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higher revenue without significant increases in business volume
and allocation of capital, such as International Markets,
asset management and business with large corporates.
In 2005, the bank’s risk-weighted assets increased by an
average 7 % or € 5.1 bn to € 75.4 bn. While this growth was
driven by the CEE business segment (up by 26 %), business
volume also expanded in line with the bank’s strategy in the
Private Customers Austria segment (up by 19 %). In its business
with companies, both large-volume and in the mid-market
segment, the bank’s efforts were, and still are, focused on
reducing the loan portfolio – independently of customer lending
activities – through secondary market placements and by
passing risks on through appropriate derivatives. In 2005 the
bank in this way reduced its risk-weighted assets in the Large
Corporates and Real Estate business segment by € 1.9 bn or
9 %, of which about € 700 m was passed on to Active Credit
Portfolio Management (which however belongs to the same
business segment, so that the net reduction is € 1.2 bn or
6 %). A further example of this strategy is the securitisation
transaction with which BA-CA Leasing securitised contracts
totalling € 425 m relating to its Austrian leasing business in
equipment and vehicles, and sold them on the capital market.
In the International Markets segment, the bank has reduced
on-balance sheet business to the required minimum over the
past years and conducted trading activities mainly via derivatives.
Fee-based business is growing strongly in both this segment
and in business with SMEs.
Volume expansion in the CEE and
Private Customers Austria segments
Change in average risk-weighted assets in % on previous year
in %
25
20
15
10
5
0
–5
–10
–15
–20
–25
–30
25.7 %
Central and
Eastern
Europe
18.8%
Private
Customers
Austria
BA-CA total +7.2%
–0.8%
Other Austrian
business
segments
– 24.6%
Corporate
Center
Proposal for the appropriation of profits
The profit available for distribution is determined on the basis
of the separate financial statements of Bank Austria Creditanstalt
AG, the Group’s parent company. For the financial year
beginning on 1 January 2005 and ending on 31 December
2005, Bank Austria Creditanstalt AG achieved net income of
€ 479.9 m. Of this amount, € 115.7 m was allocated to
reserves. Profit brought forward from the previous year
amounted to € 4.1 m. Thus the profit available for distribution
was € 368.3 m. It is proposed that, subject to approval at the
Annual General Meeting, a dividend of € 2.50 per share
entitled to a dividend be paid on the share capital of
€ 1,068,920,749.80. On the basis of 147,031,740 shares, the
dividend payout is € 367.6 m. It is also proposed that the
remaining amount of € 0.7 m be carried forward to new
account.
Calculated on the basis of Group profits, the payout ratio
rises from 36.7 % to 38.1%.
Development of BA-CA
business segments
Private Customers Austria
€ m 2005 2004 Change adjusted 1)
Operating revenues 2) … after net charge for losses
1,210 1,145 66 6 % 6 %
on loans and advances 976 1,070 – 94 – 9 % 4 %
General administrative expenses – 888 – 908 19 – 2 % – 2 %
Operating profit 88 163 – 75 – 46 % 40 %
Net income before taxes 94 163 – 69 – 42 % 39 %
Net income
Net income – share
73 119 – 46 – 39 % 46 %
of Group total 7 % 18 % 16 %
Equity – share of Group total 13 % 12 % 13 %
ROE before taxes 10.1% 20.8 % 24.4 %
ROE after taxes 3) 7.9 % 15.2 % 18.7 %
1) adjusted for one-off/special effects / 2) operating revenues including the
balance of other operating income and expenses / 3) net income / allocated
equity (annual average)
The footnotes apply to all tables in this section of the Annual Report.
In line with the new segmentation of Austrian customer business
introduced in 2005, the bank’s Private Customers Austria
segment focused on providing services to private individuals,
transferring business customers to the SMEs Austria segment.
2005 was again a successful year for Austrian private customer
business, one of the segments in which we aim to
achieve further growth. Although the operating environment
– general economic trends, interest rate movements and competitive
conditions – was even more difficult than in the previous
year, operating revenues increased by 6 % to € 1,210 m.
Management Report of the Group 31