1. ZAGREBACKA BANKA Franjo Lukovic - CEO 2nd UCI INVESTOR DAY
Focus on New Europe
London, December 5th, 2002

2. Agenda
Why Croatia ?
Bank’s Key Highlights
Key projects and strategies

3. CROATIA: STABLE ECONOMIC GROWTH AND PERSPECTIVES
Strong economic growth with low inflation and interest rates. Sovereign ratings by S&P at BBB-, with stable outlook.
Small market but with strong international ties greatly benefiting of international openness.
Some control of public expenditure (although not as tight as expected) resulting in lower fiscal deficit. Improvements in trade balance and expected higher levels of FDI.
Italy, Germany, Austria and Slovenia as main trading partners.
Service sector largely privatised (banking, telecom) with substantial part of the industrial sector still awaiting restructuring (oil, power supply, agriculture)
Year 2001
Croatia
Population, mln
4.4
Per Capita GDP, Eur
4,961
Inflation rate, %
2.6
Ref. interest rate(1), %
3.2
S&P country rating
BBB-
2002E
2003E
2004E
Sustained GDP growth with inflation under control.
Highest growth rates are expected in construction, trade, tourism and financial services.
FDIs likely to increase as Croatia moves closer to the EU, and once it joins CEFTA(2), becomes part of a free trade zone covering nearly all of eastern and southern Europe.
Real GDP growth, %
3.7
3.8
4.4
Inflation rate, %
2.4
3.0
3.0
Ref. interest rate, %
2.0
2.4
2.4
(1) 1W ZIBOR, interbank money market rate
(2) Central European Free Trade Agreement
Source: NE Research Network

4. Branches per mln inhabitants (Loans+Deposits)/GDP
HIGHLY COMPETITIVE BANKING SECTOR, LARGE GROWTH POTENTIALS
Bank consolidation and increased foreign ownership, improved profitability, asset quality, capitalisation and liquidity.
Croatian banking sector has one of the highest foreign ownership percentage (90,8%) in CEE
Highly concentrated industry: 47% of total banking assets concentrated at two largest banks (ZABA, PBZ) and 60% at 4 largest banks.
Rapidly growing banking, with substantial increase in 2001 thanks to Euro effect.
Large growth potentials to reach EU level in terms of banking penetration (loans and deposits ratio to GDP, currently 1/3 of EU average).
Branches per mln inhabitants
(Loans+Deposits)/GDP
580
203%
185
106% EU
Croatia EU
Croatia
2001
2002E
2003E
2004E
Lending - fast growth in 2001 and 2002
Retail: strong demand of housing loans
Corporate: sustained increase as a result of economic growth
Loans growth(1), %
23.2
19.5
12.7
11.5
Deposits growth(1), %
47.4
7.4
8.4
8.4
Rate on Loans(2), %
n.a.(3)
9.0
8.2
8.2
Deposit growth boosted by EMU currencies conversion into Euro; further increase expected due to economic recovery and increase in personal income
Rate on Dep.(2), %
n.a.(3)
2.3
1.9
1.9
Spread (2), %
n.a.(3)
6.7
6.3
6.3
Competition driving down margins and increasing customers expectations.
(1) Nominal growth
(2) End-of-period Banking System data; rates calculated on avg LC+FX indexed and FX denominated Loans and avg LC+FX Deposits
(3) Not available due to change in methodology which makes old data not comparable
Source: NE Research Network

5. BOSNIA AND HERZEGOVINA - A NEW HOME MARKET FOR ZAGREBACKA BANKA
FDIs in the banking system intensified, with over 68% of banking sector in the hand of foreign investors.
Banking system restructuring continues - further restoration of confidence
Good financial results in the first half 2002
sustained growth of corporate (+31%) and retail (+54%) loans;
...not followed by sufficient growth of deposits;
increased profitability.
Strong growth potential - significant amount of foreign currency held by citizens outside the domestic banking system and over 50% of citizens don’t do business with banks
BOSNIA AND HERZEGOVINA
2000
2001
2002E
2003E
Real GDP, % yoy
4,5
2,3
2,3
4,1
Industrial production % yoy
8,0
9,0
8,0
8,0
Inflation (CPI) yoy, avg
5,6
3,3
2,3
1,8
Sources: IMF; Central bank of BiH.
Tax and structural fiscal reforms are in act
Privatisation of state-owned companies / banks
Constant decrease in foreign aid
Economy recovery is expected in later years (2004/05) - according to IMF
Zagrebačka banka BH and Universal banka Sarajevo, EUR 30mln or 9% of total revenues
Strategy / focus on:
Consolidation/optimisation of existing presence
development of new products and quality of service improvement, further development of client segmentation
cost reduction
particular focus on asset quality and risk management system
Market share
Zagrebačka
Universal banka
in Federation BiH (%)
banka BH
Sarajevo
2000
2001
2000
2001
Assets
15,1
14,2
6,9
7,3
Deposits
17,6
17,0
8,4
8,2
Loans
11,2
12,6
9,3
9,8
Sources: Banking Agency of Federation BiH, ZABA BH, UBS

6. Agenda
Why Croatia ?
Bank’s Key Highlights
Key projects and strategies

7. THE LEADING BANK IN GROWING MARKETS WITH ALMOST 9 MN INHABITANTS
Croatia
Zagrebacka banka Group
Bosnia-Herzegovina
Euro mln, consolid. figures as at Sep 30, IAS
Strongest position in traditional banking services: retail and corporate loans, savings and payment services (mkt shares Croatia: corporate loans 23%, retail loans 26%, corporate deposits 32%, retail deposits 35%; mkt shares BiH: corporate loans 21%, retail loans 25%, corporate deposits 19%, retail deposits 33%)
Broad client base and excellent distribution capacities: 214 branches, well developed direct banking channels (329 ATMs, phone banking, leading internet banking provider: 33,000 corporate and 14,000 retail clients)
Growth potential in innovative and wealth management products (investment and pension funds)
Total Assets 6,748
Deposits 5,348
Loans 2,989
Loans/Deposits, % 55.9
Total Revenues 316
Net Income 96
Branches
Employees 5,800(1)
Customers mln
o/w retail 1.5 mln
o/w corporate 87,000
Cost/income, % 63
ROE, %
Deposits Mkt Share, % 34
Loans Mkt Share, % 24
(1) of which 450 in non-core businesses (tourism, etc.) to be divested

8. STRONG PERFORMANCE CONTINUED DURING 2002
Net Interest Income
+3.6%
(Euro mln)
Operating income and profitability increased due to continued growth of core business and strong cost control.
ROE improved for +40% yoy from 15.3% to 21.5%.
C/I Ratio improvement from 64% to 63%
Excellent commission and fee income growth (+33.4% yoy) above predicted levels.
Net interest income around last year’s performance, but above budgeted figure despite continuing decrease of Net Interest Margins.
Strong growth of loans (corporate +28%, retail +25% yoy), increase in transaction volumes (card business, loans and payment services).
Total Revenues*
145
150
316
+14.2%
277
9M01
9M02
Operating Income
Net Commission and Fee Income
+33.4%
+44.1% 71
119 54 83
9M01
9M02
Operating Costs
9M01
9M02
+1.5%
Other Operating Income
9M01
9M02
194
197
+20.8% 95 78
ZABA positive year end results are expected at around +50% level yoy and will confirm our strong position.
9M01
9M02
9M01
9M02
* Including extraordinary items

9. ASSET QUALITY IMPROVING, WITH INCREASED COVERAGE RATIOS
Net NPLs and Doubtful Loans as % of Total Net Loans
Coverage ratios
71.9%
71.4%
7.5%
63.0%
62.4%
5.0%
5.0%
3.4%
2001
9M02
2001
9M02
restated
restated
Net Doubtful Loans/ Total Net Loans
Net NPLs/ Total Net Loans
On Gross Doubtful Loans
On Gross NPLs
(Euro mln)
Dec. 2001
9M 2002
% ch. on
Dec.’01
Improved loan-book quality due to effective recovery actions and NPL repayments through collateral activation
Significant new loans inflow
Improvement of coverage ratios
Net Doubtful Loans
170
163
-4.1%
Net NPLs
112
103
-8.7%

10. Agenda
Why Croatia ?
Bank’s Key Highlights
Key projects and strategies

11. PARTNERSHIP PROGRAMME WITH UCI LAUNCHED ON MAY 15, 2002
KEY PROJECTS UNDERGOING:
Client segmentation (corporate & retail) with divisionalisation to be completed by end 2003
Sales force effectiveness strengthening with redeployment from back to front office
Introduction of new products and further development of product companies (funds, bancassurance, structured Term Deposits, leasing, derivatives)
Cross selling targets
Further development of e-zaba to fully exploit revenues growth potentials from liberalisation of payment services
Creation of International Desk (covering Italian and New Europe business)
REVENUES
Centralised procurement and establishment of dedicated cost management structure
Progressive headcount rationalisation
Exploit Group procurement synergies
Merger of CRT Zagreb into ZABA (additional consolidation expected in the future to foster additional costs improvement)
COSTS
New retail underwriting and corporate monitoring tools
Redesign of credit functions, in charge of developing the pilot project for management systems for all UCI NE banks
Centralised market risk management
RISK

12. South and Southeast Europe Excellent platform for the entire region
STRATEGIC GUIDELINES TO ENSURE FOR FUTURE GROWTH, EFFICIENCY AND PROFITABILITY
What we have already accomplished
South and Southeast Europe
Excellent platform for the entire region
BiH
3rd step
What we intend to accomplish together with UniCredito
Croatia
2nd step
1st step
Divisionalisation with segment based service models
Focus on affluent, small business and private
Improve penetration, share of wallet and revenues per client
Cost control and development of alternative channels
Development into clear regional leader with consolidation of Bosnian operations and further growth in the region
Leadership position in almost all business segments through organic growth and acquisitions
New home markets through Zagrebacka banka BH Mostar and Universal banka Sarajevo

13. SUMMING UP
A dominant player in a small, but rapidly growing market (rapid catch up process after several years of disarray) ...
... operating in a rapidly growing banking market with double digit volume growth although subject to some spread compression due to increased competition...
..... with scope for relevant profitability increase, via increased commercial effectiveness, improvement of loans to deposits ratio and improvement in cost income through tight cost control
Strategy focused on significant profitability increase (revenues increase especially on retail via specialised segment based service model and cost cutting) ....
... and on leveraging on strong market positioning to acquire dominant role in the region, where rapid growth is expected in the future (Bosnia almost 5 mln inhabitants, Serbia almost 10 mln inhabitants) to ensure steady EPS growth for the future

14. Annexes

15. ZABA GROUP 9M2002 CONSOLIDATED INCOME STATEMENT
(Euro mln, IAS)
Ch. %
Sept. 02/
Sept. 01
Dec. 00
Dec. 01
Ch. % 2001/2000
Sep. 01
Sept. 02
Interest margin
164
204
+24.29
145
150
+3.56
Net non interest income
248
155
-37.36
132
166
+25.96
Total revenues
412
359
-12.80
277
316
+14.21
Operating costs (incl. dep.)
-229
-247
+7.70
-194
-197
+1.46
- of which: Staff costs
-107
-118
+10.88
-85
-89
+5.35
Net operating income
183
113
-38.45 83
119
+44.14
Net loan loss provisions
-27
-22
-19.44 -3 3
Other provisions
-10 -9
-10.87 -7 1
Extraordinary income/loss
0.00
0.00
Pre-tax profit/loss
146 82
-43.92 73
123
+68.98
Taxes (1)
-10
-17
+80.05
-19
-23
+20.98
Net income
136 65
-52.64 54
100
+85.93
Minorities -4 -2
-60.87 -1 -3
Net attributable income
128 61
-52.56 53 96
+81.15
(1) Statutory tax rate for legal entities: 20% (35% until the end of 2000)

16. ZABA GROUP 9M2002 CONSOLIDATED BALANCE SHEET
Ch. %
Sept. 02/
Sept. 01
Ch. %
Sept. 02/
Dec. 01
(Euro mln, IAS)
Sept. 01
Dec. 01
Sept. 02
Cash and deposits with Central Banks
721
1,210
787
+9.20
-34.95
Loans due from and placements to:
2,979
3,375
3,895
+30.75
+15.41
- Customers
2,184
2,268
2,989
+36.85
+31.78
ASSETS
- Banks
795
1,107
906
+13.97
-18.13
Trading and avail.-for-sale securities
650
803
1,259
+93.67
+56.69
Fixed assets
256
263
289
+12.74
+9.68
Other assets
905
830
517
-42.79
-37.64
TOTAL ASSETS AND LIABILITIES
5,511
6,482
6,748
+22.44
+4.10
Deposits:
4,199
5,143
5,549
+32.15
+7,91
4,143
5,064
5,348
+29.08
+5.61
- Due to Customers
0.00
0.00
- Securities in issue 56 79
201
- Due to Banks
Reserve fund for possible loan losses
0.00
0.00
LIABILITIES
Specific reserves
0.00
0.00
Other liabilities
788
796
579
-26.45
-27.18
Subordinated debt
0.00
0.00
Minority interest 30 32 33
+9.28
+0.28
Shareholders’ equity
494
511
586
+18.68
+14.76

17. BANKING SECTOR RANKINGS BY TOTAL ASSETS
Market Share
in total assets (%)
Bank
Strategic owner
(HRK,bln)
09/2002
09/2002
2001
2000
Zagrebacka banka
UniCredito
42.4
26.0
27.7
29.1
Privredna banka
Intesa BCI
30.6
18.8
18.6
18.4
Raiffeisen banka
Raiffeisenbank
12.8
7.9
6.5
4.6
Splitska banka
HypoVereinsbank
9.4
5.8
6.6
7.2
Hypo Alpe-Adria banka
Hypo Alpe-Adria
9.3
5.7
4.3
3.4
Rijecka banka
Erste bank
8.2
5.0
7.1
7.1
Erste & Steiermark. banka
Erste bank
5.9
3.6
3.3
2.7
Hrvatska postanska banka
State owned
5.4
3.3
1.8
1.6
Nova banka
Charlemagne
5.2
3.2
2.0 -
Varazdinska banka
ZABA
3.7
2.2
2.4
2.6
Other banks -
30.1
18.5
19.7
22.0
Total
163.0
100%
100%
100%

18. ZAGREBACKA BANKA GROUP STRUCTURE (CORE BUSINESS)
Zagrebacka banka is a licensed bank operating in Croatia and the holding company for the Zagrebacka banka Group
BANKING (ownership)
Varazdinska banka, Croatia (93.8%)
Zagrebacka banka BH Mostar, Bosnia-Herzegovina (79.4%)
Universal banka Sarajevo, Bosnia-Herzegovina (99.6%)
FINANCIAL SERVICES
Prva stambena štedionica - building society (100%)
ZB Invest - investment fund management (100%)
ZB Brokeri - brokerage (100%)
ZANE - real estate agency (100%)
ASSOCIATED COMPANIES
Allianz Zagreb - insurance (48%)
Allianz ZB - pension fund management (49%)

19. DIVERSIFIED GROUP WITH COMPLEMENTARY PRODUCT COMPANIES
Zagrebacka banka is a universal bank operating in Croatia and the holding company of Zagrebacka banka Group
Non-core investments
BANKING
EUR 280 mln/88.22% of revenues
Zagrebacka banka (69.3% of revenues, 27.8% mkt share in total assets)
Varazdinska banka (6.86% of revenues, 2.5% mkt share in total assets)
Zagrebačka banka BH Mostar, BiH (5.94% of revenues, 14,2% mkt share in total assets)
Universal banka Sarajevo, BiH (3.44% of revenues, 7.3% mkt share in total assets)
Prva stambena stedionica - building society (1.09% of revenues, 42% mkt share)
ZB Invest - investment fund management company (0.54% of revenues, 54% mkt share)
ZB Brokers - brokerage (0.43% of revenues, 26% mkt share)
ZANE - real estate services (0.59% of revenues)
TOURISM
EUR 32 mln/9.97% of revenues
Istraturist Umag, one of the leading hotel operators on the Adriatic coast, to be divested
INVESTMENT PROPERTY
EUR 6 mln /1.82% of revenues
Centar Kaptol - commercial centre
CGP - property development
Strongest position in traditional banking services: retail and corporate loans, savings and payment services (mkt shares Croatia: corporate loans 23%, retail loans 26%, corporate deposits 32%, retail deposits 35%; mkt shares BiH: corporate loans 21%, retail loans 25%, corporate deposits 19%, retail deposits 33%).
Broad client base and excellent distribution capacities: 214 branches, well developed direct banking channels (329 ATMs, phone banking, leading internet banking provider: corporate and retail clients).
Excellent potential in innovative and wealth management products (investment and pension funds)

20. Corporate Net Loan Portfolio (Bank) Structure by Industry
WELL BALANCED AND DIVERSIFIED CORPORATE LENDING PORTFOLIO
Corporate Net Loan Portfolio (Bank) Structure by Industry
31/12/2001
30/09/2002