Segment Reporting

geschaeftsbericht2007.rlbooe.at

Segment Reporting

Lentos Museum of Modern Art with Pöstlingberg in the background, Linz, Austria


Corporates & Retail –

Customer Services

Segment Reporting

Loyalty

Leadership

Liquidity

Raiffeisenlandesbank Oberösterreich not only wants to fulfill expectations but

even to surpass them; it not only wants to support its customers, but also to

inspire them. A unique level of customer orientation, with competence, charm,

emotion but packing a punch, leadership with regard to the development of new,

targeted products and modern sales instruments are fundamental building blocks

that distinguish us.

Annual Report 07

19


Corporates & Retail – Customer Services

Erfolg ist Beratung

plus Kompetenz

Success equals advice plus

competence

Successful companies need financ -

ing solutions that are full of ideas

to complement their dynamic development.

As Austria’s strongest

regional bank, Raiffeisenlandesbank

Oberösterreich accordingly

supports its customers with mod -

ern and extensive financial engi -

n eering, which incorporates the har -

monised interplay between various

financial services.

Corporate customers and groups

Raiffeisenlandesbank Oberösterreich Aktiengesellschaft is firmly anchored in Upper

Austria through the local Raiffeisen banks. This healthy and strong structure for Raiff eisen

Oberösterreich ensures an enormous range in its Customer Services. The Raiffeisen

banks maintain servicing locally while the specialist services provided by Raiffeisen -

landesbank Oberösterreich allow the customers to be assisted at a global level.

More than every other SME and 80 percent of industrial firms take advantage of this

and work with Raiffeisen Oberösterreich. The Corporates and Retail segment comprises

Raiffeisenlandesbank Oberösterreich’s business areas corporate customers,

groups, SME support, major institutional customers, international finance and correspondent

banking, as well as the retail business.

Recognising opportunities, calculating and limiting risks and flexibility are Raiffeisen -

landesbank Oberösterreich’s top priorities in the servicing of its corporate customers.

Raiffeisenlandesbank Oberösterreich services its corporate customers with

cash man agement solutions, factoring, real estate solutions, insurance, assisting

companies through its global network with efficient cooperation partners and correspondent

banks, as well as interest rate and currency hedging combined with

optimal advice on subsidies.

Financing opportunities

In servicing and assisting corporate customers, it is not just a matter of providing

financing solutions. Above all, we need to provide optimal finance and be on hand

for the opportunities that the companies find on their markets at home and through -

out the world. To this end, Raiffeisenlandesbank Oberösterreich has an enormous

risk-bearing capacity. Its lasting and successful development enables Raiffeisenlandesbank

Oberösterreich to invest equity in various shapes and sizes. It contributes

to the optimisation of its customers’ balance sheets with special financing models,

such as corporate bonds, hybrid bonds, mezzanine capital, direct investments, undis -

closed investments, or by employing participatory capital.

Subsidy service

Raiffeisenlandesbank Oberösterreich not only provides modern financing models,

but sees its task as giving optimal support in structuring the many different opportunities

to obtain subsidies from the EU, the government, the province or from local

authorities. Raiffeisen Oberösterreich submitted a total of 2,538 applications for

subsidies in 2007. This represents an investment volume of EUR 558 million.

EUR 37.2 million is the amount of subsidies from which customers of Raiffeisen

Oberösterreich benefited.

20 Annual Report 07


Major institutional customers

Major institutional customers have recourse to a wide range of services at Raiff -

eisenlandesbank Oberösterreich, with structured investments, special funds as tailormade

investment models, cash pooling systems and tailor-made financing solutions.

Close cooperation with Raiffeisenlandesbank Oberösterreich’s Finance Trade Center in

liquidity management and investment round off the main areas of servicing.

Raiffeisenlandesbank Oberösterreich has particular expertise in the field of project

and special finance. In order to ensure that a project runs smoothly, experts not only

make the corresponding individual financing concepts available but also provide

support in implementing them.

In realising significant projects for the future, public-private partnerships have also

proved to be a formula for success. They ease the implementation of major projects.

This generates additional added value and safeguards jobs. A total of 415 projects

with a total investment volume of EUR 2.535 billion are currently under development

or in operation.

Segment Reporting

In addition, Raiffeisenlandesbank Oberösterreich meets individual cash management

requests to optimise domestic and international payments. To achieve this, the experts

at our subsidiaries, GRZ and RACON, are called in as IT and software service

providers.

SME support

Austria’s economy has an excellent structure: above all, the broad base of efficient

small and medium-sized enterprises ensures that the economy performs success -

fully. These mature companies are significant innovators and ensure successful

exports and an altogether high level of employment.

With a succession service initiated by Raiffeisenlandesbank Oberösterreich, it helps

to safeguard this strong backbone of the domestic economy. This is because the

safe handover of these companies to the next generation presents a particular

challenge. Research has shown that the succession issue is unresolved at 61 percent

of companies.

80 percent of industrial

concerns in Upper

Austria work with Raiff -

eisen Oberösterreich.

With its SME succession service, Raiffeisenlandesbank Oberösterreich provides

optimal support by bringing into play a combination of various financing instruments –

from a subsidy recipe through to venture and partner capital. To this end, we have

launched a special succession fund with an initial volume of EUR 30 million.

Annual Report 07

21


At Raiffeisenlandesbank Oberösterreich, customer orientation does not just mean

flexibility and speed but, above all, an intense personal relationship. Major cornerstones

of such relationships are discussions held with business owners. Here, we not only

analyse with each company key figures based on extensive comparisons with others

in the sector, which we compile and constantly update for 110 sectors of the economy,

but also discuss what the future has to hold and opportunities for positioning.

These discussions are dynamic and held as partners in business: the result is a comprehensive

rating, which not only contains the key financial figures but also soft facts,

such as the staff situation, market environment, degree of innovation, opportunities

for development, etc.

Retail business

20 branches in the

greater Linz area

ensure local supply

of financial services.

Raiffeisen Oberösterreich’s prime marketing principle is to help its customers maintain

and, if possible, expand their financial leeway. Doing this depends on security,

determination, success, reliability and trust.

With 20 branches in the Linz and Traun area, Raiffeisenlandesbank Oberösterreich

is an important local supplier of financial services to private customers and SMEs in

Upper Austria’s capital.

Looking after customers is the core feature. Our particular form of customer orienta -

tion, involving competence, charm and emotion but packing a punch, aims not only to

meet but to exceed expectations, not only to look after customers but to excite them.

Leadership in developing new, targeted products and modern sales tools are signifi -

cant building blocks distinguishing Raiffeisen’s Customer Services in Upper Austria.

In addition, personal customer relationships are linked to the demands and desires

for mobility. Customers can use our modern bank foyers or the ELBA Internet to trans -

act their banking business simply, securely, easily and flexibly.

The customer foyer of Raiffeisenlandesbank Oberösterreich with its self-service

areas are amongst the most state-of-the-art and the most secure. And customers can

access their safe-deposit boxes seven days a week between the hours of 5 a.m. and

midnight.

22 Annual Report 07


Cash management

The latest payment solutions ensure that money can stay working longer in com -

panies. With all the success Austrian companies are having abroad, the need is

growing for up-to-date, globally compatible solutions. Accordingly Raiffeisen -

landesbank Oberösterreich, together with the whole Raiffeisen banking group, offers

its customers a gateway to the SEPA age (Single Euro Payments Area). This ensures

a rapid – within a few hours – and economical processing of payments in all of the

31 countries in the EU and EEA.

With cross currency cash pooling, accounts can be pooled in various currencies

without complicated settlement payments and calculations, group interest rates can

be taken into account and interest optimisation can be achieved for the customers.

Shadow interest calculations and taking current exchange rates into account obviate

the need for currency conversions and related costs. This gives those responsible at

companies for treasury and finance an optimal tool for managing liquidity, interest,

foreign currencies and payments in one go.

Raiffeisenlandesbank

Oberösterreich is the

first bank in Austria to

offer its customers

access to German online

banking customers.

Segment Reporting

Innovative ideas for products and the technical resources of our subsidiaries GRZ

und RACON as IT and software service providers allow individual wishes concerning

domestic and international payments to be fulfilled with tailor-made solutions.

By adding Giropay to its online products, Raiffeisenlandesbank Oberösterreich has

set a new milestone in Austria. It is the first and the only bank in Austria to give its

customers potential access to 17 million German online banking customers. Giropay

is an add-on to the Austrian eps standard.

Online security is very important to us: accordingly more than 40,000 customers are

already in a position to take advantage of mobile TANs and SMS services.

A host of different types of cards rounds off our competence in products, so that

there is the right card for every customer and every area of use.

Annual Report 07

23


Matrimandir (“Mother Earth”) in Auroville, India


Corporates & Retail –

International Market

Segment Reporting

active

aspiring

approachable

With 1,621 correspondent banks and 16 partner banks, Raiffeisen -

landesbank Oberösterreich provides a powerful global service

network, which allows its customers to make optimal use of their international

experience. Special desks ensure optimal connections, especially

to the emerging/booming markets, such as Eastern Europe,

India and China.

Annual Report 07

25


Corporates & Retail – International Market

India? Your bank

is already there.

Raiffeisenlandesbank Oberösterreich

is the only Austrian bank to

have a cooperation agreement with

ICICI, India’s most dynamic bank.

This enables it to provide optimal assistance

to customers in this booming

market and to offer services

locally: from local financing transactions

and help in setting up companies

to special cash management

solutions.

Correspondent Banking

Cross-border activities demand careful planning and comprehensive service. With

1,621 correspondent banks and 16 partner banks, Raiffeisenlandesbank Oberösterreich’s

customers have access to a powerful global service network to optimally

process their export projects and international business.

This new division has taken on the newly formed organisational unit Syndication &

Asset Sales in addition to its classic correspondent banking business. The department

acts as the central point of contact for all front office areas in matters of syndi -

cations. It provides support by compiling and checking legal aspects of contracts,

forming syndicates, structuring transactions and precisely monitoring the credit

situation. This gives customers a single point of contact for structuring, processing

and repayments, which ensures a high degree of efficiency.

In addition, Raiffeisenlandesbank Oberösterreich’s continuously expanding network

guarantees optimal usage of international experience and connections. Special desks

ensure optimal connections to emerging/booming markets. This service simplifies and

speeds up, for instance, the procedure for opening accounts. In addition, it arranges

essential contacts with local customer advisers, arranges appointments and clarifies

financing needs in advance with the network banks.

Asia Desk: in China there is a comprehensive co-operation agreement with the

Industrial and Commercial Bank of China (ICBC). A special cash management system

gives corporate customers as much flexibility as possible for projects in the “Central

Kingdom”. This enables companies to see and make transactions over accounts

held by subsidiaries in China via ELBA.

Raiffeisenlandesbank Oberösterreich is the only Austrian bank to have a co-operation

agreement with ICICI, India’s most dynamic bank and can provide optimal assistance

to companies in this booming market. This co-operation agreement covers all ser -

vices – from local financing transactions and support in setting up companies to

special cash management solutions – to be provided locally. The Eastern European

Desk ensures a connection to the 18 markets in Central and Eastern Europe with

more than 3,000 Raiffeisen bank branches and network banks with more than 57,000

employees. This enables opportunities to be optimised that present themselves to

Austrian and Central European customers in Russia, for instance in connection with

the Olympic Games in Sochi.

We already started to build up banking business in the Czech Republic in 1991 when

the Iron Curtain fell. In the meantime, what is now Raiffeisenbank Prague has a

banking network with 56 branches across the country. Raiffeisenbank Prague, in which

Raiffeisenlandesbank Oberösterreich has a 25 percent stake via Raiffeisenbank Prag

26 Annual Report 07


BeteiligungsgesmbH, had total assets as at 31 December 2007 of EUR 4.4 billion

and 1,858 employees; it looks after 28,182 corporate and 186,088 private customers.

Its main strategic focus, besides looking after Western corporate customers and

financing real estate transactions, will be on building up local retail business, including

via the Internet and mobile phones, and business with SMEs. The second Ober Österreich.Haus

is due to be opened in the Old Town in Prague in the autumn of 2008.

International Finance

Austria has profited more from the opening of European borders and the multifarious

opportunities offered by internationalisation than virtually any other country. Exports

exceeded imports for the first time in 2007.

It is important to be able to provide comprehensive assistance to companies, not

only locally but, for their successful projects, around the globe. Raiffeisenlandesbank

Oberösterreich gives them this scope: the local Raiffeisen banks and the global network

of efficient partner and correspondent banks represent stable anchors for

successful projects. Its close co-operation with strong and established commercial

banks in all parts of the world enable Raiffeisenlandesbank Oberösterreich to keep

the level of its service enormously high but its costs extremely low.

Segment Reporting

With its International Finance division, Raiffeisenlandesbank Oberösterreich offers

its customers comprehensive advice and covers the whole range of products for

international business:

■ Documentary business (import/export letters of credit, guarantees)

■ Export finance (export fund procedures, Kontrollbank funding pool)

■ Financing working capital locally via partner banks with guarantees provided by

Raiffeisenlandesbank Oberösterreich; project finance when hedging risks, processing

documentary transactions, and optimal financing of export transactions

This makes Raiffeisenlandesbank Oberösterreich the most important partner for the

international business of companies in Upper Austria; it expects more high growth

in 2008 in Eastern Europe but also in China and India. Seven out of ten exporters in

Upper Austria rely on assistance from Raiffeisenlandesbank Oberösterreich for the

success of their international projects, making it the most important bank for exports

in Upper Austria. Austria’s most powerful regional bank looks after and assists more

than 4,850 exporters throughout the country.

Over the last three years Raiffeisenlandesbank Oberösterreich’s business volume in

export services has risen massively: it recorded average annual growth in its documentary

business of 38.4 percent and as much as 50 percent in export letters of credit.

Raiffeisenlandesbank

Oberösterreich is the

most important bank

for exports in Upper

Austria.

Annual Report 07

27


International Submarkets/Business Areas

Branches/representative

offices

Brussels

Milan

Paris

New York

Vilnius

Hong Kong

Seoul Ho-Chi-Minh City Chisinǎu

Mumbai Tehran

Correspondent

banks

Number of correspondent banks: 1,621 Western Europe 800 Asia 312

Eastern Europe 295 Africa 71

America 131 Australia 12

Raiffeisen

network banks

Raiffeisen banka d.d., Maribor**

Raiffeisen Bank Zrt., Budapest*

Tatra Banka, Bratislava*

Raiffeisenbank Austria d.d., Zagreb*

Raiffeisen Bank d.d. Bosna i Hercegovina, Sarajevo**

Raiffeisen Banka a.d., Belgrade**

RZB Beijing Branch, Beijing**

RZB Xiamen Branch**

Raiffeisen Bank Sh. A., Tirana**

JSPP Raiffeisen Bank Aval, Kiev**

Raiffeisen Bank Polska S.A., Warsaw**

Raiffeisenbank (Bulgaria) E.A.D., Sofia**

ZAO Raiffeisenbank, Moscow**

Priorbank JSC, Minsk**

Raiffeisen Bank Kosovo JSC, Pris˘tina**

Raiffeisen Bank S.A., Bucharest**

RZB Finance LLC, New York**

Raiffeisen Malta Bank plc, Sliema**

RZB London Branch**

RZB Singapore Branch**

Southern

Germany market

Private Banking

SMEs

Industrial companies and groups

Project development/finance

Venture and partner capital

Factoring

Leasing

Real estate

Travel agency

Gastronomy

Ober.Österreich.Haus, Munich, branches in

Heilbronn, Landshut, Nuremberg, Passau,

Regensburg, Ulm, Würzburg

PRIVAT BANK AG der Raiffeisenlandesbank

Oberösterreich

activ factoring AG

Invest Unternehmensbeteiligungs AG

Real-Treuhand Immobilien Bayern GmbH

Raiffeisen-IMPULS-Leasing GmbH & Co KG

Raiffeisen-IMPULS-Finance & Lease GmbH

CAR-ASS-Impuls Leasing GmbH & Co. KG

CAR-ASS-Impuls Autovermietung GmbH

Optimundus Reisebüro Passau

GO Gaststättenbetriebs GmbH

Czech

Republic market

Assisting corporate customers

Project development/finance

Leasing

Insurance

Private Banking

Travel agency

Real estate

Staff recruitment

M&A advice, subsidies

Factoring

Raiffeisenbank a.s., Prague and eBanka-Spezialbank

for SMEs and private customers – with a total of 101

branches and a strong presence on the Internet

Ober.Österreich.Haus Prag

ACG Prague, Budweis (Mergers & Acquisitions,

EU-Förderungsberatung, Steuerberatung,

Buchhaltung)

IMPULS-Leasing-AUSTRIA s.r.o. –

Prague, Budweis, Brno,

Raiffeisen Versicherungsmakler –

Prague, Budweis, Pilsen, Brno

PRIVAT BANK AG der Raiffeisenlandesbank

Oberösterreich, Prague branch

BTU travel agency – Prague

Real-Treuhand Reality a.s. –

Prague, Budweis, Pilsen, Brno

active factoring AG – Prague

Export and international

financing

Focal points: Eastern Europe South-East Asia

Far East

Middle East

* Minority shareholding ** Indirect shareholding in Raiffeisen Zentralbank Österreich AG

28 Annual Report 07


Correspondent Banks

Number of correspondent banks around the world

800

295

131

71

312

Segment Reporting

12

Western Europe 800

Eastern Europe 295

America 131

Asia 312

Africa 71

Australia 12

GLOBALLY 1,621

Annual Report 07

29


Skyline of Shanghai with characteristic Oriental Pearl Tower, China


Financial Markets

Segment Reporting

direct

dynamic

differentiating

Global trade has more than doubled since the turn of the century. The

fact that Austria has registered the highest growth in exports throughout

Europe is proof of the success of its companies in international business.

Raiffeisenlandesbank Oberösterreich contributes substantially to

this success with its opportunity-oriented foreign currency management

and risk-optimised option strategies.

Annual Report 07

31


Financial Markets

Erfolg braucht

Menschen, die

Chancen erkennen

Success requires

people who

recognise opportunities

Stable networks and competent

guides are the basis for success in

business. Raiffeisenlandesbank Ober -

österreich takes responsibility for its

customers and supports them in

hedging risks and taking advantage

of opportunities – around the world.

With ongoing globalisation, the role of treasury is becoming increasingly important.

Under Raiffeisenlandesbank Oberösterreich Aktiengesellschaft´s organisational

structure, specialists from treasury, money, foreign exchange, bond and

equity dealing are all united in its Finance Trade Center. This gives it clear and stream -

lined structures for both short and long-term management of interest rates, currencies

and liquidity. All business involving taking advantage of market or valuation

differences is covered by the Financial Markets segment. It also covers all business

related to managing existing market risks, hedging liquidity and sales of securities.

Individual strategies

Capital is a major strategic resource and accordingly to be used carefully and after

due consideration by banks and companies. The movements in rates on foreign

exchange and credit markets in 2007 clearly demonstrated how important it is to

have a robust risk strategy.

Returns, creditworthiness, liquidity, diversification and transparency represent the

criteria for decision-making in the investment business. In its exchange rate hedging

transactions, Raiffeisenlandesbank Oberösterreich’s Treasury sets particular store in

recognising, spreading and limiting risks. In interest management, the interest po -

sitioning is established in accordance with customers’ respective risk-bearing capacity

and in line with the yield curve and the expectation for interest rates.

Risk management for customers

Global trade has more than doubled since the turn of the century. In terms of export

growth, Austria is European champion. Successful international business requires effi

cient risk management and the targeted use of exchange rate hedging instruments.

Raiffeisenlandesbank Oberösterreich's opportunity-oriented exchange rate manage -

ment has proved most effective for its customers. Options and option strategies are

also employed as flexible tools for exchange rate hedging. Depending on the market

situation and clearly focussing on customers’ needs, advantage is taken of all kinds

of opportunities to optimise exchange rate risk. Priority is given to hedging structures

that do not involve net costs. The foreign exchange trading platform (Retra fx) allows

customers and the Raiffeisen banks in Upper Austria to structure their purchases

and sales of currencies at real-time prices. It ensures speedy, secure and simple

IT-based processing of transactions.

32 Annual Report 07


Long-term liquidity hedging with matching maturity refinancing

In its asset/liability management, Raiffeisenlandesbank Oberösterreich attaches

major importance to matching maturity refinancing.

In 2007, we raised a total of EUR 1,940 million through our own issues, borrower’s

notes and long-term deposits:

■ Retail issues:

■ Structured issues:

■ Borrower's notes:

■ Other long-term means of refinancing:

New Moody’s issuer rating

EUR 1,063 million

EUR 1,063 million

EUR 167 million

EUR 320 million

Since 2001, Raiffeisenlandesbank Oberösterreich is rated annually by Moody's

Financial Institute Group. Since 2006, there has been a special issuer rating for longterm

bond issues. This rating was fixed at “Aa3”.

Securities Sales

The service provided by the Raiffeisen banks sales unit enables the 102 Raiffeisen

banks in Upper Austria and Raiffeisenlandesbank Oberösterreich’s branches to

provide their customers with a state-of-the-art securities service. Despite a difficult

capital market environment, we raised the customer deposit volumes throughout the

Raiffeisen Banking Group Upper Austria by 8.53 percent in 2007.

Moody’s confirms the

high level of creative

strength at Raiffeisen -

landesbank Oberösterreich.

Segment Reporting

www.boerse-live.at gives Raiffeisen Oberösterreich customers a state-of-the-art

online portal. Regardless of time or location, they can execute securities transactions

speedily and securely. This instrument offers a direct link to the world's most

important stock markets in real time, as well as comprehensive information concerning

investment possibilities.

Around 60 percent of all share sales at Raiffeisen Oberösterreich are now executed

online. 2007 was a very good year with more than 60 percent growth in the volume

of sales and orders issued.

Annual Report 07

33


View of the Mühlviertel region, Upper Austria


Invest Banking

Segment Reporting

balanced

believable

boundless

Raiffeisenlandesbank Oberösterreich relies on quick action when it comes

to supporting companies in their implementation of new projects and

ideas. With venture and partner capital, Private Public Partnership models

and the development of follow-up solutions, the strongest regional bank

in Austria is greatly contributing to making the economic region of Upper

Austria stronger and even more attractive.

Annual Report 07

35


Invest Banking

lhr Wegbegleiter

zum Erfolg

Assisting you on your path

to success

Dynamic companies require modern

financing. Raiffeisenlandesbank Ober -

österreich Aktiengesellschaft therefore

provides equity in the form of

venture and partner capital through

INVEST Unternehmensbeteiligungs

AG (INVEST AG).

For years, Raiffeisenlandesbank Oberösterreich Aktiengesellschaft has distinguished

itself in areas beyond the core banking business. In dynamic times with many oppor -

tunities, investments can be financed with more than just loans. In fact, equity-like

tools can also be utilised in various ways. Raiffeisenlandes bank Oberösterreich

Aktiengesellschaft has already provided more than EUR 1,500 million of this kind of

venture capital.

The investment banking segment comprises the following portfolios:

■ Banking and financial institutions;

■ Venture and partner capital for growing companies or companies going through

succession changes as well as the investment in companies that are particularly

interesting due to their location;

■ Outsourced companies whose focus is not directly in the area of traditional bank

services, and

■ Real estate/PPP investments.

Raiffeisenlandesbank Oberösterreich has assumed responsibility for branches of

voestalpine AG and Salinen Austria AG, for example. At voestalpine AG, Raiffeisen -

landesbank Oberösterreich Invest GmbH & Co OG is the largest private shareholder

with a direct share of 14.12 percent of the stock as of the end of 2007.

In addition, four private trusts are financed by Raiffeisenlandesbank Oberösterreich

and shares in important companies are held by these foundations:

■ Private trust foundation of Raiffeisenlandesbank Oberösterreich Aktiengesellschaft

■ Private trust foundation for the maintenance of the Upper Austria location (VIVATIS,

efko)

■ Private trust foundation for the future security of companies in Upper Austria

(INVEST Unternehmensbeteiligungs AG)

■ Private trust foundation for the promotion of international cooperation (VIVATIS CEE

Holding GmbH)

Raiffeisenlandesbank Oberösterreich has provided equity to 498 companies in the

context of its investment banking activities, 160 of which are subsidiaries and 144 of

which are companies in private trusts.

36 Annual Report 07


Strategic investments in financial institutes

This segment includes the bank and insurance investments of Raiffeisenlandesbank

Oberösterreich. The market position of Raiffeisenlandesbank Oberösterreich is signifi -

cantly strengthened by these strategic investments in financial institutes as well as

in national and foreign banks. It can therefore assist and support its customers comprehensively

in existing and new markets.

The most important bank investments:

■ PRIVATE BANK AG der Raiffeisenlandesbank Oberösterreich

■ Oberösterreichische Landesbank AG

■ Salzburger Landes-Hypothekenbank AG

■ Raiffeisen Zentralbank Österreich AG

■ Raiffeisen Wohnbaubank AG

■ Raiffeisen Bausparkasse GesmbH

■ Raiffeisenbank a.s., Prague

■ Raiffeisenbank Austria d.d., Zagreb

■ Raiffeisen Bank Zrt., Budapest

■ Center Invest Bank AG

■ KEPLER-FONDS KAG

Segment Reporting

PRIVAT BANK AG

PRIVAT BANK AG der Raiffeisenlandesbank Oberösterreich has locations in Linz,

Vienna, Prague, Munich, Passau, Regensburg, Ulm, and Würzburg.

The focus of PRIVAT BANK AG is on customers who have a special desire for dis -

cretion and support and who place a particularly high value on individuality and ex -

clusivity. To assist its customers, PRIVAT BANK AG utilises the entire assessment

spectrum, including the development of individual special funds that are tailored

towards personal parameters.

PRIVAT BANK AG

increased its

business volume

to EUR 3.5 billion.

One essential special service consists of the financial planning done by PRIVAT BANK AG,

which serves to analyse and optimise all assets. Here efficient strategies of modern

business planning are utilised even in the private sector in order to safeguard the

liquidity, security, provisions, and assets in a sustainable manner.

PRIVAT BANK AG was able to increase its business volume during 2007 within the

group including bankdirekt.at AG by 24 percent to around EUR 3.85 billion. This

means almost double the results compared to 2005. As in the years before, this

clearly exceeded the market growth in Austria. The balance sheet total grew by

22.6 percent to EUR 1.056 billion.

Annual Report 07

37


HYPO Salzburg

HYPO Salzburg has continued its consistent upward trend of the last years and was

able to achieve the planned goals for its customer business in the past financial year.

The consistent, strategy-inherent customer orientation as well as the clear focus on

the target groups with attractive products are reflected in the 2007 annual results

just as much as the responsible handling of costs and risks.

The continuity of the business development of HYPO Salzburg is expressed by the

development of the balance sheet total, which was increased by EUR 271.5 million

or 6.14 percent to EUR 4,690.8 million in an annual comparison.

As of 31 December 31, HYPO Salzburg was managing 24 branches in the province

of Salzburg. Of these, thirteen locations are in the central Salzburg area and eleven

in the province of Salzburg.

The credit business with companies and public funds was significantly expanded in

recent years. Due to the strategic partnership with Raiffeisenlandesbank Oberösterreich,

HYPO Salzburg is in a position to offer high-performance solutions for businesses

ranging from small trade operations to industrial companies – always with the

goal of helping the customer realise business opportunities through the appropriate

financial latitude.

Thanks to customised financing solutions, HYPO Salzburg is a reliable and flexible

partner in the private credit business. About three quarters of all private financings

are used for construction and housing.

Despite the difficult

environment, the HYPO

banks were able to

achieve a good result.

In the securities business, the customer account volume was increased despite the

high level of volatility on the stock markets and the sinking prices on the European

bond markets.

HYPO Oberösterreich achieves a double-digit growth

in its balance sheet total

The consistent market and customer orientation of HYPO Oberösterreich has also led

to pleasant increases in its strategic business areas in 2007. Above-average gains

could be achieved in primary deposits and issues as well as in lending. The balance

sheet total increased by 18 percent to around EUR 8 billion compared to 2006 and

has therefore doubled since the financial year 2000.

The market position was expanded or maintained in all defined target groups – doctors

and independent contractors, major housing construction, public institutions, church

38 Annual Report 07


and community affairs, private customers. The loan volume grew by nearly 10 percent

to EUR 4.3 billion across all areas. Despite the above-average increase, the

bank’s credit risk remains on a very low level. It was also pleasant that the earnings

from the service business showed a higher growth (a gain of 7 percent), just as in the

previous years.

This demonstrates that HYPO Oberösterreich is able to assert itself extremely well

on the market, even under more difficult general conditions, such as the international

crisis of the financial markets or the inverse interest rate situation. The annual sur plus

will amount to EUR 24 million in 2007 before taxes.

KEPLER-FONDS KAG

For the Austrian fund industry, 2007 was disappointing compared to the boom years

just before. The total volume of the 24 capital investment companies dropped by

EUR 3.6 billion to EUR 163.8 billion (- 2.15 percent) as of the end of 2007.

Segment Reporting

KEPLER-FONDS KAG, the fund subsidiary of Raiffeisenlandesbank Oberösterreich,

was able to stand its ground nicely in the difficult markets and continued to increase

its fund volume throughout the year 2007. At the end of 2007 a volume of EUR 7.9

billion was managed, which is equivalent to a growth rate of 2.3 percent in 2007.

KEPLER ranked in fifth place among the total of 24 Austrian capital investment companies.

KEPLER achieved its growth rate in 2007 primarily by successfully issuing

innovative products. Investor funds in the amount of about EUR 127 million flowed

into newly created funds (e.g. KEPLER Top Cash Exclusive Fund, KEPLER Alpha

Return Fund, KEPLER Optima Pension Fund, KEPLER East European Plus Pension

Fund, and KEPLER Private Equity Stock Fund). Guaranteed value products also

proved to be reliable.

Numerous awards

confirm the high

quality standard of

KEPLER-FONDS KAG.

Analogous to the total market, almost no yield gains could be achieved in the stock

and pension funds in 2007. However, the long-term performance results p.a. over a

period of five years were quite attractive as of the date of 12 December 2007 (KEPLER

Ethical Stock Fund + 11.80 percent, KEPLER Europe Stock Funds + 11.29 percent,

KEPLER Global Stock Funds + 9.05 percent, KEPLER Emerging Markets Pension

Funds + 9.86 percent, KEPLER High Yield Corporate Stock Funds + 7.16 percent).

The quality of the fund management was confirmed by reputable rating agencies

in 2007. On a national level, KEPLER was awarded the “Austrian Fund Award”

by Morningstar and achieved 1st place in the “Lipper Fund Awards”. The fund

subsidiary of Raiffeisenlandesbank Oberösterreich also established itself as one

of the top contenders in Germany by occupying 2nd place for the “German Fund

Award".

Annual Report 07

39


Raiffeisen-IMPULS-Leasing

With a market share of over 20 percent, Raiffeisen-IMPULS-Leasing was able to

further expand its position as Upper Austria’s leader in the leasing market for 2007

as well. A volume of new acquisitions that was over EUR 700 million for the first time

means a 16 percent increase compared to 2006. At the end of 2007, Raiffeisen-

IMPULS-Leasing had holdings of almost 39,000 leasing agreements with purchas -

ing costs valued at over EUR 2.9 billion.

Raiffeisen-IMPULS-

Leasing Group

achieved a strong

growth in 2007

as well.

■ A gain of 20 percent was registered for vehicle leasing in 2007. As a supplement

to traditional vehicle leasing, Raiffeisen-IMPULS-Leasing also offers additional

services, such as fleet management and full-service leasing.

■ In the area of product leasing, the volume of new acquisitions in 2007 was increased

by 11 percent.

■ The real estate sector registered a growth of 18 percent.

The entire leasing group of Raiffeisenlandesbank Oberösterreich is represented in

Central and Eastern Europe with a comprehensive network of subsidiaries and was

able to achieve a growth of 50 percent in 2007.

activ factoring AG

Through its subsidiary, activ factoring AG, Raiffeisenlandesbank Oberösterreich offers

another modern and future-oriented form of financing. It hereby sets new benchmarks

in supportive company financing and corresponds to the increasing demand

for factoring services. activ factoring AG is not only successful in its traditional

markets in Austria, Southern Germany and the Czech Republic, it actually purchases

receivables around the world.

The combination of pre-financing and taking on the complete risk of bad debts, combined

with active debtor management, provides companies with a flexible financing

and services instrument.

In 2007, factoring sales rose to EUR 1.2 billion.

Real-Treuhand Management GmbH

From the revitalisation of town centres to urban planning, from terraced houses to

multifunctional office towers, Real-Treuhand develops and realises real estate projects

according to individual requirements. Choosing the right location, cost-efficient

realisation, top construction quality and optimal maintenance costs is an absolute

necessity and results in sustainably secure and profitable investments.

The following companies reinforce the competence, quality and security offered by

Real-Treuhand Management GmbH:

40 Annual Report 07


■ Oberösterreichische Bauland Entwicklungsfonds GmbH

■ Real-Treuhand Bau- und Projektmanagement GmbH

■ Real-Treuhand Facility Management GmbH

■ Real-Treuhand Immobilien Vertriebs GmbH

■ Real-Treuhand Projekt- und Bauträger GmbH

■ Real-Treuhand Regionalimmobilien GmbH

■ Real-Treuhand Portfolio Management GmbH

■ Real-Treuhand Immobilien Bayern GmbH (Southern Germany)

■ Real-Treuhand Reality a.s. (Czech Republic)

■ Real-Treuhand Croatia d.o.o. (Croatia)

■ RLV Immobilien GmbH

WAG

WAG was acquired in 2004 in the context of a privatisation. The company has nonprofit

origins and is the largest real estate company in Upper Austria.

Segment Reporting

The capital assets consist of about 22,500 rental apartments and 65,000 square meters

of rented industrial space, of which more than half are located in Linz. The other properties

are distributed in four provinces (Upper Austria, Lower Austria, Styria and Salzburg).

Overall, WAG manages 34,000 units, the revenue amounts to EUR 94 million, and the

investments reached EUR 44 million in the financial year.

GRZ IT Center

With a total of about 580 employees, GRZ IT Group is one of the largest and most

successful IT service providers in Austria.

The product and service spectrum of GRZ IT Group goes far beyond the area of finance.

It covers everything from operating mainframes, servers and networks of all kinds to

application service provision, all the way to the development of customised IT solutions.

The GRZ IT Center not only services the Raiffeisen Banking Group Upper Austria

and Tyrol, the mortgage banks in Upper Austria and Salzburg also draw on complete

solutions by GRZ. In addition, the GRZ IT Center also provides special laboratory

information systems for hospitals as well as complete solutions for municipalities

and community organisations.

RACON Software GmbH is Austria’s market leader in the development of banking

software, such as for example the entire ELBA product family, the comprehensive

payment transaction/cash management systems and the electronic distribution

information system ELVIS.

GRZ IT Group is one of

the largest and most

successful IT service

providers in Austria.

LOGIS IT Service GmbH was founded in 2003 as a GRZ/RACON spinoff and as a

joint venture with the Raiffeisen computer centre in Tyrol. LOGIS is also responsible

for the highly complex automatic software delivery and for PCs and servers outside

the computer centre.

Annual Report 07

41


Olympia Centre in Munich, Germany


Corporate Center

Segment Reporting

strong

safe

service oriented

Raiffeisen Oberösterreich is a strong partner for nearly 900,000

customers – through networked activities and a contemporary,

modern structure, the association has succeeded in achieving

a balance between local roots and global support. It is active

wherever Raiffeisen banks require support, in order to be able to

accompany their customers with all of their projects in the best

possible manner.

Annual Report 07

43


Corporate Center

Zwei Partner

für lhren Erfolg

Two partners for your success

Together with its customers, the asso

ciation of Upper Austrian Raiffeisen

banks with Raiffeisenlandesbank

Oberösterreich contributes to

the success of the province, as a

strong association. This can be seen

in the forward-looking projects, such

as “rural revival”, town centre revitalisations

or district developments.

Consolidation items relating to more than one segment, as well as income and

expenses that cannot be appropriately allocated to any other segment, are shown

under the Corporate Center segment. In this segment, one-time special effects are

also recorded which would otherwise distort the results of other segments.

The divisions included in the Corporate Center help present a clear segment structure,

as the results from the other business fields can be illustrated in a well laid-out

and clear manner.

In addition, cooperative Group services provided to the Raiffeisen Banking Group

Upper Austria by Raiffeisenlandesbank Oberösterreich are represented in the Corpo -

rate Center.

Associative activities mean success

For just under 900,000 customers, Raiffeisen Oberösterreich is the most important

supplier of local banking services. Raiffeisen Oberösterreich’s strong and healthy

structure facilitates a special customer orientation and dynamic support through

creative financial services. Above all, Raiffeisenlandesbank Oberösterreich’s solidity

and success derive from its principles of subsidiarity and solidarity.

The Raiffeisen Banking Group Upper Austria is a strong association. It is not only in

a position to jointly cover all banking sectors, but also to set new benchmarks in

banking and business. As owners of Raiffeisenlandesbank Oberösterreich Aktien -

gesellschaft, the Upper Austrian Raiffeisen banks exercise their ownership right over

the Raiffeisen landesbank cooperative association. The cooperative spirit is decisive

with this: regardless of its size, each cooperative has a vote. With this, Raiffeisen

Oberösterreich relies on the subsidiarity principle: whatever the Raiffeisen banks are

able to provide locally shall not be taken over by the superordinated association. As

a corporation, Raiffeisenlandesbank Oberösterreich undertakes global functions, but

also regards itself as an integrative hub within the Raiffeisen association. It supports

and advises Raiffeisen banks and looks after corresponding training and development,

as well as the advanced training of managing directors and management staff

of Raiffeisen banks.

Bundling of forces

The Raiffeisen Banking Group Upper Austria bundles its forces. This focus on require

ments and needs of the customers is unique. We achieve a balance between local

roots and global support for our customers. These networked activities are possible

due to the contemporary and modern structure of Raiffeisen Oberösterreich. The

association becomes active wherever Raiffeisen banks require support, in order to

be able to accompany their customers with all of their projects in the best possible

manner. Through this, the regional strength and direct customer relationship are maintained.

In addition, the cooperation in the association ensures security, power and

dynamics of Raiffeisen in Upper Austria.

44 Annual Report 07


Slected members of the Raiffeisen Banking Group Upper Austria

■ Raiffeisen Kundengarantiefonds OÖ

The security of savings deposits is the top priority of Raiffeisen Banking Group

Upper Austria. Through the Upper Austria Raiffeisen Customer Guarantee Fund,

customer deposits with Raiffeisen Oberösterreich are 100 percent secured, far

beyond the legal deposit insurance.

■ Raiffeisen-Kredit-Garantieges.m.b.H

For standardised risk management in the entire Raiffeisen Banking Group Upper Austria,

through assistance by assuming guarantees, sureties and other indemnities for

loans, if the individual Raiffeisen bank is not able to provide this itself.

■ Upper Austrian Raiffeisen Solidarity Association

Sector institution for supporting co-owners who are in difficulties through no fault of

their own.

■ Benevolent Society for Upper Austrian Raiffeisen Banks

Cooperative institution for the provision of capital and underwriting of shares.

Segment Reporting

■ Upper Austrian Marketing Association

The budgetary assurance of the marketing plan and its implementation on the basis

of resolutions by the Association and Marketing Committee are handled in the Upper

Austrian Marketing Association.

■ Spring and Autumn Campaign

At the annual Spring and Autumn Campaign, the strategic focuses are explained, mark

eting measures presented, targets defined and new developments described to employees

and employee representatives of the Raiffeisen Banking Group Upper Austria.

■ Trend-setting training system

Qualified and motivated employees are an important factor for the success and future

of the bank. Therefore, the Raiffeisen Banking Group Upper Austria relies on well-trained

employees – as only excellently trained employees can enable the success of customers.

For this, a completely new training and development system has been developed

on an e-learning basis, which is unique in the banking sector. All electronic learning

media and instructive documents (Web-based training, specific course content, scripts,

etc.) are combined in the “raiffeisen@learning” interactive learning platform. The dis -

tance learning platform has been developed by an internationally recognised company

and tailored to the requirements of Raiffeisenbanken Group Oberösterreich. Knowl -

edge checks are a significant component of all Web-based training courses accessible

in “raiffeisen@learning” and are used for the specifically developed assessment model,

“Certification of the advisors”. In cooperation with the Johannes Kepler University

Linz and the LIMAK (Johannes Keppler University Business School), this online certi fi -

cation has been formulated for various banking professions. The certification builds on

the existing knowledge of the advisors and, through continuous updating of the content,

enables the implementation of lifelong learning. The training system is constantly

being developed and has already been successfully re-certified, after an initial certifi -

cation. For “raiffeisen@learning”, Raiffeisenlandesbank Oberösterreich was presented

with the European E-Learning Award. 570 customer advisors have already been certified.

Furthermore, a dedicated Raiffeisenlandesbank Academy will ensure the future

potential of excellent employees for the long term, by high-potential employ ees being

specifically supported within the context of special training programmes.

The certified e-learning

system supports the

continuous training

and development of

employees.

Annual Report 07

45

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