UniCredit 2Q14 Group Results

Group Net Profit at €403 m in 2Q14 and at €1.1 bn in 1H14 (+37.8% H/H)

Net Profit Reaches €618 m in 2Q14 and €1.3 bn in 1H14 (+64.4% H/H) Excluding the Revised Tax Charge on the Valuation of the Stake in Banca d'Italia

Solid Balance Sheet with CET1 Ratio Fully Loaded Improving to 10.4%
and Sound Leverage Ratio Basel 3 Fully Loaded: 4.7%, among the Best in Europe

Group Asset Quality Keeps Improving with Gross Impaired Loans Down at €82.4 bn and
Coverage Ratio Above 51% in Line with Best European Peers

2Q14 Core Bank Net Profit at €1 bn (€2 bn in 1H14) with High Quality Revenue Mix

Commercial Bank Italy Net Profit at €0.6 bn in 2Q14 (+16.6% Q/Q) with €3.1 bn New Medium-Long Term Loans Granted in 2Q14 (+13.3% Q/Q) for a Total of €6 bn in 1H14 (+52.3% H/H)

CEE & Poland Key Contributors to Group Results with €0.4 bn net profit in 2Q14 (+14.1% Q/Q)

Non-Core Gross Loans Further Down by €2.6 bn in 2Q14 (-3.1% Q/Q and -9.5% H/H)

Another strong quarterly performance with 2Q14 net profit of €403 m leading to a 1H14 net profit of €1.1 bn. Adjusted for the revised tax charge on the valuation of the stake in Banca d'Italia, net profit 2Q14 and 1H14 reach €618 m and over €1.3 bn respectively with an annualised RoTE^[1] of 6.5%.

Significant strengthening of regulatory capital ratios, pro-forma for Fineco IPO and for the sale of DAB, with CET1 ratio fully loaded[2] increasing to 10.4% and CET1 ratio transitional to 10.8% thanks to RWA reduction, retained earnings and scrip dividend. Total capital ratio transitional at 15.0%.

Solid balance sheet confirmed with a sound leverage ratio Basel 3 fully loaded at 4.7%, amongst the best in Europe. Funding gap at €24.4 bn (-€6.3 bn Q/Q).

Group asset quality keeps improving with gross impaired loans decreasing to €82.4 bn. The coverage ratio remains high at 51.2% despite the sale of over 1.3 bn vintage NPLs reducing the coverage ratio by c. 65bps. The stock of Italian gross impaired loans of UniCredit decreases in 1H14 and displays a significantly lower yearly growth rate compared to Italian banks' average.

The Core Bank posts a net profit^[3] of €1.0 bn also in 2Q14, reaching €2.0 bn as of 1H14 (+7.1% H/H) thanks to growing revenues (+2.9% Q/Q) and declining costs (-2.1% Q/Q). Commercial Bank Italy is the largest contributor to Core Bank's net profit, followed by CEE & Poland and CIB.

Positive trends registered in 1Q14 are confirmed in 2Q14 resulting in the high quality of the Core Bank's revenue mix: net interest income increases (+3.3% Q/Q, +5.9% Y/Y), mainly thanks to the re-pricing of deposits, and fees are also higher (+3.3% Q/Q, +8.5% Y/Y) across all business segments.

Strong revamp in new medium-long term lending volumes in Italy with €3.1 bn in 2Q14 (+13.3% Q/Q) for a total of c. €6 bn granted in 1H14 mainly driven by household mortgages (+146.2% H/H) and corporate loans (+62.5% H/H).

All divisions positively contributed to Core Bank's results: Commercial Bank Italy's net profit amounts to €0.6 bn thanks to higher revenues (+1.3% Q/Q) and cost reduction (-5.0% Q/Q); CEE & Poland post a net profit of €0.4 bn (+14.1% Q/Q at constant FX) thanks to the positive performance achieved in all key markets; CIB's net profit stands at €0.2 bn (-45.4% Q/Q) mainly affected by valuation adjustments impacting trading profit. Adjusted for such negative items, CIB's revenues are up Q/Q; Asset Management and Asset Gathering confirmed the positive performance of 1Q14, posting €47 m net profit with €185.5 bn AUM (+3.4% Q/Q) and €40 m net profit with €82.0 bn TFA (+3.6% Q/Q) respectively.

Non-Core portfolio run-down on track, with gross loans at €81.0 bn (-€2.6 bn Q/Q and -€8.5 bn Y/Y).

The Board of Directors of UniCredit approved 1H14 results on August 5^th. Federico Ghizzoni, CEO of UniCredit commented: "The positive results achieved in this quarter confirm the Group's strong performance, despite the uncertain macroeconomic environment. These results bring us closer to our target of c. €2 bn net profit for 2014, which is now more challenging in light of the revised tax charge on the valuation of the stake in Banca d'Italia, not included in our projections. UniCredit confirms itself as one of the most solid banks in Europe: our CET1 ratio fully loaded increases to 10.4% and our leverage ratio Basel 3 fully loaded stands at 4.7%. Geographical diversification remains one of our key strengths. Italy displays increasing profitability and new loan origination increases by over 50% versus first half 2013, confirming our commitment to support the real economy."

Group

• Net profit: €403 m (€618 m and 5.9% RoTE excluding taxes on the stake in Banca d'Italia)
• Revenues: €5.7 bn net of tender offers' proceeds[4] (+1.9% Q/Q, -2.8% Y/Y)
• Total costs: €3.4 bn (-2.7% Q/Q, -2.0% Y/Y)
• AQ: LLP at €1.0 bn (+19.7% Q/Q, -34.5% Y/Y), coverage ratio 51.2%, net impaired loan ratio 8.4%
• Capital adequacy [5]: CET1 ratio fully loaded 10.4%; CET1 ratio transitional at 10.8%; Tier 1 ratio 11.3%

Core Bank

• Net profit: €1.0 bn (-2.6% Q/Q, +1.1% Y/Y)
• Revenues: €5.6 bn net of tender offers' proceeds (4) (+2.9% Q/Q, +0.1% Y/Y)
• Total costs: €3.3 bn (-2.1% Q/Q, -2.7% Y/Y) with a cost/ income⁴ ratio of 58%
• AQ: LLP at €0.6 bn (+15.3% Q/Q, -1.4% Y/Y), cost of risk at 56bps

Group

• Net profit: €1.1 bn (€1.3 m and 6.5% RoTE excluding taxes on the stake in Banca d'Italia)
• Revenues: €11.3 bn net of tender offers' proceeds⁴ (-3.2% H/H)
• Total costs: €6.9 bn (-1.9% H/H)
• AQ: LLP at €1.8 bn (-31.9% H/H)

Core Bank

• Net profit: €2.0 bn (+7.1% H/H)
• Revenues: €11.1 bn net of tender offers' proceeds4 (-0.7% H/H)
• Total costs: €6.6 bn (-2.3% H/H) with a cost/ income ratio⁴ of 59%
• AQ: LLP at €1.1 (-1.4% H/H); cost of risk at 52bps

Net profit at €403 m leading to a 1H14 net profit of €1.1 bn (+37.8% H/H). Adjusted for the revised tax charge on the valuation of the stake in Banca d'Italia, net profit 2Q14 and 1H14 reaches €618 m and €1.3 bn (+64.4% H/H) respectively with an annualised RoTE[6] of 6.5%.

Total assets broadly stable at €839 bn, as the growth in financial investments (+€6.3 bn Q/Q) and in financial assets held for trading (+€4.7 bn Q/Q) compensates lower loans to banks (-€3.1 bn Q/Q) and lower loans to institutional and market counterparts (-€7.6 bn Q/Q).

Tangible equity increases to €43.5 bn (+3.4% Q/Q) thanks to the contribution of €0.9 bn Additional Tier 1 and net profit generated in the period.

RWA/ total assets stands at 47.5%, still a relatively high level compared to European peers.

Funding gap further shrinking to €24.4 bn at Group level (improving by €39.2 bn Y/Y) and at €15.2 bn for Italy (improving by €23.2 bn Y/Y).

Asset quality dynamics confirm the positive trends registered in 1Q14 with gross impaired loans decreasing for the second quarter in a row to €82.4 bn (-0.1% Q/Q). Coverage ratio stands at a sound level of 51.2% despite the sale of vintage NPL portfolios[7]. NPLs slightly up to €49.6 bn (+0.6% Q/Q) with a strong coverage ratio of 61.1%. Other impaired loans decline to €32.8 bn (-1.2% Q/Q) with a coverage ratio of 36.3%.

CET1 ratio fully loaded² reaches 10.4%, pro-forma for Fineco IPO and for the sale of DAB (+25bps). Such significant strengthening has been achieved thanks to RWA reduction[8] (+42bps), increase in AFS and FX reserve (+18bps), scrip dividend (+9bps) and retained earnings[9] (+6bps). CET1 ratio transitional pro-forma stands at 10.8%.

Tier 1 ratio and total capital ratio transitional stand at 11.3% and 15.0% respectively, including €0.9 bn Additional Tier 1.

Leverage ratio Basel 3 fully loaded at 4.7% among the best in Europe, confirming the high solidity of UniCredit's balance sheet.

Funding plan 2014 executed for 53%. As of today, UniCredit has repaid €17.1 bn of LTRO, of which €10 bn in 2Q14. The remainder €9 bn will be gradually reimbursed. Funding plan 2014 is currently under review in light of capital markets' conditions and the liquidity effects connected with the new ECB facilities.

Net profit at €1.0 bn[10] (-2.6% Q/Q, +1.1% Y/Y) in 2Q14. Main contributors are: Commercial Bank Italy with €574 m (+16.6% Q/Q and 33% RoAC), CEE & Poland with €392 m (+14.1% Q/Q at constant FX and 19% RoAC) and CIB with €213 m (-45.4% Q/Q and over 12% RoAC). Net profit reached €2.0 bn as of 1H14 (+7.1% H/H) leading to a risk adjusted profitability (RoAC[11]) of 11.1%.

Net operating profit net of tender offers' proceeds[12] strongly up at €1.8 bn (+9.1% Q/Q, +6.4% Y/Y) as growing revenues and declining costs more than compensate the increase in LLP. Net operating profit totalled €3.4 bn as of 1H14 (+2.8% H/H).

Revenues net of tender offers' proceeds¹² increase to above €5.6 bn (+2.9% Q/Q, flat Y/Y) and display a high quality mix. Key contributors to such revenue growth are: Commercial Bank Italy with €2.1 bn (+1.3% Q/Q, +7.6% Y/Y), CEE & Poland with over €1.4 bn (+9.1% Q/Q, flat Y/Y) and Commercial Bank Austria with €0.4 bn (+13.4% Q/Q, +10.4% Y/Y).

Net interest income increases to €3.1 bn reaching €6.2 bn as of 1H14 (+3.3% Q/Q, +5.9% Y/Y and +4.7% H/H) as the re-pricing of deposits offsets the subdued dynamics on the lending side.

Customer loans decrease slightly to €426.2 bn (-1.5% Q/Q) mainly due to Institutional and Market Counterparts (-15.6% Q/Q). Commercial loans held up well in 2Q14, increasing by €1.3 bn mostly driven by CEE & Poland.

New medium-long term lending flows in Italy confirm the positive trend registered in the past quarters, with €3.1 bn new loans granted in 2Q14 (+18.5% Q/Q). Total new lending in 1H14 reached €5.9 bn (+52.3% H/H) driven by household mortgages (+146.2% H/H) and corporate loans (+62.5% H/H).

Direct funding[13] slightly down to €450.3 bn (-0.3% Q/Q) mainly as effect of the tender offer of network bonds[14] in Italy executed in 2Q14 for €2.5 bn and despite the positive trend registered in CEE & Poland and CIB.

Fees and commissions increase to €1.9 bn (+3.3% Q/Q, +8.5% Y/Y), in excess of €3.7 bn as of 1H14 (+4.9% H/H) thanks to the strong growth registered in all components: investment services fees amount to €841 m (+1.9% Q/Q, +10.5% Y/Y) confirming the rebound in asset under management and bancassurance products demand registered in 1Q14; financing services fees amount to €462 m (+5.2% Q/Q, +9.4% Y/Y) driven by credit related fees in CIB; transactional banking fees amount to €585 m (+4.0% Q/Q, +4.9% Y/Y).

Dividends and other Income[15] amount to €309 m (+107.6% Q/Q, +2.2% Y/Y) mainly thanks to Yapi Kredi's[16] strong quarterly performance (€86 m vs. €50 m in 1Q14) and to the higher dividends received on the stake in Banca d'Italia (€84m vs. €15m in 2Q13).

Trading income net of tender offers' proceeds¹² decreases to €314 m (-34.2% Q/Q, -50.6% Y/Y) mostly affected by c. €120 m credit adjustments for counterparty risk in CIB.

Total costs further down to €3.3 bn (-2.1% Q/Q, -2.7% Y/Y) reaching €6.6 bn as of 1H14 (-2.3% H/H) in line with the Group's cost reduction targets. Staff expenses reach €2.0 bn (-3.9% Q/Q, -5.0% Y/Y) while other administrative expenses and depreciation and amortization remain broadly stable in the quarter. Cost/ income ratio, net of tender offers' proceeds¹², decreases to 58% (vs. 61% in 1Q14). Commercial Bank Italy displays a sound cost/income ratio, net of tender offers' proceeds¹², of 46%.

Loan loss provisions (LLP) at €603 m, showing seasonal growth Q/Q while reducing Y/Y (+15.3% Q/Q, -1.4% Y/Y) reaching €1.1 bn as of 1H14 (-1.4% H/H). Cost of risk in CEE stands at 119bps (+13bps Q/Q, -28bps Y/Y), in CIB at 43bps (+43bps Q/Q, -26bps Y/Y), in Commercial Bank Italy at 90bps (+5bps Q/Q, +22bps Y/Y) and in Asset Gathering at 49bps (+26bps Q/Q, +18bps Y/Y), resulting in a total cost of risk for the Core Bank of 56bps (+8bps Q/Q, +1bp Y/Y).

Risk and charges amount to €148 m, including c. €30 m booked in Hungary as a result of the new law establishing the abolition of the bid/offer spreads applied to retail foreign-currency loans. Restructuring costs amount to €25 m and profit from investments stands at €42 m, including €132 m capital gain from the disposal of the stake in SIA.

Income taxes¹⁰ amount to €518 m, comprising c. €117 m one-off impact from DTA write-off following the reduction of IRAP tax rate which will translate into a lower tax charge on a running basis going forward. Consequently, effective tax rate lands at approximately 31%.

Gross customer loans shrink to €81.0 bn (-€2.6 bn or -3.1% Q/Q and -€8.5 bn or -9.5% Y/Y), of which c. 30% or €25.2 bn performing and c. 70% or €55.8 bn impaired loans.

Gross impaired loans decrease by €1.3 bn (-2.3% Q/Q) confirming the trend registered in 1Q14. Coverage ratio remains sound at 52.1%. NPLs amount to €35.3 bn, slightly down Q/Q and covered at 61.4%.

Net result strongly improving Y/Y and equal to -€370 m as of 2Q14 affected by lower revenues (€38 m, -58.4% Q/Q) and by increasing LLP (€400 m, +26.9% Q/Q) only partially compensated by cost reduction (€146 m, -15.0% Q/Q).

Commercial Bank Italy. With a net profit at €0.6 bn (+16.6% Q/Q, +28.0% Y/Y) and 33% RoAC, Commercial Bank Italy is top performer among divisions for the second quarter in a row. Revenues improve (+1.3% Q/Q) and costs register a significant reduction (-5.0% Q/Q) in line with the Strategic Plan targets.

CEE & Poland with a net profit of €0.4 bn (+14.1% Q/Q at constant FX and 19% RoAC) confirm their role as key contributor to Group result. Leveraging on their strong competitive positioning, the banks in Turkey, Russia, Poland and Czech Republic & Slovakia post a solid quarterly performance and jointly represent c. 80% of total net profit of CEE & Poland division in 1H14.

CIB. Net profit at €0.2 bn and over 12% RoAC as the positive commercial performance of GTB and F&A[17] is partly offset by valuation adjustments impacting trading profit. Adjusted for such negative item, CIB's revenues are up Q/Q. Client focus and commercial actions in such a challenging environment and increased competition allow CIB to defend and improve market positioning: #1 All EMEA Bonds (#4 in June 2013), #3 All EMEA Loans (#4 in March 2014, #5 in June 2013)[18].

S&P affirmed all the ratings including the 'BBB/A-2' long-term and short-term ratings with the existing negative outlook on the 24th of March 2014.

Moody's on the 29th of May changed the outlook on 82 European banks including UniCredit SpA (from stable to negative) as the rating agency is reviewing its systemic support assumptions.

Fitch's ratings reaffirmed on the 13th of May at 'BBB+/F2' with the existing negative outlook.

Milan, August 5^th 2014

Notes:

[1] RoTE = net profit/ tangible equity. Tangible equity net of €0.9 bn Additional Tier 1 and annualized net profit.

[2] CET1 ratio fully loaded estimated pro-forma on the basis of understanding of the regulatory framework which will be in force starting from 2019, hence anticipating all the effects that will gradually be factored in.

[3] Core Bank's net profit does not include the revised tax charge on the valuation of the stake in Banca d'Italia (€215 m).

[4] Gross proceeds from the tender offers (buy-back) on debt securities amounting to €254 m in 2Q13 and to €49 m in 2Q14.

[5] CET 1 ratio fully loaded and CET1 ratio transitional pro-forma for Fineco IPO and for the sale of DAB (+25bps).

[6] RoTE = Net profit/ Tangible equity. Tangible equity net of €0.9 bn Additional Tier 1 ("AT1") and annualized net profit.

[7] In 2Q14, UniCredit completed the sale of vintage NPL portfolios with total gross book value of €1.3 bn.

[8] RWA reduction mainly achieved thanks to the optimization allowed by regulatory change to market and operational RWA calculation and diversification related benefits.

[9] Interim net profit after dividend accrual assumed at 10 €cents in line with the previous year.

[10] Core Bank's net profit and taxes do not include the revised tax charge on the valuation of the stake in Banca d'Italia (€215 m).

[11] RoAC = net profit/allocated capital. Allocated capital is calculated as 9% of RWAs, including deductions for shortfall and securitisations.

[12] Gross proceeds from the tender offers (buy-back) on debt securities amounting to €254 m in 2Q13 and to €49 m in 2Q14.

[13] Direct funding defined as the sum of customer deposits and customer securities.

[14] Network bonds comprise the securities placed both through UniCredit commercial network and 3rd party networks.

[15] Including net other expenses/income.

[16] Starting from 1^st January 2014, following the introduction of IFRS 11 the former proportional consolidation has been ruled out and Koç/ Yapi Kredi Group (Turkey) is now valued according to the equity method. Consequently, the net profit Koç/ Yapi Kredi Group is booked as dividend and other income. Previous quarters have been restated accordingly.

[17] Global Transaction Banking and Finance & Advisory.

[18] Source: Dealogic.

Attached are the Group's key figures, the consolidated balance sheet and income statement, the quarterly evolution of the consolidated income statement and balance sheet, the first half 2014 income statement comparison for the Core Bank and for the Non-Core.