Transcript UNICREDITO ITALIANO: GROWING THROUGH SPECIALISATION

NEW EUROPE DIVISION
2003-2006 STRATEGIC PLAN
Roberto Nicastro
Head of New Europe Division
Investor Day – Bologna, 13th June 2003
UCI’S NEW EUROPE CHALLENGE: THE KEY POINTS WE HOPE WILL
COME ACROSS
 By and large the New Europe region will allow good growth for
the banking activity
 Developing this opportunity requires to forge and implement
one of the first examples of truly cross border retail banking where we need to strike the right balance between “McDonaldbanking” and tailor-made “Boutique banking”
 Are we succeeding? We think so. “Industrial” progresses are
evident, financial results are positive. Poland’s environment
could be much better - but maybe there we’ve just hit the rock
bottom …
2
AGENDA
New Europe: Why and How
Recent Results
Strategy and Business Model
Three Year Plan: the Targets
Conclusions
3
HIGHER GROWTH IN THE RECENT PAST AND IN THE NEAR FUTURE
 A positive gap in terms of
regional growth, compared to
the EU market, both in the
recent past and in the
forthcoming period
Real GDP growth %
Of which:
 Poland: 2.1%
 Other: 4.3%
5
 Expected GDP catching up
driven by:
 Internal demand
 FDIs
 Export, as a consequence
of further exploitation of
comparative advantages
 Structural funds
2000
2001
New Europe *
2002
2003e
2004-06
 Gap in GDP growth likely to
persist for decades, as the
experience of past EU
enlargement processes shows
(i.e. Ireland, Spain and Portugal)
EU
* Excluding Turkey. NEC: Poland, Bulgaria, Slovakia, Croatia, Romania,
Hungary; Czech Republic; Slovenia, Turkey, 3 Baltic countries
4
EU ACCESSION IS GETTING CLOSER FOR MOST OF OUR NEW EUROPE
COUNTRIES IN A CONTEXT OF DECLINING RISKS AND GROWING
STABILIZATION
Countries
with UCI
presence
EU
entry
date
BG 2007
HR 20071
2002 INFLATION (avg)
Moody’s
Rating
Upgrade
April 02April 03
 Lower than 3%2
Poland, Croatia, Czech Republic,
Latvia, Lithuania
EU4 avg. 2.1
 Between 3 and 10%
Bulgaria, Estonia, Hungary,
Slovakia, Slovenia
B1/positive
+
 Higher than 10%
Romania, Turkey
Baa3/stable
2002 PUBLIC DEFICIT (%GDP)
A1/stable
+++
 Lower than 3%
Bulgaria, Estonia3, Latvia,
Lithuania, Romania
May
2004
A2/stable
++
 Between 3 and 7%
Slovenia, Croatia,
Czech Republic, Poland
RO 2007
B1/stable
+
 Higher than 7%
Hungary, Slovakia, Turkey
May
2004
A3/stable
+++
CZ
PL
SK
May
2004
Not
TK defined
yet
1
2
2002 PUBLIC DEBT (%GDP)
 Lower than 60%
Bulgaria, Croatia, Czech Rep.,
Estonia, Hungary, Latvia, Lithuania,
Poland, Romania, Slovakia, Slovenia
 Higher than 60%
Turkey
B1/negative
-
Estimated
The Maastricht criteria prescribes inflation to be no more than 1.5%
above the average inflation rate of the lowest 3 inflation countries in the
EU. The 3% threshold is thus indicative.
EU4 avg. 1.9
5
3
4
Estonia in surplus
EU 15 countries
EU4 avg. 62.5
UCI HAS ACQUIRED A WIDESPREAD PRESENCE IN NEW EUROPE,
BEING AMONG THE TOP PLAYERS IN EACH MARKET
Group Pekao - Poland
UniBanka - Slovakia
76.3% acquired in October 2000
Total assets (Euro mln)
53.2% acquired in May 1999
847
Market share on Loans
6.1%
Market share on Deposits
3.3%
Net income (Euro mln)
Branches
3.2%
5
49.1%
Warsaw
66
Total assets (Euro mln)
Market share on Loans
Market share on Deposits
Net income (Euro mln)
Branches
15,750
13.2%
15.9%
195
832
Prague
Bratislava
Zagrebacka Group-Croatia
Bosnia-Herzegovina
81.9% acquired in March 2002
Total assets (Euro mln)
UniCredit – Romania
Zagreb
Bucarest
7,190
Market share on Loans
22.6%
Market share on Deposits
31.7%
22.6%
1.4%
Sofia
99.8% acquired in May 2002
Total assets (Euro mln)
105
Market share both on Loans and on Deposits 1%
Net income (Euro mln)
2.9
Branches
15
Istanbul
Net income (Euro mln)
103
Bulbank - Bulgaria
Branches
180
85.2% acquired in October 2000
Total assets (Euro mln)
Market share on Loans
Market share on Deposits
Net income (Euro mln)
Branches
6.7%
Pioneer
Total AuM in New Europe of Euro 1,7 bn (as at
31.03.03)
Zivnostenska Banka
Czech Rep.
95.04% acquired in February 2003
Total assets (Euro mln)
3.9%
2.4%
Net income (Euro mln)
3.8(1)
Branches
6
End of 2002 data Other presences: Pekao Ukraina, Koc Azerbaijan
Contribution to New Europe Total Revenues (only UCI’s portion as at
31.03.03 - pro-forma including the management account figures of
Zivnostenska)
Koç Fin. Serv. - Turkey
1,651(1)
Market share both on loans and on dep.
13.2%
29
(1)
(2)
1,406
8.8%
19.7%
40
91
Source: IAS, audited data
Data related to Kocbank
50% acquired in October 2002
Total assets (Euro mln)
approx. 4,750
Market share on Loans
8.5%
Market share on Deposits
3.5%
Branches(2)
115
UCI IS AMONG THE CLEAR LEADERS IN THE REGION
Data as at Dec. 2002 (1)
N. of
branches
UCI(2)
SOC GEN
614
RZB
524
(1)
419
215
291
4
254
200
5
166
304 (5)
22.1
8
268
357
17.6
4
211
107
11.8
8
92
178
12.5
155
178
14.1
100% of total assets and profit after tax for controlled Companies (stake >
50%) and share owned for non controlled companies (I.e. 50% Kfs)
(2) Including KFS and Zivnostenska
(3) Including Nova Ljubljanska Banka
7
233
31.8
880
# of countries with
banking presence
349
25.4
1,021
HVB/BA
Controlled (1)
29.8
1,221
KBC(3)
CITIGROUP(6)
Pro quota
1,332
ERSTE
INTESA
Total Net Profit
(mn Euro)(4)
Total Assets
(bln Euro)
7
(4)
After tax, before minority interest
HVB only pre-tax data available
(6) Pro quota not available
Source: UCI Economic Research
(5)
3
7
AGENDA
New Europe: Why and How
Recent Results
Strategy and Business Model
Three Year Plan: the Targets
Conclusions
8
RECENT GROWTH SUBSTANTIAL BOTH BY SIZE AND BY VALUE
CREATION
Capital Invested
EVA
(Euro mln)
(Euro mln)
2,6081
ROE
45.8
CAGR
+29.4%
+10.7
pp
20002
14.9%
2002
1,205
4.2%
-40
1999
now
1999
Total Revenues
(Euro mln)
1,668
Operating Income
CAGR
+28.5%
(Euro mln)
2002
Cost/Income
CAGR
+51.2%
-19.5 pp
69.0%
843
786
49.5%
244
1999
2002
1999
At Current FX
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
2002
9
1 Including
2
KFS and Zivno (the impact
of the tender offer is also included)
Including only Pekao
1999
2002
KEY HIGHLIGHTS OF THE FIRST PART OF THE YEAR

Divisional results negatively affected by the still not favourable macroeconomic environment
(stagnant GDP, WIBOR from 10.3% to 5.7% in 12 months) and FX impact in Poland (Zloty
devaluation -18.8% y/y, -9.0% on Dec02)

Increased net income of the division in the last quarter to 64 mln in 1Q03 (-7.7% y/y, +18.1% on
Avg02 at unchanged FX) supported by an overall good cost control and a lower impact of Pekao’s
provisioning
 Net interest income down by 10.9% y/y at unchanged FX as a result of a

Revenues
significant decrease at Bank Pekao – 20.7% y/y (3/4 spread on deposits, 1/4
spread on securities/free capital) and a good growth for the other banks
 Growth in commissions +8.0% y/y at unchanged FX, despite drop in loan fees
at Pekao thanks to buoyant Asset Management and Bancassurance and loan
growth in the other banks
 Net customer loans (+4.9% y/y, +3.4% on Dec02 at unchanged FX) hit by

Volumes
decreased lending in Pekao more than counterbalanced by the other banks
 Direct deposits (-2.4% y/y, -1.0% on Dec02 at unchanged FX) with a higher
weight of securities (from 0.8% in 1Q02 to 2.1% in 1Q03) mainly driven by
increased bonds in Pekao (in Poland market deposits are down)
 Assets under Management: 2.3 bn in 1Q03, +33% y/y, +8.1% on Dec02
10
KEY ACHIEVEMENTS IN THE FIRST PART OF THE YEAR
KFS
PEKAO
 Investment Funds +40.2%
 Securities under Custody +34%
 Bancassurance at full speed (Euro 4.6
 Cards +4.9%
mln since March, 30% is new money)
 50,000 accumulation plans sold in 4
months
 Staff decreasing 2.7% (-450 April on
Dec02)
 Letters of Credit +13.8%
UNIBANKA
 Mortgages from 0.56 to 1.62 mln Euro
 Packages +27.6%
 AUM +3.5%
ZABA
 Mortgages +17.7%
UCROMANIA
 Cards +6.4%
 +27% Italian Desk clients (400 in
 AUM +11.5%
10 months)
ZIVNO
BULBANK
 New Customer acquisition +3.9%
 Corporate loans +13.1%
 Retail Loans up 17.6%
11
ASSET QUALITY IN NEW EUROPE NEGATIVELY IMPACTED BY
ECONOMIC SCENARIO IN POLAND, IMPROVEMENT IN ALL OTHER
COUNTRIES
Net NPLs and Doubtful Loans as % of Total
Net Loans
Net NPL/
At unchanged FX Loans %
1Q03
ch. on
Dec02
(pp)
Net
Doubtful/
Loans %
1Q03
ch. on
Dec02
(pp)
Pekao
4.1
+0.3
12.3
+1.0
Zaba
2.5
-0.4
4.9
-0.5
KFS
4.0
-0.7
8.6
-0.5
Bulbank
0.2
-0.1
2.5
-0.7
Unibanka
4.1
-0.2
4.9
-0.4
Total NE
3.5
-0.0
9.3
+0.4
At unchanged FX
(Euro mln)
80.3
63.5
2002
Dec 02
1Q03
999
1,076
+7.7
Net NPLs
396
408
+3.1
11,553
+3.4
11,178
On Gross Doubtful
Loans
80.3
62.5
1Q03
On Gross NPLs
 Stable net NPLs/Net Loans ratio
 Net Doubtful/Loans ratio up 0.4% on Dec02
impacted by a not favourable macroeconomic
environment in Pekao nearly counterbalanced
by an improvement in all other NE banks (Zaba
-0.5pp, KFS –0.5 pp, Bulbank -0.7pp, Unibanka
-0.4pp on Dec02)
% ch.
Net Doubtful Loans
Net Loans
Coverage ratios
 Stable coverage ratio on gross NPLs loans,
slight decrease on gross Doubtful due to a
different mix (lower weight of NPLs)
12
UCI’s NEW EUROPE INVESTMENTS ARE PAYING OFF
Investment
(Euro mln)
Pekao
1,205
9%
Zaba
614
14%
Bulbank
242
14%
UniBanka
80
5%
UCRomania
22
13%
Total
2,163
11%
KFS
251
n.m.
Zivnostenska2
194
n.m.
Total Division
2,608
n.m.
13
1
2002
ROI1
Calculated on FY02 net income for the Group; FX as at 31.12.02
2 Including the impact of the tender offer
AGENDA
New Europe: Why and How
Recent Results
Strategy and Business Model
Three Year Plan: the Targets
Conclusions
14
OVERALL OUTLOOK IN THE REGION MAINLY POSITIVE
+
+
+
Volumes growth (loans, deposits, services)
+
Decreasing risks
+
Sound industry structure
+
Taxation decreases
-
Some margins pressure on domestic currency
business with convergence
-
Basel II impact
-
(Limited) Devaluations
15
NEW EUROPE DIVISION: MACROECONOMIC SCENARIO
 Overall positive part of the economic cycle
 18-24 months favourable outlook, with positive GDP growth differential vs. EU. Given still
slow EU recovery, internal demand continues to be the main engine of growth
 Back to long term growth potential for Poland (3.6 - 4.4% growth in 2004 and 2005
respectively) and the Czech Republic (3.6 – 3.9% respectively), following recent slowdown
 Continuation of positive growth dynamics in all other New Europe countries (with rates
between 4% and 5%), with economic stabilisation and growth supported by EU convergence
 Tax rates stabilization at current low level
 EU enlargement process (first round of accessions in May 2004) and first
convergence steps towards Monetary Union
 Different lifecycle stages, 3 waves of entrants
 2004 entrants: Poland, Slovak, Czech Republic
 2007 entrants: Bulgaria, Romania, Croatia (to be confirmed)
 potential entrants or “close neighbours”: Turkey (Russia, Ukraina, …)
 Macro stabilisation and operating environment convergence to best standards
 Lower level of risk
 Expected increase in labour cost
16
NEW EUROPE DIVISION: BANKING SECTOR SCENARIO
 Continuous growth of volumes in NE Countries (loans, deposits, AuM and services):
(Loans+Deposits)/
GDP 2002
Lending growth
CAGR 13%
224%
Deposit growth
CAGR 10%
66%
EU
New
Europe
2006
2002
2002
2006
 Pressure on local currency banking margins, due to convergence towards EU interest rate
levels
 NE Banks already operating in hard currency for a relevant part of their activities (45% at
Division level)
 Potential impact of Basel II
 Unclear impact on capital requirements
 Potential competitive advantage of local players not adopting advanced models
 Increase in relative attractiveness of retail lending
17
A NETWORK (NOT A PATCHWORK) OF SEVEN MULTIBUSINESS
NATIONAL BANKS
STRATEGY
GOVERNANCE
IT SYSTEMS
ORGANIZATION
PRODUCT SHELF
RISK SYSTEMS
18
HR SYSTEMS & TRAINING
OUR VISION FOR NEW EUROPE CROSS BORDER BANKING ...
In 2006 the New Europe Division will be composed by
a network (not a patchwork) of twin banks run by
strong local management teams …
… driven by the same strategy, leveraging on the
same business and organisation model, the same
products and the same processes with strong central
guidance …
… but also capable to adjust to the local differences
(cultures, legacies, stages of lifecycle, regulations) …
… so as to become one of the first successful crossborder retail banks …
… striking the right balance between “McDonald
banking” and “Boutique banking”
19
STRATEGY
… WITH A COMMON STRATEGY BY SEGMENT FOCUSED
ON THE MOST ATTRACTIVE ONES …
2002 Total Number 6,000
of customers (‘000)
2005 market revenue pool size = 500 Mln Euro
Segment
Strategy
Market revenues growth (CAGR ’01-’05, %)
20%
Private
15%
Large
Corporate
5
Selective development,
fee-driven
Mid
corporate
42
Specialised service model
Private
14
Highly differentiated
service model
Affluent/
Small
Business
900
Specialised service model
5,000
Cost focus
Cross selling
(bancassurance, mortgage,
credit cards)
Affluent
Small
Business
10%
Mid
Mass
5%
0%
Large
20%
40%
60%
80%
100%
120%
140%
160%
Mass
2005 Net profitability (ROE , %)
Source: UCI’s analysis at a constant exchange rate
20
Number of customers (‘000), excluding dormant customers (KFS is included at 100%)
... AND WITH SOME DIFFERENCES LINKED, INTER ALIA, TO
ECONOMIC LIFECYCLE OF COUNTRIES AND STARTING
POSITION
Early
Markets
Starting
Point
(mkt share)
STRATEGY
Advanced
Markets
ZABA
BULBANK
Clear
Leaders
PEKAO
KFS
ZIVNO
Rising
Leaders
UCR
UNIBANKA
Economic Life Cycle (GDP per capita)
21
GOVERNANCE
COMMON GOVERNANCE: ROLES OF GOVERNANCE
BODIES
SUPERVISORY BOARD
MANAGEMENT BOARD




Defines key strategic guidelines
Approves budget and development plan
Appoints Top Management
Controls overall operations and
performance
 Decides on key issues proposed by
Management Board
Manages the bank deciding key issues,
evaluating projects, strategies and
development plans
AUDIT COMMITTEE
Monitors/controls overall activity at Bank
level
MONITORING CYCLE
 Financial monthly monitoring of
performance for overall Bank and by
segments with quarterly monitoring of
Credit TdB and Market Risk TdB
 Commercial periodic performance review by
segments and sub segments
 Highlights performance gaps suggesting
actions for improvement
 Benchmark activities
PROJECT COMMITTEE
 Steers integration process in its different
phases
 Ensures adequate knowledge transfer (from
UCI Group, Division and other NE Banks)
 Reviews or steers Bank’s strategic projects
(100 in the 7 banks in 2003)
 Implementation progress
 Results achieved
22
PRODUCT
SHELF
COMMON ADVANCED PRODUCT SHELF AND
JOINT FACTORIES
RETAIL
Banks that have
full availability(1)
CORPORATE
Mortgage
6
FX/Basic Derivatives
7
Mutual Funds
6
Cash Management/E-banking
7
Bancassurance
5
Leasing
6
Package for Current Account
4
5
Pension Funds
4
SB Package
3
Factoring
Advanced Derivatives
(CorporateLab)
Revolving Credit Card
3
3
Structured Products
NEW EUROPE FACTORIES
 Asset Management
 TradingLab
 Card Processing
 CorporateLab
 Leasing
23
(1)
Banks that have
full availability(1)
As of May, 31 2003
2
ORGANISATION
BENCHMARK ORGANISATION AND SERVICE MODELS
 Pekao
 UniBanka
 UCR
Segment
dedicated
Corners/
Points of Sale1
Specialised
Account
Managers/
Hunters/ Sales
People
FULLY
DIVISIONALIZED
CEOs/COOs
 Zaba
 KFS
 Bulbank
 Zivno
DIVISIONALISATION
IN PROGRESS
Corporate
Banking
Division
Private
Banking
Division
SB/Affluent
Division
Family
Banking
Division
109
30
248
1,012
Other2
623
47
1,259
2,590
TOTAL FRONTLINE: 18,500
 Pekao: 12,000
 UniBanka: 480
 UCR: 175
1
 Zaba: 2,900
 Bulbank: 1,190
Excluding KFS and Zivno
2 KFS (100%), Zivnostenska and other non segment dedicated sales-force
24
 KFS: 1,470
 Zivno: 310
1,718
ORGANISATION
BENCHMARK ORGANISATION AND SERVICE MODELS
DIFFERENT STAGES OF COMPLETION IN KEY
AREAS
 MISSION OF TREASURY
 Limited proprietary portfolio
 Focus on commercial activities
on behalf of customers
 OUTSOURCING
 Maintenance and building
BENCHMARKING
AND
IMPLEMENTATION
OF BEST PRACTICE
BUSINESS MODEL
 Security
 Cash handling
 Management of mailings
…
 PURCHASING CENTRALIZATION
 KEY OPERATING PROCEDURES
 Credit underwriting
 Budgeting/strategic planning
 Antimoney laundering
…
 BRANCH MODEL
 BACK-OFFICE ORGANIZATION
25
IT SYSTEMS
SAME TARGET IT SYSTEMS AND APPLICATIONS
IT POLICY IS BASED ON:
 Development of homogeneous
target systems for strategic
application areas (Credit, MIS/CRM,
Sales Force management,
architecture, facility management),
IT STRATEGIC FOR:
 Revenues boost
 Cost of risk
 Operating risk
 Operating costs
with tailored approach for
language, regulations and
legacies
 Reliance on standardized/already
tested IT solutions and
applications (minimise proprietary
development; decrease cost/elapsed
time)
 Reduce Operative Risks (Disaster
recovery/Business continuity solution;
anti money laundering)
 Improve time to market through a
centralized development
approach
26
 “CLONE” IT
SYSTEMS
 “CLONE”
APPLICATIONS
SAME TARGET RISK SYSTEMS AND PROCEDURE,
BY THE END OF 2004 IN ALL BANKS
Underwriting
1.
Corporate
2.
Electronic
underwriting
tool
Credit rating
system
Management
Workout
4. Credit
management
system
Cross-bank project
8. New credit
corporate
governance
6. Workout Unit
9. Credit Tableau de
Bord
5. Anomalies
management
system
Small
Businesses
RISK SYSTEMS
3. Application
processing
system
7. Collection
system
Retail
27
10. Credit Academy
(1,200 credit
officers, 1,000 risk
managers)
COMMON HR SYSTEMS AND TRAININGS
HR SYSTEMS
AND TRAINING
 Increase quality of first line managers
 Develop second line talent pools, also via cross-border experiences
 Develop the best performing commercial networks
 top quality of branch managers and relationship managers (assessment centres /
substitution)
 training to pivotal positions and to local trainers
 Develop best risk manager skills in the region
 quality of credit officers and relationship managers
 training to credit officers and to local trainers
 Rejuvenating staff
 turnover higher than “natural pace” to change mix and quality of resources
 strong focus in selecting junior with high potential and internally train/grow them
 Creation of NE Banking Academy for local trainers, senior management and
pivotal jobs
 Creation of NE Banking MBA
28
UCI’S NEW EUROPE STRATEGY BASED ON A CONSISTENT NEW
EUROPE BUSINESS MODEL BOTH BY INTEGRATION OF ITS KEY
COMPONENTS ...
STRATEGY
GOVERNANCE
IT SYSTEMS
ORGANIZATION
PRODUCT SHELF
RISK SYSTEMS
29
HR SYSTEMS & TRAINING
... AND BY APPROPRIATE ADJUSTMENT OF THE NEW EUROPE
BUSINESS MODEL TO THE LOCAL ENVIRONMENTS
30
AGENDA
New Europe: Why and How
Recent Results
Strategy and Business Model
Three Year Plan: the Targets
Conclusions
31
NEW EUROPE DIVISION: STRATEGIC OBJECTIVES 2003-2006
 Clear N.1 Banking Group in New Europe for profitability, value creation, cost/income and
for AUM (double digit market share)
 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
 Future growth driven mainly by organic growth (with some potential acquisitions)
 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
 Possible completion of geographic coverage in New Europe, also leveraging on
“managerial hubs” (eg. Zaba, Pekao)
32
OUR 2006 FINANCIAL TARGETS
ROAE %
ROAA %
20.7
2.0
EVA
(Euro mln)
221
461
2002
13.44
2002
2006
RARORAC %
12.1
Avg. Cost of Equity
%
14.2 14.6
11.9
2002
(Euro mln)
2006
Euro 14 mln including KFS and Zivno (2006 perimeter)
2 1.2% including KFS and Zivno (2006 perimeter)
3 Euro 1,168 mln including KFS and Zivno (2006 perimeter)
9363
33
4
2002
2006
Tier 1 Ratio %
17.2
2006
1,832
2002
1
2006
Avg. Allocated
Capital
4.92
2002
1.25
2002
14.2
2006
Forward CoE
taking into
account EU
convergence
2006
14.9% excluding KFS and Zivno (2002
historical perimeter)
5 1.4% excluding KFS and Zivno (2002
historical perimeter)
OUR 2006 COMMERCIAL PERFORMANCE TARGETS
VOLUMES (eop) CAGR 02-06
Gross Loans/Deposits
58.4%1
Gross
Loans
Deposits
AuM
14.8%
8.7%
44.0%
REVENUES CAGR 02-06
2002
7.0
6.0
Retail
Corporate
11.3%
17.7%
Net Interest Income /Avg.
Assets
3.6%
other
2002
15%
20%
2002
2006
Branches2
golden
Front Office Staff/
Tot. Staff2
3.9%
1,3323
1
2006
Active Customers2 (mln)
REVENUES
CAGR 02-06: +8.8%
72.7%
2006
55.7% excluding KFS and Zivno (2002 historical perimeter)
2 KFS is included at 100%
3 1,184 excluding KFS and Zivno (2002 historical perimeter)
2002
34
1,628
2006
2002 pro -forma, consistent with 2006
perimeter (including Zivno and KFS)
At current FX
60%
2002
67%
2006
OUR 2006 COST TARGETS
COST/INCOME
51.6%1
Operating Costs
CAGR 02-06:
45.2%
5.3%
Employees5
31,0064
28,188
Staff Costs
2002
2006
CAGR 02-06:
2.8%
2002
Other costs3
DECREASING COST OF RISK:
Net Provisions/
Net Loans (bp)
1892
CAGR 02-06:
158
Depreciation
CAGR 02-06:
2002
1
2
3
4
6.1%
11.7%
2006
35
49.5% excluding KFS and Zivno (2002 historical perimeter)
335 bp including the impact of 2002 extraordinary provisions (Euro 168 mln)
Including deposits insurance and indirect taxes
26,531 excluding KFS and Zivno (2002 historical perimeter)
2002 pro -forma, consistent with 2006
perimeter (including Zivno and KFS)
5
KFS 100%
At current FX
2006
AGENDA
New Europe: Why and How
Recent Results
Strategy and Business Model
Three Year Plan: the Targets
Conclusions
36
UCI’S NEW EUROPE CHALLENGE: THE KEY POINTS WE HOPE WILL
COME ACROSS
 By and large the New Europe region will allow good growth for
the banking activity
 Developing this opportunity requires to forge and implement
one of the first examples of truly cross border retail banking where we need to strike the right balance between “McDonaldbanking” and tailor-made “Boutique banking”
 Are we succeeding? We think so. “Industrial” progresses are
evident, financial results are positive. Poland’s environment
could be much better - but maybe there we’ve just hit the rock
bottom
37