1. RETAIL DIVISION 2003-2006 STRATEGIC PLAN Luca Majocchi Head of Retail Division Investor Day - Bologna, June 13 th 2003

2. 2 AGENDA Structure of Retail Division P&L targets Strategic guidelines & goals

3. 3 THE RETAIL DIVISION COVERS THE ITALIAN MARKET THROUGH A NUMBER OF PRODUCT & CHANNEL SPECIALISTS… Product specialisation Retail Division Channel specialisation Retail investment products through captive and non captive networks Consumer credit products through direct channels, partners and captive networks Banking products for households and small business through proprietary branch network Mortgages and home related products through organised intermediaries (real estate agents, insurers…) per la casa

4. 4 …LEVERAGING SKILLS AND FOCUS OF PRODUCT SPECIALISATION AND SCALE AND MARKET POWER OF THE LARGEST DISTRIBUTION NETWORK IN ITALY Retail Division Partners (23) Real estate agents (2500) Third parties Stock exchange Leads   per la casa   Branches (2750)

5. 5 AGENDA Structure of Retail Division Strategic guidelines & goals P&L targets

6. 6 THE ITALIAN RETAIL MARKET WILL SEE GROWING COMPETITION AS MARGIN INCREASE WILL COME FROM MARKET SHARE GAIN RATHER THAN CROSS SELLING Market environment Customers demand Competitors behaviour  Low volume growth due to slow economic recovery  Low interest rates and risk aversion of retail investors affecting deposits and asset management revenues  No one-off revenue stream comparable with asset management and stock trading fees of II H 90’s  Declining satisfaction in the whole industry  No significant effect on customers turnover yet, but share of “potentially mobile” customers growing fastly  Large players focused on carrying out large and complex restructuring processes, with less drive for organic growth  Mid-sized and small players looking for best model to keep local focus and build further efficiency in business processes (where room for improvement is decreasing)

7. 7 UNICREDIT RETAIL DIVISION IS COMMITTED TO GROW AS THE PREFERRED BANK FOR ITALIAN HOUSEHOLDS AND SMALL BUSINESS CUSTOMERS MISSION Exploit potential of superior S3 model to become “the largest, local Italian bank”, committed to help households and small businesses “make their life projects real” STRATEGIC GOALS To become the preferred bank for Italian retail customers thanks to high quality service and close, personal relationship with clients To grow revenues faster than market average by increasing market share in all core products line To remain cost leader in the industry thanks to superior operations, logistics and network management

8. 8 DIVISIONAL REVENUE GROWTH WILL BE DRIVEN BY SUBSTANTIAL INCREASE IN BUSINESS VOLUME, ASSUMING STABLE AVERAGE MARGINS Revenues + 35% 2002 2006 TOP LINE GROWTH 2002-2006 Euro bn 4,7 6,4 Total volumes (assets & liabilities) Margin 2,45% 193 263 + 35% Number of customers Volume per customer 34 th 29 th 6,5 mln 7,7 mln + 17% + 16% 20022006 Deposits & Asset mgmt Lending 20022006 2,18% 2,02% 3,44% 3,59% 20022006 = x - 7% + 4%

9. 9 + 8.0% 1.9% 1.7% 4.5% VOLUMES AND REVENUE GROWTH WILL COME FROM BOTH EXISTING AND NEW CUSTOMERS ON THE TOP OF MARKET TREND Average GDP growth 1.5% Euribor down 122 b.p. in 2003 (1.80%) slightly recovering to 3.10% by end 2006 Driven by improved service quality and sales effectiveness thanks to new segment model Driven by improved acquisition capability and investments in networks/acquisition channel DRIVERS OF REVENUE GROWTH 2002-2006 Euro mln 2002 Revenues Impact of external scenario More business with existing customers New business from new customers 2006 Revenues = CAGR ’02-’06 4,730 400 360 950 6,440

10. 10 BUSINESS VOLUMES WILL GROW FASTER THAN MARKET AVERAGE THANKS TO FOCUSED INITIATIVES, MOST OF WHICH ALREADY STARTED Asset gathering (UniCredit Banca, TradingLab & Pioneer) Share of wallet increases thanks to new service model for mass affluent Leverage pension business to grow on existing and new customers Leverage excellence in product development to expand non captive business in Italy and abroad > 10% 2002 2006 + 10% > 11% MARKET SHARE IN KEY PRODUCT AREAS Households current accounts (UniCredit Banca) 2002 2006 ~ 9% ~ 10% + 10% Launch new Genius product line by I Q ‘04 Improved “banking at work” offer Cross selling on consumer lending (Clarima) and mortgage (UniCredit banca per la casa) customers

11. 11 BUSINESS VOLUMES WILL GROW FASTER THAN MARKET AVERAGE THANKS TO FOCUSED INITIATIVES, SOME OF WHICH ALREADY LAUNCHED MARKET SHARE IN KEY PRODUCT AREAS (Cont.) Retail mortgages (UniCredit Banca & Unicredit Banca per la casa) Consumer lending (Clarima & UniCredit Banca) 2002 2006 Further exploitation of partnership with real estate agents Opening of specialised branches Use of CRM to increase cross selling Aggressive cross selling on captive customers Scaling up of already proved direct marketing and partnership skills Development of innovative sales model for credit at PoS > 12% > 15% + 25% ~ 7,5% > 9% + 20% Small Business lending (UniCredit Banca) 2002 2006 < 7% > 8% + 20% Launch new segment-focused Imprendo packages Strengthening of specialised branches Leverage state of the art credit skills to grow penetration on existing customers and expand client base

12. 12 GROWTH IN ASSET GATHERING FROM MASS AFFLUENT CUSTOMERS WILL START FROM IMPROVEMENTS IN CURRENT SERVICE MODEL ADDRESSING SOME ISSUES OF CURRENT APPROACHES MARKET RESEARCH ON MASS AFFLUENT CUSTOMERS 11% Press 1. Share of wallet growth is closely linked to customer satisfaction due to multi-bank relationships 2. Banks are pushing sales to improve profitability of asset gathering business, harmed by risk aversion of investors and negative performance of stock markets 4. Large size of client portfolios and sales approach focused on cross selling constrains time invested in customer care Friends/ Colleagues 20% Self 35% 71% Bank Total Retail Mass affluent 68% 59% Retail customers ask for advice…….. Source of advice when deciding on investments ….but satisfaction is low Customers satisfied of professional level of advisers 3. Financial markets fall and turbulence brought customers to ask for more time from their account mgr’s - 13%

13. 13 DEVELOPMENT OF A NEW SERVICE MODEL FOR MASS AFFLUENT SEGMENT IS WELL UNDER WAY AND ALREADY PRODUCING POSITIVE RESULTS KEY ITEMS OF “NEW” MASS AFFLUENT SERVICE MODEL 1. Differentiated offer and service levels for mass affluent sub-segments (by wallet size and investment behaviour/ preferences) 3. Centralised and improved support to financial advisors to help them to be more effective and save time for customers care 2. Investor care considered as important as cross selling in driving advisors activities RESULTS TO DATE 1. Review of account portfolios almost completed (2,500 advisors involved) 2. Centralised help desk (60 investments experts) operational since feb ’03 (~ 1,800 calls managed daily) 3. First large scale “investor care campaign” on 120,000 mass affluent customers to be completed by end of June

14. 14 IN FIRST PART OF 2003, S3 ALREADY STARTED DELIVERING SUPERIOR RESULTS COMPARED TO THE OLD FEDERAL MODEL SALES OF HIGH VALUE PRODUCTS Jan-May 2003 vs. 2002 Structured bonds Jan-May 2002 Jan-May 2003 1.4 bn 2.9 bn +109% Bancassurance single premiums Jan-May 2002 Jan-May 2003 1.7 bn 2.5 bn +43% Bancassurance recurring premiums Jan-May 2002 Jan-May 2003 110 mln 293 mln +166% share of total insurance sales 6% 10%

15. 15 GeographyItalyItaly & core EuropeInternational REVENUE GROWTH IN RETAIL INVESTMENT SERVICES WILL LEVERAGE TRADINGLAB PRODUCT INNOVATION SKILLS TO FURTHER BROADEN MARKET REACH IN ITALY AND INTERNATIONALLY TRADINGLAB HISTORY AND STRATEGIC GUIDELINES TargetSelf-directed investors Advice seekers '98-'00 ' 01-'02'03-'06 Stock markets Captive networks Third parties Stock markets Captive networks Third parties Synergy with Pioneer Distribution channels Revenues mix  Market making  Origination (Captive)  Origination (Non Captive)  80%  16%  2%  55%  36%  5%  52%  31%  13% Revenue growth (CAGR) n.s.-7.4% (’00-’02)>10% (’02-’06) ProductsCovered WarrantCovered Warrant Structured Bonds From leadership in CW to leadership position in retail investment products in Italy Consolidate leadership in Italy and grow selectively in high potential markets Company start up as covered warrant specialist Goal

16. 16 CONSUMER CREDIT GROWTH WILL BE DRIVEN BY CLARIMA THAT, COMPLETED THE START UP PHASE, WILL EXPLOIT ALL POTENTIAL OF CONSUMER CREDIT FOCUS ~ 120,000 cards to date with share of revolving higher than expected 23 active partnerships generating significant inflows of new customers (> 22,000 in Jan-May ‘03) Full speed development of direct market activity starting June ‘03 Clarima re-focused on development of whole consumer lending product line (cards, personal loans, consumer credit) Spin off of existing personal loan business from UCB to Clarima by IIIQ ‘03 Cross selling activity on captive customers under extensive testing, preparing for large scale roll out CLARIMA STRATEGIC GUIDELINES

17. 17 SMALL BUSINESS LENDING WILL BENEFIT FROM EXCELLENCE IN CREDIT TECHNOLOGY THAT ALREADY PROVED TO BE A KEY DRIVER FOR GROWTH ~ 103,000 customers involved (minimum Credit line 5,000 Euro) Good credit quality (top three – out of five – performing loan classes) Results to date Two out of four months of campaign Outstanding at 31.01.03 Outstanding at 30.04.03 Target Campaign Call centre & account rep contact Packaged pricing offer linked to new credit product (Credit Più) Four months time frame starting 01.03.03 1,2 bn 1,4 bn +16% SMALL BUSINESS “LENDING GROWTH CAMPAIGN”

18. 18 TO BECOME QUALITY LEADER, UCB LAUNCHED AN AMBITIOUS PROJECT IN JUNE 2002 TO BUILD SUPERIOR INSTITUTIONAL SKILLS IN CUSTOMER SATISFACTION MANAGEMENT Project approach Key findings 1. Use of standard satisfaction measure widely applied in retailing and manufacturing 2. Huge research effort to measure satisfaction at micro- market level 3. Broad change management programme to build institutional skills and empower the front line Customer satisfaction analysis gives actionable results only when done at micro-market level and vis a vis local competitors 1. All aspects of human relation prove to be more important than physical and operational factors 2. 3. Effective management of “moments of truth” (sale of “key” products, claims management, …) is crucial for customers satisfaction 4. Substantial improvements can be achieved only by building understanding and commitment at the front line and orchestrating company-wide initiatives sponsored by the top mgmt team CUSTOMER SATISFACTION INITIATIVE

19. 19 20 30 40 50 60 70 Market AMarket B Market C Market D Market EMarket F Market G Market H Market I Market J Market K Market L Market M Market N Market O Market P Market Q Competitors’ average Unicredit Banca Regional Average CUSTOMER SATISFACTION INDEX Unicredit Banca Local competitors CUSTOMER SATISFACTION ANALYSIS AT LOCAL MARKET LEVEL GIVES ACTIONABLE AND SPECIFIC HINTS FOR LOCAL ACTION PLANS FOR CUSTOMER SATISFACTION AND RETENTION EXAMPLE CUSTOMER SATISFACTION DIAGNOSTIC Local competitor Banca X Local competitor Banca Y

20. 20 Monthly progress meetings at top mgmt level Extensive involvement of front line mgmt Structured action plans at regional level already completed Company wide projects launched, on operational excellence, claims management, product innovation and employee satisfaction THE “CUSTOMER SATISFACTION IMPROVEMENT INITIATIVE” ALREADY HAD A DEEP AND WIDESPREAD IMPACT ON BANK’S ORGANISATION AND MANAGEMENT FOCUS CEO COO Marketing Sales Operations Regions Markets Branches Task force created to co-ordinate initiatives and monitor results Top mgmt team responsible for satisfaction improvement programme New role, responsible of devising and monitoring local action plans Key part of the organisation, deeply involved and empowered in customer satisfaction improvement plans Customer satisfaction specialists Customer satisfaction team

21. 21 14,7% Branches share 4,9% Branches Share UNICREDIT BANCA WILL STRENGTHEN ITS BRANCH NETWORK (ALREADY THE 1 ST IN ITALY) FOCUSING ON ATTRACTIVE MARKETS WHERE THE BANK HAS (OR CAN BUILD) A COMPETITIVE ADVANTAGE 12,3% Branches share 11,8% Branches share 15,3% Branches share 8,5% Branches share 6,7% Branches share 2,5% Branches share 4,8% Branches share 5 6 51516 101512 LowMediumHigh Low Medium High n. Number of provinces Focus Market attractiveness UCB competitiveness 2% 6% 2% 5% 8% 4% 22% 40% 11% % Share of UCB branches

22. 22 BRANCH NETWORK RATIONALISATION AND EXPANSION WILL INVOLVE ABOUT ONE FOURTH OF BRANCHES BRANCH NETWORK IMPROVEMENT PLAN 2002 – 2006 Number of branches Saving of skilled resources to be used to strengthen existing branches/open new ones Improvements in service quality and sales effectiveness in key customers segments/markets 2002 Closures Specialisation/ Optimisation Openings 2006 2.753 120 250 430 3.060 ~ 9% + 16%+ 11%- 5%

23. 23 +3.5% + 4.5% +2.0% -1.0% VOLUME AND REVENUE GROWTH WILL BE FINANCED BY EFFICIENCY IMPROVEMENT IN EXISTING BUSINESS PROCESSES AND CAREFUL INVESTMENT MANAGEMENT OPERATING COST DYNAMICS 2002-2006 Euro mln 2002 cost base Impact of inflation Cost savings initiatives Cost increase due to new business 2006 cost base Average inflation 2% Average increase of banking industry personnel cost 1.3% Rationalisation of existing branch network Simplification of services/processes Efficiency in low value activities Cost increase (+15%) lower than growth of business (+35%) = CAGR ’02-’06 3,590 3,010 260 -140 460

24. 24 COST OF RISK IS SUPPOSED TO GROW SLIGHTLY IN LINE WITH EXPANSION OF RISKIER (BUT HIGHER MARGIN) BUSINESS LINES EVOLUTION OF LOANS MIX AND COST OF RISK Consumer credit Small business lending Mortgages Other 2002 Loans 43 bp49 bp 100%=41 bn 100%=72 bn Net provision /loans Net provisions /loans Revolving growing faster than existing personal loan business Growth on existing and new customers 48 bp 60 bp 29 bp 36 bp 176 bp 66 bp 24 bp 2006 Loans 51% 31% 52% 34% 6% 8% 3% 15% 105 bp

25. 25 AGENDA Structure of Retail Division P&L targets Strategic guidelines & goals

26. 26 DIVISION’S GOAL IS TO GROW REVENUE KEEPING COSTS AND RISKS UNDER CONTROL High importance Low importance Existing customers New customers EfficiencyRisk mgmt Intra-group synergies Retail business Pioneer UBI Corporate business UCB UPB Private Banking business UBM UBI New Europe Pioneer UBM TradingLab Revenue growth

27. 27 DOUBLE DIGIT OPERATING MARGIN GROWTH WILL BE ACHIEVED BY HEAVILY INVESTING IN NEW BUSINESS, SOME AT LOW MARGINAL COST/INCOME P&L FORECAST 2002 – 2006 Euro mln Driven by volume growth Driven by new investments, net of efficiency improvements Driven by efficiency improvements in UniCredit Banca and low marginal cost/income in Clarima and in TradingLab 20022006CAGR Operating costs & depreciation 3,010 3,590 4.5% Revenues 4,730 6,4408.0% Operating margin 1,7202,850 13.5% Cost / income ratio 64% 56% Rarorac 16% 20%

28. 28 IN SUMMARY... The Italian retail market will see growing competition for market share, key driver of future top line growth UniCredit will leverage its superior organisational model and business focus to gain market share on existing and new clients and become the preferred bank for Italian retail customers Double digit operating margin growth will be driven by consistent execution of a growth plan, leveraging skills acquired over the last 3-5 years at all levels of the organisation