Investor Day – Bologna, 13 th June 2003
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Transcript of Investor Day – Bologna, 13 th June 2003
Investor Day – Bologna, 13th June 2003
PRIVATE & AM DIVISION
2003-2006 STRATEGIC PLAN
Andrea Moneta Head of Private & AM Division
2
The reference scenario
Private & Asset Management Division
UniCredit Private Banking
UniCredit Xelion Banca
Pioneer Group
Conclusions
AGENDA
3
THE REFERENCE SCENARIO – EXECUTIVE SUMMARY
Moderate recovery of the economic cycle, at a lower pace than current potential
Re-alignment of financial market performance and real economy
High households’ saving rates, especially in Italy
Financial wealth expected to rise again
Households’ financial assets relatively under-weighted on total wealth in EU and Italy compared with US
AuM share on total financial assets in Italy lower than in EU and US, but expected to increase in the next three years
Pension fund turning-point is coming closer
Concentration of wealth expected to increase
Opportunities for the Private &
AM Division
4
AGENDA
The reference scenario
Private & Asset Management Division
UniCredit Private Banking
UniCredit Xelion Banca
Pioneer Group
Conclusions
5
… three different business …
PRIVATE & ASSET MANAGEMENT DIVISION
THE PRIVATE & ASSET MANAGEMENT DIVISION IS UCI’S ANSWER TO THE GROWING COMPLEXITY OF FINANCIAL MARKETS, IN ORDER TO FACE THE CHALLENGES AND TO EXPLOIT THE OPPORTUNITIES OF THE WEALTH MANAGEMENT BUSINESS
Three players …
… with different geographic focus …
… one single target: managing financial wealth through first-class products and services, leveraging on the strong integration between production and distribution
~3,000 young skilful Staff1
Worldwide selective presence in the most important financial centres: Milan, Boston, Dublin, London, Paris, Madrid, Hong Kong, Singapore, Lugano, Monaco, San Marino, ecc
~Euro 130 bn Tot. Financial Assets
~2,500 sales people2
1 Figure net of around 1,700 Xelion PFAs
2 Figure including UniCredit PB Private Bankers, Xelion PFAs and Pioneer salesmen
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IN A CONTEXT OF LOW INTEREST RATES AND LOW EQUITY RETURN, OPPORTUNITIES IN THE WEALTH MANAGEMENT BUSINESS COULD BE EXPLOITED ONLY BY PLAYERS ABLE TO LEVERAGING ON INNOVATION AND ADVICE …
Wealth Planning
ALM Strategies
Hedge Funds
Total Return Products
Retirement Schemes
… THANKS TO EXCELLENCE IN:
Global Research based Investment Processes
Risk Management
Distribution, advisory and client proximity
INNOVATIVE PRODUCTS … … WITH HIGH GROWTH POTENTIAL AND VALUE ADDED…
Source: BCG analysis on Intersec, Sanford B data
0.05 EnhancedIndexing
1.8
0.1 0.5
Private Equity
Market growth 2001-2006 projections
Margins
> 10% / year
5.5
Index funds
13.5
Active equities
10.9 Active bonds
0.9 Real estate
Structuredprod. 0.2 0.5 Quantitative
Prod.
Hedge Funds
0.7Commodities
Traditional products
Innovative products
2001 size($ 5 Tr)
High Alpha products
< 10% / year
Money Market
ETF
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Enlargement of the offer with High-Alfa products
… AND WITH CLEARLY DEFINED STRATEGIC PRIORITIES
Increase of market shares in Italy, through the acquisition of new clients and a higher share of wallet of existing customers
Independent advice
Innovative and tailor-made offering
Leverage on strong distribution capabilities in US and in the “International” business unit
Support to UCI’s networks in Italy and development of new partnerships with third parties
Active management, ALM solutions and world-class performance
8
AGENDA
The reference scenario
Private & Asset Management Division
UniCredit Private Banking
UniCredit Xelion Banca
Pioneer Group
Conclusions
9
~40,000 households
~Euro 36 bn Direct and Indirect Deposits
~560 Private Bankers
UNICREDIT PRIVATE BANKING: A NEW LARGE PRIVATE BANK WITH A HIGH POTENTIAL TO INCREASE PENETRATION IN HIGH VALUE ADDED SERVICES
KEY FIGURES
More than 150 branches
Market Shares1: 1.8% in AUMs 2.4% in Mutual Funds 2.5% in Securities in Custody
1 Source (for Total Italian Market data): UCI calculations on Assogestioni and BankIT data
UPB CURRENT PORTFOLIO MIX
51%
36%
13%
18%
28%
28%
31% 36%
59%
0%
25%
50%
75%
100%
UPB Average Asset Mix2
UPB MedianAsset Mix2
UPB 1st QuartileAsset Mix2
Securities in Custody
Plain-vanilla Mutual Funds
Segregated Accounts & Bancassurance
2 Data related to Average, Median and 1st Quartile UPB customers as at 30.4.2003
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PRIVATE BANKING IS A VERY INTERESTING MARKET IN ITALY,WITH FEW INDIVIDUALS CONTROLLING A HIGH PORTIONOF TOTAL FINANCIAL WEALTH
HNWI: Total Financial Assets > Euro 500K;Affluent: Euro 50K to Euro 500K; Mass: < Euro 50KSource: 2000, ISTAT Statistics and PwC Analysis
WEALTH DISTRIBUTION AND UCI PB MARKET SHARES IN ITALY
Wealth in Italy by region1
UniCredit PB Market Shares by region
3.5%
2%
4%
5%
9%
6%
9%
9%26%10%
1 Weighted Average of mean pro-capite salary and deposits by region
Source: UCI PB – Strategic Marketing calculations on UCI Group data
Other sources show a percentage between 30% and 40%
88%
26% 20%
10%
52%55%
22% 25%
2%
Affluent HNWI
Mass
~21 mlnFamilies
~€ 2,000 bn
~€ 11bn
Total Banking Assets
Families Total Banking Profits
>500K Euro
<500K Euro 3.7%
2.4%
6.6%2.2% 7,7%
7.8%
2.3%
9.3%
4.2%5.6%
4.2%
2.3%
3.5%
1.6%
3.7%
2.4%
6.6%2.2% 7,7%
7.8%
2.3%
9.3%
4.2%5.6%
4.2%
2.3%
3.5%
1.6%
3.7%
2.4%
6.6%2.2% 7,7%
7.8%
2.3%
9.3%
4.2%5.6%
4.2%
2.3%
3.5%
1.6%
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Players with a specialised Private Banking offerNon-specialised Local and National players
THE HIGH FRAGMENTATION OF THE ITALIAN MARKET ALLOWS GAINING MARKET SHARES FROM NON-SPECIALISED NATIONAL PLAYERS…
Major players in Private Banking in Italy
Bank AssetsMkt.
Share*
1. Banca Intesa1 43,0 bn 6,7 %
2. SPIMI1 + Fideuram2 41,8 bn 6,6 %
3. 36,0 bn 5,7 %
4. MPS (+Steinhauslin)1 10,0 bn 1,6 %
5. Credem (+Euromob.)1 10,0 bn 1,6 %
6. BIM (+Symphonia)3 8,4 bn 1.3 %
7. Banca Aletti (BPVN)3 6,3 bn 1,0 %
8. Ersel3 5,2 bn 0,8 %
9. UBS Italia4 5,2 bn 0,8 %
10. Deutsche Bank4 4,2 bn 0,7 %
11. Credit Suisse4 4,2 bn 0,7 %
1 Source: Company presentations2 Source: SPIMI Investor Relations (data do not include Banca Cardine)3 Source: Company websites4 Source: UCI calculations on Accenture data on Private Banking in Italy
< 30%
> 70%
* 2002 Total Banking Direct & Indirect Deposits (Liquidity, AUMs and Securities in Custody)
Source: UCI Strategic Marketing calculations on 2002 BankIT data
TOTAL PB MARKET IN ITALY*:Euro 630 bn
LEGENDA: Specialised competitors in RED
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… WHILE IN THE AREAS WHERE SPECIALISED PLAYERSOPERATE MANY HIGH POTENTIAL “PROVINCES” ARE STILL UNDER-SERVED
Distribution of the first 36 Italian “provinces” by potential for private banking and presence of specialised competitors
Source: UniCredit Private Banking Marketing calculations on MagStat data
20%
40%
40%Top 6 prov .
30 prov .
Other prov .
% Private Banking Financial Assets
Attr
activ
enes
s
Com
petit
ion
Ancona
FerraraSavona
MantovaAlessandria
Biella
Lecco
Salerno
Trento
Parma
VicenzaPavia
Palermo
Perugia
Varese
Modena
Firenze VeronaTreviso
Napoli
Genova
Como
Brescia
BergamoBariPadova
Cuneo
Venezia
0%
5%
10%
15%
20%
25%
30%
35%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%
Potential PB Financial Assets (%)
Fo
reig
n o
r S
pec
ialis
ed P
laye
rs in
th
e p
rovi
nce
s(%
on
29 p
laye
rs ta
ken
into
acc
ount
)
Udine
Cremona
R. Emilia
Novara
Milano (96.6%)
Roma (82.8%)
Torino (34.5%)
Bologna (44.8%)
20%
40%
40%Top 6 prov .
30 prov .
Other prov .
% Private Banking Financial Assets
Attr
activ
enes
s
Com
petit
ion
Ancona
FerraraSavona
MantovaAlessandria
Biella
Lecco
Salerno
Trento
Parma
VicenzaPavia
Palermo
Perugia
Varese
Modena
Firenze VeronaTreviso
Napoli
Genova
Como
Brescia
BergamoBariPadova
Cuneo
Venezia
0%
5%
10%
15%
20%
25%
30%
35%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%
Potential PB Financial Assets (%)
Fo
reig
n o
r S
pec
ialis
ed P
laye
rs in
th
e p
rovi
nce
s(%
on
29 p
laye
rs ta
ken
into
acc
ount
)
Udine
Cremona
R. Emilia
Novara
Milano (96.6%)
Roma (82.2%)
Torino (34.5%)
Bologna (44.8%)
UniCredit PB is present in 59 (out of 103) “provinces”, representing 88% Total Private Banking Financial Assets in Italy
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UNICREDIT PRIVATE BANKING CAN LEVERAGE ON ITS STRONG COMPETITIVE POSITION IN ORDER TO ENJOY AN HIGH GROWTH POTENTIAL
TARGET CUSTOMERS
POSITIONINGUCI PB COMPETITIVE
ADVANTAGESCompetitors
All categories of Private clients
Large but weak Focused strategyNATIONAL DOMESTIC PLAYERS
Upper Private clients/ Large Accounts
(Total Financial Assets>10 mln Euro)
Strong for brand and tradition, but limited (on-shore)
Wide-spread presence all-across the country
Deeper knowledge/ understanding of the clients
FOREIGN PLAYERS
Lower Private clients (500K Euro<Total Financial
Assets<1 mln Euro)
Consolidated long-term “trust” with the client
Sub-scaled
Wider offer of products/ services
Higher service quality
Superior skills Synergies with other
Group companies
LOCAL DOMESTIC PLAYERS
Dedicated business model
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Innovative and dedicated offering to each targeted client segment
Portfolio management, active advisory on securities and wealth management services (holistic approach to total financial assets, family businesses and real estate properties) as core offer
Group synergies with UniCredit Banca d’Impresa, Pioneer and product companies
First-class service model through high quality processes, long-term relationships and confidentiality
LEVERAGING ON
COMPETITIVE
ADVANTAGES IN ORDER
TO BECOME UNDISPUTED
LEADER AS FOR:
Reputation
Market Share
Profitability
IN THIS CONTEXT UNICREDIT PRIVATE BANKING WILL EXPLOIT MARKET OPPORTUNITIES IN ITALY IN ORDER TO GROW …
… AND STRATEGIC GUIDELINESKEY GOAL …
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… ACTING WITH FOUR MAIN OPERATING TOOLS…
OPERATING TOOLS
Service Model diversified by client segments and geographic presence
Upgrade of product range, leveraging also on Pioneer/UBM’s competencies, and development of new services: Active Portfolio Management, Advisory on Securities in Custody (Active Advisory and Investment Advisory), Wealth Planning
Improvement of private bankers’ competencies and productivity through a “team approach”
1. SHARE OF WALLET INCREASE
ACTIONS
Optimisation of Group synergies through referrals from UniCredit Banca d’Impresa, UBM and Locat
Focus on high potential under-served areas, with low competition from specialised players
Recruitment of private bankers and increased number of relationship managers in target areas/”provinces”
2. ACQUISITION OF NEW CLIENTS
Asset Mix Optimisation leveraging on growing asset management skills spread over the network and on new Asset Management services from UPAM
Pricing policies review with alignment to value added embedded in the services and increasing portion of recurrent revenues
3. VALUE ADDED INCREASE
Focus on highest value clients with the highest “abandon risk”
Review of processes highly impacting on customers’ satisfaction and launch of Loyalty Programs
4. CLIENT RETENTION
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53%1
11%
12%
CAGR 02-06
15%
18%
13%
7%
~150
~300
2002 Pro-forma
~36,000
~16,300
~17,100
~560
~51%
Operating Income
Revenues
Euro mln
Total Dir. + Ind. Deposits1
of which:
Asset under Management1
Securities in custody1
Private Bankers1
1 End of period data
Cost/Income
Revenues and financial assets higher than baseline thanks to the strategy implementation
Relevant investments for growth
Market share on Households’ Total Banking Assets from 1,9% to 2,5%
Market share on Private Total Banking Assets from 5,7% to 7,5%
… WHICH WILL ALLOW THE BANK TO REACH ITS DEMANDING 2006 FINANCIAL TARGETS …
6%
7%
CAGR 02-06 Baseline
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... THROUGH A TAILORED STRATEGY
Existing customers
New customers
Efficiency Risk mgmtIntra-group synergies
Corporate businessUCBUPB
New EuropePioneerUBMTradingLab
High importance
Low importance
Retail businessPioneerUBI
Revenue growth
Private Banking business
PioneerUBMUBI
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AGENDA
The reference scenario
Private & Asset Management Division
UniCredit Private Banking
UniCredit Xelion Banca
Pioneer Group
Conclusions
19
792 809
1,112
635 550
734
527 608
683
2000 2002 2006
ITALIAN HOUSEHOLDS’ BANKING FINANCIAL ASSETS 1
136115
199
15
26
48
411
15
2000 2002 2006
PFA Networks Mkt. Share on Total Household Financial Assets: 7.9% in 2000; 7.7% in 2002; 10.3% in 2006E
NETWORKS OF FINANCIAL ADVISORS ARE IMPORTANT ANDLONG ESTABLISHED PLAYERS WITH HIGH GROWTH RATES ANDA SIGNIFICANT PRESENCE IN THE HIGHEST VALUE ADDED SEGMENTS OF HOUSEHOLDS’ SAVINGS
1 Source: Network Studi UCI on BankIT data2 Source: Assoreti data and Eurisko-Prometeia estimates (growth of PFA Networks’ market share vs banks is a market trend
foreseen also by McKinsey for the whole Continental Europe)
HOUSEHOLDS’ FINANCIAL ASSETS: 2000-2006 DYNAMICS(Data in Euro bn and % changes expressed as period CAGRs)
PFA Networks Mkt. Share on Total AuMs: 15.5% in 2000; 12.9% in 2002; 16.1% in 2006E
155
AuMs
Liquidity
262
152+66%
+32%
-8%
+15%
+8%
+17%
TOTAL FINANCIAL ASSETS GATHERED BY PFA NETWORKS2
1,954
AuMs
Securities in Custody
Liquidity
2,529
1,967
+7%
-7%
+1%
+3%
+8%
+8%
Total:~7%Total: +3,3%
(net of performance effect)
+0,3%
Total: +5,3%(net of performance effect)
Total:~15%
-1%
Liquidity
Securities in Custody
AuMs
AuMs
Securities in Custody
Liquidity
Securities in Custody
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MARKET CONCENTRATION
TODAY ITALIAN PFA NETWORK INDUSTRY IS IN A TRANSITION PHASE: THERE ARE TOO MANY PLAYERS IN THE MARKET, MOST OF THEM FACING HARD TIMES, ….
0
5
10
15
20
25
30
35
40
45
50
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Source: Assoreti data as at 31.3.2003
AUMs BY COMPANY1 PFAs BY COMPANY1
Total PFAs:~34,700Total AuMs:
~Euro 152 bn
1 LEGENDA: Different colours identify different industry players
First 5 players (on 40) owning more than 60%
of Total AuMs
First 5 players employing
~43% of Total PFAs
Source: Assoreti data as at 31.3.2003
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… AND TOO MANY PFAs, MOST OF THEM WITH POOR INCOME;FURTHERMORE INSIDE THE COMPANIES AUMs ARE NOT EQUALLY DISTRIBUTED, WITH FEW PFAs CONTROLLING AN IMPORTANT SHARE OF THEM
Average AUM per PFA by company1 Average wage per PFA1
Only the first 7 players granted PFAs with gross income yearly wages higher than Euro 40K
The industry will restructure and concentrate
0
20
40
60
80
100
120
Source: Sample of Financial Statements as at 31.12.2001
Average income per PFA: Euro 56K (Euro
46K excluding Fideuram)
Source: Assoreti data as at 31.3.2003
0
2
4
6
8
10
12
14
16
18
20
Average AuMs per PFA: Euro 4.4 mln (Euro 3.4 mln
excluding the first 2 players)
1 LEGENDA: Different colours identify different industry players
22
THEREFORE THERE IS ROOM FOR A PLAYER ABLE TO ATTRACT THE BEST PROFESSIONALS AND XELION ENJOYS COMPETITIVE ADVANTAGES
XELION’S COMPETITIVE ADVANTAGES:
WIDESPREAD PRESENCE AND COMPLETE SERVICE
“Proximity services” provided by the Group branch networks for all the financial transactions requiring “materiality”. Distinctive competitive advantage, hard to replicate for competitors
Traditional banking services, as the result of being a multi-channel bank
MULTI-BRAND MODEL + ADVANCED TECHNOLOGICAL PLATFORM
Multi-brand model to reinforce independence of advice. High quality service for clients and PFAs guaranteed by the effective technological platform. Related investments already done
Structurally more flexible and faster in adapting products and services to customers’ and PFAs’ needs, as the result of being a separate legal entity
PART OF UCI GROUP AND OF PRIVATE & AM DIVISION
Great importance of UCI brand for reassuring clients and trusting PFAs
Strong integration with production (Pioneer Group)
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XELION AIMS AT INCREASING THE NUMBER ANDTHE QUALITY INDEED OF ITS PFAs
AUMs PER PFAs AND NUMBER PFAs(Data in Euro mln as at 31.12.2002 vs 31.12.1999)
Fineco
Mediolanum
B.ca Primavera
SPI
F&F
RasBank
Fideuram
0
2
4
6
8
10
12
14
16
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
Number of PFAs
AU
Ms
pe
r P
FA
Sample Average1
Source: Assoreti (RasBank merged with Ras Investimenti SIM)
2,288
6.1
Industry Leader:Focused on PFAs (and clients) of the highest market segment with a
wide sale force
“Commercial engines”:focused on PFAs (and clients) of
the medium market segment with a wide sale force
Xelio
n
1 Sample made of 10 major players
24
Data as at 30.04.03
1 AUMs, Securities in Custody, Bancassurance and liquiditySource: Assoreti
Net Inflows per PFA:2nd among Top-
Players and 4th in Italy
Net Inflows:Euro 690 Mln,
1st in Italy
1,683 PFAs,5th in Italy
Tot. Fin. Assets:Euro 5.3 bn,
8th in Italy
ENCOURAGING 2002 AND 2003 TO-DATE RESULTS: EXCELLENT NET INFLOWS AND HIGH ATTRACTIVENESS FOR NEW PFAs …
NUMBER OF PFAs
Fideuram + SPI 4,577
Mediolanum 4,147
Rasbank 3,154
Fineco Group 1,756
Xelion 1,683
Banca Primavera 1,592
Finanza & Futuro 1,424
Banca 121 1,390
Banca Generali 1,153
Banca Bnl Investimenti 1,047
TOTAL FINANCIAL ASSETS
Fideuram + SPI 53,697
Mediolanum 17,011
Rasbank 12,266
Finanza & Futuro 7,910
Credit Suisse 6,170
Banca Generali 5,745
Azimut 5,662
Xelion 5,330
Banca Primavera 5,330
Fineco 4,923
TOTAL NET INFLOWS1
Xelion 691
Credit Suisse 546
Mediolanum 449
Fideuram + SPI 422
ING Sviluppo 266
Azimut 217
Rasbank 197
Banca della Rete 184
Bipielle 176
Banca Primavera 172
NET INFLOWS PER PFA1
Credit Suisse 1.65
Xelion 0.41
Azimut 0.30
Banca Primavera 0.11
Mediolanum 0.11
Fideuram + SPI 0.09
Banca Generali 0.07
Rasbank 0.06
Fineco 0.04
Finanza & Futuro -0.01
Data as at 30.04.2003 – Euro mlnData as at 31.03.2003 – Euro mln Data as at 30.04.2003 – Euro mln
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… AS THE RESULT OF A STRATEGY BASED ON AN AMBITIOUS AND CLEARLY DEFINED KEY GOAL …
Achieving Critical Mass through the combination of:
Growth of average financial assets of existing PFAs (reduction of marginal PFAs)
Aggressive recruitment of PFAs with high average portfolios
Asset mix reshape towards Life & Pension products and fully integrated advice services (I.e.: financial planning)
Acquisition of new affluent clients for UCI Group, with benefits for Pioneer, UniCredit Banca and product companies (cross selling of mortgages, credit cards, consumer finance, ...)
… AND STRATEGIC GUIDELINES
BECOMING A TOP PLAYER IN
THE ASSET GATHERING
MARKET, STANDING OUT
FOR:
Independence of Advice
Quality of Service
Easiness and proximity
KEY GOAL…
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Operating Profit area
Xelion Growth Path
… WHICH WILL LEAD XELION TO IMPORTANT COMMERCIAL AND FINANCIAL RESULTS
Euro mln
1 End of period data
Strong recruitment of high-standing PFAs and reduction of those with low productivity
Already well on-track: revenues growth 1Q03 vs. 1Q02: +48% Xelion stand alone, +45% at Group level
2002 Pro-forma
Cost/Income ~260% 90%1
Operating Income ~-50 +101
Revenues (Xelion stand alone) ~30 40%
Total Dir. + Ind. Deposits1 ~4,950 32%
Financial Advisers1 1,720 3%
CAGR 02-06
Revenues (at Group level) ~45 35%
2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000
Nu
mb
er
of
PF
As
8,000
6,000
4,000
2,000
Break-even edge (Xelion stand-alone)
Break-even analysis
(data in Euro ,000)
AUMs per PFAs
Break-even edge (at Group level)
Operating Loss area
27
AGENDA
The reference scenario
Private & Asset Management Division
UniCredit Private Banking
UniCredit Xelion Banca
Pioneer Group
Conclusions
28
Greater scope for integration between production and distribution in order to advise clients on longer term needs and to provide individuals with in-built advice services, traditionally reserved to large institutions
THE REFERENCE SCENARIO WILL DEEPLY IMPACT ASSET MANAGEMENT INDUSTRY, ESPECIALLY IN CONTINENTAL EUROPE
Retail Investors less risk oriented, more focused on “funding future needs” and searching for trust and specialised advice
Slower growth of “open architecture” with proprietary model still dominating; acceleration in “preferred partnerships”
Need of appropriate skills to address the “new phase”: big opportunities for active asset managers offering absolute return products and asset/liability management solutions either for Institutional or Retail clients (“INSTIVIDUAL Model”)
Strong producers benefiting from difficulties of less “investment performing”, less cost-efficient and less distribution-advantaged peers
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LEVERAGING ON ITS DISTINCTIVE SKILLS …
Best practice in terms of Governance, Risk Management and disciplined Investment Process based on a unified global research
Active management with adaptable production capabilities
Innovation capabilities in terms of products, distribution agreements and customized solutions, enhanced by the long-term experience in providing UCI banks and Third Parties with a continuous flow of solutions
Ability to integrate and turnaround (Pioneer US and Momentum acquisitions), while maintaining profitability even in bear markets
Scalability of model and potential economies of scale in the production/distribution/operations chain
STRENGTH:
Global House (EU+US)
with the ability of serving
both proprietary
networks and open
platforms, optimising
know-how and synergies
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… AND ON ITS SOUND TRACK-RECORD IN TERMS OF INVESTMENT PERFORMANCES …
Standard and Poor's Fund Rankings 2002 – Funds sold in Europe(Number of funds of different categories with top 10 rankings by Asset Manager)
Perf Port v. Bmk Rank*
Pioneer Funds - Core European Equity
Micropal Equity Europe
-47.1 5.1 1Q
Pioneer Funds - Top European Players*
Micropal Equity Europe
-30.8 42.9 1Q
Pioneer Funds - European Small Companies*
Micropal Small
Companies Europe
-9.2 15.4 1Q
Funds Peer Category
3 Years or Since Inception
Eu
rop
ea
n
Perf Port v. Bmk Rank*
Pioneer Fund Lipper Large Cap Core -32.6 10.3 1Q
Pioneer Value Lipper Large Cap Value -15.7 5.4 1Q
Pioneer High Yield Lipper High Current Yield 31.0 25.4 1Q
Funds Peer Category
3 Years or Since Inception
US
1 Portfolios are measured against a benchmark net of withholding taxes and charges against the portfolio. Information as at 11.04.03
* Measured since inception
Europe - Examples of 1st Quartile portfolios1 US - Examples of 1st Quartile portfolios1
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FURTHER STRENGTHENING ITS
POSITION IN THE ASSET
MANAGEMENT INDUSTRY
LEVERAGING ON:
Infra-Division and Group
synergies
Wide high quality offering
Advice skills
… PIONEER HAS SET OUT AN AMBITIOUS GOAL …
Top-ranking performances
Further widening of the product range, also through third parties partnerships:
Absolute return solutions
Dynamic ALM either for Insitutional and Retail clients
Retirement products and Financial Planning
Implementation of an advice-pull model in distribution also thanks to proprietary Advice platforms
… AND STRATEGIC GUIDELINESKEY GOAL…
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Full exploitation of the strong distribution in order to grow in the non-proprietary fund segment
Wider offer through high quality products with sound track-record (development or acquisition of high star products)
Development of wraps & segregated accounts
US
… WHICH WILL BE PURSUED WITH SPECIFIC ACTIONS IN EACH BUSINESS AREA …
ITALY
Retail Clients (Mass, Affluent & Private) Product Innovation II and III Pillar Retirement Schemes Tailor-made Research and Advisory department, in order to satisfy private and affluent
clients’ needs (synergies with UniCredit Private Banking and Xelion)
Institutional Clients Further strengthening of the leadership in the segment and development of new relations
INTERNATIONAL(ex-Italy)
Leverage on excellence in key product segments and low marginal distribution costs Free advisory expertise for sale-networks and distributors Leverage on leading ALM know-how for institutional clients
NEW EUROPE Management of the euro-convergence for households’ assets Development of leadership in retirement products Continuous support to UCI’s expansion in the area
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… RESULTING IN IMPORTANT GROWTH TARGETS
2002 Pro-formaEuro mln
1 End of period data
CAGR 02-06
Cost/Income ~63% 57%1
Revenues ~540 10%
Operating Income ~200 14%
Total AUMs* ~104,000 12%
AUMs CAGR due to:
~4% performance effect
~ 8% net sale effect
Hedge fund weight on Total AUMs from 1,5% to 3,6%
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AGENDA
The reference scenario
Private & Asset Management Division
UniCredit Private Banking
UniCredit Xelion Banca
Pioneer Group
Conclusions
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SUMMING UP: HIGH VALUE CREATION AND GROWTH
2002 Pro-formaEuro mln
PRESENT RARORAC 31%2
Growth rates higher than traditional banking business
Lower Economic Capital absorption
Potential out-performance for integrated and specialised Players
Cost/Income 61% 58%1
MARGINAL RARORAC 23% 43%1
RARORAC -7% +18%1
CAGR 02-06
Revenues 1,070 10%
Operating Income 420 13%
Economic Capital
1 End of period data
2 Calculated at year-end 2003
750 3%