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FOREIGN TRADE IN CENTRAL-EASTERN EUROPE

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  1. FOREIGN TRADE IN CENTRAL-EASTERN EUROPE • Agenda: • UniCredit in CEE • CEE’s Foreign Trade • Romania’s Foreign Trade • CEE Growth Drivers • How UniCredit can support trade business in CEE Speaker: Andrew England Head of Global Transaction Banking, CEE Bucharest, April 5th 2011

  2. UNICREDIT IN CENTRAL-EASTERN EUROPE CEE region* ~ € 124 bntotal assets1 ~ 3,900branches1 ~ 72,300employees1 ~ 30mcustomers2 ~ 128kcorporate clients2 ~ 1.800dedicated corporate relationship managers2 Lithuania2 Latvia2 Estonia2 Russia Country No. 10 No. 9 No. 7 No. 9 Mkt. position by Total Assets Poland No 2 Ukraine Kazakhstan No. 5 Czech. Rep.2 No. 5 No. 4 Slovakia No. 5 Romania Hungary No. 5 No. 7 Slovenia Bulgaria No. 5 No. 1 Croatia Bosnia1 Serbia Turkey No. 1 No. 1 No. 4 No. 5 In Top 3 In Top 5 In Top 10 • *) data as of 3Q 2010 Source: UniCredit CEE Strategic Analysis • data as of 1H 2010 • data as of YE 2009

  3. CEE FOREIGN TRADE: MERCHANDISE TRADE VALUE 1999 - 2012 Forecast of close to 2 Trillion Euros in 2011 for CEE-17 merchandise foreign trade; after 20% drop in 2009, CEE foreign trade steadily recovering, roughly balanced between imports/exports As comparison, in 2011, for merchandise trade: GERMANY 1.9 Trillion EUR TURKEY: 264 Bln Eur (13% of CEE-17) ITALY: 762 BlnEUR RUSSIA: 517 BlnEUR (26% of CEE-17) AUSTRIA: 243 BlnEUR POLAND: 276BlnEUR (14% of CEE-17) *CEE-17: BA, BG, CZ, BALTICS, KZ, HR, HU, PL, RO, RU,RS, SI, SK, UA, TR SOURCE: UniCredit Group Research

  4. CEE FOREIGN TRADE: SHARE IN WORLD TRADE 2005 - 2009 CEE between 7-8% of world trade, with Asia and EU-15 expected to grow significantly CEE17 OTHERS N.AMERICA ASIA EU15 SOURCE: WTO; UniCredit Group CEE/GTB Coordination

  5. CEE FOREIGN TRADE: INDUSTRY STRUCTURE 2005 – 2015F Fairly stable industry structure, with manufacturing close to half, confirms CEE’s growing role as a manufacturing region *CEE-17: BA, BG, CZ, BALTICS, KZ, HR, HU, PL, RO, RU,RS, SI, SK, UA, TR SOURCE: UniCredit Group CEE/GTB Coordination

  6. CEE-9*: TOP-10 TRADE PARTNERS 2010 Total “merchandise” trade of CEE-9 countries in 2010 was roughly 1.5 Trillion EUR, of which close to half (~47%) was made with the top-10 partners; Germany is by far the largest destination and source for both export/import. *CEE-9: BG, CZ, HR, HU, PL, RO, RU, SK, TR SOURCE: UniCredit Group CEE/GTB Coordination

  7. CEE FOREIGN TRADE: GERMANY AND ITALY AS DRIVERS Germany and Italy remain the main trading partners of CEE Central Europe TO GERMANY South Eastern Europe to ITALY SOURCE: WTO; UniCredit Group Research

  8. ROMANIA: FOREIGN TRADE VALUE 1999 – 2012F ROMANIA’s merchandise foreign trade followed the same trend as the rest of CEE; largest growing markets are Turkey for exports (+69% yoy 2010) and Russia for imports (+40% yoy 2010) SOURCE: UniCredit Group CEE/GTB Coordination

  9. ROMANIA: TOP-10 TRADE PARTNERS 2010 Total “merchandise” trade of ROMANIA in 2010 was roughly 80 BlnEUR, of which ~68% was made with the top-10 partners; Germany is here too the largest destination and source for both export/import SOURCE: INSSE, UniCredit Group CEE/GTB Coordination

  10. ROMANIA: FOREIGN TRADE STRUCTURE 2010 Machinery continued to drive ROMANIA’s foreign trade; transport and textiles lead the export, while chemicals registered the highest %-age deficit. SOURCE: INSSE, UniCredit Group CEE/GTB Coordination

  11. ROMANIA: SHARE IN CEE TRADE 1999 - 2009 Before the crisis, although a relative middle place in overall regional trade (8th), Romania had the 2nd fastest growth in the CEE, with an annual average of 17% versus 13% for the region SOURCE: UniCredit Group CEE/GTB Coordination CEE-17: BA, BG, CZ, BALTICS, KZ, HR, HU, PL, RO, RU,RS, SI, SK, UA, TR

  12. CEE GROWTH: TRADE AND PRIVATE CONSUMPTION AS DRIVERS Export intensity and private consumption were key in driving growth across the CEE. PRIVATE CONSUMPTION EXPORT % in GDP SOURCE: UniCredit Group CEE/GTB Coordination

  13. HOW CAN UNICREDIT SUPPORT GROWTH? BY ENABLING FLOWS • STRONG TRANSACTION BANK FRANCHISE IN CEE: 12%ms* in documentary credit • Top 5 bank in main CEE export countries (Czech Republic, Slovakia, Hungary, Turkey) • Number 2 in Poland after state-owned no.1 • More than 2000 transactions specialists and 4.000+ corresponding banks • Experience of over 400.000 corporate customers worldwide • INTERMEDIARY FOR MENA** FLOWS TO CEE: 13%ms*** in documentary credit • Turkey as a spear-head for region's operations • Expertise and strong relationship with main exporters/importers • EBRD CREDITS TO SMEs IN CEE • Over 430 MEUR to boost flows to real economy in 7 CEE countries **** *SWIFT statistics Feb-2011 **MENA: Middle-East Nord-Africa *** Sep. 2010 **** BG, HR, RS, BA, UA, KZ, KG

  14. HOW CAN UNICREDIT SUPPORT GROWTH? BY DEVELOPING SOLUTIONS TO ADVANCE TRADE • SCF – SUPPLY CHAIN FINANCING PLATFORM • Buyer centric financing model (post shipment phase of the trade finance cycle) • Innovative approach for working capital financing without classical loan granting process • Involves sell of receivables by the supplier, which in turn has the chance to obtain financing at favorable conditions thanks to the generally better rating of the Buyer • SPE – SINGLE POINT OF ENTRY FOR L/Gs AND L/Cs • Single entry point to send Letters of Credit (UC SEP L/C) and requests to issue guarantees (UC SEP L/G) • Beneficiaries domiciled in Europe (all countries where UniCredit is present – CEE plus Austria, Germany and Italy). • Renminbi (RMB) Settlement Program for trade with China • Improved Supplier Relationship:simple & faster tax rebates processes for Chinese suppliers and reduced costs in the supply chain • Pricing Transparency:increase transparency as pricing of goods without FX risks and costs mark-up • Widening Supplier Base:access to foreign currency in China is limited, RMB settlement can be used to access a wider supplier base and to optimize payment terms

  15. KEY DETERMINANTS IN GROWING TRADE • Market proximity relevant for expanding trade; • Close relationship with bank and operating partner to access new markets; • Strong local support to invest in value chain linked to manufacturing output; • Relevant governmental support to manage medium term trade investments (ECAs); • Tools to manage liquidity, counterparty and country risk; • Ability to monetize trade receivables.