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ILLUSTRATIVE

REPORT

OF THE DIRECTORS

Capital increase in accordance with article 2441, paragraph four, of the civil code, up to a maximum amount of € 2.343.642.931,00, corresponding to up to 4.687.285.862 ordinary shares, to be paid by contribution of Bayerische Hypo-und Vereinsbank A.G. (“HVB”), Bank Austria Creditanstalt A.G. (“Bank Austria”) and Bank BPH S.A. (“BPH”) shares, with consequent amendment of the first paragraph of article 5 of the Company’s By-Laws.

Dear Shareholders,

This extraordinary shareholders meeting has been convened to resolve upon a proposal to increase the Company’s capital to be paid in by contribution in kind of: (i) HVB’s ordinary bearer and registered preference shares; (ii) Bank Austria’s ordinary bearer and registered preference shares; (iii) BPH’s ordinary bearer shares, and on the consequent amendments to the Company’s By-Laws.

The capital increase is finalised to the implementation of the envisaged combination between the UniCredit Group and the HVB Group, whose main principles are set out in an agreement (“Business Combination Agreement” or “BCA”) whereby UniCredit and HVB have agreed upon the terms of the aforementioned offers, the organizational and business model of the new Group, its governance and the lines for the definition of the future structure of the Group.

The aforementioned agreement contemplates, firstly, the acquisition of control of the HVB Group through the launching by UniCredit of: (i) a public exchange offer to acquire up to 100% of the share capital of HVB and (ii) two voluntary offers to acquire up to 100% of the shares of Bank Austria and BPH – in which HVB and Bank Austria hold a stake of 77,5% and 71,0% respectively. Taking into account the shares already held by HVB and Bank Austria in their respective subsidiaries, the proposed capital increase would be authorised to acquire - should the offers on Bank Austria and BPH be completely successful - a direct holding amounting to 22,5% of the share capital of Bank Austria and to 29,0% of the share capital of BPH.

You will find below an illustration of the rationale underlying our proposal and of the significant advantages that – upon completion of the aforementioned offers – would derive to the Company by the envisaged combination, which would lead to the creation of a Banking Group among the three first European players in the Eurozone.

1. RATIONALE AND MAIN ELEMENTS OF THE TRANSACTION

In the past decade, UniCredit showed a significant ability to create value, by generating, since the year of its privatisation (1993), a constant growth of per-share profits, which

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increased at a yearly rate of 33%, from the equivalent of € 0,02 per share in 1994 to € 0,34 per share in 2004.

To achieve such goals, the UniCredit Group was capable of leveraging both on external – through mergers and acquisitions – and on organic growth.

In particular, as far as the external growth is concerned, the UniCredit Group has achieved excellent results in restructuring various companies acquired in Italy and abroad. It should be noted in this connection that, since the year of its acquisition (1999), Bank Pekao reduced its cost/income from 69% to 55%, with a corresponding growth of the per-share price of 143%1. Since 2001, Pioneer reduced its cost/income from 78% to 51%. Moreover, from 1994 to 2004, the overall Group reduced its cost/income from 86% to 57%, also due to the integration of the regional banks following implementation of the S3 Project.

Capitalising on the S3 Project, which led to a strong focus on client segments, the UniCredit Group developed its capabilities for organic growth. Actually, between 2002 and the first quarter of 2005, the market share for lending in Italy increased from 9,9% to 10,9%, while, in 2004, 99.000 new retail clients were acquired, net of operational reclassifications. Between 2002 and the first quarter of 2005, the share of managed assets from extra-Group networks increased of 50%, from € 38 billion to € 57 billion.

Thanks to such track-record, UniCredit shares steadily rank among the most profitable securities in the Italian market, with a dividend yield of 5,3%. However, failing further growth opportunities, there is the risk that UniCredit shares could be perceived in the market as a high-yield bond, with a high yearly coupon but with limited prospects for price growth.

Against this background, the opportunities to create value which can generate positive effects on UniCredit shares’ prices in the mid-term do not seem to leave out of consideration external growth strategies. Additionally, it should be pointed out that the possibilities to implement such a strategy are limited, in light of the scarcity of available opportunities. Furthermore, any research for possible targets must take account of certain restraints: firstly, any transaction shall ensure both the preservation of dividends in the short term and growth in the following years; indeed, growth in the medium-long term cannot be detrimental to shareholders in the short term. Secondly, the transaction must give scope to create entities with increased strategic opportunities: increased geographical diversification; economies of scale in production businesses; further consolidation opportunities. Finally, each transaction must be justified by a clear equity story, within which UniCredit may take advantage of its restructuring skills and UniCredit together with the target may create a new entity with excellence features, thereby generating signficant synergies.

In light of the foregoing, the business combination with the HVB Group appears as the most interesting opportunity available at the moment. Indeed, there is no space in Italy for middle-sized or big transactions, but only for selected growth opportunities in specific businesses (if any). In other western Europe markets, notwithstanding the ostensible flurry of possible initiatives, a little number of transactions has been carried out. In such a scenario, due to its size, UniCredit could not easily propose itself in the role of the combination leader. Moreover, UniCredit’s growth initiatives continue both in Central Eastern Europe (“CEE”) – where such opportunities are at this stage limited and onerous – and in other markets (e.g. China), but cannot deliver a “strategic leap” to the Group.

1 On the basis of the price as of 2 June 2005 relative to the purchase price.

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The combination between the UniCredit Group the HVB Group would lead to the creation of a banking group among the three first European players in the Eurozone, with aggregate clients volumes amounting to approximately € 800 billion. The contribution by the HVB Group to the newly created entity would be significant both in terms of volumes and of banking revenues, amounting respectively to 64% and 47% of the combined Group, while its contribution in terms of profitability would amount approximately to 28%. The new group would also benefit from increased business diversification in geographic terms, where Italy would only account for 30% of lending activities, as well as in terms of clients segments, with a more balanced mix between retail and corporate.

Finally, the combined Group would acquire an excellent positioning in the main European markets, becoming the second Italian banking group, the second in Germany and the first in Austria, by far the first banking group in the CEE, where, in particular, it would be leader in Poland, Croatia and Bulgaria, with a presence in all other markets including Hungary, Russia and Serbia, target markets for UniCredit where we do not have a presence yet.

The combined Group would also have a selected presence outside Europe.

2. THE HVB GROUP – RECENT HISTORY AND FEATURES

2.1 RECENT HYSTORY. The HVB recent history starts in 1998, the year of the merger between Bayerische Vereinsbank (founded in 1869) and Bayerische Hypotheken-und Wechsel Bank (founded in 1835). In that year the Group, that already had a widespread presence, mainly in corporate segments, in CEE markets (Bulgaria, Czech Republic, Hungary, Slovakia, Baltic Countries), further expanded also due to the acquisition of the Polish bank Przemysolowo-Handlowy S.A. (BPH). In 1999, HVB expanded its presence in the Russian market, increasing to 40% its participation in International Moscow Bank.

In 2000, HVB acquired Bank Austria Creditanstalt, thus becoming the third European group in terms of size. Through the acquisition of Bank Austria, that already controlled the Polish bank PBK (merged into BPH thereafter) and other banks in the Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Romania, Ukraine and Russia, the HVB Group significantly increased its presence in CEE markets. In 2001, HVB and Bank Austria started the combination of the respective banking subsidiaries in those markets, under the coordination of Bank Austria, except for the banks in the ex Soviet Union.

In 2002, the Group effected a major internal reorganisation whereby it was structured in two macro-regional divisions - Germany and Austria/CEE – and in two global divisions– Corporates & Markets and Real Estate Workout, subsequently renamed RER. At the same time, the Group continued to grow in CEE through the acquisition (from UniCredit) of Splitska banka in Croatia and Bank Biochim in Bulgaria, and the setting up of HVB Bosnia Herzegovina in Bosnia Herzegovina.

In 2003, in the wake of a difficult macroeconomic environment that affected the operational performance and the quality of the assets (in particular the real estate loan portfolio), HVB started a rationalisation of its activities with a view to increasing its capital ratios. To this end it: (i) disposed of its consumer credit company Norisbank in Germany and the private banks Bank von Ernst and Baankhaus Bethmann Maffei, in Switzerland and Germany respectively; (ii) transferred its commercial real estate loan portfolio to a newco, Hypo Real Estate, that was subsequently listed; (iii) started the IPO of Bank Austria, already 100% controlled at the time. Furthermore, the organisational structure of the group was again changed by creating three macro-divisions: Germany, Austria & CEE and Corporate & Markets.

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The Group rationalization continued in 2004, through the disposal of existing holdings (in Allianz, B&B and the power company E.ON, with shareholding in Munich Re reduced to its current 10%). In March 2004, to further strengthen its capital base, HVB increased its capital with pre-emptive rights in an overall amount of €3 billion. In Germany, HVB incorporated its subsidiary bank Vereins und-Westbank, headquartered in Hamburg. The Group further expanded in the CEE by acquiring Hebros Bank in Bulgaria and Eksimbanka in Serbia, along with acquiring a majority share in International Moscow Bank.

In January 2005, HBV announced an extraordinary adjustment of its real estate loan portfolio totalling €2.5 billion, and started a restructuring plan (“PRO”), intended to achieve, upon implementation, cost synergies for €280 million. Following recent adjustments, asset quality appears to be in line with its German competitors: the Group resumed growth, also owing to a business restructuring plan in Germany which generated positive results during first quarter 2005, with profits of approximately €340 million. As far as its expansion in the CEE is concerned, the HVB Group recently finalized a transaction in Romania aimed at the merger of HVB Bank Romania and a private bank, Banca Tirac, thereby creating the fourth leading bank in Romania based on total assets.

2.2 KEY DATA. HVB, whose head office is in Munich, is currently the ninth largest banking group in Europe in terms of total assets and the second largest in Germany. As at 31 December 2004, HVB had total consolidated assets equal to € 467 billion, loans to clients of € 275 billion, deposits by clients for an amount of € 144 billion, approximately 10 million clients and a network of 2,036 branches in Germany, Austria and the CEE. The overall intermediation margin for 2004 exceeds € 9 billion, whereas the operational result is more than € 3 billion.

The group mianly focuses on retail and corporate clients in Germany, Austria and the CEE and operates through the following business lines:

− Germany: divided into 3 sub-segments: retail clients, corporate clients and real estate;

− Austria & CEE: divided into 3 sub-segments: retail clients, corporate clients and CEE;

− Corporates & Markets: (including large corporate clients and structured finance);

− RER (Real Estate Restructuring): which includes a credit portfolio under restructuring and has incorporated the previous division of Real Estate Workout (residential loans) created after the 1998 merger.

As at 10 June 2005, HVB had a market capitalization of approximately € 15.0 billion. Munich Re is the major shareholder with a share of 18.4% of the voting capital, despite having diluted its previous holding (of 25.6%) by not taking part to the capital increase of approximately € 3 billion carried out by HVB in March 2004. There are no controlling shareholders.

HVB is the controlling shareholder of Bank Austria. Since the listing of 22.5% of Bank Austria on the Vienna Stock Exchange in July 2003, HVB owns 77.5% of its capital. At the time of their combination, HVB and Bank Austria entered into agreements defining Bank Austria’s role within the Group (“Regions Bank Agreement”), whose main contents

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- together with their incidence on the transaction submitted to your approval - are illustrated below.

As of 31 December 2004, Bank Austria had total consolidated assets of € 147 billion, net credits to clients of € 78 billion and net assets of € 7 billion, increasing relative to the previous year by 7%, 8% and 8% respectively. It closed the 2004 financial year with a consolidated intermediation margin of € 3.5 billion and consolidated profits of € 0.6 billion, with a ROE of 10% and a cost/income ratio of 65%. As far as the quality of assets is concerned, the level of Bank Austria’s overdue credits appears stable compared to the end of 2004, with overdue credits equal to 4% of gross credits.

Bank Austria controls 71.0% of the Polish bank BPH. As at 31 December 2004, BPH had total consolidated assets of € 13 billion, credits to clients of € 7 billion and net assets of € 1.5 billion (data in PLN converted at the exchange rate of 4.08 PLN/€ at the end of 2004), increased, relative to the previous year, by 11%, 10% and 12% respectively. BPH closed the 2004 financial year with an intermediation margin of € 639 million and consolidated profits of € 174 million (data in PLN converted at the average exchange rate for the year 2004 of 4.53 PLN/€), with ROE of 14% and a cost/income ratio of 54%. As far as the quality of assets is concerned, the level of BPH’s overdue credits appears stable compared to the end of 2004, with overdue credits of € 0.7 billion equal to 8% of gross credits.

2.3 MARKET POSITIONING. HVB is the second largest German bank in terms of total assets, with an average national market share equal to 5% at the end of 2004, strongly rooted in the region of Bavaria, one of Germany’s richest regions (18% of the German GDP and per capita GDP equal to 128% of the EU15 average), where it controls a 15% market share. In Germany it operates through around 700 branches, of which 57% in Bavaria with a national average market share of 5%, and has 4 million clients.

The German banking sector is characterised by a three “pillar” structure: the commercial banks, the public banks (which include Landesbanken and Sparkassen) and the cooperative banks. The market is highly fragmented: the 3 biggest banks, including HVB, have an overall market share of around 15-20%, with predominance of public banks and cooperative banks, which are not necessarily oriented to maximizing profits. HVB’s main competitors at national level are Commerzbank, Deutsche Bank and Dresdner Bank, and at regional level the public banks and cooperative banks.

HVB operates on the Austrian market through Bank Austria: created in 1997 following the merger of Bank Austria and Creditanstalt, Bank Austria is the biggest Austrian bank with a national average market share of 18% in terms of total assets, 20% in terms of loans to clients and 14% in deposits by clients. It operates in Austria through around 400 branches and has 1.8 million clients.

The Austrian banking market is characterized by the presence of three different types of credit institutions: saving banks, commercial banks and cooperative banks. In this context, a limited number of banks of significant size (the 5 leading banks, including Bank Austria, increased their overall market share through mergers and acquisitions from 45%, in the mid-nineties, to approximately 55-60% nowadays) operate side by side with a large number of smaller banks, principally saving banks and cooperative banks. The main Austrian banks (Bank Austria, Erste Bank, Raiffeisen Bank) are characterized by a strong positioning in the CEE. Bank Austria’s main competitors are: Erste Bank, 3-Banken Gruppe (in which Bank Austria holds a minority stake) and Investkredit Bank.

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As far as the CEE markets are concerned, HVB operates in those countries mainly through companies controlled by Bank Austria, which has a sub-holding role in financial activities in Austria and Eastern Europe. With total assets of approximately € 35 billion, around 900 branches and 4.5 million clients, HVB is the second largest banking group in the CEE after UniCredit. The group is present in 11 countries: Croatia (5th in terms of total assets, with a market share of 8%, based on 2004 data), Bulgaria (4th with 10%), Poland (3rd with 8%), Bosnia (4th with 8%), Slovakia (5th with 5%), Czech Republic (4th with 6%), Serbia (5th with 6%), Romania (8th with 5%), Hungary (7th with 5%), Slovenia (7th with 5%) and Russia (around 1%).

With total assets of PLN 59 billion (€ 13 billion) at the end of 2004, BPH is the third largest Polish banking group. Public participation in the Polish banking sector has decreased strongly in the past 10 years and PKO BP (partially privatised in 2004) and BGZ remain the only banks currently controlled by the State. The number of banking institutions has gradually decreased over the past few years following a large number of merger and acquisition transactions. The sector is characterised by the high participation of foreign financial institutions (8 of the 10 biggest Polish banks are in fact in foreign hands). Compared with other CEE economies, Poland is characterized by a lower degree of concentration, with the 5 leading banks having around a 50% market share in terms of total assets. BPH’s main competitors are PKO BP, Bank Pekao, Bank Handlowy, ING Bank, BRE Bank and BZW BK.

2.4 FINANCIAL STRUCTURE. As of 31 March 2005, following an adjustment of non performing loans for an amount of € 2.5 billion in January, HVB has a core capital of € 15.4 billion, regulatory capital of € 27.2 billion and total risk weighted assets of around €264 billion, corresponding to a Tier I ratio of 6.4% and to a Total Capital Ratio of 10.2%.

2.5 PERFORMANCE. IN 2004 HVB recorded a consolidated operating result of € 1,389 million, slightly lower than the original target of € 1,400-1,700 million, but higher than the consensus estimate of around € 1.2 billion.

These results, higher than estimated, are mainly due to particularly high operating profits. Yet, the contribution of extraordinary items was also significant; these were mainly represented by: (i) non recurrent interest in the amount of around € 157 million; (ii) income deriving from the sale of holdings; and (iii) a reduction in operating expenses due to the postponement of IT projects and the deferment of retirement expenses and other extraordinary costs.

In spite of the good operating results, HVB recorded a consolidated loss of € 2,278 million in 2004, after extraordinary adjustments on loans in the amount of € 2.5 billion (vs. a loss of € 2,442 million in 2003).

With the adjustments on loans of € 2.5 million announced on 21 January 2005, HVB significantly improved the quality of its assets, bringing the coverage ratio of non performing loans from 44.5% at the end of 2003 to 55.5% at the end of 2004, whereas the flow of overdue loans at the level of HVB A.G. appears to have benefited from a significant slowdown (€ 1,149 million in the second half -year 2004 compared to € 1,847 million in the first half year).

As at 31 March 2005, HVB reported consolidated operating results of € 871 million, representing an increase of 11.8% compared to the first quarter of 2004 (€ 779 million), with a target for the entire 2005 financial year of € 3,324 million. These results are due

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both to the growth in earnings (+9.2% of the interest margin due to an improvement in margins; +8.0% of net commissions and profits from financial operations by 21.5% compared to the first quarter of 2004) and to cost efficiency (growth contained within 3.8%, in line with the 2005 target). Based on the annualised data of the first quarter of 2005, the net interest margin on total credits is of 1.7%, the intermediation margin on total credits is equal to 3.0% and the cost/income ratio equal to 65%. HVB closed the first quarter of 2005 with consolidated profits of € 336 million, equal to around € 1.3 billion in annualised terms, compared to a loss of € 2.7 billion at the end of 2004 and profits of € 56 million in the first quarter of 2005, equivalent to a ROE of 11.6%.

As far as the quality of the assets is concerned, the level of HVB’s non performing loans, excluding the RER division, appears stable if compared to the end of 2004 (€ 12.8 billion overdue at the end of 2004), with non performing loans of € 12.9 billion, equal to 3.4% of the credit exposure.

3. CORPORATE STRUCTURE OF THE TARGET BANKS

3.1 HVB. HVB’s share capital is equal to € 2,252,097,420 and is represented by 750,699,140 shares without per-share nominal value, subdivided in two categories: ordinary (bearer) and preference. There are 736,145,540 ordinary shares, with an overall nominal value equal to € 2,208,436,620. There are 14,553,600 preference shares, with an overall nominal value equal to € 43,660,800. Registered shares generally do not carry voting rights but guarantee the right to receive a preference dividend, equal to the ordinary dividend plus € 0.064 per share. The preference element of € 0.064 per share must be paid to the holders of preference shares in priority over the payment of ordinary dividends. In the event that the aforementioned preference element is not paid for two consecutive financial years, including any arrears, holders of preferred shares acquire a voting right until payment of outstanding dividends. Since the preferential element was not paid by HVB in 2002 and 2003 financial years, the preference shares currently carry voting rights.

HVB’s share capital (including the preference shares) is held by a variety of institutional and retail investors. In addition to the major shareholder - Munich Re – other significant shareholders are the Bavarian Foundation Bayerische Landesstiftung, which holds 2% represented solely by preference shares, and the asset management company Capital Group, which holds 5% of the capital. Based on the information supplied by HVB, the remaining 75% of the capital is divided among other strategic investors (5%), other institutional investors (55%) and retail investors (15%). The ordinary shares are listed on the Frankfurt Stock Exchange and on several other local German stock exchanges, on the Vienna Stock Exchange, the Zurich Stock Exchange and the Paris Stock Exchange. An ADR program is traded “over-the-counter” in the U.S. All the preference shares are held by Bayerische Landesstiftung and are not listed.

3.2 BANK AUSTRIA. Bank Austria’s capital amounts to € 1,068,920,749.80, represented by 147,031,740 shares without per-share nominal value, subdivided in two categories: ordinary and preference shares. There are 147,021,640 ordinary shares, and 10,100 preference shares. Special rights attach to the preference shares: in particular, it is requested that these shares be represented at the general meeting to resolve on certain matters which affect the existence and the governance structure of Bank Austria, as will be better illustrated below. 77.5% of the ordinary shares are held by HVB, with the remaining 22.5% held by institutional and retail investors. The ordinary shares are listed

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on the Vienna and Warsaw Stock Exchanges. The preference shares are held by Anteilsverwaltung-Zentralsparkasse (“AVZ”), the Foundation of the city of Vienna, and the Work Council Fund (“WCF”), the Fund of Bank Austria’s employees.

3.3 BPH. BPH’s capital amounts to PLN 143,581,150 represented by 28,716,230 ordinary shares with a nominal value of PLN 5.0 each. 71.0% of the shares are held by Bank Austria, with the remaining 29.0% held by institutional and retail investors. The shares are listed on the Warsaw and London Stock Exchanges under a GDR program.

4. THE OFFERS

As anticipated, the Business Combination Agreement entered into by UniCredit and HVB sets out the terms of the envisaged combination, the organisational and business model of the new Group, its governance and the criteria for the definition of the future Group structure. Considering that the main contents of the agreement - and, hence, of the transaction - will be illustrated below, we would like to underline in the first place that, in order to implement the transaction in consideration, UniCredit intends to launch three public offers to acquire, either directly and indirectly, up to 100% of the share capital of HVB, Bank Austria and BPH.

4.1 PUBLIC OFFER FOR HVB. UniCredit intends to launch a voluntary exchange offer to acquire up to 100% of the share capital of HVB, represented by ordinary and preference shares. The proposed exchange ratio would be 5.00 newly-issued UniCredit shares – issued following the capital increase to be subscribed for by contribution in kind submitted to your approval today - for each HVB share, determined on the basis of the valuations of the 2 companies by applying the valuation methods detailed below. Considering the price of UniCredit on 10 June 2005 (Euro 4.095), this exchange ratio represents an implicit premium of 8.3% over HVB shares’ average price during the three-month period immediately preceding the announcement of the transaction, while the premium on the price of HVB as of 10 June 2005 would be 2.3%. On the basis of the UniCredit price on 25 May 2005 - the day before the start of significant market speculation - (Euro 4.2375), this exchange ratio implies an implicit premium of 13.5% on the average price of HVB in the three months preceding the same date, while the premium on the price of HVB as of the same date would be 10.4%.

As anticipated, in order to maximise the success of the exchange offer for the HVB shares, UniCredit has undertaken to list its ordinary shares - with effect from completion of the offer - on the Frankfurt Stock Exchange.

4.2 PUBLIC OFFER FOR BANK AUSTRIA. The acquisition of control by UniCredit over HVB would entail the acquisition of (indirect) control over Bank Austria. This, under local laws, requires the launching of a mandatory take-over bid, necessarily contemplating a cash consideration.

To avoid any impact on capital structure deriving therefrom, we would launch, as a preventive measure, a voluntary public offer simultaneously with the HVB offer, over 100% of the shares of Bank Austria: the pre-emptive voluntary offer could, in fact, be launched by offering UniCredit shares as payment, provided that a cash alternative is also offered, leaving to the addresse of the offer the option to choose the form of payment. It should be noted that HVB could not adhere to the offer, neither the one contemplating an exchange offer (since this would be in breach of the prohibition contemplated by article 2357-quater read in conjunction with article 2359-quinquies of the Italian civil code), nor the cash offer since HVB has given an undertaking to that

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effect in the BCA; consequently, upon completion of the offer, UniCredit would directly hold up to a maximum of 22.5% of the share capital of Bank Austria.

The ratio of the exchange offer should take into account the premium paid to the HVB (parent company) shareholders in the valuation of the controlling interest in Bank Austria, in order to comply with the principle of equality of treatment of shareholders in said company. The structure of the offer has been informally submitted to the local supervisory authority - the Take-over Commission - which, while accepting the principle of parallel (“paper”/”cash”), preemptive offers, was not able to confirm, at that time, whether the cash offer was enough to comply with the take-over law. It should be mentioned, however, that the Take-over Commission will issue an opinion on the Offer following the formal submission of the offer document, on which it shall issue a statement, taking also into account the price component of the offer, following receipt of opinions issued thereon by one expert appointed by UniCredit and another appointed by the target company (Bank Austria).

The proposed exchange ratio - calculated on the basis of the methods detailed below - would be 19.92 newly-issued UniCredit shares for each Bank Austria share and, on the basis of the UniCredit shares’ price as at 10 June 2005, would represent an implicit premium of 8.3% on the average Bank Austria price, in the 3 months prior to the announcement, while being in line with the Bank Austria price on 10 June 2005 (+ 0.1%). On the basis of the UniCredit price on 25 May 2005, before market speculation, this exchange ratio would represent an implicit premium of 13.6% on the average Bank Austria price, in the 3 months prior to the same date, while the premium on the Bank Austria price on the same date would be 12.1%.

The cash price offered, however, would be Euro 70.04 per share, equal to the average price over the 6 months prior to 27 May 2005 (the last working day before the joint UniCredit/HVB announcement of 30 May). This price represents the lower limit required for mandatory offers.

The difference between the cash offer and the value implicit in the exchange offer (on the basis of the UniCredit price on 10 June 2005) would be 16.3%.

We would like to inform you that, on the basis of the foregoing, should those who adhere to the Bank Austria offer (who will be the minority shareholders only, given HVB’s undertaking not to adhere) opt in part to receive a cash consideration, the aggregate disbursement by UniCredit would amount approximately to Euro 2.3 billion.

4.3 PUBLIC OFFER FOR BPH. The acquisition of control over Bank Austria by UniCredit would entail (indirect) acquisition of control over BPH, triggering the requirement to launch a mandatory offer in cash. In line with the considerations already made with regard to Bank Austria, we are envisaging to launch as a preventive measure a voluntary offer simultaneously with the HVB and Bank Austria offers, for 100% of BPH shares. The offer might be launched by offering UniCredit shares in payment, provided that a cash alternative will be guaranteed, leaving to the subscribers the option to receive any form of payment. The exchange ratio proposed for the voluntary exchange offer would be 33.13 newly-issued UniCredit shares for each BPH share, which, on the basis of the UniCredit price on 10 June 2005 and the PLN/Euro exchange rate, at the same date, of 4.03, would represent an implicit premium of 9.8% on the average BPH price in the 6 months prior to the announcement (the lower price limit established under Polish law for take-over offers), while there would be a discount on the BPH price on 10 June 2005 of 2.6%. On the basis of the UniCredit price and the PLN/Euro

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exchange rate on 25 May 2005, before market speculation, this exchange ratio would represent an implicit premium of 19.7% on the average BPH price in the 6 months prior to the same date, while the premium on the BPH price on the same date would be 21.6%.

The payment for the cash offer, however, would be equal to the average price during the 6 months prior to the date of the announcement (as defined under Polish law), which price would represent the lower limit required for mandatory offers. Should the Polish authorities assume that the announcement of 12 June represents the end of the reference period for the price calculation, such price would be Euro 123.58 per share.

The offer would be launched for 100% of the share capital of BPH, provided that HVB committed to use its best efforts to procure that Bank Austria will not tender its shares in the offer; in such case, potential subscribers would be represented by the minority shareholders only and, consequently, at the end of the offer, UniCredit could directly acquire up to 29.0% of the BPH share capital. Should those who adhere to the offer opt to receive a cash consideration, the aggregate disbursement for UniCredit, would be approximately Euro 1.0 billion, subject to the requirement on UniCredit to issue, in any event, a letter of guarantee for 100% of the counter value of the cash offer (in order to account for the possibility, albeit remote, of Bank Austria tendering its shares).

The difference between the payment for cash and the value implicit in the exchange offer (on the basis of the UniCredit price on 10 June 2005) would be 9.8%.

Finally, it should be pointed out that listing of UniCredit shares on the Warsaw Stock Exchange is a condition to enable local investors to hold UniCredit shares. Consequently, UniCredit has also undertaken to list its ordinary shares on that Stock Exchange.

4.4 DAB BANK A.G. (“DAB”) AND KOEHLER & KRENZER FASHION A.G. As permitted under current German laws, UniCredit would apply for an exemption from the launching of a mandatory offer for DAB, a listed company, 76.4% of which is held by HVB (market value of Euro 451 million on 2 June 2005) and for Koehler and Krenzer Fashion A.G., a listed company, 49% of which is held by HVB (market value Euro 28 million on 2 June 2005), in light of the relatively negligible size of the aforementioned companies.

4.5 TECHNICAL ELEMENTS. UniCredit has given instructions to the transfer agent to manage the operational aspects of the offers. Should the offers prove successful, the transfer agent will be responsible to exchange the shares tendered in exchange of the newly-issued UniCredit shares, in case of exchange offers, or against cash, in case of cash offers. In addition, the agent will be responsible for the following activities: managing the accounts in which the tendered shares and in which the newly-issued UniCredit shares will be deposited; the accounting of the tendered shares and the notices to the Stock Exchanges and to the public of the acceptance levels.

With regard to the Bank Austria and BPH offers, the transfer agent will also be responsible for managing the share fractions.

4.6 OFFER CONDITIONS. Inter alia, the offers described above would be conditional upon the issuance of the necessary regulatory approvals by the competent Banking Supervisory and Stock Exchanges Authorities. It should be noted in this connection, that the Bank of Italy has already granted authorisation to the combination in pursuance of current legislative and regulatory provisions; similarly, the minutes of

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today’s resolution on the capital increase and consequent amendments to the By-Laws, shall be submitted to the aforementioned Authority, pursuant to art. 56 of Legislative Decree 385/93.

Completion of the HVB offer would, in addition, be subject to the following conditions:

§ attainment of a minimum acceptance level of at least 65% of the HVB share capital. UniCredit intends, however, to reserve the right to accept the shares received, even in the event that they do not reach the aforementioned minimum level;

§ authorisation by the competent antitrust authorities for completion of the transaction. The transaction would be examined by the antitrust authority of the European Union, which could refer it back to the competent national authorities, and by the national authorities of the non-EU countries involved.

The effectiveness of the Bank Austria offer would also be conditional upon the successful completion of the HVB offer.

As far as the BPH offer is concerned, in accordance with local laws it cannot be conditional upon the outcome of the HVB offer; specific provisions have, therefore, been inserted in the BCA to the effect that, should such offer be unsuccessful, UniCredit and HVB will negotiate ways and conditions to enable UniCredit to monetize its holding in BPH, acquired on completion of the offer launched in Poland.

4.7 SUPPORT TO THE HVB OFFER. Given the friendly nature of the proposed combination, on the date of its announcement, the HVB management board expressed a favourable opinion on the transaction; furthermore, the management board has undertaken to recommend the offer for the HVB shares to its shareholders (within two weeks of the publication of the relevant document and in compliance with current local provisions) and to use its best efforts to ensuring that the supervisory board does the same. Likewise, within the limits of the administrative bodies’ fiduciary duties under local laws, the management board has undertaken, under the same terms, not to take any steps which could prevent the success of the offers launched by UniCredit nor to solicit any competing offers.

4.8 TIMELINE OF THE OFFERS. On the basis of the provisions of German take-over rules, and considering that the terms of the combination have been announced to the market on 12 June, it is expected that the HVB offer period would start on 23 August 2005 and end on 6 October 2005, with a possible two-week extension in case the minimum acceptance level is attained. Given the different provisions of law in force in Austria, UniCredit will have to submit the offer document to the competent authorities for approval, within 40 working days as of the first joint UniCredit/HVB announcement (30 May 2005) - which was required by the same Austrian authority - and, on the basis of the expected timing for granting the authorisation - estimated in approximately 2 weeks - launch the Bank Austria offer, presumably during the second week of August. Finally, the expected timing for the BPH offer will have to be discussed with the Polish authorities.

4.9 PLACES OF THE OFFERS. The HVB, Bank Austria and BPH offers would be addressed to all shareholders, excluding, however, USA, Canadian, Japanese and Australian residents; it is proposed, however, to apply to BaFin for authorisation to extend the HVB offer to qualified institutional investors (Q.I.B.s) in the USA. The HVB offer

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would be launched only in Germany, the Bank Austria offer would be launched only in Austria, while the BPH offer would be launched in Poland only.

4.10 LISTING OF THE UNICREDIT SHARES. In order to maximise the success of the exchange offer for the HVB shares, making it more attractive to local investors, UniCredit has, under the terms of the BCA, undertaken to list its ordinary shares on the Frankfurt Stock Exchange upon completion of the offer.

In this connection, it should be noted that the Frankfurt Stock Exchange is divided into three markets, namely (i) the Official Market, (ii) the Regulated Market and (iii) the Unofficial Regulated Market. The three markets mainly differ in terms of initial admission requirements (e.g. minimum expected market capitalisation, minimum free float). These requirements are more restrictive in the case of the Official and Regulated Markets and less restrictive in that of the Unofficial Regulated Market. Furthermore, within the Official and Regulated Markets there are two separate segments: the so-called “Prime Standard” and the so-called “General Standard”. Once listed on one of the two, Official or Regulated, markets, a company automatically acquires the right to be listed on the “General Standard” segment, while admission to the “Prime Standard” segment may be obtained upon specific application to the authorities. The two segments differ in terms of reporting obligations to the market post admission (e.g. frequency of publication of financial data, frequency of meetings with financial analysts). Such obligations are more restrictive in the case of the “Prime Standard” and less so in the case of the “General Standard”. Therefore, companies listed on the “Prime Standard” of regulated markets typically address themselves to an international investor base and may be included in the major indices (e.g. DAX).

In accordance with the BCA, UniCredit has undertaken to obtain listing on the Official Market, without, however, assuming any specific undertaking with regard to the specific quotation segment (“Prime Standard” or “General Standard”) since admission to the “Prime Standard” must be decided upon by the relevant authorities. It should be noted, however, that, irrespective of the market segment, inclusion in the major indices (e.g. DAX) is reserved exclusively to companies having their registered office in Germany and, therefore, UniCredit could not, in any event, be included in one of the indices.

Furthermore, with regard to the BPH offer, it should be noted that as a precondition to enable local investors to hold UniCredit shares, UniCredit should also be listed on the Warsaw Stock Exchange. Consequently, UniCredit has also undertaken to list its ordinary shares on the Warsaw Stock Exchange. Finally, it is worth noting that, in the absence of an analogous requirement on the Austrian market, it is not contemplated to list the UniCredit shares on the Vienna Stock Exchange.

5. DETERMINATION OF THE VALUE OF UNICREDIT, HVB, BANK AUSTRIA AND BPH - THE EXCHANGE RATIOS

UniCredit internally carried out valuations on the capital of UniCredit and of the target banks based on of the most recent financial statements (31 December 2004 and 31 March 2005). The most suitable exchange ratios have been identified on the basis of the results obtained by using the various valuation methods selected. These exchange ratios have been confirmed by the advisors instructed to issue a fairness opinion.

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For the purposes of the transaction under consideration, the economic value of both UniCredit and of the target companies was estimated on a standalone basis and without taking into account the possible effects which could derive from the wider industrial project. The values resulting from the various valuation methods must, therefore, be understood as aimed only at determining an exchange ratio deemed appropriate for the purposes of the aforementioned offers. Among the many valuation methods, widely accepted and applied to companies operating in the financial sector, the following main methods were selected:

- the Discounted Dividend Model (“DDM”) method

- the “Market Multiples” method

- the “Value Map” method

- the “Stock Exchange Quotations” method

Unlike UniCredit and HVB, in the case of Bank Austria and BPH, since it was impossible to verify the estimated projections on the basis of the analysts’ and advisers’ forecasts with the management of the respective companies, it was decided not to use the DDM method in view of the lack of consistent available data and the consequent lack of comparability with the application of the same method to UniCredit. Therefore, the remaining methods were used for the evaluation concerning Bank Austria and BPH.

Furthermore, considering that all banks being valued are listed, the value per share of the companies has been verified by comparing it with the analysts’ “Target Price” consensus on the pre-speculation share price. The market data included in all valuation methods are up-dated to 10 June 2005.

It should be pointed out that the value of UniCredit shares referred to below for each valuation method only refers to UniCredit ordinary shares. The aggregate value of UniCredit includes both the value of the ordinary shares and the value of the saving shares and UniCredit saving shares have different market values compared to ordinary shares (the average value over the last 6 months exceeded by 7.1% the value of ordinary shares). In light of these circumstances, it was deemed appropriate to weight the number of savings shares, calculating the number of “ordinary shares equivalent” to the savings shares on the basis of the different price between the two classes of shares. On the basis of the average trading values in the last 6 months, the number of “ordinary equivalent shares” amounts to 23,247,718, and therefore the total number of ordinary UniCredit shares has been raised from 6,333,373,477 to 6,356,621,195 for the purposes of the compared valuation. For valuation purposes, HVB’s and Bank Austria’s preference shares have been treated as ordinary shares from an economic point of view. Therefore, the value per share of HVB and Bank Austria has been calculated by dividing total values by the total number of the ordinary and saving shares, i.e. 750,699,140 shares in the case of HVB and 147,031,740 shares in that of Bank Austria.

As detailed below, it should be noticed that the range of exchange ratios determined in accordance with each valuation method was defined by identifying:

- as a minimum exchange ratio, the ratio between the min imum value per share of the target company and the maximum value per UniCredit share;

- as a maximum exchange ratio, the ratio between the maximum value per share of the target company and the minimum value per UniCredit share.

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5.1 DUE DILIGENCE. In accordance with the BCA, UniCredit and HVB have reciprocally completed a limited due diligence exercise with a view to asses the accuracy of the valuations undertaken, with particular reference to the quality of the assets. The due diligence findings did not alter the opinion as to the validity of the strategic project and did not require any review of the valuations carried out.

5.2 THE RELATIVE EVALUATION OF UNICREDIT

The DDM Method

The financial method selected is based on a variant of the Discounted Cash Flow (DCF) method, namely the Discounted Dividend Model. This method involves the construction of a financial model based on the definition of expected profits through the construction of a Profit & Loss Account and a Balance Sheet over a 5-year period of the company to be valued. The estimates resulted in a projected increase of profits at a compounded annual growth rate of 10.6% over the period 2004-2009.

In particular, the DDM method estimates the value of the bank on the basis of maximum monetary flows which are directly attributable to the shareholders, taking into account minimum target capital ratios (6% Core Tier 1 Ratio).

Profit & Loss Account and Balance Sheet projections were estimated on the basis of 2004 accounts figures and the prospective development over the three-year period 2005-2007 indicated in the Group Plan; while in the case of subsequent years, up to 2009, growth forecasts were developed by taking into account, among other things, the Group’s business mix and the geographic operational area. The long-term profit growth rate “g” (i.e. beyond 2009) was set at 2%; the discount rate (cost of equity) was determined, on the basis of the Capital Asset Pricing Model theory, within a range of 9.10-9.55%

Market Multiples Method

The Market Multiples method assumes that the value of a bank is determined by taking as a reference the trading multiples of credit institutions whose characteristics are similar to those which are the subject of valuation (comparables). This method is based on parameters considered appropriate and more directly comparable between the banks in the selected sample. In order to find the most comparable parameter among the various companies to be valued, the net profit was selected resulting in the calculation of the P/E ratio (Price/Earning: price divided by the prospective net profit as at 2006). The P/E multiple, to be applied to the relevant net profit of the company to be valued, is universally accepted as a valuation parameter to analyse financial companies in general, and banks in particular.

The UniCredit comparables sample was selected on the basis of the principal Italian and international banking groups deemed to be comparable in terms of business mix, size, organisational structure, considering also the growing globalisation of markets as well as the significant portion of business conducted by the Group in foreign markets. Consequently, the sample includes the following banks: Banca Intesa, SanPaolo IMI, Montepaschi, Société Générale, Santander, BBVA, SEB and Danske.

The parameters used in the case of UniCredit are derived from the projection included in the Group Plan 2005-2007 drawn up by the management. In the case of the parameter used for the sample, the consensus of the financial analysts reported by FactSet was adopted. With reference to the time-scale for monitoring the share prices for the comparables, the figure

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used was the average of the prices recorded at four different time periods: last day, 1 month, 3 months and 6 months before 10th June 2005.

The extremes of the valuation range obtained using the Market Multiples method were determined by the minimum and maximum results of the valuations from application of the P/E 2006 multiple on the basis of the above-mentioned time periods.

The Value Map method

The Value Map method values the economic capital of a bank on the basis of the statistical correlation between the prospective profitability (expected Return on Equity - ROE) and the existing ratio between market capitalisation and book value (expected P/BV).

Also in this case, as in the method described above, as far as the parameter for UniCredit are concerned, the Group Plan 2005-2007 was used, while in the case of the sample, the consensus of the financial analysts reported by FactSet was adopted. Furthermore, also in this case, with reference to the time period for monitoring the share prices for the comparables, the figure used was the average of the prices recorded at four different time periods: last day, 1 month, 3 months and 6 months before 10 June 2005.

The Value Map was developed by comparing the correlation between the P/BV 2005 and the ROE 2006, in order to value UniCredit prospective profitability in relation to the expected for the sample. Therefore, the extremes of the valuation range obtained using the Value Map method were determined by the minimum and maximum results of the valuations from application of the P/BV 2005/ROE 2006 multiple on the basis of the above-mentioned time periods.

A summary of the results of the application of the valuation methods used is given in the following tables:

UniCredit valuation 100% (Euro millions)

UniCredit valuation per share (Euros)

MIN MAX MIN MAX DDM 32,158 34,144 5.06 5.37 Market Multiples 29,294 30,428 4.61 4.79 Value Map 29,587 30,388 4.65 4.78 Market averages Last day 25,961 4.08 1 month 27,082 4.26 3 months 27,981 4.40 6 months 27,610 4.34 Last day before speculation 26,865 4.23 1 month before speculation 27,952 4.40 3 months before speculation 28,333 4.46 6 months before speculation 27,647 4.35 Analysts’ consensus 29,754 32,886 4.68 5.17

5.3 THE RELATIVE VALUATION OF HVB

The DDM method

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For the application of this method the expected growth of HVB up to 2009 was estimated. The long-term growth rate “g” of net profits (beyond 2009) was quantified at 2%, while the cost of equity was determined in a range of 8.88-9.78%.

The Market Multiples method

In applying the Market Multiples method for the valuation of HVB the same assumptions were used as described earlier in the case of UniCredit. However, since the principal element which ensures the efficacy of the Market Multiples method consists of the affinity between the evaluated banks and those used for the definition of the multiples, given the diversity between UniCredit and HVB, it was considered appropriate to use comparative samples which were partially different in relation to UniCredit and took account of the differences in size and operations.

The comparables sample used in the case of HVB was selected in the context of a group of German and European banks which were comparable on the basis of performance, profitability, efficiency and relative size, within the domestic market, having characteristics as similar as possible to those of HVB and includes: Commerzbank, Postbank, Hypo Real Estate, Banca Intesa, Société Générale, Nordea and FSPA.

Unlike the UniCredit valuation, the parameters used in the case of HVB derive from internal estimates drawn up in collaboration with the advisors and verified in relation to the financial analysts’ projections and in conjunction with the HVB management, while the financial analysts’ consensus reported by FactSet was used for the sample.

The extremes of the valuation range obtained using the Market Multiples method were determined by the minimum and maximum figure of the valuations resulting from application of the P/E 2006 multiple on the basis of the time periods of the last day, 1 month, 3 months and 6 months before 10 June 2005.

The Value Map method

The assumptions described in the case of UniCredit were also used when applying the Value Map method, except that they were applied to the sample adopted for HVB in the context of the Market Multiples method. Therefore, the extremes of the valuation range obtained using the Value Map method were determined by the minimum and maximum results of the valuations from application of the P/BV 2005/ROE 2006 multiple on the basis of the time periods of the last day, 1 month, 3 months and 6 months before 10th June 2005.

A summary of the results of the application of the valuation methods used is given in the following tables:

UniCredit valuation

100% (Euro millions) HVB valuation 100%

(Euro)

MIN MAX MIN MAX

DDM 32,158 34,144 15,564 17,826 Market Multiples 29,294 30,428 14,757 15,408 Value Map 29,587 30,388 15,389 16,685 Market averages Last day 25,961 15,029 1 month 27,082 14,702 3 months 27,981 14,187

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6 months 27,610 13,622 Last day before speculation 26,865 14,406 1 month before speculation 27,952 14,133 3 months before speculation 28,333 14,005 6 months before speculation 27,647 13,407 Analysts’ consensus 29,754 32,886 14,156 15,646

UniCredit valuation

per share (Euros) HVB valuation per

share (Euros) Exchange ratio

MIN MAX MIN MAX MIN MAX

DDM 5.06 5.37 20.73 23.75 3.86 4.69 Market Multiples 4.61 4.79 19.66 20.52 4.11 4.45 Value Map 4.65 4.78 20.50 22.23 4.29 4.78 Market averages Last day 4.08 20.02 4.90 1 month 4.26 19.58 4.60 3 months 4.40 18.90 4.29 6 months 4.34 18.15 4.18

Last day before speculation 4.23 19.19 4.54 1 month before speculation 4.40 18.83 4.28 3 months before speculation 4.46 18.66 4.19 6 months before speculation 4.35 17.86 4.11

Analysts’ consensus 4.68 5.17 18.86 20.84 3.65 4.45

Conclusions

In the light of the ranges of standalone exchange ratios, the exchange ratio based on the average UniCredit and HVB 3-month market prices (4.29 UniCredit shares for each HVB share) appears to be representative of the distribution of exchange ratios obtained by applying the different methodologies.

Given such an exchange ratio, it was considered appropriate to apply a premium (16.9% or 16.6% post dilution as a result of the recently implemented increases in capital) since the transaction envisages the acquisition of a controlling interest. Such premium, justified, from a strategic and economic standpoint, by the possibility of creating synergies resulting from the transaction, has led to an exchange ratio for the offer of 5.00 UniCredit shares for each HVB share.

5.4 RELATIVE VALUATION OF BANK AUSTRIA

The Market Multiples method

In applying the Market Multiples method for the valuation of Bank Austria the same assumptions were used as described earlier in the case of UniCredit. However, since the principal element which ensures the efficacy of the Market Multiples method consists of the affinity between the evaluated banks and those used for the definition of the multiples, given the diversity between UniCredit and Bank Austria, it was considered appropriate to use

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comparative samples which were partially different in relation to UniCredit and took account of the differences in size and operations.

The comparables sample used in the case of Bank Austria was selected in the context of a group of Austrian and European banks which were comparable on the basis of performance, profitability, efficiency and relative size, within the domestic market, having characteristics as similar as possible to those of Bank Austria and includes: Erste Bank, Raiffeisen International, KBC, EFG, Komercni, PKO, Pekao, Bank Handlowy.

Unlike the UniCredit valuation, the parameters used in the case of Bank Austria derive from internal estimates drawn up in collaboration with the advisors and verified in relation to the financial analysts’ projections, while the financial analysts’ consensus reported by FactSet was used for the sample.

The extremes of the valuation range obtained using the Market Multiples method were determined by the minimum and maximum results of the valuations from application of the P/E 2006 multiple on the basis of the time periods of the last day, 1 month, 3 months and 6 months before 10 June 2005.

The Value Map method

The assumptions described in the case of UniCredit were also used when applying the Value Map method, except that they were applied to the sample adopted for Bank Austria in the context of the Market Multiples method. Therefore, the extremes of the valuation range obtained using the Value Map method were determined by the minimum and maximum results of the valuations from the application of the P/BV 2005/ROE 2006 multiple on the basis of the time periods of the last day, 1 month, 3 months and 6 months before 10 June 2005.

A summary of the results of application of the valuation methods and the consequent exchange ratios is given in the following tables:

UniCredit valuation 100% (Euro millions)

Bank Austria valuation 100% (Euro)

MIN MAX MIN MAX

Market Multiples 29,294 30,428 11,615 12,398 Value Map 29,587 30,388 10,489 13,036

Market averages Last day 25,961 11,982 1 month 27,082 11,348 3 months 27,981 11,070 6 months 27,610 10,485

Last day before speculation 26,865 11,071 1 month before speculation 27,952 10,853 3 months before speculation 28,333 10,922 6 months before speculation 27,647 10,273 Analyst’s consensus 29,754 32,886 10,681 11,805

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UniCredit valuation per share (Euro)

Bank Austria valuation per share

(Euro)

Exchange Ratio

MIN MAX MIN MAX MIN MAX Market Multiples 4.61 4.79 79.00 84.32 16.50 18.30 Value Map 4.65 4.78 71.34 88.66 14.92 19.05 Market averages Last day 4.08 81.49 19.95 1 month 4.26 77.18 18.12 3 months 4.40 75.29 17.10 6 months 4.34 71.31 16.42 Last day before speculation 4.23 75.29 17.82 1 month before speculation 4.40 73.81 16.79 3 months before speculation 4.46 74.28 16.67 6 months before speculation 4.35 69.87 16.07 Analysts' Consensus 4.68 5.17 72.64 80.29 14.04 17.15

Conclusions

In order to guarantee equal treatment for Bank Austria minority shareholders with respect to HVB, the same premium applied to the HVB offer (16.9% or 16.6% after dilution due to the impact of recently implemented capital increases) was applied to the exchange ratio based on the three month average market prices of UniCredit and Bank Austria (17.10 UniCredit shares per each Bank Austria share), which appears to be representative of the distribution of exchange ratios determined by applying the various methodologies. The application of such premium, which is justified by the existence of synergies directly attributable to Bank Austria as a result of the transaction, has led to identifying an exchange ratio for the offer of 19.92 UniCredit shares for each Bank Austria share.

5.5 THE RELATED VALUATION OF BPH

The Market Multiples method

In applying the Market Multiples method for the valuation of BPH, the same assumptions were used as described earlier in the case of UniCredit. However, since the principal element which ensures the efficacy of the Market Multiples method consists of the affinity between the evaluated banks and those used for the definition of the multiples, given the diversity between UniCredit and BPH, it was considered appropriate to use comparative samples which were partially different in relation to UniCredit and took account of the differences in size and operations.

The comparables sample used for BPH was selected from a group of Polish and European banks which are comparable on the basis of performance, profitability, efficiency, and relative size within the domestic market, having characteristics as similar as possible to those of BPH, and includes: PKO, Bank Pekao, Bank Zachodni, and Bank Handlowy.

Unlike the UniCredit valuation, the parameters used in the case of BPH derive from internal estimates drawn up in collaboration with the advisors and verified in relation to

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the financial analysts’ projections, while the financial analysts’ consensus reported by FactSet was used for the sample.

The extremes of the valuation range obtained using the Market Multiples method were determined by the minimum and maximum results of the valuations from application of the P/E 2006 multiple on the basis of the time periods of the last day, 1 month, 3 months and 6 months before 10 June 2005.

The Value Map method

The assumptions described in the case of UniCredit were also used when applying the Value Map method, except that they were applied to the sample adopted for BPH in the context of the Market Multiples method. Therefore, the extremes of the valuation range obtained using the Value Map method were determined by the minimum and maximum results of the valuations from the application of the P/BV 2005/ROE 2006 multiple on the basis of the time periods of the last day, 1 month, 3 months and 6 months before 10 June 2005.

A summary of the results of the application of the valuation methods and the resulting exchange ratios are set forth in the following tables:

UniCredit 100% Valuation (Euro mln)

BPH 100% Valuation (Euro mln)

MIN MAX MIN MAX

Market Multiples 29,294 30,428 3,614 3,870 Value Map 29,587 30,388 3,654 3,837 Market averages Last day 25,961 4,004 1 month 27,082 3,644 3 months 27,981 3,545 6 months 27,610 3,552 Last day before speculation 26,865 3,369 1 month before speculation 27,952 3,361 3 months before speculation 28,333 3,447 6 months before speculation 27,647 3,424 Analysts' Consensus 29,754 32,886 3,248 3,590

UniCredit valuation per share (Euro)

BPH valuation per share (Euro)

Exchange Ratio

MIN MAX MIN MAX MIN MAX

Market Multiples 4.61 4.79 125.86 134.78 26.29 29.25 Value Map 4.65 4.78 127.26 133.61 26.62 28.70 Market averages Last day 4.08 139.44 34.14 1 month 4.26 126.90 29.79 3 months 4.40 123.46 28.05 6 months 4.34 123.70 28.48

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Last day before speculation 4.23 117.32 27.76 1 month before speculation 4.40 117.05 26.62 3 months before speculation 4.46 120.03 26.93 6 months before speculation 4.35 119.25 27.42 Analysts' Consensus 4.68 5.17 113.11 125.01 21.86 26.71

Conclusions

In order to guarantee equal treatment for BPH minority shareholders with respect to HVB, the same premium applied to the HVB offer (16.9% or 16.6% after dilution due to the impact of recently implemented capital increases) was applied to the exchange ratio based on the six month average market prices of UniCredit and BPH (28.48 UniCredit shares per each BPH share), which appears to be representative of the distribution of exchange ratios determined by applying the various methodologies. The application of such premium, which is justified by the existence of synergies directly attributable to BPH as a result of the transaction, has led to identifying an exchange ratio for the offer of 33.13 UniCredit shares for each BPH share.

5.6 TOTAL COUNTERVALUE OF THE OFFERS. On the basis of market prices as of 10 June 2005 and the €/PLN exchange rate on the same date, and assuming complete success for the exchange offers with respect to HVB, Bank Austria, and BPH, and assuming furthermore that the Bank Austria and BPH shares held by HVB and Bank Austria, respectively, are not tendered, the total countervalue would be € 19.2 billion.

5.7 EVALUATION PURSUANT TO ARTICLE 2343 OF THE CIVIL CODE, REPORT ON THE ISSUE PRICE PURSUANT TO ARTICLE 2441 OF THE CIVIL CODE AND ARTICLE 158 OF LEGISLATIVE DECREE 58/98. The audit firm issued an opinion as to the appropriateness of the exchange ratios determined hereinabove, in compliance with Article 2441 of the civil code and Article 158, paragraph one, of Legislative Decree 58/1998.

The expert appointed by the Genoa Court in compliance with Article 2343 of the civil code at the request of UniCredit, on the other hand, has prepared his own sworn statement regarding the shares to be transferred that are the subject of the offers.

Both documents were deposited at the UniCredit’s registered office and the market management company, together with the information document prepared in compliance with Article 70 of the Issuers Regulation adopted by CONSOB with Resolution no. 11971/99, as amended.

6. UNICREDIT CAPITAL INCREASE

On the basis of the foregoing, the capital increase that is the subject matter of our proposal must be in such an amount as to enable the exchange of the shares tendered with regard to the HVB, Bank Austria and BPH offers, on the basis of the aforementioned exchange ratios without, however, including the Bank Austria shares held by HVB and the BPH shares held by Bank Austria, which cannot in any case be exchanged for UniCredit shares.

Therefore, the proposal that we are submitting to you refers to an overall maximum increase in capital stock of € 2,343,642,931.00 by issuing up to 4,687,285,862 ordinary shares with regular dividend rights, under the terms set forth in the following schedule:

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Total N° of shares

N° shares to be exchanged

Exchange Ratio

Maximum N° UniCredit shares to be issued

HVB 750,699,140 750,699,140 5.00 3,753,495,700 Bank Austria 147,031,740 33,041,840 19.92 658,193,453 BPH 28,716,230 8,318,645 33.13 275,596,709 Total 4,687,285,862

The total price of the issue would be determined on the basis of the consideration for the acquisition of HVB and the minority stakes in Bank Austria and BPH, calculated on the basis of the exchange ratios multiplied by the UniCredit share price as of 10 June 2005. The total price of the proposed capital increase issue would therefore be € 19,194,435,604.89, which represents the valuation attributed to the transaction by the market. Given the maximum number of UniCredit shares to be issued – which, as indicated hereinabove, is 4,687,285,862 - the unit price of the issue would be € 4.095, € 0.50 of which is the nominal value and € 3.595 the share premium.

Finally, we would like to inform you that, as of the date this Report, UniCredit's fully subscribed and paid-in capital was € 3,169,025,381.50, divided into 6,338,050,763 shares with a value of € 0.50 each, 6,316,344,211 of which are ordinary shares and 21,706,552 of which are saving shares. Moreover, on 2 May 2005 UniCredit’s extraordinary shareholders meeting resolved upon a capital increase of up to € 22,490, by issuing a maximum of 44,980 ordinary shares for the merger of Banca dell’Umbria 1462 and Cassa di Risparmio Carpi, that we expect to be effective on 1 July 2005.

In addition, on 12 June 2005, the UniCredit Board of Directors decided upon a free capital increase, in compliance with articles 2349 and 2443 of the Civil Code, in the total amount of € 8,492,143, by issuing 16,984,286 ordinary shares to be allocated to all Group employees in implementation of the incentives plan adopted last year. Because it is estimated that this capital increase shall be effective on the date of the illustration of this proposal to the shareholders meeting, on that date the subscribed and paid-in UniCredit capital shall amount to € 3,177,540,014.50, divided into 6,355,080,029 shares with a value of € 0.50 each, 6,333,373,477 of which are common shares and 21,706,552 are saving shares.

7. IMPACTS ON THE UNICREDIT SHAREHOLDER BASE AND ON SHAREHOLDER AGREEMENTS (IF ANY) UNDER ARTICLE 122 OF LEGISLATIVE DECREE 58/98

In light of the foregoing, the issuance of UniCredit ordinary shares for the exchange offers illustrated in this Report would entail a dilution of the holdings held by current UniCredit shareholders of approximately 42.5%.

The shareholder structure of the holding, in the event of full acceptance of the exchange offers and assuming that Munich Re sells 50% of its holding on the market, would change as indicated in the following table:

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Market 74.1%

Bayerische Landesstiftung

0.7%

AVZ 1.5%

Capital Group 1.7%

Munich Re 3.1%

Aviva 1.5%

Allianz 2.8%

Fondazione Cassamarca 1.2% Fondazione Carimonte 4.0% Fondazione Cariverona

4.3%

Fondazione CRT 5.0%

We are not aware of any shareholder agreement relating to UniCredit shares, with the exception of the shareholders’ agreement entered into by the Credit Institution Management Personnel Union Organizations "Uniosind" and "Sinfub", which have as members – according to the information available to UniCredit – 394 shareholders who are employees of the UniCredito Italiano Group who hold a total of 903,134 ordinary shares in the Company, which represents 0.014% of the ordinary capital, for which the members have not communicated any consequences deriving from the capital increase.

8. ORGANIZATIONAL MODEL OF THE GROUP RESULTING FROM THE COMBINATION – STRUCTURE OF THE GROUP TO BE IMPLEMENTED

8.1 ORGANIZATIONAL MODEL OF THE GROUP RESULTING FROM THE COMBINATION. As anticipated, the BCA sets out, inter alia, the organizational model for the new Group, which contemplates a divisionalised structure focused on customer segments, and the creation of common product factories. The focus on customer segments would facilitate the integration of operations in the various markets, thereby enabling the creation of significant synergies, especially in global businesses (asset management, investment banking, private banking, corporate).

In the past, the UniCredit and the HVB Groups displayed distinctive expertise in the retail, private and asset management and operations segments and in the corporate and investment banking segments, which provides the prospect of strong complementarity in the management and operation of the combined Group. It has therefore been agreed with the HVB management that the combined Group shall be based upon the following divisions:

- Retail;

- Private Banking and Asset Management;

- Corporate/SMEs;

- Multinationals/Investment Banking;

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- Global Banking Services;

- Central Eastern Europe.

To favour integration and the generation of synergies among the various Divisions, the new Group would maintain a clear separation between distribution activities - allocated to commercial banking institutions - and the product factories, responsible for product development of specialized services to be distributed through the Group banking own networks and third parties’ networks. The product factories could either be in the form of separate legal entities or of organizational units.

In addition, the new Group's ability to meet the potentially different requirements of clients in the major markets where it has a presence (Italy, Germany, Austria), particularly in the retail segment, would be ensured by the continued presence of separate banking institutions in individual markets. The three Italian banks in the segment would therefore be joined by a German bank and an Austrian bank, preserving the multinational character of the group and promoting institutional relationships as well as relationships with regulatory authorities in the individual countries. It is expected that increased future intra-Group integration would enable to align the legal structure of the banks in Germany and Austria with the organizational structure by segment, by "exporting" the S3 Project.

The Global Banking Services Division would retain responsibility for improving the cost structure and internal processes of the combined Group, by providing services to the other divisions in the area of human resources, IT services, organization, back-office, transaction services (payment settlement), intra-group property management. The role of the Global Banking Services division would therefore be key to the integration of the new Group and the generation of some of the synergies identified.

Given the different degree of development of the relevant markets, the CEE division would retain its own independence from other Group divisions. Such division would be responsible for management of activities in all CEE markets where the Group has a presence, including Russia, the Baltic countries and Turkey, as well as for further expansion of the Group in the region. The banks operating in the various countries in the region would nevertheless continue in the process of divitionalising their activities on the basis of customer segments, so as to ensure uniform management of operations on a regional basis and enable the generation of synergies among the various markets. As the larger and more advanced markets, such as Poland, come closer to the standards of markets which are historically part of the European Union, it is anticipated that the operations in such markets will be transferred to the respons ibility of segment divisions.

With the establishment of the new UniCredit Group, the holding company would be responsible for management of operations of significant size in numerous markets, including those with different features. To ensure a uniform management of operations, a reorganization of the activities of the holding company staff - on the basis of a limited number reporting lines to the Managing Director - is envisaged. The management structure to be implemented would be based on the "professional family" concept, which provides a direct reporting relationship among corresponding organizational functions belonging to the various companies in the Group.

8.2 GROUP STRUCTURE TO BE IMPLEMENTED. In the event that the HVB, Bank Austria, and BPH offers are successful, the structure of the combined Group immediately after completion of the offer would be relatively complex, entailing an indirect chain of control on the

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business activities of HVB. UniCredit would in fact assume direct control of HVB, which in turn would control Bank Austria, which would control the CEE banks. Various companies controlled by UniCredit, HVB, and Bank Austria would perform product factories functions in the various markets. In order to ensure an efficient structure for the new Group, we believe that the main banking institutions of the Group should be directly controlled by UniCredit. The "target" structure of the Group therefore provides that UniCredit will directly retain direct control, not only of HVB, but also of Bank Austria as well as the product factories. With regard to asset management activities, the current operations of HVB and Bank Austria should be controlled by PGAM. Banks in the CEE should also be directly controlled by UniCredit and combined into a single company in the respective markets. If tax and capital efficient, it is envisaged that a sub-holding company controlled by UniCredit will be established, which will retain control on CEE activities.

9. GROUP GOVERNANCE

To further illustrate the main elements of the agreed combination between UniCredit and HVB, the principles for the governance of the Group set out under the BCA are described below.

9.1 STRUCTURE AND COMPOSITION OF BOARD OF DIRECTORS OF UNICREDIT. Firstly, a new Board of Directors will appointed, so that eight HVB nominees indicated in the BCA will become Board members, representing one third of the members of the Board of Directors. To this end, we are proposing in the context of today's shareholders meeting an amendment to the By-Laws of the company to provide for a maximum number of 24 members of the Board of Directors. It was agreed in the BCA that, on the date of the approval of this proposal by the shareholder meeting, the current UniCredit directors would resign, conditional upon and with effect as of the completion of HVB offer.

Finally, the aforementioned appointment of all the members of the Board of Directors for a three year term will be proposed in the context of an ordinary shareholders meeting that the Board of Directors is required to convene immediately upon completion of the HVB offer.

In the context of a Board meeting to be held immediately upon its renewal the Board will appoint Mr. Dieter Rampl as Chairman of UniCredit. In line with UniCredit’s structure and consistent with the instructions by the Regulatory Authority, the Chairman would have a non-executive role, and, within that framework, he would specifically be entitled to:

- propose to the shareholders meeting – or to the Board of Directors, in case of co-optation – a candidate director should the number of directors be increased or in case of early termination (for whatever reason) of one of the directors designated by HVB, so that for the entire term of the agreement the aforementioned one-third representation will be assured;

- propose one third of the directors for a second term;

- during a period of 3 years following completion of the HVB offer: (i) give his/her consent with respect to any proposal by the Managing Director to appoint or terminate the office of the directors who are members of the Strategic Committee (also referred to as the "Management Committee") or of the "Group Management Team" (referred to below), unless such termination results from failure to achieve the

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Industrial Plan, in which case only consultation with the Chairman will be required; (ii) agree with the Managing Director on any changes to the composition of the Management Committee and of the Group Management Team in terms of number of members and functions represented therein;

- finally, designate a director among those initially designated by HVB (or subsequently proposed by the Chairman) for the appointment of Director in Charge, to exercise the aforementioned powers and authority in the event the Chairman’s absence or impediment. Any such Director in Charge would be entitled to designate a deputy.

UniCredit and HVB have also agreed on the principle that one third of the members of the UniCredit Executive Committee, as well as of the other Board committees, shall be appointed upon indication by the Chairman of the Board of Directors.

Finally, the parties have agreed that, in the event of the replacement of the current Managing Director, due to any reason, the new candidate will be selected from among the members of the Board other than those initially designated by HVB or subsequently appointed upon proposal of the Chairman.

9.2 QUALIFIED MAJORITIES FOR THE UNICREDIT BOARD OF DIRECTORS. For the purpose of ensuring compliance with the governance and organizational principles of the UniCredit Group resulting from the combination, the BCA provides that certain decisions shall be reserved to the Board of Directors, which resolve thereon by qualified majority and, specifically, with the consent of 19 directors out of 24 (i.e., 79% of the members of the Board). Such resolutions should include any resolutions contrary to the following principles provided for under the BCA:

(i) One third of the total number of the members of the Board, of the Executive Committee and of the Board Committees shall be designated upon proposal of the Chairman;

(ii) Designation of a replacement Chairman responsible for discharging the responsibilities of the Chairman under the BCA;

(iii) Right of the Chairman to make a proposal for the replacement of any members of the Board of Directors, who are designated by HVB before the completion of the aggregation or, thereafter, by the Chairman;

(iv) Right of the Chairman – during a period of 3 years as of the settlement date of the HVB offer– to express his/her consent on any proposal of the Managing Director to appoint /terminate the office of any members of the Management Committee and of the Group Management Team (unless, termination of the office is attributable to failure to achieve the Industrial Plan);

(v) Right of the Chairman – during a period of 3 years as of the settlement date of the HVB offer – to express his/her consent on the Managing Director’s proposals to change the composition of the Management Committee and of the Group Management Team in terms of number of members and functions represented therein;

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(vi) Existence of HVB e Bank Austria as a German and Austrian commercial bank respectively and autonomous legal entities, except for a reorganization of their existing business activities into up to five separate legal entities for reasons connected with their development and business needs;

(vii) Prohibition to transfer any HVB shares, acquired in the context of the transaction, to third parties outside the UniCredit Group;

(viii) Prohibition to transfer: (1) any of HVB Business Lines and/or (2) one or more assets and/or subsidiaries (directly or indirectly held) that are of essential importance for the performance of its activities in Germany and Austria, save for: (i) transfers sub (1) instrumental to any reorganization concerning the entire UniCredit Group or concerning disposals of non-performing or sub-performing loan portfolios; and (ii) transfers sub (2) instrumental to the reorganization of the existing business activities of HVB into up to five separate legal entities that reflect the business and organizational support lines;

(ix) Retaining “HVB” and “Bank Austria” brand names, provided that they may be accompanied by the UniCredit logo and by the expression “Member of the UniCredit Group”

(x) Location of Corporates/SMEs Divisions and Multinational/Investment Banking in Munich as well as of the Central Eastern Europe Division in Vienna, along with the attributions of the relevant product factories;

The parties also agreed in the BCA that should there be any major capital constraints for the Group, the Board of Directors will deal with such a situation in the best interest of the Group.

The aforementioned provisions regarding qualified majorities and exclusive competence have been included in the Rules of Procedure of the Board of Directors of UniCredit, to be adopted pursuant to the BCA, effective as of the closing date for the HVB offer.

9.3 AMENDMENTS TO THE BYLAWS. To secure performance of the obligations undertaken in the BCA on the future governance of UniCredit, the bylaws of UniCredit should be amended so as to include the following provisions, in addition to the amendments resulting from the resolution on the capital increase instrumental to the offer:

1. increase in the maximum number of the members of the Board of Directors up to 24;

2. adoption by the Board of Directors of rules of procedure regulating the functioning and attributions of the Board;

3. increase of the list of items falling within the exclusive competence of the Board, by proving that said items include those identified as such under the rules of procedure;

4. qualified majority (79%) for resolutions of the Board concerning the adoption and amendment of the rules of procedure of the Board of Directors, as well as for any

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decisions to be taken by qualified majority in accordance with the rules of procedure;

5. publication of the rules of procedure governing the functioning of the Board in a manner consistent with the publication of other communications from the Company to its shareholders and/or to the market;

6. provisions to the effect that any Board resolution adopted in breach of the rules of procedure concerning items falling within the exclusive competence of the Board of Directors and qualified majorities may be challenged in accordance with Article 2388 of the civil code;

7. acknowledgement of the existence of the Strategic Committee (also referred to as "Management Committee") in the bylaws with an indication of its functions.

As specified in the relevant illustrative report, the amendment referred to in 1 above – if approved – would be effective immediately upon its enrolment in the Companies Registry; conversely, the effectiveness of the proposed amendments referred to under 2 to 7, will remain conditional upon completion of the HVB offer.

9.4 GROUP MANAGEMENT.

a) Strategic Management (“Management Committee”)

As anticipated, the understanding between UniCredit and HVB concerning the governance of the Group resulting from the business combination envisage that the existence of the Strategic Committee (“Management Committee”) will be acknowledged in the company’s By-Laws. The Management Committee shall perform advisory and support functions to the activities of the Managing Director for the management of the newly established Group. Moreover, the Committee would be responsible for implementing decisions adopted by the Managing Director and report to the latter.

The members of the Management Committee would be appointed/revoked by the Board of Directors of UniCredit upon proposal of the Managing Director, who, for a three-year term following the execution of the BCA, should obtain prior consent from the Chairman, as detailed above. The directors to be appointed as members of the Management Committee will be selected on the basis of merit, international background and relevant business experience.

The Management Committee would comprise the Managing Director, Heads of Divisions, Chief Financial Officer (CFO), Chief Risk Officer (CRO) and the so-called Integration Officer and his deputy. According to the BCA, HVB would have the right to recommend the CRO and the Heads of the Multinationals/Investment Banking and Central Eastern Europe Divisions as well as the deputy Integration Officer. For the first three years starting from the date of execution of the BCA, any amendments to the functions and the composition of the Committee could be resolved by the Board of Directors of UniCredit upon joint proposal by the Managing Director and the Chairman.

b) Group Management Team

The BCA provides also for the creation of a “Group Management Team”, whose features and functions must be set out in the Company Regulations. The Team would comprise the members of the Management Committee as well as the Heads of the 4 business

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lines in Italy, Germany, Austria and Central Eastern Europe, the Heads of the Internal Audit, Legal Department, Corporate Identity and Human Resources functions of UniCredit.

The rules governing appointments and replacements, as well as those on changes to its composition and function, would be similar to the rules adopted for the Management Committee illustrated above. More specifically, as regards the function of the Group Management Team, its members would be responsible for supervising and controlling all planning and financial matters, risk management, legal issues, IR and Corporate Identity, Management of Resources and will be responsible for providing guidance, in those sectors, to the corresponding functions of the various Group companies, in line with the corporate governance principles and the methods adopted by the Group to manage functional relationships.

9.5 CORPORATE BODIES OF HVB AND BANK AUSTRIA. The BCA provides that - in line with the (direct or indirect) acquisition of the majority of the share capital of HVB and Bank Austria subsequent to the completion of the transaction illustrated herein – the Chairman and the majority of the members, appointed by the shareholders, of the Supervisory Board of HVB and Bank Austria shall be representatives of UniCredit. To this end, in particular, HVB has undertaken to use its ‘best efforts’ so that the said members resign and are replaced by the candidates indicated jointly by UniCredit and the representative of HVB’s Management Board.

9.6 INTEGRATION OF HVB, BANK AUSTRIA AND THEIR SUBSIDIARIES IN THE UNICREDIT BANKING GROUP. Lastly, the BCA specifies that, following the completion of the transaction, HVB and its subsidiaries will become members of the UniCredit Banking Group, subject to supervision by the Bank of Italy on a consolidated basis. As a result, HVB has undertaken to provide – and to use its ‘best efforts’ so that its subsidiaries will provide – all the information and support, in compliance with local regulations currently in force, to allow UniCredit to exercise its role as Holding Company and the Bank of Italy its supervisory role as described above. Furthermore, HVB has undertaken to amend – and to use its ‘best efforts’ so that its subsidiaries modify – the Memorandum of Association, as soon as possible, to the effect that the latter provides that HVB is part of the UniCredit Banking Group, pursuant to Article 61, paragraph 4, of the TUB (Consolidated Banking Act) and implementing regulations.

Finally, UniCredit has undertaken not to enter into any domination agreement with HVB or its subsidiaries for the entire duration of the BCA.

9.7 TEMPORARY CONSTRAINTS ON THE GOVERNANCE OF BANK AUSTRIA. In 2000, HVB and Bank Austria executed agreements (the so-called “Bank of the Region Agreements”) which affect the governance of Bank Austria and which could be terminated by either party starting from December 2006 by giving 12 months advance notice. Until then, the constraints limiting the exercise of the rights that, in principle, HVB is entitled to, as majority shareholder of Bank Austria, can be summarised as follows:

­ HVB appoints only 4 members out of 17 (6 being chosen by the employees) of the Supervisory Board of Bank Austria;

­ in addition, under the terms of the agreement and for a period still to be defined, the shareholders meeting of Bank Austria can resolve on a number of matters only if AVZ (a foundation affiliated with the city of Vienna) and WCF (Employees’ Fund), which hold “special” shares, are present. In particular:

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­ any change in the corporate status, mergers or de-mergers of Bank Austria, if Bank Austria ceases to be an Austrian bank;

­ specific amendments to the By-Laws, including attendance and voting quorum (presently 2/3) required for the Supervisory Board of Bank Austria to be able to dispose of Bank Austria’s wholly -owned subsidiaries in 2000, i.e. the year in which the agreement was executed (i.e. in the CEE, Slovakia and Rumania).

In order to provide a complete set of information on Group governance, we inform you that on 19 May 2005, the Shareholders meeting of Bank Austria granted the management Board the power to increase the share capital by an amount up to 50% of the current share capital of Bank Austria. This power might be used by the Management Board to resolve share capital increases effected through contributions in kind and/or excluding pre-emptive rights. It being understood that local regulations in the field of public offers would not allow the exercise of the abovementioned power until the transactions has been completed (as such exercise of power would be interpreted as an hostile action toward the offeror), HVB has undertaken to use its ‘best efforts’ to the effect that the Management Board of Bank Austria resolves to carry out such share capital increase, following the completion of the offer, only subject to prior approval by UniCredit. In the event that the Management Board of Bank Austria should resolve differently, HVB has undertaken to convene, not later than the date of completion of the transaction, a shareholders meeting of Bank Austria for the purpose of revoking the power granted on 19 May 2005. If HVB fails to meet its obligation to convene the shareholders meeting of Bank Austria, UniCredit shall have the right to terminate the BCA.

9.8 RULES ON TERMINATION OF THE BCA. To conclude the illustration of the main contents of the BCA, we would like to inform you that the agreement executed by UniCredit and HVB has a 5 year term (unless renewed on an annual basis upon proposal by UniCredit). The BCA can be terminated by mutual consent of the parties, but also unilaterally by UniCredit in the following cases:

− pre - closing

− where the Supervisory Board or the Management Board of HVB recommends a competing offer (in this case, also HVB would have the right to terminate) or the Management Board of HVB does not recommend the offer by UniCredit;

− where the offer is not completed by 31 March 2006 (in this case, also HVB would have the right to terminate);

− post - closing

− where HVB does not limit its activity to ordinary business until completion of the transaction;

− where HVB tenders its own shares to the offer made on the shares of Bank Austria;

− where HVB does not convene the shareholders meeting of Bank Austria, upon the conditions set out under the agreement, to pass the resolution to revoke the powers granted to the Management Board to increase the share capital (up to a maximum of 50% of the current share capital of the company).

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10. EXPECTED SYNERGIES

The UniCredit Group and HVB Group business combination is expected to generate significant synergies which by 2008 should amount to approximately € 1.0 billion (before tax) and € 0.7 billion (after tax).

The synergies would be generated in the following areas:

− Asset management. Elimination of overlapping areas in the investment management activities, operations and in the German market would allow to develop gross cost synergies of approximately € 70 million per annum, equal to about 13% of total costs on a combined basis. The widening of the range of products distributed by HVB with Pioneer and the stronger positioning of the combined Group in the institutional segment could generate also approximately € 35 million of gross income synergies.

− CEE. Elimination of overlapping areas in the central management functions of the banks of the UniCredit and HVB Groups in the various CEE countries would give rise to gross cost synergies of approximately € 170 million, of which about € 130 million relate to Poland alone. The incidence on the combined costs would be equal to 17% of the combined costs in Poland and 7% in the other markets. On a conservative basis the advantages arising from the possible rationalisation of the distribution networks have not been taken into account.

− Investment banking. Elimination of the overlaps existing in the business areas would allow to generate gross cost synergies of approximately € 140 million, equal to 20% of combined costs. The plan is to maintain a multi-local structure with offices in Munich and Milan, with the possibility to create continental platforms based in London, dealing in areas of excellence (e.g. derivatives).

− Retail. The combined Group would rely on the expertise of UniCredit in the management of the retail business to maximise the performance in Germany and Austria by increasing efficiency which, in turn, would lead to gross cost synergies of approximately € 160 million, equal to 11 % of the combined costs in the two countries. These synergies are an additional benefit to the efficiency-boosting PRO (Process Redesign and Optimisation) program announced by HVB in February 2005 which relates mainly to the central management and back-office functions.

− Corporate banking. Synergies would be achieved by exporting the CorporateLab model to the marketing of derivative products to ‘Corporate’ businesses and by eliminating overlapping areas in some of the Corporate business functions. Gross income synergies would amount to approximately € 55 million per annum, whereas gross cost synergies would be approximately € 29 million, equal to 2% of costs on a combined basis.

− IT. Given the lack of efficiency of HVB’s existing IT systems, the migration of the structures of HVB and Bank Austria to the systems of UniCredit would allow significant cost reductions in IT investments and increase the commercial efficiency of the combined Group. As a result, gross cost synergies would be approximately € 195 million per annum, equal to about 25% of combined costs.

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− Transactional services and custody. The development of a common platform based on HVB’s current platform would allow to generate gross cost synergies of approximately € 65 million, equal to 15% of combined costs.

− Back-office. The development of a common platform and the increased efficiency of the IT systems would allow to achieve gross cost synergies of approximately € 20 million per annum, equal to 5% of combined costs.

− International banking. UniCredit and HVB Groups present some overlapping areas in the foreign network of branches and representative offices. Gross cost synergies expected in this area are approximately € 29 million per annum, equal to about 8% of combined costs.

− Leasing. The creation of a common platform would generate gross cost synergies of approximately € 7 million per annum, equal to about 5% of combined costs.

− Consumer finance / credit cards. The development of common platforms in some areas and the sharing of ‘best practices’ would allow to achieve gross cost synergies of approximately € 10 million per annum, equal to 9% of combined costs.

− Corporate centre. The overlapping areas existing in certain functions would be counterbalanced by the creation of new functions to manage the combined Group, therefore, on a conservative basis, no synergies have been accounted for in this area.

In Germany, the new Group could benefit from the tax shield effect of prior years’ losses and, as a result, in 2008 net synergies would be equal to approximately € 0.7 billion and the average tax rate would be 30%. Regarding the timing for the achievement of synergies, approximately 40% of gross synergies would be achieved in 2006, approximately 80% in 2007, whereas the full benefit would materialise in 2008.

Lastly, restructuring costs expected to be incurred to achieve these synergies would be equal to € 1.3 billion gross. They would be attributable mainly to the costs relating to redundancies, estimated at approximately 9,000 units, of which around 900 in Italy, and to the write-off of IT investments included in HVB financial statements. The restructuring costs would be recorded in 2005, but the tax effects would take place in the years in which the synergies actually arise.

Cost synergies represent approximately 90% of estimated gross synergies. The estimate of revenue synergies was conservatively restricted to specific areas and did not take into account the growth potential in the retail and private banking segments, where development prospects also exist thanks to the combination of the UniCredit and HVB Groups.

Unlike the approach followed in recently completed or announced cross-border transactions, a prudent approach was followed to estimate synergies and their related costs. In fact, estimated synergies represent 11% of HVB's revenues and 16% of HVB’s cost base (HVB being the smaller partner), whereas in other European transactions these percentages range from 12% to 23% and between 18% and 59% for the smaller partner’s revenues and costs respectively. The restructuring costs amount to approximately 150% of cost synergies, whereas estimates for other transactions are occasionally lower than 100%. The estimate of synergies does not take into account potential income synergies such as: (i) improvement of product mix in favour of higher value added products, especially in the retail segment; (ii) adoption of a business model focused on increasing the degree of penetration of ‘Corporate’ customers in Germany and Austria; (iii) creation of a continental franchise (including CEE

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countries) in the investment banking segment; (iv) improvement of the critical mass and of Pioneer’s competitive positioning worldwide with the possibility of increasing institutional mandates; (v) potential achievement of revenue synergies in the private banking segment by aligning best practices at Group level; (vi) benefits arising from a possible re-rating.

11. EVOLUTION OF THE PROFIT AND LOSS ACCOUNT

Assuming a share-for-share acquisition of 100% of HVB and its subsidiaries Bank Austria and BPH, there would be a positive economic impact on the UniCredit Group. The expected pro-forma banking revenues of the newly established entity would be equal to more than € 20 billion with a cost/income ratio of 60%, net loan loss provisions/RWA of 0.6% and a ROE of 13% in 2005. Thanks to the implementation of the joint industrial plan agreed in the BCA, the cost/income ratio would fall to 51% in 2007, whereas the ROE would increase to 18%. The estimated combined Group profit would increase to € 3.8 billion in 2005, gross of the expected restructuring costs.

12. UNICREDIT EARNINGS PER SHARE

Assuming a share-for-share exchange of 100% of HVB and its subsidiaries Bank Austria and BPH, earnings per share would be diluted by 11% in 2005, but they would rise again to the level envisaged in the standalone strategic plan in 2006 and would grow by 3.5% in 2007, still compared to the standalone plan.

13. UNICREDIT DIVIDEND PER SHARE

Assuming that the economic-financial objectives are achieved, in 2005 the Group expects to maintain the same dividend paid in 2004. In 2006 and 2007, instead, the Group expects to increase the dividend and yet manage to comply with the pre-set capital targets.

14. IMPACT ON ASSETS

In view of the RWA size and current capaital structure of the HVB group, as well as the transaction structure, the combined group would have lower capital ratios than those of the UniCredit Group’s. The HVB group presents a core tier 1 ratio of 4.7% as of December 31, 2004, lower than the core tier 1 ratio of the UniCredit Group as of the same date, which is equal to 7.4% (pro-forma for the acquisition of Yapi Kredi in Turkey). The tier 1 ratio of the HVB Group is higher, equal to 6.0% as of march 31, 2005 (UniCredit group 7.9%), thanks to the contribution of hybrid capital instruments. Finally, the total capital ratio of the HVB group is equal to 10.4% as of March 31, 2005 (UniCredit group 11.6%).

In case the HVB, Bank Austria and BPH share offers are successful, the net assets of the Group would increase to € 34.5 million, core tier 1 would be equal to € 22.9 million, while tier 1 would be equal to e 27.0 million. The core tier 1 ratio of the combined group at the end of 2005 would be equal to 5.3%, the tier 1 ratio to 6.2%, and the total capital ratio

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would be 10.1%. Thanks to the self -financing generated, these ratios would increase to 5.8%, 6.8% and 10.5% in 2006 and 6.4%, 7.3% and 10.9% in 2007, respectively.

15. RISKS OF TRANSACTION

15.1 LAUNCHING OF COMPET ING OFFERS. Promotion of a public offer for the acquisition of control of HVB could induce other European banks potentially interested in the German group to intervene, with the risk that the transaction terms would need to be reviewed to ensure its success. Based on the indications from the press, the interested European banks could include BNP Paribas, ABN Amro and Santander. A “country system” reaction through a Deutsche Bank and Commerzbank counteroffer cannot be ruled out. Within the framework of the BCA, in evaluating competing offers, HVB’s Management Board agreed to take in consideration all the elements of UniCredit’s offer, including the strategic ones. It must be remembered that in case the HVB’s Management Board or Supervisory Board recommend a competing offer, UniCredit would have the right to terminate the BCA. Finally, it must be remembered that, based on the rules governing take-over bids in Germany, possible competing offers could be presented by the end of the “offer period” of the UniCredit’s offer, but would have to provide for more favourable terms with respect to it to be evaluated by German Supervisory Authority. The term of the offer promoted by UniCredit would automatically be aligned with that of the competing offer(s).

15.2 ASSET QUALITY. The poor quality of HVB credit portfolio determined levels of yearly net adjustments for credits higher, on average, than those of German banks, with a ratio of net adjustments to net credits – excluding extraordinary adjustments – at the consolidated level of 0.96% in 2002 and 0.85% in 2003 versus 0.72% for other banks. In February 2005, accounted for in the year 2004, a special € 2.5 billion adjustment regarding a credit portfolio of approximately € 15 billion has been made. This adjustment should have brought the HVB credit quality in Germany in line with other German banks. As a result of the adjustment, the ratio between gross non performing loans amounts and credit exposure including guarantees and commitments at a consolidated level is equal to 6.1%, while the non performing loans coverage ratio (excluding the collateral) is equal to 57.3%. For the Germany division, the ratio of gross non performing loans to credit exposure including guarantees and commitments is equal to 3.1%, while the non performing coverage ratio is equal to 55.5%. Finally, the coverage ratio of the RER Division, to whic h the € 15 billion credit portfolio (on which the special adjustment was made) has been transferred, is equal to 56.3%. The need for an increase of the coverage ratio, caused by a further deterioration of the portfolio quality or underlying guarantees, could lead to extraordinary adjustments to HVB credit portfolio.

15.3 EXECUTION RISK. Should the HVB offer be successful, the implementation of the industrial plan of the combined group and relative synergies would be subjected to an execution risk. As a matter of fact, the implementation of the industrial plan assumes an increase in the efficiency of the HVB Group structure, which currently presents a consolidated cost/ income ratio of 66%, exceeding the European average of 57% or the UniCredit Group average of 57%. Although this represents an opportunity for value creation, restructuring of activities to be acquired requires close coordination between various legal entities in various countries, as well as an active involvement of HVB and Bank Austria management. Therefore, there is a risk of deadlock in the implementation of the industrial plan.

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15.4 EFFECTS ON ASSET CONT RIBUTION AND RATING.

In case the HVB, Bank Austria and BPH offers are successfully completed by an exchange of shares, the net assets of the Group would increase to € 34.5 million, core tier 1 would be equal to € 22.9 million euros, while tier 1 would be equal to € 27.0 million. The core tier 1 ratio of the combined group at the end of 2005 would be 5.3%, the tier 1 ratio to 6.2%, and the total capital ratio would be 10.1%. Thanks to the self -generated financing, these ratios should increase to 5.8%, 6.8% and 10.5% in 2006 and 6.4%, 7.3% and 10.9% in 2007, respectively. These ratios are sufficient to guarantee asset stability of the new group despite the fact that rating agencies could consider them insufficient to maintain the current rating level of the UniCredit Group (Aa2 of Moody’s and AA- of Standard&Poor’s). Finally, it must be remembered that in case the structure of the above-mentioned offer needs to be modified as a result of intervention of authorities or in cas eof lower acceptance levels, the need for asset equivalent could be equal to a maximum of € 4.3 billion, assuming that the offers for Bank Austria and/or BPH are completed in full, for the part of minority shareholders, with the corresponding amount in cash. This hypothesis represents an extreme case and it is rather unlikely. The need for capital that could emerge with regard to a different combination of shares/cash and to various acceptance levels could be financed through the issue of hybrid financial instruments that can be included in the regulatory capital in accordance with the rules of the Bank of Italy or the transfer of liabilities, participations or non-strategic activities.

Finally, it should be mentioned the risk that Bank Austria and entities controlled by it would not align immediately with the new strategies of the group resulting from the combination in the period before termination of the “Bank of Region Agreement”, despite the fact that the agreement stipulates that Bank Austria would respect the principles established by HBV for the Group, including in particular dividends, investment, risk management, accounting and operating control policies. This possibility could slow down the implementation of the industrial plan in terms of integration within CEE and certain business areas.

Dear Shareholders,

If you are in agreement with the illustrated report of the Board of Directors, drawn up pursuant to article 2441, paragraph 6, of the Civil Code, we invite you to resolve on the following:

“The Extraordinary Meeting, in light of:

- The report of the Board of Directors drawn up pursuant to article 2441, paragraph 6, of the Civil Code;

- The Authorization of the combination between the UniCredit Group and HVB group issued by Banca d’Italia on [l];

- The congruity opinion, expressed by KPMG S.p.A. audit company pursuant to article 2441 of the Civil Code and article 158, paragraph 1, of Legislative Decree number 58/1998;

- The sworn report prepared by Dr. [l], an expert nominated by the Court of Genoa pursuant to article 2343 of the Civil Code and regarding the shares to be contributed;

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- The filing of all the corporate documents required by current legislative and regulatory provisions within the terms prescribed therein, including the congruity opinion and the sworn report referred to in the previous points, as well as the information document prepared pursuant to article 70 of the Issuers Regulations adopted by CONSOB with resolution no. 11971/99, as amended,

resolves

1. To increase the corporate capital with exclusion of the option right pursuant to article 2441, paragraph 4, of the Civil Code for a nominal maximum amount of 2,343,642,931.00 euros, corresponding to the maximum number of 4,687,285,862 ordinary shares with nominal value of 0.50 euro each, to be offered in subscription to those who adhere to the Public Exchange Offers promoted by UniCredit and referring to all shares of the HVB, Bank Austria and BPH companies to be paid in:

§ Up to a maximum nominal amount of 1,876,747,850.00 euros (corresponding to a maximum number of 3,753,495,700 ordinary shares) through a contribution in kind by HVB shareholders up to a maximum of 750,699,140 shares of such company, according to an exchange ratio of 5.00 newly issued ordinary UniCredit shares for each ordinary bearer and registered preference share. The aggregate amount of the issue price must be of up to 15,370,564,891.50 euros, including a premium of 13,493,817,041.50 euros, corresponding to a price per share of 4.095 euros, including a premium of 3.595 euros;

§ Up to a maximum nominal amount of 329,096,726.50 euros (corresponding to a maximum number of 658,193,453 ordinary shares) through a contribution in kind by Bank Austria shareholders of up to a maximum of 33,041,840 shares of such company, according to an exchange ratio of 19.92 newly issued ordinary UniCredit shares for each ordinary bearer and registered preference share. The aggregate amount of the issue price must be of up to 2,695,302,190.04 euros, including a premium of 2,366,205,463.54 euros, corresponding to a price per share of 4.095 euros, including a premium of 3.595 euros;

§ Up to a maximum nominal amount of 137,798,354.50 euros (corresponding to a maximum number of 275,596,709 ordinary shares) through a contribution in kind by BPH shareholders of up to a maximum of 8,318,645 shares of such company, according to an exchange ratio of 33.13 newly issued ordinary UniCredit shares for each ordinary bearer and registered preference shares. The aggregate amount of the issue price must be of up to 1,128,568,523.36 euros, including a premium of 990,770,168.86 euros, corresponding to a price per share of 4.095 euros, including a premium of 3.595 euros.

In case the agreed capital increase is not fully subscribed within the period established for the conclusion of the respective Public Exchange Offers, the capital will be increased in any case by the amount corresponding to the subscriptions collected;

2. To approve the amendment to the first paragraph of article 5 of the company By-Laws according to the actual amount of the subscribed capital increase, granting to the Chairman and to the Managing Director, jointly and severally, the power to formulate this first paragraph with the appropriate numerical expressions and perform the required registrations with the Register of Companies and to carry out any other required and appropriate formalities;

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3. To grant to the Chairman and to the Managing Director, jointly and severally, any appropriate powers, in accordance with the law, to give effect to the foregoing resolutions, to accept or introduce any amendments or additions thereto (provided that they do not alter the substance of the transaction resolved upon) which might be requested by any supervisory authority or on the enrolment of the resolutions in the Register of Companies, and to carry out any activities necessary for the deposit and enrolment, being any such activities since now approved and ratified, and to take all necessary measures for the implementation of the present resolutions.”