NEW EUROPE: UCIs SECOND HOME MARKET Paolo Fiorentino Head of New Europe Division

NEW EUROPE: UCIs SECOND HOME MARKET

Paolo Fiorentino Head of New Europe Division

ING EMEA Financials Conference 2004

London - April, 20th 2004

2

AGENDA

UCI Group and New Europe Division Highlights

Why New Europe

Strategy and Business Model

Recent Results and 2004 Outlook

3

FY2003 KEY FIGURES

MKT CAP.

Euro 25.4 bn1

NET INCOME

Euro 1,961 mln

ROE2

17.7%

BRANCH NETWORK

4,6373

UCI AT A GLANCE

1 As of 15 April 2004

TOTAL ASSETS

Euro 238 bn

DIRECT DEPOSITS

Euro 135 bn

C/I RATIO

54.5%

REVENUES

Euro 10,465 mln

2 Calculated on end of period net equity, excluding 2003 net income

3 KFS: 100%

4

Pekao

New Europe division

Private & AM division

Pioneer

Xelion

Corporate division

UBM

BMC

Locat

Clarima

UBCasa

Retail division

Zagrebacka

KFS

Bulbank

UniBanka

UC Romania

Zivnostenska

44.6% 29.6% 10.1% 15.7%

Weight on 2003 Group revenues pre Corporate Centre and elisions

Employees (Dec 2003)o/w Italy1

o/w New Europe

70,85140,98229,869

Branches (Dec 2003)o/w Italyo/w New Europeo/w other countries

4,6373,2751,355

7

1 Including other countries ex-New Europe

TODAY THE NEW EUROPE DIVISION ACCOUNTS FOR 16% OF THE GROUP’S TOTAL REVENUES

5

Total assets (Euro mln)

Market share both on loans and on dep.

Net income (Euro mln)

Branches

1,492

2%

6

26

Bulbank - Bulgaria

85.2% acquired in October 2000

End of 2003 data

Group Pekao - Poland53.0%, acquired in May 1999

Total assets (Euro mln) Market share on LoansMarket share on Deposits Net income (Euro mln) Branches

UniCredit – Romania 99.9%, acquired in May 2002


Market share on Loans

Market share on Deposits


Branches

Zagrebacka Group-Croatia

Bosnia-Herzegovina 81.9%, acquired in March 2002

7,627

25%

31%

114

193

UniBanka - Slovakia


Market share on Loans

Market share on Deposits


Branches

940

6%

4%

7

68

77.1%, acquired in October 2000

Total AuM in New Europe of Euro 2.3 billion (as at 31.12.03)

Pioneer

Koç Fin. Serv. - Turkey50%, acquired in October 2002

Warsaw

Bratislava

Sofia

ZagrebBucarest

Prague

Istanbul

Zivnostenska Banka Czech Rep.97.7%, acquired in February 2003

Other presences: Pekao Ukraina, Koc Azerbaijan

Total assets (Euro mln)Market share on LoansMarket share on DepositsNet income (Euro mln)Branches

12,91511%15%195801

1742%1%

328


1,44410%18%

4791


5,2264%5%116148

UCI ACQUIRED A LEADING ROLE IN NEW EUROPE BEING AMONG THE TOP PLAYERS IN THE MOST RELEVANT MARKETS

6.6%

40.1%

18.4%

2.7%

1.5%26.5%

Weight of the bank Total Revenues on Division Total Revenues – only UCI’s portion; balance due to Demir Romlease,Demir Securities, ZBT, ZBAM, and Xelion Poland

3.7%

http://www.fotw.net/images/ro.gif

6

AGENDA


Why New Europe



7

47% of current EU population

8% of EU GDP

NEW EUROPE: A LARGE MARKET WITH HIGH GROWTH POTENTIAL

Year 2003 data

Population, mln

GDP, Euro bn

Per Capita GDP, Euro

EU

377

9,307

24,686

NE(12)

176

4,135

728

Total

552

10,035

Loans +Deposits, Euro bn 17,919 561 18,480

Loans+Deposits/GDP % 193% 70%

Note: NE (12) including all countries which already started a more or less advanced process for EU convergence. In particular, those set for enlargement in May 2004, plus Bulgaria, Romania, Turkey and Croatia.

*EU only for this figures is referred to EU12; **2004-2006 CAGR

Weight of country’s GDP on Total NE area

GDP in 2003 (%)

25.5Poland

10.3Hungary

11.0Czech Rep.

4.0Slovakia

3.3Slovenia

3.4Croatia

28.9Turkey

UCI is present in the most relevant NE countries (82% of GDP in the area)

2.4Bulgaria

Romania 6.9

4.4Baltics

728NE GDP (bn)

New EuropeExcl Turkey

EU*2000 2001 2002 2003e 2004-06**

3.93.5

2.8

1.6

2.8

0.9

3.8

0.4

1.9

4.4GDP Growth

18,179

183%

8

STILL UNDERDEVELOPED RETAIL MARKET

2 2001 figures

(Loans+Deposits)/GDP

Cards per ths inhabitants2

1,280

EUNew

Europe1

349

BANKING PENETRATION in 2003

Lower weight of Asset Management, expected to partially substitute deposits

Mortgages and consumer credit expected to be the key retail products

54.3

UCI’s 3 Italian Banks

UCI’s NE banks

35.6

Non Interest Income/Total revenues in 2003 (%)

Life Insuran.

Pension Funds

Mutual Funds

Retail Bank Deposits

33%

15%

18%

34%

EU3

73%

11%7%9%

New Europe4

Breakdown of retail financial assets

3 2001 data considering France, Germany, Italy, Spain and UK as proxy for EU

4 Countries with UCI’s presence

193%

NewEurope1EU

70%

Share loans retail over total loans

50%

EU NewEurope1

33%

1 Poland, Hungary, Slovenia, Czech Rep., Slovakia, Estonia, Latvia, Lithuania, Bulgaria, Romania, Croatia, Turkey,

9

DECREASING RISKS AND GROWING STABILIZATION

NE declining risk represented by fast decreasing country spread compared to Euro area yield curve

Moody’s Rating

Upgrade

Apr 03-Mar 04

EU entry date

Spread SUEMI*

31 Mar 04

Countries with UCI presence

B1/stableNot

defined yet

248.80TK

A2/stableMay 2004

44.09PL

A1/stableMay 2004

-CZ

Ba3/stable

+2007 169.04RO

A3/stableMay 2004

13.43SK

Baa3/stable20071 107.10HR

Ba2/stable

++2007 131.21BG

0

200

400

600

800

1000

30/1

2/0

2

28/0

2/0

3

30/0

4/0

3

30/0

6/0

3

30/0

8/0

3

30/1

0/0

3

30/1

2/0

3

29/0

2/0

4

Suemi Latin Suemi New Europe Suemi General

*Spread over Euro yield Interest Rates Curve - SUEMI

10

AGENDA


Why New Europe



11

NEW EUROPE DIVISION: STRATEGIC OBJECTIVES

Different strategic focus with: “Leading Banks” in 3-4 countries: N.1 player in the market, focused on constant

improvement of bottom line while maintaining market shares and fulfilling their institutional role within local communities

“Emerging Leaders” in 3-4 countries: banks focused on growth through enlargement of Golden Customer’s base (customer acquisition program) with final goal of being in the “top 5” in the market

Clear N.1 Banking Group in New Europe for profitability, value creation, cost/income and AUMs

Best risk manager in the New Europe region

Focus on building a long term sustainable franchise and on assuring higher customer loyalty, through a superior quality of services

Future growth driven mainly by organic growth (with some potential acquisitions)

Possible completion of geographic coverage in New Europe, also leveraging on “managerial hubs” (eg. Zaba, Pekao)

12

UCI’s COMMERCIAL PRESENCE IS RELEVANT IN THE REGION: 1.355 BRANCHES IN 8 COUNTRIES AND ALMOST 18,300 FRONT OFFICE STAFF …

1 79 operative PFAs + 45 PFAs on training in Xelion Polska

Poland

FO staff ~11,800PFAs¹ ~ 125Branches 801

Croatia & Bosnia Herzegovina

FO staff ~2,400Branches 193

Turkey

FO staff ~1,750Branches 148

Bulgaria

FO staff ~950Branches 91

Slovakia


Czech Republic


Romania


18,300 Front-office staff 1,355 Branches

Pekao

ZivnoUniBanka

UCR

Bulbank

KFS

13

FamilyBankingSB/AffluentPrivateCorporate

… SUPPORTED BY SPECIALISED SERVICE MODELS BY SEGMENT SERVING AROUND 6,6 MILLION CLIENTS IN THE AREA

N° of Clients

N° of dedicated Salesforce 14.200

Each Bank has a specific divisionalised organisation: Pekao has 4 business divisions (Family, VIP-SME, Private, Corporate) KFS and Zivno have 3 business divisions (Retail, Private, Corporate) Zaba, Bulbank, UCR and UniBanka have 2 business divisions (Retail, Corporate)

~5,5 mln~1 mlnGolden clients~60.000

Target Products

1.100

AUM

Packages

Credit cards

For Affluent: AUM, Life insurance, Packages, Credit cards Mortgages

For SB: Packages Lending

Accumulation plans

Pension Funds

Packages

Credit cards

Mortgages

Cash Management

Trade finance Structured and

Project Finance

Leasing

14

KNOW HOW TRANSFER THROUGH CROSS BORDER PROJECTS AND UCI MANAGEMENT’S COMMITMENT (PARTNERSHIP COMMITTEE)

A team of ~45 expatriates covering key positions in 7 countries (Commercial and Control functions)

A team of ~70 people in NE Division supporting the banks in their key strategic projects

Planning & Development Retail & Corporate Credit risk & processes Organisation & HR IT Strategy Legal issues

A group of ~20 people in UCI Holding dedicated to NE banks

Around 100 projects launched during 2003 in NE banks

Cross Border projects UCI/New Europe

Cross border transfer of niches of excellence in New Europe banks

A variety of areas of intervention Launch of new products Client acquisition Network expansion Sales performance culture Credit processes and tools

ProjectsPeople

15

AGENDA


Why New Europe



16

RESULTS SO FAR

Perimeter for 1999: Group Pekao only; for 2000 and 2001: Group Pekao, Bulbank, Unibanka and Splitska (sold in Apr. 02); for 2002: Group Pekao, Zagrebacka Banka, Bulbank, UniBanka, UniCredit Romania; for 2003: Group Pekao, Zagrebacka Banka, KFS, Zivnostenska, Bulbank, UniBanka, UniCredit Romania

Branches

Total Revenues

CAGR +19.8%

(Euro mln)

1999 2003

786

1,619

Operating Income

CAGR +30.8%

(Euro mln)

244

715

1999 2003

Cost/Income

-13.1 pp

1999 2003

69.0%

55.9%

Net Profit for the Group

CAGR +69.7%

(Euro mln)

1999 2003

37

307

ROE

+13.2 pp

17.4%

4.2%

1999 20031 Including KFS 100%

At Current FX

+635 Branches

1999 20031

720

1,355

17

2003 RESULTS SHOW A GOOD GROWTH OF NET INCOME THANKS TO HIGHER NET COMMISSIONS, COST CONTROL AND LOWER PROVISIONS NEEDS

Attr. Net Income

FY03(Euro mln)

y/y % ch.

+45.5307

Total revenues -3.21,619

Operating income -10.7715

FY03(Euro mln)

y/y % ch.

Loans +3.211,848

Deposits +0.520,555

AUM3 +54.12,346

Cost/Income +3.7 pp55.9%

Cost of Risk -72 bp2117 bp

- o/w net interest income1 -3.61,036

At unchanged FX

At unchanged FX

- of which commissions +26.9418

Net write-downs of loans -61.5-139

ROE +3.8 pp17.4%

NET INCOME FOR THE GROUP up 45.5% y/y

Net interest income -3.6% y/y mainly hit by Pekao results, acceleration in 4Q03 (+3.7% on 3Q03) primarily thanks to Pekao and Zaba

Higher growth in net commissions benefiting from development of AUM3 products (stock: +54.1% y/y)

Operating costs +3.6% linked to IT investments and variable staff compensation

Decreased cost of risk (117 bp), improved NPL and Doubtful loans coverage ratios

VOLUMES:

Customer loans up 3.2% supported by higher growth in Croatia, Bulgaria and Turkey negatively impacted by Poland

Further switch from deposits to AUM

3 New Europe business area of PioneerITAS2 Deducting extraordinary provisions from 2002 stated figure

1 Excluding dividends

18

NE BANKS POSITIONING IN KEY RETAIL PRODUCTS IS IMPROVING …

AUM

Key issues

1 Pioneer Market Share in Poland 2 In Romania MFs are going to be launched

Achievements/Positioning

Leverage on Pioneer expertise Segment-tailored AUM products Development of innovative structured

products with TLab and UBM

Leaders in MFs: Pekao ~ 30% market share1, Zaba ~49% and Bulgaria ~40%, Other NE banks are in top five competitors list2

Leading position in Structured Time Deposits

Bulbank and Zaba: first movers in structured products (Bulbank also in MFs)

Mortgages

Enrichment of product offer (Mortgage + Life Insurance)

Cross selling commercial campaigns (Pekao)

Development of cooperation agreements with external partners (real estate agents)

Sales process optimization: fast and easy process, highly skilled salesforce and dedicated location (Pekao, Bulbank, Unibanka)

High credit quality, thanks to the implementation of application processing system and the adoption of sound credit policies

Launch of mortgages in UCR

Excellent sales results: Zaba: Leader with 40% market

share Pekao: strong acceleration in LC

mortgages in 1Q04 Bulbank: 133% volume growth and

+68% in new mortgages (1Q04/1Q03)

UniBanka: sales of mortgage loans started in July 2002 reaching the 5th position in the market

19

… THANKS TO A NUMBER OF PRODUCT INNOVATION PROJECTS RUNNING …

Key issues Achievements/Positioning

Cards (Debit and Credit)

Bancassurance Completion of distribution

agreements (Allianz1, Aviva2) and product innovation (Unit Linked for Bulbank and Zaba as first movers in 2004)

Zaba and Pekao leaders in 2003 new business (life) to be considered good starting point

1 Life: Bulgaria, Croatia, Poland (pre JV agreement), Slovakia,Turkey. Non Life: Romania

2 Life: Czech Republic.

Small Business

Implementation of complete product offer based on client segmentation across NE Banks

New distribution channels

Adequate risk management and organisation

UCI / NE Banks treated as Key Global Client by MasterCard

Launch of revolving cards in all NE Banks

Launch of card business in UCR Instalment payment option launched

for all KOC Credit Card (400 K – EOP 2003)

Massive Visa Electron issuing at ZABA (500 K - in 9 months)

First movers in launch of dedicated packages

Specific credit product offer Dedicated SB leasing offer in Pekao and

Zaba Implementation of CPA tool - Client

Profile Assessment

Dedicated service model with Relationship managers with micro/ small business portfolios assigned

Joint service model (SB + owner) to cross capture opportunities

20

… ALSO IN CORPORATE BANKING

Cash Management

Key issues Achievements

Structured and Project Finance

Specialised cash management units in all NE banks:

Focus on upgrading the product shelf Introduction of new value added

products (cash pooling, direct debit, etc.)

Same training to specialists for supporting sales

Increasing capabilities in Project Finance in key markets (Poland, Croatia, Bulgaria, Turkey)

Offer completed and marketed

Sales started

KPIs inserted in all RM targets

Strenghtened teams in Bank Pekao, Zaba and Koc

Prestigious transactions already won in Poland (KHGM, Simoldes, SSN, others) and in Croatia

Trade finance Interfactoring agreement with UCI

Factoring for cross-border factoring

Refocusing of sales force for trade finance products

Successful completion

Volumes increased in Zivno and Koc

Sales force refocus already completed in Pekao

21

CAREFUL RISK MANAGEMENT2002-2004 CREDIT EXCELLENCE PROGRAM, GOOD RESULTS IN 2003

Cost of risk1

-38.1%

(bp, annualised)

1892

117

20032002

79.9

2002 2003

81.3

62.6 64.1

Coverage ratios

On Gross Doubtful Loans

On Gross NPLs

Net NPL/ Loans %

Dec03

Total NE -0.23.3

ch. on Dec02 (pp)

Net Doubtful/Loans %

Dec03

ch. on Dec02 (pp)

8.6-0.1

At unchanged FX

Ow: Zaba -0.82.2 4.6-0.7

Ow: Pekao +1.64.7 12.9+0.9

Total provisions on Performing Loans to 168 mln (+82.8% on Dec02) with an increase in the coverage ratio (+0.6 pp to 1.5%)

5 credit modules designed, set-up and implemented (corporate underwriting, management and workout, individuals and small business underwriting)

UCI Group credit corporate governance defined and introduced (i.e. large exposure management, credit tableau de bord, …)

Skill assessments and training prepared and launched for roles involved in credit activities

Tactical actions: credit diagnostics and contingency plan actions

Learning organisation (3,800 people involved throughout New Europe)

1 Calculated as Net Loan Loss Provisions on Net customers Loans at period-end

2 Data obtained deducting extraordinary provisions from stated figure

22

2004 DIVISIONAL OUTLOOK IS VERY POSITIVE WITH SIGNIFICANT REVENUE GROWTH EXPECTED MAINLY DUE TO AN INCREASE IN COMMISSIONS

Significant revenue growth with strong push on net commissions

Volumes growth both in loans and in Assets under Management

Improvement in cost/income ratio and bottom line results

Implementation of relevant strategic projects to support future growth

Salesforce management program Client acquisition and development project throughout New Europe Network expansion in Turkey and Czech Republic Customer and employee satisfaction project in Poland and Croatia Reengineering projects to improve operational efficiency Credit learning program

Decrease in cost of risk, with improvement of NPL ratio and increase of the coverage ratio

Further macroeconomic improvement all over the New Europe area

Reduction of country risk

23

Annex

24

Net extraordinary income

Net non interest income

Total revenues

Operating income

Provisions on loans

Administrative costs (incl. depr.)

Net income

Other net provisions*

Goodwill depr.

(Euro mln)

Minorities

Taxes

% ch. on 3Q03 4Q03

1,306

2,541

-1,510

1,031

-440

160

380

-76

-60

-19

-216

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

% ch. on 4Q02

UNICREDITO ITALIANO: FY03 CONSOLIDATED INCOME STATEMENT

y/y % ch.

+8.9

+7.7

+1.8

-2.5

-41.1

+1.6

+2.0

-49.0

+7.8

FY03

Net interest income (incl. div.) 1,235-3.85,088

5,377

10,465

-5,703

4,762

-1,001

215

1,961

-236

-264

-22.3-129

+4.0-1,386

- of which Dividends 84+35.6293

-15.4

+0.2

+1.6

n.m.

n.m.

+10.3

-8.9

n.m.

-11.8

-44.3

-37.7

+8.0

+7.0

+1.0

+32.5

-27.2

+2.7

-1.2

-75.4

+1.7

-34.0

+18.2

+3.1 -4.6

n.m. +68.0

25

Interest margin (incl. div.)

Net non interest income

Total revenues

Operating costs (incl. dep.)

Net operating income

Net income

ROE

Cost/income

TOTAL1

1,042

577

1,619

-904

715

427

17.4%

55.9%

Net provisions -177

1 Balance due to roundings and other small companies

(Euro mln)

(UCI stake)

Net income (UCI’s portion) 307

- of which: Staff costs -446

- of which: Other costs -336

NEW EUROPE DIVISION: RESULTS BREAKDOWN BY BANK

- o/w: Net write-down of loans -139

UNI BANKA (77.1%)

27

13

40

-29

11

7

10.1%

73.4%

-7

5

-13

-13

-5

BULBANK (85.2%)

50

37

87

-34

53

20.2%

39.1%

+6

47

40

-14

-15

+5

Group PEKAO (53.0%)

510

344

853

-490

363

14.9%

57.5%

195

-107

104

-243

-182

-103

257

108

365

-201

164

114

21.7%

55.1%

-27

93

Group ZABA

(81.9%)

-112

-65

-4

7

10

17

-12

5

3

10.5%

71.4%

-6

-5

-2

3

-1

162

46

208

-94

114

58

28.6%

45.1%

-40

-40

-39

58

KFS2 (50.0%)

-29

2 Consolidated with proportional method (50%)

26

16

43

-35

7

6

7.0%

82.9%

-15

-13

-2

6

Zivno (97.7%)

-2

UniCredit Romania (99.9%)

ITAS

Banks’ data net of consolidation adjustment

261 Excluding dividends

MACROECONOMIC TREND IN POLAND: Economic strenghtening (GDP+4.7% 4Q03/4Q02, +3.7%

FY03/FY02) reverting the upward trend in NPLs ratio, started in 1996

150 bp cut of interest rate creating pressure on net interest income

Recovery in households savings and change in customer behaviour supported sale of mutual funds

IMPROVED PROFITABILITY thanks to commissions growth and reduced Cost of Risk

Net interest income down 19.0% y/y mainly impacted by decreased spread on deposits (from 2.6% to 1.7%) and debt securities (from 2.4% to 1.5%)

Net commissions up 30.5% y/y benefiting from increased AUM2 (stock +85.5%, mkt share +6.5 pp to 30.4%) and from quality upgrade of C/A

Increased coverage ratio on doubtful loans (64.5% in Dec03 from 62.1% in Dec02) and on NPL (82.3% vs. 81.4%)

SPECIAL PROJECTS: Development of credit scoring system New IT implementation allowing further optimisation of staff level:

headcount -6.4% to 16,641 and -6.3% to 15,826 at bank level

VOLUMES: Customer loans down 12.6% y/y: decreased corporate lending

and FX mortgages partially counterbalanced by a good increase in local currency retail mortgages flow

PEKAO 2003 KEY HIGHLIGHTS: IMPROVED PROFITABILITY THANKS TO HIGHER COMMISSIONS AND LOWER PROVISIONS NEEDS AND DESPITE PRESSURE ON NET INTEREST INCOME

FY03(Euro mln)

y/y % ch.

Total revenues -16.3853

FY03(Euro mln)

y/y % ch.

Loans -12.65,192

Deposits -5.210,071

AUM2 +85.52,146

At unchanged FX

At unchanged FX

Attr. Net Income +14.8104

Operating income -34.5363

Cost/Income +11.8 pp57.5%

Cost of Risk -3.3 pp198 bp

- o/w net interest income1 -19.0512

- of which commissions +30.5234

Net write-downs of loans -67.1-103

ROE +2.2 pp14.9%

2 PPIM

Data net of consolidation adjustment

ITAS

27

MACROECONOMIC SCENARIO

2004 PRODUCT FOCUS, LEVERAGING ON ECONOMIC GROWTH, SALESFORCE AND BRANCH MODEL

2004 PRODUCT FOCUS

Continued economic recovery: GDP: +4.2% in 04E (+3.7% in 03)

cagr 04/06 4.8% Loans: +10.2% in 04E (+8.1% in

03) cagr 04/06 +9.8% Deposits: +5.0% in 04E (+3.7% in

03) cagr 04/06 +6.5%

Push on mortgages: Strong market growth +29% in 2004e Shorter granting process, enriched product offer,

new distribution channels through alliances Selective focus on lending to SME and Mid

corporate

Evolving households preferences in terms of saving products

(AUM/Total deposits1 from 10.3% in 2003 to 12.1% in 2004)

Leader in mutual funds: Product enrichment, leveraging on Pioneer expertise Increased client penetration and new clients

acquisition Accumulation Plans (PAK) offer

Stabilisation of interest rates, still with pressure on margins

Focus on commissions generating products: Massive charge/credit cards campaign Continued upgrade of current accounts New cash management offer

Positive impact of economic recovery on loan portfolio quality and on cost of risk

Decreased NPL ratio Improvement in NPL portfolio management and

workout activity

1 Including AUM

28 Data net of consolidation adjustment

2004 STRATEGIC PRODUCTS AND FORECAST

2003 MAIN ACTIONS

GOOD RESULTS IN 2003 FOR ZABA, KOC AND ZIVNO; PROMISING FORECAST FOR 2004

Divisionalisation and segment based product innovation

Credit process optimisation

Preparation activity for Integration of VABA1 in Zaba

Implementation of new organisational model and reinforcement of management team

Improved service model and credit process

Repositioning of local Brand

Cross selling and retention activities

Further efficiency improvement after the merger of VABA1 in ZABA and of the two Bosnian banks

Market Shares consolidation

Strong acquisition of new clients Network expansion (+20 branches) Launch of new products (C/A

packages, Pioneer funds, PAC2) Increase in net commissions with

strong push on AUM, package products and credit cards

Strong acquisition of new clients Network expansion: around

+100% in n° of branches Improvements in efficiency Increase in market shares

1 Varazdinska Banka2 Capital Accumulation Plans

2003 RESULTS3

Strong increase in operating income (+28.2% y/y)

Good cost control (-2.7% y/y)

Higher loans mkt sh. (to 25.2%, +1.2 pp), mkt sh. in AUM at 49%

Strong contribution of net commissions (+79.2% y/y) driven by AUM (mkt sh. 13%)

Significant revenue growth (+45.8% y/y)

Costs under control (-1.2% y/y)

Increase in revenues with flat costs

Strong improvement in bottom line results

3 at unchanged FX excluding for KFSITAS

KFS

Zagrebacka

29

TREND IN VOLUMES AND COMMERCIAL INDICATORS

VOLUMES (at unchanged FX)

COMMERCIAL INDICATORS

Front Office Staff/ Tot. Staff2

61.1%59.7%

Dec02 Dec03

Branches2

1,3551,347

Dec02 Dec03

Active Customers2 (mln)

6.66.0

Dec02 Dec03

15% 15% golden

other

2 KFS is included at 100%

Deposits (Euro bn)Loans (Euro bn) Assets under Management1 (Euro bn)

Jun02 Dec03Dec02

2.32.01.5

+14.7%

+54.1%

Jun03 Dec03 Dec02

11.811.711.5

+1.0%

+3.2%

Jun03 Dec03 Dec02

20.620.220.4

+1.7%

+0.5%

1 New Europe business area of Pioneer ITAS

30

Euro 1,6 bn AUM (+91.8% on Dec02) +1,000 new active Private clients (+21.6%) 1° in leasing, among top 3 in AM

KFS

PEKAO

Euro 1.7 bn AUM in Mutual Funds1 (+112% on Dec02)

Market Share in Mutual Funds2 +6.5 pp (to 30.4%)

Euro 154 mln AUM in Pension Funds (+39.6% on Dec02)

Euro 95 mln AUM in Accumulation Plans

Euro 82 mln AUM in Mutual Funds (+36.8% on Dec02)

Euro 10 mln in Life Insurance (+97.4% y/y) +110,000 C/A in 2003 (to 1.7 mln) Flow of new mortgage +33.8% (to 340 mln) Total loans mkt share +1.2 pp (to 25.2%)

ZABA

UNIBANKA

Euro 12.2 mln AUM (from 3.1 mln in 2002) +30% Affluent clients (to 19,500) +40 bp mkt share on Deposits

Loans +105% (to Euro 110 mln) Deposits +110% (to Euro 99 mln), mkt sh.

+50bp (to 1,1%) New retail C/A +90% (to 13,000)

UCROMANIA

Credit and Debit Cards +33%

ZIVNO

BULBANK Corporate Loans +61% on Dec02, mkt share

+1.3 pp (to 11.7%) Flow of new mortgage +68.5% (to 10.3 mln) +66.000 clients (+24.3% on Dec02)

2003 SUCCESSFUL COMMERCIAL ACHIEVEMENTS SUPPORT THE REVENUE GENERATIONIMPROVEMENT IN MARKET SHARES

1 Mutual funds distributed by Pekao

2 Total PPIM Mutual Funds

31

3 Including Momentum

1 Balance due to market and FX effects

Italy

New Europe

(Euro mln)

80,759

1,522

TOTAL PIONEER

Alternative Investments3

103,687

1,517

632

284

2,104

107

US 17,665 962

International (ex-Italy)3 3,741 226

AuM as of 31.12.2002

2Q03

2003 Quarterly Net Sales

1,253

362

3,330

191

1,149

566

US in USD 18.525 1,035

85,876

2,347

115,985

2,449

21,884

5,878

AuM as of 30.12.20031

27,639

AuM as of 29.02.20042

90,237

23,480

6,170

2,659

122,546

2,710

29,1571,299

3Q03

-126

331

1,161

256

703

253

794

1Q03

372

69

2,349

411

993

915

1,177

4Q03

PGAM GROUP: QUARTERLY EVOLUTION OF 2003 NET SALES AND DEC02-FEB04 AUM TREND

2 Provisional figures including ING (not included in 2003 data). ING AUM as of 29.2.2004: 2,867 mln

More than 80% through UCI NE Banks

32

THE 2002-2004 “REACHING CREDIT EXCELLENCE IN NE” PROGRAM:DECREASING COST OF RISK IN EACH PHASE OF THE PROCESS FOR ALL THE CUSTOMER SEGMENTS

WorkoutManagementUnderwriting

Corporate

Small Businesses

Retail

1. Electronic underwriting tool

2. Credit rating system

4. Credit management system

3. Application processing system

6. Workout systemt

5. Anomalies management system

7. Collection system

8. Credit corporate governance

9. Credit Tableau de Bord

10. Learning organisation (3,800 people involved throughout New Europe)

Cross-bank project

33

Provide an overview of the main specialized lending products and services

Module 3: Specialized lending

STRUCTURE OF THE REACHING CREDIT EXCELLENCE DIPLOMA

Provide a broad perspective of the entire credit system, illustrating the logics behind the definition of credit strategies and policies

Module 1: Credit organization, strategy and policies

Provide a hands-on experience of UCIs most advanced credit underwriting methodologies and processes

Module 2: Underwriting

Provide an understanding of UCIs most advanced logics, methodologies and processes for Corporate and SB credit monitoring

Module 4: Credit monitoring and management

Illustrate UCI most advanced logics and methodologies for the workout of Corporate and Retail not performing loans

Module 5: Workout and debt restructuring

Documents

NEW EUROPE: UCIs SECOND HOME MARKET Paolo Fiorentino Head of New Europe Division