1 UNICREDITO ITALIANO GROUP 1 st Half 2004 Results Alessandro Profumo - CEO London - September, 14 th 2004

1

UNICREDITO ITALIANO GROUP1st Half 2004 Results

Alessandro Profumo - CEO

London - September, 14th 2004

2

AGENDA

1H04 Group Highlights

Divisional Reporting

Retail Division

Corporate Division

Private & AM Division

New Europe Division

3

2Q DELIVERY CONFIRMING STRATEGIC DIRECTION

Continuous growth of lending activity, with market shares improvement in Retail and Corporate business and in Asset Management in Italy

Q/Q acceleration of Net Interest Income, supported by volume growth and pricing resilience

Net Commissions increase, even with a lower dependence from up-front

Reduction of flows of new doubtful loans and improvement in asset quality indicators

Growth of Net Income over the last two quarters

4

380

4Q03

1,026

4Q03

NET INCOME UP 25.1% Q/Q BENEFITING FROM HIGHER CONTRIBUTION OF ALL REVENUE SOURCES. Y/Y DECREASE DUE TO DECLINE IN INTEREST RATES AND SLOWDOWN IN CORPORATE DERIVATIVES

1,132 1,049

1H03 1H04

NET INCOME (Euro mln)

ROE1

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

2,550 2,280

1H03 1H04

OPERATING INCOME (Euro mln)

COST/INCOME RATIO

-7.3%

-10.6%56.2%

(+1.2 pp on Dec03)

17.5% (-0.2 pp on Dec03)

583

2Q04

+25.1%

1,210

466

1Q04

1,070

1Q04 2Q04

+13.1%

5

GOOD IMPROVEMENT IN NET INTEREST INCOME (+1.7% Q/Q EXCL. DIVIDENDS) BOTH IN ITALY (BEST QUARTER SINCE 1Q03) AND IN NEW EUROPE, THANKS TO PRICING RESILIENCE …

NET INTEREST INCOME excl. Dividends

4Q03 1Q043Q032Q031Q03

New Europe

Italy

Avg. Euribor 2.46%

2.78%

2.14% 2.09%2.16%

2Q04

2.09%

Mark-up on short term(1) UBI vs. System, %

Mark-down(2) UCB vs. System, %

(1) Mark-up = Interest rate on short term loans - Euribor 1M. EOP data(2) Mark-down = Euribor 1M - Interest rate on deposits in current accounts. EOP data

ITALY: TREND OF MARK-UP & MARK-DOWN

3,553,44

3,20

3,40

3,60

3,80

4,00

mar 03 jun 03 sep 03 dec 03 mar 04 jun 04

UBI Mark-up System Mark-up

1,63

1,42

1,20

1,40

1,60

1,80

2,00

2,20

mar 03 jun 03 sep 03 dec 03 mar 04 jun 04

UCB Mark-down System Mark-down

1,140 1,1891,1601,1931,251

886 929910925988

1,210

940

254 260250268263 270

6

% ch. on Dec03

% ch. on Mar04

… AND GOOD VOLUME GROWTH CONTRIBUTED BY ALL DIVISIONS

Jun04

TOTAL CUSTOMER LOANS1

Breakdown By Division (bn)

1 Excl. Repos

Retail Division: good performance, thanks to continued growth in households’ mortgages (+11% on Dec03) and to the pick-up of Small Business lending (+4.2% on Dec03)

Corporate Division: growing 2Q04 mainly driven by UBI, with a strong contribution of m/l term lending, up 4.8%2 on 1Q04

New Europe Division up 4.1% at unchanged FX on Dec03, positive contribution of Pekao (+7.6% on Dec03, +3.5% at unchanged FX)

+5.5

Retail +7.5

Corporate +0.3

New Europe +7.6

TOTAL GROUP +4.2

Other

52.4

63.0

12.7

131.3

3.1

+4.6

+3.1

+3.8

-3.0 +21.3

+13.4

+10.2

+4.7

+10.5

-5.2

% ch. on Jun033

2 Source: Bank of Italy Matrix 3 Incl. ANBI

7

13,8%13,7%13,0%

13,6%

11,4%11,3%

17.3%16.6%

14.7%

12.2%

11.3%

9.4%

8%

10%

12%

14%

16%

18%

mar-03 giu-03 set-03 dic-03 mar-04 giu-04

5,6%

4,9%

6,0%7,2%

6,2%6,2%

12.0%

4.6%

2.1%

13.3%

12.1%

8.0%

0%

2%

4%

6%

8%

10%

12%

14%


UCI LOAN GROWTH IN ITALY OUTPERFORMS INDUSTRY WITH A MAJOR SHIFT TOWARDS M/L TERM CONTINUED MARKET SHARE GAINS IN 2003

Italian industry

Total Loans1, y/y % ch.

UCI2 Italian industry

Medium/Long Term Loans1, y/y % ch.

UCI 2

On M/L termloans 1

On total loans 1

UCI2 Market Share Widening of UCI positive gap vs industry on y/y total loans growth from Sep 03 (from +0.8% in Sep 03 to +6.4% in June 04)

Constant increase in UCI total loans market share (+89 bp from 9,99% in Mar03 to 10,88% in Jun04) with a focus on m/l term, improving 29 bp Jun04 vs Mar04

1Source: Bank of Italy Matrix (Total Loans net of NPLs and Repos)

2 Proforma incl. ANBI

10,88%

10,79%

10,74%

10,35%

10,26%

9,99%

11,03%

10,74%

10,80%

10,58%10,70%

10,48%


81 Related to UniCredit Banca and UniCredit Private Banking data restated on management accounts

NET COMMISSIONS INCREASE 7.1% ON 1Q04 (+2.0% 1H04/1H03) MAINLY DRIVEN BY HIGHER COMMISSIONS FROM LOANS GRANTED & RECEIVED (+23.4% ON 1Q04)

NET COMMISSIONS

781

1Q03

798

1Q04

839

2Q03

830

3Q03

857

4Q03

Up-front1 109154 171151179

Other627 660 679 686 689

855

2Q04

112

743

Net commissions (excluding up-front) continue to growth (+7.8% on 1Q04) benefiting from:

Corporate Finance (+19.7 mln on 1Q04) activity

Foreign Trade Services (+10.4 mln on 1Q04)

Trend of Up-front fees (+3% on 1Q04) due to higher sales of Bancassurance products; confirmed strategy of reduced emphasis on structured bonds

Net commission mix further improvement (decreasing weight of up-front on total to 13.1% in 2Q04)

Commissions from Mutual Funds up 11.3% (1H04/1H03) driven by higher stock of AUM

+7.1%

1H04/1H03: +2.0%

+7.8%

Weight of Up-front on Total

19.7% 21.3% 18.2% 20.0% 13.6% 13.1%

9

(1) Plain vanilla Mutual and Hedge Funds distributed in Italy (Total AuM in Mutual and Hedge Funds in Italy, including Mutual Funds in Segregated Accounts and Unit Linked, 70.0 bn as at 30.6.2004 vs 68.7 bn as at 31.12.2003, +1.9% - Source: Assogestioni)

MUTUAL FUNDS (Italy): in a very difficult environment for Mutual Funds in Italy, UCI strongly outperformed its main competitors for net sales in the first 8 months of 2004 …

HEDGE FUNDS (Worldwide): record net sales in 1H04 (1,123 mln) coupled with a strong 2Q/1Q acceleration (699 mln in 2Q vs 424 mln in 1Q, +65%)

4.9% AUM GROWTH VS DEC.03 DRIVING A STRONG INCREASE OF MARKET SHARE IN MUTUAL FUNDS IN ITALY; EXCELLENT PERFORMANCE OF HEDGE FUND NET SALES

Focus on Sales of AM products

DEC.03

… being the only Mkt. Share net gainer among the big players

UCI

MAR.04 JUN.04

13.39% 13.49% 13.51%

UCI TOTAL AUM(bn)

Italy US, New Europe & Intl.

Mutual & Hedge Funds1

Segregated Accounts

Insurance

Dec. 03

+2.3% vs Dec. 03

Mar. 04

43.5

23.1

22.0

34.4

42.8

22.7

20.6

31.3

117.4

+10.1%

+4.8%

+7.0%

+1.6%

+1.5%

123.0

Jun. 04

42.9

22.6

22.6

35.0

123.1

+1.5%

+0.1%

+2.9%

-2.0%

-1.4%

+11.8% vs Dec. 03

+4.9% vs Dec. 03

(2) UCI’s Total Net Sales of Mutual Funds were affected in the first 8 months of 2004 by outflows mainly deriving from ex-ING PFAs who did not sign Xelion’s mandate (-696 mln)

ASSET MIX (PGAM)

Avg.2003

Equity + Hedge

Avg.1Q04 Avg.2Q04

27.3% 29.8% 30.0%

Bond + Liquidity 62.7% 60.7% 60.9%

Balanced + others 10.0% 9.5% 9.1%

UCI (Total)2

ITALIANSYSTEM

-5,264

-118

+578

UCI (ex ING)2

AUG.04

13.61%

US, New Europe & International

10

Acceleration of Corporate Derivatives (+31.7% 2Q/1Q), posting the best result in the last 4 quarters …

INCOME FROM FINANCIAL TRANSACTIONS(mln)

INCOME FROM FINANCIAL TRANSACTIONS: STRONG REDUCTION OF THE Y/Y GAP VS 2003 (FROM -33% AS OF MARCH TO -25% AS OF JUNE), MAINLY DRIVEN BY RECOVERY OF CORPORATE AND DEVELOPMENT OF INSTITUTIONAL DERIVATIVES

292

1Q04

239

4Q03

436

1Q03

268

349

2Q03

204

263

3Q03

105 97 105

Corporate Derivatives

2Q04

Institutional Derivatives 51

42

47 4563

295

139

72

… and reducing the Y/Y gap vs 2003 (-48% as of Jun.04 vs –61% as of Mar.04)

Further development of Derivatives for Institutional customers (72 mln, +14.3% 2Q/1Q) …

Lower 2Q/1Q contribution of New Europe and Parent Company

… and recovery of Derivatives for Retail customers (33 mln in 2Q vs 25 mln in 1Q, +30%)

11

OPERATING COSTS UP 2.7% 1H04/1H03. QUARTERLY TREND +6.1% IMPACTED BY OTHER ADMINISTRATIVE EXPENSES

OPERATING COSTS BREAKDOWN(Euro mln)

PERSONNEL COSTS 2Q/1Q increasing by +1.8% (+15.1 mln), but +1.0% at constant fx

DEPRECIATION 2Q/1Q +7.5% (+8 mln) mainly impacted by investments in new branches layout and increase in IT investments

OTHER ADMIN. EXPENSES 2Q/1Q +13.5% (+64.4 mln; 59.5 at constant fx) primarily linked to an increase in:

advertising (+8.6 mln of which 4.7 in New Europe)

postal tariffs (+18.7 mln) special projects in UCB (+8.4 mln) costs directly linked to increased

business and partially recovered with higher revenues (+4.7 mln i.e. indirect taxes and credit information and searches)

Personnel costs

1H03 1H04

2,846

1,639

-2.7%

+3.4%

+3.1% 1,689

981

226

Other adm. expenses

Depr. & amort.

2,923

1,014

220

2Q04

1,418

837

+6.1%

+7.5%

+13.5%

+1.8%852

475

106

1,505

539

114

1Q04

+2.7%

1 Varadinska Banka

12

NON OPERATING ITEMS IN 2Q CHARACTERISED BY HIGHER NET WRITE-DOWNS OF LOANS AND NET EXTRAORDINARY INCOME AND BY LOWER TAX RATE vs. 1Q

Operating income

Goodwill amort.

Net Income

Net write-downs of loans

Other net provisions1

Net extraord. income

Taxes

Minorities

1Q04

1,070

-71

466

2Q04

1,210

-72

583

-192

-9

-246

-27

2 100

-296

-38

-335

-47

2,280

-143

1,049

1H04

-438

-36

102

-631

-85 Tax Rate at 34.7% vs. 37.0% in 1Q04

benefiting from lower taxes in New Europe (mainly one-off in Pekao), substantially stable on 2Q03 (34.6%)

-246 mln net write-downs of loans up 54 mln vs. 1Q04 due to higher net write-downs in Corporate division +38 mln (mainly due to write-down on a specific position) and in Retail division +17 mln (mainly due to write-down of one significant position and to write-off of some other small positions)

Net write-downs of financial investments -1 mln

Provisions for risks & charges -26 mln

110 mln release of reserves previously created o/w 67 mln write-back of provisions created for fiscal purposes “tax cleared accounts”

1 Net write-downs of financial investments, provisions for risks and charges and provision to reserve for general banking risks

13

Coverage ratio 59.3% +10 bp

Provisions on performing loans 1,290 +5.2%


Gross Doubtful Loans 9,180 -0.4%


Stated cost of risk (annualised) 66 bp +2 bp3

Weight on Gross Loans 6.61% -33 bp

mln, where not specified

Gross Non Performing Loans 6,259 +2.5%


(3) Calculated on FY03 cost of risk (76 bp) net of extraordinary provisions on Parmalat (12 bp)

1H04ch. on 2003

Jun. 04ch. on

Mar. 04

1H04 cost of risk at 66 bp, almost in line with FY03 net of extraordinary provisions on Parmalat

+5.2% increase of provision on performing loans vs Mar. 04, with coverage ratio reaching 1.00%

+2.5% increase of Gross NPLs vs Mar. 04 (mainly due to shift from Watchlist Loans) counterbalanced by a strong –6.7% reduction of Watchlist Loans (2,505 mln as of Jun.04)

Improved coverage ratios; coverage ratios adding back fiscal write-offs2 at 70.0% on NPLs (+48 bp Q/Q) and at 57.5% on Total Doubtful Loans (+130 bp Q/Q)

SIGNIFICANT Q/Q REDUCTION OF NET FLOWS OF NEW DOUBTFUL LOANS1 WITH A SLIGHT IMPROVEMENT OF MAIN ASSET QUALITY RATIOS: LOWER GROSS DOUBTFUL LOANS AND INCREASED COVERAGE RATIOS

Strong 2Q/1Q reduction of net flows of New Doubtful Loans1 (372 mln in 2Q vs 642 mln in 1Q, -42.1%) mainly driven by Corporate Division

(1) Defined as: Flow from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans(2) Calculated adding back to total provisions the fiscal write-offs of UniCredit Banca and UniCredit Banca d’Impresa only

Increased collections of doubtful loans (386 mln in 2Q vs 379 mln in 1Q, +1.9%) thanks to effective workout procedures

14

CONFIRMED OUTSTANDING SOLVENCY RATIOS, WITH CORE TIER 1 RATIO OF 7.4%.RISK ADJUSTED PROFITABILITY STILL AT HIGH LEVELS

4,869

2,930Retail Division

Corporate Division

New Europe Division

CAPITAL ABSORPTION

82

288

VALUE CREATION

10,094Group Total(3) 462

NOPAT

226

508

1,001

RARORAC %

5.6

11.8

9.2

MARGINAL RARORAC %

8.2

12.0

13.4

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 7.0% (Dec 03)to 7.4% (1H04)

ESTIMATEDCORE TIER 1 RATIO(considering all RWA)

From 11.1% (Dec 03)to 11.5% (1H04)

ESTIMATEDTOTAL CAPITAL RATIO(considering all RWA)

From Euro 146.1 bn (Dec 03) to Euro 147.4 bn (1H 04), +0.9%

TOTAL RWA


1,197 64132 10.7

(1) Minimum regulatory capital, market risks, credit risks and operational risks (2) The Cost of Equity is related to the capital employed (Net equity for the Group and allocated capital for the business units)(3) Balance due to Corporate Center and Other companies, respectively +39 for NOPAT, 1,429 for Capital absorption and 7 for Value Creation

23.6

866 2196 4.9 26.5

15



Retail Division

Corporate Division


New Europe Division

AGENDA

16

RETAIL DIVISION: GOOD Q/Q PERFORMANCE, WITH TOTAL REVENUES UP 4.2% DRIVEN BY NET COMMISSIONS AND NET INTEREST INCOME

2Q04

Net interest income (incl. div.)

Net non interest income

Total revenues

Operating costs (incl. depr.)

Operating income

Net income for the Group

Cost Income ratio, %

579

479

1,058

-748

310

131

70.7

% ch. on 1Q04

+2.9

+5.7

+4.2

+4.0

+4.5

+3.3

-10 bp

1H04ch. on FY03

Cost of risk 49 bp -1 bp

Good growth of net interest income (+1.3% excl. dividends vs. 1Q04) sustained by volume growth in all segments

Spread on deposits at 1.55%, slightly up vs. 1Q04 (+1 bp)

Net non interest income growth sustained by the good performance of commissions (+7.3% vs. 1Q04), thanks to increased sales of bancassurance products and increased number of transactions of Small Business customers

Operating costs increase due to higher administrative expenses related to projects undergoing (advertising campaigns +6 mln vs. 1Q, other projects +8 mln) and higher postal costs (+13 mln vs. 1Q), while staff costs are substantially in line with 1Q04 (-0.2% Q/Q)

Almost 40,000 net new customers acquired in 2Q04

17

POSITIVE SIGNS FROM ALL KEY MARKETS WITH GROWTH TARGETS: EXCELLENT GROWTH IN STOCKS OF RESIDENTIAL MORTGAGES, CONSUMER FINANCING …

RESIDENTIAL MORTGAGESSTOCK, bn NEW FLOWS, bn Good performance in the flow of new mortgages of both

UCB (+26% y/y) and UBCasa (+30% y/y) Growth coming mainly from partnership channel, with

49% y/y increase Avg. amount of mortgage from 93,000 (2003 avg.) to

102,000 Euros (1H04 avg.), up 15.5%

CONSUMER FINANCING Growth in stock (at 2.3 bn, +7.8% vs. Dec 03) thanks to

good flows of revolving cards and personal loans Excellent results of the focus on captive customers (more

than 170,000 revolving sold in 6 months vs. 6,000 in FY03) Acceleration in flow of personal loans granted (277 mln in 2Q vs. 183 in 1Q) driven by the launch of Credit Express in May 04. Market share(3) from 9.3% in 1Q to 12.1% in 2Q

DEC03 1H04

26.229.2

+11.0%

1H03 1H04

3.44.3

+27.4%

NEW FLOWS OF PERSONAL LOANS

FY03 1H04

95 mln

155 mln

TOTAL SPENDING(4) (+170,000 revolving cards in 1H04)

2Q average spread on new mortgages(1) : UCB at 1.28%, -1 bp vs. 1Q04 UBCasa at 1.45%, slightly up vs. 1Q04 (+4 bp)

(1) Management accounts

1Q04

27.5

mkt share(2)

17.17%17.48% 17.68%

mkt share(3)

2.4%

7.3%

(2) Related to mortgages to households as of Bank of Italy definition in table TDME0070 of the monthly bulletin

(3) Calculated on ASSOFIN data, related to revolving and pay-later credit cards

VOLUMES

PRICING

VOLUMES

2Q average spread on new production(1) : revolving cards at 9.02%, -52 bp vs. 1Q04 personal loans at 5.43%, +1 bp vs. 1Q04

PRICING

(4) POS and ATM spending through revolving cards

1H03 1H04

393 mln461 mln

+17.2%

18

… AND SMALL BUSINESS LENDING, THANKS TO CONTINUED INCREASE IN CUSTOMER ACQUISITION RATE AND IN PRESENCE OF A RESILIENT SPREAD, WITH CLEAR POTENTIAL FOR FURTHER GROWTH

STOCK, bn

Growth of acquisition rate mainly driven by development regions, also thanks to the implementation of the brand new network of Developers (675 developers up and running at the end of June)

1H04DEC03

UCB AVERAGE MONTHLY ACQUISITION RATETOTAL BANK DEVELOPMENT REGIONS STRENGTHENING REGIONS

FY03 1Q04 2Q04 FY03 1Q04 2Q04 FY03 1Q04 2Q04

SHORT TERM SPREAD(1)

1H03 FY03 1H04

Good results of the recent focus on Small Business already visible in good stock growth and in a growing number of transactions sustaining the good performance of commissions

Stock growth mainly concentrated in 2Q04, +3.0% vs. 1Q04

Resilience of short term spread(1), substantially in line with FY03

(1) Management accounts, includes also maximum overdraft charges

Low usage-to-facilities ratio(2) (47% in SB vs. 52% mkt avg) due to “youth” of many customers. July best month ever in growth of new customers. Average time before taking up the cash loan is ~1,5 month after account opening. Customers arrive at full usage in ~2 years

(2) Ratio between the utilised credit line and the total credit line available for usage

12.112.6

+4.2%

8.71% 8.63% 8.40%

0.49%0.58%

0.80%

0.70%0.86%

1.28%

0.32%0.40%

0.51%+38% +49% +26%

CLEAR FURTHER POTENTIAL 37,000 new Small Business customers in 1H04 (~1% of total market)

19

GOOD CUSTOMER SATISFACTION IMPROVEMENTS IN PRIVATE AND SMALL BUSINESS SEGMENTS, CONSISTENTLY OUTPERFORMING COMPETITION IN A CONTEXT OF GROWING MARKET SHARES

PRIVATE CUSTOMERS, TRIM INDEX

2003 July 04

4751

2003 July 04

4341

UNICREDIT BANCA AVG. TOP 4 COMPETITORS

Stability of front-end relationship with customers

Improved waiting time (shorter queues) Improved advisory on investment services,

with room for further improvement

SMALL BUSINESS, TRIM INDEX

2003 July 04

42

49

2003 July 04

4135

UNICREDIT BANCA AVG. TOP 4 COMPETITORS

Dedicated service model

Improved advisory on lending products

Focus on quality of sales

Source: NFO Infratest, Customer satisfaction analyses

20

DELIVERING ON STRATEGY IN RETAIL DIVISION

INCREASED MARKET SHARES IN KEY MARKETS

INCREASED CUSTOMER SATISFACTION

START OF GROWTH OF NET INTEREST INCOME

NET COMMISSIONS LESS DEPENDING FROM UP-FRONT DRIVEN SALES

GROWTH OF CUSTOMER ACQUISITION RATES

START OF VOLUME GROWTH

21



Retail Division

Corporate Division


New Europe Division

AGENDA

22

CORPORATE DIVISION: VERY STRONG Q/Q PERFORMANCE, WITH TOTAL REVENUES UP 13.0% MAINLY DRIVEN BY NET NON INTEREST INCOME

2Q04



Total revenues


Operating income



384

477

861

-258

603

308

30.0

% ch. on 1Q04

+4.3

+21.2

+13.0

+5.5

+16.6

+25.4

-214 bp

1H04ch. on FY03

Cost of risk (annualised) 78 bp +10 bp1

Growth of net interest income (+1.8% excl. dividends vs. 1Q04)

Strong net non interest income growth (+21.2%), sustained by the excellent performance of commissions (+26.0% vs 1Q04, mainly thanks to Corporate Finance and Foreign Trade Services) and the strong recovery of profits from financial transactions (+23.6% vs 1Q04, basically thanks to derivatives)

Operating costs increase totally due to higher administrative expenses (+12.7%) related to the increase volume of services provided to the customers2; staff costs perfectly in line with 1Q04 (stable at 134 mln)

Net write-downs on loans -144 +36.3

Net extraordinary income 64 n.s.

(1) Calculated on FY03 cost of risk (91 bp) net of extraordinary provisions on Parmalat (23 bp)(2) As these costs were strictly related to higher business volumes, they have often been partially recovered from the customers as fee income

1H04 cost of risk (annualised) 10 bp up vs FY03 net of extraordinary provisions on Parmalat, mainly due to high provisions on a single position; cost of risk at 64 bp net of provisions on this “single position”

Net income up 25.4% Q/Q, benefiting also from 64 mln net extraordinary income (o/w 55 mln write-back of provisions created for fiscal purposes “tax cleared accounts” by UBM)

(mln)

23

UBI CUSTOMER LOANS, bn

+3.8%

UBI AVG. TOTAL LENDING SPREAD(1)

2.32%1 2.32% 2.31%

+3.8% Q/Q Loan growth, concentrated in the core SMEs customers (Share of Wallet from 12.2% to 12.7%, +44 bp) …

Average Lending Spread substantially in line with 1Q04

(1) Management accounts; average quarterly figures, apart from 2003 (average yearly figure)

LOAN GROWTH CONCENTRATED IN THE CORE SMEs SEGMENT WHILE MAINTAINING SPREADS, …

47,64845,747 47,477

Dec. 03 Mar. 04 Jun. 04 2003 1Q04 2Q04

(mln)

Largest groups

Dec03

7,842

Mar04 Jun04

6,941 6,534

% ch. Jun04/ Mar04

-5.9%

SMEs 27,335 27,048 28,5163 +5.4%

Public Sect. & Others4 7,418 7,484 8,486 13.4%

(4) Including non-financial companies with Total Revenues lower than 1.5 mln

(5) Balance due to roundings; Source: Credit Bureau – differences with accounting figures due to different sources of data

Financial companies 4,412 3,684 3,466 -5.9%

TOTAL5 47,007 45,159 47,002 +4.1%

- Share of Wallet 12.3% 12.2% 12.7%3 +44 bp

(2) Source: BankIT Matrix data

… and a strong contribution of the LT component2 (from 19.3 bn as of Mar.04 to 20.2 bn as of Jun.04, +4.8%)

… with a significant acceleration in Lazio+Lombardy (from 9,954 mln to 10,696 mln , +7.4%) …

(3) Discount the securitisation of ~230 mln for Neafidi district bond and ~170 mln loans issued in conjunction with UniCredit Banca MedioCredito. Share of wallet at 12.9% adding back these amounts

24

CORPORATE DIVISION: NET COMMISSIONS BOOSTED BY “REVENUE MULTIPLIER”

CORPORATE DIVISION: REDUCTION OF NET FLOWS OF NEW DOUBTFUL LOANS1

Significant Q/Q reduction of net flows of new doubtful loans (-62.1%) …

… FACING LOWER DEFAULT RATES AND LEVERAGING ON THE “REVENUE MULTIPLIER”

(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

2Q04

376.6

142.9

1Q04

-62.1%

(mln)

Of which: To Loans to be Restructured

152.0

9.4

… even netting 1Q of the exceptional flows of Loans to be Restructured (-40.6% net of Loans to be Restructured)

2Q Default Rate2 at 0.23% (vs 0.6% in 1Q)

(2) Defined as: (Flows from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans)/ Total Gross In Bonis Loans as of 31.12.2003

2Q04

142.9

1Q04

+26.0%

139.7176.0 Higher loans, higher share of wallet, deeper

relation with the customers leading to more high value added services: +36.3 mln Net Commissions Q/Q, of which:

+10.4 mln from foreign trade services (from 26.9 mln in 1Q to 37.3 mln in 2Q)

+19.7 mln from Corporate Finance3 (from 16.1 mln in 1Q to 35.8 mln in 2Q)

(3) UBI+UBM+Banca MedioCredito

(mln)

224.6

133.5

25

SUMMING UP: DELIVERING STRATEGY IN CORPORATE DIVISION

… WHILE MAINTAINING SPREADS

LOAN GROWTH …

… LEADING TO HIGHER SHARE OF WALLET …

… AND CONCENTRATED IN CORE SMEs CUSTOMERS …

… WITH FOCUS ON LONGER MATURITIES …

FEE INCOME BOOSTED BY “REVENUE MULTIPLIER”

26



Retail Division

Corporate Division


New Europe Division

AGENDA

27

2Q04



Total revenues


Operating income



23

263

286

-188

98

92

65.7

% ch. on 1Q04

-4.4

+1.2

+0.7

+1.6

-1.1

+36.9

+61 bp

Net extraordinary income 9 n.s.

(mln - % Change at Fixed FX)

Tax Rate, % 10.4

(bn)

Jun.03 restated

Mar.04

Securities in custody

Direct deposits1

AUM

6.0

22.4

118.3

5.8

23.5

129.6

146.7158.9

Jun.04

5.9

24.7

130.1

160.7

1 Including Repos

PRIVATE & AM DIVISION: INCREASED CONTRIBUTION TO THE GROUP’S NET INCOME AND CONTINUED GROWTH OF TOTAL FINANCIAL ASSETS …

+1.1% Q/Q increase of Total Financial Assets, with higher weight of hedge funds (from 1.85% as of Mar.04 to 2.26% as of Jun.04) …

+1.1%PRIVATE & AM DIVISION TOTAL FINANCIAL ASSETS

… leading to 1.2% Q/Q growth of Net non interest income, despite the very difficult environment for Asset Management in Italy

Stronger contribution to the Group’s net income (92 mln, +36.9% Q/Q)

Vs 30.1% in 1Q

Significant +12.0% growth of Net non interest income in 1H04 vs 1H03, driven by the strong +10.5% increase of Total Financial Assets (at fixed FX)

Lower taxes (from 30 mln in 1Q to 11 mln in 2Q), due to benefits of “fiscal consolidation” of PGAM and Xelion

28

2,118

… THANKS TO PIONEER AUM INCREASE COUPLED WITH POSITIVE SALES IN ALL THE BUSINESS DIVISIONS …

AUM at new record high driven by market performance and positive net sales in all the business divisions, with excellent results in the International (ex Italy) business division and in alternative investments

(mln)

AUM Dec.03

1H04 Net Sales

1H04 Mkt. Perf.2

AUM Jun.04

119,4361

3,135 124,6891H04 Net Sales

Italy 255

Net Sales breakdown:

International (ex Italy) 1,264

US 352

New Europe 247

Alternative Invest. 1,123

TOTAL PGAM 2,118

2 Including FX effect

+4.4%

+3.6% at fixed FX

1 Pro-forma including ING-Pixel, SGR New Europe and the Real Estate Fund incorporated at the end of 2003

TOTAL PGAM ex ING-Pixel3 2,715

Italy ex ING-Pixel3 852

3 Total Net Sales in Italy were affected in 1H04 by outflows mainly deriving from ex-ING/Pixel PFAs who did not sign Xelion’s mandate (-597 mln in 1H04)

Significant increase of market shares in Italy (from 13.39% as of Dec.03 to 13.51% as of Jun.04 and 13.61% as of Aug.04 – Mutual Funds, Assogestioni perimeter) and in Poland (from 30.36% as of Dec.03 to 32.25% as of Jun.04 – Investment Funds)

29

… AND THE GOOD COMMERCIAL RESULTS OF UPB AND XELION

1

1 All data related to Total Financial Assets, Financial Assets per PFA, and Net Sales relate to Xelion+ING (2003 data are pro-forma), excluding figures related to ex-ING PFA who did not agree on Xelion’s mandate – Source: Assoreti

2Q04

142.9

1Q04

+28.4%

8481,088

NET SALES, QUARTERLY TREND(mln)

39.9 bn Total Financial Assets, +2.7% Q/Q and +6.1% vs Dec.03, with higher weight of Hedge Funds (from 1.5% as of Mar.04 to 2.2% as of Jun.04)

1,088 mln net sales in 2Q04 (best quarter since inception), with strong contribution of hedge funds (219 mln, more than 20% on the total)

69.7 mln Total Financial Assets per client-manager, +1.9% Q/Q and +4.4% vs Dec03

TOTAL FIN. ASSETS, QUARTERLY TREND(bn)

Jun.04

11.0

Mar.04

+3.9%

10.4

Dec.03

10.6

Leadership for Net Sales in Italy (1,026 mln in 1H04), with a high 24.4% market share and acceleration in 2Q (539 mln in 2Q vs 487 mln in 1Q, +10.7%)

~11.0 bn Total Financial Assets (+3.9% Q/Q and +5.5 on Dec03)

Higher Financial Assets per PFA: from ~4.6 mln as of Dec.03 to ~5.1 mln as of Jun.04, +10.9%

30



Retail Division

Corporate Division


New Europe Division

AGENDA

31

2Q04 KEY HIGHLIGHTS: NET INCOME UP 11.9% Q/Q, BENEFITING FROM REVENUE GROWTH, IMPROVED COST OF RISK AND LOWER TAXES. CONFIRMED GOOD PROFITABILITY AND EFFICIENCY LEVELS

Attributable Net Income

2Q04(Euro mln)

94

Total revenues 431

Operating income 193

Cost/Income 55.2%

Cost of Risk3 24 bp

- o/w net interest income2 264

At unchanged FX1

Net write-downs of loans -30

ROE (1H04 data, y/y % ch.)

% ch. on 1Q04

+11.9

+2.1

-1.5

+1.6 pp

-4 bp

-0.9

- o/w net commissions 104 -2.1

-10.9

+1.8 pp19.1%

ITAS

2 Excluding dividends

Operating costs -238 +5.3

Confirmed positive macroeconomic environment in all NE countries

Total Revenues up 2.1% (+5.2% incl. KFS at unch. FX) on 1Q04:

Net interest income -0.9% on 1Q04: Pekao +1.0%, Bulbank +12.9% offset by negative trend in Zaba and in KFS FX (incl. KFS at unch. FX NII of the division: +2.9% on 1Q)

Net commissions -2.1% on 1Q04 (+1.3% incl. KFS at unch.FX): increase in Zaba and Bulbank, negative impact of KFS FX

Other non operating income from 13 mln in 1Q04 to 41 mln in 2Q04

Operating Costs up 5.3% on 1Q04 (+7.7% incl. KFS at unchanged FX), mainly due to higher costs in Zaba (approx. +7 mln o/w approx. 3 mln one-off4)

Further improvement of Cost of Risk (-4 bp q/q) and higher coverage of Doubtful loans (to 68.5% from 66.0% in Mar04)

Attributable Net Income up 11.9% on 1Q04 thanks to lower provision needs and taxes

Tax Rate 11.1% -14.7 pp

3 Calculated as Net Loan Loss Provisions of 2Q04 on Net customers Loans at period-end

1 Excluding for KFS (included at current FX) 4 Due to integration of Varadinska Banka in Zaba and to the merge of two Bosnian banks in a new-co

- o/w other non oper. Inc. 41 n.m.

32

3 Calculated as Net Loan Loss Provisions of 2Q04 on Net customers Loans at period-end

PEKAO RESULTS IN 2Q04: IMPROVED PROFITABILITY AND EFFICIENCY THANKS TO TURNAROUND IN NET INTEREST INCOME, GOOD COST CONTROL, LOWER PROVISIONS AND TAXES

Attributable Net Income2

2Q04(Euro mln)

45

Total revenues 235

Operating income 109

Cost/Income 53.7%

Cost of Risk3 26 bp

- o/w net interest income1 124

Net write-downs of loans -14

ROE (1H04 data, y/y % ch.)

% ch. on 1Q04

+31.5

+3.7

+6.9

-1.1 pp

-14 bp

+1.0

- o/w net commissions 54 -1.8

-32.0

+4.6 pp21.0%

ITAS

1 Excluding dividends

Operating costs -126 +1.6

Confirmed strong GDP growth (> +6% y/y in 1H04), and tightening stance of monetary policy resulting in +1.25 pp of Central Bank’s interest rate from July up to now

Total Revenues up 3.7% on 1Q, as a result of: Increasing trend in net interest income

(+1.0% on 1Q04), benefiting from slight recovery in deposit spread and stable spread on debt securities

Lower net commissions due to decreasing sale of Mutual Funds although improving its leadership position

Costs under control with improved efficiency (C/I to 53.7%)

Further reduction of provisions also thanks to better macroeconomic environment, increased coverage of doubtful loans (70.2% from 66.7% in Mar04)

Net Income for the Group up 31.5% on 1Q04 also benefiting from a one-off release of deferred tax provisions caused by the change in corporate tax rate (approx. 10 mln)

Tax Rate 4.1% -18.1 pp

At unchanged FX

Data gross of consolidation adjustment

- o/w other net oper. Inc. 42 +42.5

2 Net of consolidation adjustment

33

1 Excluding for KFS (included at current FX)

INCREASING NET CUSTOMER LOANS DRIVEN BY PEKAO.TREND IN MUTUAL FUNDS AFFECTED BY LOWER SALES IN POLAND

ITAS

% ch. on

Mar04

Jun04(Euro mln)

% ch. on

Dec03

Net Customer Loans

- o/w Pekao

Mortgages

+2.6

+2.7

+4.0

+3.2

+7.2 +12.5

12,734

5,572

1,817

- o/w Pekao LC +21.0 +35.8383

- o/w Pekao

Mutual Funds3

-1.2 -2.2

-0.1 +19.1

Deposits -0.8 -0.921,038

10,235

4,250

- o/w Pekao2 -0.2 +11.72,493

NET CUSTOMER LOANS: Good growth (+2.6% on 1Q04) driven by acceleration of Pekao in 2Q04; further increase in KFS (+9.8% on 1Q04), consolidation in Zaba (+0.7% on 1Q04)

2 PPIM

At unchanged FX1

MORTGAGES further increasing: Pekao: market share in new LC mortgages

+3.9 pp on 1Q04 (to 23.6%) Zaba: outstanding volume +5.2% on 1Q04,

leadership confirmed with 41.2% market share (+20 bp on 1Q04)

MUTUAL FUNDS: Improvement of market share: Pekao2:

+40 bp on 1Q04 (to 32.3%), Zaba: +113 bp on 1Q04 (to 44.4%)

Higher share of equity and balanced funds in Pekao2 from 47% in 1Q04 to 50% in 2Q04Assets administr.

for customers3 +0.2 +5.133,345

3 New Europe Business Area of Pioneer is included at current FX

34

Annex

35 * Net write-downs of financial investments, provisions for risks and charges,

provisions for possible loan losses and provisions to reserve for general banking risk

2Q04 & 1H04 CONSOLIDATED INCOME STATEMENT

Net extraordinary income


Total revenues

Operating income

Provisions on loans

Administrative costs (incl. depr.)

Other net provisions*

Goodwill depr.

(Euro mln)

Minorities

Taxes

% ch. on 2Q03


- of which Dividends

-0.2

-0.3

+23.0

+104.1

+5.4

-6.5

-66.3

+2.9

+46.9

-2.6

-0.3

% ch. on 1Q04 2Q04

1,388

2,715

-1,505

1,210

-246

100

-27

-72

-47

-335

1,327

117

+7.2

+9.1

+28.1

n.m.

+6.1

+13.1

n.m.

+1.4

+23.7

+13.2

+11.2

n.m. -15.2

y/y % ch. 1H04

2,683

5,203

2,923

2,280

-438

102

-36

-143

-85

-631

2,520

121

Net income -5.5583 +25.1 1,049 -7.3

-4.6

-3.6

+20.7

+47.8

+2.7

-10.6

-73.5

+5.1

+21.4

-19.3

-2.5

-14.2

36

Retail Division

Corporate Division

Priv.& AM Division

NE Division

Total Group1

Total revenues+4.2% +13.0% +0.9% +8.2% 9.1%

Operating costs

Operating income



C/I Ratio

+4.0% +5.5% +1.9% +11.6% +6.1%

+4.5% +16.6% -0.9% +4.3% +13.1%

+31.0% +36.3% n.m. -4.9% +28.1%

+3.3% +25.4% +37.2% +18.9% +25.1%

-0.1 pp -2.1 pp +0.6 pp +1.7 pp -1.6 pp

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

2 Calculated on data at end of period FX

(Euro mln - Data at end of period FX)

DIVISIONAL CONTRIBUTION TO CONSOLIDATED RESULTS IN 2Q04

1,058 861 286 443 2,715

-748 -258 -188 -244 -1,505

310 603 99 198 1,210

-73 -144 -1 -31 -246

131 308 92 98 583

70.7% 30.0% 65.7% 55.1% 55.4%

3 Including all the employees of Koc Financial Services (3,886 as at 30.06.2004)

Employees3 25,467 6,367 3,674 29,784 71,214

2Q04 RESULTS

% Change vs 1Q042

% Change vs 1Q042

% Change vs 1Q042

% Change vs 1Q042

% Change vs 1Q042

Change in pp vs 1Q042

37

-on tot. Gross doubtful loans, % 37.4% 37.6% 46.4%66.0%37.6% 37.1% 68.5% 47.2%

-on total gross NPL, % 48.5% 44.0% 81.7% 59.2%48.5% 42.0% 83.2% 59.3%

Total gross doubtful loans 3,321 2,895 2,827 9,2150.3% -0.4%

Net Doubtful Loans/Tot. Net Loans,% 3.88%4.14% 2.92% 7.97%

3,390

4.03%

2.1% -3.3%2,798

2.71%

2,837

7.03%

9,180

3.64%

% change on Mar.04

Gross Doubtful Loans/Tot. Gr. Loans,% 6.94%6.43% 4.54% 20.0%6.28% 4.19% 19.1% 6.61%

Total net doubtful loans 2,077 1,807 962 4,940-7.0% -1.8%

2,1141.8% -2.6%

1,760 895 4,850% change on Mar.04

ASSET QUALITY: DETAILS BY DIVISIONS

Coverage ratios

Retail Division

Mar. 04 Jun. 04

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.04

Gross NPL/Tot. Gr. Loans,%

Net NPL/Tot. Net Loans,%

1,966 1,8832,15

86,107

3.6% 2.5%

3.81% 2.95% 15.3% 4.60%

2.02% 1.70% 3.27% 1.96%

2,034

3.77%

2.00%

+3.5% 0.4%

1,890

2.83%

1.69%

2,236

15.0%

2.95%

6,259

4.51%

1.91%

Net NPL

% change on Mar.04

1,013 1,054 394 2,493

-4.9% 2.2%

1,047

3.4% 3.9%

1,096 375 2,549

Mar. 04 Jun. 04 Mar. 04 Jun. 04 Mar. 04 Jun. 04

38

Interest income (incl. div.)


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: 1H04 RESULTS BREAKDOWN BY COMPANY

- o/w: Net write-down of loans

993

868

1,860

-1,333

527

233

71.7

196

-714

-619

-101

-113

51

36

87

-48

39

19

55.6

18

-25

-23

-5

-8

56

6

62

-36

26

13

58.7

16

-13

-23

-7

-7

50

12

63

-32

30

12

51.5

12

-9

-23

-14

-16

1,141

933

2,074

-1,468

606

258

70.8

258

-770

-698

-128

-145

(1) Balance due to roundings and elisions of infragroup dividends and goodwill amortisation

CR Carpi

19

11

30

-17

13

7

56.8

7

-9

-8

-2

-2

(2) Net of consolidation adjustmentS

39

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(5) (Households), %

Other deposits

Households c/accounts

Bonds

EOP DEPOSITS, Euro bn UCB AVG. MARK-DOWN(5) (Households), %

1Q042003pro-forma(3)

1Q042003

50.1

64.1

27.5

+4.6%

-0.3%21.5(4)

12.2

2.18.3

(1) Includes short term and m/l term loans(2) Includes only households mortgages(3) Including ANBI

15.4

27.2

+4.5%

+1.2%

-0.5%

-0.2%

+21.6%

+0.4%

+0.2%

48.8

26.3

12.1

2.18.3

60.2

17.7

15.3

27.2

1Q03 2Q03 3Q03 4Q03

7.18 7.18 7.337.04

1Q03 2Q03 3Q03 4Q03

2.32 2.031.78 1.72

1Q04

7.03

1Q04

1.65

UCB AVG. MARK UP(5) (Small Business), %

1Q03 2Q03 3Q03 4Q03

5.99 5.93 5.95 5.69

1Q04

5.60

(4) 1Q04 increase vs. December is due to the issue of bonds by UBCasa to fund mortgage book expansion

2Q04

2Q04

52.4

63.9

29.2

21.0(4)

12.6

2.38.3

15.4

27.6

+2.7%

+6.1%

+3.0%

+8.3%

+0.8%

-2.8%

=

+1.4%

+6.5%

2Q04

7.08

2Q04

1.65

2Q04

5.47

(5) Source: Bank of Italy matrix data

40

NET COMMISSIONS GROWTH COMING FROM INCREASED SALES OF BANCASSURANCE PRODUCTS AND HIGHER SMALL BUSINESS PAYMENT RELATED FEES. UP-FRONT FEES REPRESENTING 27.8% OF TOTAL COMMISSIONS IN 1H04, IN LINE WITH INTERNAL EXPECTATIONS

RETAIL DIVISION: NET COMMISSIONS

mln

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 Funds2 Includes management fees related to underlying Mutual Funds

2Q04

48

324

151

56

11

125

85

Q/q% ch.

-10.5

+7.3

+1.8

-5.9

-6.9

+25.0

+8.9

1Q04

54

302

149

59

11

100

78

41

RETAIL DIVISION - DETAILS ON ASSET QUALITY

Slight increase of Gross Doubtful Loans (+2.1% Q/Q), driven by increased Gross NPLs (+3.5%) while Gross Watchlist are flat vs. previous quarter (+0.1%)


Jun 04

ch. on 1Q04

Provisions on performing loans 288 +3.4%

Coverage ratio 0.57% -1 bp

Gross Doubtful Loans 3,390 +2.1%






Cost of risk (annualised) 49 bp -1 bp

Coverage ratio on Gross Doubtful Loans slightly increased vs. 1Q04 (+19 bp)

Stability of coverage ratio on performing loans, with increase in provisions substantially reflecting good loan growth

Cost of risk in line with previous year

1H04ch. on 2003

Reduced weight of both Gross Doubtful Loans and Gross NPLs on Total Gross Loans, respectively -15 bp and -4 bp

Significant reduction Q/Q of net flows of New Doubtful Loans(1), -14%

(1) Defined as flow from in bonis loans to any category of doutbtful loans - flow from any category of doubtful loans to in bonis loans

42

CORPORATE DIVISION: 1H04 INCOME STATEMENT- BREAKDOWN BY COMPANY

Interest margin (incl. div.)


Total revenues



Net income

TOTAL2UBI

Net provisions

(Euro mln)

Net income for the group


- of which: Other admin. expenses

Other companies

- o/w: Net write-downs of loans

633

298

931

667

-112

-151

-264

250

250

28.3%Cost/income Ratio

-234

-238

UBM1 LOCAT

1 Including TradingLab, merged in UBM starting from 1.7.2004

-6

445

439

323

-52

-56

-116

242

242

26.4%

7

5

97

13

110

83

-10

-15

-27

38

38

24.2%

-16

-17

27

115

142

46

-49

-45

-96

24

23

67.3%

-7

-9

751

871

1,622

1,120

-223

-267

-502

554

553

30.9%

-250

-259

2 Balance due to roundings and elisions of infragroup dividends and goodwill amortisation

43

CORPORATE DIVISION: 2Q04 AND 1H04 INCOME STATEMENT



Total revenues


Operating income


Net income

Total net provisions

Taxes



(Euro mln) 2Q04/1Q04 % ch. 2Q04

861

-258

603

-207

30.0%

64

-151

308

308

384

477

1H042Q04/2Q03 % ch.

1H04/1H03 % ch.

+13.0

+5.5

+16.6

+26.0

-214 bp

n.s.

+40.7

+25.4

+25.2

+4.3

+21.2

-0.2

-3.9

+1.5

+30.9

-115 bp

n.s.

-9.7

+8.7

+7.9

-4.5

+3.5

1,622

502

1,120

-372

30.9%

65

-259

553

554

751

871

-8.5

-3.1

-10.8

-7.5

+171 bp

n.s.

+8.8

-12.2

-12.8

-0.5

-14.4

44

CORPORATE DIVISION - DETAILS ON ASSET QUALITY


1H04ch. on 2003

Provisions on performing loans 758 +4.6%


Gross Doubtful Loans 2,798 -3.3%


Cost of risk (annualised) 78 bp +10 bp2




Weight on Gross Loans 2.83% -12 bp Drop of coverage on NPLs (-200 bp vs Mar.04)

mainly due to the high fiscal write-downs accounted in 2Q (182 mln vs 103 mln in 1Q)

+4.6% increase of provision on performing loans vs Mar. 04, also due to 21 mln provisions on the automotive sector. Coverage ratio on performing loans confirmed at an high 1.18%

1H04 cost of risk (annualised) 10 bp up vs FY03 net of extraordinary provisions on Parmalat, mainly due to high provisions on a single position; cost of risk at 64 bp net of provisions on this “single position”

Reduction of Gross Doubtful Loans (-3.3% vs Mar.04) mainly due to a significant decrease of Gross Watchlist Loans (from 622 mln as of Mar.04 to 532 mln as of Jun.04, -14.3%), given the substantial stability of Gross NPLs (+0.4% vs Mar.04)

Jun. 04ch. on

Mar. 04

(2) Calculated on FY03 cost of risk (91 bp) net of extraordinary provisions on Parmalat (23 bp)

Very strong 2Q/1Q reduction of net flows of New Doubtful Loans1 (143 mln in 2Q vs 377 mln in 1Q, -62.1%)

(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

45

(Euro mln)

Net interest income 314


Cost Income RATIO, %

114

27.9%

Net non interest income 161

Total revenues

Operating costs

Operating income

475

-133

342


Other net provisions

-135

-5

Of which:

96

- Trading profits 63

- Net commissions

UNICREDIT BANCA D’IMPRESA: 2Q04 AND 1H04 INCOME STATEMENT

2Q04/1Q04 % ch. 2Q04 1H042Q04/2Q03

% ch. 1H04/1H03

% ch.

-1.7

-16.6

-80 bp

+17.1

+3.9

+1.0

+5.1

+35.6

n.s.

+6.1

+38.8

+4.9

0.2

-91 bp

-8.7

-0.1

-3.3

+1.2

+3.5

-43.8

+15.4

-28.8

633

250

28.3%

298

931

-264

668

-234

-3.4

186

108

+6.2

-10.7

44 bp

-15.8

-2.0

-0.4

-2.6

+31.8

-85.2

+18.7

-43.1

46

UBM: 2Q04 AND 1H04 INCOME STATEMENT

(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

249

-28

-34

188

159

24.6%

211

38

183

Net extraord. income 56

Taxes -89

2Q04/1Q04 % ch. 2Q04 1H042Q04/2Q03

% ch. 1H04/1H03

% ch.

+31.2

-3.0

+28.8

+38.8

+93

-414 bp

+20.0

+169.6

+26.2

n.s.

+65.4

-7.0

-22.5

-3.5

-4.8

+22.4

-174 bp

-23.1

+54.0

-20.6

n.s.

+76

439

-56

-60

323

242

26.4%

386

52

328

57

-143

-27.5

-23.5

-2.8

-31.4

-18.0

+415 bp

-32.3

-20.2

-32.8

n.s.

-10.5

47

-€7

-€5

-€3

-€1

€1

€3

€5

€7

Jan-04

J an-04

J an-04

J an-04

Feb-04

Feb-04

Feb-04

Mar-04

Mar-04

Mar-04

Mar-04

Apr-04

Apr-04

Apr-04

May-04

May-04

May-04

May-04

Jun-04

Jun-04

Jun-04

UBM Daily VAR(1) and P&L (Jan 04 – Jun 04)Euro mln

Daily P&L

VaR

1 Calculated using a 98-99% asymmetric double tail confidence interval

1H04 avg. daily VAR: 3.6 mln vs 3.8 mln in 1H03

UBM VAR CHANNEL

48

PRIVATE & AM DIVISION: 1H04 INCOME STATEMENT – BREAKDOWN BY COMPANY

Net interest income


Total revenues


Operating income

Net income

Cost/Income Ratio




- of which: other admin. expenses

(Euro mln)


TOTAL DIVISION2

49

521

570

-372

-165

-192

198

-2

164

159

65.3%

9

UPB +

Subsidiaries

44

129

173

-112

-63

-47

61

-1

40

39

64.9%

3

5

360

365

-191

-90

-95

174

-1

104

100

52.4%

7

7

26

33

-56

-7

-45

-23

0

-20

-20

n.s.

0

PGAM Group UniCredit Xelion Banca

1

7

8

-12

-5

-6

-4

-2

35

35

n.s.

48

Other Companies1

1 Mainly companies deriving from the acquisition of ING and not integrated in UniCredit Xelion Banca2 Balance due to roundings and elisions of infragroup dividends and goodwill amortisation

49

PRIVATE & AM DIVISION: 2Q04 AND 1H04 INCOME STATEMENT



Total revenues


Operating income


Net income


Taxes



2Q04/1Q04 % ch. 2Q04

286

-188

98

-11

65.7%

9

-

92

96

23

263

1H042Q04/2Q03 % ch.

1H04/1H03 % ch.

+0.7

+1.6

-1.1

-62.7

+61bp

n.s.

n.s.

+36.9

+39.5

-4.4

+1.2

+6.0

+5.9

+6.1

-62.7

-6 bp

n.s.

n.s.

+49.3

+61.5

-1.1

+6.7

570

-372

198

-41

65.3%

9

-2

159

164

49

521

+11.2

+9.9

+13.7

-21.3

-77 bp

-3.6

-79.6

+27.3

+35.2

+4.0

+12.0

(Euro mln - Data at fixed FX)

50

3 Including Momentum

1 Balance due to roundings

Italy

New Europe

(Euro mln)

89,095

2,577

TOTAL PIONEER

Alternative Investments3

119,436

2,449

255

247

2,118

1,123

US 21,884 352

International (ex-Italy)3 5,880 1,264

AuM as at 31.12.2003

US in USD 27,639 456

90,973

2,952

124,689

3,635

23,379

7,385

AuM as at 30.06.20041

28,417

AuM as at 31.08.20042

91,412

23,182

7,644

3,019

125,257

3,828

28,076

Net sales 1H04

PGAM GROUP: DEC03-AUG04 NET SALES AND AUM TREND

2 Provisional figures; balance due to Market Performance (including FX effect)

1,623

128

3,135

63

1,143

241

322

110

35

297

205

-66

218

-81

Net sales Jul-Aug04

Mkt. Perf. 1H04

51

Credem + Euromob.

6,553Credem + Euromob.

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 30.6.20044 BNL Investimenti recently acquired by RasBank

Source: Assoreti data as at 30.6.2004

Net Inflows:Euro 1,026 Mln,

1st in Italy

Data as at 30.6.2004 – Mln

TOTAL NET INFLOWS 2

Xelion 1,026

Mediolanum 702

Azimut 572

Banca Generali 398

282

Fineco 250

Credit Suisse 162

Rasbank + BNL Inv.ti4 125

Finanza & Futuro -132

Fideuram + SPI -452

Data as at 30.6.2004

2,175 PFAs,5th in Italy

NUMBER OF PFAs

Fideuram + SPI 4,381

Mediolanum

4,093

4,055

Banca Generali 2,366

Finanza & Futuro 1,182

Azimut

1,109

Banca 121 884

868

Tot. Fin. Assets:~11.0 bn,5th in Italy


TOTAL FINANCIAL ASSETS

Fideuram + SPI 58,110

Mediolanum 20,425

Rasbank + BNL Inv.ti4 18,795

Finanza & Futuro 8,078

Azimut 7,674

Credit Suisse 7,020

Xelion 10,957

13,914

Fineco 6,104

Net Inflows per PFA1:3rd among Top-

Players


NET INFLOWS PER PFA 2 & 3

Azimut 0.69

Xelion 0.47

Credit Suisse 0.51

Credem + Euromob. 0.26

0.17

Banca Generali 0.16

Finanza & Futuro 0.11

0.03

Fideuram + SPI -0.10

Fineco 0.16

EXCELLENT COMMERCIAL RESULTS FOR XELION IN 1H04: LEADERSHIP FOR TOTAL NET SALES (WITH A STRONG 24.4% MKT. SHARE) AND HIGH PRODUCTIVITY PER PFA

Rasbank + BNL Inv.ti4

Xelion 2,175

Fineco 1,576

Mediolanum

Rasbank + BNL Inv.ti4

Credem + Euromob.

Banca Generali

52

3.0%1

2.2%1

GOOD NET INCOME GROWTH IN 2Q BENEFITING FROM HIGHER REVENUES AND DECREASED COST OF RISK

(Euro mln)

Net interest income2


Total revenues

Operating Costs3

Operating income

Net write-down of loans


Net income


Taxes

4 Including provisions to reserve for general banking risk

2 Including dividends3 Including depreciation

%ch. at unchanged FX

7.9%1

41.9%1

18.2%1

22.8%1

1 Weight of the bank Total Revenues in 2Q04 on Division Total Revenues – only UCI’s portion; balance due to UniLeasing Romania and Xelion Poland


Cost/Income ratio (%)

NEW EUROPE DIVISION % ch. on 2Q03

-0.4

+2.5

+0.7

+2.1

-1.0

-4.8

n.m.

+16.9

-74.9

-61.9

+10.6

+0.8 pp

3.4%1

BREAKDOWNOF REVENUES

ITAS

2Q04

270

161

431

-238

193

-30

-7

138

-2

-16

94

55.2

% ch. on 1Q04

+1.5

+3.2

+2.1

+5.3

-1.5

-10.9

n.m.

+14.0

n.m.

-62.8

+11.9

+1.6 pp

1H04

536

317

853

-464

389

-65

-4

259

-2

-59

178

54.4

y/y % ch.

+1.1

+12.4

+5.0

+2.7

+8.1

-10.5

n.m.

+17.7

-37.2

-29.8

+16.3

-1.3 pp

53

IMPROVED ASSET QUALITY IN ALL NEW EUROPE BANKSINCREASED COVERAGE RATIOS

Net NPLs and Doubtful Loans as % of Total Net Loans

81.8

Mar04 Jun04

83.266.0 68.5

Coverage ratios

On Gross Doubtful Loans

On Gross NPLs

Net NPL/ Loans %

Jun04

Total NE -0.72.9

ch. on Mar04 (pp)

Net Doubtful/Loans %

Jun04

ch. on Mar04 (pp)

7.0-0.3

At unchanged FX

Zaba -0.41.9 4.4-0.2

Unibanka -0.73.4 6.3-0.2

Pekao -1.14.3 10.1-0.4

Bulbank 0.2 -0.11.80.0

KFS -0.72.8 5.7-0.4

Good improvement in Coverage ratios

Cost of risk1

-15 bp

(bp, annualised)

117

102

1H04FY03

1 Calculated as Net Loan Loss Provisions on Net Customer Loans at period-end, 1H04 data annualised

Zivno 0.7 -0.53.4-0.1

Decreasing Net Doubtful/Net Loans and Net NPL/Net Loans ratios in all NE banks

Total provisions on Performing Loans to 200 mln (+7.1% on Mar04) with an increase in the coverage ratio (+5 bp to 1.66%)

Decreased gross other Doubtful2 (-13.4% on Mar04) driven by Pekao

ITAS

2 Total Doubtful – NPL, of which approx. 95% are watchlist

54

Interest margin (incl. div.)


Total revenues



Net income

ROE

Cost/income

TOTAL1

536

317

853

-464

389

259

19.1%

54.4%

Net provisions -67

1 Balance due to roundings and other small companies

(Euro mln)

(UCI stake)

Net income3 (UCI’s portion) 178

- of which: Staff costs -233

- of which: Other costs -168

NEW EUROPE DIVISION: 1H04 RESULTS BREAKDOWN BY BANK

- o/w: Net write-down of loans -65

UNI BANKA (77.2%)

12

10

23

-16

7

5

13.7%

68.3%

-2

4

-7

-6

-2

BULBANK (85.2%)

30

19

49

-17

32

19.9%

34.6%

-2

25

21

-7

-7

-2

Group PEKAO (53.0%)

251

210

461

-250

211

21.0%

54.3%

144

-40

79

-125

-91

-35

130

43

172

-102

70

50

16.6%

59.2%

-7

41

Group ZABA

(81.9%)

-55

-33

-11

6

6

12

-9

3

1

4.3%

75.5%

-4

-4

-2

1

-2

89

21

110

-48

62

32

23.5%

43.5%

-23

-19

-13

32

KFS2 (50.0%)

-12

2 Consolidated with proportional method (50%)

14

7

21

-19

2

+4

8.8%

88.6%

-9

-7

+0

+4

Zivno (96.5%)

+0

UniCredit Romania (99.9%)

ITAS

Banks’ data gross of consolidation adjustment


55

CONSOLIDATED INCOME STATEMENT: PEKAO


1 Including dividends2 Including depreciations

4 At unchanged FX

(Euro mln)



Total revenues

Operating costs2

Operating income



Net income


Taxes

Net income for the Group5

% ch.4 on 2Q032Q04

127

107

235

-126

109

-14

-6

80

-4

-3

45

% ch. on 1Q044

+3.0

+4.5

+3.7

+1.6

+6.9

-32.0

n.m.

+25.9

n.m.

-81.1

+31.5

-1.7

+22.1

+7.9

-0.2

+19.8

+20.7

n.m.

+41.0

n.m.

-84.3

+48.9

ITAS

Data gross of consolidation adjustment

1H04

251

210

461

-250

211

-35

-5

144

-5

-22

79

y/y % ch.4

-7.2

+18.4

+2.9

-1.1

+8.1

-31.9

n.m.

+27.1

n.m.

-51.2

+30.2


56


1 Including dividends2 Including depreciations

4 At unchanged FX

CONSOLIDATED INCOME STATEMENT: ZAGREBACKA

ITAS

(Euro mln)



Total revenues

Operating costs2

Operating income



Net income


Taxes


% ch.4 on 2Q032Q04

66

17

83

-54

28

-5

-2

20

+4

-6

16

% ch. on 1Q044

+3.3

-34.9

-7.7

+14.3

-32.7

-25.3

n.m.

-33.2

n.m.

-22.6

-33.2

-1.7

-45.4

-15.5

+2.7

-37.0

-56.6

n.m.

-28.2

n.m.

+23.8

-28.9

1H04

130

43

172

-102

70

-11

-1

50

+4

-13

41

y/y % ch.4

+6.4

-13.7

+0.5

+4.9

-5.1

+23.4

n.m.

-6.5

n.m.

+1.2

-5.9

Data gross of consolidation adjustment (excluding Net Income for the Group that is net)

Documents

1 UNICREDITO ITALIANO GROUP 1 st Half 2004 Results Alessandro Profumo - CEO London - September, 14 th 2004