UniCredit: consolidated results for first half 2007 approved

Ad-hoc-Meldung / Ad hoc Release
nach § 15 WpHG / pursuant to § 15 of the German Securities Trading Act

Consolidated results for first half 2007 approved
Net profit of € 3,607 million, an increase of 16,6% YoY
Operating profit rises 20.9% YoY to € 6,531 million


Today UniCredito Italiano (UniCredit)'s Board of Directors approved consolidated results for first half 2007 (1) which confirm the second quarter 2007 results announced and presented to the market on August 3, 2007.

The first half results show a net profit of €3,607 million (mn), an increase of 16.6% on the first six months of 2006.

The ROE (2) is 19.8% (compared to 19.0% in the first six months of 2006). EVA generated in the first half equals more than approximately €2 billion (€2,073 mn), +53% YoY.

The operating profit of €6,531 mn is up by an impressive 20.9% YoY. This performance is primarily attributable to the positive trend in revenues (+9.6% YoY) coupled with a decidedly limited increase in costs (+0.4%, +1.5% on a like-for-like foreign exchange and perimeter basis).

The Group's operating income reached €13,124 mn, +9.6% YoY (+10.7% YoY on a like-for-like foreign exchange and perimeter basis), generated by growth in both net interest income (€6,860 mn, +9.3% YoY, +10.2% on a like-for-like foreign exchange and perimeter basis) and in net non-interest income (€6,264 mn, +10% YoY, +11.2% on a like-for-like foreign exchange and perimeter basis).

Net interest forming part of net interest income grew by 8.8% YoY (+9.9% on a like-for-like foreign exchange and perimeter basis) to €6,425 mn thanks primarily to a rise in the volumes intermediated with customers and to an increase in market interest rates that benefited from the return on investment of proprietary funds. Customer rates, on both loans and deposits, increased less than market rates which had a positive effect on deposit spreads and a negative effect on loan spreads.

Net customer loans totaled €454 billion (bn) at June 2007 (+2.9% on the end of December 2006, +5.6% on the end of June 2006).

Customer deposits, excluding securities rose to €303 bn, confirming the growth trend with an increase of 5.3% when compared to the end of December 2006 and by more than 10% when compared to end of June 2006.

Net commissions, equal to €4,609 mn rose by 8.7% YoY (+10% YoY on a like-for-like foreign exchange and perimeter basis). The most dynamic components of this category were fees linked to segregated accounts (+41.8% YoY) and the placement of insurance products (+18.7% YoY). Overall commissions from asset management rose 9.5%, benefiting from both an increase in volumes and solid recovery in up-front and performance fees.

At the end of June 2007, in fact, volumes of the assets managed by the Group's asset management companies reached €256 bn, an increase of 4.1% when compared to the end of 2006 and of 9.8% on end of June 2006. Net inflows since the beginning of the year were positive at €3.7 bn, thanks to the contribution of all the markets where the Group is active.

Net trading, hedging and fair value income rose by 10.5% YoY to €1,389 mn and was influenced by the fair value valuation of the Generali option that had a positive impact of €78 mn. Net this effect, growth would have amounted to 4.6% YoY.

Operating costs (€6,593 mn, +0.4% YoY, +1.5% YoY on a like-for-like foreign exchange and perimeter basis) benefited from new Italian legislation related to termination of employment and the provisioning for pensions in Austria. Net the effects of these items, the costs grew by 4.4% YoY with an increase in staff costs (€3,861 mn) of 5.8% YoY primarily due to the variable component linked to business results (in particular in the MIB Division and in asset management).

Other administrative costs (€2,291 mn) grew by 5.1% YoY (+5.5% on a like-for-like foreign exchange and perimeter basis) due to the rapid and marked expansion of the CEE Division network (particularly in Russia) and to the outsourcing of certain back office functions.

Amortisation, depreciation and impairment losses on intangible and tangible assets (€576 mn) dropped by 5.4% YoY, (-4.3% on a like-for-like foreign exchange and perimeter basis).

The cost/income ratio rose by approximately 5 percentage points on the end of June 2006, reaching 50.2% at end of June 2007.

The provisions for risks and charges totaled €114 mn compared to €143 mn in first half 2006 (-20.3%), integration costs amounted to €35 mn compared to €52 mn in first half 2006 (-32.7%).

As regards to the trend in asset quality, the improvement, begun at the end of 2005, in the Group's net impaired loans (€12,342 mn) continued with a further reduction of 13.5% versus December 2006 thanks, in particular, to a decided drop in restructured loans. The most significant contributions were reported in Germany and Poland. The total impaired loans/net customer loans ratio fell from 3.23% at the end of 2006 to 2.72% at June 2007.

The coverage ratio of total impaired loans improved by more than four percentage points reaching 53.2% at June 2007 (compared to 48.9% at December 2006) and in terms of net non performing loans the ratio rose from 61.5% at year-end 2006 to 63.6%, testimony to the validity of the policies to improve risk control and coverage implemented by the Group, particularly outside the domestic market.

Profit before tax rose 16.6% YoY to €5,621 mn, despite the smaller contribution from net income from investments (€315 mn, -49.7% YoY).

Net profit attributable to the Group totaled €3,607 mn, an increase of 16.6% YoY.

The Group's portion of net equity amounted to €39,748 mn (€38,468 mn at the end of December 2006).

Core Tier 1 rose to 6.09%, an improvement of 27 pb on year-end 2006 (5.82%). Total Capital Ratio reached 10.49% at June 2007 (basically in line with December 2006).

At the end of June 2007, the Group's organisation consisted of a staff (3) of 135,880 (-1,317 heads when compared to December 2006). This total is the result of a combination of different factors: on the one hand, the reduction in personnel (-3,120 heads) due to efficiencies in the Corporate Centers, in the GBS, in the CEE countries (excluding Russia and Turkey), in the retail business, as well as the outsourcing of several operations, and the exit of companies from the Group; and on the other hand, an increase in resources (+1,803 heads) due to the inclusion of new companies in the perimeter of consolidation along with growth initiatives primarily in Russia and Turkey, in Retail Italia and in Corporate.

The Group's network consists of 7,486 branches (4) (+129 on December 2006).

With reference to occurrences which determined a crisis in the so-called "subprime" mortgages during July and August 2007, please note that UniCredit Group's exposure to the US-subprime market is negligible. In fact, UniCredit's balance sheet exposure to US-subprimes at the end of June was € 277 mn (mainly US Residential Mortgage Backed Securities, €127 mn, and Collateralized Debt Obligations, €139 mn, both with a very high asset quality).

Off-balance sheet - through conduits sponsored by HVB - UniCredit has a €28 mn exposure to US sub-prime mortgages. UniCredit Group has also invested €49 mn in third-party SIVs (Structured Investment Vehicles); the latter involve a partial exposure to US sub-prime mortgages.

Moreover, the overall exposure of Pioneer Investments' mutual funds is negligible both at a single fund level and overall, given the size, the types of instruments with sub-prime exposure and their weight on the NAV. The exposure amounts to € 13 mn.

Finally, we would like to underline that the total exposure of financial instruments held in custody or on segregated accounts invested in sub-prime mortgages may be considered immaterial.


Notes:

1) Since the close of FY 2006, the most significant changes in the scope of consolidation were principally due to the HVB Group, with the entry of 3 subsidiaries in the Retail Division (Planethome AG and its subsidiaries Planethome GmbH and Enderlein) and one Private Banking Division entity (Wealth Management Capital Holding GmbH), and the exit of Indexchange and HVB Payments & Services GmbH. Compared to H1 2006, further significant changes in the scope of consolidation referred to the sale of Splitska Banka on 30 June 2006, Uniriscossioni, 2S Banca and Banque Monégasque de Gestion. For comparison purposes, the condensed income statement also includes the change in individual items over Q2 and H1 2006, scope of consolidation and exchange rates used to translate subsidiaries' income statements being the same.. The main assets recognised as "Non-current assets and disposal groups classified as held for sale" under IFRS 5 in the balance sheet as at 30 June 2007 were "BPH200", the BPH business to be sold following the agreement with the Polish Authorities, and Istratourist, a subsidiary of Zagrebacka Banka operating in the holiday industry already recognised under this item in March 2007.
2) Calculated on the basis of the average shareholders' equity for the period (excluding dividends to be distributed, reserves for AfS assets and hedge cash flows) 
3) "Full time equivalent", calculated according to a new methodology which does not include unpaid leaves. In the figures reported the KFS Group, proportionately consolidated, is included at 100%. 
4) In the figures indicated the KFS Group, proportionately consolidated, is included at 100%.

Attached are the Group's key figures, the Group's reclassified balance sheets and income statements and the main Divisional results, which are subject to certification by the Independent Auditors.

These assessments are subject to the following disclaimer:
Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. UniCredito Italiano S.p.A. assumes no obligation to update any information contained herein.



Milan, October 16th, 2007

UniCredito Italiano S.p.A.
Via San Protaso 1/3
20121 Milano
Italien

Securities listed on German regulated markets:
ISIN IT0000064854
WKN: 850832
Listed: Official Market (Amtlicher Markt), Frankfurt Stock Exchange (General Standard)


Enquiries:

Investor Relations:
+39-02-88628715; e-mail: investorrelations@unicreditgroup.eu
Media Relations:
+39-02-88628236; e-mail: mediarelations@unicreditgroup.eu