Bulbank

The bank concentrated on meeting its financial objectives, notwithstanding the fact that its integration in HVB Bank Biochim and Hebros Bank commenced in February 2006. The profit before tax (adjusted for integration effects) rose by 26.6% over 2005; Standard and Poor’s raised its rating to BBB+ with a stable outlook.

Retail customers:

Loans were up 65% in 2006 and revenues by 30.5%. The upward trend was most pronounced in the business customer segment (loans +55%, deposits +36%). The bank is a major market participant in the area of mortgage loans. These grew by 73%, and the bank has a market share of 13%. Fund volume doubled to € 32 m, and structured deposits expanded by 31% to € 47 m.

Corporate customers:

Revenues in the corporate customers segment rose by 9%; the loan portfolio expanded by 11%, resulting in a market share of 11%. Loans to medium-sized businesses grew by 26% and revenue growth in this sub-segment was 11.6%. The leasing portfolio doubled. Overall, in 2006, business with corporate customers saw a 19% rise in profit before tax, generated by structured and project financings, factoring and other new structured products.

Outlook:

The legal merger of the three institutions is to take place in the first half of 2007. The merged bank will thereafter be the clear Bulgarian market leader with more than 1.1 million customers and a market share of about 20% in the key business segments. The name of the merged bank will be UniCredit Bulbank AD.

Besides economies of scale, improved processes, synergies from the integration process and a network covering the whole of Bulgaria, the bank will have strong potential through Group effects and the introduction of additional new bank products. This will provide a basis for further long-term growth and the further expansion of the bank’s leading position in the market.