UniCredit Group CEE Strategic Analysis
Vienna, November 9, 2009

2
Executive Summary 1
 World economic growth is recovering and this boosts prospects in CEE 2010 will show a positive regional growth, though this will remain below potential and subject to risks
 Strong regional differentiation is confirmed , with Central Europe better prepared to catch the international recovery. The performance of different banks in the same market can widely differ
 Markets are out of a “liquidity-crisis mood” – credit quality and risk appetite are today’s key constraints for CEE banking
 Medium term: “CEE convergence story” holds, but the banking model has to be rebalanced
 Financial penetration will continue, but the pace of growth will moderate, with availability of funding (domestic or external) the main driver
 Changing competition allows for leaner structure of costs
 Cost of risk to stay high, representing a constraint for banking profitability

3
Executive Summary 2
 The changing competitive environment means also opportunities
 All CEE players have been affected by the crisis – access to funding, credit quality, business/network diversification and strength the determinants of future success
 New entrants might take opportunities
 Winners – new entrants or consolidated players, with appropriate risk appetite for CEE, able to leverage on strong funding, capital and network positioning and sound risk
 UCG ready to take the upside – the Group can leverage on diversification, a strong regional network and newly raised capital to strengthen and optimize its positioning in the market

4
AGENDA
1.
How the CEE banking landscape has changed in the short term
2.
Banking through the crisis
3.
International players - UniCredit ready to take the upside

5
Signs of recovery: still 2010 implies growth below potential and countries confirm to be very different
Country
Rank
Low macro vulnerability
1 2 3 4 5
CZ
SI
HR
PL
SK
HU
BH
High macro vulnerability
Baltics
RO
BG
Ukraine
Russia
Turkey
Real GDP growth (%)
Poland
Hungary
Czech Rep.
Slovakia
Slovenia
Lithuania
Latvia
Estonia
Romania
KZ
Bulgaria
Croatia
Bosnia-H.
Serbia
Turkey
Ukraine
Russia
Kazakhstan
CEE-17
Note: (1) CEE-17: Poland, Hungary, Czech R., Slovakia, Slovenia, Lithuania, Latvia, Estonia, Romania, Bulgaria, Croatia,
Bosnia-H, Serbia, Turkey, Ukraine, Russia and Kazakhstan
Source: UniCredit Group CEE Strategic Analysis, CEE Research
-6.3
-6.2
-3.0
-4.8
-5.2
-13.5
-7.4
-1.6
-5.8
2009
1.4
-6.1
-4.2
-5.4
-8.0
-17.0
-16.3
-15.3
-7.5
-2.5
-1.5
-1.0
-0.7
3.2
1.7
1.3
2.5
1.4
2010
1.8
-0.6
1.4
2.1
0.5
-7.0
-5.4
-3.8
0.4
2.0
1.2
0.8
1.3
4.5
3.3
4.1
5.0
3.7
2011
2.6
2.4
3.5
3.5
1.4
4.4
6.0
5.1
3.5

6
Drivers of growth differ among countries. Recovery comes from the production sector, but both investment and consumption remain subdued
Investments
(real % growth)
Consumption
(real % growth)
2011
2010
2009
2008 -6.9
-1.7
3.7
CE
2011
2010
2009
2008
4.4
1.9
0.6
0.1
4.1
CE
2.3
2.2
-12.8
-2.5
14.1
SEE
-8.3
-0.9
5.1
SEE
2.3
2.3
-33.2
-6.0
-9.2
Baltics
-19.8
-6.0
-2.2
Baltics
-18.4
5.6
3.6
4.1
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
Other
-30.0
-20.0
-8.2
-10.0
0.0
2.7
6.7
Other
8.2
10.0
Source: UniCredit Group CEE Research

7
Out of a
“liquidity-crisis mood”, but funding availability and cost remain a constraint for CEE banking
CEE external liabilities (1)
€ bn
450 Volumes (l.s.)
% on total liab. (r.s.)
400
350
300
250
200
150
100
50
0
2005 2006 2007
Country Risk Premium
5Y CDS (USD, bp)
1,000
Dec 08
October 28, 2009
750
500
250
0
2008 2009F
5%
0%
25%
20%
15%
10%
3,274 1,168
Banking sector external liabilities
(% on total liabilities, June 2009)
Slovakia
Czech Rep.
Turkey
Russia
Serbia
Poland
Croatia
Bulgaria
Ukraine
Romania
Bosnia
Slovenia
Hungary
Kazakhstan
Lithuania
Estonia
Latvia
3.5%
8.5%
10.5%
16.0%
17.4%
18.7%
21.5%
23.8%
26.8%
27.2%
29.5%
30.3%
31.0%
32.7%
44.6%
52.5%
53.9%
(1) CEE-17
Source: UniCredit Group CEE Strategic Analysis

8
Banks are rebalancing the loans/deposits gap
Loan-to-deposits ratio
(banking system level, %)
Dec-08 Jun-09
CEE
112
Poland
Hungary
Czech R.
Slovakia
Slovenia
71
107
132
83
141
Estonia
Latvia
Lithuania
Bulgaria
Romania
Croatia
Bosnia-H.
Serbia
Turkey
Ukraine
Russia
Kazakhstan
125
122
127
124
141
195
240
185
80
120
166
223
Total banking system Loans
Bulgaria
Romania
Croatia
Bosnia-H.
Serbia
Turkey
Ukraine
Russia
Kazakhstan
CEE
Poland
Hungary
Czech R.
Slovakia
Slovenia
Estonia
Latvia
Lithuania
-0.2
3.1
-2.4
1.4
1.0
1.6
-1.4
-3.5
-5.2
1.5
-3.0
-0.4
3.3
10.6
-0.1
-0.8
-1.2
0.2
(1
)
(June 09 vs Dec 08 % change FX adj)
Total banking system deposits
(June 09 vs Dec 08 % change FX adj)
CEE
Poland
Hungary
Czech R.
Slovakia
Slovenia
Estonia
Latvia
Lithuania
Bulgaria
Romania
Croatia
Bosnia-H.
Serbia
Turkey
Ukraine
Russia
Kazakhstan
-6.1
-8.8
0.6
-0.9
0.4
-2.3
-2.2
0.0
1.7
6.7
2.4
5.5
6.8
3.7
4.8
5.5
7.3
11.5
Notes: (1) Nominal growth rates are corrected for the exchange rate changes weighted by the relevance of FX in loans' volumes in the previous period.
This allows to have an idea of growth of loans and deposit which is independent from the pure effect of depreciation of the currency
Source: UniCredit Group CEE Strategic Analysis
(1 )

9
Deterioration in credit quality is today’s challenge
Non-performing loans ratio (total banking system, in % of gross loans) (1
)
Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 YTD
Central Europe
Poland
Hungary
Czech R.
Slovakia
Slovenia
Baltics
SEE
Bulgaria
Romania
Croatia
Other
Turkey
Ukraine
Russia
Kazakhstan
4.5
3.8
2.7
2.9
-
1.5
2.7
4.6
4.8
3.0
-
9.0
7.4
4.1
4.1
3.0
2.9
-
1.8
2.8
5.1
4.8
3.0
-
8.9
7.5
4.2
4.5
3.3
3.2
2.9
2.4
3.2
6.3
4.8
3.5
17.4
12.7
10.8
5.0
5.2
3.7
3.5
-
4.0
3.2
9.1
5.1
4.1
-
13.9
16.2
6.0
6.5
4.3
4.2
11.3
-
6.2
4.4
-
4.6
29.9
16.0
26.1
176bp
196bp
103bp
103bp
379bp
114bp
497bp
-
-
113bp
1250bp
330bp
1533bp
(1) Incl. loans classified under substandard, doubtful and loss categories; in Ukraine, data refer to problem credits
(overdue and doubtful); in Kazakhstan, data refer to doubtful loans under category 2,4,5 and bad loans; in
Romania, data refer to loans classified under doubtful and loss categories
Source: UniCredit Group CEE Strategic Analysis, local CBs

10
AGENDA
1.
How the CEE banking landscape has changed in the short term
2.
Banking through the crisis
3.
International players - UniCredit ready to take the upside

11
The long term potential of the CEE region is intact
Real income convergence in CEE (1) Financial deepening process
(% of GDP and PPS in dollar terms)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
GDP per capita (PPP) % of Eurozone
800
600
Western Europe
400
200
CEE
0
5,000 15,000 25,000 35,000 45,000
GDP per capita
The story of economic and income convergence towards the standards of Western countries, as well as the potential related to the banking sector penetration gap, continue to hold
(1) CEE incl. new EU member states, Croatia and Turkey; calculation based on GDP per capita expressed in dollar terms
Source: UniCredit Group CEE Strategic Analysis, IMF, ECB

12
CEE banking - the medium-term scenario implies new constraints and new competitive advantages
KEY CONSTRAINTS
More balance growth model – still with external funding
KEY COMPETITIVE ADVANTAGES

Lending tied to funding strategies, but external funding still necessary
 Strong advantage for banks with a widespread network and/or strong and motivated foreign owner
More moderate “convergence”
Change in demand
– simpler products / services
Cost control
Risk appetite and cost of risk
Substantial change in the competitive framework
 Retail network crucial for deposit gathering
 Lending growth to re-start from corporate
 In retail, a structural gap holds for mortgage, while consumer credit already at international standards
In the short term, less retail lending and less investment financing. More trade financing and in general services
The crisis opening the way to leaner structures and deflating “bubbles” in staff and network costs
Quality of existing loan portfolio key in determining whether banks will be forced to concentrate on risk control or might start leveraging on new opportunities
■ Stronger state role
■ New entrants profiting from others’ risk aversion
■ Systemic banks with long term approach might benefit, provided adequate risk appetite

13
Financial penetration moderating but continuing; credit expansion more tied to deposits’ growth
After some re-balancing in 2009 and H1 2010 loan-to-deposits ratio in CEE 1 to gradually increase over time
140
EMU Loans (%GDP): 127
EMU Deposits (% GDP): 107
120
100
80
Our forecast
60
40
20
0
2005 2006 2007
CEE Loans (% GDP)
2008 2009 2010
CEE Deposits (% GDP)
2011 2012 2013 2014 2015
CEE Loan-to-deposits ratio (%)
(1) CEE aggregate including all EU member states, Bosnia, Serbia, Croatia, Turkey, Russia, Ukraine and Kazakhstan
Source: UniCredit Group CEE Strategic Analysis

A structural change in the cost structure
Cost-to-income ratio (%) (1)
60
55
50
45
CE
Baltics
40
2005 2007 2009 2011
SEE
Broader Europe
 Cost savings programmes coming into the spotlight
 Branch expansion plans halted during the crisis by almost all banking groups operating in the region
 Players who want to catch the region’s upside need to restart some investment activities as soon as market conditions allow
2013 2015
15
(1) CE: Czech R., Hungary, Poland, Slovakia, Slovenia; SEE: Bosnia, Bulgaria, Croatia, Romania, Serbia; Other: Kazakhstan, Russia, Ukraine, Turkey
Source: UniCredit Group CEE Strategic Analysis

Non-performing loans to peak in 2010, but cost of risk already converging
Non performing loans, in % of gross loans (1),(2)
23%
20%
CE
SEE
Baltics
Other
18%
15%
13%
10%
8%
5%
3%
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Cost of Risk (provisions (3) in % Ø gross loans) (2)
8%
7%
CE
SEE
Baltics
Other
6%
5%
4%
3%
2%
1%
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
16
(1) Substandard, doubtful and loss on average gross loans; in Ukraine, data refer to problem credits (overdue and doubtful); in Kazakhstan, data refer to doubtful loans under category 2,4,5 and bad loans; in Romania, only doubtful and loss; (2) CE: Czech R., Hungary, Poland, Slovakia, Slovenia; SEE: Bosnia, Bulgaria,
Croatia, Romania, Serbia; Other: Kazakhstan, Russia, Ukraine, Turkey; (3) Generic + Specific provisions. Source: UniCredit Group CEE Strategic Analysis

18
Banking profitability subdued in the short term as cost of risk is the main cause. Single players can perform quite differently from the market
Return on Assets
3.0%
TK
2.5%
Russia
2.0%
SEE
1.5%
CE
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
Central Europe
SEE
Turkey
Russia
UA and KZ
Baltics avg 2007-'08
-2.0%
SEE
CE
2009
TK
Russia
Baltics
UA and KZ
TK
CE
Baltics
UA and KZ avg 2010-'11
Size of banking profits of each period
TK
UA and KZ
SEE
Russia
Baltics avg 2011-'15
Source: UniCredit Group CEE Strategic Analysis

19
AGENDA
1.
How the CEE banking landscape has changed in the short term
2.
Banking through the crisis
3.
International players - UniCredit ready to take the upside

20
UniCredit Group is the largest player in CEE, well diversified, with 12% of group assets in the region
DATA AS OF
2008
Total Assets (1)
EUR bn
Net Profit (2)
EUR mn
Number of
Branches
Countries of presence (3)
CEE, % share in
Group Assets
UniCredit 53% 121.6
2,577 4,005 19
12
Raiffeisen
2051% 85.4
1,078 3,231
16 54
Erste 157%
79.3
1,569 2,099 7 39
KBC 112%
(4)
71.6
309 1,940
12 20
SocGen
(5)
41%
65.9
1,201 2,609 16
6
IntesaSP
5%
42.5
186 1,781 11 7
OTP n.s.
35.2
958 1,573 9
100
..%
Contribution of CEE in Group Net Profit (After tax, after minority interests)
Notes: (1) 100% of total assets, and profit after tax (before minority interests) for controlled companies (stake > 50%) and pro rata for non- controlled companies (stake < 50%). (2) After tax, before minority interest. (3) Including direct and indirect presence in the 25 CEE countries, excluding representative offices. (4) KBC Group recorded a loss in 2008. (5) SocGen including
ProFin Bank in Ukraine.
Source: UniCredit Group CEE Strategic Analysis

Winners and losers - times of change bring strong opportunities for those able to catch them
21
Source: UniCredit Group CEE Strategic Analysis

22
Winners to be those who enjoy an adequate risk appetite and can leverage on diversification and strong funding and network base
CEE International players - Key strategic drivers (1)
UCG
Raiffeisen
Intl
Erste KBC SoGen Intesa OTP
Profit potential of top players (2), (3)
Assets in CEE, % of Group Assets
12 54 39 20 6 7 100
Group T1 Ratio (4) , % 8.5
8.9
8.1
10.8
9.9
8.1
12
CEE Loans
Deposits, %
(5) /
CEE GAP (6) , %
Group Assets
Group CDS
(current), bps
118
1.5
81
127 95 98
10.1
3.8
1.4
248 128 157
96
0.5
1.1
14.2
84
118
47
129
-
CEE Cost of Risk, bps
~ 200 > 300 ~ 200 n.a.
n.a.
~ 200 (7) > 300
Note: (1) T1 ratio is pro-forma Jun. 2009; CDS as of Oct. 2009, Cost of Risk as of Jun.2009, other data as of Dec. 2008; (2) ROA and CDS for each player have been calculated as weighted average of each country of presence (CEE17 perimeter, weighted for total assets of the player in each market); (3) The dimension of the balls is total controlled assets in CEE (2008); (4) It includes private and public T1 injections announced till mid October 2009; (5) Net loans; (6) CEE gap = sum of various (loans-deposits) only if loans > deposits. Loans are net loans; (7) Calculated for "International Subsidiary Banks", which include also Bank of Alexandria in Egypt
Source: UniCredit Group CEE Strategic Analysis, Bloomberg

23
Good market potential in 2010: UCG well positioned to catch it
CEE REGION: ASSESSMENT OF COUNTRY AND BANK POTENTIALS (1 )
Czech R.
Slovakia
Slovenia
Serbia
Kazakhstan
Russia Turkey Poland
Romania
Hungary
Croatia
Bosnia-H.
Bulgaria
~56% of UCG
CEE Revenues
~79% of UCG
CEE Revenues
Ukraine
Weight in total UCG
CEE Revenues (full year 2008&H1 2009 quarterly average)
Baltics low high
UCG Banks positioning
Note: (1) Ranking on Y axis taking into account countries’ macro and banking growth potential (based on expected GDP growth, level of financial deepening, relevance of mortgage market etc.) and risk factors (credit quality, funding gap etc.); ranking on X axis taking into account relevance of UCG CEE banks in the local market, potential for expansion and structure, quality and funding position compared to market average. Source: UniCredit Group CEE Strategic Analysis

Local competition likely to change: network optimization, some new entrants, state in CIS countries
Top 10 banks by total assets (Rank as of Dec.2008)
24 Source: UniCredit Group CEE Strategic Analysis

25
Conclusions
 Economic recovery, but risk and volatility remain. Strong regional differentiation is confirmed
 Credit quality and risk appetite today’s key constraints for CEE banking
 Medium term: “CEE convergence story” holds, but the banking model has to be rebalanced
 The changing competitive environment means also opportunities
 Winners – new entrants or consolidated players, with appropriate risk appetite for CEE, able to leverage on strong funding position
(both through a strong domestic network or through international channels) and with sound risk
 UCG ready to take the upside – can leverage on diversification, strong regional network and newly raised capital to strengthen and optimize its positioning in the market