TRANSFORMING THE FRANCHISE: UNICREDIT APPROACH Alessandro Profumo - CEO Goldman Sachs Financials Conference Montecarlo, June 10 th, 2004

2 FOCUS ON THE RETAIL DIVISION New Europe division Private & AM division Corporate division Retail division 41.2%30.7%11.5% 16.6% Weight on 1Q04 Group revenues pre Corporate Centre and elisions (1) CR Carpi and Banca dell’Umbria (2) Delta due to other companies of the division and rounding 1Q04 data, Euro mln UniCredit Banca Customer Loans 36,167 Clarima 1,915 Total Division (2) 50,126 Customer Deposits 40, ,583 2, ,828 Branches UniCredit Banca per la Casa 8,007 Other banks (1) 3, , , ,727 Employees 353 1,091 RETAIL DIVISION KEY HIGHLIGHTS

3 UCI RENEWED APPROACH TO THE RETAIL BUSINESS Change of customer relations model Enhance customer loyalty Improve revenue quality Change of network management model Network differentiation in growth/strengthening areas Test of new branches format/specialised branches (2H04) Service model restructuring

4 AGENDA Change of customer relations model Change of network management model First results of the new focus

5 A NEW BANKING ENVIRONMENT Client’s satisfaction decline, due to recent bond defaults and rising awareness of transactional costs Low client confidence reduces scope for repricing and requires investments to increase banks’ reputation UniCredit answer: Start-up of a deep customer care program Improved revenue mix, less depending from up-front driven sales and more focused on recurring fees… … and net interest income, thanks to an increased focus on volume growth in 3 key markets:  small business  consumer finance  household mortgages

6 START-UP OF A DEEP CUSTOMER CARE PROGRAM… 120,000 interviews in 2002 (90,000 UCB customers + 30,000 competitors’ customers) to assess the mood of customers and their behaviours A synthetic measure of satisfaction has been built down to branch level: TRIM index Monthly interviews (~250,000 on a yearly basis) in 2004 to track customer satisfaction trends down to branch level (approx. 100 per branch)

7 …AND IMPROVED REVENUE MIX, WITH LOWER WEIGHT OF UP-FRONT AND INCREASED IMPORTANCE OF RECURRING REVENUES Avoidance of re-pricing actions in hi-elasticity demand areas Commissions more recurring and less up-front (weight of up-front on total net commissions down from 36% in 2003 to a target of 30% in 2004) Continuous and substantial growth of net interest income, with higher weight on total revenues Deliberate choice of re-balancing sales (i.e. mutual funds from 21% to 33% of total sales) with positive impact also on bank’s profitability: NPV of revenues from all asset management products (1) is by far higher than the NPV of the revenues resulting from the sales of structured bonds (1), with the exception of money market mutual funds As an example, money market mutual funds (1) give a revenue NPV which is 12% lower vs. structured bonds (1), while bond funds (1) already guarantee a 40% higher return for the bank vs. structured bonds (1)(2) (1) Simulation over 5 years horizon, including only 50% of management fees (the remainder is in Pioneer P&L) (2) Bancassurance is around 100% more profitable than structured bonds and equity mutual funds around 150%

8 SMALL BUSINESS MARKET: NEGLECTED AND PROFITABLE WHYHOW Big market 4,8 mln companies (1) 138 bn loans (2) Profitable High margins 59% current Cost Income (UCB) bp provisioning (diversification) Neglected by the banking system, squeezed between corporate and retail (asset gathering) UCB 8% market share on SB vs. 10% branch share 250 Dedicated Small Business Centres / 2,000 Specialist Account Managers Focus on Business Associations Dedicated products by industrial sector X-selling on asset gathering of SB owner (only 50% of SB owners currently have wealth management products with UCB) Speed of credit response Very advanced (BIS II) scoring system Very advanced centralized risk monitoring system (1) Source: Infocamere 2002 figures, companies with turnover lower than mln Euro (2) Source: internal estimate on Bank of Italy data

9 CONSUMER FINANCE AND HOUSEHOLD MORTGAGE MARKETS: UNDERDEVELOPED, FAST GROWING AND ATTRACTIVE CONSUMER FINANCE MARKET (1) OUR OPPORTUNITY Consumer lending volumes increasing at 15% in 2004 (after a 15.8% increase in 2003) CLARIMA 150,000 cards of non UCB customers outstanding (+5,500 a month) Significant opportunities arising from partnerships 9 new shops to open in new agents in 2004 UNICREDIT BANCA Under-penetrated customer base now being targeted Only 2.5% of our mass market customers have a revolving card Only 7% of our mass market customers have a personal loan (1) Source: ASSOFIN Italian market substantially underdeveloped (consumer lending at 3.2% of GDP vs. 6.7% avg. of Eurozone in 2003) HOUSEHOLD MORTGAGE MARKET (2) OUR OPPORTUNITY Household mortgage volumes CAGR 9.2% in 2004 (after a CAGR of 19.4% (2) UNICREDIT BANCA PER LA CASA A dedicated and integrated (production + distribution) “mortgage centre” Significant competitive advantage coming from the partnerships with real estate agents networks (Tecnocasa, FIAIP, etc.) 15 branches fully dedicated to mortgages Distribution also through PFAs networks UNICREDIT BANCA Distribution centre for the division Still under-penetrated customer base (only 10% of private customers have a residential mortgage) Italian market still underdeveloped (residential mortgages representing 14.8% of GDP vs. 32.5% avg. of Eurozone in 2003) (2) Source: Bank of Italy data for historical data, UCI estimate for future growth

10 FURTHER GROWTH OPPORTUNITIES CAN ARISE ALSO FROM EXISTING CUSTOMERS, AS SUGGESTED BY KEY PRODUCTS PENETRATION, ESPECIALLY IN MASS MARKET AFFLUENT MASS MARKET CURRENT ACCOUNT PACKAGE45%44% RESIDENTIAL MORTGAGE4%11% PERSONAL LOAN2%7% BANCASSURANCE (Single premium)21%4% CLARIMA CARD2%3% STANDING ORDERS OF PAYMENT (Utility bills)16%8% ASSET MANAGEMENT51%11% SECURITIES IN CUSTODY38%6%

11 AGENDA Change of customer relations model Change of network management model First results of the new focus

12 AFTER ITS CREATION UNICREDIT BANCA HAS STARTED A DETAILED X-RAY OF ITS 2,700 BRANCHES (1) Excluding mini-branches (2) Excluding headquarter costs (personnel & SG&A) Branches High Low High Low Large Small GOP, % of tot Branch Profitability Micro-market potential Branch Dimension # of branches (% of total (1) ) 828 (38%) 56% 444 (20%) 18% 387 (18%) 6% High growth Medium growth MAIN TARGET: SCOPE FOR SUBSTANTIAL GROWTH SCOPE FOR STRENGTHENING Cost Income (2) 49% 61% 73% Large Small 330 (15%) 15% 317 (14%) 5% 60% 69% SCOPE FOR RESTRUCTURING

13 BRANCH NETWORK ORGANISATION REDESIGNED TO BETTER FIT WITH TARGETS ASSIGNED TO STRENGTHENING AND DEVELOPMENT REGIONS… HEAD OF SALES Lombardia Head Lombardia Development (D) Head* Lombardia Strengthening (S) Head* Developers Small business centre “D” branches “S” branches 11 Regions 2004 MBO TARGETS Revenues New Customers Share of Wallet/X-selling Customer Satisfaction/Retention * 1 or 2 in each Region, depending on size of Region High weight Mid weight EXAMPLE

14 … LEVERAGING ON A DEDICATED NETWORK OF DEVELOPERS TO EXPLOIT OPPORTUNITIES IN HIGH-POTENTIAL MICRO-MARKETS Senior figures coordinating team efforts Bank’s total employees substantially unchanged in FY specialists hired from outside 418 resources coming from internal transfers 480 developers introduced in 7 months starting from October 2003 High profile resources specifically devoted to increase the customer base in the so called “Golden customer” segments (Affluent and Small Business) May 04Sept Dec 03 Mid Feb CREATION OF DEVELOPERS NETWORK Initial focus on acquisition of Small Business customers

15 SERVICE MODEL AND GEOGRAPHICAL COVERAGE RESTRUCTURING PRESENT GOOD OPPORTUNITIES TO IMPROVE THE EFFICIENCY PROFILE OF THE DIVISION MASS MARKET79% AFFLUENT47% SMALL BUSINESS59% EXAMPLE: SUB-SEGMENT CROSS SUBSIDIES IN UNICREDIT BANCA 70 branches already closed in 2003 NETWORK REORGANISATION ~100 further branches to be closed already identified, with a target of 50/60 closures in 2004 (6 already closed as at end of May) ~80 branches to be downsized already identified ~40 branches to be specialized already identified ~15 branches to be opened in 2004 (of which 2 already operating) Cost income of the different segments However, further cross subsidies between sub segments exist in each segment

16 AGENDA Change of customer relations model Change of network management model First results of the new focus

17 DECREASE OF TOTAL COMMISSIONS COMPLETELY DUE TO LOWER UP-FRONT, WITH INCREASED WEIGHT OF RECURRING COMMISSIONS IN LINE WITH INTERNAL EXPECTATIONS… 352 4Q Q Q Q Q03 Up-front commissions Recurring commissions % % % % % 33% 26% 36% 39% 36% NET COMMISSIONS

18 …POSITIVELY CONTRIBUTING TO CUSTOMER SATISFACTION IMPROVEMENTS IN PRIVATE AND SMALL BUSINESS SEGMENTS, CONSISTENTLY OUTPERFORMING COMPETITION PRIVATE CUSTOMERS, TRIM INDEX UNICREDIT BANCAAVG. TOP 9 COMPETITORS Stability of front-end relationship with customers Improved waiting time (shorter queues) Improved advisory on investment services, with room for further improvement SMALL BUSINESS, TRIM INDEX ytd UNICREDIT BANCAAVG. TOP 9 COMPETITORS Dedicated service model Improved advisory on lending products Focus on quality of sales TRI*M indexes calculated by NFO Infratest Note: customer satisfaction analyses at system level are commonly based on ~4,000 interviews (ABI, Eurisko etc.) ~42,000 interviews with UCB customers and ~4,500 interviews with competitors’ customers ~21,000 interviews with UCB customers and ~2,500 interviews with competitors’ customers Mar ytd Mar 04

19 +52% 5.8% yearly growth rate GOOD ACCELERATION IN CUSTOMER ACQUISITION CAPABILITIES… SMALL BUSINESS CUSTOMERS, MONTHLY ACQUISITION RATE 0.48% 0.58% 0.88% 20031Q04 APR MAY04 (1) 0.86% 1.40% 20031Q04 +63% 0.32% 0.40% 0.56% 20031Q04 +40% 0.70% TOTAL BANKDEVELOPMENT REGIONSSTRENGTHENING REGIONS 45% OF STOCK55% OF STOCK PILOT REGIONS: Lombardy, Lazio- Umbria-Sardegna, Tuscany-Marche, South Excellent results driven by the enhanced focus of branch managers and the brand new network of developers 16.8% yearly growth rate APR MAY04 (1) (1) Updated to May 15 th

20 CONSUMER FINANCE Continued strong performance in new cards issued by Clarima, with 28,000 revolving cards issued in May (for a total of 168,000 cards issued in 04 vs. 50,000 in FY03) 36 mln new loans issued in May through revolving cards (+16% vs. April) for a total of 120 mln ytd (vs. 95 mln in FY03) Good increase also in the flow of new personal loans granted by Clarima (330 mln, vs. 690 mln in FY03) Excellent increase in market share, from 16.8% in December to 17.0% in March Confirmed good flows of residential mortgages, with ~800 mln in May, thanks to the positive performance of both UCB (~540 mln) and UBCasa (~260 mln) Y/y comparison showing an excellent 28% increase (~3.4 bn ytd) Growth coming mainly from partnership channel, with 50% y/y increase Avg. amount of mortgage from 93,000 (2003 avg.) to 102,000 Euros (5M04 avg.), up 9.7% RESIDENTIAL MORTGAGES … INCREASED MARKET SHARES IN KEY BUSINESSES AND EXCELLENT GRANTING OF NEW LOANS IN MORTGAGE AND CONSUMER FINANCE MUTUAL FUNDS Good increase in market share on stocks of mutual funds, from 13.39% in Dec03 to 13.49% in May04 (+10 bp)