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3 3Q EXECUTIVE SUMMARY: QUALITY DRIVING GROUP RESULTS Continuous growth of lending activity (+1.5% q/q and +10.4% y/y ex. Repos), with market share improvement in Italy (10.96% as of Sep 04, +8 bp vs. Jun 04) Growth of managed assets (+7.7% y/y) with increased market shares in Italy (13.69% as of Oct 04, +18 bp vs. Jun 04) and Poland (32.68% as of Sep 04, +43bp vs. Jun 04) Evidence of improvement in revenue quality: Good growth of net interest income from Italian commercial business (+3.2% q/q, +6.8% y/y) Recurring net commissions resilience (net of adverse seasonal effects) Estimated Core Tier 1 ratio at 7.6%, vs. 7.4% in 1H04… 67.5 mln shares purchased to date Better coverage ratios on total doubtful loans (48.0%, +86 bp vs. Jun 04) and NPLs (60.1%, +87 bp vs. Jun 04), with annualised cost of risk at 65 bp (stable vs. FY2003 net of Parmalat)
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UNICREDITO ITALIANO GROUP9M 2004 Results
Alessandro Profumo - CEO
Milan - November, 12nd 2004
2
AGENDA
9M04 Group HighlightsDivisional Reporting
Retail Division
Corporate Division
Private & AM Division
New Europe Division
3
3Q EXECUTIVE SUMMARY: QUALITY DRIVING GROUP RESULTS
Continuous growth of lending activity (+1.5% q/q and +10.4% y/y ex. Repos), with market share improvement in Italy (10.96% as of Sep 04, +8 bp vs. Jun 04)
Growth of managed assets (+7.7% y/y) with increased market shares in Italy (13.69% as of Oct 04, +18 bp vs. Jun 04) and Poland (32.68% as of Sep 04, +43bp vs. Jun 04)
Evidence of improvement in revenue quality:
Good growth of net interest income from Italian commercial business (+3.2% q/q, +6.8% y/y)
Recurring net commissions resilience (net of adverse seasonal effects)
Estimated Core Tier 1 ratio at 7.6%, vs. 7.4% in 1H04… 67.5 mln shares purchased to date
Better coverage ratios on total doubtful loans (48.0%, +86 bp vs. Jun 04) and NPLs (60.1%, +87 bp vs. Jun 04), with annualised cost of risk at 65 bp (stable vs. FY2003 net of Parmalat)
4
449
3Q03
1,130
3Q03
1,581 1,504
9M03 9M04
NET INCOME (Euro mln)
ROE1
1 Calculated on end of period net equity excluding profit for the period
3,680 3,310
9M03 9M04
OPERATING INCOME (Euro mln)
COST/INCOME RATIO
-4.9%
-10.1%57.0%
(+2.0 pp on Dec03)
16.7% (-1.0 pp on Dec03)455
3Q04
+1.3%
1,030
583
2Q04
1,210
2Q04 3Q04-8.8%
466
1Q04
1,070
1Q04
GROWING NET INCOME Y/Y (+1.3% ON 3Q03). Q/Q COMPARISON AFFECTED BY NEGATIVE SEASONAL EFFECT
5
STRONG NET INTEREST INCOME (EX. DIV.) COMING FROM COMMERCIAL BUSINESS (+3.2% Q/Q AND +6.8% Y/Y IN ITALY), THANKS TO PRICING RESILIENCE …
NET INTEREST INCOME excl. Dividends
4Q03 1Q043Q032Q031Q03
New Europe
Italy ex. Parent Company
Avg. Euribor 2.46%
2.78%
2.14% 2.09%2.16%
2Q04
2.09%
Mark-up on short term(1) UBI vs. System(3), %
Mark-down(2) UCB vs. System(3), %
(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
1,140 1,1891,1601,1931,251
933 9649469701,007
1,210
979
255 259250268263 270
3Q04
2.11%
1,217
1,010
274
1,63
1,441,201,401,601,802,002,20
mar 03 jun 03 sep 03 dec 03 mar 04 jun 04 sep 04
UCB Mark-down System Mark-down
3,73
3,64
3,20
3,40
3,60
3,80
4,00
mar 03 jun 03 sep 03 dec 03 mar 04 jun 04 sep 04
UBI Mark-up System Mark-up
MemoParent Company:
-48 -34-36-45-19 -39 -67
(3) System data as of end of August 2004
Net Interest income
82 04771 91 34Dividends(4)
(4) Excl. infra-group dividends
+3.2%+6.8%
34 -34-3232-18 52 -33Parent Co. subtotal
6
% ch. on Dec03
% ch. on Jun04
… AND GOOD VOLUME GROWTH MAINLY SUPPORTED BY RETAIL AND NEW EUROPE IN 3Q04
Sep04
TOTAL CUSTOMER LOANS1
Breakdown By Division (bn)
1 Excl. Repos
Retail Division: good performance, thanks to continued growth in households’ mortgages (+16.1% on Dec03) and to the pick-up of Small Business lending (+7.2% on Dec03)
Corporate Division substantially stable (-0.3% on Dec03) mainly due to lower lending to large corporates counterbalanced by growth in SMEs and other corporate customers; good increase in m/l term (+9.2%2 Sep04/Dec03 in UBI)
New Europe Division up 8.0% at unchanged FX on Dec03, positive contribution of Pekao (+11.1% on Dec03, +3.5% at unchanged FX)
+4.1
Retail +11.2Corporate -0.3
New Europe +12.0
TOTAL GROUP +5.7
Other
54.262.6
13.2
133.2
3.2
+3.4-0.6
+1.5
+0.9 +22.4
+15.0+7.5
+9.1
+10.4
+0.6
% ch. on Sep033
2 Source: Bank of Italy Matrix 3 Incl. ANBI
7
UCI LOAN GROWTH IN ITALY OUTPERFORMS INDUSTRY WITH A MAJOR SHIFT TOWARDS M/L TERM CONTINUED MARKET SHARE GAINS
Italian industry
Total Loans1, y/y % ch.
UCI2 Italian industry
Medium/Long Term Loans1, y/y % ch.
UCI 2
On M/L term loans 1On total loans 1
UCI2 Market Share Increasing positive gap of UCI y/y total
loans growth vs. industry since Sep 03 (from +0.8% in Sep 03 to +6.2% in Sep04)
UCI total loans market share constantly improving from Mar03 (+97 bp, from 9,99% in Mar03 to 10,96% in Sep04)
1Source: Bank of Italy Matrix (Total Loans net of NPLs and Repos) 2 Proforma incl. ANBI
5.3%5.6%4.9%
6.0%7.2%
6.2%6.2%
11.5%
12.0%
4.6%
2.1%
13.3%12.1%
8.0%
0%
2%
4%
6%
8%
10%
12%
14%
Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04
12.1%
13.8%13.7%13.0%
13.6%
11.4%11.3%
17.8%17.3%16.6%
14.7%
12.2%11.3%
9.4%8%
10%
12%
14%
16%
18%
20%
Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04
10.96%10.88%
10.79%
10.74%
10.35%10.26%
9.99%
11.11%11.03%
10.74%
10.80%
10.58%10.70%
10.48%
Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04
8
Net commissions (excluding up-front) down 7.9% on 2Q mainly due to lower contribution from Corporate Division:
Less fees from Corporate Finance activity (~ -25 mln)
Adverse seasonal effect on Uniriscossioni
Good resilience of fees from Foreign Trade and Transaction Services vs. 2Q
Commissions from segregated accounts up 3.3% on 2Q04
Up-front fees down 25.9% on 2Q
Net commissions (excluding up front) up 0.7% on 3Q03 with further improvement in net commission mix (weight of up-front on total to 10.8% from 18.2% in 3Q03)
1 Related to UniCredit Banca and UniCredit Private Banking data restated on management accounts
RECURRING NET COMMISSIONS UP 0.7% Y/Y Q/Q COMPARISON IMPACTED BY ADVERSE SEASONAL EFFECT
NET COMMISSIONS
781
1Q03
798
1Q04
839
2Q03
830
3Q03
857
4Q03
Up-front1 109154 171151179
Other627 660 679 686 689
855
2Q04
743
9M04/9M03: -1.2%
Weight of Up-front on Total (%)
19.7 21.3 18.2 20.0 13.6 13.1
767
3Q04
684
-10.3%
-7.9%
10.8
83112
+0.7%
9
Sep. 04
41.4
23.9
23.1
34.8
123.2
Jun. 04
42.9
22.6
22.6
35.0
123.1
(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, 70.2 bn as at 30.9.2004 vs 67.6 bn as at 30.9.2003, +3.8% - Source: Assogestioni)
MUTUAL FUNDS (Italy): continued outperformance for net sales in the first 10 months of 2004 …
HEDGE FUNDS (Worldwide): positive inflows confirmed in 3Q (~260 mln), leading to record 1.4 bn net sales in 9M04 (+217% Y/Y)
TOTAL AUMs IN LINE WITH JUN04 BUT +7.7% Y/Y; VERY POSITIVE Q/Q GROWTH OF HIGHER VALUE ADDED PRODUCTS (SEGREGATED ACCOUNTS +5.8% AND BANCASSURANCE +2.0%) AND CONTINUED INCREASE OF MKT. SHARE IN MUTUAL FUNDS
Focus on Sales of AM products
DEC.03
… being the only mkt. share net gainer among the big players
UCI
JUN.04 SEP.04
13.39% 13.51% 13.63%
UCI TOTAL AUM(bn)
Italy US, New Europe & Intl.
Mutual & Hedge Funds1
Segregated Accounts
Insurance
Sep. 03
+3.3% vs Sep. 03
42.0
24.1
19.5
28.8
114.4
+21.3%
+7.6%
+16.2%
-6.2%
+2.1%
-0.5%
+0.1%
+2.0%
+5.8%
-3.5%
+20.7% vs Sep. 03
+7.7% vs Sep. 03
ASSET MIX (PGAM)
Avg.9M03
Equity + HedgeAvg.1Q04 Avg.2Q04
26.7% 29.8% 30.0%
Bond + Liquidity 63.0% 60.7% 60.9%
Balanced + others 10.3% 9.5% 9.1%
UCI (Total)
ITALIANSYSTEM
-9,952
-583
OCT.04
13.69%
US, New Europe & International
Avg.3Q04
30.1%
61.3%
8.6%
10
60
66
66
Negative seasonality penalising both Corporate (i.e. less than 10 mln revenues in August) and Institutional Derivatives (i.e. less than 4 mln revenues in August)
INCOME FROM FINANCIAL TRANSACTIONS(mln)
4Q031Q03 2Q03 3Q03
Corporate Derivatives
Institutional Derivatives1
436
268
349
204
263
105
65
239
97
292
1Q04
105
68
2Q04
295
139
100
Reduction of the Y/Y gap vs 2003 for Corporate Derivatives (-44% as of Sep.04 vs -48% as of Jun.04) …
Higher 3Q/2Q contribution of Retail Derivatives, New Europe and Parent Company
3Q04
233
76
50
(1) Data restated: revenues deriving from structured products distributed through non-captive networks (previously classified as Retail Derivatives) now classified as Institutional Derivatives
… and +10.6% Y/Y growth for Institutional Derivatives in 9M04 (~218 mln vs ~197 mln)
INCOME FROM FINANCIAL TRANSACTIONS: CONTINUOUS REDUCTION OF THE Y/Y GAP VS 2003 (FROM –25% AS OF JUNE TO –22% AS OF SEPTEMBER), DESPITE THE NEGATIVE SEASONALITY AFFECTING CORPORATE AND INSTITUTIONAL DERIVATIVES
9M03: 1,048 mln 9M04: 820 mln (-21.8% Y/Y)
11
OPERATING COSTS DOWN BY 2.8% 3Q/2Q04 MAINLY THANKS TO A DECREASE IN OTHER ADMINISTRATIVE EXPENSES.FIRST HEADCOUNT REDUCTION SINCE SEP03
OPERATING COSTS BREAKDOWN(Euro mln)
PERSONNEL COSTS 3Q/2Q decreasing by -1.4%. First signs of headcount reduction
OTHER ADMIN. EXPENSES 3Q/2Q -7.1% also thanks to a seasonal reduction of advertising costs (-10 mln)
Personnel costs
9M03 9M04
4,225
2,446
+0.6%
+5.3%
+3.4% 2,529
1,439
340
Other adm. expenses
Depr. & amort.
4,386
1,515
342
3Q04
1,505
852
-2.8%
+7.0%
-7.1%
-1.4%840
539
114
1,463
501
122
2Q04
+3.8%
DEPRECIATION 3Q/2Q +7.0% mainly due to UCB (+3.6 mln for new branch layout, replacement ATM)
3Q04
69,248
-112
69,136
2Q04
Headcount reduction 3Q/2Q
12
NON OPERATING ITEMS IN 3Q CHARACTERISED BY LOWER NET WRITE-DOWNS OF LOANS AND NET EXTRAORDINARY INCOME vs. 2Q
Operating income
Goodwill amort.
Net Income
Net write-downs of loans
Other net provisions1
Net extraord. income
Taxes
Minorities
1Q04
1,070
-71
466
-192
-9
2
-296
-38
2Q04
1,210
-72
583
-246
-27
100
-335
-47
3,310
-215
1,504
9M04
-660
-58
157
-895
-135 Tax Rate at 34.3% vs. 41.7% in 3Q03 benefiting from tax calculation on consolidated P&L, substantially stable on 2Q04 (34.6%)
-222 mln net write-downs of loans down 24 mln vs. 2Q04 due to lower net write-downs in Corporate division -21 mln and in Retail division -4 mln
Net write-downs of financial investments +4 mln
Provisions for risks & charges -26 mln
15 mln net capital gains from disposals 23 mln release of reserves previously
created
1 Net write-downs of financial investments, provisions for risks and charges and provision to reserve for general banking risks
3Q04
1,030
-72
455
-222
-22
55
-264
-50
13
Coverage ratio 60.1% +87 bp
Provisions on performing loans 1,328 +2.9%
Coverage ratio 1.01% +1 bp
Gross Doubtful Loans 9,311 +1.4%
Coverage ratio 48.0% +86 bp
Stated cost of risk (annualised) 65 bp +1 bp4
Weight on Gross Loans 6.60% -1 bp
mln, where not specified
Gross Non Performing Loans 6,451 +3.1%
Weight on Gross Loans 4.57% +6 bp
(4) Calculated on FY03 cost of risk (76 bp) net of extraordinary provisions on Parmalat (12 bp)
9M04 ch. on 2003
Sep. 04 ch. on Jun. 04
ASSET QUALITY: LIMITED Q/Q GROWTH OF GROSS DOUBTFUL LOANS AND SUBSTANTIAL INCREASE OF COVERAGE RATIOS
(2) Defined as: Flow from performing loans to any category of doubtful loans less Flow-back from any category of doubtful loans to performing(3) Calculated adding back to total provisions the fiscal write-offs of UniCredit Banca and UniCredit Banca d’Impresa only
3Q04
507402
-20.6%
3Q net flows of New Doubtful Loans2 slightly higher than 2Q (402 mln vs 372) but 20.6% lower than first 2 quarters Average
3.1% increase of Gross NPLs vs Jun. 04 (mainly due to shift from Watchlist Loans) partly offset by a 3.7% reduction of Watchlist Loans (2,412 mln as of Sep. vs 2,506 mln as of Jun.)
Improved coverage ratios; coverage ratios adding back fiscal write-offs3 at a high 70.6% on NPLs (+62 bp Q/Q) and at 58.4% on Total Doubtful Loans (+88 bp Q/Q)
2.9% increase of provision on performing loans vs Jun. 04, with coverage ratio at 1.01%
30.6.200430.9.2003 30.9.2004
3.20% 3.09% 3.14%
4.60%4.78% 4.84% Italian Banking
System
Weight of Total Gross NPLs1 on Total Gross Loans in Italy much lower than for the Italian Banking System
(1) Calculated as Total Gross NPLs/Total Gross Customers Loans granted to corporate and retail customers residents in Italy (Source: BankIT data)
Average 1Q04 + 2Q04
(ex New Europe)
14
9M04 Group Highlights
Divisional ReportingRetail DivisionCorporate Division
Private & AM Division
New Europe Division
AGENDA
15
RETAIL DIVISION: GOOD Q/Q PERFORMANCE, WITH TOTAL REVENUES UP 3.2% THANKS TO GROWTH OF NET INTEREST INCOME (+4% EX. DIV.) AND NET COMMISSIONS (+1.5%)
3Q04
Net interest income (incl. div.)
Net non interest income
Total revenuesOperating costs (incl. depr.)
Operating income
Net income for the Group
Cost Income ratio, %
605
487
1,092-747
345
161
68.4
% ch. on 2Q04
+4.5
+1.6
+3.2-0.2
+11.3
+23.2
-232 bp
9M04 ch. on FY03
Cost of risk 49 bp -1 bp
Good growth of net interest income (+6.5% y/y excl. dividends) sustained by volume growth in all segments
Spread on deposits(1) at 1.57%, slightly up vs. 2Q04 (+2 bp)
Good performance of commissions (+1.5% vs. 2Q04 despite negative seasonal effects), thanks to excellent sales of Focus Invest (the new investment product for affluent customers launched in July)
Good increase of Operating Income (+11.3% q/q), resulting from operating costs substantially aligned with 2Q
Almost 19,000 net new customers acquired in 3Q04
(1) Management accounts
Decrease of 200 employees in 3Q
16
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 and UBCasa (+22% y/y for both) Growth coming mainly from partnership channel, with
49% y/y increase Avg. amount of mortgage from 93,000 (2003 avg.) to
102,000 Euros (9M04 avg.), up 12.7%
CONSUMER FINANCING Excellent growth of stock (2.5 bn as of September), +18%
vs. Dec 03 and +9.6% vs. June 04 Excellent results of the focus on captive customers (more
than 200,000 revolving sold in 9 months vs. 6,000 in FY03) Acceleration in flow of personal loans granted through UCB branches (342 mln in 3Q vs. 281 in 2Q) driven by the launch of Credit Express in May 04
DEC03 9M04
26.230.5
+16.1%
9M03 9M04
5.26.3
+22%
NEW FLOWS OF PERSONAL LOANS
FY03 9M04
95 mln
248 mln
TOTAL SPENDING3) (+270k revolving cards in 9M04)
3Q average spread on new mortgages(1) : UCB at 1.28%, unchanged vs. 2Q04 UBCasa at 1.46%, slightly up vs. 2Q04 (+1 bp)
(1) Management accounts
2Q04
29.2
mkt share(2)
17.17%17.61% 17.63%
(2) Related to mortgages to households as of Bank of Italy definition in table TDME0070 of the monthly bulletin
VOLUMES
PRICING
VOLUMES
3Q average spread on new production(1) : revolving cards at 9.87%, +43 bp vs. 2Q04 personal loans at 5.40%, -2 bp vs. 2Q04
PRICING
(3) POS and ATM spending through revolving cards
9M03 9M04
582 mln
886 mln
+52%
17
… AND SMALL BUSINESS LENDING, THANKS TO CONTINUED INCREASE IN CUSTOMER ACQUISITION RATE AND IN PRESENCE OF A RESILIENT SPREAD
STOCK, bn
Growth of acquisition rate mainly driven by development regions, also thanks to the implementation of the brand new network of Developers (680 developers up and running)
9M04DEC03
UCB AVERAGE MONTHLY ACQUISITION RATETOTAL BANK DEVELOPMENT REGIONS STRENGTHENING REGIONS
FY03 3Q04 FY03 3Q04 FY03 3Q04
SHORT TERM SPREAD(1)
FY03 9M04
GOOD RESULTS OF THE RECENT FOCUS ON SMALL BUSINESS ALREADY VISIBLE IN STOCK GROWTH
Continuous growth of stock, with 2.8% increase vs. June 04
Resilience of short term spread(1), substantially in line with 1H04 (+1 bp)
(1) Management accounts, includes also maximum overdraft charges
12.1 13.0+7.2%
8.63% 8.41%
0.49%
0.64%
0.70%
0.93%
0.32%0.46%
+31% +33% +44%
52,000 new Small Business customers acquired in 9M04
18
9M04 Group Highlights
Divisional ReportingRetail Division
Corporate DivisionPrivate & AM Division
New Europe Division
AGENDA
19
CORPORATE DIVISION: GOOD PERFORMANCE OF NET INTEREST INCOME, COST CONTROL AND LOWER WRITE-DOWNS ON LOANS OFFSET BY THE NEGATIVE SEASONALITY ON NON-INTEREST INCOME AND THE LACK OF EXTRAORDINARY GAINS POSTED IN 2Q
3Q04
Net interest income (incl. div.)
Net non interest income
Total revenuesOperating costs (incl. depr.)
Operating income
Net income for the Group
Cost Income ratio, %
388
330
718-244
474
193
34.0
% ch. on 2Q04
+1.0
-30.7
-16.6-5.4
-21.4
-37.5
+402 bp
9M04 ch. on FY03
Cost of risk (annualised) 77 bp +8 bp1
Good growth of net interest income (+3.7% Q/Q and +5.9% Y/Y excluding dividends) almost totally driven by UBI
Net write-downs on loans -123 -14.5
Net extraordinary income +1 n.s.
(1) Calculated on FY03 cost of risk (91 bp) net of extraordinary provisions on Parmalat (22 bp)
(mln)
Net non interest income penalised by the negative seasonality for derivatives (income from financial transactions from 282 mln in 2Q to 178 mln in 3Q) and by the lower contribution of Corporate Finance fees (from ~36 mln in 2Q to ~11 mln in 3Q)
Operating costs decrease (-5.4% 3Q/2Q) mainly due to lower administrative expenses (less services provided to customers due to seasonality and effective cost control)
Net write-downs on loans back to “normalised levels” (-21 mln vs 2Q)
37.5% 3Q/2Q reduction of Net Income also due to very limited extraordinary income (1 mln vs 64 mln posted in 2Q2)
(2) Of which ~55 mln write-back of provisions created for fiscal purposes – “tax cleared accounts” by UBM
20
UBI AVG. CUSTOMER LOANS1, bn
+2.5%
UBI AVG. TOTAL LENDING SPREAD(1), %
2.21% 2.32% 2.41%
(1) Average quarterly figures; only performing loans (“impieghi vivi”) taken into account
NET INTEREST INCOME GROWTH DRIVEN BY UBI’S HIGHER AVERAGE LOANS COUPLED WITH EFFECTIVE PRICING
42.7 45.3 46.5
3Q03 2Q04 3Q04 3Q03 2Q04 3Q04
(mln, end of period figures)
Largest groups
Dec03
7,389
Jun04 Aug042
6,359 5,173
% ch. Aug04/ Jun04-18.7%
SMEs & other corporate 27,390 28,608 28,663 +0.2%
Public Sect. & Others4 6,811 7,872 8,145 3.5%
(4) Including non-financial companies with Total Revenues lower than 1.5 mln(5) Data as of Dec03 and Jun04 restated in order to reflect
a new share of wallet calculation criteria adopted from July ’04, which excludes loans to non-residents in Italy
Financial companies 4,446 3,478 3,295 -5.3%
TOTAL5 46,036 46,317 45,276 -2.2%
- Share of Wallet 12.3% 12.7% 12.8%3 +10 bp
Continuous growth of loans to core SMEs customers (+0.2% as of Aug042 vs Jun04) …
(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 ~13.0% adding back these amounts
+9 bp
UBI NET INTEREST MARGIN (excluding dividends), mln
293 312 325
3Q03 2Q04 3Q04
o/w: M/L 17.1 19.1 19.7
(2) Source: Credit Bureau; data as of September 2004 not yet available
… and of Share of Wallet (12.8% as of Aug04 vs 12.7% as of Jun04) …
… with a good contribution of M/L lending (from avg. 19.1 bn in 2Q to avg. 19.7 bn in 3Q)
+4.2% Q/Q+11.0% Y/Y
21
CORPORATE DIVISION: NET COMMISSIONS
SIGNIFICANT RESILIENCE OF LEAST VOLATILE COMPONENTS OF NET COMMISSIONS, DESPITE LOW “AUGUST” BUSINESS VOLUMES. 3Q NET FLOWS OF NEW DOUBTFUL LOANS SIGNIFICANTLY LOWER THAN THE FIRST 2 QUARTERS AVERAGE (-10.5%)
(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(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 31.12.2003
2Q04
142.9
1Q04
-25.4% vs 2Q
140 131
Net commissions impacted by the lower contribution of Corporate Finance fees1 (~11 mln in 3Q vs ~36 mln in 2Q) and the negative seasonality for UniRiscossioni
~35 mln from foreign trade services (vs ~37 mln in 2Q and ~27 mln in 1Q)
(1) UBI+UBM+Banca MedioCredito
(mln)
CORPORATE DIVISION: NET FLOWS OF NEW DOUBTFUL LOANS2
3Q net flows of new doubtful loans higher than in 2Q (232 mln vs 143 mln), but significantly lower than the first 2 quarters Average (-10.5%)
3Q04
~260~232
Average 1Q04 + 2Q04
-10.5%
(mln)
Of which: To Loans to be Restructured 81 72
3Q Default Rate3 at 0.37% (vs 0.42% in the first 2 quarters Average)
179 160
3Q04
176
-6.0% vs 1Q
Very good resilience of the least volatile components, despite lower business volumes in August:
~16 mln from transaction services (vs ~17 mln in 2Q and ~16 mln in 1Q)
22
9M04 Group Highlights
Divisional ReportingRetail Division
Corporate Division
Private & AM DivisionNew Europe Division
AGENDA
23
3Q04
Net interest income (incl. div.)
Net non interest income
Total revenuesOperating costs (incl. depr.)
Operating income
Net income for the Group
Cost Income ratio, %
24
251
275-175
100
88
63.6
% ch. on 2Q04
-1.4
-2.9
-2.7-5.4
+2.3
-4.3
-179 bp
Net extraordinary income 12 +37.0
(mln - % Change at Fixed FX)
Tax Rate, % 19.4
1 Including Repos
PRIVATE & AM DIVISION: OPERATING INCOME INCREASE THANKS TO HIGHER EFFICIENCY; CONTINUED GROWTH OF TOTAL FINANCIAL ASSETS …
Vs 10.3% in 2Q
(bn)
Sep.03 restated
Jun.04
Securities in custody
Direct deposits1
AUM
5.8
22.4
120.4
5.9
24.7
130.1
148.6160.7
Sep.046.1
24.7
130.6
161.4
Total Financial Assets: 0.4% Q/Q increase (+9.6% Y/Y at fixed FX), with higher weight of hedge funds (from 1.40% as of Sep.03 to 2.26% as of Jun.04 and to 2.38% as of Sep.04)
+0.4%PRIVATE & AM DIVISION TOTAL FINANCIAL ASSETS
Slight Q/Q decrease (-8 mln at fixed FX), mainly due to lower upfront fees (-6 mln at fixed FX)
Operating income: +2.3% Q/Q thanks to strict cost control (-10 mln Q/Q operating costs at fixed FX, mainly marketing and travel expenses)
Significant +6.9% growth in 9M04 vs 9M03, driven by the strong +9.6% increase of Total Financial Assets (at fixed FX)
Net income: -4.3% Q/Q (at fixed FX) totally due to taxes back to a “normalised” level (one-off benefits in 2Q coming from “first-time fiscal consolidation” of PGAM and Xelion)
Total revenues:
24
… MAINLY THANKS TO PIONEER AUM INCREASE COUPLED WITH POSITIVE SALES IN ALL THE BUSINESS DIVISIONS
Growth of total AUM 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
(bn)
AUM Sep.03 pro-forma
AUM Sep.04
115.6125.41
9M04 Net Sales
Italy 165
Net Sales breakdown:
International (ex Italy) 1,6701
US 286New Europe 287
Alternative Invest. 1,385
TOTAL PGAM 2,408
+0.5% Q/Q+0.9%
at fixed FX
Significant increase of market shares in Italy (from 13.39% as of Dec.03 to 13.63% as of Sep.04 and 13.69% as of Oct.04 – Mutual Funds, Assogestioni perimeter) and in Poland (from 30.36% as of Dec.03 to 32.25% as of Jun.04 and 32.68% as of Sep.04 – Investment Funds)
AUM Jun.04
124.7
“Institutional and Third party strategy” already paying off: Institutional+Third Party AUM/Total AUM ratio from 34.7% as of Dec.03 to 35.8% as of Sep.04
+8.4% Y/Y+9.5%
at fixed FX
1 Data gross of ~500 mln AUM withdrawn by an Institutional client in the last days of September and given back to Pioneer (as previously agreed) at the beginning of October
25
9M04 Group Highlights
Divisional ReportingRetail Division
Corporate Division
Private & AM Division
New Europe Division
AGENDA
26
Operating Costs down 2.5% on 2Q04 due to decreasing trend in major banks (Pekao, and Zaba) thanks to active cost management
3Q04 KEY HIGHLIGHTS: NET INCOME UP 18.9% Q/Q THANKS TO REVENUE GROWTH, COST CONTROL AND LOWER COST OF RISK. INCREASING CONTRIBUTION ON OPERATING INCOME OF ZABA AND KFS
Attributable Net Income
3Q04(Euro mln)
113
Total revenues 445
Operating income 210
Cost/Income 52.8%
Cost of Risk3 (annualised) 91 bp
- o/w net interest income2 270
At unchanged FX1
Net write-downs of loans -30
ROE (9M04 data, y/y % ch.)
% ch. on
2Q04
+18.9
+1.8
+7.1
-2.3 pp
-5 bp
+1.6
- o/w net commissions 99 -5.7
-1.1
20.2%
ITAS
2 Excluding dividends
Operating costs -235 -2.5
Total Revenues up 1.8% on 2Q04:Net interest income +1.6% on 2Q04:
KFS (+9.2%) and Bulbank (+4.5%) performance partially counterbalanced by Zaba (-3.0%) and Pekao (-0.2%); +4.8% incl. dividends and other income from equity investments (+9 mln from Istratourist4)
Net commissions -5.7% on 2Q04: decrease in Pekao offsets positive trends of Bulbank, Zaba and KFS mainly due to loan growth
Further reduction of Cost of Risk (-5 bp q/q) and higher coverage of Doubtful loans (to 72.4% from 68.5% in Jun04)
Attributable Net Income up 18.9% also benefiting from disposal of securities and equity investments in Pekao (7 mln)Tax Rate 15.2% +4.3 pp
3 Calculated as Net Loan Loss Provisions of 3Q04 on Net customers Loans at period-end
1 Excluding for KFS (included at current FX)
% ch. on
3Q03
+21.5
+2.8
+3.4
-0.3 pp
-3 bp
+1.3
-7.0
-5.7
+2.2 pp
+2.2
-9.3 pp
4 Company, operating in tourism business, accounted by equity method in Zaba
27
1 Excluding for KFS (included at current FX)
INCREASING NET CUSTOMER LOANS FOR NE BANKS (PEKAO STABLE ON JUN04). TREND IN MUTUAL FUNDS AFFECTED BY LOWER SALES IN POLAND AND CROATIA
ITAS
% ch. on
Jun04Sep04
(Euro mln)
% ch. on
Dec03
Net Customer Loans
- o/w Pekao
Mortgages
+4.1
-0.1
+11.9
+3.2
+8.3 +21.8
13,261
5,750
1,953
- o/w Pekao LC +17.4 +59.5464
- o/w Pekao
Mutual Funds3
+1.1 -1.1
+4.4 +24.4
Deposits +6.8 +6.622,577
10,690
4,431
- o/w Pekao2 +1.3 +13.22,607
NET CUSTOMER LOANS 3Q/2Q04: Good growth (+4.1%) driven by acceleration in Bulbank (+20.5%) and Zaba (+5.4%); further increase in KFS (+3.7%), Pekao substantially stable (-0.1%)
2 PPIM
At unchanged FX1
MORTGAGES continuing good trend: Pekao: market share in new LC mortgages
+1.9 pp on 2Q04 (to 25.5%) Zaba: stock +7.7% on 2Q04, improved
leadership position with 41.6% market share (+40 bp on 2Q04)
MUTUAL FUNDS in PEKAO: Improved market share2: +0.4 pp on 2Q04
(to 32.7%); Further increase of equity and balanced
funds2 to 51.3% (from 50% in 2Q04)
3 New Europe Business Area of Pioneer is included at current FX
DEPOSITS: ~ +430 mln on Jun04 linked to bond
issued by Zaba (total amount 450 mln)
Assets administr. for customers3 +6.3 +12.335,724
28
Annex
29 * Net write-downs of financial investments, provisions for risks and charges,
provisions for possible loan losses and provisions to reserve for general banking risk
3Q04 & 9M04 CONSOLIDATED INCOME STATEMENT
Net extraordinary income
Net non interest income
Total revenues
Operating income
Provisions on loans
Administrative costs (incl. depr.)
Other net provisions*
Goodwill depr.
(Euro mln)
MinoritiesTaxes
% ch. on 3Q03
Net interest income (incl. div.)- of which Dividends
-8.3
-0.7
+11.8
n.m.
+6.1
-8.8
-9.9
+5.6
+56.1-23.2
+8.0
% ch. on 2Q04 3Q04
1,215
2,493-1,463
1,030
-222
55-22
-72
-50-264
1,27861
-12.5
-8.2
-10.1
-45.0
-2.8
-14.9
-15.3
-0.1
+6.5-21.0
-3.7-47.9 +165.2
y/y % ch. 9M04
3,898
7,696-4,386
3,310
-660
157-58
-215
-135-895
3,798182
Net income +1.3455 -22.1 1,504 -4.9
-5.8
-2.6
+17.6
+185.5
+3.8
-10.1
-64.0
+5.4
+32.4-20.5
+0.8+11.0
30
Retail Division
Corporate Division
Priv.& AM Division
NE Division
Total Group1
Total revenues+3.2% -16.6% -3.5% +2.4% -8.2%
Operating costs
Operating income
Net write-downs of loans
Net income for the Group
C/I Ratio
-0.2% -5.4% -6.4% -2.1% -2.8%
+11.3% -21.4% +2.0% +8.0% -14.9%
-5.1% -14.5% n.m. -1.1% -10.1%
+23.2% -37.5% -4.3% +19.9% -22.1%
-2.3 pp +4.0 pp -2.0 pp -2.4 pp +3.3 pp
1 Balance due to the Parent Company, other Group companies and elisions2 Calculated on data at end of period FX
(Euro mln - Data at end of period FX)
DIVISIONAL CONTRIBUTION TO CONSOLIDATED RESULTS IN 3Q04
1,092 718 275 454 2,493
-747 -244 -175 -240 -1,463
345 474 100 214 1,030
-69 -123 -1 -31 -222
161 193 88 115 455
68.4% 34.0% 63.6% 52.8% 58.7%
3 Including all the employees of Koc Financial Services (3,908 as at 30.09.2004)
Employees3 25,261 6,388 3,667 29,787 71,110
3Q04 RESULTS
% Change vs 2Q042
% Change vs 2Q042
% Change vs 2Q042
% Change vs 2Q042
% Change vs 2Q042
Change in pp vs 2Q042
31
-on tot. Gross doubtful loans, % 37.6% 37.1% 47.2%68.5%37.9% 36.5% 72.4% 48.0%
-on total gross NPL, % 48.5% 42.0% 83.2% 59.3%48.7% 42.6% 84.5% 60.1%
Total gross doubtful loans 3,390 2,798 2,837 9,180-1.1% +1.4%
Net Doubtful Loans/Tot. Net Loans,% 3.64%4.03% 2.71% 7.03%
3,479
3.98%
+2.6% +2.5%2,869
2.82%
2,806
5.83%
9, 311
3.58%
% change on Jun.04Gross Doubtful Loans/Tot. Gr. Loans,% 6.61%6.28% 4.19% 19.1%6.23% 4.32% 18.1% 6.60%
Total net doubtful loans 2,114 1,760 895 4,850-13.6% -0.2%
2,160+2.2% +3.6%
1,823 774 4,839% change on Jun.04
ASSET QUALITY: DETAILS BY DIVISIONS
Coverage ratios
Retail Division
Jun. 04 Sep. 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 Jun.04Gross NPL/Tot. Gr. Loans,%
Net NPL/Tot. Net Loans,%
2,034 1,890 2,236 6,259
+3.7% +3.1%3.77% 2.83% 15.0% 4.51%
2.00% 1.69% 2.95% 1.91%
2,095
3.75%
1.98%
+3.0% +2.6%1,940
2.92%
1.72%
2,320
15.0%
2.71%
6,451
4.57%
1.91%
Net NPL% change on Jun.04
1,047 1,096 375 2,549-4.3% +1.1%
1,075+2.7% +1.6%
1,113 359 2,577
Jun. 04 Sep. 04 Jun. 04 Sep. 04 Jun. 04 Sep. 04
32
Interest income (incl. div.)
Net non interest income
Total revenuesOperating 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: 9M04 RESULTS BREAKDOWN BY COMPANY
- o/w: Net write-down of loans
1,505
1,317
2,821-2,012
809
359
71.3
309
-1,071
-875
-156
-179
78
54
132-73
59
30
55.0
28
-38
-32
-7
-10
83
9
92-55
37
17
59.8
22
-18
-35
-12
-12
80
24
104-48
55
29
46.7
29
-13
-34
-21
-23
1,746
1,420
3,166-2,215
951
420
70.0
419
-1,155
-987
-197
-225
(1) Balance due to rounding and elisions of infragroup dividends and goodwill amortisation
CR Carpi
28
17
45-26
19
10
58.1
10
-14
-11
-1
-1
(2) Net of consolidation adjustments
33
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), %
2Q042003pro-forma(3)
2Q042003
+3.4%
-0.2%
(1) Includes short term and m/l term loans(2) Includes only households mortgages(3) Including ANBI
+11.0%
+4.2%
+7.8%+0.6%
+18.3%
+0.4%
+1.6%
48.8
26.3
12.12.18.3
60.2
17.7
15.3
27.2
UCB AVG. MARK UP(5) (Small Business), %
1Q03
7.18
1Q03
2.32
1Q03
5.99
2Q03
7.18
2Q03
2.03
2Q03
5.93
3Q03
7.33
3Q03
1.78
3Q03
5.95
4Q03
7.04
4Q03
1.72
4Q03
5.69
1Q04
7.03
1Q04
1.65
1Q04
5.60
(4) 2Q04 increase vs. December is due to the issue of bonds by UBCasa to fund mortgage book expansion
3Q04
3Q04
54.2
63.8
30.5
20.5(4)
13.0
2.58.2
15.4
27.9
+7.4%
+4.7%
+2.8%
+9.6%-1.6%
-2.3%
+0.1%
+1.2%
+6.5%
2Q04
7.08
2Q04
1.65
2Q04
5.47
(5) Source: Bank of Italy matrix data
52.4
63.9
29.2
21.0(4)
12.6
2.38.3
15.4
27.6
3Q04
7.33
3Q04
1.67
3Q04
5.55
34
NET COMMISSIONS GROWTH COMING FROM GOOD SALES OF FOCUS INVEST. UP-FRONT FEES REPRESENTING 22% OF TOTAL COMMISSIONS IN 9M04, 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 3
Breakdown by nature
1 Includes subscription and management fees from Plain Vanilla Mutual Funds2 Includes management fees related to underlying Mutual Funds. Net commissions related to Focus Invest do no impact consolidated results
3Q04
49
329
159
50
44
121
66
Q/q% ch.
+1.7
+1.5
+5.1
-10.4
n.m.
-3.0
-22.9
2Q04
48
324
151
56
11
125
85
3 Includes management fees related to underlying Mutual Funds
35
RETAIL DIVISION - DETAILS ON ASSET QUALITY
Slight increase of Gross Doubtful Loans (+2.6% Q/Q), driven by increased Gross NPLs (+3.0%)
Coverage ratio 48.7% +15 bp
Sep 04
ch. on Jun 04
Provisions on performing loans 302 +5.0%
Coverage ratio 0.58% +1 bp
Gross Doubtful Loans 3,479 +2.6%
Coverage ratio 37.9% +28 bp
Weight on Gross Loans 6.23% -5 bp
mln, where not specified
Gross Non Performing Loans 2,095 +3.0%
Weight on Gross Loans 3.75% -2 bp
Cost of risk (annualised) 49 bp -1 bp
Increased provisions on performing loans, with slight increase in coverage ratio (+1 bp)
Cost of risk in line with previous year
9M04 ch. on 2003
Reduced weight of both Gross Doubtful Loans and Gross NPLs on Total Gross Loans, respectively -5 bp and -2 bp
(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
Increased coverage ratios, both on Doubtful Loans (+28 bp) and on Non Performing Loans (+15 bp)
3Q04
206 178
-13.5%
2Q04
240
1Q04
3Q net flows of New Doubtful Loans2 decline vs. previous 2 quarters:
36
GOOD CUSTOMER SATISFACTION IMPROVEMENTS IN PRIVATE AND SMALL BUSINESS SEGMENTS, CONSISTENTLY OUTPERFORMING COMPETITION IN A CONTEXT OF GROWING MARKET SHARES
PRIVATE CUSTOMERS, TRIM INDEX (1)
2003 3Q04
4749
2003 3Q04
4342
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 (1)
2003 3Q04
4249
2003 3Q04
4141
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(1) On a scale from 0 to 70
37
CORPORATE DIVISION: 9M04 INCOME STATEMENT- BREAKDOWN BY COMPANY
Interest margin (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
961
428
1,389
993
-169
-226
-396
371
361
28.5%Cost/income Ratio
-350
-355
UBM LOCAT
-17
588
571
404
-72
-84
-167
282
284
29.2%
7
3
152
16
168
128
-15
-23
-40
58
61
23.7%
-25
-27
43
169
212
69
-92
-66
-143
36
40
67.7%
-5
-8
1,139
1,201
2,340
1,594
-328
-399
-746
747
746
31.9%
-373
-387
1 Balance due to roundings and elisions of infragroup dividends and goodwill amortisation
38
CORPORATE DIVISION: 3Q04 AND 9M04 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, %
(Euro mln) 3Q04/2Q04 % ch. 3Q04
718
-244
474
-154
34.0%
1
-128
193
193
388
330
9M043Q04/3Q03 % ch.
y/y % ch.
-16.6
-5.4
-21.4
-25.6
+402bp
n.s.
-15.8
-37.5
-37.5
+1.0
-30.7
-4.9
-3.3
-5.7
-4.1
+62 bp
n.s.
+19.6
-18.9
-18.5
+5.9
-15.2
2,340
746
1,594
-526
31.9%
66
-387
746
747
1,139
1,201
-7.4
-3.1
-9.3
-6.6
+141 bp
n.s.
+12.2
-14.1
-14.3
+1.6
-14.6
39
CORPORATE DIVISION - DETAILS ON ASSET QUALITY
Coverage ratio 42.0% +61 bp
9M04 ch. on 2003
Provisions on performing loans 785 +3.6%
Coverage ratio 1.23% +5 bp
Gross Doubtful Loans 2,869 +2.5%
Coverage ratio 36.5% -66 bp
Cost of risk (annualised) 77 bp +8 bp2
Weight on Gross Loans 4.32% +13 bp
mln, where not specified
Gross Non Performing Loans 1,940 +2.6%
Weight on Gross Loans 2.92% +9 bp
Increased coverage on NPLs (+61 bp vs Jun.04). Coverage ratios adding back fiscal write-offs3:
at 69.2% on NPLs (+67 bp vs Jun.04) at 59.9% on Total Doubtful Loans (almost
stable vs Jun.04)
+3.6% increase of provision on performing loans vs Jun. 04, also due to 23 mln provisions on the automotive sector. Coverage ratio on performing loans at an high 1.23%
9M04 cost of risk (annualised) 8 bp up vs FY03 net of extraordinary provisions on Parmalat, mainly due to high provisions on a single position posted in 1H04; cost of risk at 68 bp (in line with FY03) net of provisions on this “single position”
Increase of Gross Doubtful Loans (+2.5% vs Jun.04) driven by Gross NPLs (+2.6% vs Jun.04) and Loans to be Restructured (from 372 mln as of Jun.04 to 400 mln as of Sep.04, +7.5%), offsetting the benefits of decreasing of Gross Watchlist Loans (from 532 mln as of Jun.04 to 522 mln as of Sep.04, -2.0%)
Sep. 04 ch. on Jun. 04
(2) Calculated on FY03 cost of risk (91 bp) net of extraordinary provisions on Parmalat (22 bp)(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
(3) Fiscal write-offs related to UBI only
40
(Euro mln)
Net interest income 328
Net income for the group
Cost Income RATIO, %
118
28.9%
Net non interest income 130
Total revenues
Operating costs
Operating income
458
-132
326
Net write-downs of loans
Other net provisions
-115
-2
Of which:89
- Trading profits 35- Net commissions
UNICREDIT BANCA D’IMPRESA: 3Q04 AND 9M04 INCOME STATEMENT
3Q04/2Q04 % ch. 3Q04 9M043Q04/3Q03
% ch. y/y
% ch.
+4.3
+5.6
+96 bp
-18.9
-3.5
-0.2
-4.8
-14.7
-62.9
-7.0-44.3
+10.7
+0.7
-202 bp
-5.2
+5.7
-1.3
+8.8
+23.8
-18.0
+5.9-22.1
961
361
28.5%
428
1,389
-396
993
-350
-5
275143
+7.7
-7.7
-32 bp
-12.8
+0.4
-0.7
+0.9
+29.0
-79.6
+14.3-39.1
41
UBM: 3Q04 AND 9M04 INCOME STATEMENT
(Euro mln)
Financial ProductsSales and Trading
Investment Banking
Total revenuesStaff costsOther costs (incl. depr.)
Operating income
Net incomeC/I Ratio
of which derivatives
133-28
-24
82
4138.5%
123
10
107
Net extraord. income -Taxes -39
3Q04/2Q04 % ch. 3Q04 9M043Q04/3Q03
% ch. y/y
% ch.1
-46.8-0.5
-29.8
-56.6
-74.8+1,394bp
-41.8
-73.9
-43.6
n.s.-55.9
-36.7-16.8
-20.6
-44.4
-54.3+858 bp
-32.5
-64.0
-30.2
n.s.-33.1
571-84
-83
404
28429.2%
509
62
447
58-182
-29.9-21.4
-8.5
-34.5
-27.0+499 bp
-29.5
-33.2
-28.2
n.s.-16.5
1 9M04/9M03 % ch. calculated netting 31 mln of tax credit on dividends accounted in 9M03
42
UBM Daily VAR2 and P&L (Jan 04 – Sep 04)Euro mln
Daily P&L
VaR
2 Calculated using a 98-99% asymmetric double tail confidence interval
9M04 avg. daily VAR: 3.9 mln
UBM1 VAR CHANNEL
-7
-5
-3
-1
1
3
5
7
Jan-04
Jan-04
Jan-04
Feb-04
Feb-04
Mar-0
4Ma
r-04
Mar-0
4Apr-0
4Apr-0
4Apr-0
4Ma
y-04
May-04
Jun-04
Jun-04
Jun-04
Jul-04
Jul-04
Jul-04
Aug-04
Aug-04
Aug-04
Sep-04
Sep-04
1 Pls. note that, the graph reflects UBM standing alone until June 30, 2004. From July 1st, 2004 it reflects UBM new perimeter (incl. TradingLab, merged in UBM from July 1st, 2004)
UBM stand alone UBM after merger of TradingLab
43
PRIVATE & AM DIVISION: 9M04 INCOME STATEMENT – BREAKDOWN BY COMPANY
Net interest income
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
73
770
843
-545
-245
-278
298
-2
255
24764.7
%
21
UPB +
Subsidiaries
55
189
243
-169
-95
-71
74
-1
56
4269.5
%
3
7
533
540
-279
-132
-136
261
-1
161
238
51.7%
20
10
39
50
-83
-12
-65
-33
0
-29
-21
n.s.
1
PGAM Group UniCredit Xelion Banca
1
8
9
-14
-7
-6
-5
-1
2
-12
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
44
PRIVATE & AM DIVISION: 3Q04 AND 9M04 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, %
3Q04/2Q04 % ch. 3Q04
275
-175
100
-21
63.6%
12
-
88
91
24
251
9M043Q04/3Q03 % ch. Y/y % ch.
-2.7
-5.4
+2.3
+102.6
-179 bp
+37.0
n.s.
-4.3
-4.5
-1.4
-2.9
-0.4
+7.2
-11.5
-28.7
+455 bp
n.s.
n.s.
+8.2
+11.8
+5.0
-0.9
843
-545
298
-62
64.7%
21
-2
247
255
73
770
+6.9
+8.8
+3.6
-24.3
+113 bp
+300.9
-84.6
+19.6
+25.6
+4.3
+7.1
(Euro mln - Data at current FX, % ch. at fixed FX)
45
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
165
287
2,408
1,385
US 21,884 286
International (ex-Italy)3 5,880 1,670
AuM as at 31.12.2003
US in USD 27,639 376
91,326
3,087
125,362
3,847
23,001
7,947
AuM as at 30.09.20041
28,543
AuM as at 31.10.20042
91,641
22,657
7,767
3,118
125,183
3,800
28,858
Net sales 9M04
PGAM GROUP: DEC03-OCT04 NET SALES AND AUM TREND
2 Provisional figures; balance due to Market Performance (including FX effect)
2,066
223
3,518
13
831
397
528
-141
25
79
13
87
108
108
Net sales Oct.04
Mkt. Perf. 9M04
46
VERY GOOD COMMERCIAL RESULTS FOR 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
+0.6%40.1
40.1 bn Total Financial Assets, +0.6% Q/Q and +8.4% Y/Y, with higher weight of Hedge Funds (from 0.8% as of Sep.03 to 2.2% as of Jun.04 to 2.3% as of Sep.04)
309 mln net sales in 3Q04, with strong contribution of hedge funds (85 mln, more than 25% on the total)
70 mln Total Financial Assets per client-manager, vs 69.7 mln as of Jun.04 and 66.1 mln as of Sep.03
TOTAL FINANCIAL ASSETS(bn)
Sep.04Jun.04Sep.03
~11.3 bn Total Financial Assets (+3.2% Q/Q and +13.1 Y/Y)
Higher Financial Assets per PFA: from ~4.3 mln as of Sep.03 to ~5.1 mln as of Jun.04, to ~5.3 mln as of Sep.04, +25% Y/Y
TOTAL FINANCIAL ASSETS(bn)
37.039.9
+3.2%11.3
Sep.04Jun.04Sep.03
10.0 11.0
47
Finanza & Futuro
Rasbank + BNL Inv.ti4 Credem + Euromob.
6,692Credem + 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 30.9.20044 BNL Investimenti recently acquired by RasBank
Source: Assoreti
Net Inflows:Euro 1,547 Mln,
1st in Italy
Data as at 30.9.2004 – Mln
TOTAL NET INFLOWS 2 & 3
Xelion 1,547Mediolanum 1,008
Azimut 889
Banca Generali 568
474
Fineco 370
Credit Suisse
272Rasbank + BNL Inv.ti4
209
Finanza & Futuro -188
Fideuram + SPI -783
Data as at 30.9.2004
2,122 PFAs,5th in Italy
NUMBER OF PFAs
Fideuram + SPI 4,349
Mediolanum 4,078
3,955
Banca Generali 2,336
Finanza & Futuro 1,160
Banca 121
1,102
Azimut 872
821
Tot. Fin. Assets:~11.3 bn,5th in Italy
Data as at 30.9.2004 – Mln
TOTAL FINANCIAL ASSETS
Fideuram + SPI 57,731
Mediolanum 20,371
Rasbank + BNL Inv.ti4 18,489
7,935Azimut
7,852
Credit Suisse 7,069
Xelion 11,314
13,702
Fineco 6,187
Net Inflows per PFA1:2rd among Top-
Players
Data as at 30.9.2004 – Mln
NET INFLOWS PER PFA 2 & 3
Azimut 1.10
Xelion 0.71Credit Suisse 0.65
Credem + Euromob. 0.43
0.25
Banca Generali
0.23
Finanza & Futuro
0.07
-0.16
Fideuram + SPI -0.18
Fineco
0.21
XELION: CONFIRMED LEADERSHIP FOR TOTAL NET SALES IN 9M04 (WITH A STRONG 25.7% MKT. SHARE) AND OUTSTANDING PRODUCTIVITY PER PFA
Rasbank + BNL Inv.ti4
Xelion 2,122Fineco 1,520
Mediolanum Credem + Euromob.
Banca Generali
48
2.4%1
2.4%1
GOOD NET INCOME GROWTH IN 3Q BENEFITING FROM HIGHER REVENUES, LOWER COSTS AND DECREASED COST OF RISK
(Euro mln)
Net interest income2
Net non interest income
Total revenues
Operating Costs3
Operating income
Net write-down of loans
Net extraordinary income
Net income
Other net provisions4
Taxes
4 Including provisions to reserve for general banking risk
2 Including dividends3 Including depreciation
%ch. at unchanged FX
7.7%1
37.7%1
20.1%1
26.0%1
1 Weight of the bank Total Revenues in 3Q04 on Division Total Revenues – only UCI’s portion; balance due to UniLeasing Romania and Xelion Poland
Net income for the Group
Cost/Income ratio (%)
NEW EUROPE DIVISION % ch. on 3Q03
+3.3
+1.9
+2.8
+2.2
+3.4
-5.7
n.m.
+27.6
-80.4
-31.0
+21.5
-0.3 pp
3.2%1
BREAKDOWNOF REVENUES
ITAS
3Q04
285
160
445
-235
210
-30
12
162
-1
-29
113
52.8
% ch. on 2Q04
+4.4
-2.4
+1.8
-2.5
+7.1
-1.1
n.m.
+15.7
-43.1
+70.6
+18.9
-2.3 pp
9M04
825
482
1,307
-704
603
-96
9
424
-4
-89
292
53.9
y/y % ch.+1.9
+8.8
+4.3
+2.5
+6.5
-9.5
-60.9
+21.5
-59.8
-29.4
+18.2
-0.9 pp
49
FURTER IMPROVEMENT IN NEW EUROPE ASSET QUALITY WITH HIGHER COVERAGE RATIOS
Net NPLs and Doubtful Loans as % of Total Net Loans
83.2
Jun04 Sep04
84.568.5 72.4
Coverage ratios
On Gross Doubtful Loans
On Gross NPLs
Net NPL/ Loans %
Sep04
Total NE -1.32.7
ch. on Jun04 (pp)
Net Doubtful/Loans %
Sep04
ch. on Jun04 (pp)
5.8-0.3
At unchanged FX
Zaba -1.51.8 2.9+0.0
Unibanka -0.32.8 5.9-0.5
Pekao -1.34.1 8.8-0.3
Bulbank 0.1 -0.71.1-0.1
KFS -0.62.3 5.1-0.5
Further improvement in Coverage ratios and cost of risk
Cost of risk1
-24 bp
(bp, annualised)
120
96
Sep04FY03
1 Calculated as Net Loan Loss Provisions on Net Customer Loans at period-end, 9M04 data annualised
Zivno 0.5 +0.03.4-0.3
Decreasing Net Doubtful/Net Loans and Net NPL/Net Loans ratios in NE
Decreased gross watchlist (-21.0% on Jun04) driven by Zaba (-67.8%) and Pekao (-17.4%) with higher coverage ratio (+1.2 pp to 14.2%)
ITAS
50
Interest margin (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Net operating income
Net income
ROE
Cost/income
TOTAL1
825
482
1,307
-704
603
424
20.2%
53.9%
Net provisions -99
1 Balance due to roundings and other small companies
(Euro mln)
(UCI stake)
Net income3 (UCI’s portion) 292
- of which: Staff costs -353
- of which: Other costs -253
NEW EUROPE DIVISION: 9M04 RESULTS BREAKDOWN BY BANK
- o/w: Net write-down of loans -96
UNI BANKA (77.2%)
19
13
32
-23
9
7
11.9%
73.3%
-2
5
-11
-10
-2
BULBANK (85.2%)
46
31
77
-27
50
20.6%
34.8%
-4
38
32
-11
-11
-4
Group PEKAO (53.0%)
389
309
698
-387
311
21.0%
55.4%
228
-58
125
-195
-138
-50
195
71
266
-146
120
89
20.0%
54.8%
-12
72
Group ZABA
(81.9%)
-79
-47
-19
10
9
19
-15
5
3
5.8%
76.1%
-7
-6
-3
3
-3
135
37
172
-73
99
54
26.6%
42.2%
-35
-29
-21
54
KFS2 (50.0%)
-18
2 Consolidated with proportional method (50%)
21
11
32
-28
4
+5
6.7%
88.2%
-13
-10
+0
+1
Zivno (96.6%)
+0
UniCredit Romania (99.9%)
ITAS
Banks’ data gross of consolidation adjustment
3 Net of consolidation adjustment
51
CONSOLIDATED INCOME STATEMENT: PEKAO
3 Including provisions to reserve for general banking risk
1 Including dividends2 Including depreciations
4 At unchanged FX
(Euro mln)
Net interest income1
Net non interest income
Total revenues
Operating costs2
Operating income
Net write-down of loans
Net extraordinary income
Net income
Other net provisions3
Taxes
Net income for the Group5
% ch.4 on 3Q033Q04
130
93
222
-128
93
-14
+12
79
-2
-10
44
% ch. on 2Q044
-1.5
-16.5
-8.4
-1.4
-17.0
-6.7
n.m.
-4.4
-47.6
n.m.
-4.9
-4.0
-1.0
-2.8
-0.7
-4.1
-10.0
n.m.
+37.4
+76.6
-57.4
+47.0
ITASData gross of consolidation adjustment
9M04
389
309
698
-387
311
-50
+7
228
-7
-32
125
y/y % ch.4
-6.2
+11.9
+1.0
-1.0
+4.4
-27.0
-53.6
+30.5
n.m.
-53.2
+35.3
5 Net of consolidation adjustment
52
2 Calculated as Net Loan Loss Provisions of 2Q04 on Net customers Loans at period-end
PEKAO RESULTS IN 3Q04: REVENUES IMPACTED BY LOWER CONTRIBUTION OF MUTUAL FUNDS COMMISSIONS, GOOD COST CONTROL AND IMPROVED ASSET QUALITY
ITAS
1 Excluding dividends
Total Revenues down 8.4% on 2Q, as a result of:
Substantially stable net interest income (-0.2% on 2Q04), positively impacted by commercial banking activity spread counterbalanced by negative impact of debt securities spread
Lower net commissions mainly due to decreasing sale of Mutual Funds and lower fees from lending activity
Costs down -1.4% on 2Q04 thanks to good cost control
Improved cost of risk also thanks to better macroeconomic environment, increased coverage of doubtful loans (73.4% from 70.2% in Jun04)
Net Income for the Group down 4.9% on 2Q04 (that benefited from a one-off release of deferred tax) and up 47.0% on 3Q03
At unchanged FX
Data gross of consolidation adjustment
Attributable Net Income
3Q04(Euro mln)
44
Total revenues 222
Operating income 93
Cost/Income 57.8%
Cost of Risk2 (annualised) 95 bp
- o/w net interest income1 128
Net write-downs of loans -14
ROE (9M04 data, y/y % ch.)
% ch. on
2Q04
-4.9
-8.4
-17.0
+4.1 pp
-8 bp
-0.2
- o/w net commissions 47 -15.6
-6.7
21.0%
Operating costs -128 -1.4
Tax Rate 10.8% +6.7 pp
% ch. on
3Q03
+47.0
-2.8
-4.1
+1.2 pp
+11 bp
-3.4
-24.1
-10.0
+4.7 pp
-0.7
-17.3 pp
53
3 Including provisions to reserve for general banking risk
1 Including dividends2 Including depreciations
4 At unchanged FX
CONSOLIDATED INCOME STATEMENT: ZAGREBACKA
ITAS
(Euro mln)
Net interest income1
Net non interest income
Total revenues
Operating costs2
Operating income
Net write-down of loans
Net extraordinary income
Net income
Other net provisions3
Taxes
Net income for the Group
% ch.4 on 3Q033Q04
70
30
99
-47
52
-8
+1
40
+3
-7
33
% ch. on 2Q044
+9.6
+80.6
+24.1
-10.6
+91.0
+79.2
n.m.
+107.3
-30.8
+38.7
+109.4
+13.1
+9.9
+12.1
-2.4
+29.5
+51.7
n.m.
+37.7
n.m.
+26.1
+48.6
9M04
195
71
266
-146
120
-19
+0
89
+7
-20
72
y/y % ch.4
+8.7
-5.3
+4.6
+2.4
+7.3
+34.3
-85.1
+9.5
n.m.
+9.4
+13.0
Data gross of consolidation adjustment (excluding Net Income for the Group that is net)