Download presentation - UniCredit Group

wakefulchardΛογισμικό & κατασκευή λογ/κού

17 Φεβ 2014 (πριν από 3 χρόνια και 7 μήνες)

114 εμφανίσεις

NEW EUROPE: UCIs SECOND
HOME MARKET


Paolo Fiorentino


Head of New Europe Division

ING EMEA Financials Conference 2004

London
-

April, 20
th

2004

2

AGENDA

UCI Group and New Europe Division Highlights

Why New Europe

Strategy and Business Model

Recent Results and 2004 Outlook


3

FY2003 KEY FIGURES

MKT CAP.

Euro 25.4 bn
1

NET INCOME

Euro 1,961 mln

ROE
2

17.7%

BRANCH NETWORK

4,637
3

UCI

AT

A

GLANCE

1
As of 15 April 2004

TOTAL ASSETS

Euro 238 bn

DIRECT DEPOSITS

Euro 135 bn

C/I RATIO

54.5%

REVENUES

Euro 10,465 mln

2

Calculated on end of period net equity, excluding 2003 net income


3

KFS: 100%


4

Pekao

New Europe
division

Private & AM
division

Pioneer

Xelion

Corporate
division

UBM

BMC

Locat

Clarima

UBCasa

Retail division

Zagrebacka

KFS

Bulbank

UniBanka

UC Romania

Zivnostenska

44.6%

29.6%

10.1%

15.7%

Weight on 2003 Group
revenues pre Corporate
Centre and elisions

Employees (Dec 2003)

o/w Italy
1

o/w New Europe

70,851

40,982

29,869

Branches (Dec 2003)

o/w Italy

o/w New Europe

o/w other countries

4,637

3,275

1,355

7

1
Including other countries ex
-
New Europe

TODAY THE NEW EUROPE DIVISION ACCOUNTS FOR 16% OF THE
GROUP’S TOTAL REVENUES

5

Total assets (Euro mln)

Market share both on loans and on dep.

Net income (Euro mln)

Branches


1,492

2%

6

26


Bulbank
-

Bulgaria

85.2% acquired in October 2000

End of 2003 data

Group Pekao
-

Poland

53.0%, acquired in May 1999

Total assets (Euro mln)



Market share on Loans

Market share on Deposits

Net income (Euro mln)



Branches


UniCredit


Romania


99.9%, acquired in

May 2002

Total assets (Euro mln)

Market share on Loans

Market share on Deposits

Net income (Euro mln)

Branches

Zagrebacka Group
-
Croatia


Bosnia
-
Herzegovina


81.9%, acquired in March 2002

7,627

25%

31%

114

193

UniBanka
-

Slovakia

Total assets (Euro mln)

Market share on Loans

Market share on Deposits

Net income (Euro mln)

Branches

940

6%

4%

7

68

77.1%, acquired in October 2000

Total AuM in New Europe of Euro 2.3 billion
(as at 31.12.03)

Pioneer

Koç Fin. Serv.
-

Turkey

50%, acquired in October 2002

Warsaw

Bratislava

Sofia

Zagreb

Bucarest

Prague

Istanbul

Zivnostenska Banka

Czech Rep.

97.7%, acquired in February 2003

Other presences: Pekao Ukraina, Koc Azerbaijan

Total assets (Euro mln)

Market share on Loans

Market share on Deposits

Net income (Euro mln)

Branches

12,915

11%

15%

195

801

174

2%

1%

3

28

Total assets (Euro mln)

Market share on Loans

Market share on Deposits

Net income (Euro mln)

Branches

1,444

10%

18%

47

91

Total assets (Euro mln)

Market share on Loans

Market share on Deposits

Net income (Euro mln)

Branches

5,226

4%

5%

116

148

UCI ACQUIRED A LEADING ROLE IN NEW EUROPE BEING AMONG THE
TOP PLAYERS IN THE MOST RELEVANT MARKETS

6.6%

40.1%

18.4%

2.7%

1.5%

26.5%

Weight of the bank Total Revenues on Division Total Revenues


only UCI’s portion; balance due to Demir
Romlease,Demir Securities, ZBT, ZBAM, and Xelion Poland

3.7%

6

AGENDA

UCI Group and New Europe Division Highlights


Why New Europe

Strategy and Business Model

Recent Results and 2004 Outlook


7


47% of
current EU
population



8% of EU
GDP

NEW EUROPE: A LARGE MARKET WITH HIGH GROWTH POTENTIAL

Year 200
3

data

Population, mln

GDP, Euro bn

Per Capita GDP, Euro

EU

377

9,307

24,686

N
E(12)

1
76

4,135

728

Total

55
2

10,035

Loans +Deposits
,
Euro

bn

17,919

561

18,480

Loans+Deposits/GDP %

193%

70%

Note: NE (12) including all countries which already started a more or less advanced process for EU convergence. In
particular, those set for enlargement in May 2004, plus Bulgaria, Romania, Turkey and Croatia.

*EU only for this figures is referred to EU12; **2004
-
2006 CAGR

Weight of country’s
GDP on Total NE area
GDP in 2003

(%)

25.5

Poland

10.3

Hungary

11.0

Czech Rep.

4.0

Slovakia

3.3

Slovenia

3.4

Croatia

28.9

Turkey


UCI is present in the
most relevant NE
countries (82% of GDP
in the area)

2.4

Bulgaria

Romania

6.9

4.4

Baltics

728

NE GDP
(bn)

New Europe

Excl Turkey

EU*

2000

2001

2002

2003e

2004
-
06**

3.9

3.5

2.8

1.6

2.8

0.9

3.8

0.4

1.9

4.4

GDP Growth

18,179

183%

8

STILL UNDERDEVELOPED RETAIL MARKET

2

2001 figures

(Loans+Deposits)/GDP

Cards per ths
inhabitants
2

1,280

EU

New

Europe
1

349

BANKING PENETRATION in 2003


Lower weight of Asset
Management, expected to
partially substitute deposits


Mortgages and consumer
credit expected to be the key
retail products

54.3

UCI’s

3 Italian
Banks

UCI’s

NE banks

35.6

Non Interest
Income/Total
revenues in 2003
(%)

Life
Insuran.

Pension
Funds

Mutual
Funds

Retail
Bank
Deposits

33%

15%

18%

34%

EU
3

73%

11%

7%

9%

New
Europe
4

Breakdown of retail
financial assets

3

2001 data considering France, Germany, Italy, Spain and UK as proxy for EU

4

Countries with UCI’s presence

193
%

New

Europe
1

EU

70%

Share loans retail
over total loans

5
0
%

EU

New

Europe
1

33
%

1

Poland, Hungary, Slovenia, Czech Rep., Slovakia, Estonia, Latvia,
Lithuania, Bulgaria, Romania, Croatia, Turkey,

9

DECREASING RISKS AND GROWING STABILIZATION


NE declining risk represented by fast
decreasing country spread compared to
Euro area yield curve

Moody’s
Rating
Upgrade

Apr 03
-
Mar 04

EU
entry
date

Spread
SUEMI*

31 Mar 04

Countries
with UCI
presence

B1/stable

Not
defined
yet

248.80

TK

A2/stable

May
2004

44.09

PL

A1/stable

May
2004

-

CZ

Ba3/stable

+

2007

169.04

RO

A3/stable

May
2004

13.43

SK

Baa3/stable

2007
1

107.10

HR

Ba2/stable

++

2007

131.21

BG

0
200
400
600
800
1000
30/12/02
28/02/03
30/04/03
30/06/03
30/08/03
30/10/03
30/12/03
29/02/04
Suemi Latin
Suemi New Europe
Suemi General
*Spread over Euro yield Interest Rates Curve
-

SUEMI

10

AGENDA

UCI Group and New Europe Division Highlights


Why New Europe

Strategy and Business Model

Recent Results and 2004 Outlook

11

NEW EUROPE DIVISION: STRATEGIC OBJECTIVES


Different strategic focus with:


“Leading Banks”

in 3
-
4 countries: N.1 player in the market, focused on constant
improvement of bottom line while maintaining market shares and fulfilling their institutional
role within local communities


“Emerging Leaders”

in 3
-
4 countries: banks focused on growth through enlargement of
Golden Customer’s base (customer acquisition program) with final goal of being in the “top
5” in the market


Clear N.1 Banking Group in New Europe

for profitability, value creation, cost/income and
AUMs



Best risk manager in the New Europe region


Focus on building a long term sustainable franchise and on assuring higher customer
loyalty
, through a superior quality of services


Future growth driven mainly by organic growth (with some potential acquisitions)


Possible completion of geographic coverage in New Europe,

also leveraging on
“managerial hubs” (eg. Zaba, Pekao)

12

UCI’s COMMERCIAL PRESENCE IS RELEVANT IN THE REGION: 1.355
BRANCHES IN 8 COUNTRIES AND ALMOST 18,300 FRONT OFFICE STAFF


1

79 operative PFAs + 45 PFAs on training in Xelion Polska

Poland


FO staff
~
11,800

PFAs
¹


~ 125

Branches 801


Croatia & Bosnia
Herzegovina


FO staff
~
2,400

Branches 193


Turkey


FO staff
~
1,750

Branches 148


Bulgaria


FO staff
~
950

Branches 91


Slovakia


FO staff
~
600

Branches 68


Czech Republic


FO staff
~
400

Branches 26


Romania


FO staff
~
350

Branches 28




18,300 Front
-
office staff



1,355 Branches

Pekao

Zivno

UniBanka

UCR

Bulbank

KFS

13

Family

Banking

SB/Affluent

Private

Corporate

… SUPPORTED BY SPECIALISED SERVICE MODELS BY SEGMENT
SERVING AROUND 6,6 MILLION CLIENTS IN THE AREA

N
°

of Clients


N
°

of dedicated
Salesforce

14.200


Each Bank has a specific divisionalised organisation:


Pekao has 4 business divisions (Family, VIP
-
SME, Private, Corporate)


KFS and Zivno have 3 business divisions (Retail, Private, Corporate)


Zaba, Bulbank, UCR and UniBanka have 2 business divisions (Retail, Corporate)

~
5,5 mln

~
1 mln

Golden
clients

~
60.000

Target
Products

1.100


AUM


Packages


Credit cards



For Affluent:
AUM, Life
insurance,
Packages,
Credit cards
Mortgages


For SB:
Packages
Lending


Accumulation
plans


Pension Funds


Packages


Credit cards


Mortgages


Cash
Management


Trade finance


Structured and
Project
Finance


Leasing

14

KNOW HOW TRANSFER THROUGH CROSS BORDER PROJECTS AND
UCI MANAGEMENT’S COMMITMENT (PARTNERSHIP COMMITTEE)


A team of
~
45 expatriates covering key
positions in 7 countries (Commercial
and Control functions)



A team of
~
70 people in NE Division
supporting the banks in their key
strategic projects



Planning & Development



Retail & Corporate



Credit risk & processes



Organisation & HR



IT Strategy



Legal issues



A group of
~
20 people in UCI Holding
dedicated to NE banks


Around 100 projects launched
during 2003 in NE banks


Cross Border projects
UCI/New Europe


Cross border transfer of
niches of excellence in New
Europe banks



A variety of areas of intervention


Launch of new products


Client acquisition


Network expansion


Sales performance culture


Credit processes and tools


Projects

People

15

AGENDA

UCI Group and New Europe Division Highlights


Why New Europe

Strategy and Business Model

Recent Results and 2004 Outlook

16

RESULTS SO FAR

Perimeter

for
1999:
Group Pekao only;

for 2000 and 2001:
Group Pekao, Bulbank,
Unibanka and Splitska (sold in Apr. 02);

for 2002
: Group Pekao, Zagrebacka Banka,
Bulbank, UniBanka, UniCredit Romania;
for 2003
: Group Pekao, Zagrebacka Banka,
KFS, Zivnostenska, Bulbank, UniBanka, UniCredit Romania

Branches

Total Revenues

CAGR
+19.8%

(Euro mln)


1999 2003

786

1,619

Operating Income

CAGR
+30.8%

(Euro mln)

244

715


1999 2003

Cost/Income

-
13.1 pp


1999 2003

69.0%

55.9%

Net Profit for the Group

CAGR

+69.7%

(Euro mln)


1999 2003

37

307

ROE

+13.2
pp

17.4%

4.2%


1999 2003

1
Including KFS 100%

At Current FX

+635
Branches


1999 2003
1

720

1,355

17

2003 RESULTS SHOW A

GOOD GROWTH OF NET INCOME THANKS TO
HIGHER NET COMMISSIONS, COST CONTROL AND LOWER
PROVISIONS NEEDS

Attr. Net Income

FY03

(Euro mln)

y/y % ch.

+45.5

307

Total revenues

-
3.2

1,619

Operating income

-
10.7

715

FY03

(Euro mln)

y/y % ch.

Loans

+3.2

11,848

Deposits

+0.5

20,555

AUM
3

+54.1

2,346

Cost/Income

+3.7 pp

55.9%

Cost of Risk

-
72 bp
2

117 bp

-

o/w net interest income
1

-
3.6

1,036

At unchanged FX

At unchanged FX

-

of which commissions

+26.9

418

Net write
-
downs of loans

-
61.5

-
139

ROE

+3.8 pp

17.4%


NET INCOME FOR THE GROUP up 45.5% y/y


Net interest income
-
3.6% y/y mainly hit by
Pekao results, acceleration in 4Q03 (+3.7%
on 3Q03) primarily thanks to Pekao and Zaba


Higher growth in net commissions benefiting
from development of AUM
3

products (stock:
+54.1% y/y)


Operating costs +3.6% linked to IT
investments and variable staff compensation


Decreased cost of risk (117 bp), improved
NPL and Doubtful loans coverage ratios




VOLUMES:


Customer loans up 3.2% supported by higher
growth in Croatia, Bulgaria and Turkey
negatively impacted by Poland


Further switch from deposits to AUM

3

New Europe business area of Pioneer

ITAS

2

Deducting extraordinary provisions from 2002 stated figure

1

Excluding dividends

18

NE BANKS POSITIONING IN KEY RETAIL PRODUCTS IS
IMPROVING …

AUM

Key issues

1

Pioneer Market Share in Poland

2

In Romania MFs are going to be launched

Achievements/Positioning


Leverage on Pioneer expertise


Segment
-
tailored AUM products


Development of innovative structured
products with TLab and UBM


Leaders in MFs: Pekao
~

30% market
share
1
,
Zaba
~49%

and
Bulgaria
~40%,

Other NE banks are in top five
competitors list
2


Leading position in Structured Time
Deposits


Bulbank and Zaba: first movers in
structured products (Bulbank also in
MFs)

Mortgages


Enrichment of product offer
(Mortgage +
Life Insurance)


Cross selling commercial campaigns
(Pekao)


Development of cooperation agreements
with external partners
(real estate agents)


Sales process optimization: fast and
easy process, highly skilled salesforce
and dedicated location
(Pekao, Bulbank,
Unibanka)


High credit quality, thanks to the
implementation of application processing
system and the adoption of sound credit
policies


Launch of mortgages in UCR




Excellent sales results:


Zaba: Leader with 40% market share


Pekao: strong acceleration in LC
mortgages in 1Q04


Bulbank: 133% volume growth and
+68% in new mortgages
(1Q04/1Q03)


UniBanka: sales of
mortgage loans
started in July 2002 reaching
the 5th
position in the market

19

… THANKS TO A NUMBER OF PRODUCT INNOVATION
PROJECTS RUNNING …

Key issues

Achievements/Positioning

Cards (Debit
and Credit)

Bancassurance


Completion of distribution
agreements

(Allianz
1
, Aviva
2
)
and
product innovation

(Unit Linked for
Bulbank and Zaba as first movers in
2004)


Zaba and Pekao leaders in 2003 new
business

(life)
to be considered good
starting point

1

Life
: Bulgaria, Croatia, Poland (pre JV agreement),
Slovakia,Turkey.
Non Life
: Romania

2
Life
: Czech Republic.

Small
Business


Implementation of complete
product offer based on client
segmentation across NE Banks


New distribution channels


Adequate risk management and
organisation


UCI / NE Banks treated as Key Global
Client by MasterCard


Launch of revolving cards in all NE
Banks


Launch of card business in UCR



Instalment payment option launched
for all KOC Credit Card

(400 K


EOP
2003)


Massive Visa Electron issuing at
ZABA
(500 K
-

in 9 months)


First movers in launch of dedicated
packages


Specific credit product offer


Dedicated SB leasing offer in Pekao and
Zaba


Implementation of CPA tool
-

Client Profile
Assessment


Dedicated service model with
Relationship managers with micro/
small business portfolios assigned


Joint service model (SB + owner) to
cross capture opportunities

20

… ALSO IN CORPORATE BANKING

Cash
Management

Key issues

Achievements

Structured
and Project
Finance


Specialised cash management units in
all NE banks:


Focus on upgrading the product shelf


Introduction of new value added
products (cash pooling, direct debit,
etc.)


Same training to specialists for
supporting sales


Increasing capabilities in Project
Finance in key markets
(Poland,
Croatia, Bulgaria, Turkey)


Offer completed and marketed


Sales started


KPIs inserted in all RM targets


Strenghtened teams in Bank Pekao,
Zaba and Koc


Prestigious transactions already won in
Poland
(KHGM, Simoldes, SSN, others)

and in Croatia

Trade finance


Interfactoring agreement with UCI
Factoring for cross
-
border
factoring


Refocusing of sales force for trade
finance products


Successful completion


Volumes increased in Zivno and Koc


Sales force refocus already completed
in Pekao

21

CAREFUL RISK MANAGEMENT

2002
-
2004 CREDIT EXCELLENCE PROGRAM, GOOD RESULTS IN 2003

Cost of risk
1

-
38.1%

(bp, annualised)

189
2

117

2003

2002

79.9

2002

2003

81.3

62.6

64.1

Coverage ratios

On Gross
Doubtful Loans

On Gross NPLs

Net NPL/
Loans %

Dec03

Total NE

-
0.2

3.3

ch. on
Dec02
(pp)

Net
Doubtful/
Loans %

Dec03

ch. on
Dec02
(pp)

8.6

-
0.1

At unchanged
FX

Ow: Zaba

-
0.8

2.2

4.6

-
0.7

Ow: Pekao

+1.6

4.7

12.9

+0.9


Total provisions on Performing Loans
to 168 mln (+82.8% on Dec02) with an
increase in the coverage ratio (+0.6 pp
to 1.5%)


5 credit modules designed, set
-
up and implemented (corporate underwriting, management and
workout, individuals and small business underwriting)


UCI Group credit corporate governance defined and introduced (i.e. large exposure management,
credit tableau de bord, …)


Skill assessments and training prepared and launched for roles involved in credit activities


Tactical actions: credit diagnostics and contingency plan actions


Learning organisation (3,800 people involved throughout New Europe)

1

Calculated as Net Loan Loss Provisions on Net customers Loans at period
-
end

2

Data obtained deducting extraordinary provisions from stated figure

22

2004 DIVISIONAL OUTLOOK IS VERY POSITIVE WITH SIGNIFICANT
REVENUE GROWTH EXPECTED MAINLY DUE TO AN INCREASE IN
COMMISSIONS



Significant revenue growth with strong push on net commissions



Volumes growth both in loans and in Assets under Management



Improvement in cost/income ratio and bottom line results


Implementation of relevant strategic projects to support future growth



Salesforce management program



Client acquisition and development project throughout New Europe



Network expansion in Turkey and Czech Republic



Customer and employee satisfaction project in Poland and Croatia



Reengineering projects to improve operational efficiency



Credit learning program


Decrease in cost of risk, with improvement of NPL ratio and increase of the
coverage ratio


Further macroeconomic improvement all over the New Europe area


Reduction of country risk

23

Annex

24

Net extraordinary income

Net non interest income

Total revenues

Operating income

Provisions on loans

Administrative costs (incl. depr.)

Net income

Other net provisions*

Goodwill depr.

(Euro mln)

Minorities

Taxes

% ch. on
3Q03

4Q03

1,306

2,541

-
1,510

1,031

-
440

160

380

-
76

-
60

-
19

-
216


* Net write
-
downs of financial investments, provisions for risks and charges
and provisions to reserve for general banking risk

% ch. on
4Q02

UNICREDITO ITALIANO: FY03 CONSOLIDATED INCOME STATEMENT

y/y %
ch.

+8.9

+7.7

+1.8

-
2.5

-
41.1

+1.6

+2.0

-
49.0

+7.8

FY03

Net interest income (incl. div.)

1,235

-
3.8

5,088

5,377

10,465

-
5,703

4,762

-
1,001

215

1,961

-
236

-
264

-
22.3

-
129

+4.0

-
1,386

-

of which Dividends

84

+35.6

293

-
15.4

+0.2

+1.6

n.m.

n.m.

+10.3

-
8.9

n.m.

-
11.8

-
44.3

-
37.7

+8.0

+7.0

+1.0

+32.5

-
27.2

+2.7

-
1.2

-
75.4

+1.7

-
34.0

+18.2

+3.1

-
4.6

n.m.

+68.0

25

Interest margin (incl. div.)

Net non interest income

Total revenues

Operating costs (incl. dep.)

Net operating income

Net income

ROE

Cost/income

TOTAL
1

1,042

577

1,619

-
904

715

427

17.4%

55.9%

Net provisions

-
177

1
Balance due to roundings and other small companies

(Euro mln)

(UCI stake)

Net income (UCI’s portion)

307

-

of which:

Staff costs

-
446

-

of which:

Other costs

-
336

NEW EUROPE DIVISION: RESULTS BREAKDOWN BY BANK

-

o/w:

Net write
-
down of loans

-
139

UNI BANKA
(77.1%)

27

13

40

-
29

11

7

10.1%

73.4%

-
7

5

-
13

-
13

-
5

BULBANK
(85.2%)

50

37

87

-
34

53

20.2%

39.1%

+6

47

40

-
14

-
15

+5

Group
PEKAO
(53.0%)

510

344

853

-
490

363

14.9%

57.5%

195

-
107

104

-
243

-
182

-
103

257

108

365

-
201

164

114

21.7%

55.1%

-
27

93

Group

ZABA (81.9%)

-
112

-
65

-
4

7

10

17

-
12

5

3

10.5%

71.4%

-
6

-
5

-
2

3

-
1

162

46

208

-
94

114

58

28.6%

45.1%

-
40

-
40

-
39

58

KFS
2

(50.0%)

-
29

2
Consolidated with proportional method (50%)

26

16

43

-
35

7

6

7.0%

82.9%

-
15

-
13

-
2

6

Zivno
(97.7%)

-
2

UniCredit
Romania
(99.9%)

ITAS

Banks’ data net of consolidation adjustment

26

1

Excluding dividends


MACROECONOMIC TREND IN POLAND:


Economic strenghtening (GDP+4.7% 4Q03/4Q02, +3.7%
FY03/FY02) reverting the upward trend in NPLs ratio, started in
1996


150 bp cut of interest rate creating pressure on net interest
income


Recovery in households savings and change in customer
behaviour supported sale of mutual funds



IMPROVED PROFITABILITY thanks to commissions growth
and reduced Cost of Risk


Net interest income down 19.0% y/y mainly impacted by
decreased spread on deposits (from 2.6% to 1.7%) and debt
securities (from 2.4% to 1.5%)


Net commissions up 30.5% y/y benefiting from increased AUM
2

(stock +85.5%, mkt share +6.5 pp to 30.4%) and from quality
upgrade of C/A


Increased coverage ratio on doubtful loans (64.5% in Dec03 from
62.1% in Dec02) and on NPL (82.3% vs. 81.4%)



SPECIAL PROJECTS:


Development of credit scoring system


New IT implementation allowing further optimisation of staff level:
headcount
-
6.4% to 16,641 and
-
6.3% to 15,826 at bank level



VOLUMES:


Customer loans down 12.6% y/y: decreased corporate lending
and FX mortgages partially counterbalanced by a good increase
in local currency retail mortgages flow

PEKAO 2003 KEY
HIGHLIGHTS
: IMPROVED PROFITABILITY
THANKS TO HIGHER COMMISSIONS AND LOWER PROVISIONS
NEEDS AND DESPITE PRESSURE ON NET INTEREST INCOME

FY03

(Euro mln)

y/y % ch.

Total revenues

-
16.3

853

FY03

(Euro mln)

y/y % ch.

Loans

-
12.6

5,192

Deposits

-
5.2

10,071

AUM
2

+85.5

2,146









At unchanged FX

At unchanged FX

Attr. Net Income

+14.8

104

Operating income

-
34.5

363

Cost/Income

+11.8 pp

57.5%

Cost of Risk

-
3.3 pp

198 bp

-

o/w net interest income
1

-
19.0

512

-

of which commissions

+30.5

234

Net write
-
downs of loans

-
67.1

-
103

ROE

+2.2 pp

14.9%

2

PPIM

Data net of consolidation adjustment

ITAS

27

MACROECONOMIC SCENARIO

2004 PRODUCT FOCUS, LEVERAGING ON ECONOMIC GROWTH,
SALESFORCE AND BRANCH MODEL

2004 PRODUCT FOCUS

Continued economic recovery:


GDP:

+4.2% in 04E

(+3.7% in 03)
cagr 04/06 4.8%


Loans: +10.2% in 04E

(+8.1% in
03) cagr 04/06 +9.8%


Deposits: +5.0% in 04E

(+3.7% in
03) cagr 04/06 +6.5%


Push on mortgages:


Strong market growth +29% in 2004e


Shorter granting process, enriched product offer,
new distribution channels through alliances


Selective focus on lending to SME and Mid
corporate

Evolving households preferences
in terms of saving products


(AUM/Total deposits
1

from 10.3% in
2003 to 12.1% in 2004)


Leader in mutual funds:


Product enrichment, leveraging on Pioneer expertise


Increased client penetration and new clients
acquisition


Accumulation Plans (PAK) offer

Stabilisation of interest rates, still
with pressure on margins


Focus on commissions generating products:


Massive charge/credit cards campaign


Continued upgrade of current accounts


New cash management offer

Positive impact of economic
recovery on loan portfolio quality
and on cost of risk


Decreased NPL ratio


Improvement in NPL portfolio management and
workout activity

1

Including AUM

28

Data net of consolidation adjustment

2004 STRATEGIC PRODUCTS
AND FORECAST

2003 MAIN
ACTIONS

GOOD RESULTS IN 2003 FOR ZABA, KOC AND ZIVNO; PROMISING
FORECAST FOR 2004


Divisionalisation
and segment based
product innovation


Credit process
optimisation


Preparation activity
for Integration of
VABA
1

in Zaba


Implementation of
new
organisational
model and
reinforcement of
management team


Improved service
model and credit
process


Repositioning of
local Brand


Cross selling and retention
activities


Further efficiency improvement
after the merger of VABA
1
in
ZABA and of the two Bosnian
banks


Market Shares consolidation



Strong acquisition of new clients


Network expansion (+20 branches)


Launch of new products (C/A
packages, Pioneer funds, PAC
2
)


Increase in net commissions with
strong push on AUM, package
products and credit cards


Strong acquisition of new clients


Network expansion:
around
+100% in n
°

of branches


Improvements in efficiency


Increase in market shares

1

Varazdinska Banka

2

Capital Accumulation Plans

2003
RESULTS
3


Strong increase in
operating income
(+28.2% y/y)


Good cost control
(
-
2.7% y/y)


Higher loans mkt sh.
(to 25.2%, +1.2 pp),
mkt
sh. in AUM at 49%



Strong contribution of
net commissions
(+79.2% y/y)

driven by
AUM
(mkt sh. 13%)


Significant revenue
growth
(+45.8% y/y)


Costs under control
(
-
1.2% y/y)


Increase in revenues
with flat costs


Strong improvement
in bottom line
results

3

at unchanged FX excluding for KFS

ITAS

KFS

Zagrebacka

29

TREND IN VOLUMES AND COMMERCIAL INDICATORS

VOLUMES (at unchanged FX)

COMMERCIAL INDICATORS

Front Office Staff/
Tot. Staff
2

61.1%

59.7%


Dec02 Dec03

Branches
2


1,355

1,347


Dec02 Dec03

Active Customers
2
(mln)

6.6

6.0


Dec02 Dec03

15%

15%

golden

other

2

KFS is included at 100%

Deposits
(Euro bn)

Loans
(Euro bn)

Assets under Management
1

(Euro bn)


Jun02

Dec03

Dec02

2.3

2.0

1.5

+14.7%

+54.1%


Jun03

Dec03


Dec02

11.8

11.7

11.5

+1.0%

+3.2%


Jun03

Dec03


Dec02

20.6

20.2

20.4

+1.7%

+0.5%

1

New Europe business area of Pioneer

ITAS

30


Euro 1,6 bn AUM
(+91.8% on Dec02)


+1,000 new active Private clients
(+21.6%)



1
°

in leasing, among top 3 in AM

KFS

PEKAO


Euro 1.7 bn AUM in Mutual Funds
1

(+112%
on Dec02)


Market Share in Mutual Funds
2

+6.5 pp

(to
30.4%)


Euro 154 mln AUM in Pension Funds

(+39.6% on Dec02)


Euro 95 mln AUM in Accumulation Plans


Euro 82 mln AUM in Mutual Funds (+36.8%
on Dec02)


Euro 10 mln in Life Insurance (+97.4% y/y)


+110,000 C/A in 2003 (to 1.7 mln)


Flow of new mortgage +33.8% (to 340 mln)


Total loans mkt share +1.2 pp (to 25.2%)

ZABA

UNIBANKA


Euro 12.2 mln AUM
(from 3.1 mln in 2002)


+30% Affluent clients (to 19,500)


+40 bp mkt share on Deposits


Loans +105%
(to Euro 110 mln)


Deposits +110%
(to Euro 99 mln),
mkt sh.
+50bp (to 1,1%)


New retail C/A +90%
(to 13,000)

UCROMANIA



Credit and Debit Cards +33%

ZIVNO

BULBANK


Corporate Loans +61% on Dec02,
mkt share
+1.3 pp (to 11.7%)


Flow of new mortgage +68.5%

(to 10.3 mln)


+66.000 clients
(+24.3% on Dec02)

2003 SUCCESSFUL COMMERCIAL ACHIEVEMENTS SUPPORT THE REVENUE
GENERATION

IMPROVEMENT IN MARKET SHARES

1

Mutual funds distributed by Pekao

2

Total PPIM Mutual Funds

31

3

Including Momentum

1

Balance due to market and FX effects

Italy

New
Europe

(Euro mln)

80,759

1,522

TOTAL PIONEER

Alternative
Investments
3

103,687

1,517

632

284

2,104

107

US

17,665

962

International (ex
-
Italy)
3

3,741

226

AuM as of
31.12.2002

2Q03

2003 Quarterly Net Sales

1,253

362

3,330

191

1,149

566

US in USD

18.525

1,035

85,876

2,347

115,985

2,449

21,884

5,878

AuM as of
30.12.2003
1

27,639

AuM as of
29.02.2004
2

90,237

23,480

6,170

2,659

122,546

2,710

29,157

1,299

3Q03

-
126

331

1,161

256

703

253

794

1Q03

372

69

2,349

411

993

915

1,177

4Q03

PGAM GROUP: QUARTERLY EVOLUTION OF 2003 NET
SALES AND DEC02
-
FEB04 AUM TREND

2

Provisional figures including ING (not included in 2003 data). ING AUM as of 29.2.2004: 2,867 mln

More than 80% through UCI NE Banks

32

THE 2002
-
2004 “REACHING CREDIT EXCELLENCE IN NE” PROGRAM:

DECREASING COST OF RISK IN EACH PHASE OF THE PROCESS FOR
ALL THE CUSTOMER SEGMENTS

Workout

Management

Underwriting

Corporate

Small

Businesses

Retail

1.
Electronic
underwriting
tool

2.
Credit rating
system

4. Credit
management
system

3. Application
processing
system

6. Workout
systemt

5. Anomalies
management
system

7. Collection
system

8. Credit corporate
governance


9. Credit Tableau de
Bord


10. Learning
organisation (3,800
people involved
throughout New
Europe)

Cross
-
bank project

33


Provide an overview of
the main specialized
lending products and
services

Module 3:

Specialized lending

STRUCTURE OF THE REACHING CREDIT EXCELLENCE
DIPLOMA


Provide a broad
perspective of the entire
credit system, illustrating
the logics behind the
definition of credit
strategies and policies

Module 1:

Credit organization,
strategy and policies


Provide a hands
-
on
experience of UCIs most
advanced credit
underwriting
methodologies and
processes

Module 2:

Underwriting


Provide an
understanding of UCIs
most advanced logics,
methodologies and
processes for Corporate
and SB credit monitoring

Module 4:

Credit monitoring
and management


Illustrate UCI most
advanced logics and
methodologies for the
workout of Corporate
and Retail not
performing loans

Module 5:

Workout and debt
restructuring