RAIFFEISENLANDESBANK NIEDERÖSTERREICH-WIEN AG

Risk Factors regarding RLB NÖ-Wien
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The Issuer is exposed to the general business risks that can affect an Austrian bank which is also
operating on the international markets. The materialization of any of these risks may have a material
adverse effect on RLB NÖ-Wien's business, results of operations and financial condition, which may in
turn adversely affect the market price of the Notes and the Issuer's ability to fulfil its interest and/or
redemption payment obligations under the Notes.
The following specific risks can occur, among others:
Credit risk
Credit risk is the risk of a partial or complete loss of interest and/or redemption payment expected to
be made by a counterparty. Any deterioration in the creditworthiness of a counterparty may lead to an
increase in the credit risk as the Issuer's business with corporate customers, other banks, financial
institutions and sovereign borrowers may be affected. The worse the credit standing of the
counterparty, the higher the non-payment and default risks. Credit risk applies to both standard
banking products, such as the credit, discount and guarantee business, as well as to certain trade
products, such as derivative contracts like financial futures, swaps and options or security pension
transactions and security lending. RLB NÖ-Wien could be required to make impairments or additional
provisions for bad debts or face additional capital adequacy requirements as a result of credit risks.
The proportion of non-performing loans and resulting impairments and provisions may have a material
adverse effect on RLB NÖ-Wien's business, results of operations and financial condition.
Participation risk
The Issuer holds participations in Raiffeisen Zentralbank Österreich AG ("RZB"), and directly and
indirectly in RZB's subsidiary Raiffeisen Bank International AG ("RBI"), as well as indirectly in
Raiffeisen Bank Zrt., Budapest. The participations are consolidated at equity (affiliated companies).
The profit contribution of affiliated companies (in particular RZB/RBI) has a material impact on RLB
NÖ-Wien's consolidated annual net income.
The Issuer's participations are subject to various risks. In particular, they are subject to general
business risks such as the risk of possible losses arising from changes in the market due to fluctuating
or changing interest rates, foreign exchange rates, share prices and prices in general (market risk),
the risk that customers may not be able to fulfil contractual or financial obligations (credit risk),
currency risks, the risk of unexpected losses resulting from inadequate or failed internal processes,
people and systems or from external events, including legal risk (operational risk) and may become
subject to litigation and regulatory or governmental scrutiny or changes in applicable regulatory
regimes that may cause substantial losses. They are dependent on the availability of liquidity and
refinancing opportunities and also subject to participation risks in connection with their own listed and
unlisted equity holdings, i.e. the risk that money invested in an equity participation may not yield a
return or depreciates in value.
The business of RLB NÖ-Wien's participation in Hungary and of RBI, which operates banking
subsidiaries and leasing companies in Central Europe, Southeastern Europe and various CIS
countries, depends on the business and economic environment in particular the development of
financial markets and the political situation in Central and Eastern Europe (CEE). These countries and
regions, in particular countries which are not members of the EU, are subject to increased political,
economic and social changes as well as risks related to these, for example, exchange-rate
fluctuations, regulatory upheavals, government interference, inflation, economic recession, local
market disruptions, tensions in the labor market combined with changes in social values, ethnic
tensions, declining birth rates, increased life expectancy, etc. (country risk). The prevailing
international financial and economic crisis, additionally, may even aggravate these effects and banking
market growth rates may fall noticeably as compared to the preceding years as a result of increasing
market saturation and stronger competition.
RZB and, in particular, its indirect subsidiary RBI are furthermore subject to risks in connection with
the 2010 merger and subsequent integration of RZB's corporate customer business into RBI (at that
time operating under the corporate name Raiffeisen International Bank-Holding AG ("RI")). The merger
has created a major financial institution in times of an economic and international macroeconomic
downturn, which could result in increased economic pressure on the merged bank. The integration of