HOW TO GENERATE ORGANIC GROWTH IN RETAIL BUSINESS

Roberto NicastroHead of Retail Division

Italian Investor Conference

New York - April 11th, 2005

2

UCI AT A GLANCE

Current market cap around Euro 29 bn

Home markets in Italy and Central Europe

Global player in Asset Management Euro 128 bn AUM

Main market shares in Italy: customer loans

10.8% household mortgages

17.7% customer deposits

10.1% mutual funds

13.8%

Main market shares in New Europe:Deposits Mutual

funds Poland 12.7% 34.5% Croatia 29.2% 39.8% Turkey 4.7% 12.1%

70,543 employees (29,540 in New Europe)

4,528 branches (1,373 in New Europe)

ROE 17.9%, Cost/Income Ratio 57.3%

Private & AM11%

New Europe18%

Corporate29%

Retail42%

TOTAL 2004 REVENUES: Euro 10.4 bn

2004 data

3

ORGANIZATION BUILT TO LEVERAGE OPPORTUNITIES IN ALL OUR CUSTOMER SEGMENTS AND MARKETS

(1) Consumer Finance(2) Retail residential mortgages(3) Leasing(4) Asset Gathering from affluent clients

New EuropeNew Europe

Pekao (Poland)

Zagrebacka (Croatia)

Bulbank (Bulgaria)

KFS (Turkey)

UniBanka (Slovakia)

UC Romania

Zivnostenska (Czech Rep.)

CorporateCorporate

UBM

Locat(3)

Clarima(1)

UBCasa(2)

RetailRetail Private & AMPrivate & AM

Pioneer

Xelion(4)

Global Banking Global Banking Services divisionServices division

Human Resources

Processes and organization

Central operations (UPA)

IT

Real Estate

Purchasing process

4

A SUCCESSFUL GROWTH PATH

INTERNATIONALIZATION

1998

0%

2004

17.6%

Weight of New Europe on Group Revenues

STATURE

1998

83.5

2004

149.7

Risk weighted assets, Euro bn

CAGR 98-04

+10%

PROFITABILITY

1998

0.193

2004

0.336

EPS, Euro

CAGR 98-04

+10%

PRODUCTIVITY

1998

26.3

2004

31.3

Net Income per employee, Euro x 000

5

VISIBILITY AND SUSTAINABILITY OF EARNINGS BOLSTERED BY DIVERSIFICATION OF REVENUE MIX AND BUSINESS PORTFOLIO

STRONG VOLUME GROWTH

Assets under management up 9.0%

Customer loans up 10.8%

STRENGTHENED COMPETITIVE POSITION

Lending market share in Italy (1) up 37 bp

Mutual funds market share in Italy (2) up 39 bp

ENHANCED REVENUE MIX

Interest income excl. dividends up 3.7%

EFFECTIVE COST MANAGEMENT

Headcount down 677 in 2H04

2004 ACHIEVEMENTS

(1) Pro-forma, including Euro 2.5 bn relative to the Locat securitization and Euro 0.5 bn relative to the District Bonds(1) Calculated according to the “old” classification methodology adopted by Assogestioni

6

GROUP RESULTS BENEFITING FROM BUSINESS DIVERSIFICATION

CONTRIBUTION TO GROUP NET INCOME BY DIVISION

y/y % ch.

949Corporate -2.7%

545Retail -6.7%

2,131TOTAL GROUP +8.7%

398New Europe +29.2%

390Private & AM +58.5%

Euro mln Marginal RARORAC

36.9%

30.8%

19.8%

17.4%

17.7%

Private & AM

New Europe

Retail

Corporate

TOTAL GROUP

Cost of equity 8.58%

2004 RORAC(4) BY DIVISION

7

RETAIL DIVISION IDENTITY CARD

2004 data, Euro bn

UniCredit Banca

Customer Loans

40.1

Clarima 2.6

Total Division (2) 56.7

Customer Deposits

42.0

-

44.4

2,591

9

2,742

Branches

UniCredit Banca per la Casa 9.7

Other banks (1) 4.2

-

2.4

15

127

23,413

299

25,136

Employees

336

1,088

RETAIL DIVISION KEY HIGHLIGHTS

(1) CR Carpi and Banca dell’Umbria(2) Delta due to elisions and rounding

3,848

150

4,323

Total revenues

125

240

8

RETAIL DIVISION

GROW MARKET SHARE

Focus on products with longer revenue streams

FOCUS ON SUSTAINABLE REVENUES

IMPROVE EFFICIENCY THROUGH ACTIVE COST MANAGEMENT

Leverage the skills of “Category Killers” (mortgages and consumer credit)

Enhance product innovation/redesign

Pursue additional cross selling opportunity

Increase customer satisfaction

Redesign processes to facilitate headcount reduction

Rationalize branch network

OBJECTIVES MAIN ACTIONS

Focus on small business customers(1)

(1) Turnover < 3 mln Euro

“HARD” THEMES

“SOFT” THEMES

Invest in our people

9

ABOVE MARKET GROWTH THROUGH CATEGORY KILLERS

RESIDENTIAL MORTGAGES CONSUMER LENDING

Leadership in New Product Development

Speed of response / Specialised IT platform

Own networks

Successful partnerships

100% owned

Good cooperation with the retail bank

10

THE “BIG” SMALL BUSINESS OPPORTUNITY

(1) Source Infocamere 31 12 2004(2) Source: UCB estimate on Bank of Italy data December 2004

WIDE AND WELL SPREAD MARKET… 6,0 mln businesses(1), Euro 150 bn of loans(2)

Italy peculiarity (20% of European Small Businesses)

Very diversified by sub-sectors

… WITH A HIGH RETURN … High revenues per customer (~ Euro 1,800)

Cost/income ratio <60%

Cost of risk of 100-125 bp

Capital absorption decrease with Basel II

SB owners are also potential customers for our Personal Banking business

… AND NOT EASY TO MANAGE FOR BIG AND MEDIUM-SIZE BANKS Lack of clear focus for banks (squeezed between Corporate and asset gathering)

Difficult trade-off between the need of a fast response and Basel II requirements

11

OUR SMALL BUSINESS PROPOSITION

DEDICATED CHANNELS 270 Small Business Centers + specialized branches

2.000 Specialized Account Managers

925 Developers (Hunters)

Heavy training investments (e.g. Sector Specialists)

ADVANCED FOCUS SYSTEMS Compulsory centralized scoring system (fully operational since 2002) (Basel II)

Risk-adjusted pricing

Global and sophisticated customer view available

Prompt credit response

CUSTOMIZED PRODUCT OFFER Imprendo 2004 (200,000 customers)

CelerCredit (5 days guaranteed response time for credit requests)

Specialty sector products

Tailor-made on-line banking (130,000 customers)

New “Start-Up” product

12

SIGNIFICANT X-SELLING OPPORTUNITIES ON VARIOUS PRODUCT AREAS

AFFLUENTMASS

MARKET

CURRENT ACCOUNT PACKAGE 49% 47%

RESIDENTIAL MORTGAGE 5% 12%

PERSONAL LOANS 2% 8%

BANCASSURANCE (recurring premium) 11% 5%

CLARIMA REVOLVING CARD 4% 7%

ASSET MANAGEMENT 55% 13%

Data as of December 2004

13

UCB Penetration of main lending products to private customers

• 8.9% excluding South** 16.3% excluding Lombardia

MORTGAGES

PERSONAL LOANS

REVOLVING

SIGNIFICANT CROSS-SELLING OPPORTUNITIES ON LENDING PRODUCTS FROM ALIGNMENT OF PERFORMANCE TO INTERNAL AND EXTERNAL BENCHMARKS

7.6%

12.8%*

5.6%

6.7%

8.2%

5.5%

2004 UCB

11.7%

7.9%

UCB Best/Worst Regions

20.2%**

15-20%

Comparable Best practices

in Europe

10-15%

30-40%

2 FACILITATING FACTORS

CLEAR ROOM FOR FURTHER CROSS SELLING

Clarima’s specialization and 100% ownership boost the X-selling opportunity

S3 merger

14

HIGHER FOCUS ON PRODUCTS WITH LONGER TERM REVENUE STREAMS

~20

~4

~5-7

~5

~6-10

~8

~20

PRODUCTGROSS REVENUES

1° YEAR (%)1

GROSS REVENUES FOLLOWING YEARS (%)

AVG DURATION

(YEARS)

FUTURE REVENUESTREAMS

2003 FLOWS(€ mln)

2004 FLOWS(€ mln)

0,65

10,00

4,50

0,46

2,50 – 3,00

4,00

2,50

BancassuranceRecurring Premium

BancassuranceSingle Premium

Segr. Acc. In Funds (Net group contrib.)2

Structured Bonds

SB Short-term Loans

Personal Loans

Mortgages 1,30

0,50

0,50

0,92

0,00

5,00693

1,163

6,3557,345

8,1615,150

125

3,519

4,850 4,163

172106

1. Assuming equal distribution of sales during the year2. The contribution of the Division to the Group for the first and the following years amounts to 0,78% in mgmt fees + 0,14% in amortization of

anticipations on 2004 sales. From the fifth year it changes into 1,14% due to the increase of the sales fees returned ti the Division. The value for the Bank is about 2,78% for the first year, and 0,78% in the following years.

8,00

AVG TRANSACTION

AMOUNT(€ 000)

103

10

12

20

37

28

2

7,459 9,022

15

RESULTS SO FAR ARE VERY ENCOURAGING: THE FOCUS ON MARKET SHARE IS PAYING BACK…

EXCELLENT LENDING GROWTH (+16.1% Y/Y) …

Mortgages +22.9% y/y

Consumer credit +31.2% y/y

Small Business +10.8% y/y

… AND GOOD SPREAD RESILIENCE IN ALL KEY MARKETS

4Q average spread(3) on:

new mortgages at 1.28% for UCB (stable q/q) and 1.43% for UBCasa (-3 bp q/q)

small business(4) s/term loans at 8.37% (+5 bp q/q)

revolving cards at 10.62% (+6 bp q/q)

… WITH HIGHER MARKET SHARES…

Market share on:

household mortgages(1) at 17.71% (+54 bp)

new flows of consumer credit(2) at 4.3% (+395 bp)

(3) Management accounts(4) Management accounts, includes also maximum

overdraft charges

(1) Group market share, related to mortgages to households as of Bank of Italy definition in table TDME0070 of the monthly bulletin

(2) Calculated on ASSOFIN data

16

… AND UCI IS SHOWING A FAVORABLE TREND VS. THE BIG COMPETITORS ALSO IN TOTAL FINANCIAL ASSETS IN ITALY

+0.2%UCI

-2.8%Top 5 banks ex UCI

-3.2%6-10 banks

+3.3%Local banks

1H04 vs. 2003, %ch. of market share on total financial assets in Italy

MIB 30 banks, -2.3%

Source: Banca d’Italia Conti Finanziari e Bollettino Statistico; Prometeia “Le azioni delle banche quotate”

17

KEEP CUTTING THE “RIGHT” COST

Merger of not yet unified retail banking subsidiaries

Leadership in multi-channel banking

Migration of cash deposits to low-cost/high-quality channels

Rationalisation of the branch network (over 300 closures in 3 years) and optimisation of its governance structure

2,000 redundancies during 2005/07, to be achieved by focusing on low added-value activities, increase in back-office productivity and process re-engineering

“No-Tie” approach to costs

18

-610 vs. June 04

COST MANAGEMENT EFFORT ALREADY PRODUCING TANGIBLE RESULTS WITH FURTHER BENEFITS EXPECTED IN 2005

TOTAL STAFF

EFFECTIVE COST MANAGEMENT ALREADY TANGIBLE…

… WITH BENEFITS FROM STAFF REDUCTION EXPECTED IN 2005

OPERATING COSTS, Euro mln

2002(1)

2,956

2003(1)

2,930

2004

2,957

1H04

25,467

2004

25,136

FEB 05

24,857

(1) Pro-forma to make perimeter comparable with 2004

128 more branches to be closed in

2005

UCB BRANCHES

BRANCH NETWORK REORGANIZATION ALREADY UNDERGOING, IN LINE WITH 3 YEAR PLAN TARGETS

2003

2,754

Branches closed

-163

2004

2,591

19

AS A RESULT OPERATING INCOME HAS POSTED A SIGNIFICANT Q/Q GROWTH IN 2004

419

391

343312

296 310345

414

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

STEADY GROWTH OF OPERATING INCOME

Avg. Euribor 2.46%

2.78%

2.14% 2.09%2.16%

2.09% 2.11% 2.15%

20

SIGNIFICANT INVESTMENTS IN OUR PEOPLE

HEAVY INVESTMENTS IN TRAINING

> 1 mln training hours in 2005, of which 800,000 classroom training

“Leadership for Results” Project, ~3.000 managers involved in 2005

FOCUS ON PROFESSIONAL DEVELOPMENT AND CAREER PATHS (STEP PROJECT)

Transparency and clarity on career options and required skills for each level

Employee and manager empowerment for design and implementation of growth path (self-evaluation tool)

Opportunity to self-determinate the training path

21

STRONG FOCUS ON CUSTOMER SATISFACTION

CUSTOMER SATISFACTION MEASUREMENT (TRI*M INDEX)

210.000 yearly customer interviews

30.000 yearly competitors’ customers interviewed

INCLUSION OF CUSTOMER SATISFACTION IN THE MBO SCHEME

The TRI*M Index is a solidarity factor, amounting to 25% of incentive for 10,000 people

MONITORING AND IMPROVEMENT OF IT PLATFORM AND ITS USAGE Availability of ATM from 89% (2003) to 96% (2004)

Operational errors down 39% (2004 vs. 2003)

MYSTERY SHOPPING AND MYSTERY CLIENT In 2004 50 UCB branches and 50 competitors branches

22

2004 RECORDED SOLID AND SUSTAINABLE RESULTS ALSO IN THE SOFT ASPECTS

36

Top 3 Competitors

IVQ 04Local banks

42

2003

48

IVQ 04

4751

39

65

2003 IVQ 04 IVQ 04 IVQ 04 IVQ 04

IVQ 04IVQ 04

56

Mid-sizebanks

CUSTOMER SATISFACTION INDEX (TRI*M INDEX)

EMPLOYEE SATISFACTION2004 vs. 2003 (%)

IMPROVEMENT SPREAD ACROSS THE WHOLE NETWORK

1

2

7

8

13

26

COMPENSATION

COLLABORATION

INVOLVEMENT

PERSONAL ENGAGEMENT

BANK’S IMAGE

CUSTOMER ORIENTATION

43

SM

AL

L B

US

INE

SS 44

HO

US

EH

OL

DS

Top 3 Competitors

Mid-sizebanks

Local banks

23

ENTERING 2005 WITH A STRONG MOMENTUM…

Building on 2004 achievements:

Grow revenues through market share gains in lending and financial assets:

Increase volumes in mortgages, consumer credit and small business

Cross-sell asset-gathering products to existing small business customers

Deliver efficiency improvement in line with 3-year plan

Continue headcount reduction thanks to processes redesign and branch network rationalization

Maintain strict control over cost of risk

… IN LINE WITH 3 YEAR PLAN TARGETS

24

PRELIMINARY COMMERCIAL RESULTS SHOW A GOOD START IN 1Q05

HOUSEHOLD MORTGAGES NEW FLOWS, bn

NEW FLOWS OF PERSONAL LOANS, mln

1Q04 1Q05

52

~70

REVOLVING CARDS TOTAL SPENDING(3), mln

1Q04 1Q05

1.92.0

+3% +33%

1Q04 1Q05

195

~450 +130%

SALES OF SEGR. ACCOUNTS INVESTING IN FUNDS, bn

2004 1Q05

3.5

~1.9

Growth continues even after an excellent 2004 Excellent growth, in line with all recent quarters

Best quarter ever More than 50% of total 2004 sales in 1Q

25

Annex

26

RETAIL DIVISION: P&L

Interest income (incl. div.)

Net non interest income

Total revenues

Operating costs (incl. dep.)

Net operating income

Net income

Cost/income ratio, %

Y/y% ch.

Q/q% ch.

4Q04

Net provisions

mln

Net income for the Group(2)

Y/y% ch.

- of which: Staff costs

- of which: Other adm. expenses

- o/w: Net write-down of loans

614

543

1,157

-743

414

126

64.2

126

-388

-334

-84

-110

+1.5

+11.5

+6.0

-0.5

+20.1

-21.8

-421 bp

-21.9

+0.7

+0.2

+21.5

+36.2

+13.9

+10.6

+12.3

+3.4

+32.8

+59.8

-552 bp

+54.9

+3.3

+12.4

-3.1

-12.3

+0.9

-2.3

-0.6

+2.6

-6.8

-6.6

+211 bp

-6.7

+2.8

+4.9

+15.2

+5.6

2004

2,360

1,963

4,323

-2,957

1,366

546

68.4

545

-1,543

-1,322

-281

-335

Net extraordinary income (loss) -123 n.m. n.m. n.m.-129

27

RETAIL DIVISION - DETAILS ON ASSET QUALITY

Coverage ratio 48.7% +4 bp

Provisions on performing loans 315 +4.3%

Coverage ratio 0.58% -2 bp

Gross Doubtful Loans 3,536 +1.6%

Coverage ratio 38.2% +30 bp

Weight on Gross Loans 6.06% -17 bp

mln, where not specified

Gross Non Performing Loans 2,153 +2.8%

Weight on Gross Loans 3.69% -6 bp

Cost of risk 50 bp - bp

Dec. 04ch. on

Sep. 04

2004ch. on 2003

(1) Defined as: Flow from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans

-5.7%

2003 2004

908

856

REDUCTION OF NET FLOWS OF NEW DOUBTFUL LOANS(1) VS. 2003 …

-8.0%

1H04 2H04

446

410

… CONFIRMED BY 2H04 TREND VS. 1H04

28

4.8 5.7

RETAIL DIVISION - MORTGAGES AND CONSUMER FINANCING

RESIDENTIAL MORTGAGESSTOCK, bn NEW FLOWS, bn

CONSUMER FINANCINGDEC03 DEC04

26.2

32.4 +22.9%

NEW FLOWS OF PERSONAL LOANS, mln

2003 2004

93 mln

339 mln

REVOLVING CARDS TOTAL SPENDING(3) (+275k revolving cards in 2004)

2Q04

29.3

mkt share(1)

17.17%17.61% 17.71%

(1) Group market share, related to mortgages to households as of Bank of Italy definition in table TDME0070 of the monthly bulletin

(3) POS and ATM spending

2003 2004

693

1,163

+67.9%

2003 2004

7.59.0

+20.9%

2.02.5

UCB

UBCasa

+19.3%

+24.1%

DEC03 DEC04

2.1

2.8

+31.2%

STOCK, bn

(2) Calculated on ASSOFIN data. Not calculated in 2003 because personal loans were sold directly by UCB and not through Clarima

mkt share(4)

2.4%

7.4%

2004 mkt share(2) at 13.2%

(4) Calculated on ASSOFIN data

29

RETAIL DIVISION - SMALL BUSINESS STOCK, SPREAD AND CUSTOMER ACQUISITION

STOCK, bn

20042003

SHORT TERM SPREAD(1)

2003 1Q04

(1) Management accounts, includes also maximum overdraft charges

15.0

16.6 +10.8% 8.63%

8.21%

2Q04

8.25%

3Q04

8.32%

4Q04

8.37%

4Q03 1Q04

12,600

18,000

2Q04

19,000

3Q04

15,000

4Q04

17,500

QUARTERLY TRENDS IN SMALL BUSINESS CUSTOMER ACQUISITION

30

RETAIL DIVISION - CUSTOMER LOANS AND CUSTOMER DEPOSITS BREAKDOWN AND DETAILS OF SHORT TERM SPREADS

SB loans (1)

Residential mortgages (2)

Cons. creditOther loans

EOP LOANS, Euro bn

UCB AVG. MARK UP(5) (Households), %

Other deposits

Households c/accounts

Bonds

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

2Q042003pro-forma(3)

2Q042003

+8.1%

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

+11.0%

+3.3%

+7.8%

+0.2%

+18.3%

+0.4%

+1.6%

48.8

26.2

15.0

2.15.5

60.2

17.7

15.3

27.2

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

7.18

1Q03

2.32

5.99

7.18

2Q03

2.03

5.93

7.33

3Q03

1.78

5.95

7.04

4Q03

1.72

5.69

7.03

1Q04

1.65

5.60

(4) 2Q04 increase vs. December is due to the issue of bonds by UBCasa to fund mortgage book expansion

4Q04

4Q04

56.7

67.2

32.2

22.8(4)

16.6

2.85.0

15.1

29.3

+7.4%

+10.5%

+7.3%

+21.8%-8.1%

+8.8%

-1.9%

+6.2%

+6.5%

7.08

2Q04

1.65

5.47

(5) Source: Bank of Italy matrix data

52.4

63.9

29.2

21.0(4)

15.5

2.35.5

15.4

27.6

7.33

3Q04

1.67

5.55

+5.1%

7.21

4Q04

1.71

5.42

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04