unicredito italiano group 1 st quarter 2003 results alessandro profumo - ceo may, 14 th 2003

UNICREDITO ITALIANO GROUP1st Quarter 2003 Results

Alessandro Profumo - CEO

May, 14th 2003

2

DISCLAIMER

Starting from 1 January 2003, UCI operates in Italy through three new born segment banks (UniCredit Banca, UniCredit Banca d’Impresa, UniCredit Private Banking) resulting from the merger and the following spin-off of the former 7 regional banks

Given the lack of 2002 quarterly accounting data comparable to 1Q03 for the three new segment banks and in order to facilitate the comprehension of y/y and q/q trends for the Italian banking activity, we provide a comparison between 2002 and 2003 on the aggregated results of the three new segment banks (former 7 regional banks pro-forma in 2002)

We provide a 2002 pro-forma for the aggregate three banks in order to consider the changes in perimeter and pricing due to S3 project implementation (reorganisation of the Group’s Real Estate properties and rationalisation of some companies)

Accordingly, the divisional structure of the Group has been changed with the creation of a Retail Division, a Corporate Division and a Private & AM Division

3

NEW DIVISIONAL STRUCTURE

New Europe Banks

New Europe division

Private & AM division

Pioneer

Xelion

Corporate division

UBM

BMC(3)

Locat(4)

Clarima(1)

Adalya(2)

TradingLab

Retail division

(1) Consumer Finance (2) Retail mortgages (3) M/l term corporate financing (4) Leasing

4

AGENDA

1Q03 Group Highlights

Divisional Reporting

Retail Division

Corporate Division

Private & AM Division

New Europe Division

Conclusions

5

POSITIVE TREND IN TOTAL REVENUES AND GOOD COST CONTROL, AFTER THE START UP OF THE NEW 3 SEGMENT BANKS AND DESPITE THE STILL NOT FAVOURABLE ECONOMIC SCENARIO

At unchanged FX(1)

TOTAL REVENUES (Euro mln)

OPERATING EXPENSES (Euro mln)

COST/INCOME RATIO %

4Q02 1Q03

2,507 2,656

1Q02

2,675

4Q02 1Q03

1,464 1,399

1Q02

1,373

FY02 1Q03

54.5 52.7

1Q02

51.3

-178 bp+134 bp

+7.8%+5.9%

-0.7% +1.7%

-3.1%-4.4%

+1.9% +4.2%

(1) Calculated on the FX of all the currencies of New Europe countries where UCI is present with fully consolidated banks.

6

At unchanged FX(1)

OPERATING INCOME (Euro mln)

GOOD NET INCOME GROWTH (+5.5% on 1Q02, +14.4% on Avg02)HIGH PROFITABILITY LEVELS RECONFIRMED (ROE AT 18.3% IN 1Q03, +1.1 pp on FY02)

ROE (2) %

17.2 18.318.4

+1.1 pp-0.1 pp

FY02 1Q031Q02

NET INCOME (Euro mln)

352515488

4Q02 1Q031Q02

(2) Calculated on end of period net equity excluding profit for the period and dividends related to FY02

1,0431,2571,302

4Q02 1Q031Q02

+23.2%+20.5%

-3.5% -0.9%

+47.4%+46.2%

+5.5% +7.6%

(1) Calculated on the FX of all the currencies of New Europe countries where UCI is present with fully consolidated banks.

7

WITH THE NEW DIVISIONAL STRUCTURE WE CONFIRM A WELL DIVERSIFIED BUSINESS PORTFOLIO

(Euro mln)

45.8%

7.9%

14.1%

100%

32.2%

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

210

374

1,219

2,6562,658

Retail Division

Private & AM

Division

New Europe Division

Corp. Centre and elisions(1)

Group Total

Total pre-Corp. Centre

-2

855

Corporate Division

Weight of the division on Total pre Corporate Centre

REVENUE COMPOSITION BY DIVISION

8

TOTAL DEPOSITS NEARLY STABLE ON DEC02 (-0.9%) LINKED TO A SHIFT INTO INDIRECT DEPOSITS (+1.7% ON DEC02)

-0.9%

-3.3%

DIRECT DEPOSITS: BREAKDOWN BY DIVISION** (bn)

TOTAL DEPOSITS*

(bn)

Dec02 1Q03

339.9

Dec02 1Q03

108.8112.5

Retail

New Europe

Corporate

55.7

21.2

20.4

55.0

19.6

21.9

-7.2%

-1.3%

Other

Direct deposits mainly hit by funding policy (bonds: -1.9% on Dec02) and by the FX impact (Zloty: -9%, $: -3.7% on Dec02) with outflows into indirect funds

Indirect deposits up 1.7% on Dec02 due to an increase in administered (+4.1%) and a slight decrease in managed funds (-0.8%). This last trend is determined by a negative impact both of market performance (MSCI: -5.6% on Dec02) and FX, nearly completely counterbalanced by positive inflows

Direct

Indirect

-19.4%

211.6 215.3

-5.2%

+1.7%

128.3 121.6

336.9

15.2 12.3

*Incl. Repos ** Excl. Repos

Retail Division down 1.3% on Dec02 with a different customer deposit mix: Stable C/A Negative trend of bonds and CDs

Corporate Division down 19.4% also hit by seasonal corporate fiscal payments concentrated in the beginning of the year

New Europe Division down 7.2% on Dec02 impacted by FX (-1% at unchanged FX)+7.2%

9

CUSTOMER LOANS DOWN 1.3% ON DEC02

TOTAL CUSTOMER LOANS*BREAKDOWN BY DIVISION

* Excl. Repos

Retail Division: substantial stability (+0.5% on Dec02) with a shift towards medium/long term loans

Corporate Division down 2.7% on Dec02 due to rationalisation of credit lines and a reduction of higher risk exposures

New Europe Division down 2.9% on Dec02 hit by Zloty devaluation (+3.4% at unchanged FX)

bn

-1.3%

Dec02 1Q03

110.6112.1

Retail

New Europe

Corporate

41.4

11.82.9

41.6

11.53.1

-2.9%

+0.5%

Other

-2.7%56.0 54.5

+6.3%

10

GOOD RESULTS IN 1Q03 COMPARED BOTH WITH 1Q02 AND 4Q02, HELPED BY THE INCREASED SPREAD IN ITALY AND THE IMPROVEMENT OF THE PARENT COMPANY MORE THAN COMPENSATING WEAKER RESULTS IN NEW EUROPE

NET INTEREST INCOME(Euro mln) 1Q03

y/y % Ch.

% Ch. on 4Q02

Corporate Centre & elisions -14 -68.6 -64.3

TOTAL GROUP 1,258 -3.9 +1.5

1,258 -0.6At constant FX +3.7

New Europe Banking 256 -22.3 -15.4

256 -10.4At constant FX -7.5

Aggr. 3 Banks 898 -0.9 +4.0

- UCI Banca (Retail Division)

- UCI Banca d’Impresa (Corporate Division)

- UCI Private Banking (PB & AM Division)

588

294

15

Other Group companies 118 +0.6 +6.1

Dividends & oth. income from equity inv.1 6 n.m. n.m.

1 Respectively 28 mln in 1Q02 and 49 mln in 4Q02

11

GOOD RESILIENCE OF NET COMMISSIONS (-1.4% YoY, -0.4% QoQ AT UNCHANGED FX)

1Q03YoY % Ch.

% Ch. on 4Q02

PGAM Group (PB & AM Division) 115 -11.0% +3.1%

TOTAL GROUP 787 -2.7% -1.5%

787 -1.4%At constant FX -0.4%

New Europe Banking 86 -5.4% -10.4%

86 +8.0%At constant FX -3.0%

Aggr. 3 Banks 448 -4.9% -0.2%



- UCI Private Banking (PB & AM Division)

330

74

44

Oth. Group companies, Corp. Centre & El. 107 +15.8% -15.2%

NET COMMISSIONS

(Euro mln)

Breakdown by company/division

UBM (Corporate Division) 31 +21.3% +88.1%

12

GOOD IMPROVEMENT (+5.7%) OF COMMISSIONS FROM WEALTH MANAGEMENT VS 4Q02 …

NET COMMISSIONS

(Euro mln) 1Q03YoY % Ch.

% Ch. on 4Q02

Securities in custody 75 +10.3% -11.8%

TOTAL GROUP 787 -2.7% -1.5%

Total Commissions from Wealth Management

410 -7.2% +5.7%

- Mutual funds 1

- Segregated Accounts 2

269 -12.7% +0.7%

32 -56.2% -20.0%

Other services 302 +1.0% -7.6%

- Insurance Products 2 109 +78.7% +34.6%

(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)

Breakdown by nature

13

… DRIVEN BY STRONG SALES OF INSURANCE PRODUCTS IN ITALY AND MUTUAL FUNDS ABROAD, OFFSETTING THE SLIGHT DECREASE OF TOTAL AUMs ON DEC. 2002 AND THE LESS FAVOURABLE ASSET MIX

(1) Plain vanilla Mutual Funds distributed in Italy (Total AuM in Mutual Funds in Italy, including Mutual Funds in Segregated Accounts and Unit Linked, Euro 61.0 bn as at 31.3.2003 vs Euro 62.6 bn as at 31.12.2002, -2.5% - Source: Assogestioni)

UCI TOTAL AuM(Euro bn)

Mutual Funds(1)

Segregated Accounts

Insurance

Negative impact of market and US$ devaluation on Total AUMs and Asset Mix…

… counterbalanced by excellent commercial results

Italy USA, New Europe & Intl.

PGAM AuM: Evolution by Asset Class

Equities

Balanced

Hedge

Bonds

Money Market 12.9%

28.0%

13.3%

45.4%

0.4%

4Q02 Avg.1Q02 Avg. 1Q03 Avg.

16.5%

30.9%

15.0%

36.4%

1.2%

18.9%

38.3%

13.4%

27.8%

1.6%

ITALY

USA, NEW EUROPE & INT.

Bancassurance

1Q03 Total New Premiums written: Euro 1,766 mln (+73.6% YoY, +68.8% on 4Q02), of which around 700 mln in Capital Guaranteed UNISTAR (+3.1% YoY, +52% on 4Q02).

Mutual Funds

1Q03 Gross Sales 27.5% up YoY and +14.9% on 4Q02 (13.3 bn vs 10.4 bn in 1Q02 and 11.6 bn in 4Q02)

Net Sales in USA sticking on 2002 momentum: 962 mln, +15.6% on 1Q02 at unchanged FX

Positive Net Sales in the International Division - ex Italy (Euro 226 mln) and strong trend in New Europe (Euro 284 mln, +302%)

Confirmed leadership in the segment: 18.9% mkt share in bancassurance (17.6% in 2002); 14.9% mkt share on total market (11.7% in 2002)

Euro 183 mln Recurring Premiums written (+237% YoY and +310% on 4Q02)

31.12.’0231.3.’02

37.6

26.0

15.3

23.5

102.4

45.4

28.1

13.5

28.5

115.5

-17.2%

-7.5%

+13.3%

-17.5%

-11.3%

-1.0% vs 31.12.’02

31.03.’03

36.4

25.3

16.4

23.7

101.8

-3.2%

-2.6%

+7.3%

+0.1%

-0.6%

14

BRILLIANT RESULT (+20% Y/Y) FROM FINANCIAL TRANSACTIONS DRIVEN BY THE CORPORATE DIVISION

INCOME FROM FINANCIAL TRANSACTIONS

(Euro mln)

1Q03YoY % Ch.

% Ch. on 4Q02

UBM (Corporate Division) 234 37.4 n.m. (1)

TOTAL GROUP 433 19.9 99.5433 22.0At constant FX 104.2

New Europe Banking 30 -48.4 -50.630 -42.7At constant FX -45.9

Aggr. 3 Banks 97 9.5 140.5



- UCI Private Banking (PB &AM Division)

-3

102

-2

TradingLab (Retail Division) 62 -0.8 n.m. (2)

Corporate Centre & elisions 10 -148.6 -60.2

Other Group companies 1 -47.5 -72.1

1 Amount in Euro in 4Q02: 72 mln2 Amount in Euro in 4Q02: 17 mln

15

OPERATING COSTS UNDER CONTROL (+1.9% Y/Y)

1Q03YoY % Ch.

% Ch. on 4Q02

TOTAL GROUP 1,399 1.9 -4.4

1,399 4.2At constant FX -3.1

Aggr. 3 Banks 830 0.9 -5.5- UCI Banca (Retail Division) 665- UCI Banca d’Impresa (Corporate Division) 128- UCI Private Banking (PB & AM Division) 37

OPERATING COSTS BREAKDOWN

(Euro mln)

By

Co

mp

an

y /

Div

isio

n (

1)

PGAM Group (PB & AM Division) 84 -5.1 -1.1

UBM (Corporate Division) 47 19.7 2.1

Depreciation 107 4.9 -31.4

Other Costs 481 2.6 -2.0

Staff Costs 811 1.1 -0.7

By

Nat

ure

New Europe Banking 211 -14.7 -18.4211 -2.5At constant FX -11.7

1 Balance of total costs by company/division due to Corporate Centre, elisions and other Group companies

16

Euro 164 mln Specific provisions (of which write-downs for Euro 298 mln and write-backs for Euro 134 mln), down 11.8% vs. 1Q02 (-7.5% at constant FX) mainly due to lower net write-downs of KFS and UBM

Disposal of Investments (Polcard) for Euro 15 mln

Net Write-downs of Financial Investments Euro 15 mln, mainly due to Commerzbank

Provisions for risks & charges Euro 40 mln

NON OPERATING ITEMS CHARACTERISED BY A CONSERVATIVE PROVISIONING POLICY AND A LOW EXTRAORDINARY INCOME

(Euro mln)

Operating income

Goodwill amort.

Net loan loss prov.

Other net prov1

Net extr. income

Taxes Minorities

1,257 -66-164

-55 +20 -437

-40515

Net Income

Tax Rate at 44.3%

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

17

DECREASING NET NPLS AND TOTAL DOUBTFUL LOANS IN ABSOLUTE TERMS; SLIGHT DETERIORATION OF NET NPLs AND NET DOUBTFUL LOANS ON TOTAL NET LOANS RATIOS MAINLY DUE LOWER TOTAL LOANS

Total Net Doub. Loans

Net NPLs

4,259 -0.8%

-0.2%2,150

Dec 02 % Ch. (Euro mln)

4,227

2,145

Mar 03 Conservative provisioning policies in Italy, particularly

in Corporate Banking, with increased coverage ratios either for Retail Banking (from 37.7% to 37.9% on Total Doubtful) or for Corporate Banking (from 40.6% to 41.7%)

Net NPLs and Doubtful Loans as % of Total Net Loans

3.71%

31.3.’03

3.77%

1.87% 1.91%

60.7%60.3%

48.2% 48.1%

Coverage ratios

Net Doubtful Loans/ Total Net Loans

Net NPLs/ Total Net Loans

On Gross Doubtful Loans

On Gross NPLs

31.12.’02 31.3.’0331.12.’02

Other Net Doubtful Loans 2,109 -1.3%2,082 4.0% reduction of Gross and Net NPLs in New

Europe as a result of the improved macroeconomic scenario and efficient workout policies

Calculated on Loans at 31.12.2002

3.68%

1.87%

18

DIVISIONAL CONTRIBUTION TO GROUP NET INCOME

44.7(1)64.4(1)

238.6(1)

515

673.0

Retail Division(2)

New Europe

Division(5)

Corp. Centre & elisions(6)

Group total


& elisions

-158.0(1)

GOODWILL AND HOLDING CHARGES:

- 69 goodwill depr.- 120 holding loss (net of

dividends), of which 24 negative interest income

(Euro mln)

+7.7%325.3(1)

Corporate Division(3)

Private & AM

Division(4)

(1) Net of infragroup dividends. Goodwill depreciation is fully charged to Corp. Centre(2) UniCredit Banca, Banca dell’Umbria, CRCarpi, TradingLab, TredingLab Inc., Clarima, Adalya, UniCredit Fondi, Pioneer Inv. Man. Luxemboug, Rolo Pioneer Luxembourg, UniCredit

Capital Italia, Vivacity, Grofofactor, Creditras Previdenza(3) UniCredit Banca d’Impresa, UBM, Locat, Locat Rent, Locat Zagreb, BMC, Unicredito Gestione Crediti, UniRiscossioni, UCI Factoring, i-Faber, Quercia Funding, S+R Investimenti,

Sviluppo Nord Ovest, Ventura Finance, UCI Internal Serivces, Broker Credit, UniCredit ServiceLab, Euro Capital Structures

(4) UniCredit Private Banking, Pioneer Global Asset Management Spa, Xelion, Bac Marino, Bac Fiduciaria, Banque Monegasque, Cordusio Fiduciaria, FRT SIM, UniCredit Suisse, Rolo Pioneer SGRpA(5) Group Pekao, Bulbank, Unibanka, Group Zagrebacka, UniCredit Romania, KFS(6) Parent Company, USI, UPA, other financial companies and elisions

From 7.21% (Dec 02)to 7.13% (1Q03)

CORE TIER 1 RATIO(considering all RWA)

From 11.89% (Dec 02)to 11.10% (1Q03)

TOTAL CAPITAL RATIO(considering all RWA)

19

TOTAL GROUP

PRIVATE & AM RETAIL CORPORATE

Net provisions 21927155

Balance due to roundings

(Euro mln)

39

NEW EUROPE

Interest income (incl. div.) 628 376 18 1,264253 -11

Net non interest income 1,392192478592 121 9

Total revenues 2,6562108551,219 374 -2

Operating costs (incl. dep.) 1,399149232738 211 69

Net operating income 1,25761622481 163 -70

Net income 55546242 328 98 -158

Cost/income ratio 52.7%71.0%27.2%60.6% 56.4% n.m.

52

Net Income for the Group 51545239 325 64 -158

CORPORATE CENTRE & ELISION

DIVISIONAL CONTRIBUTION TO GROUP P&L

Capital Absorption 9,4374864,4252,866 1,043 617

20

AGENDA



Retail Division

Corporate Division


New Europe Division

Conclusions

21

RETAIL DIVISION: BREAKDOWN OF REVENUES BY COMPANY AND INCOME STATEMENT OF THE DIVISION

1Q03

Net interest income (incl. div.) 627

Net non interest income 592

Total revenues 1,219

Administrative costs (incl. depr.) 738

Operating income 481

Net write-down of loans 46

Net extraordinary income -4

Net income 242

Other net provisions 9

Taxes 180

Net income for the Group 239

1 Pre Corporate Centre and Elisions2 Asset Management Distribution companies: UniCredit Fondi, Pioneer Inv.

Management, Rolo Pioneer Lux. e UniCredit Capital Italia

45.8% of Group

Revenues1

1,219

RETAIL DIVISION TOTAL REVENUES (Euro mln)

4.6%

87.6%

0.1%

0.2%

2.3%SGR 2

1.7%Other

companiesCost Income ratio, % 60.6

3.5%

22

UNICREDIT BANCA 1Q03 RESULTS CHARACTERISEDBY GOOD PERFORMANCE IN TERMS OF SALES ACTIVITIESAND TIGHT COST CONTROL

1Q03



Total revenues 1,068




Net extraordinary income -5


Taxes 152


Change in deposits mix vs Dec 02, resulting from stability in current accounts and decrease in bonds, CDs and savings accounts

Substantial stability of loans vs Dec 02, resulting from lower short term and increased m/l term loans, driven by residential mortgages

Good improvement in mark-up (5.96%, +32bp on Jan03) more than offsetting the decrease in mark-down (1.93%, -23bp on Jan03), with short term spread up 9bp

Good sales of third party bonds (1.6bn, in line with the excellent results of 4Q02 pro-forma) and bancassurance products (1.4 bn single premiums, +74% on 4Q and 167 mln recurring premiums, + 271% on 4Q)

Good reduction of employees (-382, from 24,681 at Dec 02 to 24,299 at end of March), with incentivisation costs lower than budgeted

Cost Income ratio, % 62.3

Net write-downs on loans resulting from 74 write-downs and 33 write-backs (of which 14 effective collections)

(Euro mln)

23

AGENDA



Retail Division

Corporate Division


New Europe Division

Conclusions

24

CORPORATE DIVISION: BREAKDOWN OF REVENUES BY COMPANY AND INCOME STATEMENT OF THE DIVISION

(Euro mln)

1 Pre Corporate Centre and Elisions

CORPORATE DIVISION TOTAL REVENUES

855

33.0%

55.2%

5.2%

2.3%

4.2%Other Companies

32.2 % of Group

Revenues 1

1Q03



Total revenues 855




Net extraordinary income 4

Net income 328


Taxes 228



25

UNICREDIT BANCA D’IMPRESA 1Q03 RESULTS SHOW EXCELLENT EFFICIENCY THANKS TO GOOD REVENUES

(Euro mln) 1Q03

Net interest income 294


Total revenues 472

Administrative costs 128


Net write-downs of loans 47


Net income 165


Taxes 118


Cost Income RATIO, % 27.1

Loans to customers at 39,333 mln in line with end of 2002 (-0.4%), but showing a consistent improvement of the pricing (mark up at 2.69, +49 bps vs Dec. 02). Short term component weights around 60%

Deposits (excl. Repos) at 7,597 mln with mark down at 1.24 (-35 bps vs Dec. 02)

Commissions at 74 mln mainly deriving from current accounts and foreign transaction services

Very good result of trading profits totalling 102 mln deriving almost all from derivatives products

Net write-downs of loans deriving from 68 mln of write offs and 21 mln of write backs (o.w. 15 mln from collections)

26

AGENDA



Retail Division

Corporate Division


New Europe Division

Conclusions

27

PRIVATE BANKING & ASSET MANAGEMENT DIVISION: BREAKDOWN OF REVENUES BY COMPANY AND INCOME STATEMENT OF THE DIVISION

7.9% of the Group1 Total

Revenues

210.2

PRIVATE BANKING & AM DIVISIONTOTAL REVENUES(Euro mln)

58.1%

28.8%

8.5%Other 2

4.6%

1Q03

Net interest income (incl. div.) 18.0

Net non interest income 192.2

Total revenues 210.2

Administrative costs (incl. depr.) 149.3

Operating income 60.9

Net write-down of loans 1.0

Net extraordinary income 4.9

Net income 46.1

Other net provisions 1.2

Taxes 17.5

Net income for the Group 44.7


(1) Pre Corporate Centre & Elisions(2) BAC S. Marino, BAC S. Marino Fiduciaria, UPAM, Cordusio Fiduciaria, FRT Sim, UniCredit Suisse Bank,

Banque Monegasque de Gestion.

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

28

UNICREDIT PRIVATE BANKING: THE START-UP OF THE BIGGEST ITALIAN PRIVATE BANK

Total Direct + Indirect Deposits slightly decreasing on Dec 2002 (Euro 36.4 bn as at 31.03 vs Euro 36.6 as at 31.12), mainly due to the negative impact of market performance on AUMs (-Euro 243 mln), not completely offset by the increase of direct deposits

Around 95,200 customers as at end of March, with 376 net acquisition of clients in 3 months

1Q03

Net interest income (incl. div.) 15.1


Total revenues 60.6



Taxes 10.1



Net commissions at Euro 44.0 mln, of which: Euro 30.4 mln from Asset Management1

Euro 13.1 mln from Securities in Custody1

of which:- Net commissions 44.0

of which:

- Staff costs

- Administrative expenses

22.3

15.0

(1) Management accounts

153 branches and 557 Private Bankers as at end of March (53.8% of total staff)

Euro 12.0 mln contribution to Net income for the Group (UCI PB stand alone); Euro 16.6 mln including subsidiaries2

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

29

AGENDA



Retail Division

Corporate Division


New Europe Division

Conclusions

30

NEW EUROPE DIVISION: BREAKDOWN OF REVENUES BY BANKS AND INCOME STATEMENT OF THE DIVISION

(Euro mln) 1Q03

Net interest income3 253


Total revenues 374

Administrative costs4 211




Net income 98

Other net provisions5 2

Taxes 42

y/y % ch.6

-10.9

-15.9

-12.6

-2.5

-22.9

-18.8

n.m.

-9.3

n.m.

-21.1

-7.7

5 Including provisions to reserve for general banking risk

3 Including dividends4 Including depreciations

6 At unchanged FX

374

6.9%2

51.1%2

13.7%2

3.3%2

1.4%2

23.5%2

1 Pre Corporate Centre and Elisions2 Weight of the bank Total Revenues on Division Total Revenues – only UCI’s portion

% ch. on 4Q026

-8.0

-31.1

-17.0

-11.7

-23.0

-58.7

n.m.

+55.6

n.m.

+20.8

Net income for the Group 64 +64.5

Cost/Income ratio (%) 56.4 53.0850.27

14.1% of Group

Revenues1

NEW EUROPE DIVISIONTOTAL REVENUES(Euro mln)

7 in 1Q02 8 in 4Q02

31

DIVISIONAL KEY HIGHLIGHTS

Divisional results negatively affected by the still not favourable macroeconomic environment and FX impact in Poland (Zloty devaluation -18.8% y/y, -9.0% on Dec02)

Volumes

Net customer loans (+4.9% y/y, +3.4% on 4Q02 at unchanged FX) hit by decreased lending in Pekao more than counterbalanced by the other banks

Direct deposits (-2.4% y/y, -1.0% on 4Q02 at unchanged FX) with a higher weight of securities (from 0.8% in 1Q02 to 2.1% in 1Q03) mainly driven by increased bonds in Pekao in order to exploit fiscal benefits

Assets under Management: 2.3 bn in 1Q03, +33% y/y, +8.1% on 4Q02

Increased net income of the division in the last quarter to 64 mln in 1Q03 (-7.7% y/y, + 64.5% on 4Q02 at unchanged FX) supported by an overall good cost control and a lower impact of Pekao’s provisioning

Zivnostenska Banka

A successful acquisition of the 10th Czech Republic Bank ranked on total assets (close last February)

Special projects

Development of new IT systems Divisionalisation and focus on attractive segments to sustain growing revenue

generation Credit process redesign to reduce risk Development of one single Pan European platform for Credit Card business

32

ASSET QUALITY IN NEW EUROPE NEGATIVELY IMPACTED BY ECONOMIC SCENARIO IN POLAND, IMPROVEMENT IN ALL OTHER COUNTRIES

Net Doubtful Loans


80.3

2002 1Q03

80.3

63.5 62.5

Coverage ratios


On Gross NPLs

Net NPLs

999 +7.7

+3.1396

Dec 02 % ch. (Euro mln)

1,076

408

Net Doubtful/Loans ratio up 0.4% on Dec02 impacted by a not favourable macroeconomic environment in Pekao nearly counterbalanced by an improvement in all other NE banks (Zaba -0.5pp, KFS –0.5 pp, Bulbank -0.7pp, Unibanka -0.4pp on Dec02)

Stable coverage ratio on gross NPLs loans, slight decrease on gross Doubtful due to a different mix (lower weight of NPLs)

1Q03

Net NPL/ Loans %

1Q03

Total NE +0.43.5

ch. on Dec02 (pp)

Net Doubtful/Loans %

1Q03

ch. on Dec02 (pp)

9.3-0.0

Net Loans +3.411,178 11,553

At unchanged FX

At unchanged FX

Zaba -0.52.5 4.9-0.4

Unibanka -0.44.1 4.9-0.2

Pekao +1.04.1 12.3+0.3

Bulbank 0.2 -0.72.5-0.1

KFS -0.54.0 8.6-0.7

Stable net NPLs/Net Loans ratio

33

AGENDA



Retail Division

Corporate Division


New Europe Division

Conclusions

34

SUMMING UP

Net income growth (+5.5% on 1Q02, +14.4% on Avg02), despite a still not favourable economic environment

High profitability (ROE at 18.3% in 1Q03) and efficiency (Cost/Income ratio at 52.7% in 1Q03) levels reconfirmed

Good start up of the new three segment banks in the 1Q03

Good revenue generation supported by a well diversified business portfolio

35

Annex

36

Net extraordinary income

Net interest income (incl. div.)

Net non interest income

Total revenues

Operating income

Net write-down of loans

Y/Y % ch.

Administrative costs (incl. depr.)

Net income +5.5

-5.5

+4.0

-0.7

-11.8

n.m.

+1.9

-3.5

Other net provisions* n.m.

Goodwill depr. -4.3

1Q03

1,264

1,392

2,656

1,399

1,257

164

20

515

55

66

(Euro mln)

Minorities -45.240

Taxes -2.0437

(*) Including provisions to reserve for general banking risk

+46.2

-1.9

+14.3

+5.9

-50.3

n.m.

-4.4

+20.5

n.m.

+11.9

+33.3

n.m.

% ch. on 4Q02

1Q03 CONSOLIDATED INCOME STATEMENT

37

DIVISIONAL CONTRIBUTION TO THE GROUP OPERATING INCOME

(Euro mln)

36.2%

4.6%

12.3%

100%

46.9%

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

61163

481

1,2571,327

Retail Division

Private & AM

Division

New Europe Division

Corp. Centre and elisions(1)

Group Total


-70

622

Corporate Division

Weight of the division on Total pre Corporate Centre

OPERATING INCOME: COMPOSITION BY DIVISION

38

ASSET QUALITY: DETAILS BY DIVISIONS

Coverage ratios

-on total gross NPL, %

-on tot. Gross doubtful loans, %

Total gross doubtful loans

Retail Banking

Dec. 02 Mar. 03

Gross NPL

% change on Dec. ‘01

Gross NPL/Tot. Gr. Loans,%

Net NPL/Tot. Net Loans,%

1,608 1,5832,15

95,466

-4.0% -1.2%

3.77% 2.66% 15.6% 4,57%

1.99% 1.49% 3.57% 1,87%

2,585 2,360 2,964 8,225

-3.1% -1.0%

48.8% 45.5% 80.3% 60.7%

37.7% 40.6% 48.2%

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

Net Doubtful Loans/Tot. Net Loans,% 3,71%3.89% 2,42% 9.09%

63.5%

(Euro mln)

1,614

3.77%

1.99%

2,608

48.6%

37.9%

3.89%

+0.4%

+0.9%

+1.3%

-0.1%

1,604

2.82%

1.57%

2,357

45.8%

41.7%

2,48%

2,072

15.4%

3.53%

2,873

80.3%

9.31%

62.5%

5,402

4,62%

1,91%

8,140

60.3%

48.1%

3,77%

% change on Dec. ‘01

Corporate Banking

NE Banking Total Group 1

Dec. 02 Mar. 03 Dec. 02 Mar. 03 Dec. 02 Mar. 03

Gross Doubtful Loans/Tot. Gr. Loans,% 6,87%6.07% 3.97% 21.4%6.08% 4,14% 21.4% 6,96%

39

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)

Net income for the Group

TradingLab

- of which: Staff costs

- of which: Other costs

Other companies

RETAIL DIVISION: RESULTS BREAKDOWN BY BANK

- o/w: Net write-down of loans

588

480

1,068

665

403

197

62.3

197

361

304

41

49

36

21

57

33

24

11

58.1

9

18

15

3

3

-8

63

55

17

38

23

31.3

23

6

11

-

-

11

28

39

23

16

11

n.m.

11

5

18

2

3

628

592

1,219

738

481

242

60.6

239

390

348

46

55

(1) CR Carpi, Banca dell’Umbria

40

IMPROVED COVERAGE RATIO ON GROSS DOUBTFULLOANS THANKS TO CONSERVATIVE PROVISIONING POLICY,DESPITE THE SLIGHT INCREASE IN TOTAL DOUBTFUL LOANS


Net NPLs

1,378 +0.6

+0.7717

Dec 02 % Ch. (Euro mln)

1,386

722

Mar 03

Conservative provisioning policy, with increased coverage ratio on Gross Doubtful Loans (from 39.5% to 39.7%)

Increase in total provisions (+1.3% on Dec02) more than offsetting the 0.9% increase of Gross Doubtful Loans, leading to 0.6% increase in Net Doubtful Loans

Increased coverage on performing loans (from 52 bp as at Dec02 to 60 bp)


3.71%

31.3.’03

3.73%

1.93% 1.94%

50.2% 50.0%39.5% 39.7%

Coverage ratios




On Gross NPLs

31.12.’02 31.3.’0331.12.’02

Other Net Doubtful Loans 661 +0.5664

3.73%

1.94%

Calculated on Loans at Dec 2002

41

BREAKDOWN OF DEPOSITS AND LOANS

1Q03

Current Accounts 32.0

Savings Accounts 4.6

DEPOSITS 53.2

Repos 2.7

VOLUMES(Euro bn)

CDs & other time deposits 1.8

Bonds 12.0

Source: Bank of Italy Matrix data

1Q03


Mortgages 18.6

LOANS to private customers

Personal loans 2.0

Other loans 0.4


Mortgages 24.8

LOANS 36.4

Personal loans 2.1

Other loans 2.0

22.9


Mortgages 5.0

LOANS to small business1

Personal loans 0.1

Other loans 1.4

11.6

1 Defined following Bank of Italy Matrix definitions, as sum of Imprese produttive, Quasi società non finanziarie con meno di 20 addetti and Famiglie produttrici

42

TRADINGLAB PROFIT & LOSS

1Q03

Net interest income (incl. div.) -7.6


Total revenues 55.5



Net extraordinary income -

Taxes 15.3


y/y% ch.

+0.7

+1.3

+1.4

-6.2

+5.3

-

-0.3

+8.7

Cost Income ratio, % 31.3 -253 bp

(Euro mln) Good increase in Structured

bonds origination (+121% y/y and +47% vs 4Q02), with a slight reduction in the average spread

Lower turnover on Covered Warrants (-62% y/y and -12% vs 4Q02), with increased market share vs. 4Q (38.6% from 35.2%)

Non captive revenues representing 63.8% of the total, from 59.3% in 2002

Decrease in administrative costs mainly driven by the decrease in advertising expenses

43(1) Balance due to roundings

CORPORATE DIVISION: RESULTS BREAKDOWN BY BANK

Interest margin (incl. div.)


Total revenues



Net income

TOTAL (2)LocatUnicredit

Banca d’Impresa

UBM

Net provisions

(Euro mln)

(UCI stake)

Net income (UCI’s portion)



Other companies

(1)


(100%)(100%) (88%)

294

178

472

344

58

70

128

165

165

27.1%Cost/income

15

62

16

266

282

236

15

32

47

142

142

16.6%

52

-7

45

14

8

6

31

4

4

16

14

30.2%

14

41

56

43

20

24

11

4

-3

5

4

76.8%

376

478

855

232

130

102

622

71

15

328

325

27.2%

44

UNICREDIT BANCA D’ IMPRESA: BREAKDOWN OF DEPOSITS AND LOANS

VOLUMES(Euro bn)

Source: Bank of Italy Matrix data1 Turnover > Euro 250 mln2 Euro 250 mln >Turnover > Euro 2.5-3.5 mln

1Q03


Savings Accounts 0.2

DEPOSITS 7.9

Repos 0.3


Other short term loans 13.1

LOANS 39.3

Mortgages 7.8

Other m/l term loans 7.2

1Q03

Public Bodies 1.6

Large Corporate1 4.5

LOANS by class of customer 39.3

SMEs2 33.2

1Q03

45

ASSET QUALITY RATIOS SHOWING A SLIGHT DETERIORATION OF NPLs AS A CONSEQUENCE OF THE MACROECONOMIC ENVIRONMENT


Net NPLs

868.6 -2.5

5.1431.2

Dec 02% Ch.on Dec02 (Euro mln)

846.9

453.2

1Q03

Conservative provisioning policy leads to an increased coverage ratio on gross doubtful loans (from 34.6% as at Dec. 02 to 36.0% in 1Q03)

Despite a decrease in Gross Doubtful Loans (-0.3% from Dec. 02 to March 03) we have increased the total provisions by 4.0%, driving down total Net Doubtful Loans by 2.5%


2.12%

1Q03

2.12%

1.05% 1.13%

40.1% 39.5%34.6% 36.0%

Coverage ratios




On Gross NPLs

Dec 02 1Q03Dec 02

Other Net Doubtful Loans 437.4 -10.0393.7

Net NPLs and net watchlist represent respectively 53.5% and 29.4% of the total net doubtful loans

Calculated on Loans at Dec 2002

2.07%

1.11%

46

EXCELLENT RESULTS OF UBM WITH TOTAL REVENUES, OPERATING INCOME AND NET INCOME INCREASING RESPECTIVELY BY 31%, 33% AND 40% Y/Y

* Of which Euro 166 mln from sales (51.2% captive and 48.8% non-captive) and Euro 21 mln from trading

Revenues increase (30.7% y/y) driven by the good performance of the derivative business and the investment and corporate banking activities (the closing of the deal “Autostrade” generated approx. 21 mln)

Excellent efficiency, with Cost / Income at 16.6% despite an increase in operating costs (+19.7% y/y) mainly due to a rise in staff costs (e.g.: + 93 employees vs 1Q02) and depreciation (+28.6% y/y).

1Q03(Euro mln) y/y% ch.

CorporateLab (Corporate Derivatives)

Investment & Corporate Banking

Sales & Trading (incl. Institutional Deriv.)

Total revenues 282 30.7

Staff costs 32 33.1

Other costs (incl. depr.) 15 -2.7

Operating income 236 33.2

Net income 142 40.2

C/I Ratio 16.6% -153 bp

187*

40

55

+36

+160

-12

47

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

Daily P&L

VaR

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

(€8)

(€6)

(€4)

(€2)

€ 0

€ 2

€ 4

€ 6

€ 8

02/0

1/20

02

02/0

2/20

02

02/0

3/20

02

02/0

4/20

02

02/0

5/20

02

02/0

6/20

02

02/0

7/20

02

02/0

8/20

02

02/0

9/20

02

02/1

0/20

02

02/1

1/20

02

02/1

2/20

02

02/0

1/20

03

02/0

2/20

03

02/0

3/20

03

02/0

4/20

03

Slight widening of the VAR channel starting from January 2003 mainly due to an increase in interest rates derivatives volumes

Still conservative policy in risk measurement

1Q03 avg. daily VAR at Euro 3.5 mln vs 4.2 in 1Q02 and vs 3.0 in 4Q02

UBM VAR CHANNEL

48



Total revenues



Net income

Cost/Income

Tax Rate

TOTAL 1PGAM Group

Unicredit Private

Banking

Net provisions


(Euro mln)

Net income (UCI’s portion)

Xelion



Other companies

PRIVATE & AM DIVISION: 1Q03 INCOME STATEMENT BREAKDOWN BY COMPANY


18

192

210

149

76

65

61

2

1

46

45

71.0%

27.6%

15

45

60

37

22

15

23

1

1

12

12

61.5%

45.7%

-4

126

122

84

46

34

38

0

0

37

37

68.8%

12.4%

1

9

10

18

2

12

-8

0

0

-8

-8

n.m.

n.a.

6

12

18

10

6

4

8

1

0

5

4

55.6%

n.a.

49

VERY GOOD NET SALES FOR PIONEER IN 1Q03, WITH STRONG RESULTS IN ALTERNATIVE INVESTMENTS. EXCELLENT RESULTS IN APRIL: NET SALES AROUND 50% OF TOTAL 1Q03

(2) Including Momentum.

(1) Balance due to market and FX effects

(3) Data already included in the other divisions

Italy

New Europe

(Euro mln)

80,759

1,522

TOTAL PGAM

- Captive 65,699

Alternative Investments 3

103,688

1,517

1Q03Net Sales

632

284

268

2,104

107

79,944

1,674

64,471

103,019

1,614

April 2003Net Sales

146

82

-40

1,032

63

2003AuMs as of

30.04 1

81,106

USA 17,665 962 17,651 537 18,772

International (ex-Italy) 2 3,741 226 3,750 267 4,065

1,822

65,368

105,765

1,681

Positive contribution of all the Business Divisions either in 1Q02 or in April

1Q03 Net sales +17% y/y, driven by USA (+15.6% y/y at unchanged FX), Italy (+459% y/y) and New Europe (+302.2% y/y)

2003AuMs as of

31.03 1

2002AuMs as of

31.12

- Non captive 15,060 364 15,473 186 15,738

50



Total revenues



Net income

ROE

Cost/income

TOTAL (1)UNI BANKA (76.3%)

Group PEKAO (53.2%)

BULBANK (85.2%)

144 12 8 253

121

374

211

163

98

17.4%

56.4%

3

11

7

4

2

17.7%

67.2%

8

20

8

12

16.5%

38.8%

91

236

129

106

16.8%

54.9%

58

Net provisions 392-241


(Euro mln)

(UCI stake)

10

Net income (UCI’s portion) 64131 9

53

18

71

42

28

25

20.4%

60.3%

-4

19

Group ZABA

(81.9%)

- of which: Staff costs 1073466 25

- of which: Other costs 763347 12

NEW EUROPE DIVISION: RESULTS BREAKDOWN BY BANK

- o/w: Net write-down of loans 412-241 -2

2

2

4

3

1

0

n.m.

73.6%

1

1

1

0

UniCredit Romania (99.8%)

1

35

-1

34

22

12

3

12.8%

63.9%

8

10

1

3(2)

KFS (50.0%)

0

(2) Consolidation with proportional method (50%)

51

1Q03 CONSOLIDATED INCOME STATEMENT: PEKAO



4 At unchanged FX

(Euro mln)1Q03

Net interest income1 144


Total revenues 236

Administrative costs2 129




Net income 58

Other net provisions3 0

Taxes 23

y/y % ch.4


% ch. on

4Q024

-20.7

+6.2

-12.1

1.7

-24.5

+8.0

n.m.

-12.6

n.m.

-38.5

-11.3

-11.0

-27.8

-18.4

0.2

-33.4

-45.4

n.m.

+25.3

n.m.

-14.7

+22.9

52



4 At unchanged FX

(Euro mln)1Q03

Net interest income1


Total revenues

Administrative costs2

Operating income

Net write-down of loans

Net extraordinary income

Net income

Other net provisions3

Taxes

y/y % ch.4

Net income for the Group

% ch. on

4Q024

+26.353

-61.918

-20.571

-5.542

-36.028

n.m.-2

n.m.0

-25.425

n.m.-2

-5.88

-27.519

-4.9

-49.4

-22.3

-36.7

+18.4

n.m.

n.m.

n.m.

n.m.

n.m.

n.m.

1Q03 CONSOLIDATED INCOME STATEMENT: ZAGREBACKA

unicredito italiano group 1 st quarter 2003 results alessandro profumo - ceo may, 14 th 2003

Documents

new segment banks

consolidated banks

regional banks proforma

retail divisionprivate

divisiontotal deposits

bntotal deposits

otherdirect deposits

indirect deposits