1999 UniCredito Italiano Consolidated Accounts ITALIAN STOCK COMPANY REGISTERED OFFICE: GENOA, VIA DANTE, 1 GENERAL MANAGEMENT: MILAN, PIAZZA CORDUSIO CAPITAL STOCK OF LIT: 2,488,085,929,000 FULLY PAID IN BANK ENTERED IN THE REGISTER OF BANKS AND PARENT COMPANY OF THE UNICREDITO ITALIANO BANKING GROUP BANKINGS GROUPS’ NO. 2008.1 GENOA TRADE AND COMPANIES REGISTER: NO. 22 (COURT OF GENOA) TAX CODE AND VAT REG. NO: 00348170101 MEMBER OF THE INTERBANK DEPOSIT PROTECTION FUND 1 Introduction Report on Operations Accounts and Annexes Board of Directors, Board of Auditors and The Group’s Activities Consolidated Accounts External Auditors Group Map Operating Performance Comparative Accounts Major Equity Key Financial Investments Information (Performance and Notes to the Accounts Results for the Period) Key Balance Sheet and Profit and Loss Account Figures (Broken Down Breakdown of the Major Annexes by Major Banks and Equity Investments Similar Business Activities) Information Regarding the “Year 2000 Issue” Subsequent Events and Outlook 2 Contents Report in Euros Reports Organisation by Geographical Area Branches in Italy and Key Financial Report of the Abroad (Parent Information External Auditors Company) Key Balance Sheet and Profit and Loss Account Figures (Broken Down Supplemental Report of Organisation by by Major Banks and the Board of Directors Geographical Area of Similar Business the Major Subsidiary Activities) Banks Reclassified Consolidated Profit and Re-issue of the Report of Loss Account the External Auditors Reclassified Consolidated Balance Sheet Commentary on the Profit and Loss Account Figures Commentary on the Balance Sheet Figures Shareholders’ Equity ROE (Return on Equity) Capital for Regulatory Purposes Ratings Consolidated Accounts in Euros Comparative Accounts in Euros 3 7 Introduction 9 Board of Directors, Board of Auditors and External Auditors 10 Group Map 12 Key Financial Information 12 Consolidated Balance Sheet 12 Consolidated Profit and Loss Account 13 Consolidated Staff and Branch Information 13 Key Financial Ratios and Other Information 14 Key Balance Sheet and Profit and Loss Account Figures (Broken Down by Major Banks and Similar Business Activities) 14 Consolidated Balance Sheet 14 Consolidated Profit and Loss Account 14 Consolidated Staff and Branch Information 17 Report on Operations 18 The Group’s Activities 18 Introduction 19 Summary 20 Commercial Activities 21 Retail Market 22 Corporate Market 23 Guarding Against Credit Risk 23 Credit Risks 24 Market Risks 24 Liquidity Gap analysis 25 The Organisational Evolution of the Group 29 The Basis of Consolidation 32 Operating Performance 33 Reclassified Consolidated Balance Sheet 35 Reclassified Consolidated Profit and Loss Account 36 Commentary on the Balance Sheet Figures 36 Loans 39 Doubtful Loans 46 Securities 49 Equity Investments 50 Amounts Due 57 Indirect Deposits and Volume of Assets in Administration 59 Commentary on Profit and Loss Figures 60 Net Interest Income 62 Revenue from Services and Other Sources 66 Total Revenues 67 Administrative Expenses 68 Adjustments to the Value of Intangible and Tangible Fixed Assets (Ordinary) 69 Analysis of Net Income for the Period 69 Operating Income 70 Analysis of Net Income for the Period 71 Reconciliation of Parent Company Net Income with Consolidated Net Income 72 Net Income for the Period and Shareholders’ Equity 74 ROE (Return on Equity) 74 Ratings 75 Shareholders’ Equity, Capital Ratios and Capital for Regulatory Purposes 77 The Workforce and Operating Structure 81 Major Equity Investments (Performance and Results for the Period) 82 Rolo Banca 1473 S.p. A. 96 Banca CRT S.p.A. 112 Cariverona Banca S.p.A. 128 Cassamarca S.p.A. 142 Caritro S.p.A. 156 Bank Pekao S.A. 166 Other Group Companies 185 Breakdown of the Major Equity Investments 187 Information Regarding the “Year 2000 Issue” 188 Subsequent Events and Outlook 191 Accounts and Annexes 192 Consolidated Accounts 192 Consolidated Balance Sheet 195 Consolidated Profit and Loss Account 4 196 Comparative Accounts 196 Consolidated Balance Sheet (Comparison of Figures) 199 Consolidated Profit and Loss Account (Comparison of Figures) 201 Notes to the Accounts 202 Consolidation Principles and Criteria 204 Part A) Valuation Criteria 212 Part B) Notes to the Consolidated Balance Sheet 257 Part C) Notes to the Consolidated Profit and Loss Account 268 Part D) Other Information 270 Annexes 272 Determination of Pro-Forma Balance Sheet as at 31 December 1998 275 Determination of Pro-Forma Profit and Loss Account as at 31 December 1998 276 1999 Accounts Balance Sheet Figures (Broken Down by Major Banks and Similar Business Activities) 278 1999 Accounts Profit and Loss Account Figures (Broken Down by Major Banks and Similar Business Activities) 280 Statement of Balance Sheet and Profit and Loss Account Figures Regarding Key Equity Investments (as described in 3.1 of the Notes to the Accounts) Regarding Balance Sheets as at 31/12/1999 306 Composition of Item 70 “Equity Investments” as at 31 December 1999 315 Composition of Item 80 “Equity Investments in Group Companies” as at 31 December 1999 317 Statement of Assets and Liabilities Positions with Group Companies as at 31 December 1999 318 Statement of Assets and Liabilities Positions with Subsidiaries (Significant Equity Investments – Not Group Companies) as at 31 December 1999 321 Report in Euros 322 Key Financial Information 322 Consolidated Profit and Loss Account 322 Consolidated Balance Sheet 323 Consolidated Staff and Branch Information 323 Key Financial Ratios and Other Information 324 Key Balance Sheet and Profit and Loss Account Figures (Broken Down by Major Banks and Similar Business Activities) 324 Consolidated Balance Sheet 324 Consolidated Profit and Loss Account 324 Consolidated Staff and Branch Information 326 Reclassified Consolidated Profit and Loss Account 327 Reclassified Consolidated Balance Sheet 328 Commentary on the Profit and Loss Account Figures 328 Net Interest Income 329 Revenue from Services and Other Sources 331 Administrative Expenses 333 Extraordinary Income and Charges 334 Commentary on the Balance Sheet Figures 334 Loans to Customers 335 Doubtful Loans 336 Market shares 337 Deposits from Customers and Securities Issued 338 Market Share of Funding from Customers 338 Securities Portfolio 338 Interbank Position 339 Direct and Indirect Deposits 339 Assets Under Management 339 Bancassurance 340 Shareholders’ Equity 341 ROE (Return on Equity) 342 Capital for Regulatory Purposes 343 Ratings 344 Consolidated Accounts in Euros 344 Consolidated Balance Sheet as at 31 December 1999 346 Consolidated Profit and Loss Account as at 31 December 1999 348 Comparative Accounts in Euros 348 Consolidated Balance Sheet 350 Consolidated Profit and Loss Account 353 Reports 355 Report of the External Auditors 359 Supplemental Report of the Board of Directors 363 Re-issue of the Report of the External Auditors 367 Organisation by Geographical Area 368 Branches in Italy and Abroad (Parent Company) 370 Organisation by Geographical Area of Major Subsidiary Banks 5 Introduction Report on Operations Accounts and Annexes Board of Directors, Board of Auditors and External Auditors Group Map Key Financial Information Consolidated Balance Sheet Consolidated Profit and Loss Account Consolidated Staff and Branch Information Key Financial Ratios and Other Information Key Balance Sheet and Profit and Loss Account Figures (Broken Down by Major Banks and Similar Business Consolidated Balance Sheet Activities) Consolidated Profit and Loss Account Consolidated Staff and Branch Information 6 Introduction Report in Euros Reports Organisation by Geographical Area 7 Board of Directors, Board of Auditors and External Auditors Group Map Key Financial Information Key Balance Sheet and Profit and Loss Account Figures (Broken Down by Major Banks and Similar Business Activities) 8 Introduction Report on Operations Accounts and Annexes Board of Directors, Board of Auditors and External Auditors Board of Directors LUCIO RONDELLI* Chairman PAOLO BIASI* Deputy Chairman (Vicarious) FABRIZIO PALENZONA* Deputy Chairman ALESSANDRO PROFUMO* Managing Director/CEO FRANCO BELLEI Directors ROBERTO BERTAZZONI* EUGENIO CAPONI MARIO CATTANEO PHILIPPE CITERNE CARLO DELAINI LEONARDO DEL VECCHIO DINO DE POLI* CANDIDO FOIS (1) FRANZO GRANDE STEVENS ACHILLE MARAMOTTI ANGELO MARCHIÒ* LUCA REMMERT GIOVANNI VACCARINO ANTHONY WYAND MARCO FANTAZZINI Secretary * Executive Committee Members (1) Co-opted at the meeting of the Board of Directors of 2 November 1999, and appointed by the Shareholders’ Meeting held in Genoa on 14 January 2000. Board of Auditors GIAN LUIGI FRANCARDO Chairman GIORGIO ARENA Designated Auditors GIORGIO LOLI ALDO MILANESE ROBERTO TIMO GIUSEPPE ARMENISE Reserve Auditors MARCELLO FERRARI External Auditors PRICEWATERHOUSE COOPERS S.p.A. 9 Report in Euros Reports Organisation by Geographical Area Group Map as at 31 December 1999 Companies consolidated using the line-by-line and proportional methods BANCA DI BERGAMO S.p.A. BANCA AGRICOLA COMM.LE S.MARINO S.A. COMEBA S.p.A. Head Office: Bergamo 86.14% Head Office: Borgo Maggiore (San Marino) Head Office: Milan 99.72% 36.60% BANCA CRT S.p.A. BANQUE MONEGASQUE DE GESTION S.A. CORDUSIO Società Fiduciaria per Azioni Head Office: Turin 100.00% Head Office: Monaco (Montecarlo) 100.00% Head Office: Milan 100.00% BANCA MEDIOCREDITO S.p.A. BANK PEKAO S.A. - GRUPA PEKAO S.A.(*) CREDIT CARIMONTE S.p.A. Head Office: Turin 62.42% Head Office: Warsaw 50.09% Head Office: Modena 51.00% CARIVERONA BANCA