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Income statement for 2005
The most salient feature of the 2005 income statement is
the strong growth in operating revenues, which was significantly
higher than the increase in the net charge for losses on
loans and advances, and also exceeded the comparatively
modest growth of costs. Revenue growth thus fed through to
operating profit. The other items in the income statement
mainly reflect one-off income (gains on sales) and the addition
to provisions for restructuring costs, which largely offset each
other for the year as a whole.
In 2005, the group of consolidated companies was
enlarged mainly with the acquisition of Hebros Bank AD, Plovdiv,
of Banca Comerciala “Ion Tiriac” S.A., Bucharest, and of
Eksimbanka a.d., Belgrade (see note 3 to the consolidated
financial statements). Also newly included in consolidation are
our subsidiaries BPH Leasing S.A., Warsaw, and Hypo Stavebni
Sporitelna, Prague, a Czech company. As a result of these
changes and several disposals and further additions, operating
revenues and general administrative expenses increased by
only about 2 % each, and net income before taxes rose by
about 1%.
In 2005 we redefined the business segments (for methodological
changes, see note 31; the comparative figures for the
previous year have been adjusted to reflect the new definition).
Austrian customer business previously comprised two
business segments – Private Customers and Corporate Customers.
From 2005, it has been divided into three segments:
“Private Customers Austria” covers business with private individuals
only. “SMEs Austria” encompasses small and mediumsized
enterprises (SMEs) and includes business customers (previously
in the Private Customers segment). “Large Corporates
and Real Estate” comprises multinational corporates, financial
institutions, and public sector and commercial real estate business.
The other business segments – International Markets,
CEE and Corporate Center – have remained unchanged. This
means that segment reporting is now divided into six business
segments. With this new definition we aim to enhance transparency
– both externally and especially within the bank, in
line with our value-based management approach. The business
segments now reflect more homogeneous customer portfolios
enabling the bank to provide targeted services as well as
enhancing benefits for customers and reducing costs.
A number of changes in IFRSs became effective on 1 January
2005. Most of the changes were applicable retrospectively; therefore
we have adjusted the previous year’s figures to reflect the
changes. The effects on the income statement relate mainly to
the net charge for losses on loans and advances, the net trading
result and net income from investments. These effects remained
within narrow limits: the adjusted net income before taxes for
2004 was € 23 m higher than the published figure; at the level of
net income, the previous year’s figure was adjusted by € 7 m.
26 Management Report of the Group
An analysis of the income statement requires exchange rate
effects arising from the translation of amounts in CEE-based
financial statements to be taken into account. The most pronounced
appreciation was recorded in the currencies of
Poland (+12.5 %), Romania (+11.0 %) and the Czech Republic
(+ 7 %). The exchange rate effects had an impact on both
income and expense items, and thus largely offset one another
in the results. For this reason, they hardly impact the overall
picture. If the CEE financial statements are translated at constant
average exchange rates for 2004, the positive exchange
rate effect – including hedging costs – is about € 22 m or
approximately 2 % of net income before taxes.
Operating revenues rose by € 436 m or 11% in 2005. More
than three-quarters of this improvement came from our
growth market of Central and Eastern Europe (CEE business
segment). The Austrian business segments also achieved higher
operating revenues, with the Private Customers Austria segment
making the strongest contribution. Overall, operating
revenues totalled € 4.3 bn, of which € 1.5 bn or 36 % was
generated in CEE and over € 2.7 bn in Austrian customer business
and International Markets.
Operating revenues *)
€ m 2005 Share Change
Bank Austria Creditanstalt 4,258 100 % 436 11%
Austrian customer business 2,451 58 % 81 3 %
– Private Customers 1,210 28 % 66 6 %
– SMEs 614 14 % 16 3 %
– Large Corporates and Real Estate 627 15 % 0 0 %
Central and Eastern Europe (CEE) 1,524 36 % 334 28 %
International Markets (INM) 275 6 % 22 9 %
Corporate Center 7 0 % –1 – 7 %
*) including the balance of other operating income and expenses
Continued revenue growth
€ m
1,000
800
600
400
200
0
27
515
297
100
542
319
35
574
317
48
599
301
568
330
588
336
589
381
588
410
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2004 2005
Dividends
28
Net interest income excl. dividends
98
54
99
Net fee and commission income