1 / 63

1H05 CONSOLIDATED RESULTS Alessandro Profumo - CEO

1H05 CONSOLIDATED RESULTS Alessandro Profumo - CEO. Milan - September, 13 th 2005. 1H05 and 2Q05 results in ITAS: strong performance of the Group. Transition to International Accounting Standards: no major impact on net income and shareholders’ equity for the Group. SUMMARY OF CONTENTS.

zephr-fry
Download Presentation

1H05 CONSOLIDATED RESULTS Alessandro Profumo - CEO

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. 1H05 CONSOLIDATED RESULTSAlessandro Profumo - CEO Milan - September, 13th 2005

  2. 1H05 and 2Q05 results in ITAS: strong performance of the Group • Transition to International Accounting Standards: no major impact on net income and shareholders’ equity for the Group SUMMARY OF CONTENTS

  3. Solid performance of operating income (+11.4% y/y) benefiting from top-line growth (+6.5% y/y) and cost control (+1.4% y/y1) • Continued volume growth (AuM: +6 bn, Loans2: +4.3 bn q/q), despite UCB mortgage securitisation (3 bn) • Strengthened competitive positioning in Italian banking (lending market share +20 bp3, mutual funds market share +35 bp vs Dec04) • Continued headcount reduction, in advance of the plan: -1,159 vs Jun04 and -669 vs Dec04 in Italy • Net income at 608 mln in 2Q05 (+4.3% y/y) and at 1.3 bn in 1H05 (+24% y/y) 2Q05 ACHIEVEMENTS (1) Calculated on operating costs net of recovered taxes (2) Ex-repos (3) Gross of UCB mortgage securitization

  4. STRONG RESULTS, FURTHER OPERATING INCOME IMPROVEMENT % ch. on 1Q05 % ch. on 2Q04 1H05 Y/Y ch. 2Q05 (mln) Total Revenues 5,604 +7.7% 2,892 +6.6% +6.5% Operating Income 2,556 +12.1% 1,347 +11.5% +11.4% Net Income 1,301 +24.0% 608 -12.1% +4.3% C/I Ratio, % 54.4% -179 bp 53.4% -202bp -203 bp C/I Ratio net of recovered taxes(1), % 53.3% -206 bp 52.3% -211bp -232 bp Tax Rate, % 34.0% -174 bp 36.1% +412 bp +143 bp Ch. on FY04 1H05 Deltas mainly due to tax free gain from disposal of “Serenissima” stake in 1Q05 Cost of Risk, bp(2) 58 bp -5 bp Tier I ratio 8.03% +9 bp (1) Calculated excluding, both from costs and revenues, taxes recovered and accounted in the “other net revenues” line (2) 1H05 data annualised

  5. NET INTEREST INCOME UP BOTH Q/Q AND Y/Y NET INTEREST INCOME excl. Dividends (mln) Underlying y/y growth(1) would be +8.4% +6.2% Q/Q % ch. 2,560 +6.7% 1,286 +0.9% 1,274 2,399 1,210 1,963 +5.0% 976 1,869 Italy 939 986 -1.1% 309 +7.5% 597 +12.7% New Europe 271 288 530 2Q04 1Q05 2Q05 1H04 1H05 • Sustained volume growth in all divisions driving net interest income good performance • Italy: • Negative impact of UCB mortgage securitisation on Italy contribution (~7 mln in 2 months) • Slight margin compression (mainly in UBI) driving lending spread to 3.61% (-25 bp Q/Q)(2), in line with system trend • New Europe: • Good volume growth in all New Europe banks, both at current and unchanged FX • Slight margin compression in major banks, with the exception of Pekao (1) Y/y % ch. adjusted for securitisations (Locat, District bonds and UCB) (2) End of period short term spread (UBI + UCB) towards non financial companies

  6. INCREASED LENDING VOLUMES AND MARKET SHARE GAINS WHILE MAINTAINING PRICING PREMIUM TOTAL CUSTOMER LOANS1(bn) UCI LENDING MARKET SHARES2 IN ITALY • Retail: loan growth driven by mortgages, consumer credit and small business. 2Q05 impacted by 3 bn mortgage securitisation • Corporate: up 5.0% vs Mar 05 with m/l term still growing (+3.4%2) • New Europe:+6.4% at unchanged FX with q/q increases in all banks (Pekao +5.2%, Bulbank +1.5%, Zaba +5.2%, Koc +11.6%) • Good lending spread (3.61%) with pricing premium vs industry (37 bp) % ch. vs MAR 05 +9.6% DEC 04 MAR 05 JUN 053 143.9 +3.0% 139.6 131.3 On total loans 10.83% 10.88% 10.79% 57.9 -0.7% 58.2 On M/L term loans 11.05% 11.13% 10.85% 52.4 Retail • Excluding 3 bn mortgages securitisation, market shares would be: • 11.03% (+20 bp on Dec 04) on total loans • 11.23% (+18 bp on Dec 04) on M/L term loans 66.9 +5.0% Corporate 63.8 63.0 New Europe +8.4% 16.2 12.7 15.0 +7.9% 3.1 2.9 Other 2.7 JUN 04 MAR 05 JUN 05 1 Net of repos 2 Source: Bank of Italy Matrix (Total Loans net of NPLs and Repos) 3 Including 3 bn mortgages securitisation.

  7. NET COMMISSIONS DRIVEN BY SPECIFIC FOCUS ON ASSET MANAGEMENT PRODUCTS AND BY FURTHER DEVELOPMENT OF TRANSACTIONAL AND LENDING RELATED FEES NET COMMISSIONS (mln) Y/Y % ch. +8.7% 1,799 +8.8% Q/Q % ch. 1,653 +6.7% 212 -7.8% 928 871 230 855 -13.8% 98 114 116 Up-front(1) +12.7% +9.8% 1,587 +11.6% 831 757 739 1,423 Other 2Q04 1Q05 2Q05 1H04 1H05 • Key drivers of the growth: • Strategic focus on recurring fees: segregated accounts & mutual funds fees (excl. up-front) up 25 mln 2Q05/1Q05 and 95 mln 1H05/1H04 • Corporate Division: foreign-trade (+7 mln 2Q/1Q, +9 mln 1H/1H), investment banking(2)(+11 mln 2Q/1Q, +35 mln 1H/1H) and transaction services (+1 mln 2Q/1Q, +4 mln 1H/1H) • Trend of up-front fees impacted by lower emphasis on sales of third party structured bonds (1) Up-front on AUM and AUC referred to UniCredit Banca, UniCredit Private Banking and Xelion (2) Corporate finance + Equity capital market + Debt capital market

  8. GROUP AUM REACHING NEW HEIGHTS: +18 BN IN ONE YEAR, +6 BN JUST IN THE LAST THREE MONTHS • A clear growth story based on Pioneer global presence: +18 bn AUM in 12 months, of which almost 9 bn in the international business units1 (+24.9% y/y) UCI TOTAL AUM (bn) % ch. vs Mar05 +14.3% 141 +4.4% • 4.6 bn net sales for Pioneer worldwide in 1H05 (vs 2.1 bn in 1H04) 135 123 44 +7.3% • UCI’s strong out-performance of the Italian market in mutual funds’ net sales: 3,421 mln out of 7,295 mln for the entire system as at end August 05… 41 International1 35 97 +3.2% • … leading to continued gains in market share and # 2 ranking 94 Italy 88 Dec04 Jun05 Aug05 Mar05 Jun05 Jun04 UCI mkt. share2 14.54% 14.89% 15.17% • Solid and consistent performance: 15 out of 47 US funds awarded 4 or 5 stars by Morningstar as well as 11 out of 65 Italian or Luxemburg funds • Slight improvement of average pricing (1)US + New Europe + International (ex Italy) (2)Calculated according to the “new” classification methodology adopted by Assogestioni since January 2005

  9. INCOME FROM FINANCIAL TRANSACTIONS SLIGHTLY AFFECTED BY LOWER CONTRIBUTION OF DERIVATIVES INCOME FROM FINANCIAL TRANSACTIONS 587 (mln) 564 -3.9% -6.5% q/q % ch. 295 287 277 -4.0% 450 Of which: Derivatives (Corporate + Institutional + Retail) 347 -22.9% 251 188 159 -15.4% 2Q04 1Q05 2Q05 1H04 1H05 • Lower contribution of derivatives to consolidated revenues (6.2% in 1H05 vs 8.6% in 1H04) • Reduction of derivatives largely balanced by New Europe, benefiting also from positive mark-to-market of government bond portfolios in 2Q05 • 2H05: y/y trend of derivatives expected to improve, mainly thanks to development of Institutional Derivatives

  10. COSTS GROWTH MAINLY DRIVEN BY SIGNIFICANT FX EFFECT OPERATING COSTS BREAKDOWN (net of taxes recovered in the “other net revenues” line) (mln) 2,914 +1.4% +3.2% Q/Q % ch. 2,825 -4.5% 210 1,474 +2.4% 220 1,454 TOTAL COSTS 1,440 +5.2% +2.2% 936 108 114 Depr. & amort. 916 102 +5.7% 481 455 488 Other admin. expenses +4.7% 1,768 1,689 +0.3% 885 883 852 Personnel costs 1H04 1H05 2Q04 1Q05 2Q05 134 98 Taxes recovered in the “other net revenues” line 71 63 51 • Quarterly trends (at constant FX and net of taxes recovered in the “other net revenues” line): • Personnel costs under control: -0.5% Q/Q, mainly thanks to staff reduction in Italy • Other adm. expenses: +4.3% Q/Q, mainly driven by advertising and marketing expenses in Retail division • Half year results (at constant FX and net of taxes recovered in the “other net revenues” line): • Total operating costs growing only by 1.7% • Personnel costs increase +3.5% mainly due to higher staff in NE division, higher accruals for MBOs (mainly Retail and NE Divisions) and bonuses linked to UCI labour agreement (VAP) • Other admin. expenses almost in line with 1H04 (+0.6%)

  11. GLOBAL BANKING SERVICES: WELL ON TRACK VS PLAN TARGETS 39,858 • REAL ESTATE: rationalisation of real estate assets including 51 UCB branches closed in 1H05 • LEGAL ENTITIES RATIONALISATION: de-merger of UBMC “core” banking and project finance activities respectively in favour of UBI and a new dedicated company (effective from January 2006); approved merger into UCI segment banks of C.R. Carpi and Banca dell’Umbria (effective from July 2005) • UPA ROMANIA: received authorization for activity transfer, 87 people hired (as of June 2005) partly still having training & partly already active • CALL CENTER: 3 largest call centres consolidated into 1 (same location and IT platform),~250 people involved (~80% of total); consolidation of the other 4 call centres expected in 2006 • PURCHASING: positive impact in 2005 from doubled on-line purchases in Italy 39,368 38,699 -1,159 • Staff downsizing (-1,159 vs 1H04, -669 vs. Dec04) better than expected ITALY 1H05 1H04 2004

  12. ASSET QUALITY: REDUCTION OF FLOWS OF NEW DOUBTFUL LOANS AND INCREASED COVERAGE RATIOS ON NPLs AND WATCHLIST NET FLOWS OF NEW DOUBTFUL LOANS1(mln) 1,014 996 -1.8% -8.3% netting 1H05 of 66 mln loans “under restructuring” moved to “performing” and thereafter re-classified as “restructured” in 1Q05 (Shifts due to the new classification categories adopted by BankIT since 1.1.2005) ch. on Mar05 Jun05 mln, where not specified Net Non Performing Loans 2,690 +0.5% Weight on Net Loans 1.80% -4 bp 1H04 1H05 • Very limited increase of net NPLs (+0.5% q/q) and q/q reduction of net watchlist (-0.3% q/q) Total Net Doubtful Loans 5,179 +2.9% Weight on Net Loans 3.46% +0.4 bp • Total net doubtful loans increase (+143 mln,+2.9% q/q,) almost totally driven by restructured loans2(+103 mln) and by loans to countries at risk (+32 mln), the latter mainly due to very prudent BanKIT rules for Bosnia Provisions on performing loans 1,414 +2.7% • Coverage ratios increased on NPLs (60.6% vs 60.2% as of Mar05) and watchlist (20.2% vs 19.8% as of Mar05), while stable on total doubtful (48%) and performing loans (0.97%) Coverage ratio 0.97% - ch. on 2004 Jun05 • 1.4 bn provisions on performing loans (+37 mln vs Mar05); no additional provisions on Convertendo FIAT: conversion loss totally provisioned for at current market prices 58 bp -5 bp Stated cost of risk (annualised) • Net loan loss provisions at 216 mln in 2Q05, in line with 1Q; 1H05 cost of risk (annualised) at 58 bp (-5 bp vs FY04), of which 17 bp for provisions on performing loans (1) Defined as: Flow from performing loans to any category of doubtful loans less Flow-back from any category of doubtful loans to performing (2) Mainly due to changed accounting rules for new loans granted to single borrowers whose old credit lines had been restructured (these new loans could be classified as performing under the old rules while with the new ones they must be classified as restructured as well)

  13. GROUP RESULTS BENEFITING FROM BUSINESS DIVERSIFICATION 1H05 OPERATING INCOME BY DIVISION CONTRIBUTION TO 1H05 GROUP OP. INCOME PRE CORPORATE CENTRE AND ELISIONS mln y/y % ch. Corporate 1,063 -3.2% Retail 838 +38.3% New Europe 521 +33.9% Private & AM 273 +37.9% TOTAL GROUP 2,556 +12.1%

  14. 42.7% 35.5% Marginal RARORAC 24.3% 23.5% 19.6% Cost of equity 8.58% Private & AM NE Retail Corporate Group RISK ADJUSTED PROFITABILITY CONFIRMED AT HIGH LEVELS ABSORBED CAPITAL(1) 1H05 RORAC(4) % ch. on 1H04(2) 1H04 1H05 Total Group 9.6 bn 10.2 bn +6.0 Divisional weight Corporate 51.0% 49.3% +5.0 Retail 27.6% 28.7% +13.1 NE 12.1% 12.9% +16.4 Private & AM 9.3% 9.1% +5.6 • Y/Y significant increase in EVA for Private, Retail and NE Divisions, thanks to high net income growth (RORAC +7.6, +5.5 & +1.6 pp y/y respectively) Excess Capital(3) 0.7 bn 1.1 bn (1) Average data, net of minorities (4) Return on risk adjusted capital = Marginal Rarorac + Cost of Equity (2) On Absorbed Capital (3) End of period, Pay-out ratio: Dps of previous year semestralised

  15. RETAIL DIVISION: STRONG LENDING MARKET SHARE INCREASE DRIVING NET INTEREST INCOME TURNAROUND • Household mortgages(1)+10.4% y/y (-0.1% vs. Dec04) • Consumer credit +44.7% y/y (+18.9% vs. Dec04) • Small Business +11.8% y/y (+4.1% vs. Dec04), mainly thanks to s/term loans • EXCELLENT LENDING GROWTH (+10.4% Y/Y) … • 2Q average spread(2) on: • new mortgages at 1.27% for UCB (+1 bp q/q) and 1.41% for UBCasa (+2 bp q/q) • small business(3) s/term loans at 7.59% (-28 bp q/q) • revolving cards at 11.77% (+40 bp q/q) • … AND GOOD SPREAD RESILIENCE IN ALL KEY MARKETS… NET INTEREST INCOME (ex. div.), mln +7.7% (+8.9% ex securitisation) • … SUSTAINING NET INTEREST INCOME SOUND PERFORMANCE (despite mortgage securitisation carried out in 2Q penalising Q/Q trend by 7 mln) 614 614 570 2Q04 1Q05 2Q05 (1) Trend due to 3 bn securitisation carried out in 2Q05. Excluding securitisation, mortgage growth would be+20.5% y/y and +9.0% vs. Dec04 (2) Management accounts (3) Management accounts, including also maximum overdraft charges

  16. RETAIL DIVISION OPERATIONAL ACHIEVEMENTS SALES OF SEGR. ACCOUNTS INVESTING IN FUNDS, bn • CONTINUED FOCUS ON WEALTH MANAGEMENT PRODUCTS GENERATING RECURRING REVENUES 1.9 1.7 1.5 4Q04 1Q05 2Q05 TOTAL STAFF -834 vs. June 04 • STAFF REDUCTION PLAN WELL ON TRACK (~50% of the total reduction announced in the plan already achieved)… 25,467 25,136 24,633 1H04 2004 1H05 STAFF COSTS, mln • … WITH CLEAR EFFECTS ON TOTAL STAFF COSTS, DESPITE NEW LABOUR CONTRACT 403 387 384 2Q04 1Q05 2Q05 CONTRIB. TO GROUP NET INCOME, mln 188 +43.9% 187 • EXCELLENT CONTRIBUTION TO GROUP NET INCOME 131 2Q04 1Q05 2Q05

  17. CORPORATE DIVISION: STRONG LENDING GROWTH SUSTAINS NET INTEREST INCOME, OFFSETTING LOWER SPREADS NET INTEREST INCOME (excl. dividends), (mln) gross of securitisations (~20 mln) +2.1% +1.1% 753 -3.2% 745 q/q % ch. 33 375 363 +1.3% Locat + District bond securitisations impact1 721 358 -3.3% 2Q04 1Q05 2Q05 1H04 1H05 TOTAL LOANS (ex Repos), (bn) • Significant growth of customers loans: +10.0% y/y gross of securitisations, +5.0% q/q … +10.0% gross of securitisations +6.2% • … with positive contribution of M/L term lending (+14.0% y/y and +3.4% q/q) 66.9 +5.0% vs Mar05 63.8 63.0 • UBI share of wallet3 at 13.8% (vs 13.4% as of Dec04) +3.4% vs Mar05 27.9 Of which: M/L2 27.0 • Reduction of lending spreads for UBI (2.12% Avg. 2Q05, -10 bp q/q and -13 bp y/y) 24.5 Jun04 Mar05 Jun05 (1) Almost totally recovered as “Other income” (2) Only UBI + UBMC (Source: BankIT Matrix) (3) Calculated on SMEs and other non-financial enterprises excluding largest Groups. Source: Credit Bureau data as of Jun05

  18. FOCUS ON SERVICE REVENUES AND RISK PROFILE NET COMMISSIONS,(mln) • Investment Banking1: 107 mln in 1H05, (+47.7% y/y), 59 mln in 2Q05 (+22.2% 2q/1q) 273 +21.0% +14.4% q/q % ch. 226 144 +11.5% • Foreign trade services: 74 mln in 1H05 (+14.5% y/y), 40 mln in 2Q05 (+21.0% 2q/1q) 129 126 • Transaction services: 37 mln in 1H05 (+11.7% y/y), 19 mln in 2Q05 (+5.5% 2q/1q) 1H04 1H05 2Q04 1Q05 2Q05 • Derivatives: 67% (-10 pp) • More balanced revenue composition for UBM in 1H05 vs 1H04 • Investment Banking1: 19% (+7 pp) • Sales & Trading on cash products: 14% (+3 pp) NET FLOWS OF NEW DOUBTFUL LOANS2, (mln) 520 • Relevant reductions of net flows of new doubtful loans both in 2Q05 vs 1Q05 and in 1H05 vs 1H04 453 -12.8% 253 200 -21.0% • Default Rate3 at0.68% in 1H05 vs 0.83% in 1H04 1H04 1H05 1Q05 2Q05 (1) Investment Banking: Corporate Finance (UBI, UBM and UBMC) + Equity Capital Market (UBM) + Debt Capital Market (UBM) (2) Defined as: Flow from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans (3) Defined as: (Flows from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans)/ Total Gross In Bonis Loans as of previous 31 December

  19. PRIVATE & ASSET MANAGEMENT DIVISION: CONTINUED ASSET AND RECURRING MANAGEMENT FEES GROWTH • Significant growth of Tot. Financial Assets (bn) • Excellent net sales in 1H05: • Asset Management: 4.6 bn net sales, vs 2.1 bn in 1H04 +16.0% 189 +4.7% vs Mar05 181 • Asset Gathering (UPB+Xelion): 3.3 bn net sales in 1H05 (+24% y/y), of which c. 0.9 bn of AM products 163 • Xelion: top-league performance in net sales in Italy(1), ranking # 2 with 14% market share (as of end June 05) Jun04 Mar05 Jun05 TOTAL REVENUES(mln) • Resilient margins thanks to product and asset mix: Q/Q % ch. +14.1% 642 12.8% 326 569 316 92 +3.2% 46 14 46 • Asset Mix (Pioneer): avg. weight of stocksandequity funds at 29.5%in 1H05, up 203bp y/y; avg. weight of hedge funds at 3.1% in 1H05, up 55bp y/y; 6 88 286 26 48 8 8 44 NII & other 22 30 2 Performance fees(2) 17 Up-front fees +10.3% 488 +10.1% +3.3% 248 240 443 Management & other fees 223 • Margins(3) (in bp of average AuM): up from 57.6bp in 1H04 to 59.1bp in 1H05 2Q04 1Q05 2Q05 1H04 1H05 All figures at unchanged FX (2) Till year-end 2004 performance fees on long-only funds were cashed by Pioneer once a year at year-end, with a seasonal effect in 4Q. Starting from 2005 they are calculated and cashed on a quarterly basis (1) Assoreti perimeter (3) Net commissions, excluding performance fees

  20. EXCELLENT VALUE CREATION THANKS TO REVENUE GROWTH AND STRONG EFFICIENCY GAINS OPERATING INCOME (mln) • 2Q05 operating income increased by 4.7% vs 1Q, confirming an excellent trend (+37.5%1H05/1H04,) thanks to revenue growth and cost control +37.5% 272 139 133 198 +4.7% • Revenue rising q/q (+3.2%) and y/y (+12.8%), driven by sales of Focus Invest and the new Investment Program and by improvement in the asset mix 1Q05 2Q05 1H04 1H05 C/I RATIO, % 65.1 57.8 57.5 -62bp -763bp 57.2 • C/I ratio further declining by 62bp q/q (-763bp 1H05/1H04); expected moderate recovery of costs for new projects in 2H05 at Pioneer 1Q05 2Q05 1H04 1H05 • Net income for the Group at 102 mln in 2Q05 (+4.3% q/q) and 199 mln in 1H05 (+25.1% y/y) All figures at unchanged FX

  21. +45.5% +4.1 pp +23.7% NEW EUROPE DIVISION: CONTINUED VOLUME GROWTH SUSTAINING REVENUES GOOD PERFORMANCE All figures at unchanged FX – P&L in ITAS • STRONG LENDING GROWTH: +18.9% Y/Y (+27.5% at current FX) Mortgages(1)(Euro mln) Consumer credit(1)(Euro mln) Net interest income(Euro mln) +33.3% 2Q/2Q % ch. Y/Y % ch. 597 +4.0% +4.2% 2,355 1,856 2,231 1,660 302 1,904 1,393 295 Jun04 Mar05 Jun05 Jun04 Mar05 Jun05 1Q05 2Q05 1H05 • FURTHER DEVELOPMENT OF MUTUAL FUNDS WITH POSITIVE IMPACT ON REVENUES AND MARKET SHARE Mutual Funds(2)(Euro mln) Market share (PPIM(3)) Net non interest income(Euro mln) 2Q/2Q % ch. Y/Y % ch. 439 +42.4% +26.7% 6,347 36.4 253 36.1 5,707 32.3 186 4,361 Jun04 Mar05 Jun05 Jun04 Mar05 Jun05 1Q05 2Q05 1H05 (1) Management accounts in LAS (2) New Europe Business Area of Pioneer is included at current FX (3) Pioneer Pekao Investment Management

  22. STRONG GROWTH IN OPERATING INCOME DRIVEN BY REVENUE INCREASE; IMPROVED EFFICIENCY AND PROFITABILITY All figures at unchanged FX – P&L in ITAS Total Revenues(Euro mln) Cost/income(%) • STRONG OPERATING INCOME INCREASE: +23.5% vs. 1H04, +37.2% 2Q05/2Q04 2Q/2Q ch. Y/Y ch. 2Q/2Q % ch. Y/Y % ch. -4.1 pp -7.1 pp 53.2% +18.5% 50.3% 1,048 +13.2% 47.8% 563 485 1Q05 2Q05 1H05 1Q05 2Q05 1H05 Cost of risk(1) (bp) Coverage ratio on doubtful loans • IMPROVED ASSET QUALITY RATIOS Y/Y ch. -6 bp 73.5% 70.7% +5.1 pp 90 68.4% 84 FY04 1H05 1H04 Dec04 1H05 Net Provisions on loans (Euro mln) Attributable Net income (Euro mln) • CAUTIOUS PROVISIONING POLICY AND GOOD PROFITABILITY Y/Y % ch. Y/Y % ch. 2Q/2Q % ch. 2Q/2Q % ch. 68 241 +12.9% +30.3% -3.8% +26.2% 38 135 30 106 1Q05 2Q05 1H05 1Q05 2Q05 1H05 (1) 1H05 data annualised

  23. Disclosure on IAS: • First Time Adoption adjustments on 31/12/2004 Shareholders’ Equity (excluding IAS 39) and 1/1/2005 Shareholders’ Equity (with IAS 39 applied) • Reconciliation from IT GAAP to IAS of 2004 Net Income (ex IAS 39, in annex) and 1H05 Net Income and Shareholders Equity (with IAS 39 applied) • “Prudent attitude” in the adoption of IAS. In order to minimize volatility on Shareholders Equity & Net income: • No revaluation of Real Estate • No restatement on past Business Combinations • Synchronized IAS and Basel 2 approach on loan loss provisioning • 3Q05 and FY2005 financial statements, including Management Discussion & Analysis and explanatory notes, will be prepared according to IAS UCI APPROACH TO IAS/IFRS ADOPTION

  24. No changes in our Business Model due to the IAS Transition • As anticipated, no substantial changes between Net Income and Shareholders’ Equity reported under Italian GAAP vs. IAS: • Impact of First Time Adoption on Shareholders Equity not material • Negligible impact on Net Income (main effect due to goodwill amortisation) • Positive impact of IAS 39 in First Time Adoption NO MAJOR IMPACT OF IAS APPLICATION ON UCI 1H05 NET INCOME AND SHAREHOLDERS’ EQUITY 1H05 IAS1 1H05 ITAS mln % ch. 1,442 1,301 +10.8 Net Income 14,900 14,223 +4.8 Shareholders’ Equity 1 Including IAS 32/39 and IFRS 4

  25. IFRS TRANSITION: IMPACT ON SHAREHOLDERS’ EQUITY SHAREHOLDERS’ EQUITY 31-12-2004 14,035 mln FINANCIAL INSTRUMENTS (IAS 39) • Time value recognition on loans • Holdings • Other financial instruments at Fair Value -607 +1,081 +25 +500 GOODWILL (IFRS 3) • 2004 goodwill amortization • Negative consolidation differences • Impairment of goodwill +272 +54 -24 +302 TREASURY SHARES (IAS 32) • Treasury shares directly deducted from equity -358 -358 FIXED ASSETS (IAS 16 & 38) • Positive impact from write-back of land depreciation • Write-off of intangible assets +54 -10 +44 EMPLOYEE BENEFITS (IAS 19, IFRS 2) • Share-based payments (stock options & stock granting) • TFR, pension funds, bonuses and deferred compensation -63 -38 -101 OTHER MINOR IMPACTS • Deferred tax assets • Other impacts • Minorities 11 -8 -52 -49 SHAREHOLDERS’ EQUITY 01-01-2005 14,373

  26. +14 +4 +151 Other Provisions for risk & charges +12 -13 -26 -12 +11 Consolidation perimeter Financial instruments at fair value Goodwill Loans and financial instruments valued at amortized cost Employee benefits Fixed assets 1H05 CONSOLIDATED NET INCOME: FROM ITALIAN GAAP TO IAS mln 1,442 1,301 30-06-05 Net Income ITAS 30-06-05 Net Income IAS

  27. Approval by UniCredit EGM • Recommendation by HVB Management Board and positive statement from HVB Supervisory Board • Initial proceedings with all relevant Regulatory and Antitrust Authorities; approvals already received by a number of key Regulators (BankIT, Bafin, FMA-Austria) • Offers on HVB and Bank Austria launched • Integration Unit established, with responsibility for monitoring the implementation process both at parent company and subsidiary level (within the limits imposed by applicable laws) Ongoing HVB DEAL: WHAT HAS BEEN DONE SO FAR COMPLETION OF THE TRANSACTION EXPECTED WITHIN THIS YEAR

  28. 1H05 CONSOLIDATED RESULTSAnnexes

  29. AGENDA Details on 1H05 consolidated results Divisional Reporting Retail Division Corporate Division Private Banking & AM Division New Europe Division Details on IAS reporting

  30. 2Q05 & 1H05 CONSOLIDATED INCOME STATEMENT (mln) % ch. on 1Q05 % ch. on 2Q04 2Q05 1H05 y/y % ch. Net interest income (incl. div.) +8.4 +6.1 +7.5 1,409 2,708 - of which Dividends n.m. +5.1 +22.3 123 148 Net non interest income +5.1 +6.9 +7.9 1,483 2,896 2,892 5,604 Total revenues +6.6 +6.5 +7.7 Administrative costs (incl. depr.) +2.8 +2.6 +4.3 -1,545 -3,048 2,556 +11.5 +11.4 +12.1 Operating income 1,347 Goodwill depr. -89 -159 +25.7 +23.1 +11.2 Provisions on loans -216 -430 +0.7 -12.5 -1.8 Other net provisions(1) -10.1 +47.0 n.m. -38 -82 Net extraordinary income -73.3 -44.8 n.m. 56 263 Taxes +9.9 +14.3 +15.7 -382 -730 -70 -117 Minorities +43.4 +45.3 +37.6 608 1,301 Net income -12.1 +4.3 +24.0 (1) Net write-downs of financial investments, provisions for risks and charges, provisions for possible loan losses and provisions to reserve for general banking risk

  31. DIVISIONAL CONTRIBUTION TO CONSOLIDATED RESULTS IN 2Q05 Total Group(1) 2Q05 RESULTS Retail Division Corporate Division Priv.& AM Division NE Division (mln - Data at end of period FX) Total revenues 1,191 751 330 573 2,892 +1.1% -2.0% +5.9% +20.7% +6.6% % Change vs 1Q05(2) Operating costs -769 -231 -189 -274 -1,545 +1.0% +3.8% +4.8% +8.0% +2.8% % Change vs 1Q05(2) Operating income 422 520 141 299 1,347 +1.3% -4.4% +7.4% +35.2% +11.5% % Change vs 1Q05(2) Net write-downs of loans -76 -100 -1 -39 -216 -9.0% +4.2% n.m. +34.5% +0.7% % Change vs 1Q05(2) Net income for the Group 188 250 103 137 608 +0.6% -1.1% +6.8% +32.6% -12.1% % Change vs 1Q05(2) C/I Ratio 64.6% 30.8% 57.3% 47.8% 53.4% -0.1 pp +1.7 pp -0.6 pp -5.6 pp -2.0 pp Change in pp vs 1Q05(2) Employees(3) 24,633 5,192 3,527 29,865 70,258 (1)Balance due to the Parent Company, other Group companies and elisions (3)Including all the employees of Koc Financial Services (3,999as at 30.06.2005) (2)Calculated on data at end of period FX

  32. NON OPERATING ITEMS 1H05 1H04 1Q05 2Q04 2Q05 (mln) 2,556 2,280 1,347 1,209 1,210 Operating income -159 -143 -89 -70 -72 Goodwill amort. Net write-downs of loans -430 -438 -216 -214 -246 -72 -36 -38 -44 -27 Other net provisions(1) 263 102 56 207 100 Net extraord. income -730 -631 -382 -348 -335 Taxes -117 -85 -70 -47 -47 Minorities 1,311 1,049 693 583 608 Net Income (1) Net write-downs of financial investments & provisions for risks and charges

  33. ASSET QUALITY: DETAILS BY DIVISIONS Retail Division Corporate Division NE Division Total Group 1 (mln - Data at end of period FX) Mar 05 Jun 05 Mar 05 Jun 05 Mar 05 Jun 05 Mar 05 Jun 05 2,236 2,275 1,866 1,892 2,489 2,534 6,716 6,829 Gross NPL % change on Mar 05 +1.7% +1.4% +1.8% +1.7% Gross NPL/Tot. Gr. Loans,% 3.73% 3.81% 2.62% 2.55% 14.3% 13.5% 4.43% 4.39% Net NPL 1,146 1,164 1,130 1,145 371 354 2,676 2,690 % change on Mar 05 +1.5% +1.4% -4.6% +0.5% Net NPL/Tot. Net Loans,% 1.97% 2.01% 1.62% 1.58% 2.48% 2.18% 1.84% 1.80% Total gross doubtful loans 3,620 3,708 2,858 2,971 3,047 3,077 9,695 9,957 % change on Mar 05 +2.4% +4.0% +1.0% +2.7% Gross Doubtful Loans/Tot. Gr. Loans,% 6.04% 6.22% 4.01% 4.00% 17.5% 16.4% 6.40% 6.40% Total net doubtful loans 2,223 2,272 1,901 2,009 855 814 5,036 5,179 % change on Mar 05 +2.2% +5.7% -4.9% +2.9% 3.82% 3.93% 2.73% 2.77% 5.71% 5.01% 3.46% 3.46% Net Doubtful Loans/Tot. Net Loans,% Coverage ratios -on total gross NPL, % 48.7% 48.8% 39.5% 39.5% 85.1% 86.0% 60.2% 60.6% -on tot. Gross doubtful loans, % 38.6% 38.7% 33.5% 32.4% 71.9% 73.5% 48.1% 48.0% 1 Balance due to other Group companies

  34. AGENDA Details on 1H05 consolidated results Divisional Reporting Retail Division Corporate Division Private Banking & AM Division New Europe Division Details on IAS reporting

  35. RETAIL DIVISION: 1H05 RESULTS BREAKDOWN BY COMPANY mln UniCredit Banca Banca d. Umbria CR Carpi Clarima TOTAL(1) UBCasa Interest income (incl. div.) 1,038 55 64 77 18 1,245 Net non interest income 1,041 38 6 27 12 1,124 Total revenues 2,079 93 70 104 30 2,370 Operating costs (incl. dep.) -1,387 -50 -37 -39 -18 -1,531 - of which: Staff costs -735 -25 -12 -10 -9 -790 - of which: Other costs -619 -23 -24 -29 -9 -704 Net operating income 692 43 33 65 12 838 Net provisions -142 -6 -11 -28 - -186 - o/w: Net write-down of loans -119 -4 -11 -27 - -160 Net extraordinary income (loss) 158 3 1 -1 - +2 Net income 466 23.4 18 22 8 376 Net income for the Group(2) 285 22.5 21 22 7 376 Cost/income ratio, % 66.7 53.8 52.9 37.6 61.1 64.6 (1) Balance due to rounding and elisions of infragroup dividends, goodwill amortisation and consolidation adjustments (2) Net of consolidation adjustments and minorities

  36. RETAIL DIVISION: P&L Q/q % ch. Y/y % ch. Y/y % ch. mln 2Q05 1H05 Interest income (incl. div.) 619 -1.2 +6.9 1,245 +9.2 Net non interest income 572 +3.7 +19.4 1,124 +20.5 Total revenues 1,191 +1.1 +12.6 2,370 +14.3 Operating costs (incl. dep.) -769 +1.0 +2.8 -1,532 +4.4 - of which: Staff costs -387 -3.9 +0.6 -790 +2.6 - of which: Other adm. expenses -361 +5.6 +6.5 -704 +7.7 Net operating income 422 +1.3 +36.1 838 +38.3 Net provisions -91 -4.0 +10.0 -186 +29.2 - o/w: Net write-down of loans -76 -9.0 +4.4 -160 +24.3 Net extraordinary income (loss) +3 n.m. -28.0 +2 n.m. Net income 188 +0.2 +43.3 375 +45.3 Net income for the Group(2) 188 +0.6 +43.9 375 +45.3 Cost/income ratio, % 64.6 -6 bp -612 bp 64.6 -614 bp

  37. RETAIL DIVISION - MORTGAGES AND CONSUMER FINANCING RESIDENTIAL MORTGAGES STOCK, bn NEW FLOWS, bn mkt share(1) 17.71% 17.61% 16.60%(2) +2.0% +10.4%(2) 4.2 32.2 32.2 4.1 29.2 1.1 -8.2% UBCasa 1.0 3.0 +8.3% UCB 2.8 1H04 1H05 1H04 DEC04 1H05 CONSUMER FINANCING STOCK, bn NEW FLOWS OF PERSONAL LOANS, mln REVOLVING CARDS TOTAL SPENDING(3) (+179k revolving cards in 1H05) +84% 942 3.3 +44.7% 2.8 512 122 mln 119 mln 2.3 1H04 1H05 1H04 1H05 1H04 DEC04 1H05 (1) Group market share, related to mortgages to households as of Bank of Italy definition in table TDME0070 of the monthly bulletin (2) Excluding 3 bn securitisation, mortgage growth would be+20.5% y/y and market share 17.62% (3) POS and ATM spending

  38. RETAIL DIVISION - SMALL BUSINESS STOCK, SPREAD AND CUSTOMER ACQUISITION STOCK, bn SHORT TERM SPREAD(1) +2.9% 8.08% 7.98% 7.98% 7.96% 17.3 7.87% 16.8 7.59% 16.6 2004 1Q05 1H05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 QUARTERLY TRENDS IN SMALL BUSINESS CUSTOMER ACQUISITION 19,000 19,000 18,000 17,500 17,000 15,000 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 (1) Management accounts, includes also maximum overdraft charges

  39. RETAIL DIVISION - CUSTOMER LOANS AND CUSTOMER DEPOSITS BREAKDOWN AND DETAILS OF SHORT TERM SPREADS EOP LOANS, Euro bn UCB AVG. MARK UP(3) (Small Business), % 58.2 57.9 56.7 Other loans 5.55 4.9 5.60 5.47 5.42 5.43 5.34 5.1 5.0 +1.9% -2.7% 3.0 3.3 Cons. credit 2.8 +8.1% +10% -0.7% (+4.4% ex securitisation) 16.8 SB loans (1) 17.3 16.6 +1.2% +2.9% 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 UCB AVG. MARK UP(3) (Households), % Residential mortgages (2) 7.33 7.30 33.5 32.2 7.21 7.27 32.2 7.08 +3.9% -1.6% 7.03 DEC04 1Q05 2Q05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 EOP DEPOSITS, Euro bn +1.3% UCB AVG. MARK-DOWN(3) (Households), % 67.8 67.2 66.9 21.8 23.0 22.8 Bonds -4.5% 1.67 1.71 15.7 14.8 1.70 1.70 Other deposits 15.1 +4.4% 1.65 1.65 Households c/accounts 29.3 29.4 29.9 +0.5% 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 DEC04 1Q05 2Q05 (1) Includes short term and m/l term loans (2) Includes only households mortgages (3) Source: Bank of Italy matrix data

  40. RETAIL DIVISION - NET COMMISSIONS RETAIL DIVISION: NET COMMISSIONS Breakdown by nature mln Q/q % ch. Y/y % ch. Y/y % ch. 2Q05 1H05 TOTAL RETAIL DIVISION 381 -1.5 +17.5 767 +22.5 184 +3.0 +21.8 364 +21.1 Total Commissions from Wealth Management • Mutual funds (1) 42 -6.0 -24.4 87 -24.3 • Segregated Accounts (2) 54 +2.7 n.m. 107 n.m. • Insurance Products (3) 88 +8.2 +3.5 169 +3.8 Securities in custody 63 -28.8 +31.6 152 +49.4 Other services 133 +12.2 +6.8 252 +12.2 (1) Includes subscription and management fees from Plain Vanilla Mutual Funds (2) Includes management fees related to underlying Mutual Funds. Net commissions related to Focus Invest do no impact consolidated results (3) Includes management fees related to underlying Mutual Funds

  41. RETAIL DIVISION - DETAILS ON ASSET QUALITY ch. on Mar 05 mln, where not specified 1H05 Net Non Performing Loans 1,164 +1.5% Weight on Net Loans 2.01% +4 bp REDUCTION OF NET FLOWS OF NEW DOUBTFUL LOANS(3) VS. 1H04 Total Net Doubtful Loans 2,272 +2.2% 446 415 Weight on Net Loans(2) 3.93% +11 bp -7.0% Provisions on performing loans 331 +1.2% 1H04 1H05 Coverage ratio 0.59% +1 bp ch. on 2004 1H05 Cost of risk(1) 56 bp +6 bp (1) Annualised (2) Excluding the 3 bn mortgage securitisation, the weight of Total Net Doubtful Loans on Net loans would be 3.73%, down 9 bp Q/Q (3) Defined as: Flow from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans

  42. AGENDA Details on 1H05 consolidated results Divisional Reporting Retail Division Corporate Division Private Banking & AM Division New Europe Division Details on IAS reporting

  43. CORPORATE DIVISION: 1H05 INCOME STATEMENT- BREAKDOWN BY COMPANY Other companies (Euro mln) TOTAL1 UBI UBM LOCAT Net Interest income (incl. div.) 639 -5 68 37 739 Net non interest income 309 392 45 30 776 Total revenues 948 387 113 67 1,515 Operating costs (incl. dep.) -276 -111 -28 -37 -452 -154 -50 -16 -15 -235 - of which: Staff costs -121 -56 -11 -17 -206 - of which: Other admin. expenses 672 276 85 31 1,063 Net operating income -217 -3 -14 5 -229 Net provisions - o/w: Net write-downs of loans -187 -1 -10 3 -196 Net income 271 169 43 19 502 Net income for the group 266 167 45 24 501 29% 29% 25% 54% 29.8% Cost/income Ratio 1 Balance due to roundings and elisions of infragroup dividends and goodwill amortisation

  44. CORPORATE DIVISION: 1H05 INCOME STATEMENT (Euro mln) Y/Y % ch. 2Q05/1Q05 % ch. 2Q05/2Q04 % ch. 2Q05 1H05 739 -2.6 Net interest income (incl. div.) 377 +4.0 -2.5 776 -0.4 Net non interest income 374 -7.3 -12.7 1,515 -1.5 Total revenues 751 -2.0 -7.9 -452 +2.7 Operating costs (incl. depr.) -231 +3.8 +2.3 1,063 -3.2 Operating income 520 -4.4 -11.7 -229 -10.2 -108 -10.7 -27.0 Total net provisions -339 -6.4 -168 -1.1. -15.9 Taxes -7.9 -17.5 502 Net income 251 -1.1 Net income for the group 501 -7.9 250 -1.1 -17.6 Cost Income ratio, % 29.8% +126bp 30.8% +171bp +304bp

  45. CORPORATE DIVISION - DETAILS ON ASSET QUALITY ch. on Mar05 Jun05 mln, where not specified Net Non Performing Loans 1,145 +1.4% NET FLOWS OF NEW DOUBTFUL LOANS1, (mln) Weight on Net Loans 1.58% -4 bp 520 Total Net Doubtful Loans 2,009 +5.7% 453 -12.8% Weight on Net Loans 2.77% +4 bp Provisions on performing loans 763 +2.1% Coverage ratio 1.07% -2 bp 1H04 1H05 ch. on 2004 Jun05 54 bp -16 bp Stated cost of risk (annualised) (1) Defined as: Flow from in bonis loans to any category of doubtful loans less Flow-back from any category of doubtful loans to in bonis loans

  46. UNICREDIT BANCA D’IMPRESA: 1H05 INCOME STATEMENT 2Q05/1Q05 % ch. 2Q05/2Q04 % ch. Y/Y % ch. (Euro mln) 2Q05 1H05 317 -1.4 +1.1 Net interest income 639 +0.9 Net non interest income 165 +13.7 +2.3 309 +3.7 Of which: - Net commissions 118 +22.0 +23.3 215 +15.5 - Trading profits 37 -20.0 -40.6 84 -22.3 Total revenues 482 +3.3 +1.5 948 +1.8 Operating costs -142 +5.4 +7.0 -277 +4.8 Operating income 340 +2.4 -0.6 672 +0.6 -98 +8.6 -27.7 Net write-downs of loans -187 -20.1 Other net provisions -8 -65.7 +63.3 -30 n.s. +9.8 +24.7 Net income for the group 139 +9.2 266 29% +59 bp +151 bp Cost Income RATIO, % 29% +83 bp

  47. UBM: 1H05 INCOME STATEMENT 2Q05 1H05 2Q05/1Q05% ch. 2Q05/2Q04 % ch. Y/Y % ch. (Euro mln) 7 -156.1 n.s. -6 -13.0 Net interest income (incl. div.) 173 -20.9 -30.1 392 -11.9 Net non interest income Total revenues 180 -12.6 -27.5 387 -11.8 -20 -30.6 -26.5 -50 -11.7 Staff costs -35 +33.8 +5.1 -62 +3.4 Other costs (incl. depr.) Operating income 125 -17.1 -33.5 276 -14.7 Net extraord. income 2 n.s. -95.9 3 -95.1 Taxes -47 -20.2 -46.8 -107 -25.4 Net income 75 -18.4 -53.4 167 -31.5 C/I Ratio 31% +381bp 29% 619 bp +236bp

  48. AGENDA Details on 1H05 consolidated results Divisional Reporting Retail Division Corporate Division Private Banking & AM Division New Europe Division Details on IAS reporting

  49. PRIVATE & AM DIVISION: 1H05 INCOME STATEMENT – BREAKDOWN BY COMPANY UPB + Subsidiaries UniCredit Xelion Banca UC Luxemburg TOTAL DIVISION2 PGAM Group1 (Euro mln) Net interest income (incl. div.) 37 8 7 2 54 141 414 32 1 588 Net non interest income Total revenues 178 422 39 3 642 -113 -196 -58 -2 -369 Operating costs (incl. dep.) -67 -97 -11 -1 -176 - of which: Staff costs -44 -92 -44 -1 -181 - of which: other admin. expenses 65 226 -19 1 272 Operating income -3 -1 -3 0 -7 Total net provisions 10 4 1 0 5 Net extraordinary income Net income 36 183 -14 1 206 Net income for the Group 36 176 -14 1 199 n.s. Cost/Income Ratio 59.7% 46.5% n.s. 57.5% 1 The Net Income and Net Income for the Group lines of PGAM Group are gross of goodwill amortisation 2 Balance due to rounding and elisions of intra-group dividends and goodwill amortisation

  50. PRIVATE & AM DIVISION: 2Q05 AND 1H05 INCOME STATEMENT (Euro mln - Data at current FX, % ch. at fixed FX) 2Q05/1Q05 % ch. 2Q05/2Q04 % ch. 2Q05 1H05 Y/y % ch. Net interest income (incl. div.) 27 -1.0 +11.4 54 +9.5 Net non interest income 303 +3.6 +14.3 588 +13.1 Total revenues 330 +3.2 +14.1 642 +12.8 Operating costs (incl. depr.) -189 +2.1 -0.3 -369 -0.4 Operating income 141 +4.7 +41.4 272 +37.5 -5 n.s. n.s. -7 n.s. Total net provisions 5 n.s. -46.8 5 -40.8 Net extraordinary income -34 +7.0 +200.3 -64 +58.2 Taxes Net income 107 +4.1 +10.1 206 +25.7 Net income for the Group 103 +4.3 +10.5 199 +25.1 57.3% -62 bp -826 bp 57.5% -763 bp Cost Income ratio, %

More Related