team spirit - Bankier.pl

Outlook for Bank Austria Creditanstalt’s
performance
� In view of the growth profile described above, we will pursue
our chosen course of “targeted growth and productivity
enhancement” with great determination:
� Economic growth in CEE is becoming more broadly-based.
The catching-up process in the banking industry is gaining in
scope, especially as it spreads to South-East Europe and industrial
integration of CEE countries makes further progress. Banking
business is being modernised and banks penetrate the market
with higher value-added products. We will actively participate
in this development with our ongoing projects, which
focus on expanding and industrialising retail customer business
and using cross-regional potential for corporate business. In the
current year we will complete the integration of banks we
acquired in 2005 and we will also start the major process of
integrating the CEE network of the new UniCredit Group. Our
objective is to further enhance efficiency and achieve growth.
� Although the Austrian economy is slightly improving, banks
are still faced with weak volume growth and a persistent
squeeze on margins. In this environment, we can only improve
profitability by pursuing our sales initiative in private customer
business and by enhancing back-office efficiency. In 2006, a
focus will be on the restructuring of business with Austrian
small and medium-sized companies, for which we made substantial
provisions in the 2005 financial statements. In the
SMEs segment, we will raise productivity with a new business
model focusing on standard products and process automation
in day-to-day activities. Our objective for the SMEs Austria segment
is to generate at least the cost of capital from 2007
onwards. In line with our objective, we will reduce the capital
requirement for SME business also by placing exposures in the
secondary market.
On the basis of medium-term planning figures for the current
group of consolidated companies, we expect continued
growth of business volume in 2006. In line with our valuebased
management approach, CEE and Private Customers
Austria will remain the growth drivers and the main segments
to which we will allocate additional capital. We expect that, as
in the past years, operating revenues after the provisioning
charge will increase at a significantly higher rate than costs,
and that the cost/income ratio will therefore continue to
decline. For 2006 we assume that, not least on account of the
refined risk measurement methodology and the measures
already taken in 2005 in respect of flat-rate specific provisions,
the net charge for losses on loans and advances in the Austrian
private customer business segment will be significantly lower.
Calculated from the level seen before the one-off adjustments
in the fourth quarter of 2005, the net charge for losses on
loans and advances in the three Austrian customer business
segments will improve in 2006. Net income before taxes
should therefore continue to develop in line with past years.
� As announced in UniCredit’s offer documents for the
takeover, it is envisaged that Bank Austria Creditanstalt acts as
holding company for the CEE network of UniCredit Group.
Details of the geographic perimeter have not yet been
defined. However, BA-CA will take over numerous UniCredit
subsidiaries and integrate them with its own local banking
subsidiaries. The Group would thus become the undisputed
market leader in this large region. Total assets and profits of
the combined CEE network would be twice as large as that of
the nearest competitor.
The banking networks of BA-CA and UniCredit overlap. Therefore
mergers are planned in six countries: in the Czech Republic,
in Slovakia, Bulgaria, Romania, Bosnia and Herzegovina,
and Poland. Work on some of these mergers will start in the
course of 2006. In the case of Poland, although the European
Commission has approved the mergers, agreement with the
national supervisory authorities has not yet been reached. In
Croatia, in response to competition law requirements, we
intend to sell HVB Splitska banka to a third party and to take
over Zagrebačka banka dd, the local market leader, from Uni-
Credit.
� For 2006 we expect further progress in operating performance
in our core markets. The year will also see extensive
organisational changes in connection with the integration of
BA-CA into UniCredit Group. Both developments underline
the importance of Bank Austria Creditanstalt as a major contributor
to overall performance within the new UniCredit
Group.
Management Report of the Group 43