Investor Day – Bologna, 13th June 2003

CORPORATE DIVISION

2003-2006 STRATEGIC PLAN

Pietro Modiano Head of Corporate Division

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Executive summary

The Corporate Division

UniCredit Banca d’Impresa (UBI)

UniCredit Banca Mobiliare (UBM)

Conclusions

AGENDA

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EXECUTIVE SUMMARY

Considerablegrowthpotential forthe CorporateDivision

The Corporate Division: a network of specialised banks

UniCredit Banca d’Impresa (UBI): fully dedicated to Corporates, Small and Medium Enterprises

UBI: high potential for low cost and low risk growth thanks to large client coverage, but low share of wallet

A new organisational structure to take advantage of the interaction between lending and commission revenues

Risk control systems based on the full implementation of the Basel II guidelines

UBM’s new challenge: to extend Corporate Finance value added products and services to Small and Medium Enterprises

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Executive Summary

The Corporate Division

UniCredit Banca d’Impresa (UBI)

UniCredit Banca Mobiliare (UBM)

Conclusions

AGENDA

5

THE CORPORATE DIVISION’S IDENTITY CARD: KEY PLAYERS…

The Investment Bank: derivatives, investment banking, relationship with large groups

The Corporate Bank:the focal point of the system

Project financing and acquisition finance expertise.

Specialised in mid-term lending

The leader in the leasing market in Italy

Corporate Division

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…AND KEY FIGURES

(Euro mln) C/I

Other companies

Number of employees 5,866

Revenues Net Income

Loans

1,723 585 40,954 29.1%

586 239 - 28.1%

175 41 8,576 30.4%

162 7 1,995 -

88 15 5,322 50.6%

TOTAL

Divisional ROE 19.4%

Divisional RARORAC 11.1%

2,734 887 56,846 32.6%

2002 data

Foreign Branches’ loans (Euro mln) 4,081

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Executive Summary

The Corporate Division

UniCredit Banca d’Impresa (UBI)

UniCredit Banca Mobiliare (UBM)

Conclusions

AGENDA

8

UBI: THE FOCAL POINT OF THE CORPORATE DIVISION

(Euro mln) RevenuesLoans

4,990 92Largest 42 groups

Other Corporates: turnover > 50 mln Euro

SMEs

Public sector and others

Total

21,489

210

1,119

5,174

39,103 (*)

168

1,589(**)

7,450

UBI is the bank dedicated to Corporates, Small and Medium Enterprises

UBI has relationships with all the Division’s customers

72% of the Corporate Division lending is concentrated in UBI. Of this, 55% goes to SMEs

2002 data

Source: UBI calculations on internal data, using Italian Credit Bureau definitions

(*) To ensure comparability with the banking system data, the data reported are from the Credit Bureau(**) Excluding free capital and other income

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A SIGNIFICANT POTENTIAL FOR GROWTH

Low share of wallet(*): the high degree of client coverage

is counterbalanced by a limited share of wallet

High degree of client coverage(*): almost full client

coverage in historical areas. Room for the acquisition of

new clients in selected, rich, areas

Room for rationalisation of the client base: large number of

clients, with unexploited potential, high concentration of revenues,

low risk profile

(*) Client coverage refers to the number of UBI clients with outstanding loans, according to Italian Credit Bureau, relative to an estimate of the total number of corporate enterprises. Share of wallet refers to the ratio between the amount of UBI outstanding loans and the banking system outstanding loans on the same customers.

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UBI core customers (non financial enterprises with a turnover of at least 1.5 mln Euro) are around 55,000 and represent 46,6% of the total corporate market

Out of these: around 40,000 have outstanding loans

As regards non financial enterprises:

Room for rationalisation: a) client base

A BANK WITH A VERY LARGE NUMBER OF CLIENTS (COVERING ALMOST 50% OF THE TOTAL NON-FINANCIAL ENTERPRISE SECTOR )…

Source: UBI calculations on internal data

(*) UBI active clients are those who have generated, as of December 2002, total revenues of at least 500 Euro.

UBI total client base: 54.657

(75,6% of system total loans)

UBI active clients (*): 45.433

(83,1% UBI total client base)

UBI clients with outstanding loans:

40.095

(88,3% UBI active clients)

Good customer mix: the bank’s clients have larger loan exposure than the system’s average

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The top 10% of UBI core customers generates:

over 60% of total outstanding loans

over 50% of UBI’s total revenues

over 50% of commission margins (net of derivatives)

The top 10% is fairly well distributed among large, medium and small enterprises

I Decile 52.4%

Total revenues (%)

Outstanding loans (%)

63.7%

Number of clients

5,466

II Quartile

I Quartile

III Quartile

Total

IV Quartile

75.1%

17.7%

6.7%

0.6%

100%

81.9%

12.9%

4.3%

0.9%

100%

13,664

54,657

13,664

13,664

13,664

Source: UBI calculations on internal data

Room for rationalisation: b) revenues concentration

…A HIGHLY CONCENTRATED REVENUE STREAM

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The total amount of loans of UBI customers, either with UBI or with other banks, represents 75% of total loans

In historical areas the lending coverage increases to around 90%

Room for further growth in coverage remains in some rich areas, such as Lombardy, and in some provinces in the North East

UBICore

Clients

Totalmarket

Client coverage

Lending coverage

(*)

Lombardy

Southern Italy

10,020

5,641

…except in Lombardy…

…except in the South

34,688 28.9%

Total 54,657 117,321 46.6% 75.6%

66.4%

15,772 35.8% 57.7%

(*) Lending coverage refers to the amount of total outstanding loans of UBI customers (both towards UBI and other banks) relative to the total stock of outstanding loans on the corporate market.

Source: UBI calculations on internal data and Credit Bureau data

High degree of client coverage

UBI’S CORE CUSTOMER BASE REPRESENTS OVER 75% OF THE BANKING SYSTEM’S TOTAL OUSTANDING LOANS…

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UBI’s share of wallet is 5.5% in large groups and 11.2% in Corporates and SMEs

This is a reflection of Italy’s well-known phenomenon of multiple banking counterparties, especially among large enterprises

Largest 42 groups

Total non-financial enterprises

(with largest 42 groups)

Other Corporates: turnover > 50 mln Euro

Share of wallet

10.2%

5.5%

8.4%

Total non-financial enterprises (without largest 42 groups)

11.2%

Source: UBI calculations on internal data, using Italian Credit Bureau definitions

Share of wallet

…WITH A 10.2% SHARE OF WALLET IN LENDING…

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The weighted average of ratings (weighted by total loans), computed on Italy’s Centrale dei Bilanci rating scale, is 4.9 for UBI versus 5.1 estimated for the system

UBI appears to be under-represented in the higher-risk classes

Source: UBI estimates on Centrale dei Bilanci data

0%

5%

10%

15%

20%

25%

1 2 3 4 5 6 7 8 9

Banking system (weightedaverage of ratings: 5.1)

UBI (weighted average ofratings: 4.9)

…AND A BETTER RISK PROFILE THAN THE SYSTEM

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GREAT OPPORTUNITY FOR LOW COST AND LOW RISK GROWTH

UBI has a unique opportunity to increase its market share at low costs, maintaining a low risk profile for its portfolio

This can be achieved through an increase in the share of wallet of a selection of existing customers and through a limited increase in the number of clients in selected areas

Source: UBI calculations on internal data and Credit Bureau data

10.2% avg. share of wallet on core non-financial customers

HIGH SHARE OF WALLET

(>11%)

MEDIUM SHARE OF WALLET

(9-11%)

LOW SHARE OF WALLET

(<9%)

LOW CLIENT COVERAGE

(<30%)

MEDIUM CLIENT COVERAGE

(30-55%)

HIGH CLIENT COVERAGE

(>55%)

TRENTINO AA FRIULI VG VENETO

EMILIA R

TOSCANA

PUGLIA

SARDEGNA

PIEMONTE

V. AOSTA

MARCHE

MOLISE

LOMBARDIA

UMBRIA

CAMPANIA

BASILICATA

SICILIA

LIGURIA LAZIO

ABRUZZO

CALABRIA

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A new organisational structure designed to:

provide relationship managers with standardised products for all customers

for a growing number of selected clients, develop a full range of high-value added products and services, to acquire the role of main relationship bank, so as to maximise the interaction between interest and commission revenues and maintain a premium price in loans…

… under the constraint of unchanged risk exposure. Risk control will be based on full implementation of Basel II guidelines

Significant expansion in lending to SMEs through:

increased share of wallet in existing customer base

increased client coverage in selected regions/provinces

Stability in lending to large groups, exploiting selected opportunities

MAIN OBJECTIVES: LENDING VOLUME EXPANSION THROUGH AN INCREASE IN THE SHARE OF WALLET IN EXISTING CUSTOMERS TO LEVERAGE THE INTERACTION BETWEEN LENDING AND COMMISSION REVENUES

17Source: UBI calculations on internal data and Italian Credit Bureau

47.7% 30.0% 10.7%

A STATISTICAL RELATION BETWEEN UBI SHARE OF WALLET IN LENDING AND UBI TOTAL REVENUES

UBI Total Revenues/System Lending

UBI customers % in each share of wallet range

Share of wallet in lending

The share of wallet which maximises the revenues is around 14% (relative to today’s 10%)

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Light, localised, specialised

The local relationship manager maintains a central role

Based on the interaction between relationship manager and product specialist

The product specialists are part of four ‘product factories’

Client needs are analysed through a complex ‘Corporate Financial Planning’ system, highly quantitative, currently being piloted on a number of branches

Source: UBI internal data

A NEW ORGANISATIONAL STRUCTURE: EFFECTIVE INTERACTION BETWEEN RELATIONSHIP MANAGERS AND PRODUCT SPECIALISTS…

Corporate Finance

Derivatives

Foreign services

Transaction services

Total

Relationship managers

14

64

22

108

208

887

Product specialists

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Derivatives

Acquisition of new customers through the development of new financial risk management solutions

Consolidation of current customer base

Customers’ increase: from 13,600 to around

20,000

Foreign services

Share of wallet increase in enterprises with significant foreign business relations

Synergies with the New Europe Banks

Commissions’ CAGR: 16.6%

Corporate finance

Market share growth in an area where global houses are currently in a leading position

Delivery of value-added products, traditionally reserved to large corporates, to SMEs

Generation of 4 bn loans

Transaction services

Increase in product range, customer base and transaction flows

Customers: up 14%

Transaction flows: up 39%

ActionsProduct Factories

Three-year plan target

…LEADING TO EXCELLENCE IN VALUE-ADDED PRODUCTS DESIGNED BY UBI ‘PRODUCT FACTORIES’…

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The Centre of the DivisionProject Financing

Corporate Finance The Retail Bank

The Leasing Co. of the Group

New Europe Banks

and

International Network

...AND BY A NUMBER OF SPECIALISED COMPANIES, FULLY EXPLOITING THE DIVISION AND GROUP SYNERGIES

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UBI intends to strengthen the existing methodologies for credit risk analysis – including the introduction of the main features of the Basel II model - by the end of 2003

The risk analysis models will become an essential evaluation system also at the commercial level in order to optimise, for each counterparty, the interaction between the amount of lending, the interest rate applied and the commission margins generated

Loan loss provisions will be computed on a forward looking basis through the analysis of each single counterparty evaluated according to the Group’s internal rating model

Calculation of loan loss provisions are based on a probability of default which, after a slight deterioration for cyclical reasons in 2003, is expected to improve to 1.32%, by the end of the period. The LGD is assumed to be around 45%

RISK CONTROL BASED ON FULL IMPLEMENTATION OF BASEL II GUIDELINES

System PD data (estimated on the basis of the decaying rates – tassi di decadimento Banca d’Italia –) are adjusted by a scale factor to ensure comparability with UBI internal data, which include all doubtful loans and not just NPLs.

Source: UBI preliminary estimations on internal data and Bank of Italy data

0.0

0.5

1.0

1.5

2.0

2.5

2002 2006

System average PD UBI average PD

1,94

1,58

1,93

1,32

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In 2003 the successful interaction between relationship managers and product specialists will lead to an increase in :

Derivatives revenues: +31% Foreign Transactions revenues: +12%

Progress in credit risk modelling

UBI TARGETS

(Euro mln) 2002

Net interest income

Net non interest income

Total revenues

Operating income

Cost Income RATIO, %

Loans

Cagr02-06

39,103(*) 9.7%

1,160

562

8.7%

10.7%

1,723 9.4%

1,222 10.8%

29.1% 25.2%(**)

3 yrs targets

Longer-term

targets

Lending coverage

Share of wallet

Net non interest income/ net interest income

Average rating (CeBi) stable

15%

~80%

stable

From 11% to 13%

From 76% to 81%

From 49% to 53%

~60%

Source: UBI estimates on internal data (*) To ensure comparability with the banking system data, the data reported are from the Credit Bureau(**) End of period figure

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Executive Summary

The Corporate Division

UniCredit Banca d’Impresa (UBI)

UniCredit Banca Mobiliare (UBM)

Conclusions

AGENDA

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UBM: THE INVESTMENT BANK OF THE GROUP

The Risk Average daily VaR (99% confidence level, 1-day holding period) below €4 mln over the

last two years

The Role in the Division UBM is the product factory and risk

taking unit for corporate derivatives sold by UBI network

UBM brings skills and expertise in investment banking to UBI clients

Total Revenues

Cost / Income

Net Income

2002

586

28.1%

239

The History Conceived in 1997 A Division of Credito Italiano Finance in 1998 Born officially as a bank on 1 January 2000 Appointed in 2001 to manage the relationship with large corporate customers

%ch.

02/01

44%

-600 bp

66%

(Euro mln)

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FOCUS ON RISK CONTROL

- 6

- 4

- 2

0

2

4

6

-6

-4

-2

0

2

4

6

UBM Daily VAR and P&L (Jan. 2002 - Apr. 2003)

Market Risk:

Development of proprietary pricing models with increasing degree of complexity and sophistication

Deployment of an enterprise-wide parallel computing and skew/smile pricing

Daily back-testing, stress tests and crash tests

Daily monitoring of VaR figures at all relevant levels (single position, portfolio, desk, area, firm)

Counterparty Risk:

Exposure to large, institutional players

Daily Risk Measurement through Counterparty’s Portfolio Analysis

Measurement methods take full advantage of market risk techniques

Use of credit risk mitigation tools (netting and collateral agreements)

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ORGANIZATIONAL CHART: THE TWO MAIN LINES OF BUSINESS

UBM

Financial Products Sales and Trading Investment Banking

Derivative Products

FX and Treasury

Bond Trading and

Sales

Equity Brokerage

Structured Finance and Syndication

Debt Orig. and

SecuritizationM&A

Equity Capital Markets

Successful business model:

innovative, complex and sophisticated offer of financial products (i. e.: derivatives) to mid-sized clients

core skills in hedging and trading

excellence in managing financial and operational risks

industrial approach: high volumes, “slim” structures

UBM’s direct relationship with Italy’s 42 largest industrial groups, providing advisory and services in the area of Corporate Finance

Joint activity of UBM and UBI to offer the same services to mid-sized corporate clients

Loans are always booked in UBI

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THE BUSINESS SYSTEM IN FINANCIAL PRODUCT SALES AND TRADING

Understand potential customer needs (market intelligence)

Transform needs and ideas into products, check compliance and systems (New Product Committee)

Implement the operational processes (software modules for pricing, hedging and risk management, accounting and regulatory reporting)

Train UBI and the Group’s sales force

Design phase

Roll out of business and operational processes

Apply risk management

Refine and improve the process

Deployment

Daily quality control

Systematic portfolio measurement and assessment

Pro-active management of customer portfolio liabilities

After sales support

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UBI AND UBM WORKING TOGETHER ON CORPORATE FINANCE

UBI:

understanding of needs, day to day relationship management

source of market intelligence, scouting and prospecting on the large scale

lending and other financing services when needed

UBM:

core skills, specialized teams, experience coming from its activity for Large Corporate clients

structuring and executing

agent bank for the more complex structures

THE MECHANICS OF COOPERATION

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STRATEGIC PLAN IS A MIX OF CONSOLIDATION, GROWTH AND EXPORT OF THE BUSINESS MODEL TO OTHER EUROPEAN COUNTRIES

Investment Banking

Large Corporate:

Growth based on products and services with higher added value: M&A, Structured Finance, Advisory

Slight increase of market share in debt origination, especially through securitization

Medium Corporate:

Significant increase in Corporate Finance products and services, originally tailored to large corporate clients, mainly due to UBM/UBI synergies

Build focused products: analyse customers by size, sector and location

Financial Products Sales and Trading Consolidation of UBM position on domestic primary

and secondary markets

International growth: export UBM business model to other European countries, building JV companies with local partners

IKB-UBM already established (German market) two more start-ups likely to come in the next

three years

Total Revenues

2002

586 12.6%

Cost / Income 27.9%*28.1%

Operating Income 422 12.7%

Cagr02-06

(*) End of period figure

(Euro mln)

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Executive Summary

The Corporate Division

UniCredit Banca d’Impresa - UBI

UniCredit Banca Mobiliare - UBM

Conclusions

AGENDA

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THE CORPORATE DIVISION: TARGETS

(*) End of period figure

(Euro mln)2002 Cagr

02-06

Loans

Total Revenues

Operating Income

Cost Income RATIO, %

RARORAC, %

Economic Capital

Expansion through share of wallet increase

Leveraging on cross-selling opportunities and

synergies within the Division

High returns, low costs relative to sector peers

56,846

2,734

1,842

32.6%

11.1%

4,567

9.0%

9.9%

11.5%

28.7%(*)

11.6%(*)

9.0%