RETAIL DIVISION

Roberto Nicastro

2

AGENDA

Retail Division overview

Country-specific plans

Austria

Germany

Italy

Conclusions

3(1) New perimeter: households with financial assets up to 1 million Euro and enterprises with yearly turnover up to 3 million(2) Direct deposits, indirect deposits and total loans as of December 2005(3) Not including Austrian small business segment

RETAIL DIVISION ID CARD

Total volumes(2) bn

111 57(3) 16199

TOTAL

383

UniCredit R etail D ivision (1)

RetailItaly

RetailAustria

Specialized platforms

RetailGermany

Households: with less than 1 mln assets

Small Businesses: with less than 3 mln turnover

4

THE STARTING POINT

Revenues Costs Net profit

4,397(61%)

2,756(52%)

609

1,753(24%)

1,638(31%)

1,059(15%)

911(17%)

-264

-68

RETAIL DIVISION PRO-FORMA ECONOMICS(1), 2005million, percent

Italy

Germany

Austria(1)

7,209 5,305 277Total

AustriaGermany

Italy

(1) After divisionalization in Germany and Austria, but not yet including Austrian small business segment

As resulted from transferring high net-worth individuals and small business

5

A 1 BN ANNUAL EVA IMPROVEMENT ACHIEVED WITH DIFFERENT FOCUS SOUTH AND NORTH OF THE ALPS

TURNAROUND AT DIFFERENT STAGES

Radical improvement, building on a very encouraging 2006 start:

Revenues and cross-selling growth with focus on highly attractive Affluent segment

Turnaround of unprofitable Mass Market (especially Germany) and Small Business (especially Austria) segments

Cost efficiency addressing high direct and indirect costs

Consolidating the current successful growth:

Customer base enlargement, focus on attractive segments

Further wide cross-selling opportunities

More cost efficiency

6

AGENDA

Retail Division overview

Country-specific plans

Austria

Germany

Italy

Conclusions

7

Specialized platforms (Clarima and Banca per la Casa)

■ Partners contribution (e.g., real estate franchisers and federations)

■ 830-strong hunters’ network in UCB

■ Innovative acquisition products (e.g., Genius One and Start-Up)

■ Customer satisfaction improvementTRI*M index

CUSTOMER GROWTH: ESTABLISHED TRACK RECORD THANKS TO IMPROVED CUSTOMER SATISFACTION

(1) Small Business and Affluent

ATTRACTIVE CUSTOMER GROWTH

130

39

UCB

CLARIMA NON-CAPTIVE

BANCA PER LA CASA NON-CAPTIVE

GROSS CUSTOMER INFLOWS, 2005Thousand

1Q20062004 Top 4 peers 2005

49 5543

51 313 364

Golden(1)

Total net new customers in 2005: 160,000

Customer growth1

Other

8

BUT STILL HIGH GROWTH POTENTIAL EXISTS

CLEAR OPPORTUNITIES … … SPECIFICALLY ADDRESSED

Customer growth1

■ Autumn 2006: launch of new specialized service line focused on immigrants and near-prime market (Linea Tu)

■ Demographic trends: e.g. fast growing immigrant (~10% of mortgages requests expected in 2008) and temporary workers segments

■ Increased focus of Clarima and Banca per la Casa on non-captive channel development

■ Consumer and mortgage loans markets still very buoyant

■ Lombardia and Center-South still under-penetrated

■ Around 170 golden branch openings in 2006 and 2007

■ Hunters network model refinement and consolidation

■ About 20% of hunters still underperforming

9

MARCH 2006

JUNE2004(1)

CURRENT ACCOUNT PACKAGES 57% 56%47% 46%

ASSETS UNDER MANAGEMENT(2) 64% 16%55% 13%

PERSONAL BANKING

MARCH 2006

JUNE2004(1)

MASS MARKET

(1) Presented at the 4th Investor Day on October 27, 2004(2) Bank-assurance not included

PRODUCT PENETRATION

CROSS-SELLING: GOOD RESULTS, WITH LARGE FURTHER OPPORTUNITIES ALSO ON THE RECENTLY ACQUIRED CUSTOMERS

High sales orientation Well-tested rewarding system (monetary and non-monetary incentives, contests, etc.) Effective campaign management system

DISTINCTIVE FACTORS

Main achievementGrowth opportunity

PERSONAL LOANS 2% 9%2% 7%

CLARIMA CARDS - REVOLVING 12% 12%3% 4%

HOUSING FINANCING 4% 13%4% 12%

Cross selling2

10

COST REDUCTIONS AHEAD OF PLAN: 60% 2007 C/I TARGET ALMOST DELIVERED NOW

Branch closures faster than planned with higher retention rate (95% vs. 90% planned)

2004 1Q06

Incorporation of Banca dell’Umbria and CRCarpi

Merger of retail businesses of the two Banks generated ~20% synergies of initial cost base in 6 months

First results of migration to low cost channels

56% wire-transfers and 21% tax payments moved out of the branches

335 deposit-ATM installed: 27% of cash deposits migrated

1.1 mln online banking customers (+43% 1Q06 vs. 1Q05)

VERY GOOD ACHIEVEMENTS

(1) Pro-forma including Banca dell’Umbria and CRCarpi, incorporated on July 1, 2005

2005 Total

26224129

109

2004 1Q06

24,280(1)

23,330

-950

FTE reduction: at mid-plan already 60% of 2007 target

Cost efficiency3

11

RESULTS WILL BE ACHIEVED THROUGH FURTHER TRANSFORMATION OF SERVICE MODELS

■ Continue migration to automated channels : ~2,000 additional deposit-ATM planned

■ Structural branch costs reduction:■ Activity centralization■ Process simplifications■ Innovative formats for 500

small branches (<4 employees)■ Optimize support for other

Divisions

■ Continue FTE reduction with sustained rate also in 2008

MAIN INITIATIVES

2008

CAGR2005-2008

Infragroup costs

~2.8%

2,756

38

2,990

2005

~1.7%

OPERATING EXPENSESmillion

~3.1%Direct costs

196

Cost efficiency3

12

DELIVERING IMPRESSIVE EVA CREATION IN THE NEXT 3-YEARS

2005 CAGR 05-08(1)

4,397 ~7%Total revenues, mln Revenues/RWA 10% ~10%

Cost/Income 63% ~56%

2005

FTE, # ~23,560 ~22,640

2008(1)

EVA, bn 0.4 ~0.7

Operating costs, mln 2,756 ~3% Revenues/FTE, mln 0.19 ~0.24

Avg. RWA, bn 42.8 ~9% Up-front fees/Revenues 14% ~13%

Cost of risk(2) 65 bp ~56 bp

(1) Under Basel I regulations and not including Clarima Deutschland start-up(2) Loan loss provisions over end-of-period total loans

13

AGENDA

Retail Division overview

Country-specific plans

Austria

Germany

Italy

Conclusions

14

~8%

~3%~9%

~23%

~14%

~8%

OUTSTANDING INCREASE OF ASSET GATHERING, MAINLY DUE TO AFFLUENT SEGMENT

1216

10

15

12 12

34

2005

43

2008

AuM

AuC

Other deposits Other

Recurring fees

Up-front fees

Interest margin

ASSET GATHERING VOLUMES IN AFFLUENT SEGMENTbillion

REVENUES MIX IN AFFLUENT SEGMENTmillion, percentCAGR

2005-2008

~2%

CAGR2005-2008

~6%

100% =

~10%

Revenue growth1

2005 2008

657 829

15% 16%

46%

14% 20%

25% 24%

40%

15

STRONG GROWTH AND LEADERSHIP IN AFFLUENT SEGMENT

■ Foster systematic customer contacts

■ Refine need-based approach and reallocate customer assets between financial needs

■ Optimize asset allocation with more efficient products

■ HVB upmarket customer base in the biggest European affluent assets’ market (37% of customers with over 3,000 Euro monthly income)

■ HVB network perceived as highly competent vs. competitors

■ Good products-shelf with need-oriented sales approach already present

WHAT WE DO WHY IT IS ACHIEVABLE

Revenue growth1

16

VERY CLEAR POTENTIAL TO INCREASE SALES PRODUCTIVITY

Revenue growth1

Meetings per Relationship Manager can be improved by 40-45% through:■ Introduction of a deterministic rewarding system as of July 1, 2006■ Clear targets and advanced sales measurement system■ Branch traffic generation activities

Number of meetings per advisor per week(1)

0

2

4

6

8

10

12

14

16

18

0 5 10 15 20 25 30 35

Productivity leaders

Average performers

Low performers

Product sales per

advisor per week(1)

Lower quartile = 6.2

Upper quartile = 10.7

(1) All advisor data is a weighted average for affluent and mass market advisors; small business advisors not included in analysis

Source: FINALTA

UCB best practice

17

STRONG TURNAROUND OF UNPROFITABLE MASS MARKET AND SMALL BUSINESS SEGMENTS

■ Focus on attractive sub-segments/selected industries

■ Attack largely under-penetrated areas:

■Mortgages and savings soloists■Customers without a current

account■Asset gathering from small

business relationship

■ Be “retail”:■Simplify and standardize

product offering■Standardize and automate credit

processes

■ Historical over-reliance on mortgages

■ Currently, 40% of mass market customers are soloists and 50% hold a current account with HVB

■ Small business segment profitable at market level (8-12% ROE) and some major German banks successfully over-perform the market

■ Current customer acquisition rate below peers

■ Spin-off of non-strategic assets held by mortgage soloists with limited cross-selling potential

WHAT WE DO WHY IT IS ACHIEVABLE

MM/SB turnaround2

18

CLEAR POTENTIAL IN MASS MARKET FOR CROSS SELLING IN ALL PRODUCT AREAS

HVB 2.4 mln clientsUCB 4.1 mln clients

Mortgages

Creditcards

Revolvingcards

Personalloans

Currentaccount

Bancass.Recurring premium

Bancass.Single premium

Securities

Assetmgmt

COMPARISON OF PRODUCT PENETRATIONS FOR MASS MARKET SEGMENT, HVB AND UCB

MM/SB turnaround2

11.9%

21.3%

7.7%

7.6%

75.1%

11.6%5.2%

5.6%

17.1%

16.0%

0.2%

21.5%

42.9%

4.4%

1.0%

7.5%

14.5%

2.9%

Increase customer loyalty/deposits thru X-selling of C/A and credit cards

Increase market share in hi-margins personal loans and revolving cards

Clarima Deutschland start-up (2H 2006)

Data as of June 2005

19

COST REDUCTION WILL BE ACHIEVED BY MORE THAN OFFSETTING INERTIAL GROWTH, MAINLY ON INDIRECT COSTS

2008

CAGR2005-2008

Indirect costs

Overhead costs

~-0.7%

2005

~-5.6%

~-3.7%

OPERATING EXPENSES(1)

million

Main initiatives:

■ Improvement of network delivery models

■ Facilities and real estate efficient management

■ GBS projects

■ Realignment of indirect and overhead costs to European standards

■ Streamline credit processes and service models

HVB SALES-RELATED AND OVERHEADCOSTS HIGHER THAN GERMAN BENCHMARKS

~0.7%Direct costs

Cost efficiency3

(1) Clarima Deutschland start-up included

Clarima Deutschland

n.m.

1,638

-80

1,602

-20

17

47

20

COST REDUCTION AS THE BASIS FOR BUILDING SUSTAINABLE GROWTH AND TURNAROUND AFTER PLAN HORIZON

2005 CAGR 05-08(1)

1,753 ~7%Total revenues, mln Revenues/RWA 5.6% ~7.2%

Cost/Income 93% ~75%

2005

EVA, bn -0.4 ~0

2008(1)

FTE ~8,630 ~8,180

Operating costs, mln 1,638 ~-1% Revenues/FTE, mln 0.20 ~0.26

(1) Under Basel I regulations and including Clarima Deutschland start-up(2) Ambitious growth target of new loans production (14% CAGR 2005-2008) does not compensate expiring mortgages(3) Loan loss provisions over end-of-period total loans

We plan to achieve this ambitious results, also by increasing and consolidating customer satisfaction through the introduction of frequent measurements and introduction in the reward system

Avg. RWA, bn 31.1 Up-front fees/Revenues 14% ~14%~-2%(2)

Cost of risk(3) 78 bp ~80 bp

21

2006: A VERY ENCOURAGING START

■ The network is reacting very positively, as shown by 1Q 2006 results:

➼ Growth of gross sales and positive net sales of AuM

➼ Growth of consumer loans volumes

➼ Containment of costs

■ Improving customer satisfaction and decreasing drop rate

22

AGENDA

Retail Division overview

Country-specific plans

Austria

Germany

Italy

Conclusions

23

OUTSTANDING INCREASE OF ASSET GATHERING MAINLY DUE TO AFFLUENT SEGMENT

4 4

610

14 15

24

2005

29

2008

AuM

AuC

Other deposits

2005 2008

Other

Recurring fees

Up-front fees

Interest margin

369 473

ASSET GATHERING VOLUMES IN AFFLUENT SEGMENTbillion

REVENUES MIX IN AFFLUENT SEGMENTmillion, percentCAGR

2005-2008

~3%

~1%

~15%

~6%

CAGR2005-2008

~7%

~17%

~13%

~9%100% =

~5%

Revenue growth1

17% 16%

56%

14% 17%

13% 14%

53%

24

STRONG TURNAROUND OF HIGHLY UNPROFITABLE SMALL BUSINESS AND MASS MARKET SEGMENTS

■ Attack under-penetrated customers:➼Savings soloists in mass market and

private-side of small business relationships

➼Increase x-selling on C/A transactional customers

■ Improve network sales effectiveness/success ratio:

➼Coaching programs➼Focus on few products➼More effective CRM

■ Standardize and automate small business credit processes

■ Address “over-invested” youth market segment and focus on profitable sub-segments

WHAT WE DO WHY IT IS ACHIEVABLE

MM/SB turnaround2

■ Mass market customers with overall low penetration of mutual funds and life insurance

■ ~40% of customers with one single product or just using C/As and payments

■ 80% of small business customers currently unprofitable

■ Very good central campaign generation engine, with improvable sales-funnel management

■ Sales success ratio ~20% below European peers

25

COST EFFICIENCY: SIMILAR TO SITUATION IN GERMANY

2008

CAGR2005-2008

Indirect costs

Overhead costs

~-4%

911

-55

803

2005

-33 ~-9%

~-5%

OPERATING EXPENSES(1)

million

~-2%Direct costs -20

Cost efficiency3

MAIN INITIATIVES

■ Improvement of network delivery models

■ Facilities and real estate efficient management

■ Realignment of indirect and overhead costs to European standards

■ Streamline credit processes

(1) Not including Austrian small business segment

26

2008 AUSTRIAN TARGETS SET HIGHER AMBITION LEVEL

2005(1) CAGR 05-08(1,2)

1,059 ~6%Total revenues, mln Revenues/RWA 8.5% ~8.0%

Cost/Income 86% ~63%

2005(1) 2008(1,2)

EVA, bn -0.1 ~0.2

Operating costs, mln 911 ~-4% Revenues/FTE, mln 0.27 ~0.38

Avg. RWA, bn 12.5 ~8% Up-front fees/Revenues 7% ~9%

FTE ~3,870 ~3,400

Cost of risk(3) 154 bp ~56 bp

(1) Not including Austrian small business segment(2) Under Basel I regulations(3) Loan loss provisions over end-of-period total loans

27

AGENDA

Retail Division overview

Country-specific plans

Austria

Germany

Italy

Conclusions

28

RETAIL DIVISION TARGETS: 3 YEARS OF STRONG GROWTH

2005(1) CAGR 05-08(1,2)

2005(1)

Avg. RWA, bn 86.4 ~6% FTE ~36,060 ~34,220

■ ~1 bn additional annual value creation (EVA from -0.1 to ~0.9 bn)■ Strong attention to cost efficiency■ Cost of risk stabilization, despite ~6% RWA growth

2008(1,2)

(1) Not including Austrian small business segment(2) Under Basel I regulations

Direct costs, mln 3,220 ~2% Up-front fees/Revenues 13% ~12%

7,209 ~7%Total revenues, mln Revenues/FTE, mln 0.20 ~0.26

Cost/Income 74% ~62%Indirect/Ovhd costs, mln 2,085 ~-2%

EVA, bn -0.1 ~0.9Risk provisions, mln 1,031 stable

29

IN ESSENCE …

■ ~1 bn additional annual EVA creation, based on few simple initiatives on which we have an established track-record

■ Italy: consolidating the growth path

■ Germany and Austria: “exporting” the turnaround

■ Adoption of Basel II regulations will bring additional significant further value (not included in the plan)

30

ANNEX

31

RETAIL DIVISION: 2005 P&L

Net Interest income (incl. div.)

Net non interest income

Total revenues

Operating costs (incl. depreciation)

Operating income

Net income

Net provisions

(mln)

Net income for the group

- of which: Staff costs

- of which: Other admin. expenses

- o/w: Net loan-loss provisions

Cost/income Ratio

2005

4,297

2,912

7,209

1,903

-2,975

-2,453

-5,305

277

282

74%

-1,031

-1,087

Profit/loss & net write-downs on investments +9