Central and Eastern Europe à la carte - Raiffeisen Zentralbank ...

Central and Eastern Europe à la carte
Annual Report 2006
Dear Sir or Madam,
Reading annual reports is rarely a pleasure – even
if the facts and fi gures contained in them are good
news. They also tend to be retrospective in nature,
i.e. reviewing past events rather than looking ahead.
While we can look back on an excellent 2006, we
are currently focusing all our efforts on achieving
good results for 2007 and the years to come.
I am convinced that also joie de vivre and the ability
to savour the fi ner things in life are key characteristics
of good managers. For this reason, we have decided
that this review should not only report on events in
2006, but also inspire you with a culinary tour of the
highlights of Central and Eastern European cuisine.
As someone who regularly has the opportunity and
privilege to enjoy the culinary delights of the region,
I hope that this annual report whets your appetite
both for the potential of Central and Eastern Europe
and for the cuisine of this, Europe’s fastest
growing zone.
Bon appetit!
Walter Rothensteiner

Central and Eastern Europe à la carte
Annual Report 2006

Summary of key data
RZB Group 2006
Monetary values are in Emn 2006 (minus OOEs) Change 2005 2004 2003
Income Statement
Net interest income after provisioning 1,840 1,840 31.5% 1,400 928 661
Net commission income 1,177 1,177 43.7% 819 626 479
Trading profit 257 257 48.8% 172 170 173
General administrative expenses (2,113) (2,113) 34.2% (1,574) (1,196) (1,017)
Profit before tax 1,882 1,286 38.3% 930 692 344
Profit after tax 1,631 1,035 46.9% 705 566 278
Consolidated profit 1,169 752 66.7% 451 446 216
Earnings per share (E) 239.9 155.7 159.2% 92.6 102.3 48.8
Balance Sheet
Loans and advances to banks 32,006 32,006 8.0% 29,647 22,229 19,152
Loans and advances to customers 53,106 53,106 34.1% 39,613 27,957 22,180
Deposits from banks 44,129 44,129 1.6% 43,416 32,270 27,423
Deposits from customers 44,727 44,727 39.1% 32,158 23,386 16,990
Equity (incl. minorities and profit) 6,637 6,637 34.1% 4,950 3,343 2,445
Balance sheet total 115,629 115,629 23.2% 93,863 67,864 56,053
Regulatory information
Basis of assessment (incl. market risk) 70,656 70,656 26.7% 55,783 38,492 30,389
Total own funds 7,614 7,614 46.4% 5,199 4,120 3,097
Total own funds requirement 5,652 5,652 26.7% 4,463 3,079 2,431
Excess cover 34.7% 34.7% 18.2 pp 16.5% 33.8% 27.4%
Core capital ratio (banking book; Tier 1) 9.0% 9.0% 0.7 pp 8.3% 9.2% 7.5%
Own funds ratio 10.8% 10.8% 1.5 pp 9.3% 10.7% 10.2%
Performance
Return on equity before tax 39.1% 26.7% 2.8 pp 23.9% 29.9% 15.5%
Return on equity after tax 33.9% 21.5% 3.4 pp 18.1% 24.4% 12.5%
Consolidated return on equity 34.0% 21.9% 6.4 pp 15.5% 22.8% 12.1%
Cost/income ratio 56.7% 56.7% (2.2 pp) 58.9% 59.8% 64.1%
Return on assets before tax 1.83% 1.25% 0.08 pp 1.17% 1.11% 0.67%
Net provisioning ratio 0.63% 0.63% 0.11 pp 0.52% 0.64% 0.72%
Risk-to-earnings ratio 15.8% 15.8% 3.0 pp 12.9% 17.4% 23.4%
Resources
Number of staff on balance sheet date 55,434 55,434 19.9% 46,243 25,323 21,119
of which in Austria 2,577 2,577 1.9% 2,529 2,373 2,513
of which in the CEE region 52,528 52,528 20.9% 43,430 22,707 18,368
Banking outlets 2,866 2,866 16.5% 2,461 932 740
Ratings of Raiffeisen Zentralbank Long-term Subordinated Short-term Fin. strength Outlook
Moody‘s Investors Service A1 A2 P-1 C+ Stable
Standard & Poor‘s A+ A A-1 — Stable
Retroactive reassignment (2002 – 2005) of a component of profit from Trading profit to Net commission income; see page 168.
OOE: One-off effect; the sale of Raiffeisenbank Ukraine and the minority stake in Bank TuranAlem were deemed to be one-off effects.

Contents
Central and Eastern Europe à la carte 4
Preface by the Managing Board 48
The Managing Board of Raiffeisen Zentralbank 50
Supervisory Board’s Report 52
Overview of RZB 53
Vision and Mission 56
Corporate Social Responsibility 62
The Raiffeisen Banking Group in 2006 72
Interview with CEO Walter Rothensteiner 77
Group Management Report 80
The course of business in 2006 86
Summary of consolidated results 87
Detailed review of items in the Income Statement 93
The Balance Sheet 99
Equity 101
Human Resources 103
Risk management 107
Outlook for 2007 111
Segment reports 114
Corporate Customers 114
Financial Institutions and Public Sector 124
Retail Customers 128
Proprietary Trading 132
Participations and Other 138
Consolidated Financial Statements (financial statements applying IFRS) 144
Income Statement 145
Balance Sheet 146
Statement of Changes in Equity 147
Cash Flow Statement 149
Notes 151
Notes to the Income Statement 170
Notes to the Balance Sheet 181
Additional notes pursuant to IFRS 196
Notes to financial instruments with Risk Report 204
Disclosures required by Austrian law 219
Boards 222
Organizational structure 224
Unqualified Auditors’ Report 225
Scope of consolidation and overview of equity participations 227
Glossary 230
Addresses and contacts 232
Throughout this report, “RZB” is used to refer to the RZB Group; “Raiffeisen Zentralbank” is used whenever statements refer solely to Raiffeisen Zentralbank
Österreich AG. Tables may contain minor rounding errors. Statements of rates of change (percentages) are based on actual figures and not on the
rounded figures provided in the tables.

Lisbon
PORTUGAL
Rabat
MOROCCO
SPAIN
Madrid
IRELAND
Dublin
ALGERIA
UNITED KINGDOM
London
Algier
Paris
FRANCE
Amsterdam
NETHERLANDS
Brussels
BELGIUM
LUXEMBURG
Bern
SWITZERLAND
Milan
Tunis
TUNESIA
Frankfurt

TURKEY
Warsaw
ALBANIA
BULGARIA
ROMANIA
UKRAINE
BELARUS
LITHUANIA
RUSSIA
Bucharest
Chisinau
Kiev
Minsk
Vilnius
Sofia
Pristina
Moscow
SERBIA
KOSOVO
MACEDONIA
SLOVAKIA
HUNGARY
Tirana
ESTONIA
LATVIA
Belgrade
Rome
DENMARK
Berlin
BOSNIA AND
HERZEGOVINA
Prague
CZECH REPUBLIC
AUSTRIA
SLOVENIA
Vienna Bratislava
Ljubljana
Budapest
Zagreb
CROATIA
Sarajevo
POLAND
MOLDOVA
GREECE
GERMANY
Stockholm
MALTA
SWEDEN
ITALY
MONTENEGRO
Copenhagen
Skopje
Istanbul
Athens
Riga

Central and Eastern Europe à la carte – Introduction
The typical foods of any country always reflect its history, traditions
and social development. As the saying goes:
”If you want to
a country well,
have to become
with its cuisine.

get to know
you first
acquainted
“
Throughout the world, the tastes and consistencies of the local foods convey an idea
of the way the people approach life. That is why we have created this presentation of
selected culinary delicacies from the markets we serve.
You are certain to be astonished by the wealth of ideas and the culinary diversity.
Join us in exploring the fascinating world of pierogi, sarma, borsch and tarator as you
broaden your culinary horizons. Raiffeisen was a pioneer in many of the financial
markets of Central and Eastern Europe.
With us, you can also be a pioneer in the exploration of these culinary worlds.
The recipes of the dishes can be accessed at http://ar2006.rzb.at
Central and Eastern Europe à la carte – Introduction

Central and Eastern Europe à la carte – Vienna

Vienna: The Emperor of Beef
Central and Eastern Europe à la carte – Vienna
What would you like to know about Viennese cuisine? The famous wiener schnitzel (escalope),
in any case, is an import, as are goulash and palatschinken. But the Viennese have every right to
be proud of their tafelspitz, succulent boiled beef served with its classic sauces and vegetables.
This is how it all began: In 1873 the city council of Vienna issued new quality standards for beef,
which specified that it could be sold in a total of 22 different cuts. At that time, imperial Vienna
saw absolutely nothing out of the ordinary about this. Each cut was endowed with a special name,
and soon there were restaurants specializing in boiled and sometimes fried beef delicacies. The
most famous of these establishments was Meissl und Schaden. This is where the local dignitaries
dined along with everyone else with an appropriate rank, name and table reservation. The
Viennese turned the task of distinguishing between tafelspitz, kruspelspitz and weisses hieferl
into a pleasurable science. And even today, the crowning creation of bourgeois cuisine is still
considered to be a well-hung and properly prepared cut of beef, even though the days when
the emperor (of beef) reigned supreme are long over and gone.

Central and Eastern Europe à la carte – Croatia
Croatia:
Hardly a Hot Tip Anymore
Croatia is often described as the new Côte d’Azur. Those in the know rave about the
historical architecture of the coastal cities, the barren, rocky landscapes, the vineyards
and the great diversity of the coastal regions. But Croatian-Mediterranean cuisine
is equally impressive.
Chefs in coastal areas can draw on an extremely wide range of ingredients. They can
choose, for example, from sardines, sea wolf, sea bream and spiny lobster, all of which
were still in the water only hours earlier. Other sea-dwellers, such as clams, head straight
for the soup kettle. Brudet is the name of the local version of the fish soup prepared
along the Mediterranean coast of France as bouillabaisse. The addition of vinegar,
however, lends brudet a sour note unknown in its southern French relative. Once again,
the preparation varies greatly by region. If you’ve first tasted brudet in Split, you
won’t recognize it in Zadar or Šibenik, where the vegetables, spices and fish varieties
are different.
The best fish come from the Gulf of Kvarner, where they have an optimal habitat, and
this good life leaves a wonderful taste behind, even after they’ve landed on your plate.
Gourmets generally agree: the scampi and sole from the Gulf of Kvarner are so delicious
that it would be worth traveling much farther than Croatia to enjoy the taste.

Central and Eastern Europe à la carte – Croatia

Central and Eastern Europe à la carte – Slovenia
0
Slovenia:
Multicultural Central Europe
Pasta, strudel, goulash – where are we? Most likely in a Slovenian restaurant or home,
where the culinary spirit and taste of Central Europe are more evident than almost anywhere
else. There’s a bit of Austrian Baroque, the clear air of the mountains and the azure of the
sea, all spiced with the lightness of Italy. And, of course, a dash of Hungary is thrown in
for good measure.
The recipes found at this crossroads of European culture are well-suited to the international
palate. Here, for example, is a strudel recipe from the year 1860: “Take a sunny day on
which the wind is silent, a quiet hour in which the children are silent, a contented housewife
whose husband is silent, two sensitive hands, lots of love, a bucket of patience and a dash
of happiness.”
This is the very strudel that Slovenes love to eat, boiled or baked, filled with salty or sweet
ingredients. Slovenian strudel culture reaches its apogee with the gibanica, a creation with
four different layers: poppy seeds, apples, curd cheese and nuts. Traditionalists, by the way,
insist on struklji. It is made of buckwheat flour, the way grandma used to.

Central and Eastern Europe à la carte – Slovenia

Central and Eastern Europe à la carte – Hungary
Hungary:
The Sine Qua Non is Paprika
Goulash is a classic example of a dish that serves as a satisfying main course or a snack between
meals. But it is also responsible for an almost Babylonian confusion of tongues: Austrians who travel
to Hungary for the first time and order goulash are surprised to be served soup instead of the
dish they would expect at home: cubed meat in a thick sauce with lots of stewed onion.
What most non-Hungarians mean when they say goulash has a different name in Hungary itself:
pörkölt or paprikás. But the latter does, at least, lead us to one of the most important ingredients in
Hungarian cuisine: paprika. The spiciness and color of this red powder made from ripe red peppers
by drying and grinding them provide the taste and hue of a classic goulash sauce.
Hungarians assess the quality of paprika with the meticulousness of a book-keeper, carefully
checking the origin, variety, hotness, quality grade and lots more. Any Hungarian deserving of the
name can tell the difference in his sleep between one of the milder powders, sweet paprika, the
rather rare semisweet form and the somewhat hotter “rose” paprika.

Central and Eastern Europe à la carte – Hungary

Central and Eastern Europe à la carte – The Pickled Cucumber Meridian
The
Pickled Cucumber
Meridian
Europe is home to a number of important culinary dividing lines.
Just as Switzerland is separated into the two sides of the Rösti
Line (of thinly sliced fried potatoes) and the Bavarians have their
Weisswurst Equator (of veal sausages), Central Europeans have a
Salzgurken Meridian (of pickled cucumbers) running across
the Continent from Berlin to Vienna.
Pickles are not an invention of modern times; they were already prized by the ancient
Romans. But ancient history witnessed not only mass migrations of peoples but migrations
of pickles as well, and a variety of cucumbers eventually settled east of the Salzgurken
Meridian, only to be pickled in turn by their new fans. This can take place in a wide
variety of ways, depending on the climate, soil and techniques of the region in which the
cucumbers happen to be growing.
The Polish, Hungarians, (eastern) Austrians and their neighbors agree that there can be
no agreement on the proper production manner or subsequent taste of a pickled
cucumber. Some may describe them as having a fruity vegetable taste, but there are
decisive differences in the final product, depending on which cucumber varieties were
chosen, when they were picked, the type of water and spices used, the length of pickling
and the quantity of the salt. The secrets of making pickled cucumbers are often handed
down in a strictly oral tradition as though one were dealing with the ultimate in state
secrets. Some people allow their cucumbers to pickle in the sun, while others insist that
they remain in the cellar. There is also an old tradition of adding a slice of bread to the
barrel to get things started.
Spices such as garlic, pepper, bay-leaf and sugar are popular. Pickles take on a special
flair if certain leaves are added, with cherry leaves allegedly having an especially
beneficial effect. The Poles are considered the true specialists. There the aroma of
pickled cucumbers wafts from many rural homes, where they are prepared according to
very special recipes. And every producer is convinced that his or hers results in the finest
pickles the world has ever known.

Central and Eastern Europe à la carte – The Pickled Cucumber Meridian

Central and Eastern Europe à la carte – Bosnia and Herzegovina
Bosnia and Herzegovina:
A Wide Variety of Good Plain Cooking
Stuffed cabbage has lots of fans both inside Austria and outside as well. In Bosnia and Herzegovina
this delicacy is known as sarma and provides an authentic example of the kind of food prepared on
special days. Probably the gourmets of Bosnia and Herzegovina would enjoy their stuffed cabbage even
more often if it did not take so much time and effort to prepare.
For those less familiar with stuffed cabbage, here is a quick rundown of the steps required for its preparation.
First, entire heads of white cabbage are marinated in the same manner as sauerkraut. The stem is cut
crossways with a knife to allow the marinade to penetrate it. The subsequent fermentation produces lactic
acid. The cabbage is then separated into individual leaves, stuffed with ground meat, and cooked until
tender with more cabbage, bacon and spices. As with all the hearty dishes of good plain cooking, there’s
an important rule that should be observed: the bigger the pot, the better the taste.
It is self-evident that there are as many ways of preparing stuffed cabbage as there are different regional,
ethnic and religious backgrounds among the population. Because the country’s cuisine has been subject
to the influence of both Turkish and Greek traditions, sarma is not the only dish to offer a wide range of
variations. Other popular dishes are one-pot meals of meat and vegetables as well as Turkish honey and
halva, ground nuts in honey.

Central and Eastern Europe à la carte – Bosnia and Herzegovina

Central and Eastern Europe à la carte – Albania

Albania:
Where ”Organic“ Is Simply That
In Western Europe, expensive advertising campaigns have been designed around
the concept, but here it is simply a fact of life: the foodstuffs produced by Albanian
farmers in this barren-looking, mountainous landscape are completely organic.
If you wander through the olive groves or try the tasty fruit of the orange trees,
you may have the feeling you’ve been transported to sunny Greece or southern Italy.
There’s no question about it: Albanian cuisine is heavily influenced by the
Mediterranean. Aromatic lamb plays just as important a role as fresh fish direct
from the sea, which within a few short hours makes the journey from its saltwater
home to the grill or oven before landing on your plate. Does that make Albania
an undiscovered paradise for gourmets? For the most part you can expect a tasty
cuisine that produces often astonishing results from only a few ingredients and
fresh vegetables.
An attentive traveler will discover a wealth of aromas and recipes that reflect the
region’s Ottoman past. There are the intensely sweet desserts, for example:
a cake soaked in honey or the famous oshaf, a sheep’s cheese pudding with figs
that might be equally at home in the Peloponnesus or a café in the Istanbul bazaar.
And after a meal in which you have savored the intense flavors of natural
ingredients, you will once again feel the breeze of the Greek islands when your
host brings out a bottle of raki, which is what the Albanians call brandy.
Central and Eastern Europe à la carte – Albania

Central and Eastern Europe à la carte – Kosovo
0

Kosovo: It All Revolves
Around Flat Bread
From the Balkan countries to the Middle East, many of the national cuisines
revolve around flat, unleavened bread. What the Turks call pide and the
Greeks pita, is pite in Kosovo. But the really conspicuous thing about the
Kosovar version of bread made from salt, flour, yeast and water is that it is
inconspicuous.
Central and Eastern Europe à la carte – Kosovo
While bread may simply remain bread in other countries, in Kosovo it often
remains unseen, hidden beneath layers of all kinds of imaginative delicacies.
Cheese, meat, leeks, paprika and many other ingredients may play the leading
role. The difference between a good and an excellent pite is decided by
whether or not the coating is added immediately before the bread is returned
to the hot oven to reheat it. An especially popular form of pite is rolled up
in a snail-like form.

Central and Eastern Europe à la carte – Europe’s Sour Pots
Europe’s
Sour Pots
We have to remember that at a time when the refrigerator
had not yet been invented, it was preserved vegetables with a
decidedly acidic taste that helped the people of Central and
Eastern Europe to get through the long, cold winters.
They turned a necessity into a virtue, adopting the culture of fermentation and of
marination. Many one-pot meals, soups and some traditional dishes for festive occasions
as well have mild, well-rounded aromas that are the result of lactic acid-fermentation.
No one gets sour about that, because not only does this food taste great, it is also
easier to digest. And that brings us to sauerkraut, the hero of everyday cuisine in many
countries but still an unknown for many people who live westwards of Alsace, where it
is called choucroute. Sauerkraut offers an amazing range of possibilities. An aromatic
elixir of health straight from the barrel, it also mixes well with noodles, for example in
the dish known as krautfleckerln, where it is baked with flat noodles and onions, or as
an accompaniment to roast pork, fish or offal, such as tripe.
Sauerkraut originally comes from northern China, where people discovered ages ago
that finely sliced white cabbage becomes a wonderful dish when it is allowed to ferment
in a vat with a bit of salt. Full of vitamin C and lactic-acid bacteria, it is not only the
pride of peasants who make it at home but also extremely popular with chefs and with
doctors, who praise its healthy properties to the skies. There is an old (and true) saying
about the best cabbage-eater living the longest.

Central and Eastern Europe à la carte – Europe’s Sour Pots

Central and Eastern Europe à la carte – Serbia

Serbia: A Paradise For Carnivores
Central and Eastern Europe à la carte – Serbia
First let’s clear the air on a question that is frequently heard in Vienna: yes, the dish called “Serbian
beef with rice” that is typically found on the menus of that increasingly rare species of simple Viennese
restaurant, the beisl, does indeed come from Serbia. That takes us straight to the leading ingredient in
Serbian cuisine, which is not rice but meat.
Ćevapčići are found on many Belgrade street corners. The little sausage-shaped meat-rolls are made
of lamb, beef and sometimes pork, are five to eight centimeters long on average, seasoned with garlic,
salt, pepper and paprika as well as herbs depending on their availability, topped with red onion rings
and served with somun bread. Some diners like to add a dollop of the sour cream called kajmak or
some ajvar, a mixture of paprika and puréed eggplant.
And if a Serbian carnivore does not feel like eating ćevapčići, he or she can always order šiš ćevap
(ćevapčići on a skewer), pljeskavica (the same meat patted into thin “burgers” and fried), or ražnjići,
the classic Serbian skewered meat.

Central and Eastern Europe à la carte – Bulgaria

Bulgaria:
The Secret of the Centenarians
Central and Eastern Europe à la carte – Bulgaria
Is there a word in Bulgarian for anti-aging? Perhaps it’s simply “yoghurt.” In any case there are
a conspicuously large number of people more than 100 years old in the Rhodope Mountains
of southern Bulgaria.
What’s their secret? Some say that it’s Bulgaria’s famous yoghurt. Certainly, yoghurt is found on
every menu of the week and plays a leading, or at least supporting, role in a wealth of recipes.
It is eaten alone or with fresh vegetables or a modest portion of meat. Tarator, for example,
is a cold yoghurt-cucumber soup that is just as much a part of summer in Bulgaria as
complaining about it is in Austria. The former, however, is a lot more pleasant than the latter.
When Bulgarian tourists walk down our supermarket aisles with their incredible variety of
yoghurt – milk from Austria, milk from Savoy, high-fat, low-fat, no-fat and everything in between
– all they can say is: “We invented it!” And they do so with a smile.
The researchers at multinational food corporations may spend a lot of time worrying about
further developing their high-tech product, but the Methuselahs of Bulgaria couldn’t care less.
The fact of the matter is: real yoghurt is made in Bulgaria, where people have been making it
since the time of the ancient Thracians. As the story goes, shepherds wore a sack of lambskin
on their belts and filled it with milk. Their body temperature and the microflora of the lambskin
did the rest, fermenting the milk. Unfortunately, no food chemist was there to watch.

Central and Eastern Europe à la carte – Romania

Romania: Cuisine with a History
Central and Eastern Europe à la carte – Romania
Lift the lids of Romanian pots and pans and one thing becomes clear: the country’s cuisine –
like that of others – is a reflection of its geography and history. The Danube and its delta with
their unbelievable abundance of fish provide two of the Romanians’ favorite species: carp and
pike-perch, both of which are prepared with a healthy dose of garlic. Romanian menus owe
a debt of gratitude to many national cuisines and cultures, and they read like a pot-pourri
of recipes from old Austrian, Italian, Jewish, Hungarian, Greek and Turkish kitchens.
Wherever you are in Romania, simply lift the lid of a soup pot in which ciorba is simmering
away, and you will discovery the diversity of the country’s regional cuisines.
Depending on where you are, you will find sauerkraut, tripe, ravioli, poultry or fish swimming
in the soup.

Central and Eastern Europe à la carte – The ”Little Water“
0
The ”Little Water“
Any time fine food is served in Russia, the sine qua non
to go with it is traditionally “little water” (vodka is the
diminutive of the Russian word for water, voda).
The traditional way of serving it is 100 grams at a time, and drinking it properly requires
some practice. First: hold your breath. Next: down all 100 grams in a single go. Then:
exhale in relief. Another tradition is to follow a shot of vodka with a pickled cucumber.
Vodka consumption is falling at the moment, a trend that some see as a sign of
economic stability. Vodka has always been a child of its time. With the collapse of the
ruble in 1998, the cheap vodka brand “Crisis” was the thing to drink, but in recent
months “Putinka” has become especially popular. Vodka has always played an
important role in politics as well. Lenin saw it as the drug of capitalism, demanded a
dictatorship of sobriety, and deported members of the most famous vodka dynasty.
But the results, even when viewed soberly, were no more successful than similar projects
undertaken by his successors. Apart from the wines made by the Rothschilds, there is
hardly another beverage that has so many legends connected with it as does vodka.
They begin with the story of how it was first made back in the 15 th century, but both
Poland and Russia claim this honor for themselves.
The raw material used in the making of vodka is generally not the potato, as is often
assumed, but rather grain, usually a mixture of rye and wheat. They are fermented to
create a mash and then distilled several times. Afterwards the distillate is filtered through
tons of activated charcoal to remove any foreign substances left over from fermentation.
The choice of water and the grains used in fermentation have a decisive influence on the
quality of the final product. But the secret of success for a truly fine vodka lies not only
in its taste: if the distillate has been properly processed, the consumer can hardly tell the
next morning that vodka (even in large quantities) was drunk the night before.
In Russia, vodka is mostly drunk with friends and acquaintances over a meal. Whether
it is served ice-cold or warm is not just a matter of taste, but sometimes the result of
simple coincidence. Tasting sessions for vodka are similar to those for wine. The tasters
check the aroma and the powerful, sometimes even sweet taste. They also watch to see
whether the distillate runs down the side of the glass like oil or water. Tasting is done
with the tongue, palate and cheeks. High-quality vodka leaves a mild taste in the mouth,
while cheap vodka creates a burning sensation. The aroma can be creamy, spicy or
neutral. In addition to expensive vintage vodkas, others that are en vogue have
extravagant flavors: Polish Zubrówka, for example, to which buffalo grass is added,
giving it a yellow color and mild aroma, and Starka, which is aged in oak casks.
To arrange to meet someone in Russia to drink vodka, you need do no more than
gesture towards your throat, a ritual that has been traditional since the time of Peter the
Great. A round of vodka drinking also requires a toast: over the course of the evening
everyone at the table is expected to come up with a more or less profound saying.
By the way, drinking vodka alone, without family or friends, is frowned upon in Russia,
where it is considered a sign of alcoholism.

Central and Eastern Europe à la carte – The ”Little Water“

Central and Eastern Europe à la carte – Poland
Poland: The Land of Pierogi
It is remarkably varied: the cuisine of the Polish people, who love their fine food and drink. Given the
great variety of possible fillings, pierogi are an unrivalled Polish favorite, but they are only one
example among many fine dishes in the national cuisine.
In case you have never tried them: imagine large ravioli filled with mushrooms, potatoes, cabbage,
fish or liver – even a sweet filling – and then doused with hot butter. Downed with a shot of vodka,
they’re even better. Polish chefs show the same level of inventiveness when it comes to preparing bigos,
a hunter’s stew of steamed sauerkraut with various kinds of meat. Bigos improves with every reheating
and used to be particularly popular with the Polish gentry, the szlachta. The real fans today, however,
are the skiers you can see fortifying themselves with bigos in the ski-lodges of Zakopane at the foot
of the Tatra Mountains. Gourmets dining at Warsaw’s top restaurants are equally reluctant to renounce
the country’s culinary symbol.
If it’s a quick snack they want, however, they choose zurek, a hearty soup of sliced sausage, available
at almost any restaurant or snack-bar. Zurek gets its slightly sour taste from the addition of
fermented cracked rye.

Central and Eastern Europe à la carte – Poland

Central and Eastern Europe à la carte – The Czech Republic

The Czech Republic:
A Dumpling for All Seasons
Central and Eastern Europe à la carte – The Czech Republic
There’s an old fairy-tale about a land of milk and honey that can be reached only by
first eating one’s way through a thick layer of semolina pudding. The Czech version
more likely features a clump of dumpling dough.
There’s really no telling how the Czechs, despite the richness of their cuisine, keep
from resembling their dumplings, which are variously made of potatoes, diced white
bread, semolina, wheat flour or curd cheese. With their delicious fillings of bacon,
meat or various types of fruit, these dumplings are an object of special devotion
on the part of Czech chefs. Any leftover devotion is used in the preparation of roast
pork – the national dish is called vepro-knedlo-zélo, “pork-dumpling-cabbage” –
or svickova, beef fillet in a creamy vegetable sauce, which is accompanied,
of course, by the popular knedliky (German: knödel – a dumpling, what else?).
Did you know that if you make dumpling dough of diced bread you should first
fry the dice in butter? That gives the dish an especially smooth taste. And there is,
indeed, truth to the story about the major contribution that 19 th -century Bohemian
cooks made to Viennese cuisine: Bohemia, today in the Czech Republic, is a real
paradise for mehlspeisen (desserts with flour as the main ingredient), which now
have such Czech-derived Viennese names as palatschinken (crêpes), kolatschen
(yeast pastry with a cheese or sweet filling), buchteln (baked yeast dumplings) and
liwanzen (gâteaux bohémiens). The original recipes fill entire volumes of cookbooks
in Czech libraries.

Central and Eastern Europe à la carte – Slovakia
Slovakia: All Cheese
Liptauer is a spicy sandwich spread that the owners of Vienna’s distinctive wine taverns,
the heurige, proclaim to be a typically Viennese specialty. The name, however, is derived
from the Slovakian region of Liptov (German: Liptau). Thus it is a classic Slovakian recipe,
and the original version features bryndza, ewe’s milk cheese of a type found only
in Slovakia.
It is kept in brine in small wooden barrels, where its shelf life is of quite limited duration.
In any case, bryndza tastes best when it’s absolutely fresh. It can be used as a spread
on black bread, as an ingredient in liptauer, or in bryndza dumplings. People who love
sheep’s milk cheese but find conventional bryndza a bit overwhelming can try the milder
version, which tastes a lot like Greek feta without the saltiness.
Oshtjepka, a semi-hard cheese made from cow’s and sheep’s milk and traditionally dried
beneath the ceiling of mountain huts, is another type of cheese found only in Slovakia.

Central and Eastern Europe à la carte – Slovakia

Central and Eastern Europe à la carte – Caviar: Only the Best is Good Enough
Caviar:
Only the Best
is Good Enough
Sturgeon roe is an uncompromising luxury.
Not only does it taste incomparably good, it is
prestige in an edible form.
Caviar has a purist touch with a whiff of extravagance. It likes to be spooned into the
mouth with utensils made of mother-of-pearl or horn, because the sensitive aroma is
irritated by any contact with metal. Caviar prefers to be burst open between tongue
and palate without further additions, although it does tolerate blini, potatoes with butter
or sour cream. Champagne and vodka are also more than welcome as liquid
accompaniments.
A genuine problem associated with sturgeon fishing has sometimes spoiled the
cosmopolitan caviar community’s taste for these delicate fish eggs. At times, the sturgeon
population, in particular that of the beluga, has been threatened with extinction
because of over-fishing and pollution. Even the UN has become involved. Now the
alarm bells are now falling silent. Fishing quotas are being largely respected and many
sturgeon fishermen have switched to more sustainable methods.
However, anyone who wants to enjoy caviar and a clear conscience at the same time
should ask whether the caviar has been produced in a sustainable manner taking into
account the needs of the species. If in doubt, it is better not to buy. This also adds to
the awareness of restaurateurs and gourmet shop-owners, and will, eventually, have an
impact on producers as well. That will help the sturgeon to survive and thus continue
contributing to the pleasure of caviar fans in years to come.

Central and Eastern Europe à la carte – Caviar: Only the Best is Good Enough

Central and Eastern Europe à la carte – Russia
0
Russia:
Babushka’s Favorite Recipes
It is said that the foundations for the multi-course meals now typical of French grande cuisine
were laid by the feasts consumed by the Russian tsars and their entourages during frequent
visits to Paris. But that was a long time ago: with the arrival of the October Revolution,
such gourmet extravaganzas disappeared for quite some time.
What remained, however, were the blinis. These thin pancakes of buckwheat flour can be
found today as a convenience product of the “caviar society” in any gourmet shop worthy of
the name. Aficionados, however, insist on the necessity of freshly preparing them in a heavy
cast-iron blini pan. Sour cream is an obligatory addition, whether the blinis are served
with caviar or salmon. What many people don’t realize, however, is that blinis can also
be served with a mushroom, vegetable or meat filling, or simply brushed with melted butter.
Adding lots of butter to the yeast batter as well makes the blinis especially light.
But Russians do not live by blinis alone; they also love soups. Shtshi, for example, a nutritious
peasant dish of cabbage, diced vegetables, meat, spices and sour cream. It might be said
to be the “babushka” of all Russian soups. Shtshi can also include beets and kvas,
a sour mixture of rye flour fermented with yeast.

Central and Eastern Europe à la carte – Russia

Central and Eastern Europe à la carte – Belarus

Central and Eastern Europe à la carte – Belarus
Belarus:
Rare Foods from Forest and Field
Everyone has heard about borsch. But who knows what draschenji is, for example?
And who has heard of motshanka? Have you?
The fields and forests of Belarus supply the ingredients for a bold cuisine, in which
potatoes, mushrooms and berries are prepared according to centuries-old recipes, many
of which have been handed down by word of mouth. “Processed” rather than prepared
might be the appropriate word in some cases. Decadent Western diners may turn up
their noses at some of the wild mushrooms that feature in Belarusian cuisine, considering
them “inedible.” It’s true that some of the wilder ones have to be “tamed” by hours of
slow cooking before being brought to the table.
But this is the way that Belarusian chefs take these rare products, whose availability
varies depending on the soil and weather, and transform them into tasty main courses
or side dishes. They pay no attention to the clock, and there’s no real reason to, either.
Diners in the know gladly wait for the aroma of draniki – little pancakes made of
freshly grated potato, and fried in lard – to waft from the kitchen: it’s a sure sign that
a fantastic meal is about to be served.

Central and Eastern Europe à la carte – Ukraine
Ukraine: Who Would Ever
Have Thought
Who should rightfully take credit for borsch, that hearty beet soup
that warms the body and soul on cold winter evenings?
The Russians have long since adopted it as part of their culinary
heritage, and the Lithuanians and Poles are equally fond of it.
But now all the evidence is in, and researchers agree: borsch was first
served in Ukraine. This event took place on the northern Black Sea
coast, where an inventive housewife conceived the idea of making
a soup of meat, bacon, garlic and much more. And, of course, she
also added beets to give the concoction its bright-red color and
inimitable sweet-sour aroma.
What few people realize, however, is that this classic winter dish is
also served in the summer months in a chilled version: “borsch light.”
But no matter how many different possibilities there may be for
preparing borsch, fans of the red soup all agree: a spoonful of sour
cream, added just before serving, is a must.

Central and Eastern Europe à la carte – Ukraine

Central and Eastern Europe à la carte – Austria
Austria:
The Height of Sweet Desserts
Mehlspeisen, the Austrian word for desserts with flour as the main ingredient, are considered
to be the absolute apogee of Alpine cuisine. And towering over most of the rest is
kaiserschmarren, the unmistakable culinary landmark of a country where people love to eat
big and love to eat, period.
Schmarren is an Austrian word for nonsense, and some of the stories about how kaiserschmarren
first came to be prepared may be just that. In any case, they’re as numerous as the raisins the
dish contains. Emperor Francis Joseph and his wife, Sisi, usually play the leading roles. One
version concerns the emperor’s personal chef in Bad Ischl, who used to make a concoction of
flour, milk and eggs and serve it to mountain hikers and shepherds. On one occasion he added
a few raisins because he was trying to please the empress. The emperor, otherwise a modest
husband, assumed the chef had named it after him, kaiser meaning “emperor.” Another
anecdote is based on Sisi’s love of minimalist food. One of her chefs had the idea of serving
small pieces of fried pancake batter with a bit of plum jam. This was still too much for the
empress, and the emperor is reported to have said: “Then give me the schmarren (nonsense)
that the chef has made.”

Central and Eastern Europe à la carte – Austria

Preface
48 www.rzb.at
Preface by the Managing Board
Dear Sir or Madam,
RZB 2006
As we present our seventh record result in a row in the pages of this report, we do so in the awareness
of having had a really exceptional year. Our results were shaped – among other things – by one-off
effects that caused an unexpectedly large rise in profit. However, our profit without these one-off
effects provided even more impressive evidence that RZB is exactly on course, because it too broke
all records.
We remained true to our growth strategy during the year under review and continued to expand
faster than the market as a whole. As a result, RZB recorded gains in market share both in Austria
and in Central and Eastern Europe (the CEE-region). The Group’s expansion in the CEE-region was
accelerated further by the acquisition of Impexbank in Russia and eBanka in the Czech Republic. In
Austria, RZB again reinforced its position as the country’s third-largest bank, and Raiffeisen has now
become by far the largest banking group in Austria.
2006 was also a noteworthy year in that we sold a Network Bank for the first time. After the
acquisition of Bank Aval in the Ukraine – a major bank with over 1,300 branches – we were
repeatedly asked whether we wouldn’t like to save ourselves the effort of merging it with the mediumsized
Raiffeisenbank Ukraine. In the end, the offers we received for Raiffeisenbank were for amounts
that prompted us to sell, albeit without the associated Raiffeisen brand rights. The book gain from
this sale came to E 486 million. In addition, we recorded a gain from the sale of our minority stake
in Kazakhstan’s Bank TuranAlem, which we sold – in line with our strategy – on the grounds that we
could not acquire the majority interest we were striving for on acceptable terms. The one-off effects of
these two transactions amounted to E 596 million, increasing profit by about a third.
Profit before tax and Consolidated profit after tax and minorities came to E 1,882 million and
E 1,169 million, respectively. However, the true extent of our success in the year under review
was demonstrated by our results without the one-off effects we have described: Profit before tax of
E 1,286 million translates into impressive growth of 38.3 per cent – and that coming on top of growth
of more than a third in 2005.
We expect the positive development of our Profit from operating activities to continue in 2007, and we
expect close on two-digit growth in our Profit before tax. However, this figure is based on our 2006
profit net of the one-off effects. Our Cost/income ratio should be stable at close to its present healthy
level. Because we will have a substantially broader capital base, our Return on equity will probably be
below its current level without one-off effects.
In the words of our long-term Vision Statement, “RZB is the leading Banking Group in Austria and
Central and Eastern Europe.” This vision is ambitious but already palpable, because we have moved
another big step closer to fulfilling it. RZB is building on solid foundations and its strategic orientation
is sound.
In Austria, these foundations are a strong market position in RZB’s core business segments – corporate
customer business and investment banking – and the Raiffeisen Banking Group’s status as the country’s
leader in retail banking and business with small and medium-sized enterprises.
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
In Central and Eastern Europe, we operate the banking network with the broadest coverage of
the region and boast award-winning product and service quality. Our innovative power and
technological edge underscore our claim to leadership. At the same time, RZB’s business operations
go hand-in-hand with uncompromising monitoring of risks and its traditionally conservative evaluation
of those risks.
Since we operate in dynamic markets and need to act accordingly if we are to achieve our goals,
we will continue to pursue our growth strategy. As in the past, the challenge in the future will be to
steer our growth. We are well known for our early identification of opportunities and trends, for their
exploitation and for extracting a good return over risk from them.
This having been said, we can fund a large part of our growth out of earned capital. As in 2006, our
owners will be carrying out regular capital increases to promote our growth path. In the long term, the
capital needed for our dynamic growth in a market that is home to over 350 million people cannot be
raised in Austria, with its population of only 8 million. Consequently, RZB will also continue to resort
to the international financial markets in order to raise capital, and we will conduct active asset and
liability management to optimize our employment of capital.
RZB will not veer from its consistent commitment to quality. We believe that it plays an important part
in our success, alongside our striving for sustained and partnership-based customer relationships. We
are pleased with the positive feedback that we receive from our customers, including in particular the
praise we were given within the scope of a study ordered jointly by Austria’s corporate banks. The
study confirmed RZB’s quality, competence, value for money and commitment to partnership, especially
compared with our competitors’ offerings.
Our consistent commitment to quality was also acknowledged by major international business
magazines. For instance, RZB won over 70 awards for its achievements in Austria and Central and
Eastern Europe during 2006, including awards from The Banker, Euromoney, Global Finance, TMI,
Finance New Europe, Trade Finance and Trade and Forfaiting Review.
We thank our customers for the trust they have placed in RZB and for our successful work together.
We extend the same thanks to our shareholders, to their representatives within Raiffeisen Zentralbank’s
boards and to those who do business with us. Our special thanks naturally also go out to our
employees, who now number over 55,000 and whose excellent work made our outstanding result
possible in the first place. We look forward to continuing together on our successful path in 2007.
Walter Rothensteiner Herbert Stepic
Patrick Butler Karl Sevelda Manfred Url
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
www.rzb.at
Preface
49

Managing Board
50 www.rzb.at
The Managing Board
The members of Raiffeisen Zentralbank’s Managing Board (from left to right):
Karl Sevelda, Herbert Stepic, Walter Rothensteiner, Patrick Butler, Manfred Url.
RZB 2006
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
Walter Rothensteiner
Remits: Management Services; Strategic Controlling; Participations; Public Relations; Human Resources; Legal and Compliance;
Audit; Tax; Group Head Office/Executive Secretariat (jointly with Manfred Url).
Born in 1953; read Commercial Science at the Vienna University of Economics and Business Administration; senior positions
at Raiffeisenlandesbank Niederösterreich-Wien (most recently in management), member of the Managing Board of Leipnik-
Lundenburger Industrie AG and sugar industry group Agrana. Joined Raiffeisen Zentralbank in 1995 as Vice-Chairman of the
Managing Board; Chairman of the Managing Board and CEO since June 1995.
Selected supervisory board posts and other positions: Kathrein & Co. Privatgeschäftsbank AG (C), Casinos Austria AG (C),
Österreichische Lotterien Ges.m.b.H. (C), Raiffeisen Bausparkasse Ges.m.b.H. (C), Raiffeisen Centrobank AG (C), Raiffeisen
International Bank-Holding AG (C), Leipnik Lundenburger Invest Beteiligungs AG, Oesterreichische Kontrollbank AG,
Oesterreichische Nationalbank AG (Generalrat), Österreichische Galerie Belvedere, Österreichische Volksbanken AG,
UNIQA Versicherungen AG, Wiener Staatsoper GmbH.
Herbert Stepic
Remits: Branches and Representative Offices; Country and Bank Risk Management; Chairman of the Managing Board of
Raiffeisen International Bank-Holding AG.
Born in 1946; read Commercial Science at the Vienna University of Economics and Business Administration; joined RZB in 1973,
where he developed the Raiffeisen Foreign Trade Service; was also Managing Director of trading house F.J. Elsner & Co; a
member of the Managing Board of Raiffeisen Zentralbank since 1987 and Deputy to the CEO since 1995.
Selected supervisory board posts and other positions: Chairman of the supervisory boards of numerous RZB Network Banks;
member of the supervisory boards of OMV AG, Oesterreichische Kontrollbank AG, Raiffeisen Centrobank AG.
Patrick Butler
Remits: Global Treasury; Global Markets; Economics and Financial Market Research.
Born in 1957; read Modern History at Oxford; began his banking career in 1979 with Chemical Bank and County Bank (NatWest
Group) working in London and New York; later joined Creditanstalt-Bankverein (subsequently BACA Group), most recently
as Group Treasurer; later Global Treasurer of Arab Bank; a member of the Managing Board of Raiffeisen Zentralbank since
October 2004.
Selected supervisory board posts: Kathrein & Co. Privatgeschäftsbank AG, Raiffeisen Centrobank AG, Raiffeisen International
Bank-Holding AG, Raiffeisen Wohnbaubank AG, RZB Private Equity Holding AG, Wiener Börse AG.
Karl Sevelda
Remits: Austrian Corporate Customers; Multinational Corporate Customers; Corporate, Trade and Export Finance; Customer
Services.
Born in 1950; read Social Science and Economics at the Vienna University of Economics and Business Administration and then
became freelance researcher and staff-member at the Wirtschaftspolitisches Institut, (economic policy institute); subsequently
worked and held senior positions at Creditanstalt-Bankverein; a member of the Managing Board of Raiffeisen Zentralbank
since 1998.
Selected supervisory board posts and other positions: Bene AG, ÖBB Infrastruktur Bau AG, Österreichische Bundesbahnen-Holding
AG, Raiffeisen Centrobank AG, Raiffeisen International Bank-Holding AG, RZB Private Equity Holding AG, Unternehmens Invest AG,
Bene Privatstiftung (Managing Board), Fepia Privatstiftung (Managing Board), Herbert Depisch Privatstiftung (Managing Board).
Manfred Url
Remits: Transaction Services; Credit Management; Marketing; Organization/IT; Verbund (Raiffeisen Banking Group); Group Head
Office/Executive Secretariat (jointly with Walter Rothensteiner).
Born in 1956; read Commercial Science at the Vienna University of Economics and Business Administration, followed by a period
abroad in France (ESSCA business school in Angers and Banque Indosuez in Paris); held several senior positions – most recently
in management – at Raiffeisen-Landesbank Steiermark; a member of the Managing Board of Raiffeisen Zentralbank since 1998.
Selected supervisory board posts: Raiffeisen Datennetz Ges.m.b.H. (C), Raiffeisen Vermögensverwaltungsbank AG (C), Europay
Austria Zahlungsverkehrssysteme GmbH, Raiffeisen Informatik GmbH, Raiffeisen International Bank-Holding AG, VISA Service
Kreditkarten AG.
(C) = Chairman.
See page 224 for an Organization Chart of Raiffeisen Zentralbank.
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Managing Board
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51

Supervisory Board’s Report
52 www.rzb.at
Supervisory Board’s Report
RZB 2006
The Supervisory Board of Raiffeisen Zentralbank Österreich AG was, in its meetings, kept
abreast by the Managing Board of business transactions of note and the development
of the bank and its group during the 2006 financial year. The Supervisory Board
performed all the tasks that are incumbent upon it by law and pursuant to the Articles of
Association.
The Supervisory Board met four times during the 2006 financial year. In a further 26
cases, it made decisions by way of written ballots. The Supervisory Board’s Working
Committee met five times during the period under review and also made two decisions
by written ballot. The committee for examining and preparing adoption of the Annual
Financial Statements, the proposal regarding the appropriation of profit and the
Management Report met once. The Personnel Committee met twice.
KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna,
examined the Consolidated Financial Statements (Balance Sheet, Income Statement,
Notes), the Group Management Report and the Annual Financial Statements and
Management Report on Raiffeisen Zentralbank Österreich AG. That examination
revealed no grounds for objection and the legislative requirements were met in full, so
an unqualified Auditors’ Report could be issued. The Supervisory Board concurs with
the Managing Board’s report on the results of the audit for the 2006 financial year and
with the Managing Board’s proposal regarding the appropriation of profit. The Annual
Financial Statements of Raiffeisen Zentralbank Österreich AG for 2006 are thus final for the purposes
of § 125 Abs. 2 AktG (Austrian stock corporations act).
There was a change in the membership of the Company’s boards during the 2006 financial year.
Georg Doppelhofer, Generaldirektor of Raiffeisen-Landesbank Steiermark AG, retired on 31 December
2005. His successor, Generaldirektor Markus Mair, was co-opted to the Supervisory Board of
Raiffeisen Zentralbank Österreich AG as of 1 January 2006 and was elected to the Supervisory Board
during the General Meeting of Shareholders held on 20 June 2006.
For the seventh time in succession, the RZB Group posted a record profit. Its balance sheet total
grew to almost E 116 billion and consolidated profit for the year amounted to close to E 1.17 billion,
providing the figures to bear out the superb effectiveness of its strategic orientation. As a
consequence, the RZB Group is now one of the world's 100 largest banks. In addition, Raiffeisen
Zentralbank Österreich AG acts as the central institution of the Austrian Raiffeisen Banking Group,
which is organized as a cooperative.
To mark our sustained outstanding business performance, the Supervisory Board extends its special
thanks and appreciation to the Managing Board as well as the senior management and other staff of
Raiffeisen Zentralbank Österreich AG and the entire Group for their work and unremitting dedication
during the year ended.
The Supervisory Board
Christian Konrad
Chairman
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
Overview of RZB
RZB’s Balance Sheet Total
ebn
105
90
75
60
45
30
15
44.6
Raiffeisen Zentralbank Österreich AG (Raiffeisen Zentralbank) was founded in 1927. It is the
central institution of the Austrian Raiffeisen Banking Group (RBG). Raiffeisen Zentralbank is one
of the foremost corporate and investment banks in Austria, where it services the country’s largest
corporations and institutions. In addition to its role as the Group’s central institution, Raiffeisen
Zentralbank functions as the core enterprise within the RZB Group (RZB). RZB is a banking group with
Austrian origins that also sees Central and Eastern Europe (the CEE-region) as its home market. The
Group’s exceptional popularity with its customers, its resultant growth and its strong commitment to
Central and Eastern Europe have made it a top player in the region. Besides Central and Eastern
Europe, RZB also has a presence in a number of international financial centres and in the emerging
markets of Asia. RZB is Austria’s third-largest banking group.
46.4
56.1
0
2001 2002 2003 2004 2005 2006
IFRS-compliant data at 31 December of each year.
67.9
93.9
Growth based on solid foundations
Balance Sheet Total of € 115.6 billion
As a result of its expansion in Central and Eastern
Europe and with the help of gains in market share
within Austria, RZB’s balance sheet total has grown
rapidly and sustainably in recent years. In 2006, it
reached � 115.6 billion, which translates into a
strong advance of 23.2 per cent versus year-end
2005.
This means that RZB’s balance sheet total has more
than doubled in just three financial years, and most
of that growth has been organic. The proportion
of RZB’s balance sheet total accounted for by
the Network Banks in the CEE-region has risen
steadily. Having come to just under a fifth in 2000,
it already reached about 45 per cent in 2006.
RZB’s vigorous growth is being driven by its expansion in Central and Eastern Europe and continuous
growth in its customer base. Its development goes hand-in-hand with a keen awareness of costs and
risks. The leading international rating agencies have repeatedly confirmed RZB’s economically solid
foundations. Raiffeisen Zentralbank’s current ratings are:
Standard and Poor’s Short Term A-1, Long Term A+
Moody’s Short Term P-1, Long Term A1, Financial Strength C+
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115.6
Overview of RZB
www.rzb.at
53

Overview of RZB
54 www.rzb.at
Raiffeisen Zentralbank’s Shareholders*
Raiffeisenlandesbank NÖ-Wien 31.34%
Raiffeisen-Landesbank Steiermark 14.91%
Raiffeisenlandesbank OÖ 14.91%
Raiffeisen-Landesbank Tirol 5.83%
Raiffeisenverband Salzburg 5.79%
Raiffeisenlandesbank Kärnten 5.62%
Raiffeisenlandesbank Burgenland 4.62%
Raiffeisenlandesbank Vorarlberg 4.59%
Zveza Bank 0.04%
Total Regional Raiffeisen Banks** 87.65%
Österreichische Volksbanken AG 5.14%
UNIQA Versicherungen AG 2.63%
RWA Raiffeisen Ware Austria 2.57%
NÖ Landesbank-Hypothekenbank AG 1.21%
Landeshypothekenbank Steiermark AG 0.63%
Hypo Tirol Bank AG 0.17%
Total other than Regional Raiffeisen Banks 12.35%
Total 100.00%
* Ordinary and preference shares held directly or indirectly.
** 81.18 percentage points of which held by R-Landesbanken-Beteiligungs-GmbH.
RZB’s range of products and services
The central institution of the RBG
RZB 2006
Raiffeisen Zentralbank acts for RBG in national
matters and represents it abroad. Additionally, as
the Group’s central institution, it renders central
services for RBG. RBG is Austria’s foremost
banking group, offering its customers a complete
range of financial services as a so-called universal
bank. At year-end 2005, it had eligible equity of
approximately � 15.1 billion and a consolidated
balance sheet total of about � 205.4 billion.
It has a market share of about one quarter in the
Austrian banking sector and operates Austria’s
densest network of banking outlets, consisting of
2,262 branches. The Regional Raiffeisen Banks
(Raiffeisen-Landeszentralen) collectively hold
nearly 88 per cent of the share capital of Raiffeisen
Zentralbank, which is not listed on a stock
exchange. An overview of RBG is provided in
the chapter of this report entitled The Raiffeisen
Banking Group in 2006 from page 72.
One of Austria’s leading corporate and investment banks
Within Austria, Raiffeisen Zentralbank operates as a specialist corporate and investment bank serving
the country’s “Top 1,000” corporates. It sees itself as the corporate finance bank in that customer
segment and as a foremost provider of export finance. Besides servicing a large number of Austrian
clients in those areas of business and in the trade finance, cash management, treasury and fixedincome
product fields, Raiffeisen Zentralbank also has a raft of Austrian and foreign key accounts and
multinationals in its customer base. In addition, numerous financial service providers also draw upon
Raiffeisen Zentralbank’s services as a financial engineer.
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
Working with its subsidiary Raiffeisen Centrobank AG, Raiffeisen Zentralbank has become an
established leader in the investment banking market. It is the pre-eminent player on the Vienna stock
exchange, in the bonds trading segment and in new issues business in equities and bonds. Specialist
subsidiaries round off Raiffeisen Zentralbank’s line, which also includes finance leasing, M&A
consultancy, asset management, private banking, real-estate services and trading. See the segment
reports for a detailed review of RZB’s domestic business activities during the year under review.
A niche player in the international marketplace
In foreign markets outside Central and Eastern Europe, RZB operates as a niche player supplying
a specially tailored range of products via its representative offices and branches. Those outposts
were originally set up to assist Austrian exporters in emerging markets and in international financial
centres. However, they now also serve local clients, albeit exclusively corporate customers and
financial institutions. They are becoming increasingly important to RZB’s Central and Eastern
European customers, who use them as a point of contact when expanding into new markets.
Raiffeisen Zentralbank has the strongest Asian presence of any Austrian bank, with branches in
Singapore and Beijing as well as representative offices in Hong Kong, Zhuhai, Seoul, Mumbai, Ho Chi
Minh City and Tehran. Raiffeisen Zentralbank is also well positioned in other international financial
centres, with offices in New York and London, a bank in Malta and representative units in Paris,
Brussels, Frankfurt am Main, Stockholm, Milan, Chicago and Houston. That presence underscores
RZB’s role as a linchpin between East and West.
A leading banking group in Central and Eastern Europe
RZB recognized Central and Eastern Europe’s substantial long-term growth potential at an early
stage. Within the CEE-region, it initially focused solely on servicing key accounts, but it has since
greatly enlarged its line of products and services. RZB now provides the services of a so-called
universal bank in all the Central and Eastern European markets that it serves. Anticipating the trend
in the market, the Group decided in 1999 to develop business with personal banking customers and
SMEs across the region. These two groups of customers make up Retail Customers segment. In the
meantime, the number of customers in this segment exceeds 12 million.
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Overview of RZB
www.rzb.at
55

Chapter RZB 2006
Vision
RZB is the leading banking group in
Austria and Central and Eastern Europe.
Mission
We seek long-term customer relationships.
In Austria and Central and Eastern Europe,
we provide a full range of highest quality
financial services.
In the world’s financial centres and Asia,
we are an important niche player.
As the central institution of the Raiffeisen
Banking Group in Austria, we offer specific
services to our owners.
We achieve a sustainable and aboveaverage
return on equity.
We empower our employees to be
entrepreneurial and to show initiative, and
we foster their development.
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RZB 2006
Twenty years of experience in Central and Eastern Europe
RZB’s involvement in Central and Eastern Europe dates back to a time when the political upheavals
and the fall of the Iron Curtain were still far from foreseeable. It founded its first banking subsidiary
in Hungary in 1986. Consequently, it has now had over 20 years of experience in banking in Central
and Eastern Europe. At year-end 2006, the Group’s network in the region consisted of 17 banks in
15 national markets. These banks are supplemented by a finance leasing company in Kazakhstan and
two representative offices in Lithuania and Moldova.
Initially, the sole goal of the Group’s business model in Central and Eastern Europe was to aid
Austrian and foreign corporate customers in their efforts to penetrate Central and Eastern Europe and
to provide them with extensive on-the-spot quality services to Western standards. At the same time,
local corporates also became customers and, subsequently, RZB strove to attract personal banking
customers in selected markets. The time scale for expansion and the sequence in which it has taken
place have depended on legal conditions and the potential for reform in the particular country.
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Overview of RZB
58 www.rzb.at
Selected major awards
“Best Trade Finance Bank
for Central and Eastern Europe“
“Best Treasury and Cash
Management Provider for Central
and Eastern Europe“
“Best Corporate/Institutional
Internet Bank in Europe“
“Best Structured
Finance House“
Treasury Management International
“Best Bank Risk Management –
Eastern Europe“
“Best Bank in
Emerging Europe“
RZB 2006
“Bank of the Year –
Central and Eastern Europe“
“Best Regional Bank“ Trade & Forfaiting Review
“Best Bank in Central
and Eastern Europe“
“Best Bank in Austria“ “Bank of the Year – Austria“
“Best Bank in Bosnia
and Herzegovina“
“Best Bank in Bosnia
and Herzegovina“
“Best Treasury and Cash
Management Provider for Central
and Eastern Europe“
“Best Bank in Ukraine“
“Best Bank in Austria“
“Bank of the Year – Croatia“
“Best Bank in Bulgaria“ “Best Bank in Albania“ “Best Bank in Albania“
“Best Bank in Belarus“ “Bank of the Year – Bulgaria“
“Best Bank in Belarus“ “Best Bank in Serbia“ Gazeta Bankovy
“Best Bank in Serbia“
“Bank of the Year –
“Best Bank in Poland“
Serbia and Montenegro“
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RZB 2006
The most complete market coverage of any bank in the CEE-region
By virtue of its 17 Network Banks, its finance leasing firms and 2,848 outlets, RZB now covers
Central and Eastern European markets more extensively than any other bank, enabling it to service
international clients nationwide and comprehensively in nearly every country in the region. In
addition, RZB smoothes the way for companies from individual countries in Central and Eastern
Europe wanting to gain access to neighbouring countries and global financial centres, thus helping
internationalize the region’s economy.
Raiffeisen International: the CEE holding company
Back in 1991, Raiffeisen Zentralbank set up a financial holding company to act as an umbrella
for its interests in the CEE-region. Today, this company operates under the name Raiffeisen
International Bank-Holding AG (Raiffeisen International). In the early stages of its expansion,
Raiffeisen International concentrated on setting up new subsidiaries of its own. From 2000, they were
supplemented by carefully targeted acquisitions. Setting up new subsidiaries had the advantage that
RZB could consistently and rapidly get its banking operations set up on its own terms.
These banks were established under the Group’s own banner – the Raiffeisen emblem with a gable
cross, whose fame quickly spread throughout the CEE-region – and with newly hired personnel. From
the outset, this strategy gave the Group considerable influence on the individual banks’ business
and risk policies. Virtually all of the resulting profits were ploughed back to ensure long-term
growth. Among other things, this enabled the Network Banks to quickly establish themselves both as
key landmarks in the banking landscape and as attractive employers in their respective markets. The
Group’s first acquisition took place in Bosnia and Herzegovina in 2000. It was followed by an
additional bank in Herzegovina and further acquisitions in Romania, Slovenia, Kosovo, Belarus,
Albania, the Ukraine and, most recently, Russia and the Czech Republic.
Acquisitions strengthen the retail customers segment
There were two special highlights in Raiffeisen International’s year. At the end of January 2006,
Raiffeisen International acquired 100 per cent of OAO Impexbank in Russia, which underwent firsttime
consolidation after the sale closed at the end of April. This underpinned RZB’s position as the
largest international banking group operating in Russia. Impexbank is one of Russia’s leading branch
based banks. It has expanded Raiffeisen International’s sales network across a total of 11 time zones
to the shores of the Pacific.
This acquisition greatly improved Raiffeisen International’s position and sales network in the
strategically key retail banking business in Russia. Impexbank mainly services personal banking
customers and SMEs through its nationwide network of 203 branches and offices and some 400 sales
outlets. Impexbank had a balance sheet total of E 1.8 billion at the end of 2006 and posted profit
before tax of E 20.8 million. The purchase price was US$ 563 million. Its legal merger with ZAO
Raiffeisenbank Austria, Moscow, set up in 1996, is planned for 2007.
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Overview of RZB
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RZB 2006
RZB’s CEE Network Balance Sheet Business
(Raiffeisen International) Total (€mn) Change* Outlets Staff
Albania: Raiffeisen Bank 1,782 8.0% 94 1,248
Belarus: Priorbank 809 26.2% 62 1,869
Bosnia and Herzegovina: Raiffeisen Bank 1,592 23.8% 75 1,303
Bulgaria: Raiffeisenbank (Bulgaria) 2,437 69.7% 111 1,866
Kosovo: Raiffeisen Bank Kosovo 372 41.1% 33 442
Croatia: Raiffeisenbank Austria 4,637 19.0% 48 1,738
Poland: Raiffeisen Bank Polska 4,012 40.3% 86 2,090
Romania: Raiffeisen Bank 4,640 40.5% 266 4,770
Russia: Impexbank 1,806 — 203 5,583
Russia: Raiffeisenbank Austria 6,462 65.0% 41 2,503
Serbia: Raiffeisen banka 2,206 56.4% 68 1,669
Slovakia: Tatra banka 6,054 24.5% 145 3,355
Slovenia: Raiffeisen Krekova banka 958 5.3% 14 356
Czech Republic: eBanka 800 — 62 969
Czech Republic: Raiffeisenbank 3,263 24.6% 53 1,239
Hungary: Raiffeisen Bank 6,295 28.1% 122 2,655
Ukraine: Raiffeisen Bank Aval 4,283 26.7% 1,312 17,395
Subtotal Network Banks 52,408 40.3% 2,795 51,050
Raiffeisen-Leasing International (Sub-Group) 3,104 36.1% 50** 1,259
Other and consolidation 356 — 3 423
Total Raiffeisen International 55,867 37.3% 2,848 52,732
* Because of movements in euro exchange rates, growth in local-currency terms may differ.
** Only includes business outlets not located on the premises of Network Banks.
During the year under review, Raiffeisen International also acquired a majority stake in eBanka, a.s.
in the Czech Republic. At the time of its first-time consolidation at the end of October, eBanka had
equity of E 54 million. The purchase price was E 130 million. This acquisition enlarged Raiffeisen
International’s customer base in the Czech Republic by over 70 per cent to a total of about 310,000
customers at year-end. eBanka is a pure retail bank that has been operating since 1998.
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RZB 2006
Strong organic growth
Raiffeisen International’s balance sheet total showed organic growth of � 13.5 billion or 33 per cent
to � 55.9 billion. This finance holding company for the CEE-region recorded another record result
in 2006. Due to the sizeable one-off effects of selling equity participations, Raiffeisen International
posted profit before tax of � 1,480 million. This was 160.2 per cent up on the comparable figure
for the previous year. Even without those one-off effects, profit before tax still advanced by 56.7 per
cent to � 891 million. (RZB’s Central Europe,
Raiffeisen International’s Balance Sheet Total
Southeastern Europe and CIS geographical
ebn
reporting segments did not exactly mirror
52.5
55.9 Raiffeisen International’s profit for the year
because of Raiffeisen Zentralbank’s funding and
45
management costs and other Group-members’
operations in the CEE-region.)
37.5
30
22.5
15
7.5
11.5
14.4
20.1
28.9
40.7
0
2001 2002 2003 2004 2005 2006
IFRS-compliant data at 31 December of each year.
The Retail Customer Base in the CEE-Region
Millions
12
10.5
9
7.5
6
4.5
3
1.5
1.9
3.2
0
1.0
2001 2002 2003 2004 2005 2006
As at 31 December of each year.
5.0
9.7
Over 12 million customers
Due to its high service standards, products that are
closely aligned with demand in the marketplace
and an increasingly dense sales network, Raiffeisen
International was again able to acquire numerous
new customers. Having had 9.7 million personal
banking and SME customers at year-end 2005,
Raiffeisen International had 12.1 million retail
customers at the end of 2006. That translates
into an increase of about 2.4 million customers
in the Retail Customers segment. Each month,
over 150,000 new customers decide to bank with
Raiffeisen International in Central and Eastern
Europe. The rest of the increase was caused by
customers added to the customer base when the
Group acquired Impexbank and eBanka.
The network of business outlets in the CEE-region
– already extensive – was systematically enlarged
during the period under review. In all, RZB set
up 178 new business outlets, which was more
than ever before in the enterprise’s history (2005:
145). As a result, Raiffeisen International’s network
in the CEE-region comprised 2,848 business outlets
in 16 markets. This compared with a total of just
185 business outlets in Central and Eastern Europe
at year-end 2000.
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Overview of RZB
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62
Corporate Social Responsibility
Corporate Social Responsibility
www.rzb.at
RZB’s role in society – its so-called corporate citizenship – is moulded by its lived responsibility
to employees, customers, shareholders, investors, business associates, interest groups and the
environment. Its understanding of business as being based on trust and ethical values is Raiffeisen’s
trademark and the key to its success.
Global corporate citizenship
RZB sees configuring all its business activities to ensure their long-term economic, ecological and
social tolerability as a key element of its successful corporate activities.
• As a global corporate citizen, RZB sees the efficient use of resources as a duty to society and,
moreover, as an opportunity to contribute on a global scale to ecological awareness with its
workforce of more than 55,000 employees.
• RZB is committed to sustainable management and lives up to its social responsibility; it has also
taken on a pioneering role in this field.
Responsible enterprise management is also reflected in RZB’s application of good corporate
governance and the management of its workforce. The core fundamentals are trust-based and efficient
cooperation between the Group’s various bodies and committees, the safeguarding of shareholders’
interests and transparent internal and external communication.
RZB believes in openness and fair dialogue with all the relevant stakeholders. They include employees,
customers and shareholders as well as interest groups, authorities, governments and the general
public.
A sustained commitment in Austria, the CEE-region and around the world
RZB is a signatory of the United Nations Environment Programme for Finance Initiative (UNEP/
FI). This UN environmental programme for financial institutions was set up in 1997. It is regarded
as the foremost international network of banks with an environmental and sustainability focus (www.
unepfi.org). RZB signed the UNEP FI statements in 1998. In addition, since 2004, it has been active
as a founding member of the UNEP FI CEE Task Force for sustainable finance in Central and Eastern
Europe. In 2006, RZB participated in the Task Force’s work on the development of environmental
criteria, thus doing important preliminary work to ensure sustainable credit management.
Art and culture: cornerstones of identity
RZB 2006
RZB continued to provide convincing proof of its fulfilment of its corporate social responsibilities in
2006 by promoting culture and the arts as a direct contribution to society. Its consistent support
of major Austrian cultural institutions like the Staatsoper, Wiener Musikverein, Albertina and
Österreichische Galerie im Belvedere underscored the Group’s conviction that business and culture
are not contradictory as cornerstones of Austria’s identity but integral components of the country’s
international competitiveness.
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RZB 2006
RZB has also become established as a major institutional art collector. Besides a raft of contemporary
works of art, it also has a remarkable collection of works by the Alt dynasty of painters. They are
united in the Carl V. Roth collection. A cross section of the collection is to be made accessible to the
general public in 2007 within the scope of an exhibition at the Liechtenstein Museum.
Contemporary art is at the centre of RZB’s many cultural activities abroad, especially in Central and
Eastern Europe. For instance, Raiffeisen Bank in Hungary is one of the most important collectors of
contemporary Hungarian art. Even in Belarus, Priorbank has a remarkable and extensive collection of
contemporary Belarusan art and is thus one of the first companies to encourage contemporary artistic
creativity in that country.
A leveraging effect in conjunction with other business sectors
RZB endeavours to consider the environmental implications of all its activities and business decisions,
especially when granting loans in Austria and abroad. This applies equally to personal loans and
project finance. Below, we have described three examples of best practice in 2006. They show clearly
how the bank is making an important and consistent contribution to sustainable development by
applying leverage in an interplay with other business sectors.
Best Practice #1: Climate protection through sustainable industrial finance
For years, Raiffeisen Zentralbank has been a pioneer and specialist in the financing of climate
protection projects. The experts at Raiffeisen Zentralbank provide advice and finance, arrange
subsidies and hedge against risks to help its customers with their CO 2 projects.
Climate issues usually have to do with carbon dioxide (or CO 2) emissions. However, there are also
other greenhouse gases, some of which are much more harmful. They include nitrous oxide (or N 2O),
which is better known under its popular name of laughing gas. A metric ton of this greenhouse gas
contributes just as much to global warming as 310 metric tons of CO 2. Extensive funding by Raiffeisen
Zentralbank made it possible in 2006 to put innovative catalytic converter technology into service to
reduce emissions of this dangerous greenhouse gas at one of the world’s largest fertilizer factories
located in Abu Qir, Egypt. Previously, N 2O entered the atmosphere unchecked. Now, emissions
totalling about 4,100 metric tons of N 2O a year are being prevented – or the equivalent of about 1.2
million metric tons of CO 2. The new filter technology breaks down into safe components almost all
of this harmful gas. Our project partner is Austrian company CARBON Projektentwicklungs GmbH
(CARBON). CARBON is also setting up a voluntary social fund in Abu Qir that will be funded by
profits from the project.
The project in Egypt has been hailed internationally as an exemplary model. Raiffeisen Zentralbank
is now financing three more filter plants in South Korea as well. The reduction in N 2O emissions will
be the equivalent of 14 million metric tons of CO 2 by 2012. Fourteen million CO 2 certificates will be
generated and sold as a result, making Raiffeisen Zentralbank an important and positive agent of
sustainability in this field.
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Best Practice #2: Cleaning up an oil field in Albania
Granting a loan of US$ 20 million, Raiffeisen Zentralbank and its local subsidiary Raiffeisen Bank
jointly financed the development, reclamation and modernization of the oil field in Patos-Marinza,
Albania. This is one of Europe’s largest onshore oil fields. In recent decades, the lack of funds and
technology had turned it into a growing hazard for the environment and humans alike.
In 2006, innovative Canadian oil company Bankers Petroleum Ltd. began working in this oil field,
which is some 60 miles south of Tirana. The antiquated oil extraction equipment was replaced by the
latest technology. The company removed existing pollution and took action to prevent new leaks. As
a result, the region’s groundwater, residential areas and flora and fauna will be largely unaffected by
the oil field in the future.
The use of new technology to extract oil in Patos-Marinza has not only optimized the crude oil yield; it
is also making an important contribution to improving the environmental situation at this location. In
addition, it is creating new jobs in Albania, whose economy is under development, and the country’s
reduced dependence on oil imports is improving its balance of trade.
Best Practice #3: Energy-efficient homes in Central and Eastern Europe
RZB 2006
During 2005 and 2006, several of RZB’s Network Banks in Central and Eastern Europe launched
successful programmes to increase the energy efficiency of homes. Private households and owners
of houses can use suitable loans and the associated advisory services to instal heat insulation, solar
heating, biomass heating or other efficient and sustainable forms of heating.
The Network Banks are carrying out a number of their energy efficiency programmes in Central
and Eastern Europe in cooperation with the EBRD and IFC. They make it possible to pay concrete
subsidies to the households that decide to re-equip. These subsidies supplement existing programmes
to promote energy efficiency in companies. The aim is to reduce total energy consumption by up to
30 per cent. At the same time, modernization is reducing CO 2 emissions and improving housing
standards and quality of life.
In Hungary alone, the energy efficiency programme of local RZB subsidiary Raiffeisen Bank made
possible the refurbishment of 300 residential buildings containing 18,000 households. This reduced
CO 2 emissions by 18,000 metric tons and improved the living conditions of 50,000 people.
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
Raiffeisen Zentralbank endows Environment Prize
Promoting Austrian environmental technology has long since been one of the Group’s key strategic
concerns. As a result, Raiffeisen Zentralbank has traditionally provided the prize money for the
environment prize awarded by the Österreichische Gesellschaft für Umwelt und Technik (ÖGUT:
Austrian environment and technology society) in the category “Austrian environmental technology in
Central, Eastern and Southeastern Europe.” The 2006 prize went to the Graz company S.O.L.I.D. This
company has built one of the world’s largest solar-powered refrigeration systems in Kosovo. The
project is seen as an exemplary and innovative best-practice model for the implementation of climate
protection standards across the region.
Environmental committee celebrates its first decade
Raiffeisen Zentralbank continuously monitors and evaluates its internal use of resources. This is
the responsibility of its Environmental Committee for internal enterprise ecology, which celebrated
10 years of existence in 2006. The committee has built up an efficient in-company environmental
management system. It attaches particular importance to the careful use of environmental
resources. The many measures taken to increase the efficiency of energy and resource usage have
already generated significant savings at the same time as enhancing efficiency.
The primary aim of ecological management is to reduce energy consumption and the associated
CO 2 emissions. In 2006, the ongoing identification and evaluation of “energy wasters” again led to
modernization and effective action to save energy in the areas of lighting, heating, refrigeration and
hot water. Other activities in the enterprise ecology field addressed, in particular, power consumption
by electrical equipment and lighting in individual offices. When buying equipment, the Group was
particularly careful to buy energy-efficient products.
Reducing paper consumption was one of RZB’s pioneering projects. Using both sides of photocopying
paper proved to be a simple, useful and economical measure. With the IT Department’s help,
all printer drivers were set up to automatically duplex print. This substantially reduces paper
consumption. Further environmental action has been taken in the paper field in that Raiffeisen
Zentralbank only uses chlorine-free bleached environmentally friendly paper. All departments have
long since been sorting their waste and collecting waste paper.
Benchmarking for financial service providers
As a member of an ÖGUT working party, Raiffeisen Zentralbank has for many years been taking
part in benchmarking for financial service providers. The figures for 2006 were again pleasing.
Raiffeisen Zentralbank was one of the sector’s best performers when it came to power and heating
consumption. As for paper and water consumption, garbage production and CO 2 emissions,
Raiffeisen Zentralbank remained a frontrunner in the middle of the field in comparisons with other
financial institutions. Moreover, the exchange of know-how inside the Working Party made it
possible to identify best practice models and served as a positive amplifier, promoting the ongoing
development of ecological management in the financial sector.
Corporate Social Responsibility
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Corporate Social Responsibility
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Sustainable investment and ethical asset management
More and more investors both private and institutional are taking ecological and social criteria into
account when making investment decisions. Through the leverage of the capital markets, this is
playing a significant part in encouraging companies to do more to integrate sustainability principles
into their business processes.
Churches and other religious institutions play a particularly important role in ethical investment. They
have done pioneering work in the design of sustainable investments. Increasingly, private investors
are also asking for investment structures that are in tune with their moral concepts and ideals. As a
specialist for the issuance and management of investment funds, RZB subsidiary Raiffeisen Capital
Management already launched the Raiffeisen-Ethik equity fund back in 2002.
The Ethics Committee: strict selection criteria
From the outset, an independent Ethics Committee made up of experts and representatives from,
among others, the Red Cross, Caritas and Amnesty International, has been supporting the work of the
Group’s fund managers. RZB’s investment fund company was thus one of the first investment houses in
Austria to actively address the issue of sustainable asset management.
The Raiffeisen-Ethik equity fund invests around the globe. They are selected both on the basis of the
financial principles that apply in the fund management field and on the basis of the criteria laid down
by Raiffeisen’s Ethics Committee. Among other things, the latter rule out investing in armaments,
nuclear energy, genetic engineering, companies that experiment on animals, the tobacco industry,
alcoholic beverages, gambling and, above all, child labour and infringements of human rights and
labour legislation. Sustainability analyses are carried out by oekom research, which is one of the
world’s leading rating agencies for corporate social responsibility (CSR).
CSR leaders chosen from 750 global large and mid-caps
RZB 2006
RZB made a selection of corporate responsibility leaders from over 750 international large and midcaps
from every major industry on a “best in class” basis for inclusion in the Raiffeisen-Ethik equity
fund. The resulting industry and country allocations ensure broad global diversity. Moreover, the
Raiffeisen-Ethik equity fund is one of the 30 funds in the OeKB Sustainability Fund Index (OeSFX). This
index only includes funds whose investment policy is only to invest in particularly environment-friendly
and/or ethically and socially compliant companies. Pure ethical funds like the Raiffeisen-Ethik
equity fund are only included if they also meet specific environmental criteria when choosing their
investments.
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
Raiffeisen-Leasing: the eco-energy leader
RZB subsidiary Raiffeisen-Leasing is a pioneer financier of projects and facilities for generating
alternative and renewable forms of energy like biodiesel, bioethanol, biogas, biomass, geothermic,
photovoltaic, small hydroelectric power and wind energy plants as well as waste recycling facilities. It
was already one of Austria’s biggest investors in the segment in 2006. In Austria alone, finance
volumes totalled € 273 million. The biggest slice of this total, namely € 136 million, was accounted
for by projects in the wind energy field, followed by the biomass segment, which accounted for € 72
million.
Renewable energy for Central and Eastern Europe
Raiffeisen-Leasing made eco-energy a focus of its foreign business operations at a relatively early
stage. Employing the know-how of its staff in the technical, financial and legislative fields, Raiffeisen-
Leasing helps its clients enter new markets and new countries. Eco-energy legislation is already in
force or under preparation throughout the EU and in the CEE-region, offering investors planning
security and allowing the economical realization of projects. The finance leasing companies set
up jointly with RZB’s local Network Banks in Albania, Belarus, Bosnia and Herzegovina, Bulgaria,
Croatia, the Czech Republic, Hungary, Kazakhstan, Poland, Romania, Russia, Serbia, Slovakia,
Slovenia and the Ukraine and are applying their expertise in these markets with great success.
The “Car and Environment Network”
For some years, Raiffeisen-Leasing has been striving to make road traffic more environmentally
friendly by encouraging the use of alternative fuels and propulsion systems. Eco-cars relieve the
burden on the economy by reducing CO 2 emissions and dust pollution. In 2006, Raiffeisen-Leasing
and the Austrian automobile association ÖAMTC jointly founded their Car and Environment Network
(Netzwerk Auto & Umwelt). The goal of this initiative is to make the advantages of environmentally
friendly vehicles and fuels better known and to promote demand. Car makers and fuel distributors are
to be encouraged to supply them nationwide.
Raiffeisen-Leasing introduced another immediate measure in 2006, paying a direct grant of € 400
per vehicle to support the leasing of natural-gas-powered cars. Other eco-cars are subsidized to
the tune of € 300. In addition, Raiffeisen-Leasing helps businesses makes use of the range of public
subsidies available to buyers of eco-friendly vehicles.
Corporate Social Responsibility
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Corporate Social Responsibility
68
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Social action and international commitment
In Austria and abroad, RZB supports culture, education and sports as well as charitable causes and
welfare institutions. These areas provide opportunities to combine economic interests with social action
and to interface with local players as a “good corporate citizen“. Every country, region and local
community has a different point of departure, different conditions and different needs. Raiffeisen’s
motto is “help for self-help”. Applying this principle, it provides stimulus and supports numerous smallscale
projects in urban and rural areas.
This gives numerous small local agencies and initiatives – which are only just beginning to develop in
Central and Eastern Europe – the opportunity to realize new and creative ideas for projects, creating
up big opportunities with relatively small amounts of money and making it possible to cross-link local
structures. Projects of this kind enhance social cohesion in city districts and give different sectors of the
population the chance to gain qualifications.
Young people and education in the CEE-region: the Albanian example
RZB 2006
We would like to describe in brief a number of regional projects and programmes in Albania as
examples of RZB’s many corporate social activities in Central and Eastern Europe. Like most countries
in Central and Eastern Europe, Albania has a lot of catching up to do in the social, economic and
democratic spheres, and it harbours considerable potential for sustainable investment projects. A raft
of similar regional activities of social relevance are promoting the interests of the regional and local
populations of all 16 Central and Eastern European countries in which RZB operates. It is precisely the
small, diversified projects that bring high social value-added to the community. The Albanian example
clearly demonstrates Raiffeisen’s special focus on youth and educational work:
• “Bring Internet to every School“: Within the scope of this project by Albania’s ministry of
education, Raiffeisen launched its Raiffeisen Computer Labs initiative, providing € 75,000 for
the creation of 10 computer labs in eight cities.
• Cooperating with schools throughout Albania, Raiffeisen is particularly involved in cultural
activities. In 2006, they included among others the RinFest, a nationwide art competition
participated in by virtually every secondary school pupil in Albania.
• Moreover, Raiffeisen Bank in Albania donated the equipment for the operating theatre in Fieri
Hospital, and it paid for the renovation of the gymnasium at a primary school in Tirana, for the
furnishings in a primary school, and for the renovation of classrooms in a secondary school in
Gjirokastra.
• Funds provided by Raiffeisen Bank made it possible to set up school libraries in 17 schools in
Northern Albania in 2006.
• Raiffeisen Bank also sponsors youth and educational initiatives in universities, including, for
example, the creation of student newspapers, and it makes it possible for about 40 business
students a year to train on the job at Raiffeisen Bank. Many former student trainees are now
permanent members of staff.
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
RZB is living out its responsibilities
In Austria, Raiffeisen Zentralbank alone contributed over € 1.8 million to research establishments,
representative bodies, universities and similar institutions during 2006, and it donated about
€ 1.4 million to support initiatives and associations and welfare and social institutions. In addition,
numerous other institutions and projects in Austria and abroad are given support at Group
level. Among others, Raiffeisen Zentralbank supports the following organizations and initiatives
in Austria:
Corporate Social Responsibility
• The Austrian Red Cross – whose honorary Vice-President is RZB’s CEO Walter Rothensteiner
– has for many years been a key partner within the scope of the bank’s social commitment. The
work done by the Austrian Red Cross ranges from ambulance transport and blood donor
services to home nursing and first-aid training to missing person searches and catastrophe aid.
• Kurier Aid Austria was set up by the Kurier newspaper in cooperation with the Raiffeisen
Banking Group, UNIQA, österreichische Bauwirtschaft (the Austrian construction industry) and
the Red Cross immediately after the tsunami. Due to donations totalling about € 10 million,
it proved possible to pay for the construction of four villages with over 700 houses, a school,
three community centres, a youth centre, apprenticeship workshops and a fishing project.
€ 3.2 million – a big slice of the donations – was raised by the Raiffeisen Banking Group.
• The Caritas-Flüchtlingskinderfonds (child refugee fund) helps children, who are often hardest
hit by the exertions of flight, making it particularly important to offer them support and
psychological aid. The Caritas team consists of ethnologists, Africa experts, social workers,
theologists, psychologists and interpreters.
• The Mobile Caritas Hospiz ensures that the seriously ill are not forced to spend the final days of
their lives in a strange, unknown environment and can continue to live in familiar surroundings
with their loved ones.
• Austrian Doctors for Disabled is a non-profit organization made up of experienced Austrian
doctors and medical workers who offer their knowledge, experience and time voluntarily and
without payment to provide medical care for the sick and disabled. Its focus in 2006 was a
project for the disabled in Bosnia.
• Hilfswerk Austria is one of Austria’s largest agencies for developmental cooperation and aid
in Eastern Europe. The “Zukunft für Waisenkinder in Moldau“ (future for orphans in Moldova)
project was at the centre of Raiffeisen Zentralbank’s work with the organization in 2006.
• Licht ins Dunkel’s very successful activities focus on providing material and emotional support to
disabled children and their families.
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Corporate Social Responsibility
70
www.rzb.at
Austria is expanding its horizons
During the year under review, Raiffeisen Zentralbank set up an “expanding horizons” initiative
called Initiative Tellerrand together with six other major Austrian corporates. This cross-party and
independent Austrian platform has been created to make a public stand for an enlarged Europe
and for Austria’s role as a strong heart in the middle of Europe. The goal is to convincingly present
the advantages and opportunities that an extended Europe is creating. After all, the involvement
of Austrian companies in the markets of the new EU member-states is also generating additional
sustainable growth in Austria as well as strengthening those companies’ business base. This is in turn
securing jobs in Austria at the same time as creating new one.
Work-life balance and staff satisfaction
RZB 2006
The key goals of corporate policy include fostering staff, furthering their professional development and
training and creating working conditions that meet employees’ needs at the same time as laying the
foundation stones for the enterprise’s business success. Fair treatment and concern for staff-members’
personal development are just as self-evident an element of RZB’s philosophy in countries without
highly evolved social welfare systems.
RZB sees the optimization of the work-life balance as a fundamental contribution to social stability
and economic growth. Consequently, RZB’s human resources policy includes concrete action to help
employees’ balance their working and family lives. This is making an important contribution to the
bank’s business success. Not least for this reason, the annual staff survey in 2006 again produced
extremely positive responses, showing that RZB is one of Austria’s most attractive employers.
Raiffeisen Zentralbank’s Works Council has an important role. As the place where staff-members’ go
with their interests and concerns, it regularly takes up new suggestions and recommendations and
prepares them for implementation in close cooperation with Human Resources. The Managing Board
again supported many of the resulting measures in 2006. Their beneficial effects contributed to the
ongoing optimization of the workforce’s work-life balance.
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
Balancing work and family life
Corporate Social Responsibility
Many staff-members welcome and make use of the option of working flexibly without any core hours
of work. This plays an important part in helping both men and women reconcile their work with
their family life, in turn making a major contribution to staff satisfaction. RZB is thus creating the
basic framework that will allow male staff-members to enjoy more family life; and the better work-life
balance also directly helps young female management staff, who benefit from the greater flexibility
and an improved infrastructure (e.g. child care facilities).
For instance, the company kindergarten at Head Office in Vienna was enlarged to cater for 45 more
children during 2006, increasing the total number of places to 100. Employee-friendly opening
hours, modern equipment and well-trained teaching staff make this in-house service particularly
attractive at a time when there is a general shortage of high-quality day care and it is getting more
and more expensive. Above all, RZB has made it easier for men and women alike to return to work
after a period of parenthood leave by allowing them to work part-time or telework. In addition, they
are offered special training programmes and flexible career planning as well as a return to their
original job.
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Raiffeisen Banking Group
72 www.rzb.at
The Raiffeisen Banking Group
in 2006
RZB 2006
The Austrian Raiffeisen Banking Group (RBG) is the country’s pre-eminent banking organization.
Raiffeisen has Austria’s densest banking network and a market share of about one quarter of the
country’s aggregate banking market. The Raiffeisen Banking Group has over € 64 billion of customer
deposits under management (without building society savings), over € 42 billion of which consists of
savings deposits. Its principal focuses in the financing field are small and medium-sized enterprises,
the tourism industry and the agricultural sector. RBG has developed its powerful position through
healthy growth and by its own efforts. It employs approximately 75,600 people around the world.
Market Shares of the Raiffeisen Banking Group in Austria
2006 2005 2004 2003 2002 2001
Domestic non-bank deposits �mn 64,215 59,477 54,635 53,184 48,956 47,026
Market share of total non-bank deposits % 27.8 26.9 25.9 26.5 25.5 24.8
Savings deposits �mn 42,083 39,998 39,064 37,815 36,036 34,402
Market share of total savings deposits % 30.1 29.2 28.7 28.6 28.2 27.4
Sight deposits �mn 15,084 13,377 11,936 11,671 9,652 8,540
Market share of total sight deposits % 21.6 23.0 23.1 24.2 23.6 22.9
Time deposits �mn 6,261 5,357 3,164 3,149 2,928 3,770
Market share of total time deposits % 17.5 24.2 15.5 17.5 14.1 15.6
Direct lending to domestic non-banks �mn 64,460 60,928 55,784 53,374 51,941 50,055
Market share of total direct lending to non-banks % 23.4 23.1 22.2 22.3 22.1 21.5
Securities funds �mn 48,565 42,661 33,265 30,625 23,445 22,731
Market share of total securities funds % 29.0 27.4 26.7 26.6 25.9 26.0
Sources: Oesterreichische Nationalbank (these data relate exclusively to business carried on by Raiffeisen Banks, the Regional Raiffeisen Banks and Raiffeisen Zentralbank but
not to business carried on by specialist companies), and Oesterreichische Kontrollbank with regard to securities funds (data for investment fund companies Raiffeisen Capital
Management, Kepler Fonds KAG and Salzburg-München Wertpapierfonds KAG).
Working together for a stronger position in the market
The Austrian Raiffeisen Banking Group is a three-tiered organization made up of the autonomous
locally active Raiffeisen Banks, the Raiffeisen-Landeszentralen (Regional Raiffeisen Banks) and
Raiffeisen Zentralbank.
The autonomous Raiffeisen Banks make up an extensive, nationwide network of banking outlets in
Austria. There are 557 autonomous Raiffeisen Banks (2005: 566) and 1,695 affiliated branches
(2005: 1,704). As a result, RBG accounts for nearly 44 per cent of all banking outlets in Austria. The
Raiffeisen Banks within a province offer customers the services of a so-called universal bank selling a
complete line of banking products and services. The Raiffeisen Banks are at the same time the owners
of the Landeszentrale in their particular province.
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
Structure of the Raiffeisen Banking Group
Interests in Austrian
financial institutions
Insurers, investment fund companies,
finance leasing companies,
building society, Raiffeisen
Centrobank, Kathrein & Co.,
Nationalbank, Kontrollbank, VISA,
Europay, etc.
The Network in Central
and Eastern Europe
Raiffeisen International:
Network Banks,
Raiffeisen Leasing International,
other subsidiaries
Raiffeisen Banks
557 Regional Raiffeisen Banks
Raiffeisenlandesbanken
8 Regional Raiffeisen Banks, Zveza Bank
Foreign branches, offices
and equity participations
Branches,
representative offices,
banks
The Regional Raiffeisen Banks perform liquidity balancing tasks and render other centralized services
for the Raiffeisen Banks in their region. In addition, the Regional Raiffeisen Banks are themselves
autonomous universal banks as well as being shareholders of Raiffeisen Zentralbank, collectively
holding 87.65 per cent of Raiffeisen Zentralbank’s share capital.
Raiffeisen Zentralbank is the Raiffeisen Banking Group’s central institution. It was set up in 1927
and has since become one of Austria’s leading corporate and investment banks. It sees Central and
Eastern Europe as part of its enlarged home market alongside Austria and operates the most extensive
banking network in this strongly growing region.
Raiffeisen-Kundengarantiegemeinschaft Österreich (RKÖ)
RBG took a pioneering step in the field of deposit guarantees in Austria when it set up Raiffeisen-
Kundengarantiegemeinschaft Österreich (RKÖ). RKÖ was founded in 2000 to give legal substance in
this era of globalization and mega-mergers to something that has been an unwritten law within RBG
from the outset. RKÖ guarantees up to 100 per cent of customer deposits, supplementing Austria’s
statutory deposit guarantee requirements. By setting up this new facility, Raiffeisen has formalized
what its trademark, the sheltering gable cross, has always stood for, namely security and trust.
RKÖ is a national amalgamation of regional deposit guarantee associations. The business reserves of
all the member-banks are made earmarked to guarantee deposits, with legally binding effect, on the
basis of a precisely defined pattern of apportionments and financial obligations. Consequently, even if
a member were forced to file for bankruptcy – which has never happened – customer deposits at that
institution would retain their value over and above the limitations of statutory deposit guarantees.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Specialist companies
and back-office companies
Payment and securities settlers,
IT companies, real-estate and
trading companies, private
equity companies, etc.
Raiffeisen Banking Group
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73

Raiffeisen Banking Group
74 www.rzb.at
Structure of the Raiffeisen Deposit Guarantee Association
RLB
RB
RB
RLB
RB
RB
RLB
RB
Obligation to furnish business reserves
Regional deposit guarantee association
Austrian Raiffeisen deposit guarantee association
Regional Raiffeisen Bank
Raiffeisen Bank
Joint risk monitoring
RB
RLB
RB
RZB 2006
For the event that a particular regional deposit
guarantee association lacks sufficient means to
meet all guaranteed customer claims against an
insolvent bank, the members of RKÖ guarantee to
commit their business reserves to match up to 100
per cent of all customer deposits at the insolvent
bank and up to 100 per cent of the obligations
arising from financial instruments issued by that
bank. Instead of claims in bankruptcy, the insolvent
bank’s customers would thus be offered claims
of appropriate value against other banks within
the Raiffeisen Banking Group. Some 78 per cent
of all Raiffeisen Banks in Austria are members
of Raiffeisen deposit guarantee associations,
including Raiffeisen Zentralbank itself. This
means that approximately 92 per cent of total
customer deposits with RBG are protected by
RKÖ (calculated on the basis of annual financial
statements for 2005).
Joint risk monitoring within RBG takes place under the aegis of the RBG Risk Committee. During each
of its quarterly meetings, it draws up a risk report on a company-by-company basis as well as on a
consolidated basis for the whole of RBG. The risk report employs a value-at-risk approach. Besides
assessing overall risk and comparing that risk with RBG’s risk-bearing capacity, the report contains
detailed analyses of credit and country risks, equity risks, market risks and operational risks. In
addition to regular monitoring of risks, RBG’s common risk monitoring activities are supplemented
by an accounting-data and benchmark based early warning system and the active observation
of markets. Among other things, the RBG Risk Committee also serves as an advisory board to the
managing board of Österreichische Raiffeisen-Einlagensicherung reg. Gen.m.b.H. in risk matters.
Austria’s market leader and foremost innovator in online banking
Some 800,000 Raiffeisen customers were already banking online in 2006. This translates into a
market share of 41 per cent, making Raiffeisen the undisputed market leader in Austria. A new
financial portal called “mein.raiffeisen.at mit ELBA-internet“ was successfully put on the market in
2006. As a result, Raiffeisen customers now have the use not just of a user-friendly and secure Internet
banking system but also a personal financial portal that they can configure to suit their needs. In
addition, the Raiffeisen mailbox within mein.raiffeisen.at provides secure communication between
customer advisors and customers. As in a Raiffeisen Bank, customers can now get everything they
need on the Internet from a single source and via a single portal.
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
During 2006, customers of the Raiffeisen Banking Group were faced with forged e-mails (phishing)
and malware. Appropriate counter-strategies and measures were developed and implemented. They
included the refinement of RBG’s TAN (transaction number) system, among other things through the
introduction of additional codes and of TANs transmitted to the user’s telephone for short-term use in
connection with a particular transaction at that moment.
Raiffeisen: the country’s foremost bank brand
Through RZB, Raiffeisen has long since become a successful internationally active banking group.
Its common brand identity signals strength and competence – and, in the final analysis, creates trust.
Zentrale Raiffeisenwerbung marketed Raiffeisen’s extensive line of products and services by way of
its nationwide “Home” and “Raiffeisen Pension” campaign focuses carried out in 2006 and by
campaigns that specifically addressed the youth/student and corporate customer segments.
Skiing hero Hermann Maier again proved to be an attention-grabbing advertising vehicle during 2006.
Emotion theory research has clearly demonstrated the positive effects of using brand testimonials.
Hermann Maier, Mario Scheiber (one of his colleagues in the Austrian skiing team), swimmer Markus
Rogan and others are not only boosting brand awareness; they are also enhancing Raiffeisen’s image.
Zentrale Raiffeisenwerbung’s fully integrated communication strategy worked, the campaigns delivering
an advertising value equivalent (AVE) that far exceeded the average AVEs of competitors’ campaigns.
As a sponsor of Austria’s national soccer team and promoter of young talent, Raiffeisen is helping
build up a new and successful national team ahead of the European Football Championships in Austria
and Switzerland in 2008.
The Gable Cross: the trademark of the Raiffeisen Banking Group
The Gable Cross is an element of the trademark used by nearly every company in the Raiffeisen
Banking Group. It represents two stylized horse’s heads crossed and attached to the gable of a
house. It is a symbol of protection rooted in old European folk traditions. A gable cross on the roof
was believed to protect a house and its occupants from outside dangers and to ward off evil. The
gable cross was chosen as our trademark back in 1877, when Friedrich Wilhelm Raiffeisen,
the founder and mentor of the Raiffeisen cooperative movement, was still alive. It stands for the
protection and security that the members of the Raiffeisen Banks enjoy through their self-determined
collaboration. Today, the Gable Cross is one of Austria’s best-known brands, and it is in use around
the world.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Raiffeisen Banking Group
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75

Raiffeisen Banking Group
The 2006 Balance Sheet of the Raiffeisen Banking Group
RZB 2006
RBG’s Consolidated Balance Sheet was prepared on the basis of the monthly returns and balance
sheets of the following entities: the Raiffeisen Banks, the Regional Raiffeisen Banks, RZB, Raiffeisen
Bausparkasse Ges.m.b.H., Raiffeisen Kapitalanlage Ges.m.b.H., Raiffeisen Wohnbaubank AG,
Notartreuhandbank AG and Raiffeisen Vermögensverwaltungsbank AG. The data conform to
Austrian accounting and reporting standards (HGB).
An Income Statement for RBG cannot be prepared until June, when all the audited financial
statements will have become available. The unaudited preliminary figures show that RBG again by far
outperformed the Austrian banking industry as a whole.
One of RBG’s characteristic features is its traditionally strong equity base. The following table shows
how RBG’s equity and other balance sheet data have evolved.
The Raiffeisen Banking Group’s Consolidated Balance Sheet and Equity Statement
€mn
RBG’s balance sheet data and equity
2006 Change 2005 2004
Loans and advances to banks 29,864 10.5% 27,023 20,437
Loans and advances to customers 118,859 17.4% 101,254 86,399
Deposits from banks 45,885 3.3% 44,422 32,728
Deposits from customers 114,396 17.1% 97,694 86,061
Equity 10,652 17.4% 9,073 7,208
Balance sheet total
Regulatory own funds
205,361 16.7% 176,008 145,530
Eligible own funds (under § 23 and § 24 BWG) 15,116 26.3% 11,971 10,494
Own funds requirement (under § 22 BWG) 11,168 17.9% 9,470 7,610
Core capital ratio 7.5% 0.1 pp 7.4% 7.9%
Equity ratio 10.8% 0.7 pp 10.1% 11.0%
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RZB 2006 Interview
Programmed for further growth
Interview with CEO Walter Rothensteiner
RZB is growing at an impressive speed and has already become one of the world’s
100 largest banks. What are the limits to your growth?
If we were to grow by 30 or 40 percent a year, we would relatively soon be one
of the world’s 10 largest banks. This is pure fantasy because there are two major
limiting factors. One is our ability to control our growth. The other is the equity that
underlies it.
What is your solution?
These are constant factors that have already been with us in recent years. However,
we have shown that we can get round them. The prerequisites are the right strategy,
effective internal organization, a strong customer orientation, the backing of one’s
owners and good access to the capital markets. I think we are doing pretty well in
all these areas.
You have an excess equity ratio of over one third. Are you now going to start
stepping on the gas?
Not really, because we see capital as a resource that is generally in short supply
and that we need to be economical with. This is the only way to ensure that we
have the right inner mindset throughout the organization, and that in turn is what will ensure that our
assets are of the desired quality. In addition, capital must grow alongside risk-weighted assets. If they
don’t, our room for manoeuvre will quickly become limited.
And that would stall your growth?
The big issue is not our percentage rate of growth, because the base is also growing. For instance,
the growth we are planning for 2007 is about the same as RZB’s balance sheet total in 1999. However,
a great deal has happened at RZB since then. It is not just our sales organization that has put on
muscle. So too have our risk management mechanisms. Our appetite is undoubtedly big, but we also
have finely tuned sensors that tell us how much we bite off without getting indigestion. That is the
crucial point.
“Growth is not a dogma. It is a way to achieve goals.”
So why are you pursuing a growth strategy? You can be more than happy with what you have
already achieved.
We do not see growth as a dogma. It is not an end in itself. It is the means by which we intend to
achieve our goals (see our Vision und Mission Statement on page 56). And in Central and Eastern
Europe in particular, there is no alternative. These markets are growing dynamically. Standing still
would mean rapidly lagging behind.
Why are the Central and Eastern European banking markets growing so fast?
Because they still have catching up to do, so their potential is huge. Lower initial levels mean
higher rates of economic growth, and it is likely to continue for years. This is an ideal environment
for banks. At the same time, the region’s banking markets are still in the early stage of their
development. For instance, the ratio of the banking system’s aggregate assets to total GDP is not even
half as high as in the eurozone, creating an added lever. And we are still a very long way from the
crowding out we are experiencing in Austria.
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77

Interview
RZB 2006
Where are the main opportunities for growth?
Geographically, in the CIS and Southeastern Europe – and business with Retail Customers promises to
deliver the biggest rates of rates of growth. This is why we have recently been investing most in those
areas. However, we also want to exploit opportunities for growth in Austria and Central and Eastern
Europe, so we are at the same time maintaining our balanced portfolio. We
also see potential in commission business. Besides helping compensate for
narrowing margins, it also diversifies our profits more effectively.
You haven’t yet said anything about acquisitions. Are they no longer an
issue?
Organic growth is undoubtedly the biggest motor of our expansion.
Nonetheless, we are continuously monitoring opportunities for acquisitions
to supplement it. To date, we have used acquisitions to accelerate a market
entry or purchase additional market shares, but when doing so, we have
always ensured that the acquisition also makes business sense on its own. In
the final analysis, we don’t need to buy at any price because we are in a
good starting position in practically every market.
“Our operations in Austria are the solid foundations
upon which have constructed the Group.“
Recently you even sold a banking subsidiary, namely Raiffeisenbank
Ukraine. Does this signal a paradigm shift?
I don’t see it as a paradigm shift. But it certainly was a unique opportunity
that we decided to grasp. Having bought Bank Aval in the Ukraine – the
country’s second-largest bank with over 1,300 branches – we received numerous enquiries from
prospective purchasers asking whether we would sell Raiffeisenbank Ukraine. The first indicative
offers were so attractive that we began negotiations. However, the Raiffeisen brand was not for
sale. In the end, we killed two birds with one stone. We saved ourselves the effort of merging our two
banks in the Ukraine and, at the same time, we received a good price. Or, if you like, we exchanged
the seventh-largest bank in the Ukraine for the second-largest at a relatively small additional cost.
Are Raiffeisen International shares also for sale?
No. Raiffeisen Zentralbank intends to keep its 70 per cent stake in Raiffeisen International. The
network in Central and Eastern Europe is an indispensable part of the RZB Group. In return, this
financial holding company benefits from the strong support it gets from its mother ship Raiffeisen
Zentralbank and the ample opportunities offered to it by Raiffeisen Zentralbank as majority
shareholder.
How is business in Austria going?
Business in Austria accounted for nearly a third of our pre-tax profits without one-off effects last year,
so it is going really well. Our operations in Austria are the solid foundations upon which we have
constructed the Group. In the corporate banking field, we are firmly ensconced in our “Top 1000”
customer segment and we were again able to acquire new customers during 2006. This is a logical
consequence of our underlying principle that the customer is at the centre of what we do. We are
a service provider, and we remain determined to be the best possible bank for our customers. We
78 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006 Interview
know that sustained success only happens if the customers are satisfied, regardless of whether it is an
Austrian key account, a Russian personal banking customer or an Italian bank.
How did RZB become the world’s most active arranger of large-scale loans for banks?
We may have enlarged our customer support capacities, but we were always a banker to banks. This
will not surprise anyone, because it was what we were set up to do. After all, we were originally
created as the Girozentrale clearing house back in 1927.
You are also a banker to banks as the central institution of the Raiffeisen Banking Group.
Not just that. We are an integral part of the Raiffeisen Banking Group. RZB now accounts for more
than half of RBG’s consolidated balance sheet total. It is both financial service provider and partner,
and it has a broad range of coordinating tasks, for instance in the product development and brand
management fields. Cooperation within the financial network of the Raiffeisen Banking Group is
one of the prerequisites for its success in the marketplace, and there are evident advantages and
synergistic effects that benefit every member of the Group. At the same time, we know that the
services we render for the Raiffeisen Banking Group must always stand up to comparisons with the
rest of the market. This keeps us fit.
“Corporate social responsibility is in our genes.“
Raiffeisen is seen as an exemplary corporate citizen. How do you differ from other banks
in this regard?
It’s in our genes. When the first credit cooperative was set up along Raiffeisen lines, the community –
out of which the Raiffeisen Banks emerged and for whose benefit they act – was already the hub of its
activities. We have retained this tradition. And today, we take this ethos and our values out into the
world, because our radius of action has grown.
In the past, RZB has been rather hesitant to talk about its
good deeds. Why?
We have always seen sustainable management and the assumption
of social responsibilities as aspects of our activities that go without
saying. These were not necessarily areas where we wanted to
make a lot of noise and draw attention to ourselves. And we won’t
be getting very vociferous about them in the future either. However,
more and more people are asking about our contribution to society,
so you will be hearing more from us.
To what extent do ecological and social criteria enter into RZB’s
lending decisions?
Looking at how a project will affect people and the environment is a
standard part of our credit checks. What we discover is then taken
into account when we make the loan decision, which, of course,
is not always easy. We never want our activities to harm either
nature or people. We want to do them good. Our role in society is
clear. We are and remain a bank – but a bank with principles.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
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Group Management Report
Group Management Report
European Interest Rates
4.0
3.5
3.0
2.5
2.0
1.5
1/’03
Economic conditions in general
RZB 2006
Despite the high price of oil, the eurozone economy developed very well in 2006, with GDP growing
by 2.7 per cent in real terms. The principal motors of growth were exports and corporate investment,
both of which grew substantially. Record survey results reflected the upbeat mood in the corporate
sector.
The positive economic climate had an impact on the jobless rate. Inside the eurozone, it dropped from
8.3 to 7.5 per cent during the year. Inflation during 2006 came to 2.2 per cent, which was above the
maximum target of 2 per cent set by European Central Bank (ECB). The ECB responded to changed
conditions by hiking interest rates.
7/’03 1/’04 7/’04 1/’05 7/’05 1/’06 7/’06 1/’07 3/’07
3-month money (EURIBOR) 10-year German Bund
Capital markets in motion
In 2006, as a result of the eurozone’s sustained
healthy economic development, the ECB gradually
raised its tender rate to 3.5 per cent from a starting
point of 2.0 per cent. Developments peaked in July
2006, when the yield on 10-year bonds stood at
4.15 per cent. Because of rising interest rates, the
prices of bonds of all maturities fell.
After that, the picture in the European bond
market varied. The long end received support
from the market’s belief that the cycle of interestrate
hikes would not go very high and from the
strength of the US bond market. At the same
time, yields at the short end rose in response to
interest-rate hikes in the second half of 2006. This
flattened the term-structure curve. As a result, the
yield on a 10-year federal bond stood at 3.95 per
cent, whereas the yield on a two-year bond was
3.88 per cent.
Prices in the world’s equity markets rose sharply during 2006. Whereas interest and inflation fears
triggered major price losses towards the end of the first half, they were more than made up for during
the second half. The primary driving force behind these developments was the corporate sector’s
excellent profits, which exhibited double-digit year-on-year growth.
In addition, the equity markets received tailwind from the end of the cycle of interest rate hikes in the
US and the associated prospect of the first interest rate reductions. In this clement environment in the
international marketplace, the Austrian equity market continued to develop very satisfactorily, the ATX
(Vienna’s key index) advancing by 21.7 per cent to 4,463.47 points.
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RZB 2006
The EU member-states in the CEE-region achieve record growth
The economies of the new EU member-states in Central and Eastern Europe – the Czech Republic,
Hungary, Poland, Slovakia and Slovenia (the CE region) – grew by an estimated average of 5.4 per
cent in 2006, setting a new record for the period since the collapse of their communist regimes. In
comparison, they had grown by 4.2 per cent in 2005. Real GDP in the countries of Southeastern
Europe – Romania, Bulgaria, Croatia, Serbia, Bosnia and Herzegovina and Albania (the SEE
region) – grew by 6.6 per cent, as against 4.7 per cent in 2005. The European members of the
Commonwealth of Independent States – Russia, the Ukraine and Belarus (the CIS region) – recorded
growth of 7.0 per cent, compared with GDP growth of 6.1 per cent in 2005.
Economic Maturity of the Countries in the CEE-Region (per capita GDP in per cent of the EU average)
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
81%
Slovenia
77%
Czech Republic
62%
Hungary
Sources: wiiw, Raiffeisen Research; estimates for 2006.
58%
Slovakia
51% 50%
Poland
The key motors of economic growth in Central and Eastern Europe were rising investment, strong
private consumption and brisk demand for exports. The healthy state of the eurozone economies,
which account for up to three quarters of the region’s exports and are therefore by far the most
important of the CE and SEE countries’ foreign trade partners, played a major role in the positive
development of their exports. As in prior years, foreign direct investment was high, and due to the
process of integration into the EU ongoing within the SEE region – above all in Romania and Bulgaria
– it continue to grow.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Croatia
40%
Russia
36%
Romania
33%
Bulgaria
27% 27% 27%
Bosnia and
Herzegovina
Serbia
Ukraine
Group Management Report
21%
Albania
Spain
Greece
Portugal
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81

Developments in the banking industry
Developments in the banking industry
in RZB’s principal markets
Expansion in the CEE-region shapes the Austrian banking industry
RZB 2006
The process of concentration that has been transforming the Austrian banking industry in recent
years did not bring any outstanding new developments during 2006. The big Austrian banks
concentrated mainly on continuing their expansion in the CEE-countries. Sizeable acquisitions took
place, underlining their orientation towards new markets – including in particular those of Central and
Eastern Europe. Major acquisitions by RZB (Impexbank in Russia), Erste Bank (BCR in Romania) and
BACA (Aton Capital in Russia) made these banks the biggest Austrian players in the M&A field.
In the Austrian banking market, the year was dominated by the crises at BAWAG/P.S.K. and Hypo
Alpe Adria. Because of losses that were not correctly accounted for, Hypo Alpe Adria had to restate
its 2004 balance sheet. BAWAG/P.S.K. got into financial difficulties because of the after-effects of
unprofitable arbitrage and its activities as lender to and former co-owner of Refco. BAWAG/P.S.K.
was subsequently sold to a foreign buyer. In addition, the change in BACA’s ownership should bring
new momentum to the Austrian personal banking segment.
Sustained rapid growth in the Austrian banking industry during 2006
Statistics published by Oesterreichische Nationalbank (OeNB) show that the balance sheet totals of
Austria’s banks grew powerfully again during the year under review following strong growth of 10.9
per cent in 2005. At the end of December 2006, the aggregate balance sheet total of Austria’s banks
came to € 798 billion, which was 9.9 per cent more than at year-end 2005. RZB again substantially
exceeded the industry’s overall rate of growth during 2006.
The growth in foreign assets was even more impressive than that of total assets. Having come to
€ 246 billion in 2005, they already reached € 294 billion in 2006. This translates into growth
of 19 per cent and means that foreign assets now account for 37 per cent of total assets. This
disproportionately large increase clearly demonstrates the importance that foreign business has for the
Austrian banking industry.
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RZB 2006
Central and Eastern Europe drives the growth of Austria’s banks
By the standards of most Western European countries, the Austrian banking industry has structural
deficits. For instance, the net interest margin is well below the Western European average, and branch
density is significantly higher. Together with stiff competition in the over-banked domestic banking
market, this means that the national average return on equity has been much lower and Cost/income
ratios have been worse than Western European averages.
Nonetheless, OeNB statistics show that profit from ordinary activities across the banking industry as a
whole (applying Austrian financial reporting standards) grew powerfully, advancing by about 64 per
cent (profit from ordinary activities being the indicator that most closely resembles IFRS profit before
tax). A large part of the advance in profit from ordinary activities resulted from the depth and intensity
of Austrian banks’ involvement in the high-growth CEE-region. Seven out of the 10 biggest Austrian
banks have substantial interests in Central and Eastern Europe.
Developments in the banking industry in Central and Eastern Europe
Central and Eastern Europe is a large region with a rapidly growing economy. In particular, it offers
the banks operating in the region ample opportunities for long-term growth. In the 17 years since
transformation began, the development of the banking markets in the Central and Eastern European
countries has been remarkable.
Central and Eastern European banking markets remained very robust in 2006. Despite the introduction
of increasingly restrictive supervisory standards directed at containing credit growth in Southeastern
Europe, banks’ total assets in the Central and Eastern Europe as a whole continued to grow strongly in
2006. Based on whole-year figures for 2006 extrapolated from half-year data, the assets of the Central
and Eastern European banking sector grew by 26.4 per cent in euro terms. That was only just slower than
the record rate of growth of 31.3 per cent recorded in 2005. Because of substantial appreciation of many
Central and Eastern European currencies during the second half of 2006, the full-year growth figures
in 2006 will probably top 2005. The figures for the whole 2006 were not yet available at the time of
writing. Growth in the banking sector was again driven by consumer and mortgage loan business, which
profited from rising incomes and expectations of rising property prices. In a growing number of financial
markets, portfolios of open investment and pension funds showed very high rates of growth, albeit from a
very low base.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Developments in the banking industry
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83

Developments in the banking industry
Personal Loans in per cent of GDP vs. per capita GDP (PPP basis), in euros
Personal loans in per cent of GDP
60%
50%
40%
30%
Bosnia and Herzegovina
Croatia
Mergers and acquisitions transform the market environment
RZB 2006
20%
Bulgaria
Poland
Czech Republic
10%
Ukraine
Hungary
Slovenia
Kosovo Serbia
Romania
Slovakia
Russia
0% Albania Belarus
5,000 10,000 15,000 20,000 25,000
Per capita GDP (PPP basis), in E
CE region SEE region CIS
At 31 December 2005; Sources: local central banks, wiiw, Raiffeisen Research.
The year 2006 saw an increase in the number of mergers and acquisitions involving international
banking groups operating in Central and Eastern Europe. The takeover by Italy’s UniCredit of
HypoVereinsbank together with its subsidiary BACA, which handles its operations in Central and
Eastern Europe, created the region’s largest international banking group in balance sheet total terms.
At the beginning of 2006, Raiffeisen International announced its takeover of JSC Impexbank, which is
one of Russia’s largest branch banks. This considerably strengthened RZB’s presence in Russia’s huge
and promising market and turned it into the country’s largest Western banking group.
This acquisition was the first of a series of takeovers that mainly targeted Russia and the Ukraine.
Hungary’s OTP acquired interests in the Ukraine and Russia, Austria’s Erste Bank acquired a smaller
bank in the Ukraine, and France’s Société Générale acquired a minority stake in Russia’s Rosbank.
84 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
Eurozone

RZB 2006
Market share of international banks continues to rise
In the wake of privatizations and restructuring in the banking industry, the market shares of
international banks in a number of Central and Eastern European countries have become pretty high
during the past 10 years. In 2005 (the most recent period for which complete data are available), the
market share of foreign-owned banks in the Czech Republic, Slovakia, Croatia, Bosnia und Albania
rose to over 90 per cent in terms of total bank assets, and following the privatization of BCR, the same
will also be true in Romania. The market shares of foreign banks rose most in Serbia and the Ukraine
during 2005.
Market Shares of Banks whose Majorities are Foreign-owned, in per cent of total assets
100%
87.5%
75%
62.5%
50%
37.5%
25%
12.5%
0%
Slovakia
Czech
Republic
Hungary
At 31 December 2005.
Sources: local central banks, Raiffeisen Research.
Poland
Slovenia
Albania
CE region SEE region CIS
RZB has the CEE-region’s densest banking network
Developments in the banking industry
The banking groups operating in Central and Eastern Europe pursue different strategies, and this
is reflected by their market presence. Whereas some are focusing on achieving high market shares
in a few markets, RZB is pursuing a more broadly conceived strategy with its subsidiary Raiffeisen
International that encompasses the entire region. Raiffeisen International has Network Banks and
lease financing companies in 16 markets in the region as well as two representative offices. With
2,848 branches, it has the largest branch network of any international bank operating in the region.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Croatia
Bosnia and Herzegovina
Bulgaria
Romania
Serbia
Ukraine
Belarus
Russia
2004
2005
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85

Course of business in 2006
The course of business in 2006
First 10-digit profit
RZB 2006
RZB turned a profit of over a billion euros for the first time in the financial year 2006. Due to strong
organic growth and one-off effects, Consolidated profit for the year (after tax and minorities) grew to
€ 1,169 million. This translates into year-on-year growth of 159 per cent or € 719 million.
Acquisition of Russia’s Impexbank
At the end of January 2006, RZB acquired 100 per cent of Russia’s OAO Impexbank, Moscow,
via Raiffeisen International (its financial holding company for the CEE-region), thus underpinning
its position as the largest international banking group operating in Russia. Impexbank is primarily
geared to servicing personal banking customers and SMEs through its nationwide network of 203
branches and offices and about 400 sales outlets.
At the time of its first-time consolidation (1 May 2006), Impexbank had a balance sheet total of
€ 1.7 billion and consolidated equity of € 158 million. On the same date, it had a workforce of
5,517. Including incidental costs, the acquisition cost US$ 563 million. The legal merger with ZAO
Raiffeisenbank Austria, Moscow, which has been operating since 1996, is planned for 2007.
Acquisition of eBanka in the Czech Republic
Furthermore, the Group acquired a 100 per cent stake in the Czech Republic’s eBanka, a.s., Prague,
for € 130 million. eBanka is a personal banking specialist. In the course of 2007, 49 per cent of its
stock will be sold to Raiffeisenlandesbank Oberösterreich and Raiffeisenlandesbank Niederösterreich-
Wien in accordance with the shareholder structure of Raiffeisenbank, a.s., Prague. At the time of
eBanka’s first-time consolidation at the end of October, it had equity of € 54 million. The acquisition
enlarged RZB’s customer base in the Czech Republic by over 70 per cent to approximately 310,000
customers.
One-off effects of divestments
A contract for the sale of 100 per cent of JSCB Raiffeisenbank Ukraine, Kiev, to OTP Bank Zrt.,
Budapest, was signed on 1 June 2006. All the approvals having been granted, the sale closed in
November 2006, when deconsolidation also took place. At the end of October 2006, Raiffeisenbank
Ukraine had a balance sheet total of over € 1.6 billion and 42 business outlets. The bank, which had
equity of € 164 million when the deal closed, was sold for € 650 million. The brand name Raiffeisen
was not part of the deal. Instead, it became part of the name of the former Bank Aval, which is now
called Raiffeisen Bank Aval.
The signing of a contract for the sale of Raiffeisen’s minority interest in JSC Bank TuranAlem (BTA),
Almaty, in Kazakhstan, took place on 23 August 2006. The Group’s 7.7 per cent interest in the BTA’s
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RZB 2006
capital was sold to a consortium of investors based in Stockholm for € 136.5 million. The sale of this
interest was the upshot of unsuccessful negotiations with other BTA shareholders aimed at acquiring a
majority stake.
Successful proprietary placements
RZB carried out a raft of proprietary placements during 2006. The following three transactions are
particularly noteworthy: In January and March, Raiffeisen Zentralbank issued two euro FRNs of
€ 1 billion each. Because they were greatly oversubscribed, both placements had to be increased
from their original volume of € 750 million within just a few hours. These two bonds were better
priced than comparable bank bonds with the same rating, at 8 basis points above the 3-month
Euribor in the case of the three-year FRN and 11 basis points above it in the case of the 5-year FRN.
In April, RZB issued a € 500 million hybrid Tier 1 bond. This transaction made RZB the first banking
group in Austria to place an individual bond of this size with international debt investors. These
notes were also oversubscribed several times over within a just a few hours. They are A-3 rated
Non-cumulative Subordinated Perpetual Callable Step-up Fixed-to-Floating Rate Capital Notes. They
will pay a coupon of 5.169 per cent for the first 10 years. The issue price was 100 per cent of the
principal amount. This translates into an agio of 95 basis points compared with the interbank rate.
Summary of consolidated results
Since 2001, the Consolidated Financial Statements of RZB have been prepared on the basis of the
International Financial Reporting Standards (IFRS). The legal position in Austria is that consolidated
financial statements prepared in accordance with internationally accepted accounting principles have
an exempting effect in that consolidated financial statements prepared in conformity with Austria’s
BWG and HGB (banking act and commercial code) are no longer required. Raiffeisen Zentralbank
also prepares separate financial statements (Einzelabschluss) in conformity with Austrian law that
provides the formal basis for calculating dividend distributions and taxes.
The majority of RZB is held indirectly by Raiffeisen-Landesbanken-Holding GmbH, Vienna, which is
non-operational, and is thus included in that company’s consolidated financial statements. In turn,
Raiffeisen-Landesbanken-Holding GmbH is owned by eight Regional Raiffeisen Banks.
On the balance sheet date, RZB’s Consolidated Group was made up of 287 companies, comprising
23 banks and 179 other financial institutions. Sixty-seven companies were consolidated for the
first time in 2006. They included 35 project-specific finance leasing subsidiaries. Three companies
were acquired, the purchase of a 100 per cent stake in OAO Impexbank, Moscow, being the most
important acquisition. Another seven companies were deconsolidated, with the sale of the entirety
of the Group’s stake in JSCB Raiffeisenbank Ukraine, Kiev, having the biggest impact. The reader is
referred to page 154 of the Notes regarding the effects of the change in the scope of consolidation on
the corresponding capital items.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Summary of consolidated results
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87

Summary of consolidated results
Profit before tax exceeds a billion euros for the first time
RZB 2006
RZB posted Profit before tax of € 1,882 million, passing a billion euros for the first time (and by a
clear margin). Two one-off effects made a big contribution to this result, but so did sustained organic
growth in every segment. Profit before tax was 102 per cent or € 952 million up on the prior-year
figure of € 930 million.
One-off effects accounted for € 596 million of Profit before tax. They resulted from the sale of
Raiffeisenbank Ukraine (€ 486 million) and the Group’s minority stake in Kazakhstan’s Bank
TuranAlem (€ 110 million). Consequently, these sales accounted for nearly one third of Profit before
tax. After adjustment to allow for capital consolidation, the companies that were added to the
scope of consolidation for the first time accounted for close to € 47 million of Profit before tax. This
translates into slightly over 2 per cent of Profit before tax in 2006 and 5 per cent of the increase
in profit. Movements in the exchange rates of Central and Eastern European currencies varied
considerably in 2006. Overall, they increased Profit before tax by a relatively modest € 6 million.
Deducting the extraordinary factors already mentioned, the Group recorded an organic advance in
Profit before tax of 33 per cent or € 303 million, again demonstrating its ability to deliver sustained
growth in profits.
One third of Profit before tax without one-off effects (€ 1,286 million) was accounted for by
Raiffeisen Zentralbank and its excluded subsidiaries, while Raiffeisen International contributed
two thirds.
Growth in RZB’s Balance Sheet Total
ebn
44.6
46.4
CAGR of 21%
56.1
67.9
93.9
The 15.2 percentage point jump in Return on equity
before tax to 39.1 per cent was largely due to
the one-off effects. After adjustment to allow for
them, Return on equity before tax came to 26.7
per cent. This was still 2.8 percentage points more
than in 2006.
Similarly, RZB’s balance sheet total passed the
E 100 billion mark for the first time, reaching
€ 115.6 billion. Having ended 2005 at € 93.9
billion, RZB’s consolidated balance sheet total
thus grew by 23 per cent or € 21.8 billion. The
compound annual growth rate over the past
five years has been no less than 21 per cent,
underscoring RZB’s sustained growth momentum.
88 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
115.6

RZB 2006
Summary of consolidated results
RZB’s Profit from Operating Activities
€000 2006 Change 2005 2004
Net interest income 2,186,493 36.1% 1,606,223 1,123,868
Net commission income* 1,177,018 43.7% 818,842 625,458
Trading profit* 256,685 48.8% 172,448 169,846
Other operating profit 104,228 43.3% 72,736 80,388
Operating income 3,724,423 39.5% 2,670,249 1,999,560
Staff costs (1,089,006) 33.3% (817,152) (599,375)
Other administrative outlay (803,028) 35.9% (590,874) (444,257)
Depreciation/amortization/write-downs (221,061) 33.2% (166,001) (152,427)
General administrative expenses (2,113,095) 34.2% (1,574,027) (1,196,059)
Profit from operating activities 1,611,328 47.0% 1,096,222 803,500
* See page 168 regarding the change in the allocation of customer margins on foreign currency business between Net commission income and Trading profit.
All the operational components of profit improved considerably. Operating income grew by nearly
40 per cent to € 3,724 million, the increase being spread relatively evenly across every component of
profit. During the year under review, the recognition of customer margins on foreign currency business
changed, resulting in the movement of this component of profit from Trading profit to Net commission
income. Prior-year figures were restated accordingly.
Net interest income grew by 36 per cent from € 1,606 million to € 2,186 million. Its relative
contribution to operating income fell by a percentage point to 59 per cent. Net commission income
grew by slightly more, advancing by 44 per cent
Structural Breakdown of Profits
to € 1,177 million, leaving its relative contribution
to operating income unchanged at 23 per cent.
emn
3,600
3,724
3%
Trading profit grew by most in relative terms,
increasing by 49 per cent to € 257 million. As
7%
a result, it accounted for 8 per cent of operating
3,000
2,670
31%
income (2005: 7 per cent). Other operating profit
3%
grew by 43 per cent to € 104 million. As in 2005,
2,400
2,014
6%
it accounted for 3 per cent of operating income.
1,800
1,200
600
0
1,338
7%
11%
29%
53%
CAGR of 29%
1,583
4%
11%
30%
55%
4%
9%
31%
56%
Net interest income Net commission income
Trading profit Other operating profit
31%
60%
General administrative expenses continued to
depend primarily on capital expenditure on the
development of the Group’s Retail Customers
operations in the CEE-region, which is still ongoing.
Operating expenses increased by 34 per cent to
€ 2,113 million. Here too, the increase in
individual items of expenditure was relatively
balanced and came to between 33 and 36 per cent.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
59%
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89

Summary of consolidated results
Development of the Cost/income ratio
emn
3,500
3,000
2,500
2,000
1,500
1,000
500
0
67.2%
1,343
900
1,583
64.1%
2,000
59.8%
2,670
58.9%
1,574
3,724
RZB 2006
Despite RZB’s focus on the development of its
sales network and the resulting effect on General
administrative expenses, RZB’s Cost/income ratio
– the gauge of efficiency that expresses general
administrative expenses as a percentage of
operating income – improved by another 2.2
percentage points to 56.7 per cent in line with
the sustained advance in Profit from operating
activities.
1,196
56% Net Provisioning for impairment losses increased
1,017
54%
by two thirds from € 207 million to € 346 million.
However, its development varied from region
52% to region. There were releases from provisions
created in Austria in prior years, and virtually no
50%
specific impairment provisions were created, so
that any increase was due solely to an increase
in portfolio-based provisioning, this item grew
substantially in the CIS and CE regions.
This was due to numerous comparatively small individual risks. Overall, specific impairment provisions
increased by a total of 45 per cent to € 190 million, whereas net portfolio-based impairment
provisioning, which does not correspond to concrete loan exposures, increased by 108 per cent to
€ 156 million.
Operating income Operating expenses Cost/income ratio
For the first time, impairment provisioning in the Retail Customers segment (55 per cent of the total)
was higher than in the Corporate Customers segment.
RZB’s Consolidated Profit History
€000 2006 Change 2005 2004
Profit from operating activities 1,611,328 47.0% 1,096,222 803,500
Provisioning for impairment losses (346,431) 67.7% (206,620) (195,723)
Other earnings 617,418 1,434% 40,262 84,528
Profit before tax 1,882,316 102.4% 929,863 692,306
Income tax (250,917) 11.4% (225,220) (126,524)
Profit after tax 1,631,398 131.5% 704,644 565,782
Minority interests in profit (461,967) 82.0% (253,780) (120,103)
Consolidated profit 1,169,432 159.4% 450,864 445,679
Other earnings consists primarily of Net income from deconsolidations in the amount of € 517 million,
including in particular the proceeds from the sale of Raiffeisenbank Ukraine, and Net income from
financial investments and current financial assets in the amount of € 142 million.
Due to one-off effects and an increase of 47 per cent in Profit from operating activities, Profit before
tax more than doubled to € 1,882 million.
90 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
2,113
56.7%
66%
64%
62%
60%
58%

RZB 2006
emn
4,900
The comparatively small increase in Income tax of 11 per cent to € 251 million was a result of
extraordinary effects that had led to a disproportionately big increase in the burden of taxes in
2005 and, above all, of the fact that the one-off effects of selling Raiffeisenbank Ukraine and Bank
TuranAlem did not attract tax. The computed tax ratio was 13 per cent, compared with 24 per cent in
the previous year.
Because of this decrease in tax expenses, Profit after tax grew by even more, namely by 132 per cent,
increasing from € 927 million to € 1,631 million.
Minority interests in profit increased by 82 per cent to € 462 million. This item consisted mainly of
profit attributable to the free float shareholders (nearly 30 per cent ) of listed Central and Eastern
European holding company Raiffeisen International, which also accounted for the one-off effects.
The Consolidated profit attributable to Raiffeisen Zentralbank came to € 1,169 million. This was a
hefty 160 per cent up on the previous year. Even without one-off effects, Consolidated profit grew by
exactly two thirds to € 752 million.
Development of Profit and Return on Equity
4,200
3,500
2,800
2,100
1,400
700
0
13.3%
1,940
2,317
2,221
15.5%
1,736
12.5%
232 243
344
29.9%
3,885
692
23.9%
930
4,812
Average equity Return on equity before tax
Profit before tax Return on equity before tax without one-off effects
Profit before tax without one-off effects
Results by business segment
Summary of consolidated results
Affected little by the capital increase at Raiffeisen
Zentralbank in November 2006, the Earnings
per share (EPS) derived from Consolidated profit
increased from € 92.6 to € 239.9, or to € 155.7
without one-off effects. The number of shares in
circulation in 2006 averaged 4,829,359.
Despite substantial growth in the capital base,
the rise in profit led to a record Return on equity
(ROE). This indicator measures Profit before tax as
a percentage of average Equity. In 2006, it rose
by 15.2 percentage points to 39.1 per cent.
Even without one-off effects, RZB’s ROE was 2.8
percentage points up on the previous year. The
average equity upon which it was based increased
by € 927 million to € 4,812 million. Most of
this increase was due to ploughing back profits
in 2005.
Profit in every one of RZB’s business segment again increased significantly. Over the past two years,
the trend has been towards a more balanced distribution of profit between segments. Just a few years
ago, RZB was still a pure corporate bank with a strong proprietary trading element. Now, the changes
in business volumes and segment results have been reflecting the Group’s strategic focus on the Retail
Customers segment.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
26.7%
1,286
39.1%
1,882
40%
35%
30%
25%
20%
15%
10%
5%
0%
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91

Summary of consolidated results
RZB 2006
It was here that the growth in earnings was most pronounced during 2006. The focus on Retail
Customers business in the CEE-region is generating increasingly large contributions to profit, even
if the number of new outlets is still rising and the exploration of new regional markets has yet to be
completed.
Profit before tax in the biggest business segment – Corporate Customers – increased by 26 per cent to
€ 565 million, even if business in a number of markets was hampered by narrower margins. However,
General administrative expenses, which increased by 22 per cent, grew by slightly less than
Operating income, which increased by 25 per cent. This improved the segment’s Cost/income ratio
by 1.0 percentage points to 39.0 per cent. High portfolio-based impairment provisions increased
Provisioning for impairment losses by 32 per cent to close to € 148 million, although the healthy
state of the economy meant that few material specific impairment provisions had to be created. Since
the segment’s profit grew by more than the equity allocated to it, its Return on equity subsequently
advanced by 2 percentage points to 26.8 per cent.
The Financial Institutions and Public Sector segment grew strongly, with business volumes increasing
by 66 per cent. Profit in this segment also grew, advancing by 41 per cent to € 208 million.
Disregarding one-off effects, the segment again accounted for 16 per cent of Consolidated profit.
Operating income grew by 25 per cent to a total of € 349 million, whereas General administrative
expenses only increased by 5 per cent. This minor increase significantly improved the segment’s Cost/
income ratio, namely by 8 percentage points to 39.7 per cent. Despite a substantial rise in profit,
the segment’s Return on equity sank to 31.1 per cent, the rise in business volumes having greatly
increased the equity attributable to it.
Profit before tax on Segment level
emn
201
238
320
449
Corporate Customers
565
20 25
96
147
Financial Institutions
and Public Sector
208
-59
Retail Customers Proprietary Trading Participations and Other
2002 2003 2004 2005 2006
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-19
51
129
258
158 142
174
238
291
-77
-43
52
-34
561

RZB 2006
The Retail Customers segment has continued to grow as planned, with Profit before tax exactly
doubling to € 258 million in 2006. Risk-weighted assets increased by 58 per cent to € 14.9 billion.
Mirroring this, Operating income in the segment totalled € 1,654 million, which was 61 per cent or
€ 626 million more than in 2005. However, General administrative expenses also increased, namely
by 50 per cent to E 1,204 million, chiefly as a result of expenditure on enlarging branch networks
and stepping up advertising activities. The segment’s Cost/income ratio of 72.9 per cent was still
relatively high as a result of RZB’s expansion, but nonetheless, it improved by 5.2 percentage points.
However, rapidly growing loan volumes and high margins in the Retail Customers segment, especially
in the CIS region and Southeastern Europe, increased credit risks. As a result, Provisioning for
impairment losses increased sharply by 99 per cent to € 192 million.
Earnings in the Proprietary Trading segment grew by 22 per cent, resulting in Profit before tax of
€ 291 million. The segment’s Return on equity of 33.0 per cent was 1.7 percentage points up on the
previous year. The 21 per cent advance in Net interest income was volume-related and resulted from
medium and long-term investments.
Trading profit grew by 77 per cent. This was attributable to higher earnings from foreign exchange
business in conjunction with opposing net income from the remeasurement of a hedge position held to
hedge RZB investments in the CEE-region in 2005 and 2006.
Profit before tax in the Participations and Other segment grew to € 561 million. This was largely a
result of the aforesaid one-off effects following a loss in 2005. This segment accounted for 30 per cent
of RZB’s Profit before tax, but in view of one-off effects, this needs to be put in perspective. Without
one-off effects, the segment showed a loss, as in the previous year, of € 34 million.
Detailed review of items in the Income Statement
Net interest income
RZB’s Net interest income increased by 36 per cent or € 580 million to € 2,186 million. Corporate
acquisitions accounted for 5 percentage points or € 77 million of the increase. This growth exceeded
the 23 per cent increase in balance sheet total, improving the Group’s interest margin (which is
calculated in relation to average balance sheet total) by 10 basis points from 2.02 per cent in 2005 to
2.12 per cent in the year under review.
RZB’s Interest income increased by 49 per cent to € 5,245 million. Interest income from Loans and
advances to customers grew by 63 per cent and accounted for the biggest slice of interest income,
namely 58 per cent. The corresponding balance sheet item increased by an average of 34 per cent.
Interest expenses increased by slightly less, namely by 60 per cent to € 3,059 million. Despite an
increase of about 39 per cent in average funds held in deposits, interest expenses in that area rose
by 60 per cent. These changes were due partly to higher interest expense on liabilities evidenced by
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Detailed review of items in the Income Statement
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93

Detailed review of items in the Income Statement
Development of Interest Margins
2%
1.75%
1.5%
1.25%
1%
0.75%
0.5%
0.25%
0%
CIS countries
36%
1.32%
1.56%
1.69%
1.79%
2.02%
RZB 2006
paper and partly to an increase in the cost of
subordinated capital. The biggest advance in Net
interest income took place in the Retail Customers
segment, where it grew by 57 per cent. Net
interest income in the Financial Institutions and
Public Sector segment also grew substantially,
increasing by 40 per cent, due to significant
growth in business volumes.
Broken down into regions, the increase was most
notable in Southeastern Europe, where Net interest
income grew by 31 per cent or € 127 million,
and, above all, in the CIS region, where it grew by
131 per cent or € 327 million. These were also
the regions where lending to personal banking
customers and SMEs grew most. Net interest
income grew only slightly in Austria as loans and advances to customers grew by 15 per cent and
earnings from equity participations accounted for, using the equity method, were good.
Provisioning for impairment losses
The rapid growth of business volumes also increased RZB’s Provisioning for impairment losses by
over two thirds or € 140 million to € 346 million. RZB’s Risk-to-earnings ratio, which expresses net
provisioning for impairment losses as a percentage of net interest income, came to 15.8 per cent
and was, similarly 3.0 percentage points up on the previous year’s figure of 12.8 per cent. The Net
allocation rate (calculated on the basis of average risk-weighted assets in the banking book) also rose,
namely by 11 basis points to 0.63 per cent.
A trend became apparent in the business segments that are key to credit risk: For the first time,
provisioning in the Retail Customers segment exceeded provisioning in the Corporate Customers
segment. Whereas provisioning in the Corporate Customers segment increased by just 32 per cent to
€ 148 million, provisioning in the Retail Customers segment increased by 99 per cent to € 192 million.
The increase in the Corporate Customers segment
was due to the fact that although there were only
a few problem loans in the year under review,
portfolio-based impairment provisioning, which
is not related to any concrete problem loan,
more than doubled. The biggest single case in
Austria had a volume of € 24 million, and the
biggest case in the CEE-region had a volume of
€ 9 million. Impairment provisioning in Austria
increased by 52 per cent to € 45 million. The Loss
rate, which expresses genuine loan losses (use of
loan loss provisions and direct write-downs) in
relation to total loans outstanding, grew slightly, by
2 basis points, to 0.14 per cent.
94 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
2.12%
Regional Breakdown of Provisioning for Impairment Losses
Southeastern Europe
24%
Other
1%
Austria
13%
Central Europe
26%

RZB 2006
Loan loss provisioning in the Retail Customers segment grew by slightly more than volumes. The
increase was particularly pronounced in CIS Retail Customer markets. However, those were at the
same time the markets offering the biggest margins. The Risk-to-earnings ratio in the CIS countries
remained high but stable at 22.0 per cent, but there were some increases in other regions. RZB’s
Austria region delivered the best figure, namely just 10.7 per cent.
Development of the Net Commission Income
emn
1,200
1,000
800
600
400
200
0
383
13%
30%
17%
18%
22%
479
12%
29%
12%
19%
28%
625
10%
28%
Payment transfers Credit and guarantee business
Securities business
Other banking services
FX, notes/coin, precious metals business
12%
23%
27%
Net commission income
Net commission income depends greatly on the
quantity of transactions. Its steady growth
continued in 2006, as it advanced by 44 per
cent or € 358 million to € 1,177 million. Newly
consolidated companies accounted for € 53 million
or about 7 per cent of the increase. Payment
transfers business remained the biggest contributor
to Net commission income, contributing € 424
million and accounting for 36 per cent of the
total. There was also a sizeable increase in
commission from foreign exchange business,
where Net commission income grew by 31 per
cent to € 317 million, and Net commission income
from securities business grew by 27 per cent to
€ 135 million.
The main reason for these increases was further
growth in the number of customers, especially in
the personal banking market and the SME sector (which is also counted as part of the Retail Customers
segment) in the CEE-region. These customer groups made a particularly large contribution of 70 per
cent to the advance in Net commission income. Net commission income grew particularly strongly in
the CIS region, where it advanced by 137 per cent or € 186 million.
Trading profit
819
8%
30%
13%
20%
29%
Detailed review of items in the Income Statement
Trading profit increased by 49 per cent or € 84 million to € 257 million. This item includes both
realized and unrealized gains and losses arising from all positions in the trading portfolio net
of the funding costs associated with asset items in the trading portfolio and net income from the
remeasurement of all foreign-currency positions.
As of the year under review, the method of reporting earnings from customer margins on foreign
exchange transactions was changed, resulting in the reallocation of these components of profit from
Trading profit to Net commission income. Prior-year figures were restated accordingly. As a result,
Trading profit now only includes dealer margins on such transactions. Nonetheless, RZB’s Trading
profit has always been dominated by Net income from currency-related transactions. This rose by
150 per cent to € 196 million and thus accounted for over three quarters of total Trading profit.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
1,177
9%
27%
12%
17%
36%
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95

Detailed review of items in the Income Statement
Development of the Trading Profit
emn
154
2%
73%
25%
175 170 172
13%
68%
19%
15%
65%
20%
15%
46%
39%
Interest-rate related and credit products Currency-related and FX valuations
Share-related
RZB 2006
This substantial increase was due to much bigger
earnings from hedges of RZB’s investments in the
CEE-region. However, these do not qualify for
capital hedge accounting for the purposes of IFRS
and, therefore, were recognized in the Income
Statement.
Trading profit from the Group’s proprietary
activities fell in 2006. In an unfavourable market
environment, Net trading income from interestrate-related
business fell by 60 per cent to € 27
million. This was above all due to the fact that
interest rates had risen again.
Trading assets grew by 32 per cent to € 9.9 billion,
due largely to an increase in the activities of the
London branch. Net trading income from share-
/index-related business was 26 per cent up on
the previous year at € 34 million (2005: € 27
million). These earnings were generated almost
exclusively by equity products specialist Raiffeisen
Centrobank.
Net income from financial investments and current financial assets
Net income from financial investments and current financial assets came to € 142 million, which was
a substantial € 26 million up on the previous year. This item is made up of Net Income from financial
investments (which in turn consists of Net remeasurements of financial assets and equity participations
classed as financial investments and Net proceeds from sales of financial investments and equity
participations classed as financial investments) and Net income from other current financial assets (Net
remeasurements of financial assets at fair value through profit and loss and Net proceeds from sales of
financial assets at fair value through profit and loss).
The dominant component of Net income from financial investments and current financial assets was
the sale of RZB’s minority interest in Kazakhstan’s Bank TuranAlem, which generated net proceeds of
€ 110 million. Net income from other current financial assets rose by € 2 million to € 31 million. A
large part of the increase was due to write-backs to assets written down in prior years.
General administrative expenses
General administrative expenses increased by 34 per cent or € 539 million to € 2,113 million. Six per
cent of the increase, or close to € 99 million, was due to additions to the scope of consolidation.
General administrative expenses increased by slightly less than Operating income, improving the
Group’s gauge of operating efficiency – the Cost/income ratio – from 58.9 to 56.7 per cent.
Staff costs increased by 33 per cent or € 272 million to € 1,089 million. This item accounted for an
96 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
257
13%
76%
11%

RZB 2006
Breakdown of General Administrative Expenses
emn
2,100
1,800
1,500
1,200
900
600
300
0
900
11%
40%
49%
1,017
12%
37%
51%
1,196
13%
37%
50%
Detailed review of items in the Income Statement
unchanged 52 per cent of General administrative
expenses. € 219 million of the increase was
due to organic growth, and € 53 million was
due to Group units newly added to the scope of
consolidation.
The Average number of staff working for the
Group (full-time equivalent basis) increased by
67 per cent or 20,700 to 51,765. Because of
lower wage levels in the CIS region, this was
slightly more than the increase in Staff costs,
notwithstanding bonus payments and routine
salary raises in the CEE-region. As a result,
operating income per staff-member fell to € 72
thousand, as against € 86 thousand in 2005.
The 214 per cent growth in the workforce in the CIS
region, where the Group employed an average of
25,997 people, was by far the biggest. It was the
result of acquisitions. The increase was below 20 per cent in the Southeastern Europe region (increase
of 14 per cent) and the Central Europe region (increase of 15 per cent). This was because market
penetration was already very high in a number of countries in those regions. The average workforce in
Austria was almost unchanged at 2,476.
Staff expenses Other administrative outlay
Depreciation/amortization/write-downs
1,574
11%
37%
52%
Most of the growth in the workforce took place in the Retail Customers segment, where staffing
increased by 87 per cent as the development of customer centres and the opening of new branches
necessitated a corresponding increase in resources. Seventy per cent of the Group’s total workforce
was already working in the Retail Customers segment, or 8 percentage points more than in 2005.
Other administrative outlay increased by 36 per cent or € 212 million to € 803 million to account for
38 per cent of total Operating expenses (increase of 1 percentage point). Four percentage points of
the increase – or € 33 million – was accounted for by newly consolidated units. A large part of the
increase was due to the Group’s retail strategy in the CEE-region and the associated enlargement of
the branch network as scheduled. The principal
Breakdown of Other Administrative Outlay
items of expenditure were property rents, the costs
of implementing settlement systems and marketing.
Security
4%
Deposit guarantees
5%
Advertising
12%
Legal and
consultancy
8%
Communication
9%
Rents and maintenance was the largest cost
category within Other administrative outlay. It
increased by 33 per cent to € 191 million. Outlay
on Information technology and Communication
was also important, growing by a third to total
€ 187 million. Costs were increased among
other things by system changes and process
optimizations. Advertising costs rose by 40 per
cent auf € 100 million, reflecting the work being
done to acquire customers in newly developed
local markets.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
2,113
10%
38 %
52%
Other items
24%
Rents and
maintenance
24%
Information
technology
14%
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97

Detailed review of items in the Income Statement
RZB 2006
Depreciation/amortization/write-downs of tangible and intangible fixed assets rose by an average
of 33 per cent or € 55 million on the previous year to € 221 million. Depreciation/write-downs of
tangible fixed assets increased by 34 per cent from € 103 million to € 139 million. Amortization/
write-downs of intangible fixed assets – mainly software and similar licences – accounted for another
€ 64 million (2004: € 55 million). This total included the write-down to the Impex brand. This brand
will be terminated because of the planned merger of Impexbank with Raiffeisenbank Austria, Moscow.
Other operating profit
Other operating profit fell by 28 per cent on the previous year from € 87 million to € 63 million. This
item includes net income from Non-banking activities of € 74 million (increase of € 7 million) and
other Non-profit-dependent taxes of € 31 million (decrease of € 1 million).
This item also includes a net loss on allocations to and releases of Other provisions for liabilities and
charges in the amount of € 30 million (2005: net loss of € 11 million). The increased loss was due to
the creation of a provision for an operational loss.
In addition, this item includes the Net loss from other derivatives of € 42 million (2005: net income of
€ 14 million). This loss arose from business in securities, remeasurements of which are recognized in
Net income from financial investments and current financial assets.
Finally, Other operating income net of Other operating expenses came to € 55 million, as against
€ 44 million in the previous year.
Net income from deconsolidations
On the grounds of materiality, Net income from deconsolidations during the year under review is
recognized as a separate line item in the Income Statement. Net income from deconsolidations
during the year under review came to € 517 million. Most of this total derived from the sale of
Raiffeisenbank Ukraine, which was deconsolidated as of close of the sale at the beginning of October
2006. Net income from this deconsolidation came to € 486 million.
Other Group-members were also sold, including above all two project companies of Raiffeisen Real
Estate Management. This company’s core business is the development and sale of real estate in
Hungary. The resulting net income of € 20 million was much higher than in prior years. In addition,
Raiffeisen-Leasing, Vienna, sold two Slovenian project companies, contributing about € 8 million to
Consolidated profit.
98 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
The Balance Sheet
Assets
Structure of Balance Sheet Assets
ebn
46.4
8%
18%
42%
32%
RZB passed another milestone during the 2006 financial year when its assets topped a billion euros
for the first time, underscoring the Group’s continuing growth. Its balance sheet total grew by 23.2 per
cent from € 93.9 billion at year-end 2005 to € 115.6 billion at the end of the year under review.
56.1
12%
16%
48%
33%
67.9
9%
19%
40%
33%
93.9
9%
19%
41%
31%
Approximately 7 per cent or € 1.5 billion of the
increase of € 21.7 billion was attributable to
changes in the scope of consolidation, resulting
primarily from the addition of Impexbank in the
second quarter and eBanka in the fourth quarter
together with the deconsolidation of Raiffeisenbank
Ukraine in the fourth quarter. Only just under
2 per cent or € 0.4 billion of the increase resulted
from movements in exchange rates in the CEEregion.
In other words, the Group achieved
organic growth in its balance sheet total of € 19.9
billion, or 21 per cent versus year-end 2005.
The increase on the assets side of the balance
sheet was driven by growth in Loans and advances
to customers, which increased by 34 per cent or
€ 13.5 billion to a total of € 53.1 billion. Changes
in the scope of consolidation contributed just € 0.7
billion to the increase.
Adjusted to allow for net of provisioning for
impairment losses of € 1.3 billion, Loans and
advances to customers now accounted for 45 per
cent of assets on the balance sheet. Lending to
Corporate Customers grew by € 8.9 billion or 30
per cent to end the year at € 38.6 billion. Lending
to Retail Customers increased by 48 per cent
to € 12.6 billion. The larger part of Loans and
advances to customers was accounted for by
customers in the Group’s Central Europe region,
namely 28 per cent of total lending.
Loans and advances to banks grew slightly,
increasing by 8 per cent to total € 32.0 billion at
year-end. Most of the total resulted from inter-bank
business transacted with multinational corporate
banks. Time deposits with central banks accounted
for € 2.6 billion.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
115.6
Loans and advances to banks Loans and advances to customers (net)
Securities, equity participations Other assets
Structure of Loans and Advances to Customers
SMEs
12%
Personal banking
customers
20%
9%
18%
45%
28%
Public Sector
4%
Corporate Customers
64%
Balance Sheet
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99

Balance Sheet
46.4
7%
RZB 2006
The balance sheet items collected together under the heading Securities, equity participations in the chart
increased by 22.8 per cent from € 17.5 billion to € 21.5 billion. The biggest increase was in Trading
assets, which grew by € 2.4 billion, with Raiffeisen Zentralbank and Raiffeisen Centrobank recording
the fastest portfolio growth. Trading assets in the Central Europe region declined.
Equity and liabilities
On the equity and liabilities side of the balance sheet, Deposits from customers increased by 39
per cent or € 12.6 billion to € 44.7 billion, substantially increasing their relative contribution to
the balance sheet total, namely by 5 percentage points to 39 per cent. As a result, Deposits from
customers became RZB’s biggest source of funds for the first time. Nearly 48 per cent of the absolute
increase was attributable to Corporate Customers (increase of € 8.0 billion to € 24.6 billion), and
about 29 per cent was accounted for by personal banking customers (increase of € 4.2 billion to
€ 18.3 billion). € 1.8 billion of the increase was generated by newly consolidated companies,
whereas the sale of Raiffeisenbank Ukraine deprived RZB of about € 0.6 billion of customer
deposits. € 23.8 billion or close to 70 per cent of deposits came from the CEE-region, slightly
reducing their relative contribution. The level of cover for customer deposits provided by Loans and
advances to customers increased by 3 percentage points from 81 to 84 per cent.
Structure of Balance Sheet Equity and Liabilities
ebn
15%
27%
51%
56.1
6%
15%
30%
49%
67.9
7%
11%
34%
48%
93.9
7%
12%
34%
46%
Deposits from banks Deposits from customers
Other equity and liabilities Own funds in the broader sense
Deposits from banks increased only slightly,
growing by 2 per cent or € 0.8 billion to € 44.1
billion, significantly reducing the proportion of
the Group’s balance sheet total accounted for
by Deposits from banks from 46 to 38 per cent
and leaving this item smaller than Deposits from
customers in absolute terms.
Austrian banks accounted for about 44 per cent
of Deposits from banks (year-end 2005: 37 per
cent), whereas major international banks outside
Austria and the CEE-region account for more than
half. The larger part of the growth in this item
was generated by an increase in deposits from
Austrian banks. Funding through foreign banks
was reduced.
The proportion of total equity and liabilities
accounted for by Other equity and liabilities
increased by 3 percentage points to 15 per cent. This was above all due to the more active role
played by RZB in the international capital markets as it issued a bigger volume of its own securities.
Liabilities evidenced by paper increased by 82 per cent to € 11.3 billion as a result.
Own funds in the broader sense (i.e. inclusive of subordinated obligations) accounted for about 8 per
cent of the balance sheet total, having grown by nearly € 3.0 billion to € 9.5 billion. This resulted
from the issuance of hybrid Tier 1 capital and subordinated capital and from profit in the financial
year 2006.
100 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
115.6
8%
15%
39%
38%

RZB 2006
Breakdown of Equity
emn
6,000
5,000
4,000
3,000
2,000
1,000
0
2,275
17%
44%
Equity
Equity on the Balance Sheet
Equity on the balance sheet grew by 34 per cent from € 4,950 million to € 6,637 million. Most of the
increase was due to profit in 2006. This came to € 1,631 million, some € 462 million of which was
attributable to minorities.
Paid-in capital – made up of subscribed capital
and capital reserves – increased by € 150 million
to € 1,172 million. The increase was due to the
capital increase at Raiffeisen Zentralbank carried
out in November 2006.
RZB’s Earned capital – comprising Retained
earnings and Consolidated profit – increased
2,445
3,343
20%
50%
by 43 per cent or € 1,073 million to € 3,571
million, € 1,169 million of the increase being
22%
42%
49%
accounted for by Consolidated profit in the year
under review. The remaining change resulted
from various elements. The positive factors were
31%
21%
18% exchange differences, which, taking hedging into
account, came to € 29 million, and changes in the
equity of Companies accounted for using the equity
method, which came to € 10 million. Furthermore,
remeasurements of available-for-sale financial
assets increased eligible equity by € 13 million.
On the other hand, equity attributable to RZB was reduced by € 79 million by Net income from
remeasurements of cash-flow hedges as well as by the dividend of € 106 million distributed out of the
previous year’s profit.
Paid-in capital Earned capital
Minority interests
39% 36%
4,950
29%
Minority interests in equity increased by 32 per cent or € 464 million to € 1,894 million. Alongside
profit in 2006 attributable to other shareholders in the amount of € 462 million, the principal
reasons for the increase were inpayments from other shareholders of Group-members, the net effect
of changes in relative shareholdings in the amount of € 51 million and the net effect of dividend
distributions to non-Group shareholders in the amount of € 72 million.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
6,637
28%
54%
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Equity
101

Equity
Development of Own Funds
emn
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2,238
2,869
28% 27%
Regulatory own funds pursuant to BWG (Austrian banking act)
RZB 2006
The consolidated Own funds of the RZB Credit Institutions Group (RZB-Kreditinstitutsgruppe) within
the meaning of Austria’s Bankwesengesetz came to € 7,614 million, which was 46 per cent or
€ 2,415 million more than the previous year’s figure of € 5,199 million.
Core capital accounted for € 5,652 million thereof, which was 42 per cent or € 1,670 million more
than in 2005. In addition to profit for the year under review, this sizeable increase was mainly due
to the capital increase of € 150 million and the issuance of € 500 million of hybrid Tier 1 capital,
as described above. Whereas stronger exchange rates in the CEE-region had small a positive effect,
goodwill arising from acquisitions of nearly E 400 million was deducted directly because of changes
in consolidation policies.
4,120
3,097 3,079
34%
2,431
4,463
5,199
17%
35%
Additional own funds increased by 32 per cent
or € 417 million to € 1,723 million as a result of
new issues of subordinated capital securities. The
deduction for interests held in banks, financial
institutions and insurers increased slightly by 3 per
cent to € 209 million.
These Own funds compared with a regulatory
Own funds requirement that was 27 per cent up
on the previous year at € 5,652 million (2005:
€ 4,463 million). The increase in business volumes
was clearly reflected by a 31 per cent increase in
Risk-weighted assets (banking book) which totalled
to € 62.9 billion at year-end.
The resulting own funds requirement for the
banking book of € 5,033 million together with
the own funds requirement for market risk, which
increased by 5 per cent to € 460 million, and the
requirement for open currency positions, which fell by 14 per cent to € 160 million, made up RZB’s
total regulatory Own funds requirement.
Required own funds Actual own funds Excess own funds
5,652
Despite the rapid growth in business volumes, the substantial increase in Core capital improved RZB’s
Own funds position. As a result, its Core capital ratio, which is measured in relation to the total own
funds requirement for the banking book, rose from 8.3 per cent to 9.0 per cent. RZB’s Own funds
ratio rose from 9.3 per cent to 10.8 per cent.
102 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
7,614
100%
75%
50%
25%
0%

RZB 2006
Human Resources
The workforce continued to grow in 2006, again creating major challenges for the Human Resources
Division (HR). As before, operational HR management was carried out by local HR departments. The
HR Division of Group parent Raiffeisen Zentralbank still has a coordinating role and ensures that
the Group pursues one common HR strategy by issuing suitable guidelines and defining a general
regulatory framework. The Personnel Department at Raiffeisen International develops the basic
specifications for HR management activities at the Network Banks in partnership with the Network
Banks themselves, and these requirements are then
Staffing on the Balance Sheet Date
implemented locally. In addition, further common
Human resources at year-end (FTE)
standards are applied and cross-border HR projects
60,000
carried out.
55,434
50,000
40,000
30,000
20,000
10,000
0
16,700
681 228
6,187
7,076
2,528
21,119
238
3,282
7,241
7,845
2,513
25,324
244
3,718
10,292
8,697
46,245
284
21,942
11,834
9,654
2,373 2,531
Austria Central Europe Southeastern Europe
CIS Rest of world
Staffing, by Group-member
Other
2%
Raiffeisen
International
95%
329
27,620
A growing workforce
Both RZB’s organic growth and the acquisitions of
Impexbank and eBanka – which had 5,583 and
969 employees, respectively, on the balance sheet
date – led to another increase in the workforce,
which grew by 9,191 or 20 per cent to total
55,434 (full-time equivalents) on 31 December
2006. The Network Banks in the CEE-region
accounted for 51,050 of the total and 97 per
cent of the increase. The workforce at Raiffeisen
Zentralbank increased by 140 or 11 per cent to
total 1,416 on 31 December 2006.
Sixty-six per cent of RZB’s staff members were
women, as were 48 per cent of staff at Raiffeisen
Zentralbank. The equivalent figures at the Network
Banks ranged from 50 per cent (Kosovo) to 77 per
cent (Croatia).
The low average staff age of below 35 remains an
RZB trademark. It remained this low because of the
bank’s rapid growth and intensive recruiting work
in recent years. The average age of the workforce
at Raiffeisen Zentralbank is 36.2 years, and the
equivalent figures at the Network Banks range
from 29 years at Raiffeisenbank Austria, Moscow,
to 37 years in Bosnia and Herzegovina. As a
consequence, the average period of service of staff
to date in the banking network in the CEE-region is relatively low by industry standards at 5.3 years.
Staff-members at Raiffeisen Zentralbank have been with the company for an average of 7.1 years.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
13,481
11,427
2,577
Raiffeisen Zentralbank
3%
Human resources
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103

Human resources
Three new HR programmes
RZB 2006
The results of the staff survey carried out in the autumn of 2005 were very positive, but it also showed
that there was scope for improvement. Three new HR programmes were the result. They are designed
to exploit this scope.
Performance management
During 2006, Raiffeisen Zentralbank’s proven “Management by Objectives“ system was refined to
create a performance management system. Besides annual goal-setting interviews that also include
a performance assessment, ongoing coaching and feedback from one’s superior, there will also be
a review and development interview in mid-year that will look more closely at an employee’s future
development.
Expert career track
Raiffeisen Zentralbank’s expert career track was redefined and extended during the year under
review. It now has three levels – Expert, Professional Expert and Senior Expert – and areas of
responsibility and requirements are precisely defined for each one. This career track enables experts
to continue their development in parallel with classical management careers.
“Young Professional Potentials” (YPP)
The YPP programme was developed during 2006 and launched with its first participants at the
beginning of 2007. The programme is designed for young staff-members of between 25 and 30
who have been identified as having potential.
Personnel development
The outstanding professional and personal qualifications of RZB’s staff are key to its exceptional
quality-of-service, and give the Group a decisive competitive edge. Personnel development is
therefore a high priority for RZB. Because a large proportion of the people working for RZB
are university or college graduates, personnel development work can build on very high initial
qualifications. Specifically, 54 per cent of employees at Raiffeisen Zentralbank are university or
college graduates, and the average at the Network Banks in the CEE-region is 70 per cent.
The number of people wanting to participate in the Group-wide management training programme
remained high during the year under review. Since RZB is an internationally active and networked
enterprise, most of the training courses are held in English, which is the Group’s official language.
Intensive use has already been made of the training programme for Group Leaders launched in 2005
(Group Leaders lead groups, which are the smallest organizational units at RZB), and participant
assessments of the programme have been very positive.
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University and College Graduates at Raiffeisen Zentralbank and the Network Banks, by country
Poland
Romania
Ukraine
Bulgaria
Hungary
Belarus
Employees at Raiffeisen Zentralbank spent an average of 4.59 working days in training during the
2006 financial year. 68.3 per cent of the staff at Raiffeisen Zentralbank took part in at least one
course during 2006. At the Network Banks, the equivalent figures were between 1 working day
(Hungary) and 5.2 working days (Croatia). In addition to outward postings to other Group units
lasting several years, brief training visits have also proven very worthwhile. Besides facilitating the
sharing of banking skills, the resulting encounters also help foster the continuing development of a
common corporate culture and the evolution of productive networks within the Group.
Making it easy to combine working with having a family is a particularly important aspect of RZB’s
HR policies. For instance, at Raiffeisen Zentralbank, this is mainly achieved with the help of flexible
working hours; and in addition to flexitime, employees in Vienna have also been able to opt for parttime
and teleworking models for a number of years. 10.4 per cent of the workforce were working
part-time in 2006. The company kindergarten with its especially employee-friendly opening hours is
very popular.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Russia
Albania
Raiffeisen Zentralbank
Slovakia
Bosnia and Herzegovina
Kosovo
Serbia
Czech Republic
Croatia
Slovenia
Human resources
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Information technology
Recruitment
RZB 2006
Raiffeisen Zentralbank’s reputation as an attractive employer in Vienna makes it easier to find suitable
staff and is an important prerequisite for timely and efficient recruiting. Reflecting its determination
to sustain its good position in the employment market, RZB continued to cooperate with universities,
technical colleges and other educational institutions of relevance to the Group within the scope of
sponsoring activities, courses, guest lectures and seminars.
Thanks to staff
The Managing Board would like to take this opportunity to thank every member of staff for his or her
work. RZB’s exceptionally good results would have been impossible without the untiring dedication
of its workforce and their determination to succeed. We also thank the Works Council of Raiffeisen
Zentralbank and the staff representatives at the Network Banks. As in prior years, they effectively
represented the workforce and developed reasonable and constructive solutions in cooperation with
Management whenever changes were necessary. Our successful work together and our excellent work
climate play an important part in RZB’s success.
Information technology
Implementing Basel II
One of the major focal points during 2006 was on implementing the requirements of Basel II
throughout the Group. The introduction of the appropriate risk management tools and installation of
the Group’s central “Data Warehouse” were largely completed. The Group’s credit process support
systems – such as, for instance, Security Management and Balance Sheet Analysis – were greatly
improved or developed anew. Integration testing to ensure that all the necessary bank applications
and data supply systems were interacting correctly commenced in the last quarter. Supervisory
authority acceptance of the new processes and applications is planned for 2007.
Progressive rollout of the treasury trading system throughout the Group
The ongoing rollout of the Global Treasury System (GTS) at the Network Banks specified by the
Group’s Business Strategy progressed well. During 2006, the settlements module of GTS was
successfully implemented at Raiffeisenbank Austria, Zagreb, alongside the front-office component,
which is already in use. The introduction of the front-office modules in Romania is going well. This
centrally implemented and centrally operated solution is playing an important part in Group-wide IT
standardization in the treasury field. A front-to-back-office solution has already been implemented
at Raiffeisen Zentralbank, the London branch and the Group’s Network Bank in Croatia, and a
front-office solution has been implemented at the Singapore branch and Raiffeisenbank Austria,
Moscow. Further implementations are planned for 2007.
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Greater efficiency through increased process orientation
Raiffeisen Zentralbank launched numerous initiatives aimed at increasing process orientation during
2006. Applying the SixSigma methodology, process transparency was increased and opportunities
for optimization were identified in a number of key processes. The consistent application of process
management techniques helped customer and product divisions rapidly satisfy customer expectations
and optimized internal processes across department boundaries.
The carefully targeted use of new or enhanced IT applications further improved the provision of process
support to the various departments. For instance, a new application was introduced that supports
trading in the repos and securities lending segments. System support for trading in credit derivatives
was greatly improved due to further automation of order routing to various global markets and trading
partners. A Customer Relationship Management application was successfully introduced to improve
sales support.
Risk management
Active risk management is one of RZB’s core responsibilities. In addition to the regulatory requirements
that exist pursuant to the Bankwesengesetz (BWG: Austrian banking act), it also takes into account in
particular the nature, scale and complexity of business activities and the resulting risks for RZB. Not
only does striving to increase enterprise value involve exploiting opportunities; it also creates risks. To
detect and weigh up these risks as early as possible, RZB has been carrying on enterprise-wide risk
management for many years. It constitutes the basis for RZB’s business activities.
The key tasks within this process are to ensure the flow of information about facts and circumstances
that entail risk and to continue to refine risk management in every area of RZB’s activities. The
principal risks are analytically modelled, subjected to continuous quantification and aggregated to
generate an enterprise-wide risk figure once a month. This is done using advanced risk tools and the
usual methods of assessment (e.g. value-at-risk, sensitivity analysis and stress testing, rating models,
expert appraisals).
In line with RZB’s standardized reporting system, the results are communicated to the levels of
management that are appropriate in each case. The transparent reporting system serves RZB as
an early-warning mechanism and is the basis for the efficient initiation and execution of steering
measures designed to control risk.
The Notes to the Consolidated Financial Statements contain a detailed overview of the various risk
categories (credit risk, country risk, market risk, liquidity risk and operational risk) and RZB’s risk
management structure (commencing page 204).
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Risk management
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Risk management
Risk management principles
RZB 2006
RZB controls and manages risk using an extensive system of risk principles, procedures for measuring
and monitoring risk and appropriate organizational structures. Risk policies and principles are laid
down by the Managing Board of Raiffeisen Zentralbank.
• Relevant risk categories: As the principal risk categories, credit, country, market, liquidity and
operational risks are managed on a Group-wide basis.
• Homogeneous methodologies: Homogenous methods of risk assessment and risk limitation are
applied to ensure a consistent and coherent approach to risk management.
• Continuous planning: Risk policy is reviewed and approved in the course of the annual
budgeting and planning process, special attention also being paid to risk concentration.
• Independent control: There are clear personal and functional firewalls between business
operations and all risk management and controlling activities.
• Calculations before and after the fact: Risks are consistently captured within the scope of prior
and retrospective calculations as well as within the scope of the risk-orientated allocation of
remits.
• Conservative provisioning for impairment risks : Impairment provisions are created on a
conservative basis. In particular, impairment provisions for business loans are created on a
case-by-case basis.
Risk position
In the case of credit risk, which is RZB’s biggest single risk category, the positive economic environment
during the 2006 financial year also had a corresponding effect on risk costs, even if the rapid
development of Retail Customer operations in the CEE-region in accordance with the Group’s Business
Model led, as planned, to an increase in impairment provisioning. In particular, the economic
evolution of the CEE-countries and the associated political risk create material risks for RZB. Steady
improvements in and stabilization of this economic area are also being reflected by improvements in
the ratings given to these countries by international rating agencies.
Close attention is also paid to operational risks. The careful examination of business processes
and operational procedures led to a series of enhancements during the year under review. Besides
systematically assessing such risks, RZB is working on the development of further qualitative and
quantitative early-warning indicators and suitable preventative measures to help it guard against risks.
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Risk management initiatives
The principal focus in 2006 was on continuing to develop the Group’s risk management infrastructure,
which has provided and will provide the foundations for growth in business volumes. Above all, the
Group pressed ahead with the implementation of Basel II.
Implementation of the capital adequacy requirements of Basel II, applicable since the beginning of
2007, is taking place within the scope of a Group project to coordinate local implementation and
provide central support. The main thrusts of the project are the optimization of harmonized rating
methods, the capturing of loan losses in accordance with the Basel provisions and the calculation of
own funds using the IRB (internal ratings-based) approach as well the reviewing of processes and the
associated manuals.
Improving Group-wide data availability and data quality has been and remains a central goal.
Existing IT systems have been examined and analyzed to ensure Basel II conformity and any necessary
adaptations have already been carried out or are presently being put into effect. The selection of the
technical components needed to compute capital adequacy at Group level having already taken place,
the implementation of these systems continued in 2006 and was partially completed.
Retail risk management
RZB continued to strengthen its Retail Customers infrastructure during 2006. It introduced an
extensive framework for risk management in the personal banking segment that subdivides the
various domains – e.g. organization, portfolio management, fraud prevention – into three levels
of complexity. Harmonized standards were then defined for each level. Based on these standards,
every retail risk organization then carried out a risk assessment and agreed staff plans with Central
Risk Management in Vienna, these plans being specific to each particular country and division. The
development plans were then included as a core element in the personal goal-agreement processes
carried out by Retail Risk Managers at the Network Banks. The assessments also provided the
yardstick for the amount of support given to individual banks by central units.
A number of risk instruments, guidelines and procedures were also introduced in addition to this
framework. They include a standard stress test for retail portfolios denominated in a foreign currency
or pegged to a foreign currency. They also include detailed specifications that supplement IAS 39
and the Consolidated Financial Statements Manual, providing clear guidelines regarding the creation
of provisions and budgeting for provisions for personal banking and micro-portfolio business. An
extensive package of specifications regarding the monitoring of debt collection performance and
further debt collection instruments were developed and are currently being introduced by individual
network units.
The management of portfolio growth was one focus of the Group’s retail risk management
activities. To determine and mitigate the principal risks, dozens of new and previously existing
products were tested. At the same time, the profitability of these products was examined and the
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Risk management
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109

Risk management
RZB 2006
underlying processes closely examined. Over 40 application and behavioural analysis models
underwent development and testing in the personal banking and micro fields. The small enterprise
assessment model was subjected to two verification analyses. Portfolio control and management
became mandatory at a segment and product level. The reporting resolution applicable to larger
network units was substantially increased and SME reports were standardized.
RZB introduced key performance indices based on budgets and historical and expected developments.
The forecasting model’s predictive accuracy is currently being analyzed. The Group’s existing
Basel II Concept Papers were reviewed and significantly extended with credit risk in the personal
banking segment in mind. The aim is to provide individual network units with extensive behavioural
guidelines. A general risk assessment system was introduced in the personal banking segment. It
applies the same scaling as the risk assessment system used in the Corporate Customers segment, but
the probability of default is determined on a customer-by-customer basis.
Integration and transformation
The implementation of risk standards, processes and risk assessment tools within the scope of the
integration of Raiffeisen Bank Aval, Kiev, acquired in 2005, continued as planned during 2006.
Modelled on this process, integration plans have also been developed for Impexbank, Moscow, and
eBanka, Prague – acquired in 2006 – and they are gradually being implemented. The process of
rating the entire portfolio of outstanding corporate loans applying the Raiffeisen rating model was
completed in all three banks.
During the transformation of these subsidiaries’ finance leasing operations, particular emphasis was
placed on closely dovetailing the local finance leasing company with the respective Network Bank. The
functions of the risk management units at finance leasing companies were subordinated to those of the
respective Network Bank or completely merged with them. The goals of the transformation process are
to increase the efficiency of the credit process and achieve coherent and consistent risk management
within those local banks and finance leasing institutions.
In addition, a new unit called Credit Examination / Quality Control was set up at Central Risk
Management level. Its task is to carry out quality control of the credit process and to monitor whether
risk management instruments and standards are being adequately applied by the Network Banks.
Similarly, lending decisions by local decision-makers are evaluated by this unit during individual
on-the-spot audits. Based on the result of these evaluations, the unit then prepares examples of bestpractice
and optimizes processes.
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Outlook for 2007
We expect the eurozone economy to continue to perform well in 2007. However, the expected
slowdown in the US economy is likely to affect the pace of investment and exports in Europe, so the
tempo of growth will slow a little. As soon as initial restraint on the part of German consumers – a
result of the VAT hike on 1 January 2007 – has eased, we expect the improvement in the European
labour market to cushion weaker demand in the corporate sector. We expect the eurozone’s GDP to
grow by 2.2 per cent in 2007. Inflation is likely to be running at 2.0 per cent.
Austrian economic growth should outpace the eurozone’s
The present brisk Austrian economy should continue to generate pleasing rates of growth in 2007.
Although the loss of tempo in the international economy makes slower export growth likely, we
expect the domestic economy to remain strong. The mild winter has resulted in full order books
in the construction sector, and industrial production is in full swing. As a result, these two sectors
will make a major contribution to growth during 2007. As before, the only fly in the ointment will
be private consumption. Despite low rates of inflation and rising employment, its development is
slow. Nonetheless, Austria’s GDP growth during 2007 should top the eurozone average at 2.5 per
cent, and the rate of inflation should be below average at 1.7 per cent. However, current forward
indicators suggest that this GDP forecast is too conservative and that 2.5 per cent is in fact the bottom
end of the range.
Growth in Central and Eastern Europe will remain dynamic
Following extraordinarily rapid economic growth in the second half of 2006, the economies of Central
and Eastern Europe had a vigorous start to 2007. Continued strong real GDP growth is being forecast
for 2007, although it is expected to be slightly down on 2006. One of the principal reasons is the
international economic environment, which is providing the basis for Central and Eastern European
growth scenarios. Real GDP growth in the US is expected to slow significantly to 1.9 per cent in 2007
(2006: 3.4 per cent). The slowdown in the eurozone should be slightly less pronounced, resulting in
growth of 2.2 per cent (2006: 2.7 per cent).
Despite the forecast deceleration of Hungarian economic growth to about 2.5 per cent – a consequence
of overdue budget consolidation – the new EU member-states in Central Europe should, on average,
achieve real GDP growth of about 4.8 per cent, having recorded record growth of 5.4 per cent in
2005. The positive effects of EU accession should largely balance out any initial problems associated
with EU membership in Bulgaria and Romania, which are the two newest EU member-states. Overall,
the transitional economies of Southeastern Europe are likely to record real GDP growth of about 5.8
per cent in 2007 (2006: 6.6 per cent). The European CIS countries should remain the fastest-growing
economies in 2007, recording growth of about 5.9 per cent (2006: 7.0 per cent).
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Outlook for 2007
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111

Outlook for 2007
Growth driven by private consumption and corporate investments
RZB 2006
As in recent years, consumer demand and capital expenditure are very likely to remain the principal
motors of growth. Both are profiting from the sustained credit boom in the Central and Eastern
European countries. It has been made possible by extensive restructuring and privatization within the
banking sector and drastic reforms of legislative and institutional frameworks as a consequence of the
process of integration into the EU. In addition, the CEE-countries have remained an attractive target
for foreign direct investment. The development of modern, export-orientated production facilities
undoubtedly bodes well for the future growth of the region’s exports and their economies as a whole.
Moreover, these countries’ economies are continuing to catch up with the West. In the medium term,
this should allow a continuation of the real and, in part, nominal appreciation of Central and Eastern
European currencies, even if their unusually strong performance in the last quarter of 2006 has
increased the likelihood of a temporary correction during the first half of 2007.
RZB expected to continue to grow
RZB will remain on its growth path in 2007. Although the Group’s growth will be slower in percentage
terms than in 2006 because of the higher base, it will still be remarkable in absolute terms. For
instance, the planned increase in RZB’s balance sheet total would be bigger than the entire Group’s
balance sheet total at year-end 1998. Reflecting differing environments, growth in Austria will be less
rapid and growth in the CEE-region will be faster. The Retail Customers segment should continue to
grow disproportionately rapidly.
Profit after tax is expected to show close to double-digit growth. However, this is based on
comparative figures that do not include one-off effects, as those cannot be topped by operationsdriven
growth. RZB’s Return on equity is expected to be lower than in 2006 (without one-off effects),
mainly as a result of the broader capital base that has been created by ploughing back profits. Its
Cost/income ratio is likely to amount to a good 57 per cent.
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Material events after the Balance Sheet date
Structural change
A change in the structure of Raiffeisen Zentralbank took effect on 1 January 2007. The customer
division Global Financial Institutions and Sovereigns was amalgamated with the product division
Global Markets and now operates under the name Global Markets. The next level below this
comprises the main departments Global Financial Institutions, Syndications & Asset Sales and Global
Treasury and Securities Sales. The purpose of this divisional merger was to increase RZB’s global
placement power, better exploit synergies when originating securities and loans in the debt market
and strengthen syndications and sales.
RZB celebrates two decades in Central and Eastern Europe
A major event was held on 21 January 2007 to celebrate Raiffeisen’s 20 years in Hungary. Over
10,000 visitors accepted Raiffeisen Bank’s invitation to attend an international show in Budapest’s
sports arena. Raiffeisen Bank was founded in December 1986 and began operations in 1987. RZB’s
foundation of its Hungarian subsidiary marked the beginning of its expansion into the CEE-region.
Successful issuances of the bank’s own securities
Of the numerous issuances of securities in the bank’s own name during the first 10 weeks of 2007,
two were particularly striking, and they were both issued within a few hours. Demand within that brief
period would even have sufficed to double their volume.
Raiffeisen Zentralbank issued its first sterling bond at the end of January 2007. This £ 500 million
FRN has a maturity of five years. It was attractively priced with a premium of 11 basis points
above the London Interbank Offered Rate (LIBOR). Subsequently, at the end of February, Raiffeisen
Zentralbank issued a € 500 million subordinated capital bond with a maturity of 12 years. This is
the first lower Tier 2 bond issued by an Austrian bank to be included in the German stock exchange’s
iboxx bond index. The return is fixed at 4.5 per cent per annum for the first seven years, after which
the value of the coupon will be pegged to variable interbank rates.
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Events after the Balance Sheet date
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113

Corporate Customers
Segment reports
RZB 2006
The basis for primary segment reporting within the meaning of IAS 14 is RZB’s internal management
reporting system. RZB primarily segments business along customer segment lines. Customer
segmentation at RZB takes place as follows:
• Corporate Customers
• Financial Institutions and Public Sector
• Retail Customers
• Proprietary Trading
• Participations and Other.
The customer segments upon which RZB reports are to be found as organizational units in the
organizational charts of all material Group units. In addition, Proprietary Trading is also a reporting
segment. At a secondary reporting level, income and costs are segmented according to geographical
origin (Austria, Central Europe, Southeastern Europe, CIS, Other). Detailed comparisons are
provided from page 170.
Corporate Customers
The Corporate Customers segment encompasses business with Austria’s “Top 1,000” enterprises,
multinational groups and medium-sized and large companies in Central and Eastern Europe (the CEEregion).
This segment also includes smaller subsidiaries of larger enterprises and profit-orientated
state-owned enterprises. The small corporate customers serviced by the Network Banks are included in
the Retail Customers segment.
Corporate Customers is the Group’s largest business segment. Despite narrower margins in some
markets, the segment’s Profit from operating activities was 26 per cent up on the previous year at
€ 565 million. The business focus in the CEE-region was on SMEs, with revenues of more than
€ 5 million, and delivered an increase in the number of transactions. The Corporate Customers
remained RZB’s biggest generator of profit, accounting for 30 per cent of Profit before tax (or 44 per
cent without one-off effects). That was 4 percentage points less than in 2005.
Operating income continued to develop well, increasing by 25 per cent. Costs did not rise as much.
This reduced the segment’s Cost/income ratio by a percentage point to 39.0 per cent. Provisioning
for impairment losses in this segment increased by 32 per cent to about € 148 million. No large
specific impairment provisions were recognized. The biggest individual impairment in Austria came to
€ 24 million, and the largest in the CEE-region (Slovakia) to € 9 million. Nearly half of the increase
in Provisioning for impairment losses in the CEE-region was accounted for by the CIS countries. The
segment’s Risk-to-earnings ratio came to 21.0 per cent, which was 1 percentage point up on the
previous year. Because the segment’s profit grew by more than the equity allocated to it, its Return on
equity improved by 2 percentage points to 26.8 per cent.
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RZB 2006
The average number of staff in this segment increased by 38 per cent. New acquisitions had a minor
impact, but Raiffeisen Bank Aval, Kiev, which was not included until the fourth quarter of 2005,
created a catch-up effect.
€000 2006 2005 Change
Net interest income 702,663 575,535 22.1%
Provisioning for impairment losses (147,652) (111,565) 32.3%
Net interest income after provisioning 555,011 463,969 19.6%
Net commission income 413,865 322,935 28.2%
Trading profit 21,136 15,494 36.4%
Net income from financial investments 1,164 3,378 (65.5%)
General administrative expenses (454,028) (371,603) 22.2%
Other operating profit 27,967 15,309 82.7%
Profit before tax 565,116 449,482 25.7%
Segment’s contribution to profit before tax 30.0% 48.3% (18.3 pp)
Basis of assessment (including market risk) 29,060,851 26,065,873 11.5%
Average number of staff 8,311 6,044 37.5%
Cost/income ratio 39.0% 40.0% (1.0 pp)
Average equity 1,979,168 1,815,554 9.0%
Return on equity before tax 26.8% 24.8% 2.0 pp
Market environment remains positive
Raiffeisen Zentralbank’s business with Austrian and multinational Corporate Customers developed
very well during 2006. The sustained vigour of the world economy was an important factor. It profited
from the fall in oil prices that began in August, from the low level of long-term interest rates and from
continuing, powerful growth in Central and Eastern Europe and China. The sustained high level of
(direct) investment was another important source
Gross Earnings from Corporate Customers Serviced from Vienna of business momentum. It was particularly
evident in Austria and the CEE-region.
emn
210
180
150
120
90
60
30
0
148.2
161.3
168.7
176.5
202.8
236.6
2001 2002 2003 2004 2005 2006
Corporate Customers business managed from
Vienna expanded significantly both in diversity
and scale during the year under review. RZB’s
leading position as an arranger of syndicated
loans in Central and Eastern Europe was one
contributing factor in this growth. Gross earnings
(net interest income, net commission income
and trading profit) from business with customers
serviced from Vienna rose by nearly 17 per cent
to € 236.6 million. Besides demand for credit,
which remained brisk, this pleasing increase was
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Corporate Customers
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115

Corporate Customers
RZB 2006
driven by the acquisition of numerous new clients in the “Top 1,000” segment and by targeted crossselling
activities. The segment’s Risk-weighted assets increased by 23 per cent to total € 10,898.8
million at year-end 2006.
Austrian corporate customers
Raiffeisen Zentralbank’s Corporate Customer operations in Austria have a clear focus on enterprises
in Austria’s “Top 1,000” segment. They continued to develop well during the 2006 financial year.
Business with corporate customers in Austria was again Raiffeisen Zentralbank’s principal source
of profit. Due to the day-to-day work of the Group’s customer and product support staff, it proved
possible to continue to develop existing customer relationships and acquire new clients during the year
under review.
A 2006 survey of the banking providers used by key accounts in Austria, commissioned by the
country’s corporate banks, confirmed RZB’s good rankings in the quality, expertise, value for money
and partnership sections. This survey confirmed RZB’s positioning as the corporate bank with the most
expertise in every area of its banking operations.
RZB’s product line is extensive even by international standards, and it continued to grow during the
2006 financial year. New products like multi-year syndicated guarantee facilities were successfully
launched in Austria, and demand among the Group’s Austrian corporate customers was brisk.
Moreover, RZB was increasingly able to position itself as a direct and indirect equity and mezzanine
capital partner to its corporate customers during the year under review.
Risk-weighted Assets:
Corporate Customers Serviced from Vienna
ebn
10.25
9.50
8.75
8.00
7.25
6.50
5.75
5.00
7.5
7.7
7.8
7.6
8.8
Multinational corporate customers
The number of key accounts in Western, Central
and Eastern Europe using RZB as their principal
provider of banking services again grew significantly.
Syndications, capital markets finance and M&A
consultancy are becoming an increasingly
important part of RZB’s line of services for
multinational corporate customers. These services
were particularly in demand among Central
and Eastern European key accounts. Continuous
growth in the project finance field and remarkable
increases in RZB’s earnings from cash management
services and treasury products were responsible
for the segment’s record year in 2006. The Group’s
success in the multinational corporate customers
market was also reflected by a 40 per cent rise in
the contribution to profit made by this market.
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10.9
2001 2002 2003 2004 2005 2006

RZB 2006
Operations in Western Europe concentrated on the countries with the biggest potential for growth.
Since opening its representative office in Frankfurt, RZB has established a raft of business relationships
with medium-sized enterprises in Germany. Above all, RZB and its network in Central and Eastern
Europe is being seen as an important business partner for exporters to and investors in the region.
The Group stepped up its market development work in Scandinavia, broadening its base of customers
with Central and Eastern European affinities. Italy and Spain have also been identified as markets
with a high Central and Eastern European “potential”, and France has confirmed its importance as
such a market.
Project and acquisition finance
RZB was involved in numerous project and acquisition finance transactions during 2006. Besides
Western Europe, these leveraged buyout and structured corporate finance transactions also focused on
the CEE-region. RZB’s long-standing customer relationships and close familiarity with its Central and
Eastern European home market gave it the opportunity to take a leading role in shaping a number of
outstanding transactions, including the following.
RZB participated in Russia’s largest syndication outside the oil and gas industries, financing the
merger of Russia’s two leading supermarket chains Perekriostok and Pyateroschka. RZB’s contribution
to this US$ 800 million acquisition loan, arranged by four banks, was US$ 200 million. RZB took
part another benchmark deal in Russia, for News Outdoor, which is Russia’s foremost outdoor
advertising provider. RZB also refinanced all the liabilities of the only Russian company in Rupert
Murdoch’s News Corporation with a US$ 300 million facility arranged in its entirety by RZB.
Moreover, RZB was one of three mandated lead arrangers for € 475 million loan used by Croatia’s
leading food manufacturer and retailers operating under the trademark Konzum to restructure
their liabilities.
New Business and Export Loans Outstanding
emn
4,550
3,900
3,250
2,600
1,950
1,300
1,600
1,900
1,800
2,900
650
850
200
0
2003 2004 2005 2006
New business Loans outstanding
Besides Russia, which was a national focus of
the Group’s project finance, structured corporate
finance and acquisition finance activities, RZB also
completed projects in the Czech Republic, Poland,
Latvia, Bulgaria, Romania, Serbia, the Ukraine,
Kazakhstan and Turkey.
Export finance
RZB’s export finance operations during the financial
year under review focused on investment and
acquisition finance. Geographically, the focus was
on the Group’s home markets in the CEE-region.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
2,100
5,000
Corporate Customers
www.rzb.at
117

Corporate Customers
RZB 2006
RZB completed an interesting project with Renault/Axis that involved not just Raiffeisen Leasing in
Russia but also a number of export finance agencies. New business volumes in the export finance field
grew by over 16 per cent from € 1.8 billion to € 2.1 billion in 2006.
The CEE-region’s most successful arranger of syndicated loans
RZB continued to assert its leadership in the Central and Eastern European syndicated loans market
during 2006. RZB again handled more transactions than any other bank in the region with 63
mandates. The syndications market in Central and Eastern Europe grew to a total volume of € 69
billion. Almost all of the market’s growth occurred in the Commonwealth of Independent States (CIS),
which accounted for € 50 billion thereof. With a transaction volume of € 14.5 billion, RZB was able
to secure for itself a substantial proportion of the Central and Eastern European syndications market
as mandated lead arranger.
Borrowers’ confidence in RZB’s arranging expertise also generated growth in its corporate finance
operations. Within this competitive environment, RZB’s market share increased from seven to 15 per
cent in 2006 due to the arrangement of 17 syndicated loans with a volume of € 7.5 billion.
Its biggest syndications in Austria included loans of € 1.4 billion for Porsche System Engineering Ltd.
and € 415 million for Immofinanz Immobilien Anlagen AG. Most of the syndications in Central and
Eastern Europe were for the CIS region, including the aforementioned US$ 800 million facility for
Pyateroschka and a US$ 400 million facility for the Siberian Coal Energy Co, a US$ 350 million loan
for ROLF (Russia’s leading car dealer) and a US$ 1.3 billion loan for Russian mobile phone operator
MobileTelesystems.
Further strong growth in real estate loans
During the year under review, Raiffeisen Zentralbank granted a new record volume of commercial
real-estate finance loans totalling approximately € 1.3 billion. The main geographical focuses were
Austria, Western Europe and the CEE-region. The most noteworthy transactions in Austria were
structurings of large-volume loans for institutional investors, for instance to finance the purchase of
the former ÖGB headquarters building and the Allianz Group’s administrative HQ in Vienna. RZB
financed purchases of real-estate portfolios by foreign and Austrian investors – such as the conwert
Group – in Berlin, Leipzig and Dresden within the scope of the its German market offensive. In
addition, RZB was mandated to arrange finance for the construction of the Trump Tower in Toronto,
which will be one of the most exclusive residential and hotel building in Canada – not to mention the
highest, at 57 floors.
Financing the reduction of greenhouse gases
In 2006, RZB entered the wide-ranging climate protection market by financing four projects to reduce
greenhouse gases. The factories that were built reduced emissions by a total of 15 million metric
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RZB 2006
tons of CO 2 equivalent. Consequently, these projects made a significant contribution to reducing the
global increase in greenhouse gas emissions. In addition, the purchase of a part of the certificates that
resulted from the reduction by the Austrian government will help Austria meet its Kyoto goals.
Trade finance
RZB asserted its leadership in the settlement and commodity finance markets in Austria and the
CEE-region. RZB’s outstanding teamwork with its Group-members – including above all the members
of the Group in Russia, the Ukraine and Belarus – resulted in a consistent deal pipeline in those
countries. In addition, RZB was able to complete additional transactions in Azerbaijan, Armenia and
Kazakhstan as well as in the Western Balkans.
In addition to the principal traded commodities – oil, oil products, metals, coal, coke and fertilizers
– RZB also completed transactions in the regenerative fuels sector (e.g. biodiesel). Supplementing its
long-standing customer relationships with commodity producers and businesses in the first processing
stage such as refineries and steelworks, RZB substantially expanded its trader and transport finance
activities, helped by high oil prices. Finance volumes were 15 per cent up on the previous year, and
despite seriously eroded margins, gross earnings in the CEE-region grew by 5 per cent.
Cash management: one account, worldwide
Cooperating with a total of six Network Banks, RZB implemented a new cross-border cash pooling
system in 2006. Because it allows customers to concentrate their liquid resources in Central and
Eastern Europe in one account, this product was immediately warmly received in the marketplace.
Electronic banking security was another focus of the Group’s product management activities. For
instance, to hinder hacker and phishing attacks, RZB introduced TAN (transaction numbers) with an
extra code and mobile TANs (m-TANs) transmitted to a mobile phone.
Deposit volumes under management for Austrian and multinational Corporate Customers grew by
over 36 per cent to € 29.48 billion during 2006. Their growth was attributable both to the acquisition
of new customers and to an increase in business with existing customers.
Successes overseas
RZB’s Asian branches in Beijing and Singapore had a very good year. Beijing in particular bore out
the Group’s strategy of expansion, as its profits grew from € 3.5 million to E 13.7 million. The Group
opened a representative office in Zhuhai, which is a special economic zone near Hong Kong, and it
will be opening a branch in Xiamen, on the South China coast in 2007. These positive results were
driven, among other things, by RZB’s licence to do business in local currency, granted in 2005. Trade
and corporate finance are the core businesses of RZB Finance LLC in New York. Business in Latin
America was resumed in 2006.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Corporate Customers
www.rzb.at
119

Corporate Customers
Leader in the Austrian corporate bond market
RZB 2006
After a record year in 2005, bond issues in the Austrian market fell in 2006. Nonetheless, RZB
handled two deals in the domestic corporate bond market: it was joint lead manager for the € 75
million FIMAG bond and the € 60 million Futurelab Holding GmbH bond; it was also joint lead
manager and bookrunner for the ÖBB Infrastruktur Bau AG bond, which amounted to € 1 billion.
Austrian and foreign IPOs
Raiffeisen Centrobank again won a number of IPO mandates during 2006. The Österreichische
Post IPO during the first half – during which Raiffeisen Centrobank acted as joint lead manager and
bookrunner – was particularly successful and was oversubscribed eight times over. Supported by the
Raiffeisen Banking Group, Raiffeisen Centrobank placed the retail component of this stock issue, which
amounted to a total of € 650 million. Raiffeisen Centrobank also handled the IPO of BENE AG and
took part in the IPO of Zumtobel AG.
However, 2006 was not just a good IPO year for Raiffeisen Centrobank in Austria. This company
also acted as advisor on a significant number of IPOs in the CEE-region, including above all that of
INA. Working in cooperation with Raiffeisenbank Austria – the Group’s Network Bank in Croatia – it
sold the shares of this Croatian oil company to both retail customers and institutional investors. Other
stock exchange transactions that involved Raiffeisen Centrobank in a key role included the IPO of
Romanian power company Transelectrica and the capital increase by Romanian IT company Flamingo
International, during which Raiffeisen Centrobank acted as joint lead manager via Raiffeisen Capital
& Investment.
Raiffeisen Centrobank is a wholly-owned subsidiary of Raiffeisen Zentralbank. It acts as the equity
house of the Raiffeisen Banking Group. The sections on the Financial Institutions segment (page 124)
and the Proprietary Trading segment (page 132) contain more details.
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RZB 2006
Raiffeisen International’s Risk-weighted Assets
in the Corporate Customers segment
ebn
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
5,448
8,232
9,982
14,356
19,067
Business in the CEE-region
RZB’s Corporate Customer business in the CEEregion
is carried on primarily by the Network
Banks and finance leasing units operating under
the umbrella of Raiffeisen International. They serve
both local corporate customers and multinationals,
services for the latter being rendered mainly in
cooperation with Raiffeisen Zentralbank. As in
prior years, the line of products for corporate
customers continued to broaden and improve
during 2006. The Group stepped up its business
acquisition work, broadening the customer base in
this segment.
Generally, the bandwidth of the products and
services on offer will of course depend on the
maturity of the particular economy and banking
landscape. However, significant technical progress
has been made, due not least to the Group-wide interchange of know-how. As a result, RZB is
now, in effect, able to provide the complete line of internationally available services even in small,
comparatively immature markets.
2001 2002 2003 2004 2005 2006
Risk-weighted assets in Raiffeisen International’s Corporate Customers segment grew by one third
on the previous year to € 19.1 billion. Profit before tax in this business segment at Raiffeisen
International came to € 467 million (increase of 38 per cent). The associated return on equity before
tax was 31.7 per cent (increase of 4.8 percentage points), and the Cost/income ratio in this segment
improved by 3.5 percentage points to 36.7 per cent.
The credit portfolio of Raiffeisenbank in the Czech Republic grew by 54 per cent to € 1.8 billion,
making 2006 its best-ever year in the Corporate Customers market. Raiffeisenbank continued to
expand its structured finance and real-estate project finance operations, and it is also one of country’s
three leading project financiers.
Raiffeisen Bank in Hungary was able to defend its position as the fourth-largest player in the corporate
finance market, and it was able to reinforce its market position, above all by extending its successful
instant loan line. Overall, its corporate loan portfolio grew by 29 per cent to € 2.7 billion.
The corporate loan portfolio at Raiffeisen Bank in Albania grew significantly. Its US$ 20 million loan
to Bankers Petroleum – the biggest loan ever granted by one Albanian bank – set new standards both
for the bank itself and for the Albanian financial sector.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Corporate Customers
www.rzb.at
121

Corporate Customers
RZB 2006
The corporate loan portfolio of Raiffeisen Bank d.d. Bosna i Hercegovina grew by 36 per cent on
the previous year to € 326 million. Deposits from Corporate Customers grew by 31 per cent to
€ 183.1 million. The bank had over 6,200 Corporate Customers, which was 7 per cent more than
at year-end 2005.
Raiffeisenbank (Bulgaria) underscored its position as the country’s market leader in corporate bonds
and foreign currency transactions in the Corporate Customers segment. It was lead manager for
17 new bonds with a total of € 283 million, recording a market share of 70 per cent.
The corporate loan portfolio of Raiffeisenbank Austria in Croatia grew by over a third to € 768 million.
Despite stiff competition, deposits from Corporate Customers grew by 38 per cent to € 956 million.
Raiffeisen Bank in Romania focused its activities in the Corporate Customers segment in helping its
customers meet new standards in the wake of EU accession. Its loan portfolio grew by 63 per cent to
€ 1.27 billion, and deposits increased by 47 per cent to € 1.39 billion.
Raiffeisen banka remained Serbia’s leading provider of banking services to local and multinational
Corporate Customers. The bank’s position was underpinned not least by a 63 per cent increase in
deposits, which totalled € 415 million at year-end.
Priorbank in Belarus launched a number of loan products for Corporate Customers during 2006. They
included car loans, structured finance solutions for oil trading companies and working capital lines
for trading and manufacturing companies. Priorbank was one of the country’s first banks to offer its
customers Swiss franc loans, reducing their interest payments. At the same time, it offers them forward
contracts to hedge exchange risks. These changes increased Priorbank’s corporate loan portfolio by
12 per cent to € 381 million.
Raiffeisenbank Austria, Moscow, underscored its reputation as a reliable partner during 2006,
providing first-class services to both Russian and foreign corporates. Its corporate loan portfolio grew
by 71 per cent to € 3.8 billion, and its customer base in this segment grew by half to nearly 5,800
companies. The bank arranged 17 corporate bonds with a total of € 1.4 billion and 27 syndications
totalling € 3.6 billion.
A excellent year for the Raiffeisen-Leasing Group
The Raiffeisen-Leasing Group’s new business volumes in Europe grew by a very satisfactory 20 per
cent to € 3,433 million. As a result, it remained the most successful Austrian finance leasing provider
operating in European markets. Raiffeisen-Leasing’s new business in Austria, inclusive of cross-border
finance, totalled € 1,069 million; it concluded 13,840 new contracts. Motor vehicle leasing
accounted for € 294 million of the total, movable property leasing for € 292 million and real-estate
leasing inclusive of proprietary projects for € 483 million.
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RZB 2006
New Business at Raiffeisen-Leasing International,
by product class
emn
1,750
1,500
1,250
1,000
750
500
250
0
782
70
202
510
1,037
90
225
722
1,117
61
215
841
Motor vehicle Movable property Real estate
Goals for 2007
1,353
105
235
1.013
1,949
Finance leasing in the CEE-region
The Group’s finance leasing subsidiaries in Albania
and the Ukraine began operations during the
year under review. As a result, Raiffeisen-Leasing
International has lease financing companies of
its own in 15 CEE-countries. 1,259 people were
employed by this sub-group at year-end.
New finance leasing business in the CEE-region
grew strongly during 2006, increasing by 44 per
cent to about € 1,949 million. The movable
property and real-estate segments grew fastest,
namely by 66 and 94 per cent, respectively.
Raiffeisen-Leasing International’s balance sheet
total grew by 40 per cent to about € 3,070 million
during 2006.
The number of Austrian customers using RZB as their principal source of banking services should
continue to increase during 2007, and the additions should also include customers in Austria “Top
1,000” segment. RZB’s core products in the corporate finance, investment banking, cash management,
treasury and export finance fields are to be made accessible to more corporates. This will apply
particularly to subsidy, cash management, export and international trade finance services.
Raiffeisen Zentralbank will be using its leadership in corporate banking to acquire more companies
based in Germany and Scandinavia as customers, including above all companies with a strong
presence in the CEE-region.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
204
390
1.355
Corporate Customers
www.rzb.at
123

Financial Institutions and Public Sector
Financial Institutions and Public Sector
RZB 2006
This segment encompasses business with banks, funds, financial service providers, insurers and public
sector entities. Banks also includes all Austrian and foreign corporate banks. This segment also
encompasses supranational institutions like the World Bank, the European Bank for Reconstruction and
Development (EBRD), the European Investment Bank (EIB), the International Monetary Fund (IMF) and
the Kreditanstalt für Wiederaufbau (KfW).
Financial service providers includes brokers and asset managers such as investment banks, investment
fund companies, finance leasing companies and other companies that perform activities connected
with the credit industry. The Insurers sub-segment encompasses all kinds of insurer and reinsurer. They
include property insurers, health insurers, life assurers and pension insurers. Public sector includes
public sector entities such as ministries, provinces, municipalities and similar public bodies.
€000 2006 2005 Change
Net interest income 180,831 129,117 40.1%
Provisioning for impairment losses (2,824) 1,004 —
Net interest income after provisioning 178,006 130,121 36.8%
Net commission income 140,083 107,381 30.5%
Trading profit 21,306 31,672 (32.7%)
Net income from financial investments (439) 1,104 —
General administrative expenses (138,872) (132,256) 5.0%
Other operating profit 7,501 9,104 (17.6%)
Profit before tax 207,586 147,126 41.1%
Segment’s contribution to profit before tax 11.0% 15.8% (4.8 pp)
Basis of assessment (including market risk) 10,611,175 6,399,293 65.8%
Average number of staff 2,129 1,727 23.3%
Cost/income ratio 39.7% 47.7% (8.0 pp)
Average equity 722,666 445,727 62.1%
Return on equity before tax 31.1% 33.0% (1.9 pp)
The Risk-weighted assets of the dynamically growing Financial Institutions and Public Sector segment
grew by 66 per cent. At the same time, the improvement in the segment’s risk situation allowed a
reduction in Provisioning for impairment losses. As the margins allowed by the market narrowed in
2006, the rise in interest income driven by bigger volumes was smaller than the increase in business
volumes themselves. Net commission income grew by approximately 31 per cent, driven by asset
management and custody operations. The unfavourable interest-rates environment reduced Trading
profit to € 21 million.
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RZB 2006
Whereas Operating income rose substantially, increasing to a total of € 349 million, General
administrative expenses rose by a comparatively modest 5 per cent. As a result, the segment’s Cost/
income ratio fell by a remarkable 8 percentage points to 39.7 per cent.
The increase in eligible equity attributable to this segment associated with the growth in business
volumes reduced its Return on equity to 31.1 per cent, which was 1.9 percentage points down on
2005. The one-off effects recognizable in 2006 reduced the proportion of total profit accounted for
by the Financial Institutions and Public Sector segment by 5 percentage points to 11 per cent. Without
one-off effects, proportion of total profit accounted for by this segment was static on the previous
year at 16 per cent.
A bridgehead between East and West
The growing volume of business with medium-sized banks in both Western Europe and the CEE-region
led to substantial increases in the segment’s performance and profits. Volumes of cash management
and custody settlement transactions between the CEE-region and Western Europe rose significantly,
underlining RZB’s role as a bridgehead between these regions.
The Commonwealth of Independent States (the CIS region) and the Baltic countries gave RZB its
highest rates of growth in business volumes during 2006, due above all to the extension of its trade
finance activities and a rise in cash management volumes.
The world’s leader in syndicated loans
RZB’s syndicated loan operations continued to thrive as they had in prior years, setting new records.
The Group arranged 48 facilities more than in 2005, giving a total of 147 syndicated loans in all.
It arranged well over two thirds of the syndicated loans in the Financial Institutions sub-segment
– namely a total of 105 facilities – making RZB the world’s clear No. 1 in terms of transaction numbers
in this area. The development of business with banks in Turkey and the Gulf region was particularly
noteworthy, as RZB’s mandates in those markets rose from 34 in 2005 to 48 in 2006.
In terms of the number of loan syndications in the CEE-region handled by RZB as mandated lead
arranger, RZB was, as in prior years, also the banking industry’s leading player in its home market.
Russia accounted for more than half of the total of 63 transactions in the CEE-region. The outstanding
transactions included the syndication of a US$ 212 million loan for Russian universal bank URALSIB.
Facilities arranged by RZB during 2006 had a total volume of over € 14 billion.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Financial Institutions and Public Sector
www.rzb.at
125

Financial Institutions and Public Sector
Development of Custody Volumes
ebn
225
200
175
150
125
100
75
50
94.6 94.9
Assets under custody set a new record
RZB 2006
On 31 December 2006, deposits under management by RZB for customers in this segment stood at
€ 248.9 billion, or nearly 17 per cent more than at the end of the previous year. Earnings also
reflected this increase in business volumes. Not only did the assets under custody with RZB set a new
record, but so too did fees. This was the result of organic growth in existing assets and the acquisition
of substantial volumes of new business. Acquisition work in the segment focused mainly on Global
Custodians and Broker/Dealer operations, where RZB was able to acquire numerous new customers.
133.0
160.3
213.2
The broadening of the custodian banking line also
proceeded apace. RZB was able to reinforce its
market position in Austria, with 61 new funds,
and it reaffirmed its leadership of the custodian
banking market with a market share of just over
24 per cent.
Volume of securities issued doubles
Raiffeisen Centrobank acts as RZB’s equity house.
Due to its performance in the brokerage market,
it is not just market leader in Austria but also an
acknowledged partner to local and multinational
investors in the CEE-region. Raiffeisen Centrobank
is by far the biggest issuer of structured securities
in Austria. The value of the securities issued in this
segment totalled over € 1.3 billion, which was almost twice as much as in 2005. Already existing
markets – Austria, Germany, Italy and Switzerland – were supplemented by the addition of Poland,
Hungary, Slovakia, the Czech Republic and Slovenia in 2006.
First choice among leading issuers
In the fixed income field, RZB acts as an investment bank for other financial institutions. Serving as a
link between East and West, it enjoys an excellent global reputation in this demanding market.
Because of its placement power, RZB is constantly helping create new markets, especially in the
transformational economies of Central and Eastern Europe.
One outstanding example of this was the first variable rate bond issued by the European Investment
Bank (EIB) in Bulgarian leva. The issue was arranged by Raiffeisen Zentralbank in collaboration with
Raiffeisenbank (Bulgaria). It took place under the EIB’s Euro Medium-Term Note Programme and
amounted to BGN 150 million.
126 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
248.9
2001 2002 2003 2004 2005 2006

RZB 2006
Domestic Payments
Millions
275
250
225
200
175
150
125
100
151.24
Dynamic growth in payment transfers
RZB is an important, capable and reliable partner to its customers in both the euro and the US dollar
clearing markets. This applies equally to its activities as a payments settler within national boundaries
and to its cross-border payment transfer services. While the number of domestic payment transactions
settled by RZB grew by over 17 per cent to a total of approximately 297 million, the number of crossborder
payment transactions rose by nearly 40 per cent to about 9.9 million.
Developed in 2005, RZB introduced a new cross-border payments product called “Cash Payments
to CEE“ in 2006. This is an attractive solution for its correspondents around the world, enabling
them to make use of the dense Raiffeisen network in the CEE-region to effect money transfers. “Cash
Payments” is conceived as an open solution. It links standardized interbank channels like S.W.I.F.T.
to a Web application that allow the inclusion of additional correspondents in cash disbursement
transactions.
174.09
190.69
Outlook
197.17
252.54
297.02
2001 2002 2003 2004 2005 2006
Cross-border Payments
Financial Institutions and Public Sector
Plans for the harmonization of European payment transfer infrastructures (SEPA) grew out of the
changeover to a common currency within the scope of the EU’s European Monetary Union. It is
RZB’s goal not only to create passive interfaces to its Credit Transfer and Direct Debit products within
SEPA but also to actively offer its customers SEPA instruments. To do so, it plans to introduce a SEPA
conversion service to supplement its well-established clearing services.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Millions
8.75
7.50
6.25
5.00
3.75
2.50
1.25
0
2.487
3.976
5.047
5.799
7.091
9.893
2001 2002 2003 2004 2005 2006
www.rzb.at
127

Retail Customers
Retail Customers
RZB 2006
This segment encompasses business with personal banking customers and small and medium-sized
enterprises (SMEs) with annual revenues of less than € 5 million. This segment centres almost
exclusively on the CEE-region. However, it also encompasses the private banking activities of the
Kathrein & Co. banking house, operating out of Vienna, whose profit after tax applying IFRS was up
two thirds on the previous year to € 5.8 million. With the exception of Kathrein & Co., all of RZB’s
business in the Retail Customers segment is carried on by the Network Banks in the CEE-region held
by Raiffeisen International. In accordance with the prescribed allocation of tasks and responsibilities
within the Raiffeisen Banking Group (RBG ), Raiffeisen Zentralbank does not carry on retail banking
business in Austria. However, it supports RBG’s activities in this segment by rendering central services
– for instance within the scope of nationwide marketing campaigns – and by providing products via its
specialist subsidiaries.
€000 2006 2005 Change
Net interest income 1,030,327 657,814 56.6%
Provisioning for impairment losses (191,709) (96,540) 98.6%
Net interest income after provisioning 838,617 561,273 49.4%
Net commission income 603,647 357,476 68.9%
Trading profit 1,913 6,337 (69.8%)
Net income from financial investments — 82 —
General administrative expenses (1,204,399) (802,677) 50.0%
Other operating profit 18,558 6,674 178.1%
Profit before tax 258,336 129,165 100.0%
Segment’s contribution to profit before tax 13.7% 13.9% (0.2 pp)
Basis of assessment (including market risk) 14,846,100 9,370,410 58.4%
Average number of staff 36,153 19,356 86.8%
Cost/income ratio 72.9% 78.1% (5.2 pp)
Average equity 1,011,083 652,673 54.9%
Return on equity before tax 28.4% 19.8% 8.6 pp
The creation and development of the region-wide branch presence that is needed to succeed in
Retail Customer business is expensive and therefore involves high capital expenditure. Nonetheless,
this segment continued to develop well in 2006. Having turned a profit for the first time in the 2004
financial year, Profit before tax in the Retail Customers segment already came to € 258.3 million in
2006. This was exactly 100 per cent more than in 2005. The segment’s Cost/income ratio improved
from 78.1 per cent to 72.9 per cent.
The Risk-weighted assets attributable to this business segment grew by more than half to € 15 billion.
As in 2005, The Retail Customers segment accounted for 14 per cent of Profit before tax. Without oneoff
effects, its contribution would have increased by 6 percentage points to 20 per cent.
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RZB 2006
Enormous potential for growth in Central and Eastern Europe
The Group’s Retail Customer operations in Central and Eastern Europe will continue to grow rapidly
over the next few years. The spending power of a broad section of society will increase in the course
of economic development and the convergence process, generating higher consumption and investment
and, consequently, increasing the demand for financial services. Most of the markets in which RZB
operates are still far from completing that process.
RZB launched an extensive retail banking programme in 1999 in order to systematically exploit
that potential for growth. Since then, it has been steadily extending its retail banking presence both
geographically and in product terms. RZB now provides Retail Customer services in all the Central
and Eastern European markets in which it operates a bank. In doing so, it benefits from the strength
and public profile of the Raiffeisen brand. RZB therefore cultivates its market presence under the wellestablished
Raiffeisen banner everywhere in the region but Slovakia, where its local subsidiary trades
as Tatra banka. That name, however, looks back on a long tradition in Slovakia and is very well
known. In Belarus too, Priorbank will continue to use its old name for the time being, but as a rule,
acquired banks are given the Raiffeisen name at the earliest possible opportunity.
The number of Retail Customers serviced by the Network Banks continued to rise rapidly during
2006. It ended the year at about 12.1 million, as against 9.7 million at the end of 2005.
Ongoing expansion of the branch network
In many Central and Eastern European markets, RZB is seen as a pioneer when it comes to technology
and innovative banking services. Nonetheless, the branch is and remains at the centre of its customer
relationships. This is where advice is provided and sales take place, and branches also play a key
role in brand positioning.
For these reasons, RZB will continue to focus
Raiffeisen International Outlets in the CEE-region
on the region-wide development of its branch
network. Most new outlets are specifically designed
2,625
2,848 for Retail Customer business; they generally have
relatively small and cost-efficient sales areas.
2,250
1,875
1,500
1,125
750
375
0
494
604
722
916
2,443
2001 2002 2003 2004 2005 2006
At year-end 2006, the network in the CEE-region
had 2,848 business outlets, which was 405 or
16.6 per cent more than the end of 2005; 178
outlets were newly opened, and the remaining
227 outlets were added to the network by
Impexbank and eBanka.
The systematic enlargement of RZB’s network of
bank branches will continue in 2007. It should
contain over 3,400 branches by 2009.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Retail Customers
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129

Retail Customers
The “Sales Force Effectiveness“ programme
RZB 2006
As the development of the banking markets in the CEE-region progresses, cross-selling is becoming
an increasingly important aspect of RZB’s activities. Cross-selling in this context means selling
supplementary products and services to existing customers in order to get more out of a customer
relationship. To maximize the exploitation of inherent cross-selling potential, RZB launched a
“Sales Force Effectiveness“ programme spanning the CEE-region in 2005. Within the scope of this
programme, existing customer relationships are analyzed to identify added potential. This process is
tailored directly to the maturity of the particular market in terms of product standards. For instance,
in some countries, insurance products (which also generate commission income) are automatically
offered when consumer or mortgage loans are granted. Customer advisors are offered special
information systems and incentives to optimize the effectiveness of advisory and selling activities.
The programme was fully implemented and completely in place in Poland in 2006. On the reporting
date, it was still undergoing implementation in Albania, Bulgaria, Croatia, the Czech Republic,
Hungary, Romania, Serbia and Slovakia. The programme will soon be launched in the Group’s other
national markets. The whole project is to be completed by the end of 2008.
Asset management products are booming
Investment funds find themselves at the beginning of a lengthy boom in Central and Eastern Europe.
The region’s speedy economic development is generating a rapid rise in the living standards of broad
sections of the population and, therefore, altering saving patterns. As in Austria, more and more
people in Eastern Europe are discovering investment funds as an attractive alternative to deposit
accounts. During 2006, investment and pension funds under management by RZB in the CEE-region
grew by 59 per cent to € 3.28 billion.
At year end 2006, funds in the five EU member-states in Central Europe – the Czech Republic, Hungary,
Poland, Slovakia and Slovenia – amounted to about € 20 billion, which was about 7 per cent of
GDP. In Austria alone, € 155.6 billion was held in funds at that time, and assets held in investment
funds came to about 60 per cent of GDP in the eurozone as a whole. The equivalent figure was
not even 1 per cent in Bulgaria or Romania, and it was just over 1 per cent in Russia. This clearly
demonstrates the enormous long-term growth potential for investment funds in Eastern Europe.
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RZB 2006
RZB began setting up investment fund companies in Central and Eastern Europe at an early stage of
the region’s development, and it set up its first specialist subsidiaries in Slovakia and Croatia back in
1998. RZB is now the clear market leader in the investment fund markets of both countries with market
shares of about one third. In the spring of 2006, it set up subsidiaries in Bulgaria and Romania. In
all, RZB offers its own investment fund products to customers in nine countries in the region. The
Group plans to set up investment fund companies of its own in Serbia and the Ukraine in the near
future. Among other things, RZB is building on the many years of experience accumulated by Groupmember
Raiffeisen Capital Management (RCM) – Austria’s leading investment fund company – in the
CEE-region
Debit and credit cards are growing in popularity in the CEE-region
By the standards of the EU member-states in the eurozone, cashless payments are not yet widespread
in Central and Eastern Europe. However, the general increase in mobility and rising purchasing
power are making them more popular. Consequently, rates of growth in this product area are likely to
remain high. It is a stated objective of RZB’s retail banking strategy to make a material contribution to
the continuing penetration of Central and Eastern Europe by debit and credit cards.
The dissemination of credit cards in Central and Eastern Europe is still comparatively limited by
Western European standards, but it is rapidly increasing. By year-end 2006, some 1.22 million
credit cards had been issued through the RZB network in the CEE-region. This was nearly double the
previous year’s figure of 620,000. The aggregate card portfolio should again grow significantly in
2007. RZB foresees particularly rapid growth in the CIS countries, including above all Russia and the
Ukraine and in Romania.
Goals for this year
Having reached break-even in this segment in 2004 and following further improvements in results
in 2005 und 2006, RZB intends profits from its Retail Customer operations to continue to grow
substantially faster than those of its competitors in the segment during 2007 and is aiming to enlarge
its market share. Its main focuses during 2007 will be on the transformation and integration of the
newly acquired banks in Russia and the Czech Republic, renewed expansion (above all in the CIS
countries), further development of short-term credit products, including in particular consumer credit
and mortgage finance, the accelerated extension of finance leasing operations and business with
SMEs, and further improvements in risk and receivables management processes.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Retail Customers
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131

Proprietary Trading
Proprietary Trading
The Proprietary Trading segment encompasses proprietary trading in the Treasury and Investment
Banking divisions of Raiffeisen Zentralbank, Raiffeisen Centrobank, the Network Banks and the
Group’s investment firms in Central and Eastern Europe.
RZB 2006
The Treasury sub-segment encompasses RZB’s proprietary positions in on-balance-sheet products such
as money-market deposits, foreign exchange and notes and coin and off-balance-sheet interest-rate
and price-based products such as forwards, futures and options. In addition, this sub-segment also
encompasses proprietary portfolio management activities in the equity, bond, fund and short-term and
long-term alternative investment fields.
The Investment Banking sub-segment encompasses the management of the proprietary securities
positions in RZB’s books as well as market making. In addition, it encompasses securities lending and
repurchase transactions with foreign counterparties. Most of this business is driven by customer orders
and so-called “flow” business and is not affected by market positionings.
€000 2006 2005 Change
Net interest income 223,422 184,422 21.1%
Provisioning for impairment losses 24 (2) —
Net interest income after provisioning 223,446 184,420 21.2%
Net commission income 16,237 36,131 (55.1%)
Trading profit 215,088 121,503 77.0%
Net income from financial investments 35,745 (1,894) —
General administrative expenses (159,973) (116,131) 37.8%
Other operating profit (loss) (40,003) 14,333 —
Profit before tax 290,539 238,361 21.9%
Segment’s contribution to profit before tax 15.4% 25.6% (10.2 pp)
Basis of assessment (including market risk) 12,555,160 10,952,194 14.6%
Average number of staff 2,119 1,305 62.4%
Cost/income ratio 35.0% 34.0% 1.0 pp
Average equity 855,060 762,848 12.1%
Return on equity before tax 33.0% 31.2% 1.8 pp
The Proprietary Trading segment recorded a rise in Profit before tax of 22 per cent to € 291 million.
Most of the 21 per cent advance in Net interest income was generated by medium and longer-term
investments. Whereas Net commission income was € 20 million down on the previous year, Trading
profit rose by over € 90 million.
Growth in the workforce of 814 or 62 per cent increased the segment’s General administrative
expenses by nearly 38 per cent. To a small extent, this increase in resources was also reflected in the
segment’s Cost/income ratio, which was 1 percentage point up on the previous year at 35.0 per cent.
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RZB 2006
Other operating profit in 2005 turned into a loss in 2006. This was mainly the result of remeasurements
of derivative financial instruments in the banking book as of the reporting date and of the
cost of hedging securities. In other words, Other operating profit must therefore be seen within the
context of Net income from financial investments and current financial assets, which contains the
corresponding counter-positions.
The segment’s Return on equity increased by 1.8 percentage points to 33 per cent. Because
of consolidated one-of effects, the segment’s relative contribution to RZB’s Profit before tax fell to
15.4 per cent. Without those one-off effects, it would have come to 23 per cent.
A flatter yield curve narrows eurobond spreads
Eurobond prices fell across the board during 2006. This was triggered by the recovering economy
and rising interest rates in the eurozone. The trend peaked towards the middle of the year, when
the yield on 10-year bonds stood at 4.15 per cent. After that, the European bond market showed a
more varied picture as the yield curve became increasingly flat. At year-end, the yield on ten-year
treasuries stood at 3.95 per cent, and the yield on a two-year treasury was 3.88 per cent.
Although its current deficit remain high, the US had no difficulty financing it with capital inflows.
Repeated hikes in the Fed rate up to mid-year – taking it from 4.25 per cent to 5.25 per cent –
widened the rates gap between the US and the eurozone and Japan.
Euro strengthens powerfully versus the dollar and yen
The likelihood of a break in Federal Reserve rate hikes in response to the weak forward indicators
already triggered a sharp rise in the euro versus the US dollar during the second quarter of 2006. The
rates gap between the US and the eurozone narrowed in the second half, whereas the rates gap
between the eurozone and Japan narrowed throughout the year. However, it was only towards yearend
that the euro showed another significant rise against the US dollar. The exchange rate finally
reached its annual high of E 1.33 to the US dollar in December.
Although the Japanese interest rate hike in July 2006 marked the end of a zero interest rates policy
that had lasted for years, this failed to support the yen. The widening rates gap drove the yen’s
exchange rate against the euro from ¥ 140 at the beginning of the year to ¥ 157 at its end. The
exchange rate against the US dollar ranged between ¥ 109 and ¥ 122; it ended the year at ¥ 119,
which was at the upper end of the range.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Proprietary Trading
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133

Proprietary Trading
Development of Euro Exchange Rates
12.5%
10.0%
7.5%
5.0%
2.5%
0%
– 2.5%
1/2006
3/2006 5/2006 7/2006 9/2006 11/2006 1/2007
USD/E JPY/E PLN/E RUB/E HUF/E
Broader product line in the Fixed Income field
RZB 2006
In response to growing customer demand, RZB again significantly enlarged its trading books in the
Fixed Income field, which handles trading in credit risks – in the form of bond and credit derivative
trading – and trading in interest-rate and structured products. The most striking enlargements took
place in books in Central and Eastern European currencies such as the Hungarian forint, the Polish
Zloty and the Slovakian and Czech crowns.
An Order Execution Desk was set up in 2006. It is a central hub for customer enquiries, ensuring
prompt and cost-efficient bond trading. It has substantially shortened the route between customers
and traders, greatly increasing the importance of RZB’s role as an active trading partner with desks in
Vienna, London and Singapore.
RZB’s Financial Engineering Division continued to extend its made-to-measure fixed income product
structuring capacities, and pricing was automated by implementing powerful state-of-the-art software
(a so-called pricing engine). In addition, the division developed a political risk swap designed to
synthetically hedge political risks in selected markets.
134 www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
3/2007

RZB 2006
Strong rise in Foreign Exchange revenues
Supported by a positive market environment, the revenues from Foreign Exchange business grew
by 25 per cent. This growth in business volumes was driven by RZB’s continuing development of its
position in foreign exchange trade. During 2006, RZB was among the world’s leaders not just in the
currencies of the 10 biggest industrial countries but also and above all in the currencies of Central
and Eastern Europe. For instance, in turnover terms, RZB was ranked fourth in USD/PLN trading on
the Reuters Dealing electronic trading platform. This is the world’s most important foreign exchange
trading platform for Eastern European currencies, with 112 trading clients.
RZB reacted in good time to the free convertibility of the RON, HRK and RUB and to the resulting
development of demand by increasing the workforce accordingly in Austria and abroad. Besides
measures designed to give greater depth to existing customer relationships, development of RZB’s
trade in bank notes during the year under review consisted mainly of customer acquisition work in
the CIS region and the Middle East. By stepping up trade in the key CEE currencies, RZB was able to
establish itself as a leading market maker in this market segment during 2006.
US commercial paper programme launched
Although macroeconomic conditions were made difficult by high energy prices and prevailing
uncertainty in the market regarding monetary policy in the US, RZB had a very good year in Money
Markets business. RZB reached an important milestone in its funding strategy in 2006 when it
introduced its US commercial paper programme.
The programme was launched in the summer with a total volume of up to US$ 4.0 billion. It is aimed
at US investors (e.g. money market funds and investment companies) as well as private companies
and public institutions. It has broadened RZB’s US dollar funding possibilities in maturities of up to a
year. The programme’s targeted utilization was reached within just a few weeks and volumes have
since been held constant.
RZB’s Securities Finance broadens its product line
RZB’s Securities Finance had another record year in 2006. Both the customer base and business
volumes grew substantially. The driving forces were the enlargement of the product line – to include,
for instance, the first transactions denominated in Russian rubles – and the extension of the division’s
trading activities in the CEE-region.
The successful introduction of a powerful front-office system created the basis for the central
management of every securities portfolio. It uses state-of-the-art technology that will support the
development of further business activities in the short-term finance and securities lending fields.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Proprietary Trading
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135

Proprietary Trading
ABS and CDO portfolios made accessible to institutional customers
RZB 2006
Because of attractive margins, good borrower quality and the breadth of diversity of the underlying
receivables, investments in asset backed securities (ABS) and collateralized debt obligations (CDO)
account for a steadily growing proportion of RZB’s portfolio.
Despite narrower margins than in 2006 – but combined with the portfolio’s unchanged investment
grade rating – a constant spread was attained. This was achieved by optimizing analysis and pricing
instruments, by employing new quantitative models and with the help of conservative, stabilityorientated
management of the portfolio of alternative investments and hedge funds. Due to the
development of a fund platform, it became possible for institutional customers to invest in an actively
managed ABS and CDO portfolio in 2006.
Balance Sheet Management smooths the way for capital market financing
Raiffeisen Zentralbank’s Balance Sheet Management Department handles the active and central
management of RZB’s assets and continuously drives forward the refinement and optimization of
balance sheet steering instruments. The principal focus in 2006 was on extending steering instruments,
in turn allowing considerable enlargement of the circle of investors and prospective clients.
During 2006, the division reduced its interbank financing activities in favour of capital markets
financing. The development of innovative capital market instruments and the intensification of RZB’s
active debt investor relations work enabled it to perform efficiently on the international stage with its
own securities.
Following the placement of a variable rate bond with a value of € 1 billion at 11 basis points above
the Euribor at the beginning of the year, RZB issued a hybrid tier 1 bond of € 500 million at a
premium of 95 basis points over the mid-swap rate. This issue made RZB the first bank in Austria to
place a single security of this size with international credit investors. The issue of a lower Tier 2 bond
of € 400 million at 35 basis points above the Euribor followed.
A new team was set up to strengthen the management of the banking book across risk classes within
the scope of Asset Liability Management.
The credit value book supports risk management
The Credit Value Book Department was created at the beginning of the second quarter. Its job is to
develop a high-quality, diversified credit risk portfolio made up of international corporate, financial
and sovereign risks. In addition, this unit acts as a product and market specialist in the credit risk
instruments field that supports RZB’s credit and country default risk management processes.
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RZB 2006
Raiffeisen Centrobank reasserts its strong market position
Raiffeisen Centrobank is RZB’s equity house. Its market share in the securities trading segment on the
Vienna stock exchange was approximately 13 per cent in 2006. It underscored its market leadership
in Vienna’s capital markets by winning some 70 per cent of the specialist and market maker mandates
awarded during the year. Besides its strong position in its Austrian home market, Raiffeisen Centrobank
is also well placed internationally due to memberships of the Frankfurt, Stuttgart, Zurich, Milan,
London, Budapest and Warsaw stock exchanges.
Outlook
The Proprietary Trading segment will continue to focus on enlarging its line of customer-orientated
products this year. For instance, the Fixed Income Division plans to extend its range to include swap
books denominated in RUB, RON and BGN. The Financial Engineering Division and the Commodities,
Credit and FX divisions also plan to extend their product lines.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Proprietary Trading
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137

Participations and Other
Participations and Other
RZB 2006
Besides non-banking activities, this segment mainly encompasses RZB’s extensive portfolio of equity
participations. These also include interests in associates accounted for using the equity method. In
addition, the segment encompasses other cross-segment activities, including in particular those of
Raiffeisen Zentralbank as parent company and of downstream management holding companies.
€000 2006 2005 Change
Net interest income 49,251 59,335 (17.0%)
Provisioning for impairment losses (4,269) 484 —
Net interest income after provisioning 44,981 59,819 (24.8%)
Net commission income 3,186 (5,081) —
Trading profit (2,758) (2,559) —
Net income from financial investments 105,080 23,368 350%
General administrative expenses (155,823) (151,360) —
Other operating profit 48,672 41,542 (17.2%)
Net income from deconsolidations 517,401 — —
Profit before tax 560,739 (34,271) —
Segment’s contribution to profit before tax 29.8% — —
Basis of assessment (including market risk) 3,582,952 2,995,654 19.6%
Average number of staff 3,053 2,633 16.0%
Cost/income ratio 157.7% 161.5% (3.8 pp)
Average equity 244,014 208,655 16.9%
Return on equity before tax 225.9% (16.4%) —
The principal reason for the increase in Profit before tax was the one-off effect of selling Raiffeisenbank
Ukraine and the Group’s minority stake in Kazakhstan’s Bank TuranAlem. The 17 per cent drop
in Interest income was due to a sightly reduced real Return on equity after the deduction of computed
return attributable to other business segments. General administrative expenses, consisting primarily
of the expenses incurred by non-bank subsidiaries and Group management costs, grew by a meagre
3 per cent to € 156 million. Because of one-off effects, the segment accounted for 30 per cent of RZB’s
Profit before tax.
Flughafen Wien AG, Raiffeisen Zentralbank and Slovakian private equity group Penta jointly set up
the TwoOne consortium, which won the bid to privatize 66 per cent of Kosice airport. The deal
closed on 25 October 2006. In addition, the stake in Unternehmens Invest Aktiengesellschaft held
by RZB Private Equity Holding AG was sold to its principal shareholder CROSS Industries AG in
December 2006.
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RZB 2006
There follows a description of the equity participations in this segment that are of most significance to
business policy and that make the biggest contribution to profits. The list of interests in the Notes (page
227 et seq) provides an overview of material equity participations as well as their size and structure
(direct and indirect stakes).
Accounted Recurring-premium Income of
UNIQA Group Austria
emn*
4,550
3,900
3,250
2,600
1,950
1,300
650
2,687.1
307.0
3,132.8
402.3
3,777.8
700.8
4,730.4
UNIQA Versicherungen AG. UNIQA Group
Austria is one of Central Europe’s leading
insurance groups. In the insurance market of
Central and Eastern Europe, it pursues a consistent
profit-orientated growth policy based on expansion
and internationalization. It thus entered the
Serbian and Ukrainian markets during 2006. As a
result, UNIQA is active in 15 CEE-countries. When
developing these markets, UNIQA and RZB give
each other mutual support within the scope of a
preferred partnership. UNIQA operates as a niche
insurer with clearly defined target groups in Italy,
Germany, Switzerland and Liechtenstein.
According to provisional figures, the UNIQA
Group’s accounted premium income in 2006 was
6.8 per cent up on the previous year at € 5,050
million. Foreign subsidiaries accounted for
€ 1,631 million of this total (growth of 21.3 per
cent), and the group’s foreign premium income
accounted for over 32 per cent of its consolidated premium. The group’s accounted premium income
in Austria grew by 1.0 per cent to € 3,419 million. According to provisional figures, the UNIQA
Group’s profit from ordinary activities in the financial year under review was 23.4 per cent up on the
previous year at € 235 million (2005: € 190.3 million).
0
2002
International component.
2003 2004 2005 2006
* Includes savings components of premium income from unit-linked and index-linked life insurance.
Raiffeisen Bausparkasse: Loan Allocations
and Financed Residential Units in Austria
emn
1,200
1,000
800
600
400
200
0
6,203
613
7,474
655
9,903
796
Loan allocations in Emn Financed residential units
1,344.8
10,406
1,020
5,050.0
1,631.0
Raiffeisen Bausparkasse Gesellschaft m.b.H.
Raiffeisen Bausparkasse took advantage of the
favourable conditions that prevailed in 2006. It
topped its high Loan allocations in 2005 by
another 3.2 per cent, taking them up to € 1.05
billion. This corresponds to a market share of
35 per cent. Brisk demand for loans generated
another rise in the company’s Lendings, which
grew by 3.5 per cent to € 5.03 billion (likewise
giving it a market share of 35 per cent). Raiffeisen
Bausparkasse concluded a total of 275,700
new building society contracts in Austria,
which translates into a market share of 32 per
cent. 316,000 building society contracts were
concluded in Slovakia, the Czech Republic, Croatia
and Romania; Raiffeisen Bausparkasse has a
subsidiary in each of these countries.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
11,063
1,053
Units
12,000
10,000
8,000
6,000
4,000
2,000
0
Participations and Other
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139

Participations and Other
RZB 2006
The balance sheet total of Raiffeisen Bausparkasse, whose financial statements are drawn up in
conformity with the provisions of HGB, came to € 6.2 billion (2005: € 6.2 billion). It recorded Equity
of € 161.5 million (2005: € 158.6 million). Profit before tax of € 13.1 million resulted in a Return on
equity before tax of 8.2 per cent. Raiffeisen Bausparkasse employed some 300 people in Austria.
Market Shares in the Austrian Investment Fund Market
As of 31.12.2006
Other*
42.81%
*Of which 5.53 pp
accounted for by other
investment fund companies
in the Raiffeisen Banking Group.
Raiffeisen Capital
Management
23.49%
Competitor #1
17.87%
Competitor #2
15.83%
Raiffeisen Kapitalanlage-Gesellschaft m.b.H.
(Raiffeisen Capital Management). Raiffeisen KAG
trades under the umbrella of the Raiffeisen Capital
Management (RCM) brand together with its three
wholly-owned subsidiaries Raiffeisen Immobilien
Kapitalanlage-GmbH, Raiffeisen Vermögensverwaltungsbank
AG and foreign sales company
Raiffeisen International Fund Advisory (RIFA).
Funds under management grew by about
€ 4.6 billion or 13.3 per cent to € 39.3 billion
due above all to the dynamic growth of RCM’s
foreign business operations. The company’s
business volumes thus grew nearly twice as
strongly as the Austrian investment fund market
as a whole (growth of 7.5 per cent). As a result, the company’s market share as market leader in
the Austrian fund market grew by 1.2 percentage points to 23.5 per cent (at year-end). Numerous
awards bore witness to RCM’s high quality standards in every business segment.
Last year, Raiffeisen Capital Management’s revenues grew by 41.5 per cent to € 242 million, and it
reported profit before tax (applying HGB) of € 9 million. Its balance sheet total grew to € 140 million
(2005: € 121 million), and its equity increased to € 25 million (2005: € 20 million). Its return on
equity before tax came to 35 per cent (2005: 60 per cent). The company employed an average of
230 people, including an average of 225 in Austria.
Raiffeisen Investment AG (RIAG). RIAG operates in the international M&A markets. It continued to
increase its lead in the Austrian and Central and Eastern European markets during 2006. In terms of
transaction quantities, it is the market leader in Southeastern Europe with a market share of about
10 per cent, ahead of the major international investment banks. The team in Moscow were given new
management to cope with the rapidly developing Russian M&A market.
After the privatization of Turkish steelworks Erdemir had successfully been concluded RIAG won a
mandate to help the Turkish government privatize Petkim, which is the country’s only petrochemical
refinery. Another transaction that involved Turkish companies was the takeover of ground handling
(airport services) at Budapest Airport by Celebi, a ground handling service provider operating inter
alia in Istanbul and Ankara. The company’s other mandates in Southeastern Europe included
the privatization of Telekom Srpske, advising UNIQA during its acquisition of Zepter Osiguranje,
supporting German pharmaceutical company Anzag during its acquisition of a pharmaceutical chain
in Romania, and acting as advisor during the sale of K&K Electronics, which is Bulgaria’s market
leader in electronic retailing.
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RZB 2006
With a workforce of 63 people, RIAG recorded gross fees of € 18.6 million and profit from ordinary
activities of € 6 million. It had a balance sheet total of € 23.0 million at year-end 2006.
Leipnik-Lundenburger Invest Beteiligungs AG (LLI). This holding company’s core business is the
management of its strategic interests in the food and beverage industries in the Flour and Milling,
Vending (hot beverages and food from vending machines) segment and in the Other (sugar,
specialities, fruit and casinos) segment. LLI is market leader in both segments in Austria and a number
of neighbouring countries – and where it is not, it is striving to become so. Moreover, it plans to
develop a region-wide presence in every CEE-country and in Southeastern Europe.
The group’s consolidated revenues increased to € 678.7 million in its 2005/06 financial year
(2004/05: € 619.0 million). Its profit before tax came to € 35.2 million (2004/05: € 36.0 million).
The LLI Group prepares its financial statements in conformity with IFRS. It had an average of 2,587
employees, 480 of whom were working in Austria. Its balance sheet total grew by 11.1 per cent to
€ 738.2 million. Its Return on equity before tax came to 12.6 per cent.
ÖPAG Pensionskassen AG. ÖPAG is one of the long-standing performance leaders in the pension
fund sector. It delivered performance of about 5 per cent in 2006 (with a range – depending on the
investment and risk community – of between 4 and 9 per cent), maintaining its leadership position. It
had market shares of about a quarter in terms of beneficiaries (persons entitled in expectancy and
benefit recipients) and pension fund contributions and a much higher market share of over 40 per cent
in terms of contracts. ÖPAG is at the top of the range in all performance indicators.
ÖVK Vorsorgekasse AG (ÖVK). ÖVK is a staff benefit fund that offers corporate staff benefit products
(within the scope of Austria’s new termination benefits system Abfertigung neu) to all companies
operating in Austria and to their employees via the sales networks of the Raiffeisen Banking Group
and UNIQA. At the end of 2006, ÖVK had funds under management of € 236 million, which was
74 per cent more than at the end of the previous year. ÖVK’s customer base grew by 32 per cent
to approximately 87,000 in 2006, giving it a market share of 28 per cent. The number of persons
entitled in expectancy grew by a good 36 per cent to 939,000. ÖVK outperformed Austria’s other
staff benefit funds in 2006, delivering a return of 4.6 per cent.
Raiffeisen Wohnbaubank AG (RWBB). This specialist bank issues tax-privileged home construction
bonds. Proceeds from their sale exceeded € 170 million in 2006, further strengthening RWBB’s
position as a key partner of the Raiffeisen Banking Group in the home construction project refinancing
field. The company prepares its financial statements in conformity with HGB. According to provisional
figures, it had a year-end balance sheet total of € 1,176 million (year-end 2005: € 1,059 million)
and eligible own funds of € 5.70 million (year-end 2005: € 5.65 million). Its profit from ordinary
activities came to € 1.03 million (2005: € 0.99 million), giving a return on equity before tax of
16.9 per cent (2005: 16.9 per cent).
Notartreuhandbank AG. This is the only bank authorized by the Österreichische Notariatskammer
(Austrian chamber of notaries) to manage the fiduciary deposits of the country’s notaries. Fiduciary
deposits under management by Notartreuhandbank in 2006 averaged € 813 million in some 54,000
accounts. This was 24 per cent or € 158 million more than in 2005.
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Participations and Other
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141

Participations and Other
RZB 2006
VISA-SERVICE Kreditkarten AG. VISA reported aggregate turnover of E 4.4 billion (increase of
9.1 per cent versus 2005) generated by 970,000 VISA cardholders at approximately 95,000 points
of sale. € 3.1 billion of that turnover was generated in Austria (increase of 7.5 per cent). This makes
VISA the highest-turnover credit card in Austria, where it has a market share of about 44 per cent (in
terms of cards issued). Recently introduced products – like the Urlaub mit VISA (Vacation with VISA)
tourism portal, the VISA Electron Prepaid card and the Verified by VISA standard for making secure
payments in the Internet – have been warmly received by customers and partners alike.
Europay Austria Zahlungsverkehrssysteme GmbH. Austria’s banks charged Europay with the task of
developing payment cards like the multifunctional Maestro Bankomat ATM card, the Quick electronic
purse and a raft of different MasterCards credit cards. Europay Austria services over 95,000
contractual partners. Payment volumes increased substantially during 2006, growing by 9.5 per cent
to € 16.1 billion. In detail, MasterCards generated turnover of € 3,72 billion (increase of 9.9 per cent),
the volume of payments made using the Maestro Bankomat ATM card increased by 9.4 per cent to
€ 12.25 billion, and payments made with the Quick system increased by 0.7 per cent to € 134.7 million.
Maestro SecureCode (secure payments in the Internet) and the prepaid segment also developed
well. Since September, it has been possible to check one’s purchases, view and download monthly
statements, make complaints, administer one’s card details and arrange repayments in instalments
using the Internet (online portal). All these services are available around the clock.
Raiffeisen evolution project development GmbH. This company and its subsidiaries are leading
property developers operating in Austria and Central and Eastern Europe. Raiffeisen evolution focuses
primarily on markets where the potential for growth and profits is high. For instance, it is currently
stepping up property developments and completions in Russia, Romania and Poland. It also plans
to enter the Ukrainian market. Extensive project development work last year has created the basis
for good project completions in 2007. The company is aiming for a total ongoing project volume
(proprietary projects and projects commissioned by third parties) in Austria and Central and Eastern
Europe of about € 800 million and annual output of about € 140 to € 200 million. During 2006
– and taking into account changes in the portfolio – the company employed an average of 160 people
(89 of whom were working in Austria) and posted revenues of € 132 million. The balance sheet total
of this company, which prepares IFRS-compliant financial statements, came to € 180 million at yearend,
and it recorded equity of € 77.7 million (provisional figures).
Raiffeisen Informatik GmbH. Raiffeisen Informatik is Austria’s second-largest provider of IT services
with a market share of 10.4 per cent. Together with its subsidiaries, it provides services in the IT
Operations, Outsourcing, Security Services, Software Solutions, Output Services and Client Management
fields. Among other things, it successfully completed two outsourcing projects within RBG (for
Raiffeisen Leasing and Raiffeisen Bausparkasse) and other projects for non-Group clients (Mannheimer
Versicherung, regional hospitals in Lower Austria). During the next few years, the company
intends to expand into the public administration and health services fields, and its is also planning to
internationalize further. Including the staff of subsidiaries, it had a total of 1,049 employees at yearend.
Raiffeisen Informatik recorded revenues of € 204.2 million in the year under review. It ended
the year with a balance sheet total of € 91.6 million and posted profit from ordinary activities of
€ 1.8 million.
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RZB 2006
F.J. Elsner & Co. GesmbH and F.J. Elsner Trading GesmbH. These two companies make up the
Handelshaus Elsner trading house, which engages in traditional East-West trade from its base in
Vienna in cooperation with its representative offices and branches in Beijing, Kiev, Miami, Moscow,
New York, Riga, Sofia and Varschez. F.J. Elsner & Co. GesmbH mainly carries on agency business
in the paper and cellulose sectors and trades in plywood, and it operates the only remaining
refrigerated warehouse in Bulgaria (which will mainly be used to store third-party produce once the
remaining stock has been sold off). The company had an average of 90 employees (nine of whom
were working in Austria). It recorded revenues of € 24.5 million and profit from ordinary activities
of € 67 thousand. Its return on equity before tax came to 4.4 per cent. Its balance sheet total shrank
to € 8.5 million. F.J. Elsner Trading GesmbH trades in steel and chemical products. In this business
segment, 36 employees (27 of whom were working in Austria) generated revenues of € 179.4 million,
profit from ordinary activities of € 0.9 million and a return on equity before tax of 18.3 per cent. The
company’s balance sheet total grew by 67 per cent to end the year at € 60.6 million. (All figures are
as of and for the period ended 30 June 2006 applying HGB.)
Strategic goals and outlook
In line with the principles currently underlying RZB’s equity participations strategy, the principal focus
in the Participations and Other segment during the 2007 financial year will again be on entering into
and holding long-term interests in companies whose activities lie within RZB’s core areas of business or
which are able, by virtue of their business activities, to support RZB in those areas.
Another focus in the Participations and Other segment will be on the subsidiaries and associates that
make products and render services for the Raiffeisen Banking Group as a whole. This must be seen
against the background of RZB’s role as the central institution within the Raiffeisen Banking Group
in Austria. If suitable opportunities arise, RZB will consider acquiring purely financial interests on a
case-by-case basis.
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Participations and Other
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143

Income statement RZB 2006
144
Consolidated Financial Statements
Income statement
€000
Notes 1/1–31/12
2006
1/1–31/12
2005
Due to changes in presentation, a reclassification between trading profit and net commission income amounting to
€ 199,805 thousand was made for 2005. Details see on page 168f.
Change
Interest income 5,245,019 3,516,633 49.1%
Interest expenses (3,058,526) (1,910,410) 60.1%
Net interest income (2) 2,186,493 1,606,223 36.1%
Provisioning for impairment losses (3) (346,431) (206,620) 67.7%
Net interest income after provisioning 1,840,062 1,399,603 31.5%
Commission income 1,372,801 969,054 41.7%
Commission expense (195,783) (150,212) 30.3%
Net commission income (4) 1,177,018 818,842 43.7%
Trading profit (5) 256,685 172,448 48.8%
Net income from financial investments and
current financial assets (6) 141,551 26,037 443.7%
General administrative expenses (7) (2,113,095) (1,574,027) 34.2%
Other operating profit/loss (8) 62,695 86,962 (27.9%)
Income from disposal of group assets 517,401 – –
Profit before tax 1,882,316 929,864 102.4%
Income taxes (9) (250,917) (225,220) 11.4%
Profit after tax 1,631,399 704,644 131.5%
Minority interests in profit (461,967) (253,780) 82.0%
Consolidated profit 1,169,432 450,864 159.4%
in €
Notes 1/1–31/12
2006
1/1–31/12
2005
Change
Earnings per share (10) 239.9 92.6 147.3
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RZB 2006 Consolidated Financial Statements
Profit development
Interim results
€000 H1 2003 H2 2003 H1 2004 H2 2004
Net interest income 385,588 477,285 515,651 608,216
Provisioning for impairment losses (73,157) (129,058) (93,689) (102,034)
Net interest income after provisioning 312,431 348,227 421,962 506,182
Net commission income 228,588 250,709 299,686 325,773
Trading profit 74,710 98,552 56,329 113,517
Net income from financial investments and
current financial assets (14,823) (33,990) 26,070 67,882
General administrative expenses (488,559) (528,852) (533,504) (662,556)
Other operating profit/loss 53,594 43,053 37,957 33,007
Profit before tax 165,940 177,700 308,500 383,806
Income taxes (33,371) (31,833) (44,542) (81,982)
Profit after tax 132,569 145,867 263,958 301,824
Minority interests in profit (29,668) (32,533) (39,323) (80,780)
Consolidated profit 102,901 113,334 224,636 221,043
€000 H1 2005 H2 2005 H1 2006 H2 2006
Net interest income 732,835 873,388 998,656 1,187,837
Provisioning for impairment losses (110,997) (95,623) (160,353) (186,078)
Net interest income after provisioning 621,838 777,765 838,303 1,001,759
Net commission income 382,392 436,450 531,704 645,314
Trading profit 40,300 132,147 148,355 108,330
Net income from financial investments and
current financial assets 21,855 4,182 (8,796) 150,347
General administrative expenses (688,713) (885,314) (936,933) (1,176,162)
Other operating profit/loss 55,110 31,852 6,360 56,335
Income from disposal of group assets – – – 517,401
Profit before tax 432,782 497,082 578,992 1,303,324
Income taxes (110,446) (114,774) (98,596) (152,321)
Profit after tax 322,336 382,308 480,396 1,151,003
Minority interests in profit (104,992) (148,788) (124,221) (337,746)
Consolidated profit 217,344 233,520 356,175 813,257
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145

Balance sheet RZB 2006
146
Balance sheet
Assets
€000
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Notes
31/12/2006
31/12/2005
Change
Cash reserve (11,30) 5,017,028 3,305,203 51.8%
Loans and advances to banks e (12,30,31) 32,005,923 29,646,533 8.0%
Loans and advances to customers (13,30,31) 53,105,675 39,613,302 34.1%
Impairment losses on loans and advances (14) (1,289,251) (1,078,550) 19.5%
Trading assets (15,30,31) 9,854,848 7,494,296 31.5%
Other current financial assets (16,30,31) 5,940,147 4,600,725 29.1%
Financial investments (17,30,31) 5,721,616 5,431,059 5.3%
Intangible fixed assets (18,20) 1,350,342 981,848 37.5%
Tangible fixed assets (19,20) 1,316,963 1,008,206 30.6%
Other assets (21,30,31) 2,605,558 2,860,877 (8.9%)
Total assets 115,628,849 93,863,499 23.2%
Equity and liabilities
€000
Notes
31/12/2006
31/12/2005
Change
Deposits from banks (22,30,31) 44,129,411 43,416,484 1.6%
Deposits from customers (23,30,31) 44,727,489 32,157,831 39.1%
Liabilities evidenced by paper (24,30) 11,322,460 6,217,210 82.1%
Provisions for liabilities and charges (25,31) 509,152 468,132 8.8%
Trading liabilities (26,30,31) 3,141,250 2,711,462 15.9%
Other liabilities (27,30,31) 2,266,279 2,312,021 (2.0%)
Subordinated capital (28,30,31) 2,895,608 1,630,638 77.6%
Equity (29) 6,637,200 4,949,721 34.1%
Consolidated equity 3,573,721 3,068,496 16.5%
Consolidated profit 1,169,432 450,864 159.4%
Minority interests 1,894,047 1,430,361 32.4%
Total equity and liabilities 115,628,849 93,863,499 23.2%

RZB 2006 Consolidated Financial Statements
Statement of changes in equity
€000
Subscribed
capital
Capital
reserves
Retained
earnings
Consolidated
profit
Minority
interests Total
Equity as of 1/1/2005 386,114 635,769 1,206,997 445,679 668,102 3,342,661
Capital increases – – – – 655,838 655,838
Transferred to retained earnings – – 372,916 (372,916) – –
Dividend payments – – – (72,763) (37,993) (110,756)
Consolidated profit – – – 450,864 253,780 704,644
Exchange differences – – 89,046 – 35,209 124,254
Capital hedge – – (7,813) – (3,844) (11,657)
Cash-flow hedge – – (91,965) – – (91,965)
Proceeds from the sale of equity
participations not leading to a
loss of control – – 113,292 – – 113,292
Dilution – – 231,969 – (124,558) 107,410
Changes in equity of companies
valued at-equity – – 120,872 – – 120,872
Other changes – – 11,299 – (16,171) (4,873)
Equity as of 31/12/2005 386,114 635,769 2,046,612 450,864 1,430,361 4,949,721
€000
Subscribed
capital
Capital
reserves
Retained
earnings
Consolidated
profit
Minority
interests Total
Equity as of 1/1/2006 386,114 635,769 2,046,612 450,864 1,430,361 4,949,721
Capital increases 18,349 131,631 – – 50,806 200,786
Transferred to retained earnings – – 344,426 (344,426) – –
Dividend payments – – – (106,438) (71,658) (178,096)
Consolidated profit – – – 1,169,432 461,967 1,631,398
Exchange differences – – (26,495) – 3,874 (22,621)
Capital hedge – – 55,174 – 23,598 78,772
Cash-flow hedges – – (79,299) – – (79,299)
Valuation result of available-forsale
financial assets
Changes in equity of companies
– – 13,352 – – 13,352
valued at-equity – – 10,409 – – 10,409
Other changes – – 37,679 – (4,901) 32,778
Equity as of 31/12/2006 404,463 767,400 2,401,858 1,169,432 1,894,047 6,637,200
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147

Statement of changes in equity RZB 2006
148
Subscribed capital
The issued share capital of Raiffeisen Zentralbank Österreich AG (Raiffeisen Zentralbank) amounted to € 404,463
thousand as of 31 December 2006. It was subdivided into 5,565,749 no-par shares, comprising 5,050,029 registered
ordinary shares and 515,720 non-voting bearer preference shares.
Retained earnings
Capital hedges comprise hedges for investments in economically independent sub-units in conformity with IAS 39.102.
The item valuation result of available-for-sale financial assets mainly contains net valuations of participations without
effecting income statement.
The following items recognised in retained earnings developed as follows:
€000
Exchange
differences
Capital
hedge
Cash flow
hedge
Valuation of a-f-s
financial assets
As of 1/1/2005 (101,395) (18,189) 3,566 –
Net changes in financial period 89,046 (7,813) (91,965) –
As of 31/12/2005 (12,349) (26,003) (88,398) –
€000
Exchange
differences
Capital
hedge
Cash flow
hedge
Valuation of a-f-s
financial assets
As of 1/1/2006 (12,349) (26,003) (88,398) –
Net changes in financial period (26,495) 55,174 (79,299) 13,352
As of 31/12/2006 (38,844) 29,171 (167,697) 13,352
Proceeds from the sale of equity participations not leading to a loss of control contains net income arising from the sale of
shares in fully consolidated Group members without their being excluded from the scope of consolidation. Dilution
comprises the effects of Raiffeisen Zentralbank’s waiver of rights in the course of capital increases at Raiffeisen
International Bank-Holding AG.
The item changes in equity of companies valued at-equity comprises the net measurements assignable to RZB on a
proportionate basis that require recognition in equity but not in the income statement. They derived predominantly from
available-for-sale portfolios of companies valued at-equity.
Other changes in retained earnings are due to changes in shares of group units and currency differences between the
income statement and the balance sheet. Moreover, deferred taxes on Cash flow hedge, amounting to € 19,853 thousand
(2005: € 23,811 thousand), are shown in other changes.
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RZB 2006 Consolidated Financial Statements
Cash flow statement
€000 2006 2005
Profit after tax
Non-cash positions in profit and transition to net cash from operating activities:
1,631,399 704,644
Write-downs/write-ups of tangible fixed assets and financial investments 199,984 179,452
Net provisioning for liabilities and charges and impairment losses 553,521 354,936
Gains (losses) from disposals of tangible fixed assets and financial investments (90,363) (22,613)
Other adjustments (net) (85,076) 37,042
Subtotal 2,209,465 1,253,460
Changes in assets and liabilities arising from operating activities after
corrections for non-cash positions:
Loans and advances to banks and customers (21,594,475) (21,058,628)
Trading assets (2,025,914) (2,335,642)
Other assets (1,266,383) (2,188,430)
Deposits from banks and customers 15,932,848 20,853,624
Liabilities evidenced by paper 5,208,145 3,108,247
Trading liabilities 467,632 788,322
Other liabilities (238,981) 78,166
Interest received 4,714,647 2,064,141
Dividends received 23,835 5,754
Interest paid (2,491,426) (898,530)
Income taxes paid (86,066) (59,343)
Net cash from operating activities 853,326 1,611,142
Proceeds from sale of:
Financial investments and equity participations 2,884,941 3,845,897
Tangible and intangible fixed assets 146,159 114,574
Inflows from disposal of group assets 569,369 –
Payments for purchase of:
Financial investments and equity participations (3,091,402) (4,195,960)
Tangible and intangible fixed assets (538,573) (395,099)
Outflows for acquisition of subsidiaries (473,985) (624,370)
Net cash from investing activities (503,491) (1,254,958)
Capital increases 200,786 655,838
Inflows/outflows of subordinated capital 1,264,970 287,727
Dividends paid (178,097) (110,756)
Net cash from financing activities 1,287,659 832,808
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149

Cash flow statement RZB 2006
150
€000 2006 2005
Cash and cash equivalents at the end of previous period 3,305,203 2,098,151
Net cash from operating activities 853,326 1,611,142
Net cash from investing activities (503,491) (1,254,958)
Net cash from financing activities 1,287,659 832,808
Effect of exchange rate changes 74,331 18,058
Cash and cash equivalents at the end of period 5,017,028 3,305,203
The cash flow statement shows the structure and changes in cash and cash equivalents during the financial year and is
broken down into three sections: operating activities, investing activities and financial activities.
Net cash from operating activities comprises inflows and outflows from loans and advances to banks and customers,
trading assets, and other assets. Further inflows and outflows from deposits from banks and customers, liabilities
evidenced by paper, trading liabilities and other liabilities are shown in operating activities. The interest and dividend
received from operating activities are also reflected in net cash from operating activities.
Net cash from investing activities shows inflows and outflows from financial investments, tangible and intangible assets,
proceeds from disposal of group assets, and payments for acquisition of subsidiaries. The impact on liquidity of acquired
and sold subsidiaries is shown on page 158.
Net cash from financing activities consists of inflows and outflows of equity and subordinated capital. This covers capital
increases, dividend payments, and changes in subordinated capital.
Cash and cash equivalents include the item cash reserve recognised in the balance sheet, which consists of cash in hand
and balances at central banks due at call. It does not include loans and advances to banks that are due at call, which
belong to operating activities.
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RZB 2006 Consolidated Financial Statements
Notes
Company
Raiffeisen Zentralbank Österreich AG acts as the central institution of the Austrian Raiffeisen Banking Group. It is
registered in the companies register at Handelsgericht Wien (Vienna commercial court) under number FN 58.882 t. The
company’s address is Am Stadtpark 9, A-1030 Vienna, Austria.
The Regional Raiffeisen Banks hold shares in Raiffeisen Zentralbank under the umbrella of a non-operational holding
company called Raiffeisen-Landesbanken-Holding GmbH (RLBHOLD). This company holds 81 per cent of Raiffeisen Zentralbank
via its subsidiary R-Landesbanken-Beteiligung GmbH and must thus be regarded as the ultimate parent of the
whole Group. The consolidated financial statements of RLBHOLD are lodged in the companies register in accordance
with Austrian disclosure regulations and published in the Wiener Zeitung newspaper.
Within Austria, Raiffeisen Zentralbank specializes in corporate and investment banking. It is one of Austria’s foremost
corporate finance and export and trade finance banks. Cash and asset management and treasury operations are further
fields of activity. RZB’s principal focus as a highly specialized “financial engineer” is on servicing Austrian and foreign
key accounts, multinationals and providers of financial services. The companies within the Group are also active in the
private banking, capital investment, finance leasing, real-estate, and banking-related IT service fields.
RZB also operates in Central and Eastern Europe (the CEE region) through banking subsidiaries known as Network
Banks. There were 17 Network Banks as of the balance-sheet date. They have a network of branches that spans the
region. In addition, RZB has branches, specialist subsidiaries and representative offices in the world’s major financial
centres, at selected locations in Western Europe and in a number of focal Asian markets.
These consolidated financial statements were signed by the Managing Board on 12 March 2007 and subsequently
submitted to the Supervisory Board for review.
Principles underlying the consolidated financial statements
Policies
The consolidated financial statements for the financial year 2006 and the comparative figures for the financial year
2005 were prepared in accordance with the International Financial Reporting Standards (IFRS) published by the International
Accounting Standards Board (IASB) and the international accounting standards adopted by the EU on the basis of
IAS Regulation (EC) 1606/2002 including the interpretations of the International Financial Reporting Interpretations
Committee (IFRIC/SIC) that were already applicable. All standards have been applied that have been published by the
IASB in the 2006 International Financial Reporting Standards as International Accounting Standards to be applied to
financial statements for 2006, and have been adopted by the EU. The consolidated financial statements satisfy the requirements
of § 245a UGB (Austrian commercial code) and § 59a BWG (Austrian banking act) regarding exempting
consolidated financial statements that comply with internationally accepted accounting principles.
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151

Notes RZB 2006
152
The consolidated financial statements are based on the IASB framework and on the following relevant IAS/IFRS:
IAS 1 Presentation of Financial Statements
IAS 2 Inventories
IAS 7 Cash Flow Statements
IAS 8 Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies
IAS 10 Events after the Balance Sheet Date
IAS 12 Income Taxes
IAS 14 Segment Reporting
IAS 16 Property, Plant and Equipment
IAS 17 Leases
IAS 18 Revenue
IAS 19 Employee Benefits
IAS 21 The Effects of Changes in Foreign Exchange Rates
IAS 23 Borrowing Costs
IAS 24 Related Party Disclosures
IAS 26 Accounting and Reporting by Retirement benefit Plans
IAS 27 Consolidated and Separate Financial Statements
IAS 28 Investments in Associates
IAS 29 Financial Reporting in Hyperinflationary Economies
IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions
IAS 32 Financial Instruments: Presentation
IAS 33 Earnings per Share
IAS 34 Interim Financial Reporting
IAS 36 Impairment of Assets
IAS 37 Provisions, Contingent Liabilities and Contingent Assets
IAS 38 Intangible Assets
IAS 39 Financial Instruments: Recognition and Measurement
IAS 40 Investment Property
IFRS 1 First-time Adoption of International Financial Reporting Standards
IFRS 2 Share-based Payment
IFRS 3 Business Combinations
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
IAS 11, IAS 20, IAS 31, IAS 41 and IFRS 4 are not applied as there were no relevant business transactions in the Group
during the financial year.
The consolidated financial statements are based on the reporting packages of all fully consolidated Group members
which are prepared according to uniform Group standards and IFRS rules. With the exception of six subsidiaries
accounted for as of and for the period ended 30 September or 31 October, all fully consolidated companies prepared
their annual financial statements as of and for the period ended 31 December. Figures in these financial statements are
stated in thousands of euros.
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RZB 2006 Consolidated Financial Statements
If estimates or assessments are necessary for accounting and measuring under IAS/IFRS rules, they are made in accordance
with the respective standards. They are based on past experience and other factors such as planning and expectations
or forecasts of future events that appear likely from our current perspective.
Associates and deferred taxes were not accounted for separately in the income statement and on the balance sheet.
Details are provided under the appropriate headings in the notes.
Published IFRS not in effect and hence not applied yet
IFRS 7 amends the rules for disclosure of financial instruments and takes effect for annual periods beginning on or after
1 January 2007. IFRS 7 will result in changes in financial reporting because IFRS 7 supersedes IAS 30 and the disclosure
requirements of IAS 32. IFRS 7 has not been applied yet in the consolidated financial statements. It is expected that
IAS 1.124 A – C and IFRIC 10, also adopted by the EU, will have no material effects on future consolidated financial
statements.
Consolidation methods
RZB consolidates all material subsidiaries, in which Raiffeisen Zentralbank Österreich AG directly or indirectly, holds
either more than 50 per cent of the voting rights or otherwise has control over the financial and operating policies.
Material interests in associated companies – on whose financial and operating polices the Group exerts a significant
influence – are valued at equity and reported under financial investments. Profit or losses occurring in companies valued
at-equity are shown net in net interest income. The same rules apply to companies valued at-equity (offsetting acquisition
costs against proportional fair net asset value) as apply to fully consolidated companies. On principle, IFRS financial
statements of associated companies are used.
Shareholdings in subsidiaries not included in the consolidated financial statements because of their minor significance
are shown under financial investments and are measured at amortised cost.
Business combinations
In the course of capital consolidation, all identifiable assets, liabilities and contingent liabilities of the subsidiary are
measured at their fair values on the acquisition date according to IFRS 3. The acquisition costs are offset with the proportional
net assets. The resulting positive differences are capitalised as goodwill. The goodwill is tested annually for impairment,
or more frequently, if events or changes in circumstances indicate impairment. Impairment test was carried out
on the basis of the updated respective calculation models of the individual subsidiaries. According to IAS 36.99, the
calculation model of the previous years can be used if the goodwill is unlikely to be lower. In view of the results, we
concluded that the goodwill is definitely higher at the balance sheet date than in the past years and there is no need for
impairment. Negative differences arising within initial consolidation will be recognised immediately in profit.
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153

Notes RZB 2006
154
Companies of RZB use brands to differentiate their services from the competition. According to IFRS 3, brands of acquired
companies have been recognised separately under the item intangible fixed assets. Brands have an undeterminable
useful life and are therefore not subject to scheduled amortisation. Brands have to be tested annually for impairment
and additionally whenever indications of impairment arise. The value of brands was determined using the comparable
historical cost approach, because neither immediately comparable transactions nor a market with observable prices were
available at the time of purchase price allocation. Documentation of brand-related marketing expenses in the previous
years was taken as the data base for the historical cost approach.
If customer contracts and associated customer relationships are acquired in a business combination, they must be recognised
separately from goodwill, if they are based on contractual or other rights. The acquired companies meet the criteria
for a separate recognition of contractual customer relationships for existing customers. The customer base is valued using
the multi-period excess earnings method based on projected future income and expenses allocable to the respective
customer base. The projections are based on planning figures.
Consolidation entries
Intra-group balances between parent company and subsidiaries and intra-group balances between subsidiaries are
eliminated in the consolidated accounts. Remaining temporary differences are recognised under other assets/other
liabilities.
Intra-group income and expenses are off-set and timing differences resulting from bank business transactions are shown
in net interest income. Other differences were shown in other operating profit/loss.
Intra-group results are eliminated insofar as they had a material effect on the items of the income statement. Bank business
transactions between Group members are usually executed in arm’s length transaction.
Consolidated group
The number of fully consolidated companies and companies valued at-equity changed as follows:
Fully consolidated Equity method
Number of units 2006 2005 2006 2005
As of 1/1 228 180 14 15
Included for the first time in the financial period 67 58 – –
Merged in the financial period (1) (2) – –
Excluded in the financial period (7) (8) – (1)
As of 31/12 287 228 14 14
Of the 287 entities in the Group, 158 were domiciled in Austria (2005: 148) and 129 abroad (2005: 80). They
comprised 23 banks, 179 financial institutions, 13 companies rendering banking-related ancillary services, 9 financial
holding companies and 63 other companies.
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RZB 2006 Consolidated Financial Statements
Because of their minor importance in giving a view of the Group’s assets, and financial and earnings position, 257
subsidiaries were not included in the consolidated financial statements. (2005: 276). They were recognised at amortised
cost under financial investments as interests in affiliated companies. The balance sheet total of the companies not included
in the Group came to less than 2 per cent of the Group’s aggregated balance sheet total.
A list of fully consolidated companies, associated companies and other equity participations may be found on pages
228ff.
In the financial year 2006, the following companies were included for the first time:
Name Share Included as of Fact
Banks
OAO “Impexbank”, Moscow (RU) 100.0% 1/5 Acquisition
eBanka a.s., Prague (CZ) 100.0% 1/11 Acquisition
Financial institutions
Raiffeisen Real Estate Management Zrt., Budapest (HU)
and 21 project companies
8 project companies of
Several dates Materiality
Raiffeisen-Leasing Real Estate, s.r.o, Prague (CZ) Several dates Foundation
3 project companies of Raiffeisen-Leasing d.o.o., Sarajevo (BA) 1/6 Foundation
21 project companies of Raiffeisen-Leasing Gesellschaft
m.b.H., Vienna (AT) Several dates
Foundation,
Materiality
LLC “Raiffeisen Leasing Aval”, Kiev (UA) 87.2% 1/6 Foundation
OOO “Vneshleasing”, Moscow (RU) 100.0% 1/5 Acquisition
Raiffeisen-Leasing sh.a., Tirana (AL) 93.8% 1/5 Foundation
Raiffeisen Rent doo, Belgrade (RS) 82.5% 30/3 Foundation
RI Finance (Jersey) Limited, St. Helier (JE) 0.0% 1/4 Foundation
RLOL ESTATE 1 d.o.o., Belgrade (RS) 82.5% 28/2 Foundation
RZB Finance Jersey IV Ltd, St. Helier (JE) 0.0% 1/4 Foundation
Vela Sp z o.o., Warsaw (PL) 0.0% 1/1 Foundation
Other companies
Raiffeisen International Liegenschaftsbesitz GmbH, Vienna (AT) 100.0% 1/5 Foundation
Raiffeisen International Liegenschaftsbesitz Holding GmbH,
Vienna (AT) 100.0% 1/5
Financial holding
Foundation
RI-RBHU Holding GmbH, Vienna (AT) 100.0% 1/12 Foundation
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Business combinations
The following table shows the assets and liabilities revalued as of the acquisition date:
€000 Impexbank* eBanka Total
Cash reserve 86,704 40,507 127,211
Loans and advances to banks 179,013 143,004 322,017
Loans and advances to customers 1,027,247 380,245 1,407,492
Other current financial assets 220,277 62,773 283,050
Financial investments 1,725 27,838 29,564
Intangible fixed assets 17,933 18,197 36,129
Brand 5,286 4,191 9,477
Retail customer base 12,158 4,683 16,841
Tangible fixed assets 109,987 11,489 121,475
Other assets 30,011 19,953 49,965
Assets 1,672,897 704,006 2,376,903
Deposits from banks (220,808) (6,343) (227,151)
Deposits from customers (1,049,170) (570,646) (1,619,816)
Liabilities evidenced by paper (218,369) (20,695) (239,064)
Provisions for liabilities and charges (3,461) (8,227) (11,688)
Trading liabilities (1,769) (834) (2,603)
Other liabilities (21,086) (30,021) (51,107)
Subordinated capital – (12,820) (12,820)
Net assets 158,235 54,420 212,655
Minority interests – – –
Net assets after minority interest 158,235 54,420 212,655
Acquisition costs (471,195) (130,000) (601,195)
Goodwill (312,960) (75,580) (388,540)
* Figures are on a consolidated level with Vneshleasing.
The effect of acquired subsidiaries on liquidity is shown as follows:
€000 Impexbank* eBanka Total
Acquisition costs (471,195) (130,000) (601,195)
Liquid funds 86,704 40,507 127,211
Cash flow for the acquisition of subsidiaries (384,491) (89,493) (473,985)
* Figures are on a consolidated level with Vneshleasing.
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RZB 2006 Consolidated Financial Statements
OAO “Impexbank” (Impexbank)
OAO “Impexbank”, Moscow, was consolidated in the Group for the first time on 1 May 2006. The contract to purchase
100 per cent of the shares in Impexbank was signed on 31 January 2006. The approvals required for the acquisition
were obtained from the Central Bank of Russia and antitrust authorities in Russia and in Austria by April 2006, the closing
took place on 28 April 2006. The total purchase price for OAO “Impexbank” amounted to USD 563,200 thousand.
As of the acquisition date, Impexbank had a balance sheet total of € 1,664,443 thousand, and its equity was
€ 155,743 thousand. Due to the takeover of Impexbank, OOO “Vneshleasing“, Moscow, a company operating in
equipment leasing, was also consolidated for the first time as of 1 May 2006. The company reported a balance sheet
total of € 34,155 thousand and equity of € 2,496 thousand at the acquisition date.
In the context of allocating the purchase price pursuant to IFRS 3, the Impexbank brand and the existing customer base in
the retail segment were identified as intangible fixed assets separately shown in the balance sheet. The value of the
brand amounted to € 5,286 thousand as of 1 May 2006. The future business strategy is geared to integrating the
customer structure of Impexbank into that of the Raiffeisen International Group, which will lead to a corresponding
change of the current customer base. The acquisition cost of the existing customer base in the retail segment totalled
€ 12,158 thousand as of 1 May 2006. The amortisation period was set at five years.
eBanka a.s. (eBanka)
eBanka a.s., Prague, was included in the consolidated financial accounts as of 1 November 2006 for the first time. The
contract to purchase 100 per cent of the shares in eBanka which operates in the retail business was signed in July 2006.
The deal closed at the end of October 2006. The purchase price for the acquisition of eBanka was € 130,000 thousand.
As of the acquisition date, the balance sheet total of eBanka amounted to € 704,006 thousand, and its equity was
€ 54,420 thousand. In the context of allocating the purchase price pursuant to IFRS 3, intangible fixed assets were identified
as follows: The value of the eBanka brand was € 4,191 thousand as of 1 November 2006. The acquisition cost of
the existing customer base in the retail segment came to € 4,683 thousand. The existing customer base is amortised over
five years.
Other included units
Some new companies were founded in the leasing business: Raiffeisen-Leasing sh.a., Tirana, and LLC “Raiffeisen Leasing
Aval“, Kiev, will focus at first on movables and motor vehicle leasing. Two other new companies were founded, both
leasing specialists in Serbia: Raiffeisen Rent doo, Belgrade, will engage in operating leasing, and RLOL ESTATE 1 d.o.o.,
Belgrade, is active in real estate leasing. In Poland, Vela SP z o.o, Warsaw, was founded in connection with a securitisation
deal for Polish leasing receivables. In the financial year eight newly founded project companies of Raiffeisen-Leasing
Real-Estate s.r.o., Prague, were included for the first time. These companies operate in project finance leasing of real
estate.
Raiffeisen Real Estate Management Zrt., Budapest, has been operating on the Hungarian market for several years in
property development and exploitation. Because of its rising importance, the company together with its projects spun off
as subsidiaries was consolidated for the first time in 2006. The business volume of this group amounts to € 124,248
thousand.
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During the financial year 2006, 21 leasing companies of Raiffeisen-Leasing Gesellschaft m.b.H., Vienna, operating in
real estate projects, were consolidated for the first time. They are newly founded companies and companies which
started business in 2006, respectively.
In April 2006, two companies were founded in Jersey, RI Finance (Jersey) Limited, St. Helier, and RZB Finance Jersey IV
Ltd., St. Helier. New hybrid Tier 1 capital amounting to € 500,000 thousand was made available to the Group.
Mergers
In the financial year, RLRE Zeus Property, s.r.o., Prague, was merged with RLRE Orion Property s.r.o., Prague, due to the
strong economic involvements in a real estate project.
Excluded units
JSCB Raiffeisenbank Ukraine (RBUA)
In the financial year, a 100 per cent share in JSCB Raiffeisenbank Ukraine, Kiev, was sold to the Hungarian OTP Bank
Zrt., Budapest. At the time of deconsolidation, RBUA reported a balance sheet total of € 1,591,567 thousand and had
42 business outlets. The selling price totalled € 650,000 thousand. The transaction closed in November 2006 and RZB
realised gains on the disposal of group assets of € 486,479 thousand as of 1 November 2006, the date of deconsolidation.
Premier Outlet Center Kft. (POC), POCM Kft.
In December 2006, a 40.6 per cent shareholding in Premier Outlet Center Kft., Budapest, was sold to AVIVA Central
European Property Fund (Morley Fund Management). The selling price totalled € 16,957 thousand for the 40.6 per cent
shareholding in POC. The income from the disposal of group assets as of 31 December 2006 amounted to € 16,484
thousand. A real estate management subsidiary, POCM Kft., Budapest, was sold together with POC.
SCTO Fogarasi UT Kft.
In December 2006, Raiffeisen Ingatlan Vagyonkezelö Kft. sold its 75.3 per cent share in SCTO Fogarasi UT Kft. to
OROC Group, Endurance Asset S.a.r.l, Luxembourg. The selling price for this shareholding came to € 3,709 thousand
and income from disposal of group assets was € 3,591 thousand.
Raiffeisen-Leasing ALPHA d.o.o.
End of September 2006, Raiffeisen-Leasing Gesellschaft m.b.H., (RLGMBH) Vienna, sold its share of 100 per cent in
Raiffeisen-Leasing ALPHA d.o.o., Ljubljana, to Immoeast AG, Vienna. The selling price was € 15,570 thousand. The
income from disposal of group assets amounted to € 5,960 thousand.
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RZB 2006 Consolidated Financial Statements
Raiffeisen-Leasing BETA d.o.o.
Raiffeisen-Leasing Gesellschaft m.b.H., Vienna, sold its 100 per cent shareholding in Raiffeisen-Leasing BETA d.o.o.,
Ljubljana, to Immoeast AG, Vienna, with a selling price of € 6,941 thousand. The income from disposal of group assets
came to € 2,453 thousand.
Raiffeisen-Reisebüro Gesellschaft m.b.H. (RRBG)
As of the beginning of 2006, Raiffeisen-Reisebüro Gesellschaft m.b.H., Vienna, a 75 per cent shareholding of Raiffeisen-
Invest Gesellschaft m.b.H.,Vienna, was sold and excluded from the consolidated group. The selling price was € 2,300
thousand. The income from disposal of group assets as of 1 January, 2006 was € 2,437 thousand.
The following table shows assets and liabilities of the sold subsidiaries as of the disposal date:
€000 RBUA REM* RLGMBH** RRBG Total
Cash reserve (126,070) – – (38) (126,108)
Loans and advances to banks (102,572) (2,093) (90) (67) (104,822)
Loans and advances to customers (1,324,226) – (82) – (1,324,309)
Trading assets (6) – – – (6)
Other current financial assets (20,228) – – – (20,228)
Financial investments (1) – – (1,044) (1,046)
Intangible fixed assets (13,831) (2) – (234) (14,067)
Tangible fixed assets (1,945) (45,303) (13,872) (990) (62,110)
Other assets (2,688) (2,718) (198) (8,003) (13,607)
Assets (1,591,567) (50,116) (14,243) (10,377) (1,666,303)
Deposits from banks 761,711 41,425 – 4,706 807,842
Deposits from customers 615,962 5,829 – – 621,791
Liabilites evidenced by paper 2,311 – – – 2,311
Provisions for liabilities and charges 14,435 – – 2,161 16,596
Other liabilities 6,540 1,555 143 3,694 11,932
Subordinated capital 27,086 – – – 27,086
Net assets (163,522) (1,307) (14,100) 183 (178,746)
Minority interests – 715 – (46) 669
Net assets after minority interest (163,522) (592) (14,100) 137 (178,077)
Selling price 650,000 20,666 22,510 2,300 695,477
Income from disposal of group assets 486,479 20,075 8,410 2,437 517,401
* REM: Subgroup Premier Outlet Center Kft. and SCTO Fogarasi UT Kft.
**RLGMBH: 2 subsidiaries of Raiffeisen-Leasing Gesellschaft m.b.H., which are Raiffeisen-Leasing ALPHA d.o.o. and Raiffeisen-Leasing BETA d.o.o.
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The effect of sold subsidiaries on liquidity is shown as follows:
€000 RBUA REM* RLGMBH** RRBG Total
Selling price 650,000 20,666 22,510 2,300 695,477
Liquid funds (126,070) – – (38) (126,108)
Net cash from sale of subsidiaries 523,930 20,666 22,510 2,262 569,369
* REM: Subgroup Premier Outlet Center Kft. and SCTO Fogarasi UT Kft.
** RLGMBH: 2 subsidiaries of Raiffeisen-Leasing Gesellschaft m.b.H., which are Raiffeisen-Leasing ALPHA d.o.o. and Raiffeisen-Leasing BETA d.o.o.
Foreign currency translation
Financial statements of fully consolidated companies prepared in foreign currencies were translated into euros employing
the modified current rate method in accordance with IAS 21. Equity was translated at historical exchange rates while all
other assets, liabilities and the notes were translated at the prevailing foreign exchange rates as of the balance sheet
date.
Differences arising from the translation of equity (historical exchange rates) were offset against retained earnings and not
recognised in the income statement. The items of the income statement were translated at the average exchange rates
during the year calculated on the basis of month-end rates. Differences arising between the exchange rate as of the balance
sheet date and the average exchange rate applied in the income statement were offset against equity and not
recognised in the income statement.
Because of changes in economic conditions, IAS 29 (financial reporting in hyperinflationary economies) has no longer
been applied in Priorbank OAO, Minsk, since 1 January 2006.
In the case of seven subsidiaries not headquartered in the Euro zone, the euro was the reporting currency for measurement
purposes given the economic substance of the underlying transactions, and the US-dollar was the reporting currency
in the case of two companies. Raiffeisen Leasing SRL, Bucharest, changed from functional currency (euro) to local
currency (Romanian Leu) as reporting currency because leasing contracts are mainly made in the local currency.
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RZB 2006 Consolidated Financial Statements
The following exchanges rates were used for currency translation:
Capital hedge
2006 2005
Rates in units per € As of 31/12 Average As of 31/12 Average
Albanian lek (ALL) 123.850 123.079 122.580 124.216
Belarusian rouble (BYR) 2,817.310 2,689.745 2,546.350 2,692.559
Bosnian marka (BAM) 1.956 1.956 1.956 1.956
Bulgarian lev (BGN) 1.956 1.956 1.956 1.956
Croatian kuna (HRK) 7.350 7.325 7.372 7.414
Czech koruna (CZK) 27.485 28.322 29.000 29.846
Hungarian forint (HUF) 251.770 263.247 252.870 248.394
Kazakh tenge (KZT) 167.120 158.429 158.540 166.188
Polish zloty (PLN) 3.831 3.897 3.860 4.027
Romanian leu (RON) 3.384 3.525 3.680 3.648
Russian rouble (RUB) 34.680 34.148 33.950 35.270
Serbian dinar (RSD) 79.000 84.169 85.500 82.863
Slovenian tolar (SIT) 239.640 239.588 239.500 239.579
Slovak koruna (SKK) 34.435 37.149 37.880 38.591
Ukrainian hryvna (UAH) 6.651 6.327 5.972 6.405
US dollar (USD) 1.317 1.257 1.180 1.247
In the Group, hedges of investments in economically independent sub-units (IAS 39.102) were made in order to reduce
differences arising from the translation of equity. Liabilities in foreign currency, currency options, currency futures and
currency swaps are mainly used as hedging instruments. The resulting gains and losses from currency translation are
shown in equity without affecting profit and are separately shown in the statement of changes in equity, insofar as the
hedging relation is effective. The ineffective part of this hedge relation is recognised in profit. The related interest components
are shown in net interest income.
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Accounting and valuation principles
Financial instruments: Recognition and measurement (IAS 39)
A financial instrument is defined as any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity. In IFRS balance sheets, the following five categories are distinguished:
1. financial assets or liabilities recognised at fair value via the income statement
a. Trading assets/ liabilities
b. Designated financial instruments at fair value
2. financial instruments held to maturity
3. loans and advances
4. available-for-sale financial assets
5. liabilities.
1. Financial assets or liabilities recognised at fair value via the income statement
a. Trading assets/liabilities
Trading assets/liabilities are acquired or incurred principally for the purpose of generating profit from short-term fluctuations
in market prices. Securities (including short selling of securities) and derivative financial instruments held for trading
are recognised at their fair values. If securities are listed, the fair value is based on stock exchange prices. Where such
prices are not available, internal prices based on present value calculations for originated financial instruments and
futures or option pricing models for options are applied. Present value calculations are based on the zero-coupon curve.
As option price formulas Black-Scholes 1972, Black 1976 or Garman-Kohlhagen are applied depending on the kind of
option.
Derivative financial instruments held for trading are also shown under trading assets or trading liabilities. Positive fair
values including accrued interest (dirty price) are shown under trading assets. Negative fair values are recorded under
trading liabilities. Positive and negative fair values are not netted. Changes in dirty prices are recognised in the income
statement under trading profit/loss.
b. Designated financial instruments at fair value
This category comprises mainly all those financial instruments which are irrevocable designated at fair value (so called
fair value option) upon initial recognition in the balance sheet independent of the intention to trade. An entity may use
this designation only when doing so results in more relevant information, because a group of financial assets, financial
liabilities or both is managed and its performance is evaluated on a fair value basis. These instruments are debt securities
and other fixed-interest securities or equities and other variable-yield securities.
These instruments are measured at fair value according to IAS 39. They are stated under the balance sheet item other
current financial assets, current income is shown under net interest income, and valuation gains and losses and proceeds
from sale are stated in net income from financial investments and other current financial assets.
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RZB 2006 Consolidated Financial Statements
2. Financial instruments held to maturity
Non-derivative financial assets (securities with fixed or determinable payments and fixed maturities) purchased with the
intention and ability to hold them to maturity are reported under the balance sheet item financial investments. They are
recognised at amortised cost and differences to the settlement value are amortised over the term to maturity and recognised
in the income statement under net interest income. Coupon payments are also recognised under net interest income.
A sale of these financial instruments is only allowed in cases as stated in IAS 39.
3. Loans and advances
Loans and advances are recognised at their nominal value without deduction of impairment losses. Accrued interest is
recognised in the income statement if there is a high probability that it would be received. Moreover, debt instruments
are also stated there if there is no active market.
4. Available-for-sale financial assets
The category of financial assets available-for-sale contains those financial instruments (mainly equity participations for
which there are no active market) that did not qualify or any of the other three categories. They are stated at fair value, if
a fair value is reliably measurable. Valuation differences are shown directly in equity and only recognised in the income
statement if there is an objective indication of impairment. Only in the case of debt instruments such impairments are
recognised in the income statement. In case of equity instruments, such impairments are booked versus equity. This kind
of financial instruments is reported under financial investments or other current financial assets.
5. Liabilities
Liabilities are recognised at amortised cost, and differences to the settlement value are amortised over the term to maturity
and recognised in the income statement under net interest income. Discounted debt securities and similar obligations are
measured at their present value.
Hedging
Derivative instruments not held for trading because acquired for hedging purposes are subdivided into the following
categories reflecting differing modes of recognition on the IFRS-compliant balance sheet:
1. Fair value hedge according to IAS 39
Interest-rate swaps that satisfy the prerequisites for hedge accounting are contracted to hedge against the interest-rate
risks arising from loans and liabilities evidenced by paper. Hedges are formally documented, continuously assessed, and
rated to be highly effective. In other words, throughout the term of a hedge, one can assume that changes in the fair
value of a hedged item will be nearly completely offset by a change in the fair value of the hedging instrument and that
the actual outcome will lie within a band of 80 to 125 per cent.
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Derivative instruments held to hedge the fair values of individual balance sheet items (except trading assets/liabilities) are
recognised at their fair values (dirty prices) under other assets (positive dirty prices) or other liabilities (negative dirty
prices). Changes in the carrying amounts of hedged items (assets or liabilities) are allocated directly to the corresponding
balance sheet items and reported separately in the notes. Both the effect of changes in the carrying values of positions
requiring hedging and the effects of changes in the clean prices of the derivative instruments are recorded under other
operating profit/loss (net result from hedge accounting).
2. Cash-flow hedge
Derivative instruments held to hedge against the risk of fluctuating cash flows arising from specific variable interest-rate
items were recognised as follows: The hedging instrument was recognised at fair value; changes in its clean price are
recorded as a separate item in equity and not recognised in the income statement. In the financial year 2006 –
different to 2005 –, currency-based derivative financial instruments in connection with Cash flow hedge are not applied.
3. Other derivative instruments
Derivative instruments held to hedge against market risks (except trading assets/liabilities) that are based on an inhomogeneous
portfolio do not satisfy the requirements for hedge accounting according to IAS 39. They are captured as
follows: Positive dirty prices are recognised under other assets, and negative dirty prices are recorded under other
liabilities. The effect of remeasuring those derivative instruments on a clean-price basis is recognised under other
operating profit/loss (net income from other derivative instruments); interest is recorded under net interest income.
Offsetting
In the case of identity of borrower and lender, offsetting of loans and liabilities with matching maturities and currencies
occurs, only if a legal right, by contract or otherwise exists and offsetting is in line with the actually expected course of
the business.
Cash reserve
The cash reserve includes cash on hand and balances at central banks that are due on call. They are shown with their
nominal value.
Impairment losses on loans and advances
Credit risk is accounted for by making specific impairment provisions and portfolio-based impairment provisions. The
latter comprise impairment provisions for portfolios of loans with identical risk profiles that may be compiled under
certain conditions. In the retail segment, provisions are built according to product portfolio and past due days. Specific
and portfolio-based impairment provisions are not netted against corresponding receivables but are stated separately in
the balance sheet.
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For credit risks related to loans and advances to customers and banks, provisions are made in the amount of expected
loss according to homogeneous Group-wide standards. Risk of loss is deemed to exist if the discounted projected
repayment amounts and interest payments are below the carrying value of the loans, taking collateral into account.
Portfolio-based impairments are calculated according to valuation models that estimate expected future cash flow for the
loans in the respective loan portfolio based on loss experience history. For retail portfolios without a documented loss
history of their own, peer group benchmark figures serve as a comparative base.
The entirety of the provision for impairment losses arising from on-balance-sheet loans (individual loan loss provisions and
portfolio-based provisions) is shown as a separate item on the assets side of the balance sheet, below loans and
advances to banks and customers. The provision for impairment losses arising from off-balance-sheet transactions is
recorded under provisions for liabilities and charges.
Genuine sale and repurchase agreements
In a genuine sale and repurchase transaction, the transferor sells assets to a third party and agrees at the same time to
repurchase these assets at an agreed price and time. The assets remain in the balance sheet of the transferor and are
measured like the balance sheet item where they are shown. Cash inflows arising from a sale and repurchase transaction
are recognised in the balance sheet depending on the counterparty as deposits from banks or deposits from customers.
Under reverse repurchase agreements, assets are acquired with the obligation to sell them in the future. Cash outflows
arising from reverse repurchase agreements are recorded in the balance sheet under loans and advances to banks or
loans and advances to customers.
Interest expense from sale and repurchase agreements and interest income from reverse sale and repurchase agreements
are accrued in a straight line over their term to maturity and are shown under net interest income.
Finance lease business
A finance lease is a lease that transfers substantially all the risks and rewards incident to ownership of an asset to the
lessee. Pursuant to IAS 17, the present value of all future lease payments and any residual values are shown as loans
and advances to banks or customers in the balance sheet of the lessor. The lessee recognises the assets as tangible fixed
assets to which refer a corresponding leasing liability.
Equity participations
Shareholdings in subsidiaries not included in the consolidated financial statements because of their minor significance
and shareholdings in companies that are not valued at-equity are shown under financial investments and are measured
at amortised cost if no shares prices are available.
Other shareholdings are categorised as designated financial instruments at the balance sheet date if reliably measurable
market prices are available and are measured at fair value. Changes in value are therefore recognised in profit. If there
is no active market for other interests or if a fair value is not reliably measurable, they are categorised as available for
sale. The changes in value are directly shown in equity without effecting income statement.
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Intangible fixed assets
Under this item, internally developed and acquired software, brand rights, acquired customer bases and especially
goodwill are stated. Goodwill and other intangible fixed assets without definite useful lives are tested for impairment at
every balance sheet date. Whenever events or changes in circumstances indicate that the expected benefit no longer
exists, impairment must be made pursuant to IFRS 3.
Acquired intangible fixed assets (software, and customer base) with determinable useful lives are capitalised at cost and
amortised over their estimated useful lives.
Internally developed intangible fixed assets comprise without exemption software. Software is capitalised if it is probable
that the future economic benefits attributable to the asset will accrue to the enterprise and the cost of the asset can be
measured reliably. The useful life of software is between four and six years and may be longer for major software projects.
The useful life of the acquired customer base was set at seven years for corporate customers and for the acquired
customer base in the retail segment of Raiffeisen Bank Aval at 20 years and for Impexbank and eBanka at five years.
Tangible fixed assets
Tangible fixed assets are measured at cost of acquisition or conversion less scheduled depreciation. The straight-line
method is used for depreciation and is based on the following useful life figures:
Useful life Years
Buildings 25 – 50
Office furniture and equipment 5 – 10
Hardware 3 – 5
If a permanent impairment was to be expected, extraordinary write-downs were carried out. In the event that the reason
for the write-down no longer applies, a write-up will take place up to the amount of the amortised cost of the asset.
Investment property
Investment property is reported at amortised cost using the cost model permitted by IAS 40 and is shown under fixed
assets because of minor importance. Income resulting from investment property is shown in other operating profit/loss.
Operating leasing
An operating lease exists if the lessor bears all risks and enjoys the rewards of ownership. The leased assets are reported
by the lessor under fixed assets and depreciated in accordance with the principles applicable to the type of fixed assets
involved.
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Inventory
Inventories are measured at the lower of cost or net realisable value. Write-downs are made if the acquisition cost is
above the net realisable value as of the balance sheet date or if limited usage or longer periods for storage has impaired
the value of the inventory.
Provisions for liabilities and charges
All defined benefit plans relating to so-called social capital (Provisions for pensions, provisions for severance payments
provisions for anniversary bonuses) are measured using the Projected Unit Credit Method in accordance with IAS 19 –
Employee Benefits.
The actuarial calculation of pension obligations for active employees is based on an interest rate of 4.5 per cent per year
(2005: 4.25 per cent per year) and an unchanged effective salary increase of 3.0 per cent per year and an unchanged
individual career trend of 1.5 per cent per year, respectively. The parameters for retired employees are an interest rate of
4.5 per cent per year (2005: 4.25 per cent per year) and an expected increase in retirement benefits of 2.0 per cent per
year. Calculations are based on an assumed retirement age of 65 years and are subject to transitional statutory regulations
and special arrangements in individual contracts.
Actuarial gains or losses calculated for pension obligations are recognised immediately in profit. The right to vote according
to IAS 19.92 (“corridor method”) was not applied.
The actuarial computation of severance payments and anniversary bonuses is based on an interest rate of 4.5 per cent
per year (2005: 4.25 per cent per year), an unchanged average increase in salary of 3.0 per cent per year and an
unchanged individual career trend of 2.0 per cent per year.
The biometrical basis for the calculation of provisions for pensions, severance payments and anniversary bonuses is
provided by AVÖ 1999-P-Rechnungsgrundlagen für die Pensionsversicherung (Computational Framework for Pension
Insurance) – Pagler & Pagler, using the variant for salaried employees.
Other provisions are made to uncertain liabilities to third parties in the amount of the expected claim. These provisions
are not discounted because the resulting interest effect is immaterial.
Defined contribution plans
Under defined contribution plans, the company pays fixed contributions into a separate entity (a fund). These payments
are recognised as staff expense in the income statement.
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Notes RZB 2006
168
Subordinated capital
The balance sheet item comprises subordinated capital and supplementary capital. Liabilities, documented or undocumented,
are subordinated if, in the event of liquidation or bankruptcy, they can only be met after the claims of the other –
not subordinated – creditors have been satisfied. Supplementary capital contains all paid in own funds which are
available for the company for more than eight years with the creditor renouncing prior notice, for which interest is paid
only from the profit (before reserve transactions) and which can be repaid in the case of solvency after all other debtors
are satisfied.
Share-based remuneration
In the subsidiary Raiffeisen International Bank-Holding AG, the Managing Board obtained Supervisory Board approval to
institute a share incentive program (SIP) offering performance-based allotments of company shares for eligible employees
at home and abroad for a given period of time. All Managing Board members of Raiffeisen International Bank-Holding
AG managing board members of associated bank subsidiaries, and selected upper management personnel of Raiffeisen
International Bank-Holding AG and its affiliated enterprises are eligible to participate.
The number of common shares in Raiffeisen International Bank-Holding AG to be actually transferred will depend on
meeting two performance criteria: the targeted average return on equity (ROE) and the total shareholder return (TSR) for
Raiffeisen International Bank-Holding AG shares in relation to TSRs of shares in the DJ Euro Stoxx Banks-index after a
three-year holding period. Moreover, beneficiaries have to be in active service for Raiffeisen International. SIP
participation is voluntary.
All share-based remunerations are recognised according to IFRS 2 (Share-based payment) as staff expenses and booked
directly via equity.
Net interest income
Interest and similar income mainly includes interest income on loans and advances to banks and customers and from
fixed-interest securities. In addition current income from shares and other variable-yield securities (especially dividends),
income from equity participations and from investments accounted for at-equity, and similar income calculated as interest
are also reported under interest and similar income. Interest paid and similar charges mainly include interest paid on
deposits from banks and customers and on liabilities evidenced by paper and subordinated capital. Interest income and
interest expenses are accrued.
Net commission income
Net commission income mainly includes income and expenses arising from payment transfers, credit business and foreign
exchange business. Commission income and expenses are accrued in the reporting period.
As of 1 January 2006, trading margins achieved in foreign exchange business with customers have been split into a
trader margin and a customer margin in order to increase transparency, with the customer margins from these transactions
being stated in net commission income, and the trader margin continuing to be shown in trading profit. Until
31 December 2005, these customer margins are disclosed in trading profit. The comparative figures for 2005 were
adjusted.
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RZB 2006 Consolidated Financial Statements
Trading profit
Trading profit comprises the customer margins resulting from the foreign exchange business, results due to foreign
exchange-revaluations and all realised and unrealised gains and losses from financial assets and liabilities at fair value.
In addition, it includes all interest and dividend income attributable to trading activities and related refinancing costs.
General administrative expenses
General administrative expenses include staff and other administrative expenses as well as amortisation/depreciation
and impairment losses for fixed and intangible fixed assets.
Income taxes
Deferred taxes are recognised and calculated in accordance with IAS 12 applying the liability method. Deferred taxes
are based on all temporary differences that result from comparing the carrying amounts of assets and liabilities in the
IFRS accounts with the tax bases of assets and liabilities and will reverse in the future. Deferred taxes are calculated by
using tax rates applicable in the countries concerned. A deferred tax asset should also be recognised on tax loss carry-
forwards if it is probable that sufficient taxable profit will be available in the future (on principle 5 years) against which
the tax loss carry-forwards can be utilised within the same entity. Deferred tax assets and deferred tax liabilities within the
same entity are netted.
Income tax credits and income tax obligations were recorded separately under other assets and tax provisions
respectively.
Fiduciary business
According to IFRS 30 transactions arising from the holding and placing of assets on behalf of third parties are not shown
in the balance sheet. Fees arising from these transactions are shown under net commission income.
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169

Notes to the income statement RZB 2006
170
Notes to the income statement
(1) Segment reporting
Segment reporting by business segment
The basis for primary segment reporting according to IAS 14 is RZB’s internal management reporting system which is
mainly customer-oriented. Business is divided into the following segments:
• Corporate customers
• Financial institutions and public sector
• Retail customers
• Proprietary trading
• Participations and other.
The corporate customers segment encompasses business with Austria’s ”Top 1,000”, with large corporates and mid
market companies from Central and Eastern Europe (CEE) as well as with companies from other countries that are operating
in the CEE region – , including especially multinationals. The criteria are key ratios like revenues, profit and number
of employees. Small and medium-sized companies belong to corporate customers if their annual sales are at least € 5
million or clearly relate to project or trade finance. All other small and medium-sized enterprises are included in the small
enterprises sub-segment of the retail segment.
The financial institutions and public sector segment encompasses business with banks, financial service providers, insurers
and public sector entities.
Business with banks, providers of financial services, and insurance companies is reported in this segment (financial institutions).
This excludes transactions which are connected to the proprietary trading with financial instruments respectively
invested within the asset and liability management as those are allocated to the segment treasury. The banks sub-segment
encompasses national and international commercial, retail and private banks. Banks also include supranational institutions
like the World Bank, the European Bank for Reconstruction and Development (EBRD), the European Investment Bank
(EIB), and the International Monetary Fund (IMF). Financial service providers include brokers and asset managers such as
investment banks, investment fund companies, leasing companies as well as companies operating in businesses related
to the credit industry. Insurance companies consist of all kind of insurers and reinsurers. They include property, health, life
and pension insurers.
The public sector comprises all public sector entities such as ministries, provinces, municipalities and similar public corporations.
Embassies and trade representations also belong to this segment.
The retail customers segment encompasses retail banking in the CEE region, the retail operations of Raiffeisen-Leasing in
Austria and the CEE region and private banking operations in Austria and the CEE region. According to the prescribed
allocation of tasks and responsibilities within the Raiffeisen Banking Group (RBG), Raiffeisen Zentralbank does not
engage in retail banking activities in Austria.
www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006 Consolidated Financial Statements
Retail customers are all private individuals (consumers), self-employed (Micro) and small and medium-sized enterprises
with annual revenues of less than € 5 million (small enterprises), whereby smaller country-specific deviations may occur.
They are offered standardised products such as saving books and saving deposits, time deposits, current and salary
accounts, consumer credits, overdraft lines, credit cards, and mortgages as well as other earmarked loans. Earnings
arising from private banking provided by a number of Group units are also included in this customer segment. In
Austria, private banking operations are the domain of Kathrein & Co. Privatgeschäftsbank AG. In the CEE region, this
sub-segment is handled by individual Network Banks. For high-net-worth individuals an individualised advisory approach
is applied and asset management services are offered.
The proprietary trading segment encompasses proprietary trading in the Treasury and Investment Banking divisions of
Raiffeisen Zentralbank, Raiffeisen Centrobank AG and the Network Banks in the CEE region.
Treasury encompasses the Group’s own positions in on-balance-sheet and off-balance-sheet interest-based and currencybased
products (forwards, futures, options). These encompass interest-rate business, foreign exchange business, liquidity
management and asset/liability management (covering with matching assets). The treasury sub-segment also encompasses
portfolio management in the equities, bonds and funds fields and short-term and long-term alternative investments
(combinations of securities products with derivative products) and hybrid securities. In addition, the Group does securities
lending and repo business with foreign counterparties in this sub-segment. Pure trading in financial instruments is centrally
steered and is subject to strictly controlled limits. In addition, the Group has a portfolio of medium-term and long-term
financial investments. Whereas the entirety of the Group’s proprietary trading activities are included in this segment,
contributions to profit made by some Treasury transactions carried out on customer’s account are recognised in other
segments. Components of proceeds that exceed prices attainable in the market are assigned to the customer segments.
The investment banking sub-segment encompasses transactions in securities and equity participations – in particular accompanying
issuances – and market making.
Besides non-banking activities, the participations and other segment mainly include the management of RZB’s extensive
portfolio of equity participations, which also comprises interests in associates valued at-equity. In addition, this segment
encompasses other cross-segment activities, including in particular those carried out by Raiffeisen Zentralbank as parent
company and by subordinate management holding companies.
RZB applies two central steering benchmarks:
• The return on equity before taxes is the ratio that states the profit before tax to average equity employed and
expresses the return on capital employed.
• The cost/income ratio represents the cost efficiency of business segments. The cost/income ratio is calculated as
quotient of general administrative expenses and the sum of net interest income, net commission income, trading
profit/loss and other operating income/loss (adjusted for the net result from hedge accounting and other derivative
financial instruments).
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171

Notes to the income statement RZB 2006
172
Segment reporting is based on RZB’s internal management income statement which is similar to a multi-stage contribution
costing calculation. Income and expenses are allocated according to the causation principle. Income items are net
interest income, net commission income, trading profit and other operating profit/loss. Net interest income is calculated
using the market interest rate method. Net interest received from equity is apportioned to individual segments on the basis
of regulatory capital requirements and recognised under net interest income.
Provisioning for impairment losses on loans and advances consists of net allocations of individual and portfolio-based
impairment losses on credit risks, direct write-downs as well as income received from written-down claims. General
administrative expenses include direct and indirect costs. Direct costs (staff expenses and other administrative expenses)
are incurred by business segments while the indirect costs are allocated according to agreed ratios.
The risk-weighted assessment base pursuant to Section 22 of the Austrian Banking Act (BWG) serves as sector-specific
substitute for segment assets (including market risk).
Financial year 2006
€000
Corporate
customers
Financial
institutions &
public sector
Retail
customers
Proprietary
trading
Participations
and other
Net interest income 702,663 180,831 1,030,327 223,422 49,250 2,186,493
Provisioning for impairment losses (147,652) (2,825) (191,709) 24 (4,269) (346,431)
Net interest income after provisioning 555,011 178,006 838,618 223,446 44,981 1,840,062
Net commission income 413,865 140,083 603,647 16,237 3,186 1,177,018
Trading profit
Net income from financial invest-
21,136 21,306 1,913 215,088 (2,758) 256,685
ments and current financial assets 1,164 (439) – 35,745 105,080 141,551
General administrative expenses (454,028) (138,872) (1,204,399) (159,973) (155,823) (2,113,095)
Other operating profit/loss 27,967 7,501 18,558 (40,003) 48,672 62,695
Income from disposal of group assets – – – – 517,401 517,401
Profit before tax 565,116 207,586 258,336 290,539 560,739 1,882,316
Risk-weighted assets (incl. market risk) 29,060,851 10,611,175 14,846,100 12,555,160 3,582,952 70,656,238
Own funds requirement 2,324,868 848,894 1,187,688 1,004,413 286,636 5,652,499
Average number of staff 8,311 2,129 36,153 2,119 3,053 51,765
Cost/income ratio 39.0% 39.7% 72.9% 35.0% – 56.7%
Average equity 1,979,168 722,666 1,011,083 855,060 244,014 4,811,991
Return on Equity before tax 26.8% 31.1% 28.4% 33.0% – 39.1%
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Total

RZB 2006 Consolidated Financial Statements
Financial year 2005
€000
Segment report by region
Corporate
customers
Financial
institutions &
public sector
Retail
customers
Proprietary
trading
Participations
and other
Net interest income 575,535 129,117 657,814 184,422 59,335 1,606,223
Provisioning for impairment losses (111,565) 1,004 (96,540) (2) 484 (206,620)
Net interest income after provisioning 463,969 130,121 561,273 184,420 59,819 1,399,603
Net commission income 322,935 107,381 357,476 36,131 (5,081) 818,842
Trading profit
Net income from financial invest-
15,494 31,672 6,337 121,503 (2,559) 172,448
ments and current financial assets 3,378 1,104 82 (1,894) 23,368 26,037
General administrative expenses (371,603) (132,256) (802,677) (116,131) (151,360) (1,574,027)
Other operating profit 15,309 9,104 6,674 14,333 41,542 86,962
Profit before tax 449,482 147,126 129,165 238,361 (34,271) 929,864
Risk-weighted assets (incl. market risk) 26,065,873 6,399,293 9,370,410 10,952,194 2,995,654 55,783,425
Own funds requirement 2,085,270 511,943 749,633 876,175 239,652 4,462,674
Average number of staff 6,044 1,727 19,356 1,305 2,633 31,065
Cost/income ratio 40.0% 47.7% 78.1% 34.0% – 58.9%
Average equity 1,815,554 445,727 652,673 762,848 208,655 3,885,456
Return on Equity before tax 24.8% 33.0% 19.8% 31.2% – 23.9%
Secondary segment reporting shows earnings components and portfolio figures by regional aspects. Allocation criteria
are the headquarters of the respective company. In addition to direct results, funding costs, capital hedging costs and
direct management costs are apportioned to regions according to their causes. The regional segments under review are
described below (internal English-language abbreviations in parenthesis):
• Austria
Austria encompasses business done at the Head Office of Raiffeisen Zentralbank and the results generated by the
Group’s numerous subsidiaries in Austria.
• Central Europe (CE)
This segment contains the five countries in which Raiffeisen International operates that joined the EU on 1 May
2004. They are the Czech Republic, Hungary, Poland, Slovakia and Slovenia.
• Southeastern Europe (SEE)
Southeastern Europe includes Albania, Bosnia and Herzegovina, Bulgaria, Kosovo, Croatia, Romania and Serbia.
• Commonwealth of Independent States (CIS)
The CIS segment contains the members of the Commonwealth of Independent States – created from parts of the
former Soviet Union – where RZB is active, namely Belarus, Kazakhstan, Russia and the Ukraine.
• Other
This segment encompasses RZB’s branches in London, Singapore and Beijing and the Group units located in other
countries such as Malta, the USA, Germany and Switzerland.
Income items and head office costs in Austria, most of which accrue within RZB, are apportioned between the above
segments according to the causation principle. If a direct allocation is impossible, allocation is based on other criteria
such as risk-weighted assets (this is the basis of assessment including market risk).
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Total
173

Notes to the income statement RZB 2006
174
Regional allocation by respective headquarters considering refinancing costs:
Financial year 2006
€000
Financial year 2005
€000
Austria
Austria
www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
CE
Net interest income 421,942 597,823 542,366 577,642 46,720 2,186,493
Provisioning for impairment losses (45,027) (93,150) (86,160) (127,049) 4,955 (346,431)
Net interest income after provisioning 376,915 504,673 456,206 450,593 51,675 1,840,062
Net commission income 220,421 343,813 263,220 322,143 27,421 1,177,018
Trading profit 69,058 41,347 50,339 83,515 12,426 256,685
Income from financial investments
and other current financial assets 26,306 (1,252) 874 110,550 5,072 141,551
General administrative expenses (363,950) (608,750) (527,688) (560,629) (52,077) (2,113,095)
Other operating profit/loss 56,916 3,373 11,781 (15,869) 6,494 62,695
Income from disposal of group assets 10,847 20,075 – 486,479 – 517,401
Profit before tax 396,514 303,279 254,730 876,781 51,012 1,882,316
Total assets 52,203,217 22,087,761 17,905,331 13,562,279 9,870,261 115,628,849
Risk-weighted assets (incl. market risk) 26,297,598 16,075,784 12,010,344 11,055,935 5,216,577 70,656,238
Own funds requirement 2,103,807 1,286,063 960,828 884,475 417,326 5,652,499
Average number of staff 2,476 10,403 12,579 25,997 310 51,765
Cost/income ratio 44.9% 62.0% 60.8% 58.0% 53.5% 56.7%
Average equity 1,872,344 1,036,858 819,908 700,525 382,356 4,811,991
Return on Equity before tax 21.2% 29.2% 31.1% 125.2% 13.3% 39.1%
CE
Net interest income 396,515 506,839 415,479 250,143 37,248 1,606,223
Provisioning for impairment losses (29,601) (48,468) (63,479) (55,281) (9,791) (206,620)
Net interest income after provisioning 366,913 458,371 352,000 194,862 27,457 1,399,603
Net commission income 194,838 264,704 197,771 135,687 25,842 818,842
Trading profit 113,240 36,471 42,061 (26,355) 7,031 172,448
Income from financial investments
and other current financial assets 8,252 7,542 2,718 (147) 7,672 26,037
General administrative expenses (380,621) (525,213) (415,686) (200,533) (51,974) (1,574,027)
Other operating profit/loss 70,083 (8,953) 3,753 (1,432) 23,511 86,962
Profit before tax 372,703 232,921 182,617 102,083 39,540 929,864
Total assets 45,964,633 16,849,436 13,520,943 9,089,503 8,438,984 93,863,499
Basis of assessment (incl. market risk) 23,681,407 12,049,547 8,730,827 7,016,925 4,304,719 55,783,425
Own funds requirement 1,894,513 963,964 698,466 561,354 344,377 4,462,674
Average number of staff 2,469 9,013 11,032 8,270 281 31,065
Cost/income ratio 49.2% 65.6% 63.1% 56.4% 63.8% 58.9%
Average equity 1,661,093 975,778 617,103 347,232 284,250 3,885,456
Return on Equity before tax 22.4% 23.9% 29.6% 29.4% 13.9% 23.9%
SEE
SEE
CIS
CIS
Other
Other
Total
Total

RZB 2006 Consolidated Financial Statements
(2) Net interest income
The net interest income position includes income and expense from items of banking business, dividend income and
commissions with interest-like characteristics.
€000 2006 2005
Interest income 5,120,357 3,400,606
from loans and advances to banks 1,360,311 794,872
from loans and advances to customers 3,065,944 1,884,562
from current financial assets 168,577 121,420
from financial investments 235,669 253,138
from leasing claims 234,997 186,413
from derivative financial instruments (non-trading), net 54,859 160,201
Current income 113,550 108,690
from shares and other variable-yield securities 5,687 4,328
from shares in affiliated companies 9,564 11,619
from companies valued at equity 78,892 68,105
from other interests 19,407 24,638
Interest-like income 11,112 7,337
Interest and interest-like income, total 5,245,019 3,516,633
Interest expense (3,045,778) (1,899,619)
on deposits from banks (1,453,861) (913,376)
on deposits from customers (1,129,067) (712,277)
on liabilities evidenced by paper (348,317) (206,458)
on subordinated capital (114,533) (67,509)
Interest-like expenses (12,748) (10,790)
Interest expense and interest-like expenses, total (3,058,526) (1,910,410)
Net interest income 2,186,493 1,606,223
The interest margin on the respective averages of the stated base is as follows:
Per cent 2006 2005
Interest margin (balance sheet total) 2.12 2.02
Interest margin (risk-weighted assets in the banking book) 3.98 4.02
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175

Notes to the income statement RZB 2006
176
(3) Provisioning for impairment losses
Provisioning for impairment losses on balance sheet and off-balance sheet items are made as follows:
€000 2006 2005
Individual loan loss provisions (190,348) (131,725)
Allocation to provisions for impairment losses (430,813) (338,491)
Release of provisions for impairment losses 278,449 215,839
Direct write-downs (69,719) (42,745)
Income received on written-down claims 31,735 33,672
Portfolio-based loan loss provisions (156,108) (74,898)
Allocation to provisions for impairment losses (211,428) (104,367)
Release of provisions for impairment losses 55,320 29,469
Gains from the sales of loans 25 2
Total (346,431) (206,620)
Details on risk provisions are shown under item 14 provisions for impairment losses.
Per cent 2006 2005
Net provisioning ratio (Ø risk-weighted assets of the banking book) 0.63% 0.52%
Net provisioning ratio (total credit exposure) 0.40% 0.32%
Loss rate 0.14% 0.12%
Portfolio rate (total credit exposure) 1.58% 1.76%
Risk/earnings ratio 15.84% 12.86%
(4) Net commission income
€000 2006 2005
Payment transfer business 424,210 239,699
Loan administration and guarantee business 198,121 164,451
Securities business 135,198 106,453
Foreign currency and precious-metals business* 316,941 241,813
Other banking services 102,548 66,426
Total 1,177,018 818,842
* Reclassification from trading profit (see note on pages 144 and 168).
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RZB 2006 Consolidated Financial Statements
(5) Trading profit
The position trading profit also includes interest and dividend income, refinancing costs, commissions and any changes
in fair value of trading portfolios.
€000 2006 2005
Interest-based transactions 27,043 68,176
Currency-based transactions* 195,892 78,370
Equity-/index-based transactions 33,764 26,731
Other transactions (14) (829)
Total 256,685 172,448
* Reclassification to net commission income (see note on pages 144 and 168).
(6) Income from financial investments and current financial assets
The position net income from financial investments comprises valuation results and net proceeds from disposal of financial
investment portfolio and equity participations which include shares in affiliated companies, companies valued at-equity,
and other equity investments.
€000 2006 2005
Net income from financial investments 110,240 23,760
Net valuations of financial investments held-to-maturity (24) (2,881)
Net proceeds from sales of financial investments held-to-maturity 1,974 (205)
Net valuations of equity participations (8,931) (29,560)
Net proceeds from sales of equity participations 117,221 56,406
Net income from other current financial assets 31,311 2,277
Net valuations of other current financial assets 25,905 (4,513)
Net proceeds from sales of other current financial assets 5,406 6,645
Net proceeds from sales of claims evidenced by paper – 145
Total 141,551 26,037
The significant increase in net proceeds from sales of equity investments is mainly due to the sale of a minority share in
JSC Bank TuranAlem, Almaty.
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177

Notes to the income statement RZB 2006
178
(7) General administrative expenses
General administrative expenses contain staff expenses, other administrative expenses and depreciation on tangible and
intangible assets. They break down as follows:
€000 2006 2005
Staff expenses (1,089,006) (817,152)
Wages and Salaries (835,996) (610,796)
Social security costs and staff related taxes (202,047) (145,632)
Other voluntary social expenses (27,545) (26,101)
Expenses on severance payments and retirement benefits (19,912) (33,503)
Expenses on share incentive program (SIP) (3,506) (1,119)
Other administrative expenses (803,028) (590,874)
Office space expenses (190,676) (143,726)
IT costs (112,841) (90,100)
Communication expenses (74,627) (51,733)
Legal, advisory and consulting expenses (67,846) (43,800)
Advertising, PR and promotional expenses (100,147) (71,684)
Deposit insurance fees (42,905) (33,942)
Office supplies (27,570) (17,084)
Car expenses (15,722) (8,884)
Security expenses (33,885) (19,966)
Travelling expenses (20,329) (12,511)
Training expenses for staff (14,748) (11,542)
Sundry administrative expenses (101,732) (85,904)
Depreciation on intangible and tangible fixed assets (221,061) (166,001)
Tangible fixed assets (138,746) (103,310)
Intangible fixed assets (63,691) (54,735)
Leased assets (Operating leasing) (18,624) (7,956)
Total (2,113,095) (1,574,027)
Amortisation of intangible fixed assets capitalised in the course of initial consolidation was € 10,531 thousand (2005:
€ 1,192 thousand). This is due to scheduled amortisation of the acquired customer base and an impairment loss on the
Impex brand of € 5,286 thousand because of the decision taken in 2006 to merge Impexbank, the brand is no longer
used in the future.
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RZB 2006 Consolidated Financial Statements
(8) Other operating profit/loss
The position other operating profit/loss captures, among other things, sales revenues and expenses from non-banking
activities, income and expenses from disposal as well as income from the revaluation of tangible and intangible fixed
assets. The net result of hedge-accounting, also included in this position, derives from valuation of hedging instruments
and of hedged items.
€000 2006 2005
Sales revenues from non-banking activities 846,248 609,982
Expenses arising from non-banking activities (772,262) (543,171)
Revenues from additional leasing services 67,621 55,904
Expenses from additional leasing services (66,960) (60,519)
Net result from investment property 4,934 1,487
Net result from other operating lease 20,592 9,927
Net result from hedge accounting 83 (642)
Net result from other derivative instruments (41,617) 14,867
Net proceeds from disposal of tangible and intangible fixed assets 1,199 (4,707)
Other taxes (30,947) (29,539)
Impairment of goodwill – (2,506)
Income from release of negative goodwill 8,244 2,924
Net expense from allocation and release of other provisions (29,687) (11,024)
Sundry operating income 90,401 87,628
Sundry operating expenses (35,154) (43,650)
Total 62,695 86,962
Income from disposal of group assets amounting to € 517,401 thousand is shown in details on page 158.
(9) Income taxes
Income taxes break down as follows:
€000 2006 2005
Current income taxes (285,394) (223,046)
Austria (34,402) (88,565)
Foreign (250,992) (134,481)
Deferred taxes 34,477 (2,174)
Total (250,917) (225,220)
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179

Notes to the income statement RZB 2006
180
Raiffeisen Zentralbank Österreich AG is the group hub of a tax group whose membership comprises of four fully consolidated
subsidiaries close to Raiffeisen International and Raiffeisen Research Gesellschaft m.b.H.
The following transition shows the relation between profit before tax and the effective tax burden:
€000 2006 2005
Profit before tax 1,882,316 929,864
Theoretical income tax expense in the financial year based on the domestic
income tax rate of 25 per cent (470,579) (232,466)
Effect of divergent foreign tax rates
Tax deductions because of tax-exempted income from equity participations and
45,342 39,790
other tax-exempted income 180,008 28,632
Tax increases because of non-tax-deductible expenses (32,620) (34,113)
Other tax deductions and tax increases 26,930 (27,063)
Effective tax burden (250,917) (225,220)
Tax rate in per cent 13.3% 24.2%
Other changes largely consist of tax savings resulting from tax loss carry-forwards and tax savings in connection with
withholding taxes.
(10) Earnings per share
€000 2006 2005
Consolidated profit 1,169,432 450,864
Less preference dividend (10,675) (6,745)
Adjusted consolidated profit 1,158,757 444,119
Average number of ordinary shares outstanding 4,829,359 4,797,538
Earnings per share in € 239.94 92.57
There are no conversion or option rights outstanding, so undiluted earnings per share are equal to diluted earnings per
share.
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RZB 2006 Consolidated Financial Statements
Notes to the balance sheet
(11) Cash reserve
€000 2006 2005
Cash in hand 1,203,904 851,212
Balances at central banks 3,813,124 2,453,991
Total 5,017,028 3,305,203
(12) Loans and advances to banks
€000 2006 2005
Giro and clearing business 1,644,091 1,243,510
Money market business 23,872,243 23,145,399
Loans to banks 5,948,349 4,815,465
Purchased loans 262,709 192,072
Leasing claims 78,610 68,262
Claims evidenced by paper 199,921 181,824
Total 32,005,923 29,646,533
Loans and advances to banks classified regionally (counterparty’s seat) are as follows:
€000 2006 2005
Austria 8,607,475 9,206,113
Central Europe (CE) 1,698,885 1,568,764
Southeastern Europe (SEE) 1,858,179 1,202,215
Commonwealth of Independent States (CIS) 680,849 533,154
Other countries 19,160,535 17,136,287
Total 32,005,923 29,646,533
Loans and advances break down into the following bank segments:
€000 2006 2005
Central banks 2,525,284 2,294,826
Commercial banks 29,468,282 27,346,593
Multinational development banks (MDB) 12,357 5,113
Total 32,005,923 29,646,533
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181

Notes to the balance sheet RZB 2006
182
(13) Loans and advances to customers
€000 2006 2005
Credit business 32,900,181 25,038,622
Money market business 7,752,822 4,713,845
Mortgage loans 7,400,135 5,998,242
Purchased loans 1,049,698 584,770
Leasing claims 3,775,818 3,131,727
Claims evidenced by paper 227,021 146,095
Total 53,105,675 39,613,302
Loans and advances to customers break down into business segments as follows:
€000 2006 2005
Sovereigns 1,872,026 1,236,630
Corporate customers – large 34,485,197 27,884,459
Corporate customers – small business 3,952,053 1,612,849
Retail customers – private individuals 10,405,872 6,608,900
Retail customers – small and medium-sized entities 2,187,503 1,913,308
Other 203,024 357,156
Total 53,105,675 39,613,302
Loans and advances to customers classified regionally (counterparty’s seat) are as follows:
€000 2006 2005
Austria 7,812,211 6,819,067
Central Europe (CE) 15,116,303 10,831,066
Southeastern Europe (SEE) 8,421,907 6,743,316
Commonwealth of Independent States (CIS) 9,728,562 6,398,995
Other countries 12,026,692 8,820,859
Total 53,105,675 39,613,302
(14) Impairment losses on loans and advances
Provisions for impairment losses are formed in accordance with uniform Group standards and cover all recognisable
counterparty risks. A table with the development of the impairment losses for loans and advances can be found in the risk
report on page 210. Provisions for impairment losses are allocated to the following segments:
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RZB 2006 Consolidated Financial Statements
€000 2006 2005
Sovereigns 192 710
Banks 12,042 15,005
Corporate customers – large 781,727 733,759
Corporate customers – small business 90,117 42,544
Retail customers – private individuals 320,905 184,991
Retail customers – small and medium-sized entities 84,268 101,541
Total 1,289,251 1,078,550
Provisions for impairment losses classified regionally are as follows:
€000 2006 2005
Austria 399,521 411,776
Central Europe (CE) 303,791 246,340
Southeastern Europe (SEE) 205,662 150,027
Commonwealth of Independent States (CIS) 362,075 252,812
Other countries 18,202 17,595
Total 1,289,251 1,078,550
(15) Trading assets
The trading assets consist of the following securities and derivative instruments held for trading:
€000 2006 2005
Bonds, notes and other fixed-interest securities 7,685,656 5,287,608
Treasury bills and bills of public authorities eligible for refinancing 1,062,790 532,358
Other securities issued by the public sector 915,574 870,102
Bonds and notes of non-public issuers 5,707,292 3,885,148
Shares and other variable-yield securities 1,074,137 1,074,162
Shares and other variable-yield securities 469,535 563,715
Mutual funds 155,042 165,180
Other variable-yield securities 449,560 345,267
Positive fair values of derivative financial instruments 867,361 959,062
Interest-based transactions 210,678 514,196
Currency-based transactions 537,086 374,481
Equity-/index-based transactions 119,597 70,385
Table is continued on following page.
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183

Notes to the balance sheet RZB 2006
184
€000 2006 2005
Loans held for trading 58,911 167,630
Pledged securities ready to be sold/repledged by transferee 168,783 5,834
Total 9,854,848 7,494,296
(16) Other current financial assets
€000 2006 2005
Bonds, notes and other fixed-interest securities 5,449,725 4,142,119
Treasury bills and bills of public authorities eligible for refinancing 558,345 989,031
Other securities issued by the public sector 327,919 114,595
Bonds and notes of non-public issuers 4,561,984 3,037,501
Money market instruments 1,477 992
Shares and other variable-yield securities 485,381 441,446
Shares 20,235 17,942
Mutual funds 451,511 409,636
Other securities 13,635 13,868
Pledged securities ready to be sold/repledged by transferee 5,041 17,159
Total 5,940,147 4,600,725
(17) Financial investments
Financial investments comprise securities held-to-maturity and strategic equity participations held on a long-term basis:
€000 2006 2005
Bonds, notes and other fixed-interest securities 4,388,392 4,463,326
Treasury bills and bills of public authorities eligible for refinancing 1,612,549 1,590,110
Other securities issued by the public sector 1,093,921 1,078,972
Bonds and notes of non-public issuers 1,679,452 1,791,774
Others 2,470 2,470
Equity participations 1,333,224 967,734
Interests in affiliated companies 296,640 97,822
Interests valued at-equity 633,187 580,370
Other interests 403,397 289,541
Total 5,721,616 5,431,059
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RZB 2006 Consolidated Financial Statements
Equity participations valued at amortized cost for which fair values could not be reliably measured amounted to
€ 381,788 thousand (2005: € 254,750 thousand).
Financial information of associated companies is shown in the following table:
€000
* Consolidated financial statements.
** Consolidated figures 2005, because UNIQA is a quoted company and has not yet published its consolidated financial statements 2006.
Further information regarding associated companies is stated on page 228.
(18) Intangible fixed assets
Total
assets
Total
revenues
Profit
after tax
Shareholders´
equity
FactorBank Aktiengesellschaft, Vienna (AT) 148,188 5,347 19 5,210
LEIPNIK-LUNDENBURGER INVEST Beteiligungs AG, Vienna (AT)* 738,171 45,546 22,123 280,041
NOTARTREUHANDBANK AG, Vienna (AT) 864,461 7,951 5,974 19,535
Österreichische Hotel- und Tourismusbank Ges.m.b.H., Vienna (AT) 805,480 4,463 813 26,702
Raiffeisen Bausparkasse a.s., Prague (CZ) 1,515,559 30,153 4,903 48,281
Raiffeisen Bausparkasse Gesellschaft m.b.H., Vienna (AT)* 8,014,430 162,815 25,264 251,958
Raiffeisen Bausparkasse Rumänien S.A., Bucharest (RO) 73,084 3,956 (3,472) 14,917
Raiffeisen evolution project development GmbH, Vienna (AT)** 180,050 132,100 3,030 77,721
Raiffeisen Informatik GmbH, Vienna (AT) 91,547 1,997 1,882 21,157
Raiffeisen Kapitalanlage-Gesellschaft m.b.H., Vienna (AT)* 139,820 67,971 6,118 25,452
Raiffeisen stambena štedionica d.d., Zagreb (HR) 292,362 12,027 (3,819) 6,415
Raiffeisen Wohnbaubank Aktiengesellschaft, Vienna (AT) 1,176,426 1,820 763 6,943
UNIQA Versicherungen AG, Vienna (AT)** 22,568,392 216,883 133,342 1,133,674
VISA-SERVICE Kreditkarten Aktiengesellschaft, Vienna (AT) 355,456 85,869 36,998 61,950
€000 2006 2005
Goodwill 865,195 555,086
Software 257,637 191,261
Other intangible fixed assets 227,510 235,501
Total 1,350,342 981,848
The increase in goodwill is mainly due to the acquisition of Impexbank and eBanka. In 2006, goodwill has been
adjusted according to IFRS 3 for VAT Raiffeisen Bank Aval in the amount of € 40,089 thousand. In the item of other
intangible assets, € 5,286 thousand were capitalised for the Impexbank brand and € 4,191 thousand for the eBanka
brand. The decision to merge ZAO Raiffeisenbank Austria with OAO “Impexbank” was made in December 2006 and
therefore the Impexbank brand will cease to exist. It is therefore completely impaired in 2006. Moreover, the acquired
customer base was capitalised for Impexbank in the amount of € 12,158 thousand and for eBanka in the amount of
€ 4,683 thousand.
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185

Notes to the balance sheet RZB 2006
186
(19) Tangible fixed assets
€000 2006 2005
Land and buildings used by the Group for own purposes 590,835 396,769
Other land and buildings (Investment property) 23,161 13,878
Office furniture and equipment as well as other tangible fixed assets 553,031 480,122
Leased assets (Operating lease) 149,936 117,437
Total 1,316,963 1,008,206
The fair value of investment property totalled € 59,294 thousand (2005: € 44,839 thousand).
(20) Development of fixed assets
Intangible and tangible fixed assets developed in the financial year 2006 as follows:
Financial year 2006 Cost of acquisition or conversion
€000
As of
1/1/2006
Change in
consolidated
group
Exchange
differences Additions Diposals Transfers
As of
31/12/2006
Intangible fixed assets 1,254,839 408,655 (61,203) 126,211 (32,601) (9,348) 1,686,553
Goodwill 613,503 355,995 (47,784) – – – 921,713
Software 380,678 25,483 7,204 115,925 (30,826) 4,556 503,020
Other intangible fixed assets 260,658 27,177 (20,623) 10,286 (1,775) (13,904) 261,819
Tangible fixed assets 1,614,499 206,430 905 412,292 (151,255) 9,348 2,092,219
Land and buildings used by the
Group for own purposes 569,387 168,841 (6,116) 71,752 (19,289) 13,675 798,250
Other land and buildings 24,279 525 (415) 3,588 (7,443) 17,687 38,221
of which land value of
developed land 3,302 9,052 (48) 8 – – 12,314
Office furniture and equipment as
well as other tangible fixed assets 875,391 45,953 7,478 233,450 (112,168) (1,721) 1,048,383
Leased assets (Operating lease) 145,442 (8,889) (42) 103,502 (12,355) (20,293) 207,365
Total 2,869,338 615,085 (60,298) 538,503 (183,856) – 3,778,772
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RZB 2006 Consolidated Financial Statements
Financial year 2006 Write-ups, amortisation, depreciation, impairment Book value
€000 Cumulative Write-ups Depreciation As of 31/12/2006
Intangible fixed assets (336,211) 23 (63,691) 1,350,342
Goodwill (56,518) – – 865,195
Software (245,384) 23 (48,691) 257,637
Other intangible fixed assets (34,310) – (15,001) 227,510
Tangible fixed assets (775,256) 5,023 (157,370) 1,316,963
Land and buildings used by the Group for own
purposes (207,416) 49 (22,191) 590,835
Other land and buildings (15,060) – (4,900) 23,161
of which land value of developed land – – – 12,314
Office furniture and equipment as well as other
tangible fixed assets (495,352) 1,405 (111,655) 553,031
Leased assets (Operating lease) (57,429) 3,569 (18,624) 149,936
Total (1,111,467) 5,045 (221,061) 2,667,305
Intangible and tangible fixed assets developed in the financial year 2005 as follows:
Financial year 2005 Cost of acquisition or conversion
€000
As of
1/1/2006
Change in
consolidated
group
Exchange
differences Additions Diposals Transfers
As of
31/12/2006
Intangible fixed assets 481,031 680,023 7,885 103,695 (26,569) 8,774 1,254,839
Goodwill 157,334 457,771 2,363 (3,966) – 613,503
Software 293,833 11,427 1,767 86,334 (21,457) 8,774 380,678
Other intangible fixed assets 29,864 210,825 3,754 17,361 (1,146) – 260,658
Tangible fixed assets 1,191,185 189,361 40,910 291,408 (89,591) (8,774) 1,614,499
Land and buildings used by the
Group for own purposes 409,960 112,631 15,071 58,806 (20,075) (7,006) 569,387
Other land and buildings 23,469 (485) 597 4,190 (2,501) (992) 24,279
of which land value of
developed land
Office furniture and equipment as
3,478 461 – 3,184 (3,820) – 3,302
well as other tangible fixed assets 673,131 58,981 24,367 177,873 (56,940) (2,022) 875,391
Leased assets (Operating lease) 84,623 18,234 875 50,539 (10,075) 1,246 145,442
Total 1,672,216 869,384 48,795 395,103 (116,160) – 2,869,338
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187

Notes to the balance sheet RZB 2006
188
Financial year 2005 Write-ups, amortisation, depreciation, impairment Book value
€000 Cumulative Write-ups Depreciation As of 31/12/2006
Intangible fixed assets (272,991) 89 (57,241) 981,848
Goodwill (58,417) – (2,506) 555,086
Software (189,417) 51 (48,481) 191,261
Other intangible fixed assets (25,157) 38 (6,254) 235,501
Tangible fixed assets (606,293) 674 (111,266) 1,008,206
Land and buildings used by the Group for own
purposes (172,618) – (14,080) 396,769
Other land and buildings (10,400) – (2,845) 13,878
of which land value of developed land 517 – – 3,820
Office furniture and equipment as well as other
tangible fixed assets (395,269) 63 (86,386) 480,122
Leased assets (Operating lease) (28,006) 611 (7,956) 117,437
Total (879,284) 763 (168,507) 1,990,055
Additions to intangible and tangible assets did not include major individual investments.
(21) Other assets
€000 2006 2005
Tax assets 145,646 122,218
Current tax assets 48,205 65,274
Deferred tax assets 97,441 56,944
Receivables arising from non-banking activities 170,363 119,449
Prepayments and other deferrals 441,442 263,092
Positive fair values of derivatives in fair value hedges (IAS 39) 40,401 46,880
Interest-based transactions 40,401 46,880
Positive fair values of derivatives in cash flow hedges 805,872 1,572,384
Interest-based transactions 805,872 734,197
Currency-based transactions – 838,187
Positive fair values of banking book derivatives without hedge accounting 176,003 83,388
Interest-based transactions 52,991 14,458
Currency-based transactions 83,189 56,137
Equity-/index-based transactions 30,744 12,793
Other transactions 9,079 –
Sundry assets 825,831 653,467
Total 2,605,558 2,860,877
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RZB 2006 Consolidated Financial Statements
Insofar as the conditions for hedge accounting according to IAS 39 are fulfilled, derivative financial instruments are
measured at their fair values (dirty prices) in their function as hedging instruments. The hedged items in connection with
fair value hedges are loans and advances to banks and customers and liabilities evidenced by paper. The hedged risks
are interest rate risks. The changes in carrying amount of the hedged underlying transactions in IAS 39 fair value hedges
are included in the respective balance sheet items. In the financial year 2006 – different to 2005 –, currency-based
derivative financial instruments in connection with Cash flow hedges are not applied. The item also includes the positive
fair values of derivative financial instruments that neither are held for trading nor constitute fair value hedging instruments
under article 39 of IAS.
The item sundry assets mainly contains clearing claims from payment transfer business. Assets held for sale according to
IFRS 5 amounting to € 3,685 thousand (2005: € 4,602 thousand) were also recognised in other assets.
Deferred taxes break down as follows:
€000 2006 2005
Deferred tax assets 97,441 56,944
Provisions for deferred taxes 43,255 44,231
Net deferred taxes 54,186 12,713
The net deferred taxes result from the following items:
€000 2006 2005
Loans and advances to customers 43,765 39,485
Impairment losses on loans and advances 34,450 32,424
Other assets 68,640 44,251
Provisions for liabilities and charges 34,942 24,255
Other liabilities 20,166 24,122
Tax loss carry-forwards 16,343 46,527
Other balance sheet items 69,504 27,612
Deferred tax assets 287,810 238,676
Loans and advances to banks 430 10,547
Loans and advances to customers 16,554 16,763
Trading assets 30,244 27,335
Financial Investments 22,460 16,329
Tangible and intangible fixed assets 59,871 33,535
Other liabilities 31,049 46,380
Other balance sheet items 73,017 75,074
Deferred tax liabilities 233,625 225,962
Net deferred taxes 54,186 12,713
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189

Notes to the balance sheet RZB 2006
190
Deferred income tax assets are recognised for unused tax loss carry-forwards and amounted to € 16,343 thousand
(2005: € 46,527 thousand). The tax loss carry-forwards are mainly without any time limit.
The Group did not recognise deferred income tax assets of € 6,697 thousand (2005: € 19,995 thousand) because from
present point of view there is no prospect to realise them within a reasonable period of time.
(22) Deposits from banks
€000 2006 2005
Giro and clearing business 2,633,392 2,070,770
Money market business 32,782,662 35,423,602
Long term loans 8,713,357 5,922,112
Total 44,129,411 43,416,484
Deposits from banks classified regionally (counterparty’s seat) break down as follows:
€000 2006 2005
Austria 19,550,062 15,942,855
Central Europe (CE) 1,427,102 1,219,289
Southeastern Europe (SEE) 501,216 488,815
Commonwealth of Independent States (CIS) 556,031 296,133
Other countries 22,095,000 25,469,392
Total 44,129,411 43,416,484
The deposits break down into the following bank segments:
€000 2006 2005
Central banks 521,856 99,249
Commercial banks 42,534,019 41,995,282
Multinational Development Banks (MDB) 1,073,536 1,321,952
Total 44,129,411 43,416,484
(23) Deposits from customers
€000 2006 2005
Sight deposits 19,464,463 14,162,861
Time deposits 23,920,407 16,533,817
Savings deposits 1,342,619 1,461,152
Total 44,727,489 32,157,831
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RZB 2006 Consolidated Financial Statements
Deposits break down into the following segments:
€000 2006 2005
Sovereigns 1,691,722 996,706
Corporate customers – large 22,111,894 15,407,654
Corporate customers – small business 2,014,350 1,148,996
Retail customers – private individuals 15,897,403 12,166,685
Retail customers – small and medium sized entities 2,396,400 1,911,375
Others 615,720 526,414
Total 44,727,489 32,157,830
Deposits from customers classified regionally (counterparty’s seat) are as follows:
€000 2006 2005
Austria 4,360,256 3,093,630
Central Europe (CE) 14,197,744 10,611,077
Southeastern Europe (SEE) 10,300,625 8,110,373
Commonwealth of Independent States (CIS) 7,344,326 5,078,773
Other countries 8,524,538 5,263,977
Total 44,727,489 32,157,831
(24) Liabilities evidenced by paper
€000 2006 2005
Bonds and notes issued 8,243,459 4,924,380
Money market instruments issued 2,559,761 927,681
Other liabilities evidenced by paper 519,240 365,149
Total 11,322,460 6,217,210
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191

Notes to the balance sheet RZB 2006
192
(25) Provisions for liabilities and charges
€000
As of
1/1/2006
Change in
consolidated
group Allocation Release Usage
Provisions for severance payments and similar obligations developed as follows:
Transfers,
exchange
differences
As of
31/12/2006
Severance payments 43,901 (1,176) 5,717 (30) (77) 2 48,337
Retirement benefits 58,983 (65) 5,922 (109) (34) 84 64,781
Taxes 156,915 (8,068) 130,027 (39,716) (152,148) (1,403) 85,607
Current taxes 112,684 (1,236) 96,619 (22,182) (142,497) (1,036) 42,352
Deferred taxes
Contingent liabilities
44,231 (6,832) 33,408 (17,534) (9,651) (367) 43,255
and commitments 50,492 66 43,663 (24,313) (1,219) 3,851 72,540
Restructuring – 2,380 671 – – (16) 3,035
Pending legal issues 63,972 (1,112) 15,876 (4,198) (716) 4,360 78,182
Overdue vacations 12,732 2,460 14,719 (5,298) 0 (33) 24,580
Others 81,137 10,798 94,420 (10,929) (40,827) (2,508) 132,091
Total 468,132 5,283 311,015 (84,593) (195,021) 4,337 509,152
€000 2006 2005
DBO as of 1/1 43,901 32,070
Exchange differences 1 5
Change in consolidated group (1,176) –
Service cost 4,371 2,864
Interest cost 1,903 1,730
Payments (2,427) (2,147)
Actuarial gain/loss 1,763 9,380
Provision as of 31/12 (=DBO) 48,337 43,901
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RZB 2006 Consolidated Financial Statements
Provisions for retirement benefits developed as follows:
€000 2006 2005
DBO as of 1/1 58,983 44,507
Exchange differences – 3
Change in consolidated group (65) –
Service cost 4,123 1,330
Interest cost 4,034 3,986
Payments (4,871) (4,392)
Change in plan assets 664 (2,545)
Actuarial gain/loss 1,913 16,093
Provision as of 31/12 (=DBO) 64,781 58,983
(26) Trading liabilities
€000 2006 2005
Negative fair values of derivative financial instruments 2,325,564 2,087,638
Interest-based transactions 225,351 504,981
Currency-based transactions 631,266 338,877
Equity-/index-based transactions 1,468,947 1,243,780
Shortselling of trading assets 677,332 458,775
Liabilities from trading activities 138,354 165,049
Total 3,141,250 2,711,462
(27) Other liabilities
€000 2006 2005
Liabilities from non-banking activities 143,470 184,080
Accruals and deferred items 361,553 214,354
Negative fair values of derivatives in fair value hedges (IAS 39) 26,460 284
Interest-based transactions 26,460 244
Currency-based transactions – 40
Negative fair values of derivatives in cash flow hedge 715,373 1,334,908
Interest-based transactions 715,373 667,826
Currency-based transactions – 667,082
Table is continued on following page.
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Notes to the balance sheet RZB 2006
194
€000 2006 2005
Negative fair values of bankbook derivatives without hedge accounting 201,745 243,444
Interest-based transactions 175,122 27,630
Currency-based transactions 21,802 215,814
Other transactions 4,821 –
Sundry liabilities 817,678 334,951
Total 2,266,279 2,312,021
Insofar as they satisfy the requirements for hedge accounting under article 39 of IAS, derivative financial instruments are
measured at their fair values (dirty prices) in their function as hedging instruments. The underlying transaction in connection
with fair value hedges are loans and advances to customers and liabilities evidenced by paper. Risks arising from
changes in interest rates are hedged. In the financial year 2006 – different to 2005 –, currency-based derivative
financial instruments in connection with Cash flow hedges are not applied.
The item sundry liabilities mainly contains clearing claims from payment transfer business.
(28) Subordinated capital
€000 2006 2005
Subordinated liabilities 2,789,195 1,475,897
Supplementary capital 74,996 120,054
Profit-sharing certificates 31,417 34,687
Total 2,895,608 1,630,638
The following table contains borrowings which exceed 10 per cent of the subordinated capital.
€000 Amount Currency Interest rate 1 Due
EUR 400 mn callable subordinated capital FRN
EUR 500 mn non-cumulative subordinated perpetual
400,000 EUR
3 month EURIBOR
+ 0.33 per cent 22/6/2016
callable step-up fixed to floating rate capital notes2 500,000 EUR 5.169 per cent No maturity
1 Current interest rates, step-up clauses are agreed.
2 having the benefit of a support agreement entered into with Raiffeisen Zentralbank Österreich AG
In 2006, expenses on subordinated liabilities totalled € 114,525 thousand (2005: € 67,549 thousand).
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RZB 2006 Consolidated Financial Statements
(29) Equity and minorities
€000 2006 2005
Consolidated equity 3,573,721 3,068,496
Subscribed capital 404,463 386,114
Capital reserves 767,400 635,769
Retained earnings 2,401,858 2,401,613
Consolidated profit 1,169,432 450,864
Minority interest 1,894,047 1,430,361
Total 6,637,200 4,949,721
The issued share capital of Raiffeisen Zentralbank Österreich AG was subdivided into 5,565,749 no-par shares.
5,050,029 were registered ordinary shares and 515,720 were non-voting bearer preferences shares. The company’s
total nominal share capital as stated in its Memorandum and Articles of Association was € 404,463 thousand.
A resolution of the Extraordinary General Meeting of Shareholders held on 27 October 2004 authorized the Managing
Board, subject to the consent of the Supervisory Board, to increase the share capital by up to € 42,701 thousand for
cash or contributions in kind by not later than 26 October 2009, if necessary in several tranches, by issuing up to
516,808 registered ordinary shares and up to 62,127 non-voting bearer preference shares while preserving
shareholders’ rights as conferred by the particular stock category.
In the financial year 2006, this authorization was partly used and the share capital has been increased by 252,491
ordinary shares amounting to € 18,349 thousand. Considering the share premium less cost of issue, the proceeds of
issue totalled € 149,980 thousand and strengthened the equity capital accordingly.
The authorization granted in the Extraordinary General Meeting held on 27 October 2004 to increase share capital is
still effective up to an amount of € 23,723 thousand.
The holders of non-voting preference shares received a preference shareholders’ dividend on the amount of share capital
attributable to their shares. The preference shareholders´ dividend for 2006 financial year came to € 20.70 per preference
share resulting in a distribution of € 10,675 thousand.
The Managing Board intends to propose at the Annual General Meeting that a dividend of € 20.70 per ordinary share
be distributed from Raiffeisen Zentralbank Österreich AG´s profit for the financial year 2006, which represents a
distribution of € 99,309 thousand, and that the remaining amount of € 1,913 be carried forward.
The statement of changes in equity and other disclosures are shown on page 147.
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Additional IFRS information RZB 2006
196
Additional IFRS information
(30) Breakdown of remaining terms to maturity
2006
€000
Due at call or
without
maturity
Up to
3 months
More than
3 months,
up to 1 year
More than
1 year, up to
5 years
More than
5 years
Cash reserve 5,017,028 – – – –
Loans and advances to banks 1,901,523 22,786,904 3,904,693 2,895,259 517,544
Loans and advances to customers 4,651,479 10,008,548 9,920,568 18,975,814 9,549,266
Trading assets 832,538 728,447 1,403,526 4,633,766 2,256,571
Other current financial assets 483,632 164,917 511,323 3,415,657 1,364,618
Financial investments 1,333,224 749,518 1,158,380 2,221,878 258,616
Other assets 577,814 961,261 238,002 569,001 259,480
Deposits from banks 2,735,604 28,731,506 3,508,852 7,196,060 1,957,389
Deposits from customers 18,901,234 18,157,363 4,776,883 1,959,565 932,444
Liabilities evidenced by paper – 2,890,302 698,719 6,749,492 983,947
Trading liabilities 226,160 1,071,800 529,457 783,432 530,401
Subordinated capital 819,133 135,190 118,936 732,280 1,090,069
Other liabilities 626,268 637,586 130,497 549,935 321,993
2005
€000
Due at call or
without
maturity
Up to
3 months
More than
3 months,
up to 1 year
More than
1 year, up to
5 years
More than
5 years
Cash reserve 3,305,203 – – – –
Loans and advances to banks 1,428,889 21,457,462 4,128,017 2,097,835 534,330
Loans and advances to customers 3,103,977 8,151,878 7,975,473 13,502,166 6,879,808
Trading assets 494,629 828,560 342,284 3,557,287 2,271,536
Other current financial assets 217,432 963,153 477,937 2,345,055 597,148
Financial investments 967,733 723,178 1,035,458 2,571,196 133,494
Other assets 514,594 643,521 239,064 1,329,043 134,655
Deposits from banks 1,966,468 32,142,100 3,501,290 4,026,961 1,779,665
Deposits from customers 14,295,197 12,608,710 3,510,397 1,086,550 656,977
Liabilities evidenced by paper – 1,439,215 463,201 3,482,901 831,893
Trading liabilities 448,908 588,975 807,624 356,777 509,178
Subordinated capital – 106,280 2,611 556,486 965,261
Other liabilities 239,402 491,051 177,141 1,234,705 169,722
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RZB 2006 Consolidated Financial Statements
(31) Related parties
Companies can carry out business with related parties that may affect the entity’s asset, financial and earnings position.
The following related companies have been identified mainly as related parties:
Parent companies are Raiffeisen-Landesbanken-Holding GmbH, Vienna, a non-operational equity holding company and
its subsidiary R-Landesbanken-Beteiligung GmbH, Vienna, which is the majority shareholder of Raiffeisen Zentralbank
Österreich Aktiengesellschaft, Vienna. Companies exercising a significant influence are mainly Raiffeisenlandesbank
Niederösterreich-Wien AG, Vienna, as largest indirect shareholder and its parent company, Raiffeisen-Holding
Niederösterreich-Wien registrierte Genossenschaft mit beschränkter Haftung, Vienna. 257 subsidiaries which were not
included into the consolidated group because of their minor importance are deemed affiliated companies.
Disclosures on Raiffeisen Zentralbank´s relations to key management (Managing Board) are reported under item 50.
In the financial year 2006, the following transactions with related parties are shown:
2006
€000
Parent
companies
Companies
with significant
influence
Affiliated
companies
Companies
valued
at-equity
Other
interests
Loans and advances to banks – 1,598,899 – 251,138 270,496
Loans and advances to customers – – 353,084 27,446 427,275
Trading assets – 18,835 – 8,532 16,324
Other current financial assets – – – 4,738 30,102
Financial investments – – – 2,470 10,000
Equity participations – – 296,640 633,187 403,397
Other assets 9 – 1,840 6 14,021
Deposits from banks – 2,026,419 42,543 646,770 9,877,003
Deposits from customers 108 – 271,763 2,794 236,436
Provisions for liabilities and charges – – 643 – 4,458
Trading liabilities – – – 749 4
Other liabilities – – 463 32 3,082
Guarantees given – 10,903 1,778 315,498 269,959
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Additional IFRS information RZB 2006
198
In the financial year 2005, the following transactions with related parties are shown:
2005
€000
(32) Foreign currency volumes
The consolidated financial statements consist of the following volumes of assets and liabilities denominated in foreign
currencies:
(33) Foreign assets/liabilities
Parent
companies
Companies with
significant
influence
Assets and liabilities with counterparties outside Austria are as follows:
Affiliated
companies
Companies
valued
at-equity
Other
interests
Loans and advances to banks – 1,019,025 – 211,944 830,981
Loans and advances to customers – – 387,583 2,158 514,196
Trading assets – 26,138 15,073 21,413 10,588
Other current financial assets – – 4,261 – 229
Financial investments – – – 2,470 18,501
Equity participations – – 97,822 580,370 289,541
Other assets – 1,283 3,008 4,848 57,642
Deposits from banks – 1,707,921 – 678,041 6,839,307
Deposits from customers 328 – 109,719 6,935 271,483
Provisions for liabilities and charges – – 809 310 3,261
Trading liabilities – 20,830 – 14,204 13,991
Other liabilities – 697 687 4,685 29,029
Guarantees given – 9,578 12,563 250,907 34,942
€000 2006 2005
Assets 58,736,841 47,757,308
Liabilities 53,989,381 45,071,461
€000 2006 2005
Assets 90,744,624 69,956,818
Liabilities 71,584,702 59,765,882
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RZB 2006 Consolidated Financial Statements
(34) Subordinated assets
€000 2006 2005
Loans and advances to banks 28,640 9,662
Loans and advances to customers 44,998 98,260
Trading assets 65,071 65,046
Other current financial assets 375,954 191,399
Financial investments 22,465 22,465
Total 537,128 386,832
(35) Securitisation
Securitization is the packaging of designated portfolios of loans or leasing claims with an appropriate level of credit
enhancement and the redistribution of these portfolios to investors. The objective of RZB´s securitisation is to ease the
strain on the Group's regulatory own funds.
The following transactions are executed in 2006:
€000 Secured party Date of contract Maturity Volume
True sale transaction
ROOF Poland 2006 Raiffeisen Leasing Polska S.A., Warsaw (PL) 12/1/2006 about 8 years 167,000
Synthetic securitisation
ROOF CEE 2006-1
Raiffeisenbank Polska S.A., Warsaw (PL)
Raiffeisenbank a.s., Prague (CZ) 21/3/2006 about 10 years 450,000
In both transactions, own funds requirements for the junior tranche (first loss piece) were taken by group companies.
(36) Contingent liabilities and commitments
€000 2006 2005
Contingent liabilities 11,304,393 9,913,604
Acceptances and endorsements 16,628 22,035
Credit guarantees 7,308,265 6,582,227
Other guarantees 1,697,653 1,316,580
Letters of credit (documentary business) 2,082,530 1,967,426
Other contingent liabilities 199,317 25,336
Table is continued on the following page.
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Additional IFRS information RZB 2006
200
€000 2006 2005
Commitments 17,820,644 13,485,380
Irrevocable credit lines and /stand-by facilities 16,009,874 11,616,525
Up to 1 year 8,477,553 5,857,602
More than 1 year 7,532,321 5,758,922
Non-genuine repurchase agreements 29,127 176,956
Other commitments 1,781,643 1,691,899
Raiffeisen Zentralbank is a member of Raiffeisen-Kundengarantiegemeinschaft Österreich. The members of this
association have a contractual obligation to guarantee jointly and severally the punctual fulfilment of the entirety of an
insolvent association member’s commitments arising from customer deposits and its own issues up to the limit of the sum
of the individual capacities of the remaining association members. The individual capacity of an association member is
measured on the basis of its freely available reserves subject to the pertinent provisions of BWG.
(37) Genuine repurchase agreements
The following repurchase and redelivery commitments are shown as of the balance sheet date:
€000 2006 2005
Genuine repurchase agreements as borrower
Deposits from banks 4,358,939 4,879,068
Deposits from customers 163,821 56,733
Total 4,522,760 4,935,801
€000 2006 2005
Genuine repurchase agreements as lender (reverse-repurchase-agreement)
Loans and advances to banks 3,305,462 3,154,475
Loans and advances to customers 1,414,182 684,588
Loans held for trading 55,687 –
Total 4,775,331 3,839,063
Securities sold in a genuine sale and repurchase agreement amounted to € 2,224,415 thousand (2005: € 2,226,367
thousand). Securities purchased in a genuine sale and repurchase agreement totalled € 4,958,887 thousand (2005:
€ 3,843,015 thousand). € 444,143 thousand of the securities accepted as collateral was sold or repledged. (2005:
€ 484,886 thousand).
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RZB 2006 Consolidated Financial Statements
(38) Assets pledged as collateral
The following liabilities are secured by assets shown in the balance sheet:
€000 2006 2005
Deposits from banks 8,282,577 4,912,555
Deposits from customers 49,592 356
Liabilities evidenced by paper 206,654 179,724
Other liabilities 157,594 169,217
Contingent liabilities and commitments 4,253 23,817
Total 8,700,670 5,285,669
The following balance sheet assets are provided as collateral for the above mentioned obligations:
€000 2006 2005
Loans and advances to banks 2,604,991 1,951,268
Loans and advances to customers 2,357,572 1,040,989
Trading assets 245,140 87,186
Other current financial assets 1,618,431 1,487,983
Financial investments 662,998 820,739
Total 7,489,132 5,388,164
Additionally, securities from security lending transactions are provided as collateral for the above mentioned obligations.
(39) Fiduciary business
Fiduciary business not recognised in the balance sheet was concluded with the following volumes:
€000 2006 2005
Loans and advances to banks 6,285 12,351
Loans and advances to customers 375,769 345,101
Financial investments 37,803 38,923
Other fiduciary assets 5,687 5,594
Fiduciary assets 425,544 401,969
Deposits from banks 253,021 232,435
Deposits from customers 156,827 152,533
Other fiduciary liabilities 15,696 17,001
Fiduciary liabilities 425,544 401,969
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Additional IFRS information RZB 2006
202
Moreover, the Group managed funds of € 800,883 thousand (2005: € 542,000 thousand) as of the balance
sheet date.
Fees income from fiduciary business amounted to € 6,436 thousand (2005: € 2,878 thousand). Fees expenses totalled
€ 818 thousand (2005: € 401 thousand).
(40) Finance leases
€000 2006 2005
Gross investment value 4,589,267 3,953,853
Minimum lease payments 4,150,814 3,474,063
Up to 3 months 308,936 332,110
More than 3 months, up to 1 year 746,205 700,675
More than 1 year, up to 5 years 1,988,109 1,572,806
More than 5 years 1,107,564 865,169
Non-guaranteed residual value 438,453 478,355
Unearned finance income 913,838 703,157
Up to 3 months 53,599 47,361
More than 3 months, up to 1 year 137,322 116,436
More than 1 year, up to 5 years 378,711 298,061
More than 5 years 344,206 241,299
Net investment value 3,675,429 3,250,696
Write-offs on unrecoverable minimum lease payments outstanding totalled € 13,502 thousand (2005: € 15,547
thousand) as of the balance sheet date.
Assets under finance leases break down as follows:
€000 2006 2005
Vehicles leasing 1,633,660 1,390,966
Real estate leasing 1,473,194 1,383,619
Equipment leasing 568,575 476,111
Total 3,675,429 3,250,696
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RZB 2006 Consolidated Financial Statements
(41) Operating leases
Operating leases from view of lessor
Future minimum lease payments under non-cancellable operating leases are as follows:
€000 2006 2005
Up to 1 year 27,260 17,158
More than 1 year, up to 5 years 83,075 38,409
More than 5 years 15,646 10,557
Total 125,981 66,124
Operating leases from view of Raiffeisen International as lessee
Future minimum lease payments under non-cancellable operating leases are as follows:
€000 2006 2005
Up to 1 year 51,442 33,982
More than 1 year, up to 5 years 203,273 119,257
More than 5 years 143,556 90,166
Total 398,271 243,405
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Notes on financial instruments RZB 2006
204
Notes on financial instruments
(42) Risks arising from financial instruments (Risk Report)
A bank’s ability to extensively capture and measure risks, to monitor them in real time and to manage them is a decisive
competitive factor. To ensure the long-term success of the RZB Credit Institutions Group and to permit RZB’s selective
growth in the relevant markets, RZB’s risk management and risk controlling activities are directed at ensuring the careful
handling and professional management of credit, country, market, liquidity, equity and operational risks.
RZB’s risk management concept particularly takes into account the legal framework provided by the Austrian Bankwesengesetz
(BWG: Banking Act) and the requirements imposed on banks with regard to the mitigation of banking risks,
with special consideration given to the type and scale of a particular transaction.
Overall risk management and structure of risk management
The Managing Board of Raiffeisen Zentralbank is responsible for the implementation of risk policy in a way appropriate
to each type of risk. RZB’s risk policy is an integral part of its overall bank management procedures, which means that
earnings and risk management in all business segments are systematically linked. The stipulation of risk policy, changes
therein and its integration into overall bank strategy and overall bank management procedures are recorded and communicated
within the RZB Credit Institutions Group, so that similar risk management procedures can be applied throughout
the RZB Credit Institutions Group.
Risk policy encompasses plans for the development of the bank’s business as a whole, among other things according to
industry focus, geographical distribution and segmental subdivision as well as according to exposure size class. In
particular, the Managing Board and Supervisory Board lay down limits for all pertinent risks, and they limit agglomerated
risks by setting lower and upper limits for major exposures.
The Managing Board of Raiffeisen Zentralbank decides which procedures are to be employed in the capturing,
measuring and monitoring of risks and defines the associated regulatory framework. RZB measures all risks on a Groupwide
basis applying a value-at-risk (VaR) approach.
The Managing Board is supported in those tasks by independent risk-controlling and risk management units and specially
appointed committees.
The Risk Management Committee (RMK) reports directly to the Managing Board on a monthly basis and assesses the
current risk situation with reference to the risk-bearing capacity of the RZB Credit Institutions Group and the commensurate
risk limits. It assists the Managing Board with the allocation of the risk budget and with risk management. As a crossdivisional
and enterprise-wide body, the Risk Management Committee (RMK) is responsible for the ongoing further development
and implementation of means of risk measurement, the refining of the instruments of management and the
maintenance and updating of the regulatory framework. The risk that the value of a financial instrument will fluctuate due
to changes in market interest rates and risks arising from the structure of the balance sheet are evaluated by the
Assets/Liabilities Management Committee. The Loan Committee, which is made up of members from the Front Office and
Back Office divisions, assesses credit risk and the effectiveness of credit risk management.
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RZB 2006 Consolidated Financial Statements
The Risk Controlling Department is a service unit that performs the central and independent risk controlling functions
required by the Bankwesengesetz (BWG: Banking Act). This department’s responsibilities consist of drawing up and
implementing the common Group-wide risk management guidelines, capturing all risks within the Group (credit, country,
equity and market risks, operational risk) on a value-at-risk (VaR) basis, and making independent and impartial risk
profile reports to the Managing Board as a whole and to those responsible for individual business subsegments. Those
risks are aggregated into an assessment of overall banking risk and weighed against the Group’s risk-bearing capacity
to provide a basis for risk-adjusted capital allocations and performance measurement.
Risk-bearing capacity and the management of risk within the Group
The available covering assets and funds (earnings, reserves, equity) are compared quarterly with RZB’s aggregated risks
on a value-at-risk basis in a multistage process. The Group’s risk-bearing capacity thereby sets a ceiling on its
aggregated overall banking risk. In addition to actual measured risk, existing risk limits are also taken into account.
Individual risk types in relation to RZB’s
economic capital on 31 December 2006
Risk bearing capacity
Economic capital
When estimating unexpected losses on an annual basis
(so-called economic capital), the Group employs a confidence
interval of 99.95 per cent. This figure is based
on the probability of default implied by the Group’s
target rating. The purpose of calculating economic
capital is to ascertain the amount of capital required for
servicing the claims of customers and creditors even
applying extreme loss scenarios (economic equity).
Based on that level of risk, RZB is in a position to carry
out a risk-adjusted performance measurement (RAPM).
That in turn is used as a parameter in overall bank
management and for the purposes of the associated
capital allocations. Economic capital is currently calculated
on a segment-by-segment basis. Efforts are underway
to extend this management instrument further.
In parallel with that procedure, risk (value at risk) is also calculated on the basis of a confidence interval of 99 per cent.
This capital requirement is likewise weighed against a corresponding estimate of risk-bearing capacity particularly as
regards the bank’s continued existence on a going concern basis and also utilized for the management of business.
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Notes on financial instruments RZB 2006
206
Credit risk
Credit risk within the RZB Credit Institutions Group consists mainly of the default risk that arises from business with personal
banking and corporate customers, other banks and sovereign borrowers. Default risk is the risk that a customer will
not be able to fulfil contractually agreed financial obligations. However, one also distinguishes between migration risks
(caused by deteriorations in customers’ creditworthiness), liquidation and country risk.
Raiffeisen Zentralbank’s credit risk is monitored and analyzed both on an individual loan and customer-by-customer basis
and on a portfolio basis. Credit risk management and lending decisions are based on the credit risk policy approved by
the Managing Board of Raiffeisen Zentralbank. Besides new lending, the areas to which lending decisions pertain also
include in particular overdrafts, increases in credit lines, renewals and risk-relevant changes in circumstances compared
with the time an original lending decision was made (e.g. with respect to collateral or purpose) as well as the setting of
limits for particular borrowers (e.g. issuer limits) and equity participations. The approval of the Front Office and Back
Office divisions is required for an individual loan to be granted and to ratify the regular re-evaluation of the counterparty
risks of default. In the event that the individual decision-making parties disagree, the structure of authority within the
group provides for escalation to the next decision-making level.
The internal system for controlling credit risk encompasses every form of monitoring measure that is directly or indirectly
integrated into the work processes that require monitoring. Against the background of the new capital adequacy
framework for banks (Basel II), the seamless management, monitoring and control of credit risk at the RZB Credit
Institutions Group are thus assured.
The RZB Credit Institutions Group employs risk-classification procedures to measure counterparty risk (rating procedures,
scoring models) when assessing creditworthiness so as to provide an independent assessment of credit risk (as required,
inter alia, by Basel II) and, in future, to permit the calculation of own funds using an internal ratings based approach
(IRB). The rating models for corporate customers, financial institutions and sovereigns rank creditworthiness in ten classes.
They are employed throughout the Group.
Lending to corporate customers,
by internal rating and region
in € million
The internal rating model for Corporate Customers also
takes into account qualitative factors as well as the following
yardsticks, which are tailored to the various
industries and financial reporting standards:
• Interest coverage
• Profit in per cent of revenues
• Net cash from profit in per cent of revenues
• Equity ratio
• Overall return on equity
• Redemption period
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RZB 2006 Consolidated Financial Statements
The following table provides a breakdown of the credit exposure based on economic scores within the rating model for
Corporate Customers in thousands of euros. These figures are based on loans outstanding; collateral must also be taken
into account in the overall assessment:
Internal rating 2006 Per cent 2005 Per cent
0.5 Minimal risk 464,319 0.7% 610,955 1.3%
1.0 Excellent credit standing 5,605,691 8.8% 4,062,591 8.3%
1.5 Very good credit standing 7,718,045 12.1% 4,883,960 10.0%
2.0 Good credit standing 7,422,149 11.7% 5,975,109 12.3%
2.5 Sound credit standing 8,441,276 13.3% 6,813,950 14.0%
3.0 Acceptable credit standing 10,074,786 15.9% 7,795,798 16.0%
3.5 Marginal credit standing 10,783,996 17.0% 7,404,604 15.2%
4.0 Weak credit standing/sub-standard 6,685,610 10.5% 6,105,792 12.5%
4.5 Very weak credit standing/doubtful 2,155,634 3.4% 2,328,138 4.8%
5.0 Default 555,507 0.9% 467,799 1.0%
NR Not rated 3,639,657 5.7% 2,277,306 4.7%
Total 63,546,671 100.0% 48,726,003 100.0%
An examination of portfolio weighting by rating category indicates a slight shift to credit standings in the middle of the
range compared with 2005. The increase in the unrated category is attributable to group units newly acquired in 2006.
The economic rating shown in this table is purely from a borrower standpoint and does not take into account collateral
for specific transactions.
The Retail Customers segment is divided into private customers and small and medium-sized enterprises (SMEs).The table
below provides a breakdown of the credit exposure for this segment by region in thousands of euros:
2006 Total Per cent Austria CE SEE CIS
Retail – private individuals 11,261,294 81.9% 115,212 4,136,754 3,978,032 3,031,296
Retail – SME 2,489,993 18.1% 86,543 1,123,625 751,997 527,828
Total 13,751,288 100.0% 201,755 5,260,379 4,730,029 3,559,125
2005 Total Per cent Austria CE SEE CIS
Retail – private individuals 7,482,249 80.2% 128,524 2,706,831 2,986,527 1,660,367
Retail – SME 1,848,196 19.8% 211,050 549,627 670,053 417,467
Total 9,330,446 100.0% 339,574 3,256,458 3,656,580 2,077,834
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Notes on financial instruments RZB 2006
208
The internal rating model for Financial Institutions is based on a peer-group approach that takes both qualitative and
quantitative information into account. A limit is set on the final rating for Financial Institutions by the pertinent country
rating.
The following table shows the credit exposure per rating class for Financial Institutions (excluding central banks) in thousands
of euros:
Internal rating 2006 Per cent 2005 Per cent
A1 Minimal risk 846,539 1.9% 1,375,421 3.3%
A2 Excellent credit standing 8,517,765 18.8% 7,366,000 17.5%
A3 Very good credit standing 19,232,307 42.5% 18,286,717 43.5%
B1 Good credit standing 5,165,197 11.4% 5,200,364 12.4%
B2 Average credit standing 4,041,792 8.9% 3,778,681 9.0%
B3 Mediocre credit standing 1,434,080 3.2% 1,517,889 3.6%
B4 Weak credit standing 3,403,788 7.5% 1,601,812 3.8%
B5 Very weak credit standing 582,114 1.3% 1,267,331 3.0%
C Doubtful/high default risk 388,482 0.9% 101,675 0.2%
D Default 9,279 0.0% 8,359 0.0%
NR Not rated 1,640,515 3.6% 1,564,011 3.7%
Total 45,261,859 100.0% 42,068,259 100.0%
The table below provides a breakdown of the credit exposure to Sovereigns (including central banks) based on the internal
rating in thousands of euros:
Internal rating 2006 Per cent 2005 Per cent
A1 Minimal risk 1,640,953 11.6% 1,926,982 17.6%
A2 Excellent credit standing 591,300 4.2% 684,014 6.2%
A3 Very good credit standing 2,496,015 17.6% 2,526,682 23.0%
B1 Good credit standing 1,747,320 12.3% 438,082 4.0%
B2 Average credit standing 4,840,937 34.1% 3,059,718 27.9%
B3 Mediocre credit standing 150,254 1.1% 167,130 1.5%
B4 Weak credit standing 782,878 5.5% 247,790 2.3%
B5 Very weak credit standing 1,375,980 9.7% 1,668,717 15.2%
C Doubtful/high default risk 843 0.0% 6,183 0.1%
D Default 38,898 0.3% 361 0.0%
NI Not identifiable 270,858 1.9% 184,918 1.7%
NR Not rated 256,389 1.8% 55,151 0.5%
Total 14,192,624 100.0% 10,965,729 100.0%
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RZB 2006 Consolidated Financial Statements
Impairment provisions and other provisions
All default definitions have been adapted for the purposes of the IRB approach and the revised definitions have been
applied throughout the RZB Credit Institutions Group within the scope of our Basel II project. As defined by RZB, a default
situation exists if a customer is overdue with respect to a material financial obligation to the bank for at least 90 days, if
a customer is the subject of insolvency or similar proceedings, if an impairment provision has been allocated or a direct
write-down has been carried out to a customer account receivable, or if Credit Risk Management have adjudged a
customer account receivable to be not wholly recoverable and the Work-out Unit is considering stepping in to help a
company regain its financial soundness.
A Group-wide rating and default database has been created within the scope of the Group’s Basel II project to capture
and assess customers and to record default situations. This database also serves the RZB Credit Institutions Group as the
basis for backtesting.
The lending portfolio and borrowers are subject to constant monitoring. A review is conducted at least annually for corporate
customers, financial institutions and sovereigns and emphasizes the detection of any early warning indicators.
Troubled loans are processed by specially trained and experienced employees of the Work-Out Unit. They mainly handle
medium-sized to large cases and are also assisted by RZB’s in-house Legal Department and/or by external specialists.
The Work-Out Unit plays a decisive role in charting and analyzing as well as forming provisions for impairment losses
(write-downs, value adjustments, provisioning) and becomes involved early on in reducing the losses caused by troubled
loans. Each case in which restructuring or settlements take place is analyzed by Raiffeisen Zentralbank to ascertain its
causes. Lending processes are then adapted as necessary on the basis of the results of such analyses.
The following table shows the corresponding loans outstanding in the defined asset classes within Loans and advances to
banks and Loans and advances to customers on the Balance Sheet and the corresponding proportion of non-performing
loans (without taking any collateral into account) and impairment provisions splitted by RZB’s regions:
2006
€000
Austria
CE
Corporate Customers 16,195,859 10,280,243 5,069,337 6,451,725 643,111 38,640,275
Non-performing 414,238 216,638 100,183 96,995 39,553 867,607
Impairment losses on loans 357,088 179,962 108,304 187,531 38,959 871,844
Retail Customers 180,173 4,683,906 4,320,801 3,408,495 – 12,593,375
Non-performing 385 152,138 78,125 90,762 – 321,410
Impairment losses on loans 9,272 123,659 97,174 174,271 – 404,376
Financial Institutions 25,728,261 2,093,367 2,705,945 1,399,159 79,191 32,005,923
Non-performing 25,024 1,642 161 – 8,996 35,823
Impairment losses on loans 9,210 – 161 – 2,671 12,042
Sovereigns 595,857 481,816 387,931 236 406,187 1,872,026
Non-performing – 534 – – – 534
Impairment losses on loans – 170 22 – – 193
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SEE
CIS
Other
Total
209

Notes on financial instruments RZB 2006
210
2005
€000
Austria
CE
Corporate Customers 13,065,101 8,290,117 3,200,308 4,400,309 963,740 29,919,575
Non-performing 286,962 149,419 95,388 51,574 54,355 637,699
Impairment losses on loans 360,558 159,691 83,543 127,020 45,491 776,303
Retail Customers 304,744 2,598,295 3,459,581 2,094,477 – 8,457,096
Non-performing – 72,438 20,216 31,316 – 123,969
Impairment losses on loans 7,129 86,649 67,004 125,750 – 286,532
Financial Institutions 24,646,235 2,113,304 2,032,029 761,964 93,001 29,646,533
Non-performing 17,494 – – – 10,063 27,557
Impairment losses on loans 11,845 – 177 – 2,982 15,005
Sovereigns 596,217 291,561 326,459 4,296 18,098 1,236,630
Non-performing – 1,447 – – – 1,447
Impairment losses on loans 677 – – 33 – 710
Impairment losses on loans and advances
Provisions for impairment losses on loans and advances are formed on the basis of Group-wide standards and cover
all discernible credit risks. The following summary of impairment losses on loans and advances shows the development
in the fiscal year and that of the underlying balance sheet items whereby the geographic disclosure refers to the
customer’s seat:
€000
As of
1/1/2006
www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group
SEE
CIS
Change in
consolidated
group Allocation* Release Usage**
Other
Transfers,
exchange
differences
As of
31/12/2006
Individual loan loss provisions 955,842 10,250 468,798 (278,450) (123,267) (16,718) 1,016,455
Loans and advances to banks 15,005 – 1,862 (33) (3,981) (809) 12,043
Loans and advances to customers 890,345 10,184 430,080 (255,071) (118,066) (19,504) 937,968
Austria 232,557 – 22,942 (32,241) (26,233) (11,765) 185,260
CE 208,171 3,814 149,558 (98,765) (42,203) 5,267 225,842
SEE 105,378 7 93,864 (25,761) (20,308) (1,220) 151,960
CIS 166,416 6,363 131,923 (78,583) (17,343) (14,613) 194,163
Other 177,823 – 31,793 (19,721) (11,979) 2,827 180,743
Off-balance-sheet obligations 50,492 66 36,856 (23,346) (1,219) 3,595 66,444
Portfolio-based provisions 173,200 21,282 211,428 (55,320) – (5,256) 345,335
Loans and advances to customers 173,200 21,282 204,621 (54,353) – (5,511) 339,240
Off-balance–sheet obligations – – 6,807 (967) – 255 6,095
Total 1,129,042 31,533 680,226 (333,770) (123,267) (21,974) 1,361,790
* Allocation including direct write-downs and income on written down claims.
** Usage including direct write-downs and income on written down claims.
Total

RZB 2006 Consolidated Financial Statements
Country risk
Country risk includes transfer and convertibility risks and political risk. RZB’s proactive management of country risk takes
place on the basis of the country risk policy laid down by the Managing Board (as prepared by the Country Risk
Committee). The Country Risk Committee is made up of representatives of the various business segments and Risk Management.
The measurement of risks associated with sovereign institutions is based on a ten-class rating model that
captures both macroeconomic factors and qualitative indicators. Each country limit takes into account the business volumes
that are of relevance for risk purposes net of any third-country collateral.
Lending portfolio
RZB’s lending portfolio is broad and well diversified in terms of region and industry. Granularity has improved further,
although, as a leading commercial bank, RZB focuses on the top 1,000 enterprises in Austria as well as medium and
large-scale enterprises in CEE. The ten largest corporate exposures, with an excellent average rating of 1.5, account for
5% of the corporate portfolio.
Within the scope of its risk policy and assessments of creditworthiness, RZB also considers the borrower’s industry. The
following table covers the customer credit exposure (without banks and central banks):
€000 2006 Per cent 2005 Per cent
Manufacturing 16,544,963 19.2% 13,895,154 21.7%
Retail and wholesale trade 14,687,577 17.0% 12,234,470 19.1%
Private households 12,136,527 14.1% 7,743,340 12.1%
Real estate 11,758,521 13.6% 7,451,683 11.6%
Banking and insurance 10,049,486 11.6% 6,215,987 9.7%
Public administration, social insurance institutions 8,904,280 10.3% 7,301,446 11.4%
Transport and telecommunications 3,832,666 4.4% 3,012,354 4.7%
Construction 3,509,909 4.1% 2,318,865 3.6%
Other 4,954,145 5.7% 3,795,489 5.9%
Total 86,378,074 100.0% 63,968,788 100.0%
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211

Notes on financial instruments RZB 2006
212
Credit exposure from banks and customers break down regionally as follows:
€000 2006 Per cent 2005 Per cent
European Union (EU-15) 28,810,126 21.1% 21,852,623 19.7%
Austria 28,103,473 20.6% 27,483,675 24.7%
European Union (EU-10)* 26,772,750 19.6% 22,630,861 20.4%
SEE 20,012,779 14.6% 14,333,556 12.9%
CIS 14,329,570 10.5% 11,244,552 10.1%
North Amercia 5,489,345 4.0% 5,659,184 5.1%
Far East 5,157,414 3.8% 4,577,460 4.1%
Other 8,076,983 5.9% 3,300,933 3.0%
Total 136,752,441 100.0% 111,082,845 100.0%
* The EU-10 pertain to the new member states that acceded in May 2004, especially those from Central and Eastern Europe.
Equity risk
The banking book also contains risks arising from listed and unlisted equity participations. They are captured separately
under this risk heading. The methodology used for the value-at-risk measurement and risk-capital assessment of equity
participations is comparable to the methodology used to capture the price risk arising from shareholdings. However, in
the light of the longer-term strategic nature of equity participations, annual volatilities based on periods of observation of
several years are also brought into the calculation. RZB does not include strategically and operatively controlled Group
subsidiaries under this risk heading because their risks are calculated with precision under the other risk headings during
consolidation and are captured by that process.
Market risk
RZB defines market risk as the risk of possible losses arising from changes in the market due to fluctuating or changing
interest rates, foreign exchange rates, share prices and prices in general (directly observable prices [e.g. indices and
commodities] or also indirectly observable prices, e.g. volatilities and correlations). This risk category encompasses both
trading book and banking book positions. Risky positions are the result either of business done for customers or of the
deliberate assumption of positions and are managed by the Treasury and Investment Banking divisions.
RZB approves, measures, monitors and manages all market risks by setting a variety of limits. The overall limit is set by
the Managing Board as a whole on the basis of the bank’s risk-bearing capacity and income budgeting. This limit is
apportioned on the basis of a coordinated proposal made by the particular department, Central Risk Management and
the responsible member of the Managing Board. The individual limits set at book level will vary according to the different
risk factors. Besides value-at-risk (VaR) limits, those limits may include volume and position limits as well as sensitivity
limits (basis-point value, delta, gamma, vega) and stop-loss limits, depending on the type of transaction. Options may
only be entered into by appropriately trained dealers. Positions and limits undergo daily scrutiny throughout the Group.
Value-at-risk is of central importance in setting limits. It is calculated daily for Raiffeisen Zentralbank and weekly for the
Raiffeisen Credit Institutions Group using a variance-covariance matrix and applying a confidence interval of 99 percent.
Market data are taken from the preceding year applying a retention period of 10 days. The informative value and
reliability of the value-at-risk approach based on past market developments are checked daily at Raiffeisen Zentralbank
using appropriate backtesting.
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RZB 2006 Consolidated Financial Statements
The ascertained value-at-risk figures forecast maximum losses under normal market conditions but do not provide any
specific information about the effects of exceptional extreme market movements. To take such events into account, RZB
carries out weekly defined stress tests that capture the biggest daily market movements in the preceding five years. That
procedure allows the simulation of crisis situations and of major fluctuations in market parameters and the application of
those simulations to positions. The results are an important substructure for the management of risks.
Market risk in RZB’s trading books
Market risk in RZB’s trading books depends primarily on currency risk, which results from the equity of foreign Group
units held in foreign currencies and the related hedging activities by the Assets/Liabilities Management Committee.
The table below provides risk figures (99%, VaR, 10-day) for market risk in the trading books of the RZB Credit
Institution Group, by risk type:
€000
VaR as of
31/12/2006
Average
VaR
Minimum
VaR
Maximum
VaR
Interest rate risk 9,663 5,149 1,711 11,586
Currency risk 33,052 31,290 18,272 48,454
Price risk 18,514 19,830 16,405 26,406
€000
VaR as of
31/12/2006
Average
VaR
Minimum
VaR
Maximum
VaR
Interest rate risk 3,768 3,246 1,697 6,327
Currency risk 35,905 28,042 13,714 52,236
Price risk 18,715 17,906 8,469 35,849
RZB uses the standard methodology within the meaning of the Capital Adequacy Directive to calculate its own funds
requirement for the trading book.
Market risk in the banking book
Alongside value-at-risk measurement, interest-rate risk in the banking book is also estimated using classical means of
capital and interest maturity analysis. Furthermore, because of the special importance and complexity of interest-rate risk
in the banking book, RZB also employs interest-income scenarios and simulations. Managing the structure of balance
sheets is a core task of Central Treasury and of the local banks, which receive assistance from Assets/Liabilities Management
Committees. Since 2002, interest-rate risk has been the subject of quarterly reporting within the scope of the
interest-rate risk statistics submitted to the supervisory authorities. Reports also capture the change in the present value of
the banking book as a percentage of own funds in line with the requirements of Basel II. Necessary key measures for
maturities are undertaken as specified by regulatory authorities and based on internal statistics and empirical values.
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213

Notes on financial instruments RZB 2006
214
Interest maturity gaps at RZB as of 31 December 2006 in €000:
Maturity gap 2006 6–12 months 1–2 years 2–5 years >5 years
EUR (1,166,125) 649,026 (1,503,441) (46,229)
USD 1,064,625 (192,184) (51,412) 81,026
JPY 13,116 (28) 7,466 0
CHF 46,926 (537) (7,729) 21,073
Other 360,775 287,027 364,592 47,943
Interest maturity gaps at RZB as of 31 December 2005 in €000:
Maturity gap 2005 6–12 months 1–2 years 2–5 years >5 years
EUR (4,565,021) (48,769) 7,790,274 24,033
USD (883,938) 637,336 61,972 30,181
JPY 1,597 (87) (57) 8,459
CHF 107,667 1,438 1,292 (4,970)
Other 632,986 66,742 533,099 (598)
The change in the present value of RZB’s banking book in the year ended 31 December 2006 in €000 given a simultaneous
one-basis-point increase in interest rates:
Change of present value 2006 6–12 months 1–2 years 2–5 years >5 years
EUR 95.3 (41.6) (428.2) (49.8)
USD (60.2) 10.9 16.3 (44.8)
JPY (0.9) 0.0 (3.0) 0.0
CHF (3.9) 0.2 3.0 (26.9)
Other (21.2) (35.3) (90.8) (24.5)
The change in the present value of RZB’s banking book in the year ended 31 December 2005 in €000 given a simultaneous
one-basis-point increase in interest rates:
Change of present value 2005 6–12 months 1–2 years 2–5 years >5 years
EUR 224.1 (46.8) (2,116.4) (19.7)
USD 64.0 (99.2) (15.9) (15.5)
JPY (0.2) 0.0 0.0 (4.2)
CHF (8.9) (0.1) (0.2) 3.9
Other (52.8) (9.8) (146.1) (1.2)
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RZB 2006 Consolidated Financial Statements
Liquidity risk
RZB defines liquidity risk as the risk that the bank could be unable to meet its current and future financial obligations in
full or in good time. The liquidity risk therefore results from the risk that, for example, refinancing can only be carried out
at disadvantageous conditions or not at all. Other examples are situations in which assets have to be sold at short notice
at a great discount or in which repayments in lending business are not made on schedule. Customers availing themselves
of standby arrangements unexpectedly are a further example, as is a widespread unexpected withdrawal of deposits.
The tasks of managing liquidity and liquidity risk and, in turn, of ensuring the bank’s solvency at all times are performed
both centrally – by Global Treasury in Vienna – and on a decentralized basis by the local banks. An internal monitoring
system records and analyzes cash flows by currency both for each location and globally on a weekly basis. Besides
conforming to the statutory requirements and taking liquidity limits into account, analyses are also based on goingconcern
principles and make allowance for crisis scenarios, in particular examining the sensitivity of liabilities and the
liquidity of assets.
The analysis below shows cumulative excess liquidity and the ratio of due assets to liabilities for select maturities taking
into account balance sheet items and off-balance-sheet business. Based on expert opinions, statistical analyses and country-specific
differences, this process also incorporates cautious estimates of the possibilities of liquidating defined asset
items or that part of customer deposits that are permanent in character.
Maturity 2006 2005
Monetary values in €000 1 week 1 month 1 year 1 week 1 month 1 year
Liquidity gap 13,843,721 13,068,377 7,739,691 13,893,341 9,889,983 6,772,286
Liquidity ratio in per cent 1.49 1.35 1.11 1.54 1.28 1.11
Limits are put in place for each Group unit to limit liquidity risk. They require a positive short-term liquidity gap subject to
conservative assumptions regarding the marketability of liquid assets and outflows on the liabilities side of the Balance
Sheet. The bank maintains extensive liquid holdings of liquid securities to ensure its liquidity in various currencies and
carries out continuous liquidity balancing and cash flow forecasts. These too are subject to assessment by the
Assets/Liabilities Management Committees.
Operational risk
In line with Basel II, operational risk is defined as the risk of unexpected losses resulting from inadequate or failed internal
processes, people and systems or from external events, including legal risk.
As with other types of risk, the principle of firewalling between risk management and risk controlling is also applied to
operational risk. Operational risk is analyzed and managed on the basis of the Group’s own historical loss data and the
results of risk evaluations. The collection of loss data and as well as the assessment of risk take place in a structured and
homogeneous Group-wide form for each business segment according to business process and type of event. The
introduction of standardized early-warning indicators for operational risks is planned.
The standard approach to operational risk within the meaning of Basel II is employed. This approach is based on gross
earnings in each business segment.
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215

Notes on financial instruments RZB 2006
216
To further reduce operational risk, RZB is stepping up the staff training programme as well as working on the development
of emergency plans and back-up systems. The SixSigma method for business process improvement is also being
applied.
(43) Derivative financial instruments
The total volume of unsettled financial instruments as of 31 December 2006 breaks down as follows:
2006 Nominal amount by maturity Fair values
€000 Up to 1 year
More than 1,
up to 5 years
More than
5 years Total Positive Negative
Total 102,108,964 86,855,296 24,529,969 213,494,229 1,933,059 (3,270,876)
Interest rate contracts 52,863,769 81,740,213 23,412,367 158,016,349 1,156,257 (1,186,565)
OTC products
Interest rate swaps 42,104,786 65,593,040 20,562,823 128,260,649 1,060,512 (1,138,904)
Interest rate futures 5,443,828 2,419,684 7,863,512 5,663 (5,403)
Interest rate options – buys 1,867,093 6,421,224 905,606 9,193,923 56,774 –
Interest rate options – sells 354,738 1,201,050 1,257,221 2,813,009 – (26,101)
Other similar contracts 858,684 2,620,908 275,165 3,754,757 9,651 (5,727)
Products traded on stock exchange
Interest rate futures 2,196,675 2,891,107 341,353 5,429,135 23,416 (8,197)
Interest rate options 37,965 593,200 70,200 701,365 240 (2,232)
Foreign exchange contracts 48,164,995 4,011,949 101,922 52,278,865 613,426 (620,596)
OTC products
Cross-currency interest rate swaps 2,181,848 2,344,976 99,771 4,626,594 75,041 (29,303)
Foward foreign exchange
contracts 42,158,146 560,930 2,133 42,721,209 474,866 (530,778)
Currency options – buys 1,591,899 540,973 18 2,132,889 62,538 –
Currency options – sells 1,776,885 565,070 – 2,341,955 – (59,487)
Other similar currency contracts 449,904 – – 449,904 159 (327)
Products traded on stock exchange
Currency contracts (Futures) 6,314 – – 6,314 822 (700)
Equity/index contracts 1,032,399 1,103,134 1,015,680 3,151,213 163,377 (1,462,200)
OTC products
Equity-/index-based options – buys 166,518 73,324 152,828 392,670 78,916 –
Equity-/index-based options – sells 38,483 44,801 106,939 190,222 – (15,993)
Other similar contracts 442,216 920,037 755,913 2,118,166 66,065 (1,441,287)
Products traded on stock exchange
Equity/index futures 172,523 64,389 – 236,912 14,222 (3,080)
Equity-/index-based options 212,659 583 – 213,242 4,174 (1,839)
Commodity futures 47,801 – – 47,801 – (1,515)
www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006 Consolidated Financial Statements
Due to the initial presentation of own-structured issued notes in this table, other similar contracts regarding equity-based
transactions increased by € 809,714 thousand. The negative fair values of other equity-based transactions (OTC
products) are covered by adequate asset items, especially trading assets.
The total volume of unsettled financial instruments as of 31 December 2005 breaks down as follows:
2005 Nominal amount by maturity Fair values
€000 Up to 1 year
More than 1,
up to 5 years
More than
5 years Total Positive Negative
Total 104,690,544 58,550,944 18,814,291 182,055,779 1,854,971 (2,215,495)
Interest rate contracts 59,657,017 56,749,528 18,626,004 135,032,549 1,341,005 (1,201,502)
OTC products
Interest rate swaps 35,088,607 45,153,818 15,325,382 95,567,807 1,287,074 (1,165,024)
Interest rate futures 18,940,693 1,418,966 – 20,359,658 14,567 (10,973)
Interest rate options – buys 2,899,696 6,439,061 1,306,376 10,645,132 33,857 –
Interest rate options – sells 1,047,935 538,570 1,539,886 3,126,391 – (21,490)
Products traded on stock exchange
Interest rate futures 1,631,668 2,749,115 294,360 4,675,142 4,480 (3,730)
Interest rate options 48,419 450,000 160,000 658,419 1,026 (284)
Foreign exchange contracts 42,408,320 1,776,766 183,953 44,369,039 384,795 (366,159)
OTC products
Cross-currency interest rate swaps 245,984 1,070,055 180,703 1,496,741 23,442 (35,418)
Foward foreign exchange contracts 39,401,784 569,123 3,251 39,974,158 339,967 (304,926)
Currency options – buys 1,273,867 69,510 – 1,343,377 21,082 –
Currency options – sells 1,311,687 68,078 – 1,379,765 – (25,063)
Products traded on stock exchange
Currency contracts (Futures) 174,998 – – 174,998 303 (752)
Equity/index contracts 2,594,616 24,650 4,333 2,623,599 115,705 (640,487)
OTC products
Equity/index futures 780,911 17,411 2,167 800,488 102,681 –
Equity-/index-based options 1,454,349 7,239 2,167 1,463,754 – (638,599)
Products traded on stock exchange
Equity/index futures 359,356 – – 359,356 13,024 (1,888)
Commodity futures 30,592 – – 30,592 13,467 (7,348)
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217

Notes on financial instruments RZB 2006
218
(44) Fair values of financial instruments
Fair Value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing
parties in an arm's length transaction. As far as market prices are available (mainly securities and derivatives quoted on
stock exchange or active markets), this quotation represents the fair value.
All other financial instruments are valued using internally accepted calculation models, especially discounted cash flow
analysis and option pricing models. Fair values different from the carrying amount are calculated for fixed-interest loans
and advances to and deposits from banks or customers, if the remaining maturity is more than one year. Variableinterest
loans and advances and deposits are taken into account if they have an interest rollover period of more than one
year. The effect of discounting by using a computational interest rate that reflects the market rates is only material in those
cases.
2006 €000 Fair value Carrying amount Difference
Assets
Loans and advances to banks 31,730,777 32,005,923 (275,146)
Loans and advances to customers 53,094,879 53,105,675 (10,796)
Financial investments 5,741,366 5,721,616 19,750
Liabilities
Deposits from banks 44,084,345 44,129,411 (45,066)
Deposits from customers 44,741,545 44,727,489 14,056
Liabilities evidenced by paper 11,348,920 11,322,460 26,460
Subordinated capital 2,649,998 2,895,608 (245,610)
2005 €000 Fair value Carrying amount Difference
Assets
Loans and advances to banks 29,640,944 29,646,533 (5,589)
Loans and advances to customers 39,781,398 39,613,302 168,096
Financial investments 5,485,314 5,431,059 54,255
Liabilities
Deposits from banks 43,377,672 43,416,484 (38,812)
Deposits from customers 32,161,816 32,157,831 3,985
Liabilities evidenced by paper 6,292,696 6,217,210 75,486
Subordinated capital 1,674,440 1,630,638 43,802
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RZB 2006 Consolidated Financial Statements
Disclosures required by Austrian law
(45) Securities admitted for trading on a stock exchange pursuant to § 64 BWG
2006 2005
€000 Listed Unlisted Listed Unlisted
Bonds, notes and other fixed-interest securities 13,480,896 733,376 10,419,200 354
Shares and other variable-yield securities 1,028,653 – 1,203,463 –
Equity participations 88,884 – 75,456 –
(46) Volume of the trading book pursuant to § 22b BWG
€000 2006 2005
Securities 9,196,620 8,596,323
Other financial instruments 140,520,975 156,487,978
Total 149,717,595 165,084,302
(47) Regulatory own funds
The own funds of the RZB-Kreditinstitutsgruppe pursuant to the Austrian Banking Act (BWG) break down as follows:
€000 2006 2005
Tier 1 capital (core capital) 5,651,645 3,981,642
Tier 2 capital (additional own funds) 1,723,495 1,306,391
Less interests in banks and financial institutions (209,371) (201,877)
Eligible own funds 7,165,769 5,086,156
Tier 3 capital (short-term subordinated own funds) 448,457 113,136
Total own funds 7,614,226 5,199,292
Total own funds requirement 5,652,499 4,462,674
Excess own funds 1,961,727 736,618
Excess cover ratio in per cent 34.7% 16.5%
Core capital ratio (Tier 1), banking book, in per cent 9.0% 8.3%
Own funds ratio in per cent 10.8% 9.3%
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219

Disclosures required by Austrian law RZB 2006
220
The total own funds requirement is as follows:
€000 2006 2005
Risk-weighted basis of assessment according to Sec. 22 BWG 62,908,300 47,967,650
hereof 8 per cent minimum own funds requirement 5,032,664 3,837,412
Own funds requirement for the trading book according to Sec. 22b (1) BWG 460,192 439,569
Own funds requirement for open currency positions according to Sec. 26 BWG 159,643 185,693
Total own funds requirement 5,652,499 4,462,674
(48) Average number of staff
The average number of staff employed during the financial year (full-time equivalents) break down as follows:
Full-time equivalents 2006 2005
Salaried employees 49,324 30,368
Wage earners 2,441 697
Total 51,765 31,065
Full-time equivalents 2006 2005
Austria 2,476 2,469
Central Europe (CE) 10,403 9,013
Commonwealth of Independent States (CIS) 25,997 8,270
Southeastern Europe (SEE) 12,579 11,032
Other countries 310 282
Total 51,765 31,065
(49) Expenses on severance payments and retirement benefits
€000 2006 2005
Members of the Managing Board and senior staff 12,669 25,101
Other employees 12,091 12,542
Total 24,760 37,644
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RZB 2006 Consolidated Financial Statements
(50) Relations to Key Management
Group relations of key management
Key management refers to the Managing Board of Raiffeisen Zentralbank Österreich AG and the management of
Raiffeisen-Landesbanken-Holding GmbH. Relations of key management to RZB are as follows (respective fair values):
€000 2006 2005
Loans – 33
Sight deposits 9 76
Shares 7,109 2,796
Time deposits 1,016 637
Other claims 10 145
The following table shows relations of close family members of key management to RZB:
€000 2006 2005
Sight deposits 138 2
Beyond that, there are no further relations of RZB to key management. Moreover, there is no compensation agreed
between the company and their members of the Managing Board and Supervisory Board or employees in the case of a
takeover bid.
Remuneration of members of the Managing Board
The members of the Managing Board of Raiffeisen Zentralbank Österreich AG are remunerated as follows:
€000 2006 2005
Fixed and performance-based remunerations 9,118 5,443
Payments to pension funds 315 311
Total 9,433 5,754
The table contains fixed remunerations and performance-based remunerations as well as remunerations for membership
of boards of affiliated companies, bonuses, and payments in kind. In the financial year 2006, the share of performancebased
remuneration components including a special bonus was 68.0 per cent (2005: 39.0 per cent).
Performance-based remuneration components of the Managing Board are linked to achieve the objectives regarding
profit after tax, return on standard capital and cost/income ratio as well as to achieve the personal objectives that are
agreed annually. There were no material changes in the principle for profit-sharing compared to the previous year.
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Disclosures required by Austrian law RZB 2006
222
Moreover, a pension plan was granted to a member of the Managing Board having a function in the Managing Board
of a subsidiary. In the financial year 2006, a provision was built in the amount of € 2,000 thousand. Furthermore this
member of the Managing Board received a bonus promise in connection with the acquisitions made; therefore a
provision of € 2,458 thousand was made. The planned payments are due not before 2009. These payments are mainly
dependent on achieving the targeted objectives of these acquired subsidiaries (return on standard capital, cost/income
ratio and profit after tax). In the previous year, there were no such commitments.
Remuneration of members of other bodies
The following remunerations are paid to members of other boards and because of contractual obligations to former
members of the Managing Board:
€000 2006 2005
Former members of the Managing Board and dependants 813 914
Supervisory Board 451 434
Federal Advisory Board (Länderkuratorium) 170 165
The annual remuneration to the members of the Supervisory Board and Federal Advisory Board totalled € 621 thousand.
Moreover, no contracts subject to approval pursuant to Section 95 (5) 12 Austrian Corporation Act are concluded with
members of the Supervisory Board in the financial year 2006.
(51) Bodies
Pursuant to Section 70 (1) Stock Corporation Act (AktG), the Managing Board shall manage the enterprise on its own
responsibility in such a way as is necessary for the good of Raiffeisen Zentralbank and its Group taking into account the
interests of the shareholders and employees and the public interest.
According to Stock Corporation Act, the Supervisory Board is responsible for monitoring the activities of the Managing
Board and supporting it in connection with fundamental strategic enterprise decisions. The Supervisory Board established
the Personnel Committee, the Audit committee and the Working Committee from its midst.
• The Personnel Committee has the responsibility for legal relationships between the Company and active and retired
members of the Managing Board except in matters of the appointment or dismissal of members of the
Managing Board.
• The Supervisory Board’s Audit Committee reviews and audits the annual financial statements and the Company’s
management report together with any consolidated financial statements and the Group’s management report. The
committee prepares the formal approval of the annual financial statements by the Supervisory Board and in
addition, it makes a recommendation to the Supervisory Board regarding the choice of auditor and group auditor.
• The Supervisory Board’s Working Committee exercises its supervisory and approving powers above all when
banking risks are assumed (including acquisition and sale of securities) or risk limits are granted to customers or
group of related customers at the amount of or in excess of a specific ceiling as laid down in the memorandum
and articles of association and with the respect to the setting up, deactivation or closure of subsidiaries and the
acquisition or disposal of equity participations, whether directly, or indirectly by way of a subsidiary pursuant to
Section 244 (2) Austrian Commercial Code (UGB), insofar as ceilings as laid down in the memorandum and
articles of association are exceeded.
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RZB 2006 Consolidated Financial Statements
Finally, it also approves appointments of members of the Managing Board or of employees of the bank as members of
boards of subsidiaries and, with regard to the Managing Board, approves the lifting of the restraint on competition so
as to allow the acceptance of posts on the supervisory boards of companies that are not related to this Company within
the scope of the Group or in which this Company does not have a shareholding pursuant to Section 228 (1) Austrian
Commercial Code. In addition, it must approve the conclusion of special contracts of employment under which retirement
benefit promises are made except in the case of the legal relationship specified in Section 6 (2) of the Supervisory
Board’s standing orders.
The Federal Advisory Committee (Länderkuratorium) is another statutory body established by the Supervisory Board. It
has an advisory function and is entitled to make suggestions to the Supervisory Board at any time.
Managing Board
• Walter Rothensteiner, Chairman and CEO (1 January 1995)
• Herbert Stepic, Vice-Chairman and Deputy to the CEO (28 April 1987)
• Patrick Butler, M.A. (1 October 2004)
• Karl Sevelda, (1 March 1998)
• Manfred Url, (1 March 1998)
All mentioned members of the Managing Board are
appointed until 10 March 2012.
Supervisory Board
Presiding Committee
• Christian Konrad, President, P, A, W; (24 April 1990), Generalanwalt
of Österreichischer Raiffeisenverband and Chairman of the Supervisory
Board of Raiffeisenlandesbank Niederösterreich-Wien AG
• Markus Mair, Vice-President, P, A, W, (26 June 2006), CEO of
Raiffeisen-Landesbank Steiermark AG
• Julius Marhold, P, A, W, Vice-President, ( 2 April 1982), CEO of
Raiffeisenlandesbank Burgenland und Revisionsverband regGenmbH
• Ludwig Scharinger, P, A, W, (22. April 1986), Vice-President, CEO of
Raiffeisenlandesbank Oberösterreich AG
Members
• Klaus Buchleitner, (20 June 2003), Chairman of the Managing Board
of RWA Raiffeisen Ware Austria AG
• Klaus Pekarek, (25 April 1989), CEO of Raiffeisenlandesbank Kärnten
– Rechenzentrum und Revisionsverband, regGenmbH
• Franz Pinkl, (23 June 2004), CEO of Österreichische Volksbanken-AG
• Peter Püspök, (1 September 1998), CEO of Raiffeisenlandesbank
Niederösterreich-Wien AG
• Günther Reibersdorfer, (23 June 2005), CEO of Raiffeisenverband
Salzburg regGenmbH
• Hannes Schmid, (23 June 2005), Chairman of the Managing Board
of Raiffeisen-Landesbank Tirol AG
• Karl Waltle, (12 April 1985), Chairman of the Managing Board of
Raiffeisenlandesbank Vorarlberg Waren- und Revisionsverband regGenmbH
• Gottfried Wanitschek, (25 June 1997), Member of the Managing
Board of UNIQA Versicherungen AG
All mentioned members of the Supervisory Board are
appointed until the Annual General Meeting 2009.
Staff Council delegates
• Franz Hummel, A, W, (9 January 1997), Chairman of the Staff Council
• Martin Prater, A, W, (11 January 1991),
Deputy to the Chairman of the Staff Council
• Hildegard Svejda, (9 January 1997),
Deputy to the Chairman of the Staff Council
• Peter Anzeletti-Reikl, (1 January 2004)
• Heidrun Mössner, (1 September 2005)
• Helge Rechberger, (26 January 2002)
State Commissioners
• Alfred Lejsek, (1 September 1996), State Commissioner
• Christian Riemer, (1 September 1993), Deputy State Commissioner
Federal Advisory Board (Länderkuratorium)
• Kurt Amann, Chairman (from 20 June 2006, previously
Deputy to the Chairman), Chairman of the Supervisory Board of
Raiffeisenlandesbank Vorarlberg Waren- und Revisionsverband regGenmbH
• Sebastian Schönbuchner, Chairman (to 20 June 2006, thereafter
member), Chairman of Raiffeisenverband Salzburg regGenmbH
• Helmut Thrackl, Deputy to the Chairman (from 20 June 2006, previously
member), Chairman of Raiffeisenlandesbank Burgenland und
Revisionsverband regGenmbH
• Walter Zandanell, Vice-Chairman, Chairman of the Supervisory Board
of Österreichische Volksbanken-AG
• Jakob Auer, Chairman of the Supervisory Board of Raiffeisenlandesbank
Oberösterreich AG
• Peter Greiderer, Chairman of the Supervisory Board of Raiffeisen-
Landesbank Tirol AG
• Hans Malliga, Chairman of the Supervisory Board of Raiffeisenlandesbank
Kärnten – Rechenzentrum und Revisionsverband, regGenmbH
• Franz Romeder, Vice-Chairman of Raiffeisen-Holding Niederösterreich-
Wien regGenmbH
• Wilfried Thoma, President of the Supervisory Board of Raiffeisen-
Landesbank Steiermark AG
P – Member of the Personnel Committee
A – Member of the Audit Committee
W – Member of the Working Committee
(Date) – Date of first assignment
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Disclosures required by Austrian law RZB 2006
224
(52) Organizational structure of Raiffeisen Zentralbank
Customer and product segments mesh within a matrix at
Raiffeisen Zentralbank. That facilitates customer-orientated
transaction processing and cooperation between divisions.
In addition, there are service departments that serve all
other divisions. The various divisions report to members of
the Managing Board as follows:
1 – Walter Rothensteiner
2 – Herbert Stepic
3 – Patrick Butler, M.A.
4 – Karl Sevelda
5 – Manfred Url
Vienna, 12 March 2007
The Managing Board
Walter Rothensteiner Herbert Stepic
Customer divisions
• Austrian Corporate Customers, 4, Joseph Eberle
• Multinational Corporate Customers, 4, Peter Bazil
• Global Markets, 3, Martin Czurda
• Raiffeisen International, 2
• Verbund (Raiffeisen Banking Group), 5
Product divisions
• Corporate, Trade and Export Finance, 4, Helmut Breit
• Customer Services, 4, Günter Kreuzhuber
• Transaction Services, 5, Günther Gall
• Global Treasury, 3, Nicolaus Hagleitner
Service divisions
• Audit, 1, Robert Tinauer
• Group Control, 1, Wolfgang Forster
• Human Resources, 1, Josef Dellinger
• Legal and Compliance, 1, Friedrich Sommer
• Management Services, 1, Gerhard Tanew
• Participations, 1, Christian Teufl
• Public Relations, 1, Andreas Ecker-Nakamura
• Tax, 1, Horst Bergmann
• Group Head Office/Executive Secretariat, 1, 5,
Johannes Schuster
• Branches and Representative Offices, Country and
Bank Risk Management, 2, Eberhard Winkelbauer
• Economic and Financial Market Research, 3,
Peter Brezinschek
• Credit Management, 5, Hubert Figl
• Marketing, 5, Leodegar Pruschak
• Organisation/IT, 5, Jens Wirsching
Patrick Butler Karl Sevelda Manfred Url
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RZB 2006 Consolidated Financial Statements
Unqualified auditor´s report
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Raiffeisen Zentralbank Österreich Aktiengesellschaft,
Vienna, for the financial year from 1 January to 31 December 2006. These consolidated financial statements
comprise the balance sheet as at 31 December 2006, and the income statement, statement of changes in equity and
cash flow statement for the year ended 31 December 2006, and a summary of significant accounting policies and other
explanatory notes.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance
with International Financial Reporting Standards as adopted by the EU. This responsibility includes: designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements
that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted
our audit in accordance with laws and regulations applicable in Austria and in accordance with International Standards
on Auditing, issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation
of Accountants (IFAC). Those standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
Our audit did not give rise to any objections. Based on the results of our audit in our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the group as of 31 December 2006, and of its
financial performance and its cash flows for the financial year from 1 January to 31 December 2006 in accordance with
International Financial Reporting Standards as adopted by the EU.
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Unqualified auditor´s report RZB 2006
226
Report on Other Legal and Regulatory Requirements
Laws and regulations applicable in Austria require us to perform audit procedures whether the consolidated management
report is consistent with the consolidated financial statements and whether the other disclosures made in the consolidated
management report do not give rise to misconception of the position of the group.
In our opinion, the consolidated management report for the group is consistent with the consolidated financial statements.
Vienna, 12 March 2007
KPMG Austria GmbH
Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
Wilhelm Kovsca Rainer Hassler
Wirtschaftsprüfer Wirtschaftsprüfer
(Austrian Chartered Accountants)
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RZB 2006 Consolidated Financial Statements
List of fully consolidated companies
The following table shows a selection of operating companies of the consolidated group. The complete list of Raiffeisen
Zentralbank’s equity participations is deposited with the Group parent’s headquarters.
Company, domicile (country)
Subscribed capital
in local currency Share* Type 1
Centrotrade Chemicals AG, Zug (CH) 5,000,000 CHF 100.0% OT
Centrotrade Deutschland GmbH, Eschborn (DE) 410,000 EUR 100.0% OT
Centrotrade Holding AG, Vienna (AT) 3,000,000 EUR 100.0% OT
Centrotrade Minerals & Metals Inc., Viginia Beach (US) 3,000,002 USD 100.0% OT
eBanka, a.s., Prague (CZ) 1,184,500,000 CZK 70.2% BA
F.J. Elsner & Co. Gesellschaft mbH, Innsbruck (AT) 436,037 EUR 100.0% OT
F.J. Elsner Trading Gesellschaft m.b.H., Vienna (AT) 35,000 EUR 100.0% OT
JV "Raiffeisen-leasing", Minsk (BY) 1,251,583,348 BYR 50.6% FI
Kathrein & Co. Privatgeschäftsbank Aktiengesellschaft, Vienna (AT) 20,000,000 EUR 100.0% BA
Kathrein & Co. Vermögensverwaltung GmbH, Vienna (AT) 125,000 EUR 80.0% FI
LLC "Raiffeisen Leasing Aval", Kiev (UA) 11,758,092 UAH 66.4% FI
OAO Impexbank, Moscow (RU) 3,630,899,000 RUB 70.2% BA
OOO "Vneshleasing", Moscow (RU) 131,770 RUB 70.2% FI
OOO “Raiffeisen Capital” Asset-Management, Moscow (RU) 150,000,000 RUB 70.2% FI
OOO Raiffeisen-Leasing, Moscow (RU) 146,000,000 RUB 67.8% FI
Priorbank, OAO, Minsk (BY) 102,801,217,650 BYR 44.2% BA
Raiffeisen Auto Leasing Bulgaria EOOD, Sofia (BG) 5,000 BGN 66.6% FI
Raiffeisen Bank d.d. Bosna i Hercegovina, Sarajevo (BA) 104,391,250 BAM 68.1% BA
Raiffeisen Bank Kosovo S.A., Prishtina (RS) 33,000,000 EUR 70.2% BA
Raiffeisen Bank Polska S.A., Warsaw (PL) 572,988,150 PLN 70.2% BA
Raiffeisen Bank S.A., Bucharest (RO) 1,196,258,639 RON 69.8% BA
Raiffeisen Bank Sh.a., Tirana (AL) 34,592,963 EUR 70.2% BA
Raiffeisen Bank Zrt., Budapest (HU) 29,769,140,000 HUF 49.3% BA
Raiffeisen banka a.d., Belgrade (RS) 15,723,637,580 RSD 70.2% BA
Raiffeisen Car Leasing Ltd., Budapest (HU) 20,000,000 HUF 57.4% FI
Raiffeisen Centrobank AG, Vienna (AT) 47,598,850 EUR 100.0% BA
Raiffeisen International Bank-Holding AG, Vienna (AT) 434,517,391 EUR 70.2% FH
Raiffeisen International GROUP IT GmbH, Vienna (AT) 37,000 EUR 69.5% BR
Raiffeisen Investment Aktiengesellschaft, Vienna (AT) 730,000 EUR 100.0% FI
Raiffeisen Krekova banka d.d., Maribor (SI) 3,386,992,000 SIT 60.1% BA
Raiffeisen Leasing Bulgaria OOD, Sofia (BG) 5,900,000 BGN 66.6% FI
Raiffeisen Leasing d.o.o., Belgrade (RS) 226,544,550 RSD 67.8% FI
Raiffeisen Leasing d.o.o., Ljubljana (SI) 895,800,000 SIT 65.4% FI
Raiffeisen Leasing d.o.o., Sarajevo (BA) 3,008,000 BAM 66.7% FI
Raiffeisen Leasing IFN S.A., Bucharest (RO) 14,935,400 RON 65.4% FI
Raiffeisen Lízing Zrt., Budapest (HU) 225,620,000 HUF 57.4% BA
Raiffeisen Malta Bank plc, Sliema (MT) 4,500,000 EUR 100.0% BA
Raiffeisen Mandatory Pension Fund Management d.d., Zagreb (HR) 110,000,000 HRK 51.7% FI
Raiffeisen Non-Government Pension Fund, Moscow (RU) 165,000,000 RUB 70.2% FI
Raiffeisen Real Estate Management Zrt., Budapest (HU) 105,440,000 HUF 57.4% BR
Raiffeisenbank (Bulgaria) EAD, Sofia (BG) 94,932,152 BGN 70.2% BA
Raiffeisenbank a.s., Prague (CZ) 3,614,000,000 CZK 35.8% BA
Raiffeisenbank Austria d.d., Zagreb (HR) 2,194,132,000 HRK 51.7% BA
Legend:
* Computed effective share of Raiffeisen Zentralbank
1 Company type
BA Bank BR Company rendering banking-related ancillary services
FI Financial institution IN Insurer
FH Financial holding OT Other company
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List of equity participations RZB 2006
228
Company, domicile (country)
Subscribed capital
in local currency Share* Type 1
Raiffeisen-Invest-Gesellschaft m.b.H., Vienna (AT) 40,000 EUR 100.0% OT
Raiffeisen-Leasing d.o.o., Zagreb (HR) 30,000,000 HRK 58.6% FI
Raiffeisen-Leasing Österreich Gesellschaft m.b.H., Vienna (AT) 35,000 EUR 51.0% FI
Raiffeisen-Leasing Real Estate, s.r.o., Prague (CZ) 10,000,000 CZK 58.0% FI
Raiffeisen-Leasing, spolecnost s.r.o., Prague (CZ) 50,000,000 CZK 50.6% FI
RALT Raiffeisen-Leasing Gesellschaft m.b.H. & Co. OHG, Vienna (AT) 280,000,000 ATS 100.0% BR
RALT Raiffeisen-Leasing Gesellschaft m.b.H., Vienna (AT) 218,500 EUR 100.0% FI
RI Eastern European Finance B.V., Amsterdam (NL) 400,000 EUR 70.2% FI
RZB Finance (Jersey) II Ltd, St. Helier (JE) 100,000,002 EUR 0.0% FI
RZB Finance (Jersey) III Ltd, St. Helier (JE) 200,001,000 EUR 0.0% FI
RZB Finance (Jersey) IV Limited, Jersey (JE) 500,002,000 EUR 0.0% FI
SINESCO Kft., Budapest (HU) 3,000,000 HUF 57.4% OT
Tatra Banka, a.s., Bratislava (SK) 1,075,577,600 SKK 47.5% BA
Tatra Leasing spol. s r.o., Bratislava (SK) 200,000,000 SKK 56.5% FI
TOO Raiffeisen Leasing Kazakhstan, Almaty (KZ) 85,800,000 KZT 65.4% FI
Ukrainian Processing Center, JSC, Kiew (UA) 180,000 UAH 70.2% BR
VAT Raiffeisen Bank Aval, Kiew (UA) 2,099,934,975 UAH 67.1% BA
ZAO Raiffeisenbank Austria, Moskau (RU) 9,846,560,000 RUB 70.2% BA
ZHS Office- & Facilitymanagement GmbH, Vienna (AT) 36,336 EUR 100.0% BR
List of equity participations
The following tables show a selection of equity participations. The complete list of Raiffeisen Zentralbank’s equity participation
is deposited with the Group parent’s headquarters.
Companies valued at-equity
Company, domicile (country)
Subscribed capital
in local currency
Group’s
share Type 1
FactorBank Aktiengesellschaft, Vienna (AT) 1,791,385 EUR 38.0% BA
LEIPNIK-LUNDENBURGER INVEST Beteiligungs Aktiengesellschaft, Vienna (AT) 24,247,333 EUR 35.5% OT
NOTARTREUHANDBANK AG, Vienna (AT) 8,030,000 EUR 26.0% BA
Österreichische Hotel- und Tourismusbank Gesellschaft m.b.H., Vienna (AT) 11,627,653 EUR 31.3% BA
Raiffeisen Bausparkasse Gesellschaft m.b.H., Vienna (AT) 35,000,000 EUR 37.0% BA
Raiffeisen stambena štedionica d.d., Zagreb (HR) 70,000,000 HRK 26.0% BA
Raiffeisen Banca pentru Locuinte S.A., Bucharest (RO) 96,000,000 RON 33.3% BA
Raiffeisen evolution project development GmbH, Vienna (AT) 43,750 EUR 40.0% OT
Raiffeisen Informatik GmbH, Vienna (AT) 1,460,000 EUR 46.4% OT
Raiffeisen Kapitalanlage-Gesellschaft m.b.H., Vienna (AT) 15,000,000 EUR 50.0% BA
Raiffeisen Bausparkasse a.s., Prague (CZ) 650,000,000 CZK 25.0% BA
Raiffeisen Wohnbaubank Aktiengesellschaft, Vienna (AT) 5,100,000 EUR 25.0% BA
UNIQA Versicherungen AG, Vienna (AT) 119,777,808 EUR 31.9% IN
VISA-SERVICE Kreditkarten Aktiengesellschaft, Vienna (AT) 6,000,000 EUR 25.0% BA
Legend:
* Computed effective share of Raiffeisen Zentralbank
1 Company type
BA Bank BR Company rendering banking-related ancillary services
FI Financial institution IN Insurer
OT Other company
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RZB 2006 Consolidated Financial Statements
Other non-consolidated subsidiaries
Company, domicile (country)
Subscribed capital in local
currency
Group's
share Type 1
CENTRUM BÝVANIA, s. r. o., Bratislava (SK) 27,100,000 SKK 47.5% BR
CP Inlandsimmobilien-Holding GmbH, Vienna (AT) 364,000 EUR 100.0% OT
Doplnková dôchodková spoločnosť Tatra banky, a.s., Bratislava (SK) 50,000,000 SKK 100.0% FI
ELIOT, s. r. o., Bratislava (SK) 48,610,000 SKK 100.0% BR
Go Equity Mittelstandsfinanzierungs AG, Vienna (AT) 7,301,000 EUR 68.5% OT
inCentro data services AG, Vienna (AT) 674,630 EUR 82.2% OT
Raiffeisen Asset Management (Bulgaria) EAD, Sofia (BG) 250,000 BGN 100.0% FI
Raiffeisen BROKERS doo, Sarajevo (BA) 1,000,000 BAM 100.0% FI
Raiffeisen Capital & Investment S.A., Bucharest (RO) 1,600,000 RON 100.0% FI
Raiffeisen CEE Private Equity Fund LP, St. Helier (JE) 10,285 EUR 19.9% FI
Raiffeisen consulting Ltd., Zagreb (HR) 14,900,000 HRK 100.0% FI
Raiffeisen Energy Service Ltd., Budapest (HU) 20,000,000 HUF 100.0% OT
Raiffeisen Faktoring Sp. z.o.o., Warsaw (PL) 3,847,500 PLN 100.0% FI
RAIFFEISEN FUTURE AD, Belgrade (RS) 1,500,000 EUR 100.0% FI
Raiffeisen Invest d.o.o., Zagreb (HR) 8,000,000 HRK 100.0% FI
Raiffeisen Investment Fund Management Zrt., Budapest (HU) 100,000,000 HUF 80.0% FI
Raiffeisen Ost Invest Unternehmensbeteiligungsges.m.b.H., Vienna (AT) 40,000 EUR 100.0% OT
Raiffeisen Pension Insurance d.o.o., Zagreb (HR) 14,400,000 HRK 100.0% FI
Raiffeisen Private Equity Management AG, Vienna (AT) 363,500 EUR 100.0% FI
Raiffeisen Property Management GmbH, Vienna (AT) 40,000 EUR 100.0% OT
Raiffeisen Research GmbH, Vienna (AT) 55,000 EUR 100.0% BR
Raiffeisen Voluntary Pension Fund Management d.o.o., Zagreb (HR) 33,445,300 HRK 100.0% FI
Raiffeisen-Leasing Real Estate Spzoo, Warsaw (PL) 50,000 PLN 75.5% OT
S.A.I. Raiffeisen Asset Management S.A., Bucharest (RO) 3,600,000 RON 100.0% FI
Tatra Asset Management sprav.spol., a.s., Bratislava (SK) 52,000,000 SKK 96.2% FI
Other equity participations
Company, domicile (country)
Subscribed capital in
local currency
Group's
share Type 1
A-Leasing SpA, Treviso (IT) 10,000,000 EUR 49.0% FI
A-Trust Gesellschaft für Sicherheitssysteme im elektronischen Datenverkehr GmbH, Vienna (AT) 4,790,013 EUR 10.9% OT
Austria Immobilien Leasing (Schweiz) AG, St. Gallen (CH) 5,000,000 CHF 50.0% FI
Austrian Airlines Österreichische Luftverkehrs-Aktiengesellschaft, Vienna (AT) 247,180,000 EUR 6.5% OT
Budapest Stock Exchange, Budapest (HU) 541,348,100 HUF 6.4% SC
Cards & Systems EDV-Dienstleistungs GmbH, Vienna (AT) 75,000 EUR 42.0% OT
EUROPAY AUSTRIA Zahlungsverkehrssysteme GmbH, Vienna (AT) 13,234,665 EUR 11.2% BA
Medicur - Holding Gesellschaft m.b.H., Vienna (AT) 4,360,500 EUR 25.0% OT
Oesterreichische Kontrollbank AG, Vienna (AT) 130,000,000 EUR 8.1% BA
Oesterreichische Nationalbank AG, Vienna (AT) 12,000,000 EUR 8.8% BA
ÖPAG Pensionskassen Aktiengesellschaft, Vienna (AT) 10,200,000 EUR 16.3% OT
Österreichische Raiffeisen Einlagensicherung reg. Gen.m.b.H., Vienna (AT) 2,800 EUR 7.1% OT
Österreichische Volksbanken-Aktiengesellschaft, Vienna (AT) 311,095,412 EUR 5.7% BA
Raiffeisen Datennetz Gesellschaft m.b.H., Vienna (AT) 145,346 EUR 25.0% OT
Raiffeisen Software Solution und Service GmbH, Vienna (AT) 773,000 EUR 16.5% OT
Raiffeisen-Leasing Mobilien und KFZ GmbH, Vienna (AT) 35,000 EUR 15.0% FI
RLKG Raiffeisen-Leasing GmbH, Vienna (AT) 40,000 EUR 12.5% OT
W 3 Errichtungs- und Betriebs-Aktiengesellschaft, Vienna (AT) 1,020,000 ATS 20.0% OT
WED Holding Gesellschaft m.b.H., Vienna (AT) 72,673 EUR 9.6% OT
Wiener Börse AG, Vienna (AT) 14,000,000 EUR 6.1% SC
Legend:
1 Company type
BA Bank BR Company rendering banking-related ancillary services SC Securities company, recognised stock exchange
FI Financial institution IN Insurer OT Other company
Interview Management Report Segment Reports Financial Statements Glossary Contacts www.rzb.at
229

Glossary RZB 2006
230
Glossary
Affiliated companies – Entity over which the
investor has control (=power to govern the
financial and operating policies).
Associated companies – Entity over which the
investor has significant influence.
Back testing – The backward comparison of
VaR figures with actual results to test the
quality of a model.
Badwill – Any remaining excess of the
acquirer's interest in the fair values of the
identifiable assets and liabilities acquired
over the cost of the acquisition as at the date
of the exchange transaction.
Banking book – All positions that are not
assigned to the trading book.
Basis of assessment (incl. market risk) –
Comprises the basis of assessment within the
meaning of section 22 of the Austrian Banking
Act (BWG) plus 12.5 times the own funds
required as cover for the trading book and
open currency positions.
BWG – Austrian Banking Act
Credit exposure – Comprises all on-balance
sheet exposures (loans, debt securities) and
off-balance-sheet exposures (guarantees,
commitments).
Cash flow – Inflows and outflows of cash and
cash equivalents.
Cash flow statement – Statement of cash
flows during the financial year arising from
operating activities, investing activities and
financing activities and a reconciliation of
cash and cash-equivalents held at the beginning
and the end of the financial year.
CEE – Central and Eastern Europe
CE – Central Europe. For RZB it is defined as
total of Hungary, Poland, Slovakia, Slovenia,
and Czech Republic.
CIS – Commonwealth of Independent States,
consisting predominantly of territories of the
former Soviet Union
Clean price – Price of a financial instrument
without accrued interest.
Consolidated ROE – Return on Consolidated
Equity. It is calculated by consolidated profit
in relation to average balance sheet equity
(without minority interest). Average equity is
based on month-end figures and does not
include current year profit.
Core capital – Paid-in capital and reserves
less intangible fixed assets and balance sheet
losses and material losses during the current
financial year.
Core capital ratio – This ratio's numerator is
core capital (tier 1) and its denominator is the
basis of assessment (incl. market risk).
Cost/income ratio – Indicator of an enterprise's
cost efficiency based on the ratio of
expenses to earnings. It is calculated by
comparing general administrative expenses
(comprising staff expenses and other
administrative expenses and depreciation/
amortisation of tangible and intangible fixed
assets) with operating income (net interest
income, net commission income, trading
profit (loss) and other operating profit (loss)
adjusted by the net result from hedge
accounting and net income from other
derivative instruments).
DBO – Defined benefit obligation = The
present value, without deducting any plan
assets, of expected future payments required
to settle the obligation resulting from
employee service in the current and prior
periods.
Default risk – Risk that counterparties in a
financial transaction will not be able to fulfil
an obligation, causing the other party a
financial loss.
Deferred tax assets – The amounts of income
taxes recoverable in future periods in respect
of deductible temporary differences, the carry
forward of unused tax losses, and the carry
forward of unused tax credits.
Deferred tax liabilities – The amounts of
income taxes payable in future periods in
respect of taxable temporary differences.
Derivatives – Financial instruments whose
value changes in response to the change in a
specified interest rate, financial instrument
price, commodity price, foreign exchange
rate, index of prices or rates, a credit rating
or credit index, or other variable, that requires
no initial net investment or small initial
net investment and that is settled at a future
date.
Dirty Price – Price of a financial instrument
including accrued interest.
Earnings per share (EPS) – Profit attributable
to ordinary equity holder (profit adjusted by
dividends to preference share holders)
divided by the weighted average number of
ordinary shares outstanding during the
period.
Fair value – The amount for which an asset
could be exchanged or a liability settled,
between knowledgeable, willing parties in an
arm's length transaction.
Finance lease – A lease that transfers substantially
all the risks and rewards incidental to
ownership of an asset.
Futures – Standardised forward contracts
traded on a stock exchange under which a
commodity traded in a money, capital,
precious metal or currency market is to be
delivered or accepted at a price fixed in an
exchange environment.
Goodwill – Any excess of the cost of the
acquisition over the acquirer's interest in the
fair value of the identifiable assets and
liabilities acquired as at the date of the
exchange transaction.
Gross investment value – The aggregate of
minimum lease payments receivable by the
lessor under a finance lease and any
unguaranteed residual value accruing to the
lessor.
Hedging – Designating one or more hedging
instruments so that their change in fair value
is an offset, in whole or in part, to the change
in fair value or cash flows of a hedged item.
Held-for-trading – Securities held for trading
purposes to take advantage of short-term
market fluctuations.
Held-to-maturity investments – Financial assets
with fixed or determinable payments and
fixed maturity that an entity has the positive
intention and ability to hold to maturity.
HGB/UGB – [Austrian] Commercial Code
IFRIC, SIC – International Financial Reporting
Interpretation Committee – Interpreter of the
International Financial Reporting Standards,
formerly also SIC (Standing Interpretations
Committee).
IFRS, IAS – The International Financial Reporting
Standards or International Accounting
Standards are reporting standards published
by the IASB (International Accounting Standards
Board) with the goal of achieving
transparent and comparable accounting on
an international basis.
Interest margin – Net interest income in
relation to average balance sheet total.
IPO – Initial public offering
www.rzb.at Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006 Glossary
Loss rate – Usage of previously allocated
loan loss provisions plus direct write-downs
and Income received on written-down claims
divided by total credit exposure
Market risk – The risk that the value of a
financial instrument will fluctuate because of
changes in market prices whether those
changes are caused by factors specific to the
individual security or its issuer or factors
affecting all securities traded in the market.
Net provisioning ratio (Ø risk-weighted
assets banking book) – Risk valuation ratio.
Is calculated by provisioning for impairment
losses divided by average risk-weighted
assets of the banking book.
Net provisioning ratio (total credit exposure)
– Risk valuation ratio. Is calculated by
provisioning for impairment losses divided by
the total credit exposure.
Operating lease – Lease under which commercial
and legal ownership remains with the
lessor with the effect that the lessor must show
the asset on its balance sheet.
Operating profit/loss – In IFRS-compliant
financial statements, it consists of operating
income net of general administrative expenses.
Operating income comprises net
interest income, net commission income,
trading profit (loss) and other operating profit
(loss) adjusted by the net result from hedge
accounting and net income from other
derivative instruments. General administrative
expenses comprise staff expenses and other
administrative expenses and depreciation/amortisation
of tangible and intangible
fixed assets.
Options – Instruments that give the holder the
right to purchase the underlying from a
contracting party at an agreed price and at
an agreed time or within an agreed period
(call option) or to sell the underlying to a
contracting party at an agreed price and at
an agreed time or within an agreed period
(put option).
OTC instruments – Financial instruments that
are neither standardised nor traded on a
stock exchange. They are traded directly
between market participants "over-thecounter".
Own shares – Repurchased equity instruments
(shares) held by the issuing entity itself
or by its subsidiaries.
Own funds within the meaning of BWG –
Consist of core capital (tier 1), additional
and subordinated capital (tier 2) and shortterm
subordinated capital and rededicated
tier 2 capital (tier 3).
Own funds ratio – The ratio's numerator is
own funds within the meaning of the Austrian
Banking Act (BWG) and its denominator is
the basis of assessment pursuant to section
22 BWG plus 12.5 times the own funds
required as cover for the trading book and
open currency positions.
Portfolio rate – Total provisions for impairment
losses divided by total credit exposure
Projected unit credit method – An actuarial
valuation method defined by IAS 19 that sees
each period of service as giving rise to an
additional unit of benefit entitlement and
measures each unit separately to build up the
final obligation (sometimes known as the
accrued benefit method prorated pro-rated
on service or as the benefit/years of service
method).
Raiffeisen International – The Group of
Raiffeisen International Bank-Holding AG
Repurchase agreement – During a genuine
repurchase transaction (repo), the enterprise
sells assets to a counterparty and concurrently
agrees to reacquire the assets at an
agreed time and at an agreed price.
Risk-weighted assets of the banking book –
According to the Austrian Banking Act
(BWG) these are on-balance sheet assets, offbalance
sheet and special off-balance-sheet
banking book asset positions weighted by
business and counterparty risk, respectively.
Risk/Earnings-Ratio – Risk valuation ratio. Is
calculated by Provisioning for impairment
losses divided by net interest income.
ROE (return on equity) – Return on the total
equity including minority interests, i.e. profit
before tax respectively after tax in relation to
weighted average balance sheet equity.
Average equity is calculated on month-end
figures and does not include current year
profit.
RZB – Raiffeisen Zentralbank Österreich AG
Group
RZB-Kreditinstitutsgruppe – Pursuant to
section 30 of the Austrian Banking Act
(BWG), RZB-Kreditinstitutsgruppe is made up
of all banks, financial institutions, securities
companies and companies rendering
banking-related services in which Raiffeisen
Zentralbank holds direct or indirect interests
or has control as a superordinate institution.
Segment reporting – Disclosure of earnings
and asset data for business segments (primary)
and geographical areas (secondary).
SEPA – Single European Payments Area. This
is a project to create a European wide
standardized payment area. In this payment
area there is no distinction between crossborder
and national payments for customers
anymore.
SME – Small and medium sized companies.
Splitting – A procedure that is particularly
common in U.S. investment banking where
equities that have become very highly priced
are split into two or more shares or share
certificates.
Stress tests – Stress tests endeavour to
simulate extreme fluctuations in market
parameters. They are used because such
fluctuations are usually inadequately captured
by VaR models (VaR forecasts maximum
losses under normal market conditions).
Swap – Exchange of interest obligations
(interest swap) and/or currency positions
(currency swap).
Trading book – Bank regulators' term for
assets held by a bank for short-term resale to
exploit fluctuations in prices and interest
rates.
VaR – Value at risk expresses the potential
loss that will, with a 99 per cent probability,
not be exceeded within the period for which
an asset is held in the portfolio in question.
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231

Contacts
232 www.rzb.at
Addresses and contacts
Raiffeisen Zentralbank
Österreich AG
Austria (Head Office)
Am Stadtpark 9, 1030 Vienna
Phone: +43-1-71 707-0
Fax: +43-1-71 707-1715
SWIFT/BIC: RZBAATWW
www.rzb.at
Contacts:
Austrian Corporate Customers
Joseph Eberle
Phone: +43-1-71 707-1487
joseph.eberle@rzb.at
Multinational Corporate Customers
Peter Bazil
Phone: +43-1-71 707-1547
peter.bazil@rzb.at
Central and Eastern European
Corporate Customers
Christian Theuer
Phone: +43-1-71 707-1462
christian.theuer@rzb.at
Corporate, Trade & Export Finance
Helmut Breit
Phone: +43-1-71 707-1321
helmut.breit@rzb.at
Global Markets
Martin Czurda
Phone: +43-1-71 707-1120
martin.czurda@rzb.at
Transaction Services
Günther Gall
Phone: +43-1-71 707-1168
guenther.gall@rzb.at
Raiffeisen International
Bank-Holding AG
Am Stadtpark 9, 1030 Vienna
Phone: +43-1-71 707-3504
Fax: +43-1-71 707-1377
www.ri.co.at
Contact: Roman Hager
roman.hager@ri.co.at
China
Beijing Branch
Beijing International Club, Suite 200
21, Jianguomenwai Dajie
100020 Beijing
Phone: +86-10-6532 3388
Fax: +86-10-6532 5926
SWIFT/BIC: RZBACNBJ
Contact: Andreas Werner
andreas.werner@cn.rzb.at
Malta
Raiffeisen Malta Bank plc
52, Il-Piazzetta, Tower Road,
Sliema SLM16, Malta
Phone: +356-2260 0000
Fax: +356-2132 0954
Contact: Anthony C. Schembri
anthony.schembri@rmb-malta.raiffeisen.at
Singapore
Singapore Branch
One Raffles Quay
#38-01 North Tower
Phone: +65-6305 6000
Fax: +65-6305 6001
Contact: Rainer Šilhavý
rainer.silhavy@sg.rzb.at
United Kingdom
London Branch
10, King William Street
London EC4N 7TW
Phone: +44-20-7933 8000
Fax: +44-20-7933 8099
SWIFT/BIC: RZBAGB2L
www.london.rzb.at
Contact: Ian Burns
ian.burns@uk.rzb.at
U.S.A.
RZB Finance LLC
1133, Avenue of the Americas
16 th floor, New York, N.Y. 10036
Phone: +1-212-845 4100
Fax: +1-212-944 2093
www.rzbfinance.com
Contact: Dieter Beintrexler
dbeintrexler@rzbfinance.com
Banking Network
Central and Eastern
Europe
Albania
Raiffeisen Bank Sh.a.
European Trade Center, Bulevardi
“Bajram Curri”, Tirana
Phone: +355-4-274 912
Fax: +355-4-230 013
SWIFT/BIC: SGSBALTX
www.raiffeisen.al
Contact: Steven Grunerud
steven.grunerud@raiffeisen.al
94 banking outlets
Belarus
Priorbank, JSC
31–A, V. Khoruzhey Str.
Minsk, 220002
Phone: +375-17-289 9087
Fax: +375-17-289 9191
SWIFT/BIC: PJCBBY2X
www.priorbank.by
Contact: Olga Gelakhova
olga.gelakhova@priorbank.by
62 banking outlets
RZB 2006
Bosnia and Herzegovina
Raiffeisen Bank d.d.
Bosna i Hercegovina
Danijela Ozme 3, 71000 Sarajevo
Phone: +387-33-287 100
Fax: +387-33-213 851
SWIFT/BIC: RZBABA2S
www.raiffeisenbank.ba
Contact: Michael G. Mueller
michael.mueller@rbb-sarajevo.raiffeisen.at
75 banking outlets
Bulgaria
Raiffeisenbank (Bulgaria) EAD
18/20 Ulica N. Gogol, 1504 Sofia
Phone: +359-2-9198 5101
Fax: +359-2-943 4528
SWIFT/BIC: RZBBBGSF
www.rbb.bg
Contact: Momtchil Andreev
momtchil.andreev@rbb-sofia.raiffeisen.at
111 banking outlets
Croatia
Raiffeisenbank Austria d.d.
Petrinjska 59, 10000 Zagreb
Phone: +385-1-456 6466
Fax: +385-1-481 1624
SWIFT/BIC: RZBHHR2X
www.rba.hr
Contact: Vesna Ciganek-Vukovic
vesna.ciganek-vukovic@rba.hr
48 banking outlets
Czech Republic
Raiffeisenbank a.s.
Olbrachtova 2006/9
140 21 Praha 4
Phone: +420-221-141 111
Fax: +420-221-142 111
SWIFT/BIC: RZBCCZPP
www.rb.cz
Contact: Lubor Žalman
lubor.zalman@rb.cz
53 banking outlets
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
eBanka, a.s.
Na Prˇíkopě 19
11719 Praha 1
Phone: +420-222-115 222
Fax: +420-222-115 500
SWIFT/BIC: EBNKCZPP
www.ebanka.cz
Contact: Martin Kolouch
mkolouch@ebanka.cz
62 banking outlets
Hungary
Raiffeisen Bank Zrt.
Akadémia útca 6, 1054 Budapest
Phone: +36-1-484 4400
Fax: +36-1-484 4444
SWIFT/BIC: UBRTHUHB
www.raiffeisen.hu
Contact: Frank Daniel
frank.daniel@raiffeisen.hu
122 banking outlets
Kosovo
Raiffeisen Bank Kosovo J.S.C.
Rruga UÇK 51, Prishtina
Phone: +381-38-222 222
Fax: +381-38-2030 1130
SWIFT/BIC: RBKOCS22
www.raiffeisen-kosovo.com
Contact: Oliver Whittle
oliver.whittle@raiffeisen-kosovo.com
33 banking outlets
Poland
Raiffeisen Bank Polska S.A.
Ul. Piekna 20, 00-549 Warszawa
Phone: +48-22-585 2000
Fax: +48-22-585 2585
SWIFT/BIC: RCBWPLPW
www.raiffeisen.pl
Contact: Piotr Czarnecki
piotr.czarnecki@raiffeisen.pl
86 banking outlets
Romania
Raiffeisen Bank S.A.
Piata Charles de Gaulle 15
011857 Bucuresti 1
Phone: +40-21-306 1000
Fax: +40-21-230 0700
SWIFT/BIC: RZBRROBU
www.raiffeisen.ro
Contact: Steven C. van Groningen
centrala@raiffeisen.ro
266 banking outlets
Russia
ZAO Raiffeisenbank Austria
Leninsky Prospekt 15A
119071 Moskwa
Phone: +7-495-721 9900
Fax: +7-495-721 9901
SWIFT/BIC: RZBMRUMM
www.raiffeisen.ru
Contact: Johann Jonach
jjonach@raiffeisen.ru
41 banking outlets
OAO Impexbank
Novopeschanaya Ul. 20/10
125252 Moskwa
Phone: +7-495-258 3219
Fax: +7-495-248 1370
SWIFT/BIC: IMPERUMM
www.impexbank.ru
Contact: Pavel Lysenko
pavel.lysenko@impexbank.ru
203 banking outlets
Serbia
Raiffeisen banka a.d.
Bulevar AVNOJ-a 64a
11070 Novi Beograd
Phone: +381-11-320 2100
Fax: +381-11-220 7080
SWIFT/BIC: RZBSRSBG
www.raiffeisenbank.co.yu
Contact: Oliver Rögl
oliver.roegl@raiffeisenbank.co.yu
68 banking outlets
Slovakia
Tatra banka, a.s.
Hodžovo námestie 3
811 06 Bratislava 1
Phone: +421-2-5919 1111
Fax: +421-2-5919 1110
SWIFT/BIC: TATRSKBX
www.tatrabanka.sk
Contact: Rainer Franz
rainer_franz@tatrabanka.sk
145 banking outlets
Slovenia
Raiffeisen Krekova banka d.d.
18 Slomškov trg, 2000 Maribor
Phone: +386-2-229 3100
Fax: +386-2-252 4779
SWIFT/BIC: KREKSI22
www.r-kb.si
Contact: Klemens Nowotny
klemens.nowotny@r-kb.si
14 banking outlets
Ukraine
VAT Raiffeisen Bank Aval
9, Leskova vul., 01011 Kyiv
Phone: +38-044-490 88 88
Fax: +38-044-295 32 31
SWIFT/BIC: AVAL UA UK
www.aval.ua
Contact: Angela Prigozhina
angela.prigozhina@aval.ua
1.312 banking outlets
Representative offices
in Europe
Belgium
Brussels
Rue du Commerce 20–22
1000 Bruxelles
Phone: +32-2-549 0678
Fax: +32-2-502 6407
Contact: Helga Steinberger
raiffbxl@raiffeisenbrussels.be
Germany
Frankfurt am Main
Mainzer Landstraße 51
D-60329 Frankfurt am Main
Phone: +49-69-29 92 19-18
Fax: +49-69-29 92 19-22
Contact: Dorothea Renninger
dorothea.renninger@rzb.at
France
Paris
9–11, Avenue Franklin Roosevelt
75008 Paris
Phone: +33-1-4561 2700
Fax: +33-1-4561 1606
Contact: Harald Stoffaneller
harald.stoffaneller@fr.rzb.at
Italy
Milan
Via Andrea Costa 2
20131 Milano
Phone: +39-02-2804 0646
Fax: +39-02-2804 0658
www.rzb.it
Contact: Maurizio Uggeri
maurizio.uggeri@it.rzb.at
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
www.rzb.at
Contacts
233

Contacts
234 www.rzb.at
Lithuania
Vilnius (Raiffeisen Bank
Polska S.A.)
A. Jaksto Street 12, 01105 Vilnius
Phone: +370-5-266 6600
Fax: +370-5-266 6601
www.raiffeisen.lt
Contact: Vladislovas Jancis
vladislovas.jancis@raiffeisen.pl
Moldova
Chisinau (Raiffeisen Bank S.A.)
65 Stefan cel Mare blvd.
Chisinău, MD-2001
Phone: +373-22-279 331
Fax: +373-22-279 343
Contact: Victor Bodiu
victor.bodiu@rzb.md
Russia
Moscow
14, Pretchistensky Pereulok
Building 1, 119034 Moskwa
Phone: +7-495-721 9903
Fax: +7-495-721 9907
Contact: Evgheny Rabovsky
erabovsky@raiffeisen.ru
Sweden and
Nordic countries
Stockholm
Norrlandsgatan 12
10396 Stockholm
Phone: +46-8-440 5086
Fax: +46-8-440 5089
Contact: Lars Bergström
lars.bergstrom@rzb.at
Representative offices
in America and Asia
China
Hongkong
Lippo Centre, 89 Queensway
Unit 2001, 20 th floor, Tower 1
Hong Kong
Phone: +85-2-2730 2112
Fax: +85-2-2730 6028
Contact: Edmond Wong
edmond.wong@hk.rzb.at
Zhuhai
Room 2404, Yue Cai Building
188, Jingshan Road, Jida
519015 Zhuhai
Phone: +86-756-323 3500
Fax: +86-756-323 3321
Contact: Susanne Zhang-Pongratz
susanne.zhang@cn.rzb.at
India
Mumbai
87, Maker Chamber VI
Nariman Point, Mumbai 400 021
Phone: +91-22-663 01700
Fax: +91-22-663 21982
Contact: Anupam Johri
anupam.johri@in.rzb.at
Iran
Teheran (UNICO Banking Group)
Vanak, North Shirazi Avenue
16, Ladan Str., 19917 Tehran
Phone: +98-21-804 6767-2
Fax: +98-21-803 6788
Contact: Gerd Wolf
unico@sayareh.com
South Korea
Seoul
Leema Building, 8 th floor
146-1, Soosong-dong
Chongro-ku, 110-755 Seoul
Phone: +822-398 5840
Fax: +822-398 5807
Contact: Kun II Chung
kun-il.chung@kr.rzb.at
U.S.A.
Chicago (RZB Finance LLC)
10 N. Martingale Road, Suite 400
Schaumburg, IL 60173
Phone: +1-847-466 1043
Fax: +1-847-466 1295
Contact: Charles T. Hiatt
chiatt@rzbfinance.com
Houston (RZB Finance LLC)
10777, Westheimer, Suite 1100
Houston, TX 77042
Phone: +1-713-260 9697
Fax: +1-713-260 9602
Contact: Stephen A. Plauche
splauche@rzbfinance.com
New York
1133, Avenue of the Americas
16 th floor, New York, NY 10036
Phone: +1-212-593 7593
Fax: +1-212-593 9870
Contact: Dieter Beintrexler
dieter.beintrexler@rzb-newyork.raiffeisen.at
Vietnam
Ho Chi Minh City
6, Phung Khac Khoan Str.
District1, Room G6
Ho Chi Minh City
Phone: +84-8-8297 934
Fax: +84-8-8221 318
Contact: Ta Thi Kim Thanh
ta-thi-kim.thanh@vn.rzb.at
Investment Banking
RZB 2006
Austria
Raiffeisen Zentralbank
Österreich AG
Global Markets
Am Stadtpark 9, 1030 Vienna
Phone: +43-1-71 707-1120
Fax: +43-1-71 707-3813
www.rzb.at
Contact: Martin Czurda
martin.czurda@rzb.at
Raiffeisen Centrobank AG
Equity
Tegetthoffstraße 1, 1015 Vienna
SWIFT/BIC: CENBATWW
Phone: +43-1-51 520-0
Fax: +43-1-513 4396
www.rcb.at
Contact: Eva Marchart
marchart@rcb.at
Raiffeisen Investment AG
Advisory
Tegetthoffstraße 1, 1015 Vienna
Phone: +43-1-710 5400-0
Fax: +43-1-710 5400-39
www.raiffeisen-investment.com
Contact: Heinz Sernetz
h.sernetz@raiffeisen-investment.com
Subsidiaries and representative
offices in Bosnia and Herzegovina,
Bulgaria, Czech Republic, Hungary,
Montenegro, Poland, Romania,
Russia, Serbia, Turkey and Ukraine.
Bosnia and Herzegovina
Raiffeisen Bank d.d.
Bosna i Hercegovina
Danijela Ozme 3, 71000 Sarajevo
Phone: +387-33-287 100
Fax: +387-33-213 851
www.raiffeisenbank.ba
Contact: Dragomir Grgić
dragomir.grgic@rbb-sarajevo.raiffeisen.at
Bulgaria
Raiffeisen Asset Management EAD
18/20 Ulica N. Gogol, 1504 Sofia
Phone: +359-2-919 85 451
Fax: +359-2-943 4528
www.rbb.bg
Contact: Ivailo Grigorov
ivailo.grigorov@rbb-sofia.raiffeisen.at
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

RZB 2006
Croatia
Raiffeisenbank Austria d.d.
Petrinjska 59, 10000 Zagreb
Phone: +385-1-456 6466
Fax: +385-1-456 6490
www.rba.hr
Contact: Ivan Žižic
ivan.zizic@rba.hr
Czech Republic
Raiffeisenbank a.s.
Olbrachtova 2006/9
140 21 Praha 4
Phone: +420-221-141 863
Fax: +420-221-143 804
www.rb.cz
Contact: Martin Bláha
martin.blaha@rb.cz
Hungary
Raiffeisen Bank Zrt.
Akadémia útca 6, 1054 Budapest
Phone: +36-1-484 4400
Fax: +36-1-484 4444
www.raiffeisen.hu
Contact: Gábor Liener
gliener@raiffeisen.hu
Poland
Raiffeisen Investment
Polska Sp.z o.o.
Ul. Piekna 20, 00-549 Warszawa
Phone: +48-22-585 2900
Fax: +48-22-585 2901
Contact: Marzena Bielecka
marzena.bielecka@ripolska.com.pl
Romania
Raiffeisen Capital & Investment S.A.
Piata Charles de Gaulle 15
011857 Bucuresti 1
Phone: +40-21-306 1233
Fax: +40-21-230 0684
www.rciro.ro
Contact: Dana Mirela Ionescu
dana-mirela.ionescu@rzb.ro
Russia
ZAO Raiffeisenbank Austria
Leninsky Prospekt 15A
119071 Moskwa
Phone: +7-495-721 9900
Fax: +7-495-721 9901
www.raiffeisen.ru
Contact: Pavel Gourine
pgourine@raiffeisen.ru
Serbia
Raiffeisen Investment AG
Bulevar AVNOJ-a 64a
11070 Novi Beograd
Phone: +381-11-212 9220
Fax: +381-11-212 9213
Contact: Radoš Ilinčic’
r.ilincic@riag.co.yu
Slovakia
Tatra banka, a.s.
Hodžovo námestie 3
811 06 Bratislava 1
Phone: +421-2-5919 1111
Fax: +421-2-5919 1110
www.tatrabanka.sk
Contact: Igor Vida
igor_vida@tatrabanka.sk
Slovenia
Raiffeisen Krekova banka d.d.
Slomškov trg 18, 2000 Maribor
Phone: +386-2-229 3111
Fax: +386-2-252 5518
www.r-kb.si
Contact: Gvido Jemenšek
gvido.jemensek@r-kb.si
Ukraine
Raiffeisen Investment TOV
43, Zhylyanska Str., 01033 Kyiv
Phone: +38-044-490 6898
Fax: +38-044-490 6899
Contact: Vyacheslav Yakymuk
yakymuk@rio.kiev.ua
Selected specialist
Raiffeisen companies
Austria
Kathrein & Co. Privatgeschäftsbank
Aktiengesellschaft
Wipplingerstraße 25, 1010 Vienna
Phone: +43-1-53 451-600
Fax: +43-1-53 451-599
SWIFT/BIC: KTBKATWW
www.kathrein.at
Contact: Claudio Cantele
claudio.cantele@kathrein.at
Interview Management Report Segment Reports Consolidated Financial Statements Glossary Contacts
Raiffeisen Bausparkasse Ges.m.b.H.
Wiedner Hauptstraße 94
1050 Vienna
Phone: +43-1-546 46-1420
Fax: +43-1-546 46-2359
SWIFT/BIC: RBSKAT W1
www.wohnbausparen.at
Contact: Sonja Hochreiter
sonja.hochreiter@raibau.at
Equity interests in Croatia, Czech
Republic, Romania and Slovakia.
Raiffeisen Capital Management
(Raiffeisen Kapitalanlage
Ges.m.b.H.)
Am Schwarzenbergplatz 3
1010 Vienna
Phone: +43-1-71 170-1250
Fax: +43-1-71 170-76-1250
www.rcm.at
Contact: Monika Riedel
monika.riedel@rcm.at
Raiffeisen Versicherung AG
Untere Donaustraße 21
A-1029 Vienna
Phone: +43-1-21 119-0
Fax: +43-1-21 119-1134
www.raiffeisen-versicherung.at
service@raiffeisen-versicherung.at
Raiffeisen Versicherung is a
member of the UNIQA Group,
which has further subsidiaries in
Austria, Bosnia and Herzegovina,
Bulgaria, Czech Republic, Croatia,
Hungary, Poland, Romania, Serbia,
Slovakia, Slovenia and Ukraine,
as well as in Germany, Italy,
Liechtenstein and Switzerland.
Raiffeisen-Leasing GmbH
Hollandstraße 11–13, 1020 Vienna
Phone: +43-1-71 601-8440
Fax: +43-1-71 601-8448
www.raiffeisen-leasing.at
Contact: Andrea Weber
andrea.weber@rl.co.at
Subsidiaries in Germany, Italy,
Sweden and Switzerland.
www.rzb.at
Contacts
235

Contacts
236 www.rzb.at
Raiffeisen-Leasing
International GmbH
Am Stadtpark 9, 1030 Vienna
Phone: +43-1-71 707-2966
Fax: +43-1-71 707-762966
Contact: Dieter Scheidl
dieter.scheidl@rli.co.at
Subsidiaries in Albania, Belarus,
Bosnia and Herzegovina, Bulgaria,
Croatia, Czech Republic, Hungary,
Kazakhstan, Poland, Romania,
Russia, Serbia, Slovakia, Slovenia
and Ukraine.
ÖPAG Pensionskassen AG
Rögergasse 36, 1090 Vienna
Phone: +43-1-316 48-100
Fax: +43-1-316 48-610
www.oepag.at
Contact: Johannes Ziegelbecker
johannes.ziegelbecker@oepag.at
ÖVK Vorsorgekasse AG
Untere Donaustraße 21
1029 Vienna
Phone: +43-810-530 099
Fax: +43-810-530 098
www.oevk.co.at
Contact: Bernhard Breunlich
office@oevk.co.at
Raiffeisen evolution project
development GmbH
Ernst-Melchior-Gasse 22
1020 Vienna
Phone: +43-1-71 706-600
Fax: +43-1-71 706-410
www.raiffeisenevolution.com
Contact: Mag. Markus Neurauter
mkus.neurauter@raiffeisenevolution.com
Subsidiaries in Bulgaria, Croatia,
Czech Republic, Hungary, Poland,
Romania, Russia, Serbia, Slovakia
and Ukraine.
F.J. Elsner Trading GesmbH
Am Heumarkt 10, 1030 Vienna
Phone: +43-1-79 736-0
Fax: +43-1-79 736-9142
www.elsner.at
Contact: Dr. Siegfried Purrer
siegfried.purrer@elsner.at
Branches in Bulgaria, China, Latvia,
Russia, Ukraine and the USA.
Notartreuhandbank AG
Landesgerichtstraße 20
1010 Vienna
Phone: +43-1-535 68 86-208
Fax: +43-1-535 68 86-250
www.notar.at
Contact: Karl Grünberger
karl.gruenberger@ntbag.at
Leipnik-Lundenburger Invest
Beteiligungs AG
Börsegasse 9, 1010 Vienna
Phone: +43-1-535 11 24-0
Fax: +43-1-535 11 24-33
www.lli.at
Contact: Christian Teufl
office@lli.at
RZB 2006
Raiffeisen Informatik GmbH
Lilienbrunngasse 7-9, 1020 Vienna
Phone: +43-1-99 399-1010
Fax: +43-1-99 399-1011
www.raiffeiseninformatik.at
Contact: Ursula Freiseisen-Pfneiszl
ursula.freiseisen@r-it.at
Data accurate on 1 March 2007.
Numbers of branches as on
31 December 2006.
Preface Managing Board Supervisory Board’s Report Overview of RZB Raiffeisen Banking Group

Raiffeisen Zentralbank Österreich AG
Am Stadtpark 9
1030 Vienna, Austria
Phone: +43-1-71 707-0
Fax: +43-1-71 707-1715
www.rzb.at
www.rzb.at