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Luca Majocchi UCI Group Deputy CEO

IS GROWING IN RETAIL FINANCIAL SERVICES A SINGLE PATH STRATEGY ?. Luca Majocchi UCI Group Deputy CEO. Goldman Sachs European Financials Conference 2002 Venice, June 10 th -12 st 2002. Agenda. Growth opportunities of the European retail business “gameboard”

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Luca Majocchi UCI Group Deputy CEO

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  1. IS GROWING IN RETAIL FINANCIAL SERVICES A SINGLE PATH STRATEGY ? Luca Majocchi UCI Group Deputy CEO Goldman Sachs European Financials Conference 2002 Venice, June 10th-12st 2002

  2. Agenda Growth opportunities of the European retail business “gameboard” UCI’s portfolio strategy for retail growth Conclusions

  3. PERFORMANCE FORECAST OF EUROPEAN BANKS SEES A SLOWDOWN OF RETAIL EARNINGS GROWTH RATE Performance forecast for European financial players Percent REVENUE Y/Y GROWTH (2002 on 2001) GROSS OPERATING PROFIT Y/Y GROWTH (2002 on 2001) Retail 5.7 9.7 Wholesale 7.6 12.2 Supra-regionals 7.7 13.8 Investment services 8.8 19.3 Source: UBS Warburg

  4. WHILE RETAIL GROWTH AT EUROPEAN LEVEL MIGHT BE AN ISSUE, SIGNIFICANT DIFFERENCES EXIST BY COUNTRY Growth of retail revenue pool by country Cumulated growth 2000-2005, Percent UCI Presence Revenues/Inhabitants (Euro, 2000) 58% 510 950 585 42% 795 39% 37% 35% 765 31% 25% Average Core Europe New Europe France Germany Italy UK Spain

  5. IN CORE EUROPE SIZE OF RETAIL REVENUE POOL APPEARS TO BE RELATED TO COUNTRY-SPECIFIC STAGE OF INDUSTRY EVOLUTION Financial industry concentration and revenue pool by country 4.00 MATURE Size of revenue pool (20 Euro bn) IN BETWEEN FINANCIAL SERVICES REVENUE/GDP (Percent) POTENTIAL 2.75 30 75 TOP 5 PLAYERS MARKET SHARE BY ASSETS (Percent)

  6. IN ITALY, DUE TO WIDESPREAD USE OF FEDERAL MODELS, LEADING PLAYERS ARE FEWER (AND SMALLER) THAN WHAT CONSOLIDATED FIGURES SHOW Branches mkt share, % Branches mkt share, % GROUP GROUP BANK 11.1 9.7 IntesaBCI Group UCI Banca* UCI Sanpaolo IMI Group (incl. Cardine) 10.4 7.9 IntesaBCI SpA IntesaBCI 4.7 10.1 Sanpaolo IMI SpA Sanpaolo IMI UCI Group B. di Roma Group (incl. Bipop) 7.4 4.1 Banca di Roma SpA B. di Roma 3.3 6.2 Banca MPS SpA MPS Montepaschi Group Banca Antoniana Pop. Veneta Scrl B. Pop. Verona e Novara Group 3.1 3.9 Antonveneta 2.5 3.4 Banco di Napoli SpA Sanpaolo IMI Antonveneta Group Banca Lombarda Group 2.4 2.6 BNL SpA BNL 2.0 2.5 Banco di Sicilia SpA B. di Roma BNL Group B. Pop. Lodi Group BP Verona e Novara Banca Pop. di Novara Scrl 2.1 1.8 * Sum of the current 7 banks of UCI Group to be merged July 1st 2002

  7. OTHER THAN BY COUNTRY, GROWTH AND PROFITABILITY PATTERNS VARY SIGNIFICANTLY ACROSS RETAIL BUSINESS SEGMENTS Financial services attractiveness in core Europe = 20 bn revenues AG= Asset Gathering - Single most profitable and growing industry in Europe 14% CF= Consumer Finance - Heterogeneous growth and spreads between countries RE= Retail banking (individuals) - Growth and profitability driven by affluent and private asset gathering REVENUE GROWTH 2001-2005 CB= Corporate banking (SMEs) - Attractive growth but negative Rarorac due to lending CF AM= Asset management - Strong growth and high Rarorac 2% -8% 46% RARORAC 2000

  8. Agenda Growth opportunities of the European retail business “gameboard” UCI’s portfolio strategy for retail growth Conclusions

  9. UNICREDIT STRATEGY IS TO DEVELOP RETAIL TOP LINE BY GROWING MARKET SHARE ALONG FOUR KEY COMPLEMENTARY DIRECTIONS UCI GROWTH STRATEGY Increase penetration of existing customer base Continue external/ organic growth to strengthen market share Upside in Italian domestic market Improve market coverage by selective branch network expansion/ acquisitions Grow top line while keeping leading edge efficiency Strengthen leading market positions in new “domestic” markets (Central Europe) Consolidate position in new Europe and build presence in core Europe Enter new, highly attractive markets Enter core European countries selectively addressing retail segments

  10. IN ITALY, ORGANIC GROWTH OPPORTUNITIES EXIST BY BOTH DEVELOPING THE EXISTING CUSTOMER BASE AND GETTING NEW CLIENTS THROUGH NEW SPECIALISED BRANCHES Share of wallet increase Branch network expansion Mass affluent & Private Banking UCI market share in Italy, % 30 25 32 6 24 21 53% 19 +9 pp 7 44% 4 12 Equal to 16 bn of incremental assets 21 5 9 20 6 9 2 6 4 Current Average 2004 Targets GDP per capita (Euro) >25,000 3 20,000<GDP<25,000 <20,000

  11. ORGANIC GROWTH WILL BE SYSTEMATICALLY COMPARED WITH EXTERNAL GROWTH OPPORTUNITIES ILLUSTRATIVE Organic vs. external growth benchmarking NPV Index per branch 199 169 Maximum Branch opening return range 119 Minimum 85 71 47 Target Bank Bank A Bank B Bank C Bank D Bank E Bank F MAKE (Open Branch) To be decided BUY (Acquire bank)

  12. IN NEW EUROPE AREA, CONSOLIDATION AND CROSS THE BORDER SYNERGIES WILL FOLLOW LAST THREE YEARS OF FRANCHISE BUILDING UCI position in New Europe (2001) Deposits market share, percent GDP CAGR 2000-2004, % 3.57 36.0 4.20 2.52 23.3 16.4 3.82 4.35 3.5 0.7 Poland Romania Croatia Slovakia Bulgaria 201.9 22.4 41.1 22.9 15.2 GDP, Euro bn 38.6 5.4 22.4 4.4 7.9 Inhabitants, mln

  13. IN CORE EUROPE, COUNTRY AND PRODUCT DIFFERENCES LEAD TO A STRATEGIC MAP OF RETAIL OPPORTUNITIES Retail strategic map "Hot" ”Warm" Percent UK GER F I SP RETAIL & SMES ASSET GATHERING CONSUMER FINANCE CORPORATE BANKING ASSET MANAGEMENT

  14. CROSS THE BORDER AND DOMESTIC TRANSACTIONS WILL BE ABLE TO LEVERAGE TRANSFER OF RETAIL SKILLS THAT UCI ALREADY DEMONSTRATED IN ITALY ... Performance improvement of UCI Italian Banks 1998-2001 INCOME GROWTH 38.3% Transfer of retail skills (customer segmentation, product innovation, sales management, service models) GROSS OPERATING INCOME GROWTH 16.1% 95.6% UCI saving banks* Italian industry average 23.3% OPERATING COST GROWTH 11.4% UCI saving banks* Italian industry average Cost control and synergies through centralised operations (IT, back offices, logistics) 0.4% UCI saving banks* Italian industry average * Banca CRT, Cariverona, Cassamarca

  15. ... AND IN NEW EUROPE Bank Pekao performance compared with Polish banking system 2000-2001 2001/2000 % GROWTH NET INTEREST INCOME NET COMMISSIONS 46 Banking System 7 7 20 17 Pekao Best perf. Pekao -6 Pekao Best perf. BH Banking System OVERHEADS COSTS NET INCOME 65 65 18 Banking System Best perf. Pekao Pekao Pekao Best perf. Pekao Banking System -4 -4 -29

  16. Agenda Growth opportunities of the European retail business “gameboard” UCI’s portfolio strategy for retail growth Conclusions

  17. IN SUMMARY ..... • The European market is very complex, with different growth perspectives depending on country and business, and UCI strategy is to selectively focus on businesses and countries with the highest potential • Growth will leverage superior retail skills developed in the highly competitive Italian market and our track record is there • Growth will be pursued consistently exploiting all levers of organic and external growth

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