Financial Statements - Raiffeisenlandesbank Oberösterreich
Tower 2000 and Bagration Bridge to Moscow City, Russia
Raiffeisenlandesbank Oberösterreich
Aktiengesellschaft
efficient
effective
experienced
Raiffeisenlandesbank
Oberösterreich
Sustainability and responsibility are of the highest priority for the Raiff -
eisenlandesbank Oberösterreich Aktiengesellschaft. It only operates
within business fields in which it possesses the necessary expertise to
assess and evaluate all risks. This high awareness of its responsibility
ensures the long-term success of the company – and thereby the success
of its customers as well.
Annual Report 07
947
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
Management Report 2007
TOTAL ASSETS DEVELOPMENT (IN EUR BN)
2007
20.4
2006
17.3
2005
15.7
2004
14.2
2003
12.8
0 5 10 15 20 25
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft has
adopted a special customer orientation. The goal is to do
everything possible to assist the customers. For this reason,
the leading institution of the Raiffeisen Banking Group Upper
Austria supports its customers with new, well-targeted financ -
ing instruments, improves its own risk-bearing capacity through
consistent reduction of the cost/income ratio, con tinuously
expands its worldwide service and support network and engages
in forward-thinking training and education measures
for its employees to establish a firm foundation for the success
of its customers.
Raiffeisenlandesbank Oberösterreich plans, develops, maintains
and expands relationships with its customers, with institutions,
with the competent authorities in the various regions of activity,
with neighbours outside of Upper Austria and with strong partners
around the world. The company relies heavily on sustain -
ability and value added. The strategies are clearly discernible
and comprehensible. Raiffeisenlandesbank Oberösterreich has
always considered it very important to avoid overregulation and
excess bureaucracy, keeping instead a sense of proportion with
regard to financing, carefully calculating risks and maintaining a
high risk-bearing capacity.
High risk-bearing capacity thanks to a low cost/income ratio
A bank that dynamically assists companies, finances exports and
supports companies with banking services in all parts of the world
must be capable of bearing risks. The lower the cost/income ratio,
the greater the bank’s ability to positively arrange its operations.
With its high risk-bearing capacity, Raiffeisenlandesbank Ober -
österreich is capable of financing the diverse opportunities that
arise for companies and their employees.
BUSINESS DEVELOPMENT
The sustained positive development and stability of Raiff -
eisenlandesbank Oberösterreich are also demonstrated in the
balance sheet totals, which grew by EUR 3,002 million, or
17.3%, compared with the end of the previous year’s balance
sheet date to reach EUR 20,350 million.
SOURCE OF FUNDS/CAPITAL STRUCTURE
The increase on the liabilities side of the balance sheet was
derived in particular from a sharp increase in savings and giro
deposits as well as a rise in the liabilities to banks.
The liabilities to banks increased over the last year by EUR
1,463 million, or 18.1%, to EUR 9,527 million.
Of this year-end amount, EUR 2,847 million are payable on
demand. Included in this are deposits held by the Upper
Austrian Raiffeisen banks in the amount of EUR 1,764 million,
which reflect the strong primary funds available at the primary
level.
48 Annual Report 07
The liabilities with fixed term or withdrawal date amounted to
EUR 6,680 million as at 31 December 2007, which provides
the Upper Austrian Raiffeisen banks with EUR 1,549 million in
long-term refinancing funds.
Also included are long-term refinancing funds totalling EUR
5,131 million from subsidy providers (such as the Oesterreichische
Kontrollbank), revenue transfers from issues by
subsidiaries, loans against borrower’s notes and funds
borrowed from banks. These funds represent an important
long-term basis for refinancing.
The organisational preparations for the submission of cus -
tomer loans to the European Central Bank tender process
were completed at Raiffeisenlandesbank Oberösterreich
during 2007.
The Oesterreichische Nationalbank certified the process submitted
by Raiffeisenlandesbank Oberösterreich. Effective
immediately, customer loans can now also be used for shortterm
refinancing.
The volume of issues, which consisted of securitised loans of
EUR 3,587 million, subordinated liabilities of EUR 93 million
and the supplementary capital of EUR 1,105 million, totalled
EUR 4,785 million as at 31 December 2007. This represents an
increase of 10.6% over the previous year.
Liabilities to customers reported on the 2007 balance sheet
date exhibited an attractive increase of 25.4% over the preceding
year to reach EUR 4,473 million. This figure related to
savings of EUR 803 million and payables on demand and
fixed-term deposits of EUR 3,670 million.
31 Dec 2007 331 Dec 2006 Change
in EUR mill. in % in EUR mill. in % in EUR mill. in %
Liabilities to banks 9,527 46.8 8,064 46.5 + 1,463 + 18.1
Own issues 4,785 23.5 4,328 24.9 + 457 + 10.6
Savings and giro deposits 4,473 22.0 3,566 20.6 + 907 + 25.4
Equity 1,316 6.5 1,076 6.2 + 240 + 22.3
Other liabilities 249 1.2 314 1.8 - 65 - 20.7
Raiffeisenlandesbank
Oberösterreich
Total assets 20,350 100.0 17,348 100.0 +3,002 + 17.3
CAPITAL RESOURCES
As at 31 December 2007, reported equity included the follow -
ing items:
Mio. EUR
Subscribed capital 254.0
Capital reserves 547.8
Retained earnings 219.3
Statutory reserves 262.4
Untaxed reserves 10.2
Net income for the year 22.1
Equity 1,315.8
The level of equity at Raiffeisenlandesbank Oberösterreich
rose in absolute terms by EUR 239.7 million to EUR 1,315.8
million. This growth was the result of a capital increase and
the strong power of the bank to finance itself, due to the
excellent income situation. A dividend distribution of EUR
21.2 million is planned.
The total amount of own funds to be taken into account at
Raiffeisenlandesbank Oberösterreich pursuant to the Austrian
Banking Code amounted to EUR 2,241 million at the end of
2007. The statutory capital requirement was EUR 1,283 million.
Despite the high level of growth in 2007, there was an
equity surplus of EUR 958 million on the balance sheet date.
With a core capital ratio of 8.10% and an equity ratio in the
banking book of 13.99%, the figures are noticeably above the
minimums.
Raiffeisenlandesbank Oberösterreich is in a very pleasing equity
situation for financing its further growth over the coming years.
Annual Report 07
49 9
APPLICATION OF FUNDS/ASSETS STRUCTURE
31 Dec 2007 31 Dec 2006 Change
in EUR mill. in % in EUR mill. in % in EUR mill. in %
Loans and advances to customers 11,358 55.8 8,918 51.4 + 2,440 + 27.4
Loans and advances to banks 4,462 21.9 4,063 23.4 + 399 + 9.8
Securities 3,470 17.1 3,391 19.6 + 79 + 2.3
Holdings and investments
in associated companies 853 4.2 784 4.5 + 69 + 8.8
Other assets 207 1.0 192 1.1 + 15 + 7.8
Total assets 20,350 100.0 17,348 100.0 + 3,002 + 17.3
On the asset side, above all, more loans and advances to
customers contributed to the increase in the total assets.
Holdings and shares in associated companies were expanded
compared to the previous year by EUR 69 million.
As at the 2007 balance sheet date there was a volume of EUR
11,358 million in loans and advances to customers. Com pared
to the year before, this amounts to an increase of EUR 2,440
million or 27.4%. As in past years, the focus was on qualitative
growth. In supporting and accompanying our customers,
we not only want to provide them with financing, we also hope
to help them take advantage of good chances with modern
financing models and a diverse range of subsidy opportunities.
The far-sighted, dynamic risk provision policy applied
when assessing credit exposure was continued.
Loans and advances to banks rose during the course of 2007
by EUR 399 million to EUR 4,462 million. Of the loans and
advances at the end of the year, EUR 1,039 million were re -
financed to Raiffeisen banks in Upper Austria.
Securities held by the bank increased in the year 2007 by 2.3%
to EUR 3,470 million. As at the end of the year, these con -
sisted of EUR 436 million in public sector debt issues and
similar securities, EUR 1,744 million in bonds and other fixed
interest securities and EUR 1,290 million in shares and other
non-fixed interest securities (e.g. pension funds).
Raiffeisenlandesbank Oberösterreich did not have any US
subprime securities in its portfolio on 31 December 2007.
As in previous years, all securities, including those held as
fixed assets, were valued according to the strict lower of cost
or market principle. The exception to this is a small volume of
trading securities that are assessed “mark to market”.
INCOME SITUATION
In 2007, Raiffeisenlandesbank Oberösterreich again succeeded
in maintaining its pleasing profit trend.
The net interest income reported for 2007 was EUR 91.2 million,
or 14.6%, higher than the comparable value for the preceding
year, mainly due to the flattening off of the interest-rate
curve. In 2007, the Raiffeisenlandesbank Oberösterreich
interest margin amounted to 0.48%.
The increase in operating income by 9.3% was due to the rise
in income from securities and investments (31.7%) and other
operating income (11.5%). The income balance from commission
business in 2007 was 15.5% up on that for the preceding
year, and amounted to EUR 62.9 million.
General administration costs in 2007 comprised EUR 72.7 million
in personnel expenses and EUR 58.7 million in operating
expenses.
While total assets increased by 17.3%, total operating expenditure
was only 6.1% higher than in the previous year.
The cost/income ratio was also further improved in 2007
by 1.4% points. In a banking comparison, the cost/income
ratio of 47.1% in 2007 was extremely favourable. In 2007,
for every euro earned, only 47.1 cents were consumed by
costs.
50
Annual Report 07
2007 2006 Change
in EUR mill. in % in EUR mill. in % in %
Ø TA
Ø TA
Net interest income 91.2 0.48 106.8 0.65 - 14.6
Income from securities and investments 137.5 0.73 104.4 0.63 + 31.7
Other income 101.9 0.54 91.4 0.55 +11.5
Operating income 330.6 1.75 302.6 1.83 +9.3
Personnel expenses -72.7 -0.38 - 67.8 -0.41 +7.2
Operating expenses -58.7 -0.31 - 55.3 -0.34 +6.1
Other expenses -24.3 -0.13 - 23.6 -0.14 +3.0
Total operating expenditure -155.7 -0.82 - 146.7 -0.89 +6.1
Operating profit 174.9 0.93 155.9 0.94 +12.2
Cost/income ratio 47.1% 48.5%
ø Balance sheet total 18,849 16,516
DEVELOPMENT OF THE COST/INCOME RATIO (IN %)
60
56
54
53.4
51.9
52
49.5
50
48.5
48
47.1
46
44
42
valuation of securities according to a strict lower of cost or
market principle, the EUR 100 million mark was crossed for the
first time.
Profit for the year was up by EUR 102.5 million and is thus
also over EUR 100 million for the first time.
Following the deduction of the movements in the reserves,
which resulted in expenditure of EUR 80.3 million, the net profit
reported for 2007 amounted to EUR 22,122,854.50.
RATING UPGRADE
OF RAIFFEISENLANDESBANK OBERÖSTERREICH
Raiffeisenlandesbank
Oberösterreich
40
2003 2004 2005 2006 2007
Moody’s rating agency raised the long-term rating on 20 April
2007 from A1 to Aa3, thereby confirming the successful course
of Raiffeisenlandesbank Oberösterreich.
The operating profit posted by Raiffeisenlandesbank Ober -
österreich for the 2007 financial year hit a record level once
again with EUR 174.9 million. Compared to the previous year,
this was an increase of EUR 19 million, or 12.2%.
The profit on ordinary activities rose by 6.9% to EUR 105.5 million.
Despite an extremely prudent risk provision policy and the
BANK BRANCHES
On 31 December 2007 Raiffeisenlandesbank Oberösterreich
had 20 bank branches in the greater Linz and Traun urban
area. Our customers have modern and friendly business facilities
at their disposal, which have been equipped in line with
Annual Report 07 951
the very latest banking operation know-how and are set up
for confidential consulting meetings. The self-service com -
ponents and, in particular, our electronic banking system
(ELBA) offer customers the most amount of flexibility possible
with which they can do their banking.
Apart from the acquisition of new clients, the assistance and
support of existing customers was the main priority. The success
of customer relations is measured with the so-called
cross-selling ratio. On average, the customers in the retail area
have 4.37 products. During the reporting year, it was possible
to increase the number of retail customers supported to almost
69,000. Compared to the previous year, this represents
a 2.8% rise.
Raiffeisenlandesbank Oberösterreich also successfully applies
this customer-orientated approach on the Internet. 44% of
private customers with an account at Raiffeisen already take
advantage of Internet Banking.
For this, Raiffeisen customers with “mein.raifeisen.at mit ELBA-
Internet” have the following Internet services at their fingertips:
the areas of special financing for companies, real estate project
financing as well as in the superior private banking sector.
MODERN VIDEO CONFERENCING SYSTEMS FOR
EFFICIENT COMMUNICATION THROUGHOUT THE
UPPER AUSTRIAN RAIFFEISEN NETWORK
The continuously growing volume of business at the locations
in Vienna, Germany and the Czech Republic requires fast and
above all efficient information and communications exchange.
Raiffeisenlandesbank Oberösterreich is planning to use an
integrated video conferencing solution for this.
At the moment, the relevant video conferencing systems are
being designed and set up. The plan is to furnish selected
work places and conference rooms with modern video technology
that will enable our employees in future to communicate
quickly and efficiently between the various locations in
Austria, Germany and the Czech Republic. With this, we hope
to improve communication and at the same time reduce travel
time and expenses.
■ Payment transactions
■ Account information
■ Securities transactions (“boerse-live.at”)
■ Online savings
■ as well as a secure communication line with a
personal mailbox
Raiffeisen customers that do not have “mein.raiffeisen.at mit
ELBA-Internet” and non-customers can access the following
Internet services around the clock:
■ Application for products and product information: Giro
account, Maestro Raiffeisen card, credit card, custody account,
online savings, savings with a building society, financing,
provisions and retaining value.
The branch in Southern Germany has a total of seven loca tions:
During the 2007 reporting year, the number of cus tomers
serviced and the business volume was again noticeably increased.
For 2008, the opening of another bank branch in Heilbronn
is planned. The core competencies of Raiffeisen lan desbank
Oberösterreich in this market segment are above all in
Once it is implemented, this efficient communications solution
will naturally be available to all Upper Austrian Raiffeisen
banks, which will further improve the cooperation and communication
in the Upper Austrian Raiffeisen network.
HUMAN RESOURCES MANAGEMENT
As at 31 December 2007, Raiffeisenlandesbank Ober österreich
had a banking staff of 891 and thus offered a large number
of top quality full and part-time jobs (part-time quota: 11%).
With a tailor-made overall design, Raiffeisenlandesbank
Oberösterreich added new momentum to the training and
development of apprentices. This paves the way to college
for our next generation bankers.
At the Raiffeisenlandesbank Academy which was founded
to build up future managers and specialists, high-potential
employees with individual training programmes are pro -
moted and prepared for deployment in strategically im -
portant positions.
52
Annual Report 07
QUALIFIED AND COMMITTED EMPLOYEES ARE
AN ESSENTIAL POTENTIAL FOR THE FUTURE AT
RAIFFEISENLANDESBANK OBERÖSTERREICH
Only employees that have been excellently trained can
guarantee the success of customers for the future.
E-learning has a very high status in the Raiffeisen Banking
Group Upper Austria. The learning platform, raiffeisen@
learning, combines all the modern instruments of communication
to guarantee an efficient training and development programme
with blended-learning concepts and is being con -
tinuously developed further and adjusted to meet the current
requirements.
The online certification of consultants was developed in cooperation
with the Johannes Kepler University in Linz and the
LIMAK Johannes Kepler University Business School and has
been recognised with the European E-Learning Award.
Market risks
Market risks are defined as changes in interest rates, currency
and exchange rates relating to securities, interest-rate and
foreign exchange items. These risks are measured in terms of
the value-at-risk parameter. This measures a possible loss,
which with 99% probability will not be exceeded in the case
of a certain holding period.
The value-at-risk is established daily for the trading books
using the Bloomberg trading system, while the KVAR+ risk
management program is employed for the bank books.
Apart from this parameter, stop-loss, present value of a basis
point and volume limits are also applied as additional risk
limitations.
These risk management methods are also employed for hedge
positions.
In 2008, this innovative training instrument will be expanded
to include multimedia e-learning. In the future it will be pos -
sible to transmit instruction units live through the raiffeisen@
learning platform directly to the workspaces of the various
employees.
Participants in this multimedia training program, which is
produced in its own e-learning multimedia studio, work
through the contents of the programme on their computer at
their own desk.
RISK MANAGEMENT
The long-term success of Raiffeisenlandesbank Oberösterreich
is largely dependent upon active risk management. In order to
achieve this target, risk management was implemented with
structures that facilitate the identification and measurement of
all risks (market, credit, liquidity and operational risks) and their
active managerial counteraction.
The Managing Board’s overall risk strategy ensures that risks
remain synchronised and in line with the strategic orientation
of the company. The Managing Board and the Supervisory
Board are regularly informed.
The total limit for these risks is decided on by the Managing
Board after taking the risk-bearing capabilities of the bank into
consideration. Controlling continuously checks that these
limits are complied with.
Shifts in the interest, currency and share price landscape can
bring a major influence to bear on results and the risk situation.
Therefore, possible shifts in risk parameters are simulated and
the consequences reported to the Managing Board.
Credit risk
The principles for the credit ratings of the customers are in -
corporated in the “Credit Risk Management” manual. This set of
regulations is a compact representation of the standards valid for
Raiffeisenlandesbank Oberösterreich. These are oriented on international
standards (Basel II) and on supervisory recommendations.
The organisational separation between the market and
market consequences was already implemented some years ago.
Moreover, in order to measure the credit risk, following an internal
bank rating, financing is divided into creditworthi ness and
risk classes. The risk class of a borrower therefore assumes two
dimensions, comprising the determination and assess ment of
the economic situation and the taking of collateral.
Raiffeisenlandesbank
Oberösterreich
Annual Report 07 953
Both hard and soft facts are employed as creditworthiness
criteria. In corporate customer business, soft facts are de fined
systematically during discussions with the company and then
assessed.
Since 2005, a scoring system has been employed for the auto -
matic classification of small volume business with employed
retail customers.
This credit rating system is also utilised by subsidiaries in this
customer segment.
Liquidity risk
Liquidity risk means not being able to fulfil one’s payment
obligations by the due date or, in the case of a liquidity short -
age, of not being able to acquire enough liquidity at the terms
expected.
Maturity-matching refinancing has a high priority in Raiffeisenlandesbank
Oberösterreich. This is reflected in the liquidity
gap analysis.
This is used for the calculation of monthly scenarios, which
define the closure expenditure required for open liquidity items.
The sufficient supply of short- and medium-term liquidity
in possible bottleneck situations is shown in the liquidity
hedging plan.
Operational risks
Raiffeisenlandesbank Oberösterreich defines operational risk
as being the risk of losses derived from the inadequacies or
failure of internal procedures, people and systems, or external
events.
Raiffeisenlandesbank Oberösterreich uses both organisa tional
and computer technology methods in order to best limit this
type of risk. A high degree of security is attained by means of
limit systems, competence regulations, a risk-adequate in -
ternal control system, a comprehensive security manual as
a behaviour code and directive, as well as scheduled and
unscheduled audits by Internal Auditing.
The operative management of this type of risk involves risk
discussions and analyses with managers (early warning system)
and the systematic registration of errors in a database for analysis
(ex-post analysis).
Risk-bearing capacity analysis
The risk bearing capacity analysis compares the Group risk
with the available risk coverage (operating result, hidden reserves,
provisions and equity), in order to furnish the certainty
that even in the very unlikely case of an extreme situation,
sufficient capital for risk coverage would be available.
The comparison of the Group risk with the available coverage
provides the risk-bearing capacity.
OeNB Audit 2007
The extensive audit carried out during the 2007 financial year
by OeNB of the business operations of Raiffeisenlandesbank
Oberösterreich, confirmed that the risk management already
complied with the requirements of Basel II, even before
Basel II came into effect.
OUTLOOK
Raiffeisenlandesbank Oberösterreich is in the process of
further expanding its risk-bearing ability and competitiveness.
The cost/income ratio is being reduced further by exercising
tight cost and income management, which also increases the
bank’s positive creative power.
State-of-the-art financial services for our customers
In the past, Raiffeisenlandesbank Oberösterreich has built up
many innovative business fields. With inventive and modern
financial services, we focus on sustainability and value-added,
as well as a continuous and lasting upward trend. Due to the
large capital resources available and the positive results, we
are in a position of systematically being able to expand our
special customer orientation. Our predominant marketing principle
is to assist the retention and enlargement of the financial
leeway of our customers.
54 Annual Report 07
Ongoing further development
In the 2008 financial year, Austria’s strongest regional bank
will remain on its successful course. The available figures point
toward the continuation of this unique path to success.
In the current year, we will push forward with the expansion of
the correspondent and cooperation bank network, focus on
Romania and Southern Russia, strengthen export financing,
accompany more and more companies to China and India,
broaden our leasing offers in the direction of Eastern Europe
and, above all, help to optimally shape the financing of the
generation change in companies.
Raiffeisenlandesbank Oberösterreich intends that expecta -
tions should not only be fulfilled but surpassed, and cus-
tomers should not only receive support, but also inspiration.
A unique level of customer orientation, with competence,
charm, understanding and yet assertireness, leadership with
regard to the development of new, targeted products and
modern sales instruments are fundamental building blocks
that distinguish us. We want to create trust, guarantee security
and ensure a solid base for a successful and sustainable
partnership.
There were no events of particular significance after the close
of the 2007 business year.
There are no results of research and development to comment
on, as these are not relevant in this industry.
Linz, 04 February 2008
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
Europaplatz 1a, 4020 Linz
THE MANAGING BOARD
Raiffeisenlandesbank
Oberösterreich
Ludwig Scharinger
Chief Executive
Hans Schilcher
Deputy Chief Executive
Helmut Schützeneder
Member of the Managing Board
Georg Starzer
Member of the Managing Board
Markus Vockenhuber
Member of the Managing Board
Michaela Keplinger-Mitterlehner
Member of the Managing Board
Annual Report 07 955
FINANCIAL STATEMENTS 2007
RAIFFEISENLANDESBANK OBERÖSTERREICH
AKTIENGESELLSCHAFT, 4020 LINZ, EUROPAPLATZ 1A
BALANCE SHEET AS AT 31 DECEMBER 2007
INCOME STATEMENT 2007
NOTES TO THE FINANCIAL STATEMENTS 2007
(SECTION SUBJECT TO STATUTORY DISCLOSURE)
AUDIT CERTIFICATES
2007
56
Annual Report 07
Balance Sheet as at 31 December 2007
ASSETS
31 Dec. 2007 31 Dec. 2006
in EUR in EUR in EUR ‘000 in EUR ‘000
1. Cash in hand and balances
at central banks 35,544,006.14 19,308
2. Public sector debt issues and
bills of exchange eligible for refinancing
at the Austrian Central Bank
a) Public sector debt issues
and similar securities 436,212,606.65 502,292
b) Bills of exchange eligible
for refinancing at central banks 0.00 436,212,606.65 0 502,292
3. Loans and advances to banks:
a) Payable on demand 1,159,712,435.02 519,771
b) Other loans and advances 3,302,114,702.20 4,461,827,137.22 3,542,791 4,062,562
4. Loans and advances to customers 11,357,637,755.85 8,918,370
5. Debt securities and other
fixed-income securities:
a) From public sector issuers 254,767.62 6,501
b) From other issuers 1,744,110,847.85 1,744,365,615.47 1,798,051 1,804,552
including:
own bonds (60,718,420.95) (43,398)
6. Shares and other variable
yield securities 1,290,128,229.79 1,083,924
7. Investments 106,976,761.89 82,981
including:
banks (6,353,570.51) (6,257)
8. Investments in associates 746,497,803.02 701,389
including:
banks (32,824,255.26) (25,824)
9. Intangible fixed assets 0.00 0
10. Property, plant and equipment 22,006,185.34 24,134
including:
land and buildings used by the bank
in the course of its operations (17,498,574.44) (19,426)
11. Own shares or interests and shares
in companies with a controlling or
majority holding 0.00 0
including:
nominal values (0.00) (0)
12. Other assets 126,746,889.59 121,770
13. Subscribed capital (payment has been
demanded but not yet paid) 0.00 0
14. Deferred income from tax assets 22,138,518.86 26,967
Raiffeisenlandesbank
Oberösterreich
Total assets 20,350,081,509.82 17,348,249
1. Foreign assets 6,220,305,729.64 4,506,127
Annual Report 07 957
Balance Sheet as at 31 December 2007
LIABILITIES
31 Dec. 2007 31 Dec. 2006
in EUR in EUR in EUR ‘000 in EUR ‘000
1. Liabilities to banks:
a) Payable on demand 2,846,748,009.36 2,725,331
b) With fixed term or withdrawal date 6,680,088,006.43 9,526,836,015.79 5,338,256 8,063,587
2. Liabilities to customers:
a) Savings deposits 803,279,199.05 746,233
including:
aa) payable on demand (45,973,350.91) (45,012)
ab) with fixed term or termination date (757,305,848.14) (701,221)
b) Other liabilities 3,669,738,499.02 4,473,017,698.07 2,820,211 3,566,444
including:
ba) payable on demand (1,890,875,149.84) (1,639,450)
bb) with fixed term or termination date (1,778,863,349.18) (1,180,761)
3. Debt securities in issue:
a) Bonds issued 1,326,584,033.37 1,120,454
b) Other liabilities evidenced by certificates 2,260,603,839.08 3,587,187,872.45 2,065,003 3,185,457
4. Other liabilities 138,388,243.20 188,962
5. Deferred income from tax liabilities 30,768,981.37 37,121
6. Provisions:
a) Provisions for severance payments 16,353,595.00 14,838
b) Provisions for pension obligations 17,565,881.92 17,479
c) Provisions for taxes 12,234,582.90 10,321
d) Other provisions 33,913,354.92 80,067,414.74 45,515 88,153
6.A Fund for general bank risks 0.00 0
7. Subordinated liabilities 92,700,721.44 94,201
8. Supplementary capital 1,105,283,809.76 1,048,224
9. Subscribed capital 254,031,954.25 241,032
10. Capital reserves:
a) Committed 547,845,996.45 410,859
b) Uncommitted 0.00 547,845,996.45 0 410,859
11. Retained earnings
a) Statutory reserves 0.00 0
b) Reserves in accordance with
the articles of association 0.00 0
c) Other reserves 219,328,790.46 219,328,790.46 164,499 164,499
including:
reserves pursuant to § 225 (5)
of the Austrian Business Code (0.00) (0)
12. Liability reserve pursuant to § 23 (6)
of the Austrian Banking Act 262,359,531.48 229,940
13. Net income for the year 22,122,854.50 19,056
58
Annual Report 07
LIABILITIES
31 Dec. 2007 31 Dec. 2006
in EUR in EUR in EUR ‘000 in EUR ‘000
14. Untaxed reserves:
a) Valuation reserve due to
special depreciation 10,141,625.86 10,714
b) Other untaxed reserves 0.00 10,141,625.86 0 10,714
including:
ba) investment allowance pursuant
to § 10 of the 1988 Austrian
Income Tax Act (0.00) (0)
bb) carry-over reserves pursuant
to § 12 of the 1988 Austrian
Income Tax Act (0.00) (0)
Total liabilities 20,350,081,509.82 17,348,249
1. Contingent liabilities 2,073,425,058.85 1,710,949
including:
a) acceptances and endorsed bills sold (0.00) (0)
b) liabilities from indemnity
agreements and guarantees (2,073,345,747.23) (1,710,870)
2. Credit risks 7,911,056,429.98 7,027,493
including:
liabilities from
repurchase transactions (31,847,192.70) (54,960)
3. Liabilities from
trust fund transactions 12,196,298.19 10,334
4. Equity eligible for inclusion pursuant
to § 23 (14) of the Austrian Banking Act 2,241,482,297.14 1,965,596
including:
equity pursuant to § 23 (14)
subpara. 7 of the Austrian Banking Act (0.00) (0)
5. Mandatory equity pursuant to
§ 22 (1) of the Austrian Banking Act 1,283,547,846.98 1,023,749
including:
mandatory equity pursuant to § 22 (1)
(1 and 4) of the Austrian Banking Act (1,279,368,846.98) (1,018,956)
6. Foreign liabilities 3,940,648,433.21 3,524,094
7. Hybrid capital pursuant to § 23 (2)
(5 and 6) of the Austrian Banking Act 0.00 0
8. Under-accrual in provisions
for pension obligations 273,637.47 354
Raiffeisenlandesbank
Oberösterreich
Annual Report 07 959
Income Statement 2007
2007 2006
in EUR in EUR in EUR ‘000 in EUR ‘000
1. Interest and interest-related income 781,859,363.79 558,723
including:
from fixed interest securities (100,102,206.16) (76,781)
2. Interest and interest-related expenses - 690,713,806.63 - 451,968
I. NET INTEREST INCOME 91,145,557.16 106,755
3. Income from securities and investments:
a) Income from shares, other equity interest
and non-fixed interest securities 75,980,894.02 54,275
b) Income from investments 5,029,733.58 3,714
c) Income from shares in associates 56,501,196.36 137,511,823.96 46,448 104,437
4. Commission income 95,748,540.04 86,924
5. Commission expenses - 32,853,251.31 - 32,452
6. Income from/expenses
in financial operations 13,044,110.76 11,442
7. Other operating income 25,977,309.48 25,504
II. OPERATING INCOME 330,574,090.09 302,610
8. General administrative expenses:
a) Personnel expenses - 72,719,194.27 - 67,808
including:
aa) wages and salaries (- 52,701,886.46) (- 46,529)
ab) expenses for statutory social security
contributions, payroll taxes
and mandatory contributions (- 13,149,481.11) (- 13,849)
ac) other social expenses (- 947,970.32) (- 970)
ad) expenses for pension schemes
and support payments (- 3,990,978.61) (- 3,806)
ae) allocations to the provisions
for pensions (- 86,654.58) (- 74)
af) expenses for severance payments
and employee pension funds (- 1,842,223.19) (- 2,579)
b) other administrative expenses
(operating expenses) - 58,679,474.06 - 131,398,668.33 - 55,262 - 123,070
9. Value adjustments for property items
in asset Items 9 and 10 - 2,823,970.57 - 3,085
10. Other operating expenses - 21,464,157.43 - 20,566
III. OPERATING EXPENSES - 155,686,796.33 - 146,721
IV. OPERATING RESULT 174,887,293.76 155,889
60
Annual Report 07
2007 2006
in EUR in EUR in EUR ‘000 in EUR ‘000
IV. OPERATING RESULT
(carry-over) 174,887,293.76 155,889
11./12. Balance from reversals/
additions, or value adjustments
to loans and certain securities
and provisions for contingent
liabilities and loan risks - 57,092,877.37 - 55,275
13./14. Balance from reversals/
additions, or value adjustment
to securities valued as financial
assets as well as investments and
shares in associates - 12,282,434.31 - 1,920
V. RESULTS FROM ORDINARY
BUSINESS ACTIVITIES 105,511,982.08 98,694
15. Extraordinary income 0.00 0
including:
withdrawals from the fund
for general bank risks (0.00) (0)
16. Extraordinary
expenses 0.00 0
including:
allocations to the fund
for general bank risks (0.00) (0)
17. Extraordinary result 0.00 0
(subtotal of items 15 and 16)
18. Taxes on income
and earnings - 1,084,400.60 - 3,495
19. Other taxes, unless reported
under Item 8 - 1,958,160.94 - 329
Raiffeisenlandesbank
Oberösterreich
VI. PROFIT FOR THE YEAR 102,469,420.54 94,870
20. Movements in reserves - 80,346,566.04 - 75,814
including:
allocation to the statutory reserve (- 32,419,309.87) (- 20,982)
reversal from the statutory reserve (0.00) (0)
VII. NET PROFIT 22,122,854.50 19,056
21. Profit/loss carry-over 0.00 0
VIII. NET INCOME FOR THE YEAR 22,122,854.50 19,056
Annual Report 07 961
Notes to the Financial Statements 2007
1. INFORMATION CONCERNING THE REPORTING AND VALUATION METHODS USED IN THE BALANCE SHEET
AND THE INCOME STATEMENT
The 2007 Financial Statements were prepared in accordance
with the provisions of the Austrian Banking Act (BWG) and the
Austrian Business Code (UGB).
The annual financial statements were drawn up in line with the
principles of orderly accounting, as well as the generally
accepted standard practice providing a true and fair view of
the assets, financial position and profitability of the company.
The principle of completeness was observed in preparing the
annual financial statements.
The principle of individual valuation was observed during the
valuation of the various assets and liabilities and the con tinued
operation of the company was assumed.
The principle of prudence was observed, as only those profits
realised on the balance sheet date were reported. All recog -
nisable risks and impending losses were taken into account.
1.1 Foreign currency translation
Sums in foreign currency were converted using the European
Central Bank’s foreign currency mean exchange rate pursuant
to § 58 (1) of the Austrian Banking Act.
1.2 Securities
Both securities held as fixed and current assets were valued
in accordance with the strict lower of cost or market method.
In accordance with § 56 (2) of the Austrian Banking Act, bonds
purchased above par and other fixed-interest securities held
as fixed assets, were written down pro rata temporis to the
amount repayable.
There were no pro rata write-ups in the case of securities
purchased below par.
Securities used as cover funds for trust funds were regarded
as fixed assets and valued according to the strict lower of cost
or market method pursuant to § 2 (3) of the Austrian Trustees
Securities Directive.
Low-volume trading stock securities admissible to the stock
markets were valued on a mark to market basis.
1.3 Risk provisions
Itemised value adjustments and provisions were made for
recog nisable risks as they relate to borrowers. As in previous
years, a dynamic, forward-looking approach was adopted for
the valuation of loan business. For some loans, standardised,
defined value adjustments were employed, or provisions were
formed in the shape of dynamic risk provisions, on the basis
of risk groups in accordance with the "risk management"
rating model.
An appropriate provision was formed for possible loan
defaults relating to financing in risk countries, on the basis of
international, estimated values.
On the whole, this is a continuation of the cautious valuation
policy.
1.4 Special valuation pursuant to § 57 (1) and (2)
of the Austrian Banking Act
The scope for valuation as per § 57 (1) and (2) of the Austrian
Banking Act was not employed.
1.5 Investments
Investments and shares in associated companies were valued
at historical cost. Extraordinary depreciation was made in the
case of value impairments which were likely to be of a permanent
nature, due to sustained losses, a reduction in equity
and/or a reduced earnings capacity level.
1.6 Property, plant and equipment
Pursuant to § 55 (1) of the Austrian Banking Act in combination
with § 204 of the Austrian Business Code, the valuation of
tangible assets took place at the historical price or the cost of
production less scheduled depreciation.
Low-value items were written-off completely in the year of
purchase.
The useful economic life employed as a basis for scheduled depreciation
amounted to 20-50 years for immovable fixed assets
and 3- 20 years for movables.
62
Annual Report 07
Extraordinary depreciation was applied in cases of assumed
lasting value impairment.
1.7 Provisions for pension obligations
Pension commitments were calculated according to the partial
value method for future retirement benefit entitlements, using
the AVÖ 1999 R Pagler & Pagler mortality tables and an
interest rate of 3.5%.
The transitional provisions pursuant to Article X of the Austrian
Business Code have been applied since 1992 and extend over
a period of 20 years.
1.11 Derivative financial instruments
The fair value to be provided is the amount at which an asset
was exchanged or a debt was paid between competent, contractually
willing and mutually independent business partners.
Where stock exchange prices were available, these were
employed for evaluation. Internal evaluation models with current
market parameters and in particular the cash value method
and option price models were used for financial instruments
lacking a stock exchange price.
1.8 Provisions for severance payments
and similar pensions
The provisions for severance payments on the balance sheet
date were calculated according to actuarial mathematical principles
using an interest rate of 3.5% and subject to the assumption
that an average employment term can be expected.
The provisions for long-service bonuses were calculated according
to actuarial mathematical principles using an interest
rate of 3.5% and subject to the assumption that an average
employment term can be expected. A deduction for fluc tuations
was taken.
Raiffeisenlandesbank
Oberösterreich
The transitional provisions of Article X of the Austrian Business
Code were not implemented.
1.9 Other provisions
In line with the prudence principle, other provisions include all
risks recognisable at the time the balance sheet was prepared,
as well as those liabilities which were basically certain, but
where uncertainty existed as to their amount have been considered.
1.10 Own issues
Accruals and deferrals relating to issue costs, additional
cash payment commission, premiums and discounts were
reversed over the term of debt in proportion to the capital
guaranteed.
Annual Report 07 963
2. NOTES TO THE BALANCE SHEET
2.1 Periods to maturity
Loans and advances and other liabilities to banks and non-banks that are not payable on demand have the following periods to
maturity:
Loans and advances
Loans and advances
Remaining period to banks to non-banks
to maturity 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Committed for up to 3 months 1,761,173 2,054,173 1,945,081 1,238,233
Committed for
3 to 12 months 888,785 1,155,603 1,673,203 1,319,846
Committed for
1 to 5 years 268,770 657,053 2,642,751 2,194,210
Committed for
more than 5 years 383,386 354,390 3,427,671 2,774,295
Total 3,302,114 4,221,219 9,688,706 7,526,584
Liabilities to banks
Liabilities to non-banks
Remaining period
to maturity 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Committed for up to 3 months 2,358,872 1,218,572 1,184,130 630,628
Committed for
3 to 12 months 1,060,971 1,381,803 806,567 612,158
Committed for
1 to 5 years 1,227,800 1,289,169 1,916,314 1,733,501
Committed for
more than 5 years 2,032,445 1,523,564 2,117,373 2,020,507
Total 6,680,088 5,413,108 6,024,384 4,996,794
In 2008, bonds and other fixed-interest securities held by Raiffeisenlandesbank Oberösterreich in the amount of EUR 170,454k
(2007: 316,078k) will mature, along with bond issues in the amount of EUR 8,721k (2007: EUR 63,619k),
64
Annual Report 07
2.2 Securities
The securities admitted to trading shown in asset Items 5 and 6
consist of listed bonds and other fixed interest securities amounting
to EUR 1,722,824k (previous year: EUR 1,782,409k) and
listed shares and other non-fixed interest securities totalling
EUR 77,634k (previous year: EUR 30,108k).
There are no non-listed bonds and other fixed interest securi -
ties, non-listed shares and other non-fixed interest securities,
or investments and shares in associated companies admitted
to trading.
The shares and other non-fixed interest securities recognised
as fixed assets amounted to EUR 72,643k (previous year: EUR
21,976k) and those recognised as current assets to EUR
4,992k (previous year: EUR 8,132k).
Asset items are allocated to the fixed assets because the
securities listed above serve the long-term investment of liquid
funds, in order to obtain higher returns.
Securities held as current assets were acquired for the purpose
of securities trading, in order to attain price gains and for the
retention of a cash reserve.
The securities admitted to trading shown in asset Items 5 and 6
are divided into bonds and other fixed interest securities recognised
as fixed assets totalling EUR 1,573,431k (previous year:
EUR 1,617,307k) and bonds and other fixed interest securities
recognised as current assets of EUR 149,393k (previous year:
EUR 165,102k).
Raiffeisenlandesbank Oberösterreich maintains a securities
trading account book, in accordance with § 2 subpara. 35 of
the Austrian Banking Act. The volume of the listed securities
amounted to EUR 144,423k (previous year: EUR 175,858k)
and that of the other financial instruments to EUR 123,497k
(previous year: 116,852k).
Raiffeisenlandesbank
Oberösterreich
Annual Report 07 965
2.3 Fixed assets
Raiffeisenlandesbank Oberösterreich‘s fixed and financial assets developed as follows:
Acquisition cost/ Depre- Book Depre-
Balance sheet item Cost of production ciation values ciation
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
As at: Additions Disposals As at: As at:
01 Jan of in the in the 31 Dec of 31 Dec of in the
the financial financial financial the financial the pre- financial
year year year Total year vious year year
Public sector debt issues
and similar securities 454,532 77,977 139,798 8,319 384,392 448,332 2,320
Other loans to banks 74,749 63,769 128,467 2 10,049 74,586 0
Loans and advances
to customers 431,954 37,835 25,427 8,747 435,615 426,020 2,979
Debt securities and other
public interest fixed-interest
securities 2,435 13,042 15,477 0 0 2,435 0
Debt securities and other
fixed-interest securities from
other issuers 1,626,033 415,959 438,606 29,955 1,573,431 1,614,872 22,920
Shares and other
variable interest securities 1,032,990 971,808 731,219 29,526 1,244,053 1,018,750 20,576
Investments 83,071 34,204 10,208 90 106,977 82,981 0
including:
banks (6,257) (97) (0) (0) (6,354) (6,257) (0)
Shares in associates 703,553 58,617 13,508 2,164 1) 746,498 701,389 0
including:
banks (25,824) (7,000) (0) (0) (32,824) (25,824) (0)
Property, plant and equipment 72,947 724 1,294 50,371 22,006 24,134 2,824
including:
Land and buildings used
by the bank in the course
of its operations (55,764) (129) (67) (38,327) (17,499) (19,426) (2,040)
Total 4,482,264 1,673,935 1,504,004 129,174 4,523,021 4,393,499 51,619
1)
Loss allocation of atypical silent partners for start-up losses of EUR 2,163,900 relating to depreciation for wear and tear.
66
Annual Report 07
2.4 Equity and equity-related liabilities
In the case of subordinated liabilities, the subordination is
always agreed separately in writing pursuant to § 51 (9) of the
Austrian Banking Act. The term and repayment are established
in a manner that permits allocation to equity in accordance
with § 23 (8) subpara. 1 of the Austrian Banking Act. The subordinated
liabilities contain an issue of EUR 124,172k and an
interest rate of 5.161% as well as an emission with a nominal
value of EUR 117,305k and an interest rate of 5.0%, which
will be paid off in 2020.
In accordance with its articles, Raiffeisenlandesbank Ober österreich’s
share capital as at 31 December 2007 was EUR 253,000k
(previous year: 240,000k). It consists of 714,578 (previous year:
714,578) ordinary shares and 749,294 (previous year: 674,075)
preferred shares.
The increase in share capital by a nominal amount of 13,000k
was raised in accordance with the decision of the extraordinary
general meeting on 07 December 2007 and with the approval
of the Supervisory Board by issuing 75,219 individual shares
– non-par, registered and voting preferred shares – at an issue
amount of EUR 1,994 each.
Participation capital amounting to EUR 1,032k (previous year:
EUR 1,032k) has been issued.
2.5 Provisions and other liabilities
Due to the use of the transitional provision contained in Article
X (3) of the Austrian Accounting Act, on 31 December 2007
there was an under-accrual in the provisions for pension
obligations of EUR 274k (previous year: EUR 354k).
2.6 Supplementary information
The balance sheet contains foreign currency items recog -
nised as assets amounting to EUR 2,287,011k (previous year:
EUR 2,019,767k) and EUR 1,821,958k (previous year: EUR
1,656,999k) recognised as liabilities.
Raiffeisenlandesbank
Oberösterreich
Annual Report 07 967
The following derivative financial instruments existed on the balance sheet date:
Term to maturity
Nominal amount
Market value
up to from 1 year over
1 year to 5 years 5 years Total Positive Negative
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Interest rate derivatives
OTC products
Forward rate agreements 1,500,000 2,265,350 0 3,765,350 7,158 6,748
Interest-rate swaps 4,927,304 7,716,157 11,080,274 23,723,735 265,341 373,317
Interest-rate options – purchases 4,000 609,197 408,912 1,022,109 8,414 41
Interest rate options – sales 95,539 1,708,854 1,487,991 3,292,384 1,305 25,504
Products traded on the stock exchange
Interest rate futures 298 34,226 69,887 104,411 0 0
Interest rate options – purchases 5,178 0 0 5,178 0 0
Interest rate options – sales 9,135 0 0 9,135 0 0
Total 6,541,454 12,333,784 13,047,064 31,922,302 282,218 405,610
Foreign-currency derivatives
OTC products
Spot exchange and
forward transactions 1,013,215 4,488 0 1,017,703 6,121 7,296
Currency and interest-rate swaps
with several currencies 2,324,670 118,448 30,990 2,474,108 34,814 21,756
Currency options – purchases 262,225 165,363 0 427,588 12,725 0
Currency options – sales 270,494 164,858 0 435,352 0 12,364
Total 3,870,604 453,157 30,990 4,354,751 53,660 41,416
Other futures
OTC products
Structured shares/index products 205 0 0 205 0 204
Shares options – purchases 31,134 128,716 75,211 235,061 27,649 6,132
Shares options – sales 32,829 124,861 75,210 232,900 5,508 27,147
Commodity options – purchases 0 15,000 5,000 20,000 1,152 298
Commodity options – sales 0 15,000 5,000 20,000 318 1,378
Total 64,168 283,577 160,421 508,166 34,627 35,159
Total OTC products 10,461,615 13,036,292 13,168,588 36,666,495 370,505 482,185
Total products traded
on the stock exchange 14,611 34,226 69,887 118,724 0 0
Total 10,476,226 13,070,518 13,238,475 36,785,219 370,505 482,185
68
Annual Report 07
Market values from derivatives are not booked, due to the fact that valuation units are formed.
Prepay- Accruals
ments and and
2007 Bank Bank Other Other accrued deferred
loans liabilities assets liabilities income income
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Book values of
trading book derivatives
a) Interest-rate related agreements 104 290 0 140 0 0
Book values of
banking book derivatives
a) Interest-rate related agreements 244,254 204,860 387 -37,674 13,056 26,973
b) Exchange-rate related agreements 0 0 8,421 0 0 0
c) Securities-related transactions 0 0 6 180 0 0
Market values from derivatives are not booked, due to the fact
that valuation units are formed.
As at 31 December 2007, securities to the amount of EUR 2,798k
(previous year: EUR 2,873k) were held as cover for trust fund
deposits of EUR 5,753k (previous year EUR 3,392k).
Securities amounting to a book value of EUR 24,044k (previous
year: EUR 35,940k) were pledged as collateral for certain
issues of securities, in addition securities with a book value of
EUR 993,702k (previous year: EUR 1,023,872k) were deposited
as collateral at banks and stock exchanges. EUR 89,374k (previous
year EUR 35,722k) were deposited at banks for reasons
of collateral arrangements and EUR 15,000k are pledged.
Money claims to the amount of EUR 631,266k (previous year:
EUR 534,667k) were assigned to the Oesterreichische Kontrollbank.
Outstanding debts of EUR 53,423k (previous year:
49,833k) were assigned to the European Investment Bank.
In addition, as at 31 December 2007, fixed-interest securities
with a nominal value of EUR 40,000k (previous year EUR 13,000k)
were held in a blocked account at the Landeszentralbank in
the Free State of Bavaria as a security deposit for advances
on securities.
Raiffeisenlandesbank
Oberösterreich
Annual Report 07 969
3. NOTES TO THE INCOME STATEMENT
3.1 Other operating income
To a large extent, the other operating income shown in Item 7 of
the income statement amounting to EUR 18,587k (previous year:
EUR 18,066k) relates to non-bank subsidiary offsetting.
3.2 Other operating expenses
To a large extent, the other operating expenses shown in Item 10
of the income statement amounting to EUR 18,363k (previous
year: EUR 17,690k) relates to non-bank subsidiary offsetting.
3.3 Expenses for
subordinated liabilities
Expenses for subordinated liabilities in the 2007 financial year
totalled EUR 54,796k (previous year: EUR 47,458k).
3.4 Tax savings
As a result of the change in the untaxed reserves, a reduction
in taxes on income and earnings of EUR 0k was calculated
for 2007 (previous year: EUR 0k).
4. OTHER NOTES
4.1 Workforce information
An average of 831 employees worked in banking operations
during the 2007 financial year (previous year: 800).
4.2 Advances and loans to members of the Managing
Board and the Supervisory Board
Advances and loans to members of the Raiffeisenlandesbank
Oberösterreich Aktiengesellschaft Managing Board and the
Supervisory Board consisted of EUR 306k (previous year:
EUR 287k) to members of the Managing Board and EUR 963k
(previous year: EUR 385k) to members of the Supervisory
Board.
Loans to members of the Managing Board and the Super -
visory Board were granted at standard bank conditions. Repayments
are made as agreed.
4.3 Expenses for severance payments pension obligations
The personnel expenses contain expenses for severance payments
amounting to EUR 1,703k (previous year: EUR 2,475k)
and contributions to employee pension funds of EUR 139k
(previous year: EUR 104k).
Expenses for severance payments (including provisions) and
pension obligations (including provisions) in 2007 amounted
to EUR 243k (previous year: EUR 313k) for members of the
Managing Board and to EUR 3,057k for other employees (previous
year: EUR 3,244k).
Further expenditure of EUR 1,039k (previous year: EUR 997k)
was used for Managing Board pensions and EUR 1,580k (previous
year: EUR 1,350k) for other employees.
4.4 Expenses for remunerations and reimbursements
to the members of the Managing Board and the
Supervisory Board
In 2007, the remunerations and reimbursements paid to members
of the Managing Board (including payments in kind and
expenses in connection with pensions) totalled EUR 2,724k
(previous year: EUR 2,555k).
As far as the expenses for former executive managers (severance
and pension payments) are concerned, § 241 (4) of the
Austrian Business Code is called upon.
In 2007, reimbursements of EUR 402k (previous year: EUR 385k)
were paid to members of the Supervisory Board.
4.5. The Members of the Board of Raiffeisenlandesbank
Oberösterreich Aktiengesellschaft
The names of the members of the Raiffeisenlandesbank Ober -
österreich Aktiengesellschaft Managing Board and Super -
visory Board can be found on pages 4 to 7.
70
Annual Report 07
Linz, 4 February 2008
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
Europaplatz 1a, 4020 Linz
THE MANAGING BOARD
Ludwig Scharinger
Chief Executive and Chairman of the Managing Board
Hans Schilcher
Deputy Chairman of the Managing Board
Helmut Schützeneder
Member of the Managing Board
Georg Starzer
Member of the Managing Board
Markus Vockenhuber
Member of the Managing Board
Michaela Keplinger-Mitterlehner
Member of the Managing Board
Raiffeisenlandesbank
Oberösterreich
Annual Report 07 971
Unqualified Audit Certificate
We examined the annual financial statements of
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft,
Europaplatz 1a, 4020 Linz
for the financial year from January 1 to December 31, 2007,
taking into consideration the accounting. In compliance with
Austrian commercial law and the supplementary stipulations
contained in the company articles, the accounting, presentation
and content of these financial statements, as well as the
management report, are the responsibility of the legal rep -
resentatives of the company. Our responsibility is to express
an opinion on these financial statements based on our audit
and a statement concerning the correspondence of the
management report with the financial statements.
Our audit was conducted in accordance with the applicable
Austrian legal regulations and professional standards. These
standards require that the audit be planned and performed in
such a manner that reasonable assurance can be obtained as
to whether the financial statements are free of material mis -
statement and whether an opinion can be expressed concerning
the correspondence of the management report with the
financial statements. During the audit, knowledge concerning
the business activities and economic and legal background
of the company, as well as the expectations concerning possible
errors, were taken into account.
The audit includes an examination, largely on a test basis, of
evidence supporting the amounts and disclosures in the
financial statements. The audit also includes the assessment
of the accounting principles used and significant estimates
made by the legal representatives of the company, as well as
the eval u ation of the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.
The results of our audit gave no reason for objection. On the
basis of the knowledge gained during the audit, in our judgement
the financial statements comply with the legal regula -
tions in Austria, as well as the supplementary stipulations
in the company articles and present a true and fair view of
the assets, financial position and earnings of the company in
accordance with Austrian accounting regulations. The management
report corresponds with the financial statements.
Linz, 07 March 2008
KPMG Austria GmbH
Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
Martha Kloibmüller
Auditor
Ernst Pichler
Auditor
72
Annual Report 07
Unqualified Audit Certificate
I examined the annual financial statements of
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft,
Europaplatz 1a, 4020 Linz
for the financial year from 1 January 2007 to 31 December
2007, taking into consideration the accounting. In compliance
with Austrian commercial law and the supplementary stipulations
contained in the company articles, the accounting, presentation
and content of these financial statements and of the
management report are the responsibility of the legal representatives
of the company. My responsibility is to express an
opinion on these financial statements based on my audit and
make a statement concerning whether the management
report corresponds with the financial statements.
My audit was conducted in accordance with the applicable
Austrian legal regulations and professional standards. These
standards require that the audit be planned and performed in
such a manner that reasonable assurance can be obtained as
to whether the financial statements are free of material misstatement
and whether an opinion can be expressed concern -
ing the correspondence of the management report with the
financial statements. During the audit, knowledge concerning
the business activities and economic and legal background
of the company as well as the expectations concerning possible
errors were taken into account. The audit includes an
examination, largely on a test basis, of evidence supporting the
amounts and disclosures in the financial statements. The audit
also includes the assessment of the accounting principles
used and significant estimates made by the legal representatives
of the company, as well as the evaluation of the overall
financial statement presentation. I believe that my audit provides
a reasonable basis for my opinion.
The results of my audit gave no reason for objection. On the
basis of the knowledge gained during the audit, in my judgement
the financial statements comply with the legal regula -
tions in Austria, as well as the supplementary stipulations in
the company articles and present a true and fair view of the
company’s assets and financial position as at 31 December
2007 and the company’s earnings in the financial year from
1 January 2007 until 31 December 2007, in accordance with
Austrian accounting regulations. The management report corresponds
with the financial statements.
Raiffeisenlandesbank
Oberösterreich
Linz, 04 February 2008
Auditing association: Österreichischer Raiffeisenverband
Auditor:
Ursula Palle-Futschik
Association Auditor
Annual Report 07 973
Group Management Report 2007
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
GROUP STRUCTURE
As a superordinated banking institute, starting with the 2007
financial year Raiffeisenlandesbank Oberösterreich Aktien -
gesellschaft is obliged to prepare and publish consolidated
financial statements in accordance with the IAS Regulation (EC)
1606/2002, abiding by the regulations of the International
Financial Reporting Standards (IFRS). In addition, notes and
explanations are required in accordance with the regulations
of the Austrian Banking Act and the Austrian Business Code.
Apart from the parent company, the consolidated balance sheet
of the Raiffeisenlandesbank Oberösterreich Group as on
31 December 2007 included 25 fully consolidated Group companies
and 7 Group companies consolidated according to the
equity method. During 2007, bankidirekt.at AG was fully consolidated
for the first time and included in the consolidated
financial statements of Raiffeisenlandesbank Oberösterreich.
The shares in three subsidiaries, “LDZ” Landesdienstleis -
tungszentrum Vermietungs GmbH, Passage Linz GmbH and
Passage Linz GmbH & Co KG, were sold in December 2007
and the companies removed from the scope of consolidation.
BUSINESS TRENDS
The results of the 2007 financial year proved to be a continuation
of the upward trend seen over the past few years. The main
reason for this development was the excellent growth and
earnings situation of Raiffeisenlandesbank Oberösterreich, which
dominates the Group.
INCOME STATEMENT
The income situation of the Raiffeisenlandesbank Oberösterreich
Group is characterised by a clear upward trend.
Net interest income before risk provisions sank compared to
the previous year by EUR 4.6 million or 1.8% to EUR 248.5
million. This mainly reflects interest income from loans and
advances to customers and banks as well as fixed-income
securities. It also includes income from shares and variable yield
securities as well as from holdings. Interest expenses arise in
conjunction with amounts owed to customers and banks, with
securitised liabilities and with subordinated capital.
2007 2006 Change
in EUR mill. in EUR mill. in EUR mill. in %
Net interest income 248.5 253.1 - 4.6 - 1.8
Risk provisions - 81.5 - 77.9 3.6 4.6
Net interest income after risk provisions 167.0 175.2 - 8.2 - 4.7
Net commission income 92.7 79.0 13.7 17.3
Trading income 17.0 8.5 8.5 100.0
Results of the valuation of designated financial instruments 12.4 12.6 - 0.2 - 1.6
Net investment income 36.0 38.1 - 2.1 - 5.5
Result of companies that are accounted for at equity 109.4 80.7 28.7 35.6
Administrative Expenses - 250.7 - 242.4 8.3 3.4
Other operating result 71.2 67.1 4.1 6.1
Pre-tax profit for the year 255.0 218.8 36.2 16.5
Operating profit 288.1 246.0 42.1 17.1
Cost/income ratio 46.5% 49.6%
74
Annual Report 07
The result of fee and commission income and expenses was
increased by 17.3% to EUR 92.7 million.
The result of the evaluation of designated financial instruments
sank by a slight 1.6% to EUR 12.4 million. Net investment income
reached a value of EUR 36.0 million, including the result
of the final consolidation of the three subsidiaries, “LDZ”
Landesdienstleistungszentrum Vermietungs GmbH, Passage
Linz GmbH and Passage Linz GmbH & Co KG.
The result of companies accounted for at equity rose com -
pared to the previous year by EUR 28.7 million or 35.6% to
EUR 109.4 million. This was mainly due to the positive de -
velopment of Oberösterreichische Landesbank Aktiengesellschaft
and Raiffeisenlandesbank Oberösterreich Invest GmbH,
which holds shares in the voestalpine AG group.
The administrative expenses rose by 3.4% to EUR 250.7 million
and contain personnel expenses, other administrative
expenses and depreciation.
Other operating income, which mainly consists of income and
expenses of non-bank group companies, rose by EUR 4.1 million
or 6.1% to EUR 71.2 million.
The pre-tax profit posted for 2007 rose by EUR 36.2 million or
16.5% to a record EUR 255.0 million.
Corporates & Retail
In this segment all of Raiffeisenlandesbank Oberösterreich’s
business relations are bundled that are exposed to a counterparty
risk. Thus, the Corporates & Retail segment includes the
business areas corporate customers and groups, major institutional
customers, SME support, retail business, cash man -
agement, correspondent banking and international finance.
In total, this segment added the amount of EUR 28.7 million
to the operating income.
Financial Markets
The Financial Markets segment includes the results of the
trad ing areas (money, foreign exchange, stocks and bonds), the
treasury results from interest-rate management and hedging
with customers and from the management of the banking book,
as well as the income from services arising from the area of
securities sales. In the trading areas, customer business takes
priority over in-house trading and this is reflected in the high
portion of income from services.
All in all, the Financial Markets sector contributed a total of
EUR 45.3 million to the group’s consolidated result in 2007.
Invest Banking
Compared to the previous year, the operating profit, at EUR
288.1 million, was up by EUR 42.1 million, a pleasing 17.1%.
In detail, the 2007 financial year saw the following business
developments at the most important Group companies:
The cost/income ratio developed very positively in the
2007 financial year. With an excellent 46.5% risk-bearing
capacity, customers of the affiliated group can be provided
with even more dynamic assistance in the realisation of their
opportunities.
Fully consolidated banks:
■ Hypo Holding GmbH
■ SALZBURGER LANDES-HYPOTHEKENBANK AKTIEN-
GESELLSCHAFT
The Group
SEGMENTS
The Group’s pre-tax profit for the year is composed of the results
of the following segments:
The shares in HYPO Salzburg are mainly held indirectly through
Hypo Holding GmbH. As on 31 December 2007 HYPO Salzburg
was operating 24 branches in the province of Salzburg.
Of these, 13 locations are in the central Salzburg area and
eleven spread out in the province of Salzburg.
Annual Report 07
75
Corporate customer business grew, taking the conservative
risk assessment into consideration. In the public sector, classic
financing models are being increasingly supplemented by
alternative models. In both areas, synergies with Raiffeisen -
landesbank Oberösterreich Aktiengesellschaft are to be used
to the advantage of the customers.
In the private loan business, the focus of HYPO Salzburg is
on financing building and residential projects. This area makes
up three fourths of the bank’s total private financing.
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.
■ PRIVAT BANK AG der Raiffeisenlandesbank Oberösterreich
PRIVATBANK AG of Raiffeisenlandesbank Oberösterreich was
able to increase its business volume during 2007 in the group
picture including bankdirekt.at AG by 19.3% to about EUR 3.5
billion. Once again – as in the years before – this was clearly
above market growth in Austria.
■ bankdirekt.at AG
bankdirekt.at AG stands for first-class products for private
money investment and online securities trading without classic
investment consultants.
Effective as at 26 November 2007, bankdirekt.at AG took over
the direktbank.at division of PRIVAT BANK AG der Raiffeisen -
landesbank Oberösterreich. Business development was characterised
by the extreme fluctuations on the stock exchanges
that brought good sales particularly in the months of October and
November. All told, the company was able to reach its targets.
■ KEPLER-FONDS Kapitalanlagegesellschaft m.b.H.
KEPLER-FONDS KAG was able to stand its ground nicely in the
difficult markets and continued to increase fund volume through -
out 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%. This
fund volume put KEPLER in fifth place among the 24 Austrian
capital investment companies.
Fully consolidated financial institutions:
■ Raiffeisen-IMPULS-Leasing Gesellschaft m.b.H.
■ Raiffeisen-IMPULS-Mobilienleasing GmbH
■ Raiffeisen-IMPULS-Immobilien GmbH
■ Raiffeisen-IMPULS-Realitätenleasing GmbH
■ Raiffeisen-IMPULS-Leasing GmbH & Co KG Passau
With a market share of over 20%, Raiffeisen-IMPULS-Leasing
was able to further expand its positions as Upper Austria’s leader
in the leasing market in 2007. A volume of new acquisitions that
exceeded EUR 700 million for the first time meant a 16%
increase compared to 2006. At the end of 2007, Raiffeisen-
IMPULS-Leasing had an inventory of almost 39,000 leasing
agreements with a purchasing value of over EUR 2.9 billion.
Other fully consolidated companies:
The other fully consolidated companies, which also include
major holding companies (e.g. REAL-TREUHAND Management
GmbH), companies that play a supportive role in the
group (e.g. GRZ IT Center Linz GmbH) and institutions that are
close to the bank (e.g. activ factoring AG), likewise con tribute
to the positive development of the group.
■ 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 in accordance with individual
requirements. Choosing the right location, cost-efficient
realisation, top construction quality and optimal maintenance
costs are the first priorities and ensure secure and profitable investments.
■ GRZ IT Center Linz GmbH
With a total of 580 employees, GRZ IT Group is one of the
largest and most successful IT service providers in Austria. The
product and service spectrum of the GRZ IT Group goes far
beyond the area of finance. It covers everything from oper at ing
mainframes, servers and networks of any kind to application
service provisions, all the way to developing total tailor-made
IT solutions.
■ activ factoring AG
activ factoring AG is not only successful in its traditional markets
Austria, Southern Germany and the Czech Republic, it actually
purchases receivables around the world. The combination of prefinancing,
taking on the complete risk of bad debs and active
debtor management provides companies with a flexible financ -
ing and services instrument.
Companies consolidated at equity:
Among the most important companies accounted for at equity
are Oberösterreichische Landesbank Aktiengesellschaft, which
is held by the fully consolidated Hypo Holding GmbH, and
Raiffeisenlandesbank Oberösterreich Invest GmbH & Co OG,
76 Annual Report 07
which holds shares in the voestalpine AG group. All seven
companies that are accounted for at equity achieved a highly
satisfactory business and earnings development during the
2007 financial year, contributing positively to the overall operative
success of the Group.
The Invest Banking segment made the largest contribution to
the Group’s overall result in 2007, in the amount of EUR 178.0
million.
Corporate Center
The Corporate Center segment shows income and expenses
where the content does not fit into any other segment. Onetime
special effects that would distort the various segment
results are also recorded here when applicable.
In addition, cooperative Group services provided to the Raiff -
eisen Banking Group Upper Austria by Raiffeisenlandesbank
Oberösterreich are listed under the Corporate Center.
In total, the Corporate Center segment contributed EUR 3.0
million to the total result in 2007.
THE BALANCE SHEET DEVELOPMENT
The total assets of Raiffeisenlandesbank Oberösterreich
Aktiengesellschaft as at 31 December 2007 amounted to EUR
25,267 million. Compared to the same balance sheet date in
the preceding year, this represented an increase of EUR 3,116
million or 14.1%.
ASSETS 31 Dec 2007 31 Dec 2006 Change
in EUR mill. in % in EUR mill. in % in EUR mill. in %
Loans and advances to banks 4,633 18.3 4,432 20.0 + 201 + 4.5
Loans and advances to customers 13,744 54,4 11,009 49.7 + 2,735 + 24.8
Trading assets 537 2.1 511 2.3 + 26 + 5.1
Financial investments 5,294 21.0 5,058 22.8 + 236 + 4.7
Companies accounted for at equity 625 2.5 514 2.4 + 111 + 21.6
Other assets 434 1.7 627 2.8 - 193 - 30.8
Total 25,267 100.0 22,151 100.0 + 3,116 + 14.1
On the 2007 balance sheet date there was a volume of EUR
13,744 million loans and advances to customers. Compared
to the prior year, this amounts to a strong increase of EUR
2,735 million or 24.8%. The dynamic risk provision policy
applied when assessing credit exposure was continued.
Financial investments rose compared to the previous year by
4.7% to a value of EUR 5,294 million.
Loans and advances to banks as at the last balance sheet
date were EUR 4,633 million, which was EUR 201 million
higher than 31 December 2006.
The Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
Group did not have any US subprime securities in its port folio
on 31 December 2007.
The Group
LIABILITIES 31 Dec 2007 31 Dec 2006 Change
in EUR mill. in % in EUR mill. in % in EUR mill. in %
Liabilities to banks 8,704 34.5 7,577 34.2 + 1,127 + 14.9
Liabilities to customers 6,691 26.5 5,532 25.0 + 1,159 + 21.0
Debt securities in issue 5,922 23.4 5,574 25.2 + 348 + 6.2
Other liabilities 956 3.8 853 3.8 + 103 + 12.1
Subordinated capital 1,295 5.1 1,207 5.4 + 88 + 7.3
Equity 1,699 6.7 1,408 6.4 + 291 + 20.7
Total 25,267 100.0 22,151 100.0 + 3,116 + 14.1
Annual Report 07
77
The increase on the liabilities side of the balance sheet is
mainly derived from a sharp expansion of savings and giro
deposits among the liabilities to customers as well as more
liabilities to banks.
The amounts owed to customers reached a record high of EUR
6,691 million, showing a rise of 21.0% compared to the previous
year. Amounts owed to banks rose by 14.9%. Compared
to the previous year, this represents an increase of EUR 1,127
million to EUR 8,704 million.
As at 31 December 2007, reported equity included the fol -
lowing items:
in EUR mill.
Subscribed capital 254.0
Capital reserves 547.9
Cumulative results 859.2
AfS reserves - 41.1
Minority interests 79.4
Total 1,699.4
The equity of the Raiffeisenlandesbank Oberösterreich Group
rose in absolute numbers by EUR 291.7 million. This growth was
the result of an increase in the share capital of Raiffeisen -
landesbank Oberösterreich Aktiengesellschaft as well as the
ex cellent income situation and the strong power of the Group
companies to finance themselves.
All in all, the Raiffeisenlandesbank Oberösterreich Group has a
very pleas ing equity capital situation which will also provide
for further growth in the years to come.
BANK BRANCH MANAGEMENT
During the reporting year it was possible to increase the number
of supported retail customers to almost 115,000. Compared
to the previous year this represents a 2.8% increase.
Aside from modern self-service components and the inno -
vative electronic banking system (ELBA), customers have
access above all to modern and customer-friendly business
facilities that have been equipped in line with the very latest
banking operation know-how.
HUMAN RESOURCES MANAGEMENT
During the 2007 financial year, on average, the fully consolidated
companies employed a workforce of 1,752 staff.
Every success depends on people. For this reason, ongoing
training and development of employees receives special focus.
OUTLOOK
The Raiffeisenlandesbank Oberösterreich Group is in the process
of further expanding its risk-bearing ability and competi -
tiveness. The cost/income ratio is being reduced further by
exercising tight cost and income management, which also increases
the positive creative power of the Group.
Other important cornerstones of Raiffeisenlandesbank Oberösterreich
Group’s strategic orientation are sustainable growth
and the generation of additional value-added. In the past, the
con tin uous upwards trend and good results have enabled the
formation of a well-founded capital base. For this reason Raiff -
eisenlandesbank Oberösterreich Group is in a position to offer
special services as an expression of a pronounced customer
focus. For example, it has become more and more important
to strengthen the competitive ability of companies by using
special financing models. For years we have also been pro -
viding venture and partner capital.
Ongoing further development
This successful course will be continued during the 2008
financial year. The available budget figures point toward the
continuation of this unique path to success.
78
Annual Report 07
During the current year the Raiffeisenlandesbank Oberösterreich
Group will expand its activities, actively build up its networks
of correspondent banks and partner banks, focus on
Romania and Southern Russia, strengthen export finance and
increasingly support companies especially in penetrating the
countries that are currently carrying the world economy:
China, India and Russia.
The Raiffeisenlandesbank Oberösterreich Group intends not
only to fulfil expectations, but to surpass them. It not only wants
to support customers, it hopes to inspire them. A unique level of
customer orientation, leadership with regard to the devel op -
ment of new, targeted products and modern sales instruments
are fundamental building blocks that distinguish the Group.
This further increases trust, guarantees security and ensures
a solid base for a successful and sustainable partnership.
There were no events of particular importance after the close
of the 2007 business year.
There are no results of research and development to comment
on as these are not relevant in this industry.
Linz, 07 April 2008
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
Europaplatz 1a, 4020 Linz
THE MANAGING BOARD
Ludwig Scharinger
Chief Executive and Chairman of the Managing Board
Hans Schilcher
Deputy Chairman of the Managing Board
Helmut Schützeneder
Member of the Managing Board
Georg Starzer
Member of the Managing Board
The Group
Markus Vockenhuber
Member of the Managing Board
Michaela Keplinger-Mitterlehner
Member of the Managing Board
Annual Report 07
79
IFRS CONSOLIDATED
FINANCIAL STATEMENTS 2007
RAIFFEISENLANDESBANK OBERÖSTERREICH
Aktiengesellschaft, 4020 Linz, Europaplatz 1a
INCOME STATEMENT
BALANCE SHEET
STATEMENT OF CHANGES IN EQUITY
CASH FLOW STATEMENT
NOTES
The company
The basics of the consolidated accounts according to IFRS
Accounting policies
Segment reporting
Notes to the income statement
Notes to the balance sheet
Risk report
Other information
Information based on Austrian accounting practices
Events after the balance sheet date
The Members of the Board of Raiffeisenlandesbank Oberösterreich
AUDIT CERTIFICATES
STATEMENT OF THE MANAGING BOARD
REPORT OF THE SUPERVISORY BOARD
2007
80
Annual Report 07
Income Statement
Note No. 2007 2006
in EUR ‘000 in EUR ‘000
Interest and interest-related income 1,066,134 822,741
Interest and interest-related expenses - 817,558 - 569,594
Net interest income (1) 248,576 253,147
Risk provisions (2) - 81,537 - 77,931
Net interest income after risk provisions 167,039 175,216
Fee and commission income 141,908 124,733
Fee and commission expenses - 49,214 - 45,749
Net fee and commission income (3) 92,694 78,984
Trading income (4) 16,978 8,456
Income from designated financial instruments (5) 12,396 12,625
Net investment income (6) 35,982 38,064
Income from companies accounted for at equity 109,426 80,765
Administrative expenses (7) - 250,663 - 242,355
Other operating results (8) 71,220 67,068
Pre-tax profit for the year 255,072 218,823
Taxes on income and earnings (9) - 29,333 - 11,130
Profit for the year 225,739 207,693
Minority interests - 7,880 - 10,128
Net profit 217,859 197,565
The Group
Annual Report 07
81
Balance Sheet
ASSETS Note No. 31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Cash and cash equivalents (10), (11) 116,012 103,239
Loans and advances to banks (10), (12), (14) 4,633,396 4,431,704
Loans and advances to customers (10), (13), (14) 13,744,557 11,009,014
Trading assets (10), (15) 536,872 511,285
Financial assets (10), (16) 5,293,991 5,057,778
Companies accounted for at equity (17) 625,406 514,447
Intangible assets (18), (21) 1,719 3,126
Property, plant and equipment (19), (21) 79,532 103,291
Financial real estate (19), (21) 8,731 175,890
Current tax assets (9) 28,295 17,071
Deferred tax assets (9) 15,981 18,869
Other assets (20) 182,597 205,785
Total 25,267,089 22,151,499
LIABILITIES Note No. 31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Liabilities to banks (10), (22) 8.703.699 7.576.904
Liabilities to customers (10), (23) 6.690.824 5.531.842
Debt securities in issue (10), (24) 5.921.938 5.573.969
Provisions (14), (25) 121.633 123.481
Current tax liabilities (9) 12.909 10.459
Deferred tax liabilities (9) 34.655 27.162
Trading liabilities (10), (26) 531.795 413.221
Other liabilities (27) 255.261 279.439
Subordinated capital (10), (28) 1.294.971 1.207.349
Equity (29) 1.699.404 1.407.673
of which minority interests 79.420 76.697
of which shareholder of the parent company 1.619.984 1.330.976
Total 25.267.089 22.151.499
82
Annual Report 07
Statement of Changes in Equity
Sub-
Cumuscribed
Capital lative AfS Sub- Minority
capital reserve results reserves total interests Total
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Equity 01 January 2007 241,032 410,859 671,207 7,878 1,330,976 76,697 1,407,673
With no effect on the Income Statement
in accordance with IAS 39 0 0 0 - 67,689 - 67,689 0 - 67,689
Changes in equity in companies
accounted for at equity 0 0 - 17,079 0 - 17,079 - 3,517 - 20,596
Other changes 0 0 - 78 0 - 78 0 - 78
Taxes recognised with no effect
on the Income Statement 0 0 0 18,734 18,734 0 18,734
Total of results recorded
directly under equity 0 0 - 17,157 - 48,955 - 66,112 - 3,517 - 69,629
Profit for the year 0 0 217,859 0 217,859 7,880 225,739
Total results for the year 0 0 200,702 - 48,955 151,747 4,363 156,110
Dividends 0 0 - 12,726 0 - 12,726 - 1,640 - 14,366
Capital increase/reduction 13,000 136,987 0 0 149,987 0 149,987
Equity 31 Dec 2007 254,032 547,846 859,183 - 41,077 1,619,984 79,420 1,699,404
Sub-
Cumuscribed
Capital lative AfS Sub- Minority
capital reserve results reserves total interests Total
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Equity 01 January 2006 241,032 410,859 487,605 39,176 1,178,672 65,667 1,244,339
With no effect on the Income Statement
in accordance with IAS 39 0 0 0 - 39,763 - 39,763 0 - 39,763
Changes in equity in companies
accounted for at equity 0 0 - 3,845 0 - 3,845 2,600 - 1,245
Other changes 0 0 0 0 0 0 0
Taxes recognised with no effect
on the Income Statement 0 0 0 8,465 8,465 0 8,465
Total of results recorded
directly under equity 0 0 - 3,845 - 31,298 - 35,143 2,600 - 32,543
Profit for the year 0 0 197,565 0 197,565 10,128 207,693
Total results for the year 0 0 193,720 - 31,298 162,422 12,728 175,150
Dividends 0 0 - 10,118 0 - 10,118 - 1,698 - 11,816
Capital increase/reduction 0 0 0 0 0 0 0
The Group
Equity 31 Dec 2006 241,032 410,859 671,207 7,878 1,330,976 76,697 1,407,673
The item “changes in equity in companies accounted for at equity” includes all of the valuation results that are proportionately attrib uted
to Raiffeisenlandesbank Oberösterreich Aktiengesellschaft and recorded under equity without affecting the balance sheet. They come for
the most part from financial instruments in the category of “financial assets available for sale” (Afs) in companies accounted for at equity.
Annual Report 07
83
Cash Flow Statement
2007 2006
in EUR ‘000 in EUR ‘000
Profit for the year 225,739 207,693
Non-cash items contained in the profit for the year and transferral
to the cash flow from operating activities:
Write-offs/write-ups of property, equipment and financial assets,
trading securities, intangible assets and financial real estate 58,964 75,055
Reversal/allocation of reserves and risk provisions 86,069 67,670
Profit/loss from sale of property, equipment and financial assets,
trading securities, intangible assets and financial real estate - 2,368 - 14,262
Other adjustments due to non-cash items - 415,764 -345,891
Subtotal - 47,360 - 9,735
Changes in operating assets and liabilities after correcting
for non-cash components:
Loans and advances to banks and customers - 2,751,535 - 1,240,096
Trading assets 589 55,356
Other assets 33,587 - 114,149
Liabilities to banks and customers 2,250,383 1,316,367
Trading liabilities 17,494 4,159
Debt securities in issue 363,516 595,501
Other liabilities - 21,392 49,230
Interest and dividends received 1,094,854 685,808
Interest paid - 774,280 - 425,597
Cash flow from operating activities 165,856 916,844
Cash proceeds from the sale of:
Financial assets and shares in companies 1,634,817 699,853
Property and equipment, financial real estate and intangible assets 549 1,819
Payments to acquire:
Financial assets and shares in companies - 2,009,977 - 1,514,815
Property and equipment, financial real estate and intangible assets - 10,231 - 12,282
Cash flow from investing activities - 384,842 - 825,425
Capital increase 149,987 0
Income and payments from subordinated capital 96,138 - 16,209
Dividends - 14,366 - 11,816
Cash flow from financing activities 231,759 - 28,025
Cash and cash equivalents at the end of the previous period 103,239 39,845
Cash flow from operating activities 165,856 916,844
Cash flow from investing activities - 384,842 - 825,425
Cash flow from financing activities 231,759 - 28,025
Cash and cash equivalents at the end of the period 116,012 103,239
Cash includes the balance sheet item “cash reserves” which consists of the cash in hand and balances payable on demand at
central banks,
84
Annual Report 07
Notes
THE COMPANY
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft acts
as a regional central institution of the Raiffeisen Banking
Group Upper Austria and is registered in the Commercial
Register at the District Court in Linz under the number
247579m. The headquarters are in Austria, at Europaplatz
1a, 4020 Linz.
Shareholders of Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
are the “RLB Holding registrierte Genossenschaft
m.b.H. OÖ” with a portion of the share capital amounting to
48.81% (ordinary shares) and the registered cooperative asso -
ciation “Raiffeisenbankengruppe OÖ Verbund” with 51.19%
(preferred shares). The latter cooperative is the uppermost
parent company of the Group.
The Upper Austrian Raiffeisenbanks make up the most important
owner groups of the two cooperatives. These two are supported
by Raiffeisenlandesbank Oberösterreich Aktien gesellschaft
(referred to below as Raiffeisenlandesbank Oberösterreich) in its
func tion as Upper Austrian headquarters in all banking matters.
As a superordinated banking institute, starting with the 2007
finan cial year, Raiffeisenlandesbank Oberösterreich is obliged
to prepare consolidated financial statements in accordance with
the IAS Regulation (EC) 1606/2002, abiding by the regulations
of the International Financial Reporting Standards (IFRS). In addition,
notes and explanations are required in accordance with
the national regulations of the Austrian Banking Act and the Austrian
Business Code.
THE BASICS OF THE CONSOLIDATED ACCOUNTS ACCORDING TO IFRS
Principles
These consolidated financial statements for the 2007 financial
year as well as the comparative figures from 2006 were
prepared in compliance with the applicable International Financial
Reporting Standards (IFRS) as published by the Inter -
national Accounting Standards Board (IASB) and international
accounting and financial reporting standards based on the IAS
Regulation (EC) 1606/2002 as adopted by the EU.
The figures in these financial statements are quoted in EUR
thousands.
Not yet mandatory application of IFRS
The following new or modified standards and interpretations
were already published as at the balance sheet date, however,
they have not yet come into effect and were not applied in
these consolidated financial statements:
Standard/Interpretation Mandatory for Already adopted
financial year beginning by the EU
IFRS 8 (“Business Segments”) 01 Jan 2009 yes
Modification of IAS 23 (“Borrowing Costs”) 01 Jan 2009 no
Modification of IAS 1 (“Presentation of the Financial Statements”) 01 Jan 2009 no
IFRIC 14 (“IAS 19 - The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction”) 01 Jan 2008 no
IFRIC 13 (“Customer Loyalty Programmes”) 01 July 2008 no
IFRIC 12 (“Service Concession Arrangements”) 01 Jan 2008 no
IFRIC 11 (“IFRS 2 – Dealing with own shares and shares
of Group companies”) 01 March 2007 yes
The Group
No material effects are expected on future consolidated financial statements as a result of the application of the standards and
interpretations listed.
Annual Report 07
85
First-time adoption of IFRS
Raiffeisenlandesbank Oberösterreich is publishing consoli -
dated financial statements for the 2007 financial year that have
been prepared in accordance with the International Financial
Reporting Stand ards for the first time and is therefore a firsttime
adopter in the sense of IFRS 1. The transition time for
the first-time adoption is 01 January 2006 so the information
from the previous year that is quoted in the financial statements
was gathered as required in accordance with IFRS.
When preparing the IFRS opening balance, all IFRS that were
valid on the balance sheet date are to be applied retrospectively.
Adjustments that thus result from the application of previous
accounting policies are to be charged directly to the reserves
for accumulated results.
Differences that were already charged to equity at the time of
the first- time adoption of the IFRS were not recorded.
The group of fully consolidated companies according to IFRS
is, in accordance with the terms of IAS 27, much broader than
the previous scope of consolidation according to the Austrian
Business Code and the Austrian Banking Act. In accordance
with § 59 in conjunction with § 30 of the Austrian Banking Act,
the consolidation includes banks, financial institutions, securities
companies and companies providing bank-related support
services, while IAS 27 on the other hand does not exclude a
subsidiary from full consolidation due to the fact that it exercises
a different business than that of the group.
As stipulated by the guidelines in IFRS 1, transition calculations
show the equity and the result of the 2006 financial year abid -
ing by the previously applied accounting practices (Austrian
Business Code/Austrian Banking Act) in transition to the equity
and the IFRS result in the same financial year, whereby important
adjustments are to be explained separately.
Additional explanations in this context concern important
adjustments to the cash flow statement and information on
the classification of financial instruments that were applied
earlier.
Reconciliation of equity to IFRS
When determining the equity the following differences result between the application of the previous accounting principles
(Austrian Business Code/Austrian Banking Act) and IFRS:
01 Jan 2006 31 Dec 2006
in EUR ‘000 in EUR ‘000
Subscribed capital 241,032 241,032
Capital reserves 391,778 391,778
Retained earnings (incl, net income for the year) 134,952 243,002
Liabilities pursuant to § 23 (6) of the Austrian Banking Act 219,201 242,896
Minority interests 35,143 36,026
Untaxed reserves 11,283 10,714
Fund for general banks risks 1,453 1,453
Equity according to the Austrian Business Code/Austrian Banking Act (total) 1,034,842 1,166,901
Adjustment due to change in the scope of consolidation 162,463 187,802
Adjustment of the evaluation of financial instruments with effect on the Income Statement 980 17,624
Available for sale reserves 39,176 7,878
Provisions for personnel expenses - 23,195 - 22,097
Other adjustments - 451 8,894
Adjustments of minority interests 30,524 40,671
IFRS equity (total) 1,244,339 1,407,673
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Annual Report 07
Reconciliation of the results to IFRS
When determining the result the following differences emerge between the application of the previous accounting principles
(Austrian Business Code/Austrian Banking Act) and IFRS:
2006
in EUR ‘000
Austrian Business Code/Austrian Banking Act net profit after tax 141,295
Adjustment due to change in the scope of consolidation 29,184
Adjustment of the evaluation of financial instruments with effect on the Income Statement 16,643
Provisions for personal expenses 1,098
Other adjustments 9,345
IFRS profit for the year 197,565
Notes on material adjustments to the cash flow statement
The cash flow statement in the consolidated financial statements according to the accounting principles of the Austrian Business
Code and the Austrian Banking Act was already very similar to the terms of IAS 7 (“Cash flow statements”). However, differences
did result because the scope of consolidation was different in the two kinds of financial statements – national compared to
international accounting principles.
Classification of previously determined financial instruments
The following financial assets were assigned to the category of “designated financial instruments” at the time of the transition to
IFRS (1 January 2006):
Carrying amount Carrying amount
ABC/ABA
IFRS
in EUR ‘000 in EUR ‘000
The Group
Loans and advances to banks 334,875 334,957
Loans and advances to customers 343,279 355,554
Financial assets 962,346 1,037,429
Total 1,640,500 1,727,940
Annual Report 07
87
The following financial liabilities were assigned to the category of “designated financial instruments” at the time of the transition to
IFRS (1 January 2006):
Carrying amount Carrying amount
ABC/ABA
IFRS
in EUR ‘000 in EUR ‘000
Liabilities to banks 1,846,249 1,871,505
Liabilities to customers 1,009,965 1,069,444
Debt securities in issue 3,752,411 3,789,668
Subordinated capital 510,921 542,436
Total 7,119,546 7,273,053
The following financial assets were assigned to the category of “financial assets available for sale” (AfS) at the time of the transition
to IFRS (1 January 2006):
Carrying amount Carrying amount
ABC/ABA
IFRS
in EUR ‘000 in EUR ‘000
Financial assets 2,953,941 3,046,129
Total 2,953,941 3,046,129
The IFRS carrying amounts of AfS financial assets contain equity instruments held on 1 January 2006 in the amount of EUR 667,141k
that are valued at historical cost because their fair value cannot be reliably determined.
88
Annual Report 07
Consolidation methods
The starting point for preparing the consolidated balance
sheet and the group income statement is the sum of the
separate financial statements of the subsidiaries included in
the consolidated financial statements. Subsidiaries are companies
on which Raiffeisenlandesbank Oberösterreich exercises
a controlling influence on their business and financial policies.
The separate financial statements of the fully consolidated
subsidiaries are prepared in accordance with IFRS and are
based on uniform accounting principles applied throughout
the group. The balance sheet date of the fully consoli dated
companies is 31 December with the exception of a few leasing
companies and RB Prag Beteiligungs GmbH that are included
as of 30 September. The selection of a date for these companies
that differs from that of the parent company guarantees
that the financial statements can be prepared and audited without
delay. Two subsidiaries prepare their financial statements
as at 28 February and 30 June and report as at 31 December
with an IFRS interim report.
In the course of the capital consolidation the carrying amounts
of the shares in each subsidiary belonging to the parent company
are calculated based on the trial balance with the proportionate
equity of each subsidiary. When a subsidiary is acquired
it is included as of the date of acquisition. The assets and liabilities
acquired are recorded applying the revaluation method in
accordance with IFRS 3 at their fair value. If there is a positive
difference between the purchase price and the proportionate
net assets in the acquired company it is to be reported as goodwill.
Goodwill is not subject to scheduled depreciation but rather
is subject to an annual impairment test according to IAS 36.
Associates are companies where the group exercises a sig -
nificant influence on business and financial policy. There is
usually a significant influence when the holdings amount to
between 20% and 50%. Material investments in associates
are accounted for at equity and recorded in a separate balance
sheet item. The proportionate profits and losses from com -
panies accounted for at equity are also shown separately in
the income statement. When applying the equity method the
same basic approach is used in accounting for acquisitions
as is used for a fully consolidated company.
In the course of the debt consolidation, loans and advances
within the group are set off against internal liabilities. Expenses
and income resulting from transactions between companies in
the full scope of consolidation are eliminated in the course of
the expense and income consolidation.
Consolidated companies
The scope of consolidation was determined according to the
terms of IAS 27, taking the principle of materiality into con -
sideration. Materiality in this sense is determined according
to criteria applied uniformly throughout the group, focussing on
the effect of the inclusion or non-inclusion of a subsidiary on
the representation of the group’s assets, financial position and
profitability. Because of their minor significance for assets,
financial position and profitability, 143 subsidiaries were not
included and 62 associates were not accounted for at equity.
For the IFRS financial statements as at 31 December 2007, the
scope of consolidation of Raiffeisenlandesbank Oberösterreich
includes 25 fully consolidated companies (incl. Raiffeisen -
landesbank Oberösterreich). Seven additional companies were
accounted for at equity. Of the 32 companies, 27 are based in
Austria and 5 abroad. Of the fully consolidated companies, 5
are banks, 6 are financial institutions and 14 other companies.
The following list shows the material subsidiaries and as so -
ciates. An overview of all holdings of the Raiffeisenlandesbank
Oberösterreich Group (information according to § 265 (2)
of the Austrian Business Code) has been prepared separately.
This list is available at the headquarters of the parent company.
Raiffeisenlandesbank Oberösterreich has, because of
both a direct and an indirect holding, a clear majority vote in
Salzburger Landes-Hypothekenbank AG.
The Group
Annual Report 07
89
Name Share in % Balace sheet date
Fully consolidated subsidiaries
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft Group parent 31 Dec
Raiffeisen-IMPULS-Leasing GmbH 100.00% 30 Sept
Raiffeisen-IMPULS-Mobilienleasing GmbH 100.00% 30 Sept
Raiffeisen-IMPULS-Immobilien GmbH 100.00% 30 Sept.
Raiffeisen-IMPULS-Realitätenleasing GmbH 100.00% 30 Sept
Raiffeisen-IMPULS-Leasing GmbH & Co KG, Passau 100.00% 31 Dec
PRIVAT BANK AG der Raiffeisenlandesbank Oberösterreich 100.00% 31 Dec
SALZBURGER LANDES-HYPOTHEKENBANK AKTIENGESELLSCHAFT 49.98% 31 Dec
Hypo Holding GmbH 70.00% 30 June
RB Prag Beteiligungs GmbH 100.00% 30 Sept
KEPLER-FONDS Kapitalanlagegesellschaft m.b.H. 64.00% 31 Dec
Kapsch Financial Services GmbH 74.00% 30 Sept
activ factoring AG, München 94.00% 31 Dec
RVD Raiffeisen-Versicherungsdienst GmbH 75.00% 31 Dec
GRZ IT Center Linz GmbH 96.19% 31 Dec
LOGIS IT Service GmbH 73.10% 31 Dec
RLB OÖ Sektorbeteiligungs GmbH 100.00% 31 Dec
BHG Beteiligungsmanagement und Holding GmbH 100.00% 28 Feb
INCOM Private Equity GmbH, Passau 100.00% 31 Dec
Invest Holding GmbH 100.00% 31 Dec
Invest Holding GmbH & Co KG 100.00% 31 Dec
REAL-TREUHAND Management GmbH 100.00% 31 Dec
RealRendite Immobilien GmbH 100.00% 31 Dec
IB-RT Immobilien Beteiligungs Real-Treuhand
Portfoliomanagement GmbH & Co KEG 100.00% 31 Dec
bankdirekt.at AG 100.00% 31 Dec
Companies consolidated at equity
Oberösterreichische Landesbank Aktiengesellschaft 34.01% 31 Dec
Raiffeisenbank a.s., Prag 25.00% 31 Dec
eBanka a.s., Prag 25.00% 31 Dec
ZRB Beteiligungs GmbH 20.00% 31 Dec
Österreichische Salinen Aktiengesellschaft 41.25% 30 June
Beteiligungs- und Wohnungsanlagen GmbH & Co OEG 46.00% 31 Dec
Raiffeisenlandesbank Oberösterreich Invest GmbH & Co OG 49.00% 30 Sept
Changes in the scope of consolidation and their effects
The number of fully consolidated companies accounted for at equity developed during the financial year as follows:
Number of units Fully consolidated Equity method
2007 2006 2007 2006
As at 01 January 27 27 6 6
Included for the first time during the reporting year 1 — 1 —
De-consolidated during the reporting year 3 — — —
As at 31 December 25 27 7 6
90
Annual Report 07
ankdirekt.at AG was newly founded and included in the scope of consolidation of Raiffeisenlandesbank Oberösterreich for the
first time in 2007. The shares in three subsidiaries, “LDZ” Landesdienstleistungszentrum Vermietungs GmbH, Passage Linz GmbH
and Passage Linz GmbH & Co KG, were sold in December 2007 and the companies removed from the scope of consolidation.
The number of companies accounted for at equity increased with the acquisition of a 25% share in eBanka a.s. in August 2007.
The following table shows the assets and liabilities of the three companies that were de-consolidated at the time of their final
consolidation:
Disposals
in EUR ‘000
Cash and cash equivalents - 53
Loans and advances to customers 180,322
Trading assets 12,769
Financial assets 13,443
Intangible assets - 939
Financial real estate - 179,859
Tax assets - 52
Other assets - 5,921
Assets, total 19,710
Liabilities to customers 2,969
Provisions - 1
Tax liabilities - 33
Trading liabilities 745
Other liabilities - 16,872
Nets assets 32,902
Minority interests 28
Net assets including minority interests 32,930
Sale price (in cash) 73
Result from final consolidation 33,003
Foreign currency translation
The Group
Financial statements prepared in a foreign currency in foreign business operations must be converted to euros in accordance with
the regulations of IAS 21. This applies to the two banks accounted for at equity that are headquartered in Prague, Raiffeisenbank
a.s. and eBanka a.s., who use Czech korunas (CZK) as their currency.
Annual Report 07
91
ACCOUNTING POLICIES
FINANCIAL INSTRUMENTS
A financial instrument is a contract that is a financial asset for
the first company and, at the same time, results in a financial
liability or an equity instrument in the other company. In accordance
with IAS 39, all financial assets and liabilities includ -
ing all derivative financial instruments must be included in the
balance sheet. A difference is made between the following
categories:
■ Financial assets or liabilities that are assessed at fair value
with an effect on income; and this category is subdivided
into:
❑ Financial instruments held for trading
❑ Designated financial instruments
■ Financial assets available for sale
■ Financial investments held to maturity
■ Loans and receivables
■ Financial liabilities that are assessed to continued acqui -
sition costs
The purchase and sale of financial instruments is always balanced
on the day of trading.
The stock exchange prices are used to determine the fair
value of financial instruments listed on the stock exchange
(with the exception of bonds). Bonds and other financial
instruments are valued based on market-maker prices. If these
prices are not available, for originative financial instruments
and forward transactions internal prices are determined based
on cash value calculations assuming own spread of creditworthiness
and liquidity and for options using applicable options
price models.
Financial instruments held for trading
The category “financial instruments held for trading” includes
dealing securities and derivative financial instruments. They
are assessed at fair value. The financial instruments in this
category are used to take advantage of short-term price fluctuations
on the market or are purchased for the purpose of
economic security.
If there are positive market values including deferred interest
(“dirty price”), the financial instruments are included in the
trading assets.
If there are negative market values then they are recorded
under the balance sheet item of “trading liabilities”. There is no
settlement of positive and negative market values. Interest and
dividend income, refinancing costs, commisions and changes
in value of dealing securities are recorded as part of the trad -
ing result with effect on the Income Statement Changes in the
value of derivatives effect the income statement and are shown
in the results of designated financial instruments. Interest payments
connected with such financial instruments are included
in the interest income or interest expenses from designated
financial instruments in the net interest income.
Designated financial instruments
Designated financial instruments refer to those financial assets
and liabilities that, at the point in time that they are first stated in
the balance sheet, are categorised or designated as a fair value
assessment with effect on the balance sheet (the so-called
fair value option). Such a categorisation can only be made if:
■ The categorisation eliminates or considerably decreases
incongruencies in the assessment or the approach,
■ The management and the performance measurement of a
portfolio of financial assets and /or financial liabilities are
done on a fair value basis according to a documented risk
management or investment strategy,
■ A contract contains an embedded derivative that must be
separated.
The following balance sheet items contain designated financial
instruments:
■ Loans and advances to banks
■ Loans and advances to customers
■ Financial assets
■ Liabilities to banks
■ Liabilities to customers
■ Liabilities evidenced by certificates
■ Subordinated capital
These financial instruments are evaluated at fair value, unreal
ised and realised profits and losses are recorded with
effect on the income statement as income from designated
financial instruments. Interest Income or expenses from
designated financial instruments are recorded under the net
interest income.
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Annual Report 07
Financial assets available for sale (AfS)
Loans and receivables
These include bonds and other fixed-income securities, shares
and other variable-interest securities as well as shares in companies.
Financial asset in this category are evaluated in accordance
with IAS 30 at fair value. The balance sheet value is recorded
under the balance sheet item “financial assets,” changes in
the fair value are shown without effect on the income statement.
Changes in value that are recognised directly in the
equity are transferred to the income statement if the financial
asset in questions is derecognised. The same applies in the
case of impairment; the difference between the fair value and
the cost of purchase (less any repayments and amortisation)
is to be recorded with effect on the income. If the reasons for
impairment no longer apply a reversal of the impairment loss
is to be carried out with effect on the income statement if it
is a debt capital instrument. However, any increases in fair
value that go beyond the amount of the reversal of the
impairment loss are recorded with no effect on the income
statement. If an equity instrument is held, the impairment is
not retracted with effect on the income statement. Increases
in value in later periods are therefore accounted for with no
effect on the income statement. If the fair value of an equity
instrument held cannot be reliably determined at the cost of
purchase is used.
Financial investments held to maturity (HtM)
Financial assets in the category “loans and receivables” are
evaluated as carry forward acquisition costs as long as they are
not placed in the category of “designated financial instruments”.
They are mainly recorded under the balance sheet items “loans
and advances to banks” and “loans and advances to customers”.
Risk provisions:
Risk provisions have been made for recognisable risks among
borrowers. A dynamic approach was used to evaluate the loan
transactions. For some loans, standardised, defined risk provisions
were formed in the shape of dynamic risk provisions,
on the basis of risk groups in accordance with the "risk
management" rating model. The amount of the credit risk provision
that applies to the financial loans including the value
adjustments and the portfolio-based revaluations is subtracted
from the applicable loans. The risk provision for commitments
similar to loans is booked as provisions.
Financial liabilities that are evaluated with the carried
forward acquisition costs
If financial instruments on the liabilities side are neither "finan -
cial instruments held for trading" nor from the category of
"designated financial instruments" they are evaluated as carry
forward acquisition costs. They are mainly recorded under the
balance sheet items “amounts owed to banks”, “amounts owed to
customers”, “debt securities in issue” or “subordinated capital”.
This category contains non-derivative financial assets with
fixed or determinable payments and a fixed term, that are
quoted on an active market and held to maturity, with the exception
of those financial assets that are evaluated and desig -
nated at the initial recognition with effect on the income
statement and those that are determined as being available
for sale. Financial assets in this category are evaluated with
the carried forward acquisition costs. Impairment in the sense
of IAS 39 is recorded with effect on the income statement.
Financial investments that are included in this category are
listed under the balance sheet item “financial assets”.
Repurchase transactions
In the course of real repurchase transactions (repo) the group
sells assets to a contract party, at the same time agreeing to
buy them back on a certain date at a certain price. These assets
remain on the group’s balance sheet and are evaluated
according to the rules of the various balance sheet items.
At the same time, an obligation in the amount of the payment
received is shown on the liabilities side.
The Group
Annual Report 07
93
In a reverse repo transaction assets are purchased together
with the obligation to sell in future for a certain price. The cash
outflow from the purchase is recorded under the balance
sheet items loans and advances to banks or loans and advances
to customers. Interest expenses from repo transactions
and interest income from reverse repo transactions are
accrued by the straight-line method throughout the term and
recorded under net interest income.
For non-real repurchase transactions the debtor bank has the
obligation to take the assets back but it does not have the right
to demand them back. The creditor bank makes the decision
alone as to whether it wants a retrocession.
Leasing transactions
The group differentiates between finance leases and operat -
ing leases. According to IFRS, a finance lease is essentially
when the risks associated with the property and the opportuni -
ties of an asset are transferred to the lessee. An operating
lease is a lease that is not a financing lease. For the evaluation,
substance over form is decisive.
In accordance with IAS 17, when financing leases the lessor
records the future leasing payments and any remaining amounts
as loans and advances to lessees. The lessee at the
same time records the assets under the respective item of
property, plant and equipment balanced by a corresponding
leasing liability.
With operating leases, the leasing contracts are recognised
with an effect on income by both the lessee and the lessor.
The lessor capitalised the asset being leased less the amount
of depreciation.
Intangible assets
The paid acquisition of intangible assets is accounted for at
the historical cost less depreciation and impairment. All
intangible assets (except goodwill) exhibit a limited useful life
and are subject to linear depreciation over this period. The
usual useful life ranges from 2 to 20 years. There were no selfproduced
intangible assets to be recorded upon the balance
sheet date.
Property, plant and equipment and financial real estate
The assessment of property, plant and equipment occurs
at their historical or production costs less depreciation. The
following terms of useful life are usually taken as the basis for
straight-line depreciation:
Useful life expectancy
Years
Movable assets 3 – 20
Immovable assets 20 – 67
In the event of impairment, the greater of the two comparable
values (fair value less the cost of disposal and value in use) are
amortised pursuant to IAS 36. If the reasons for impairment
cease, then appreciation up to the historical cost carried
forward shall occur. The real estate objects held as financial
investments (financial real estate) are also assessed according
to the respective electoral law in IAS 40 in accordance with
the historical or production costs carried forward.
Provisions
All social provisions (provisions for pension obligations, sever -
ance obligations and bonuses) are determined pursuant to
IAS 19 – Employee Benefits – following the ‘projected unit
credit method’.
A valuation interest rate of 5.0% p.a. (previous year: 4.5%)
as well as an effective pensionable salary increase of 4.0% p.a.
(previous year: 3.5%) shall form the basis of the actuarial
calcu lation of pension obligations for the entitlement phase.
The parameters for the working periods are calculated at an
interest rate of 4.75% p.a. (previous year: 4.0% p.a.) and an un -
changed anticipated pension increase of 3.5% p.a. The calcu -
lations are based on a calculative pensionable age of 60 for
women and 65 for men with adherence to the legal transitional
regulations as well as individual contractual particularities.
The actuarial calculation of severance obligations and bonuses
shall occur using a valuation interest rate of 5.0% p.a. (previous
year: 4.5% p.a.) and an average salary increase of
4.0% p.a. (previous year: 3.5% p.a.). A fluctuation deduction
of 5.0% p.a. is accounted for.
94 Annual Report 07
The actuarial profits and losses in the case of social pro visions
are immediately recognised with effect on the income and
shown under personnel expenses.
Further provisions are made for contingent liabilities towards
third parties at the amount of anticipated utilisation. If interest
rates play a significant role, then the rates of such provisions
shall be reduced and assessed at their cash value.
Defined contribution plans
Pursuant to IAS19, the defined contribution plans are to be
distinguished from the performance-oriented plans – for which
provisions for pensions and severance payments must be
made. In the context of such plans, specified payments are
made to an independent institution (pension fund, employee
provision fund). Within this scheme, the company only guarantees
the contributions, not the amount of the later benefits.
These payments are effectively recognised as personnel expenses.
Taxes on income
Taxes on income are accounted for in accordance with IAS 12.
Deferred taxes based on the country-specific tax rates are calcu
lated for temporary differences that result from the settlement
of consolidated book value and tax values, which balance out
in the following period. Tax losses carried forward are re -
corded as deferred taxes under assets if it seems probable
that there will be taxable profits in the future in a similar amount
in the same company. Deferred tax assets are set off against
deferred tax liabilities for each subsidiary separately.
Raiffeisenlandesbank Oberösterreich, as head of the group, has
formed a corporate group with diverse financially affiliated companies
in the sense of § 9 of the Corporation Tax Act since 2005.
Trust fund transactions
Business operations based on the administration or placement
of assets for third party accounts are not shown on the
balance sheet. Commission payments from these operations
are shown under net commission income.
Net interest income
Interest and interest-related income includes, on the one hand,
interest income from loans and advances to customers and
banks as well as fixed-interest securities. On the other hand,
it includes current earnings from shares and variable interest
securities as well as from holdings and non-consolidated
companies, for example in the form of dividend payments.
Interest expenses mostly arise in connection with amounts
owed to customers, banks, debt securities in issue and sub -
ordinated capital.
Interest income and expenses are subject to accrual accounting,
dividends are recognised as soon as legal entitlement
arises.
Proportional profit or loss from companies balanced at equity,
and regular income and expenses in connection with trading
assets and liabilities which were not acquired for the purpose
of economic security, are not shown under net interest income,
but rather under individual profit and loss positions.
Risk provisions
In the context of this item on the income statement, the building
and the release of risk positions (revaluations and reserves for
the lending business) are shown. Direct write-offs and retro -
active payments to loans that have already been written off are
also included in this item.
The Group
Annual Report 07
95
Net fee and commission income
Net fee and commission income is the result of the expenses
and income accrued approbiate to the period in connection
with the services business. This mainly includes payment trans -
actions, foreign exchange, currency and precious metal transactions,
the securities business, and loan processing and the
financial guarantee business.
Net income from investments
Net income from investments shows the profits and losses
recorded with an effect on the income statement, both unrealised
(the result of the valuation) and realised (from the disposal),
from securities that are listed under financial assets in
the category of “financial investments held to maturity” and
“financial assets available for sale” (AfS). Profits and losses
from the available-for-sale assets that are recorded directly
under equity or that were transferred from equity to the income
statement can be found under their own heading in the Notes.
In addition, net income from investments also includes the net
income from the valuation and disposal of assets of affiliated
companies and other holdings that are neither fully consolidated
nor accounted for at equity. These are, due to a lack of
reliable information on their fair value, assessed at historical
cost less any impairment, so that no changes in the valuation
(without effect on the income statement) are recorded.
Income from designated financial instruments
Unrealised and realised profits and losses in conjunction with
designated financial instruments that are recorded on the balance
sheet under financial assets are not shown as net income from
investment but rather in a separate item on the income statement
called “income from designated financial instruments”.
The latter item also includes the net income from valuation
and sale of all other designated financial instruments and de -
rivatives.
Administrative Expenses
The general administrative expenses include personnel and
operating expenses as well as depreciation and impairment
of property, plant and equipment, financial real estate and
intangible assets.
Exercising judgement and making estimates
For the consolidated financial statements, a certain amount of
judgement must be used when applying the accounting policies
and, to a certain extent, estimations and assumptions must be
made that influence the accounts of the assets and liabilities,
the declaration of contingent liabilities on the balance sheet date
and the report on expenses and income during the reporting period.
When applying the accounting policies the management exercises
judgement, keeping in mind the goal of the financial state -
ments to provide meaningful information about the company’s
assets, financial position and profitability as well as about any
changes in the assets, financial position or profitability of the
company.
The main areas effected by assumptions and estimates are the
determination of the fair value of some financial instruments,
balancing risk positions for future bad debt or a drop in interest
rates, building provisions for obligations, severance payments
and long-term service bonuses, other provisions and determin -
ing the useful life of long-term assets. The amounts that actually
turn up may be different from the estimates.
96 Annual Report 07
SEGMENT REPORTING
The segment reporting is based on the internal market segment
calculation, in accordance with IAS 14. This is a gradu ated
breakeven analysis that illustrates customer respon si bility
within the Raiffeisenlandesbank Oberösterreich Group. When
dividing up the segments, care was taken to combine in one
segment activities that show for the most part a homogenous
structure of opportunities and risks.
Income and expenses are always assigned to the segment
that caused them. Net interest income is calculated using the
market interest rate method. The interest benefit from the
equity is assigned to the segments based on the regulatory
capital requirements. The general administrative expenses
include direct and indirect costs. The direct costs (personnel
and material costs) are the responsibility of the market segments,
the indirect costs are assigned based on certain keys.
The results per segment also include results from transactions
with other segments. The assessment of services exchanged
between the segments is always done at market price, the
segments are positioned to each other like external suppliers.
The segment reporting is divided into the following four segments:
Corporates and Retail
Here all of Raiffeisenlandesbank Oberösterreich’s business
relations are bundled together that are exposed to a counterparty
risk. Thus, this segment includes the business areas corporate
customers, groups, SME support, major institutional
customers, international finance and correspondent banking
as well as the retail business in Raiffeisenlandesbank Ober -
österreich’s branches in Linz and Traun.
Financial Markets
The Financial Markets segment includes the results of the
trading areas (money, foreign exchange, stocks and bonds),
the treasury results from interest-rate management and hedg -
ing with customers and from the management of the banking
book, as well as the income from services arising from the
area of securities sales. In the trading areas, customer business
takes priority over in-house trading and this is reflected in the
high portion of income from services.
Invest Banking
The invest banking segment includes in particular Raiffeisen
landesbank Oberösterreich’s bank and financial insti -
tution oriented holding portfolio. In addition, aside from the
most import ant fully consolidated subsidiaries, this segment
also includes subsidiaries and other holdings from other
business branches that are accounted for at equity or at
historical cost.
Corporate Center
This includes revenue and yields where the content does not
fit into any other segment. One-time special effects that would
distort the various segment results are also recorded here
when applicable.
A segmentation according to geographic criteria was not made
because the companies of the Raiffeisenlandes bank Oberösterreich
Group do business for the most part in a single
homogenous economic region.
The Group
Annual Report 07
97
Segment reporting 2007
Corporates Financial Invest Corporate
& Retail Markets Banking Center Total
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Net interest income 134,365 4,156 93,697 16,358 248,576
Risk provisions - 51,729 0 - 29,808 0 - 81,537
Net interest income after risk provisions 82,636 4,156 63,889 16,358 167,039
Net fee and commission income 32,131 28,176 32,158 229 92,694
Trading income 684 13,357 2,937 0 16,978
Income from designated financial instruments 0 7,762 4,634 0 12,396
Net investments income 0 11,499 24,483 0 35,982
Income from companies accounted for at equity 0 0 109,426 0 109,426
Administrative expenses - 87,085 - 20,114 - 128,283 - 15,181 - 250,663
Other operating results 323 447 68,823 1,627 71,220
Profit before tax 28,689 45,283 178,067 3,033 255,072
Segment reporting 2006
Corporates Financial Invest Corporate
& Retail Markets Banking Center Total
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Net interest income 114,293 33,467 88,949 16,438 253,147
Risk provisions - 41,790 0 - 36,141 0 -77,931
Net interest income after risk provisions 72,503 33,467 52,808 16,438 175,216
Net fee and commission income 28,502 24,449 25,810 223 78,984
Trading income 679 11,217 - 3,440 0 8,456
Income from designated financial instruments 0 273 12,352 0 12,625
Net investments income 0 6,719 31,345 0 38,064
Income from companies accounted for at equity 0 0 80,765 0 80,765
Administrative expenses - 82,039 - 19,665 - 122,390 - 18,261 - 242,355
Other operating results 1,633 - 2,611 64,871 3,175 67,068
Profit before tax 21,278 53,849 142,121 1,575 218,823
98
Annual Report 07
NOTES TO THE INCOME STATEMENT
1. Net interest income
2007 2006
in EUR ‘000 in EUR ‘000
Interest income
from financial instruments in the category
“loans and receivables” 716,604 436,870
from financial instruments in the category
“available for sale” 104,024 71,077
from financial instruments in the category
“held to maturity” 4,297 6,901
Subtotal 824,925 514,848
from designated financial instruments 112,438 180,431
from lease financing 25,426 18,097
Total interest income 962,789 713,376
Regular income
from shares and other variable-yield securities 42,952 40,779
from investments in affiliated companies 9,079 23,771
from other investments 46,888 40,988
Regular income 98,919 105,538
Other interest-related income 4,426 3,827
Interest and interest-related income 1,066,134 822,741
Interest expenses
financial liabilities that are evaluated with the
carried forward acquisition costs - 549,456 - 469,954
for designated financial instruments - 265,901 - 89,799
Total interest expenses - 815,357 - 559,753
The Group
Other interest-related expenses - 2,201 - 9,841
Interest and interest-related expenses - 817,558 - 569,594
Net interest income 248,576 253,147
Annual Report 07
99
2. Risk provisions
2007 2006
in EUR ‘000 in EUR ‘000
Allocation to risk provisions for loans and advances - 173,949 - 147,383
Release of risk provisions 91,413 59,661
Direct write-offs - 1,069 -1,339
Amounts received against loans and advances written off 2,068 11,130
Total - 81,537 - 77,931
3. Net fee and commission income
2007 2006
in EUR ‘000 in EUR ‘000
from payment transactions 17,528 15,651
from financing transactions 11,422 9,573
from securities business 53,592 44,421
from foreign exchange, currency and precious metals transactions 5,907 5,298
from other service business 4,245 4,041
Total 92,694 78,984
100
Annual Report 07
4. Trading income
2007 2006
in EUR ‘000 in EUR ‘000
Interest-rate related business 6,262 6,191
Currency related business 8,302 1,103
Stock and index related business 3,737 3,168
Other business - 1,323 - 2,006
Total 16,978 8,456
5. Income from designated financial instruments
2007 2006
in EUR ‘000 in EUR ‘000
Net profit/loss from designated financial instruments
and derivatives 12,396 12,625
6. Net investment income
2007 2006
in EUR ‘000 in EUR ‘000
Securities in the category “held to maturity”
Net result from valuation - 261 - 155
Net result from disposal 26 1
Securities in the category “available for sale”
Net result from the valuation 0 0
Net result from disposal 7,037 25,067
Shares in companies in the category “available for sale”
Net result from valuation - 3,927 12,738
Net result from disposal 104 413
Result from final consolidation 33,003 0
The Group
Total 35,982 38,064
Annual Report 07
101
7. Administrative Expenses
2007 2006
in EUR ‘000 in EUR ‘000
Personnel expenses
Wages and salaries - 101,457 - 94,249
Compulsory social security contributions - 25,033 - 25,324
Voluntary social security contributions - 2,258 - 2,255
Expenses on severance payments and pensions - 4,533 - 10,111
Operating expenses
Rent and leasing expenses - 9,888 - 9,850
Room expenses (operation, maintenance, administration) - 26,529 - 23,661
IT and communications - 12,795 - 12,598
Legal and consulting expenses - 7,321 - 6,629
Advertising and representation expenses - 15,144 - 14,182
Other material expenses - 24,894 - 21,255
Depreciation of property, plant and equipment, financial real estate
and intangible assets
Property, plant and equipment - 14,500 - 15,877
Financial real estate - 5,518 - 5,648
Other intangible assets - 793 - 716
Total - 250,663 - 242,355
Breakdown of expenses for defined contribution plans for severance and pension payments:
2007 2006
in EUR ‘000 in EUR ‘000
Pension fund - 1,364 - 2,347
Employee pension fund - 154 - 104
Expenses for defined contribution plans - 1,518 - 2,451
102
Annual Report 07
8. Other operating results
2007 2006
in EUR ‘000 in EUR ‘000
Other operating income
Income from non-bank activities 136,048 131,000
Remaining operating income 34,100 26,898
Other operating expenses
Expenses from non-bank activities - 24,511 - 24,070
Other taxes and fees - 2,289 - 1,091
Remaining operating expenses - 72,128 - 65,669
Total of other operating result 71,220 67,068
9. Taxes on income and earnings
2007 2006
in EUR ‘000 in EUR ‘000
Current taxes on income and earnings - 3,280 - 6,218
of which domestic - 3,288 - 6,207
of which foreign 8 - 11
Deferred taxes - 26,053 - 4,912
Total - 29,333 - 11,130
The following calculation of translation reserves shows the relationship between the profit for the year and the actual tax burden:
2007 2006
in EUR ‘000 in EUR ‘000
The Group
Pre-tax profit for the year 255,072 218,823
Income tax expense expected for the financial year
at the statutory tax rate (25%) 63,768 54,706
Tax reductions due to tax-exempt earnings of investments - 17,693 - 22,493
Tax reductions due to at-equity profit - 20,584 - 17,103
Tax reductions due to tax-exempt other earnings - 1,631 -1,892
Tax increase due to non-deductable expenses 2,971 2,708
Tax credit/burden from previous years 4,147 962
Effect of deviating foreign tax rates - 471 - 2,820
Change in the usability of losses carried forward 0 0
Other - 1,174 - 2,938
Actual tax burden 29,333 11,130
Annual Report 07
103
Tax assets
2007 2006
in EUR ‘000 in EUR ‘000
Current tax assets 28,295 17,071
Deferred tax assets 15,981 18,869
of which deferred tax assets from tax losses carried forward
that have not yet been utilised 6,910 6,675
Total 44,276 35,940
Development of tax liabilities
Current taxes
Deferred taxes
2007 2006 2007 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
As at 01 January 10,459 4,131 27,162 21,027
Allocations 2,601 6,329 8,815 6,953
Reversals - 151 0 - 1,322 - 818
Utilised 0 - 1 0 0
As at 31 December 12,909 10,459 34,655 27,162
104
Annual Report 07
Temporary differences between the valuation rates in the IFRS consolidated financial statements and the tax valuation rates have
the following effect on the deferred taxes recorded on the balance sheet:
Deferred Deferred With effect
tax tax on the income
assets liabilities statement in
2007 2007 2007
in EUR ‘000 in EUR ‘000 in EUR ‘000
Financial assets of the category “available for sale” 2,940 10,616 - 7,533
Designated financial instruments and derivatives - 1,577 1,883 - 10,816
Shares in companies 2,217 - 11,876 3,893
Leasing transactions 79 25,775 - 4,946
Social capital provisions - 287 6,536 - 1,950
Risk provisions 3,897 - 4,212 - 1,281
Other provisions 1,640 -23 1,045
Tax losses carried forward, not yet utilised 6,910 2,211 -391
Other temporary differences 162 3,745 - 4,074
Total 15,981 34,655 - 26,053
Deferred Deferred With effect
tax tax on the income
assets liabilities statement in
2006 2006 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000
Financial assets of the category “available for sale” - 3,551 11,005 - 11,481
Designated financial instruments and derivatives 5,485 2,513 6,731
Shares in companies 1,266 - 8,935 1,078
Leasing transactions 647 21,397 - 4,278
Social capital provisions - 115 5,260 -739
Risk provisions 4,642 - 4,750 607
Other provisions 591 -824 - 4,097
Tax losses carried forward, not yet utilised 6,675 533 6,013
Other temporary differences 3,229 963 1,254
The Group
Total 18,869 27,162 - 4,912
Annual Report 07
105
NOTES TO THE BALANCE SHEET
10. Financial instruments disclosures
Categories of financial assets and financial liabilities as at 31 December 2007
ASSETS
Financial
Designated
instruments
financial
held for trading instruments
in EUR ‘000 in EUR ‘000
Cash and cash equivalents 0 0
Loans and advances to banks 0 606,922
Loans and advances to customers 0 583,040
Trading assets 536,872 0
Financial assets 0 1,315,185
Carrying amount total as at 31 Dec 2007 536,872 2,505,147
The fair value carrying amounts in the category “Assets available for sale (Afs)” contain equity instruments in the amount of
EUR 813,092k that are valued at the cost of purchase because their fair value cannot be reliably determined.
Financial
Designated
LIABILITIES instruments financial
held for trading instruments
in EUR ‘000 in EUR ‘000
Liabilities to banks 0 1,742,916
Liabilities to customers 0 975,420
Debt securities in issue 0 3,656,504
Trading liabilities 531,795 0
Subordinated capital 0 506,011
Carrying amount total as at 31 Dec 2007 531,795 6,880,851
Because there was no significant change to the rating at Raiffeisenlandesbank Oberösterreich, fair value changes of designated
financial liabilities were due to changes in market circumstances. The credit exposure for these designated liabilities as at 31 December
2007 was EUR 6,880,851k.
106
Annual Report 07
Financial assets Financial assets Loans Carrying amount Fair Value
available held to and total total
for sale maturity receivables as at 31 Dec 2007 as at 31 Dec 2007
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
0 0 116,012 116,012 116,012
0 0 4,026,474 4,633,396 4,617,780
0 0 13,161,517 13,744,557 13,766,879
0 0 0 536,872 536,872
3,891,020 87,786 0 5,293,991 5,294,977
3,891,020 87,786 17,304,003 24,324,828 24,332,520
The amount of the change in fair value of designated loans and receivables that was due to changes in ratings in 2007 was
EUR - 265k (aggregate EUR 1,884k). This figure was obtained by applying the credit spread changes based on rating changes.
The credit exposure for these designated loans and receivables as at 31 December 2007 was EUR 1,189,962k.
Financial liabilities Total Total
valued at carrying amount fair Value
carried forward as at as at
acquisition cost 31 Dec 2007 31 Dec 2007
in EUR ‘000 in EUR ‘000 in EUR ‘000
6,960,783 8,703,699 8,661,667
5,715,404 6,690,824 6,662,209
2,265,434 5,921,938 5,916,523
0 531,795 531,795
788,960 1,294,971 1,286,741
The Group
15,730,581 23,143,227 23,058,935
The carrying amount of designated financial liabilities as at 31 December 2007 was EUR 178,594k less than the repayment sum
contractually agreed on.
Annual Report 07
107
Categories of financial assets and financial liabilities as at 31 December 2006
ASSETS
Financial
Designated
instruments
financial
held for trading instruments
in EUR ‘000 in EUR ‘000
Cash and cash equivalents 0 0
Loans and advances to banks 0 480,587
Loans and advances to customers 0 442,576
Trading assets 511,285 0
Financial assets 0 1,166,718
Carrying amount total as at 31 Dec 2006 511,285 2,089,881
The fair value carrying amounts in the category “Assets available for sale (Afs)” contain equity instruments in the amount of
EUR 758,430k that are valued at the cost of purchase because their fair value cannot be reliably determined.
Financial
Designated
LIABILITIES instruments financial
held for trading instruments
in EUR ‘000 in EUR ‘000
Liabilities to banks 0 1,623,514
Liabilities to customers 0 966,299
Debt securities in issue 0 3,823,574
Trading liabilities 413,221 0
Subordinated capital 0 588,997
Carrying amount total as at 31 Dec 2006 413,221 7,002,384
Because there was no significant change to the rating at Raiffeisenlandesbank Oberösterreich, fair value changes of designated
financial liabilities were due to changes in market circumstances. The credit exposure for these designated liabilities as at 31 December
2006 was EUR 7,002,384k.
108
Annual Report 07
Financial assets Financial assets Loans Carrying amount Fair Value
available held to and total total
for sale maturity receivables as at 31 Dec 2006 as at 31 Dec 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
0 0 103,239 103,239 103,239
0 0 3,951,117 4,431,704 4,423,100
0 0 10,566,438 11,009,014 11,066,149
0 0 0 511,285 511,285
3,789,753 101,307 0 5,057,778 5,059,896
3,789,753 101,307 14,620,794 21,113,020 21,163,669
The amount of the change in fair value of designated loans and receivables that was due to changes in ratings in 2006 was
EUR 2,670k. This figure was obtained by applying the changes in credit spread due to rating changes. The credit exposure for
these designated loans and receivables as at 31 Dec 2006 was EUR 923,163k.
Financial liabilities Total Total
valued at carrying amount fair Value
carried forward as at as at
acquisition cost 31 Dec 2006 31 Dec 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000
5,953,390 7,576,904 7,566,952
4,565,543 5,531,842 5,512,163
1,750,395 5,573,969 5,576,556
0 413,221 413,221
618,352 1,207,349 1,202,599
The Group
12,887,680 20,303,285 20,271,491
The carrying amount of designated financial liabilities as at 31 December 2006 was EUR 54,559k less than the repayment sum
contractually agreed on.
Annual Report 07
109
The following derivative financial instruments existed on the 2007 balance sheet date:
Term to maturity
Nominal amount
Market value
up to from 1 year over
1 year to 5 years 5 years Total Positive Negative
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Interest rate derivatives
OTC products
Forward rate agreements 1,500,000 2,265,350 0 3,765,350 7,158 6,748
Interest rate swaps 5,188,524 8,670,894 13,948,613 27,808,031 295,578 424,602
Interest rate options – purchases 4,000 609,497 410,227 1,023,724 8,400 41
Interest rate options – sales 95,539 1,709,154 1,499,272 3,303,965 1,305 25,505
Products traded on the stock exchange
Interest rate futures 298 34,226 69,887 104,411 0 0
Interest rate options – purchases 5,178 0 0 5,178 0 0
Interest rate options – sales 9,135 0 0 9,135 0 0
Total 6,802,674 13,289,121 15,927,999 36,019,794 312,441 456,896
Foreign-currency derivatives
OTC products
Spot exchange and
forward transactions 1,169,508 4,488 0 1,173,996 5,537 6,685
Currency and interest-rate swaps
with several currencies 2,671,226 140,119 108,816 2,920,161 32,028 20,072
Currency options – purchases 271,615 393,335 0 664,950 13,057 0
Currency options – sales 279,185 311,748 0 590,933 0 14,659
Total 4,391,534 849,690 108,816 5,350,040 50,622 41,416
Other futures
OTC products
Structured shares/index products 205 0 0 205 0 204
Shares options – purchases 68,756 128,716 75,211 272,683 27,676 6,132
Shares options – sales 77,249 124,861 75,210 277,320 5,508 25,471
Commodity options – purchases 0 15,000 5,000 20,000 1,152 298
Commodity options – sales 0 15,000 5,000 20,000 318 1,378
Total 146,210 283,577 160,421 590,208 34,654 33,483
Total OTC products 11,325,807 14,388,162 16,127,349 41,841,318 397,717 531,795
Total products traded
on the stock exchange 14,611 34,226 69,887 118,724 0 0
Total 11,340,418 14,422,388 16,197,236 41,960,042 397,717 531,795
110
Annual Report 07
The following derivative financial instruments existed on the 2006 balance sheet date:
Term to maturity
Nominal amount
Market value
up to from 1 year over
1 year to 5 years 5 years Total Positive Negative
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Interest related derivatives
OTC products
Forward rate agreements 20,440 568,862 20,440 609,742 5,362 163
Interest rate swaps 3,805,986 6,036,232 8,043,306 17,885,524 267,111 334,249
Interest rate options – purchases 14,860 480,422 1,186,589 1,681,871 5,409 1,698
Interest rate options – sales 53,127 892,167 1,478,848 2,424,142 2,567 14,402
Products traded on the stock exchange
Interest rate futures 0 21,830 81,069 102,899 0 0
Interest rate options – purchases 0 0 10,635 10,635 0 0
Interest rate options – sales 2,913 0 0 2,913 0 0
Total 3,897,326 7,999,513 10,820,887 22,717,726 280,449 350,512
Foreign-currency derivatives
OTC products
Spot exchange
and forward transactions 407,711 1,972 0 409,683 2,662 2,648
Currency and interest-rate swaps
with several currencies 1,497,688 63,842 61,204 1,622,734 21,191 15,446
Currency options – purchases 510,975 81,322 0 592,297 11,536 189
Currency options – sales 509,665 83,061 0 592,726 189 11,454
Total 2,926,039 230,197 61,204 3,217,440 35,578 29,737
Other futures
OTC products
Structured shares/index products 166 0 0 166 0 166
Shares options – purchases 34,686 138,716 95,210 268,612 23,599 5,171
Shares options – sales 34,478 134,646 95,148 264,272 5,171 23,729
Commodity options – purchases 0 15,000 5,000 20,000 3,560 346
Commodity options – sales 0 15,000 5,000 20,000 346 3,560
Total 69,330 303,362 200,358 573,050 32,676 32,972
Total OTC products 6,889,782 8,511,242 10,990,745 26,391,769 348,703 413,221
Total products traded
on the stock exchange 2,913 21,830 91,704 116,447 0 0
The Group
Total 6,892,695 8,533,072 11,082,449 26,508,216 348,703 413,221
Annual Report 07
111
11. Cash and cash equivalents
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Cash in hand 34,727 33,576
Balances at central banks 81,285 69,663
Total 116,012 103,239
12. Loans and advances to banks
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Loans and advances payable on demand 1,406,973 813,824
Money market transactions 1,875,874 2,347,002
Loans to banks 1,328,463 1,263,706
Purchased loans and advances 22,086 7,172
Total 4,633,396 4,431,704
In Austria 3,329,668 3,549,256
Abroad 1,303,728 882,448
Total 4,633,396 4,431,704
13. Loans and advances to customers
31 Dec 2007 31.12.2006
in EUR ‘000 in EUR ‘000
Money market transactions 1,712,510 1,098,539
Loan transactions 10,771,967 8,617,536
Mortgage 478,002 519,980
Covering loans 229,696 241,343
Purchased loans and advances 175,999 187,991
Lease financing 372,517 343,625
Other 3,866 0
Total 13,744,557 11,009,014
In Austria 9,270,546 7,829,678
Abroad 4,474,011 3,179,336
Total 13,744,557 11,009,014
112
Annual Report 07
14. Risk provisions 2007
As at Alloca- As at
01 Jan 2007 tions Reversals Utilised 31 Dec 2007
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Loans and advances to banks 5,583 0 948 1,116 3,519
of which domestic 2,249 0 22 1,116 1,111
of which foreign 3,334 0 926 0 2,408
Loans and advances to customers 388,225 148,142 82,005 34,618 419,744
of which domestic 290,358 123,687 66,063 22,280 325,702
of which foreign 97,867 24,455 15,942 12,338 94,042
Revaluations in the portfolio 40,801 15,571 0 0 56,372
Subtotal 434,609 163,713 82,953 35,734 479,635
Risks for commitments similar to loans 17,599 10,236 8,460 240 19,135
Total 452,208 173,949 91,413 35,974 498,770
Risk provisions 2006
As at Alloca- As at
01 Jan 2006 tions Reversals Utilised 31 Dec 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Loans and advances to banks 5,356 638 411 0 5,583
of which domestic 1,611 638 0 0 2,249
of which foreign 3,745 0 411 0 3,334
Loans and advances to customers 329,135 133,796 40,583 34,123 388,225
of which domestic 259,091 77,933 29,081 17,585 290,358
of which foreign 70,044 55,863 11,502 16,538 97,867
Revaluations in the portfolio 36,588 4,263 50 0 40,801
Subtotal 371,079 138,697 41,044 34,123 434,609
Risks for commitments similar to loans 27,694 8,686 18,617 164 17,599
The Group
Total 398,773 147,383 59,661 34,287 452,208
The interest income from impaired financial assets that were made interest-free amounted to EUR 2,845k (previous year: EUR 2,553k) in 2007.
Annual Report 07
113
15. Trading assets
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Debt securities and other fixed-interest securities
Public sector debt issues eligible for refinancing 38,732 39,652
Other public sector debt issues 255 4,043
Bonds and debt securities from other issuers 95,017 113,494
Shares and other variable-yield securities
Shares 169 0
Other variable yield securities 4,982 5,392
Positive market value from derivative transactions
Interest rate transactions 312,441 280,450
Currency exchange transactions 50,622 35,578
Stock and index related business 33,157 28,770
Other business 1,497 3,906
Total 536,872 511,285
16. Financial assets
Designated financial assets
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Debt securities and other fixed-interest securities
Public sector debt issues eligible for refinancing 274,482 339,265
Bonds and debt securities from other issuers 702,314 719,875
Shares and other variable-yield securities
Shares 11,375 12,139
Shares in investment funds 265,853 87,496
Other variable yield securities 61,161 7,943
Total 1,315,185 1,166,718
114
Annual Report 07
Financial assets in the category “available for sale” (AfS)
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Debt securities
and other fixed-interest securities
Public sector debt issues eligible for refinancing 124,692 115,549
Other public sector debt issues 2,004 4,526
Bonds and debt securities from other issuers 1,984,415 1,945,288
Shares
and other variable-yield securities
Shares 2,843 11,092
Shares in investment funds 959,613 952,506
Other variable yield securities 192,112 188,019
Shares in companies
Investments in associated companies 150,436 155,928
Other holdings 474,905 416,845
Total 3,891,020 3,789,753
Financial instruments in the category “held to maturity” (HtM)
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Debt securities and other fixed-interest securities
Public sector debt issues eligible for refinancing 54,178 59,352
Bonds and debt securities from other issuers 33,608 41,955
Total 87,786 101,307
The Group
Annual Report 07
115
17. Companies accounted for at equity
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Banks 238,516 186,477
Non-banks 386,890 327,970
Total 625,406 514,447
Among the banks that are accounted for at equity is the 34% share in the group Oberösterreichische Landesbank AG (HYPO
Oberösterreich) which is held by the fully consolidated Hypo Holding GmbH. Raiffeisenlandesbank Oberösterreich sees itself as a
long-term strategic partner to the regional bank that is headquartered in Linz and in which the province of Upper Austria has a majority
holding.
As regards non-bank holdings, the participation in Raiffeisenlandesbank Oberösterreich Invest GmbH &Co OG is worth
particular mention. This company also owns 14.12% of the shares in the voestalpine AG group and have, as the largest
individual share holder, the opportunity to exercise a considerable influence on the financial and business policies of the
most important steel company in Austria. In his function as deputy chairman of the Supervisory Board, the CEO of
Raiffeisenlandesbank Oberösterreich – Ludwig Scharinger – is an active participant in the strategic decisions made at voest -
alpine AG.
A list of the companies that are accounted for at equity can be found under the heading “Scope of consolidation”. The following
table is a summary of the financial data on the companies mentioned in this list. The figures are a sum of the information contained
in the various financial statements.
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Assets 14,713,658 11,364,393
Liabilities 13,363,243 10,125,441
Earnings 631,533 557,496
Result 192,240 146,206
Two of the companies have a balance sheet date that is different from that of Raiffeisenlandesbank Oberösterreich. Both in the
application of the equity method and for the list above, Raiffeisenlandesbank Oberösterreich Invest GmbH & Co OG was taken
into con sideration with values in accordance with its reporting date of 30 September. The data for Österreichische Salinen Aktiengesellschaft
(reporting date 30 June) is based on an interim report as at 31 December.
116
Annual Report 07
18. Intangible assets
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Other intangible assets 1,719 3,126
Total 1,719 3,126
19. Property, plant and equipment and financial real estate
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Land and buildings used for bank operations 31,275 41,802
Other property, plant and equipment 15,584 27,693
Leasing property and equipment rented out 32,673 33,796
Financial real estate 8,731 175,890
Total 88,263 279,181
The fair value of financial real estate amount to EUR 10,428k (previous year: EUR 205,259k).
20. Other assets
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Receivables from non-bank activities 9,742 8,882
Prepayments and accrued income 8,302 6,276
Other assets 164,553 190,627
Total 182,597 205,785
The Group
Annual Report 07
117
21. Schedule of fixed asset transactions 2007
Historical/production costs
As at Change in the scope
01 Jan 2007 of consolidation Additions
in EUR ‘000 in EUR ‘000 in EUR ‘000
Intangible assets 10,854 - 1,264 482
Other intangible assets 10,854 - 1,264 482
Property, plant and equipment 258,924 - 15,782 9,729
Land and buildings used for operations 86,945 0 1,203
of which basic value of developed land 40,393 0 0
Other property, plant and equipment 135,722 - 15,782 7,716
Leasing property and equipment rented out 36,257 0 810
Financial real estate 215,886 - 203,383 21
Total 485,664 - 220,429 10,232
Schedule of fixed asset transactions 2006
Historical/production costs
As at Change in the scope
01 Jan 2005 of consolidation Additions
in EUR ‘000 in EUR ‘000 in EUR ‘000
Intangible assets 10,516 0 620
Other intangible assets 10,516 0 620
Property, plant and equipment 266,036 0 11,586
Land and buildings used for operations 86,326 0 647
of which basic value of developed land 40,393 0 0
Other property, plant and equipment 144,498 0 9,067
Leasing property and equipment rented out 35,212 0 1,872
Financial real estate 216,056 0 77
Total 492,608 0 12,283
118
Annual Report 07
Appreciation and depreciation Carrying amount
Reclassifi- As at Accumulated As at
Disposals cations 31 Dec 2007 depreciation Depreciation 31 Dec 2007
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
295 0 9,777 8,058 793 1,719
295 0 9,777 8,058 793 1,719
18,400 - 1,179 233,292 153,760 14,500 79,532
183 0 87,965 56,690 3,212 31,275
67 0 40,326 0 0 40,326
18,160 0 109,496 93,912 10,175 15,584
57 - 1,179 35,831 3,158 1,113 32,673
0 166 12,690 3,959 5,518 8,731
18,695 - 1,013 255,759 165,777 20,811 89,982
Appreciation and depreciation Carrying amount
Reclassifi- As at Accumulated As at
Disposals cations 31 Dec 2006 depreciation Depreciation 31 Dec 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
282 0 10,854 7,728 716 3,126
282 0 10,854 7,728 716 3,126
18,698 0 258,924 155,633 15,877 103,291
28 0 86,945 45,143 2,886 41,802
0 0 40,393 0 0 40,393
17,843 0 135,722 108,029 11,874 27,693
827 0 36,257 2,461 1,117 33,796
247 0 215,886 39,996 5,648 175,890
19,227 0 485,664 203,357 22,241 282,307
The Group
Annual Report 07
119
22. Liabilities to banks
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Liabilities payable on demand 2,628,283 2,603,066
Money market transactions 4,058,640 3,408,861
Long-term financing 2,016,776 1,564,977
Total 8,703,699 7,576,904
In Austria 6,555,057 5,442,734
Abroad 2,148,642 2,134,170
Total 8,703,699 7,576,904
23. Liabilities to customers
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Demand deposits 2,561,996 2,240,713
Term deposits 2,490,379 1,719,183
Savings deposits 1,604,164 1,532,649
Other 34,285 39,297
Total 6,690,824 5,531,842
In Austria 4,793,590 3,830,456
Abroad 1,897,234 1,701,386
Total 6,690,824 5,531,842
120
Annual Report 07
24. Debt Sescurities in issue
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Bonds issued 2,363,165 2,288,358
Pfandbriefe/ municipal bonds 396,257 411,070
Other debt securities in issue 3,162,516 2,874,541
Total 5,921,938 5,573,969
25. Provisions
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Severance provisions 33,838 31,015
Pension obligation provisions 56,718 62,694
Long-term service bonus fund provisions 5,379 5,253
Other provisions 25,698 24,519
Total 121,633 123,481
Development of severance provisions
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Present value (DBO) 01 January 31,015 27,905
Service cost 1,919 1,950
Interest cost 1,460 1,343
Payments -782 -1,426
Actuarial profit/loss 226 1,243
The Group
Present value (DBO) 31 December (= provisions) 33,838 31,015
Annual Report 07
121
Development of pension obligation provisions
2007 2006
in EUR ‘000 in EUR ‘000
Present value (DBO) 01 January 62,694 63,994
Change in scope of consolidation 0 0
Service cost 483 519
Interest cost 2,575 2,570
Payments - 3,378 - 3,311
Actuarial profit/loss - 5,656 - 1,078
Present value (DBO) 31 December (= provisions) 56,718 62,694
Development of long-term service bonus fund provisions
2007 2006
in EUR ‘000 in EUR ‘000
Present value (DBO) 01 January 5,253 4,863
Change in scope of consolidation 0 0
Service cost 357 354
Interest cost 245 232
Payments - 395 - 275
Actuarial profit/loss - 81 79
Present value (DBO) 31 December (= provisions) 5,379 5,253
Development of other provisions
Risk provisions
Other provisions
2007 2006 2007 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
As at 01 January 17,599 27,694 6,920 18,152
Allocations 10,236 8,686 37 3,897
Reversals - 8,460 - 18,617 - 394 - 13,950
Utilised - 240 - 164 0 - 1,179
As at 31 December 19,135 17,599 6,563 6,920
122
Annual Report 07
26. Trading liabilities
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Interest rate transactions 456,896 350,512
Currency exchange transactions 41,416 29,737
Stock and index related business 33,483 29,066
Other transactions 0 3,906
Total 531,795 413,221
27. Other liabilities
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Liabilities from non-bank activities 28,075 32,356
Accruals and deferred income 7,459 23,223
Other liabilities 219,727 223,860
Total 255,261 279,439
28. Subordinated capital
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Subordinated liabilities 134,395 127,838
Supplementary capital 1,160,576 1,079,511
Total 1,294,971 1,207,349
The Group
Annual Report 07
123
29. Equity
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Subscribed capital 254,032 241,032
Capital reserves 547,846 410,859
Accumulated results 859,183 671,207
Afs reserves - 41,077 7,878
Minority interests 79,420 76,697
Total 1,699,404 1,407,673
In accordance with its articles, Raiffeisenlandesbank Oberösterreich’s share capital as at 31 December 2007 was EUR 253,000k
(previous year: 240,000k). It consists of 714,578 (previous year: 714,578) ordinary shares and 749,294 (previous year: 674,075) preferred
shares.
The increase in share capital by a nominal amount of EUR 13,000k was raised in accordance with the decision of the extraordinary
general meeting on 07 December 2007 and with the approval of the Supervisory Board by issuing 75,219 individual shares – non-par,
registered and voting preferred shares – at an issue amount of EUR 1,994 each.
Participation capital amounting to EUR 1,032k (previous year: EUR 1,032k) has been issued.
Capital reserves amounting to EUR 410,859k were set aside in conjunction with bringing bank business from the former Raiffeisenlandesbank
Oberösterreich reg. Gen.m.b.H. into Raiffeisenlandesbank Oberösterreich Aktiengesellschaft in the 2004 financial year.
With the capital increase and the premiums on newly issued preferred shares the capital reserves grew in 2007 by EUR 136,987k.
In the 2007 financial year dividends of EUR 12,726k were paid on the preferred shares and the participation capital, in accordance
with the decision made at the annual general meeting concerning the use of the profit of 2006. The dividend per preferred share
was EUR 17.56. The recommendation of the Managing Board as to the use of the profit from 2007 will be to pay a dividend of
EUR 21,238k on the preferred shares and participation capital. This means that the planned dividend for each preferred share
(before new shares are issued) will be EUR 30.19.
The provisions for aggregate results contain the reinvested profits of the group as well as the group profit for the current year.
Development of the Afs provisions
2007 2006
in EUR ‘000 in EUR ‘000
As at 01 January 7,878 39,176
Changes in the fair value of Afs assets with no effect on the income statement - 54,115 -20,866
Amounts transferred to the income statement after disposal of Afs assets - 13,574 -18,897
Taxes recognised with no effect on the income statement 18,734 8,465
As at 31 December - 41,077 7,878
The Afs provisions reflect changes in valuation recorded under equity with no effect on the income statement of financial instruments
in the category "financial assets available for sale" (Afs) in accordance with IAS 39.
124
Annual Report 07
RISK REPORT
Summary
The long-term success of Raiffeisenlandesbank Ober österreich
Aktiengesellschaft is largely dependent upon active
risk management. In order to achieve this objective, as the
dominating Group company, Raiffeisenlandesbank Oberösterreich
has implemented a risk management system which
allows the identification and measurement of all risks within
the Group (market, credit, liquidity and operational risks) and
their active managerial control.
The risk policy sanctioned by the Raiffeisenlandesbank Ober -
österreich Managing Board represents the guidelines for the
other Group companies.
Risk Controlling analyses all risks and examines adherence
to the defined risk limits by means of ongoing projection and
actual comparisons. Internal/Group Auditing assesses the
effectiveness of working procedures, processes and internal
controls.
RISK MANAGEMENT ORGANISATION
The Managing Board of Raiffeisenlandesbank Oberösterreich
bears responsibility for all risk management activities.
It approves the risk policy in accordance with the business
strategies, the risk principles, procedures and methods of risk
measurement and the risk limits.
The Managing Board and all employees act in accordance
with the risk policy principles and make decisions on the basis
of these guidelines. Risk management is organised in such a
way that conflicts of interest both on a personal level and at
the organisation units level are avoided.
For the main types of risks, Raiffeisenlandesbank Oberösterreich
strives to operate a risk management system on a
level which at least corresponds to that of institutions of a
similar structure and size (best practice principle) and is primarily
aimed at the continuation of the company as a going
concern.
Raiffeisenlandesbank Oberösterreich in general only aims its
work at areas of the business in which it has the requisite expertise
in the assessment of the specific risks. Before it moves
into new areas of business or products, the group always
carries out an adequate analysis of the risks posed by that
specific business.
The Managing Board and the Supervisory Board of Raiff -
eisenlandesbank Oberösterreich are informed promptly of the
bank’s risk situation by means of comprehensive, objective
reports. All the quantifiable risks (in particular credit, market,
liquidity and operational risks) to which Raiffeisenlandesbank
Oberösterreich is exposed are monitored and coordi nated
with the Group’s overall strategy.
All the quantifiable risks are monitored on the basis of the
Group-wide risk-bearing capacity. The aim of the early risk
identification and risk monitoring systems is to ensure the
qualified and timely identification of all major risks.
The Controlling organisation unit is responsible for the identification
and measurement of risks in cooperation with the
organisation units charged with them. Controlling is also responsible
for the development and provision of risk measurement
methods and IT systems and provides the result and risk
information required for active risk management.
Market risks
Market risks take the form of changes in interest rates, currency
and exchange rates relating to securities, interest rate and
foreign exchange items
The basis for all business is a balanced risk/reward ratio.
The Raiffeisenlandesbank Oberösterreich Group also uses the
principle of diversification on the basis of business partners,
products, regions and sales channels to reduce its risks. In
addition, derivative transactions are conducted almost exclusively
with banks with which security agreements are in place.
The strict division of labour between front, middle and back
office and risk controlling ensures that risks can be described
comprehensively, transparently and objectively to the Manag -
ing Board and supervisory authorities.
New products and markets are evaluated in an approval process
and then approved by the Managing Board. The primary
objective of trading activities in the Finance Trade Center is
customer transactions. The trades and the market price risk
are limited by an extensive limit system.
The Group
Annual Report 07
125
All trading positions are valued every day at market prices.
The strategic alignment and positioning in the bank book are
presented to the Managing Board on a weekly basis and
continued procedure is then agreed. No open liquidity po -
sitions are entered into for deadline transformation purposes.
Foreign currency risks are only entered into on a very limited
basis by Raiffeisenlandesbank Oberösterreich. All market
price risks from customer transactions are recorded and valued
in the bank book.
The excess risk from all customer transactions is insured.
The market risks are measured every day with the value-at-risk
index for the trading and bank books. This indicates a possible
loss, which with 99% probability will not be exceeded
in the case of a certain holding period. The assumed holding
period is one day for the trading book and one month for the
bank book. The calculations are made using the variancecovariance
method in the trading book and a historic simulation
in the bank book.
The market risks are managed using a limit system based on
the value at risk. All market risk activities are assigned a risk
limit which is included in full in the risk capacity analysis.
In addition to the value-at-risk index, the following limits are
used for risks: Stop loss, scenario analyses and volume limits.
The value-at-risk figures for Raiffeisenlandesbank Oberösterreich
Aktiengesellschaft and Salzburger Landes-Hypothekenbank
AG are calculated on a daily basis. Reports to the full
Managing Board are made every day for the trading book and
on a monthly basis for the bank book. The Board member responsible
for the treasury is also informed of the bank book every
day. The other fully consolidated Group companies minimise
their market risks through punctual re-financing via Raiffeisen -
landesbank Oberösterreich.
Shifts in the interest, currency and share price landscape can
bring a major influence to bear on results and the risk situation.
Therefore, in Raiffeisenlandesbank Oberösterreich possible
changes in risk parameters are simulated and the con -
sequences reported to the Managing Board.
The following table shows the value-at-risk values for the
Raiff eisenlandesbank Oberösterreich Group (confidence level
99%, holding period 1 month). The value-at-risk of the trading
book with a holding period of one day was rescaled to a
holding period of one month due to its insignificance and has
not been shown separately.
Raiffeisenlandesbank 31 Dec 2007 31 Dec 2006
Oberösterreich Group in EUR ‘000 in EUR ‘000
Total 31,946 50,072
Interest 32,976 52,148
Currency 424 645
Shares 5,161 12,729
Volatility 3,017 1,440
The total value-at-risk on 31 December 2007 fell in comparison
with 31 December 2006 by EUR 18.1 million to EUR 31.9 million.
In view of the high volatility of the financial markets, the
Treasury continuously reduces the interest and shares risk
over the course of the year.
The Raiffeisenlandesbank Oberösterreich Group did not invest
in US sub-prime finance instruments neither in 2007 nor in pre -
vious years.
To check the forecast quality of the value-at-risk figures, backtesting
is carried out on a daily basis. This means that the
actual results are compared to the values forecast by the
value-at-risk model. This back-testing confirms the validity
of the statistical methods used.
126 Annual Report 07
In addition, stress tests are conducted to take account of
risks in the event of extreme market movements. The crisis
scenarios include the simulation of large fluctuations in the
risk factors and are designed to highlight potential losses
which are not covered by the value-at-risk model. The stress
scenarios comprise both the extreme market fluctuations
which have actually occurred in the past and also a series of
standardised shock scenarios involving interest rates, share
prices, currency exchange rates and volatility. On the basis of
the value losses simulated by these stress tests, we analyse
whether the market risks we review are reasonable in relation
to our equity capital on a quarterly basis.
within Raiffeisenlandesbank Oberösterreich, which in turn are
based on the regulations of the international “Basel II” standards.
The organisational separation between the market and market
consequences was already implemented some years ago.
Moreover, in order to measure the credit risk, following an
inter national bank rating, financing is divided into creditworthi -
ness and risk classes. The risk situation of a borrower therefore
comprises two dimensions – the recording and the
assess ment of their financial situation and the provision of
securities.
Credit risk
The credit risk constitutes the risk of the bank that a loss will
occur as a result of the non-fulfilment of the contract duties of
customers or contract partners.
Credit risk is mainly generated by the loans to customers and
banks and from securities from the bank book. The Group
takes into account and consolidates all elements of credit risk
claims, such as the risk of insolvency of individual debtors,
national and sector risks for the purpose of producing a risk
report.
The credit risk of the securities from the trading book is treated
separately for the purposes of risk management. Reports are
made as part of the market risk.
The principles for the credit ratings of the customers are incor -
porated in the ”Credit Risk Management” manual. This manual
contains a complete description of the standards that apply
Both hard and soft facts are employed as creditworthiness
criteria. In corporate customer business, soft facts are also
defined systematically during discussions with the company
and then adjudged.
The rating systems are distinguished on the basis of the claim
classes of corporates, retail customers, banks and securities
issuers and states.
Since 2005, a scoring system has been employed for the automatic
classification of small volume business with employed
retail customers.
The credit rating systems are validated on an on-going basis
and undergo further development if necessary.
The following rating classes, which were supplemented in
2000 with half-classes as a result of Basel II, are used for
rating purposes in the Raiffeisenlandesbank Oberösterreich
Group. The following table demonstrates the rating struc tures
described below.
The Group
Annual Report 07
127
Text 10 point scale Subclasses S&P Moodys
Risk-free 0,5 0,5 AAA Aaa
AA+
Aa1
outstanding creditworthiness 1 1
AA Aa2
AA-
Aa3
A+ A1
excellent creditworthiness 1.5 1.5
A A2
A- A3
good creditworthiness (+) 2 + BBB+ Baa1
2
good creditworthiness 2 BBB Baa2
good to average creditworthiness 2 - BBB- Baa3
2.5
average creditworthiness 2.5 BB+ Ba1
satisfactory creditworthiness (+) 3 + BB Ba2
satisfactory creditworthiness 3 3 BB- Ba3
mediocre creditworthiness (-) 3 - B+ B1 .
3.5
poor creditworthiness 3.5 B B2
very poor creditworthiness (+) 4 + B- B3
4
very poor creditworthiness 4 CCC Caa
in danger of default 4.5 4.5 CC
default criteria C Ca
5 5
reached
D
Individual rating classes are defined and delineated by means
of calculations which assess mathematical default probabilities,
the written specification is only for elucidatory purposes,
the above transition to external ratings corresponds to the
bank’s experience to date.
Addendums showing +/- do not represent main rating classes,
they simply aim to enhance pricing accuracy. Moreover,
default probabilities are the basis for transitions to external
rating classes.
128
Annual Report 07
Overall financial structure pursuant to balance sheet items
Maximum credit risk exposure pursuant to IFRS 7.36 a
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Cash reserves (credit balance at central banks) 81,285 69,663
Loans and advances to banks 4,633,396 4,431,704
Loans and advances to customers 13,744,557 11,009,014
Trading assets 536,703 511,285
Financial assets 4,580,961 4,393,601
Tax assets 44,276 35,940
Other assets 182,597 205,784
Total 23,803,775 20,656,991
Contingent liabilities 2,188,951 1,819,967
Credit risks 8,504,940 7,543,522
Total 10,693,891 9,363,489
Total maximum credit exposure 34,497,666 30,020,480
Security values for overall financial structure
The stated security values correspond to the values determined within internal risk management; they communicate the conservative
income expectations in the event of settlement of existing credit commitments.
Security values pursuant to IFRS 7.36 b
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Loans and advances to banks 5,391 1,933
Loans and advances to customers 5,053,011 4,467,734
Total 5,058,402 4,469,667
The Group
Contingent liabilities 574,478 449,833
Credit risks 1,133,276 845,580
Total 1,707,754 1,295,413
Total security values 6,766,156 5,765,080
Annual Report 07
129
Rating structure for credit risk exposure which is neither overdue nor impaired
The quality of the financial assets which are neither overdue nor impaired are depicted as follows on the basis of the internal rating
classification:
Very low risk: Rating classes 0.5 to 1.5
Normal risk: Rating classes +2 to 3+
Increased risk:
Rating classes 3 and poorer
Customers Banks Others
2007 2006 2007 2006 2007 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Very low to low risk 12,452,788 10,947,146 5,561,761 5,436,339 125,561 105,603
Normal risk 11,522,497 9,406,455 463,813 409,229 215,873 242,213
Increased risk 1,393,058 1,012,547 5,046 289 0 0
Total 25,368,343 21,366,148 6,030,620 5,845,857 341,434 347,816
Structure of overdue or impaired credit risk exposure
Book values of overdue or impaired financial assets.
Classification of maximum credit risk exposure in accordance to IFRS 7.36 d (overdue or impaired)
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Loans and advances to banks 92,344 111,724
Loans and advances to customers 1,915,660 1,738,533
Trading assets 689 750
Financial assets 137,285 80,711
Total 2,145,978 1,931,718
Contingent liabilities 173,999 214,550
Credit risks 437,292 314,391
Total 611,291 528,941
Total 2,757,269 2,460,659
130
Annual Report 07
Sector structure/Correlation risk
Maximum credit risk exposure pursuant to sector groups
Sector
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Banks 8,553,811 8,140,681
Real estate projects, property management and residential building management 5,137,732 4,295,683
Public households and non-profit organisations 2,596,691 2,904,754
Finance leasing institutions 2,317,106 1,396,759
Retail (natural persons) 1,204,055 1,120,381
Construction 1,053,480 951,340
Finance holdings 1,018,521 627,417
Supplementary construction trade 985,786 806,783
Engine and plant construction 919,792 776,811
Foodstuffs 802,194 797,358
Metal production and processing 767,129 521,764
Consumer goods 713,659 581,760
Financial services 696,977 506,652
Energy and other utilities 673,867 609,456
Automotive 599,837 558,661
Transport (goods, people, on land, on water) 546,763 559,535
Subtotal 28,587,400 25,155,795
Other 5,910,266 4,864,685
Total 34,497,666 30,020,480
The Credit Institution Group of Raiffeisenlandesbank Oberösterreich procured 15 large-volume assessments exhibiting credit exposure
amounting to EUR 8,190 million at the end of 2007. Eight of these large-volume assessment come from the commercial
sector, 3 come from the public sector and 4 from the banking sector. Thirteen commitments exhibited very low and low risk
ratings; two were classified as exhibiting normal risk.
The Group
Age structure of overdue credit risk exposure
The financial assets which were overdue but not impaired upon balance sheet date exhibit the following age structure:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
up to 30 days 615,204 561,232
31 to 60 days 145,328 184,194
61 to 90 days 13,017 17,371
over 90 days 36,875 33,547
Total 810,424 796,344
Annual Report 07
131
Risk provisions for impaired credit exposure
The financial assets which were individually determined to be impaired upon balance sheet date, exhibit the following structure: *)
Customers Banks Others
2007 2006 2007 2006 2007 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Gross value 2,872,518 2,557,877 113,437 153,457 137,974 81,461
Risk provisions (incl. general provisions) - 375,788 - 341,593 - 3,519 - 5,583 0 0
Book value 2,496,730 2,216,284 109,918 147,874 137,974 81,461
*)
Contributions without portfolio value adjustment
In the rating class w 5.0, the proportion of the due credit risk exposure not covered by the securities calculated through bankinternal
measures are usually determined as risk provisions. In rating classes w 3.0 to w 4.5, proportional value adjustments are
made for the blank portion of the due credit exposure.
Standardised (pursuant to risk classes) risk provisions are applied in the retail sector.
Collateral relating to overdue or impaired credit risk exposure
The following value-based collateral applies to the overdue or impaired financial assets:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Loans and advances to banks 431 431
Loans and advances to customers 826,047 853,721
Contingent liabilities 63,045 89,618
Credit risks 136,710 87,694
Total security values 1,026,233 1,031,464
The securities valuations of impaired credit risk exposure are assessed without delay – and correspond to the conservative,
prospective long-term earnings through realisation,
132
Annual Report 07
Credit-Value-at-Risk
Credit-Value-at-Risk for all assets exhibiting address default
risk is assessed monthly. Risk may arise due to credit default
or worsening of creditworthiness – and it is communicated
through the key figures credit-value-at-risk, expected loss and
unexpected loss.
The expected loss represents the most probable value de -
crease of a given portfolio. This specified decrease in value
should be expected each year. This loss is covered by the
calculated risk costs. The unexpected loss represents a portfolio’s
possible loss beyond the expected loss, and thus communicates
possible negative deviation from the expected loss.
The unexpected loss is covered by the equity capital.
The aggregate of expected loss and unexpected loss results
in the credit-value-at-risk. The credit-value-at-risk is the
maximum loss that can possibly arise within a single year,
and which – with a certain amount of probability – will
not be exceeded. Raiffeisenlandesbank Oberösterreich
calculates unexpected loss at probabilities of 95%, 99%
and 99.9%.
The calculation is carried out by RiskMetrics’ credit manager
program. Credit-value-at-risk is assessed with adherence to
diversification effects within the portfolio. The asset value
model is applied to this end.
Liquidity risk
The liquidity risk encompasses the risk of not being able to
fulfil one’s payment obligations by the due date or, in the case
of a liquidity shortage, of not being able to acquire enough
liquidity at the terms expected (structural liquidity risk).
The bank’s liquidity must be secured at all times. This is why
no open liquidity risks are taken for term transformation purposes.
Furthermore, securities suitable for ECB tenders shall
only be used for securitisation for clearing houses and se curity
agreements in exceptional cases in order to ensure that sufficient
coverage is always available and can be refinanced in
the event of a liquidity crisis.
In 2007 the organisational preparations were completed at
Raiffeisenlandesbank Oberösterreich for submitting customer
loans to the ECB tender process.
The Österreichische Nationalbank certified the procedures submitted
by Raiffeisenlandesbank Oberösterreich. Thus, with imme
diate effect, customer credits may be utilised for short-term
re financing.
The structural liquidity risk is monitored and managed with
continuous reports showing capital commitment (pertaining
to both assets and liabilities) at all the different time frames
until maturity.
The short-term liquidity reserves that are available to be capitalised
are depicted in the liquidity protection plan (emergency plan).
On the basis of the liquidity maturity balance, monthly scenarios
are calculated for Raiffeisenlandesbank Oberösterreich
Aktiengesellschaft and Salzburger Landes-Hypothekenbank AG,
which determine the closure expense for the open liquidity
items. The sufficient supply of short- and medium-term liquid -
ity for the event of bottleneck situations is presented in the
liquidity protection plan.
To measure the structural liquidity risk, a simulated worsening
of Raiffeisenlandesbank Oberösterreich’s rating class on the
basis of Moody’s transition probability is assessed. The risk
capital requirements result from the difference in present-value
expenditure between refinancing at the present conditions
and refinancing at the simulated altered rating class.
The other fully consolidated group companies are also re -
financed on a punctual basis.
The following table summarises the maturities of the nondiscounted
liabilities including the respective interest payments
and depicts the earliest possible utilisation of guarantees and
credit commitments:
The Group
Annual Report 07
133
Payable on de- Up to 3 months 1 year to Over
31 Dec 2007 mand/no term 3 months to 1 year 5 years 5 years Total
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Liabilities to banks 2,465,162 2,151,578 1,133,546 1,369,573 1,912,021 9,031,880
Liabilities to customers 2,547,430 1,503,548 801,387 728,008 1,530,245 7,110,618
Debt securities in issue 4,157 312,658 689,664 3,211,804 3,500,347 7,718,630
Trading liabilities 0 243,622 627,966 2,376,940 6,044,509 9,293,037
Subordinated capital 0 13,645 49,381 403,909 1,224,417 1,691,352
Contingent liabilities 2,188,951 0 0 0 0 2,188,951
Credit risks 8,504,940 0 0 0 0 8,504,940
Payable on de- Up to 3 months 1 year to Over
31 Dec 2006 mand/no term 3 months to 1 year 5 years 5 years Total
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Liabilities to banks 2,419,781 1,163,367 1,373,469 1,319,962 1,268,927 7,545,506
Liabilities to customers 2,274,287 827,654 559,906 664,876 1,580,287 5,907,010
Debt securities in issue 60,241 360,549 502,259 2,903,500 3,230,926 7,057,475
Trading liabilities 0 182,579 499,620 1,673,355 1,808,814 4,164,368
Subordinated capital 0 6,707 120,497 297,070 1,138,693 1,562,967
Contingent liabilities 1,819,967 0 0 0 0 1,819,967
Credit risks 7,543,522 0 0 0 0 7,543,522
From the gap analysis below it can be seen that there is no liquidity risk in the individual maturity periods.
GAP in EUR mill.
1,500
31 Dec 2007 31 Dec 2006
1,000
500
Active
surplus
0
- 500
Passive
surplus
- 1,000
up to 1 year 1 to 3 years 3 to 5 years 5 to 7 years 7 to 10 years over 10 years
134
Annual Report 07
Operational risks
The Group defines operational risk as being the risk of losses
derived from the inadequacies or failure of internal procedures,
people and systems, or external events.
The Group has used organisational and technical computing
measures in order to restrict this type of risk. Limit systems,
com petence regulations, a risk-adequate internal control
system, as well as scheduled and unscheduled audits by
Internal / Group Auditing in the individual group companies
guarantees a high degree of security.
The goal of the self assessments done in the group is to make
an appraisal of the operational risks and to increase the awareness
of operational risks (early warning system).
Risk-bearing capacity analysis
In the analysis of risk-bearing capacity the aggregate banking
risk of the entire Group is divided into credit risk, market risk,
refinancing risk, operational risk and other risks (= strategic risk,
reputational risk, equity risk and earnings risk) and compared
with the risk coverage (= operating result, hidden reserves,
provisions and equity).
This comparison of the Group risk with the available coverage
shows the risk-bearing capacity.
With this comparison, the Raiffeisenlandesbank Oberösterreich
Group is able to guarantee that it can cover extremely
unexpected losses from its own funds without difficult negative
effects. Economic capital is the measurement of risk used
to calculate extremely unexpected losses. It is defined as the
minimum amount of capital necessary to cover unexpected
losses with a probability of 99.9% within one year.
The Group
Annual Report 07
135
OTHER NOTES
Breakdown of remaining maturities
Breakdown of remaining maturities as at 31 December 2007
Payable on de- Up to 3 months 1 year to Over
mand/no term 3 months to 1 year 5 years 5 years Total
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Cash and cash equivalents 116,012 0 0 0 0
Loans and advances to banks 1,406,826 1,634,591 918,628 464,132 209,219
Loans and advances to customers 1,994,954 2,234,292 2,049,005 3,302,245 4,164,061
Trading assets 94,231 32,491 36,602 185,680 187,868
Financial assets 2,206,355 103,019 103,028 1,685,273 1,196,316
Companies accounted for at equity 625,406 0 0 0 0
Liabilities to banks 2,986,129 2,015,754 1,024,655 1,086,163 1,590,998
Liabilities to customers 2,565,465 1,518,443 787,763 553,989 1,265,164
Debt securities in issue 139,045 245,697 580,834 2,404,887 2,551,475
Trading liabilities 4,908 16,294 54,147 146,433 310,013
Subordinated capital 28,528 0 21,199 257,469 987,775
Breakdown of remaining maturities as at 31 December 2006
Payable on de- Up to 3 months 1 year to Over
mand/no term 3 months to 1 year 5 years 5 years Total
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Cash and cash equivalents 103,239 0 0 0 0
Loans and advances to banks 822,176 1,475,083 1,223,493 643,302 267,650
Loans and advances to customers 1,530,163 1,625,055 1,603,189 2,828,555 3,422,052
Trading assets 115,972 125,235 58,531 113,815 97,732
Financial assets 1,955,516 81,625 264,479 1,463,499 1,292,659
Companies accounted for at equity 514,447 0 0 0 0
Liabilities to banks 2,947,311 1,108,343 1,276,479 1,142,372 1,102,399
Liabilities to customers 2,243,986 857,704 542,821 515,507 1,371,824
Debt securities in issue 161,202 294,309 357,799 2,263,616 2,497,043
Trading liabilities 17,449 248,601 42,974 46,650 57,547
Subordinated capital 30,867 0 41,678 142,516 992,288
136
Annual Report 07
Loans and advances and other liabilities to related companies
Loans and advances and other liabilities to related companies as at 31 December 2007
Loans and advances and other liabilities of Raiffeisenlandesbank Oberösterreich to parent companies and companies in which
Raiffeisen landesbank Oberösterreich holds shares are as follows:
Companies accounted Shares in
for at equity companies
in EUR ‘000 in EUR ‘000
Loans and advances to banks 804,724 1,075,288
Loans and advances to customers 384,666 1,411,034
Trading assets 58,792 15,509
Financial assets 62,121 527,486
Other assets 179 19,369
Liabilities to banks 808,800 456,306
Liabilities to customers 9,090 151,354
Other liabilities 2,439 18,711
Contingent liabilities 0 0
Loans and advances and other liabilities to related companies as at 31 December 2006
Companies accounted Shares in
for at equity companies
in EUR ‘000 in EUR ‘000
Loans and advances to banks 516,353 1,845,640
Loans and advances to customers 311,754 1,211,163
Trading assets 20,350 27,198
Financial assets 170,331 635,067
Other assets 131 41,766
Liabilities to banks 867,289 602,692
Liabilities to customers 35,648 74,075
Other liabilities 21 17,218
The Group
Contingent liabilities 0 35
As of 31 December 2007 EUR 15,000k are pledged to companies accounted for at equity. Valuation allowances in the amount of
EUR 8,000k were reserved for related companies in the 2007 financial year.
The parent company is a cooperative registered as “Raiffeisenbankengruppe OÖ Verbund eingetragene Genossenschaft” which is not,
aside from its function as a holding, operationally active. Information about the companies accounted for at equity is recorded separately
from other shares in companies. The latter are holdings in companies that are neither fully consolidated nor accounted for at equity.
As of the balance sheet date there were no material loans and advances or other liabilities to the parent company.
In the course of ordinary business activities, transactions with related companies and persons are concluded under standard market
conditions.
Annual Report 07
137
Remuneration of the Managing Board and the Supervisory Board
Expenses for the remuneration of members of the Managing Board of Raiffeisenlandesbank Oberösterreich are spread out during
the financial year as follows:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Ongoing payments 1,684 1,558
Post-employment benefits 1,192 1,096
Other long-term benefits due 9 12
Total 2,885 2,666
During the 2007 financial year EUR 402k (previous year: EUR 385k) were paid to members of the Supervisory Board,
Advances and loans to membersof the Managing Board and the Supervisory Board
Advances and loans to members of the Raiffeisenlandesbank Oberösterreich Managing Board and the Supervisory Board consisted of
EUR 306k (previous year: EUR 287k) to members of the Managing Board, and EUR 963k (previous year: EUR 385k) to members of the
Supervisory Board.
Loans to members of the Managing Board and the Supervisory Board are granted at standard bank conditions. Repayments are made
as agreed.
138
Annual Report 07
Contingent liabilities and credit risks
As at the balance sheet date the following off-balance-sheet obligations existed:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Contingent liabilities 2,188,951 1,819,967
of which other indemnity agreements 2,188,872 1,819,888
of which other contingent liabilities 79 79
Credit risks 8,504,940 7,543,522
of which revocable loan commitments/stand-by facilities 8,452,794 7,488,562
up to 1 year 5,233,036 4,948,961
over 1 year 3,219,758 2,539,601
of which pseudo repo transactions 31,847 54,960
of which other credit risks 20,299 0
Assets pledged as collateral
As at 31 December 2007, securities to the amount of EUR
9,429k (previous year: EUR 6,441k) were held as reserve for
trust fund deposits of EUR 5,991k (previous year EUR 5,190k).
Actuarial reserve funds of EUR 721,665k (previous year: EUR
863,839k) have been earmarked for Pfandbriefe, municipal
bonds and covered bonds. In addition, securities are held in
the substitute reserve depot in accordance with § 2 para 3 of
the “Austrian Pfandbrief Act” in the amount of EUR 0 (previous
year: EUR 2,921k).
Securities with a carrying amount of EUR 1,013,926k (previous
year: EUR 1,074,918k) have been deposited as collateral at
banks and stock exchanges. EUR 89,374k (previous year EUR
35,722k) were deposited at banks for collateral arrangements
and EUR 15,000k (previous year: EUR 0 k) are pledged.
Money claims to the amount of EUR 631,266k (previous year:
EUR 534,667k) were ceded to the Oesterreichische Kontrollbank.
Outstanding debts of EUR 53,565k (previous year: EUR
50,420k) were ceded to the European Investment Bank.
In addition, as at 31 December 2007, fixed-interest securities
with a carrying amount of EUR 39,970k (previous year EUR
13,149k) were held in a blocked account at the Landeszentral -
bank in the Free State of Bavaria as a security deposit for
advances on securities.
As per 31 December 2007 securities with a carrying amount of
EUR 135,646k (previous year: EUR 201,377k) were put in pensions.
The Group
Annual Report 07
139
Finance lease (Lessor)
Claims from leasing transactions (Finance Lease) are as follows:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Investment (gross) 468,646 364,509
Minimum lease payments 432,596 330,579
up to 3 months 40,994 32,975
from 3 months to 1 year 72,215 51,976
from 1 to 5 years 215,938 159,476
over 5 years 103,449 86,152
Non-guaranteed residual values 36,050 33,930
Unrealised financial earnings 95,830 70,656
up to 3 months 4,883 2,936
from 3 months to 1 year 12,387 8,341
from 1 to 5 years 39,281 29,208
over 5 years 39,279 30,171
Investment (net) 372,816 293,853
Value adjustments for irrecoverable outstanding minimum lease payments amount to EUR 299k.
The leased property holdings are structured as follows:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Vehicle leasing 131,433 82,634
Real estate leasing 121,508 113,342
Lease of movables 119,875 97,877
Total 372,816 293,853
140
Annual Report 07
Finance lease (Lessee)
The assets and future minimum lease payments below refer to finance lease agreements in which Raiffeisenlandesbank Ober -
österreich is the lessee:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Net carrying amount 1,919 2,776
Minimum lease payments 1,113 2,301
of which up to one year 713 1,417
of which from 1-5 years 400 884
of which for more than 5 years 0 0
The contingent lease payments recognised as expenses amounted to EUR 1,517k in the financial year 2007 (EUR 1,655k in the previous year).
Operating Leasing (Lessor)
The depicted future minimum lease payments below refer to irredeemable operating lease business operations in which Raiff -
eisenlandesbank Oberösterreich is the lessor:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
up to 1 year 3,136 2,300
from 1 to 5 years 9,571 8,312
over 5 years 18,284 18,543
Total 30,991 29,155
The minimum lease payments refer solely to real estate leasing.
The Group
The further operative earnings from Operating Leasing amount to EUR 2,355k for the financial year 2007 (previous year: EUR 1,813k).
Annual Report 07
141
INFORMATION BASED ON AUSTRIAN ACCOUNTING STANDARDS
Foreign currency trading volumes
The assets and liabilities below are recognised in foreign currencies in the consolidated financial statements:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Assets 3,245,339 2,905,240
Liabilities 2,496,413 2,309,961
Listed securities pursuant to § 64 of the Austrian Banking Act
listed
non-listed
31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000 in EUR ‘000 in EUR ‘000
Bonds and other
fixed-interest securities 2,216,444 2,162,489 0 0
Shares and other
fixed-interest securities 77,734 34,991 0 0
Of the listed bonds and other fixed-interest securities, EUR 1,779,306k (previous year: EUR 1,545,688k) can be allocated to the
fixed assets.
Volume of securities book in accordance with § 22 of the Austrian Banking Act
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Securities 144,423 175,858
Other financial instruments 123,497 116,852
Total 267,920 292,710
142
Annual Report 07
Regulatory equity requirements
Equity of the Credit Institution Group of Raiffeisenlandesbank Oberösterreich in accordance with the Austrian Banking Act is divided as follows:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Tier 1 - capital (core capital) 1,459,848 1,218,265
Tier 2 capital (supplementary capital) 1,242,888 1,150,198
Less holdings in banks/financial institutions - 192,330 - 142,780
Equity eligible for inclusion 2,510,406 2,225,683
Tier 3 capital (short-term subordinated capital) 0 0
Total equity 2,510,406 2,225,683
The total equity requirement is divided up as follows:
31 Dec 2007 31 Dec 2006
in EUR ‘000 in EUR ‘000
Risk-weighted assessment bases
in accordance with § 22 of the Austrian Banking Act 19,302,709 16,001,356
of which 8% minimum equity requirement 1,544,217 1,280,108
Equity requirement for the securities trading book
in accordance with § 22b para 1 of the Austrian Banking Act 4,179 4,793
Equity requirements for the open foreign exchange positions
in accordance with § 26 of the Austrian Banking Act 0 0
Total equity requirement 1,548,396 1,284,901
Requisite equity bank book 1,544,217 1,280,108
Requisite equity trading book 4,179 4,793
Equity surplus 962,010 940,782
Coverage ratio in% 5,0 5,9
Tier 1 ratio in% 7,56 7,61
Equity ratio in% 12,98 13,88
The Group
The Tier 1 ratio refers to the risk-weighted basis pursuant to § 22 of the Austrian Banking Act.
Within the framework of equity management, the main focus lies on securing adequate financial resources for the group and
maintaining regulatory equity requirements for the Credit Institute Group of Raiffeisenlandesbank Oberösterreich.
Annual Report 07
143
Average number of employees pursuant to § 266 of the Austrian Business Code
31 Dec 2007 31 Dec 2006
Employees 1,736 1,732
Labourers 16 16
Total 1,752 1,748
Additional information on terms according to § 64 of the Austrian Banking Act
In 2008, bonds and other fixed-interest securities held by Raiffeisenlandesbank Oberösterreich to the amount of EUR 190,898k
(2007: 343,290k) will mature, along with bond issues of EUR 225,552k (2007: EUR 178,192k).
Subordinated liabilities
In the case of subordinated liabilities, the subordination is always agreed separately in writing pursuant to § 51 para 9 of the
Austrian Banking Act. The term and repayment are established in a manner that permits allocation to equity in accordance with
§ 23 para 8 subpara 1 of the Austrian Banking Act. The subordinated liabilities include an emission with the nominal value of
EUR 124,172k and an interest rate of 5.161% as well as an emission with the nominal value of EUR 117,305k and an interest rate
of 5.0% which will be repaid in 2020.
Expenses for subordinated liabilities
Expenses for subordinated liabilities in the 2007 financial year totalled EUR 60,141k (previous year: EUR 52,951k).
EVENTS AFTER THE BALANCE SHEET DATE
There were no events of particular importance after the close of the 2007 business year.
THE MEMBERS OF THE BOARD OF RAIFFEISENLANDESBANK OBERÖSTERREICH AKTIENGESELLSCHAFT
Information on the members of the Raiffeisenlandesbank Oberösterreich Aktiengesellschaft Managing Board and Supervisory
Board can be found on pages 4 to 7.
144
Annual Report 07
Linz, 07 April 2008
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
Europaplatz 1a, 4020 Linz
THE MANAGING BOARD
Ludwig Scharinger
Chief Executive
Hans Schilcher
Deputy Chief Executive
Helmut Schützeneder
Member of the Managing Board
Georg Starzer
Member of the Managing Board
Markus Vockenhuber
Member of the Managing Board
Michaela Keplinger-Mitterlehner
Member of the Managing Board
The Group
Annual Report 07
145
Unqualified Audit Certificate
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
We have audited the accompanying consolidated financial statements of
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft,
domiciled in 4020 Linz, Europaplatz 1a,
for the financial year from 1 January 2007 to 31 December
2007. Those financial statements comprise the balance sheet
as at 31 December 2007, and the income statement, statement
of changes in equity and cash flow statement for the
year then ended, and a summary of significant accounting
policies and other explanatory notes. Our liability as auditors
is guided under § 275 UGB.
Management’s Responsibility
for the Financial Statements
Management is responsible for the preparation and fair presentation
of these consolidated financial statements in
accordance with International Financial Reporting Standards
(IFRSs) as adopted by the EU. This responsibility includes:
designing, implementing and maintaining internal control
relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether
due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that
are reasonable in the circumstances.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We con ducted
our audit in accordance with laws and regulations applicable
in Austria and Austrian Standards on Auditing and Inter -
national Standards on Auditing, issued by the International
Auditing and Assurance Standards Board (IAASB) of the
International Federation of Accountants (IFAC). Those stand -
ards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance
whether the consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the con soli -
dated financial statements. The procedures selected depend
on the auditor’s judgement, including the assessment of the
risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant
146
Annual Report 07
to the entity’s preparation and fair presentation of the con -
solidated financial statements in order to design audit pro -
cedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. An audit also includes evaluation
of the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
Our audit did not give rise to any objections. Based on the
results of our audit in our opinion the consolidated financial
statements present fairly, in all material respects, the financial
position of the group as of 31. December 2007 and of its finan -
cial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards
(IFRSs) as adopted by the EU.
REPORT ON OTHER LEGAL REQUIREMENTS
Law and regulation applicable in Austria require us to perform
audit procedures whether the group management report is
consistent with the consolidated financial statements and
whether the other disclosures made in the group management
report do not give rise to misconception of the position of the
group.
In our opinion, the Group Management Report is consistent
with the consolidated financial statements.
Linz, 07 April 2008
KPMG Austria GmbH
Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
The Group
Martha Kloibmüller
Ernst Pichler
Chartered accountants and tax consultants
This report is a translation of the original report in German, which is solely valid.
Annual Report 07
147
Unqualified Audit Certificate
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
I have audited the consolidated financial statements of
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft,
domiciled in 4020 Linz, Europaplatz 1a,
for the financial year from 1 January 2007 to 31 December
2007. These consolidated financial statements include the consolidated
balance sheet as of 31.12.07, the group income statement,
the group cash flow statement and the group statement
of changes in equity for the financial year ending 31.12.07 and
a summary of material accounting policies and other data in the
appendices.
The legal representatives of the company are responsible for
compiling the consolidated financial statements presenting a
true and fair view of the assets, financial position and earnings
of the company in accordance with the International Financial
Reporting Standards (IFRS), as they are applied in the EU. This
responsibility includes: The design, implementation and maintaining
of an internal control system, insofar as this is important
for the compiling of consolidated financial statements and presenting
a true and fair view of the assets, financial position and
earnings of the company so that these consolidated financial
statements are free of material misstatements, whether due to
intended or unintended errors; the selection and application of
suitable accounting policies; the submission of estimates which,
taking into account the given framework conditions, appear appropriate.
My responsibility consists of issuing an auditing opinion about
these consolidated financial statements based on my audit. My
audit was conducted in accordance with the applicable Austrian
legal regulations. These standards require that I plan and perform
the audit in such a manner that I can form a reasonable opinion
as to whether the financial statements are free of material
misstatement.
An audit includes the implementation of auditing actions to obtain
auditing evidence in respect of the amounts and other details
given in the consolidated financial statements. The choice
of auditing actions is left to the obligatory discretion of the auditor,
taking into account his assessment of the risk of material
misstatements occurring, whether due to intended or unintended
errors. In assessing this risk, the auditor takes into account
the internal control system, insofar as it is important for compiling
the consolidated financial statements and presenting a true
and fair view of the assets, financial position and earnings of
the company, in order to determine suitable auditing actions taking
account of the framework conditions, not however to submit
an auditing opinion about the effectiveness of the company’s
internal control system. Furthermore, the audit also includes the
assessment of the appropriateness of the accounting principles
used and material estimates made by the legal representatives
of the company, as well as the evaluation of the overall financial
statement presentation.
I believe that I have obtained sufficient and suitable auditing
proof, so that my audit provides a reasonable basis for my opinion.
The results of my audit gave no reason for objection. On the
basis of the knowledge gained during the audit, in my judgement
the consolidated financial statements comply with the legal
regulations and present a true and fair view of the company’s
148
Annual Report 07
assets and financial position as at 31.12.07 and the company’s
earnings and cash flow in the financial year from 1 January 2007 to
31 De cember 2007, in accordance with the International Financial
Reporting Standards (IFRS), as they are applied in the EU.
The unqualified auditor’s certificate was issued for the un -
abridged, German-language version of the consolidated
financial statements.
As a result of Austrian legal regulations, the group management
report is to be audited as to whether it is consistent with
the consolidated financial statements and whether other details
given in the group management report give a misleading
impression of the group’s financial position.
In my opinion, the group management report is consistent with
the consolidated financial statements.
Linz, 07 April 2008
Auditing association: Österreichischer Raiffeisenverband
Auditor:
Ursula Palle-Futschik
Association Auditor
The Group
Annual Report 07
149
Statement of the Managing Board
The managing board of the Raiffeisenlandesbank Oberösterreich Aktiengesellschaft declares that the annual financial statements
as at 31 December 2007 compiled according to Austrian Business Code/Austrian Banking Act regulations and the consolidated
financial statements as at 31 December 2007 compiled according to the International Financial Reporting Standards (IFRS) present
a true and fair view of the assets, financial position and earnings of Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
and of the companies included in the consolidation, in their entirety.
Equally, the management report and the group management report for the financial year 2007 present a true and fair view of the
assets, financial position and earnings of the company and the group and give information about business performance and the
effects of existing and future risks to business activities.
Linz, 07 April 2008
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
Europaplatz 1a, 4020 Linz
THE MANAGING BOARD
Ludwig Scharinger
Chief Executive and Chairman of the Managing Board
Hans Schilcher
Deputy Chairman of the Managing Board
Helmut Schützeneder
Member of the Managing Board
Georg Starzer
Member of the Managing Board
Markus Vockenhuber
Member of the Managing Board
Michaela Keplinger-Mitterlehner
Member of the Managing Board
150
Annual Report 07
Report of the Supervisory Board
The Supervisory Board of Raiffeisenlandesbank Ober österreich
Aktiengesellschaft has fulfilled the tasks incumbent upon
them according to the law and the company articles for
the financial year 2007. The Managing Board has reported
regularly, promptly and comprehensively about important
business transactions and the situation and development of
the bank and the group.
Three committees (executive and personnel committee, auditing
committee and balance sheet committee) have effectively
supported the entire Supervisory Board in the completion of
its work.
The Österreichischer Raiffeisenverband and KPMG Austria
GmbH have audited the accounts, the annual financial statement
according to Austrian Business Code/Austrian Banking
Act regulations and the consolidated financial statements
according to the International Financial Reporting Standards
(IFRS) as at 31 December 2007 and the management report
and the group management report for the financial year 2007.
management report for the financial year 2007. It concurs
with the result of the financial statement auditor and the
Managing Board’s proposals as to how the profits should
be used and approves Raiffeisenlandesbank Oberösterreich
Aktiengesellschaft’s annual financial statement for 2007,
which thereby adheres to Section 125 (2) of the Stock Corporation
Act.
The Supervisory Board would like to thank the Managing
Board and all employees of Raiffeisenlandesbank Ober österreich
Aktiengesellschaft and the whole group for their per -
formance and notable success in financial year 2007.
Linz, 30 April 2008
The Supervisory Board
The audits did not give cause for any reservations and all legal
regulations were complied with in full. Consequently, the un -
qualified audit certificate was given. The Supervisory Board
noted with approval the results of the audit.
The Supervisory Board has also audited the annual financial
statements and the consolidated financial statements as at
31 December 2007, the management report and the group
Jakob Auer
Chairman of the Supervisory Board
The Group
Annual Report 07
151
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