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Management Report of the Group
Overview
� Bank Austria Creditanstalt showed a steady upward trend
in its performance in the past years and achieved record results
for 2005: operating profit has improved from year to year over
the past five years; from 2004 to 2005, the increase was
21%, to € 1,142 m. Net income amounted to € 1,075 m, an
increase of 60 %; after deduction of minority interests, consolidated
net income for 2005 was € 964 m, up by 58 %. Earnings
per share increased from € 4.14 in 2004 to € 6.56, after
first-time application effects resulting from amended and new
IFRSs. Since the launch of BA-CA shares on the stock market
on 8 July 2003, market capitalisation – i.e., the bank’s value –
has risen from € 4.3 bn to € 13.8 bn at the end of 2005. This
means that Bank Austria Creditanstalt remains one of the
three companies with the highest stock market valuation in
Austria. The dynamic growth of profits and market capitalisation
reflects the strong increase in profitability and the confidence
of the capital market in the Group’s performance.
The good results for 2005 confirm the bank’s consistent pursuit
of value-creating growth and capital allocation, sustainable
earnings improvement and efficiency enhancement in the last
five years: the consolidation process in Austria (completed with
the merger of Bank Austria and Creditanstalt in 2002) was followed
by the integration of CEE subsidiaries of HVB and BA-CA
(essentially in 2001 and 2002). In the past two years we
switched to expansion in profitable business segments and
enhanced efficiency in retail customer business and back-office
activities.
Trend in results from 2000 to 2005
€ m
1,200
1,000
800
600
400
200
0
494
500
2000
pro forma
552
483
572
24 Management Report of the Group
309
602
442
944
609
2001 2002 2003 2004 2005
Operating profit Consolidated net income
1,142
964
� On the basis of our medium-term planning figures, we set
ourselves the target of generating a net income before taxes
of over € 1 bn for 2005. This target was published in our
2004 Annual Report. In our interim report for the first nine
months of 2005, we raised the target for net income before
taxes to “over € 1.3 bn” for the year as a whole while
announcing that the 2005 consolidated financial statements
would reflect additional provisions for restructuring costs and
special expenses which are yet to be determined and relate to
integration into UniCredit Group. Even including the special
expenses, we reached our target for the year as a whole,
achieving a net income before taxes of € 1,301 m. The
increase over 2004 was € 443 m or 52 %. In the fourth quarter
we made a charge of € 143 m for
Target for net income before
special and one-off expenses, also to
taxes of € 1.3 bn achieved
despite special expenses prepare the Group for future requirements
in the course of integration into
UniCredit Group. Prior to these measures, net income before
taxes would have been € 1,444 m.
Overview of 2005
€ m
1,500
1,400
1,300
1,200
1,100
1,000
900
Net income before taxes
adjusted for one-off effects
1,250
Record results for 2005: despite large special/
one-off expenses in the fourth quarter,
BA-CA achieves net income before taxes
of € 1.3 bn as planned.
Substantial provisions made for sustainable
profit growth.
+130
Gain on sale of
Investkredit shares
+123
Gain on sale of shares/
exchange for Banca Tiriac shares
–70
Additional provisioning
charge
– 108
Provisions for
restructuring costs
–25
Special expense
for UniCredit integration
1,301
Net income before taxes
stated in the income statement