PRIVATE BANKING & ASSET MANAGEMENT DIVISION

Dario Frigerio

2

AGENDA

Market scenario

The divisional model

The new perimeter

Results

Prospects and Industrial Plan 2005-2008

Main KPIs

Unique combination of drivers

3

POSITIVE MARKET SCENARIO FOR GLOBAL INTEGRATED ASSET GATHERING AND ASSET MANAGEMENT PLAYERS

CONSISTENT HIGH RETURN ON RISK-WEIGHTED ASSETS

ABOVE NOMINAL GDP GROWTH RATES

FAVOURABLE ADVISORY-BASED TREND

4

Group Retail Bank network Third Parties

THE ESTABLISHED DIVISIONAL BUSINESS MODEL…

INTEGRATED AND EFFICIENT IN THE VALUE CHAIN, OPEN TO EXTERNAL GROWTH OPTIONS

PRIVATE & ASSET MANAGEMENT DIVISION

ASSET MANAGEMENT

Investment ProcessProduct Design

Advice Platforms Risk Management

ASSET GATHERING

5

154132

TOTAL FINANCIAL ASSETS1 GROWTH (bn) PROFITABILITYPROFIT BEFORE TAXES (Euro mn)

20032

…IS PROVING TO BE SUCCESSFUL

209

2004

173

2005

CAGR 02-05~ 17%

469

2003

355

2004 2005

596CAGR 03-05

~ 30%

Asset Management: net sales and asset qualityNet sales: € 23 bn (of which 62% from non-proprietary channels)Asset quality: key role of advisory wraps (67% of captive assets)ROA: from 51 bp to 56 bp

Asset Gathering: net sales, advisory and productivityNet sales: €14 bn – Xelion: leadership since ’03 in Italian FA’s marketSeparate Accounts: ~ 30% of total assets; 60% of total net commissionsAssets per Private Banker: UPB up 30% to € 90 mn and Xelion +160% to € 7.5 mn

RUN RATE 2007 vs. OLD 3YP: ~ 20%

EoP 2002

(1) Calculated at current exchange rates (€/$)(2) € 3.4bn out of the total increase related to the acquisition of ING

6

~ 156

~ 273*

IN THE NEW PERIMETER…

Pioneer ActivestNordinvest

Ass

et

Man

agem

ent

Capital InvestAsset Management

Ass

etG

athe

ring HVB Wealth Managem.

HVB Luxemburg PBDAB Group

BankPrivatSchoellerbank

Total Assets*(Euro bn)

Global

European

PRIVATE & AM DIVISION

UPB & SubsidiariesXelionUCI Luxemburg

* Of which € 30bn AuA, as of May 2006

MarketCoverage

7

…SCALABILITY OF BUSINESS MODEL IS KEY

GROWTH IN AUM GROWTH IN CLIENTS

Group Retail Bank network

ThirdParties

PRIVATE & ASSET MANAGEMENT DIVISION

Investment ProcessProduct Design

Advice Platforms Risk Management

GroupInvestment

BankGroup

Corporate Division

Growth in Institutional and HNW

ASSET MANAGEMENT ASSET GATHERING

8

ASSET MANAGEMENT: A GLOBAL PRESENCE UNDER A GLOBALLY RECOGNIZED BRAND

€ 273 bn financial assets with over 300 investment professionals and distribution across 22 countries

Strong presence in markets representing 40% of European financial wealth (Italy, Germany, Austria, Poland)

Growing and profitable presence in the USA ($ 64 bn AUM – Operational Margin ~30%)

Expanding in global open architecture and institutional business (Non-captive AuM: 43%)

Central Investment HUBSLocal Investment HUBSDistribution Centres

New York ParisBucharestBoston

London

Sydney

Dublin

Tel Aviv

Milan

Beijing

Warsaw

Singapore

Hong KongMiami

MadridGeneva & Lugano

Luxemburg

Munich

Taiwan

Hamburg

Sofia

ZagrebPrague

Bern Budapest

Bermuda

Omaha

Buenos Aires

Vienna

Bratislava

9

PRIVATE BANKING: A UNIQUE ONSHORE POSITION TO SET UP A EUROPEAN FRANCHISE

Turin

Wien

Munich

Off-shore centreOn-shore centre

PRIVATE BANKING

Above € 100 bn pure private banking assets

~ 900 relationship managers~ 200 dedicated branches spread over Europe’s wealthiest regions

Optimal off-shore support for the overall group (Switzerland, Luxembourg, S. Marino)

Data as of December 2005

10

AN AMBITIOUS PLAN…

INCREASE IN OPERATING INCOME (CAGR ’05-’08):

GROWTH IN MANAGED ASSETS (CAGR ’05-’08):

EVA (DELTA ’05-’08):

+19%

+14%

+74%

11

…BASED ON A UNIQUE COMBINATION OF 4 DRIVERS

CROSS-FERTILIZATION

SCALABILITY

GEOGRAPHICAL LEVERAGE

INNOVATION MODEL CONSISTENCY

12

GEOGRAPHICAL PRESENCE GUARANTEES CLOSER CLIENT RELATIONSHIP

GEOGRAPHICAL LEVERAGE

* Source: Company data, Istat, Eurostat, Bayerisches Landesamt für Statistik und Datenverarbeitung. Data as of year end 2004Note:Northern Italy includes: Piemonte, Valle d’Aosta, Lombardia, Trentino Alto-Adige, Veneto, Friuli Venezia-Giulia, Liguria and Emilia Romagna

LOW ORIGINATION COSTS

Extensive retail and corporate banking networks in highly wealthy regions

7000 branches in 20 countries

Combined GDP per capita in Austria, Northern Italy, Bavaria: 117% vs. EU15 average 100%*

Off-shore focus

UHNWI and Family Offices

Eastern Europe opportunities

Business diversification

Eastern Europe, with expected wealth CAGR 10% over next 3 years

Pioneer third party global network

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SCALE DRIVES OPERATIONAL LEVERAGE

SCALABILITY

Centralization ofInvestment Process and Advisory Function

Product design and marketing

Governance

IT convergence

Support functions

Strong rationalization of fundsNumber of funds to be reduced by 40%

Number of Model Portfolios to be reduced by 20%

Unified service model∼70 households (€ 100-120 mn) per Relationship Managers

Operating Expenses/Total Financial Assets: from 36bps (’05) down to 30bps (’08)

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KNOW-HOW LEADS TO BEST PRACTICE IN CROSS-FERTILIZATION

* 2005 Data considering UPB and Xelion

CROSS-FERTILIZATION

Consistency in Proprietary Model

AuM penetration: in Italy and Austria AuM

50% of Total Assets vs. 30% in Germany

AuA profitability: in Germany and Austria

40-50 bp vs 15-20 bp in Italy

Non-Proprietary Growth Targets

Institutional (HVB Investment Banking,

Vanderbilt, Momentum) and Open

Architectures: over €20 bn

IMPROVING MARGINS

15

KNOW-HOW LEADS TO BEST PRACTICE IN INNOVATION

INNOVATION

Building scale in diversified alphaPerformance consistency and persistency

● Long Funds 30° percentile* positioning 3 and 5 years vs. peers

● 47 Pioneer Investments’ funds with 4-5 Morningstar stars

Continue to develop investment process

Leverage FoF success, acquire expertise in other strategies /asset classes

Adding Quant-based beta-enhanced products and new total-return solutions

Segmenting client base on behavioursXelion leader in advisory services: Net commissions CAGR ’05-’08 ~ 26%

DAB: profitable direct banking option ≈ Operating Income CAGR ’05-’08: ~ 18%

* Average of funds as of 31 March 2006

16

FOCUS ON PRIVATE BANKING

Source: BCG Wealth Market Sizing Database 2005, MOW, Eurostat, EIU –Economist Intelligence Unit, Banca D'Italia, BCG analyses

€ 1.6 tn Financial Assets in 2005 (1.5 tn in 2004)

∼8% financial asset growth p.a. expected by 2008

High profitability (~30 bp pre-tax margin on Assets ‘05)

Fragmented: local players still dominating without a clear continental leader

~ 8% ~ 7% ~ 8%

2005

2008

1,180

850

GermanyAustria

Italy

690

930

1,620

2,030

Total

CLIENTS WITH FINANCIAL ASSETS > 0.5 M€

FA growth CAGR ‘05-’08

PRIVATE BANKING MARKET IN GERMANY, ITALY AND AUSTRIA IS LARGE AND ATTRACTIVE

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FOCUS ON PRIVATE BANKING IN GERMANY

In a fragmented and profitable market, wealth management division starts among the first 3 players

Total Financial Assets: € 25-30 bn

∼200 Relationship Managers

28 dedicated locations covering almost 90% of total domestic wealth

München

Ulm

Bayreuth

WürzburgSaarbrücken

Kempten

Köln

Hannover

Berlin

Hamburg

Kiel

Leipzig

Augsburg

Nürnberg

Wiesbaden

Mannheim

Stuttgart

Regensburg

Düsseldorf

Dresden

Coburg

Rosenheim

Flensburg

Baden-Baden

Frankfurt

Passau

Rottach-EgernGarmisch

Traunstein

Landshut

WeidenBamberg

Ingolstadt

Magdeburg

Neustadt/Donau

Branch New branch Remote desk

GROWTH IN MANAGED ASSETS (CAGR ’05’08): +17%

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KPI PRIVATE & ASSET MANAGEMENT DIVISION

CAGR 05-08

PBT/Total Assets(3), bp

52ROA(2), bp

23

2005

56

30

Total Financial Assets, bn 377 ~9%

2005 2008

Operating Income, mn 855

AuM, bn 253 ~14%

Total Revenues, mn 2,116 ~10%

~19%

ASSUMPTION: Market performance(1) ~ 4%

Excellent results thanks to:

Geographical leverageScalability of the modelBusiness mixExecution expertise

(2) Net commissions excl. performance fees/Total Average Assets excl. deposits(3) Profit before tax net of extraordinary items/Total Assets

(1) Net performance on divisional Total Financial Assets (2005-2008 CAGR)

19

ANNEX

20

PRIVATE & ASSET MANAGEMENT DIVISION: 2005 P&L

Net Interest income (incl. div.)

Net non interest income

Total revenues

Operating costs (incl. depreciation)

Operating income

Net income

Net provisions

(mln)

Net income for the group

- of which: Staff costs

- of which: Other admin. expenses

- o/w: Net loan-loss provisions

Cost/income Ratio

2005(1)

292

1,824

2,116

855

-527

-633

-1,261

562

540

59.6%

-15

-32

Profit/loss & net write-downs on investments -10

(1) Managerial view