unicredito italiano group 1 st half 2003 results
DESCRIPTION
UNICREDITO ITALIANO GROUP 1 st Half 2003 Results. London - September, 16 th 2003. EXCELLENT INCREASE IN NET INCOME AND GOOD EFFIENCY LEVELS AFTER SIX MONTHS FROM THE THREE SEGMENT BANKS START-UP. Net Income up 12.3% 1H03/1H02 (19.8% 2Q03/1Q03). - PowerPoint PPT PresentationTRANSCRIPT
UNICREDITO ITALIANO GROUP1st Half 2003 Results
London - September, 16th 2003
2
EXCELLENT INCREASE IN NET INCOME AND GOOD EFFIENCY LEVELS AFTER SIX MONTHS FROM THE THREE SEGMENT BANKS START-UP
Excellent capital ratios confirmed: Core Tier 1 at 7,07%, Total Capital Ratio 11,40%
Net Income up 12.3% 1H03/1H02 (19.8% 2Q03/1Q03)
Good revenue generation (Total Revenues up 2.1% 1H03/1H02, +3,5% 2Q03/1Q03) supported by different Divisional drivers:
Retail: substantial increase in sales of high value added products (bancassurance and structured bonds)
Corporate: excellent increase of revenues from corporate derivatives sales (474 mln, +29% y/y)
Private & AM: record net sales of Pioneer (5.4 bn), more than doubled vs. 1H02
New Europe: positive results from the launch of new products (2 bn AUM, +98% y/y)
Improvement of profitability and efficiency ratios (ROE from 17.2% in Dec02 to 20.2% in 1H03; Cost/Income from 54.6% in Dec02 to 52.1% in 1H03)
3
AGENDA
1H03 Group Highlights
Divisional Reporting
Retail Division
Corporate Division
Private & AM Division
New Europe Division
4
VERY GOOD NET INCOME GROWTH (+12.3% on 1H02) SUPPORTED BY AN INCREASE IN OPERATING INCOME (+0.9% on 1H02) AND LOWER PROVISIONS’ NEEDS. HIGH PROFITABILITY AND EFFICIENCY LEVELS RECONFIRMED (ROE at 20.2%, C/I at 52.1%)
1,0081,132
1H02 1H03
NET INCOME (Euro mln)
515 617520
1Q03 2Q032Q02
+19.8%
+18.7%
ROE (1) %
17.220.219.3
+3 pp+0.9 pp
FY02 1H031H02
(1) Calculated on end of period net equity excluding profit for the period
2,576 2,599
1H02 1H03
OPERATING INCOME (Euro mln)
1,258 1,3411,272
1Q03 2Q032Q02
+6.6%
+5.4%
COST/INCOME RATIO %
54.6 52.151.5
-2.5 pp+0.6 pp
FY02 1H031H02
+12.3%
+0.9%
5
WELL BALANCED BUSINESS PORTFOLIO SUPPORTS GOOD PROFITABILITY AND EFFICIENCY IN 1H03 …
(1) Balance due to the Parent Company, other Group companies and elisions
1H03 RESULTS
(Euro mln)
Total revenues 2,461 1,663 444 813 5,423
Operating costs -1,503 -478 -310 -453 -2,824
Operating income 958 1,185 134 360 2,599
Loan-loss provisions -96 -213 -3 -72 -363
Net income for the Group 464 565 85 153 1,132
Retail Division
Corporate Division
Priv.& AM Division
NE Division
Total Group1
C/I Ratio 61.1% 28.6% 69.8% 55.7% 52.1%
Employees2 25,799 6,072 3,122 30,128 70,356
(2) Including all the employees of Koc Financial Services (3,564 as at 30.6.2003)
6
2Q03 RESULTS
(Euro mln) Retail Division
Corporate Division
Priv.& AM Division
NE Division
Total Group1
Total revenues 1,242 809 234 427 2,758% Change vs 1Q032 +1.9% -5.3% +11.4% +10.4% +3.5%
Operating costs -765 -246 -161 -233 -1,417
Operating income 477 563 73 194 1,341
Loan-loss provisions -50 -157 -2 -31 -199
Net income for the Group 225 240 40 86 617
C/I Ratio 61.6% 30.4% 68.8% 54.6% 51.4%
% Change vs 1Q032 +3.7% +6.0% +8.1% +6.0% +0.7%
% Change vs 1Q032 -0.8% -9.5% +19.7% +16.2% +6.6%
% Change vs 1Q032 +8.7% n.m. n.m. -24.5% +21.3%
% Change vs 1Q032 -5.9% -26.2% -11.1% +26.9% +19.8%
Change in bp vs 1Q032 +105 bp +324 bp -215 bp -226 bp -142 bp
(1) Balance due to the Parent Company, other Group companies and elisions
… AS WELL AS IN 2Q03
(2) Calculated on data at end of period FX
7
GOOD GROWTH OF TOTAL REVENUES (+3.5 Y/Y AT CONSTANT FX), HELPED BY THE STRONG PERFORMANCE OF INCOME FROM FINANCIAL TRANSACTIONS AND HIGHER DIVIDENDS MORE THAN OFFSETTING THE SLIGHT DECREASE IN NET INTEREST INCOME AND NET COMMISSIONS
TOTAL REVENUES(Euro mln)
TOTAL GROUP
At constant FX
% ch. on 2Q022Q03
% ch. on 1Q03 1H03
% ch. on 1H02
Net interest income (incl. Dividends)
Net commissions
Income from financial transactions
Other net income
1 3 mln in 1Q03
At constant FX
At constant FX
At constant FX
At constant FX
+5.0
+4.6
2,758
2,760
+3.5
+3.6
5,423
5,423
+2.1
+3.5
1,387 +9.4 +2.12,655 -1.8
830 +5.2 -1.01,619 -1.8
349 -20.0 +37.9785 +27.6
192 +11.6 +9.7364 +6.1
1,387 +9.3 +1.42,655 -0.4
832 +5.7 -0.61,619 -0.6
349 -19.9 +37.8785 +28.9
192 +11.8 +7.3364 +7.4
8
CUSTOMER LOANS UP 2.1% ON DEC02 MAINLY DRIVEN BY DOMESTIC LENDING BOTH IN RETAIL AND CORPORATE
TOTAL CUSTOMER LOANS*BREAKDOWN BY DIVISION
* Excl. Repos
Retail Division up +2.9% on Dec02 supported by a positive contribution of residential mortgages to households (+6.4% on Dec02)
Corporate Division up 2.1% on Dec02 also thanks to increased volumes to SMEs (+6.7%** 1H03/1Q03)
New Europe Division down 3.1% on Dec02 (+2.8% at unchanged FX) mainly hit by Zloty devaluation (-10.2% on Dec02) and decreased lending in Poland (-6.3% at unchanged FX)
bn
Dec02 1Q03
111.4112.8
Retail
New Europe
Corporate
41.4
12.52.9
41.6
12.23.1
-2.5%
+0.5%
Other
-2.7%56.0 54.5
+6.3%
115.2
42.6
12.13.2
-0.6%
+2.4%
+5.0% 57.2
+5.6%
1H03
+2.1%
% ch 01Q03/Deco2
% ch. 1H03/1Q03
** Corporate Bank
9
TOTAL DEPOSITS (incl. repos) UP 3.6% ON DEC02 DUE TO AN INCREASE IN BOTH ADMINISTERED AND MANAGED FUNDS
CUSTOMER DEPOSITS**: BREAKDOWN BY DIVISION(bn)
TOTAL DEPOSITS*
(bn)
Dec02 1Q03
341.3
Dec02 1Q03
77.480.5
Retail
New Europe
Corporate
38.6
22.08.0
39.0
20.48.8
-7.4%
+1.1%
Other
Direct deposits down 1.7% on Dec02 due to a decrease in repos (-18.2% on Dec02) while customer deposits (excl. repos) grow by 0.7% on Dec02; stable trend in securities in issue (+0.3% on Dec02).
Indirect deposits up 6.9% on Dec02 (+5.4% on 1Q03) due to an increase both on administered (approx. 4.5 bn securities placed by Retail and Private banks, +7.9% on Dec02) and on managed funds (+5.9% on Dec02) driven by strong net inflows and positive market performance (MSCI World: +10% on Dec02) but negatively hit by $ devaluation (-8.2% on Dec02)
Direct
Indirect
-22.4%
211.8 215.3
-5.2%
+1.7%
129.5 122.8
338.1
11.9 9.2
* Incl. Repos
Retail Division up 1,5% on Dec02 Corporate Division down approx. 11% on
Dec02 but up 15% on 1Q03 hit by seasonal corporate fiscal payments
New Europe Division down 7.4% on Dec02 mainly impacted by Zloty devaluation (-1.7% at unchanged FX) and switch into managed funds
+9.4%
1H03
39.2
20.4
10.8
10.6
0%
+0.4%
+24.1%
+14.8%
81.0
1H03
226.5
+3.6%
+5.4%
127.2
353.7
% ch 01Q03/Deco2
% ch. 1H03/1Q03
+3.6%
+0.7%
% ch 1Q03/Dec02
% ch. 1H03/1Q03
** Excl. Repos
10
18.9%
STRONG INCREASE OF TOTAL AuMs (+6.4% ON END OF MARCH) DRIVEN BY EXCELLENT SALES AND POSITIVE INVESTMENT PERFORMANCE IN 2Q03
(1) Plain vanilla Mutual and Hedge Funds distributed in Italy (Total AuM in Mutual and Hedge Funds in Italy, including Mutual Funds in Segregated Accounts and Unit Linked, Euro 64.3 bn as at 31.6.2003 vs Euro 62.6 bn as at 31.12.2002, +2.8% - Source: Assogestioni)
UCI TOTAL AuM(Euro bn)
Mutual & Hedge Funds1
Segregated Accounts
Insurance
Strong recovery of Total AuMs (despite a less favourable Asset Mix) lead by positive market performance …
… and excellent sales of high value added products indeed
Italy US, New Europe & Intl.
PGAM AuM: Evolution by Asset Class
Equities
Balanced
Hedge Funds
Bonds
Money Market 15.3%
29.0%
13.1%
41.9%
0.7%
1Q03 Avg.2002 Avg. 2Q03 Avg.
38.3%
13.4%
27.8%
1.6%
19.5%
40.8%
12.5%
25.6%
1.6%
BANCASSURANCE (Italy) 2Q03 Total New Premiums written: Euro 1,932 mln
(+9.4% on 1Q03); 1H03 Total New Premiums written: Euro 3,698 mln (+24.8% YoY)
HEDGE FUNDS (Worldwide) 2Q03 Net Sales Euro 191 mln vs Euro 107 mln in
1Q03, +78.5%; 1H03 Net Sales Euro 298 mln vs Euro 155 mln in the whole 2002
Reinforced leadership in the segment: 18.6% mkt share in bancassurance (17.6% in 2002); 14.6% mkt share on total market (11.7% in 2002)
Euro 140 mln Recurring Premiums written in 1H03 (+65.0% YoY); Recurring Premiums/Total Premiums written ratio from 2.9% in 1H02 to 3.8% in 1H03
31.12.’02 31.03.’03
23.7
36.9
24.8
16.4
101.8
+3.5% vs 31.03.’03
30.06.’03
38.3
24.4
18.3
27.4
108.4
+3.8%
-2.0%
+11.3%
+16.1%
+6.4%
23.5
37.6
26.0
15.3
102.4
-2.0%
-4.4%
+7.3%
+0.7%
-0.6%
AM PRODUCTS in US, NEW EUROPE and in the INTERNATIONAL business areas
2Q03 Total Net Sales of Asset Management products in the foreign business areas increasing by 41.1% on 1Q03 (Euro 2,077 mln vs Euro 1,472 mln)
1H03 Net Sales (Euro 3,549 mln) representing around 75% of Total 2002 Net Sales
11
INVESTMENTS AND STAFF COSTS INCREASING AGAINST A GOOD COST CONTROL OF THE OTHER COSTS
TOTAL GROUPAt constant FX
OPERATING COSTS BREAKDOWN(Euro mln)
Depreciation
Other Costs
Staff Costs
% ch. 2Q02
+7.5
-1.0
2Q03
831
472
% ch. on 1Q03
+2.8
-3.7
1H03
1,639
962
% ch. on 1H02
+4.1
+0.8
114 +4.6 +10.7223 +7.2
1,419 +0.9 +4.42,824 +4.7
1,417 +0.7 +4.72,824 +3.2
First half 03 total group costs impacted by the “in progress” reorganisation and investments (depreciation +7.2% mainly due to the New Europe Division – IT and network investments)
C/I at 52.1% decreases to 51.5% net of one-off S3 costs
Staff costs’ increase vs. 1H02 (+4.1%) is mainly attributable to the new labour contract (weights 2.5%). More accruals for the variable part of some companies (UBM, TradingLab) due to the brilliant results achieved weight for 0.8%
12
Tax Rate at 40.5%
Euro 363 mln Net loan loss provisions (of which write-downs for Euro 670 mln and write-backs for Euro 307 mln), down 27.7% vs. 1H02 mainly due to lower net write-downs (152 mln) in New Europe
Disposal of Investments for Euro 31 mln
Euro 58 mln of release of reserves previously created
Net Write-downs of Financial Investments Euro -2 mln
Provisions for risks & charges Euro -134 mln
NON OPERATING ITEMS CHARACTERISED BY LOWER PROVISIONS’ NEEDS AND BY DECREASED NET EXTRAORDINARY INCOME vs. 1H02
(Euro mln)
Operating income
Goodwill amort.
Net loan loss prov.
Other net prov1
Net extr. income
Taxes Minorities
2,599 -136-363
-136 +70 -825
-771,132
Net Income
1 Net write-downs of financial investments, Provisions for risks and charges, Provision to Reserve for General Banking risks
13
ASSET QUALITY IMPACTED BY THE WEAK ECONOMIC CYCLE IN ITALY BUT IMPROVING IN NEW EUROPE; STRONG YoY REDUCTION OF GROSS NPLs ENTRY FLOWS AND SIGNIFICANT GROWTH OF COLLECTIONS
Strong YoY reduction of gross NPLs entry flows from “in bonis” (Euro 252 mln in 1H03 vs Euro 418 mln in 1H02, -39.8%) and decreasing entry flows of other gross doubtful loans from “in bonis” (Euro 913 mln in 1H03 vs 937 in 1H02, -2.6%), mainly thanks to New Europe
Net NPLs and Doubtful Loans as % of Total Net Loans
3.73%
30.06.’03
3.71%
1.87% 1.92%
60.6% 60.0%
48.0% 47.7%
Coverage ratios
Net Doubtful Loans/ Total Net Loans
Net NPLs/ Total Net Loans
On Gross Doubtful Loans
On Gross NPLs
31.12.’02 30.06.’0331.12.’02
+24.2% YoY growth of total collections (Euro 656 mln in 1H03 vs Euro 528 mln in 1H02) thanks to effective workout activities
64 73
+9 bp
Cost of risk1
63
1H03
-1 bp
(bp, annualised)
200221H022
1 Calculated as Net Loan Loss Provisions on Net customers Loans at period-end; half-year data annualised on a daily basis (Total Net Loan Loss Provisions in the period / Number of days of the period x 365)
2 Data net of extraordinary provisions posted in 2002 (Bank Pekao and UniCredit Banca)
Cost of risk1 in line with 1H022
14
CONFIRMED OUTSTANDING SOLVENCY RATIOS, WITH CORE TIER 1 RATIO ABOVE 7%.RISK ADJUSTED PROFITABILITY STILL AT HIGH LEVELS
1,184
4,507
2,832Retail Division
Corporate Division
New Europe Division
CAPITAL ABSORPTION
334
28
346
VALUE CREATION
9,460Group Total(3) 595
NOPAT
464
153
565
1,132
RARORAC %
23.6
4.8
15.3
12.6
(1) Minimum regulatory capital, market risks, credit risks and operational risks (2) The Cost of Equity is related to the capital employed (Net equity for the Group and allocated capital for the business units)(3) Balance due to Corporate Center and Other companies, respectively -136 for NOPAT, 466 for Capital absorption and -83 for
Value Creation
MARGINAL RARORAC %
24.1
18.1
15.4
16.5
(Euro mln)
NOPAT(a)
Risk taken(1)
(b)
Shareholder’s value added(c) =(a)-COE(2)
Value added per unit of risk taken
(c)/(b)
From 7.21% (Dec 02)to 7.07% (Jun 03)
CORE TIER 1 RATIO(considering all RWA)
From 11.89% (Dec 02)to 11.40% (Jun 03)
TOTAL CAPITAL RATIO(considering all RWA) From Euro 135.9 bn
(Dec 02) to Euro 144.4 bn (Jun 03), +6.25%
TOTAL RWA
471Private & AM Division -3085 -12.9 27.0
15
AGENDA
1H03 Group Highlights
Divisional Reporting
Retail Division
Corporate Division
Private & AM Division
New Europe Division
16
RETAIL DIVISION : GOOD PERFORMANCE OF TOTAL REVENUES, OPERATING COSTS GROWTH DUE TO MARKETING EXPENSES AND TRAINING PROJECTS, 500 HEADCOUNT REDUCTION IN UNICREDIT BANCA VS. YEAR END
1Q03
Net interest income (incl. div.)
Net non interest income
Total revenues
Administrative costs (incl. depr.)
Operating income
Net write-down of loans
Net extraordinary income
Net income
Other net provisions
Taxes
Net income for the Group
RETAIL DIVISIONBREAKDOWN OF1H03 REVENUES
5.8%
86.5%
0.2%
0.2%
2.6%Other
companies Cost Income ratio, %
3.5%
2Q03% ch. on
1Q03
1.2%
628
591
1,219
-738
481
-46
-4
242
-9
-180
239
60.5
677
565
1,242
-765
477
-50
-3
224
-14
-186
225
61.6
+7.8
-4.4
+1.9
+3.7
-0.8
+8.7
-25.0
-7.4
+55.6
+3.3
-5.9
+105bp
17
INCREASED LENDING VOLUMES NOT COUNTERBALANCING THE SHRINKING DEPOSIT SPREAD, BRINGING TO A REDUCTION OF NET INTEREST INCOME (EXCL. DIVIDENDS) VS. 1Q03 (-6.1% Q/Q)
SB loans (1)
Residential mortgages (2)
Cons. creditOther loans
Good flow of new residential mortgages(2), 1.6 bn in 2Q03 vs. 1.3 bn in 1Q03, +23%
EOP LOANS, Euro bn UniCredit Banca: avg. lending spread from 5.81% in 1Q03 to 5.98% 2Q03, up 17bp
Other deposits
Households c/accounts
Bonds
Decrease of volumes mainly explained by bond, from 17.1 bn (Dec 02) to 14.2 bn (Jun 03), -17%
EOP DEPOSITS, Euro bn
UniCredit Banca: avg. deposit spread from 2.07% in 1Q03 to 1.81% in 2Q03, down 26bp
2Q031Q03
2Q031Q03
2002
2002
42.641.6
55.558.0
41.4
59.4
20.920.119.6 Clarima: 81,000 cards actively used, +60% on Dec 02. 1.7mln transactions, +70% on full year 2002
+2.4%
-4.3%14.216.017.1
13.113.212.9
2.01.91.8
6.76.57.0
(1) Includes short term and m/l term loans(2) Includes only households mortgages
15.616.816.5
25.725.325.8
+2.2%
+1.6%
+1.6%-6.7%
+4.1%
-0.8%
+5.0%+2.7%
-6.7%
+1.4%
-2.1%
-11.0%
-6.9%
+1.7%
18
GROWTH OF NET COMMISSIONS (+1.1% Q/Q), DRIVEN BY THE GOOD PERFORMANCE OF BANCASSURANCE AND SECURITIES IN CUSTODY...
RETAIL DIVISION: NET COMMISSIONS
(Euro mln) 1Q03 2Q03% Ch.
on 1Q03
Securities in custody
TOTAL RETAIL DIVISION
Total Commissions from Wealth Management
- Mutual funds 1
- Segregated Accounts 2
Other services
- Insurance Products 2
Breakdown by nature
1 Includes subscription and management fees from Plain Vanilla Mutual Funds and management fees from Mutual Funds in Segregated Accounts and in Unit Linked
2 Management fees related to Mutual Funds underlying Segregated Accounts and Unit Linked not included (see note 1)
- Commissions paid back to Pioneer 3
3 Management commissions paid back to Pioneer from the SGR of the division for the management of funds
60 80 +31.6
378 383 +1.3
212 213 +0.8
158 149 -5.7
21 20 -5.6
106 90 -15.1
97 107 +10.0
-64 -63 n.m.
19
... AND BY A GOOD INCREASE IN INDIRECT DEPOSITSSUSTAINED BY EXCELLENT SALES OF VALUE ADDED PRODUCTS
Structured bonds
Jan-Aug 2002
Jan-Aug 2003
Bancassurance single premiums
Jan-Aug 2002
Jan-Aug 2003
Bancassurance recurring premiums
Jan-Aug 2002
Jan-Aug 2003
= share of total insurance sales
INDIRECT DEPOSITS(1), Euro bn
2Q031Q03
MAIN TRENDS IN STOCKS OF AUMs
Total assets invested in Funds(2) from 44.7 bn to 46.0 bn, +2.8% Q/Q
Total Insurance policies(3) from 4.0 bn to 4.3 bn, +6.3% Q/Q
97.796.5
AUMs
Administered assets 46.046.2
51.750.3
+1.2%
-0.4%
+2.8%
(1) Management accounts, including only deposits of private customers(2) Plain vanilla mutual funds + Segregated accounts invested in funds +
Unit Linked invested in funds(3) Unit Linked not invested in funds + traditional policies
104 mln
154 mln+48%
3.4%
3.9%
3.0 bn
4.4 bn+50%
2.9 bn
3.8 bn+31%
20
COST OF RISK OF THE DIVISION IN LINE WITH THE PREVIOUS YEAR, EVEN AFTER A SUBSTANTIAL INCREASE OF GENERIC PROVISIONS LEADING TO AN IMPROVED COVERAGE RATIO ON PERFORMING LOANS
Net NPLs and Doubtful Loans as % of Total Net Loans
3.89%
30.06.’03
3.94%
1.99% 2.07%
48.8% 48.2%37.7% 37.8%
Coverage ratios
Net Doubtful Loans/ Total Net Loans
Net NPLs/ Total Net Loans
On Gross Doubtful Loans
On Gross NPLs
31.12.’02 30.06.’0331.12.’02
48 bp
Cost of risk(1)
45 bp
1H03
-3 bp
(bp, annualised)
2002
Increased coverage ratio on Performing Loans, from 56 bp as at Dec 2002 to 67 bp at end of June, +11 bp
Increased coverage ratio on Gross Doubtful Loans Cost of risk in line with the previous year(2)
Effective workout activities, resulting in total collections of Euro 29 mln
(1) Calculated as Net Loan Loss Provisions on Net customers Loans at period-end; half-year data annualised on a daily basis (Total Net Loan Loss Provisions in the period / Number of days of the period x 365)
(2) Pro-forma, net of extraordinary provisions
21
KEY HIGHLIGHTS ON OTHER COMPANIES OF THE DIVISION
Good revenue growth (+3.4% y/y) coming from
stable Net Interest Income (+0.2% y/y)good Net Non Interest income growth
(+9.0%), driven by 15.5% increase in net commissions
Excellent efficiency improvement, cost/income ratio from 57.8% in 1H02 to 55.9% in 1H03
BANCA DELL’UMBRIA TRADINGLAB
Total revenues from Euro 99 mln to Euro 141 mln, + 42.4% y/y
1H03 non captive revenues representing 62.3% of total revenues (59.2% in FY2002)
Excellent performance of DLN(1) Origination business, with growing volumes (+58% y/y) and margins (+94% y/y)
2Q avg. Daily VaR: Euro 2.9mln, -6.1% vs. avg. 2002
Good increase in the number of cards issued (136,000, +49% vs. Dec 02)
Good increase in the number of partnerships, from 17 in Dec 02 to 23 at end of June
Increased number of employees to strengthen call centre
CLARIMA
Set-up of the operating platform almost completed
Good increase in the flow of new mortgages, from Euro 130 mln in 1Q to Euro 160 mln in 2Q, +23% q/q
UNICREDIT BANCA PER LA CASA
(1) Derivative Linked Notes
22
AGENDA
1H03 Group Highlights
Divisional Reporting
Retail Division
Corporate Division
Private & AM Division
New Europe Division
23
THE CORPORATE DIVISION SHOWS A VERY GOOD EFFICIENCY WITH A COST/INCOME AT 30.4% IN 2Q03 (AT 28.6% IN 1H03) AND A GOOD PROFITABILITY (1H03 RARORAC AT 15.3%)
1Q03
Net interest income (incl. div.) 376
Net non interest income 478
Total revenues 854
Operating costs (incl. depr.) -232
Operating income 622
Net write-downs of loans -56
Net extraordinary income 4
Net income 327
Other net provisions -15
Taxes -228
Net income for the Group 325
CORPORATE DIVISIONBREAKDOWN OF 1H03 REVENUES
29.7%
56.4%
2.7%
5.5%
Cost Income ratio, % 27.2%
5.7%
2Q03
368
441
809
-246
563
-157
16
243
-10
-169
240
30.4%
% ch.
-2.1
-7.7
-5.3
+6.0
-9.5
+180.4
n.m.
-25.7
-33.3
-25.9
-26.2
+324bp
Other Companies
(Euro mln)
24
UNICREDIT BANCA D’IMPRESA RESULTS SHOW NETINTEREST INCOME IN 2Q03 ALMOST IN LINE WITH 1Q03 AND THE EXPECTED DETERIORATION IN ASSET QUALITY DUE TO THE ECONOMIC CYCLE
(Euro mln)
Net interest income
Net income
Net income for the Group
Cost Income RATIO, %
1Q03
294
165
165
27.1%
Net interest income: –1.1% vs. March03 as result of the recovery in 2Q03 vs. 1Q03 in both loans (avg. loans +2.96%) and deposits (avg. deposits +3.87%) coupled with an avg. short term spread decreasing from 3.99 in 1Q03 to 3.79 in 2Q03
2Q03
291
109
109
29.4%
-1.1
-33.6
-33.6
+230bp
% ch. on1Q03
Provisions: the 2Q/1Q03 increase is due to NPLs’ growth explained by cyclical reasons and by the adoption of a cautious policy of higher coverage on the in bonis loans due to the tough macroeconomic cycle
Net non interest income: -1.7% vs. March03 mainly due to the seasonal decrease of the revenues from corporate derivatives (-15% 2Q/1Q03)
Net non interest income 178 175 -1.7
Total revenues
Operating costs
Operating income
472
-128
344
466
-137
329
-1.3
+7.2
-4.5
Net write-downs of loans
Other net provisions
-48
-15
-130
-6
+174.2
-57.6
Of which:74 82 +11.2
- trading profits 102 88 -13.3- commissions
25
FIRST HINTS OF INCREASE IN LENDING MARKET SHARE.LOANS TO SMEs GROWING SLIGHTLY FASTER THAN THESYSTEM. VOLUMES IMPACTED BY SOME DEALS TO LARGE CORPORATE
Source: Credit Bureau* With turnover > 50 mln
System’s data show an increase in loans from Dec02 to Jun03 of 2.6% and from Mar03 to Jun03 of 1.0% against respectively +3.3% and +6.7% of UBI loans to SMEs
(Euro mln)
Largest 42 groups
SMEs
Public sector and others
Total
Mar03
6,077
6,477
20,802
4,130
37,486
Dic02
4,990
21,489
5,174
39,103
7,450
Jun03
6,545
7,532
22,203
4,754
41,034
% ch.Jun03/Dec02
+31.2
+1.1
+3.3
-8.1
+4.9
% ch. Jun03/Mar03
+7.7
+16.3
+6.7
+15.1
+9.5
Other corporates*
LOANS
Largest 42 groups: increase mainly due to the “Autostrade”and Fidis deals
26
EXCELLENT RESULTS OF UBM IN BOTH TOP AND BOTTOM LINE ALSO RECOGNISED BY STANDARD AND POOR’S RATING “AA-”
Revenue increase driven by good performance of derivatives and by the investment banking activities
Excellent efficiency thanks to the consistent revenue growth and a less than proportional increase in costs
(Euro mln)
Financial ProductsSales and Trading
Investment Banking
Total revenues
Staff costs
Other costs (incl. depr.)
Operating income
Net income
C/I Ratio
of which derivatives
1H03
495
-58
-37
400
234
19.1%
431
64
390
y/y% ch.
+29.9
+17.9
+2.5
+35.2
+41.8
-318 bp
+25.0
+76
+24.7
Strong and efficient risk control with an avg daily VAR of 3.8 mln in 1H03 vs. 4.1 in 1H02.
2Q03y/y
% ch.
213 +28.8
-27 +4.4
-21 +5.0
165 +38.3
92 +44.3
22.6% -530 bp
190
23
+31.2
+11.8
172 +28.3
Rating based on recognition of central role of UBM within the Group and top level quality of risk management
27
SYNERGIES BETWEEN UBI AND UBM: CONSOLIDATION IN THE CORPORATE DERIVATIVES BUSINESS AND REPLICATION OF THE SAME JOINT BUSINESS MODEL IN THE CORPORATE FINANCE ACTIVITY
(Euro mln)
UBI
UCI TOT. REVENUESFROM SALES
UBM
Other companies
Total Captive
% ch.on 1H02
1H03 2Q03
189 87
474 204
281 114
4 3
+28.8
+29.3
+27.7
n.a.
341 152 +27.7
non captive 133 52 +33.8captive 148 62 +22.7
Corporate Derivatives
Thanks to the successful joint actionof UBM and UBI the Group revenuesfrom corporate derivatives show anexcellent growth 1H03/1H02 (+29%).Moreover, focus on sales qualitythrough the implementation of dailymonitoring tools strengthens longterm business sustainability
Busy pipeline of deals with UBM acting as structurer and advisor and UBI dynamically managing its greatly diversified credit portfolio and booking power
Corporate FinanceUBI and UBM are implementing common operating business processes able to deliver sophisticated corporate finance deals and techniques to Italian SMEs
One of the first example of the potential synergies is the structuring of guaranteed district bonds (e.g.: Neafidi bond)
28
CAUTIOUS PROVISIONING POLICY OF THE CORPORATE DIVISION TAKING ACCOUNT OF THE ECONOMIC ENVIRONMENT
Net NPLs and Doubtful Loans as % of Total Net Loans
2.42%
30.06.’03
2.50%
1.49% 1.53%
45.5% 45.9%40.6% 41.0%
Coverage ratios
Net Doubtful Loans/ Total Net Loans
Net NPLs/ Total Net Loans
On Gross Doubtful Loans
On Gross NPLs
31.12.’02 30.06.’0331.12.’02
1 Calculated as Net Loan Loss Provisions on Net Customers Loans at period-end; half-year data annualised on a daily basis (total Net Loan Loss Provisions in the period / number of days of the period x 365)
Cost of risk1
48 bp73 bp
1H03
+25 bp
2002
Deterioration of business cycle causing a slight worsening of net NPLs and net Doubtful Loans on the total net loans (+4 bp and +8 bp respectively from Dec02 to Jun03)
Increased provisioning levels (from 48 to 73 bp) to take into account the financial deterioration of specific industrial sectors
Improved coverage ratios on Gross Doubtful Loans and Gross NPLs (+40 bp both)
+10 bp on coverage ratio on Performing Loans
29
AGENDA
1H03 Group Highlights
Divisional Reporting
Retail Division
Corporate Division
Private & AM Division
New Europe Division
30
UPB subsidiaries2
SIGNIFICANT QoQ IMPROVEMENT OF REVENUES AND OPERATING INCOME; NET INCOME PENALISED BY HIGHER PROVISIONS AND TAXES AND LOWER EXTRAORDINARY INCOME
1Q03
Net interest income 18
Net non interest income 192
Total revenues 210
Operating costs (incl. depr.) -149
Operating income 61
Net write-downs of loans -1
Net extraordinary income +5
Net income 46
Other net provisions -1
Taxes -18
Net income for the Group 45
Cost/Income ratio, % 71.0%
2Q03
20
214
234
-161
73
-2
+1
42
-5
-25
40
68.8%
% ch.on 1Q03
+11.1
+11.5
+11.4
+8.1
+19.7
n.m.
n.m.
-8.7
n.m.
+38.9
-11.1
-215 bp
PRIVATE BANKING & AM DIVISION1H03 TOTAL REVENUES1
(Euro mln – Data at end of period FX)
(1) % contribution of the single companies to Division Total Revenues pre infra-group elisions(2) BAC S. Marino, BAC S. Marino Fiduciaria, UPAM, Cordusio Fiduciaria, FRT Sim, UniCredit Consulting, UniCredit Suisse Bank,
Banque Monegasque de Gestion.
56.5%
30.5%
4.6%
(Stand alone)
8.4%
31
INCREASED TOTAL FINANCIAL ASSETS WITH IMPROVED MIX; SALES GAINING MOMENTUM DRIVEN BY HEDGE FUNDS AND INSURANCE PRODUCTS
AUMs
Securities in Custody2
(Euro mln)
16,974
17,000
TOTAL UPB
- Mutual Funds 6,000
36,599
1Q03Net Sales
-47
-473
56
-9
-51
-413
-85
154
17,418
16,912
6,048
37,286
Fin. Assets as of
31.12.2002
- Hedge Funds 81 20 75 179
2Q03Net Sales
Fin. Assets as of
30.06.2003
- Segregated Accounts
- Insurance Products 2,558 1201 2601 3,159
Deposits 2,625 853 2463 2,956
8,335 -243 -300 8,032
Dec. 2002 Jun. 2003
Asset Mix Gross Sales monthly trend (AM Products4 + Structured Bonds) – Euro mln
Total Financial Assets 1.9% up on Dec. ’02, with increased weight of AUMs (from 46.4% to 46.7%, +30 bp)
Turnaround of Total Net Sales of AM products in June (+Euro 55 mln), after 4 months of negative net sales
(2) Including Repos
(1) New Premiums written
(3) Absolute delta (including market performance for Securities in Custody)
(Stand alone)
AUMs
Deposits
Securities in Custody
7.2%
46.4%
46.4%
7.9%
45.4%
46.7%
+70 bp
-100 bp
+30 bp
Jan. Feb. Mar. Apr. May Jun.
(4) Mutual Funds, Hedge Funds, Segregated Accounts and Insurance Products
280
461
583467 513
629
Positive trend of Gross Sales of AM products and Structured bonds: from Euro 280 mln in January to Euro 629 in June; weight of Hedge Funds on gross sales from 1.8% in January to 6.8% in June
Strong QoQ growth of Net Sales of Hedge Funds (Euro 75 mln vs Euro 20 mln) and Insurance Products (Euro 260 mln vs Euro 120 mln)
Around Euro 800 mln inflows from 2nd Tax Amnesty5
(5) The figure relates to UniCredit Private Banking together with its subsidiaries
32
% Ch.
+37.4
+33.9
+2.1
-428 bp
+15.1
+16.5
+12.6
2Q03
32.0
-13.5
12.2
57.2%
-42.9
-25.9
-16.9
STRONG OPERATING PERFORMANCE; NET INCOME NEGATIVELY AFFECTED BY ONE-OFF PROVISIONS
1Q03
Operating income 23.3
Taxes -10.1
Net income for the Group 12.0
Cost/Income ratio, % 61.5%
Operating costs (incl. depr.) -37.3of which:
- Staff costs
- Administrative expenses
-22.3
-15.0
(Euro mln)
Net Income including subsidiaries1: Euro 16.6 mln, in line with 1Q
-0.715.0Net interest income 15.1
+31.859.9Net non interest income 45.4
+23.774.9Total revenues 60.6
n.m.-5.3Net provisions -1.5
of which:
+29.256.944.0- Net commissions
Good resilience of Net interest income, thanks to increasing average deposits offsetting lower spreads
Strong +29.2% growth of Net commissions driven by increased sales of high value added products (Hedge Funds and Insurance) and the improvement of the Asset Mix
Return on Average Financial Assets from 0.68% in 1Q to 0.81% in 2Q
Operating costs increase due to higher average staff (1,099 in 2Q vs 1,022 in 1Q), non-competition agreements with Private Bankers and other expenses for the development of the new bank
(1) BAC S. Marino, BAC S. Marino Fiduciaria, UPAM, Cordusio Fiduciaria, FRT Sim, UniCredit Consulting, UniCredit Suisse Bank, Banque Monegasque de Gestion.
Increase of Provisions mainly due to Euro 3.4 mln posted in 2Q to face operational risks (one-off cost, not fiscally deductible)
(Stand alone)
33
LEADERSHIP IN ITALY BY TOTAL NET SALES IN 1H03, THANKS TO AN EXCELLENT +77% YoY GROWTH;ING PROVIDING ADDITIONAL SALES CAPACITY AND PERFECTLY FITTING WITH THE COMPANY STRATEGY
31.12.2002Pro-forma1
30.6.2003
1,833 1,610
-223
PFAs
~2,360
30.6.2003 Pro-forma with ING
ING
Net Sales
1H02Pro-forma1
1H03
5701,008
+77%
1H03Pro-forma with ING
ING
(1) Pro-forma including data of “former Xelion”, UniCredit Banca and OnBanca
~1,300(Euro mln)
Total Fin. Assets
31.12.2002Pro-forma1
30.6.2003
4,883 5,988
+23%~9,600
30.6.2003 Pro-forma with ING
ING
(Euro mln)
Streamlining of the Network:
750 PFAs, reinforcing Xelion’s 5th position among Italian PFAs networks
ING ADDS:
Net sales 77% up YoY, ranking Xelion 1st in Italy for Total Net Sales in 1H03 (around 15% market share) and 2nd for Net sales per PFA2
Improving QoQ trend (Euro 521 mln in 2Q vs Euro 487 mln in 1Q), with increasing weight of AM products3 (83.2% in 2Q vs 67.8% in 1Q)
ING ADDS:
Important additional sales capacity (~Euro 300 mln in 1H03)
(2) Among top-players for Total AUMs as at 30.6.2003; 5th taking into account all the Italian players
Total Financial Assets 23% up vs 31.12.2002; Total Financial Assets per PFA from Euro 2.7 mln as of 31.12.2002 to Euro 3.7 mln as of 30.6.2003 (+39.7%)
Weight of AM products3 from 70.5% as at end of March to 71.1% as at end of June (+68 bp)
(3) AM Products: Mutual Funds + Sicav + Segregated Accounts + Insurance products
ING ADDS: ~Euro 3.6 bn Financial Assets (of which more than 90% in AM
products3), making Xelion the 5th asset gatherer in Italy by Fin. Assets
Exit of “marginal” PFAs (Euro 1.36 mln Average Tot. Financial Assets of lost PFAs)
Recruitment of 125 new PFAs, generating on average Euro 2.9 mln net sales in 1H03
34
EXCELLENT NET SALES IN ALL THE BUSINESS AREAS;NEW HIGH FOR TOTAL AUMs AT THE END OF AUGUST,HIGHER THAN 11 bn VS YEAR END 2002
(3) Including Momentum
(1) Balance due to market and FX effects
(4) Data already included in the other business areas
Strong QoQ Net Sales trend: Italy +98%, International ex-Italy +150%, US +19% (+25.5% in USD), New Europe +27%
Italy
New Europe
(Euro mln)
80,759
1,523
TOTAL PIONEER
- Captive 65,693
Alternative Investments 3
103,688
1,517
1Q03
632
284
268
2,104
107
84,090
2,046
67,985
110,770
1,812
Jul.+Aug. 03Net Sales2
442
260
574
1,333
172
AuMs as of 31.08.20031
85,351
US 17,665 962 20,053 427 22,042
International (ex-Italy)3 3,741 226 4,581 204 5,064
2,413
69,342
114,870
2,064
AuMs as of 30.06.20031
AuMs as of 31.12.2002
- Non captive 15,066 364 16,105 -132 16,009
2Q03
1H03 Net Sales
1,253
362
940
3,330
191
1,149
566
313
US in USD 18.525 1,035 22.915 485 24,0851,299
Increased market shares on total AUMs in US5 (from 1.36% as of Dec. 2002 to 1.5% as of end of June) and in Poland (from 24.7% to 26.6%)
(5) Calculated on Non-proprietary funds
Excellent +19.4% growth of Hedge Funds vs Dec. 2002
(2) Provisional figures, susceptible to small changes
35
AGENDA
1H03 Group Highlights
Divisional Reporting
Retail Division
Corporate Division
Private & AM Division
New Europe Division
36
3.0%1
1.4%1
NEW EUROPE: ACCELERATION OF REVENUES GENERATION IN 2Q03 DRIVEN BY FEES AND COMMISSIONS. GOOD PROFITABILITY (NET INCOME UP 39.1% y/y, +28.4% on 1Q03) IN A CONTEXT OF IMPROVING CREDIT RISK.
(Euro mln)1H03
Net interest income2 530
Net non interest income 283
Total revenues 813
Operating Costs3 -453
Operating income 360
Net write-down of loans -72
Net extraordinary income 20
Net income 220
Other net provisions4 -4
Taxes -84
4 Including provisions to reserve for general banking risk
2 Including dividends3 Including depreciations
%ch. at unchanged FX
6.5%1
42.8%1
17.6%1
24.6%1
1 Weight of the bank Total Revenues on Division Total Revenues – only UCI’s portion; balance due to Demir Romlease (weight: 0.2%)
Net income for the Group 153
Cost/Income ratio (%) 55.7
y/y % ch.
-3.3
+0.7
-1.9
+4.6
-9.1
-64.7
-52.4
+37.5
+91.1
+16.7
+39.1
2Q03
270
156
427
-233
194
-31
4
119
-6
-42
86
54.6+3.4 pp
NEW EUROPE DIVISION % ch. on 1Q03
% ch. on 2Q02
+5.2
+18.5
+9.7
+12.2
+6.8
-79.2
-88.2
+154.5
n.m.
+119.7
+149.0
+1.2 pp
4.0%1
BREAKDOWNOF REVENUES
+4.6
+24.6
+11.2
+5.9
+18.2
-20.0
-66.7
+17.8
n.s.
-0.0
+28.4
-2.2 pp
37
TREND IN VOLUMES AND COMMERCIAL INDICATORS
VOLUMES (at unchanged FX)
COMMERCIAL INDICATORS
Front Office Staff/ Tot. Staff2
60.1%60%
Dec02 1H03
Branches2
1,3501,347
Dec02 1H03
Active Customers2 (mln)
6.36.0
Dec02 1H03
15% 15% golden
other
2 KFS is included at 100%
Deposits (Euro bn)Loans (Euro bn) Assets under Management1 (Euro bn)
Dec02 1H03 1H02
2.01.51.0
+34.4%
+97.9%
Dec02 1H03 1H02
12.211.811.7
+3.1%
+4.5%
Dec02 1H03 1H02
21.021.121.1
-0.5%
-0.3%
1 New Europe business area of Pioneer
38
OPERATING INCOME +1% y/y, +25% excluding exceptional items
NET INCOME +85.7% y/y
All figures at unchanged FX, Data net of infragroup items
VOLUMES: Customer loans -6.3% on Dec02: thanks to a selective lending policy asset quality remained stable with
a slight increase in coverage ratio on Doubtful loans (62.7% in 1H03 from 62.2% in Dec02) Direct deposits down -3.5% on Dec02 more than offset by a strong increase in investment funds
VOLUMES: Customer loans +13.5% on Dec02 in a context of improving structural macroeconomic conditions Direct deposits +3.2% on Dec02 with higher loans/deposits ratio (to 64.6% from 58.7% in Dec02)
TOTAL REVENUES -11.7% y/y Net interest income down 18.9% mainly impacted by deposits spread (–1.1 pp vs. June 02) and debt
securities spread reduction (-1 pp vs. June 02) Net commissions up 18.5% benefiting from a re-pricing on C/A packages and increased AUM
OPERATING COSTS +4.8% y/y Higher depreciation (+21.6%) mainly due to IT investments
TOTAL REVENUES +0.2% y/y, +9.4% excluding exceptional items Net interest income up 22.7% y/y despite margin pressure in a context of growing volumes Trading profits down –66.8% y/y, -24% excluding exceptional items, mainly impacted by mark to market
evaluation of Pliva shares (Euro -5 mln in 1H03, Euro +17 mln in 1H02) OPERATING COSTS -0.5% y/y
Higher depreciation (+26.1%) linked to IT investments and branch network restructuring Increased staff costs (+5.1%) despite headcount reduction (-1.5% y/y, to 5,296), mainly due to incentives Lower administrative costs (-17.8%) due to tight cost control policies
PEKAO IMPROVES PROFITABILITY THANKS TO SUCCESSFUL HIGH VALUE ADDED PRODUCT SALES AND REDUCED COST OF RISK.ZABA: GOOD OPERATING INCOME GROWTH THANKS TO HIGHER NET INTEREST INCOME (DRIVEN BY INCREASED VOLUMES) AND TIGHT COST CONTROL
39
+100,000 Credit Cards (+32%), mkt share +50 bp (to 2.5%)
+500 new active Private clients (+12%) 1° in leasing, among top 3 in AM
KFS PEKAO
Euro 1.4 bn AUM in Mutual Funds1 (+87% on Dec02)
Market Share in Mutual Funds1 +270 bp (to 26.6%)
Euro 138 mln AUM in Pension Funds (+19% on Dec02)
Euro 50 mln AUM in Accumulation Plans Staff decreasing 4.9% (-866 on Dec02)
Euro 82 mln AUM in Mutual Funds (+34%on Dec02)
+140,000 Cards in 1H03 (to 1.9 mln), mkt share +49 bp (to 33.7%)
+64,000 Retail C/A in 1H03 (to 1.7 mln) Retail loans mkt share +60bp (to 24.1%)
ZABA
UNIBANKA
+14% AUM, +13% AUC +20% Affluent clients +33 bp mkt share on Deposits
Loans +37% (to Euro 81 mln), mkt sh. +20bp (to 1.5%)
Deposits +47% (to Euro 75 mln), mkt sh. +33bp (to 0.9%)
New retail C/A +24%
UCROMANIA
Total loans +6% Credit and Debit Cards +31%
ZIVNOBULBANK
Corporate Loans +33% on Dec02, mkt share +130 bp (to 11.7%)
+26,000 total clients
SUCCESSFUL COMMERCIAL ACHIEVEMENTS IN THE FIRST HALFIMPROVEMENT IN MARKET SHARES
1 Mutual funds distributed by Pekao
40
GOOD ASSET QUALITY IN NEW EUROPE IMPACTED BY PRUDENT LENDING POLICY IN PEKAO
Net NPLs and Doubtful Loans as % of Total Net Loans
79.8
2002 1H03
79.9
62.5 62.5
Coverage ratios
On Gross Doubtful Loans
On Gross NPLs
Net NPL/ Loans %
1H03
Total NE +0.13.5
ch. on Dec02 (pp)
Net Doubtful/Loans %
1H03
ch. on Dec02 (pp)
8.9+0.0
At unchanged FX
Zaba -0.62.2 4.8-0.7
Unibanka +1.83.9 7.1-0.5
Pekao +1.14.5 12.5+0.7
Bulbank 1.1 -1.61.6+0.9
KFS -1.45.0 8.3+0.0
Stable coverage ratios both on NPL and on Doubtful loans
1632 1882
+15%
Cost of risk1
119
1H03
-27%(bp, annualised)
20021H02
1 Calculated as Net Loan Loss Provisions on Net customers Loans at period-end; half-year data annualised
2 Data obtained deducting extraordinary provisions from stated figure
Zivno 0.7 -0.96.5-0.8
Decreasing cost of risk thanks to stable asset quality and lower provisions’ needs
Stable Net NPL/Net Loans ratio and slight increase of Net Doubtful/Loans ratio
Net NPL/Loans and Net Doubtful/Loans ratios increase in Pekao mainly due to prudent lending policy (Net loans –6.3% on Dec02)
Strong decrease of gross NPLs entry flows from in Bonis -70.5% on 1H02, good increase of collections (+19% y/y)
41
Annex
42
Net extraordinary income
Net non interest income
Total revenues
Operating income
Net write-down of loans
Administrative costs (incl. depr.)
Net income
Other net provisions*
Goodwill depr.
(Euro mln)
Minorities
Taxes
% ch. on 1Q03 2Q03
1,371
2,758
-1,417
1,341
-199
50
617
-81
-70
-36
-388
(*)Net write-downs of financial investments, provisions for risks and charges, provisions for possible loan losses and provisions to reserve for general banking risk
% ch. on 2Q02
1H03 CONSOLIDATED INCOME STATEMENT
y/y % ch.
+12.3
+6.2
+2.1
-27.7
-51.4
+3.2
+0.9
-9.9
+10.6
1H03
Net interest income (incl. div.) 1,387-1.82,655
2,768
5,423
-2,824
2,599
-363
70
1,132
-136
-136
-10.5-77
-1.7-825
- of which Dividends 182+33.1185
+19.8
-1.9
+3.5
+21.3
+150.0
+0.7
+6.6
+47.3
+6.1
-12.2
-11.2
+18.7
+8.3
+5.1
-36.8
-67.9
+4.7
+5.4
-40.9
+29.6
n.s.
-1.3
+9.4 +2.1
n.s. +64.0
43
DIVISIONAL CONTRIBUTION TO THE GROUP OPERATING INCOME
(Euro mln)
36.3%
5.1%
13.7%
100%
44.9%
(1) Parent Company, USI, UPA, Audit, other companies and elisions
134
360
958
2,5992,637
Retail Division
Private & AM
Division
New Europe Division
Corp. Centre and elisions(1)
Group Total
Total pre-Corp. Centre
-38
1,185
Corporate Division
Weight of the division on Total pre Corporate Centre
OPERATING INCOME: COMPOSITION BY DIVISION
44
(Euro mln)
45.8%
7.9%
14.1%
100%
32.2%
(1) Parent Company, USI, UPA, Audit, other companies and elisions
444
813
2,461
5,4235,381
Retail Division
Private & AM
Division
New Europe Division
Corp. Centre and elisions(1)
Group Total
Total pre-Corp. Centre
+42
1,663
Corporate Division
Weight of the division on Total pre Corporate Centre
REVENUE COMPOSITION BY DIVISION
DIVISIONAL CONTRIBUTION TO THE GROUP TOTAL REVENUES
45
ASSET QUALITY: DETAILS BY DIVISIONS
Coverage ratios
-on total gross NPL, %
-on tot. Gross doubtful loans, %
Total gross doubtful loans
Retail Banking
Dec. 02 Jun. 03
Gross NPL
% change on Dec. ‘02
Gross NPL/Tot. Gr. Loans,%
Net NPL/Tot. Net Loans,%
1,608 1,5832,18
05,487
-2.3% +1.9%
3.77% 2.66% 14.94% 4,56%
1.99% 1.49% 3.46% 1,87%
2,585 2,360 3,027 8,288-3.9% -0.4%
48.8% 45.5% 80.0% 60.6%
37.7% 40.6% 48.0%
(1) Balance due to other Group companies (mainly Parent Company)
Net Doubtful Loans/Tot. Net Loans,% 3,73%3.89% 2,42% 8.99%
62.6%
(Euro mln - Data at end of period FX)
1,698
3.87%
2.07%
2,696
48.2%
37.8%
3.94%
+5.6%
+4.3%
+4.3%
+4.7%
1,651
2.75%
1.53%
2,471
45.9%
41.0%
2,50%
2,129
15.07%
3.50%
2,910
79.9%
8.94%
62.5%
5,589
4,60%
1,92%
8,254
60.0%
47.7%
3,71%
% change on Dec. ‘02
Corporate Banking
NE Banking Total Group 1
Dec. 02 Jun. 03 Dec. 02 Jun. 03 Dec. 02 Jun. 03
Gross Doubtful Loans/Tot. Gr. Loans,% 6,89%6.07% 3.97% 20.75%6.14% 4,11% 20.61% 6,79%
Net NPL
% change on Dec. ‘02
824 862 436 2,161
-2.1% +3.5%
880
+6.9% +3.7%
894 427 2,238
Total net doubtful loans 1,611 1,402 1,132 4,310-3.7% +0.2%
1,678+4.2% +4.0%
1,459 1,091 4,317% change on Dec. ‘02
46
Interest income (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Net operating income
Net income
Cost/income ratio, %
TOTAL (2)Other banks (1)
UniCredit Banca
Net provisions
(2) Balance due to roundings
(Euro mln)
Net income for the Group
TradingLab
- of which: Staff costs
- of which: Other costs
Other companies
RETAIL DIVISION: RESULTS BREAKDOWN BY BANK
- o/w: Net write-down of loans
1,144
984
2,128
1,346
782
363
63.2
363
719
574
83
103
72
44
116
65
51
24
56.2
22
35
28
8
9
71
71
141
40
102
66
28.2
66
15
22
-
-
18
57
76
51
24
14
n.m.
14
10
39
5
7
1,305
1,156
2,461
1,503
959
467
61.0
464
780
662
96
120
(1) CR Carpi, Banca dell’Umbria
47(1) Balance due to roundings
CORPORATE DIVISION: RESULTS BREAKDOWN BY BANK
Interest margin (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Net operating income
Net income
TOTALLocatUnicredit
Banca d’Impresa
UBM
Net provisions
(Euro mln)
Net income (UCI’s portion)
- of which: Staff costs
- of which: Other costs
Other companies
(1)
- o/w: Net write-downs of loans
585
353
938
673
117
148
265
274
274
28.20%Cost/income
178
199
24
471
495
400
37
58
95
234
234
19.10%
106
-11
95
27
15
12
68
15
14
32
28
28.70%
31
106
137
91
42
49
46
12
9
31
31
744
919
1663
478
263
215
1185
238
212
570
565
28.8%
11
11
48
UNICREDIT BANCA D’ IMPRESA: BREAKDOWN OF DEPOSITS AND LOANS
VOLUMES(Euro bn)
Source: Bank of Italy Matrix data
1H03
Current Accounts 8.5
Savings Accounts 0.2
DEPOSITS 9.0
Repos 0.3
Current Accounts 11.2
Other short term loans 14.7
LOANS 42.3
Mortgages 8.1
Other m/l term loans 8.3
1H03
49Source: UBI estimates on Centrale dei Bilanci data
UBI RISK PROFILE COMPARED TO THE SYSTEM
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: 5.0)
50
UBM Daily VAR(1) and P&L (June 2002 – June 2003)Euro mln
Daily P&L
VaR
(1) Figure are calculated with a 98-99% asymmetric double tail confidence interval.
1H03 avg. daily VAR at Euro 3.8 mln vs 4.1 in 1H02 and 2Q03 avg. daily VAR at Euro 4.2 vs. 3.9 in 2Q02
UBM VAR CHANNEL
(€8)
(€6)
(€4)
(€2)
€ 0
€ 2
€ 4
€ 6
€ 8
03/0
6/20
02
17/0
6/20
02
01/0
7/20
02
15/0
7/20
02
29/0
7/20
02
12/0
8/20
02
26/0
8/20
02
09/0
9/20
02
23/0
9/20
02
07/1
0/20
02
21/1
0/20
02
04/1
1/20
02
18/1
1/20
02
02/1
2/20
02
16/1
2/20
02
30/1
2/20
02
13/0
1/20
03
27/0
1/20
03
10/0
2/20
03
24/0
2/20
03
10/0
3/20
03
24/0
3/20
03
07/0
4/20
03
21/0
4/20
03
05/0
5/20
03
19/0
5/20
03
02/0
6/20
03
16/0
6/20
03
30/0
6/20
03
51
Net interest income
Net non interest income
Total revenues
Operating costs (incl. dep.)
Operating income
Net income
Cost/Income Ratio
Tax Rate
Net provisions
(1) Balance due to roundings
Net income for the Group
- of which: Staff costs
- of which: Other costs
PRIVATE & AM DIVISION 1H03 INCOME STATEMENT –BREAKDOWN BY COMPANY
- o/w: Net write-downs of loans
(Euro mln - Data at end of period FX)
Net extraordinary income
TOTAL DIVISION1
38
406
444
-310
-154
-141
134
-9
-3
88
85
69.8%
32.8%
+6
UPB subsidiaries
12
25
37
-22
-10
-10
15
-1
-1
10
9
59.5%
n.a.
0
-7
258
251
-166
-91
-68
85
0
0
76
74
66.3%
16.9%
7
3
17
20
-41
-5
-31
-21
-1
0
-22
-22
n.m.
n.a.
0
30
105
135
-80
-48
-32
55
-7
-2
24
24
59.2%
49.3%
-1
(stand alone)
52
Data as at 30.06.03
1 Calculated on average PFAs2 AUMs, Securities in Custody, Bancassurance and liquidity3 Ranking taking into account only the 10 major Italian players by Total Financial Assets as at 30.6.2003
Net Inflows per PFA1:2nd among Top-
Players and 5th in Italy
Net Inflows:Euro 1,008 Mln,
1st in Italy
1,610 PFAs,5th in Italy
Tot. Fin. Assets:Euro 6.0 bn,
9th in Italy
ASSET GATHERING – RANKINGS OF THE ITALIAN PLAYERS AS AT 30.6.2003 (XELION AND OTHER COMPANIES STAND ALONE)
NUMBER OF PFAs
Mediolanum 4,130
Fideuram 3,406
Rasbank 3,170
Fineco 1,711
Xelion 1,610
Banca Primavera 1,562
Finanza & Futuro 1,393
Banca 121 1,301
Banca S.Paolo Invest 1,147
Banca Generali 1,125
TOTAL FINANCIAL ASSETS
Fideuram 47,712
Mediolanum 18,211
Rasbank 12,764
Banca S.Paolo Invest 8,257
Finanza & Futuro 8,152
Banca Generali 6,923
Credit Suisse 6,740
Azimut 6,313
Xelion 5,988
Banca Primavera 5,538
TOTAL NET INFLOWS2
Xelion 1,008
Mediolanum 965
Credit Suisse 679
Fideuram 430
Azimut 377
Banca Primavera 342
Bipielle 302
Rasbank 295
ING Sviluppo 274
Banca della Rete 232
NET INFLOWS PER PFA2 & 3
Credit Suisse 2.05
Xelion 0.60
Azimut 0.52
Mediolanum 0.23
Banca Primavera 0.22
Banca Generali 0.16
Fidueram 0.13
Rasbank 0.09
Banca S.Paolo Invest 0.03
Finanza & Futuro -0.03
Data as at 30.06.2003 – Euro mlnData as at 30.06.2003 – Euro mln Data as at 30.06.2003 – Euro mln
Source: Assoreti data as at 30.6.2003
53
Data as at 30.06.03
1 Mergers: Banca Generali + Banca Primavera. Acquisitions: ING by Xelion, Commerzbank by Rasbank, Zurigo by Finanza & Futuro, Banca Idea by Pop. Vicenza2 Calculated on average PFAs3 AUMs, Securities in Custody, Bancassurance and liquidity4 Ranking taking into account only the 10 major Italian players by Total Financial Assets as at 30.6.2003
Net Inflows per PFA2:2nd among Top-
Players and 5th in Italy
Net Inflows:Euro 1,283 Mln,
1st in Italy
2,360 PFAs,5th in Italy
Tot. Fin. Assets:Euro ~9.6 bn,
5th in Italy
ASSET GATHERING – POR-FORMA RANKINGS OF THE ITALIAN PLAYERS BY GROUP AS AT 30.6.2003 (AFTER RECENTLY ANNOUNCED MERGERS AND ACQUISITIONS1)
NUMBER OF PFAs
Fideuram + SPI 4,553
Mediolanum 4,130
Rasbank + Commerz 3,374
Generali + Primavera 2,687
Xelion + ING 2,360
Fineco + B.ca Rete 2,163
F&F + Zurigo 1,736
Banca 121 1,301
Euromob. + Credem 1,063
Banca SAI 1,038
TOTAL FINANCIAL ASSETS
Fideuram + SPI 55,969
Mediolanum 18,211
Rasbank + Commerz 13,462
Generali + Primavera 12,461
Xelion + ING ~9,600
F&F + Zurigo 8,316
Credit Suisse 6,740
Fineco + B.ca Rete 6,403
Azimut 6,313
Euromob. + Credem 6,284
TOTAL NET INFLOWS3
Xelion+ING 1,283
Mediolanum 965
Credit Suisse 679
Generali + Primavera 525
Fideuram + SPI 462
Fineco + B.ca Rete 434
Euromob. + Credem 415
Azimut 377
Rasbank + Commerz 318
Bipielle Network 302
NET INFLOWS PER PFA3 & 4
Credit Suisse 2.05
Xelion 0.53
Azimut 0.52
Euromob. + Credem 0.41
Mediolanum 0.23
Fineco + B.ca Rete 0.19
Generali + Primavera 0.19
Fideuram + SPI 0.10
Rasbank + Commerz 0.09
F&F + Zurigo -0.02
Data as at 30.06.2003 – Euro mlnData as at 30.06.2003 – Euro mln Data as at 30.06.2003 – Euro mln
Source: Assoreti data as at 30.6.2003 and UCI data for Xelion+ING pro-forma figures
54
Interest margin (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Net operating income
Net income
ROE
Cost/income
TOTAL (1)
530
283
813
453
360
220
17%
55.7%
Net provisions 76
(1) Balance due to roundings and Demir Romlease
(Euro mln)
(UCI stake)
Net income (UCI’s portion) 153
- of which: Staff costs 227
- of which: Other costs 164
NEW EUROPE DIVISION: RESULTS BREAKDOWN BY BANK
- o/w: Net write-down of loans 72
UNI BANKA (76.3%)
15
7
22
15
7
4
11.0%
66.7%
4
3
6
7
4
BULBANK (85.2%)
25
18
43
16
27
20.1%
37.6%
-2
23
20
7
7
-2
Group PEKAO (53.2%)
272
179
451
256
195
16.4%
56.5%
113
54
61
129
93
53
119
48
168
96
73
53
19.2%
56.8%
9
42
Group ZABA
(81.9%)
57
27
9
3
4
8
6
2
2
25%
72.7%
3
2
0
2
0
82
17
99
48
50
21
19.1%
49.0%
18
22
12
21
KFS(2) (50.0%)
9
(2) Consolidation with proportional method (50%)
13
9
22
17
5
4
10.2%
75.7%
7
6
-1
4
Zivno (95.0%)
-1
UniCredit Romania (99.8%)
Data net of infragroup items (dividends and extraordianry items)
55
CONSOLIDATED INCOME STATEMENT: PEKAO
3 Including provisions to reserve for general banking risk
1 Including dividends2 Including depreciations
4 At unchanged FX
(Euro mln)
Net interest income1
Net non interest income
Total revenues
Operating costs2
Operating income
Net write-down of loans
Net extraordinary income
Net income
Other net provisions3
Taxes
Net income for the Group
2Q031H03
272
179
451
-256
195
-53
16
113
-1
45
y/y % ch.4
61
-18.9
+2.0
-11.7
+4.8
-26.9
-73.25
-51.8
+82.6
-53.6
+9.4
+85.7
127
88
215
-126
89
-11
1
55
-1
-22
30
% ch.4 on 1Q03
-9.2
-1.7
-6.3
-0.1
-13.8
-70.4
-93.7
-1.6
n.m.
-2.9
% ch.4 on 2Q02
-1.3
-16.9
-1.9
-11.4
+8.2
-29.4
-92.4
-97.0
n.m.
-14.9
n.m.
n.m.
5 –38% excluding extraordinary provisions in 1H02
Data net of infragroup items (dividends and extraordianry items)
56
3 Including provisions to reserve for general banking risk
1 Including dividends2 Including depreciations
4 At unchanged FX
CONSOLIDATED INCOME STATEMENT: ZAGREBACKA
(Euro mln)
Net interest income1
Net non interest income
Total revenues
Operating costs2
Operating income
Net write-down of loans
Net extraordinary income
Net income
Other net provisions3
Taxes
Net income for the Group
2Q031H03
119
49
168
-96
73
-9
1
53
0
-12
y/y % ch.4
42
+22.7
-30.9
+0.2
-0.5
+1.0
n.m.
-58.2
-23.7
-76.0
-26.2
-25.4
67
31
98
-53
45
-10
1
28
-2
-5
23
% ch.4 on 1Q03
+22.7
+65.3
+33.2
+19.6
53.7
n.m.
n.m.
+9.1
n.m.
-44.5
% ch.4 on 2Q02
+12.6
+19.8
+36.0
+24.5
+4.2
+61.8
n.m.
-67.7
-22.0
n.m.
-46.9
-23.4
Data net of infragroup items (dividends and extraordianry items)