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Bank Austria
Vienna, August 2015
Presentation to Fixed Income Investors
2
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
Bank Austria – at a glance
Bank Austria Highlights as of 30 June 2015
Member of UniCreditsince 2005
Leading corporate bankand one of the largestretail banks in Austria
~ 7,000 FTE and about230 branches in Austria
Management of theleading banking networkin CEE in 13 countries
~ 29,000 FTE and about1,400 branches in fullCEE subsidiaries1)
Solid capital base (10.8%CET1 Ratio)
Stable liquidity with aperfect balance betweencustomer loans and directfunding
1) plus a further 19,000 FTE and ~ 1,100 branches in Turkey (the 41%-stake now being consolidated at equity)2) Capital ratios based on all risks; Basel 3 (transitional) and IFRSs; end of period.
6/15 12/14
Total Assets 191.4 189.1
Customer Loans 117.2 113.7
Direct Funding 136.6 132.3
Equity 15.7 14.9
In € bn
1H15 1H14
Operating income 2,905 2,967
Operating costs -1,527 -1,546
LLP -391 -352
Net profit 489 778
In € mn
RoE after tax 6.9%
Cost / income ratio 52.6%
CET1 capital ratio2) 10.8%
Total capital ratio2) 14.4%
Non-performing exposureratio
4.2%
Coverage ratio 55.8%
Cost of risk 67bp
3
S&P BBB A-2
Moody’s Baa2 P-2
Fitch BBB+ F2
Market share loans /deposits Austria
14,6 % / 14,5 %
Market share loans /deposits CEE
6% / 6%
4
Business Model and Market Position in Bank Austria‘sHome Market
Bank Austria is one of the strongest banks in Austria:
CIB = Corporate & Investment Banking
CIB
Leading corporate bank in
the country (7 of 10 large
corporates are clients)
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
- Real Estate
- Public Sector (excluding
Republic of Austria)
Broad coverage through a
network of approx. 230
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
26% 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
5
Bank Austria‘s Market Shares1) in the Domestic Customer Business(as of May 2015)
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
Very efficient network structure to cover the important size of customer sharewith only 5% of all bank branches in Austria
16.2%
16.2%
23.6%
24.3%
14.5%
10.5%
14.6%
12.5%
12.2%
Austrian economic growth YoY in % Austrian inflation rate YoY in %
Economic Conditions in Austria
Sources: Statistik Austria, Bank Austria Economics & Market Analysis Austria
forecast
6
Employment and unemployment rate
2,3
1,5
2,2
3,2
0,5
1,9
3,3
2,4
2,0
1,7
1,2
1,6
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 2016
2,1
3,43,6
1,5
-3,8
1,9
3,1
0,9
0,20,3
0,9
1,5
-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 2016
forecast
Hopes of perceptible economic growth in 2014 weredashed by faltering support from growth markets andthe Ukraine conflict with Russia. Austria’s economygrew by an insignificant 0.3% in 2014 as a whole
There are at least five good reasons why 2015 will bebetter than 2014: The modest increase in globaldemand, supported by the weaker euro and lower oilprices, and fiscal and monetary impetus in the pipeline
The sharp fall in oil prices will significantly curbthe inflationary trend in Austria also in 2015, whilethe economy still lacks the impetus for an improvementon the labor market. 2015 will probably see a furtherrise in unemployment in Austria to 5.7 %
3000
3100
3200
3300
3400
3500
3600
3700
0
1
2
3
4
5
6
7
8
9
10
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Employment excl. persons drawing maternity benefits, military service andtraining (1000s, SA) - RS
Unemployment rate (%, SA) - LS
7
Cross-country breakdownReal GDP growth, %
Economic growth in CESEE to continue on its recovery path,while the whole CEE region is set to pick up from 2016
-8
-6
-4
-2
0
2
4
6
8
10
2016F
2.5
1.1
2.2
-0.7
2.1
1.2
201320092005
0
-1
-2
-3
-4
-10
4
3
2
1
TR
3.6
BH
3.5
SK
3.2
CZ
2.7
SI
2.6
RO
2.5
HU
2.4
BG
2.3
UA
1.6
RS
1.3
HR
0.8
RU
-1.4
2016F2015FCESEECEE
CEE: BG: Bulgaria, BH: Bosnia and Herzegovina, CZ: Czech Republic, HR: Croatia, HU: Hungary, RO: Romania,RS: Serbia, RU: Russia, SI: Slovenia, SK: Slovak Republic, TR: Turkey, UA: Ukraine;CESEE: CEE excluding Russia, Turkey, Ukraine
Source: UniCredit Research, UniCredit CEE Strategic Analysis
Data as ofFY 2014
OTP
ISP
SocGen
UniCredit
(5)
Note: (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 andbefore minorities; (3) Including direct and indirect presence in the 25 CEE countries, excluding representative offices; (4) including branches in Turkey at 100%; (5)Results of RBI exclude group corporate, markets and corporate center segments; (6) BG, HR, MG, MD and MC as of FY2013 since 1H 2014 data not available; (7)As of 1H14; (8) Excluding BG, HR, MG, MD and MC. Rest of the countries as per 1H14.
Source: UniCredit CEE Strategic Analysis
Countries ofpresence (3)
Total Assets (1)
EUR bnNumber ofBranches
116 19
CEE, % share inGroup revenues
33
37
57
73
77
80
142
Net Profit (2)
EUR mn
(6)
(7)
156
79
75
73
57
37
35
(6)
1.361
252
-257
353
525
-53
-331
(7)
3.499
2.852
1.828
2.494
761
1.204
1.421
(7)
14
17
6
15
4
10
9
(7)
25
81
53
14
29
10
n.m.
(8)
(4)
UniCredit: leadership in CEE
8
9
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
~ € 90 bn Direct funding (Primary
funds = Deposits from customers +
Debt securities in issue)
~2,400 branches*) and ~47,000 FTE *)
Within top 5 in 10 Countries
*) excl. ~1,100 branches and ~19,000 FTE of Turkish Joint Venture
RankingMarket
Share
Total
Assets
(€ mn)
Customer
Loans
(€ mn)
Primary
Funds
(€ mn)
Branches
Poland 2 10% 41.244 28.815 30.784 1.015
Russia 9 2% 19.813 12.698 13.653 102
Czech Republic 4 9% 20.618 13.048 14.707 184
Slovakia 5 7% - - - -
Croatia 1 26% 14.447 9.888 9.084 135
Bulgaria 1 18% 8.860 5.230 6.195 197
Romania 6 8% 7.053 4.701 3.259 184
Hungary 3 7% 7.046 3.068 3.753 85
Ukraine ("held for sale") 6 4% - - - 250
Slovenia 4 7% 2.904 1.921 2.055 30
Bosnia & Herzegovina 1 23% 2.752 1.791 1.966 119
Serbia 3 9% 2.519 1.500 1.225 71
at equity consolidated
Turkey 5 10% 30.306 20.792 19.257 1.056
o/w Azerbaijan 7 1% 129 83 72 18
Rep. Offices
Belarus
Macedonia
Montenegro
CEE Division (excl. Turkey, excl. Ukraine) 91.950 58.870 56.073 2.416
CEE Region (excl. Turkey, excl. Ukraine) 133.194 87.684 86.857 3.431
Note: Data as of 30 June 2015, ranking and market share as of 31 March 2015
Poland (Bank Pekao) under management of UniCredit
Since 1 Dec. 2013, foreign branch of UniCredit Bank Czech Republic and Slovakia
Turkey consolidated at equity as from 2014
Representative Office of UniCredit Russia
incl. Turkey, incl. Ukraine
2)
3)
4)
5)
1)
5)
4)
3)
2)
1)
5)
10
Turkey and Ukraine shown separately as
Yapi Kredi (Turkish Joint-Venture) consolidated at equity since 2014
Ukrsotsbank (Ukraine) reclassified to “Held for Sale”
CEE Division1) – incl. Details on Turkey and Ukraine(as of 30 June 2015)
1) excl. Poland (under direct management of UniCredit)2) Primary funds (= Direct Funding) = Deposits from Customers + Debt Securities in Issue
11.8% 5.1%
9.5% 4.8%
Market Share CEE Division – Customer Loans
Market Share CEE Division – Customer Deposits
Excl. Russia Incl. Russia
Excl. Russia Incl. Russia
(€ mn)
Loans to Customers 58,870 20,792 1,526
Primary Funds 2) 56,073 19,257 955
CEE(excl. TR, UA)
Turkey(at 40.9%)
Ukraine
▪ Reinforcing business refocusing through:
− Country portfolio optimization, targeting leadership position, increasing profitabilityand volumes market share with attention to risk awareness
− Discipline and execution
− Focus on efficiency
− Leveraging on presence in CEE as added value for the Group
▪ Boost value creation of corporate portfolio through:
− Enhancement of service model (targeting “capital light” approach) on a value baselogic, strengthening cross-selling and pricing capabilities
− Increase penetration and customer base on most attractive sub-segments thanks tofocus on SME and internationalization program
▪ Profound business model transformation, enabled by investments in infrastructure, toquickly boost profit generation through:
RetailTransformation
− Simplification of operating model to free-up resources
− Service model revision to enhance productivity
− Extensive leverage of digital and multi-channels
− Further increase customer base
Balancedgrowth
ReinforcingLeadershipin Corporate
To support the strategic ambition of CEE Division, a large-scaleprogram has been launched, targeting transformation and improvedprofitability in key areas
11
CEE keeps focus on portfolio optimization, targeting balanced growthand efficiency
Sale of ATF Bank
Sale of Yapi Kredi Sigorta
Merger of UCB CZ and UCB SK Acquisition of AXA retail portfolio (CZ) Acquisition of Transfinance a.s. (CZ)*
Wind-down of bank activities andmerger with UC Leasing Latvia*
JV with Renault,Nissan and Infiniti
Sale of MICEX
Retail portfolio acquisition (RBS) Corporate portfolio acquisition (RBS)* Purchase of stake held by Tiriac Holdings
Merger of UniCredit Bank Ukraineand Ukrsotsbank
CAIBs Integration of CAIBs completed*
UCIFIN Integration in RO, BG completed
Leasings Transfer in 2014/15**
CEEregion
12
Further achievements 2014: Turkey: Successful branch expansion Hungary: Solid profitability maintained (unlike most competitors)
Sale ofIstratourist*
* completed in 2014
** ongoing
Branch concept with extended opening hours
(9 a.m. to 6 p.m.), advanced design and new
service model
Advisory services intensified
Services provided by a team and highly
specialised experts via video conference
Online branch with more than 100 employees
for SmartBanking (extended opening hours from
8 a.m. to 8 p.m.) delivers a bank branch to
every customer’s home and smartphone
About 1,000 advisory talks via video
telephony per month
State-of-the-art online shop which delivers all
relevant products on a 24/7 basis
SmartBankingTransformation based on new business model is making rapid progress
13
14
Rating Overview
1) Subordinated (Lower Tier II)2) Securities issued before 31 Dec. 2001 which benefit from a secondary liability by the City of Vienna (grandfathered debt) are also rated as shown
above by Standard & Poor´s, while by Moody´s the corresponding senior securities are rated A3 and the subordinated ones are rated Baa3
1) 1) 1)
2)
(as of 6 July 2015)
Long-Term Short-Term Subordinated Long-Term Short-Term Subordinated Long-Term Short-Term Subordinated
Baa2 P-2 Ba2 BBB A-2 BB+ BBB+ F2 -
Stable Negative Stable
Baa1 P-2 Ba2 BBB- A-3 BB BBB+ F2 BBB
Stable Stable Stable
Public Sector
Covered Bond
Mortgage Covered
BondAaa - -
Aaa - -
UniCredit S.p.A.
Moody's S&P Fitch
Bank Austria
15
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
P&L of Bank Austria – 1H15Sound operating performance despite persistently weak economic trends
Note: Non-operating items include provisions for risks and charges, systemic charges, profit from investments and integration costs
16
Operating income slightly down, mainly due to low interest environment in Austria, currency effects and expiry of profit
contribution in UniCredit Markets Division (part of the intra-group sale of CAIB in 2010) at the end of 2014
Costs lower vs. 2014, due to overall improvement in P&L cost lines, following strict cost management
Net write-downs of loans in Austria turned positive, higher in CEE with an increasing coverage ratio
Profit/loss from discontinued operations includes mainly the loss re/ Ukrsotsbank
Group net profit at € 489 mn would be up y/y on a proforma basis if excluding major one-offs like Ukrsotsbank (-202 mn),
higher systemic charges (-44 mn), UCG profit contribution 2014 (63 mn) and 2014 gain on real estate sales (72 mn)
1-6/ 1-6/(€ mn) 2015 2014
Operating Income 2,905 2,967 -2.1% 1,522 1,383 1,554 10.1% -2.1%
Operating Costs -1,527 -1,546 -1.3% -776 -751 -774 3.4% 0.3%
Operating Profit 1,378 1,420 -3.0% 746 632 780 18.0% -4.4%
Net Write-Downs of Loans -391 -352 11.3% -181 -210 -144 -13.5% 25.9%
Net Operating Profit 986 1,069 -7.7% 564 422 636 33.7% -11.2%
Non-Operating Items -183 -126 45.8% -71 -112 -113 -36.1% -36.7%
Profit Before Tax 803 943 -14.8% 493 310 523 58.8% -5.7%
P/L discontinued operations -183 -25 >100.0% -123 -60 -27 >100.0% >100.0%
Other positions 131 140 -6.3% 78 53 66 47.6% 19.2%
Group Net Profit 489 778 -37.2% 291 198 430 47.5% -32.3%
Cost / Income Ratio (in %) 52.6% 52.1% 44 bp 51.0% 54.3% 49.8% -329 bp 118 bp
y/y 2Q15 1Q15 2Q14 q/q y/y
17
Net Operating Profit Composition (€ mn)
-774 -751 -776
-144 -210 -181
2Q15
564
1,522
1Q15
422
1,383
2Q14
636
1,554
Net Operating ProfitBank Austria confirms profitability, with CEE as main contributor
LLP
Costs
Operating income
2,905
1-6/2014
1,069
-352
-1,546
2,967
-8%
1-6/2015
986
-391
-1,527
CEE
Austria32%
68%
*) without Corporate Center
Share of Divisions *) –Net Operating Profit by region (%)
NOP down y/y (-8%)
Reduction of revenues y/y due to low interest
environment in Austria and expiry of profit contribution
in UniCredit Markets Division
Y/y decrease in costs due to strict cost control (in
particular lower payroll costs)
LLP higher y/y and q/q (driven by CEE), but with
Austria at positive level due to releases
18
Cost of Risk (in basis points)Net Write-Downs of Loans (in mn €)
168
175219
-38
35
-24
2Q15
181
1Q15
210
2Q14
144
119
-3
13
68
136
1
0
67
CEE
CIB
CommercialBanking
BA Group
1-6/2015FY14
Loan Loss Provisions and Cost of RiskLLPs higher despite positive values for Austria; Cost of Risk stable
37
+11%
1-6/2015
391
-2
394
1-6/2014
352
314
LLPs: higher y/y, with a positive value in Austria due to excellent risk management (favorable
development in all segments) and higher in CEE (due to Russian and Ukrainian borrowers), leading
to further improvement in coverage ratios in CEE
Cost of risk on FY14 level (BA Group at 67 bps vs. FY14 with 68 bps), with
Favorable development in Austria. Net LLP releases in Corporate segment
CEE moderately higher mainly due to Russia and Ukraine
AustriaCEE
19
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 QualityImprovement of Asset Quality Ratios in 2Q15 due to declining impairedvolume
In 2Q15 decrease of Net
Impaired Loans on
group level leading to
an improved net
impaired loans ratio of
4.2%
High quality of loan
portfolio in Austria;
further improvement
of Coverage Ratio in
Austria to 64.4%
Substantial
improvement of
Coverage Ratio also in
CEE, decrease of the
Net Impaired Loans ratio
to 6.4%
-3%
2Q15
4.9
1Q15
5.2
2Q14
5.1
-10bp
2Q15
4.2%
1Q15
4.4%
2Q14
4.3%
+121bp
2Q15
55.8%
1Q15
54.7%
2Q14
54.6%
-9%
2Q15
1.2
1Q15
1.3
2Q14
1.3 2.1%
1Q15
2.2%
2Q14
2.2%
-13bp
2Q15
+182bp
2Q15
64.4%
1Q15
64.2%
2Q14
62.5%
0%
2Q15
3.7
1Q15
3.9
2Q14
3.7
-20bp
2Q15
6.4%
1Q15
6.6%
2Q14
6.6%
2Q15
+117bp
52.0%
1Q15
50.4%
2Q14
50.9%
BA Group
Austria
BA GroupBA Group
AustriaAustria
CEE CEECEE
CEE Division increases profit before tax by 6% (at constant rates)
Profit before tax up by 6% (at
constant rates)
based on stable revenues and
strict cost management, despite
higher loan loss provisions
Stable development through good
regional diversification
Russia still in a difficult
environment, but an essential
profit contributor
Strong improvement in Turkey
due to significant business growth
In South East Europe positive
development in all countries,
despite a challenging environment
Clear upswing also in Central
Europe
Cost/income ratio of CEE
Division at excellent 38.1%Slovenia 5
Hungary 66
CZ/SK 141
CE 213
Bosnia 27
Serbia 35
Romania 34
Croatia 91
Bulgaria 103
SEE 290
Turkey 157
Russia 155
CEE 678
20 1) Turkey consolidated at equity, therefore incl. in CEE total with net profit of € 157 mn. The proportionate profit before tax amounts to € 198 mn.
1)
3%
449%
30%
77%
27%
252%
7%
21%
24%
12%
-16%
6%
n.m.
1)
Profit before tax 1-6 2015in EUR mn - change y/y in % (at constant exchange rates)
21
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
Other Assets
OtherFinancial Assets
Loans andreceivableswith customers
Loansand receivableswith banks
Assets
191,442 (100%)
12,635 (7%)
33,440 (17%)
117,226 (61%)
28,142 (15%)
Deposits fromcustomers
Deposits frombanks
Liabilities
191,442 (100%)
15,696 (8%)
16,675 (9%)
28,637 (15%)
107,971 (56%)
22,463 (12%)
Equity
Other Liabilities
Debt securitiesin issue
Balance Sheet structure (as of 30 June 2015)
Balance Sheet (€ mn) Change vs. 31 December 2014
+1.2%
06/15
191
12/14
189
Balance sheet Loans to customers
+3.1%
06/15
117
12/14
114
Deposits fromcustomers
Securitiesin issue
+5.6%
06/15
108
12/14
102
-4.6%
06/15
29
12/14
30
(€ bn)
+5.2%
06/15
16
12/14
15
46bp
6.0%
06/1512/14
5.6%
Shareholders’equity
Leverage ratio Significant growth in customer business vs. YE2014, both in
customer loans (+3%) and especially on the deposit side (+6%)
Solid equity base of EUR 15.7bn, +5% y/y vs. YE15 due to
semi-annual profit and positive development of the foreign
currency reserve and the social capital
22
23
Loans to Customers1) (€ mn)
0%
+1%
2Q15
117,226
58,640
58,586
1Q15
117,511
58,979
58,533
4Q14
113,749
56,963
56,786
3Q14
115,533
57,377
58,155
2Q14
115,661
58,115
57,545
Loan and Deposit VolumesStrong increase in deposits, Loans/Direct Funding Ratio improved further
1Q15
13%+2%
106,150
54,368
51,782
4Q14
102,256
52,716
49,540
3Q14
99,773
52,108
47,665
2Q15
107,971
55,183
52,788
2Q14
95,724
49,601
46,123
Deposits from Customers1) (€ mn)
CEE
Austria
89% 86%93% 86% 86%
Loans/Direct Funding Ratio
1) All figures recast and excl. Turkey and Ukraine
Loans to customers q/q stable in all segments; slight increase y/y both in Austria and in CEE
Deposits from customers +2% q/q, confirming the positive trend in both Austria and CEE. Strong growth of 13%
y/y, driven by high growth rates in all Austrian segments and throughout CEE
Overall excellent funding base, Loans/Direct Funding Ratio stable at 86%, implying that customer loans are
covered by customer deposits and debt securities in issue to the extent of over 100%
CEE
Austria
24
Customers loans / Direct Funding (€ bn) 1)
Volumes in CEEGood business development, impact from currency movements
Loans/Direct Funding: Within CEE, ratio significantly improved y/y
to 104%
Regional Breakdown: well-balanced distribution of volumes, with
Russia and Czech Rep./Slovakia as largest banks. In a
proportionate view, equity-consolidated Turkey would be the largest
CEE bank (loans 21 bn, direct funding 19 bn)
Primary funds (€ bn) – June ‘15 1)
Customer loans (€ bn) – June ‘15
Regional Breakdown
1) Direct Funding = Deposits from customers + Debt securities in issue
2Q15
56.158.6
1Q15
54.658.5
2Q14
49.1
57.5
Direct FundingCustomer loans
Romania 5
Croatia 10
Bulgaria 5
Hungary 3
CZ/SK 13
Russia 13
o/w
CEE 59
Romania 3
Croatia 9
Bulgaria 6
Hungary 4
CZ/SK 15
Russia 14
o/w
CEE 56
Regional Breakdown
104%117% 107%
Loans/Direct Funding Ratio CEE
CVA charge
Market risk
2Q15 B3
134.6
116.7
12.0
0.55.4
2014
130.4
113.0
12.1
4.6
2013
118.5
103.6
12.8
2.1
Risk-Weighted Assets (€ bn)
11.3% 10.3% 10.8%CET1
Tier 1
2Q15B3 phase-in
14.4%
10.8%
2014
13.4%
10.3%
2013
13.5%
11.5%
Capital Ratios
2Q15B3 phase-in
CET1
Additional
Tier 1
19.4
14.5
0.0
2014
17.5
13.5
0.0
2013
16.0
13.4
0.3
Regulatory Capital (€ bn)
Total CAR
Total Capital Total RWA
1) Starting with 2014, figures in accordance with Basel 3/CRR and since 3Q14 based on IFRS; transitional adjustments (phase-in) only relevant for capital, not for RWA
1)1)
1)
Capital position and RWASound capital ratios
25
Common Equity Tier 1 (CET1) ratio stands at
solid 10.8% and Total Capital ratio at 14.4%
(both according to Basel 3 phase-in and IFRS)
Safe capital base as Bank Austria – unlike its
main competitors – did not take up state capital
Total RWA increase by € 4.3 bn vs YE mainly
due to FX development (CHF, USD and RUB)
26
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
27
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
UniCredit S.p.A
(Baa1/BBB-/BBB+)
RLC Germany RLC Poland
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
Long-Term Ratings by (Moody’s/S&P/Fitch) as of 6 August 2015 *) Namensschuldverschreibungen
RLC Italy
UniCredit Bank AG
(A3/BBB/A-)
Bank Pekao SA
(A2/BBB+/A-)
UniCredit Bank
Austria AG
(Baa2/BBB/BBB+)
28
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
29
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
30(1) 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 (steered centrally by ALM BA)
0
10.000
20.000
30.000
40.000
50.000
60.000
30.0
9.1
0
31.1
2.1
0
31.0
3.1
1
30.0
6.1
1
30.0
9.1
1
31.1
2.1
1
31.0
3.1
2
30.0
6.1
2
30.0
9.1
2
31.1
2.1
2
31.0
3.1
3
30.0
6.1
3
30.0
9.1
3
31.1
2.1
3
31.0
3.1
4
30.0
6.1
4
30.0
9.1
4
31.1
2.1
4
31.0
3.1
5
30.0
6.1
5
0,880,890,900,910,920,930,940,950,960,970,980,991,001,011,021,031,041,051,061,071,081,091,10
Dec
-09
Mar
-10
Jun-
10
Sep-
10
Dec
-10
Mar
-11
Jun-
11
Sep-
11
Dec
-11
Mar
-12
Jun-
12
Sep-
12
Dec
-12
Mar
-13
Jun-
13
Sep-
13
Dec
-13
Mar
-14
Jun-
14
Sep-
14
Dec
-14
Mar
-15
Jun-
15
1Y Liquidity Ratio
1Y Limit
Constant prudent net liquidity reserve
inflows from market and captive customer
base
positive effect of cash pooling
Cash horizon constantly above 3M
Sound counterbalancing capacity
(approx. € 28.5bn on 1Y average)
Structural liquidity ratio3) well above limits…
Internal rule of 0.90 for maturities above 1y
Level as of June 2015: 1.10
… thanks to
Stable Loan/Deposit ratio
2015 M/L Term Funding Plan positively
kicked off
31
Medium- & Long-Term Funding Development and Target 2015
Medium- & Long-Term Funding(in € bn)
Benchmark Issuances in 2014
and 2015:
Mortgage Pfandbrief
Benchmarks in January, April,
September 2014 and February
2015 successfully placed
Public Sector Pfandbrief
Benchmark in May 2014
successfully placed
Plan for 2015:
Benchmark Issues, Private
Placements and Issuance via
own Network of Covered
Bonds and Senior Bonds
3,18
4,63
2,10
3,79 3,854,08
2014 2015 Plan
o/w 0.5Pre-Funding
2015
2013
o/w 0.5Pre-Funding
2014
201220112010
Pfandbriefe€ 2.3 bn
Pfandbriefe€ 3.0 bn
Pfandbriefe€ 0.8 bn
Pfandbriefe€ 1.75 bn
Pfandbriefe€ 1.4 bn
Pfandbriefe€ 2.0 bn
32
Maturity Profile(in € mn)
Split of Instruments(in € mn)
4,837
11,614
7,572
Subordinated Bonds
Senior Bonds
CoveredBonds
Maturity Profile of Bank Austria’s Own Issues(as of 30 June 2015)
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
865834
474
682
626
2020
1,635
1,136
25
2019
2,045
1,015
1,029
1
2018
2,225
1,360
0
2017
3,451
139
2,687
2016
5,236
4,243
159
2015
887
115
90
after 2020
8,544
3,468
1,139
3,937
Senior Bonds
Covered Bonds
Subordinated Bonds
24,023Total
33
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
34
Overview of Pfandbrief Benchmark Issues 2015
In February, successful issue of a 10-year Mortgage Pfandbrief Benchmark
Insurance companies
Central Banks/Official Institutions
4%
Funds
18%
Banks
30%
48%
OthersSwitzerland
UK
France
Asia
Austria
6%Germany
25%
52%
Bank AustriaMortgage Pfandbrief
0.75% 25/02/2025 € 500 mn Feb. 2015 MS + 3bps
3%
5%
3% 6%
35
Overview of Pfandbrief Benchmark Issues 2014 1/2
In January, successful issue of a 10-year Mortgage Pfandbrief Benchmark
9%
6%
30%55%
Insurance companies
Central Banks
Funds
Banks
In April, successful issue of a long 5-year Mortgage Pfandbrief Benchmark
Insurance companies
Central Banks5%
Funds
12%
Banks
31%
52%
2%
Others
2%
Switzerland
3%
Italy
6%UK
France
Asia
9%
Austria
10%
Germany
21%
47%
Bank AustriaMortgage Pfandbrief
2.375% 22/01/2024 € 500 mn Jan. 2014 MS + 35bps
Bank AustriaMortgage Pfandbrief
1.25% 14/10/2019 € 500 mn April 2014 MS + 23bps
Benelux 11%
3%Italy 2%
2%
SpainAsiaSwitzerland
10%Nordics
6%
Austria
12%
Germany54%
In May, successful issue of a 7-year Public Sector Pfandbrief Benchmark
Corporates
37%
Funds46%
3%
Insurance companies
4%
Central Banks 10%
Banks
UK
1%3%
Nordics/Benelux
3%
Others
3%
Italy
2%
France
Germany
71%
4%
Austria 10%
Switzerland
3%Asia
Bank AustriaPublic SectorPfandbrief
1.375% 26/05/2021 € 500 mn May 2014 MS + 25bps
In September, successful issue of long 5-year Mortgage Pfandbrief Benchmark
Banks62%
Insurance companies6%
Central Banks
4%
Funds 28%
UK/Ireland
7%Benelux
7%
6%Italy
4%
Nordics
Switzerland
3%Middle East
4%
Austria
France
2%
7%
Germany
56%
Others
4%
Bank AustriaMortgage Pfandbrief
0.5% 16/01/2020 € 500 mn Sept. 2014 MS + 7bps
36
Overview of Pfandbrief Benchmark Issues 2014 2/2
37
Overview of Pfandbrief Benchmark Issues prior to 2014
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 Apr 2012 Mid-Swap +88
Bank AustriaPublic Sector Pfandbrief
Bank AustriaPublic Sector Pfandbrief
Bank AustriaPublic Sector Pfandbrief
Bank AustriaMortgage Pfandbrief
1.25% € 500 mn July 2013 Mid-Swap +2630/07/2018
Bank AustriaMortgage Pfandbrief /First Tap
1.25% €200 mn Sept. 2013 Mid-Swap +1030/07/2018
Bank AustriaPublic Sector Pfandbrief
1.875% € 500 mn Oct 2013 Mid-Swap +2529/10/2020
Strong performance of all BA Covered Benchmark Bonds issued so far
38
Bank Austria Covered Bond Spread Comparison
Source: Bloomberg Mid ASW-Spread
39
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
Other
6%8%Insurances
Banks31%
Funds54%
40
CEE – Local issuance activities strengthen the liquidity profile of ourbanking subsidiaries and open up new funding sources
Notice: TR = Turkey, RU = Russia, CZ = Czech Republic *) WAL = weighted average life
RU Senior Public Market 1 y€ 250 mln
equivalent RUBAug. 2014 10.30% MS + 65bps
TR Senior Public Market 5 y€ 362 mln
equivalent USDOct. 2014 5.125% MS + 357bps
TR Club Term Loan 1 y€ 1 bn
equivalent(USD 340 mln / €761mln)
Oct. 2014 floating MS + 80bps
TRDiversified Payment of
Rights (DPR)17 y WAL *
€ 362 mln
equivalent USDOct. 2014 floating MS + 211bps
RU Senior Public Market 1 y€ 96 mln
equivalent RUBNov. 2014 12.00% MS + 145bps
CZMortgage Covered
Bond4 y € 196 mln Dec. 2014 1.875% MS + 80bps
CZMortgage Covered
Bond8.5 y € 131.8 mln March 2015 floating MS + 48bps
CZMortgage Covered
Bond6 y € 234 mln March 2015 floating MS + 35bps
CZMortgage Covered
Bond5 y € 250 mln April 2015 floating MS + 45bps
TR Club Term Loan 1 y€ 1,26 bn
equivalent(USD 428 mln / €835 mln)
May 2015 floating MS + 70bps
41
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
42
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 30 June 2015 amounts to EUR 7,154 mn
Average volume of loans is approx. € 1.83 mn
Average seasoning is 5.7 years
Parameters of Issues:
Total Number 35
Average Maturity (in years) 5.7
Average Volume (in EUR) 102,275,874
Parameters of Cover Pool
Weighted Average Life (in years incl. Amortization) 6.5
Contracted Weighted Average Life (in years) 8.8
Average Seasoning (in years) 5.7
Total Number of Loans 3,901
Total Number of Debtors 1,431
Total Number of Guarantors 281
Average Volume of Loans (in EUR) 1,833,981
Stake of 10 Biggest Loans 30.5%
Stake of 10 Biggest Guarantors 32.5%
Stake of Bullet Loans 61.6%
Stake of Fixed Interest Loans 35.0%
Amount of Loans 90 Days Overdue 0
Average Interest Rate 1.5%
43
Public SectorParameters of Cover Pool and Issues
Total Value of the Cover Pool as of 30 June 2015 in EUR equivalent: 7,154 mn
• thereof in EUR: 3,460 mn
• thereof in CHF: 1,850 mn
• thereof public sector bonds in EUR equivalent: 1,844 mn
Moody’s Rating: Aaa
Nominal / Present Value Over-Collateralization*): 99.9% / 81.2%
Total Value of Sold Covered Bonds as of 30 June 2015 in EUR: 3,580 mn
*) Austrian Mortgage Banking Act requires a nominal over-collateralisation of 2%. The basis for its calculation is a cover pool valuereduced by legally defined haircuts. Taking these haircuts into consideration, the cover pool value amounts to EUR 6,663 mn, thus theovercollateralization is 86.1%.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 1,474 20.6%
Maturity 12 - 60 months 1,672 23.4%
thereof Maturity 12 - 36 months 577 8.1%
thereof Maturity 36 - 60 months 1,095 15.3%
Maturity 60 - 120 months 933 13.0%
Maturity longer than 120 months 3,075 43.0%
Total 7,154 100.0%
Maturity of Issued Covered Bonds in mn EUR in %
Maturity up to 12 months 100 2.8%
Maturity 12 - 60 months 1,070 29.9%
thereof Maturity 12 - 36 months 560 15.6%
thereof Maturity 36 - 60 months 510 14.2%
Maturity 60 - 120 months 2,097 58.6%
Maturity longer than 120 months 313 8.7%
Total 3,580 100.0%
44
Public SectorMaturity Structure of Cover Pool and Issues
45
Public SectorRegional Breakdown of Assets*) in Austria
*) Considering Guarantors
Assets: Type of Debtor / Guarantor in mn EUR Number
State 542 4
Federal States 2,404 49
Municipalities 1,046 2,481
Guaranteed by State 543 159
Guaranteed by Federal States 1,584 258
Guaranteed by Municipalities 692 488
Other 344 462
Total 7,154 3,901
Assets: Type of Debtor / Guarantor in mn EUR Number
State 542 4
Federal States 2,404 49
Municipalities 1,046 2,481
Guaranteed by State 543 159
Guaranteed by Federal States 1,584 258
Guaranteed by Municipalities 692 488
Other 344 462
Total 7,154 3,901
46
Public SectorAssets Volume Breakdown by Type of Debtor / Guarantor
Volume Breakdown by Size of Assets in mn EUR Number
below 300,000 259 2,372
thereof under 100,000 55 1,259
thereof 100,000 - 300,000 204 1,113
300,000 - 5,000,000 1,425 1,390
thereof 300,000 - 500,000 191 494
thereof 500,000 - 1,000,000 306 430
thereof 1,000,000 - 5,000,000 927 466
above 5,000,000 5,470 139
Total 7,154 3,901
47
Public SectorVolume Breakdown by Size of Assets
48
Executive SummaryBank Austria Public Sector Cover Pool
Aaa Rating by Moody‘s - under review for upgrade
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
ECBC Covered Bond Label has been granted to the BA Mortgage Cover Pool
Parameters of Issues:
Total Number 108
Average Maturity (in years) 5.2
Average Volume (in EUR) 48,544,556
Parameters of Cover Pool
Weighted Average Life (in years incl. Amortization) 9.6
Contracted Weighted Average Life (in years) 13.9
Average Seasoning (in years) 6.4
Total Number of Loans 27,192
Total Number of Debtors 25,413
Total Number of Mortgages 27,192
Average Volume of Loans (in EUR) 333,176
Stake of 10 Biggest Loans 13.9%
Stake of 10 Biggest Debtors 17.7%
Stake of Bullet Loans 38.2%
Stake of Fixed Interest Loans 12.8%
Amount of Loans 90 Days Overdue 0
Average Interest Rate 1.4%
49
Mortgage Cover PoolParameters of the Cover Pool and Issues
Total Value of the Cover Pool as of 30 June 2015 in EUR equivalent: 9,188 mn
• thereof in EUR: 7,264 mn
• thereof in CHF: 1,796 mn
• thereof substitute cover in EUR: 128 mn
Moody’s Rating: Aaa
Nominal / Present Value Over-Collateralisation*): 75.3% / 81.9%
Total Value of Issued Mortgage Pfandbriefe as of 30 June 2015 in EUR: 5,243 mn
Total Value of Sold Mortgage Pfandbriefe as of 30 June 2015 in EUR: 4,043 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 cover pool value amounts to EUR 5,948 mn, thus the overcollateralization is 13.5%. Additionally, in itsArticles of Association, UniCredit Bank Austria commits itself 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 572 6.2%
Maturity 12 - 60 months 1,159 12.6%
thereof Maturity 12 - 36 months 700 7.6%
thereof Maturity 36 - 60 months 459 5.0%
Maturity 60 - 120 months 1,625 17.7%
Maturity longer than 120 months 5,832 63.5%
Total 9,188 100.0%
Maturity of Issued Covered Bonds in mn EUR in %
Maturity up to 12 months 879 16.8%
Maturity 12 - 60 months 2,708 51.7%
thereof Maturity 12 - 36 months 333 6.4%
thereof Maturity 36 - 60 months 2,375 45.3%
Maturity 60 - 120 months 1,180 22.5%
Maturity longer than 120 months 475 9.1%
Total 5,243 100.0%
50
Mortgage Cover PoolMaturity Structure of Cover Pool and Issues
Volume Breakdown by Size of Loans in mn EUR Number
below 300,000 2,932 23,024
thereof under 100,000 550 9,815
thereof 100,000 - 300,000 2,382 13,209
300,000 - 5,000,000 2,736 3,385
thereof 300,000 - 500,000 775 1,980
thereof 500,000 - 1,000,000 500 717
thereof 1,000,000 - 5,000,000 1,461 688
above 5,000,000 3,520 178
Total 9,188 26,587
51
Mortgage Cover PoolAssets Volume Breakdown
52
Mortgage Cover PoolRegional Breakdown *) of Mortgages in Austria
*) Without substitute cover (consists of bonds)
Mortgages Breakdown by Type of Use in mn EUR Number
Residential 3,805 23,458
Residential subsidized 1,744 2,008
Residential used for business purposes 517 1,065
Commercial 2,994 661
thereof Office 1,269 128
thereof Trade 922 66
thereof Tourism 166 93
thereof Agriculture 14 64
thereof mixed Use / Others 622 310
Total 9,060 27,192
53
Mortgage Cover PoolBreakdown*) by Type of Use
*) Without substitute cover (consists of bonds)
54
Mortgage Cover PoolBreakdown*) by Type of Use
Bank Austria’s Mortgage Cover Pool Value accounts for € 9,060 mn as of 30 June 2015
(without substitute cover)
All mortgages in cover pool are located in Austria
The main concentration is in the City of Vienna 40.9% and the state of Lower Austria 25.4%
Breakdown of cover pool by type of use:
67.0% residential real estate (thereof 19.3% subsidized)
33.0% commercial real estate, divides as follows:
Office 14.0%
Trade 10.2%
Tourism 1.8%
Other / Mixed use 7.0%
*) all percent Values are respective cover pool value without substitute cover
The over-collateralization is approx. EUR 3.5 bn or 74% (as of 31th Dec.2014)
Covering of CHF risk in Cover Pool
FX-risks are explicitly considered in the rating process of Moody´s andare reflected as part of their over-collateralization requirement
Moody´s currently requires an OC of 26.5%
Bank Austria contractually committed itself to a higher OC of 32%
Internal Risk Management of Bank Austria
According to the Cover Pool Regulation of Bank Austria NPLs are removed regularly(monthly).
Less than 1% of the loans (175 of 26,000) were taken out in 2014 for this reason
Special safety buffers are designated for CHF Loans
The credit rating of FX-Loans is subject to additional and stricter standards andwill - as always - be evaluated regularly
For CHF Loans an additional FX-buffer of 20% on the credit volume is considered,which must be covered by the credit rating of the client
No new CHF mortgage loans, therefore no inflows into Cover Pool since 2010
Overview 31.12.2014
Issue volume EUR 4.8 bn
Over-collateralization EUR 3.5 bn 31.12.2014 31.01.2015
Total Asset Value EUR 8.3 bn o/w CHF EUR 1.6 bn EUR 1.8 bn (22% of total asset value)
Total Cover Value EUR 5.6 bn o/w CHF EUR 670 mln EUR 670 mln (12% of collateral value / HypBG)
(74%)
55
CHF Loans in mortgage Cover Poolare 100% private residential financing
Changes due toCHF revaluation
56
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
57
Agenda
Overview Bank Austria
Profit & Loss
Liquidity & Funding
Funding Strategy & Position
Balance Sheet & Capital Ratios
Business Model & Strategy
Transactions
Annex
Cover Pool
58
Agenda
Annex
Bank Austria within UniCredit Group
Legal Situation – Austrian Covered Bonds
Real Estate Market Austria
59
UniCredit at a glanceA clear international profile based on a strong European identity
1) Source: UniCredit analysis on Sodali Shareholders' ID. All data based on ordinary shares as at 31 March 20142) As at 6 August 2015
Strong local roots in almost 20 countries
~ 130,000 employees
~ 7,500 branches
~ 31 mn customers in Europe
One of the most important banks in Europe
with total assets of ~ € 840 bn
One of the 30 Global Systemically Important
Banks (“G-SIBs”) worldwide
Market capitalization of ~ € 36 bn 2)
Common Equity Tier 1 (CET1) Ratio at 10.37%
under Basel 3 fully loaded
Main shareholders:
Stable shareholders, e.g. Foundations
Institutional investors
Retail investors
Shareholder Structure1)UniCredit Highlights
Retail,miscellaneous
and unidentifiedInvestors
StableShareholders
24.3%
InstitutionalShareholders
27.4%
48.3%
60
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 ofapprox. 300 mn
Managing a network of about1,400 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
*) FTE = Full-time equivalent**) excl. a further 1,000 branches and ~19,000 FTE of the Turkish Joint Venture
61
Agenda
Annex
Bank Austria within UniCredit Group
Legal Situation – Austrian Covered Bonds
Real Estate Market Austria
62
Austrian Real Estate MarketOverview
The Austrian Real Estate Market is a small, relatively stable market. In the first quarter of
2014, appr. € 650 mn were invested in commercial real estate (according to CBRE)
Top yields in the office market are slightly below 5%. Currently, there is stable demand and a
very limited offer in the office market
The Austrian retail market is saturated. Throughout Austria there is very limited new
construction or extension of shopping centers. The top return regarding shopping centers is
approx. 5.25%.
Prices for residential real estate increased significantly within the last years (see next page).
Austrian National Bank (OeNB) mentions an overvaluation of approx. 22% in the first quarter
2014
According to OeNB, the low increase in real estate loans and a still low indebtedness of
households in an international comparison (and decreasing in relation to the GDP) indicates
a high share of own funds in private real estate purchases
63
Austrian Real Estate MarketPrices for residential real estate
Source: OeNB, TU Wien, Institut für Stadt- und Regionalforschung
Strong increase in residential real estate prices in Vienna
Austria excl. Vienna shows a much more stable development
Wohnimmobilienpreisindex (2000 = 100)
80
100
120
140
160
180
200
220
Q1
00
Q300
Q1
01
Q3
01
Q1
02
Q302
Q1
03
Q303
Q1
04
Q3
04
Q105
Q3
05
Q1
06
Q3
06
Q1
07
Q3
07
Q108
Q3
08
Q109
Q3
09
Q1
10
Q310
Q1
11
Q3
11
Q1
12
Q3
12
Q1
13
Q313
Q1
14
Wien Österreich ohne Wien
Residential Real Estate Price Index (2000 = 100)
Austria excl. ViennaVienna
64
Austrian Real Estate MarketOffice Market
Source: CBRE, IRG, EHL
The Viennese office market remains one of the most stable ones in Europe
Neuproduktion und VermietungsleistungBüroflächen Wien 2001-2014f
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
2013
2014
f
Neuflächenproduktion in m² Vermietungsleistung in m²
Office Space in Vienna 2001-2014
New space in m2 Rentable space in m2
65
Agenda
Annex
Bank Austria within UniCredit Group
Legal Situation – Austrian Covered Bonds
Real Estate Market Austria
66
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‘
67 * 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
68
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
69
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