0623 Bank Austria - Investor Presentation EN · 4 UniCredit / Structure Re-organization completed...
Transcript of 0623 Bank Austria - Investor Presentation EN · 4 UniCredit / Structure Re-organization completed...
Bank Austria
London, 24 – 25 June 2014
Credit Update
2
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
3
Bank Austria at a glance
Bank Austria continues being…
the leading corporate bank in Austria
one of the largest retail banks in Austria
parent bank of the largest banking networks in CEE
embedded in UniCredit, a large European banking group with access to
group know-how and the major financial centers worldwide
benefitting from stable liquidity with a perfect balance between customer
loans and primary funds
and a sound capital base: Common Equity Tier 1 (CET1) ratio of 11.0%
and Total Capital ratio of 13.5% (both as of 31 March 2014 and according to Basel 3
phase-in)
4
UniCredit / Structure Re-organization completed in 2013Countries more accountable / simplified service model to the customers
New organizational structure (effective as from January 2013) is fully implemented:
From a divisional breakdown to a regional view in Italy, Germany, Austria and Poland
CIB remains a Global division to further strengthen its focus on multinational and
large corporate customers, with clear investment banking needs regardless of
turnover
CEE, Asset Management and GBS (Global Banking Services) not impacted by the
organizational changes
In Italy, the adoption of the new model allowed to cut one organizational layer and to create
7 fully-accountable regional banking hubs to foster the client relationship and proximity
This project created a leaner organization, streamlined decision-making
processes, improved operational efficiency in Bank Austria for its regional
responsibility in Austria & CEE
5
Business Model and Market Position in Bank Austria‘sHome Market
Bank Austria confirms its position as one of the strongest banks in Austria:
CIB = Corporate & Investment Banking
CIB
Leading corporate bank in
the country (client shares of
up to 84% in large
companies)
Focus on
- Multinational corporates
- International and
institutional Real Estate
customers requiring
investment banking
solutions and capital
markets-related products
- Financial Institutions
Clients have access to the
largest banking network in
CEE as well as to UniCredit
branches in major financial
centers worldwide
Commercial Banking
The division covers
- Retail customers
- Corporate customers
- Customer Direct Service
- Real Estate
- Public Sector (excluding
Republic of Austria)
Broad coverage through a
network of approx. 260
branches, offering its
customers a complete
range of high-quality
products
13% market share in loans
to individual customers
Strong market position in
all corporate segments
Private Banking
27% of Austrian High Net
Worth Individuals are
customers of BA
Clients benefit from the
combination of local
understanding and
international capabilities
Tailored financial services
to High Net Worth
Individuals and foundations
Successful client
approach through BA‘s PB
Division and Schoellerbank
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Bank Austria‘s Market Shares1) in the Domestic Customer Business(as of March 2014)
1) UniCredit Bank Austria AG2) Pioneer Investments Austria + Bank Austria real estate funds Source: Monthly Report Austrian National Bank (OeNB); VÖIG
Funds2)
Loans total
Retail Loans
Corporate Loans
Public Sector Loans
Deposits total
Retail Deposits
Corporate Deposits
Public Sector Deposits
15.4%
18.4%
20.8%
32.0%
14.0%
10.5%
14.4%
12.5%
13.3%
Very efficient network structure to cover the important size of customer sharewith only 6% of all bank branches in Austria
vs. 4Q13 vs. 4Q13
Austrian economic growth YoY in % Austrian inflation rate YoY in %
Economic Conditions in Austria
Sources: Statistik Austria, Bank Austria Economics & Market Analysis Austria
forecast
7
Employment and unemployment rate
2,32,2
3,2
0,5
3,3
2,4
1,7
1,92,0
1,9
1,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
3,7 3,7
1,4
-3,8
1,82,0 2,1
0,4
0,9
2,8
2,4
-4,0
-3,5
-3,0
-2,5
-2,0
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
forecast
After a weak 2013 with growth nearly stagnating, GDPhas started growing already in the second half of 2013and growth will accelerate in 2014
We expect 2.0% growth in 2014 and also for 2015,growth should stay at around the same level
Inflation will slightly fall in 2014 and stay below 2%also in 2015, while the conditions on the labor marketwill improve in the second half of 2014, so for theaverage, the unemployment rate in 2014 will be higherthan in 2013, but will fall in 2015.The unemploymentrate will still be the lowest in the Euro area 0
1
2
3
4
5
6
7
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
3000
3100
3200
3300
3400
3500
3600
3700Employment excl. persons drawing maternity benefits, military service andtraining (1000s, SA) - RSUnemployment rate (%, SA) - LS
8
Differentiation expected to persist(real GDP %)
GDP Growth in CEE vs. Eurozone(real GDP %)
SOURCE: UniCredit Research CEE Quarterly December 2013 and UniCredit Chartbook February 2014, UniCredit CEE Strategic Analysis
forecast
-8
-6
-4
-2
0
2
4
6
8
10
20152013200920052001
EMU
CEE
CEE to EMU growth differential
CEE economic growth expected to pick up in 2015, although cross-country differentiation remains key
3.02.9
SK
3.6
CZ
2.5
RO TR
2.8
0.0
2.7
2.0
RS
2.5
1.3
BH
2.5
1.5
BG
2.1
1.5
HU
2.0
2.7
RU
1.2
0.5
SI
1.1
-0.3
UA
1.0
-6.0
HR
1.0
-1.0
2014 2015
9
Net Profit (2)
(€ mn)
Countries ofpresence (3)
Total Assets (1)
(€ bn)
Number ofBranches
Data as of1H13
CEE, % share inGroup revenues
UniCredit confirms its leadership in CEE
116 1,299 3,92719
6
19
16
4
11
9
15
475
1,007
175
-28
315
444
511
1,389
1,294
799
2,524
3,042
1,865
3,615
57
87
31
15
11
28
83
82
73
56
39
34
RBI
Erste
UniCredit 136
OTP
IntesaSanPaolo
KBC
SocGen (6)
(4)
(5)
(1) 100% of total assets for controlled companies (stake > 50%) and pro rata for non-controlled companies (stake < 50%), except for OTP; (2) After tax before minority interest; (3) Includingdirect and indirect presence in the 25 CEE countries, excluding representative offices; (4) Results of RBI exclude group corporates, markets and corporate center segments; (5) Total assetsfor SI, HR and GG as of YE 2012; (6) Excluding SI, HR and GG; (7) Disposal of HU and TR ongoing; (8) Considering presence in core countries only (i.e. CZ, SK, HU, BG), P&L based onunderlying figures. (9) Branches as of end of 2012
SOURCE: UniCredit CEE Strategic Analysis
(9)(8)
(6)(7)
n.m.
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The Leading Network in Central & Eastern EuropeBroad presence of UniCredit / Bank Austria in CEE Region
The leading player in CEE:
# 1 by assets, branches and
net profit
~ € 75 bn Direct funding (Primary
funds = Deposits from customers +
Debt securities in issue)
~2,600 branches and ~48,000 FTE
Within top 5 in 10 Countries
Note: Data as of 31 March 2014, ranking and market share as of 31 December 2013
1) Including Turkey (Yapi Kredi)2) Poland (Bank Pekao) under management of UniCredit3) Total Assets not included as Turkey is consolidated at equity as from 20144) Since 1 Dec. 2013, foreign branch of UniCredit Bank Czech Republic and Slovakia5) Representative Office of UniCredit Russia
Ranking
Total
Assets
(€ mn)
Customer
Loans
(€ mn)
Primary
Funds
(€ mn)
Market
Share
Offices
1)
Poland 2 35,501 25,539 27,496 11% 1,001
Turkey 5 - - - 9% 986
o/w Azerbaijan 12 - - - 2% 14
Croatia 1 14,773 9,710 8,476 27% 138
Russia 9 18,174 11,908 11,287 2% 109
Czech Republic 4 18,376 11,822 12,724 9% 106
Slovakia 5 - - - 7% 78
Hungary 6 5,567 3,005 3,201 6% 100
Bulgaria 1 6,961 4,904 4,467 15% 206
Romania 4 6,421 4,186 3,044 8% 188
Ukraine ("held for sale") 6 - - - 3% 388
Slovenia 5 2,812 2,132 1,389 6% 34
Bosnia & Herzegovina 1 2,428 1,596 1,685 21% 127
Serbia 3 2,236 1,359 951 9% 73
Rep. Offices
Belarus
Macedonia
Montenegro
CEE Division (excl. PL) - 82,473 50,622 47,224 - 2,553
CEE Region - 117,975 76,161 74,719 - 3,554
2)
4)
3)
5)
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Turkey and Ukraine shown separately as
Yapi Kredi (Turkish Joint-Venture) consolidated at equity as from 1 January 2014
Ukrsotsbank (Ukraine) reclassified to “Held for Sale” on 31 December 2013
CEE Division*) – incl. Details on Turkey and Ukraine(as of 31 March 2014)
*) excl. Poland (under direct management of UniCredit)**) Primary funds (= Direct Funding) = Deposits from Customers + Debt Securities in Issue
9.6% 5.1%
8.4% 4.7%
Market Share CEE Division – Customer Loans(as of 31 Dec. 2013)
Market Share CEE Division – Customer Deposits(as of 31 Dec. 2013)
Excl. Russia Incl. Russia
Excl. Russia Incl. Russia
(€ mn)
Total Assets 82,473 56,819 23,239 2,949
Loans to Customers 50,622 36,995 15,131 2,134
Primary Funds**) 47,224 35,342 14,455 1,211
UkraineTurkey
(at 40.9%)CEE
Turkey
(at 100%)
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The CEE Division of Bank Austria manages the largest banking network in CEE:
~ 30,000 FTE and about 1,600 branches in full subsidiaries, plus a further 17,500 FTE and1,000 branches in Turkey (the 41%-stake now being consolidated at equity)
CEE Strategy overall confirmed: Organic growth, with a specific focus on growth regionsand areas. The classical branch network is being optimized and complemented by anongoing extension of alternative distribution channels (e.g. internet and mobile banking).Strong local presence, supported by leveraging on Group Platforms (incl. Cross-BorderBusiness and International Clients)
CEE StrategyRole of the region as key income generator for Bank Austria confirmed
Measures to further improve profitability andefficiency:
Completed in 2013:
Sale of Kazakh unit (ATF Bank) in April 2013
Merger of Czech and Slovak subsidiaries(Dec. 2013)
Establishment of a Russian joint-venture withRenault/Nissan (Dec. 2013)
Sale of Turkish insurance subsidiary(Yapi Sigorta) to Allianz (July 2013)
Downsizing of presence in the Baltic countriesto only leasing business (Dec. 2013)
Planned/ongoing:
Planned sale of Ukrsotsbank
Integration of UniCredit leasing and consumerfinance activities into CEE banking network
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Transactions
Czech Republic & Slovakia: Legal merger of UniCredit Bank Czech Republic and UniCredit Bank Slovakia
completed on 1 December 2013 the bank in Slovakia is now a full branch of the bank in the Czech Republic
Baltics: UniCredit Bank Latvia’s de-licensing completed, merger with UniCredit Leasing planned for mid 2014
Ukraine: Legal and operational merger between Ukrsotsbank and UniCredit Bank Ukraine (formerly a
subsidiary of Bank Pekao, Poland) completed on 2 December 2013
Kazakhstan: ATF Bank sold in April 2013
Turkey: Sale of Yapi Kredi Sigorta (insurance company)
Russia: Sale of MICEX (Moscow Interbank Currency Exchange) shares
Leasing: Transfer of CEE leasing companies to CEE banks started; to be closed in 2014
Romania and Czech Republic: Acquisition of the retail portfolios of Royal Bank of Scotland (including more
than 65,000 clients) and AXA in the Czech Rep. (29,000 clients)
Efficiency enhancement
Continued focus on cost optimization
RWA efficiency project: Reduction of € 2 bn in 2013 (> € 8 bn RWA reduction since 2011)
Value creation & profitability
Launch of “CEE 2020” strategic program targeting transformation and improvement of profitability in key areas
Russia: Joint Venture with Renault-Nissan and Infiniti – operations started in 4Q13
Excellence in CIB proven by significantly higher customer satisfaction vs. global peers in all the sub-
segments and first top position in most of the League Tables
Increased number of clients (~ 500,000 Retail and ~ 3,000 Corporate clients)
CEE – Bank Austria’s Milestones and Achievements 2013 in Detail
Austria - SmartBanking Solutions project –the future of Retail Banking
SmartBanking Solutions project is of strategic importance to improve sales efficiency by amodern needs-based multi-channel offering
New business model for Retail sales:
Blending of virtual and stationary branches
Personal services provided via video telephony, e-mail, telephone and SMS
Customers decide when, where and how they contact Bank Austria
Reorientation of branch network:
At present, 90% of our customers are serviced in 75 % of our 260 retail branches – focus onthese branches, including a further upgrading
New, modern branch formats: the new advisory service centres will offer a comprehensiverange of banking services for all customer groups in cities
The classic branch will also be re-launched to make advisory services the focus of itsactivities
Some of the remaining 25% will be converted into modern self-service branches with thelatest technology. As highly efficient banking offices, these will meet basic financial needs
The other remaining branches will be integrated into other branches
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Strategy for 2014: Bank Austria, a modern retail bankand the most innovative player in the Austrian market
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Strategic repositioning
Basic services bank Basic top-quality services around the clock,
meeting everyday financial needs
Permanent presence for banking transactions tomeet everyday needs
Advisory bank Specialists offer various customer groups
highly qualified advisory services at branchesand via SmartBanking
Trend-setting offers and products witha new pricing structure
Unique positioning as the mostinnovative player in Austria
Targets to be achieved by 2017 350,000 SmartBanking customers
Including 80,000 new customers
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Rating Overview
(as of 23 June 2014)
1) Subordinated (Lower Tier II)2) Grandfathered debt is rated Baa1 (senior debt) and respectively Ba2 (subordinated debt) by Moody’s and AA- (senior and subordinated debt)
by Standard & Poor’s. This relates to securities issued before 31 Dec. 2001 which benefit from a secondary liability by the City of Vienna.
Short Term Long Term Subordinated 1) Short Term Long Term Subordinated 1) Short Term Long Term Subordinated 1)
P-2 Baa2 Ba2 A-2 A- BBB- - - -
Negative
outlook
Credit Watch
Negative
P-2 Baa2 Ba2 A-2 BBB BBB- F2 BBB+ BBB
Negative
outlook
Negative
outlook
Negative
outlook
Bank Austria -
Public Sector
Covered Bond
Bank Austria -
Mortgage Covered
Bond
S&P
Aaa - -
Moody's S&P Fitch
UniCredit S.p.A.
Bank Austria 2)
FitchMoody's
Aa1 - -
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Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
18
P&L of Bank Austria – Full year 2013Solid operative performance but high one-offs
Note: Non-operating items include provisions for risks and charges, profit from investments and integration costs
1-12 1-12(€ mn) 2013 2012
Operating Income 6,960 6,681 4.2% 1,850 1,673 1,723 10.6% 7.4%
Operating Costs -3,856 -3,786 1.9% -1,001 -920 -993 8.8% 0.8%
Operating Profit 3,104 2,895 7.2% 849 753 730 12.8% 16.4%
Net Write-Downs of Loans -1,441 -969 48.7% -565 -289 -279 95.6% >100.0%
Net Operating Profit 1,663 1,926 -13.7% 285 464 451 -38.7% -36.9%
Non-Operating Items -531 -656 -19.0% -568 163 -534 >-100.0% 6.4%
Profit Before Tax 1,131 1,269 -10.9% -284 627 -83 >-100.0% >100.0%
Income Tax -534 -327 63.4% -259 -100 -80 >100.0% >100.0%
Goodwill Impairments / Other -2,200 -523 >100.0% -2,146 -7 -516 >100.0% >100.0%
Group Net Profit -1,603 419 >-100.0% -2,689 520 -680 >-100.0% >100.0%
Cost / Income Ratio - excl. bank levies (in %) 53.4% 54.7% -134 bp 52.6% 53.3% 55.4% -73 bp -281 bp
y/y q/q y/y4Q13 3Q13 4Q12
Operating income y/y up by 4.2% - despite major one-offs in 2012 (€ +126 mn ex hybrid buy-back). In particular, fee and trading
income improved significantly despite currency depreciation
Cost development flat, also supported by currency depreciation. Increase only due to again higher bank levy and FTT in CEE
Positive development in operating customer business: Operating profit increased by 7% to € 3.1 bn
LLPs up by 48.7% - impacted by higher provisioning in particular in South East Europe and Hungary, leading to an improvement of
the Coverage ratio
Negative Group Net Profit (€ -1,603 mn) due to full impairment of goodwill (€ 2.0 bn) and further one-off effects
19
P&L of Bank Austria – 1Q14Good start into 2014 with a solid operative performance
Note: Non-operating items include provisions for risks and charges, profit from investments and integration costs
Operating income y/y down by 6.5%, mainly due to lower contribution from Turkey and Russia (partly driven bycurrency devaluation)
Costs lower vs. 4Q13 and 1Q13, driven by strict cost management and despite further increase in Austrian bank levy
Net write-downs of loans lower vs. 4Q13 and 1Q13, driven by lower needs in CEE. Coverage ratio remains at 55%
Group Net Profit of € 350 mn clearly above previous year, supported by positive result of 2 real estate transactionsin Austria (included in non-operating items)
(€ mn)
Operating Income 1,376 1,694 1,472 -18.8% -6.5%
Operating Costs -835 -892 -844 -6.3% -1.0%
Operating Profit 541 802 628 -32.6% -13.9%
Net Write-Downs of Loans -190 -532 -246 -64.3% -22.6%
Net Operating Profit 350 270 382 29.8% -8.3%
Non-Operating Items 70 -571 -67 >-100.0% >-100.0%
Profit Before Tax 421 -301 316 >-100.0% 33.2%
Income Tax -64 -245 -38 -74.0% 66.9%
Goodwill Impairments / Other -7 -1,797 4 -99.6% >-100.0%
Group Net Profit 350 -2,344 281 >-100.0% 24.5%
Cost / Income Ratio - excl. bank levies (in %) 56.5% 51.0% 53.5% 552 bp 298 bp
q/q y/y1Q14 4Q13 1Q13
20
Net Operating Profit Composition (€ mn)
-246
-532
-190
-844
1Q14
350
-835
1,376
4Q13
270
-892
1,694
1Q13
382
1,472
Net Operating Profit – Details BA GroupAlmost stable NOP due to lower LLPs and lower costs
LLP
Costs
Operating income
1-3/2014
350
-190
-835
1,376
1-3/2013
382
-246
-844
1,472
CEE
Austria
24%
76%
*) without Corporate Center
Share of Divisions *) –Net Operating Profit by region (%)
Reduction of revenues y/y due to currency
effects and more difficult environment in some
markets (Russia, Turkey). 4Q13 included some
positive one-off effects.
Y/y, decrease in costs despite higher bank
levies in Austria due to strict cost control and
also currency effects
Loan loss provisions decreased y/y
(especially in CEE)
21
Net Operating Profit Composition (€ mn)
-188
-10.6%
1-3/2014
337
-134
-404
875
1-3/2013
377
-422
986
Net Operating Profit CEE – Details1Q14 Net operating profit decreased due to lower operating income,despite lower costs and LLPs
Operating Income: Decrease due to lower trading
income in Russia, lower at equity income (Turkey) and
currency devaluations
Costs: decrease due to currency devaluation,
otherwise flat despite higher bank levies and Financial
Transaction Tax
LLP: Significantly lower LLP, mainly due to Croatia,
Czech Republic/Slovakia and Romania
Russia, Czech Republic/Slovakia, Croatia and
Bulgaria most important fully consolidated contributors;
Turkey also contributing well but consolidated at equity
starting from 2014
Net Operating Profit by region (€ mn)
LLP
Costs
Operating income
11
20
46
45
46
110
Romania
Croatia
o/w
CZ/SK
337
Bulgaria
Hungary
Russia
CEE
22
Cost of Risk (in basis points)Net Write-Downs of Loans (in mn €)
190
532
246
1Q144Q131Q13
110
191
37
33
66
97
38
43
CIB
CommercialBanking
BA Group
CEE
1-3/2014
FY13
Loan Loss Provisions and Cost of RiskLower LLPs in CEE leading to lower Cost of Risk
1-3/2014
190
1-3/2013
246
-23%
LLPs: decreased y/y by 23%, mainly due to CEE, partly due to write-backs in several countries
Cost of risk lower than in 2013 (BA Group -44 bps vs. FY13), with
Commercial Banking (i.e. the Austrian customer business) and CIB remaining at moderate
levels and
CEE risk costs strongly decreasing in 1Q14
23
Net Impaired Loans 1)
(in bn €)% of Net Impaired Loans
on Total Net Loans 1)
% Coverage Ratio onImpaired Loans 1)
1) on-balance clients (non-banks) only
Asset QualityNet Impaired Loans declining, coverage ratio clearly improving
Net impaired loans on
a decreasing trend y/y,
due to significant
bookings of LLP in
4Q13. Q/q, stable
(decrease due to Turkey,
excluded starting from
2014 due to
reclassification as equity
shareholding)
Net impaired loan ratio
stable, increase in
1Q14 due to exclusion
of Turkey
Coverage ratio on
impaired loans
improved y/y by 454
bp, reflecting a build-up
of provision stock mainly
in CEE. Coverage ratio
improved both in CEE
and Austria
-11%
1Q14
5.0
4Q13
5.1
1Q13
5.6
+17bp
1Q14
4,3%
4Q13
4,0%
1Q13
4,2%
+454bp
1Q14
55.0%
4Q13
54.9%
1Q13
50.4%
-14%
1Q14
1.4
4Q13
1.3
1Q13
1.6
-24bp
1Q14
2.3%
4Q13
2.2%
1Q13
2.5%
+390bp
1Q14
62.6%
4Q13
62.9%
1Q13
58.7%
-10%
1Q14
3.6
4Q13
3.8
1Q13
4.0
97bp
1Q14
6.6%
4Q13
5.5%
1Q13
5.6%
+505bp
1Q14
51.2%
4Q13
51.2%
1Q13
46.2%
BA Group
Austria
BA GroupBA Group
AustriaAustria
CEE CEECEE
24
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
25
Other Assets
OtherFinancial Assets
Loans andreceivableswith customers
Loansand receivableswith banks
Assets
179,158 (100%)
11,867 (7%)
29,351 (16%)
114,259 (64%)
23,680 (13%)
Equity
Other Liabilities
Debt securitiesin issue
Deposits fromcustomers
Deposits frombanks
Liabilities
179,158 (100%)
15,126 (8%)
14,597 (8%)
28,298 (16%)
95,805 (53%)
25,332 (14%)
Balance Sheet structure (as at 31 March 2014)
Balance Sheet (€ mn)
Balance sheet reduced to € 179 bn vs. prior periods due to Turkey (Yapi Kredi) being consolidated
at equity starting in 2014 (year-end 2013 adjusted accordingly to enable comparisons)
Classical commercial bank - customer loans and customer deposits represent a high share in the
overall balance sheet. Loans and primary funds (customer deposits + debt securities in issue) well
balanced
Solid capital base of € 15 bn
Change vs. 31 December 2013
+0.7%
03/14
179
12/13
178
Balance sheet Loans to customers
-0.5%
03/14
114
12/13
115
Deposits fromcustomers
Securitiesin issue
-1.2%
03/14
96
12/13
97 2827
03/14
+3.6%
12/13
(€ bn)
26
Loans to Customers1) (€ mn)
61,959
58,092
-5%
1Q14
114,259
59,654
54,606
4Q13
115,466
59,555
55,911
3Q13
118,056
60,460
57,596
2Q13
119,661
62,298
57,363
1Q13
120,051
Loan and Deposit VolumesLoans more than fully covered by deposits and debt securities in issue
0%
1Q14
95,805
51,132
44,672
4Q13
96,978
50,219
46,759
3Q13
92,266
49,023
43,242
2Q13
93,837
51,298
42,538
1Q13
95,830
52,621
43,209
Deposits from Customers1) (€ mn)
Austria
CEE
92%93%99%99%98%
Loans/Direct Funding Ratio
1) All figures recast (excl. Turkey and Ukraine)
Loans to customers -5% y/y due to decrease in Austria and currency devaluation in CEE, q/q down by -1%,decrease in CEE also driven by currency devaluation (mainly Russia)
Deposits from customers stable y/y, with growth in CEE being partially mitigated by currency devaluation.In Austria, the successful deposit campaign led to a positive trend in the last 2 quarters
Loans more than fully covered by deposits and debt securities in issue, Loans/Direct Funding Ratio improved toexcellent 92%
Austria
CEE
27
Customers loans / Primary funds (€ bn) 1)
Volumes in CEEStable business development, impact from currency movements
Loans to customers: decrease due to currencydevaluations in particular in Russia and Czech Republic(stable at current rates)
Primary funds: Increase y/y by € 1.2 bn, despitecurrency devaluations
Primary funds (€ bn) - March ‘14 1)
Customer loans (€ bn) - March ‘14
Regional Breakdown
1) Primary funds = Deposits from customers + Debt securities in issue
1Q14
47.5
54.6
4Q13
49.6
55.9
1Q13
46.3
58.1
Primary fundsCustomer loans
3
4
5
9
12
12Russia
CEE
Hungary
o/w
Bulgaria
Romania
55
Croatia
CZ / SK
3
3
4
8
13
11
CEE
CZ / SK
Croatia
Hungary
Romania
Bulgaria
Russia
47
o/w
Regional Breakdown
28
Credit risk
Operational risk
CVA charge
Market risk
1Q14 B3
123.5
103.5
13.2
1.25.6
2013
118.5
103.6
12.8
2.1
2012
130.1
114.9
12.6
2.5
Risk-Weighted Assets (€ bn)
CET1
Tier 1
1Q14 B3phase-in
13.5%
11.0%
11.0%
2013
13.5%
11.3%
11.6%
2012
12.5%
10.6%
10.9%
Capital Ratios
1Q14 B3phase-in
CET1
AdditionalTier 1
16.7
13.6
0.0
2013
16.0
13.4
0.3
2012
16.2
13.8
0.3
Regulatory Capital (€ bn)
Total CAR
Total Capital Total RWA
1) Starting with 2014, figures in accordance with Basel 3/CRR; transitional adjustments (phase-in) only relevant for capital, not for RWA
1)
1)
1)
Capital position and RWASound capital ratios
Common Equity Tier 1 (CET1) ratio stands at
solid 11.0% and Total Capital ratio at 13.5%
(both Basel 3 phase-in)
Safe capital base as Bank Austria – unlike its
main competitors – did not take up state capital
RWA development in 1Q14 influenced by
implementation of the CRR, leading to higher
market risk RWA in 2014. Decrease in 2013
includes sale of Kazakh subsidiary
29
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
30
Bank Austria Acts as Regional Liquidity Center for Austria / CEEand is a Strategic Issuing Platform for UniCredit Group
UniCredit S.p.A. – Holding
Bank capital
OBG (coveredbonds)
Registered sec./Schuldschein-darlehen (SSD)
Senior benchmark
Private placement
Retail issues
Mortgage- andPublic SectorPfandbriefe
Senior benchmark
Registered sec.(SSD, NSV*))covered / senior
Private placements
Retail Issues
Certificates
Mortgage- and PublicSector Pfandbriefe
Senior benchmark
Housing-bank-bonds(Wohnbaubank-anleihen)
Registered sec. (SSD,NSV*)) covered/senior
Private placements
Retail issues
RLC Italy
UniCredit S.p.A
(Baa2/BBB/BBB+)
RLC Germany
UniCredit Bank AG
(Baa1/A-/A+)
RLC Poland
Bank Pekao SA
(A2/BBB+/A-)
Retail issues
Bearer bonds
Own Issue Programs
Presence on the local and global markets
During the liquidity crisis no state aid needed
Coordination of the global market presence through UniCredit Holding
RLC Austria/CEE
UniCredit Bank
Austria AG
(Baa2/A-/-)
Long-Term Ratings by (Moody’s/S&P/Fitch) as of 23 June 2014 *) Namensschuldverschreibungen
31
Self-funding of Business Growth of Bank Austria Group
Business Growth of BA Group to be self-funded by a well-balanced mix of customer deposits
and market issuances
Well-diversified funding base due to BA’s commercial banking model. Priority is on growth of local funding
sources out of customer business with a variety of products (sight, savings, term deposits) as well as medium- and
long-term placements of own issues
The self-funding strategy of Bank Austria was demonstrated by returning to the capital markets: from 2010 focus
was given to issuance of benchmark-sized Pfandbriefe and since 2013 also on Senior Unsecured Benchmarks
The strict principle of self-sufficient funding of Bank Austria
• ensures that the proceeds are used primarily for business development of entities of Bank Austria Group
• enables Bank Austria to calculate its own funding costs according to its own risk profile
Same Principles apply for the CEE banks of BA Group
Also in CEE the business model as commercial bank with its priority on growth of local funding sources from
customer business leads to a well-diversified funding base
Self-sufficiency target is applied in CEE as a business principle of UniCredit Group and is also strongly favored
by regulators, e.g. introduction of ”Loans to Local Stable Funding Ratio - LLSFR” by Austrian National Bank (OeNB)
Through its know-how and international business relationships BA actively supports the development of
local capital markets, especially in local currency, e.g. local Covered Bond issuance in Czech Republic, first SME
Covered Bond in Turkey and Senior Unsecured issues in Russia, Turkey and Romania
32
Liquidity and Funding Management within BA Group based onclear and strict Risk Management Principles
Clear Rules and Principles in Bank Austria for the Management of Liquidity and Funding
Liquidity strategy
Bank Austria acting as an independent Regional Liquidity Center (RLC) within UniCredit Group - in line with the
self-funding principle of the new Group Strategy
Bank Austria manages the liquidity development in Austria and CEE
Clear operative rules
Active liquidity and funding management by defining short-term and structural liquidity and funding limits for all
banking subsidiaries of BA Group
In addition to the Austrian regulator’s principles, BA strictly monitors the balanced intra-group funding flows
within BA Group
All international and national legal / regulatory constraints have to be followed on single bank level
Bank Austria establishes a separate Funding and Liquidity Plan for Austria and its CEE subsidiaries as part of
the Funding and Liquidity Plan of UniCredit Group
331) Sum of net liquidity inflow + counterbalancing capacity
BA RLC 3 month available liquidity position 1) 2)
Structural liquidity ratio (1Y)
3) Calculated as ratio between liabilities (cumulative sum above one year) and assets (cumulative sum above one year)
2) Assuming no roll-over of current outstanding wholesale debt
BA Group-wide liquidity position is centrally managed byBank Austria’s ALM
Internal limit
0,88
0,90
0,92
0,94
0,96
0,98
1,00
1,02
1,04
Jan
-10
Feb
-10
Ma
r-10
Ap
r-1
0M
ay-
10
Jun
-10
Jul-
10
Au
g-1
0Se
p-1
0O
ct-1
0N
ov-
10
De
c-10
Jan
-11
Feb
-11
Ma
r-11
Ap
r-1
1M
ay-
11
Jun
-11
Jul-
11
Au
g-1
1Se
p-1
1O
ct-1
1N
ov-
11
De
c-11
Jan
-12
Feb
-12
Ma
r-12
Ap
r-1
2M
ay-
12
Jun
-12
Jul-
12
Au
g-1
2Se
p-1
2O
ct-1
2N
ov-
12
De
c-12
Jan
-13
Feb
-13
Ma
r-13
Ap
r-1
3M
ay-
13
Jun
-13
Jul-
13
Au
g-1
3Se
p-1
3O
ct-1
3N
ov-
13
De
c-13
Jan
-14
Feb
-14
Ma
r-14
Ap
r-1
4M
ay-
14
1Y Liquidity Ratio
1Y Limit
Prudent net liquidity reserve increasing at the
year-end
inflows from market and captive customer
base
positive effect of cash pooling
Cash horizon constantly above 3M (unchanged
vs Q4)
Sound counterbalancing capacity (approx.
€21bn avg)
Structural liquidity ratio(3) well above limits…
Internal rule of 0.90 for maturities above 1y
Level as of May ‘14: 1.04 (slightly improving
from 1.03 in April ‘14)
… thanks to
Improving Loan/Deposit-ratio
2014 M/L Term Funding Plan positively kicked
off
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
45.000
30
.09.
10
31
.10.
10
30
.11.
10
31
.12.
10
31
.01.
11
28
.02.
11
31
.03.
11
30
.04.
11
31
.05.
11
30
.06.
11
31
.07.
11
31
.08.
11
30
.09.
11
31
.10.
11
30
.11.
11
31
.12.
11
31
.01.
12
29
.02.
12
31
.03.
12
30
.04.
12
31
.05.
12
30
.06.
12
31
.07.
12
31
.08.
12
30
.09.
12
31
.10.
12
30
.11.
12
31
.12.
12
31
.01.
13
28
.02.
13
31
.03.
13
30
.04.
13
31
.05.
13
30
.06.
13
31
.07.
13
31
.08.
13
30
.09.
13
31
.10.
13
30
.11.
13
31
.12.
13
31
.01.
14
28
.02.
14
31
.03.
14
30
.04.
14
31
.05.
14
Good performance of all BA Covered Benchmark Bonds issued so far
34
Bank Austria Covered Bond Spread Comparison
Source: Bloomberg Mid ASW-Spread
35
Medium- & Long-Term Funding Development and Target 2014
Medium- & Long-Term Funding(in € bn)
Benchmark Issuances in 2013:
Senior Unsecured Bond in
January 2013 and its first tap in
May 2013 and a second in
November 2013 as pre-funding
for 2014 (€ 500 mn)
Mortgage Pfandbrief in July
and its tap in September 2013
Public Sector Pfandbrief
in October 2013
Execution and Plan for 2014:
Mortgage Pfandbrief
Benchmarks in January and in
April 2014 successfully placed
Public Sector Pfandbrief
Benchmark in May 2014
successfully placed
One Senior Unsecured
Benchmark planned2014
2.11
2014 Plan
4.06
2013
3.79o/w 0.5
Pre-Funding2014
2012
2.10
2011
4.63
2010
3.18
Pfandbriefe€ 2.3 bn
Pfandbriefe€ 3.0 bn
Pfandbriefe€ 0.8 bn
Pfandbriefe€ 1.5 bn
Pfandbriefe€ 1.4 bn
Pfandbriefe€ 1.5 bn
36
Maturity Profile(in € mn)
Split of Instruments(in € mn)
2,882
13,862
8,231
Subordinated Bonds
Senior Bonds
CoveredBonds
Maturity Profile of Bank Austria’s Own Issues(as of 30 April 2014)
Note: Data including issues sold through Group network
Above percentage distribution of
these instruments targeted to be
maintained at similar levels also
in the future
Approx. 15% of total own issues
were placed as retail issues
513
2,577
142
1,921
2016
4,663
842
3,668
152
2015
4,837
976
182
2014
2,782
1,315
1,467
0
after 2019
6,141
3,078
1,030
2,033
2019
1,959
1,011
947
1
2018
2,017
866
1,151
0
2017
Covered Bonds
Senior Bonds
Subordinated Bonds
24,976Total
37
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
Overview of Public Sector Pfandbrief Benchmark Issues 2014
Overview of Investors
In May, successful issue of a 7-year Public Sector Pfandbrief Benchmark
Bank AustriaPublic Sector Pfandbrief
1.375% € 500 mn May 2014 Mid-Swap +2526/05/2021
Corporates
3%
Insurance companies
4%Central Banks
10%
Banks
37%
Funds46%
SwitzerlandAsia
3% 3%
UKFrance
Nordics/Benelux2%
1%
3%
Italy
10%Austria
Germany
4%
71%
39
Overview of Mortgage Pfandbrief Benchmark Issues 2014
In January, successful issue of a 10-year Mortgage Pfandbrief Benchmark
Bank AustriaMortgage Pfandbrief
2.375% € 500 mn January 2014 Mid-Swap +3522/01/2024
Overview of Investors
6%
Insurance companies
9%Central Banks
Funds30% Banks55%
6%
10%
11%
Asia
2%
Switzerland
2%Spain
3%Italy
Nordics
Benelux
Austria
12%
Germany54%
In April, successful issue of a 5.5-year Mortgage Pfandbrief Benchmark
Bank AustriaMortgage Pfandbrief
1.25% € 500 mn April 2014 Mid-Swap +2314/10/2019
40
Overview of Senior Unsecured Benchmark Issues 2013
Senior Unsecured Benchmarks (January 2013 and its first tap in May and an additional one inNovember 2013) were successfully issued
Bank AustriaSenior Unsecured Bond
2.625% € 500 mn Jan. 2013 Mid-Swap +16330/01/2018
Bank AustriaSenior Unsecured Bond
2.625% € 250 mn May 2013 Mid-Swap +10530/01/2018
Overview of Investors
6%
Other
10%Italy
3%Nordics
Switzerland5%
Netherlands 11%
France
12%
UK
13%
Austria17%
Germany
23%
Bank AustriaSenior Unsecured Bond
2.5% € 500 mn Nov. 2013 Mid-Swap +13527/05/2019
8%6%
31%Banks
Other
Insurances
Funds54%
41
Overview of Covered Bond (Pfandbriefe) Benchmark Issues 2013
In July, Bank Austria successfully issued its first ever Mortgage Pfandbrief Benchmarkand first tap in September
Bank AustriaMortgage Pfandbriefand its tap
1.25%€ 500 mn€ 200 mn
July 2013Sept. 2013
Mid-Swap +26Mid-Swap +10
30/07/2018
Bank AustriaPublic Sector Pfandbrief
1.875% € 500 mn Oct. 2013 Mid-Swap +2529/10/2020
Overview of Investors
In October, Bank Austria successfully issued an additional Public Sector Pfandbrief Benchmark
10%
Funds
38%
Banks
43%
Central banks
Insurances Other
1%8%
5%
4%
Switzerland 4%3%
3%
Italy
France 2%
UKNordics
Asia
3%
Austria
17%
Benelux
Germany57%
Other
2%
42
2010 – 2012 Bank Austria‘s issues of Public Sector Pfandbriefe have become an attractivefunding source
Overview of Public Sector Covered Bond (Pfandbrief) BenchmarkIssues before 2013
Bank AustriaPublic Sector Pfandbrief
2.375% € 750 mn June 2010 Mid-Swap +45
24/02/2021 € 1 bn Feb. 2011 Mid-Swap +69
04/11/2016 € 500 mn Nov. 2011
15/06/2015
4.125%
2.875% Mid-Swap +85
2.625% 25/04/2019 € 500 mn April 2012 Mid-Swap +88
Bank AustriaPublic Sector Pfandbrief
Bank AustriaPublic Sector Pfandbrief
Bank AustriaPublic Sector Pfandbrief
43
CEE – Local issuance activities strengthen the liquidity profile of ourbanking subsidiaries and open up new funding sources
RU 2y € 250m equ. RUB Feb. 2013 8.15%Senior Public
Market
RU 3y € 250m equ. RUB Feb. 2013 8.60%Senior Public
Market
SK 5y € 30m March 2013 2.10%Covered Bond
Mortgage
TR 7y € 370m equ. USD Jan. 2013 4.00%Senior Public
Market
RO 5y € 123m equ. RON June 2013 6.35%Senior Public
Market
TR 4.8y WAL*) € 380m equ.(USD 355m / € 115m)
July 2013 1.50%Diversified
Payment of Rights(DPR)
Note: TR = Turkey, RU = Russia, SK = Slovakia, RO= Romania
*) WAL = Weighted Average Life
RU 3y € 250m equ. RUB Nov. 2013 8.10%Senior Public
Market
TR 5y € 370m equ. USD Dec. 2013 5.25%Senior Public
Market
44
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
45
Executive Summary Bank AustriaPublic Sector Cover Pool
Aaa Rating by Moody‘s
ECBC Covered Bond Label has been granted to the Public Sector Cover Pool of Bank Austria
Cover Pool Volume as of 31 March 2014 amounts to € 7,245 mn
Average volume of loans is approx. € 1.97 mn
Average seasoning is 5.1 years
Parameters of Cover Pool
Weighted Average Life (in years incl. Amortization) 7.1
Contracted Weighted Average Life (in years) 9.8
Average Seasoning (in years) 5.1
Total Number of Loans 3,679
Total Number of Debtors 1,359
Total Number of Guarantors 273
Average Volume of Loans (in EUR) 1,969,355
Stake of 10 Biggest Loans 27.6%
Stake of 10 Biggest Guarantors 34.4%
Stake of Bullet Loans 56.9%
Stake of Fixed Interest Loans 36.2%
Amount of Loans 90 Days Overdue 0
Average Interest Rate 1.8%
Parameters of Issues:
Total Number 44
Average Maturity (in years) 4.3
Average Volume (in EUR) 124,881,844
46
Public SectorParameters of Cover Pool and Issues
Total Value of the Cover Pool as of 31 March 2014 in EUR equivalent: 7,245 mn
• thereof in EUR: 3,764 mn
• thereof in CHF: 1,610 mn
• thereof public sector bonds in EUR equivalent: 1,871 mn
Moody’s Rating: Aaa
Nominal / Present Value Over-Collateralization*): 41.5% / 30.9%
Total Value of Sold Covered Bonds as of 31 March 2014 in EUR: 5,120 mn
*) Austrian Mortgage Banking Act requires a nominal over-collateralisation of 2%. The basis for its calculation is a cover pool value reduced by legallydefined haircuts. Taking these haircuts into consideration, the cover pool value amounts to EUR 6,899 mn, thus the overcollateralization is 28.8%.Additionally, in its Articles of Association, UniCredit Bank Austria commits itself to an over-collateralisation on a present value basis.
Maturity of Assets in the Cover Pool in mn EUR in %
Maturity up to 12 months 1,259 17.4%
Maturity 12 - 60 months 1,021 14.1%
thereof Maturity 12 - 36 months 386 5.3%
thereof Maturity 36 - 60 months 635 8.8%
Maturity 60 - 120 months 1,649 22.8%
Maturity longer than 120 months 3,316 45.8%
Total 7,245 100.0%
Maturity of Issued Covered Bonds in mn EUR in %
Maturity up to 12 months 1,296 25.3%
Maturity 12 - 60 months 1,420 27.7%
thereof Maturity 12 - 36 months 1,360 26.6%
thereof Maturity 36 - 60 months 60 1.2%
Maturity 60 - 120 months 2,067 40.4%
Maturity longer than 120 months 338 6.6%
Total 5,120 100.0%
47
Public SectorMaturity Structure of Cover Pool and Issues
Vienna26%
Lower Austria12%
Upper Austria10%Salzburg
1%Tyrol3%
Styria14%
Carinthia11%
Burgenland4%
Vorarlberg3%
Republic of Austria16%
Regional Breakdown Austria
48
Public SectorRegional Breakdown of Assets*) in Austria
*) Considering Guarantors
Assets: Type of Debtor / Guarantor in mn EUR Number
State 540 7
Federal States 2,236 53
Municipalities 1,269 2,634
Guaranteed by State 611 143
Guaranteed by Federal States 1,669 281
Guaranteed by Municipalities 771 483
Other 150 78
Total 7,245 3,679
49
Public SectorAssets Volume Breakdown by Type of Debtor / Guarantor
State7%Federal States
31%
Municipalities18%
Guaranteed by State8% Guaranteed by
Federal States23%
Guaranteed byMunicipalities
11%
Other2%
Assets: Type of Debtor / Guarantor
thereof under 100,0001%
thereof 100,000 - 300,0003%
thereof 300,000 - 500,0002%
thereof 500,000 - 1,000,0004%
thereof 1,000,000 - 5,000,00015%
above 5,000,00075%
Breakdown by Size of Assets
Volume Breakdown by Size of Assets in mn EUR Number
below 300,000 239 2,131
thereof under 100,000 50 1,103
thereof 100,000 - 300,000 189 1,028
300,000 - 5,000,000 1,547 1,397
thereof 300,000 - 500,000 164 424
thereof 500,000 - 1,000,000 323 450
thereof 1,000,000 - 5,000,000 1,061 523
above 5,000,000 5,459 151
Total 7,245 3,679
50
Public SectorVolume Breakdown by Size of Assets
51
Executive SummaryBank Austria Mortgage Cover Pool New
Aa1 rating by Moody’s
Bank Austria decided to streamline its Mortgage Cover Pool targeting a simple and transparent
pool composition:
focus on Austrian mortgages only
change to whole loan reporting instead of collateral volume
Benefit:
pure Austrian risk offer to our investor base
no blending of risk, diversification to be decided by investor
simple pricing logic
Non-Austrian mortgages to be channeled into specific collateralized structure with focus on CEE
ECBC Covered Bond Label has been granted to the BA Mortgage Cover Pool
52
Bank Austria’s Whole Loan ApproachWhole Loan Approach and its Benefits for Investors
Scenario II = Approach of Bank Austria = Whole Loan Approach
Loan Volume
&
Value to cover issuedPfandbriefe
Scenario I: Split Loan Approach = Minimum Approach
Loan Volumesplit
Value of Mortgage
&
€ 100 € 100 = €60 + €40 € 60
€ 100 € 100 € 100
For optimization of its collateral value
loans are split into 2 parts:
1) included in cover pool and
2) not included in cover pool
The whole loan – and not only its legally
assigned value – is included in the cover
pool to collateralize BA‘s issued
Mortgage Pfandbriefe.
Thus, investors benefit from
collateralization above legal
requirement in BA‘s cover pool.
€60 = MaximumPfandbrief volumeissued accordingto HypBG
€40 = AdditionalPool volume
Value of Mortgage
Not inCover Pool
Loan inCover Pool
Value to cover issuedPfandbriefe
Loan inCover Pool
According to the Austrian Mortgage Banking Act (HypBG), the maximum coverage volume of ”Beleihungswert” is 60%(maximum current outstanding of the loan)
€60 = MaximumPfandbrief volumeissued accordingto HypBG
Parameters of Issues:
Total Number 105
Average Maturity (in years) 5.6
Average Volume (in EUR) 37,250,052
Parameters of Cover Pool
Weighted Average Life (in years incl. Amortization) 9.4
Contracted Weighted Average Life (in years) 13.5
Average Seasoning (in years) 6.7
Total Number of Loans 24,759
Total Number of Debtors 23,163
Total Number of Mortgages 24,759
Average Volume of Loans (in EUR) 299,638
Stake of 10 Biggest Loans 12.7%
Stake of 10 Biggest Debtors 16.2%
Stake of Bullet Loans 37.9%
Stake of Fixed Interest Loans 13.8%
Amount of Loans 90 Days Overdue 0
Average Interest Rate 1.9%
53
Mortgage Cover PoolParameters of the Cover Pool and Issues
Total Value of the Cover Pool as of 31 March 2014 in EUR equivalent: 7,523 mn
• thereof in EUR: 5,727 mn
• thereof in CHF: 1,691 mn
• thereof substitute cover in EUR: 105 mn
Moody’s Rating: Aa1
Nominal / Present Value Over-Collateralisation*): 92.3% / 93.0%
Total Value of Issued Mortgage Pfandbriefe as of 31 March 2014 in EUR: 3,911 mn
Total Value of Sold Mortgage Pfandbriefe as of 31 March 2014 in EUR: 2,611 mn
*) Austrian Mortgage Banking Act requires a nominal over-collateralization of 2%. The basis for its calculation is a cover pool value reduced by legally definedhaircuts. Taking these haircuts into consideration the overcollateralization is 20.4%. Additionally, in its Articles of Association, UniCredit Bank Austria commitsitself to an over-collateralization on a present value basis.
Maturity of Assets in the Cover Pool in mn EUR in %
Maturity up to 12 months 418 5.6%
Maturity 12 - 60 months 1,101 14.6%
thereof Maturity 12 - 36 months 584 7.8%
thereof Maturity 36 - 60 months 517 6.9%
Maturity 60 - 120 months 1,363 18.1%
Maturity longer than 120 months 4,641 61.7%
Total 7,523 100.0%
Maturity of Issued Covered Bonds in mn EUR in %
Maturity up to 12 months 871 22.3%
Maturity 12 - 60 months 1,353 34.6%
thereof Maturity 12 - 36 months 372 9.5%
thereof Maturity 36 - 60 months 981 25.1%
Maturity 60 - 120 months 1,213 31.0%
Maturity longer than 120 months 475 12.1%
Total 3,911 100.0%
54
Mortgage Cover PoolMaturity Structure of Cover Pool and Issues
Volume Breakdown by Size of Loans in mn EUR Number
below 300,000 2,647 22,220
thereof under 100,000 556 10,005
thereof 100,000 - 300,000 2,091 12,215
300,000 - 5,000,000 2,131 2,400
thereof 300,000 - 500,000 457 1,247
thereof 500,000 - 1,000,000 380 541
thereof 1,000,000 - 5,000,000 1,294 612
above 5,000,000 2,745 139
Total 7,523 24,759
55
thereof under100,000
7%
thereof 100,000 -300,000
28%
thereof 300,000 -500,000
6%
thereof 500,000 -1,000,000
5%
thereof 1,000,000- 5,000,000
17%
above 5,000,00037%
Breakdown by Size of Loans
Mortgage Cover PoolAssets Volume Breakdown
Vienna40%
Lower Austria26%
Upper Austria7%
Salzburg4%
Tyrol6%
Styria7%
Carinthia5%
Burgenland3%
Vorarlberg2%
Regional Breakdown Austria
56
Mortgage Cover PoolRegional Breakdown *) of Mortgages in Austria
*) Without substitute cover (consists of bonds)
Residential41%
Residential subsidized24%
Residential used forbusiness purposes
5%
Commercial30%
Mortgages / Type of Use
Mortgages Breakdown by Type of Use in mn EUR Number
Residential 3,007 21,347
Residential subsidized 1,751 2,046
Residential used for business purposes 408 952
Commercial 2,253 414
thereof Office 1,183 100
thereof Trade 593 37
thereof Tourism 162 61
thereof Agriculture 8 49
thereof mixed Use / Others 307 167
Total 7,419 24,759
57
Mortgage Cover PoolBreakdown*) by Type of Use
*) Without substitute cover (consists of bonds)
58
Mortgage Cover PoolBreakdown*) by Type of Use
Bank Austria’s Mortgage Cover Pool Value accounts for € 7,419 mn as of 31 March 2014
(without substitute cover)
All mortgages in cover pool are located in Austria
The main concentration is in the City of Vienna 40% and the state of Lower Austria 26%
Breakdown of cover pool by type of use:
70% residential real estate (thereof 24% subsidized)
30% commercial real estate, divides as follows:
Office 15.9%
Trade 8.0%
Tourism 2.2%
Mixed use 4.2%
*) all percent Values are respective cover pool value without substitute cover
59
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
60
Agenda
Annex
Bank Austria within UniCredit Group
Legal Situation – Austrian Covered Bonds
Real Estate Market Austria
61
UniCredit at a glanceA clear international profile based on a strong European identity
1) Based on latest available data. Source: Sodali*) Including unidentified shares owned by the Group and Cashes
Strong local roots in almost 20 countries
~ 131,000 employees
~ 8,000 branches
~ 32 mn customers in Europe
One of the most important banks in Europe
with total assets of ~ € 890 bn
One of the 28 Global Systemically Important
Banks (“G-SIBs”) worldwide
Market capitalization of over € 30 bn
Capital increase of € 7.5 bn in 2012, with
strong response from all investor clusters
Common Equity Tier 1 (CET1) Ratio at 9.9%
and Total Capital Ratio at 14.2% (Basel 3 phase-in)
– as of 31 March 2014
Main shareholders:
Stable shareholders, e.g. Foundations
Institutional investors
Retail investors
Shareholder Structure1)UniCredit Highlights
Retail
ItalianInstitutional
Investors
2.2%
Other*)
21.6%
Stable Shareholders
3.6%
InternationalInstitutionalInvestors
37.2%
35.4%
62
Role of Bank Austria within UniCredit
Within UniCredit, Bank Austria is the
Central hub for the CEE Region(except Poland) and the
Responsible unit for the Austrianmarket
Bank Austria benefits from being part ofUniCredit:
Strong market presence in 17European countries
Access to a worldwide network
Leveraging on the know-how of theGroup‘s product factories
Bank Austria as UniCredit‘s centralhub for the CEE Region:
Holding for banks in 13 CEEcountries with a population ofaround 300 mn
Managing a network of about1,600 branches and 30,000FTE in CEE
Development of retail andcorporate business in the region
Liquidity management for theCEE subsidiaries
Management of credit andmarket risk
Responsibility for HRdevelopment
63
Agenda
Annex
Bank Austria within UniCredit Group
Legal Situation – Austrian Covered Bonds
Real Estate Market Austria
64
Austrian Real Estate MarketOverview
Austrian Real Estate Market shows rising price levels and stable demand
Prices and new building volumes for commercial real estate (commerce and industry as well
as offices) are stable
Prices for residential real estate increased significantly within the last years (see next page),
but not reaching the excessive levels of comparable other European real estate markets
This increase is due to strengthened private demand and is expected to slow down in the future.
In our opinion, the market is not over-priced as there are stabilizing factors:
High level of owners equity
High fees (tax and others) keep bargain hunters away from the market
High level of public ownership and subsidized housing and a social tenancy law are limiting
rental fees. Therefore, market participation of investors taking an eye on high yields is limited
65
Austrian Real Estate MarketPrices for residential real estate
Source: OeNB (Austrian Central Bank), TU Wien, Institut für Stadt- und Regionalforschung, ECB
80
100
120
140
160
180
200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Residential Real Estate Price Index (2000 = 100)
Austria without Vienna Vienna
Residential real estate price development has been stable
66
Austrian Real Estate MarketOffice Market
Source: CBRE, IRG
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
500.000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e
Office space in Vienna 2001 - 2013e
New spaces built in m² Rent able space in m²
Viennese office market has been one of the most through steady European markets
for years
67
Agenda
Annex
Bank Austria within UniCredit Group
Legal Situation – Austrian Covered Bonds
Real Estate Market Austria
68
Austrian Legal FrameworkMortgage and Public Sector Pfandbriefe
Austrian Covered Bonds
Pfandbriefe
Pfandbriefgesetz(Pfandbrief Law 1938)
Hypothekenbankgesetz(Mortgage Banking Act 1899)
FundierteSchuldverschreibungen
Law of 1905
Bank Austria
Remark:Austrian ‘Mortgage Pfandbriefe‘ also follow the same legal regulation as ‘Public Sector Pfandbriefe‘
69 * if included in the Articles of Association of the respective credit institution
Austrian„Hypothekenbankgesetz“ wasinitially based on the Germanlegislation
Important changes to theGerman "Pfandbrief" -legislation were followed by theAustrian"Hypothekenbankgesetz",which continues to reflect theprincipal features of theGerman "Pfandbriefgesetz”
Main differences in the currentversion are:
• German law also allowscollateral assets fromnon-European countries
• German law includescompulsory NPV-matching, whereas inAustria a voluntarycommitment is foreseento be stipulated in thearticles of association.Bank Austria, accordingly,included such clause inits articles of association
Comparison Austria vs. Germany
Criteria of Pfandbrief law /Hypothekenbankgesetz
Austria Germany
Pfandbrief law in place YES YES
Mortgage and public sector
collateral assets in separate poolsYES YES
Cover register YES YES
Collateral assets limited to Europe YES X
Legally required minimum over-
collateralizationYES YES
Cover pool monitoring (Trustee) YES YES
Special proceedings in case ofinsolvency
YES YES
Pfandbriefe remain outstanding in
case of issuer‘s bankruptcyYES YES
NPV matching YES* YES
70
Your Contacts
CFO FinanceUniCredit Bank Austria AG
Martin KlauzerHead of FinanceTel. +43 (0) 50505 [email protected]
Thomas Ruzek
Head of Strategic Funding
Tel. +43 (0) 50505 82560
Gabriele WiebogenHead of Long Term FundingTel. +43 (0) 50505 [email protected]
Werner Leitner
Head of Cover Pool Management
Tel. +43 (0) 50505 82647
CFO Planning & Controlling Austria
UniCredit Bank Austria AG
Günther StromengerHead of Corporate RelationsTel. +43 (0) 50505 [email protected]
Impressum
UniCredit Bank Austria AGCFO FinanceA-1010 Vienna, Schottengasse 6-8
71
This publication is presented to you by:UniCredit Bank Austria AGJulius Tandler-Platz 3A-1090 Wien
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Note to US Residents:The information provided herein or contained in any report provided herein is intended solely for institutional clients of Corporate & Investment Banking of UniCredit Group acting through UniCredit Bank AG, New York Branch and UniCredit CapitalMarkets, Inc. (together “UniCredit”) in the United States, and may not be used or relied upon by any other person for any purpose. It does not constitute a solicitation to buy or an offer to sell any securities under the Securities Act of 1933, asamended, or under any other US federal or state securities laws, rules or regulations. Investments in securities discussed herein may be unsuitable for investors, depending on their specific investment objectives, risk tolerance and financialposition.In jurisdictions where UniCredit is not registered or licensed to trade in securities, commodities or other financial products, any transaction may be effected only in accordance with applicable laws and legislation, which may vary from jurisdiction tojurisdiction and may require that a transaction be made in accordance with applicable exemptions from registration or licensing requirements.All information contained herein is based on carefully selected sources believed to be reliable, but UniCredit makes no representations as to its accuracy or completeness. Any opinions contained herein reflect UniCredit's judgement as of theoriginal date of publication, without regard to the date on which you may receive such information, and are subject to change without notice.UniCredit may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in any report provided herein. Those reports reflect the different assumptions, views and analytical methods of theanalysts who prepared them. Past performance should not be taken as an indication or guarantee of further performance, and no representation or warranty, express or implied, is made regarding future performance.UniCredit and/or any other entity of Corporate & Investment Banking of UniCredit Group may from time to time, with respect to any securities discussed herein: (i) take a long or short position and buy or sell such securities; (ii) act as investmentand/or commercial bankers for issuers of such securities; (iii) be represented on the board of such issuers; (iv) engage in “market-making” of such securities; and (v) act as a paid consultant or adviser to any issuer.The information contained in any report provided herein may include forward-looking statements within the meaning of US federal securities laws that are subject to risks and uncertainties. Factors that could cause a company's actual results andfinancial condition to differ from its expectations include, without limitation: Political uncertainty, changes in economic conditions that adversely affect the level of demand for the company‘s products or services, changes in foreign exchangemarkets, changes in international and domestic financial markets, competitive environments and other factors relating to the foregoing. All forward-looking statements contained in this report are qualified in their entirety by this cautionarystatement.
This product is offered by UniCredit Bank Austria AG who is solely responsible for the Product and its performance and/or effectiveness. UEFA and its affiliates, member associations and sponsors (excluding UniCredit and UniCredit Bank AustriaAG) do not endorse, approve or recommend the Product and accept no liability or responsibility whatsoever in relation thereto.
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