~80% of total); consolidation of the other 4 call centres expected in 2006
PURCHASING: positive impact in 2005 from doubled on-line purchases in Italy
Staff downsizing (-1,159 vs 1H04, -669 vs. Dec04) better than expected
2004
39,858 39,368
1H04
-1,159
ITALY
38,699
1H05
12
Weight on Net Loans
Provisions on performing loans 1,414 +2.7%
Coverage ratio 0.97% -
Total Net Doubtful Loans 5,179 +2.9%
Weight on Net Loans 3.46% +0.4 bp
mln, where not specified
Net Non Performing Loans 2,690 +0.5%
1.80% -4 bp
Jun05ch. on Mar05
ASSET QUALITY: REDUCTION OF FLOWS OF NEW DOUBTFUL LOANS AND INCREASED COVERAGE RATIOS ON NPLs AND WATCHLIST
(1) Defined as: Flow from performing loans to any category of doubtful loans less Flow-back from any category of doubtful loans to performing
Very limited increase of net NPLs (+0.5% q/q) and q/q reduction of net watchlist (-0.3% q/q)
Coverage ratios increased on NPLs (60.6% vs 60.2% as of Mar05) and watchlist (20.2% vs 19.8% as of Mar05), while stable on total doubtful (48%) and performing loans (0.97%)
Net loan loss provisions at 216 mln in 2Q05, in line with 1Q; 1H05 cost of risk (annualised) at 58 bp (-5 bp vs FY04), of which 17 bp for provisions on performing loans
1.4 bn provisions on performing loans (+37 mln vs Mar05); no additional provisions on Convertendo FIAT: conversion loss totally provisioned for at current market prices
1H04
1,014
1H05
996 -1.8%
NET FLOWS OF NEW DOUBTFUL LOANS1 (mln)
Stated cost of risk (annualised) 58 bp -5 bp
Jun05ch. on 2004
Total net doubtful loans increase (+143 mln, +2.9% q/q,) almost totally driven by restructured loans2 (+103 mln) and by loans to countries at risk (+32 mln), the latter mainly due to very prudent BanKIT rules for Bosnia
(2) Mainly due to changed accounting rules for new loans granted to single borrowers whose old credit lines had been restructured (these new loans could be classified as performing under the old rules while with the new ones they must be classified as restructured as well)
-8.3% netting 1H05 of 66 mln loans “under restructuring” moved to “performing” and thereafter re-classified as
“restructured” in 1Q05 (Shifts due to the new classification
categories adopted by BankIT since 1.1.2005)
13
GROUP RESULTS BENEFITING FROM BUSINESS DIVERSIFICATION
1H05 OPERATING INCOME BY DIVISION
y/y % ch.
1,063Corporate -3.2%
838Retail +38.3%
2,556TOTAL GROUP +12.1%
521New Europe +33.9%
CONTRIBUTION TO 1H05 GROUP OP. INCOME PRE CORPORATE CENTRE AND ELISIONS
273Private & AM +37.9%
mln
19.2%
10.1%
39.5%
31.2%
RETAIL DIVISION CORPORATE DIVISION
PRIVATE & AM DIVISION NEW EUROPE DIVISION
14
(1) Average data, net of minorities
(3) End of period, Pay-out ratio: Dps of previous year semestralised
1H05 RORAC(4)ABSORBED CAPITAL(1)
Total Group 9.6 bn
1H04
+6.0
% ch. on 1H04(2)
10.2 bn
1H05
Retail
51.0% +5.0
28.7%
NE
27.6% +13.1
12.9%
Corporate
12.1% +16.4
49.3%
Private & AM 9.3% +5.69.1%
Divisional weight
Excess Capital(3) 0.7 bn 1.1 bn
(4) Return on risk adjusted capital = Marginal Rarorac + Cost of Equity(2) On Absorbed Capital
42.7%
35.5%
24.3%19.6%
23.5%
Private & AM
NE Retail Corporate Group
Cost of equity 8.58%
Ma
rgin
al
RA
RO
RA
C
RISK ADJUSTED PROFITABILITY CONFIRMED AT HIGH LEVELS
Y/Y significant increase in EVA for Private, Retail and NE Divisions, thanks to high net income growth (RORAC +7.6, +5.5 & +1.6 pp y/y respectively)
15
RETAIL DIVISION: STRONG LENDING MARKET SHARE INCREASE DRIVING NET INTEREST INCOME TURNAROUND
EXCELLENT LENDING GROWTH (+10.4% Y/Y) …
Household mortgages(1) +10.4% y/y (-0.1% vs. Dec04)
Consumer credit +44.7% y/y (+18.9% vs. Dec04)
Small Business +11.8% y/y (+4.1% vs. Dec04), mainly thanks to s/term loans
… AND GOOD SPREAD RESILIENCE IN ALL KEY MARKETS…
2Q average spread(2) on:
new mortgages at 1.27% for UCB (+1 bp q/q) and 1.41% for UBCasa (+2 bp q/q)
small business(3) s/term loans at 7.59% (-28 bp q/q)
revolving cards at 11.77% (+40 bp q/q)
… SUSTAINING NET INTEREST INCOME SOUND PERFORMANCE (despite mortgage securitisation carried out in 2Q penalising Q/Q trend by 7 mln)
2Q04
570
1Q05
614
NET INTEREST INCOME (ex. div.), mln
2Q05
614
(2) Management accounts(3) Management accounts, including also maximum overdraft charges
+7.7%(+8.9% ex securitisation)
(1) Trend due to 3 bn securitisation carried out in 2Q05. Excluding securitisation, mortgage growth would be +20.5% y/y and +9.0% vs. Dec04
16
STAFF COSTS, mln
-834 vs. June 04
1H04
25,467
2004
25,136
TOTAL STAFF
1H05
24,633
RETAIL DIVISION OPERATIONAL ACHIEVEMENTS
STAFF REDUCTION PLAN WELL ON TRACK (~50% of the total reduction announced in the plan already achieved)…
CONTINUED FOCUS ON WEALTH MANAGEMENT PRODUCTS GENERATING RECURRING REVENUES
SALES OF SEGR. ACCOUNTS INVESTING IN FUNDS, bn
… WITH CLEAR EFFECTS ON TOTAL STAFF COSTS, DESPITE NEW LABOUR CONTRACT
EXCELLENT CONTRIBUTION TO GROUP NET INCOME
CONTRIB. TO GROUP NET INCOME, mln
2Q04
131
1Q05
187
2Q05
188
4Q04
1.5
1Q05
1.9
2Q05
1.7
2Q04
384
1Q05
403
2Q05
387
+43.9%
17
375
358363
2Q04 1Q05 2Q05
-3.2%
+1.3%
+2.1% gross of securitisations (~20 mln)
CORPORATE DIVISION: STRONG LENDING GROWTH SUSTAINS NET INTEREST INCOME, OFFSETTING LOWER SPREADS
(2) Only UBI + UBMC (Source: BankIT Matrix)(3) Calculated on SMEs and other non-financial enterprises excluding largest Groups. Source: Credit Bureau data as of Jun05
NET INTEREST INCOME (excl. dividends), (mln)
(1) Almost totally recovered as “Other income”
1H04 1H05
745
721
+1.1%
Locat + District bond securitisations
impact1
75333
-3.3%
TOTAL LOANS (ex Repos), (bn)
Of which: M/L2
Significant growth of customers loans: +10.0% y/y gross of securitisations, +5.0% q/q …
… with positive contribution of M/L term lending (+14.0% y/y and +3.4% q/q)
Reduction of lending spreads for UBI (2.12% Avg. 2Q05, -10 bp q/q and -13 bp y/y)
63.0 63.866.9
Jun04 Mar05 Jun05
+6.2%
+5.0% vs Mar05
24.5 27.0 27.9
+10.0% gross of securitisations
+3.4% vs Mar05
q/q % ch.
UBI share of wallet3 at 13.8% (vs 13.4% as of Dec04)
18
FOCUS ON SERVICE REVENUES AND RISK PROFILE
NET COMMISSIONS, (mln)
1H04 1H05
226
273 +21.0%
126129
144
2Q04 1Q05 2Q05
+14.4%
+11.5%
Foreign trade services: 74 mln in 1H05 (+14.5% y/y), 40 mln in 2Q05 (+21.0% 2q/1q)
Transaction services: 37 mln in 1H05 (+11.7% y/y), 19 mln in 2Q05 (+5.5% 2q/1q)
More balanced revenue composition for UBM in 1H05 vs 1H04
Derivatives: 67% (-10 pp)
Investment Banking1: 19% (+7 pp)
Sales & Trading on cash products: 14% (+3 pp)
NET FLOWS OF NEW DOUBTFUL LOANS2, (mln)
Default Rate3 at 0.68% in 1H05 vs 0.83% in 1H04
Relevant reductions of net flows of new doubtful loans both in 2Q05 vs 1Q05 and in 1H05 vs 1H04
(2) 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
1H04 1H05
520453 -12.8%
1Q05 2Q05
253200 -21.0%
q/q % ch.
(3) 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 previous 31 December
Investment Banking1: 107 mln in 1H05, (+47.7% y/y), 59 mln in 2Q05 (+22.2% 2q/1q)
(1) Investment Banking: Corporate Finance (UBI, UBM and UBMC) + Equity Capital Market (UBM) + Debt Capital Market (UBM)
19
626
46
PRIVATE & ASSET MANAGEMENT DIVISION: CONTINUED ASSET AND RECURRING MANAGEMENT FEES GROWTH
Significant growth of Tot. Financial Assets (bn)
All figures at unchanged FX
Excellent net sales in 1H05:
Asset Management: 4.6 bn net sales, vs 2.1 bn in 1H04
Asset Gathering (UPB+Xelion): 3.3 bn net sales in 1H05 (+24% y/y), of which c. 0.9 bn of AM products
(1) Assoreti perimeter
Xelion: top-league performance in net sales in Italy(1), ranking # 2 with 14% market share (as of end June 05)
(2) Till year-end 2004 performance fees on long-only funds were cashed by Pioneer once a year at year-end, with a seasonal effect in 4Q. Starting from 2005 they are calculated and cashed on a quarterly basis
TOTAL REVENUES (mln)
Up-front fees
Management & other fees
Performance fees(2)
1Q05
316326
+3.2%
+3.3%
2Q04 2Q05
286
223
172
240
228
248
Q/Q % ch.
NII & other 44
46
163181 189
Jun04 Mar05 Jun05
+16.0%
1448
92
1H04
569
642
1H05
308
488
88
+10.1%
12.8%
+4.7% vs Mar05
443
+10.3%
+14.1% Resilient margins thanks to
product and asset mix:
Asset Mix (Pioneer): avg. weight of stocks and equity funds at 29.5%in 1H05, up 203bp y/y; avg. weight of hedge funds at 3.1% in 1H05, up 55bp y/y;
Margins(3) (in bp of average AuM): up from 57.6bp in 1H04 to 59.1bp in 1H05
(3) Net commissions, excluding performance fees
20
EXCELLENT VALUE CREATION THANKS TO REVENUE GROWTH AND STRONG EFFICIENCY GAINS
All figures at unchanged FX
Revenue rising q/q (+3.2%) and y/y (+12.8%), driven by sales of Focus Invest and the new Investment Program and by improvement in the asset mix
Net income for the Group at 102 mln in 2Q05 (+4.3% q/q) and 199 mln in 1H05 (+25.1% y/y)
2Q05 operating income increased by 4.7% vs 1Q, confirming an excellent trend (+37.5%1H05/1H04,) thanks to revenue growth and cost control
OPERATING INCOME (mln)
1Q05 2Q05
133 139+4.7%
1H04 1H05
198272 +37.5%
C/I RATIO, %
1Q05 2Q05
57.8 57.2
1H04 1H05
65.157.5 -763bp-62bp
C/I ratio further declining by 62bp q/q (-763bp 1H05/1H04); expected moderate recovery of costs for new projects in 2H05 at Pioneer
21
STRONG LENDING GROWTH: +18.9% Y/Y (+27.5% at current FX)
FURTHER DEVELOPMENT OF MUTUAL FUNDS WITH POSITIVE IMPACT ON REVENUES AND MARKET SHARE
All figures at unchanged FX – P&L in ITAS
(1) Management accounts in LAS
NEW EUROPE DIVISION: CONTINUED VOLUME GROWTH SUSTAINING REVENUES GOOD PERFORMANCE
(3) Pioneer Pekao Investment Management
(2) New Europe Business Area of Pioneer is included at current FX
Mortgages(1) (Euro mln)
Jun05
2,231
Mar05
2,3551,904
Jun04
+23.7%
Consumer credit(1) (Euro mln)
Jun05
1,660
Mar05
1,8561,393
Jun04
+33.3%
Mutual Funds(2) (Euro mln)
Jun05
5,707
Mar05
6,347
4,361
Jun04
+45.5%
Market share (PPIM(3))
Jun05
36.1
Mar05
36.432.3
Jun04
+4.1 pp
Net non interest income
(Euro mln)
1H05
253
2Q05
439
186
1Q05
+26.7%
Y/Y % ch.
+42.4%
2Q/2Q % ch.
Net interest income (Euro mln)
1H05
302
2Q05
597
295
1Q05
+4.2%
Y/Y % ch.
+4.0%
2Q/2Q % ch.
22(1) 1H05 data annualised
IMPROVED ASSET QUALITY RATIOS
CAUTIOUS PROVISIONING POLICY AND GOOD PROFITABILITY
STRONG OPERATING INCOME INCREASE: +23.5% vs. 1H04, +37.2% 2Q05/2Q04
Total Revenues (Euro mln) Cost/income (%)
Cost of risk(1) (bp) Coverage ratio on doubtful loans
Attributable Net income (Euro mln)
STRONG GROWTH IN OPERATING INCOME DRIVEN BY REVENUE INCREASE; IMPROVED EFFICIENCY AND PROFITABILITY
All figures at unchanged FX – P&L in ITAS
1H05
70.7%
Dec04
73.5%68.4%
1H041H05
90
FY04
84
Net Provisions on loans (Euro mln)
-6 bp
1H05
563
2Q05
1,048
485
1Q05
+13.2%
Y/Y % ch.
+18.5%
2Q/2Q % ch.
1H05
47.8%
2Q05
50.3%53.2%
1Q05
-4.1 ppY/Y ch.
-7.1 pp2Q/2Q ch.
+5.1 pp
Y/Y ch.
1H05
135
2Q05
241
106
1Q05
+26.2%
Y/Y % ch.
+30.3%2Q/2Q % ch.
1H05
38
2Q05
68
30
1Q05
-3.8%
Y/Y % ch.
+12.9%2Q/2Q % ch.
23
UCI APPROACH TO IAS/IFRS ADOPTION
3Q05 and FY2005 financial statements, including Management Discussion & Analysis and explanatory notes, will be prepared according to IAS
Disclosure on IAS:
First Time Adoption adjustments on 31/12/2004 Shareholders’ Equity (excluding IAS 39) and 1/1/2005 Shareholders’ Equity (with IAS 39 applied)
Reconciliation from IT GAAP to IAS of 2004 Net Income (ex IAS 39, in annex) and 1H05 Net Income and Shareholders Equity (with IAS 39 applied)
“Prudent attitude” in the adoption of IAS. In order to minimize volatility on Shareholders Equity & Net income:
No revaluation of Real Estate No restatement on past Business Combinations
Synchronized IAS and Basel 2 approach on loan loss provisioning
24
1H05 IAS1
1,442
14,900
1H05 ITAS
1,301
14,223
% ch.
NO MAJOR IMPACT OF IAS APPLICATION ON UCI 1H05 NET INCOME AND SHAREHOLDERS’ EQUITY
No changes in our Business Model due to the IAS Transition
Net Income +10.8
Shareholders’ Equity +4.8
As anticipated, no substantial changes between Net Income and Shareholders’ Equity reported under Italian GAAP vs. IAS:
Impact of First Time Adoption on Shareholders Equity not material
Negligible impact on Net Income (main effect due to goodwill amortisation)
Positive impact of IAS 39 in First Time Adoption
1 Including IAS 32/39 and IFRS 4
mln
25
IFRS TRANSITION: IMPACT ON SHAREHOLDERS’ EQUITY
SHAREHOLDERS’ EQUITY 31-12-2004 14,035
SHAREHOLDERS’ EQUITY 01-01-2005 14,373
FINANCIAL INSTRUMENTS (IAS 39)
Time value recognition on loans Holdings Other financial instruments at Fair Value
-607+1,081
+25
+500
GOODWILL(IFRS 3)
2004 goodwill amortization Negative consolidation differences Impairment of goodwill
+272+54-24
+302
EMPLOYEEBENEFITS(IAS 19, IFRS 2)
Share-based payments (stock options & stock granting)
TFR, pension funds, bonuses and deferred compensation
-63-38
-101
OTHER MINOR IMPACTS
Deferred tax assets Other impacts Minorities
11-8
-52
-49
TREASURY SHARES(IAS 32)
Treasury shares directly deducted from equity -358 -358
mln
FIXED ASSETS(IAS 16 & 38)
Positive impact from write-back of land depreciation
Write-off of intangible assets
+54
-10
+44
26
1H05 CONSOLIDATED NET INCOME: FROM ITALIAN GAAP TO IAS
30-06-05Net Income
ITAS
30-06-05 Net Income
IAS
mln
1,301
1,442+151
Goodwill
+11
Fixed assets
-12
Employee benefits
+14
Other
-26
Loans and financial
instruments valued at amortized
cost
Provisions for risk & charges
+4
+12
Consolidation perimeter
Financial instruments at fair value
-13
27
HVB DEAL: WHAT HAS BEEN DONE SO FAR
Initial proceedings with all relevant Regulatory and Antitrust Authorities; approvals already received by a number of key Regulators (BankIT, Bafin, FMA-Austria)
Approval by UniCredit EGM
Offers on HVB and Bank Austria launched
Recommendation by HVB Management Board and positive statement from HVB Supervisory Board
Integration Unit established, with responsibility for monitoring the implementation process both at parent company and subsidiary level (within the limits imposed by applicable laws)
Ongoing
COMPLETION OF THE TRANSACTION EXPECTED WITHIN THIS YEAR
1H05 CONSOLIDATED RESULTS
Annexes
29
Details on 1H05 consolidated results
Divisional Reporting
Retail Division
Corporate Division
Private Banking & AM Division
New Europe Division
Details on IAS reporting
AGENDA
30 (1) Net write-downs of financial investments, provisions for risks and charges,
provisions for possible loan losses and provisions to reserve for general banking risk
2Q05 & 1H05 CONSOLIDATED INCOME STATEMENT
Net extraordinary income
Net non interest income
Total revenues
Operating income
Provisions on loans
Administrative costs (incl. depr.)
Other net provisions(1)
Goodwill depr.
(mln)
Minorities
Taxes
% ch. on 2Q04
Net interest income (incl. div.)
- of which Dividends
+6.9
+6.5
-12.5
-44.8
+2.6
+11.4
+47.0
+23.1
+45.3
+14.3
+6.1
% ch. on 1Q05 2Q05
1,483
2,892
-1,545
1,347
-216
56
-38
-89
-70
-382
1,409
123
+5.1
+6.6
+0.7
-73.3
+2.8
+11.5
-10.1
+25.7
+43.4
+9.9
+8.4
n.m. +5.1
y/y % ch. 1H05
2,896
5,604
-3,048
2,556
-430
263
-82
-159
-117
-730
2,708
148
Net income +4.3608 -12.1 1,301 +24.0
+7.9
+7.7
-1.8
n.m.
+4.3
+12.1
n.m.
+11.2
+37.6
+15.7
+7.5
+22.3
31
Retail Division
Corporate Division
Priv.& AM Division
NE Division
Total Group(1)
Total revenues+1.1% -2.0% +5.9% +20.7% +6.6%
Operating costs
Operating income
Net write-downs of loans
Net income for the Group
C/I Ratio
+1.0% +3.8% +4.8% +8.0% +2.8%
+1.3% -4.4% +7.4% +35.2% +11.5%
-9.0% +4.2% n.m. +34.5% +0.7%
+0.6% -1.1% +6.8% +32.6% -12.1%
-0.1 pp +1.7 pp -0.6 pp -5.6 pp -2.0 pp
(1) Balance due to the Parent Company, other Group companies and elisions
(2) Calculated on data at end of period FX
(mln - Data at end of period FX)
DIVISIONAL CONTRIBUTION TO CONSOLIDATED RESULTS IN 2Q05
1,191 751 330 573 2,892
-769 -231 -189 -274 -1,545
422 520 141 299 1,347
-76 -100 -1 -39 -216
188 250 103 137 608
64.6% 30.8% 57.3% 47.8% 53.4%
(3) Including all the employees of Koc Financial Services (3,999 as at 30.06.2005)
Employees(3) 24,633 5,192 3,527 29,865 70,258
2Q05 RESULTS
% Change vs 1Q05(2)
% Change vs 1Q05(2)
% Change vs 1Q05(2)
% Change vs 1Q05(2)
% Change vs 1Q05(2)
Change in pp vs 1Q05(2)
32
NON OPERATING ITEMS
Operating income
Goodwill amort.
Net Income
Net write-downs of loans
Other net provisions(1)
Net extraord. income
Taxes
Minorities
1Q05
1,209
-70
693
-214
-44
207
-348
-47
2Q04
1,210
-72
583
-246
-27
100
-335
-47
1,347
-89
608
2Q05
-216
-38
56
-382
-70
(1) Net write-downs of financial investments & provisions for risks and charges
1H05
2,556
-159
1,311
-430
-72
263
-730
-117
1H04
2,280
-143
1,049
-438
-36
102
-631
-85
(mln)
33
-on tot. Gross doubtful loans, % 38.6% 33.5% 48.1%71.9%38.7% 32.4% 73.5% 48.0%
-on total gross NPL, % 48.7% 39.5% 85.1% 60.2%48.8% 39.5% 86.0% 60.6%
Total gross doubtful loans 3,620 2,858 3,047 9,695+1.0% +2.7%
Net Doubtful Loans/Tot. Net Loans,% 3.46%3.82% 2.73% 5.71%
3,708
3.93%
+2.4% +4.0%2,971
2.77%
3,077
5.01%
9,957
3.46%
% change on Mar 05
Gross Doubtful Loans/Tot. Gr. Loans,% 6.40%6.04% 4.01% 17.5%6.22% 4.00% 16.4% 6.40%
Total net doubtful loans 2,223 1,901 855 5,036-4.9% +2.9%
2,272+2.2% +5.7%
2,009 814 5,179% change on Mar 05
ASSET QUALITY: DETAILS BY DIVISIONS
Coverage ratios
Retail Division
Mar 05 Jun 05
1 Balance due to other Group companies
(mln - Data at end of period FX)
Corporate Division
NE Division Total Group 1
Gross NPL
% change on Mar 05Gross NPL/Tot. Gr. Loans,%
Net NPL/Tot. Net Loans,%
2,236 1,8662,48
96,716
+1.8% +1.7%
3.73% 2.62% 14.3% 4.43%
1.97% 1.62% 2.48% 1.84%
2,275
3.81%
2.01%
+1.7% +1.4%
1,892
2.55%
1.58%
2,534
13.5%
2.18%
6,829
4.39%
1.80%
Net NPL
% change on Mar 05
1,146 1,130 371 2,676
-4.6% +0.5%
1,164
+1.5% +1.4%
1,145 354 2,690
Mar 05 Jun 05 Mar 05 Jun 05 Mar 05 Jun 05
34
Details on 1H05 consolidated results
Divisional Reporting
Retail Division
Corporate Division
Private Banking & AM Division
New Europe Division
Details on IAS reporting
AGENDA
35
Interest income (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Net operating income
Net income
Cost/income ratio, %
TOTAL(1)Banca d. Umbria
UniCredit Banca
Net provisions
mln
Net income for the Group(2)
UBCasa
- of which: Staff costs
- of which: Other costs
Clarima
RETAIL DIVISION: 1H05 RESULTS BREAKDOWN BY COMPANY
- o/w: Net write-down of loans
1,038
1,041
2,079
-1,387
692
466
66.7
285
-735
-619
-119
-142
55
38
93
-50
43
23.4
53.8
22.5
-25
-23
-4
-6
64
6
70
-37
33
18
52.9
21
-12
-24
-11
-11
77
27
104
-39
65
22
37.6
22
-10
-29
-27
-28
(1) Balance due to rounding and elisions of infragroup dividends, goodwill amortisation and consolidation adjustments
CR Carpi
18
12
30
-18
12
8
61.1
7
-9
-9
-
-
(2) Net of consolidation adjustments and minorities
Net extraordinary income (loss) 158 3 1 -1 -
1,245
1,124
2,370
-1,531
838
376
64.6
376
-790
-704
-160
-186
+2
36
RETAIL DIVISION: P&L
Interest income (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Net operating income
Net income
Cost/income ratio, %
Q/q% ch.
2Q05
Net provisions
mln
Net income for the Group(2)
Y/y% ch.
- of which: Staff costs
- of which: Other adm. expenses
- o/w: Net write-down of loans
619
572
1,191
-769
422
188
64.6
188
-387
-361
-76
-91
-1.2
+3.7
+1.1
+1.0
+1.3
+0.2
-6 bp
+0.6
-3.9
+5.6
-9.0
-4.0
+6.9
+19.4
+12.6
+2.8
+36.1
+43.3
-612 bp
+43.9
+0.6
+6.5
+4.4
+10.0
Net extraordinary income (loss) +3 n.m. -28.0
Y/y% ch.
1H05
1,245
1,124
2,370
-1,532
838
375
64.6
375
-790
-704
-160
-186
+9.2
+20.5
+14.3
+4.4
+38.3
+45.3
-614 bp
+45.3
+2.6
+7.7
+24.3
+29.2
+2 n.m.
37
2.8 3.0
RETAIL DIVISION - MORTGAGES AND CONSUMER FINANCING
RESIDENTIAL MORTGAGESSTOCK, bn NEW FLOWS, bn
CONSUMER FINANCING1H04 1H05
29.2
32.2+10.4%(2)
NEW FLOWS OF PERSONAL LOANS, mln
1H04 1H05
119 mln 122 mln
REVOLVING CARDS TOTAL SPENDING(3) (+179k revolving cards in 1H05)
DEC04
32.2
mkt share(1)
17.61% 17.71%16.60%(2)
(1) Group market share, related to mortgages to households as of Bank of Italy definition in table TDME0070 of the monthly bulletin(2) Excluding 3 bn securitisation, mortgage growth would be +20.5% y/y and market share 17.62%
1H04 1H05
512
942
+84%
1H04 1H05
4.14.2
+2.0%
1.01.1
UCB
UBCasa
+8.3%
-8.2%
STOCK, bn
1H04 1H05
2.3
3.3+44.7%
DEC04
2.8
(3) POS and ATM spending
38
RETAIL DIVISION - SMALL BUSINESS STOCK, SPREAD AND CUSTOMER ACQUISITION
STOCK, bn
1H05
SHORT TERM SPREAD(1)
1Q04
(1) Management accounts, includes also maximum overdraft charges
17.3+2.9% 8.08%
7.96%
2Q04
7.98%
3Q04
7.98%
4Q04
7.87%
1Q04
18,000
2Q04
19,000
3Q04
15,000
4Q04
17,500
QUARTERLY TRENDS IN SMALL BUSINESS CUSTOMER ACQUISITION
1Q05
1Q05
17,000
2004
16.6 7.59%
2Q051Q05
16.8
2Q05
19,000
39
DEC04
DEC04
1Q05
1Q05
58.2
66.9
33.5
21.8
16.8
3.04.9
15.7
29.4
+3.9%
+1.2%
+8.1%-2.7%
-4.5%
+4.4%
+0.5%
56.7
67.2
32.2
22.8
16.6
2.85.0
15.1
29.3
RETAIL DIVISION - CUSTOMER LOANS AND CUSTOMER DEPOSITS BREAKDOWN AND DETAILS OF SHORT TERM SPREADS
SB loans (1)
Residential mortgages (2)
Cons. creditOther loans
EOP LOANS, Euro bn
UCB AVG. MARK UP(3) (Households), %
Other deposits
Households c/accounts
Bonds
EOP DEPOSITS, Euro bn UCB AVG. MARK-DOWN(3) (Households), %
(1) Includes short term and m/l term loans(2) Includes only households mortgages
UCB AVG. MARK UP(3) (Small Business), %
7.03
1Q04
1.65
5.60
7.08
2Q04
1.65
5.47
(3) Source: Bank of Italy matrix data
2Q05
2Q05
57.9
67.8
32.2
23.0
17.3
3.35.1
14.8
29.9
7.33
3Q04
1.67
5.55
+1.3%
7.21
4Q04
1.71
5.42
1Q04 2Q04 3Q04 4Q04
1Q04 2Q04 3Q04 4Q04
7.27
1Q05
1.70
5.43
1Q05
1Q05
7.30
2Q05
1.70
5.34
2Q05
2Q05
-1.6%
+2.9%
+10%+1.9%
-0.7%(+4.4% ex
securitisation)
40
RETAIL DIVISION - NET COMMISSIONS
RETAIL DIVISION: NET COMMISSIONS
mln
Securities in custody
TOTAL RETAIL DIVISION
Total Commissions from Wealth Management
- Mutual funds (1)
- Segregated Accounts (2)
Other services
- Insurance Products (3)
Breakdown by nature
(1) Includes subscription and management fees from Plain Vanilla Mutual Funds(2) Includes management fees related to underlying Mutual Funds. Net commissions related to Focus Invest do no impact consolidated results
Y/y% ch.
+31.6
+17.5
+21.8
-24.4
n.m.
+6.8
+3.5
2Q05
63
381
184
42
54
133
88
(3) Includes management fees related to underlying Mutual Funds
Q/q% ch.
-28.8
-1.5
+3.0
-6.0
+2.7
+12.2
+8.2
1H05
152
767
364
87
107
252
169
Y/y% ch.
+49.4
+22.5
+21.1
-24.3
n.m.
+12.2
+3.8
41
RETAIL DIVISION - DETAILS ON ASSET QUALITY
Provisions on performing loans 331 +1.2%
Coverage ratio 0.59% +1 bp
Net Non Performing Loans 1,164 +1.5%
Weight on Net Loans 2.01% +4 bp
mln, where not specified
Total Net Doubtful Loans 2,272 +2.2%
Weight on Net Loans(2) 3.93% +11 bp
Cost of risk(1) 56 bp +6 bp
1H05ch. on Mar 05
1H05ch. on 2004
(1) Annualised
-7.0%
1H04 1H05
446 415
REDUCTION OF NET FLOWS OF NEW DOUBTFUL LOANS(3) VS. 1H04
(3) 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) Excluding the 3 bn mortgage securitisation, the weight of Total Net Doubtful Loans on Net loans would be 3.73%, down 9 bp Q/Q
42
Details on 1H05 consolidated results
Divisional Reporting
Retail Division
Corporate Division
Private Banking & AM Division
New Europe Division
Details on IAS reporting
AGENDA
43
CORPORATE DIVISION: 1H05 INCOME STATEMENT- BREAKDOWN BY COMPANY
Net Interest income (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Net operating income
Net income
TOTAL1UBI
Net provisions
(Euro mln)
Net income for the group
- of which: Staff costs
- of which: Other admin. expenses
Other companies
- o/w: Net write-downs of loans
639
309
948
672
-121
-154
-276
271
266
29%Cost/income Ratio
-187
-217
UBM LOCAT
-5
392
387
276
-56
-50
-111
169
167
29%
-1
-3
68
45
113
85
-11
-16
-28
43
45
25%
-10
-14
37
30
67
31
-17
-15
-37
19
24
54%
3
5
739
776
1,515
1,063
-206
-235
-452
502
501
29.8%
-196
-229
1 Balance due to roundings and elisions of infragroup dividends and goodwill amortisation
44
CORPORATE DIVISION: 1H05 INCOME STATEMENT
Net interest income (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. depr.)
Operating income
Net income
Total net provisions
Taxes
Net income for the group
Cost Income ratio, %
(Euro mln) 2Q05/1Q05 % ch. 2Q05
751
-231
520
-168
30.8%
-108
250
251
377
374
2Q05/2Q04 % ch.
-2.0
+3.8
-4.4
-1.1.
+171bp
-10.7
-1.1
-1.1
+4.0
-7.3
-7.9
+2.3
-11.7
-15.9
+304bp
-27.0
-17.6
-17.5
-2.5
-12.7
1H05 Y/Y % ch.
1,515
-452
1,063
-339
29.8%
-229
501
502
739
776
-1.5
+2.7
-3.2
-6.4
+126bp
-10.2
-7.9
-7.9
-2.6
-0.4
45
CORPORATE DIVISION - DETAILS ON ASSET QUALITY
(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
NET FLOWS OF NEW DOUBTFUL LOANS1, (mln)
520
453
1H04 1H05
-12.8%
Weight on Net Loans
Provisions on performing loans 763 +2.1%
Coverage ratio 1.07% -2 bp
Total Net Doubtful Loans 2,009 +5.7%
Weight on Net Loans 2.77% +4 bp
mln, where not specified
Net Non Performing Loans 1,145 +1.4%
1.58% -4 bp
Jun05ch. on Mar05
Stated cost of risk (annualised) 54 bp -16 bp
Jun05ch. on 2004
46
(Euro mln)
Net interest income 317
Net income for the group
Cost Income RATIO, %
139
29%
Net non interest income 165
Total revenues
Operating costs
Operating income
482
-142
340
Net write-downs of loans
Other net provisions
-98
-8
Of which:
118
- Trading profits 37
- Net commissions
UNICREDIT BANCA D’IMPRESA: 1H05 INCOME STATEMENT
2Q05/1Q05 % ch. 2Q05 2Q05/2Q04
% ch.
-1.4
+9.8
+59 bp
+13.7
+3.3
+5.4
+2.4
+8.6
-65.7
+22.0
-20.0
+1.1
+24.7
+151 bp
+2.3
+1.5
+7.0
-0.6
-27.7
+63.3
+23.3
-40.6
639
266
29%
309
948
-277
672
-187
-30
215
84
Y/Y% ch. 1H05
+0.9
+9.2
+83 bp
+3.7
+1.8
+4.8
+0.6
-20.1
n.s.
+15.5
-22.3
47
UBM: 1H05 INCOME STATEMENT
(Euro mln)
Total revenues
Staff costs
Other costs (incl. depr.)
Operating income
Net income
C/I Ratio
180
-20
-35
125
75
31%
Net extraord. income 2
Taxes -47
2Q05/1Q05% ch. 2Q05 2Q05/2Q04
% ch.
-12.6
-30.6
+33.8
-17.1
-18.4
+381bp
n.s.
-20.2
-27.5
-26.5
+5.1
-33.5
-53.4
619 bp
-95.9
-46.8
Net interest income (incl. div.)
Net non interest income
7
173
-156.1
-20.9
n.s.
-30.1
387
-50
-62
276
167
29%
3
-107
Y/Y% ch. 1H05
-11.8
-11.7
+3.4
-14.7
-31.5
+236bp
-95.1
-25.4
-6
392
-13.0
-11.9
48
Details on 1H05 consolidated results
Divisional Reporting
Retail Division
Corporate Division
Private Banking & AM Division
New Europe Division
Details on IAS reporting
AGENDA
49
PRIVATE & AM DIVISION: 1H05 INCOME STATEMENT – BREAKDOWN BY COMPANY
Net interest income (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Operating income
Net income
Cost/Income Ratio
Total net provisions
Net income for the Group
- of which: Staff costs
- of which: other admin. expenses
(Euro mln)
Net extraordinary income
TOTAL DIVISION2
54
588
642
-369
-176
-181
272
-7
206
199
57.5%
5
UPB +
Subsidiaries
37
141
178
-113
-67
-44
65
-3
36
36
59.7%
10
8
414
422
-196
-97
-92
226
-1
183
176
46.5%
4
7
32
39
-58
-11
-44
-19
-3
-14
-14
n.s.
1
PGAM Group1 UniCredit Xelion Banca
2
1
3
-2
-1
-1
1
0
1
1
n.s.
0
UC Luxemburg
1 The Net Income and Net Income for the Group lines of PGAM Group are gross of goodwill amortisation
2 Balance due to rounding and elisions of intra-group dividends and goodwill amortisation
50
PRIVATE & AM DIVISION: 2Q05 AND 1H05 INCOME STATEMENT
Net interest income (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. depr.)
Operating income
Net extraordinary income
Net income
Total net provisions
Taxes
Net income for the Group
Cost Income ratio, %
2Q05/1Q05 % ch. 2Q05
330
-189
141
-34
57.3%
5
-5
103
107
27
303
1H052Q05/2Q04 % ch. Y/y % ch.
+3.2
+2.1
+4.7
+7.0
-62 bp
n.s.
n.s.
+4.3
+4.1
-1.0
+3.6
+14.1
-0.3
+41.4
+200.3
-826 bp
-46.8
n.s.
+10.5
+10.1
+11.4
+14.3
642
-369
272
-64
57.5%
5
-7
199
206
54
588
+12.8
-0.4
+37.5
+58.2
-763 bp
-40.8
n.s.
+25.1
+25.7
+9.5
+13.1
(Euro mln - Data at current FX, % ch. at fixed FX)
51
1 Including Repos
PRIVATE & AM DIVISION: DETAILS ON TOTAL FINANCIAL ASSETS Y/Y AND 2Q/1Q TRENDS
(bn - data at constant FX)
Securities in custody
Direct deposits1
AUMs
PRIVATE & AM DIVISION TOTAL FINANCIAL ASSETS
+4.7%+16% Y/Y
Jun04
5.9
26.9
130.2
6.8
29.9
143.8
163180.5
7.4
31.9
149.7
189
Mar05 Jun05% weight of AUM products 79.279.779.9
521 Balance due to rounding
Italy
New Markets
92,809
3,702
TOTAL PIONEER
Alternative Investments3
129,614
3,830
3,435
795
4,642
301
US 25,032 -286
International (ex-Italy) 7,889
699
AuM as at 31.12.2004
US in USD 34,0963 -362
100,342
4,869
142,580
4,363
27,841
9,529
AuM as at 30.06.20051
33,6653
AuM as at 31.08.052
103,415
28,113
10,449
5,175
147,152
4, 359
34,292
1H05 Net sales
PIONEER GROUP: DETAILS ON NET SALES AND AUM TREND (Jan05-Aug05)
2 Provisional figures; balance due to Market Performance (including FX effect)
4,098
845
8,323
231
3,095
285
-69
1,651
233
2,342
-41
-187
644
-227
Net sales Jul-Aug.05
1H05 Mkt. Perf. (mln - Data at end of period FX)
53
Finanza & Futuro
RasbankCredem + Euromob.7,617Credem + Euromob.
1 Calculated on average PFAs2 AUMs, Securities in Custody, Bancassurance and liquidity3 Ranking taking into account only the 10 largest Italian players by Total Financial Assets as at 30.06.2005
Source: Assoreti
Net Inflows:788 Mln,3rd in Italy
Data as at 30.06.05 – Mln
TOTAL NET INFLOWS 2 & 3
Xelion 788
Mediolanum 730
Azimut 910
Banca Generali 1,001
329
Credem + Euromob. 484
409Rasbank
Fideuram + SPI 345
Data as at 30.06.05
1,965 PFAs,5th in Italy
NUMBER OF PFAs
Fideuram + SPI 4,155
Mediolanum 3,980
3,668
Banca Generali 4,906
Finanza & Futuro 1,098
Bipielle Network
1,078
Banca SAI 1,481
1,125
Tot. Fin. Assets:~13.4 bn,5th in Italy
Data as at 30.06.2005 – Mln
TOTAL FINANCIAL ASSETS
Fideuram + SPI 61,094
Mediolanum 22,583
Rasbank 20,032
10,114Azimut
8,008
Xelion 13,401
16,761
Fineco 6,945
Net Inflows per PFA1:3rd among Top-
Players
Data as at 30.06.05 – Mln
NET INFLOWS PER PFA 2 & 3
Azimut 1.01
Xelion 0.39
Credem + Euromob. 0.45
0.23
Mediolanum
0.20
Finanza & Futuro
0.08
0.00
Fideuram + SPI
-0.09
Banca Generali
0.18
XELION: SECOND BEST PLAYER IN NET SALES(14% MARKET SHARE) AND GOOD PRODUCTIVITY PER PFA
Rasbank
Xelion 1,965
Fineco 1,445
Fineco
Fineco
Banca Generali
Bipielle Network -0.05Bipielle Network 4,379
-55
Finanza & Futuro -94
Bipielle Network
54
Details on 1H05 consolidated results
Divisional Reporting
Retail Division
Corporate Division
Private Banking & AM Division
New Europe Division
Details on IAS reporting
AGENDA
55
2.6%(1)
2.3%(1)
(Euro mln)
Net interest income(2)
Net non interest income
Total revenues
Operating Costs(3)
Operating income
Net write-down of loans
Net extraordinary income
Net income
Other net provisions(4)
Taxes
(4) Including provisions to reserve for general banking risk
(2) Including dividends
(3) Including depreciation
%ch. at unchanged FX
7.2%(1)
40.5%(1)
22.2%(1)
21.2%(1)
(1) Weight of the bank Total Revenues in 1H05 on Division Total Revenues – only UCI’s portion; balance due to UniLeasing Romania, UniLeasing Bulgaria and Xelion Poland
Net income for the Group
Tax Rate (%)
NEW EUROPE DIVISION % ch. on 2Q04
+4.2
+42.4
+18.5
+3.1
+37.2
+12.9
n.m.
+35.4
+12.3
n.m.
+30.3
+8.3 pp
3.5%(1)
BREAKDOWNOF REVENUES
ITAS
2Q05
310
253
563
-269
294
-38
2
206
-2
-50
135
19.8
% ch. on 1Q05
+3.8
+35.7
+16.0
+4.0
+29.8
+28.2
-29.8
+33.5
-49.0
+21.6
+27.2
-1.5 pp
1H05
609
439
1,048
-527
521
-68
5
359
-7
-92
241
20.5
y/y % ch.
+5.2
+26.5
+13.2
+4.6
+23.5
-3.8
n.m.
+27.8
n.m.
+43.8
+26.2
+1.8 pp
Cost of Risk (bp) 84 -6 bp
ROE (%) 21.2 +2.1 pp
Cost/Income ratio (%) -7.1 pp47.8 -5.4 pp 50.3 -4.1 pp
NEW EUROPE DIVISION: 2Q05 & 1H05 INCOME STATEMENT
56
NEW EUROPE DIVISION: 2Q05 & 1H05 TREND IN VOLUMES
ITAS
% ch. on
Mar05
Jun05(Euro mln)
% ch. on
Dec04
Net Customer Loans
- o/w Pekao
Mortgages(1)
+6.3
+5.2
+11.7
+7.4
+5.6 +23.7
16,238
6,796
2,355
- o/w Pekao LC +9.2 +54.6663
- o/w Pekao
Mutual Funds(2)
+0.6 +1.9
+11.2 +28.2
Deposits +1.4 +0.923,936
10,992
6,347
- o/w Pekao(3) +11.4 +26.34,063
NET CUSTOMER LOANS 2Q05/1Q05: KFS +11.6%, Zaba
+5.0%, Bulbank +1.6% Jun05/Jun04: Bulbank +64.8%, KFS
+33.5%, Zaba +19.4%
(3) Pioneer Pekao Investment Management
At unchanged FX
MUTUAL FUNDS in PEKAO: Market share(3): to 36.4 up 4.1 pp y/y
(1) Management accounts in LAS
(2) New Europe Business Area of Pioneer is included at current FX
57
NEW EUROPE ASSET QUALITY
Net NPLs and Doubtful Loans as % of Total Net Loans 85.1
Mar05 Jun05
86.0
71.9 73.5
Coverage ratios (%)
On Gross Doubtful Loans
On Gross NPLs
Net NPL/ Loans %
Jun05
Total NE -0.72.2
ch. on Mar05 (pp)
Net Doubtful/Loans %
Jun05
ch. on Mar05 (pp)
5.0-0.3
At unchanged
FX
Zaba -0.41.6 2.5-0.3
Unibanka -1.53.1 4.0+0.1
Pekao -0.93.1 6.4-0.4
Bulbank 0.2 -0.41.1-
KFS -0.21.7 4.3-0.4
Cost of risk(1)
-6 bp
(bp, annualised)
90 84
1H052004
(1) Calculated as Net Loan Loss Provisions on Net Customer Loans at period-end, 1H05 data annualised
ITAS
58
Interest margin (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Net operating income
Net income
ROE
Cost/income
TOTAL(1)
609
439
1,048
-527
521
359
21.2%
50.3%
Net provisions -75
(1) Balance due to roundings, other small companies & adjustments to be ITAS compliant
(Euro mln)
(UCI stake)
Net income(3) (UCI’s portion) 241
- of which: Staff costs -267
- of which: Other costs -187
NEW EUROPE DIVISION: 1H05 RESULTS BREAKDOWN BY BANK
- o/w: Net write-down of loans -68
UNI BANKA (77.2%)
11
13
23
-19
5
7
17.5%
79.3%
0
6
-9
-8
+1
BULBANK (86.1%)
37
21
58
-20
38
21.2%
33.9%
-6
27
23
-8
-8
-4
Group PEKAO (52.9%)
297
235
532
-280
252
20.9%
52.6%
180
-29
112
-145
-96
-29
130
50
180
-103
77
46
13.0%
57.0%
-20
38
Group ZABA
(81.9%)
-55
-33
-17
9
7
16
-13
3
2
6.2%
80.0%
-6
-5
-1
2
-1
116
38
155
-65
90
51
25.4%
41.9%
-34
-24
-19
51
KFS(2) (50.0%)
-17
(2) Consolidated with proportional method (50%)
15
10
25
-21
4
3
6.2%
82.4%
-9
-8
0
3
Zivno (96.6%)
0
UniCredit Romania (99.9%)
ITAS
Banks’ data gross of consolidation adjustment
(3) Net of consolidation adjustment
59
VERY GOOD PERFORMANCE OF NE BANKS IN 1H05
PEKAO
Revenue growth (+3.1% y/y, +7.0% q/q) thanks to good performance of net interest income (+4.1% y/y, +6.3% q/q), benefiting also from significant lending growth: +8.9% y/y, +5.2% q/q (o/w mortgages(1) +54.3% y/y, +9.2% q/q & consumer loans +16.6% y/y, +31.2% q/q)
Stable costs with improved efficiency (C/I to 52.6%, -1.6 pp y/y) Lower cost of risk: -33 bp vs. Dec04 to 85 bp(2) and improved doubtful loans coverage ratio (+1.8
pp q/q to 78.7%) Further growth in Mutual Funds (+45.7% y/y, +11.4% q/q)
ZABA
Operating income: +9.6% y/y, mainly thanks to mark to market of securities portfolio Cautious provisioning policy Further lending growth: net loans +19.4% y/y, +5.0% q/q (o/w mortgages(3) +14.9% y/y, +2.8% q/q,
consumer loans(3) +33.0% y/y, +3.9% q/q) Improvement in Mutual Funds: +55% y/y, +18% q/q
KFS
Strong lending growth: net loans +33.5% y/y, +11.6% q/q, with positive impact on net interest income (+17% y/y, +6.1 q/q)
Lower negative impact of monetary loss (+10 mln y/y) Focus on retail products: Mutual Funds +23% y/y, +6% q/q; ~51,000 cards and ~14,000 C/A
packages sold in 2Q05
(1) Management accounts in LAS, only LC
All figures stated at unchanged FX
(2) 1H05 data annualised
(3) Management accounts in LAS, only bank
60
CONSOLIDATED INCOME STATEMENT: PEKAO
(3) Including provisions to reserve for general banking risk
(1) Including dividends(2) Including depreciations
(Euro mln)
Net interest income(1)
Net non interest income
Total revenues
Operating costs(2)
Operating income
Net write-down of loans
Net extraordinary income
Net income
Other net provisions(3)
Taxes
% ch. on 2Q04
2Q05
156
119
275
-141
134
-14
-1
100
-0
-54
% ch. on 1Q05
+10.1
+3.2
+7.0
+0.6
+14.5
-8.5
+58.0
+24.1
n.m.
+34.7
+9.2
-0.7(5)
+4.7
-0.5
+10.7
-14.6
-92.6
+10.9
-93.9
n.m.
ITASData gross of consolidation adjustment
1H05
297
235
532
-280
252
-29
-1
180
-0
-42
y/y % ch.
+5.7
-0.1(6)
+3.1(7)
0.0
+6.8
-27.7
-84.4
+11.6
-94.2
+72.8
Net income for the Group(4) 69 +60.9 +44.2 112 +29.9
(4) Net of consolidation adjustment
ROE 20.9% -0.1 pp
Cost of Risk 85 bp -33 bpCost/Income 51% -3.2 pp -2.7 pp 52.6% -1.6 pp
Tax Rate 17% -4.5 pp +12.7 pp 18.8% +5.8 pp
(7) +5.4% without “one off items” in 2004
% ch. at unchanged FX
(5) +9.4% without “one off items” in 2004(6) +5.0% without “one off items” in 2004
61
(3) Including provisions to reserve for general banking risk
(1) Including dividends(2) Including depreciations
(4) At unchanged FX
CONSOLIDATED INCOME STATEMENT: ZAGREBACKA
ITAS
(Euro mln)
Net interest income(1)
Net non interest income
Total revenues
Operating costs(2)
Operating income
Net write-down of loans
Net extraordinary income
Net income
Other net provisions(3)
Taxes
Net income for the Group
% ch.(4) on 2Q042Q05
66
30
95
-53
42
+14
+1
23
-0
-6
19
% ch. on 1Q05(4)
+2.6
+43.4
+12.5
+7.4
+19.6
n.m.
n.m.
-2.4
-89.8
-7.7
0.0
-0.6
+73.5
+14.5
-3.0
+48.3
n.m.
n.m.
+13.4
n.m.
+6.6
+14.0
1H05
130
50
180
-103
77
-17
+1
46
-3
-12
38
y/y % ch.(4)
-0.2
+16.2
+3.8
-0.1
+9.6
+55.5
n.m.
-8.0
n.m.
-3.1
-7.6
Data gross of consolidation adjustment (excluding Net Income for the Group that is net)
62
Details on 1H05 consolidated results
Divisional Reporting
Retail Division
Corporate Division
Private Banking & AM Division
New Europe Division
Details on IAS reporting
AGENDA
63
Reserve for loan losses
Deferred taxes
NEGLIGIBLE IMPACT OF IAS ADOPTION ON 2004 CONSOLIDATED NET INCOME
31-12-04Net Income
ITAS
31-12-04 Net Income
IAS
mln
2,131 2,069
Goodwill
Fixed assetsReserve for
General Banking
Risks Reserve for risk &
charges
Employee benefits
Other
NON RECURRING IMPACT OF IAS TRANSITION = -281 MLN
283 -16
-46
-30-125
-24
-149+45