Levon Hampartzoumian - CEO

BULBANK

London, December 5th, 2002

2nd UCI INVESTOR DAYFocus on New Europe

2

Agenda

Why Bulgaria ?

Bulbank Key Highlights

Key projects and strategies

3

Year 2001 Bulgaria

Population, mln

Inflation rate, %

7.9

4.8

Per Capita GDP, Eur 1,915

2002E

Real GDP growth, %

Ref. interest rate

3.7

4.3

Inflation rate, % 6.5

2003E

4.3

4.5

4.5

Ref. interest rate, % 4.7

2004E

5.0

4.6

4.0

S&P country rating BB+

WHY BULGARIA?

Macroeconomic stability

Low inflation

Currency board providing for monetary discipline

Increasing sovereign rating

GDP growth over av.NE and av.EU

Low inflation

Stable interest rates

Low-cost manufacturing, opportunity for de-localisation

Source: NE Research Network and Bulbank, based on BNB statistics.

4

Fast increase in volumes with high growth potential

Intensified lending in the last 1.5 year, 33% growth in 2001, 40% expected in 2002

Retail volumes grow faster than corporate ones

Competition driving spreads down

2001

33.1

35.5

40.3

12.1

2002E

23.3

13.3

2003E

15.9

10.8

BANKING SECTOR GROWING FAST, WITH GREAT POTENTIAL

272

EU

580

Branches per mln inhabitants

(Loans+Deposits)/GDP

Privatisation of banking sector almost completed. The last one, SSB (13% market share in asset terms), to be privatised in early 2003.

More than 80% of assets now owned by foreign investors

High concentration, >45% of assets and deposits held by the 3 largest banks

Relatively low efficiency (71% in 2001) Fast growing and improving banking sector

yet still low penetration and underdeveloped markets

Bulgaria

45%

EU

203%

Bulgaria

2004E

13.0 11.7 10.6 9.7Rate on Loans(2), %

1.9 1.8 1.8 1.8Rate on Dep.(2), %

11.1 9.9 8.8 7.9Spread(2), %

(2) End-of-period Banking System data; rates calculated on local currency denominated Loans and Deposits

(1) Nominal growth

Loans growth(1), %

Deposits growth(1), %

Source: NE Research Network and Bulbank, based on BNB statistics.

5

Agenda

Why Bulgaria ?

Bulbank Key Highlights

Key projects and strategies

6

Affluent 37%

Large50%

Mid and small11%

Private 38%

Total Assetsmkt share

Depositsmkt share

Loansmkt share

o/w Corporate loansLoans/Deposits, %Total revenuesNet Income

mkt shareCost/Income, %ROE, %BranchesEmployeesCustomers o/w retail o/w corporate

THE LEADING BANK IN BULGARIA

Euro mln(1), as at Sep 02, IAS

BULBANK

(1) Eur 1 = Bgn 1.96, Bgn is pegged to Euro under the Currency Board arrangement.(2) ROE and cost/income compared only with 10 largest banks.

MARKET SHARES as of Dec. 01

1,376 22% 1,029

21%2569%

24125%

5931

36%39

16.891

2,070290,000

259,00031,000

Ranking(2)

31 Dec 01

1st

1st

2nd

1st

1st

1st

1st

1st

3rd

3rd

4th

Leader by size Leader by efficiency Low credit risk, thus

good potential for growth

Distinctive corporate profile

Unravelled leadership in top segments

Good positions in mid and small business segment

Well developed balanced branch network

7

POSITIVE PERFORMANCE IN 2002, 15% GROWTH IN OPERATING INCOME AND 45% GROWTH IN FEE INCOME

23% growth in net income for growth in core business revenues

Operating income and profitability growth due to 45% increase in fee income (for launch of new products and cross selling thanks to increase of salesforce) offsetting 11% drop in net interest margin (for the fall in international interest rates)

Tight cost control benefiting from UCI synergy

C/I Ratio improved from 45% to 39%

Operating Income

(IAS, Euro mln)

Total Revenues

Operating Costs

9M02

36 +14.7%

9M02

23

-2.8%

9M02

59 +7.2%

9M01

24

9M01

55

9M01

31

9M02

16+45.1%

9M02

34

-11.2%

9M01

11

9M01

39

9M02

9 62.1%

9M01

6

Net Interest Income

Net Fee Income

Other Operating Income

8

BULBANK

13.5

Net Income (provision adjusted), y/y % ch.

5.0

Banking System

BULBANK-2.8

Operating costs, y/y % ch.

8.9

BankingSystem

45.1

Net Fee Income, y/y % ch.

17.9

BankingSystem

BULBANK

38.9

Cost /Income, %

60.4

Banking System

BULBANK

AHEAD OF THE SYSTEM IN TERMS OF REVENUE GROWTH, PROFITABILITY AND EFFICIENCY

BULBANK

14.7

Net Operating Income, y/y % ch.

9.4

Banking System

NOTE: Figures as at end of Sept. 2002. Data for the banking system is under NAS. Figures from Bulbank under NAS would be generally slightly better than under IAS, and respectively 16.1% for Net Income, 9.3% for Net Op. Income, 35.7% for Cost/Income, 47.3% for Net Fee Income, 1.7% for Operating costs and 2.7% for ROAA

BULBANK

2.2

ROAA, %

1.6

Banking System

(As at September 2002)

9

Net NPLs and Doubtful Loans as % of Total Loans (eop, Euro mln)

6.5%

2001 9M02

2.8%

0.43% 0.36%

142%

2001 3Q02restated

152%

65.0%85.3%

Coverage ratios

Doubtful Loans/

Total Loans

NPLs/

Total Loans

On Gross Doubtful Loans

On Gross NPLs*

Improved loan-book quality due to successful work outs

Improvement of coverage ratios Conservative provisioning, covering also

regular exposures calculated on the basis of risk by sector

ASSET QUALITY IMPROVING, WITH INCREASED COVERAGE RATIOS

Total doubtful loans

o/w NPLs

11.9 -44.5

-1.0

Dec. 2001

% ch. (Euro mln)

6.6

1.0

Sept. 2002

10

Agenda

Why Bulgaria ?

Bulbank Key Highlights

Key projects and strategies

11

KEY PROJECTS RESULTS(1)

New commercial approach implemented with dedicated sales people by segment

Accountability and target setting

Value added, fee based package products launch

Retail reinforcement – loans, utilities, cards, asset management

MBO and sales stimulation programs introduction

UCI synergy use Cost cutting

New investment policy Credit underwriting New IT Controlling

MARKED ACHIEVEMENTS WITHIN THE PARTNERSHIP PROGRAMME WITH UCI

230 new sales people 44% increase in no. of customers >60% growth in revenues >80% growth in fee income >16K packages sold >20% growth in the amount of cross-

border payments 25% Net fee income/Revenues

(19.4% in 2000 and 21% in 2001) 150% Net fee income/Personnel costs 200 people with MBO

>2mn cost saving Negotiation power increase

Low risk of securities portfolio NPL/Loans halved down to below 5% New IT implementation by mid-2003 Tight monitoring on all levels with

new approach and sophisticated tools(1) Compared to pre-acquisition period (2000).

REVENUES

COSTS

RISK & OPERATIONS

12

Dec.01

231

No. of customers(eop, in ths.)

259

Sept.02

Dec.01

31

No. of salesforce(eop)

58

Sept.02

26

No. of active customers(eop, in ths.)

31

Sept.02Dec.01

10,305

No. of products sold (1)

12,013

10M022001

STRONG COMMERCIAL APPROACH EXPANDING BUSINESS AND IMPROVING PRODUCTIVITY

Dec.01

115

No. of salesforce(eop)

180

Sept.02

2001

6,213

No. of contacts (2)

16,655

10M02

RETAIL

CORPORATE

(1) Including packages, consumer loans, mortgages and intl.cards. (2) Meetings.

13

AMBITIOUS STRATEGIC PLAN

BUSINESS STRATEGY Divisionalisation HNW customer acquisition model Opening of leasing company Asset management products launch (mutual funds, bancassurance,

structured depos) and market leadership in the area Value proposition distinctiveness

OPERATIONAL STRATEGY New branch model New credit underwriting system for Corporate customers, pilot

project for all UCI NE banks New IT system New risk management system Alternative channels development

Intensified conversion from back-office to front-office Active training and focused career development for talents Outsourcing of non-core activities

PEOPLE

14

Strong financial standing: high capitalisation, critical mass, low risk on assets, high efficiency, UCI support

Distinctive market leadership: 1st bank in asset, deposit, payment, corporate loan, FC operations, upper-end markets terms

Deep changes and model: active relationship management on a broad basis, innovative servicing approach and products

AMBITIOUS TARGETS AND DEVELOPMENT PLAN: double digit annual income growth, deeper segmentation, enrichment of value propositions, alternative channels, new IT, fast systems’ upgrade, investment in people

CUSTOMER CENTRIC BUSINESS MODEL: knowledge, flexibility, proficiency, tailored approach

SHAREHOLDER COMMITMENT: UCI commitment to Bulgarian economy development and strong monitoring of the bank’s operations and development

STRONG POSITIONING

SUMMING UP: BULBANK – BIG,SAFE, SOUND AND INNOVATIVE

15

Annexes

16

Interest margin (incl. div.)

Net non interest income

Total revenues

Operating costs (incl. dep.)

Net operating income

Net income

- of which: Staff costs

Dec. 00

49.7

26.8

76.5

40.8

81.8

-15.6

Net loan loss provisions -15.3

(Euro mln, IAS)

Taxes (2)

-35.7

Dec. 01

50.9

23.0

73.9

39.9

35.2

-14.2

4.5

-9.6

-34.0

Ch. % 2001/2000

2.4

-14.3

-3.5

-2.2

-56.9

-9.0

-129.5

-58.2

-5.0

Sep. 01

38.7

16.3

55.0

31.4

25.3

-10.0

3.5

-9.9

-23.6

Sept. 02

34.3

24.6

58.9

36.0

31.2

-9.7

5.0

-9.8

-22.9

-11.2

50.9

7.2

14.7

22.9

-3.7

43.4

-0.3

-2.8

Ch. % Sept. 02/Sept. 01

79.2(1) 0.4 -99.5 0.3 0 -100.0Extraordinary income/loss

-22.9

BULBANK 9M02 INCOME STATEMENT

- of which: Fee income 14.8 15.5 4.8 10.8 15.6 45.1

(1) Including EUR 78.4mn gains from sale of equity investments mainly in UBB, HVB Bulgaria and Corporate Commercial Bank.(2) Statutory tax rate for legal entities: 23.5% (28% until the end of 2000)(3) Less gains from sale of equity investments

Net income (adj.)(3) 24.5 35.2 43.8

104.7Pre-tax profit/loss 44.8 -57.2 35.2 41.0 16.4

17

Cash and deposits with Central Banks

(Euro mln, IAS) Sept. 01

99 118 88

Sept. 02

-11.5 -25.7

Ch. % Sept. 02/Sept. 01

AS

SETS

Bank placements 774 759 582 -24.7 -23.2

Dec. 01Ch. %

Sept. 02/Dec. 01

Securities 267 281 386 44.3 37.2

Fixed assets 60 60 64 6.8 6.9

Other assets 13 12 18 40.1 42.9

LIA

BIL

ITIE

S

TOTAL ASSETS AND LIABILITIES 1,412 1,397 1,376 -2.5 -1.5

Deposits:1,033 1,048 1,024 -0.9 -2.2 - Due to Customers

51 33 24 -52.1 -27.0

Other liabilities 55 30 43 -19.8 45.0

1,397 1,442 3.3

- Due to Banks

Reserve fund for possible loan losses 33 35 31 -6.9 -10.6

Customer Deposits-adj.(1) 1,048 1,089 3.9

BULBANK 9M02 BALANCE SHEET

TOTAL ASSETS AND LIABILITIES-adj.(1)

(1) With Sept.02 figures recalculated at BGN/USD exchange rate ruling on 31 Dec.01.

Shareholders’ equity 240 251 253 5.5 1.0

Customer loans 199 167 239 19.9 43.1

1,412

1,033

2.1

5.4