team spirit - Bankier.pl

Operating profit for 2005 was € 91 m, up from € 13 m for
the previous year. The increase was due to the one-off adjustment
of the provisioning charge. Net income before taxes
and net income reached € 1 m, reflecting the allocation of
€ 90 m to the provision for restructuring costs. Adjusted for
special/one-off effects, the ROE would be 2.8 % before taxes
and 2.1% after taxes, clearly below the cost of capital.
The ongoing SME Plus project aims at making the SMEs Austria
business segment profitable on a sustainable basis. In
2006 we will implement numerous partial projects in this context:
� Initial efforts will focus on optimising results from business
with those customers that are currently not making a satisfactory
contribution to the bank’s value creation. This will be
done by charging prices which cover costs and through riskadjusted
margins on loans. Our objective is to expand business
relations on a profitable basis. With the “FinanzCheck” which
we offer to small and medium-sized businesses free of charge,
we can analyse the volume of business in the mutual interest.
In particular, we want to increase our “share of wallet”
through intensive cross selling. Given the fact that business
has so far concentrated on lending, we will step up efforts to
provide services, risk management products and investment/
pension-planning products. A computer-based system will
enable account managers to quickly identify business potential
in each case. This will also involve a restructuring of daily
activities, with the objective of further relieving account managers
of administrative work and focusing on services for
defined customer groups.
� It is important to use low-cost settlement and processing
procedures that are suitable for both customers and the bank
in order to intensify the bank’s customer relationships and
enhance service quality. The degree of automation will be
increased through online sales channels, including the expansion
of BusinessNet, mainly for day-to-day business. We will
introduce appropriate incentives in this respect.
� Last but not least, internal processes such as the lending
process will be redesigned. As part of end-to-end process reengineering,
and using a target-costing approach, we will
closely adjust procedures to business structures on an automated
and user-friendly basis.
Our ROE target for the SMEs Austria segment for 2006 is
7.5 %.
34 Management Report of the Group
Large Corporates and Real Estate *)
€ m 2005 2004 Change adjusted
Operating revenues
… after net charge for losses on
627 627 0 0 % 0 %
loans and advances 591 592 –1 0 % 0 %
General administrative expenses – 292 – 291 –1 0 % – 2 %
Operating profit 300 301 – 2 –1% 2 %
Net income before taxes 430 261 168 64 % 23 %
Net income
Net income – share
315 196 119 60 % 27 %
of Group total 29 % 29 % 24 %
Equity – share of Group total 20 % 23 % 20 %
ROE before taxes 30.1% 17.3 % 22.5 %
ROE after taxes 22.1% 13.0 % 17.5 %
*) including ACPM (Active Credit Portfolio Management)
The Large Corporates and Real Estate business segment comprises
multinational companies, public sector customers and
financial institutions. The segment also serves as the BA-CA
Group’s centre of competence for international corporate business,
ranging from trade finance and cash management to
special-financing transactions such as leasing and commercial
real estate financing, to corporate finance and M&A.
In 2005, the environment for these operations was characterised
by excess liquidity in the business sector after a period
of balance sheet restructuring. On the other hand, lively acquisition
activities and international expansion strategies of corporates
were favourable factors enabling us to demonstrate
our CEE competence. For all of these reasons, the trend away
Capital allocation and contribution of
business segments to net income
in %
60
30
30
30
20
10
0
–10
13
7
17
Private
Customers
Austria
13
2
0
SMEs
Austria
29
24
20
Large
Corporates
and
Real Estate
Share of average equity allocated
Contribution to net income of BA-CA
Contribution to net income of BA-CA,
adjusted for special/one-off effects
3
12 13
International
Markets
29
55
47
Central and
Eastern
Europe
22
–3 –3
Corporate
Center