Fortis Bank Financial SymposiumAmsterdam, March 21st 2002

UNICREDITO ITALIANO: CREATING VALUE THROUGH LONG TERM RETIREMENT SERVICES

Gianluca BenattiHead of Retail Investment Services

2

Group highlights

Life/pension is the key asset-gathering market in the next five years

Key success factors for a bank in this business

Why Unicredito Italiano is bound to be among the leaders of the pack

AGENDA

3

UCI: A EUROPEAN LEADER IN DISTRIBUTION, A GLOBAL PLAYER IN ASSET MANAGEMENT WITH OUTSTANDING PROFITABILITY AND EFFICIENCY

MKT CAP.Euro 23.5 bn (1)

(1) As of 12.3.2002

NET INCOMEEuro 1,454 mln

C/I RATIO52.7%

PRE-TAX ROE32.9%

ROE18.0%

BRANCH NETWORK3,998

2001 KEY FIGURES

4

THE DIVISIONAL STRUCTURE SUPPORTS OUR GROUP STRATEGY FOCUSED ON SPECIALISATION OF PRODUCTION AND DISTRIBUTION

Diversified investments and structure to exploit different options for growth and to diversify business portfolio

Brilliant results from recent investments, reinforcing confidence on the quality of the strategy

Italian Banking still core business, but other divisions’ importance growing at a fast pace

Different business models for production and distribution

Foreign Banks

Italian Banking

Wholesale Banking

New Initiatives

New Europe Banking

Italian Banks

5

2000 2001

ROE(1)

20.8%(4)

COST/INCOME RATIO52.7%

51.0%

2000 2001

47.8%47.7%Structural Cost/Income

18.0%

+3.5%

2000 2001

9,318

NET INCOME

4,726

9,989

4,566

+7.2%

20002001

1,3951,454

2000 2001

(Euro mln)

+4.2%1,611(2)

1,695(3)

+5.3%

22.2%(2)

21.0%(3)

(Euro mln)

19.2%(5)

DESPITE A DETERIORATED MARKET ENVIRONMENT UCI SHOWS GOOD REVENUE AND INCOME GROWTH

TOTAL REVENUES

OPERATING INCOME

(1) Calculated on end of period net equity(2) Adding back goodwill amortisation related to the Group and 98-’99 provisions related to Ciampi Law(3) Adding back goodwill amortisation related to the Group(4) Adding back ’98-’99 provisions related to Ciampi Law(5) Calculated on Group net income of Euro 1395 mln

(Euro mln)

6

Italian Banking- OtherItalian Banking-

Wealth ManagementNew Europe

UBM + TL Pioneer

REVENUE COMPOSITION BY BUSINESS AREA (Net of Corporate Centre negative contribution)

WE WERE ABLE TO MAINTAIN A SIGNIFICANT CONTRIBUTION FROM THE WEALTH MANAGEMENT AND ASSET MANAGEMENT BUSINESS ...

59.8%

13.7%

2.7%4.8%

19.0%

60.2%

14.6%

4.7%

5.8%

14.6%

78.8% 74.8%

2000 2001

7

... THANKS TO OUR ABILITY TO PARTIALLY COUNTERBALANCE THE NEGATIVE IMPACT OF FINANCIAL MARKETS ON COMMISSIONS WITH THE DISTRIBUTION OF VALUE ADDED PRODUCTS

NET COMMISSIONS2000* 2001 % ch.

(Euro mln)

Excellent impact of capital guaranteed products on commissions from segregated accounts and insurance products

* consistent with new Bank of Italy criteria for breakdown of commissions

Commissions from securities in custody suffered the lower turnover of customers’ portfolios

Positive contribution from other services (mainly commissions from loans granted and from payment services)

Asset management commissions stable despite negative market environmentAsset management 1,8031,789 +0.8

Mutual funds 1,3241,447 -8.5

Securities in custody 334422 -20.8

Other services, of which: 1.1541,128 +2.3

Insurance products 226156 +44.9

Total 3,2913,339 -1.4

Loans granted & received 456 497 +9.0

Cash management services 250 263 +5.2

Segregated accounts 253186 +36.0

8

CAPITAL GUARANTEED PRODUCTS: EURO 7.46 Bn NET INFLOWS IN 2001*, MORE THAN EURO 8.7 Bn FROM LAUNCH TO

FEB. ‘02

* Net of Euro 91 mln. inflow from a joint BANK PEKAO / TRADINGLAB Capital Protected Note issued in October

1,242

731

16

2,734

868

386

1

2

(Euro bn)

02Q’01 3Q’01 4Q’01 Jan-Feb.

2002

Segregated Accounts

Unit Linked (UNISTAR)

1Q’01

465 386

632

703

165

146

Fund, Equity & Index Linked Notes

3

4

Tot:1,018

Tot:465

Tot:1,989

Tot:3,988

Tot:1,273

2001 sales

Net inflows 1,965 13.56

Ch. on 2000

+23 bp

Dec 01 mkt sh.

MUTUAL FUNDS

2001 sales

Premium written +43

Rank in Italy

1st

UNIT LINKED

3,889

Confirmed leadership in market shares on Unit Linked (98% of the total new production of insurance premiums):

34.5% (+11 pp y/y) in Bancassurance only

26.7% (+ 9.7 pp y/y) on total market

% Ch. on 00

OUR EXCELLENT COMMERCIAL RESULTS ALLOWED UCI GROUP TO RANK FIRST IN THE SALES OF ALL HIGH VALUE-ADDED PRODUCTS IN ITALY

(Euro mln)

(Euro mln)

9

Group highlights

Life/pension is the key asset-gathering market in the next five years

Key success factors for a bank in this business

Why Unicredito Italiano is bound to be among the leaders of the pack

AGENDA

10

THE NEXT WAVE WILL BE MUCH MORE RESILIENT….

A shrinking “social parachute”: declining birth rate, shorter working life, longer life expectancy

A shrinking “private parachute”: decreasing families’ size, improved mobility and lower children-parents dependency (THE

CATHOLIC FAMILY CONCEPT IS CHALLENGED)

A changing approach to golden age: longer, healthier, wealthier

THESE ARE LONG TERM TRENDS OF CHANGE, RELATIVELY INDEPENDENT OF FINANCIAL MARKET CYCLES

11

EMPLOYEES

01020304050607080

57 58 59 60 61 62 63 64 65

30.000 Euro 60.000 Euro 100.000 Euro

01020304050607080

57 58 59 60 61 62 63 64 65

RETIR

EM

EN

T G

AP

%R

ETIR

EM

EN

T G

AP

%

AGE OF RETIREMENT

AGE OF RETIREMENT

SELF-EMPLOYED WORKERS

Current Pillar II schemes are far from succeeding in closing the gap between last pay and retirement income in the case of middle and high-income individuals

Self-employed workers more penalised than employees

AVERAGE YEARLY INCOME

IN THE LAST DECADE PERSPECTIVE PENSION BURDEN ON PUBLIC FINANCES FORCED ITALY TO REDUCE HER GENEROSITY

Source: Pioneer Global Asset Management Research Unit

12

50’S18 22 40 53

Today

25 33 58 60

retirement

retirement

starts working

starts working

first child

first childchild starts working and

becomes independent

child starts working and

becomes independent

Head of the family’s age

DEMOGRAPHIC TRENDS WILL AFFECT THE TRANSFER OF WEALTH AMONG GENERATIONS

In the 50’s, households’ financial needs had already been satisfied at the age of 55, whereas today they are all unmet

Today financial assets at the threshold of the golden age have to be much higher than before and are “the scarce resource”

Head of the family’s age

13

A LONGER LIFE DURATION BRINGS IN NEW KIND OF FEARS

Males Females Total

To lose self -sufficiency 54 69,2 62,7

Spouse's death 34,4 38,4 36,7

To retire 19,8 13,3 16,1

Death of friends/ people of the same age

15,8 8,6 11,7

To complete 70 yrs of age

8,3 13,1 11,1

To become grandparent 12,3 4,2 7,6

Source: CENSIS, February 2002

“WHAT ARE THE LANDMARKS OF THE GOLDEN AGE”?% OF RESPONDENTS; MULTIPLE ANSWERS ADMITTED

14

1996 Households’ total financial assets: Euro 1,878 bn

2000 Households’ total financial assets: Euro 2,602 bn

SO FAR PENSION PRODUCTS HAVE NOT FULLY BENEFITED FROM THE STRONG GROWTH OF TOTAL FINANCIAL ASSETS IN ITALY

Italian savings market witnessed an unprecedented growth in the past 4 years (CAGR 8.5%). Households progressively reduced their risk aversion, as shown by the rise of the portion of assets diverted to mutual funds and shares

Source: Bank of Italy

Life/Pensions: 10%Other: 3%

Deposits: 30%

Bonds: 30%Mutual Funds: 5%

Equities: 22%

Life/Pensions: 11%Other: 2%

Deposits: 25%

Bonds: 19%Mutual Funds: 18%

Equities: 25%

+8.5%CAGR

1996-2000

Pension funds could scarcely benefit from this growth, mainly due to legal uncertainties and lack of products

15

MUTUAL FUNDS INSTEAD OF PENSION FUNDS: ITALY VERSUS THE NETHERLANDS

Source: Pioneer Global Asset Management Research Unit

16

BUT PENSIONS WILL BECOME ONE OF THE FASTEST GROWING INDUSTRIES IN ITALY IN THE NEXT DECADES

Pension fund industry set to grow strongly in the next 20 yearsEuro bn

This will be due to the diversion of a larger portion of savings to pension funds and life insurance products and to a partial switch of assets from other investment categories

We estimate that the Italian pension fund market will total Euro 2,000 bns in 2020. This would imply a 2001-2020 CAGR of 23.5% for the pension fund industry

+23.5%

CAGR2001-2020

0

500

1,000

1,500

2,000

2,500

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Source: Pioneer Global Asset Management Research Unit

17

Group highlights

Life/pension is the key asset-gathering market in the next five years

Key success factors for a bank in this business

Why Unicredito Italiano is bound to be among the leaders of the pack

AGENDA

18

THE URGE FOR A PENSION NEED HAS ALREADY BEEN CREATED, BUT HARDLY IT WILL BE TRANSFORMED INTO SHAREHOLDERS’ VALUE

Trust: why should banks’ salespeople be suddenly trusted an insurance-related culture?

Culture: why should Italian customers suddenly “invest long term” and not invest to get short term gains?

Matching: will longer term products produce the same revenues as current shorter term portfolios?

ISSUESFOR BANKS

PAYG scheme simulations widely available on and off-line, through banks, financial consultants, agents

Press campaigns always on

TAKE OFF INDEPENDENT OF FURTHER

REFORMS

19

93%

83%

69%

78%

87%

84%

0% 20% 40% 60% 80% 100%

buy a house

integrate social security benefits

get medical assistance

inheritance to children

children’s education

unforeseen

IT REQUIRES ENHANCED SALE SKILLS: “RETIREMENT” MEANS “PROTECTION” AND IMPLIES MANY TECHNICAL SOLUTIONS

December 2000 DOXA survey on retirement;% of interviewees declaring interest in the item

Retirement Services

They go well beyond selling single premium financial Unit Linked

It means offering a complex advice which is not normally recognised to banks’ salesforce

Saving for retirement means

20

Sales Reps will have to test and quantify the most common constraint to the take off of private pensions:

the intra-generation wealth transfer

Child

Parent

Expected inheritance weakens the perception of Social Security gap

Expected support from children (in return for inheritance) weakens the perception of Social Security and Assistance gap

Reasons NOT to be investing for one’s own retirementClient Status

Some events in life are bound to break this virtuous cycle:•mobility due to education•mobility due to job search•consumption (non durable) in the old age•etc

IT REQUIRES EVEN MORE TRUST FROM THE CLIENT: TO GET THE SOFT AND DELICATE INFO NECESSARY TO IDENTIFY THE NEED

21

Group highlights

Life/pension is the key asset-gathering market in the next five years

Key success factors for a bank in this business

Why Unicredito Italiano is bound to be among the leaders of the pack

AGENDA

22

THIS IS A BUSINESS OF MANAGING RISKS AFFECTING HOUSEHOLDS’ BALANCE SHEET AND INCOME STATEMENT

Longevity risk

Coping with the unavoidable heavy Health care ticket of the old age w/o eating into the living standard (=the pension revenues)

Preserving stocks FOR heirs and protecting them FROM conversion into a supplementary annuity

Coping with the unforeseen w/o eating into the household’s assets and revenues

Coping with the odd of NOT achieving a consumption/accumulation target, due to market vagaries

Catastrophicrisk

Financialrisk

23

LEVERAGING OUR EXCELLENT GROUP MANUFACTURERS WE ARE OVERHAULING THE WHOLE PROCESS TO GAIN TRUST FROM CLIENTS IN THE OTHER TWO AREAS OF HOUSEHOLDS’ RISK MANAGEMENT

SELLING PROCESS REDESIGN

NEW PENSION PRODUCTS

DISTRIBUTION MODEL

DEDICATED COMMUNICATION

BRAND NEW PFP SOFTWARE

BRAND NEW TRAINING TOOLS

BRAND NEW PRODUCTS