Annual Financial Statements 2008 of Bank Austria

Annual Financial Statements 2008 

of Bank Austria

Contents 

I. Bank Austria 5 

Consolidated Financial Statesments: 

Management Report of the Group *) 

The Banking Enviroment in 2008 5 

Management Report of Bank Austria Group 

for 2008 8 

Consolidated Financial Statements in 

accordance with IFRSs *) 38 

Income statement 38 

Balance sheet 39 

Statement of changes in equity 40 

Cash flow statement 41 

Notes to the consolidated financial 

statements incl. risk report 42 

Concluding Remarks 

of the Management Board 126 

Consolidated Financial Statements 

of the UniCredit Bank Austria Group 

for 2008 Statement by Management 127 

Report of the auditors 128 

II. UniCredit Bank Austria AG 131 

Preliminary remarks on the financial statements 

of UniCredit Bank Austria AG for 2008 132 

Management Report of UniCredit Bank Austria AG 133 

Financial statements of 

UniCredit Bank Austria AG for 2008 152 

Notes to the Financial Statements 

of UniCredit Bank Austria AG 157 

List of shares in group companies and 

equity interests of UniCredit Bank Austria AG 178 

Supervisory Board and Management 

Board of UniCredit Bank Austria AG 181 

Signatures of the Management Board/ 

Auditors`Report 183 

Statement by Management 186 

Investor Relations, ratings, 

financial calender, imprint 188 

*) Part of the consolidated financial statements in accordance with IFRSs 

Bank Austria - Annual Financial Statements 2008 1

Bank Austria at a Glance 

Income statement figures 

(€ m) 2008 2007 +/– 

Net interest income 5,367 3,936 36.3% 

Net fees and commissions 2,076 2,124 –2.2% 

Net trading, hedging and fair value loss/income –414 141 – 

Operating income 7,231 6,414 12.7% 

Operating expenses –3,935 –3,351 17.4% 

Operating profit 3,296 3,063 7.6% 

Profit before tax 1,505 2,740 –45.1% 

Consolidated profit 1,144 2,254 –49.2% 

Volume figures 

(€ m) 31 dec. 2008 31 dec. 2007 +/– 

Total assets 222,152 209,186 6.2% 

Loans and receivables with customers 131,973 115,216 14.5% 

Primary funds 127,761 119,699 6.7% 

Equity 14,237 15,332 –7.1% 

Risk-weighted assets (overall, Basel I) 131,981 117,993 11.9% 

Key performance indicators 

2008 2007 

Return on equity after tax (ROE) 7.8% 17.0% 

Cost/income ratio 54.4% 52.2% 

Risk/earnings ratio 18.8% 12.3% 

Provisioning charge/avg. lending volume (cost of risk) 0.80% 0.46% 

Marginal Economic Value Added € 1,091 m € 1,262 m 

Marginal RARORAC 12.5% 15.8% 

Total capital ratio (2008: Basel II, 2007: Basel I) 9.19% 11.16% 

Tier 1 capital ratio 6.82% 8.20% 

Tier 1 capital ratio without hybrid capital (Core Tier 1 capital ratio) 6.52% 7.86% 

Staff *) 

31 dec. 2008 31 dec. 2007 +/– 

Bank Austria (full-time equivalent) 67,002 54,387 23.2% 

Central Eastern Europe business segment 56,058 43,648 28.4% 

Other business segments 10,944 10,739 1.9% 

Austria 10,175 9,953 2.2% 

*) Employees of companies accounted for under the proportionate consolidation method are included at 100% 

Offices *) 

31 dec. 2008 31 dec. 2007 +/– 

Bank Austria 3,166 2,343 35.1% 

Central Eastern Europe business segment 2,824 1,977 42.8% 

Other business segments 342 366 –6.6% 

Austria 331 348 –4.9% 

*) Offices of companies accounted for under the proportionate consolidation method are included at 100%. From 2008 without representative offices. 

Bank Austria · Annual Financial Statements 2008 

2


Consolidated Financial Statements: 

Management Report of the Group 5 

The Banking Enviroment in 2008 5 

Management Report of Bank Austria for 2008 8 

Consolidated Financial Statements in 

accordance with IFRSs 38 

Income statement, balance sheet, 

statement of changes in equity, 

cash flow statement 39 

Notes to the consolidated financial 

statements incl. risk report 42 

Concluding Remarks of 

the Management Board 126 


of the Bank Austria Group for 2008 


Report of the Auditors 128 


Consolidated Financial Statements: 

Management Report of the Group 

Management Report of Bank Austria for 2008 5 

The Banking Environment in 2008 5 

Bank Austria in 2008 8 

Development of Business Segments 18 

Balance sheet developments 31 

Further information 33 

Outlook 34 

Bank Austria · Annual Financial Statements 2008 4

Consolidated Financial Statements: Management Report of the Group 

Management Report 

of Bank Austria for 2008 

The Banking Environment in 2008 

� The financial market crisis that started in the US affected all 

segments of global capital markets in the course of 2008, escalating 

into a banking crisis which threatened the financial system in 

September / October 2008. Stabilisation programmes put in place by 

governments helped to cushion the adverse impact. With some time 

lag, the crisis spread to the real economy as the year progressed. 

From the middle of 2008, it became clear that Europe and the Asian 

growth markets would not escape recession. Fears of inflation quickly 

turned into fears of deflation and a global economic crisis. As expectations 

were more or less the same around the world, leading 

indicators of industrial activity fell dramatically in the autumn, in an 

unprecedented synchronous movement. The particularly strong international 

links in the automotive industry were one of the factors triggering 

this development. Investors worldwide withdrew from high-risk 

asset classes in response to the financial crisis and the economic 

downturn. Recently, financial flows from private investors to emerging 

markets – a precondition for global prosperity – all but dried up. The 

repricing of risks finally affected corporate finance in the last four 

months of 2008, after years of excess liquidity and declining loan loss 

provisions. 

➔ The downward trend gradually impacted banking business in our 

core markets via different paths on the supply and demand sides: 

� first, through direct effects on trade and capital markets and in the 

form of increasingly difficult funding conditions and market expectations 

of higher capital ratios; 

� second, through customers’ response to the new asset price 

structure, especially that of disconcerted investors and also companies 

in commercial business. Demand for banking products and services 

tended to shift from capital market products and derivatives back 

to traditional on-balance sheet banking business; 

� and third, via the macroeconomic impact in Austria and, above all, 

in highly-exposed CEE countries, which became clearly visible in the 

fourth quarter of 2008 and strongly dampened volume growth in 

banking business. 

� Over a period of about twelve months, efforts to deal with the 

financial market crisis included the workout of a broad range of structured 

capital market products as well as the recapitalisation and bailout 

of banks and insurance companies. The collapse of Lehman 

Brothers, one of the systemically important market participants with 

links throughout the world, on 15 September 2008 marked a turning 

point for the global banking sector, leading to an unprecedented loss 

of confidence in interbank business. Notwithstanding large-volume, 

globally coordinated intervention including open-market operations by 

central banks, interbank rates – especially in the US dollar but also in 

the euro – rose sharply, temporarily exceeding the rates on central 

bank funds (3-month interest rate swap, OIS) by 4 and 2 percentage 

points, respectively, and significantly increasing liquidity costs for 

banks. Moreover, CDS spreads rose sharply from an already high 

level. 

Investors moved faster to exit all high-yield and risk-carrying asset 

classes as the year progressed, and this made it more expensive for 

emerging markets to raise funds, especially for those countries which 

depended on steady capital inflows to build their economies. 

Global investors’ flight to safe havens favoured the US dollar: from a 

low of 1.6038 on 21 July, it appreciated against the euro by 30 % to 

reach a high on 28 October. Low-interest currencies such as the 

Japanese yen (+ 47 %) and the Swiss franc (15 %), which until then 

had been attractive currencies for debt vehicles, strengthened. 

Sterling, on the other hand, depreciated by 23 % against the euro, reflecting 

the difficult situation in the banking sector and the recession 

partly caused by these difficulties. 

The reduction of investment positions, temporarily in panic reactions, 

also impacted commodity prices in the summer. After reaching an alltime 

high of 147.50 US dollars per barrel on 11 July 2008, crude oil 

prices fell by 75 % to a level of 36.20 US dollars per barrel by December. 

Prices for industrial metals and agricultural commodities also 

declined significantly. Major factors in this context were the gloomy 

outlook and, later on, the downturn in global economic activity (see 

shipping futures index). 

World stock markets (MSCI World), which had recovered slightly in the 

spring, lost almost one half of their value from May to the low in 

November, and fell by 41 % year-on-year. Share prices in emerging 

markets, both Asia (– 49 % year-on-year, including China) and Europe 

(– 65 %, of which Russia: – 73 %), were particularly hard hit, after 

many years in which they saw increases in value. 


5

As a result of the sharp rise in commodity prices and fairly resilient 

growth in the first six months, inflation (HCPI) in the euro area 

reached 4.0 % in June 2008. Prompted by fears of excessive inflation, 

the ECB raised key interest rates one last time to 4.25 % at the 

beginning of July. When it became clear that the European economy 

could not uncouple itself from global developments, and the primary 

objective of economic policy was to resolve the banking crisis, the 

ECB lowered key interest rates in four stages to 2.25 % at the end of 

the year (currently 1.5 %). The money market followed suit, although 

credit spreads were exceptionally high. 

Flat yields on 10-year benchmark bonds, still 4.66 % in the middle of 

2008, fell faster than money market rates to 2.93 % at the end of the 

year due to strong demand from risk-averse investors. This resulted in 

a variety of interest rates that matched the respective bond ratings. 

Even within the euro area, credit spreads of government bonds of 

highly indebted countries reached unprecedented levels. Yields of corporate 

bonds rose significantly in October: at the end of 2008, yields 

of BBB-rated bonds were about 1.5 percentage points above the level 

at the beginning of the year. This increase in the credit spread corresponded 

to more than double the interest rate reduction of benchmark 

government bonds. Lending rates (over and beyond increased 

corporate risk) were subsequently accompanied by higher liquidity 

and funding costs of the banking sector, which were partly absorbed 

by margins. 

� Austria felt the full impact of the global economic downturn later 

in the year: in the fourth quarter of 2008, Austria’s economic performance 

shrank for the first time in 30 quarters. As economic trends 

in Austria follow international developments with some time lag, the 

quarter-on-quarter decline of 0.2 % was significantly lower than in the 

euro area. Real GDP in 2008 as a whole still grew by 1.8 %, driven by 

the strong momentum early in the year. However, the Austrian economy 

was increasingly impacted by the sharp decline in global 

demand via the export-oriented industrial sector with its close links as 

a supplier. Towards the end of 2008, exports fell at double-digit rates 

compared with the previous year. Industrial companies strongly 

reduced output, cut investment and started to adjust employment. 

The year-end 2008 number of unemployed persons exceeded the 

December 2007 level by more than 30,000 or 12 %. Supported by the 

significant decline in inflation, to a level of 1.3 % in December 2008, 

private consumption continued to grow in the fourth quarter, though 

at a moderate rate. In 2008, the inflation rate averaged 3.2 % and 

private consumption rose by 1 %. The savings ratio continued to grow 

from quarter to quarter – as it usually does in times of uncertainty –, 

rising to an annual average of over 12.3 %. 

Loss of confidence in interbank markets 

Interbank/central bank funds 

(3-month Libor/3-month OIS) 

4.0 

3.5 

3.0 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

Higher credit spreads 

800 

700 

600 

500 

400 

Turnaround in currency markets 

1.15 

1.25 

1.35 

1.45 

1.55 

Economic downturn and oil price 

1,000 

800 

600 

400 

200 

0 

80 

60 

40 

20 

Shipping Futures 

(Baltic Dry Index) 

Credit Default Swaps 

(iTraxx Crossover, 5yr) 

Emerging markets (EMBI+) 

bond yields; benchmark spread 

Euro 

US dollar 

BBB corporate bond yields; 

benchmark spread 

Spillover to emerging markets (regional MSCI indices) 

100 

Emerging Asia 

JPY per EUR 

(inverted scale) 

USD per EUR 

(inverted scale) 

London Brent 

Crude Oil USD/bl. 

World stock index 

Emerging Europe 

Q1 Q2 Q3 Q4 Q1 



900 

800 

700 

600 

500 

400 

300 

200 

100 

125 

135 

145 

155 

165 

175 

140 

120 

100 

80 

60 

40 

6


Management Report 2008 (cONTINUED) 

As the situation in financial markets escalated, the final quarter of 

2008 saw an even stronger trend towards shifting private financial 

assets into liquid forms of investments, all the more so as the Austrian 

government provided an unlimited guarantee on deposits held by 

private individuals. Bank deposits accounted for two-thirds of the 

increase in holdings of financial assets; deposit growth in 2008 was 

7%, matching the figure for 2007. Bond holdings, the second most 

important form of investment behind bank deposits, also increased at 

a disproportionately high rate. The two asset categories recorded 

combined growth that was stronger than the overall increase in holdings 

of financial assets, as there was a significant switch mainly out 

of mutual funds. In 2008, the mutual fund industry in Austria recorded 

outflows of over € 15 bn or more than 9 % of total volume. Added to 

these outflows were price losses totalling over € 22 bn. As a result, 

total fund volume fell by about € 38 bn or almost 23 %. Lending 

growth reached 7 % year-on-year, exceeding the expansion recorded 

in previous years; the absolute increase of € 20 bn (also adjusted for 

exchange rate effects) was the strongest growth ever seen in the 

history of Austrian banking. While the growth momentum in loans to 

private households weakened in the second half of 2008, corporate 

loans continued to grow very strongly until the end of the year. 

� In the first half of 2008, the economies of the CEE countries still 

grew at a rate matching that of previous years. The dynamic growth 

continued in the third quarter, but business conditions were now less 

favourable (reversal in oil prices, risk-averse behaviour of investors) 

and some countries in the region were facing specific problems. All 

countries however felt the full force of the sharp downturn of the 

global economy in the last few months of the year, although the 

effects varied from country to country. The close production links 

maintained with Western Europe in some key European industries, 

coupled with the worldwide decline in demand for raw materials, led 

to the collapse of the region’s exports, the key driver of economic 

growth, towards the end of the year. The countries were impacted by 

developments in 2008 to a varying degree in light of different production 

structures, convergence levels and the external funding gap. Real 

economic growth in the CEE region consequently slowed from almost 

6.5 % in the last five years to an average 4.3 % in 2008. The sharp 

contraction at the turn of the year is reflected in the downward revision 

of the forecast for 2009 to minus 1 %. The difference in the 

growth rates between CEE and Western Europe indicates that these 

developments represent an externally triggered temporary deviation 

from the long-term upward trend and from the catching-up process 

which is still underway. 

The cyclical economic downturn hit the CEE countries’ most vulnerable 

spot, namely external and internal funding flows. Initially, the inflationary 

pressure from commodity prices multiplied the homemade 

inflation of many countries, which encountered stabilisation problems; 

this has limited the scope for monetary measures. Most importantly, 

however, global investors withdrew almost entirely from both highyield 

investments and emerging markets in the second half of the 

year. Stock exchange prices and CDS spreads deteriorated gradually 

as the year progressed, and this deterioration was particularly dramatic 

after the collapse of Lehman Brothers. The deleveraging of the 

global banking sector took place at the cost of emerging markets. As 

a result, countries which – over and beyond direct investments – depended 

on a steady flow of portfolio investments or short-term loans 

to finance their current account deficit were faced with balance of 

payments problems. Highly-indebted countries moreover found it increasingly 

difficult to roll over their debt. In addition, countries with a 

current account surplus and / or substantial foreign exchange reserves 

were classified as a sovereign risk from one moment to the next. 

Countries with the highest macro vulnerability were generally those 

which had previously experienced a boom (Baltic countries, Bulgaria, 

Romania, Russia and Ukraine). The adjustments required of countries 

whose currency was tied to another currency or standard had a direct 

impact on domestic demand, while nations with a flexible exchange 

rate system were in danger of becoming trapped in a devaluation 

spiral towards the end of the year. This significantly increased these 

countries’ costs for servicing their private and public foreign currency 

debt; in some cases the IMF and the EU had to help out with stabilisation 

facilities and loans to support the balance of payments. 

The funding problems of the CEE countries cannot be compared with 

the Asian debt crisis in the second half of the nineties: the ratio of 

foreign exchange reserves to short-term debt is better, direct investments 

play a much more important role than short-term speculative 

capital flows, and convergence with the EU is intact. Capital flows – 

investments in the economic integration of the CEE region and the 

West – should again be based more on fundamental data. The countries 

best placed to benefit from a renewed upturn are those which 

previously had relatively steady macroeconomic growth, such as 

Turkey, and stable domestic funding, such as the Central European 

countries with the longest CEE track record (see Outlook, page 34). 


7

Bank Austria in 2008 

Overview 

� Bank Austria *) coped well in absorbing the growing direct and 

indirect impacts from financial markets, the banking sector and global 

economic trends on banking business in our core markets in the 

course of 2008. Operating profit rose by € 232 m or 8 % to € 3.3 bn 

in 2008. Even adjusted for positive one-off effects such as the extension 

of the consolidation perimeter, the B&C special dividend and the 

ASVG effect, operating profit was only 10 % lower than the high figure 

for the previous year. 

These results have been achieved through a remarkable performance 

of our operations in Austria and CEE, all the more so as they include 

the direct impact of the financial market crisis, which is reflected in 

the net trading, hedging and fair value result: the strong reversal in 

the trading performance from net income of € 141 m in 2007 to a net 

loss of € 414 m was offset in overall results. 

It should be noted that the bank was faced with increasingly difficult 

funding conditions and an abrupt shift in demand from structured 

products to traditional on-balance sheet business – the indirect consequences 

of the situation in financial markets. As a result, net fees 

and commissions were 2 % lower than in the previous year, which is a 

noteworthy success, while net interest income rose by 36 %. 

2008 saw a good operating performance across all areas also in 

regional terms: operating profit generated by the three Austrian 

customer business divisions held up well (+ 1 %) in a difficult market 

environment, while the Central and Eastern Europe (CEE) business 

segment increased its operating profit by one-quarter (+ 27 %) based 

on the old perimeter; if profit contributions from the newly added 

banks in Kazakhstan and Ukraine are included, CEE achieved an 

operating profit that exceeded the previous year’s figure by about one 

half (+ 53 %). All countries except Bosnia and the Baltic states 

recorded double-digit growth. 

➔ The business model of a multi-local, diversified universal bank – 

one of the strategic principles of Bank Austria and UniCredit Group – 

has proved successful in times of crisis by allowing the bank to 

respond flexibly to partly shock-like market trends. 

*) In this report, “Bank Austria” refers to the group of consolidated companies. 

“UniCredit Bank Austria AG” is the name of the group’s parent company. 

� As the financial market crisis escalated, culminating in the 

collapse of Lehman Brothers in mid-September, and economic activity 

showed a sharp downturn towards year-end 2008, the outlook for 

banking business changed dramatically in the course of the year. 

Moreover, as expectations pointed in the same direction, investors 

proved to be risk-averse and high-risk exposures in the global financial 

sector were reduced (deleveraging), a particularly critical view 

was taken of CEE business. Whether justified in fundamental terms or 

not, this created new facts which are also strongly reflected in Bank 

Austria’s development during the year: while operating profit rose as 

the year progressed, the market’s new assessment of our two core 

markets – Austria and CEE – required substantial provisions and a 

revaluation of various equity investments (impairment of goodwill) to 

be made in the fourth quarter of 2008. In the fourth quarter alone, the 

“non-operating” items of the income statement between operating 

profit and profit before tax resulted in a charge of € 1.7 bn weighing 

on overall results. 

➔ Although operating profit reached a record level of € 3.3 bn, 

profit before tax for 2008 was only € 1.5 bn – mainly because of 

valuation adjustments made in the area of equity investments in the 

fourth quarter of 2008 – after € 2.7 bn in the previous year. This 

changed all key performance indicators. 

� In 2008, Bank Austria continued to expand its operations in its 

two core markets. Growth in Austrian customer business was 4 %, 

and in CEE 27 % in the old perimeter and 45 % including acquisitions 

(measured by risk-weighted assets). At the UniCredit Investors Day 

held in Vienna at the end of June 2008, we confirmed organic growth 

in CEE as a strategic focus supported by targeted capital allocation. In 

operational terms, we implemented the growth strategy by pursuing 

an ambitious branch network expansion programme. As uncertainty in 

markets increased, we suspended the programme in October until 

further notice without cancelling it. 

� As in previous years, we continued to improve cost efficiency in 

Bank Austria’s commercial banking business. The cost / income ratio 

declined, both in CEE (by 4.2 percentage points to 47.2 %) and in 

Austrian customer business (by 3.5 percentage points to 52.8 %). 

The improvement was achieved through short-term cost-saving 

programmes and, above all, through progress in the production 

sector and in back-office and administrative functions. The latter 

are increasingly organised at Group level with a view to unlocking 

international synergies. 


8



Development of Bank Austria in 2008 

Noting quarter-on-quarter developments is particularly important in 

the reporting year because the middle of September marked a turning 

point in financial markets and the last few weeks of 2008 saw a 

global economic downturn; these developments have completely 

changed the outlook and determine the assessment of the year as a 

whole in retrospect. (Details of income statement items are given in 

the subsequent section.) 

� Overall, Bank Austria’s operating performance by quarter was 

resilient, right until the end of 2008, in the face of the mixed trends 

that characterised the business environment during the year. Large 

losses reflected in the net trading, hedging and fair value result were 

more than offset by the increase in net interest income. Net fees and 

commissions were, however, affected by a decline in securities business 

noticeable already in early 2008 and by the fact that customers 

began to view innovative instruments with scepticism. 

Operating performance of Bank Austria by quarter 

€ M Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q4 08 *) +/– 

PREV. 

YEAR 

Operating income 

of which: 

1,632 1,543 1,700 1,814 2,173 1,758 + 8 % 

net interest income 

net fees and 

1,079 1,125 1,183 1,306 1,752 1,337 + 24 % 

commissions 

net trading, hedging 

550 519 518 522 518 518 – 6 % 

and fair value result – 39 – 143 – 55 – 80 – 136 – 136 

Operating expenses 941 941 951 1,003 1,041 1,041 + 11 % 

Operating profit 691 603 750 811 1,133 718 + 4 % 

… excl. net trading, hedging and fair value result: 

Operating income 1,671 1,686 1,755 1,894 2,310 1,895 + 13 % 

Operating profit 730 745 804 891 1,269 854 + 17 % 

*) Excluding special dividend from the sale of profit-sharing rights in B&C (€ 415 m), which is reflected in 

net interest income. 

Operating income for the fourth quarter of 2008 totalled € 2,173 m; 

this includes a special dividend of € 415 m, recognised within net 

interest income (in the sub-item Dividend income) in connection with 

the sale of profit-sharing rights in the B&C foundation (partly offset by 

capital losses on this transaction reflected in net income from investments). 

Adjusted for this one-off effect, net interest income continued 

to rise from quarter to quarter. Net fees and commissions, which 

declined at the beginning of the year and then stagnated, were again 

weaker in the fourth quarter. The net trading, hedging and fair value 

result deteriorated in the final quarter of 2008 – a period strongly 

affected by the collapse of Lehman Brothers, the investment bank – 

falling to a loss (– € 136 m) similar to that recorded in the first quar- 

ter of 2008, in which the financial market crisis first came to a head 

with the bail-out of Bear Stearns. Operating income (without B&C) in 

the fourth quarter was slightly lower than in the third quarter but 

higher than the Q4 2007 figure (+ 8 %). Operating profit declined 

somewhat more strongly, while still exceeding the Q4 2007 level by 

4 %. Excluding the net trading, hedging and fair value result, operating 

profit continued to rise and in the fourth quarter of 2008 exceeded 

the Q4 2007 figure by 17 %. 

� It was only in the fourth quarter of 2008 that the risk environment 

deteriorated abruptly. For the Austrian business segments, especially 

Corporates, this is a cyclical counter-movement following many years 

in which default risks declined. While Bank Austria was even in a 

position to release a provision in the third quarter of 2008, economic 

trends then reversed unusually fast. 

Net writedowns of loans and provisions for guarantees and 

commitments by quarter 

CHARGE (€ M) Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 

Bank Austria as a whole 128 173 156 155 528 

Austrian customer business 67 70 59 11 168 

Central and Eastern Europe (CEE) 62 103 96 124 215 

without Ukraine and Kazakhstan 66 54 60 82 127 

Markets & Investment Banking – 2 0 0 20 146 

Improvement in operating profit until year-end despite 

impact of net trading, hedging and fair value result, 

but strong increase in provisioning charge and 

goodwill impairment (€ m) 

1,000 

900 

800 

700 

600 

500 

400 

300 

200 

100 

0 

–100 

–200 

–300 

–400 

–500 

–600 

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 

Operating profit 

Profit before tax 

Q4 08 

From financial market crisis to recession 

Net writedowns of loans, 

provisions for risk and charges, 

restructuring costs, net income 

from investments: minus € 653 m 

Goodwill impairment: minus € 1,027 m 


9

The same applies to our CEE banking subsidiaries: growth of net 

interest income and business volume was significantly stronger than 

the increase in net writedowns of loans and provisions for guarantees 

and commitments in the past few years; until most recently, the 

provisioning charge was below the average for the bank as a whole. 

However, our two most recent acquisitions are operations in young, 

high-growth markets whose economies are particularly vulnerable. 

From the very start, the risk / earnings ratio was considerably higher in 

these countries, which are now facing a particularly high risk of a 

withdrawal of international lenders and investors and of higher credit 

spreads. 

Condensed income statement of Bank Austria *) (€ m) 

CHANGE 

2008 2007 € M IN % IN % ADJ. 

Net interest 4,657 3,653 1,004 + 27.5 + 19.8 

Dividend income 587 124 463 >100 + 38.5 

Other income from equity investments 123 160 – 37 – 22.9 – 49.0 

Net interest income 5,367 3,936 1,431 + 36.3 + 18.2 

Net fees and commissions 2,076 2,124 – 47 – 2.2 – 7.5 

Net trading, hedging and fair value loss / income – 414 141 – 555 n.m. n.m. 

Net other expenses / income 201 214 – 12 – 5.8 – 1.5 

Net non-interest income 1,864 2,478 – 614 – 24.8 – 33.5 

OPERATING INCOME 7,231 6,414 816 + 12.7 – 1.8 

Payroll costs – 2,235 – 1,836 – 399 + 21.7 + 4.4 

Other administrative expenses – 1,371 – 1,243 – 128 + 10.3 + 4.9 

Recovery of expenses 

Amortisation, depreciation and impairment losses 

3 4 0 – 10.7 – 33.0 

on tangible and intangible assets – 331 – 275 – 56 + 20.4 + 6.0 

OPERATING EXPENSES – 3,935 – 3,351 – 584 + 17.4 + 4.7 

OPERATING PROFIT 3,296 3,063 232 + 7.6 – 9.7 

Goodwill impairment – 1,027 0 – 1,027 n.m. n.m. 

Provisions for risks and charges – 87 – 75 – 12 + 15.9 + 16.1 

Restructuring costs – 6 – 33 27 – 82.6 – 82.6 

Net writedowns of loans and provisions for guarantees and commitments – 1,012 – 483 – 529 >100 + 67.0 

Net income from investments 340 268 72 + 27.0 + 83.2 

PROFIT BEFORE TAX 1,505 2,740 – 1,236 – 45.1 – 14.2 

Income tax – 222 – 380 158 – 41.7 + 0.6 

NET PROFIT 1,283 2,360 – 1,077 – 45.6 – 16.5 

Minority interests – 139 – 106 – 33 + 31.0 + 30.5 

CONSOLIDATED PROFIT 1,144 2,254 – 1,110 – 49.2 – 18.9 

n.m. = not meaningful 

� Results for the fourth quarter – and for 2008 as a whole – were 

strongly impacted by impairment losses of € 1,027 m on goodwill. 

With the reassessment of the medium-term outlook for CEE countries 

which are highly exposed in macroeconomic terms, the market 

required a revision of the business cases that applied when the 

acquisitions were made, and this entailed material impairment losses 

being recognised for goodwill. Profit before tax consequently turned 

negative in the fourth quarter of 2008, to a loss of € 547 m, despite 

the robust operating performance. 

*) Bank Austria’s income statement as presented in this table is a reclassified format corresponding to the format used for segment reporting. 

Together with the segment reporting data (see note 56) it is the basis for the comments in the management report of the Group. This also 

makes it possible to present the contributions from the various business segments to specific balance sheet items. The reconciliation of reclassified 

accounts to the mandatory reporting schedule of the 2008 consolidated financial statements is given in note 55 to the consolidated financial 

statements. 


10



Income statement of Bank Austria 

for 2008 

� Bank Austria’s results for 2008 are the net product of an operating 

profit which held up well in a challenging environment, and of 

substantial provisions and valuation adjustments reflecting the fast 

deterioration of the market environment in the fourth quarter of 2008. 

Operating profit for 2008 was € 3,296 m, up by 8 % over the previous 

year’s level. After deduction of non-operating items, which totalled 

– € 1,791 m, profit before tax amounted to € 1,505 m, down 

by 45 % from the 2007 figure. Consolidated profit (without minority 

interests) therefore fell by over € 1 bn or 49 %, from € 2,254 m to 

€ 1,144 m. 

Results for 2008 (€ m) 

ADJ. 1) ADJ. 2) 

2008 2007 +/– +/– % +/– % +/– 

Operating income 7,231 6,414 + 816 + 13 % + 6 % – 2 % 

Operating expenses – 3,935 – 3,351 – 584 + 17 % + 12 % + 5 % 

Operating profit 3,296 3,063 + 232 + 8 % – 3 % – 10 % 

Net writedowns of loans – 1,012 – 483 – 529 >100 % + 67 % 

Goodwill impairment 

Other items (net income 

– 1,027 0 – 1,027 n.m. + 100 % 

from investments, provisions 

for risks and charges, 

restructuring costs) 

Total non-operating items 

248 160 + 88 + 55 % >100 % 

to be deducted – 1,791 – 323 – 1,468 >100 % + 26 % 

Profit before tax 1,505 2,740 – 1,236 – 45 % – 14 % 

Consolidated profit 1,144 2,254 – 1,110 – 49 % – 19 % 


ADJ.1): adjusted for one-off effects – 2008: special dividend from B&C Holding as part of the sale of 

profit-sharing rights (€ 415 m); 2007: release of pension provision (ASVG equivalent) amounting to 

€ 164 m. 

ADJ.2): additionally adjusted for major consolidation effects (ATF and Ukrsotsbank, ATON, iT-Austria 

not taken into account; including funding costs; without leasing business). 

When analysing the income statement, one should note that it reflects 

one-off effects and consolidation effects. These factors should be 

taken into account in assessing the bank’s operating performance. 

This relates primarily to the analysis of operating profit and its components 

as well as segment reporting. Among the one-off effects, a 

special dividend of € 415 m included in the sub-item dividend income 

within net interest income is the main factor distorting the picture; the 

special dividend was distributed in connection with the sale of profitsharing 

rights in B&C Holding and is partly offset by capital losses on 

this transaction which are reflected in net income from investments 

(referred to as the “B&C effect” in the following comments). Operating 

expenses in 2007 included a € 164 m one-off release of pension 

provisions which the bank made as a result of the amendment to the 

Austrian General Social Insurance Act (“ASVG effect”). 

The acquisition of ATF Bank in Kazakhstan (consolidated as from 

December 2007) and of Ukrsotsbank (consolidated as from the beginning 

of 2008) has extended the group of consolidated companies 

in the CEE network to include large banks operating in countries 

which are at an earlier stage of the convergence process. The Russian 

Aton Group has been consolidated in the Markets & Investment 

Banking (MIB) Division since the end of July 2007, while Informations 

Technologie Austria GmbH (iT Austria) has been accounted for under 

the proportionate consolidation method since the beginning of 2008 

(in the previous year, iT Austria was accounted for using the cost 

method). In the Corporates business segment, the former BA-CA 

Leasing GmbH was a consolidated company in the first two quarters 

of 2007; in the middle of 2007 it was transferred to UniCredit Global 

Leasing – now number one in the European leasing market. Since 

then, a 32.59 % interest in the results of UniCredit Global Leasing has 

been accounted for under the equity method, which means that income 

and expense items in this business segment are not directly 

comparable with the previous year, but the effect on results is less 

significant. This should be noted when analysing the operating performance 

of the Corporates Division. As part of the adjustment for the 

above companies’ contributions to the income statement at Bank 

Austria level, funding costs associated with equity investment management 

in the Corporate Center are eliminated. 

� Maintaining the steady trend in operating activities was one of the 

successes achieved by Bank Austria in a turbulent year. Operating income 

in 2008 increased by € 816 m or 13 % to € 7,231 m, although 

the net trading, hedging and fair value result was € 555 m lower than 

in the previous year. Even without the contributions from the newly 

added banks in Central and Eastern Europe for 2008, the negative 

performance from trading activities was offset by other items: on an 

adjusted basis, operating income in 2008 was only 2 % below the 

high level of the previous year. This was due to expansion in the CEE 

business segment, where operating income rose by € 1,369 m or 

41%; based on adjusted figures, the increase was 20 %. The three 

segments of Austrian customer business also made a significant 

contribution to revenue stability, with operating income totalling 

€ 2,320 m, down by only 6 % – or 3 %, on an adjusted basis – from 

2007; the overall figure also reflects a sharp decline in net fees and 

commissions, which was caused by lower demand from customers. 


11

Net interest income in 2008 was € 5,367 m, up by € 1,431 m or 

36% on the previous year. On an adjusted basis (i.e., not including the 

B&C effect in particular), net interest income rose by 18 %. Most of the 

increase came from the CEE business segment (in the old perimeter) 

and Markets & Investment Banking (MIB). Austrian customer business 

also contributed to this growth. In Central and Eastern Europe, the 

stronger performance was supported by the significant expansion of 

the entire banking sector, which continued until most recently; in this 

context, our local banking subsidiaries recorded stronger deposit 

growth and slightly reduced the proportion of loans to deposits. The 

three Austrian customer business segments generated a 7 % increase 

in net interest income (adjusted for leasing effects). Average volume of 

loans and deposits continued to rise, with strong pressure on margins 

resulting from higher funding and liquidity costs and, above all, from 

intense competition for deposits. The MIB business segment, which 

also includes capital market-related business in large-volume 

corporate banking, such as syndications and structured finance, 

achieved high net interest income and benefited from the capital 

allocation to the business segment, which was transformed into a separate 

legal entity in the middle of 2008. 

Net fees and commissions, the mainstay of revenue growth in the 

past few years, were € 2,076 m, slightly lower than in the previous 

year (– 2 %; on an adjusted basis: – 7 %). CEE still achieved doubledigit 

growth (+ 25 %; adjusted: + 12 %), with the strongest increases 

seen in Turkey (+ 22 %, driven by a substantial expansion of fee-based 

services) and in Russia, where growth reached about 20 %. The structure 

of net fees and commissions differed widely in the various countries: 

some CEE banks recorded large securities turnover in customer 

business, while other countries generated considerable fee and commission 

income from commercial services. Yet the growth of net fees 

and commissions in CEE was relatively weak when compared with the 

strong increase in total operating income in the region; in absolute 

terms, net fees and commissions accounted for 26 % of total operating 

income, which is a comparatively low proportion indicating large potential 

for catching up. In the mature Austrian market, net fees and commissions 

rose to over 40 % of total operating income in 2007, reflecting 

the strong expansion of fee-based business over the past years. In 

2008, net fees and commissions in Austria declined for the first time 

(– 18 %; on an adjusted basis: – 16 %), with a sharp decrease of 32 % 

recorded in Private Banking & Asset Management, which is also responsible 

for production in the securities sector; net fees and commissions 

also declined in the Retail and Corporates business segments. 

Apart from the current restraint in securities business – discernible in 

both sales and capital market issues – the downturn reflects the scepticism 

of customers in all segments towards derivative instruments and 

the difficult market situation in structured products. In previous years, 

the bank strongly promoted these financing, investment and risk-management 

products in its customer business with a view to keeping capital 

requirements down. MIB generated net fees and commissions of 

€ 77 m, less than half the comparative figure for the previous year. 

The net trading, hedging and fair value result for 2008 was a net loss 

of € 414 m; the figure for the previous year – which included two quarters 

before the onset of the credit market crisis – was net income of 

€ 141 m. This means that there was a negative swing of € 555 m. The 

net loss of € 662 m evidenced in this item in the MIB Division compares 

with net trading, hedging and fair value income of € 384 m in 

CEE (including a contribution of € 90 m from the newly added banks), 

with our subsidiaries in Romania, Russia and Croatia making the largest 

contributions to the overall figure. The figure for the Corporate Center 

(– € 147 m) reflects the negative performance of our investment management 

subsidiary in the Cayman Islands (hedge funds) and, to a 

lesser extent, hedging costs related to expected profits for the year. 

Most of the losses recorded in the MIB business segment in 2008 

resulted from mark-to-market adjustments, which were not sufficiently 

offset by the current other components of the net trading, hedging and 

fair value result. Substantial mark-to-market adjustments were required 

mainly in the Credit Structured Products and Credit Trading sectors already 

in the first quarter of 2008. After the collapse of Lehman Brothers, 

the financial market crisis escalated, leading to a situation never 

experienced before. Market participants were suddenly faced with unprecedented 

counterparty risks and credit spreads on all asset classes 

widened dramatically. The market values of instruments which became 

illiquid fell sharply or were hardly determinable any longer. In the final 

months of the year, current trading activities and customer business in 

several market segments slumped to very low levels. Applying the rules 

in the amendments to IAS 39 issued in October 2008, which permit the 

retroactive reclassification of illiquid instruments from financial assets 

held for trading into other categories not requiring measurement at fair 

value, we reclassified the ABS portfolio (largely into loans and receiv - 

ables with customers) thereby avoiding further valuation losses of 

€ 350 m in the net trading, hedging and fair value result. 

Keeping costs under control while pursuing business expansion in CEE, 

and also against the background of the dim outlook for revenues, was 

the objective of long-term projects and ad-hoc cost-saving measures 

effective in the short term in 2008. Operating expenses rose strongly, 

by 17 %, in 2008; however, some 80 % of the € 584 m increase is related 

to changes in the group of consolidated companies. On an adjusted 

basis, costs rose by only 5 % compared with 2007. A comparison 

with the 13 % growth of operating income excluding the net trading, 

hedging and fair value result shows very clearly that cost efficiency 

has made good progress. 


12



Operating expenses 

€ m 2008 2007 +/– % +/– % ADJ. 

Austrian customer business 1,224 1,392 – 12 % – 7 % 

Cost / income ratio 52.8 % 56.3 % – 3.5 %p – 2.5 %p 

CEE 2,234 1,729 + 29 % + 13 % 

Cost / income ratio 47.2 % 51.4 % – 4.2 %p – 2.8 %p 

Bank Austria as a whole 3,935 3,351 + 17 % + 5 % 

Cost / income ratio 54.4 % 52.2 % + 2.2 %p + 3.6 %p 

Both adjusted and unadjusted figures for operating expenses indicate 

that costs in the three Austrian customer business segments were 

reduced in absolute terms (see table). This success underlines the 

sustained turnaround in the Retail Division. In the past years we have 

separated front-office business from back-office activities, and this 

organisational change has proved very effective. The transfer of settlement 

and administrative activities to separate subsidiaries within 

the Group on the basis of refined service level agreements has created 

cost transparency and led to specialisation gains, especially in 

cooperation with Administration Services (AS). Moreover, our costsaving 

programmes, which were intensified several times during the 

second half of 2008, reduced non-staff expenses. On this basis we 

reduced the cost / income ratio (operating expenses as a percentage 

of operating income) in the three Austrian customer business segments 

by 2.5 percentage points (on an adjusted basis), moving closer 

to the 50 % mark. 

Cost growth of 13 % (adjusted for the first-time consolidation of the 

banks in Kazakhstan and Ukraine) in CEE, on the other hand, reflects 

business expansion and our investment in organic growth. The 13 % 

increase in costs based on the previous perimeter compares with 

growth of risk-weighted assets at double the rate (+ 27 % on an adjusted 

basis) and revenue growth of 20 %; it should be noted that 

total costs included those associated with the branch network expansion 

programme which we pursued in 2008. In the old CEE countries 

we opened 386 new branches in 2008 and significantly increased 

staff numbers in this context, especially in Turkey, Romania and Hungary 

(see the section on the CEE business segment). Nevertheless, 

the cost / income ratio in CEE (old perimeter) was reduced by 2.8 percentage 

points. The decline in the cost / income ratio was even 

stronger on an unadjusted basis (– 4.2 percentage points) as the 

newly consolidated subsidiaries in Ukraine and Kazakhstan operate at 

cost / income ratios of below 40 %. 

The cost / income ratio for Bank Austria as a whole does not provide 

meaningful information because income reflects the revenue shortfall 

in the MIB Division. 

� The income statement items leading from operating profit to profit 

before tax resulted in a combined charge of € 1,791 m on Bank Austria’s 

results for 2008. Some of these items are related to operating 

activities – such as net writedowns of loans and provisions for guarantees 

and commitments, and parts of net income from investments; 

other items are provisions for risks and charges, and valuation 

processes with an impact on the income statement, including the 

substantial impairment losses on goodwill. 

� As a result of the developments in the fourth quarter explained 

above, net writedowns of loans and provisions for guarantees and 

commitments rose to over one billion euros in 2008 (€ 1,012 m after 

€ 483 m). The € 529 m increase for the first time includes a total 

provisioning charge of € 214 m for operations in Kazakhstan and 

Ukraine. Adjusted for the factors mentioned above, net writedowns of 

loans and provisions for guarantees and commitments still rose by a 

substantial € 320 m to € 798 m. The risk environment in current 

lending business deteriorated in the fourth quarter of 2008, reflecting 

economic trends. Another – unprecedented – factor was the large 

provisioning charge for banks and counterparties (Lehman Brothers 

and banks in Iceland in particular), which is reflected in the results of 

the Corporates Division with its Financial Institutions sub-segment 

and in Markets & Investment Banking. 

Net writedowns of loans and provisions for guarantees 

and commitments 

€ m 2008 2007 +/– € +/– % +/– % ADJ. 

Austrian customer business 308 272 + 36 + 13 % + 17 % 

Risk / earnings ratio 1) 21.3 % 19.5 % + 1.8 %p + 1.9 %p 

cost of risk 2) 47 bp 43 bp 

Central and Eastern Europe 537 211 + 327 >100 % + 51 % 

Risk / earnings ratio 17.5 % 9.8 % + 7.7 %p + 2.6 %p 

cost of risk 90 bp 51 bp 

Markets & Inv. Banking 3) 165 – 1 + 166 n.m. 

Bank Austria as a whole 1,012 483 + 529 >100 % + 67 % 

Risk / earnings ratio 18.8 % 12.3 % + 6.6 %p + 5.0 %p 

cost of risk 80 bp 46 bp 

1) Provisioning charge as a percentage of net interest income. 

2) Provisioning charge measured as basis points of average lending volume. 

3) Key indicators are of limited informative value. 


Net writedowns of loans and provisions for guarantees and commitments 

in the three Austrian customer business segments increased 

by 13 % to a combined € 308 m. In the Retail Division, the figure 

matched the previous year’s level and the risk / earnings ratio (26.9%) 

improved slightly, while remaining above the average for the bank as 


13

a whole as did the cost of risk at 101 basis points. These developments 

resulted from improved early identification and management 

measures introduced in the past years, and from a sale of loans. The 

impact of the financial market crisis in the autumn and the dramatic 

economic downturn in key industries marked a turning point for the 

Corporates Division. Large provisioning charges for multinational corporates 

and, as mentioned above, for banks led to an increase in net 

writedowns of loans and provisions for guarantees and commitments 

to a level of € 100 m. In 2008, the cost of risk rose to 22 basis points 

of lending volume, after a multi-year low of 15 basis points in the 

previous year and the release of a large provision for a liquidated 

investment in the third quarter of 2008. Portfolio management (including 

the placement of loans in the fourth quarter of 2007) helped 

to significantly improve credit quality compared with the previous 

year. 

Based on the old perimeter of our CEE banking subsidiaries, net 


rose by over one half to € 324 m, clearly exceeding the rate of 

volume expansion (RWA up by 27 %). The risk / earnings ratio (12.7 %) 

and the cost of risk remained at disproportionately low levels. 

The strongest increases over 2007 were seen in Russia (+ € 37 m, 

but with a comparatively low risk / earnings ratio of 14.9 %), Romania 

(+ € 22 m) and in the Baltics (+ € 12 m), a region which has 

experienced a prolonged recession to stabilise the economy; the 

risk / earnings ratio in Romania and in the Baltics is about 50 %. 


at our banking subsidiaries in Kazakhstan and Ukraine in their 

first full year as consolidated companies were particularly conservative, 

at € 124 m and € 89 m, respectively, and the risk / earnings ratio was 

50 % and 32 %, respectively. This is related to integration activities 

involving the initial application of Group-wide risk definitions, method - 

ologies and valuation parameters. Loan portfolios were scrutinised, 

which resulted in a decline in volume in both countries. These 

activities took place against the background of the precarious economic 

situation in which these countries found themselves in 2008 as 

a result of the external financing gap in combination with the withdrawal 

of international lenders and investors. 

At the level of Bank Austria as a whole, net writedowns of loans and 

provisions for guarantees and commitments in 2008 were thus more 

than double the figure for the previous year (on an unadjusted basis). 

The risk / earnings ratio rose by 6.6 percentage points to 18.8 %, the 

cost of risk deteriorated by 34 basis points to 80 basis points. Overall, 

at the end of 2008, 2.49 % of on-balance sheet lending volume was 

classified as non-performing (year-end 2007: 1.80 %), the coverage 

ratio was 49.4 %. 

� Net income from investments for 2008 was € 340 m, a significantly 

higher net figure than in 2007 (€ 268 m). The largest component 

within the total figure was the share of profits of the Polish banking 

subsidiaries, which is defined in the terms and conditions of the 

sale of Bank BPH in November 2006 and amounted to € 237 m 

(2007: € 223 m). Moreover, we realised gains on the sale of equity 

interests which we sold in line with our strategy of concentrating on 

our core business: these included the sale of the equity interest in the 

Czech bank Hypo Stavebni Bank (gain on sale: € 26 m); the sale of 

our shareholding interest in BPH TFI Fund, the asset management 

business of Bank BPH, to GE Money (profit: € 92 m); and the sale of 

the equity interest in the Budapest Stock Exchange (profit: € 41 m). 

The sale of the properties in Am Hof and Vordere Zollamtsstrasse resulted 

in a profit of € 47 m. Net income from investments reflected an 

impairment loss of € 59 m on an investment vehicle. The sale of our 

equity interest in Pioneer Investments Austria GmbH to PioneerGlobal 

Asset Management S. p. A, Milan, on 30 December 2008 resulted in 

a profit of € 66 m. The total package in connection with the sale of 

the bank’s profit-sharing rights in B&C Holding to B&C Beteiligungs - 

verwaltungs GmbH (wholly owned by B&C Privatstiftung) had a negative 

impact on net income from investments in the form of a realised 

book loss of € 163 m (which is more than offset by a final dividend of 

€ 415 m included in net interest income; moreover, an additional 

potential deferred payment amount has been agreed which is conditional 

on the future performance of B&C). Most of the residual amount 

in net income from investments came from current business. 

� The net allocation to provisions for risks and charges was € 87 m 

(2007: € 75 m). This relates to pending legal risks in line with the estimated 

probability of costs arising from litigation. In connection with 

the investments affected by the Madoff case, several customers addressed 

enquiries and complaints to Bank Austria, but Bank Austria 

has not been served with any statement of claims in this context. 

Investors concerned are said to have brought actions before a 

US court against parties including Bank Austria as shareholder of 

Bank Medici AG; in this case, too, Bank Austria has not been served 

with any statement of claims. 

� As mentioned above, we recognised impairment losses of about 

one billion euros on goodwill in the income statment for 2008. We are 

still convinced of the market potential and long-term growth opportunities 

available in the region of Central and Eastern Europe (CEE). 

However, as a result of the dramatic deterioration in global economic 

conditions and the financial impact on the CEE region, forecasts of 

medium-term growth for several countries have been lowered; this 

has led to adjustments in respect of the value stability of recognised 

goodwill. 


14



The recognised goodwill relating to every cash-generating unit was 

tested for impairment in the fourth quarter. For this purpose the 

recoverable amount was compared with the respective carrying 

amount, which is determined on the basis of equity allocated to the 

unit and recognised goodwill relating to the unit. The recoverable 

amount was determined on the basis of the value in use. The value in 

use was calculated using a dividend discount model (DDM) adjusted 

to the specific characteristics of banking business and regulatory 

capital requirements. 

An impairment loss totalling € 1,027 m was recognised in the fourth 

quarter of 2008 in the income statement of Bank Austria as an 

impairment loss on goodwill. The carrying amount of Ukrsotsbank, the 

bank acquired at the beginning of 2008, declined strongly at the end 

of 2008 as a result of exchange rate movements; moreover, an 

impairment loss of € 333 m on goodwill was recognised when it 

became clear that Ukraine is one of the countries hit hardest by the 

global economic crisis. At ATF Bank, the bank in Kazakhstan acquired 

in November 2007, an impairment loss of € 417 m on goodwill was 

recognised as forecasts of medium-term growth had to be lowered. 

Moreover, an impairment loss of € 11 m on goodwill was recognised 

for our unit in Latvia. Among the units combined in UniCredit CAIB in 

the MIB business segment, an impairment loss of € 125 m on goodwill 

was recognised for CAIB Polska and an impairment loss of € 140 m 

on goodwill was recognised for the ATON Group. It is planned to 

transfer this business segment to HypoVereinsbank in 2009. 

Income statement for 2008 compared with 2007 

Change in € m 

Net interest income 

Net non-interest income 

Operating income 

Operating expenses 


Goodwill impairment 

Net writedowns of loans … 

Other items *) 


Consolidated profit 

–45% 

–49% 

–25% 

+17% 

*) Provisions for risks and charges (– € 12 m), restructuring costs (+€ 27 m) 

and net income from investments (+€ 72 m). 

+8% 

+13% 

+36% 

–1,200 –800 –400 0 400 800 1,200 

� Operating profit was € 3,296 m (+ 8 %) and the balance of nonoperating 

items was a net charge of € 1,791 m (2007: – € 323 m). 

On this basis, profit before tax for 2008 was € 1,505 m (down by 

45%). On an adjusted basis, profit before tax amounted to € 2,155 m, 

a decline of 14 %. 

Based on profit before tax, income tax for 2008 was € 222 m, the 

effective tax rate is 14.7 %, slightly higher than in the previous year 

(13.9 %). Net profit amounted to € 1,283 m. Minority interests in net 

income were € 139 m, up by 31 % on the previous year, mainly on 

account of the strong momentum of profit growth at our unit in Turkey. 

Consolidated profit for 2008 was € 1,144 m, down by 49 % or 

€ 1,110 m from the previous year. Adjusted for the above-mentioned 

consolidation effects and one-off effects, consolidated profit declined 

by 19 % compared with the previous year. 

Return on equity (ROE after taxes without minority interests) at 

Bank Austria was 7.8 %, half the figure of the previous year (17.0 %) 

due to non-operating expenses reducing profits. Yet the figure is still 

higher than the long-term yield on government bonds. Earnings per 

share declined from € 11.69 to € 5.66 in 2008, based on the annual 

average number of shares outstanding. 

Proposal for the appropriation of profit: The profit available for distribution 

is determined on the basis of the separate financial statements 

of the group’s parent company, UniCredit Bank Austria AG. The profit 

for the financial year beginning on 1 January 2008 and ending on 

31 December 2008 (after release of the fund for general banking 

risks in the amount of € 1,518.3 m) was € 100 thsd. The profit 

brought forward from the previous year was € 1.9 m. Thus the profit 

available for distribution was € 2.0 m. The Management Board proposes 

to the Annual General Meeting that no dividend be paid on the 

share capital of € 1,468,770,749.80 and that the total profit of € 2.0 m 

available for distribution be carried forward to new account. 


15

Profitability, value creation 

and resources 

The key indicators and performance data for 2008 reflect the unusual 

situation in the MIB business segment, which leads to high percentage 

shares for the commercial banking business segments and our 

two core markets in a long-term comparison. Moreover, when comparing 

the three Austrian customer business segments with the CEE 

business segment, one should note that the weaker trend became 

increasingly discernible in Austria from quarter to quarter, while the 

CEE countries started to be strongly affected by the deterioration in 

the market environment only towards the end of the reporting period. 

If these factors are taken into account, the most recent key indicators 

confirm that Bank Austria, as an Austrian bank and the sub-holding 

company for CEE operations, is continuing its performance along its 

strategic lines under the current exceptional circumstances: in 

Austria, the bank is maintaining its leading market position and 

profitability levels while employing its resources sparingly; in Central 

and Eastern Europe, Bank Austria is taking advantage of the region’s 

continued, disproportionately strong growth. 

In Austria (three customer business segments), business volume expanded 

at a moderate pace typically seen in a mature market (RWA: 

+ 4 %), while revenues contracted as a result of the tighter margins 

referred to above and of the currently discernible shift to business reflected 

in the balance sheet. In CEE, revenue growth fell only slightly 

short of the strong external and internal volume growth of 45 %. Marginal 

Economic Value Added (mEVA) measures value creation beyond 

the cost of capital (net operating profit after tax less minimum return 

required by the market on equity capital employed, excluding goodwill 

impairment). In 2008, Bank Austria generated an mEVA of € 1,091 m, 

a figure which was only 14 % lower than in the previous year. The 

contribution from the Markets & Investment Banking Division was 

negative, at – € 345 m; this business segment recorded a negative 

performance while the capitalisation of UniCredit CAIB increased the 

equity capital employed in the segment. The CEE business segment’s 

contribution to mEVA rose by 35 % to € 783 m in 2008. In the three 

business segments of Austrian customer business (Retail, PB&AM 

and Corporates), value creation beyond the cost of capital was a 

combined € 316 m, down by 12 % from the previous year. 

We increased the capital allocated to our banking subsidiaries in CEE 

by an additional 34 % to safeguard our growth prospects in the region 

in line with our strategy. The capital is intended for the acquisitions 

mentioned above, and for supporting organic growth. Risk-weighted 

assets (average RWA) of the CEE business segment rose by 45 % in 

2008, indicating that capital employment improved. The two newly 

added banking subsidiaries in Kazakhstan and Ukraine made positive 

contributions to mEVA already in the first year of their integration, 

despite the particularly difficult local environment. RARORAC, risk-adjusted 

return on risk-adjusted capital, was 12.5 % in CEE, lower than 

in the very good year 2007 (14.7 %) but still significantly higher than 

the 2006 level (pro-forma figure: 10.2 %). 

Equity capital employed in Austrian customer business rose by 5 % 

and risk-weighted assets (RWA) increased by 4 %. RARORAC was 

10.7 %, also significantly better than in 2006, also as a result of the 

turnaround in the Retail Division since then. While the RARORAC 

figures for Austrian customer business and CEE do not differ by a 

wide margin, there is a significant gap in absolute terms of marginal 

Economic Value Added. 

Resources and profitability 

2008 AUSTRIAN CENTRAL AND 

CUSTOMER BUSINESS *) EASTERN EUROPE (CEE) 

Relative size 

Share of average risk-weighted assets 38 % 52 % 

Share of operating income 32 % 65 % 

Growth 

Average risk-weighted assets, 

% over previous year + 4 % + 45 % 

Operating income, % over previous year – 6 % + 41 % 

Value creation 

marginal EVA, € m 316 783 

RARORAC 10.7 % 12.5 % 

Capital allocation 

Share of equity 24 % 62 % 

Equity, % over previous year + 5 % + 34 % 

*) Retail, PB&AM and Corporates Divisions 


16



At the end of 2008, Bank Austria maintained 3,166 offices, of which 

2,824 (89 %) were in the CEE business segment. In line with the 

strategic objective of expanding retail banking activities especially in 

fast-growing CEE countries with a large population, we strongly enlarged 

the CEE branch network while also adjusting it through several 

branch closures. On balance, 847 branches were added to the network 

of the CEE business segment (+ 43 %). The increase was due to 

consolidation effects (Ukrsotsbank contributed 508 branches at the 

beginning of 2008) and to our branch opening programme (+ 443 

new branches) net of closures. In Austria, the number of branches declined 

as a result of various branches being combined in the Vienna 

area; three new branches were opened in other Austrian regions. 

Offices *) 

31 DEC. 2008 31 DEC. 2007 CHANGE 

Total 3,166 2,343 + 823 + 35 % 

CEE business segment 2,824 1,977 + 847 + 43 % 

Other business segments 342 366 – 24 – 7 % 

Austria (regional) 331 348 – 17 – 5 % 

*) Companies accounted for under the proportionate consolidation method are included at 100 %. 

From 2008 without representative offices. 

The bank’s growth profile in 2008 was also reflected in changes in 

staff numbers. Almost all of the increase of 12,616 to a total of 

67,002 FTEs came from the CEE business segment. Three-quarters 

of the change related to the first-time inclusion of Ukrsotsbank’s 

9,670 employees; adjusted for this consolidation effect, staff numbers 

in 2008 rose by 2,757 FTEs or 6 %. Among the other business 

segments, staffing levels in the three Austrian customer business 

segments and in Markets & Investment Banking declined by a combined 

250. This compares with an increase in Corporate Center staff, 

due to the change in the method used in accounting for iT Austria 

(previously at cost, now at equity). Without this effect, employment in 

the other business segments (Bank Austria without CEE) and in Austria 

(regional definition) would have been down by 4 %. 

Employees (FTEs*) 

31 DEC. 2008 31 DEC. 2007 CHANGE 

Total 67,002 54,387 12,616 23 % 

CEE business segment 56,058 43,648 12,410 28 % 

Other business segments 10,944 10,739 206 2 % 

Austria (regional) 10,175 9,953 222 2 % 

*) Companies accounted for under the proportionate consolidation method are included at 100 %. 

Exchange rate effects 

The currencies of several countries within our perimeter of operations 

depreciated strongly towards the end of 2008. The income statements 

of our subsidiaries, which are not prepared in euro, are translated 

at annual average exchange rates for consolidation purposes. 

Based on annual averages, a comparison with the previous year 

shows that exchange rate movements were relatively small in 2008 

because the partly strong changes in exchange rates took place in 

the last few weeks of the year. Moreover, appreciation and depreciation 

of CEE currencies largely offset one another. Currency translation 

of the contributions to income statement items from our CEE subsidiaries 

had a net exchange rate effect of only € 20 m or 1.5 % of 

the contribution to profit before tax. The impact of exchange rate 

movements on the translation of balance sheet figures at year-end 

2008 was much stronger as year-end exchange rates are used for 

this purpose. The resulting foreign currency translation differences 

are shown as a separate component of equity. 

Major exchange rate movements in 2008 

Appreciation and depreciation against the euro 2008/2007 

15% 

10% 

5% 

0% 

–5% 

–10% 

–15% 

CZK 

Czech crown 

SKK 

Slovak crown 

PLN 

Polish zloty 

Hungarian forint 

based on a comparison of annual average figures 

based on a comparison of year-end figures 

HUF RUB ROM 

Russian rouble 

Romanian leu 

USD 

US dollar 


17

Development of Business Segments 

Retail Division 

(€ m) 

2008 2007 CHANGE 

Net interest income 774 748 + 26 + 3 % 

Net non-interest income 461 517 – 57 – 11 % 

Operating income 1,235 1,266 – 31 – 2 % 

Operating expenses – 851 – 935 + 84 – 9 % 

Operating profit 383 330 + 53 + 16 % 

Net writedowns of loans – 208 – 208 0 0 % 

Net income from investments 6 14 – 8 – 55 % 

Profit before tax 172 135 + 37 + 27 % 

Risk-weighted assets (avg.) 15,751 16,171 – 420 – 3 % 

Average equity 992 1,019 – 27 – 3 % 

Cost / income ratio 69.0 % 73.9 % 

Risk / earnings ratio 26.9 % 27.8 % 

ROE before tax 17.4 % 13.3 % 

1) Average risk-weighted assets for credit and market risk under Basel I. 

2) Equity allocated as defined in note 55, IFRS capital for subsidiaries. 

This information applies to all business segment tables. 

Bank Austria’s Retail Division serves a customer base comprising 

three sub-segments: Mass Market customers, Affluent Customers 

and Small Businesses in Austria. The Division also felt the repercussions 

of the financial market crisis in the course of 2008. It was indirect 

rather than direct impacts that led to divergent developments and 

pronounced structural changes in savings and investment behaviour. 

Investors started to exit high-risk asset classes already in the first half 

of 2008, and performance ultimately proved them right. In the second 

half of September, bank failures in other countries temporarily caused 

uncertainty among private customers, but in October doubts were 

dispelled. After many years, 2008 again saw great demand for on 

balance-sheet products, with a shift away from securities including 

mutual funds. Despite changing sentiment in the market and fears of 

inflation and deflation, our guarantee products met customers’ 

respective preferences and proved very attractive. 

The flexible range of products helped to maintain revenues at a stable 

level, and cost efficiency was further enhanced. Profit before tax 

improved by 27 % to € 172 m after € 135 m in 2007 and a loss 

before tax of € 119 m in 2006. The Retail Division has thereby shown 

that the turnaround achieved in the previous year is sustainable. The 

Division generates a positive contribution to value creation beyond the 

cost of capital, and this contribution can be further improved. At 

7.84% of risk-weighted assets (slightly exceeding the previous year’s 

level), revenues as a percentage of RWA are above the average for 

the bank as a whole. Net writedowns of loans and provisions for 

guarantees and commitments are also above average but were kept 

under control. The Retail Division operates profitably and its deposit 

base supports the bank’s universal banking activities. 

Operating income was € 1,235 m, almost matching the previous 

year’s level. Interest-earning and fee-based business showed highly 

divergent trends. 

Net interest income amounted to € 774 m, up by 3 % on the previous 

year. Contributions to the increase came from the deposit side and 

from lending business. The annual average volume of time deposits 

including our particularly successful capital savings accounts grew by 

almost one-quarter compared with 2007, with interest margins 

narrowing only slightly. Savings deposits, which are more than three 

times the volume of time deposits, were maintained at the average 

level of € 17.2 bn recorded in the previous year. Sight deposits and 

the bank’s own issues declined. Overall volume rose slightly to € 31 bn 

(without safe-custody accounts). In lending business, medium-term 

and long-term loans increased by 4 % year-on-year. There was 

strong demand especially for housing loans (mainly in the Affluent 

Customers sub-segment) throughout the year while short-term loans, 

overdrafts in particular, declined; consumer loans (instalment credit) 

also decreased, though to a lesser extent. On balance, lending volume 

rose only slightly by 1 %; net interest income grew at a lower rate. Interest 

rates increased until mid-summer 2008, then key interest 

rates were reduced several times. The resulting adjustment delays influenced 

margins. Generally, high funding and liquidity costs in the 

banking sector had an impact on short-maturity business in 2008 – 

both short-term deposits and short-term loans such as overdrafts and 

consumer loans; these costs and intense competition for deposits diminished 

interest margins. The decline in volume (of short-term loans 

in particular) is also to be seen in the context of our efforts to put customer 

loans on a medium to long-term basis. 

Net fees and commissions moved in the opposite direction, accounting 

for 38.6 % of operating income in 2008, compared with 43 % in 

the previous year. The decline in net fees and commissions was 

nevertheless limited to 13 %. In absolute terms, the decrease of € 72 m 

is partly offset by the fact that for accounting reasons, part of the 

income from securities business was included in net trading, hedging 

and fair value income (+ € 12 m). The main reason for the decrease 

in net fees and commissions was lower turnover in securities and 

safe-custody business and a sharp decline in derivatives business. 

Fees and commissions from account services and payment transactions 

were maintained at a stable level. 


18



Cost trends had a strong positive influence on results for 2008. Staff 

expenses remained unchanged while non-staff expenses were 

reduced by 14 %. As a result, operating expenses (€ 851 m) were 

down by 9 % or € 84 m from 2007. The cost / income ratio fell by 

almost 5 percentage points to below the 70 % mark (69.0 %). The improvement 

in cost efficiency was again due to successful cooperation 

with Administration Services, Bank Austria’s back-office service 

provider. UniCredit-wide ad-hoc cost-cutting measures also 

contributed to the improvement. 


commitments in 2008, at € 208 m, matched the previous year’s 

level although adverse economic trends were reflected in rising 

numbers of insolvencies as the year progressed. Extensive changes in 

methodology in 2006 and ongoing measures to reduce risk had a 

strong influence on developments in this area. The sale of a package 

of non-performing loans (impaired assets) at the end of 2007 improved 

the risk position on a sustained basis. The risk / earnings ratio 

was 26.9 %, above the average for the bank as a whole – as is 

usually the case in the retail banking sector – but slightly lower than 

in the previous year (27.8 %). Measured by average lending volume, 

the cost of risk in the Retail business segment in 2008 remained 

unchanged at 101 basis points. 

Profit before tax amounted to € 172 m, up by 27 % on the previous 

year. In line with the development of risk-weighted assets, the allocation 

of average equity slightly declined (– 3 %). Return on equity (ROE 

before tax) improved from 13.3 % to 17.4 % mainly on account of the 

higher profit. Marginal Economic Value Added (EVA) reached € 25 m 

after € 11 m, RARORAC was 3.5 %. *) 

*) In this report, EVA and RARORAC always refer to marginal EVA and marginal RARORAC, i.e. the definition 

excludes goodwill impairment. 

Private Banking & Asset Management 

(€ m) 


Net interest income 22 19 + 3 + 15 % 

Net non-interest income 133 183 – 50 – 27 % 

Operating income 155 202 – 47 – 23 % 


Operating profit 54 98 – 44 – 45 % 

Net writedowns of loans 0 1 – 1 n.m. 

Net income from investments 9 3 + 7 n.m. 

Profit before tax 62 99 – 38 – 38 % 

Risk-weighted assets (avg.) 423 452 – 29 – 6 % 

Average equity 182 203 – 21 – 10 % 



The Private Banking & Asset Management (PB&AM) business 

segment, in the structure effective until the end of 2008, combined 

responsibility for serving the top segment of private customers 

through Bank Privat and Schoellerbank, two private banking units 

operating under their own brand names, with important product competence 

and production functions for Bank Austria. These functions 

included those of AMG, a company responsible for discretionary and 

standardised asset management as well as securities-related services 

(including brokerage), and Pioneer Investments Austria (PIA), the 

former Capital Invest. On 30 December 2008, we sold PIA to Pioneer 

Global Asset Management with a view to intensifying the links with 

one of the world’s largest providers of mutual funds. PIA will continue 

to serve the Austrian market, based on the strength, expertise and 

complete range of products of a global investment house. 

� Among the commercial banking business segments active in 

customer business, PB&AM was particularly affected by developments 

in credit and financial markets and the subsequent banking 

crisis in 2008. Losses in value in almost all segments of the global 

financial market – except cash, precious metals and top-quality 

government bonds – had a direct impact on the valuation of asset 

portfolios and mutual funds. Moreover, on balance, investors withdrew 

from medium / high-risk instruments in all areas. The Private Banking 

sub-segment took advantage of the shift by investors from investments 

with high and medium risk to top-rated alternatives, and 

further strengthened its market position among customers with a view 

to benefiting from a future improvement in the investment climate. 


19

After an excellent final quarter of 2007, operating income in the 

PB&AM business segment declined at the beginning of 2008, when 

hopes that the credit market crisis could be overcome were dashed. 

The situation improved in the second quarter in line with stock market 

developments and the upward trend in markets for commodities and 

precious metals, coupled with a – still good – performance of investments 

in emerging markets: operating income remained stable and 

profit before tax improved. However, in the third quarter the remaining 

asset classes which were still turning in a positive performance were 

also adversely affected by the crisis. Responding to the slump in 

market prices, investors increasingly shifted their funds to liquid bank 

deposits. In the wake of the uncertainty triggered by the collapse of 

Lehman Brothers, investors spread their deposits across a number of 

banks. Finally, in the fourth quarter, the economic downturn dashed 

all hopes for a trend reversal. Most investors still prefer risk avoidance 

to long-term asset accumulation; they are looking for “absolute return”, 

currently giving preference to fixed deposits or guarantee products. 

Even satisfactory relative performance (compared with the underlying 

benchmark indices) lost its attractiveness as the financial crisis 

progressed. 

Performance of asset classes 

% CHANGE OVER YEAR-END 2007 JUNE 2008 DEC. 2008 2 MARCH 2009 

MSCI World Stock Index – 14.0 % – 40.9 % – 49.7 % 

… Emerging Europe – 11.5 % – 64.7 % – 69.4 % 

… BRIC – 16.3 % – 55.0 % – 57.7 % 

Austrian shares (ATX) – 12.6 % – 61.2 % – 68.2 % 

Emerging markets bonds 1) – 0.3 % – 12.1 % – 11.9 % 

Commodities (Rodgers, €) + 30.2 % – 44.9 % – 46.1 % 

Gold price (US$ / oz) + 10.9 % + 5.4 % + 14.7 % 

Money market, euro 2) + 2.6 % + 5.9 % + 6.8 % 

Austrian government bonds (7 – 10yr) 3) – 1.3 % + 10.0 % + 8.3 % 

1) JP Morgan EMBIG; 2) 6-month money, cumulative (JP Morgan Eurocash Index); 

3) Austrian government bonds, 7 – 10 years, SSB WGBIndex, total return (coupon + price). 

� In 2008 the PB&AM Division generated a profit before tax of € 62 m. 

This represents a decline of 38 % from the previous year, which 

included two quarters before the onset of the sub-prime crisis. Operating 

income was down by 23 %, with net fees and commissions – 

mainly reflecting sales and turnover in securities business – 

contracting by 32 %. Net interest income (not so significant in this 

business segment) rose by 15 %. The cost-cutting programme was 

stepped up, which lowered operating expenses by 2 %. Net income 

from investments (+ € 9.2 m after + € 2.5 m) included realised gains 

on investments. PB&AM’s profit before tax of € 62 m gives a return 

on equity (ROE before tax) of 33.9 % (2007: 48.9 %). Given the high 

proportion of fee-based business and advisory services – which 

keeps capital allocation at a low level – in this business segment, the 

return beyond the cost of capital (marginal RARORAC) is far above 

average, at 23.4 %. 

� Private Banking, one of the two sub-segments of the PB&AM 

Division, performed relatively well by offering integrated investment 

advisory services and promoting defensive products in 2008, one of 

the worst years for investments ever. Bank Privat generated net 

inflows of € 252 m, notwithstanding a 12 % decline in total volume 

(€ 5.9 bn) following the slide in financial markets. In the second half 

of the year, demand focused on government debt instruments across 

all maturities. Bank Privat placed customised, highly-rated interestrate 

products especially for this risk-averse environment. Schoellerbank 

recorded net inflows of € 476 m, with new customers accounting 

for most of this amount. Despite the sharp fall in stock markets, 

volume declined by only about 4 % to € 6.4 bn. Both private banking 

units are taking advantage of the current market situation to draw 

their clients’ attention to the long-term benefits of diversifying away 

from the current preference for liquid assets in favour of bonds and 

anti-cyclical investments, thereby preparing for times when the 

market is in better condition. AMG was faced with the return of some 

asset management products, but it recorded a rise in turnover from 

brokerage activities towards year-end 2008, even if this increase was 

often at the expense of direct investment. Structured products, 

primarily guarantee products, were the only category for which there 

was still a favourable level of demand in 2008. AMG launched 14 

structured bonds (six for the Retail segment, eight for Bank Privat) 

with a total volume of € 365 m (+ 12 % over the previous year). At the 

Total financial assets in Private Banking in 2008: 

€ 13,767 m 

€ m 

Institutions 

AMG 

Bank Privat 

Schoellerbank 

1,889 

5,918 

6,414 

Double counting – 454 

Asset mix 

254 

3,264 

Assets under advisory 

(discretionary management) 

Assets under custody 

(safe-custody accounts) 

5,128 Assets under management 

5,107 Direct deposits 

14 

Double counting/rest 


20



end of December, total financial assets in Private Banking were 

€ 13.8 bn, down by 11 % from the year-end 2007 figure. The decline 

in volume was significantly lower than market performance. 

� Pioneer Investments Austria (PIA) held its own in the challenging 

environment prevailing in 2008. The mutual fund market saw a sharp 

decline in volume caused by negative price developments in securities 

markets and by outflows of funds. 

While fund volume in the market as a whole fell by 23 % in 2008, PIA 

recorded a decline of 18 %, thus losing much less ground and achieving 

by far the best performance among the top 3 fund management 

companies in the Austrian market. PIA is the only major Austrian fund 

management company that gained market share in 2008, from 15.2 % 

at the end of 2007 to 16.2 % at year-end 2008. The increase was due 

to various factors, including the successful placement of guarantee 

funds with private investors over the past years. This product category 

was affected by price declines only to a limited extent, which also led 

to lower outflows of funds. Funds for large investors, accounting for 

about 57 % of total volume at Pioneer Investments Austria at the end 

of 2008, also showed significantly better trends than the market as a 

whole. In this area, PIA maintained its 2nd place ranking in the 

Austrian market and was the only major fund management company 

in Austria to expand its market share. The increase from 15.9 % to 

17.3 % was even more pronounced than in the area of retail funds. 

Numerous awards which are based on annual and / or multi-year performance 

as at year-end 2008 and were received at the German Fund 

Awards 2009, the Lipper Fund Awards Austria 2009 or the Morningstar 

Fund Awards 2009 show that the high quality of Pioneer Investments 

products is recognised even in difficult times. 

Pioneer Investments Austria 

Assets under management in 2008: € 20,470 m 

in % 

… by target groups 

Institutional funds 

Retail funds 

57 

43 

… by asset categories 

5 

3 

32 

61 

Equity funds 

Money-market funds 

Mixed funds 

Bond funds 

Corporates 

(€ m) 

2008 2007 CHANGE WITHOUT 

LEASING *) 

Net interest income 655 630 + 25 + 4 % + 11 % 

Net non-interest income 275 375 – 101 – 27 % – 14 % 

Operating income 930 1,005 – 75 – 8 % + 2 % 

Operating expenses – 271 – 353 + 81 – 23 % – 2 % 

Operating profit 658 652 + 6 + 1 % + 4 % 

Net writedowns of loans – 100 – 66 – 35 + 53 % 

Net income from investments – 57 – 12 – 45 – >100 % 

Profit before tax 492 570 – 78 – 14 % 

Risk-weighted assets (avg.) 33,158 31,009 + 2,149 + 7 % 

Average equity 2,477 2,260 + 216 + 10 % 


Risk / earnings ratio 15.3 % 10.4 % 


*) Leasing business not included because of different accounting methods used in 2007 and 2008. 

Although current business in the Corporates Division – like that of its 

customers – came under growing pressure from different sides as 

the year progressed, the Division achieved a good operating performance 

in 2008: operating profit was € 658 m, exceeding the very high 

level of the previous year (+ 1 % as reported, + 4 % adjusted for consolidation 

effects in the leasing business). 

Given the different methods used in accounting for leasing business 

(consolidation of BA-CA Leasing until and including the first half of 

2007, since then shareholding interest in UniCredit Global Leasing 

S.p.A. accounted for under the equity method, see note on page 57), 

a comparison of specific income and expense items with the previous 

year does not provide meaningful information. For this reason the 

following comments also include performance figures adjusted for 

this structural effect. 


21

The progressive financial market crisis, the sharp decline in global 

stock markets, the rising credit spreads demanded by the market 

and, finally, the dramatic downturn in economic activity in the last few 

months of the year led to pronounced changes in demand and 

customer preferences also in this business segment. Thanks to its 

leading market position and wide range of products and services, the 

Corporates Division responded to the changed environment in a 

flexible manner. Based on our systems-supported analysis tools 

(FinanzierungsCheck and WorkingCapitalCheck), we assisted our corporate 

customers in optimising their financing structure and liquidity 

position. Corporates thereby precisely met the current needs of its 

customers while also further improving the efficient use of our 

product range. 

� Despite the unfavourable environment, operating income in the 

Corporates business segment totalled € 881 m (without leasing business), 

matching the high level of the previous year (+ 2 %). The total 

figure reflects divergent trends in the various product groups and in 

the components of the income statement. While interest-based business 

volume rose strongly throughout the year, fee-earning business 

was affected by customers’ restraint in securities transactions and 

commercial derivatives – the very products which the bank as market 

leader and innovator promoted strongly in recent years. However, 

without leasing business, the absolute increase in net interest income 

more than offset the decline in net fees and commissions. 

� Despite the effect of deteriorating funding conditions and rising 

liquidity costs, net interest income in 2008 increased by 11 % on an 

adjusted basis although this item includes income from companies 

accounted for under the equity method which declined in the reporting 

year. Most of the increase resulted from lending business, with 

average volume up by 8 % and interest rate spreads remaining more 

or less unchanged. Medium / long-term loans, accounting for almost 

two-thirds of total volume, made the largest contribution to growth. 

Short-term loans expanded at a disproportionately high rate, but represented 

a much smaller proportion of lending volume. Trade finance 

rose by a strong 40 %, though pressure on margins increased. In this 

area the bank further expanded its leading market position supported 

by positive network effects in the Group. On the liabilities side, deposit 

volume grew by almost 20 %, mainly in time deposits, which were up 

by more than 40 %; however, a decline in interest rate spreads offset 

a significant part of the growth effect. These business developments 

show very clearly that customers currently prefer bank deposits to 

securities investments. 

� Net fees and commissions fell by 15 % in 2008 (on an adjusted 

basis). This exceptional decline was due, in about equal measure, to 

securities business and to fees and commissions from derivatives, 

which were down by 40 % and 30 %, respectively. The figure for 

derivatives includes, however, the significantly higher hedging costs 

relating to the securitisation of the bank’s own portfolio. In commercial 

business, our customers again increasingly used derivatives for 

risk management purposes in the final part of the year, mainly in the 

Financial Institutions sub-segment. A slight increase in fees and 

commissions from domestic payments was offset by a decline in fee 

and commission income from international payment transactions. 

Trade Finance generated very strong net fees and commissions from 

services including Cash Management, an area in which the bank is 

among the European specialists. 

Costs in the Corporates Division declined significantly over the past 

quarters. Operating expenses in 2008 were reduced from the previous 

year’s level (– 2 % on an adjusted basis; down by 23 % if leasing is 

included). The cost / income ratio therefore improved to 30.8 % after 

32.0 % in the previous year. Staff expenses rose by 8 %, reflecting the 

regional business initiatives in Western Austria. Non-staff expenses 

fell strongly (– 8 %) in connection with further progress in efficiency 

achieved through cooperation with GBS service providers which are 

separate entities within the Group, and as a result of cost-reduction 

measures adopted in autumn 2008. 

Corporate bonds with higher credit spreads (% p.a.) 

7.00 

6.00 

5.00 

4.00 

3.00 

2.00 

1.00 

0.00 

Corporate bonds 

with rating 

BBB credit 

Capital market rate, 

5 years (interest rate swaps) 

3-month money rate 

(interbank market) 

Q1 Q2 Q3 Q4 Q1 



22



� As in the other Divisions, the good operating performance of the 

Corporates Division was affected by the economic downturn in the 

fourth quarter and by the impact of the crisis in the banking sector. 

(Figures in the following comments are unadjusted figures.) 

� Net writedowns of loans and provisions for guarantees and 

commitments rose to € 100 m, compared with € 66 m in the previous 

year. In the first six months of the year, the provisioning charge declined 

to a multi-year low, with a risk / earnings ratio of 7.3 %, thanks 

to improvements in portfolio quality and the then still favourable economic 

trend; the third quarter saw the release of a large provision. 

The abrupt reversal of the trend in the fourth quarter was partly a 

direct result of the financial market crisis, which required substantial 

provisions in the Financial Institutions profit centre for banks in Iceland 

and other banks. In addition, the downturn in industrial activity led to 

an increased provisioning requirement in the International Corporates 

sector. The risk / earnings ratio for the year as a whole thus rose by 

almost 5 percentage points to 15.3 %. On an annual average, the cost 

of risk was 22 basis points of average lending volume (2007: 15 bp), 

a figure which is still considerably lower than the average for the bank 

as a whole (80 bp). 

� Net income / loss from investments for 2008 was a net loss of 

€ 57 m, compared with a net loss of € 12 m in the previous year. The 

figure reflects the impairment loss on an investment vehicle in the 

third quarter of 2008 which included structured investments that had 

to be liquidated in view of the sharp fall in market prices. 

Profit before tax reached € 492 m in 2008, down by 14 % from the 

previous year. Given the growth of about 7 % in risk-weighted assets 

(average RWA), average equity also increased (+ 10 %) and ROE 

before tax declined to 19.9 % after 25.2 % in the previous year. Based 

on the market position, supported by the cross-regional network of 

UniCredit Group, and the level of cost efficiency, the Corporates 

Division made a substantial contribution to value creation in Austria, 

even if the less favourable risk position and higher equity capital 

employed weighed on performance. Marginal EVA amounted to a 

strong € 263 m, a decrease of 9 % compared with € 289 m in the 

previous year. Marginal RARORAC (risk-adjusted return on risk-adjusted 

capital) was 12.3 % after 14.5 %. 

Markets & Investment Banking (MIB) 

(€ m) 


Net interest income 731 330 + 400 >100 % 

Net non-interest income – 589 140 – 729 n.m. 

Operating income 142 470 – 329 – 70 % 


Operating profit – 64 238 – 301 n.m. 

Net writedowns of loans – 165 1 – 166 n.m. 

Net income from investments – 24 1 – 25 n.m. 

Profit before tax – 253 237 – 490 n.m. 

Risk-weighted assets (avg.) 7,711 5,352 + 2,359 + 44 % 

Average equity 5,112 1,960 + 3,153 >100 % 

The data for the key performance indicators are not meaningful. 

In 2008, the MIB business segment was faced with unprecedented 

market turmoil. As mentioned in several sections of this report, the 

financial market crisis came in several waves in the past one and a 

half years, affecting almost all market segments and coming to a 

head in the final quarter of 2008. Originating from the US sub-prime 

segment, the crisis spread to the entire credit market via structured 

securitisations, spilling over into the corporate sector and emerging 

markets as the year progressed. The collapse of the US investment 

bank Lehman Brothers on 15 September 2008 marked a decisive 

point for the industry: in addition to continued falls in market prices 

for troubled assets, the rise in spreads and the sharp downturn in 

stock markets, counterparty risk became an essential argument – 

suddenly and without precedent – which brought trading and, above 

all, the primary market to a virtual standstill. Many market participants, 

including prominent names, were faced with a downward spiral of fair 

value adjustments, reduction of risk-weighted assets (deleveraging) 

as well as funding and liquidity problems. Several prominent US 

investment banks which were exclusively active in proprietary trading 

and funded their operations via the market lost their independence. In 

Europe, banks with significant exposures also experienced difficulties 

and had to be supported through stabilisation programmes put in 

place by governments. 

As a result of these developments, universal banks also need to cope 

with risks which were previously of lesser significance: the risk of 

default of counterparties in trading activities (counterparty risk), 

especially in the context of repos, derivatives transactions and 

structurings. Moreover, in the last few months of 2008, the crisis 

spilled over from the financial sector to the real economy. The sharp 

downturn in economic activity led to a further significant decline in 


23

stock market prices – previously hardly thought possible – and the 

combination of global recession and withdrawal from remaining exposures 

triggered macroeconomic risks. The markets experienced a 

panic attack with regard to CEE countries, regardless of their fundamentals 

and long-term outlook. This led to balance-of-payments difficulties 

and currency depreciation, phenomena seen especially in the 

1970s and 1980s. 

➔ These developments had a direct impact resulting from a sharp 

fall in market prices and higher credit spreads. They also changed the 

level and structure of demand from our customers as well as 

turnover: entire market segments dried up, especially the primary 

market; on the other hand, the related need for advisory services and 

risk management also offered opportunities. Those were the factors 

that characterised the MIB Division’s operating environment. 

� The quarter-by-quarter analysis of revenues generated by MIB 

(see chart) shows this dramatic development. Revenues reflect the 

volatility of the net trading, hedging and fair value result, which 

reached a low (net loss of € 196 m) in the first quarter of 2008 due to 

significant mark-to-market adjustments, mainly on the portfolio of 

asset-backed securities (ABS). The valuation result also had an impact 

on the subsequent quarters, though to a lesser extent, while the 

performance from trading in credit market instruments deteriorated 

as the year progressed. At the beginning of the second half of 2008, 

we applied the rules in the amendment to IAS 39 and reclassified the 

ABS portfolio out of financial assets held for trading into loans and 

receivables with customers. For the year as a whole, we thereby 

avoided book losses of € 350 m in the net trading, hedging and fair 

value result. In the fourth quarter, the net trading, hedging and fair 

value result fell further, to a net loss of € 283 m. This was due to 

sluggishness in current business and to the fact that the previously 

stable link between spot markets (e.g. yield on corporate bonds) and 

derivatives (related CDS spreads) no longer applied. This “basis risk” 

caused problems in hedging and made trading activities more difficult, 

leading to losses especially in credit-related areas. Moreover, 

volatility in stock markets rose strongly in the fourth quarter. Given the 

unusually strong correlation between global stock markets, even good 

diversification had little effect. However, the negative net trading, 

hedging and fair value result was almost fully offset in the fourth 

quarter of 2008 by a record level of net interest income, which 

resulted from accrued interest, successful interest rate management 

and advantage being taken of the steeper yield curve. 

Operating income in the MIB Division amounted to € 142 m in 2008, 

down by 70 % on the previous year due to a net loss of € 662 m in the 

net trading, hedging and fair value result and lower net fees and commissions 

(€ 77 m after € 172 m); results for 2007 included two quarters 

before the onset of the sub-prime crisis. Net interest income was 

€ 731 m, double the figure for the previous year (€ 327 m). 

� An analysis of performance by market segment provides more 

meaningful information in economic terms than the analysis of items 

in the income statement. This shows that apart from the losses in 

market value, there were areas in current business which performed 

well on account of their proximity to customers in 2008. 

In the Markets area, classic trading operations comprising FIC (Fixed 

Income, Currencies) made the strongest contribution. This shows that 

interest rate management, foreign exchange trading and the Emerging 

Markets team as well as Custody are the mainstay of the Markets 

area; these units are particularly close to customers and are capable 

of delivering a sustained contribution to value creation even in such 

volatile periods as the second half of 2008. Within the Equity sector, 

Sales helped to offset the very low level of market activity in private 

equity transactions and capital market measures. Our Brokerage unit 

benefited from turnover which was also related to the reduction of 

positions and won new market participants as customers. The abovementioned 

significant losses recorded in credit-near trading were 

largely offset by current customer-related operating activities. Investment 

Banking, the other MIB area, generated a profit for 2008 but 

fell short of expectations. While many M&A projects were postponed 

until further notice, Corporate Solutions / Austria achieved very good 

results in the Financing sector, benefiting from its excellent customer 

relationships. Corporate Finance Emerging Europe also made a good 

contribution to revenues. Principal Investments, which manages 

alternative investments of the Group, was affected by the liquidation 

of numerous hedge funds and recorded losses. 

� The MIB Division intensified its cost-cutting programme in view of 

the difficult revenue situation and outlook. Operating expenses of the 

Division were down by 12 % to € 206 m. Contributions to this improvement 

came, above all, from lower provisions for performancerelated 

remuneration components, which were substantially reduced. 

A hiring freeze, fluctuation among traders and the implementation of 

the restructuring project from the fourth quarter onwards have also 

produced tangible effects. The number of employees declined by 16 % 

to 770 FTE. Non-staff expenses were more or less unchanged. Nevertheless, 

in view of the renewed escalation of the crisis, revenues were 

too weak to absorb the lower costs. MIB recorded an operating loss 

of € 64 m for 2008 (after an operating profit of € 238 m in the previous 

year). 


24



For the first time in many years, the MIB Division had to make 

significant loan loss provisions for credit risk in the amount of € 165 m 

as a result of developments since September 2008. The provisions 

relate mainly to transactions with banks which have collapsed 

(Lehman Brothers, banks in Iceland), irrecoverable equity repo transactions 

with Russian counterparties and financing transactions with 

customers in the commodities sector. Provisions also had to be made, 

though to a lesser extent, for individual assets from the ABS portfolio 

reclassified out of financial assets held for trading into loans and 

receivables with customers in the middle of 2008. MIB recorded a 

net loss from investments of € 24 m (2007: net income from investments 

just over zero). 

➔ The negative net trading, hedging and fair value result, the 

revenue shortfall in net fees and commissions and, additionally, the 

provisioning charge were the main reasons for the swing from a profit 

before tax of € 237 m in 2007 to a loss before tax of € 253 m in 

2008. 

� Following the transfer of the trading activities of UniCredit Bank 

Austria AG to UniCredit CAIB AG, the transfer of the required systems 

and processes and the consolidation of IT systems, trading and 

capital markets business has been performed by UniCredit CAIB AG 

as legal successor to UniCredit Bank Austria AG since 1October 2008. 

Pursuant to a resolution adopted by the Management Board, it is 

planned to transfer UniCredit CAIB to HVB. The increased equity 

capital employed in the MIB business segment in 2008 reflects the 

capitalisation of UniCredit CAIB. As explained in the comments on the 

balance sheet on page 31 of this report, UniCredit CAIB is classified 

as held for sale in the consolidated balance sheet at 31 December 

2008 and is included in the items Non-current assets and disposal 

groups classified as held for sale and Liabilities included in disposal 

groups classified as held for sale. 

The transfer of Bank Austria’s trading and capital markets activities to 

a specialised unit of UniCredit Group is in line with the Restated Bank 

of the Regions Agreement (REBORA) made after the business combination 

to form the new UniCredit Group in 2005. In light of the current 

market situation, this move is of major operational significance: the 

organisational and legal combination of all Markets & Investment 

Banking units of the entire UniCredit Group to form a unit operating 

on a multi-local basis enables it to use economies of scale and 

network effects, improve diversification and enhance efficiency. 

Capital markets activities will benefit from improved competitiveness 

also in Bank Austria’s core markets. In the second half of 2008 

UniCredit Group’s MIB Division started to implement a restructuring 

programme which aims at a strict reorientation towards customerdriven 

business while reducing proprietary trading. Moreover, the 

Group has taken organisational measures to establish close cooperation 

with local units of the Large Corporates sub-segment of the 

Corporates Division. This will ensure continuity in serving customers 

in Austria and CEE with a higher level of effectiveness. 

MIB: operating income by quarter (€ m) 

250 

200 

150 

100 

50 

0 

–50 

–100 

–150 

–200 

–250 

Other components 

of operating income 

Net trading, hedging and fair value result MIB 

–300 

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 

Total 

operating 

income 


25

Central Eastern Europe (CEE) 

(€ m) 

2008 2007 CHANGE ADJ. *) 

Net interest income 3,068 2,151 + 916 + 43 % + 20 % 

Net non-interest income 1,668 1,216 + 452 + 37 % + 20 % 

Operating income 4,736 3,367 + 1,369 + 41 % + 20 % 

Operating expenses – 2,234 – 1,729 – 504 + 29 % + 13 % 

Operating profit 2,502 1,638 + 864 + 53 % + 27 % 

Net writedowns of loans – 537 – 211 – 327 >100 % + 51 % 

Net income from investments 123 20 + 103 >100 % >100 % 

Profit before tax 2,019 1,342 + 677 + 50 % + 35 % 

Risk-weighted assets (avg.) 67,682 46,593 + 21,089 + 45 % + 27 % 

Average equity 9,483 7,099 + 2,384 + 34 % … 

Cost / income ratio 47.2 % 51.4 % 48.7 % 

Risk / earnings ratio 17.5 % 9.8 % 12.7 % 

ROE before tax 

*) without ATF and Ukrsotsbank. 

21.3 % 18.9 % … 

Several unfavourable factors combined to produce an increasingly 

critical economic environment for the countries in Central and Eastern 

Europe (CEE) in the course of 2008, though there were significant 

regional differences. After a strong increase in world market prices for 

commodities and primary products in the first half of the year, price 

levels fell dramatically in the summer, hitting Russia, Ukraine and 

Kazakhstan. International investors’ risk aversion was initially reflected 

in sharp increases in credit spreads; towards the end of 2008, inflows 

of international capital dried up, leading to balance-of-payments 

problems and currency depreciation in countries with an external 

financing gap. Most recently, the sharp downturn in industrial activity 

spilled over into EU member states and candidates for EU membership 

in Central and Eastern Europe. 

� In this challenging environment, our CEE banking subsidiaries 

continued to expand their business and generated higher operating 

income and profits from quarter to quarter throughout the year (see 

chart). ATF Bank, Kazakhstan, and Ukrsotsbank, Ukraine, have been 

included in the group of consolidated companies since December 

2007 and the beginning of 2008, respectively. These banks also 

achieved growth in revenues and profits from quarter to quarter in 

2008: the combined operating profit of the two banks in Q4 was 

double the Q2 figure. In the fourth quarter, the CEE banks as a whole 

– and the two newly added banks in particular, given the country 

profiles – felt the impact of the deteriorating outlook and had to set 

up substantial loan loss provisions. Despite this development, profit 

before tax in the fourth quarter reached € 485 m, a significant 

increase over the first-quarter figure (€ 420 m). 

➔ Overall, 2008 was another very successful year for the CEE 

business segment. Business volume on a local currency basis 

continued to expand, even without consolidation effects, and provided 

the basis for revenue growth. Costs remained under control, despite 

our investment in the branch network and the integration of the two 

new banks. Net writedowns of loans and provisions for guarantees 

and commitments developed in line with expectations, remaining 

below the risk / earnings levels in the mature West European 

economies. A major asset is the balanced diversification of our presence, 

covering countries with different economic structures. The 

banking subsidiaries in all countries – with only two exceptions, 

namely the Baltics (as a result of a prolonged recession) and Bosnia 

(on account of special effects in 2007) – achieved double-digit profit 

growth, thus contributing to the bank’s overall profits. 

� Operating income in 2008 amounted to € 4.7 bn, up by 41 % 

on 2007, and accounted for two-thirds of the total figure for 

Bank Austria. Even adjusted for consolidation effects, operating income 

grew by 20 %. 

CEE business segment expanding throughout the year, 

but provisioning charge increases (€ m) 

700 

600 

500 

400 

300 


Net writedowns of loans 

and provisions for guarantees 

and commitments, net 

income from investments, 

other non-operating items 


200 

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 

2007 

2008 


26



Operating income in 2008 by country group 

€ m 2008 SHARE +/– € m +/– % 

CEE business segment 1) 4,736 100 % + 1,369 + 41 % 

Central Europe 2) 879 19 % + 117 + 15 % 

South-East Europe (SEE) 3) 1,392 29 % + 186 + 15 % 

“Broader Europe” 4) 1,715 36 % + 384 + 29 % 

Recent acquisitions 5) 737 16 % + 707 5) 

1) Difference in total: CEE headquarters in Vienna. 2) Slovakia, Czech Republic, Hungary, Slovenia. 

3) Romania, Bulgaria, Croatia, Serbia and Baltics. 4) Russia and Turkey (proportionate share). 5) ATF Bank, 

Kazakhstan, consolidated since 1 December 2007; Ukrsotsbank, Ukraine, consolidated since 1 January 2008 

A breakdown by revenue components indicates a steady trend: while 

the profile shows similar developments to those in the Group’s 

mature core markets (strong net interest income, weak net fees and 

commissions), growth is driven by the general expansion of the 

banking system: risk-weighted assets (average RWA) in the old 

perimeter increased by 27 % (if the recently acquired banks are 

included, average RWA rose by 45 %). 

Revenue components for 2008 compared with 2007 

€ m 0LD PERIMETER ACQUISITIONS 

2008 +/– € +/– % 2008 

Net interest income 2,544 + 416 + 20 % 524 

Net fees and commissions 

Net trading, hedging and 

1,037 + 110 + 12 % 127 

fair value result 298 + 125 + 72 % 86 

The strong increase in net interest income (old perimeter: + 20 %) 

was driven by volume expansion with satisfactory trends in margins; 

this applies to all country groups and all countries. Net fees and 

commissions grew by 12 %, a disproportionately low rate. The largest 

contribution to growth in this component came from Turkey (+ € 58 m / 

+ 11 %) and especially Russia (+ € 162 m /+ 45 %). In 2008, the CEE 

Division also generated significantly higher net trading, hedging and 

fair value income: including the new banks, it reached € 384 m 

(without the new banks, € 298 m) after € 177 m in the previous year. 

This is an indicator of the commercial background of trading activities, 

reflecting the significance of instruments used for interest-rate 

and exchange-rate management in countries with large corporate 

banking operations. The best performance in this context (€ 171 m) 

and the strongest growth was achieved in Romania, followed by 

Russia (€ 74 m), Ukraine (€ 54 m) and Kazakhstan (€ 36 m). 

Costs in 2008 grew at a significantly lower rate than revenues in the 

previous year, both in the new consolidation perimeter (+ 29 %) and in 

the old perimeter (+ 13 %). As a result, the cost / income ratio improved 

on both definitions: from 51.4 % to 48.7 % (old) and from 51.4 % to 

47.2 % (new). The cost / income ratio in the CEE business segment 

was significantly lower than the average for the bank as a whole 

(54.4 %). 

Operating expenses in 2008 by country group 

€ m 2008 +/– € m +/– % C / I % 08 

CEE business segment 2,234 + 504 + 29 % 47.2 % 

Central Europe 407 + 35 + 9 % 46.3 % 

SEE 713 + 90 + 15 % 51.2 % 

“Broader Europe” 719 + 90 + 14 % 41.9 % 

Acquisitions 294 + 283 39.9 % 

This is to be seen against the background of our ongoing branch network 

expansion programme, investments aimed at unlocking further 

cross-regional synergies, and the rebranding process. In our Three- 

Year Plan presented in the middle of 2008, we announced the opening 

of about 1,200 new branches, depending on future economic 

developments. In September 2008 we put the plan on hold for 2009 

until further notice. In 2008, we opened 433 new branches, bringing 

the total number in our network to 2,824. The programme focuses on 

growth markets: we opened 176 new branches in Turkey, where a 

new branch reaches the break-even point in less than one year, on 

average. Romania is in second place in the old perimeter, with 101 

new branches opened in 2008, followed by Hungary (34), Russia (20), 

Serbia (22) and Bulgaria (10) as well as the new markets Ukraine (24) 

and Kazakhstan (23). 

� The deterioration in economic conditions in 2008 is mainly 

reflected in the “non-operating” items between operating profit and 

profit before tax. Net writedowns of loans and provisions for 

guarantees and commitments were € 324 m in the old perimeter in 

2008, up by one half on 2007; the reported figure was € 537 m 

(2007: € 211 m). 


commitments in 2008 by country group 

€ m 2008 +/– € m +/– % R / E % 08 

CEE business segment 537 + 327 >100 % 17.5 % 

Central Europe 67 + 16 + 30 % 11.7 % 

SEE 89 + 41 + 84 % 10.9 % 

“Broader Europe” 168 + 55 + 48 % 15.2 % 

Acquisitions 214 + 218 40.9 % 


27

Two-thirds of the increase in the provisioning charge resulted from 

the consolidation in 2008 of ATF / Kazakhstan (€ 124 m) and 

USB / Ukraine (€ 89 m). The consolidation effect should not obscure 

the fact that the risk position in these countries is precarious. The 

risk / earnings ratio of these two banking subsidiaries is 50 % and 

32 %, respectively, the cost of risk is close to 240 basis points in both 

cases. In the Kazakh banking sector, work on adjusting the loan portfolio 

has been underway for some time, recently in a more challenging 

environment. In Ukraine, economic trends are the main reason for 

the deterioration. Added to country-specific factors is the strict application 

of UniCredit risk management methodologies with a view to 

putting the loan portfolio on a healthy basis. 

Based on the old consolidation perimeter, net writedowns of loans and 

provisions for guarantees and commitments were also substantially 

higher, at € 324 m, than in the previous year (€ 215 m). Of the € 109 m 

increase, € 37 m was accounted for by Russia, in connection with 

credit risk resulting from large trading operations. Romania (+ € 22 m) 

and the Baltics (+ € 12 m) also recorded strong increases. In the 

other countries, the rising provisioning charge is currently well in line 

with general business expansion and the focus on retail banking and 

business with medium-sized companies. Benefiting from diversification, 

the risk / earnings ratio is still comparatively low, at 17.5 %, also 

in the extended consolidation perimeter. The cost of risk, i.e. the ratio 

of provisioning charge to average lending volume, was 90 basis 

points in the CEE business segment (new) in 2008, compared with 

51 basis points in the previous year. 

Net income from investments was significantly larger in 2008 

(€ 123 m) than in the previous year (€ 20 m). Most of the increase 

was due to gains on the sale of Hypo Stavebni, our building society in 

the Czech Republic, and of the equity interest in the Budapest Stock 

Exchange. 

➔ Operating profit was € 2,502 m, up by € 864 m or 53 % on the 

previous year. In 2008, the CEE Division generated a profit before tax 

of over two billion euros (€ 2,019 m), an increase of 50 % over the 

previous year; without the banks in Kazakhstan and Ukraine, which 

were included for the first full year, the increase in profit before tax 

was 35 %. Return on equity (ROE before tax) rose from 18.9 % to 

21.3 %. 

Risk-weighted assets including the two new banks grew by 45 %. 

RWA productivity – i.e. the ratio of revenues to risk-weighted assets 

– declined only slightly compared with the previous year (7.00 % as 

against 7.23 %). Profits (+ 50 %) rose more strongly than riskweighted 

assets (+ 45 %). Volume expansion went hand in hand with 

improved capital efficiency: allocated equity increased by 34 %, from 

€ 7.1 bn to € 9.5 bn (annual averages). Value creation beyond the 

cost of capital (marginal Economic Value Added) in the CEE business 

segment amounted to € 783 m, up by 35 % on the previous year. 

RARORAC was 12.5 %. 

� At the editorial close of this report, the capital market is taking a 

critical view of banking business in CEE in connection with the predominantly 

macroeconomic risks involved. This scepticism is reflected 

in further increases in credit spreads on debt instruments of CEE 

countries and in continued depreciation of several currencies. In view 

of the balance-of-payments problems experienced by some countries, 

coordinated action by public and international institutions is important 

to maintain capital flows into the region. Nevertheless, regardless of 

the current difficult conditions, Bank Austria is convinced of the 

medium-term and long-term potential of the CEE region. The economic 

convergence process as growth driver remains intact and the 

deepening of financial markets is an additional structural factor 

supporting the outlook for banking business on a sustained basis. 

(More details are given in the Outlook section.) We will continue to 

pursue the integration of our network – while maintaining local 

responsibility for customer business – by implementing our divisional 

business model and bundling production and back-office functions. 


28


Management Report 2008 (CONTINUED) 

Income statement of the consolidated banking subsidiaries in CEE 

(€ m) 

(€ m) 

cZecH RepUblIc slOvAKIA HUngARY 

2008 2007 % 2008 2007 % 2008 2007 % 

net interest income 267.5 207.5 29% 105.7 84.9 25% 156.1 153.8 1% 

Net fee and commission income 112.9 111.4 1% 30.6 23.5 31% 92.0 82.8 11% 

Net trading, hedging and fair value income 1.9 4.7 –61% 28.5 24.5 17% 18.4 10.9 70% 

Net other income/expenses –1.3 0.6 n.m. 3.5 2.4 47% 0.6 –1.5 n.m. 

net non-interest income 113.5 116.7 –3% 62.6 50.3 25% 111.0 92.2 20% 

OpeRATIng IncOme 380.9 324.2 18% 168.3 135.1 25% 267.1 246.0 9% 

OpeRATIng expenses –155.7 –156.5 0% –79.8 –66.0 21% –136.1 –119.8 14% 

OpeRATIng pROfIT 225.2 167.7 34% 88.5 69.1 28% 131.0 126.1 4% 

Provisions for risks and charges 0.9 0.5 67% 1.3 –0.3 n.m. –1.5 –1.2 21% 

Net writedowns on loans –29.4 –17.7 66% –4.8 –7.0 –31% –26.4 –22.6 17% 

Net income from investments 33.1 –5.0 n.m. 1.0 –1.8 n.m. 42.9 12.6 >100% 

Integration costs –4.7 – 9.7 –52% 0.0 –0.3 n.m. –1.5 –4.9 –70% 

pROfIT befORe TAx 225.0 135.8 66% 85.9 59.7 44% 144.6 110.0 31% 

Cost/income ratio 40.9% 48.3% 47.4% 48.9% 50.9% 48.7% 

Risk/earnings ratio 11.0% 8.5% 4.6% 8.2% 16.9% 14.7% 

Exchange rate 24.946 27.766 31.262 33.775 251.512 251.352 

Appreciation/depreciation against the euro +11.3% +8.0% –0.1% 

cROATIA bOsnIA seRbIA 

2008 2007 % 2008 2007 % 2008 2007 % 

net interest income 355.8 287.1 24% 74.8 76.1 –2% 50.7 36.2 40% 

Net fee and commission income 134.3 125.6 7% 30.2 30.9 –2% 21.0 16.9 25% 

Net trading, hedging and fair value income 29.8 25.4 17% 6.2 5.2 18% 6.5 5.9 11% 

Net other income/expenses 44.9 57.1 –21% 2.7 –0.5 n.m. –0.8 –0.3 >100% 

net non-interest income 209.0 208.1 0% 39.1 35.6 10% 26.8 22.5 19% 

OpeRATIng IncOme 564.8 495.2 14% 113.8 111.8 2% 77.5 58.7 32% 

OpeRATIng expenses –304.7 –256.4 19% –80.9 –73.2 11% –32.8 –29.2 12% 

OpeRATIng pROfIT 260.1 238.7 9% 32.9 38.6 –15% 44.6 29.5 52% 

Provisions for risks and charges –0.5 –1.6 –68% –0.7 –2.4 –70% –0.1 0.0 n.m. 

Net writedowns on loans 0.8 –0.9 n.m. –8.9 –1.3 >100% –6.0 –3.6 69% 

Net income from investments 12.0 –0.6 n.m. 3.5 0.4 >100% 0.0 0.2 n.m. 

Integration costs –0.1 –0.1 22% –2.0 –2.9 –31% 0.0 0.0 – 

pROfIT befORe TAx 272.3 235.5 16% 24.8 32.3 –23% 38.5 26.0 48% 

Cost/income ratio 53.9% 51.8% 71.1% 65.4% 42.4% 49.8% 

Risk/earnings ratio –0.2% 0.3% 11.9% 1.8% 11.9% 9.9% 

Exchange rate 7.224 7.338 1.956 1.956 81.433 79.986 

Appreciation/depreciation against the euro +1.6% +0.0% –1.8% 

1) Pro quota. 2) Included in the group of consolidated companies as from 1 December 2007 3) Fully consolidated as from 1 January 2008. 


29

slOvenIA bUlgARIA ROmAnIA bAlTIcs 

2008 2007 % 2008 2007 % 2008 2007 % 2008 2007 % 

45.2 35.8 26% 237.2 194.4 22% 74.1 118.9 –38% 22.8 14.6 56% 

20.1 17.8 13% 79.8 73.4 9% 59.8 63.1 –5% 1.0 0.3 >100% 

–2.4 3.0 n.m. –12.1 –2.6 >100% 171.2 78.4 >100% –2.3 –1.0 >100% 

0.1 0.2 –60% 2.1 2.7 –25% 1.4 –2.0 n.m. 1.2 0.1 >100% 

17.9 21.1 –15% 69.7 73.5 –5% 232.3 139.5 67% –0.1 –0.6 –84% 

63.0 56.9 11% 306.8 267.9 15% 306.5 258.4 19% 22.7 14.0 63% 

–35.1 –30.6 15% –129.0 –116.6 11% –153.6 –138.9 11% –13.9 –10.6 32% 

27.9 26.3 6% 177.9 151.3 18% 152.8 119.5 28% 8.8 3.4 >100% 

0.0 0.0 –81% 1.9 –1.3 n.m. –2.7 –3.2 –15% 0.0 0.0 – 

–6.5 –4.3 51% –25.6 –26.8 –4% –38.0 –16.4 >100% –11.2 0.7 n.m. 

3.7 –0.6 n.m. 5.9 8.5 –31% 3.2 –0.3 n.m. 0.0 0.2 –100% 

–1.5 –1.6 –7% 6.4 –2.0 n.m. 0.0 –5.5 n.m. 0.0 0.0 – 

23.5 19.7 19% 166.5 129.8 28% 115.3 94.0 23% –2.4 4.3 n.m. 

55.8% 53.7% 42.0% 43.5% 50.1% 53.7% 61.2% 75.6% 

14.4% 12.0% 10.8% 13.8% 51.3% 13.8% 48.9% –4.5% 

1.000 1.000 1.956 1.956 3.683 3.335 0.703 0.700 

0.0% +0.0% – 9.4% –0.4% 

TURKeY 1) RUssIA KAZAKHsTAn 2) UKRAIne 3) cee bAnKs TOTAl 

2008 2007 % 2008 2007 % 2008 2007 2008 2008 2007 % 

587.0 528.8 11% 517.8 355.4 46% 246.5 23.5 276.4 3,017.6 2,116.9 43% 

322.8 265.5 22% 137.0 114.5 20% 45.8 2.9 80.9 1,168.3 928.6 26% 

12.1 24.8 –51% 73.5 –5.0 n.m. 35.9 3.8 53.7 420.8 177.9 >100% 

58.0 46.3 25% 7.6 0.8 >100% –3.0 –1.0 2.3 119.2 104.9 14% 

393.0 336.6 17% 218.1 110.2 98% 78.7 5.8 136.9 1,708.3 1,211.4 41% 

980.0 865.4 13% 735.9 465.6 58% 325.2 29.3 413.3 4,726.0 3,328.3 42% 

–463.8 –448.3 3% –254.7 –179.9 42% –122.7 –10.5 –162.4 –2,125.3 –1,636.5 30% 

516.1 417.1 24% 481.2 285.7 68% 202.5 18.8 250.9 2,600.6 1,691.9 54% 

–63.6 –68.3 –7% 0.0 0.0 – 0.0 –0.3 –0.2 –65.3 –78.1 –16% 

– 91.1 –73.2 24% –77.3 –40.7 90% –124.3 4.0 –89.4 –538.3 –209.9 >100% 

14.2 6.8 >100% 2.6 2.9 –13% 3.0 –0.5 0.3 125.3 22.7 >100% 

0.0 0.0 – 0.0 0.0 – 0.0 0.0 0.0 –3.4 –27.1 –88% 

375.6 282.5 33% 406.4 247.9 64% 81.2 22.0 161.7 2,118.9 1,399.5 51% 

47.3% 51.8% 34.6% 38.6% 37.7% 35.9% 39.3% 45.0% 49.3% 

15.5% 13.8% 14.9% 11.5% 50.4% –17.0% 32.3% 17.8% 9.9% 

768.7% 

1.906 1.786 36.421 35.018 176.963 167.871 – – – 

–6.3% –3.9% 0.0% 




Balance sheet developments 

� Bank Austria’s total assets at 31 December 2008 were € 222.2 bn, 

up by € 13.0 bn or 6.2 % on year-end 2007. During the year, total 

assets rose by 9.8 % from year-end 2007 to the end of September, 

with the consolidation of Ukrsotsbank (for the first time in the balance 

sheet at the end of March) accounting for 2.6 percentage points of 

the increase. ATF Bank was already included in the consolidated 

financial statements for 2007. From September 2008 to the end of 

2008, total assets declined by 3.3 %; as a result, the year-on-year 

change was 6.2 % (see chart). Balance sheet developments reflect 

the direct and indirect impacts of the financial market crisis: interbank 

business fell sharply in the fourth quarter. Exchange rate effects were 

a very significant factor as almost all CEE currencies depreciated 

strongly towards year-end 2008, and there was also an indirect effect 

resulting from differences in exchange rates used for translating 

income statement items (at annual average rates) and balance sheet 

items (at year-end rates). Finally, goodwill impairment as explained 

above also contributed to the decrease in total assets from the third 

quarter to the fourth quarter. 

Total assets (€ bn) 

195.6 

30 Sept. 

2007 

USB/Ukraine 

ATF/Kazakhstan 

209.2 

31 Dec. 

2007 

+9.8% 

220.8 

31 March 


+6.2% 

228.6 

30 June 


30 Sept. 


229.8 

222.2 

31 Dec. 


� The balance sheet at 31 December 2008 reflects the intended 

sale of equity interests in companies which have so far been consolid 

ated companies. In accordance with IFRS 5, the balance sheet includes 

disposal groups classified as held for sale (written down to the 

lower of carrying amount and fair value less costs to sell) which are 

shown in the items Non-current assets and disposal groups classified 

as held for sale and Liabilities included in disposal groups 

classified as held for sale. One of the companies is the investment 

bank UniCredit CAIB AG including its subsidiaries in Poland, Russia 

and the United Kingdom. The Management Board has decided to sell 

these companies on an intra-Group basis so that all investment banking 

units of UniCredit Group can be combined. Also included is card 

complete Service Bank AG. With a view to streamlining its interests in 

the Austrian card business, Bank Austria together with the other 

shareholders set up a selling process for card complete Service Bank 

AG. Completion is scheduled for 2009. 

Major changes in balance sheet items 

ASSETS 31 DEC. 08 31 DEC. 07 +/– € M +/– % 

Financial assets held for trading 4,489 19,092 – 14,603 – 76.5 % 

Loans and receivables with banks 

Loans and receivables with 

20,023 38,007 – 17,983 – 47.3 % 

customers 

Non-current assets and disposal 

131,973 115,216 + 16,756 + 14.5 % 

groups classified as held for sale 34,068 1,727 + 32,342 

TOTAL ASSETS 222,152 209,186 + 12,966 + 6.2 % 

LIABILITIES AND EQUITY 31 DEC. 08 31 DEC. 07 +/– € M +/– % 

Deposits from banks 35,511 52,445 – 16,934 – 32.3 % 

Deposits from customers 95,164 93,203 + 1,961 + 2.1 % 

Debt securities in issue 

Liabilities included in disposal 

32,597 26,496 + 6,101 + 23.0 % 

groups classified as held for sale 33,137 1,247 + 31,890 

Equity 14,237 15,332 – 1,095 – 7.1 % 

As the above-mentioned companies are presented in a separate 

asset item and liabilities item in the consolidated balance sheet at 

31 December 2008, the amounts of some of the other balance sheet 

items declined significantly, reflecting the size of the companies 

classified as held for sale. It is mainly for this reason that a year-onyear 

comparison shows decreases of double-digit billion euro 

amounts especially in financial assets / liabilities held for trading and 

in loans and receivables with banks as well as deposits from banks; 

these changes reflect the main business activities of an investment 

bank. 


31

The intended sale of the above-mentioned companies has a lesser 

impact on loans and receivables with customers and on primary 

funds, i.e. deposits from customers and debt securities in issue; 

these items therefore increased strongly from year-end 2007 to 

31 December 2008. 

� The amounts of major balance sheet items shown in the table 

below include the respective amounts accounted for by the Group 

companies classified as held for sale. This presentation makes it 

possible to analyse balance sheet developments during 2008 in economic 

terms. 

Changes in major balance sheet items – analytical presentation 1) 

ASSETS 31 DEC. 08 1) 31 DEC. 07 +/– € M +/– % 

Financial assets held for trading 22,285 19,092 + 3,193 + 16.7 % 

Loans and receivables with banks 

Loans and receivables with 

31,424 38,007 – 6,582 – 17.3 % 

customers 134,806 115,216 + 19,589 + 17.0 % 

… in % of total assets 60.7 % 55.1 % 

TOTAL ASSETS 222,152 209,186 + 12,966 + 6.2 % 

LIABILITIES AND EQUITY 31 DEC. 08 1) 31 DEC. 07 +/– € M +/– % 

Deposits from banks 53,420 52,445 + 975 + 1.9 % 

Deposits from customers 95,470 93,203 + 2,267 + 2.4 % 

Debt securities in issue 32,597 26,496 + 6,101 + 23.0 % 

… Primary funds 2) 128,067 119,699 + 8,368 + 7.0 % 


Equity 3) 14,237 15,332 – 1,095 – 7.1 % 


1) Assets / liabilities classified as held for sale added back to the relevant balance sheet items. 

2) Sum total of deposits from customers and debt securities in issue. 

3) Equity not affected by classification as held for sale. 

The above presentation shows that the € 13.0 bn increase in total 

assets was supported by the expansion of customer business while 

the significance of interbank business declined. Financial assets held 

for trading and financial liabilities held for trading increased in 2008. 

� On the assets side, loans and receivables with customers rose by 

€ 19.6 bn or 17.0 % over the previous year (without Ukrsotsbank by 

13.6%.) Loans and receivables with banks declined by € 6.6 bn or 

17.3%. Financial assets held for trading increased by € 3.2 bn or 

16.7% although illiquid financial assets held for trading in the amount 

of € 2.4 bn for which there was no active market were reclassified 

into loans and receivables with customers as permitted under the 

amendments to IAS 39. 

� The liabilities side shows a largely similar picture: customer deposits 

and debt securities in issue at the end of 2008 were 2.4 % and 

23.0 %, respectively, higher than at year-end 2007. Primary funds – 

the sum total of the above two items, representing funding from commercial 

banking business sources – reached € 128.1 bn, exceeding 

the year-end 2007 figure by € 8.4 bn or 7 %. Deposits from banks 

rose only slightly (+ 1.9 %). Financial liabilities held for trading doubled 

to € 15.5 bn, driven by increased trading activities in the fourth 

quarter of 2008. 

Equity amounted to € 14.2 bn, 6.4 % of the balance sheet total. The 

decline of € 1.1 bn or 7.1 % resulted mainly from the dividend paid 

for 2007 (€ 832 m) and from the balance of income and expenses 

recognised in equity (– € 241 m): the net profit of € 1,283 m 

(unexpectedly low as a result of impairment losses of € 1,027 m on 

goodwill) was included in retained earnings; this effect is more than 

offset by exchange differences from foreign currency translation 

(– € 1,185 m) and by changes in reserves in accordance with IAS 39 

(– € 381 m). 

➔ Commercial banking business with customers accounts for a 

growing proportion of the balance sheet total: at the end of 2008, 

loans and receivables with customers were 60.4 % of total assets 

(year-end 2007: 55.1 %). The proportion of primary funds also rose 

slightly (57.6 % after 57.2 %), mainly on account of the bank’s 

increased efforts in the area of medium-term funding. Although the 

young banking markets which are still catching up in terms of 

financial intermediation are of major significance, 95 % of loans and 

receivables with customers are funded out of primary funds. Equity 

represents a healthy 6.4 % of the balance sheet total. 

Capital resources 

On 1 January 2008, the calculations required under regulatory 

standards pursuant to the Austrian Banking Act were converted to the 

Basel II rules. The main changes in respect of (net) capital resources 

result from differences in taking account of deductions and from the 

lower net Tier 3 capital (to meet – lower – capital requirements for 

market risks in the trading book). In addition to the changed rules for 

determining the assessment basis for credit risk, the provisions in 

Section 22 of the Austrian Banking Act concerning the minimum capital 

requirements now comprise the calculation of capital requirements 

for operational risk and changes in the rules for capital to be held 

against parts of the trading book (in particular, Tier 3 capital can no 

longer be used to meet the capital requirements for counterparty 

default risk). 


32



Since 31 March 2008, UniCredit Bank Austria AG has applied the 

advanced internal ratings-based approach for credit risk. The 

subsidiaries are taken into account by applying the standardised 

approach for credit risk. As at 31 December 2008, operational risk is 

determined in UniCredit Bank Austria AG and in Zagrebačka banka 

d.d. using the advanced approach, while the other subsidiaries use 

the standardised or basic-indicator approach. 

The comparison of 31 December 2008 (new presentation pursuant to 

Basel II) with the calculation as at the end of 2007 (old method pursuant 

to Basel I) shows a decline of 6.9 % in net capital resources to 

€ 12.3 bn, most of which is due to the new supervisory rules. On the 

other hand, risk-weighted assets rose by 12.9 % to € 133.2 bn as a 

result of the regulatory changes and the bank’s underlying business 

development. The largest contribution to this development came from 

expansion in the CEE business segment. The capital requirement for 

credit risk increased by 6.9 % to € 9.4 bn, and together with the other 

risk types it rose by 12.9 % to € 10.7 bn. 

At the end of 2008, the Tier 1 capital ratio – based on credit risk 

pursuant to Basel II – was 7.70 %, comfortably above the minimum 

level required by law. Further details are given in the table below: 

Capital ratios: year-end 2008 (Basel II) and year-end 2007 (Basel I) 

Based on credit risk 2008 2007 

Tier 1 capital ratio 7.70 % 8.76 % 

Total capital ratio 9.35 % 11.37 % 

Based on all risks 2008 2007 

Tier 1 capital ratio 6.82 % 8.20 % 

Total capital ratio 9.19 % 11.16 % 

Further information 

The following detailed information is included in the notes to the 

consolidated financial statements: 

� details of events of particular significance after the end of the 

financial year in note 4, “Events after the balance sheet date”; 

� details on the use of financial instruments in note 3, “Significant 

accounting policies”; 

� information on existing risks of changes in prices, credit risk, 

liquidity risk and cash flow risk in the risk report in notes 66 to 69; 

� information pursuant to Section 243a of the Austrian Commercial 

Code (concerning rights linked to shares) in note 50, “Equity”. 


33

Outlook 

Economic environment 

� The global economy is in deep recession. After growth of 5 % in 

2007 and over 3 % in 2008, world GDP (at purchasing power parities) 

will stagnate for the first time in the post-war period. Economic 

growth in China and in the Asian emerging markets is expected to 

reach 5.5 % and 5 %, respectively, which is a serious setback for 

these countries. The US economy has shown a downward trend since 

the end of 2007; recent indicators confirm that it continues to shrink, 

despite unprecedented rescue and support programmes. Economic 

performance in the euro area will decline by 2.3 % in 2009, a 

development which also reflects the repercussions of the oil-price 

hike and the euro’s strength until summer 2008. At the beginning of 

2009, the synchronous global downturn in manufacturing seen in the 

final quarter of 2008 is spilling over from key industries to all sectors 

of the economy, via demand for capital goods, employment, incomes 

and demand for consumer goods. It is not yet possible to say how far 

this development has progressed and at what point we are now. And 

it is not clear for how long we will have to expect further adverse 

impacts and valuation losses in financial markets. One of the few 

positive factors in this scenario is the pragmatic approach taken by 

economic policymakers and their readiness to intervene. 

� The Austrian economy felt the full impact of the global economic 

downturn around the turn of the year, with some time lag. The rate of 

growth in Q4 2008 compared with the preceding quarter was negative, 

at – 0.2 %, for the first time since the beginning of 2001. For the 

first quarter of 2009 we expect GDP to shrink by at least 1%. The volume 

of orders from abroad has fallen, which means that the first few 

months of 2009 may see a double-digit drop in exports compared 

with the previous year. Investment activity is also being reduced in 

view of the unfavourable international environment. We assume that 

Austria’s economic performance in 2009 will decline by 1.6 %, after 

GDP growth of 1.8 % in 2008. While there are currently no signs of a 

turnaround, we expect that economic activity will recover slightly towards 

the end of 2009. Next year may see moderate growth of 0.7 %. 

This scenario is based on hopes that the ECB, which has already 

eased its monetary policy, will continue to pursue this course with all 

instruments currently available or yet to be created, and that the Austrian 

government’s economic stimulus package will start to have tangible 

effects as the year progresses. The risk of an even sharper 

downturn is still higher than any risk of inflation. 

For the banking sector this means that the trends recorded in credit 

demand and savings deposits in the last few months of 2008 will intensify 

in 2009. Credit demand will lose momentum and there will be 

a shift from medium-term and long-term loans for investment projects 

to short-term loans. We assume that lending volume will decline 

due to lower demand. Bank deposits will grow at a slightly lower rate 

than in 2008, with the inflow of deposits from the business sector 

slowing down. As incomes grow more slowly and public awareness of 

the recession rises, the already high savings ratio will increase further, 

from 12.3 % to 13.1 % in 2009. Given the uncertain market outlook, 

holdings of financial assets will continue to focus on short-term bank 

deposits and especially top-quality bond issues, entailing further 

structural adjustments in the area of mutual funds. 

� For 2009 we forecast a 0.8 % contraction of GDP for the entire 

CEE region, with major countries falling into recession. This development 

in Central European countries like Poland, the Czech Republic, 

Slovakia and Slovenia, which have been characterised by a relatively 

sound macroeconomic environment, will be driven mainly by a slowdown 

in external demand. South-East European countries, the Baltics 

and Hungary will have to cope with domestic weaknesses in addition 

to the global slowdown – i.e. high current account deficits and 

external indebtedness – which in the current environment further 

bleakens their short-term prospects as external financing is difficult 

to obtain and rather expensive. Kazakhstan, Russia and Ukraine 

will be affected by a lack of external funding, as well as by a fall in 

commodities prices due to the first two economies’ dependence on 

energy production and on Ukraine’s reliance on steel. 

In the current environment the key consideration is continuity in the 

financing cycle. In past years, consumption and investment growth 

were mainly financed through local bank loans to households and the 

corporate sector. Apart from macroeconomic factors, the local banking 

sectors differ in their external financing needs and the respective 

level of foreign exchange lending. Several measures have already 

been implemented by local governments and national banks, as well 

as by international institutions, in order to restore external and internal 

confidence in banks (e.g. by introducing deposit guarantee schemes), 

inject liquidity into the banking system and support economic growth. 

This is especially the case in Russia and Kazakhstan, where major 

initiatives have been taken by the local governments to support the 

banking sector, and in Ukraine, Hungary and Latvia, where the IMF’s 

intervention has also been required. 


34



We expect all these measures to have an effect in the medium to long 

term, and the CEE region to start recovering in 2010, with GDP increasing 

by 2.7 %. Turkey and the Czech Republic are in a relatively 

stronger position as their banking systems are less leveraged and 

have a lower share of foreign-currency loans to the private sector. 

These countries could benefit from a significant easing of monetary 

policy aimed at stimulating domestic demand, and they could record 

some recovery of economic growth already in the second half of 

2009. Even if we had to again slightly reduce our forecasts, two 

positive factors remain: first, during both the upswing and cyclical 

downturn, the CEE region is performing better than West European 

countries. Second, the regional diversification of our subsidiaries is a 

major asset: we have a stronger presence in those countries where 

the economic downturn will be least pronounced. 

Growth and inflation in our core markets 

2007 2008 2009 2010 

Economic growth (real GDP, % change over previous year) 

CEE region 6.7 % 4.3 % – 0.8 % 2.7 % 

CEE region, weighted *) 6.3 % 3.8 % – 0.4 % 2.6 % 

Mature markets (I, G, A) 2.2 % 0.5 % – 2.4 % 0.7 % 

Austria 3.1 % 1.8 % – 1.6 % 0.7 % 

Inflation (annual average, % change over previous year) 

CEE region 7.4 % 11.3 % 6.9 % 6.5 % 

CEE region, weighted *) 5.5 % 8.5 % 4.9 % 4.5 % 

Mature markets (I, G, A) 2.1 % 2.9 % 0.9 % 1.9 % 

Austria 2.2 % 3.2 % 0.9 % 1.6 % 

*) Average for CEE countries weighted by shares of our UniCredit banking subsidiaries. UniCredit Group 

forecasts as at February 2009. 17 CEE countries including Poland. 

Outlook for Bank Austria’s performance 

in 2009 

The economic environment described above suggests that 2009 will 

continue to be very difficult. Uncertainty about the economic outlook 

has increased until recently, and the volatility of recent financial 

market indicators does not provide a sound foundation on which to 

base expectations. It is not possible to say when the downturn will 

touch bottom and how strong its impact on credit demand, default 

risk and propensity to invest will be. The strain on the financial sector 

has not yet eased, and unpleasant surprises are possible at any time. 

Credit spreads demanded by the market – in respect of countries, 

companies and especially banks – rose again in the last few weeks of 

the reporting season, after having eased somewhat around the turn of 

the year. On the basis of available data, we cannot provide a sound 

forecast of results for 2009. 

Bank Austria – and the entire UniCredit Group – confirmed its longterm 

strategy on several occasions during the past year while 

adjusting its implementation to the new conditions. In view of the 

lower demand expected in Austria, and as economic performance and 

revenue growth in CEE lose momentum, implementing the crossregional 

business model is essential. 

� Using a customer-focused, multi-local sales approach, we aim to 

enhance our competitiveness by bundling product know-how in international 

business. The planned transfer of UniCredit CAIB to HVB is to 

be seen in this light, a move which will create a strong provider of 

customer-oriented investment banking services of European stature. 

We are generally concentrating on classic banking business with simple 

and easy-to-understand products, and on advisory services for 

customers. 

� We are also intensifying our efforts to create a cross-regional infrastructure 

for production within Global Banking Services, ranging 

from back-office and administrative activities all the way to information 

and communication technology. This will help us unlock cost and 

revenue synergies from 2009 onwards. 


35

� We will fully maintain our long-term commitment to CEE and gradually 

implement our divisional structure there. The slowdown in 2009 

is a cyclical phenomenon while convergence of Eastern and Western 

Europe, European integration, is a structural process offering large 

potential for value creation in the medium term. 

9 March 2009, the Management Board 

Erich Hampel 

(Chairman) 

Helmut Bernkopf Federico Ghizzoni 

Ralph Müller Carlo Vivaldi 

Stephan Winkelmeier Robert Zadrazil 


36


in accordance with 

International Financial Reporting Standards (IFRSs) 

Income statement for the year ended 31 December 2008 38 

Balance sheet at 31 December 2008 39 

Statement of changes in equity 40 

Statement of recognised income and expenses 40 

Cash flow statement 41 


37

Consolidated Financial Statements in accordance with IFRSs 

Consolidated Income Statement 

of the Bank Austria Group 

for the year ended 31 December 2008 

(€ m) 

(Notes) 2008 2007 

Interest income and similar revenues (5) 12,837 10,282 

Interest expense and similar charges (5) –8,180 –6,629 

Net interest margin 4,657 3,653 

Fee and commission income (6) 2,706 2,575 

Fee and commission expense (6) –629 –451 

Net fees and commissions 2,076 2,124 

Dividend income and similar revenue (7) 592 128 

Gains and losses on financial assets and liabilities held for trading (8) –375 119 

Fair value adjustments in hedge accounting (9) – – 

Gains and losses on disposal of: (10) 133 255 

a) loans 1 1 

b) available-for-sale financial assets 132 252 

c) held-to-maturity investments –1 – 

d) financial liabilities 1 2 

Gains and losses on financial assets/liabilities at fair value through profit or loss (11) –48 15 

OperatiNg iNcOme 7,035 6,294 

Impairment losses on: (12) –1,096 –502 

a) loans –1,019 –507 

b) available-for-sale financial assets –25 –3 

c) held-to-maturity investments –59 –14 

d) other financial assets 8 23 

Net income from financial activities 5,939 5,792 

Premiums earned (net) (13) 112 115 

Other income (net) from insurance activities (14) –86 –82 

Net income from financial and insurance activities 5,964 5,825 

Administrative costs: –3,621 –3,113 

a) staff expense (15) –2,235 –1,840 

b) other administrative expense (16) –1,386 –1,273 

Provisions for risks and charges (17) –78 –74 

Impairment/write-backs on property, plant and equipment (18) –213 –197 

Impairment/write-backs on intangible assets (19) –119 –80 

Other net operating income (20) 178 184 

OperatiNg cOsts –3,854 –3,280 

Profit (loss) of associates (21) 412 181 

Gains and losses on tangible and intangible assets measured at fair value – – 

Impairment of goodwill –1,027 – 

Gains and losses on disposal of investments (22) 9 14 

tOtal prOfit Or lOss befOre tax frOm cONtiNuiNg OperatiONs 1,505 2,740 

Tax expense (income) related to profit or loss from continuing operations (23) –222 –380 

Net prOfit Or lOss fOr the year 1,283 2,360 

Minorities –139 –106 

Net prOfit Or lOss attributable tO the pareNt cOmpaNy 1,144 2,254 

Earnings per share (in €, basic and diluted) 5.66 11.69 


38

Consolidated Balance Sheet 


at 31 December 2008 

Assets (€ m) 

(Notes) 31 Dec. 2008 31 Dec. 2007 

Cash and cash balances (26) 3,908 2,967 

Financial assets held for trading (27) 4,489 19,092 

Financial assets at fair value through profit or loss (28) 567 935 

Available-for-sale financial assets (29) 10,034 10,864 

Held-to-maturity investments (30) 5,754 7,623 

Loans and receivables with banks (31) 20,023 38,007 

Loans and receivables with customers (32) 131,973 115,216 

Hedging derivatives (33) 85 1,147 

Changes in fair value of portfolio hedged items (+/–) – – 

Investments in associates and joint ventures (34) 2,277 2,281 

Insurance reserves attributable to reinsurers – – 

Property, plant and equipment (35) 2,346 2,003 

Intangible assets (36) 4,170 4,400 

of which goodwill 3,595 3,837 

Tax assets (37) 1,088 1,007 

a) current tax assets 253 151 

b) deferred tax assets 835 856 

Non-current assets and disposal groups classified as held for sale (38) 34,068 1,727 

Other assets (39) 1,369 1,918 

tOtal assets 222,152 209,186 

Liabilities and equity (€ m) 

(Notes) 31 Dec. 2008 31 Dec. 2007 

Deposits from banks (40) 35,511 52,445 

Deposits from customers (41) 95,164 93,203 

Debt securities in issue (42) 32,597 26,496 

Financial liabilities held for trading (43) 2,155 7,442 

Financial liabilities at fair value through profit or loss (44) 2,000 2,386 

Hedging derivatives (45) 123 1,638 


Tax liabilities (46) 541 634 

a) current tax liabilities 138 125 

b) deferred tax liabilities 403 510 

Liabilities included in disposal groups classified as held for sale (47) 33,137 1,247 

Other liabilities (48) 2,515 3,574 

Provisions for risks and charges (49) 4,015 4,611 

a) post-retirement benefit obligations 3,537 4,088 

b) other provisions 477 523 

Insurance reserves 156 178 

Equity (50) 14,237 15,332 

of which Minorities (+/–) 733 660 

tOtal liabilities aND equity 222,152 209,186 


39


Statement of changes in equity 


sub- 

scribeD 

capital 

capital 

reserVes 

retaiNeD 

earNiNgs 

fOreigN 

curreNcy 

traNslatiON 

reserVes iN 

accOrDaNce 

With ias 39 *) 

actuarial 

lOsses iN 

accOrDaNce 

With ias 19 

share- 

hOlDers’ 

equity 

(€ m) 

miNOrity 

iNterests equity 

as at 1 January 2007 1,069 2,859 6,482 –73 347 –757 9,927 213 10,140 

Capital increase 400 2,463 2,863 365 3,228 

Changes in the group of consolidated companies – – 

Shares in controlling companies 1 1 1 

Recognised income and expenses 2,258 43 49 157 2,507 86 2,593 

Dividend paid –588 –588 –6 –594 

Other changes –34 –34 –34 

as at 31 December 2007 1,469 5,323 8,118 –31 397 –600 14,676 658 15,334 

*) Reserves in accordance with IAS 39 1 Jan. 2007 31 Dec. 2007 

Cash flow hedge reserve –175 –119 

Available-for-sale reserve 522 516 

Total 347 397 

sub- 

scribeD 

capital 

capital 

reserVes 

retaiNeD 

earNiNgs 

fOreigN 

curreNcy 

traNslatiON 

reserVes iN 

accOrDaNce 

With ias 39 *) 

actuarial 

lOsses iN 

accOrDaNce 

With ias 19 

share- 

hOlDers’ 

equity 

miNOrity 

iNterests equity 

as at 1 January 2008 1,469 5,323 8,118 –31 397 –600 14,676 658 15,334 

Purchase price allocation –4 –4 2 –2 

as at 1 January 2008 restated 1,469 5,323 8,114 –31 397 –600 14,672 660 15,332 

Changes in the group of consolidated companies – –1 –1 

Shares in controlling companies – – 

Recognised income and expenses 1,144 –1,145 –381 42 –339 98 –241 

Dividend paid –808 –808 –24 –832 

Other changes 4 –25 –21 –21 

as at 31 December 2008 1,469 5,327 8,425 –1,175 16 –558 13,505 733 14,237 

*) Reserves in accordance with IAS 39 1 Jan. 2008 31 Dec. 2008 

Cash flow hedge reserve –119 29 

Available-for-sale reserve 516 –13 

Total 397 16 

of which reserves of companies classified as held for sale –138 

Statement of recognised income and expenses (€ m) 

31 Dec. 2008 31 Dec. 2007 

Gains/losses on assets held for sale (available-for-sale reserve) –600 –1 

Gains/losses on cash flow hedges (cash flow hedge reserve) 149 75 

Changes at companies accounted for under the equity method –45 – 

Foreign currency translation – exchange differences –1,166 30 

Foreign currency translation relating to assets held for sale –19 – 

Actuarial gains/losses on defined-benefit plans 56 210 

Taxes on items directly recognised in equity 99 –85 

recognised directly in equity –1,524 229 

Net profit 1,283 2,364 

tOtal Of iNcOme aND expeNses recOgNiseD iN the repOrtiNg year –241 2,593 

Shareholders’ equity –339 2,507 

Minority interests 98 86 


40

Cash flow statement 



(€ m) 


Net prOfit 1,283 2,360 

Non-cash items included in net profit, and adjustments to reconcile net profit to cash flows from operating activities 

Depreciation, amortisation, net writedowns of loans, and changes in fair values 1,861 819 

Increase in staff-related provisions and other provisions 114 137 

Increase/decrease in other non-cash items –250 280 

Gains/losses on disposal of intangible assets, property, plant and equipment, and investments –141 –299 

sub-tOtal 2,867 3,297 

Increase/decrease in operating assets and liabilities after adjustment for non-cash components 

Financial assets held for trading –6,043 –386 

Loans and receivables with banks and customers – 9,980 – 9,230 

Other asset items 1,425 –1,890 

Financial liabilities held for trading 7,676 2,603 

Deposits from banks and customers 2,466 11,710 

Debt securities in issue 5,362 –6,241 

Other liabilities items –2,243 2,109 

cash flOWs frOm OperatiNg actiVities 1,530 1,972 

Proceeds from disposal of 

investments 8,810 17,947 

property, plant and equipment 97 51 

Payments for purchases of 

investments –6,812 –16,029 

property, plant and equipment –756 –655 

Proceeds from sales (less cash disposed of) of subsidiaries 205 – 

Payments for acquisition (less cash acquired) of subsidiaries –1,583 –1,223 

Other changes 275 –148 

cash flOWs frOm iNVestiNg actiVities 236 –57 

Proceeds from capital increase – – 

Dividends paid –808 –588 

Subordinated liabilities and other financial activities (net) 146 66 

cash flOWs frOm fiNaNciNg actiVities –662 –522 

cash aND cash equiValeNts at eND Of preViOus periOD 2,967 1,584 

Cash flows from operating activities 1,530 1,972 

Cash flows from investing activities 236 –57 

Cash flows from financing activities –662 –522 

Effects of exchange rate changes –142 –10 

cash aND cash equiValeNts at eND Of periOD 3,929 2,967 

paymeNts fOr taxes, iNterest aND DiViDeNDs 

Income taxes paid –89 –68 

Interest received 12,837 10,282 

Interest paid –8,180 –6,448 

Dividends received 612 153 

41


Notes to the Consolidated Financial 

Statements of Bank Austria 

(1) Legal basis of the consolidated financial statements 43 

(2a) Structural changes 43 

(2b) Impairment test 48 

(3) Significant accounting policies 49 

(4) Events after the balance sheet date 57 

Notes to the income statement 58 

(5) Interest income/Interest expense 58 

(6) Fee and commission income/Fee and commission expense 59 

(7) Dividend income and similar revenue 60 

(8) Gains and losses on financial assets and liabilities 

held for trading 60 

(9) Fair value adjustments in hedge accounting 61 

(10) Gains and losses on disposals/repurchases 61 

(11) Net change in financial assets and liabilities 

at fair value through profit or loss 62 

(12) Impairment losses 62 

(13) Premium earned (net) – breakdown 64 

(14) Other income (net) from insurance business 64 

(15) Payroll: breakdown 65 

(16) Other administrative expenses 65 

(17) Net provisions for risks and charges 65 

(18) Impairment on property, plant and equipment 66 

(19) Impairment on intangible assets 66 

(20) Other net operating income 66 

(21) Profit (Loss) of associates 67 

(22) Gains and losses on disposal of investments 67 

(23) Income tax from continuing operations 68 

(24) Earnings per share 68 

(25) Dividends 68 

Notes to the balance sheet 69 

(26) Cash and cash balances 69 

(27) Financial assets held for trading 69 

(28) Financial assets at fair value through profit or loss 70 

(29) Available-for-sale financial assets 71 

(30) Held-to-maturity investments 71 

(31) Loans and receivables with banks 72 

(32) Loans and receivables with customers 73 

(33) Hedging derivatives 74 

(34) Equity investments 74 

(35) Property, plant and equipment 75 

(36) Intangible assets 77 

(37) Tax assets 78 

(38) Non-current assets and disposal groups classified 

as held for sale 79 

(39) Other assets 80 

(40) Deposits from banks 80 

(41) Deposits from customers 81 

(42) Debt securities in issue 81 

(43) Financial liabilities held for trading 82 

(44) Financial liabilities at fair value through profit or loss 83 

(45) Hedging derivatives 83 

(46) Deferred tax liabilities 84 

(47) Liabilities included in disposal groups classified 

as held for sale 84 

(48) Other liabilities 85 

(49) Provisions for risks and charges 85 

(50) Equity 86 

Additional IFRS disclosures 87 

(51) Time breakdown by contractual residual maturity 

of financial assets and liabilities 87 

(52) Geographical distribution 87 

(53) Related party disclosures 88 

(54) Share-based payments 89 

(55) Reconciliation of reclassified accounts to 

mandatory reporting schedule 91 

(56) Segment reporting 93 

(57) Assets pledged as security 97 

(58) Subordinated assets 97 

(59) Assets and liabilities in foreign currency 97 

(60) Trust assets and trust liabilities 98 

(61) Repurchase agreements 98 

(62) Guarantees given and commitments 98 

(63) List of selected subsidiaries and other equity interests 99 

(63a) Consolidated companies 99 

(63b) Investments in companies accounted 

for under the proportionate consolidation method 101 

(63c) Investments in associated companies accounted 

for under the equity method 101 

(63d) Investments in associated companies not accounted 

for under the equity method 101 

(64) Employees 102 

(65) Supervisory Board and Management Board 102 

Risk report 103 

(66) Overall risk management 103 

(66a) Market risk 106 

(66b) Liquidity risk 113 

(66c) Counterparty risk 114 

(66d) Credit risk 114 

(66e) Operational risk 120 

(66f) Business risk 121 

(66g) Risks arising from the bank’s shareholdings 

and equity interests 121 

(67) Legal risks 121 

(68) Information on the squeeze-out 121 

(69) Financial derivatives 121 

Information required under Austrian law 125 

(70) Consolidated capital resources and regulatory 

capital requirements 125 

Concluding Remarks of the Management Board 

of UniCredit Bank Austria AG 126 

Report of the Auditors 128 

Note 

In this report, “Bank Austria” and “the Bank Austria Group” refer to the Group. To the extent that information relates to the parent company’s separate financial statements, “UniCredit Bank Austria 

AG” is used. In adding up rounded figures and calculating the percentage rates of changes, slight differences may result compared with totals and rates arrived at by adding up component figures 

which have not been rounded off. 


42

(1) Legal basis of the 

consolidated financial statements 

UniCredit Bank Austria AG, Schottengasse 6–8, A-1010 Vienna, 

Austria, is a universal bank conducting banking business within 

the meaning of Section 1 (1) of the Austrian Banking Act. It is 

registered under no. FN 150714p in the Austrian Register of 

Firms at the Commercial Court of Vienna. On 27 September 

2008, the name of Bank Austria Creditanstalt AG was changed to 

UniCredit Bank Austria AG. The bank continues to operate in the 

market under the “Bank Austria” brand name. The geographical 

focus of the bank’s operations is on Austria and CEE. 

(2a) Structural changes 

Acquisition of Ukrsotsbank, Ukraine 

On 25 June 2007, the Management Board of BA-CA AG (“Bank Austria”) 

approved the acquisition of Joint Stock Commercial Bank for 

Social Development Ukrsotsbank, Kiev, Ukraine, (Ukrsotsbank). On 

21 January 2008, the bank acquired a 94.20% shareholding interest 

for € 1,526.9 m including additional costs. A shareholding interest of 

8.05% with a book value of € 131.7 m was acquired directly by 

Bank Austria, and 86.15% was acquired indirectly through Private 

Joint Stock Company “Ferrotrade International” (a wholly-owned subsidiary 

of Bank Austria), which has its headquarters in Kiev. 

On the basis of this purchase price, and after net asset value adjustments, 

goodwill amounts to UAH 8,948 m or € 1,203.7 m. 

The net asset value adjustments relate to the intangible assets brand 

name and retail customer base which were acquired as part of the 

acquisition of Ukrsotsbank, and to related deferred taxes. 

The value of the brand name was determined at UAH 293 m or 

€ 39.5 m, on the assumption of an indefinite useful life from a current 

perspective. The retail customer base was valued at UAH 147 m 

or € 19.8 m and is amortised on a straight-line basis over the useful 

period of 3 years. 

In July 2008, the bank acquired a further 4.3% shareholding interest 

in Ukrsotsbank by way of a capital increase. As at 31 December 

2008, Bank Austria’s total shareholding interest in Ukrsotsbank was 

94.47%, the purchase price including additional costs amounted to 

€ 1,694 m. 

The two companies have been included in the group of consolidated 

companies of the Bank Austria Group as from 1 January 2008. 

Furthermore, the following subsidiaries were included in the group of 

consolidated companies of the Bank Austria Group as from 1 January 

2008: 

� FactorBank Aktiengesellschaft, Vienna 

� HYPERION Immobilienvermietungsgesellschaft m.b.H., Vienna 

� Teledata Consulting und Systemmanagement Ges.m.b.H., Vienna 

� Treuconsult Beteiligungsgesellschaft m.b.H., Vienna 

� Informations Technologie Austria GmbH, Vienna (accounted for 

under the proportionate consolidation method) 

Two of UniCredit Bank Austria AG’s Bosnian banking subsidiaries – 

HVB Central Profit Banka d.d., Sarajevo, and UniCredit Zagrebačka 

banka d.d., Mostar – were integrated to form the new UniCredit 

Bank d.d., Mostar, on 1 March 2008. 


43


Notes (CONTINUED) 

In March 2008, our equity interest in the Czech banking subsidiary 

Hypo Stavebni Sporitelna was sold for CZK 1.2 bn. 

In the course of the new corporate branding process, the subsidiary 

International Moscow Bank (IMB) was renamed UniCredit Bank in 

the first quarter of 2008; it is now operating under the name of 

ZAO UniCredit Bank. 

The following subsidiaries were included in the group of consolidated 

companies as from 1 April 2008: 

� “Artist” Marketing Entertainment GmbH, Vienna 

� MY Beteiligungs GmbH, Vienna 

� MC Marketing GmbH, Vienna 

� MC Retail GmbH, Vienna 

The banking subsidiary Nova banjalučka banka a.d. in Bosnia and 

Herzegovina was renamed UniCredit Bank a.d. Banjaluka in June 


OJSC Sohibkorbank, ATF Bank’s banking subsidiary in Tajikistan, was 

sold for US$ 3.6 m in July 2008. 

On 4 September 2008, UniCredit Bank Austria AG sold a shareholding 

interest of 4.65% in UniCredit Tiriac Bank S.A., Bucharest, for 

€ 45 m, thereby reducing its shareholding interest in UniCredit Tiriac 

Bank S.A. from 55.21% to 50.56%. This measure was a contractual 

part of the agreement on the merger of HVB Tiriac Bank S.A. with 

UniCredit Romania S.A. from the year 2007. 

In the third quarter of 2008 the hive-down of UniCredit Bank Austria 

AG’s trading activities to UniCredit CAIB AG, Vienna, was approved by 

the supervisory authorities and entered in the Austrian Register of 

Firms. This means that with effect from 1 October 2008 trading in 

the fixed income, currency, credit and equity markets is performed by 

UniCredit CAIB AG. 

At the beginning of October 2008, Informations Technologie Austria 

GmbH (IT-Austria) transferred data processing systems to Bank Austria 

Global Information Services GmbH (BAGIS) as part of restructuring 

activities. In return, IT-Austria acquired a 20% equity interest in 

BAGIS from UniCredit Bank Austria AG. BAGIS has been included in 

the group of consolidated companies of the Bank Austria Group since 

1 December 2008. 

Purchases of shares from minority shareholders in the period from 

June to December 2008 increased UniCredit Bank Austria AG’s 

shareholding interest in UniCredit Bulbank AD, Sofia, Bulgaria, from 

90.30% to 92.08%. 

Since 1 December 2008, the Cypriot investment management 

company Lowes Limited, a subsidiary of UniCredit Aton International 

Limited, has been consolidated in the Bank Austria Group. 

UniCredit Bank Austria AG transferred the consolidated company 

caibon.com Internet Service GmbH to BA-CA Infrastructure Finance 

Advisory GmbH on 11 December 2008. The equity interest in that 

company is wholly owned via ZETA Fünf Handels GmbH. 

On 30 December 2008, UniCredit Bank Austria AG sold its equity 

interest in Pioneer Investments Austria GmbH to Pioneer Global Asset 

Management S.p.A, Milan, for € 117 m. The resulting profit in the 

Bank Austria Group was € 66 m. 

“JOHA” Gebäude-, Errichtungs- und Vermietungsges.m.b.H. was 

included in the group of consolidated companies of Bank Austria as 

from the end of 2008. 

UniCredit Menkul Degerler AS, a brokerage firm, commenced operations 

in Turkey in the fourth quarter of 2008. As part of the Yapı Kredi 

Group, the brokerage firm is accounted for in the Bank Austria Group 

under the proportionate consolidation method. 


44

(2a) Structural changes (CONTINUED) 

Effects of changes in the group of consolidated companies 


31 Dec. 2007 

ADDITIONS AT 

The begINNINg 

Of 2008 

OTher 

ADDITIONS 

IN 2008 


DISPOSAL 


Cash and cash balances 2,967 155 – –1 

Financial assets held for trading 19,092 – – – 

Financial assets at fair value through profit or loss 935 106 – – 

Available-for-sale financial assets 10,864 30 631 –582 

Held-to-maturity investments 7,623 – – –416 

Loans and receivables with banks 38,007 421 7 –175 

Loans and receivables with customers 115,216 3,604 3 –100 

Hedging derivatives 1,147 – – – 

Changes in fair value of portfolio hedged items (+/–) – – – – 

Investments in associates and joint ventures 2,281 132 629 – 

Insurance reserves attributable to reinsurers – – – – 

Property, plant and equipment 2,003 379 56 –5 

Intangible assets 4,400 20 – –5 

of which goodwill 3,837 – – – 

Tax assets 1,007 5 6 –7 

a) current tax assets 151 – – – 

b) deferred tax assets 856 5 6 –7 

Non-current assets and disposal groups classified as held for sale 1,727 – – – 

Other assets 1,918 38 1 –45 

TOTAL ASSeTS 209,186 4,890 1,333 –1,335 


31 Dec. 2007 

ADDITIONS AT 

The begINNINg 

Of 2008 

OTher 

ADDITIONS 


DISPOSAL 


Deposits from banks 52,445 1,055 54 –19 

Deposits from customers 93,203 2,490 7 –1,145 

Debt securities in issue 26,496 646 – – 

Financial liabilities held for trading 7,442 – 3 – 

Financial liabilities at fair value through profit or loss 2,386 – – – 

Hedging derivatives 1,638 – – – 

Changes in fair value of portfolio hedged items (+/–) – – – – 

Tax liabilities 634 29 – –1 

a) current tax liabilities 125 3 – – 

b) deferred tax liabilities 510 26 – – 

Liabilities included in disposal groups classified as held for sale 1,247 – – – 

Other liabilities 3,574 59 2 –84 

Provisions for risks and charges 4,611 8 1 –5 

a) post-retirement benefit obligations 4,088 8 – –2 

b) other provisions 523 1 1 –3 

Insurance reserves 178 – – – 

Equity 15,332 603 1,265 –82 

of which Minorities (+/–) 660 – – – 

TOTAL LIAbILITIeS AND eqUITy 209,186 4,890 1,333 –1,335 

45



Changes resulting from net asset value 

adjustments of subsidiaries acquired 

in the previous year 

Net asset value adjustments were carried out in respect of the subsidiaries 

ATF Bank, Kazakhstan, and Aton International Limited, Nicosia, 

acquired in the previous year. The values published for 2007 were 

adjusted and the adjusted figures are used as comparative figures in 

the 2008 Annual Report. 

ATf bank 

In November 2007, UniCredit Bank Austria AG acquired 92.88% 

of the share capital of ATF Bank, Kazakhstan, with subsidiaries in 

Kyrgyzstan, Tajikistan and the Omsk region in southern Siberia, 

at a purchase price including additional costs of € 1,592 m. 

After net asset value adjustments, goodwill was 209,700 m tenge 

or € 1,176.8 m. 

The net asset value adjustments related to loans and receivables 

with customers, the intangible assets brand name and customer 

base which were acquired as part of the acquisition of ATF Bank, 

and related deferred taxes. 

The value of the brand name was determined at 9,596 m tenge 

or € 53.9 m, on the assumption of an indefinite useful life from 

a current perspective. 

The value of the corporate customer base was determined at 

13,832 m tenge or € 77.6 m, and is amortised on a straight-line 

basis over the useful period of 12 years. The value of the SME customer 

base was determined at 6,665 m tenge or € 37.4 m and is 

amortised on a straight-line basis over the useful period of 18 years. 

After further purchases of shares in 2008, UniCredit Bank Austria 

AG’s shareholding interest in ATF Bank as at 31 December 2008 

was 99.6%, the total purchase price including additional costs is 

€ 1,898.3 m, goodwill amounts to 232,991 m tenge or € 1,299.2 m. 

Aton International 

The purchase transaction concerning Aton International Limited, 

Nicosia, and Aton Broker, Moscow, companies acquired in the 

previous year, was completed in the third quarter of 2008. The total 

purchase price including additional costs amounts to € 315.8 m. 

After net asset value adjustments, goodwill for Aton International is 

US$ 236.9 m (€ 172.8 m). The net asset value adjustments in the 

amount of € 21.1 m relate to the intangible assets customer base, 

software and favourable rental agreements, which are amortised on 

a straight-line basis over the useful period, and to related deferred 

taxes. Goodwill for Aton Broker, Moscow, remained unchanged at 

€ 43.7 m. 


46

(2a) Structural changes (CONTINUED) 


31 Dec. 2007 

PPA 

ADjUSTmeNTS* 

31 Dec. 2007 

PUbLISheD 

Cash and cash balances 2,967 2,967 

Financial assets held for trading 19,092 19,092 

Financial assets at fair value through profit or loss 935 935 

Available-for-sale financial assets 10,864 10,864 

Held-to-maturity investments 7,623 7,623 

Loans and receivables with banks 38,007 38,007 

Loans and receivables with customers 115,216 –124 115,341 

Hedging derivatives 1,147 1,147 


Investments in associates and joint ventures 2,281 2,281 

Property, plant and equipment 2,003 2,003 

Intangible assets 4,400 141 4,258 

of which goodwill 3,837 –49 3,886 

Tax assets 1,007 1,007 

a) current tax assets 151 151 

b) deferred tax assets 856 856 

Non-current assets and disposal groups classified as held for sale 1,727 1,727 

Other assets 1,918 –1 1,918 

TOTAL ASSeTS 209,186 16 209,170 


31 Dec. 2007 

PPA 

ADjUSTmeNTS* 

31 Dec. 2007 

PUbLISheD 

Deposits from banks 52,445 52,445 

Deposits from customers 93,203 93,203 

Debt securities in issue 26,496 26,496 

Financial liabilities held for trading 7,442 7,442 

Financial liabilities at fair value through profit or loss 2,386 2,386 

Hedging derivatives 1,638 1,638 


Tax liabilities 634 18 616 

a) current tax liabilities 125 125 

b) deferred tax liabilities 510 18 492 

Liabilities included in disposal groups classified as held for sale 1,247 1,247 

Other liabilities 3,574 3,574 

Provisions for risks and charges 4,611 4,611 

a) post-retirement benefit obligations 4,088 4,088 

b) other provisions 523 523 

Insurance reserves 178 178 

Equity 15,332 –2 15,334 

of which Minorities (+/–) 660 2 658 

TOTAL LIAbILITIeS AND eqUITy 209,186 16 209,170 


47



(2b) Impairment test 

The recognised goodwill relating to every cash-generating unit was 

tested for impairment in the fourth quarter of 2008 in accordance with 

IFRS 3 in conjunction with IAS 36 and IAS 38. For this purpose the recoverable 

amount was compared with the respective carrying amount. 

In Bank Austria, business segments defined for segment reporting 

purposes are defined as cash-generating units. Within a business 

segment, separate legal entities and all entities in a specific country 

are shown as a cash-generating unit. 

The carrying amount of a cash-generating unit is determined on the 

basis of equity allocated to the unit and recognised goodwill relating 

the unit. 

The recoverable amount is determined on the basis of the value in 

use. Value in use is calculated using a discounted cash flow model, 

more specifically a dividend discount model (DDM) adjusted to the 

specific characteristics of banking business and regulatory capital 

requirements. 

The DDM model used in the entire UniCredit Group takes account of 

3 phases: 

� Phase 1 (2009–2011) is based on the current budget for 2009 

and the projection figures in the 3-Year Plan, which were originally 

adopted by management in June 2008 and revised in response to the 

financial crisis. 

� Phase 2 (2011/12–2017): Proceeding from strong business 

growth which may be achieved depending on the respective market 

potential, an adjustment of growth potential to EU averages is made 

towards the end of phase 2. 

� Phase 3: Calculation of the present value of a perpetual annuity on 

the assumption of a long-term growth rate which takes sustained 

long-term economic growth and the inflation rate into account. 

The expected cash flows are discounted at the country-specific rate of 

cost of capital, which is determined on the basis of the long-term riskfree 

interest rate of the local currency, the UniCredit Group debt risk 

premium and UniCredit equity risk premium, and the specific country 

risk premium. 

The country-specific rate of cost of capital in Phase 1 is between 

9.1% in the euro area (Slovenia, Slovakia) and 25.9% for Ukraine. 

The rate of cost of capital for Kazakhstan is 21%. From Phase 2, the 

rates are gradually adjusted to the 11.5% rate of cost of capital used 

as a standard rate in Phase 3. 

After 2008, the economic environment will remain difficult in 2009. 

The projections for 2010 to 2013 are based on expectations of strong 

growth in volume and profits. According to these projections, profit 

growth in Ukraine in 2011 is expected to reach 44.8%, thereafter declining 

slightly to 38.3% in 2013. In Kazakhstan, profit growth in 2011 

is forecast to be 37.2%, with a subsequent slowdown to 29.2% in 

2013. In subsequent years, the growth rates are gradually adjusted to 

long-term growth opportunities in the EU area (2% – Phase 3, basis 

for perpetual annuity). 

For model plausibility purposes, an external valuation of our banking 

subsidiaries in Ukraine and Kazakhstan was carried out in conformity 

with IAS 36, which arrived at the same company value in Ukraine and 

at a higher company value (+4.5%) in Kazakhstan. 

The Bank Austria Group is still convinced of the market potential and 

long-term growth opportunities available in the region of Central and 

Eastern Europe (CEE). 

However, as a result of the dramatic deterioration in global economic 

conditions and the financial impact on the region of Central and 

Eastern Europe, forecasts of medium-term growth have been lowered 

in several countries; this required adjustments in respect of future 

profit expectations, which led to impairment losses being recognised 

on goodwill relating to specific companies. 

An impairment loss totalling € 1,027 m was recognised in the fourth 

quarter of 2008 in the income statement of the Bank Austria Group as 

an impairment loss on goodwill. 

The carrying amount of Ukrsotsbank, the bank in Ukraine acquired 

at the beginning of 2008, declined strongly at the end of 2008 as 

a result of exchange rate movements; moreover, an impairment loss 

of € 333 m on goodwill was recognised when it became clear that 

Ukraine is one of the countries hit hardest by the global economic 

crisis. 

At ATF Bank, a bank in Kazakhstan acquired in November 2007, an 

impairment loss of € 417 m on goodwill was recognised as forecasts 

of medium-term growth had to be lowered. 

Moreover, an impairment loss of € 11 m on goodwill was recognised 

for our unit in Latvia. 

Among the units combined in the Investment Banking (CAIB) segment, 

an impairment loss of € 125 m on goodwill was recognised for CAIB 

Polska, an impairment loss of € 112 m on goodwill was recognised for 

UniCredit ATON International Limited, and an impairment loss of € 28 m 

on goodwill was recognised for ZAO UniCredit Aton. It is planned to 

transfer this business segment to HypoVereinsbank in 2009. 


48

(3) Significant accounting policies 

Pursuant to Section 59a of the Austrian Banking Act and Section 

245a of the Austrian Commercial Code, and in conformity with Regulation 

(EC) No 1606/2002 of the European Parliament and of the 

Council of 19 July 2002, the 2008 consolidated financial statements 

of Bank Austria have been prepared in accordance with International 

Financial Reporting Standards (IFRSs) published by the International 

Accounting Standards Board (IASB) and in accordance with the 

interpretations of the International Financial Reporting Interpretations 

Committee (IFRIC/SIC) applicable at the balance sheet date. All 

International Financial Reporting Standards required to be applied to 

financial statements for 2008, and adopted by the EU, have been 

applied. In addition, the disclosure rules which are specified in the 

Accounting Manual of UniCredit, the ultimate parent company, and 

are required to be applied throughout the Group, were used as a 

basis for the preparation of the consolidated financial statements. 

The comparative figures for the previous year are also based on 

these standards. Unless indicated otherwise, all figures are in millions 

of euros (€). 

Published IFRSs which have 

not yet become operative and 

have not yet been applied 

IFRS 8, which was adopted by the European Union at year-end 2007 

and is to be applied to annual financial statements for periods beginning 

on or after 1 January 2009, contains new rules for the basis of 

segment reporting. Under these rules, segment reporting is to be 

based on data other than IFRS data if management decisions rely 

on such other data. In such a case, a reconciliation to IFRS data in 

the other elements of financial reporting is required. As UniCredit 

Bank Austria AG’s internal reporting system is based on IFRS data, 

there will be no changes in this respect. Furthermore, the new rules 

require segment reporting figures to reflect inter-segment items and 

transactions, i.e. gross figures are to be stated. This may result in 

various changes in individual lines within segment reporting, without 

having an impact on the bank’s overall results or on the segment 

result. 

In January 2008, the IASB published a revised IFRS 3, “Business 

Combinations” (“IFRS 3 R”), and an amended IAS 27, “Consolidated 

and Separate Financial Statements” (“IAS 27 R”). IFRS 3 R and IAS 

27 R will become effective for business combinations in business 

years beginning on or after 1 July 2009. They may be applied for 

earlier periods if both Standards are applied simultaneously. The 

Bank Austria Group is examining the possible application from 2009. 

Changes in accounting principles 

for the 2008 financial statements 

IFRS 7, Financial Instruments: Disclosures, requires more detailed 

disclosures of the risk position of banks, especially regarding credit 

risk, to give the user a better insight into the bank’s overall risk position. 

In order to fulfil this requirement Bank Austria has included in 

the notes (see note 66d) some of the information which was not part 

of the notes in previous years. 

The income statement in the consolidated financial statements for 

2008 is presented in a more extensive format than in the 2007 

Annual Report of Bank Austria. The comparative figures for 2007 

have been adjusted to this format. 

reclassifications pursuant to the amendments to IAS 39 

Results for 2008 were significantly influenced by the reclassification 

of financial instruments into other valuation categories pursuant to 

the amendments to IAS 39 Financial Instruments: Recognition and 

Measurement and IFRS 7 Financial Instruments: Disclosures, which 

were approved by the IASB and adopted by the European Union in 

October 2008. 

The amendments to IAS 39 and IFRS 7 permit specific financial 

instruments to be reclassified in particular circumstances out of the 

held-for-trading category into another category. Bank Austria used 

this possibility and with effect from 1 July 2008 reclassified financial 

instruments held in the trading portfolio at the fair value determined 

on that date. As the current financial crisis is a situation characterised 

by particular circumstances, use of this possibility was justified. 


49



The following table shows the effects related to the reclassifications: 

Reclassifications in accordance with IAS 39 

(€ m) 

1 jULy 2008 31 Dec. 2008 

Financial assets held for trading –2,433 –1,993 

Held-to-maturity investments 1 1 

Loans and receivables with customers 2,556 2,374 

Deferred tax liabilities –31 –32 

Effects on the income statement (€ m) 

30 SePT. 2008 31 Dec. 2008 

Interest income 5 31 

Gains and losses on financial assets 

and liabilities held for trading 120 350 

Income tax expense 31 32 

The effect in the income statement shows the improvement in gains 

and losses on financial assets and liabilities held for trading which 

results from the reclassifications. 

Loans and receivables with customers include assets amounting to 

€ 11 m on which writedowns have been made. 

Consolidation methods 

All companies that are material and are directly or indirectly controlled 

by UniCredit Bank Austria AG have been consolidated in the 

consolidated financial statements. The consolidated financial statements 

of Bank Austria in accordance with IFRSs are based on the 

separate financial statements of all consolidated companies prepared 

on a uniform basis. 

Investments in jointly controlled companies are accounted for under 

the proportionate consolidation method if they are material for the 

Bank Austria Group. 

Material investments in associated companies, i.e., companies which 

are neither indirectly nor directly controlled by UniCredit Bank Austria 

AG but in which it can exercise a significant influence, are accounted 

for using the equity method. 

Shares in all other companies are classified as investments available 

for sale and recognised at their fair values, to the extent that fair 

value is reliably measurable. 

The method of inclusion in the consolidated financial statements is 

shown in the list of selected subsidiaries and other equity interests in 

note 63. 

Consolidation procedures 

Intragroup receivables, liabilities, expenses and income are eliminated 

unless they are immaterial. Intragroup profits are also eliminated. 

Business combinations 

In accordance with IFRS 3, paragraph 3 (b), IFRS 3 was not applied 

to business combinations involving entities under common control. 

When a subsidiary is acquired, the fair values of its identifiable 

assets, including identifiable intangible assets, and liabilities are 

offset against the cost of acquisition. The difference between the 

cost of acquisition and the fair value of net assets is recognised in 

the balance sheet as goodwill if such difference cannot be attributed 

to intangible assets, e.g. a customer base. Pursuant to IFRS 3 and 

IAS 36, goodwill is not amortised. Goodwill arising on business combinations 

after 1 April 2004 is stated in the currency of the acquired 

company and translated at the closing rate. Goodwill is tested for 

impairment at least once a year. 

As at the date of acquisition, equity of foreign subsidiaries which prepare 

their financial statements in foreign currency is translated into 

euros. Gains and losses arising on the foreign currency translation of 

equity of foreign subsidiaries are recorded directly in equity as at the 

subsequent balance sheet dates. 

Goodwill arising on acquisitions of subsidiaries and other equity 

interests before 1 January 1995 has been offset against retained 

earnings. 

When a subsidiary is acquired, the calculation of minority interests is 

based on the fair values of assets and liabilities. 


50

(3) Significant accounting policies (CONTINUED) 

Foreign currency translation 

Foreign currency transactions are translated into the functional 

currency on initial recognition by applying the exchange rate at the 

date of the transaction. Foreign currency translation is performed in 

accordance with IAS 21. Monetary assets and liabilities denominated 

in currencies other than the euro are translated into euros 

at market exchange rates prevailing at the balance sheet date. 

Forward foreign exchange transactions not yet settled are translated 

at the forward rate prevailing at the balance sheet date. 

For the purpose of foreign currency translation of the financial 

statements of foreign subsidiaries, which are prepared in a currency 

other than the euro, the middle exchange rate prevailing at 

the balance sheet date has been applied to balance sheet items 

and the annual average exchange rate has been applied to income 

statement items. 

Cash and cash equivalents 

The amount of cash and cash equivalents stated in the cash flow 

statement includes the cash holdings (cash and demand deposits 

with central banks). In addition to the cash and cash equivalents 

shown in the balance sheet item Cash and cash balances, cash 

and cash equivalents also include those in the item Non-current 

assets and disposal groups classified as held for sale. 

Financial instruments 

Cash purchases and cash sales of financial instruments are recorded 

at the trade date. 

Netting of trading positions is performed only to the extent that 

there is an enforceable right to set-off and that this reflects the 

expected future cash flows from the transaction. 

financial assets and financial liabilities held for trading (hfT) 

When an HfT financial instrument is recognised initially, it is 

measured at its fair value excluding transaction costs that are 

directly recognised in profit or loss. After initial recognition, an 

entity shall measure these financial instruments at their fair value 

through profit or loss. A gain or loss arising from sale or redemption 

or a change in the fair value of an HfT financial instrument is 

recognised in the income statement item Gains and losses on 

financial assets and liabilities held for trading. 

Financial assets held for trading include securities held for trading 

and positive market values of derivative financial instruments, recognised 

at their fair values. To determine fair values, market prices and 

quotes via Bloomberg, Reuters, Telerate and other price indications 

from the interbank market etc. are used. Where such prices or 

quotes are not available, values based on present values or option 

pricing models are applied. 

The item Financial liabilities held for trading shows negative market 

values of derivative financial instruments and short positions held in 

the trading portfolio. To determine fair values, market prices and 

quotes via Bloomberg, Reuters, Telerate and other price indications 

from the interbank market etc. are used. Where such prices or 

quotes are not available, values based on present value calculations 

or option pricing models are applied. 

fair value option 

When financial assets and financial liabilities are recognised initially, 

they may be classified as financial assets and financial liabilities at 

fair value through profit or loss (aFVtPL) if certain requirements are 

met (either reduction of valuation inconsistencies between economically 

related assets and liabilities, or inclusion in a group of financial 

instruments managed at their fair values on the basis of an investment 

and risk strategy). In Bank Austria’s balance sheet, financial 

assets/liabilities at fair value through profit or loss include only those 

financial instruments which were designated as at fair value through 

profit or loss upon initial recognition. 

Available-for-sale financial assets (AfS) 

Available-for-sale financial instruments are a separate category of 

financial instruments. To determine their fair values, market prices are 

used. Where such prices are not available, generally recognised valuation 

methods are used for determining fair values. Changes in fair 

values resulting from remeasurement are recognised in a component 

of equity (available-for-sale reserve) with no effect on income until 

the disposal of the financial asset. Impairment losses are recognised 

in income. Reversals of impairment losses on equity instruments are 

recognised in the available-for-sale reserve within equity; reversals of 

impairment losses on debt instruments are recognised in income. 

Shares in companies which are neither consolidated nor accounted 

for under the equity method are classified as available for sale. 


51



Held-to-maturity investments (HtM) 

Held-to-maturity investments are non-derivative financial assets 

with fixed or determinable payments and fixed maturity for which 

there is the positive intention and ability to hold to maturity. 

These investments are recognised at amortised cost. Cost is amortised 

to the repayable amount until maturity. A held-to-maturity 

investment is impaired within the meaning of IAS 39.63 if its carrying 

amount is greater than the present value of estimated future 

cash flows. Such an impairment is recognised in the item Impairment 

losses on held-to-maturity investments. 

Loans and receivables with banks, 

loans and receivables with customers 

Loans and receivables are carried in the balance sheet at amortised 

cost after deduction of loan loss provisions and including accrued 

interest. Amounts of premiums and discounts are accounted 

for at amortised cost. 

fair values 

The fair values of loans and receivables with banks as well as 

loans and receivables with customers are stated net of loan loss 

provisions. The fair values indicated in the table are the amounts 

for which the financial instruments could have been exchanged 

between knowledgeable, willing parties in an arm’s length transaction 

at the balance sheet date. To the extent that market prices 

were available from exchanges or other efficient markets, these 

were stated as fair values. For the other financial instruments, internal 

valuation models were used, in particular the present value 

method (discounting future cash flows on the basis of current 

yield curves). For fixed-rate loans to, and deposits from, banks 

and customers with a remaining maturity of, or regular interest 

rate adjustment within a period of, less than one year, amortised 

cost was stated as fair value. Investments in listed companies are 

included in the fair value of investments at their market values as 

at the balance sheet date. For investments in unlisted companies, 

the carrying amount was stated as fair value. 

Loan loss provisions 

Loan loss provisions comprise specific writedowns (including flatrate 

specific writedowns, i.e., writedowns on small loans evaluated 

according to customer-specific criteria) and portfolio-based 

writedowns (for losses “incurred but not reported”). Loan loss pro- 

visions are made on the basis of estimates of future loan losses and 

interest rebates. Loans and receivables are shown net of loan loss 

provisions. 

Derivatives 

Derivatives are financial instruments whose value changes in 

response to changes in the underlying instrument, which require no 

initial net investment or only a small initial net investment, and are 

settled at a future date. Derivatives may be interest rate contracts, 

foreign exchange contracts, equity-related and other instruments. 

Credit derivatives are used for active credit portfolio management to 

optimise writedowns of loans. Derivative transactions may be concluded 

over the counter (OTC), i.e. directly with the counterparty, or 

via exchanges. The exposure is reduced by a margin which must be 

deposited for exchange-traded contracts (futures and options) to 

absorb current price fluctuations. 

Derivatives are stated at their fair values. Changes in fair values are 

recognised in the income statement, except for effective cash flow 

hedges in accordance with IAS 39. Credit derivatives meeting the 

definition of financial guarantees are shown like financial guarantees. 

To determine fair values as at the transaction date, market prices and 

official quotes (Bloomberg, Telerate) are used. Where such prices or 

quotes are not available, recognised and tested models are used for 

determining current prices. 

hedging derivatives/hedge accounting 

In hedge accounting, Bank Austria distinguishes between fair value 

hedges and cash flow hedges. To qualify for hedge accounting in 

accordance with IAS 39, hedges must be highly effective. 

A fair value hedge provides protection against changes in the fair 

value of an asset or a liability. The hedging instrument is stated at its 

fair value, and any gains or losses on the hedging instrument are 

recognised in income. Gains or losses on the hedged item which are 

attributable to the hedged risk adjust the carrying amount of the 

hedged item and are recognised in income. The effectiveness of fair 

value hedges is measured on an ongoing basis. 

Cash flow hedges are used by Bank Austria for protecting future 

variable cash flows against changes in market rates. They hedge the 

exposure to variability in cash flows which result from assets or liabilities 

or from planned transactions and have an effect on income. 


52


Changes in the fair values of derivatives designated as hedging 

instruments are divided into a portion that is determined to be an 

effective hedge, and into an ineffective portion. The effective portion 

of any gain or loss on the hedging instrument is included in the cash 

flow hedge reserve and recognised in income in the same period in 

which the change in the value of the hedged item is recognised in 

income. This neutralises the effect on income. The effectiveness of 

cash flow hedges is measured on a regular basis. 

Property, plant and equipment; 

intangible assets 

Property, plant and equipment as well as intangible assets are carried 

at cost less depreciation and/or amortisation in accordance with 

IAS 16. 

Assets are depreciated and amortised on a straight-line basis over 

their estimated useful lives. At Bank Austria, depreciation and amortisation 

is calculated on the basis of the following average useful lives: 

� buildings used for banking operations: 25–50 years 

� office furniture and equipment: 4–15 years 

� software: 4–6 years 

� other intangible assets: 4–20 years 

� customer base: 3–20 years 

Any impairments are recognised in income. When the circumstances 

that led to such an impairment cease to exist, a reversal of the impairment 

loss is made. Since 1 January 2005, goodwill arising on 

business combinations has not been amortised but tested for impairment 

at least once a year. Impairment losses on goodwill are recognised 

in the income statement item Impairment of goodwill. No writebacks 

are allowed in respect of goodwill. 

Investment property 

Land and buildings held as investment property to earn rental income 

and/or for capital appreciation are included in property, plant and 

equipment and recognised at amortised cost. From 2006, rental 

income from such investments is included in Other net operating 

income. 

Disposal groups classified 

as held for sale 

Pursuant to IFRS 5 such disposal groups are to be carried at the 

lower of carrying amount and fair value less costs to sell. Assets 

and liabilities of the disposal group are stated separately in the 

consolidated financial statements. The result from this transaction 

will be recognised in the Corporate Center business segment. 

Deferred taxes 

Taxes on income are recognised and calculated in accordance with 

IAS 12 under the balance sheet liability method. At any taxable 

entity, the calculation is based on the tax rates that are expected 

to apply to the period in which the deferred tax asset or liability will 

reverse. 

Deferred tax assets and liabilities are calculated on the basis of the 

difference between the carrying amount of an asset or a liability 

recognised in the balance sheet and its respective tax base. This 

difference is expected to increase or decrease the income tax 

charge in the future (temporary differences). Deferred tax assets 

are recognised for tax losses carried forward if it is probable that 

future taxable profits will be available at the same taxable entity. 

Deferred tax assets and liabilities are not discounted. 

The tax expense related to profit before tax is recognised in the 

relevant item in the consolidated income statement. Taxes other 

than those on income are included in the item Other administrative 

expenses. 

Pursuant to the group taxation rules introduced in Austria in 2005, 

Bank Austria has formed a group of companies. Profit and loss 

transfer agreements have been concluded with 29 group members, 

and tax compensation agreements have been reached with 

the other companies. 

Other assets 

The components of this item are accounts receivable from 

deliveries of goods and the performance of services, tax claims 

and deferred tax assets. 


53



Deposits from banks/customers, 

debt securities in issue 

These items are carried at amortised cost. 

In the case of debt securities in issue, any difference between the 

issue price and the amount repayable is amortised over the period to 

maturity. 

Long-term employee benefits 

and termination benefits 

Provisions for post-employment benefits are recognised using the 

projected unit credit method in accordance with IAS 19. Pursuant to 

IAS 19.93A, actuarial gains and losses are not recognised in income 

but directly in equity. Such gains and losses are stated in the table 

“Statement of recognised income and expenses”. 

Under a commitment to provide defined benefits, Bank Austria continues 

to recognise a pension provision for the entitlements of employees 

who retired before the pension reform as at 31 December 

1999 became effective, and – as a special feature of UniCredit Bank 

Austria AG’s staff regulations – for the future benefits, equivalent to 

those under mandatory insurance, earned by active employees and 

pensioners for whom UniCredit Bank Austria AG has assumed the 

obligations of the mandatory pension insurance scheme pursuant to 

Section 5 of the Austrian General Social Insurance Act (ASVG). The 

following are also covered by the provision: 

� disability risk and rights to future benefits based on early retirement 

and pension entitlements of surviving dependants, less reimbursement 

from the pension funds, 

� rights to future benefits under commitments to provide direct 

benefits in individual service agreements, 

� rights to future benefits relating to additional pension payments 

for employees performing manual work. 

The present value of pension obligations and severance-payment 

obligations as well as anniversary bonuses is determined with due 

regard to internal service regulations, on the basis of the following 

actuarial assumptions: 

� discount rate/Austria: 5.75% p.a. (2007: 5.25% p.a.) 

� increases under collective bargaining agreements: 2.80% p.a. 

(2007: 2.45% p.a.); assumption of increases for employees and 

pensioners 

� career trends including regular salary increases under the current 

collective bargaining agreement for employees of Austrian banks and 

the effects of the transitional rules under the 2005 reform of Bank 

Austria’s service regulations. The rate applied in calculating non-regular 

salary increases was 0.25% p.a. (2007: 0.25% p.a.); assumption 

of increases for employees 

� no discount for staff turnover 

� retirement age: as a basis for calculation in respect of employees 

enjoying “permanent tenure” status in accordance with the internal 

agreement dated 30 December 1999 (as amended on 1 May 2007) 

on the payment of a Bank Austria ASVG pension equivalent, the age 

of 60 for men and 55 for women, with a transition to the retirement 

age of 65, has been taken into account. For all other employees, the 

new retirement age of 65 for men and women has been taken into 

account in accordance with the applicable rules (2003 pension reform 

including transitional rules). If the corridor pension rule results 

in a lower retirement age, the lower age was used as retirement age. 

� 2008-P statistical tables of Aktuarverein Österreich (most recent 

life-expectancy tables for salaried staff) 

No provisions are made for defined-contribution plans. Payments 

agreed to be made to a pension fund for defined-contribution plans 

are recognised as an expense. 

Insurance reserves 

Pursuant to IFRS 4, insurance contracts are contracts under which 

one party (the insurer) accepts significant insurance risk – i.e. risk, 

other than financial risk, to which the policy-holder is exposed on the 

basis of an uncertain event under contracts held by the policy-holder 

– from the policy-holder. These reserves represent the obligations, 

calculated using actuarial methods, arising from insurance contracts 

within the meaning of IFRS 4. 


54


Equity 

Equity is composed of paid-in capital, i.e., capital made available 

to the company by shareholders (subscribed capital plus capital 

reserves), and earned capital (retained earnings, foreign currency 

translation reserves, IAS 39 reserves, actuarial gains/losses, profit 

carried forward from the previous year, and net profit). The IAS 39 

reserves include gains and losses on available-for-sale financial 

assets (available-for-sale reserve), which are not recognised in 

income, and those components of hedge accounting in accordance 

with IAS 39 which are not included in income (cash flow hedge reserve), 

after adjustment for deferred taxes. Since 1 January 2005, 

minority interests have been included in equity. 

Treasury shares held are deducted from equity. The difference 

between the price on a later sale of treasury shares and the 

related post-tax repurchase cost is recognised directly in equity. 

Net interest margin 

Interest income and interest expense is accrued and recognised 

as long as such interest is expected to be recoverable. Income 

mainly received as payment for the use of capital (usually 

calculated, like interest, on the basis of a specific term or on the 

amount receivable) is included in income similar to interest. This 

item also includes income and expenses from the trading portfolio 

arising from interest, accrued interest on debt instruments and 

funding costs relating to the trading portfolio. The net interest 

margin also includes interest income and interest expense from 

hedging activities and from derivatives. 

Net fees and commissions 

Net fees and commissions comprise income from services provided 

on a fee and commission basis, including trading-induced 

commission components, as well as expenses incurred for services 

provided by third parties and related to fee-earning business. 

Fees and commissions are recognised on an accrual basis. Securities 

trading commission is recognised at the time the service is 

rendered. Investment portfolio management fees, advisory fees 

and investment fund management fees are recognised on a pro- 

rata time basis. Fees included in amortised cost used to calculate 

effective interest rates are not included under fees and commissions; 

they are part of interest expense. 

Dividend income 

Dividends are recognised in the income statement in the financial 

year in which their payment was approved. 

Gains and losses on financial assets 

and liabilities held for trading 

This item shows the realised and unrealised results from measuring 

all financial instruments of the trading portfolio at fair value through 

profit or loss using the mark-to-market method. Income and 

expenses from derivatives relating to the trading portfolio are not 

included. Such income and expenses are partly included in the net 

interest margin and partly in the net change in financial assets and 

liabilities at fair value through profit or loss. 

Gains and losses on disposals of 

financial instruments 

This item shows the results from disposals of loans and receivables, 

available-for-sale financial assets, held-to-maturity investments and 

financial liabilities. Gains and losses on disposal of financial assets 

held for trading and on financial instruments at fair value through 

profit or loss are not included. 

Gains and losses on financial assets/ 

liabilities at fair value through profit 

or loss 

This item includes gains and losses on financial assets and financial 

liabilities as well as the results from the measurement of these items 

at their fair values. 


55



Impairment losses on loans/ 

Impairment losses on other 

financial transactions 

These items include writedowns of loans, write-offs and additions to 

provisions for guarantees and commitments, and income from writebacks 

as well as recoveries of loans previously written off. 

Impairment/write-backs on property, 

plant and equipment and on 

intangible assets 

Writedowns on assets held under finance leases are part of this item. 

Profit (Loss) of associates 

Dividends received from associates are included in the item Dividend 

income. 

Impairment of goodwill 

Impairment losses on goodwill reflect the results of the impairment 

test performed on an annual basis. 

Gains and losses on disposal 

of investments 

This item includes gains/losses on the disposal of investments in 

property and other assets. 

Repo transactions 

Securities received in a transaction that entails a contractual obligation 

to sell them at a later date or delivered under a contractual 

obligation to repurchase are neither recognised nor derecognised. 

In respect of securities purchased under an agreement to resell, the 

consideration is recognised as a loan to customers or banks, or as 

an asset held for trading. In respect of securities held under a repurchase 

agreement, the liability is recognised as due to banks or customers, 

or as an HfT financial liability. 

Revenue from these loans, being the coupons accrued on the securities 

and the difference between the sale/purchase and resale/repurchase 

prices, is recognised in profit or loss through interest income 

and expenses on an accrual basis. These transactions can only be 

offset if, and only if, they are carried out with the same counterparty 

and provided that such offset is provided for in the underlying contracts. 


56

(4) Events after the balance sheet date 

In December 2008, UniCredit Bank Cayman Islands Ltd. returned 

its banking licence and filed an application to change its name. 

On 21 January 2009, the change of its name to Alpine Cayman 

Islands Ltd. was entered in the local register of companies. 

With effect from 1 January 2009, UniCredit Bank Austria AG transferred 

its equity interests in two wholly-owned companies – BA-CA 

Administration Services GmbH, Vienna, and Banking Transaction 

Services s.r.o., Prague, Czech Republic – to UniCredit Processes & 

Administration S.p.A., Cologno Monzese, Italy, a company wholly 

owned by UniCredit S.p.A, Rome, Italy, with a view to bundling 

back-office activities, and received a 28.81% shareholding interest 

in UniCredit Processes & Administration S.p.A. 

With effect from 1 January 2009, UniCredit Global Leasing S.p.A., 

Milan, Italy, in which UniCredit Bank Austria AG held a 32.59% 

interest and UniCredit S.p.A held a 67.41% interest, merged with 

Locat S.p.A, Bologna, Italy, the UniCredit Group’s Italian leasing 

company. At the same time, the absorbing company Locat S.p.A. 

was renamed UniCredit Leasing S.p.A. UniCredit Bank Austria AG 

now has a 31.01% shareholding interest in that company. 

On 13 February 2009, the Supervisory Board 

� authorised UniCredit Bank Austria AG, upon demand of the 

National Bank of Ukraine (NBU), to increase Ukrsotsbank’s capital resources 

by way of a capital increase and issues eligible for inclusion 

in Tier 2 capital totalling up to € 100 m. These capital measures are 

to be implemented in the first half of 2009; 

� authorised UniCredit Bank Austria AG, upon demand of the 

Agency of the Republic of Kazakhstan on the Regulation and Supervision 

of the Financial Market and Financial Organisations (AFN), to 

increase the capital resources of JSC ATF Bank by way of a capital 

increase of up to € 150 m. This capital measure is to be implemented 

in the first half of 2009; 

� authorised Bank Austria to acquire the remaining minority interests 

in UniCredit Bank Serbia JSC of 0.08%. When completed, this 

measure will bring UniCredit Bank Austria AG’s shareholding interest 

to 100%. 


57



Notes to the income statement 

(5) Interest income/Interest expense 

Interest income and similar revenues (€ m) 


UNImPAIreD fINANcIAL ASSeTS 

ImPAIreD 

DebT SecUrITIeS LOANS fINANcIAL ASSeTS OTher ASSeTS TOTAL TOTAL 

Financial assets held for trading 447 2 6 28 483 556 

Financial assets at fair value through profit or loss 40 1 – – 41 19 

Available-for-sale financial assets 451 – 1 48 500 424 

Held-to-maturity investments 513 – 2 – 515 664 

Loans and receivables with banks – 1,800 6 – 1,806 1,912 

Loans and receivables with customers 113 8,846 351 39 9,348 6,375 

Hedging derivatives X X X 137 137 312 

Financial assets sold but not derecognised – – – – – – 

Other assets X X X 7 7 20 

TOTAL 1,564 10,649 365 259 12,837 10,282 

Interest expense and similar charges (€ m) 


DePOSITS SecUrITIeS OTher LIAbILITIeS TOTAL TOTAL 

Deposits from banks –2,546 X – –2,546 –2,422 

Deposits from customers –3,970 X – –3,970 –2,946 

Debt securities in issue X –1,515 – –1,515 –1,114 

Financial liabilities held for trading –21 –1 –50 –72 –76 

Financial liabilities at fair value through profit or loss – –38 – –38 –41 

Financial liabilities relating to assets sold but not derecognised – – –5 –5 – 

Other liabilities X X –26 –26 –24 

Hedging derivatives X X –8 –8 –4 

TOTAL –6,537 –1,553 – 90 –8,180 –6,629 


58

Notes to the income statement (CONTINUED) 

(6) Fee and commission income/Fee and commission expense 

Fee and commission income (€ m) 


guarantees given 174 154 

credit derivatives 10 17 

management, brokerage and consultancy services: 1,064 866 

securities trading 37 50 

currency trading 299 262 

segregated accounts 376 147 

custody and administration of securities 148 136 

custodian bank 42 46 

placement of securities 58 102 

client instructions 25 22 

advisory 15 18 

distribution of third party services 64 84 

collection and payment services 972 871 

Securitisation servicing – – 

factoring 40 31 

Tax collection services – – 

Other services 445 636 

TOTAL 2,706 2,575 

Fee and commission expense (€ m) 


guarantees received –7 –5 

credit derivatives –30 –16 

management, brokerage and consultancy services: –293 –123 

securities trading –17 –18 

currency trading –5 –5 

segregated accounts – 91 –47 

custody and administration of securities –61 –46 

placement of securities –120 –6 

off-site distribution of securities, products and services – – 

collection and payment services –201 –191 

Other services – 98 –117 

TOTAL –629 –451 


59



(7) Dividend income and similar revenue 

DIvIDeNDS 


INcOme frOm UNITS IN 

INveSTmeNT fUNDS DIvIDeNDS 

(8) Gains and losses on financial assets and liabilities held for trading 

(€ m) 

INcOme frOm UNITS IN 

INveSTmeNT fUNDS 

Financial assets held for trading 5 – 4 – 

Available-for-sale financial assets 546 2 84 3 

Financial assets at fair value through profit or loss – 8 – 6 

Investments 30 X 30 – 

TOTAL 581 10 118 9 

cAPITAL gAINS 

TrADINg 

PrOfIT 


cAPITAL 

LOSSeS 

(€ m) 

2007 

TrADINg 

LOSSeS NeT PrOfIT NeT PrOfIT 

financial assets held for trading 1,087 1,664 –1,764 –1,696 –709 –203 

Debt securities 156 340 – 948 –255 –707 –305 

Equity instruments 873 1,129 –805 –1,097 100 51 

Units in investment funds – 1 –11 –133 –143 32 

Loans – 7 – – 7 6 

Other 59 188 – –211 36 14 

financial liabilities held for trading – 4 –6 –17 –19 –9 

Debt securities – – – – – – 

Deposits – – –1 –1 –1 1 

Other – 4 –6 –16 –17 –10 

Other financial assets and liabilities: exchange differences X X X X 398 230 

Derivatives 813 1,292 –542 –1,204 –46 101 

Financial derivatives 813 1,098 –542 –1,147 –183 67 

on debt securities and interest rates 755 971 –489 –787 450 23 

on equity securities and share indices 26 88 –24 –335 –246 62 

on currency and gold X X X X –405 –31 

other 32 39 –29 –25 17 13 

Credit derivatives – 194 – –57 137 34 

TOTAL 1,901 2,961 –2,313 –2,917 –375 119 


60


(9) Fair value adjustments in hedge accounting 

(10) Gains and losses on disposals/repurchases 


gAINS LOSSeS NeT PrOfIT gAINS LOSSeS NeT PrOfIT 

financial assets 

Loans and receivables with banks – – – – – – 

Loans and receivables with customers 1 – – 2 – 1 

Available-for-sale financial assets 473 –341 132 380 –127 252 

Debt securities 37 –36 – 52 –57 –5 

Equity instruments 419 –286 133 318 –70 248 

Units in investment funds 18 –19 –1 8 –1 8 

Loans – – – 1 – 1 

Held-to-maturity investments –1 – –1 – – – 

TOTAL ASSeTS 473 –341 132 381 –127 254 

financial liabilities 

Deposits with banks – – – – – – 

Deposits with customers – – – – – – 

Debt securities in issue 1 – 1 2 – 2 

TOTAL LIAbILITIeS 1 – 1 2 – 2 

TOTAL 474 –341 133 383 –127 255 


(€ m) 


gains on: 

Fair value hedging instruments 5 26 

Hedged asset items (fair value) 7 – 

Hedged liability items (fair value) 1 3 

Cash flow hedges – – 

Assets and liabilities denominated in currency – – 

Total gains on hedging activities 13 29 

Losses on: 

Fair value hedging instruments –13 –22 

Hedged asset items (fair value) – –7 

Hedged liability items (fair value) – – 

Cash flow hedges – – 

Assets and liabilities denominated in currency – – 

Total losses on hedging activities –13 –29 

NeT heDgINg reSULT 0 –0 

(€ m) 

61



(11) Net change in financial assets and liabilities at fair value 

through profit or loss 

(12) Impairment losses 

cAPITAL gAINS 

gAINS ON 

TrANSfer 

(€ m) 


cAPITAL 

LOSSeS 

LOSSeS ON 

TrANSfer NeT PrOfIT NeT PrOfIT 

financial assets 20 9 –58 –16 –46 22 

Debt securities 12 5 –9 –7 1 –4 

Equity securities – – –1 – – – 

Units in investment funds 7 3 –49 –9 –47 25 

Loans 1 – – – 1 – 

financial liabilities 234 7 –49 –8 184 37 

Debt securities 234 7 –48 –8 185 37 

Deposits from banks – – –1 – –1 – 

Deposits from customers – – – – – – 

financial assets and liabilities in foreign currency: 

exchange differences X X X X 5 –5 

financial derivatives 42 8 –234 –7 –191 –39 

Derivatives 42 8 –234 –7 –191 –39 

Credit derivatives – – – – – – 

TOTAL 295 24 –341 –32 –48 15 

Impairment losses on loans (€ m) 

WrITe-DOWNS WrITe-bAck 


SPecIfIc SPecIfIc POrTfOLIO 

WrITe-OffS OTher POrTfOLIO INTereST OTher INTereST OTher TOTAL TOTAL 

Loans and receivables with banks – –80 – – – – – –80 7 

Loans and receivables with customers –83 –1,279 –204 – 521 – 105 – 940 –514 

TOTAL –83 –1,358 –204 – 521 – 105 –1,019 –507 


62


Impairment losses on available-for-sale financial assets (€ m) 


SPecIfIc SPecIfIc 

Impairment losses on held-to-maturity investments (€ m) 





Debt securities –59 – – – – – – –59 –14 

Loans to banks – – – – – – – – – 

Loans to customers – – – – – – – – – 

TOTAL –59 – – – – – – –59 –14 

Impairment losses on other financial transactions (€ m) 





WrITe-OffS OTher INTereST OTher TOTAL TOTAL 

Debt securities –13 – – – –13 –1 

Equity instruments –3 –9 x x –12 –2 

Units in investment funds – – x – –1 – 

Loans to banks – – – – – – 

Loans to customers – – – – – – 

TOTAL –16 –9 – – –25 –3 


Guarantees given – –32 –12 – 50 – 1 7 20 

Credit derivatives – – – – – – – – – 

Commitments to disburse funds – –4 –1 – 4 – 2 1 1 

Other transactions – – –1 – – – – –1 2 

TOTAL – –36 –13 – 54 – 3 8 23 


63



(13) Premium earned (net) – breakdown 

(14) Other income (net) from insurance business 

DIrecT bUSINeSS 

(€ m) 


Net change in insurance provisions –15 9 

Claims paid pertaining to the year – 93 – 90 

Other income and expense (net) from insurance business 22 –1 

TOTAL –86 –82 

(€ m) 


INDIrecT 

bUSINeSS TOTAL TOTAL 

Life business 

Gross premiums written (+) 22 – 22 21 

Reinsurance premiums paid (–) –2 –2 –1 

Total 21 – 21 20 

Non-life business 

Gross premiums written (+) 127 – 127 136 

Reinsurance premiums paid (–) –33 –33 –36 

Change in gross value of premium reserve (+/–) –6 – –6 –8 

Change in provision for unearned premiums ceded to reinsurers (–/+) 3 – 3 2 

Total 91 – 91 95 

TOTAL NeT PremIUmS 112 – 112 115 


64


(15) Payroll: breakdown 


(€ m) 


employees –2,178 –1,800 

Wages and salaries –1,511 –1,368 

Social charges –306 –248 

Severance pay –12 –20 

Social security costs –58 –61 

Allocation to employee severance pay provision –30 –32 

Provision for retirement payments and similar provisions *) –195 –22 

Payments to external pension funds –31 –26 

Costs related to share-based payments –5 –2 

Other employee benefits –62 –57 

Recovery of compensation 32 37 

Other –57 –40 

TOTAL –2,235 –1,840 

*) less ASVG equivalent of € 164 m in 2007 

(16) Other administrative expenses 

(€ m) 


Indirect taxes and duties –45 –21 

miscellaneous costs and expenses –1,341 –1,252 

Advertising, marketing and communication –185 –202 

Expenses related to credit risk –15 –23 

Expenses related to personnel –82 –75 

Information and communication technology expenses –334 –338 

Consulting and professional services –68 –77 

Real estate expenses –340 –269 

Other functioning costs –317 –268 

TOTAL –1,386 –1,273 

(17) Net provisions for risks and charges 

PrOvISIONS 

(€ m) 


reALLOcATION 

SUrPLUS TOTAL TOTAL 

Other provisions 

Legal disputes –33 10 –24 –11 

Staff costs – – – 1 

Other –89 35 –54 –64 

TOTAL –122 44 –78 –74 

65



(18) Impairment on property, plant and equipment 

(20) Other net operating income 

DePrecIATION 

Other operating expenses (€ m) 


Cost for operating leases – – 

Reclassification of gains/losses associated with cash flow hedges of non financial assets or liabilities from equity to profit or 

loss (IAS 39, paragraph 98a) – – 

Non-deductible tax and other fiscal charges –2 –2 

Writedowns on improvements of goods owned by third parties – – 

Costs related to the specific service of financial leasing – – 

Other –74 –57 

TOTAL OTher OPerATINg eXPeNSeS –76 –60 

(€ m) 


ImPAIrmeNT 

LOSSeS WrITe-bAckS NeT PrOfIT 

Property, plant and equipment 

Owned –209 –6 6 –209 –197 

used in the business –207 –6 6 –207 –172 

held for investment –2 – – –2 –25 

finance lease –4 – – –4 –1 

used in the business –4 – – –4 –1 

held for investment – – – – – 

TOTAL –213 –6 6 –213 –197 

(19) Impairment on intangible assets 

AmOrTISATION 

(€ m) 


ImPAIrmeNT 

LOSSeS WrITe-bAckS NeT PrOfIT 

Intangible assets 

Owned –115 –4 1 –119 –80 

generated internally by the company –34 – – –34 –23 

other –82 –4 1 –85 –57 

finance leases –1 – – –1 – 

TOTAL –116 –4 1 –119 –80 


66


Other operating income (€ m) 


recovery of costs 3 4 

Other income 251 240 

Revenue from administrative services 35 39 

Reclassification of valuation reserve relating to cash-flow hedging of non-financial assets/liabilities – – 

Revenues from rentals of real estate investments (net of operating costs) 13 48 

Revenues from operating leases 1 2 

Recovery of miscellaneous costs paid in previous years 5 6 

Revenues from finance lease activities – – 

Other 198 145 

OTher OPerATINg INcOme 254 244 

OTher NeT OPerATINg INcOme 178 184 

(21) Profit (Loss) of associates 


(€ m) 


Income 458 190 

Revaluations 123 160 

Gains on disposal 321 30 

Writebacks 14 1 

Other positive changes – – 

expense –46 –9 

Writedowns 22 – 

Impairment losses –42 –8 

Losses on disposal –26 –1 

Other negative changes – – 

TOTAL 412 181 

(22) Gains and losses on disposal of investments 

(€ m) 


Property 



Other assets 



TOTAL 9 14 

67



(23) Income tax from continuing operations 

(€ m) 


Current tax (–) –396 –310 

Adjustment to current tax of prior years (+/–) 25 9 

Reduction of current tax for the year (+) – 1 

Changes to deferred tax assets (+/–) 79 –104 

Changes to deferred tax liabilities (+/–) 69 25 

TAX eXPeNSe fOr The yeAr (–) –222 –380 

Reconciliation of theoretical tax charge to actual tax charge (€ m) 


Profit before tax 1,505 2,740 

Applicable tax rate 25% 25% 

Theoretical tax –376 –685 

Different tax rates 77 68 

Non-taxable income 405 553 

Non-deductible expenses –60 –399 

Prior years and changes in tax rates 22 19 

a) effects on current tax 12 22 

losses carried forward – 1 

other previous year effects 12 22 

b) effects on deferred tax 9 –4 

changes in tax rates –1 1 

new tax imposed (–), previous tax revoked (+) 11 –5 

Valuation adjustments and non-recognition of deferred taxes –78 77 

writedowns of deferred tax assets –28 –33 

recognition of deferred tax assets 53 85 

non-recognition of deferred tax assets –104 –4 

non-recognition of deferred tax assets/liabilities under IAS 12.39 and 12.44 –52 29 

other 53 – 

Amortisation of goodwill –225 – 

Non-taxable foreign income 2 9 

Other differences 12 –21 

INcOme TAX –222 –380 

effective tax rate 14.8% 13.9% 

(24) Earnings per share 

During the reporting period, no financial instruments with a dilutive 

effect on the bearer shares were outstanding. Therefore basic earnings 

per share in accordance with IAS 33 equal diluted earnings per 

share in accordance with IAS 33. Earnings per share are calculated 

on the basis of the average number of shares outstanding (2008: 

202.0 million shares; 2007: 192.9 million shares). 

(25) Dividends 

After release of the fund for general banking risks in the amount of 

€ 1,518.3 m, the profit of UniCredit Bank Austria AG for the financial 

year beginning on 1 January 2008 and ending on 31 December 2008 

was € 100 thsd. The profit brought forward from the previous year 

was € 1.9 m. Thus the profit available for distribution was € 2.0 m. 

The Management Board proposes to the Annual General Meeting that 

no dividend be paid on the share capital of € 1,468,770,749.80 and 

that the total profit of € 2.0 m available for distribution be carried 

forward to new account. 


68

Notes to the balance sheet 

(26) Cash and cash balances 

(27) Financial assets held for trading 


(€ m) 


LISTeD UNLISTeD TOTAL TOTAL 

financial assets (non-derivatives) 1,568 255 1,823 11,491 

Debt securities 1,554 15 1,569 10,416 

Structured securities 51 9 60 216 

Other debt securities 1,503 6 1,509 10,201 

Equity instruments 5 240 246 808 

Units in investment funds 8 – 8 42 

Loans – – – 214 

Repos – – – – 

Other – – – 214 

Impaired assets – – – 10 

Assets sold but not derecognised – – – – 

Derivative instruments 10 2,656 2,666 7,601 

Financial derivatives 10 2,656 2,666 7,489 

trading 10 2,652 2,662 7,482 

fair value hedges – – – 1 

other – 4 4 6 

Credit derivatives – – – 112 

trading – – – 112 

fair value hedges – – – – 

other – – – – 

TOTAL 1,577 2,911 4,489 19,092 

(€ m) 


Cash 1,242 1,013 

Demand deposits with central banks 2,666 1,954 

TOTAL 3,908 2,967 

69



(28) Financial assets at fair value through profit or loss 

This item shows assets in respect of which Bank Austria used the 

option to designate financial instruments as at fair value through 

profit or loss in order to avoid inconsistencies in the valuation of 

assets and liabilities which are connected with each other. Most of 

these assets are complex structures with embedded derivatives. 

(€ m) 



Debt securities 354 26 381 577 

Structured securities – – – – 

Other debt securities 354 26 381 577 


Units in investment funds – 149 149 306 

Loans – 17 17 20 

Structured – – – – 

Other – 17 17 20 

Impaired assets – – – – 


TOTAL 358 209 567 935 

Financial assets at fair value through profit or loss (other than assets sold and not derecognised or impaired assets): 

annual changes (€ m) 

DebT SecUrITIeS 

eqUITy 

INSTrUmeNTS 


UNITS IN 

INveSTmeNT 

fUNDS LOANS TOTAL 

Opening balance 577 31 306 20 935 

Increases 1,043 2 327 2 1,375 

Purchases 1,011 – 307 – 1,318 

Positive changes in fair value 8 2 7 1 18 

Other increases 24 – 13 2 39 

Decreases –1,239 –13 –485 –6 –1,743 

Sales –785 –3 –337 – –1,124 

Redemptions –421 –4 – –4 –430 

Negative changes in fair value –15 –6 –53 – –74 

Other decreases –19 – – 95 –1 –115 

cLOSINg bALANce 381 21 149 17 567 


70

Notes to the balance sheet (CONTINUED) 

(29) Available-for-sale financial assets 

(30) Held-to-maturity investments 



(€ m) 

LISTeD UNLISTeD LISTeD UNLISTeD 

Debt securities 6,585 2,660 4,894 2,615 

Structured securities 5 453 1 59 

Other 6,580 2,207 4,893 2,557 

Equity instruments 34 656 129 2,056 

Measured at fair value 34 647 129 2,045 

Carried at cost – 8 – 11 

Units in investment funds – 97 26 1,132 

Loans – – – – 

Impaired assets 1 3 4 7 


TOTAL 6,620 3,414 5,053 5,811 


cArryINg 

AmOUNT fAIr vALUe 

(€ m) 

cArryINg 

AmOUNT fAIr vALUe 

Debt securities 5,754 5,760 7,623 8,118 

Structured securities – 21 70 69 

Other securities 5,754 5,739 7,553 8,049 

Loans – – – – 

Impaired assets – – – – 

Asset sold but not derecognised – – – – 

TOTAL 5,754 5,760 7,623 8,118 

71



Held-to-maturity investments (other than assets sold but not derecognised or impaired assets): 

annual changes (€ m) 

(31) Loans and receivables with banks 

(€ m) 


Loans to central banks 6,397 5,365 

Time deposits 250 289 

Compulsory reserves 4,337 3,573 

Repos 1,765 1,120 

Other 46 382 

Loans to banks 13,626 32,641 

Current accounts and demand deposits 1,548 7,527 

Time deposits 3,412 11,689 

Other loans 8,628 13,397 

Repos 1,486 4,820 

Finance leases – – 

Other 7,141 8,577 

Debt securities – – 

Structured – – 

Other – – 

Impaired assets 38 28 

Assets sold not derecognised – – 

TOTAL (cArryINg AmOUNT) 20,023 38,007 

TOTAL (fAIr vALUe) 20,137 38,463 

Loan loss provisions deducted from loans and receivables 62 33 


DebT SecUrITIeS LOANS TOTAL 

Opening balance 7,623 – 7,623 

Increases 1,718 – 1,718 

Purchases 1,328 – 1,328 

Write-backs – – – 

Transfers from other portfolios 74 – 74 

Other changes 317 – 317 

Decreases –3,587 – –3,587 

Sales –1,077 – –1,077 

Redemptions –1,701 – –1,701 

Write-downs –6 – –6 

Transfers to other portfolios – 97 – – 97 

Other changes –705 – –705 

cLOSINg bALANce 5,754 – 5,754 


72


(32) Loans and receivables with customers 


(€ m) 


Current accounts 15,232 15,824 

Repos 141 880 

Mortgages 20,070 15,506 

Credit cards and personal loans, incl. loans guaranteed by salary 9,814 8,559 

Finance leases 748 740 

Factoring 507 404 

Other transactions 81,963 71,155 

Debt securities 219 202 

Structured securities – – 

Other debt securities 219 202 

Impaired assets 3,280 1,947 

Assets sold but not derecognised – – 

TOTAL (cArryINg AmOUNT) 131,973 115,216 

TOTAL (fAIr vALUe) 133,308 116,812 

Loan loss provisions deducted from loans and receivables 3,876 3,695 

Finance leases: customers (€ m) 

mINImUm LeASe PAymeNTS 

31 Dec. 2008 

PreSeNT vALUe Of mINImUm 

LeASe PAymeNTS 

Amounts receivable under finance leases: 

Up to 12 months 321 290 

From 1 to 5 years 473 430 

Over 5 years 31 29 

Total gross/net investment value 825 748 

of which: Unguaranteed residual values of assets leased under finance leases – – 

Less: Unearned finance income (by remaining maturity) –77 X 

PreSeNT vALUe Of mINImUm LeASe PAymeNTS receIvAbLe 

(NeT INveSTmeNT IN The LeASe) 748 748 

73



(33) Hedging derivatives 

(34) Equity investments 

INTereST rATeS 

cUrreNcy 

AND gOLD 


(€ m) 

eqUITy 

INSTrUmeNTS LOANS OTher TOTAL 

Listed – – – – – – 

Financial derivatives – – – – – – 


Unlisted 85 – – – – 85 

Financial derivatives 85 – – – – 85 

with underlying asset exchange 32 – – – – 32 

purchased options – – – – – – 

other derivatives 32 – – – – 32 

with no underlying asset exchange 53 – – – – 53 

purchased options – – – – – – 

other derivatives 52 – – – – 52 


with underlying asset exchange – – – – – – 

with no underlying asset exchange – – – – – – 

TOTAL 85 – – – – 85 

Total 31 Dec. 2007 992 140 15 – – 1,147 

INveSTmeNTS 

vALUeD AT eqUITy 

OF WHICH 

GOODWILL 

ASSOcIATeD 

cOmPANIeS 

(€ m) 

OTher 

INveSTmeNTS 31 Dec. 2008 31 Dec. 2007 

Opening balance 1,921 126 54 305 2,281 1,890 

Increases 193 – 13 102 308 1,109 

Purchases 70 – 13 51 133 876 

Writebacks – – – – – 12 

Revaluation 123 – – – 124 – 

Other changes – – – 51 51 221 

Decreases –129 –14 –16 –166 –312 –718 

Sales – – –16 –68 –84 –687 

Writedowns –28 – – –17 –45 –8 

Other changes –102 –14 – –81 –183 –22 

cLOSINg bALANce 1,985 113 51 241 2,277 2,281 


74


(35) Property, plant and equipment 


(€ m) 


Assets for operational use 2,036 1,751 

Owned 1,979 1,698 

Land 205 185 

Buildings 1,296 1,088 

Office furniture and fittings 164 152 

Electronic systems 178 131 

Others 135 142 

Leased 56 53 

Lands – – 

Buildings 50 53 

Office furniture and fittings – – 

Electronic systems 6 – 

Others – – 

Leasehold improvements and upgrade expenditure capitalised (group properties excluded) – – 

held-for-investment assets 310 252 

Owned 310 252 

Land 255 197 

Buildings 55 55 

Other – – 

Leased – – 

Land – – 

Buildings – – 

other – – 

TOTAL 2,346 2,003 

75



Property, plant and equipment used in the business (€ m) 

LAND bUILDINgS 

OffIce 

fUrNITUre AND 

fITTINgS 

chANgeS IN 2008 

eLecTrONIc 

SySTemS OTher TOTAL 

gross opening balance 185 1,835 490 490 358 3,358 

Total net reduction in value – –694 –338 –359 –216 –1,607 

Net opening balance 185 1,140 152 132 142 1,751 

Increases 31 439 57 170 84 780 

Purchases 27 391 52 153 62 685 

Capitalised expenditure on improvements – 19 – 2 1 21 

Write-backs – 6 – – – 6 

Increase in fair value – – – – – – 

in equity – – – – – – 

through profit or loss – – – – – – 

Positive exchange differences 1 8 1 2 1 13 

Transfer from properties held for investment – – – – – – 

Other changes 3 15 4 15 20 55 

reductions –11 –233 –44 –118 – 90 –496 

Disposals –1 –32 –1 –3 –13 –50 

Depreciation – –66 –37 –75 –33 –211 

Impairment losses – –2 – – –4 –6 

in equity – – – – – – 

through profit or loss – –2 – – –4 –6 

Reductions of fair value – – – – – – 

in equity – – – – – – 

through profit or loss – – – – – – 

Negative exchange differences –9 –129 –5 –21 –5 –169 

Transfers – –2 – –14 – –16 

property, plant and equipment held for investment – –1 – – – –1 

assets held for sale – –1 – –14 – –16 

Other changes –1 –3 –2 –5 –34 –44 

NeT fINAL bALANce 205 1,346 165 184 136 2,036 


76


Property, plant and equipment held for investment: annual changes (€ m) 


LAND bUILDINgS TOTAL 

Opening balances 197 55 252 

Increases 59 4 63 

Purchases 59 2 61 

Capitalised expenditure on improvements – – – 

Increases in fair value – – – 

Writebacks – – – 

Positive exchange differences – – – 

Transfer from properties used in the business – 1 1 

Other changes – 1 2 

reductions –1 –3 –4 

Disposals –1 – –1 

Depreciation – –2 –2 

Reductions in fair value – – – 

Impairment losses – – – 

Negative exchange differences – –1 –1 

Transfers – – – 

property, plant and equipment held for investment – – – 

assets held for sale – – – 

Other changes – – – 

cLOSINg bALANceS 255 55 310 

meASUreD AT fAIr vALUe 255 58 313 

(36) Intangible assets 


(€ m) 


goodwill 3,595 3,837 

Attributable to the Group 3,595 3,837 

Attributable to minorities – – 

Other intangible assets 575 563 

Intangible assets generated internally 164 153 

Other assets 411 410 

Assets valued at fair value: – – 

Intangible assets generated internally – – 

Other assets – – 

Intangible assets – leased – – 

TOTAL 4,170 4,400 

77



Intangible assets – annual changes (€ m) 

(37) Tax assets 

gOODWILL 


OTher INTANgIbLe ASSeTS 

geNerATeD 

INTerNALLy OTher TOTAL 

gross opening balance 4,246 295 789 5,330 

Net reductions –410 –142 –379 – 932 

Net opening balance 3,837 153 410 4,400 

Increases 1,585 56 169 1,811 

Purchases 1,437 47 88 1,572 

Increases in intangible assets generated internally X 7 – 7 

Writebacks X – 1 1 

Increase in fair value X – – – 

in equity X – – – 

through profit or loss X – – – 

Positive exchange differences 148 – 15 164 

Other changes – 3 65 68 

reductions –1,827 –46 –167 –2,040 

Disposals –38 –4 –6 –48 

Writedowns –1,027 –34 –85 –1,145 

Depreciation X –34 –81 –115 

write-downs –1,027 – –4 –1,031 


through profit or loss –1,027 – –4 –1,031 

Reduction in fair value – – – 


through profit or loss X – – – 

Transfers to non-current assets held for sale –115 – –17 –132 

Negative exchange differences –626 –2 –44 –671 

Other changes –21 –6 –16 –44 

NeT cLOSINg bALANce 3,595 164 411 4,170 

(€ m) 


Deferred tax assets related to: 

Assets/liabilities held for trading 8 13 

Other financial instruments 37 42 

Property, plant and equipment/Intangible assets 19 31 

Provisions 308 387 

Other assets/liabilities 33 65 

Loans and receivables with banks and customers 64 70 

Tax losses carried forward 354 244 

Other 13 3 

TOTAL 835 856 


78


In 2008, deferred taxes were also recognised directly in equity. € 166 m 

(2007: € 16 m) was credited to the available-for-sale reserve and 

€ 43 m (2007: € 18 m) was debited to the cash flow hedge reserve. 

In addition, as actuarial gains and losses on pension and severancepayment 

obligations were not recognised in income in the reporting 

year, deferred tax assets of € 14 m (2007: € 53 m) were offset 

against equity in UniCredit Bank Austria AG. 

As a result of the first-time consolidation of the subsidiaries and 

sub-groups referred to in note 2, and of foreign currency translation 

of deferred taxes and direct offsetting against reserves, part of the 

change in deferred taxes was not reflected in the expense in 2008. 

The assets include deferred tax assets arising from the carryforward 

of unused tax losses in the amount of € 380 m (2007: € 245 m), of 

which € 26.2 m held for sale. Most of the tax losses carried forward 

can be used without time restriction. 

In respect of tax losses carried forward in the amount of € 367 m 

(2007: € 126 m), no deferred tax assets were recognised because, 

from a current perspective, a tax benefit is unlikely to be realised 

within a reasonable period. 

(38) Non-current assets and disposal groups classified as held for sale 


(€ m) 


Individual assets 

Equity investments – 59 

Property, plant and equipment 1 55 

Intangible assets – – 

Other non-current assets – 421 

Total 2 535 

Asset groups classified as held for sale 

Financial assets held for trading 17,796 – 

Financial assets at fair value through profit or loss 77 – 

Available-for-sale financial assets 982 557 


Loans and receivables with banks 11,401 65 

Loans and receivables with customers 2,833 95 

Equity investments 1 – 

Property, plant and equipment 16 3 

Intangible assets 132 3 


Total 34,066 1,192 

ASSeTS 34,068 1,727 

This item includes the investment bank UniCredit CAIB AG and its 

subsidiaries in Poland, Russia and the United Kingdom. In autumn 

2008, in connection with the intended concentration of Markets & 

Investment Banking activities of UniCredit Group, the sale process for 

the sale of UniCredit CAIB AG to Bayerische Hypo- und Vereinsbank 

AG, Munich, was initiated. Appropriate measures aimed at a reorientation 

of the subsidiaries have also been taken. 

Also included is card complete Service Bank AG. With a view to 

streamlining its interests in the Austrian card business, UniCredit 

Bank Austria AG together with the other shareholders set up a selling 

process for card complete Service Bank AG. Completion is scheduled 

for 2009. 

79



(39) Other assets 

(40) Deposits from banks 

(€ m) 


Deposits from central banks 9,777 5,448 

Deposits from banks 25,733 46,997 

Current accounts for services rendered – – 

Current accounts and demand deposits 965 6,933 


Loans 17,525 16,543 

Finance leases – – 

Other 17,525 16,543 

Liabilities in respect of commitments to repurchase treasury shares – – 

Liabilities relating to assets sold but not derecognised – – 

Reverse repos – – 

Other – – 


TOTAL 35,511 52,445 

fAIr vALUe 35,608 52,324 

(€ m) 


Margin with derivatives clearers (non-interest bearing) 22 7 

Gold, silver and precious metals 36 45 

Positive value of “servicing contracts” for financial assets sold and derecognised – – 

Accrued income other than capitalised income 54 43 

Cash and other valuables held by cashier 8 11 

Interest and charges to be debited to 56 81 

Customers 51 61 

Banks 5 20 

Items in transit between branches not yet allocated to destination accounts – – 

Items in processing 288 522 

Items deemed definitive but not attributable to other items 148 494 

Securities and coupons to be settled – 298 

Other transactions 148 196 

Adjustments for unpaid bills and notes 27 4 

Tax items other than those included in item 140 42 32 

Other items 689 679 

TOTAL 1,369 1,918 


80


(41) Deposits from customers 


(€ m) 


Current accounts and demand deposits 39,266 34,439 


Deposits received in administration – – 

Loans 952 976 

Finance leases 2 2 

Other 951 975 

Liabilities in respect of commitments to repurchase treasury shares – – 

Liabilities relating to assets sold but not derecognised – – 

Reverse repos – – 

Other – – 


TOTAL 95,164 93,203 

fAIr vALUe 95,560 94,399 

(42) Debt securities in issue 


(€ m) 

cArryINg AmOUNT fAIr vALUe cArryINg AmOUNT fAIr vALUe 

Listed securities 13,178 12,955 12,329 12,180 

Bonds 12,769 12,546 11,923 11,891 

structured – – – – 

other 12,769 12,546 11,923 11,891 

Other securities 409 409 406 289 

structured 5 5 5 5 

other 404 404 401 284 

Unlisted securities 19,419 19,386 14,167 14,243 

Bonds 18,253 18,213 11,663 11,738 

structured 159 159 120 120 

other 18,094 18,054 11,543 11,618 

Other securities 1,166 1,173 2,504 2,504 

structured 447 447 462 462 

other 719 726 2,042 2,042 

TOTAL 32,597 32,341 26,496 26,422 

81



(43) Financial liabilities held for trading 

(€ m) 



financial liabilities 15 3 19 1,248 

Deposits from banks – – – 1,109 

Reverse repos – – – – 

Others – – – 1,109 


other – – – 1,109 

short position – – – – 

Deposits from customers 15 – 15 114 

Reverse repos – – – – 

Others 15 – 15 114 


other – – – 59 

short position 15 – 15 55 

Debt securities – 3 3 25 

Bonds – 3 3 3 


Other – 3 3 3 

Other securities – – – 22 


Other – – – 22 

Derivative instruments 8 2,128 2,136 6,194 

financial derivatives 8 2,128 2,136 6,120 

Trading 8 2,127 2,135 6,120 

Relating to Fair Value option – – – – 

Other – 1 1 – 

credit derivatives – – – 74 

Trading – – – 74 

Relating to Fair Value option – – – – 

Other – – – – 

TOTAL 23 2,132 2,155 7,442 


82


(44) Financial liabilities at fair value through profit or loss 

This item shows liabilities in respect of which Bank Austria used the 

option to designate financial instruments as at fair value through 

profit or loss in order to avoid inconsistencies in the valuation of 

assets and liabilities which are connected with each other. Most of 


these liabilities are debt securities and complex structures with 

embedded derivatives. In 2008, changes in fair values resulting from 

changes in our own credit rating were + € 71 m (31 December 

2007: + € 30.6 m). 


(€ m) 

LISTeD UNLISTeD LISTeD UNLISTeD 

Deposits from banks – 12 – 12 


Other – 12 – 12 

Deposits from customers – – – – 


Other – – – – 

Debt securities 174 1,814 183 2,191 


Other 174 1,814 183 2,191 

TOTAL 174 1,826 183 2,203 

(45) Hedging derivatives 

INTereST rATeS 

cUrreNcy 

AND gOLD 


(€ m) 

eqUITy 

INSTrUmeNTS LOANS OTher TOTAL 

Listed – – – – – – 

Unlisted 122 1 – – – 123 

Financial derivatives 122 1 – – – 123 


issued options – – – – – – 

other derivatives – – – – – – 

with no underlying asset exchange 122 1 – – – 123 

issued options – – – – – – 

other derivatives 122 1 – – – 123 



with no underlying asset exchange – – – – – – 

TOTAL 122 1 – – – 123 

Total 31 Dec. 2007 1,097 541 – – – 1,638 

83



(46) Deferred tax liabilities 

(€ m) 


Deferred tax liabilities related to: 

Loans and receivables with banks and customers 16 1 

Assets/liabilities held for trading 18 6 

Other financial instruments 181 382 

Property, plant and equipment/intangible assets 136 85 

Other assets/liabilities 23 12 

Deposits from banks and customers 1 1 

Other 28 24 

TOTAL 403 510 

Pursuant to IAS 12.39, no deferred tax liabilities were recognised 

for temporary differences in connection with investments in domestic 

subsidiaries because from a current perspective, they are not 

intended to be sold. 

(47) Liabilities included in disposal groups classified as held for sale 

(€ m) 


Liabilities associated with assets classified as held for sale 

Deposits – – 

Securities – – 

Other liabilities – 103 

Total – 103 

Liabilities included in disposal groups classified as held for sale 

Deposits from banks 17,909 – 

Deposits from customers 306 1,143 

Debt securities in issue – – 

Financial liabilities held for trading 13,315 – 

Financial liabilities at fair value through profit or loss 37 – 

Provisions 16 – 

Other liabilities 1,555 1 

Total 33,137 1,144 

LIAbILITIeS 33,137 1,247 


84


(48) Other liabilities 

(49) Provisions for risks and charges 


(€ m) 


Pensions and other post-retirement benefit obligations 3,537 4,088 

Other provisions for risks and charges 477 523 

Legal disputes 136 145 

Staff expenses 10 36 

Other 331 341 

TOTAL 4,015 4,611 

(€ m) 


Liabilities in respect of financial guarantees issued – 1 

Impairment: of financial guarantees issued, of credit derivatives, of irrevocable commitments to distribute funds 165 164 

Accrued expenses other than those to be capitalized for the financial liabilities concerned 86 74 

Share-based payment classified as liabilities under IFRS 2 – – 

Other liabilities due to employees 412 430 

Other liabilities due to other staff 8 11 

Other liabilities due to directors and statutory auditors 1 – 

Interest and amounts to be credited 89 107 

Items in transit between branches and not yet allocated to destination accounts 4 5 

Available amounts to be paid to others 5 12 

Items in processing 547 1,331 

Entries related to securities transactions 1 36 

Items deemed definitive but not attributable to other lines 302 311 

Liabilities for miscellaneous entries related to tax collection service 8 10 

Adjustments for unpaid portfolio entries – 1 

Tax items different from those included in tax liabilities 55 55 

Other entries 833 1,027 

TOTAL OTher LIAbILITIeS 2,515 3,574 

85



Provisions for risks and charges: annual changes (€ m) 

(50) Equity 

From 1 January 2008 to 31 December 2008, the number of shares 

was 202,031,740, of which 10,100 were registered shares. The registered 

shares (10,000 registered shares are held by “Privatstiftung 

zur Verwaltung von Anteilsrechten”, a private foundation under Austrian 

law; 100 registered shares are held by “Betriebsratsfonds des 

Betriebsrats der Angestellten der UniCredit Bank Austria AG 

Großraum Wien”, the Employees’ Council Fund of the Employees’ 


PeNSIONS AND POST 

reTIremeNT beNefIT 

ObLIgATIONS OTher PrOvISIONS TOTAL 

Opening balance 4,088 523 4,611 

Increases 326 107 433 

Provisions for the year 234 83 317 

Changes due to the passage of time – – – 

Differences due to discount-rate changes – – – 

Other increases 92 24 116 

Decreases –877 –153 –1,029 

Use during the year –280 –140 –420 

Differences due to discount-rate changes – – – 

Other decreases *) –597 –12 –609 

cLOSINg bALANce 3,537 477 4,015 

*) incl. € 522 m changes in pension provisions at Koç Finansal Hizmetler A.S. 

Insurance provisions: breakdown (€ m) 

DIrecT 

bUSINeSS 


INDIrecT 

bUSINeSS TOTAL 

DIrecT 

bUSINeSS 

INDIrecT 

bUSINeSS TOTAL 

Non-life business 57 – 57 66 – 66 

Provision for unearned premiums 43 – 43 50 – 50 

Provision for outstanding claims 14 – 14 16 – 16 

Other provisions – – – – – – 

Life business 100 – 100 112 – 112 

Mathematical provisions 97 – 97 110 – 110 

Provisions for amounts payable 1 – 1 1 – 1 

Other insurance provisions 1 – 1 1 – 1 

Insurance provisions when investment risk is borne by 

the insured party – – – – – – 

Provision for policies where the performance is connected to 

investment funds and market indices – – – – – – 

Provision for pension funds – – – – – – 

TOTAL INSUrANce PrOvISIONS 156 – 156 178 – 178 

Council of employees of UniCredit Bank Austria AG in the Vienna 

area) carry special rights: for resolutions concerning spin-offs and 

specific mergers or specific changes in the bank’s Articles of Association 

to be adopted at a general meeting of shareholders, the registered 

shareholders have to be present when the resolutions are 

adopted. The relevant resolutions are specified in Article 20 (13) and 

(14) of UniCredit Bank Austria AG’s Articles of Association. 


86

Additional IFRS disclosures 

(51) Time breakdown by contractual residual maturity 

of financial assets and liabilities 

ON DemAND 

1 TO 7 

DAyS 

Geographical distribution of total assets and operating income (€ m) 


TOTAL ASSeTS OPerATINg INcOme 

Austria 131,304 1,825 

Total European countries 83,296 4,945 

Western Europe 669 –8 

Central and Eastern Europe 82,627 4,953 

America 608 –152 

Asia 6,944 417 

Rest of the world – – 

TOTAL 222,152 7,035 

The geographic breakdown is based on the location of the subsidiary in which the transaction is recorded. 

7 TO 15 

DAyS 

15 DAyS TO 

1 mONTh 


1 TO 3 

mONThS 

3 TO 6 

mONThS 

6 mONThS 

TO 1 yeAr 

balance sheet assets 22,132 3,922 2,108 7,047 8,885 6,699 13,814 41,314 57,150 

Government securities 2 47 2 159 354 542 545 1,930 2,529 

Debt securities 4 54 112 647 626 174 404 1,977 2,874 

Other equity securities 234 – – – – 4 – 26 5 

Units in investment funds 106 – – – – – – – 98 

Loans 21,786 3,820 1,993 6,241 7,904 5,979 12,865 37,380 51,643 

Banks 3,694 2,454 1,143 2,539 1,893 730 1,451 4,373 1,138 

Customers 18,091 1,366 850 3,703 6,011 5,249 11,414 33,008 50,506 

balance sheet liabilities 37,776 6,795 2,950 14,875 13,073 14,589 12,504 27,385 24,911 

Deposits 37,573 5,006 2,401 6,863 8,440 8,519 9,163 7,032 2,713 

Banks 801 709 325 656 1,615 332 424 1,162 2,035 

Customers 36,772 4,297 2,076 6,207 6,825 8,187 8,739 5,869 677 

Debt securities in issue 14 168 165 93 1,029 1,202 2,357 13,196 15,957 

Other liabilities 189 1,621 384 7,919 3,604 4,868 984 7,158 6,242 

Off balance sheet transactions 

Financial derivatives with exchange of principal 

long positions 99 942 2,029 1,486 2,039 1,307 869 1,032 27 

short positions 99 955 2,032 1,487 2,040 1,296 871 1,025 27 

Deposits and loans receivable/to be made 

long positions 295 – – – – – – – – 

short positions – – – – – – – – – 

Irrevocable commitments to disburse funds 

long positions 1,051 42 32 302 454 1,521 1,336 2,851 726 

short positions 2,031 42 35 191 454 574 1,338 2,175 719 

(52) Geographical distribution 

1 TO 5 

yeArS 


(€ m) 

Over 5 

yeArS 

87



(53) Related party disclosures 

Related party disclosures as at 31 December 2008 (€ m) 

PAreNT 

cOmPANy AND 

UNcONSOLIDATeD 

SUbSIDIArIeS ASSOcIATeS 

key mANAgemeNT 

PerSONNeL 

OTher reLATeD 

PArTIeS 

Loans and advances 12,673 680 5 79 


Other receivables 165 0 0 0 

TOTAL ASSeTS 12,851 687 5 81 

Deposits 4,371 13,509 11 424 

Other financial liabilities 9,405 0 0 0 

Other liabilities 79 0 0 0 

TOTAL LIAbILITIeS 13,855 13,509 11 424 

a) Information on members of the Management Board, 

the Supervisory Board and the Employees’ Council of 

UniCredit Bank Austria AG 

emoluments of members of the management board and the 

Supervisory board 

The emoluments paid by UniCredit Bank Austria AG to Management 

Board members in the 2008 financial year (excluding payments into 

pension funds) totalled € 3.98 m (comparable emoluments in 2007 

totalled € 7.62 m). Of this total, € 2.73 m (2007: € 1.88 m) related 

to fixed salary components, and € 1.25 m (2007: € 5.74 m) related 

to variable salary components. Several members of the Management 

Board receive their emoluments from companies which are not included 

in the group of consolidated companies of Bank Austria; 

these emoluments granted to Management Board members in such 

companies in the 2008 financial year amounted to € 5.79 m (2007: 

€ 5.06 m). These Management Board members also received emoluments 

for activities which are not connected with the Bank Austria 

Group but are in the interest of UniCredit Group. 

Payments to former members of the Management Board and their 

surviving dependants (excluding payments into pension funds) totalled 

€ 21.68 m (2007: € 9.64 m), mostly as one-off payments. 

Of this total, € 4.71 m (2007: € 4.76 m) was paid to former Management 

Board members of Creditanstalt AG, which merged with 

Bank Austria in 2002, and their surviving dependants; € 1.98 m 

(2007: € 1.92 m) was paid to former Management Board members 

of Österreichische Länderbank AG, which merged with Zentralsparkasse 

in 1991, and their surviving dependants. Emoluments 

paid to this group of persons for activities in subsidiaries amounted 

to € 0.53 m (2007: € 0.53 m). 

The emoluments of the Supervisory Board members active in the 

2008 business year totalled € 342 thsd (2007: € 324 thsd) for 

UniCredit Bank Austria AG, and € 3 thsd (2007: € 7 thsd) for the two 

credit associations. 

Loans to members of the management board and of the 


Loans to members of the Management Board amounted to € 408 thsd 

(2007: € 266 thsd), overdrafts granted to them were € 29 thsd 

(2007: € 64 thsd). 

Loans to members of the Supervisory Board amounted to € 2.81 m 

(2007: € 0.72 m). Credit lines and overdrafts granted to Supervisory 

Board members totalled € 0.31 m (2007: € 0.52 m). Repayments 

during the business year totalled € 127 thsd (2007: € 32 thsd). 

Loans to the Supervisory Board include those made to members of 

the Employees’ Council who are members of the Supervisory Board. 

The maturities of the loans range from five to fifteen years. The rate 

of interest payable on these loans is the rate charged to employees 

of UniCredit Bank Austria AG. 

Names of members of the management board and the 


Note 65 contains a list of the members of the Management Board 

and the Supervisory Board. 


88

Additional IFRS disclosures (CONTINUED) 

b) Relationships with unconsolidated subsidiaries and 

other companies in which an equity interest is held 

All related-party banking transactions were effected on market terms. 

Transactions with companies which are related parties are explained 

in note 2. 

There is a syndicate agreement – the “Restated Bank of the Regions 

Agreement” – between UniCredit, “Privatstiftung zur Verwaltung von 

Anteilsrechten” (“AV-Z Stiftung”) and “Betriebsratsfonds des Betriebsrats 

der Angestellten der UniCredit Bank Austria AG Großraum Wien”. 

In the Restated Bank of the Regions Agreement, the contracting parties 

“AV-Z Stiftung” and “Betriebsratsfonds des Betriebsrats der Angestellten 

der UniCredit Bank Austria AG Großraum Wien” have given 

an undertaking to UniCredit to the effect that if they want to sell 

UniCredit Bank Austria shares, they will first offer such shares held 

by them to UniCredit. If UniCredit does not accept the offer, the relevant 

contracting party could sell the UniCredit Bank Austria shares to 

a third party. In this case UniCredit has a right of preemption. 

For the duration of this agreement (10 years), “AV-Z Stiftung” has a 

right to nominate two members of the Supervisory Board of UniCredit 

Bank Austria AG, and thereafter one member of the Supervisory 

Board for the duration of the guarantee issued by the Municipality of 

Vienna and “AV-Z Stiftung”. 

As at 31 December 2008, UniCredit held a direct interest of 

99.995% in UniCredit Bank Austria AG. 

As at 31 December 2008, one Management Board member of HVB 

was a member of the Supervisory Board of UniCredit Bank Austria AG 

(the same member was a member of UniCredit’s Management Committee). 

As at 31 December 2008, there were the following interlocking 

relationships with UniCredit S.p.A.: 

� The Chairman of the Supervisory Board of UniCredit Bank Austria 

AG was a member of the Board of Directors and a member of the 

Management Committee of UniCredit. 

� A further six members of the Supervisory Board of UniCredit Bank 

Austria AG were members of the Management Committee of 

UniCredit (one of them was also a member of the Management 

Board of HVB). 

� Two members of the Management Board of UniCredit Bank Austria 

AG were members of the Management Committee of UniCredit. 

c) Other information on related party relationships 

Under Section 92 (9) of the Austrian Banking Act, “Privatstiftung zur 

Verwaltung von Anteilsrechten” (“AV-Z Stiftung”) serves as deficiency 

guarantor for all liabilities of UniCredit Bank Austria AG in the 

event of the company’s insolvency. The board of trustees of the 

Private Foundation has 14 members. These included four members 

of the Supervisory Board of UniCredit Bank Austria AG. 

After the change in the legal form of Anteilsverwaltung-Zentralsparkasse 

into a private foundation (“AV-Z Stiftung”) in 2001, the 

Municipality of Vienna serves as deficiency guarantor for all outstanding 

liabilities, and obligations to pay future benefits, of UniCredit Bank 

Austria AG (then Bank Austria Aktiengesellschaft) which were entered 

into prior to and including 31 December 2001. 

The board of trustees of Immobilien Privatstiftung has three 

members. One of them is a member of the Management Board of 

UniCredit Bank Austria AG. 

(54) Share-based payments 

DESCRIPTION OF SHARE-BASED PAYMENTS 

OUTSTANDING INSTRUMENTS 

Group Medium & Long Term Incentive Plans for selected employees 

refers to Equity-Settled Share Based Payments based on the shares 

of the parent company UniCredit S.p.A. 

This category includes the following: 

� Stock Options allocated to a selected group of Top & Senior 

Managers and Key Talents; 

� Performance Shares allocated to a selected group of Top & 

Senior Managers and Key Talents and represented by free UniCredit 

ordinary shares that the parent company undertakes to grant, conditional 

upon achieving performance targets set at Group and Division 

level in the Strategic Plan and any amendments thereto approved by 

the parent company’s Board of Directors; 

� Restricted Shares allocated to a selected group of Middle 

Managers. 


89



MEASUREMENT MODEL 

Stock Options 

The Hull and White Evaluation Model has been adopted to measure 

the economic value of stock options. 

This model is based on a trinomial tree price distribution using the 

Boyle’s algorithm and estimates the early exercise probability on the 

basis of a deterministic model connected to: 

� reaching a market share value equal to an exercise price- 

multiple (M); 

� the probability of beneficiaries’ early exit (E) after the end of the 

vesting period. 

The following table shows the measurements and parameters used 

in relation to the Stock Options granted in 2008. 

Measurement of Stock Options in 2008 

STOck OPTIONS 2008 

Exercise price (€) 4.185 

UniCredit share market price (€) 4.185 

Date of UniCredit Board’s granting resolution 

(grant date) 25 June 2008 

Vesting period start-date 9 July 2008 

Vesting period end-date 9 July 2012 

Expiry date 9 July 2018 

Exercise price-multiple (M) 1.5 

Exit rate post vesting (E) 3.73% 

Dividend yield* 4.8459% 

Volatility 20.564% 

Risk-free rate 4.649% 

Stock Options’ fair value per unit at grant date (€) 0.6552 

*) Ratio between the average of the dividends paid by UniCredit S.p.A. from 2005 to 2008 and the 

stock’s market value at grant date. 

Parameters are calculated as follows: 

� Exit rate: annual percentage of Stock Options forfeited due to 

termination; 

� dividend yield: average dividend yield of the last four years, 

according to the duration of the vesting period; 

� volatility: historical daily average volatility for a period equal to the 

duration of the vesting period; 

� exercise price: arithmetic mean of the official market price of 

UniCredit ordinary shares during the month preceding the resolution 

adopted by UniCredit’s Board of Directors; 

� UniCredit share market price: set equal to the exercise price, in 

consideration of the “at the money” allocation of Stock Options at the 

date of the grant. 

Other equity instruments (Performance Shares) 

The economic value of Performance Shares is measured considering 

the share market price at the grant date less the present value of the 

future dividends during the performance period. Parameters are estimated 

by applying the same model used for Stock Options measurement. 

The following table shows the measurements and parameters used 

in relation to the Performance Shares granted in 2008. 

Measurement of Stock Options in 2008 

PerfOrmANce 

ShAreS 2008 

Date of UniCredit Board’s granting resolution 

(grant date) 25 June 2008 

Vesting period start-date 1 January 2011 

Vesting period end-date 31 December 2011 

UniCredit share market price (€) 4.185 

Economic value of vesting conditions (€) –0.705 

Performance Shares’ fair falue per unit at grant date (€) 3.480 

Other equity instruments (restricted Shares) 

The economic value of Restricted Shares is measured considering 

the share market price at grant date. The parent company has not 

granted any new Restricted Shares Plans during 2008. 

Payroll costs in 2008 included share-based payments of € 4.7 m. 

The (cumulative) accrual totalled € 7.9 m. 


90


(55) Reconciliation of reclassified accounts to mandatory reporting schedule 


(€ m) 


Net interest 4,657 3,653 

Dividends and other income from equity investments 710 284 

Dividend income and similar revenue 592 128 

minus: dividend income and similar revenue from financial assets held for trading (7) –5 –4 

Profit (loss) of associates – of which: income from revaluation (21) 123 160 

Net interest margin 5,367 3,936 

Net fees and commissions 2,076 2,124 

Net trading, hedging and fair value income –414 141 

Gains (losses) on financial assets and liabilities held for trading –375 119 

plus: dividend income and similar revenue from financial assets held for trading (7) 5 4 

Fair value adjustments in hedge accounting – – 

Gains (losses) on disposal and repurchase of available-for-sale financial assets – private equity 4 1 

Gains (losses) on disposal or repurchase of financial liabilities 1 2 

Gains (losses) on financial assets and liabilities designated at fair value through profit and loss –48 15 

Net other expenses/income 201 214 

Gains (losses) on disposals/repurchases of loans and receivables – not impaired 1 – 

Premiums earned (net) 112 115 

Other income (net) from insurance activities –86 –82 

Other net operating income 178 184 

minus: other operating income – of which: recovery of expenses (20) –3 –4 

Gains (losses) on disposals of investments – assets leasing operation – – 

Net non-interest income 1,864 2,478 

OPerATINg INcOme 7,231 6,414 

Payroll costs –2,235 –1,836 

Administrative costs – staff expenses –2,235 –1,840 

minus: integration costs – 3 

Other administrative expenses –1,371 –1,243 

Administrative costs – other administrative expenses –1,386 –1,273 

minus: integration costs 15 30 

Recovery of expenses 3 4 

Amortisation, depreciation and impairment losses on intangible and tangible assets –331 –275 

Impairment/Write-backs on property, plant and equipment –213 –197 

minus: impairment losses/write backs on property owned for investment 1 1 

minus: integration costs – – 

Impairment/Write-backs on intangible assets –119 –80 

minus: integration costs – – 

OPerATINg cOSTS –3,935 –3,351 

OPerATINg PrOfIT 3,296 3,063 

91




Impairment of goodwill –1,027 – 

Provisions for risks and charges –87 –75 

Provisions for risks and charges –78 –74 

Surplus on release of integration provision –9 –1 

Integration costs –6 –33 

Net impairment losses on loans and provisions for guarantees and commitments –1,012 –483 

Gains (losses) on disposal and repurchase of loans 1 1 

minus: gains (losses) on disposals/repurchases of loans and receivables – not impaired position –1 – 

Impairment losses on loans –1,019 –507 

Impairment losses on other financial assets 8 23 

Net income from investments 340 268 

Gains (losses) on disposal and repurchase of available-for-sale financial assets 132 252 

minus: gains (losses) on disposal and repurchase of available-for-sale financial assets – private equity –4 –1 

Gains (losses) on disposal and repurchase of held-to-maturity investments –1 – 

Impairment losses on: available-for-sale financial assets –25 –3 

Impairment losses on: held-to-maturity investments –59 –14 

Impairment losses/write-backs on property owned for investment –1 –1 

Profit (loss) of associates 412 181 

minus: income from revaluation (21) –123 –160 

Gains (losses) on disposal of investments 9 14 

minus: gains (losses) on disposals of investments – assets leasing operation – – 

PrOfIT befOre TAX 1,505 2,740 

Income tax for the period –222 –380 

NeT PrOfIT 1,283 2,360 

Minorities –139 –106 

NeT PrOfIT ATTrIbUTAbLe TO The grOUP 1,144 2,254 


92


(56) Segment reporting 

As in previous periods, the primary segment reporting format is 

based on the internal reporting structure of business segments, 

which reflects management responsibilities in the Bank Austria Group 

in 2008. The business segments are presented as independent units 

with their own capital resources and are responsible for their own 

results. This also meets the requirements of IFRS 8. 

The definition of business segments is primarily based on organisational 

responsibility for customers. 

retail 

Responsibility for the Retail Division covers Bank Austria’s business 

with private customers and small businesses and the credit card 

business. 

Private banking & Asset management 

The Private Banking & Asset Management Division comprises the 

subsidiaries Bank Privat, Schoellerbank AG, Asset Management 

Gesellschaft AMG and Pioneer Investments Austria. 

corporates 

The Corporates Division covers the sub-segment Large Corporates 

(multinational corporates, financial institutions, public sector) and 

Real Estate, business with medium-sized companies and customers 

using specific products (e.g derivatives) as well as the activities of 

BA-CA Wohnbaubank AG and BA-CA Real Invest Group. The leasing 

business of the Bank Austria Creditanstalt Leasing Group was transferred 

to UniCredit Global Leasing with effect from July 2007. In exchange, 

Bank Austria received a 32.59% shareholding interest in 

that company, which is accounted for under the equity method. 

cee 

The CEE business segment includes the commercial banking units of 

the Bank Austria Group in the region of Central and Eastern Europe. 

From 2007, the CEE business segment also includes the units in 

Central and Eastern Europe and in Turkey which were transferred 

from UniCredit and HVB to the Bank Austria Group. Corporate finance 

business for CEE customers was transferred to the Markets & Investment 

Banking Division. JSC ATF Bank has been included in this segment 

since December 2007 and Ukrsotsbank has been included 

since January 2008. 

markets & Investment banking 

The Markets & Investment Banking Division essentially comprises the 

treasury activities of the Bank Austria Group; the trading activities 

were hived down by Bank Austria to UniCredit CAIB AG. The equity 

interests in Aton International Limited and Aton Broker were included 

in the group of consolidated companies and allocated to the MIB 

Division as from August 2007. 

corporate center 

“Corporate Center” covers all equity interests that are not assigned to 

other segments. Also included are inter-segment eliminations and 

other items which cannot be assigned to other business segments. 

Methods 

Net interest income is split up according to the market interest rate 

method. Costs are allocated to the individual business segments from 

which they arise. 

The result of each business segment is measured by the profit 

before tax and the net profit after tax earned by the respective 

segment. In addition to the cost/income ratio, the return on equity 

is one of the key ratios used for controlling the business segments. 

The segment reporting data also show the net profit after tax. 

The interest rate applied to investment of equity allocated to the 

business segments corresponds to the 3-month EURIBOR plus a 

margin of the average 5-year UniCredit credit spread. The rate 

applied to the business segments for investment of equity is determined 

for one year as part of the budgeting process. A uniform rate 

of 3.8% is applied to loans on which interest is not accrued and to 

writedowns. 

Overhead costs are allocated proportionately to direct and indirect 

costs of the business segments. 

Capital allocated to the business segments in Bank Austria is based 

on the Core Tier 1 capital ratio on the basis of planned risk-weighted 

assets. The bank uses differentiated percentage rates according to 

the individual business segments: 

Retail 6.00% 

Private Banking & Asset Management 5.90% 

Corporates 6.45% 

CEE 6.45% 

Markets & Investment Banking 6.45% 

Corporate Center 6.80% 

Capital allocation to subsidiaries reflects actual IFRS capital. In the 

CEE Division and in the MIB Division, the IFRS capital of subsidiaries 

exceeds the capital calculated on the basis of risk-weighted assets. 

This effect is reflected in the Corporate Center, leading to a negative 

amount being shown as average equity for the Corporate Center. 


93



Segment reporting 1–12 2008/1–12 2007 (€ m) 

reTAIL 

DIvISION 

PrIvATe 

bANkINg 

& ASSeT 

mANAgemeNT 

DIvISION 

cOrPOrATeS 

DIvISION 

ceNTrAL 

eASTerN 

eUrOPe 

DIvISION 

mArkeTS & 

INveSTmeNT 

bANkINg 

DIvISION 

cOrPOrATe 

ceNTer 

bANk 

AUSTrIA 

grOUP 

Net interest income 1–12 2008 774 22 655 3,068 731 117 5,367 

1–12 2007 748 19 630 2,151 330 58 3,936 

Net fees and commissions 1–12 2008 476 98 277 1,163 77 –15 2,076 

1–12 2007 548 143 342 929 172 –11 2,124 

Net trading, hedging and 1–12 2008 12 1 – 384 –662 –147 –414 

fair value loss/income 1–12 2007 – 1 – 177 –42 6 141 

Net other expenses/income 1–12 2008 –28 35 –2 121 –4 78 201 

1–12 2007 –31 39 33 110 11 52 214 

Net non-interest income 1–12 2008 461 133 275 1,668 –589 –84 1,864 

1–12 2007 517 183 375 1,216 140 46 2,478 

OPerATINg INcOme 1–12 2008 1,235 155 930 4,736 142 33 7,231 

1–12 2007 1,266 202 1,005 3,367 470 104 6,414 

OPerATINg eXPeNSeS 1–12 2008 –851 –102 –271 –2,234 –206 –271 –3,935 

1–12 2007 – 935 –104 –353 –1,729 –233 3 –3,351 

OPerATINg PrOfIT 1–12 2008 383 54 658 2,502 –64 –238 3,296 

1–12 2007 330 98 652 1,638 238 107 3,063 

Goodwill impairment 1–12 2008 – – – – – –1,027 –1,027 

1–12 2007 – – – – – – – 

Provisions for risks and charges 1–12 2008 –9 –1 –8 –65 1 –4 –87 

1–12 2007 –1 –1 –5 –79 – 11 –75 

Restructuring costs 1–12 2008 – – – –3 – –2 –6 

1–12 2007 – –1 – –27 –2 –3 –33 

Net writedowns of loans and provisions 1–12 2008 –208 – –100 –537 –165 – –1,012 

for guarantees and commitments 1–12 2007 –208 1 –66 –211 1 – –483 

Net income from investments 1–12 2008 6 9 –57 123 –24 284 340 

1–12 2007 14 3 –12 20 1 243 268 

PrOfIT befOre TAX 1–12 2008 172 62 492 2,019 –253 – 987 1,505 

1–12 2007 135 99 570 1,342 237 357 2,740 

Income tax 1–12 2008 –41 –13 – 97 –417 43 303 –222 

1–12 2007 –26 –25 –120 –250 –51 91 –380 

NeT PrOfIT 1–12 2008 131 49 396 1,601 –209 –684 1,283 

1–12 2007 109 75 450 1,092 186 448 2,360 

rWA credit and market risk (avg.) 1–12 2008 15,751 423 33,158 67,682 7,711 4,551 129,276 

1–12 2007 16,171 452 31,009 46,593 5,352 4,927 104,504 

Equity 1) 1–12 2008 992 182 2,477 9,483 5,112 –2,835 15,412 

1–12 2007 1,019 203 2,260 7,099 1,960 1,391 13,933 

ROE before tax in % 1–12 2008 17.4 33.9 19.9 21.3 –4.9 n.m. 2) 9.8 

1–12 2007 13.3 48.9 25.2 18.9 12.1 n.m. 19.7 

ROE after tax in % 1–12 2008 13.2 26.7 16.0 16.9 –4.1 n.m. 8.3 

1–12 2007 10.7 36.8 19.9 15.4 9.5 n.m. 16.9 

Cost/income ratio in % 1–12 2008 69.0 65.4 29.2 47.2 145.1 n.m. 54.4 

1–12 2007 73.9 51.5 35.1 51.4 49.5 n.m. 52.2 

Risk/earnings ratio in % 1–12 2008 26.9 n.m. 15.3 17.5 n.m. n.m. 18.8 

1–12 2007 27.8 n.m. 10.4 9.8 n.m. n.m. 12.3 

1) Total of IFRS capital for the subsidiaries allocated to the respective Division and standardised capital for the rest of the respective Division / 2) Not meaningful 


94


Segment reporting Q1–Q4 2008 (€ m) 

reTAIL 

DIvISION 

PrIvATe 

bANkINg 

& ASSeT 

mANAgemeNT 

DIvISION 

cOrPOrATeS 

DIvISION 

ceNTrAL 

eASTerN 

eUrOPe 

DIvISION 

mArkeTS & 

INveSTmeNT 

bANkINg 

DIvISION 

cOrPOrATe 

ceNTer 


bANk 

AUSTrIA 

grOUP 

Net interest income q4/2008 233 7 175 819 254 265 1,752 

q3/2008 184 6 163 814 176 –37 1,306 



Net fees and commissions Q4/2008 116 22 58 306 21 –5 518 

Q3/2008 113 24 64 315 11 –4 522 



Net trading, hedging and Q4/2008 15 – – 177 –283 –45 –136 

fair value loss/income Q3/2008 –1 – – 98 – 98 –79 –80 

Q2/2008 –2 – – 78 –86 –46 –55 

Q1/2008 – – – 31 –196 22 –143 

Net other expenses/income Q4/2008 –5 9 – 22 –2 16 40 

Q3/2008 –8 8 – 40 – 25 65 

Q2/2008 –8 9 –1 34 –2 21 54 

Q1/2008 –7 8 – 24 – 16 42 

Net non-interest income q4/2008 125 31 58 505 –264 –34 421 

q3/2008 104 32 63 452 –87 –58 507 

q2/2008 109 35 73 394 –65 –29 517 

q1/2008 123 36 80 316 –172 36 418 

OPerATINg INcOme q4/2008 358 38 233 1,324 –10 231 2,173 

q3/2008 288 38 227 1,267 89 – 95 1,814 

q2/2008 293 40 239 1,125 108 –105 1,700 

q1/2008 296 40 231 1,020 –45 2 1,543 

OPerATINg eXPeNSeS q4/2008 –206 –29 –77 –613 –57 –58 –1,041 

q3/2008 –214 –23 –64 –564 –48 – 91 –1,003 

q2/2008 –217 –24 –67 –544 –50 –49 – 951 

q1/2008 –215 –26 –63 –513 –50 –73 – 941 

OPerATINg PrOfIT q4/2008 153 8 155 711 –67 173 1,133 

q3/2008 74 15 163 703 42 –186 811 


q1/2008 81 15 168 506 – 96 –72 603 

Goodwill impairment Q4/2008 – – – – – –1,027 –1,027 

Q3/2008 – – – – – – – 



Provisions for risks and charges Q4/2008 –10 –1 –8 –21 1 –9 –49 

Q3/2008 –3 – –2 –22 – – –27 

Q2/2008 4 – 1 –15 – 5 –5 

Q1/2008 – – 1 –7 – – –7 

Restructuring costs Q4/2008 – – – –4 – –1 –5 

Q3/2008 – – – –2 – –1 –2 

Q2/2008 – – – 7 – – 6 

Q1/2008 – – – –4 – –1 –5 

95



reTAIL 

DIvISION 

PrIvATe 

bANkINg 

& ASSeT 

mANAgemeNT 

DIvISION 

cOrPOrATeS 

DIvISION 

ceNTrAL 

eASTerN 

eUrOPe 

DIvISION 

mArkeTS & 

INveSTmeNT 

bANkINg 

DIvISION 

cOrPOrATe 

ceNTer 

bANk 

AUSTrIA 

grOUP 

Net writedowns of loans and provisions Q4/2008 –49 – –119 –215 –146 – –528 

for guarantees and commitments Q3/2008 –53 – 42 –124 –20 – –155 

Q2/2008 –51 – –9 – 96 – – –156 

Q1/2008 –56 – –15 –103 – – –173 

Net income from investments Q4/2008 5 1 13 14 –25 –79 –71 

Q3/2008 – 2 –61 52 – 128 121 

Q2/2008 – 4 –9 29 1 164 190 

Q1/2008 1 2 – 28 – 70 101 

PrOfIT befOre TAX q4/2008 100 8 42 485 –238 – 944 –547 


q2/2008 29 20 155 506 58 16 785 

q1/2008 26 17 154 420 – 96 –2 520 

Income tax Q4/2008 –25 – –2 –112 38 190 90 

Q3/2008 –4 –4 –29 –121 –6 39 –125 

Q2/2008 –6 –5 –34 – 90 –14 48 –101 

Q1/2008 –6 –4 –33 – 94 26 26 –86 

NeT PrOfIT q4/2008 75 8 40 373 –200 –753 –457 


q2/2008 23 15 122 416 44 64 684 

q1/2008 20 13 122 326 –70 24 434 

rWA credit and market risk (avg.) q4/2008 15,923 349 31,929 69,571 10,659 3,550 131,981 

q3/2008 15,397 395 34,199 73,648 5,944 5,155 134,737 



Equity 1) Q4/2008 1,037 162 2,506 9,743 5,726 –3,932 15,242 

Q3/2008 968 189 2,526 10,580 6,043 –4,207 16,100 



ROE before tax in % Q4/2008 38.5 19.2 6.6 19.9 –16.6 n.m. 2) –14.4 

Q3/2008 7.2 36.9 22.3 23.0 1.5 n.m. 18.6 


Q1/2008 10.6 33.7 26.5 20.8 –8.7 n.m. 13.9 

ROE after tax in % Q4/2008 28.9 20.0 6.4 15.3 –14.0 n.m. –12.0 




Cost/income ratio in % Q4/2008 57.4 78.0 33.2 46.3 –549.1 n.m. 47.9 




Risk/earnings ratio in % Q4/2008 20.8 n.m. 68.1 26.2 n.m. n.m. 30.1 

Q3/2008 28.9 n.m. 25.7 15.2 n.m. n.m. 11.8 



1) Total of IFRS capital for the subsidiaries allocated to the respective Division and standardised capital for the rest of the respective Division / 2) Not meaningful 


96


(57) Assets pledged as security 

As at 31 December 2008, assets pledged by UniCredit Bank Austria 

AG and UniCredit CAIB AG totalled € 33,126 m (2007: € 17,835 m). 

(58) Subordinated assets 

(59) Assets and liabilities in foreign currency 


(€ m) 


Financial assets held for trading – 646 

Available-for-sale financial assets 272 432 


Loans and receivables with banks 836 822 

Loans and receivables with customers 490 381 

Deposits from banks 168 130 

Deposits from customers 90 71 

Debt securities in issue 5,572 5,484 


(€ m) 

ASSeTS LIAbILITIeS ASSeTS LIAbILITIeS 

USD 30,938 22,362 20,182 24,566 

JPY 1,652 2,638 953 1,545 

CHF 16,444 9,393 14,375 2,839 

Other 55,119 49,833 56,485 49,367 

TOTAL 104,153 84,226 91,995 78,316 

97



(60) Trust assets and trust liabilities 

Trust assets and liabilities (€ m) 

(61) Repurchase agreements 

Under repurchase agreements, financial assets were sold to third 

parties with a commitment to repurchase the financial instruments at 

a price specified when the assets were sold. At the balance sheet 

date, the total amount of repurchase agreements was € 1,492 m 

(62) Guarantees given and commitments 


Loans and receivables with banks 14 17 

Loans and receivables with customers 704 692 

Equity securities and other variable-yield securities 7,342 9,783 

Debt securities 6,931 11,118 


TrUST ASSeTS 15,121 21,811 

Deposits from banks 283 338 

Deposits from customers 13,733 21,229 

Debt securities in issue – – 

Other liabilities 1,105 243 

TrUST LIAbILITIeS 15,121 21,811 

(2007: € 6,820 m). In those cases where Bank Austria is the trans feror, 

the relevant assets continue to be recognised in its balance sheet at 

their fair values. In those cases where Bank Austria is the transferee, 

the bank does not recognise the assets in its balance sheet. 

(€ m) 


financial guarantees given to: 9,449 8,228 

Banks 546 1,697 

Customers 8,903 6,531 

commercial guarantees given to: 12,996 12,768 

Banks 2,632 2,825 

Customers 10,364 9,943 

Other irrevocable commitments to disburse funds 14,880 14,224 

Banks: 465 143 

Usage certain 7 18 

Usage uncertain 458 125 

Customers: 14,415 14,081 

Usage certain 8,889 10,613 

Usage uncertain 5,526 3,468 

Underlying obligations for credit derivatives: sales of protection 954 969 

Other commitments 5,426 5,731 

TOTAL 43,705 41,919 

The amount of contingent claims in Bank Austria is equal to the amount of contingent liabilities. 


98


(63) List of selected subsidiaries and other equity interests 

The list of unconsolidated subsidiaries required under the Austrian 

Commercial Code/Austrian Banking Act is included in the notes 

to the financial statements of UniCredit Bank Austria AG as at 

(63a) Consolidated companies 

cOmPANy cITy cOUNTry 

31 December 2008. The notes have been lodged with the Austrian 

Register of Firms, a public register at the Commercial Court of Vienna 

(Handelsgericht Wien). 

DOmIcILe INTereST IN % 

DIrecT 

OWNerShIP 

INDIrecT 

OWNerShIP TOTAL 

AI Beteiligungs GmbH Vienna Austria 0.00 100.00 100.00 

Artist Marketing Entertainment GmbH Vienna Austria 0.00 100.00 100.00 

Asset Management GmbH Vienna Austria 100.00 0.00 100.00 

ATF Bank Kyrgyzstan OJSC Bishkek Kyrgyzstan 0.00 95.46 95.46 

ATF Capital B.V. Rotterdam Netherlands 0.00 99.60 99.60 

AWT International Trade AG Vienna Austria 100.00 0.00 100.00 

BA-CA Administration Services GmbH Vienna Austria 100.00 0.00 100.00 

BA-CA Infrastructure Finance Advisory GmbH Vienna Austria 0.00 100.00 100.00 

BA-CA Markets & Investment Beteiligung Ges.m.b.H. Vienna Austria 100.00 0.00 100.00 

Bank Austria Creditanstalt Wohnbaubank AG Vienna Austria 100.00 0.00 100.00 

Bank Austria Global Information Services GmbH Vienna Austria 80.00 10.01 90.01 

Bank Austria Real Invest GmbH Vienna Austria 94.95 0.00 94.95 

Bank Austria Trade Services Gesellschaft m.b.H. Vienna Austria 100.00 0.00 100.00 

Banking Transaction Services S.R.O. Prague Czech Republic 100.00 0.00 100.00 

BankPrivat AG Vienna Austria 100.00 0.00 100.00 

CA IB Securities (Ukraine) AT Kiev Ukraine 0.00 100.00 100.00 

CABET-Holding-Aktiengesellschaft Vienna Austria 100.00 0.00 100.00 

CAIB D.D. Securities Zagreb Croatia 0.00 84.21 84.21 

Card Complete Service Bank AG Vienna Austria 50.10 0.00 50.10 

Centar Kaptol doo Zagreb Croatia 0.00 84.21 84.21 

CJSC Bank Sibir Omsk City Russian Federation 0.00 99.60 99.60 

Domus Bistro GmbH Vienna Austria 100.00 0.00 100.00 

Domus Clean Reinigungs GmbH Vienna Austria 100.00 0.00 100.00 

Domus Facility Management GmbH Vienna Austria 100.00 0.00 100.00 

Eurolease RAMSES Immobilien Leasing Gesellschaft m.b.H. & Co OG Vienna Austria 99.30 0.20 99.50 

FactorBank Aktiengesellschaft Vienna Austria 100.00 0.00 100.00 

HYPERION Immobilienvermietungsgesellschaft m.b.H. Vienna Austria 99.00 0.00 99.00 

HypoVereins Immobilien EOOD Sofia Bulgaria 0.00 92.07 92.07 

Istra Golf DOO Umag Croatia 0.00 60.46 60.46 

Istraturist Umag, Hotelijerstvo i Turizam DD Umag Croatia 0.00 60.46 60.46 

JOHA Gebäude- Errichtungs- und Vermietungsgesellschaft m.b.H. Vienna Austria 0.00 94.03 94.03 

Joint Stock Commercial Bank for Social Development Ukrsotsbank Kiev Ukraine 12.34 82.12 94.46 

JSC ATF BANK Almaty Kazakhstan 99.60 0.00 99.60 

Lassallestraße Bau-, Planungs-, Errichtungs- und Verwertungsgesellschaft m.b.H. Vienna Austria 99.00 0.00 99.00 

Limited Liability Company B.A. Real Estate Moscow Russian Federation 0.00 100.00 100.00 

Lowes Limited Nicosia Cyprus 0.00 100.00 100.00 

Marketing Zagrebacke Banka doo Zagreb Croatia 0.00 84.21 84.21 

MC Marketing GmbH Vienna Austria 100.00 0.00 100.00 

MC Retail GmbH Vienna Austria 0.00 100.00 100.00 


99



cOmPANy cITy cOUNTry 

DOmIcILe INTereST IN % 

DIrecT 

OWNerShIP 

INDIrecT 

OWNerShIP TOTAL 

MY Beteiligungs GmbH Vienna Austria 100.00 0.00 100.00 

OOO IMB Leasing Company Moscow Russian Federation 0.00 100.00 100.00 

Open saving pension fund Otan JSC Almaty Kazakhstan 0.00 82.74 82.74 

Pominvest DD Split Croatia 0.00 74.66 74.66 

Private Joint Stock Company Ferrotrade International Kiev Ukraine 100.00 0.00 100.00 

PRVA Stambena Stedionica DD Zagreb Zagreb Croatia 0.00 84.21 84.21 

Schoellerbank Aktiengesellschaft Vienna Austria 100.00 0.00 100.00 

Teledata Consulting und Systemmanagement Gesellschaft m.b.H. Vienna Austria 0.00 94.95 94.95 

Treuconsult Beteiligungsgesellschaft m.b.H. Vienna Austria 0.00 94.95 94.95 

UniCredit Aton International Limited Nicosia Cyprus 0.00 100.00 100.00 

UniCredit Bank a.d. Banja Luka Banja Luka Bosnia and Herzegovina 90.92 0.00 90.92 

UniCredit Bank Cayman Islands Ltd. Georgetown Cayman Islands 100.00 0.00 100.00 

UniCredit Bank Czech Republic A.S. Prague Czech Republic 100.00 0.00 100.00 

UniCredit Bank d.d. Mostar Bosnia and Herzegovina 24.40 55.23 79.63 

UniCredit Bank Hungary ZRT. Budapest Hungary 100.00 0.00 100.00 

UniCredit Bank Latvia AS Riga Latvia 100.00 0.00 100.00 

UniCredit Bank Serbia a.d. Belgrade Serbia 99.92 0.00 99.92 

UniCredit Bank Slovakia A.S. Bratislava Slovakia 99.03 0.00 99.03 

UniCredit Banka Slovenija D.D. Ljubljana Slovenia 99.99 0.00 99.99 

UniCredit Bulbank AD Sofia Bulgaria 92.07 0.00 92.07 

UniCredit CAIB AG Vienna Austria 0.00 100.00 100.00 

UniCredit CAIB Czech Republic AS Prague Czech Republic 0.00 100.00 100.00 

UniCredit CAIB Hungary Ltd. Budapest Hungary 0.00 100.00 100.00 

UniCredit CAIB Poland S.A. Warsaw Poland 0.00 100.00 100.00 

UniCredit CAIB Romania SRL Bucharest Romania 0.00 100.00 100.00 

UniCredit CAIB Securities UK Ltd. London United Kingdom 0.00 100.00 100.00 

UniCredit CAIB Serbia Ltd. Belgrade Serbia 0.00 100.00 100.00 

UniCredit CAIB Slovakia A.S. Bratislava Slovakia 0.00 100.00 100.00 

UniCredit CAIB Slovenija, d.o.o. Ljubljana Slovenia 0.00 100.00 100.00 

UniCredit CAIB UK Ltd. London United Kingdom 0.00 100.00 100.00 

UniCredit Factoring EAD Sofia Bulgaria 0.00 92.07 92.07 

UniCredit Jelzalogbank ZRT. Budapest Hungary 0.00 100.00 100.00 

UniCredit Tiriac Bank S.A. Bucharest Romania 50.56 0.03 50.59 

Universale International Realitäten GmbH Vienna Austria 100.00 0.00 100.00 

UPI Poslovni Sistem doo Sarajevo Bosnia and Herzegovina 0.00 56.23 56.23 

WAVE Solutions Information Technology GmbH Vienna Austria 100.00 0.00 100.00 

Z Leasing POLLUX Immobilien Leasing Gesellschaft m.b.H. Vienna Austria 99.80 0.00 99.80 

Z Leasing RIGEL Immobilien Leasing Gesellschaft m.b.H. Vienna Austria 99.80 0.00 99.80 

Z Leasing SIRIUS Immobilien Leasing Gesellschaft m.b.H. Vienna Austria 99.80 0.00 99.80 

Zaba Turizam DOO Zagreb Croatia 0.00 84.21 84.21 

Zagreb Nekretnine DOO Zagreb Croatia 0.00 84.21 84.21 

Zagrebacka Banka d.d. Zagreb Croatia 84.21 0.00 84.21 

Zane BH DOO Sarajevo Bosnia and Herzegovina 0.00 84.21 84.21 

ZAO IMB-Leasing Moscow Russian Federation 0.00 100.00 100.00 

ZAO UniCredit Aton Moscow Russian Federation 0.00 100.00 100.00 

ZAO UniCredit Bank Moscow Russian Federation 100.00 0.00 100.00 

ZB Invest DOO Zagreb Croatia 0.00 84.21 84.21 

ZETA Fünf Handels GmbH Vienna Austria 100.00 0.00 100.00 



(63b) Investments in companies accounted for under the proportionate consolidation method 

DOmIcILe 

cOmPANy cITy cOUNTry ADD-% 

(63c) Investments in associated companies accounted for under the equity method 

DOmIcILe 

INveSTmeNTS vALUeD AT eqUITy 

NAme Of cOmPANy cITy cOUNTry ADD-% 

(63d) Investments in associated companies not 

accounted for under the equity method 

In the 2007 financial year, aggregate total assets of associated companies 

in which Bank Austria held investments which were not ac- 

TOTAL ASSeTS 

IN € ThSD 

TOTAL ASSeTS 

IN € ThSD 

OPerATINg 

INcOme 

IN € ThSD 

OPerATINg 

INcOme 

IN € ThSD 

eqUITy cAPITAL 

IN € ThSD 

Informations-Technologie Austria GmbH Vienna Austria 50.05 113,445 –2,377 17,739 

Koc Finansal Hizmetler AS Istanbul Turkey 50.00 2,055,681 3,903 2,013,674 

Stiching Custody Services KBN Amsterdam Netherlands 40.90 125 – 125 

UniCredit Menkul Degerler AS Istanbul Turkey 50.00 3,311 79 1,290 

Yapi Kredi Azerbaijan Baku Azerbaijan 40.90 92,982 8,788 34,186 

Yapi Kredi Bank Nederland NV Amsterdam Netherlands 40.90 1,605,417 25,307 156,269 

Yapi Kredi Bankasi AS Istanbul Turkey 40.90 29,377,300 2,042,677 3,451,393 

Yapi Kredi Emeklilik AS Istanbul Turkey 38.42 338,777 30,856 56,001 

Yapi Kredi Faktoring AS Istanbul Turkey 40.88 507,295 18,131 40,452 

Yapi Kredi Finansal Kiralama AO Istanbul Turkey 40.43 1,310,350 96,795 287,672 

Yapi Kredi Holding BV Amsterdam Netherlands 

Russian 

40.90 45,507 58 45,480 

Yapi Kredi Moscow Moscow Federation 40.90 143,190 14,989 32,207 

Yapi Kredi Portföy Yönetimi AS Istanbul Turkey 40.88 37,365 38,164 32,917 

Yapi Kredi Sigorta AS Istanbul Turkey 38.42 337,138 16,311 138,132 

Yapi Kredi Yatirim Menkul Degerler AS Istanbul Turkey 40.89 138,095 47,311 101,933 

Yapi Kredi Yatirim Ortakligi AS Istanbul Turkey 22.93 25,458 –1,679 25,077 

eqUITy cAPITAL 

IN € ThSD 

Allianz ZB D.O.O. Drustvo za Upravljanje Dobrovoljnim Zagreb Croatia 41.26 2,214 875 1,227 

Allianz ZB D.O.O. Drustvo za Upravljanjie Obveznim Zagreb Croatia 41.26 19,784 11,321 18,830 

Bank fur Tirol und Vorarlberg Aktiengesellschaft Innsbruck Austria 47.38 8,499,200 196,000 538,747 

Banque de Commerce et de Placements SA Geneva Switzerland 12.54 1,148,275 54,848 60,504 

BKS Bank AG Klagenfurt Austria 36.03 6,129,100 169,591 442,623 

CA Immobilien Anlagen Aktiengesellschaft Vienna Austria 11.17 4,627,688 103,048 1,844,190 

Österreichische Clearingbank AG Vienna Austria 20.75 1,493,617 882 179,496 

Notartreuhandbank AG Vienna Austria 25.00 970,999 16,307 21,337 

Oberbank AG Linz Austria 33.34 15,200,000 387,410 898,447 

Oesterreichische Kontrollbank Aktiengesellschaft Vienna Austria 49.15 39,400,000 158,000 451,009 

Österreichische Hotel- und Tourismusbank Ges.m.b.h. Vienna Austria 50.00 958,008 4,727 24,626 

UniCredit Global Leasing SPA Milan Italy 32.59 32,888,244 470,555 1,787,683 

Yapi Kredi Koray Gayrimenkul Yatirim Ortakligi AS Istanbul Turkey 12.45 70,130 –5,195 48,154 

counted for under the equity method were € 460.5 m. Aggregate 

equity capital of these companies amounted to € 89.9 m. The combined 

net profit of these companies was € 16.2 m. 




(64) Employees 

In 2008 and 2007, the Bank Austria Group employed the following 

average numbers of staff (full-time equivalents 1): 

Employees 

(65) Supervisory Board 

and Management Board 

In the reporting year, the following persons 

were members of the Management Board of 

UniCredit Bank Austria AG: 

Chairman and Chief Executive Officer: Erich HAMPEL 

Members: Helmut BERNKOPF (from 16 September 2008), 

Federico GHIZZONI, Thomas GROSS (until 31 October 2008), 

Wilhelm HEMETSBERGER (until 31 May 2008), Werner KRETSCHMER 

(until 31 December 2008), Ralph MÜLLER, Regina PREHOFER 

(until 15 September 2008), Carlo VIVALDI, Stephan WINKELMEIER 

(from 7 November 2008), Robert ZADRAZIL 


Salaried staff 67,069 49,604 

Other employees 90 98 

TOTAL 2) 67,159 49,702 

of which: in Austria 10,441 10,237 

of which: abroad 56,718 39,465 

1) Average full-time equivalents of staff employed in the Bank Austria Group (consolidated companies), excluding apprentices and employees on unpaid sabbatical or maternity/paternity leave 

2) The average numbers of staff for 2007 include Ukrsotsbank and IT Austria from December 2007. 

In the reporting year, the following persons 

were members of the Supervisory Board of 

UniCredit Bank Austria AG: 

Chairman: Alessandro PROFUMO 

Deputy Chairman: Franz RAUCH 

Members: Vincenzo CALANDRA BUONAURA (until 31 July 2008), 

Claudio CONSOLO (from 31 July 2008), Sergio ERMOTTI, Paolo 

FIORENTINO, Dario FRIGERIO, Roberto NICASTRO, Vittorio OGLIENGO, 

Karl SAMSTAG, Gerhard SCHARITZER, Wolfgang SPRISSLER, 

Wolfgang HEINZL, Adolf LEHNER, Emmerich PERL, Martina ICHA 

(until 27 May 2008), Karin WISAK-GRADINGER (from 28 May 2008), 

Heribert KRUSCHIK (until 3 November 2008), Riccardo HOFER (from 

4 November 2008), Josef REICHL 


Risk report 

(66) Overall risk management 

Bank Austria identifies, measures, monitors and manages all risks of 

the Bank Austria Group. In performing these tasks, Bank Austria 

works closely with the risk control and risk management units of 

UniCredit. In this context, Bank Austria supports UniCredit’s ongoing 

projects which are aimed at establishing uniform group-wide risk 

controlling procedures. 

Bank Austria divides the monitoring and controlling processes associated 

with risk management into the following categories: 

� Market risk (66a) 

� Liquidity risk (66b) 

� Counterparty risk (66c) 

� Credit risk (including real estate risk; 66d) 

� Operational risk (66e) 

� Business risk (66f) 

� Risks arising from the bank’s shareholdings and 

equity interests (66g) 

The Management Board determines the risk policy and approves 

the principles of risk management, the establishment of limits for all 

relevant risks, and the risk control procedures. 

In performing these tasks, the Management Board is supported by 

specific committees and independent risk management units. All 

risk management activities of Bank Austria are combined within a 

management function at Management Board level directed by the 

Chief Risk Officer (CRO); after completion of adjustments of the CRO 

organisation to the UniCredit Group’s divisional structure, secondary 

lending decisions for corporate customers are made in the Corporate 

Risk and MIB & Market Risk departments and in the Local Industry 

Teams, and for retail customers in the Retail Risk department. 

The Special Accounts Management department deals with problem 

loans. These organisational units are supported by the Strategic Risk 

Management & Control department. Credit risk control of the CEE 

business units is performed by the CEE Risk Control department and 

by the CEE Risk Monitoring and CEE Policies & Guidelines units. The 

unit for active credit portfolio management (Credit Treasury) reports 

directly to the Chief Financial Officer (CFO). 

The Asset/Liability Committee (ALCO) is responsible for the management 

of balance-sheet structure positions, it controls liquidity 

risk and deals with cross-divisional risk management issues arising 

between sales units and overall bank management while also addressing 

the results of the credit portfolio model. Control of market 

risk of the trading books is ensured by the Market Risk Committee 

(MACO), which meets once a week. MACO deals with short-term 

business management issues relating to the presentation and discussion 

of the risk/earnings position of Markets & Investment Banking 

and with limit adjustments, product approvals and positioning 

decisions. MACO also deals with methodological issues concerning 

the determination of counterparty risk. In addition, the general 

framework and limits for banking subsidiaries are defined by MACO. 

Credit risk is assessed by the credit committee. The newly established 

Operational Risk Committee (OpRiCo) meets on a quarterly 

basis to deal with operational risk issues. 

The Management Board of Bank Austria sets risk limits for market 

risk activities of the entire Bank Austria Group at least once a year. 

MACO, which holds a meeting every week, makes limit decisions at 

the operational level and analyses the risk and earnings positions 

of the bank’s Markets & Investment Banking units. ALCO performs 

analyses and makes decisions with regard to business activities 

closely connected with customer business (in particular, balance 

sheet structure, liquidity, and risk management issues arising between 

sales units and overall bank management). The decisions and 

results of these committees are reported directly to the bank’s full 

Management Board. Risk Management, which is separate from the 

business divisions up to Management Board level, is in charge of 

preparing analyses and monitoring compliance with limits. The final 

stage of work on modelling counterparty risk calculations was completed 

in the course of 2008. In the third quarter of 2008, the model 

– developed by Bank Austria itself – was examined by an external 

expert pursuant to the Austrian Banking Act. The expert opinion confirms 

compliance with the Basel II standards, which have also been 

incorporated in local law. Following coordination activities with 

UniCredit Group, the process of approval by the supervisory authorities 

will start in the first quarter of 2009. 

The Bank Austria Group applies the principle of value-based management. 

In line with this principle, for pricing purposes in business 

and customer relations (micro control), capital employed (comprising 

both the Tier 1 capital required pursuant to the Austrian Banking Act 

and economic capital) is expected to yield a specific return. 

Beyond compliance with the regulatory capital rules pursuant to the 

Austrian Banking Act, economic capital is intended to reflect the 

bank’s specific risk profile in a comprehensive and more consistent 

way. For micro-control purposes, economic capital for credit risk is 

calculated using value-at-risk methodologies. These unexpected 

losses over a period of one year are calculated with a confidence 

level of 99.95%. 




Additionally, value-at-risk methodologies are used in the Bank Austria 

Group for calculating or planning economic capital for all specified 

types of risk (market risk, credit risk, risks arising from shareholdings 

and equity interests, real estate risk, operational risk, business risk). 

The Bank Austria Group is included in the risk monitoring and risk 

management system of the entire UniCredit Group. This ensures 

overall risk management across the Group. Examples in this context 

are global MIB risk reporting and the global MIB limits in the area of 

market risk. 

current status of bASeL II implementation 

in the bank Austria group 

In spring 2003, Bank Austria set up a group-wide programme to 

create the conditions for compliance with the new rules, effective 

since 2007, for holding adequate capital against risk-weighted assets. 

UniCredit Bank Austria AG decided, based on the discretion for credit 

institutions defined in the EU Directive and in line with the approach 

taken by the Group, to use the option to start employing Basel II at 

the beginning of 2008. 

Since the beginning of 2003, the focus of the programme has been 

on refining credit risk systems to meet the standards of the Advanced 

IRB approach, setting up a group-wide data base for the purposes of 

regulatory reporting and on creating the basis for ongoing implementation 

activities. Operational risk activities also commenced in this 

period. The Basel II project comprises UniCredit Bank Austria AG and 

all Austrian and foreign subsidiaries belonging to the group of consolidated 

companies, all risk categories (credit risk, operational risk 

and market risk) and all three pillars of Basel II. 

From the different approaches that may be chosen in the area of 

credit risk under Basel II, the Bank Austria Group – in line with the 

decision taken by UniCredit Group – has opted for the advanced internal 

ratings-based (A-IRB) approach. Within the sub-group, the 

switch to the advanced approach will take place in stages – defined 

in the IRB roll-out plan. The roll-out plan was submitted to all competent 

regulators and found to be appropriate by them. In the first 

phase, the focus was on UniCredit Bank Austria AG, which has maintained 

the major part of its portfolio in the A-IRB since 31 March 

2008. The prerequisite for doing so was the approval by the competent 

supervisory authorities, which was given in time before the first 

IRB Basel II report as at 31 March 2008 (for the first two months of 

2008, Bank Austria computed RWAs for regulatory purposes using 

the standardised approach). 

As mentioned above, Basel II implementation has been established 

as a Group-wide programme. Since the acquisition of HVB Group 

by UniCredit Group in 2005, UniCredit has been responsible for 

Group-wide decisions and Group guidelines also in the Basel II environment, 

as well as for the development of Group-wide rating systems. 

For example, Group-wide homogeneous portfolios have been 

defined for which uniform rating models are used across the Group, 

such as those for countries, banks and multinational companies, or 

are planned to be used for other portfolios. The Group has also 

selected and (further) developed specific system components as 

Group-wide solutions for the calculation of loss parameters and riskweighted 

assets. 

Close cooperation ensures Group-wide consistency in the implementation 

of Basel II. Group standards have already been prepared and 

adopted by the UniCredit Group holding company in cooperation with 

the major legal entities, and are used as an instrument for uniform 

Group-wide implementation, taking into consideration the local legal 

requirements and safeguarding Group interests. Such Group standards 

will also continue to be gradually extended and complemented. 

Integrating these Group standards in the processes and organisational 

set-up of all business divisions and Group units was one of 

Bank Austria’s major tasks in the past year and remains an important 

item on the bank’s agenda, especially because local features and 

legal requirements must be taken into account in ensuring Basel II 

compliance. These Group standards will also be rolled out step by 

step in the relevant CEE subsidiaries. 

With the transfer of ownership of HVB Group to the Italian banking 

group, the Italian banking supervisory authority – Banca d’Italia (the 

Bank of Italy) – became the new home supervisor of UniCredit Group. 

Since then the Bank of Italy has been responsible for all approvals at 

Group level, while local supervisory authorities are responsible for 

local topics in the legal entities and for local on-site examinations. All 

regulatory issues are being dealt with in close cooperation between 

home and host regulators. 

The supervisory assessment of the A-IRB for the local models in 

UniCredit Bank Austria AG took place in 2007 and was completed 

with very satisfactory results. This was followed at the beginning of 

2008 by an assessment of the local implementation and use of the 

Group-wide rating models already developed for banks and countries/sovereigns. 

Again, the review produced good results, with 

UniCredit Bank Austria AG thus meeting the requirements for the 

Bank of Italy’s approval (consequently granted) of the use of the internal 

ratings-based approach in calculating UniCredit Bank Austria 

AG’s assessment basis for regulatory capital from 31 March 2008. 


Risk report (CONTINUED) 

Since 30 September 2008, in line with the roll-out plan, the A-IRB 

approach has also been used in respect of another portion of the 

portfolio, namely multinational corporates, for which a Group-wide 

model was developed. In this context the supervisory approval process 

took place in summer 2008. 

The bank is planning to introduce various other Group-wide rating 

models in the next few years while also further refining and developing 

local models. 

The Group has also chosen the most elaborate approach, the advanced 

measurement approach (AMA), in respect of operational risk 

– UniCredit Bank Austria AG has used the AMA since the beginning 

of 2008. 

Austrian subsidiaries 

All Austrian subsidiaries in the new Group structure started to use 

the standardised approach in 2008. From a current perspective, for 

reasons of materiality, it is not planned to switch to one of the IRB 

approaches. 

In the area of operational risk, Schoellerbank has chosen the advanced 

measurement approach (AMA). It is planned to obtain approval 

for this approach in the course of 2009. 

cee subsidiaries 

The CEE subsidiaries have used the Basel II standardised approach 

since the beginning of 2008. Given the Group’s decision to use the 

IRB approach, there are of course plans to switch to the advanced 

IRB approach at most of the CEE subsidiaries; as an intermediate 

step, all subsidiaries will start with the Foundation IRB approach 

(F-IRB) between 2010 and 2012. A detailed roll-out plan for the 

gradual switch to the IRB approaches was drawn up with all CEE 

subsidiaries at the beginning of 2008 and communicated to the 

supervisory authorities involved. 2009 will see supervisory IRB 

assessments at those subsidiaries which are planning to start using 

the F-IRB in 2010. 

Measures have been initiated together with the two new subsidiaries 

in Kazakhstan and Ukraine to ensure step-by-step compliance with 

the standardised approach. 

In the area of operational risk, the AMA at UniCredit Bank Czech 

Republic was approved and on-site assessments took place in 

UniCredit Bank Slovakia, UniCredit Bank Hungary and UniCredit 

Banka Slovenija. UniCredit Bank Czech Republic will use the AMA as 

from the beginning of 2009; approval for UniCredit Bank Slovakia, 

UniCredit Bank Hungary and UniCredit Banka Slovenija is planned 

to be obtained in the course of 2009. 

Following an implementation phase which lasted about five years, 

UniCredit Bank Austria AG has successfully completed work on 

meeting the legal requirements under the EU’s Capital Requirements 

Directive in connection with Basel II. In the next few years, in 

addition to ongoing compliance-related activities in UniCredit Bank 

Austria AG, the bank will roll out the quality standards for risk management 

instruments, reporting and compliance in the sub-group 

with a view to ensuring uniform Group-wide implementation and 

Group-wide consistency. 

Implementation of disclosure requirements pursuant to 

Sections 26 and 26a of the Austrian banking Act (regular 

disclosure of information on the organisational structure, risk 

management and risk capital position pursuant to Sections 2 

to 15 of the Austrian Disclosure Regulation) 

Within UniCredit Group, a comprehensive disclosure is carried out 

by the parent company UniCredit on its website, based on the consolidated 

financial position in its function as EEA parent bank of 

Bank Austria. Bank Austria is a significant subsidiary pursuant to 

Section 26 (4) of the Austrian Banking Act and therefore discloses 

its supervisory capital structure and its capital adequacy requirement; 

furthermore, the bank discloses information regarding the 

use of own estimates for volatility adjustments (comprehensive 

method) for credit risk mitigation techniques pursuant to Section 17 

of the Austrian Disclosure Regulation and in accordance with the 

approval by the Financial Market Supervision Authority (FMA). 

The above information is available at http://www.bankaustria.at/ 

en/open.html?opencf=/en/7638.html, in the menu item Investor 

Relations/Basel II Disclosure Pillar 3. 




(66a) Market risk 

Market risk management encompasses all activities in connection 

with our Markets & Investment Banking operations and management 

of the balance sheet structure in Vienna and at Bank Austria’s subsidiaries. 

Risk positions are aggregated at least daily, analysed by 

the independent risk management unit and compared with the risk 

limits set by the Management Board and the committees (including 

MACO) designated by the Management Board. At Bank Austria, market 

risk management includes ongoing reporting on the risk position, 

limit utilisation, and the daily presentation of results of Markets & 

Investment Banking operations. 

Bank Austria uses uniform risk management procedures throughout 

the Group. These procedures provide aggregate data and make 

available the major risk parameters for the various trading operations 

once a day. Besides Value at Risk, other factors of equal importance 

are stress-oriented sensitivity and position limits. Additional 

elements of the limit system are loss-warning level limits and options-related 

limits applied to trading and positioning in non-linear 

products. 

Bank Austria’s risk model (“NoRISK”) was developed by the bank 

and has been used for many years. The model is applied and further 

refined by MIB & Market Risk. Ongoing refinement work includes 

reviewing the model as part of backtesting procedures, integrating 

new products, implementing requirements specified by the Management 

Board and by MACO, and adjusting the system to general 

market developments. A major factor to be noted in this context is 

the market risk stress considerations against the background of the 

current financial market situation. A product introduction process 

has been established in which risk managers play a decisive role in 

approving a new product. The “NoRISK” risk model, approved by the 

supervisory authorities since 1998, is used for computing capital requirements; 

in contrast to the internal risk management process, the 

computation of capital requirements takes into account the statutory 

parameters (confidence interval of 99%, 10-day holding period) and 

additionally the multiplier determined as part of the model review is 

applied. The model, which has so far been used for UniCredit Bank 

Austria AG and the Bank Austria Group, also received regulatory approval 

for use for CAIB in 2008. The risk model covers all major risk 

categories: interest rate risk and equity position risk (both general 

and specific risk), exchange rate risk and commodities position risk. 

The structure of the standard risk report presented at MACO’s 

weekly meetings corresponds to the weekly UniCredit-wide MIB risk 

report and thus covers the same (stress) sensitivities in addition to 

VaR figures. Regular and specific stress scenario calculations complement 

the information provided to MACO/ALCO and the Management 

Board. Macro scenarios show the potential adverse impacts of 

global developments with specific effects on the respective risk categories, 

while stress sensitivities of individual risk factors or groups 

of risk factors show the potential adverse impacts on partial market 

segments. Stress scenarios are based on assumptions of extreme 

movements in individual market risk parameters. The bank analyses 

the effect of such fluctuations and a liquidity disruption in specific 

products and risk factors on the bank’s results. These assumptions 

of extreme movements are dependent on currency, region, liquidity 

and the credit rating, and are set by MIB & Market Risk on a discretionary 

basis after consultation with experts in other areas of the 

bank (e.g. research, trading). 

In addition to the risk model results, income data from market risk 

activities are also determined and communicated on a daily basis. 

These data are presented over time and compared with current 

budget figures. Reporting covers the components reflected in IFRSbased 

profit and the marking to market of all investment positions 

regardless of their recognition in the IFRS-based financial statements 

(“total return”). The results are available to Bank Austria’s 

trading and risk management units via the access-protected Intranet 

application “ERCONIS”, broken down by portfolio, income statement 

item and currency. The regulatory approach to prudent valuation in 

the trading book is also implemented primarily by MIB & Market Risk 

and further developed on an ongoing basis through cooperation 

within UniCredit Group. 

In Vienna, Bank Austria uses the “MARCONIS” system developed 

by the bank itself to completely and systematically review the 

market conformity of its trading transactions. This tool is also used 

by almost all CEE banking subsidiaries with market risk activities. 

Value-at-risk movements (1 day, confidence interval of 99%) in 

2008 reflected the banking crisis, which led to an exceptionally 

strong increase in volatility in the wake of the Lehman Brothers 

insolvency. In the fourth quarter of 2008, VaR rose significantly 

although Bank Austria’s risk positions were more or less left 

unchanged or reduced. In the trading book, VaR doubled to about 

€ 40 m in the fourth quarter as compared with the first half of 

2008. Overall VaR, including banking book positions, temporarily 

even quadrupled (€ 160 m) in the fourth quarter. The higher VaR 

levels were mainly caused by an increase in interest-rate and 



spread volatility. In the interest rate sector, most of the increase was 

due to the positions of our CEE/SEE subsidiaries, which hold longterm 

interest rate positions from customer business and partly also in 

sovereign bonds in the banking book. The fact that there are no comparable 

trading positions in these currencies in the Group explains 

the wide difference between VaR of the trading book and overall VaR. 

VaR of the Bank Austria Group in 2006–2008 (€ m) 

160 

140 

120 

100 

80 

60 

40 

20 

0 

avg. 19.8 

avg. 10.3 

avg. 35.2 

avg. 12.3 

Jan. 06 

Feb. 06 

March 06 

April 06 

May 06 

June 06 

July 06 

Aug. 06 

Sept. 06 

Oct. 06 

Nov. 06 

Dec. 06 

Jan. 07 

Feb. 07 

March 07 

April 07 

May 07 

June 07 

July 07 

Aug. 07 

Sept. 07 

Oct. 07 

Nov. 07 

Dec. 07 

Jan. 08 

Feb. 08 

March 08 

April 08 

May 08 

June 08 

July 08 

Aug. 08 

Sept. 08 

Oct. 08 

Nov. 08 

Dec. 08 

Total Return VaR 

VaR in the trading book 

The results of the internal model based on VaR (1 day, confidence interval 

of 99%) in 2008 moved between € 36.6 m and € 167.4 m for 

the Bank Austria Group. The average Total Return VaR was € 65.1 m, 

significantly higher than the comparative figure for the previous year 

(€ 35.2 m) although the positions were reduced in terms of sensitivity. 

The average VaR in the trading book in 2008 only rose to a level 

of € 21.2 m (from € 12.3 m in the previous year). As in previous 

The strong increase in overall VaR in credit spreads was also mainly 

due to the banking book positions of the subsidiaries (e.g. Turkish 

sovereign bonds in the held-to-maturity portfolio). In the peak area of 

the VaR curve, the credit-spread trading VaR of the subsidiaries is 

lower than one-tenth of the comparative amount if the banking book 

position of the subsidiaries is included in the calculation. 

160 

140 

120 

100 

80 

60 

40 

20 

avg. 65.1 

avg. 21.2 

21 Oct. 

26 Oct. 

31 Oct. 

5 Nov. 

10 Nov. 

15 Nov. 

20 Nov. 

25 Nov. 

30 Nov. 

5 Dec. 

10 Dec. 

15 Dec. 

20 Dec. 

25 Dec. 

30 Dec. 

years, the risk report includes the non-trading driven equity positions 

of the bank’s investment books and the hedge-fund positions. Credit 

spread risk and interest rate risk account for most of the total risk of 

the Bank Austria Group. Since January 2007, commodity risk has 

only been assumed in the Bank Austria Group on a back-to-back 

basis. 




VaR of the Bank Austria Group by risk category (€ m) 

rISk cATegOry mINImUm AverAge mAXImUm yeAr-eND 

Interest rate risk 24.9 47.4 108.7 67.0 

Credit spread 24.8 45.0 118.2 93.6 

Exchange rate risk 0.6 2.6 10.2 3.9 

Equity risk/trading 1.3 3.0 5.5 1.3 

Emerging markets/high yield 2.2 3.0 5.0 2.9 

Hedge funds 3.9 5.4 11.7 6.6 

Equity risk/investment 4.2 10.9 22.3 14.1 

Vega risk 0.7 2.6 6.8 4.9 

TOTAL 2008 36.6 65.1 167.4 98.1 

Total 2007 16.7 35.2 58.7 49.9 

In addition to VaR, risk positions of the Bank Austria Group are limited 

through volume limits. As part of daily risk reporting, detailed “Trader 

Reports” are prepared for a large number of portfolios, with updated 

and historical information made available to all risk-takers and the 

responsible senior management via the Intranet. The comprehensive 

statistical data on VaR made available in addition to limit-relevant 

99% quantile figures include the average of scenario results beyond 

the 99% quantile mark, providing an indication of the magnitude of 

events for which the probability of occurrence is very low. In addition 

to limit-relevant overall simulation runs, the results of about 30 par- 

tial simulation runs are recorded daily in the risk database. Partial 

simulation runs simulate specific risk classes while keeping others 

constant. The combination of portfolios and partial simulation runs 

enables the bank to analyse all major risk components on a daily 

basis and over time. 

As at 31 December 2008, the entire interest rate position of the 

Bank Austria Group (trading and investment) for major currencies 

was composed as follows (the table below shows basis point values 

over € 500): 



Basis point values of the Bank Austria Group (in €) 

UP TO 

1 mONTh 

1 mONTh TO 

3 mONThS 

Significant interest rate positions continue to be held in KZT, TRY, 

HRK and RUB, reflecting the size of our subsidiaries; most of the 

related interest rate sensitivity is in the banking book (not in the 

trading book). The USD position is also related to the banking book 

position of our banking subsidiaries. In 2008, the EUR interest rate 

position was held at a low level compared with previous years. 

AS AT 31 December 2008 ANNUAL AverAge, mINImUm/mAXImUm 

3 mONThS 

TO 1 yeAr 

1 yeAr TO 

5 yeArS 

Over 

5 yeArS TOTAL mAXImUm mINImUm 

AbSOLUTe 

AverAge 

Western EUR –156,665 – 9,510 –46,065 –287,734 –179,417 –679,390 –141,509 –1,708,170 915,415 

Europe CHF 22,240 122,611 –100,554 –5,574 –42,196 –3,473 51,461 –301,553 120,293 

DKK 86 –100 –75 – – –89 4,631 –734 201 

GBP 1,904 –17,341 –378 12,830 –25,931 –28,915 11,023 – 92,882 36,182 

NOK 290 –1,885 –1 1 – –1,596 4,682 –4,102 1,905 

SEK 342 671 –773 – – 239 1,288 –2,316 619 

New EU countries CZK –3,992 5,519 –10,978 –76,633 85,735 –348 110,603 –103,519 39,819 

HUF –4,117 13,402 –5,683 –31,434 –23,974 –51,806 8,320 –148,066 53,875 

PLN –3,472 1,303 27,290 –38,570 23,642 10,193 82,078 –188,478 39,622 

SKK –1,151 –7,587 –6,014 31,145 339,727 356,120 356,120 37,151 136,868 

Central and BAM –470 422 236 –885 –3,034 –3,731 –841 –3,731 1,850 

Eastern Europe BGN 828 –550 4,102 –20,706 –11,155 –27,480 –8,839 –74,233 25,816 

incl. Turkey HRK –3,246 –6,399 –7,674 – 91,212 –40,085 –148,616 –130,811 –240,727 187,599 

KGS 81 –15 –234 –1,200 –731 –2,099 343 –3,427 1,229 

KZT 6,369 1,671 2,647 –74,250 –60,312 –123,875 –118,212 –340,853 209,788 

LVL –114 –824 –707 985 –139 –800 3,487 –5,191 2,575 

RON 3,785 489 –12,531 –6,498 –13,432 –28,186 3,383 –56,111 25,050 

RSD –157 1 –327 –55 – –538 4,899 –3,723 1,624 

RUB 2,070 –1,767 –25,261 29,133 –24,795 –20,620 111,729 –345,766 116,563 

TRY –3,008 –18,104 –30,258 –66,824 –35,541 –153,735 –141,562 –301,313 199,444 

UAH –124 –124 –26,264 8,683 –12,314 –30,143 –4,538 –100,949 37,508 

Overseas – highly AUD –115 –434 113 192 – –243 727 –33,375 10,719 

developed countries CAD 571 –600 –3,895 423 –5 –3,507 14,442 –18,017 5,417 

JPY 3,494 –2,186 –7,493 3,720 –8,751 –11,217 24,553 –51,745 16,714 

NZD 132 55 –523 – – –336 3,209 –16,550 4,885 

USD 30,895 –20,350 –52,768 220,566 –1,666,943 –1,488,601 – 998,816 –1,731,349 1,401,709 

Other countries AED 202 –18 –1,181 786 – –211 1,089 –1,406 693 

EGP –32 –8 – – – –40 –40 –557 256 

HKD –39 –27 –72 – – –138 1,308 –166 76 

ILS 26 –433 1,775 –5,408 – –4,039 7,244 –7,899 1,655 

ISK 2 1 94 –5 – 92 743 16 335 

SAR 9 –2 –19 –54 – –66 606 –474 190 

XAU 367 317 119 – – 803 5,737 230 2,302 

ZAR 880 – 978 –3,126 5,580 106 2,462 24,697 –8,762 6,443 

BPV



Credit spread basis-point values of the Bank Austria Group (in €) 

Measured by the total basis-point value, the Bank Austria Group’s 

credit spread position in 2008 moved between € 6 m and € 9 m and 

was thus lower than the relevant levels in the previous year. In 2008, 

the average credit spread position in corporates, financials and ABSs 

was reduced. Treasury-near instruments now account for the largest 

part of the credit spread positions. 

ABS and MBS positions were further reduced in 2008 through redemptions 

and partly also through sales. As the remaining periods to 

maturity shortened, the average credit spread basis-point value 

declined to less than half the previous year’s figure. The dramatic fall 

in liquidity of these instruments prompted Bank Austria, like many 

other market participants, to use the possibility to reclassify holdings 

in accordance with IFRS rules; the bank now holds almost all of the 

portfolio in the banking book (loans and receivables). Measured by 

redemption behaviour, almost the entire ABS/MBS book continued 

to be classified as performing in 2008. Following reclassification of 

these assets as at mid-2008, mark-to-market losses in the second 

half of the year are disclosed in compliance with the relevant requirement, 

but they do not have an adverse impact on IFRS results. 

A review of the second half-year shows that this measure was appropriate: 

there is no liquid market for these asset classes and the 

few price indications that are available for many assets can only be 

ANNUAL AverAge, mINImUm/mAXImUm 

SP-bPvS SecTOr mAXImUm mINImUm AbSOLUTe AverAge 

Main sectors Financial services –392,830 –1,345,378 752,619 

ABS and MBS –753,524 –1,561,947 971,983 

Corporates Industrial 362,858 –370,038 266,895 

Automobiles 16,197 –59,404 19,796 

Consumer goods 184,443 –22,451 138,683 

Pharmaceutical –114,919 –223,765 133,096 

Telecommunications 76,560 – 94,832 34,228 

Energy & utilities 29,943 –236,733 71,439 

Other (e.g. merchandising) –286,690 –848,961 505,839 

Treasury-near Treasuries – EU –1,560,271 –2,798,704 2,408,379 

Treasuries – new EU countries –593,823 –1,160,088 847,355 

Treasuries – CEE & emerging markets –1,090,129 –1,628,494 1,404,085 

Treasuries – developed countries overseas 51,389 –17,148 26,535 

Treasuries – agencies & supranationals –51,981 –89,147 63,125 

Municipals & German Jumbo –35,089 –506,627 401,460 

TOTAL –6,118,038 – 9,113,559 7,176,069 

explained by the sharp fall in liquidity, while a fundamental analysis 

of expected redemptions of the same assets would lead to significantly 

higher prices in a normal liquidity environment. Although rating 

agencies more stringently revised their original rating assumptions 

and models for a wide range of ABSs in the course of 2008, instruments 

with an excellent rating continue to predominate in Bank Austria’s 

portfolio and are decisive for portfolio quality (some 99% are 

rated AA or better, and 90% are rated AAA). 

The widening of credit spreads had a negative impact on the Bank 

Austria Group’s results for 2008. In this context, management initiated 

a massive reduction of credit spread-related trading activities: 

Credit Trading was significantly reduced, activities in some areas 

such as Emerging Markets Trading and the high-yield corporate book 

almost ceased. The main credit spread position left in the trading 

sector are the hedges relating to the bank’s own trading issues and 

a very small book in financials. Crisis tests were adjusted to the new 

market environment on a timely basis. In this context, a new financial 

crisis scenario was created for the regulatory stress test in the third 

quarter; the scenario takes into account developments following the 

Lehman Brothers insolvency in mid-September 2008 and lower market 

liquidity in financials. 



Bank Austria has invested in hedge funds through its subsidiary 

UniCredit Bank Cayman Islands Ltd., Cayman Islands, since 1999; the 

name of the company was changed to Alpine Cayman Islands Ltd. on 

21 January 2009. While the focus is on market-neutral and eventdriven 

strategies and leverage is comparatively low, the financial 

crisis had a negative impact on results of the hedge funds in 2008 

(part of the negative results is due to the default of Lehman Brothers 

and the related counterparty risks). Management initiated a reduction 

of the exposure and a transfer of assets from the Cayman Islands to 

Vienna. This means that in the first quarter of 2009, invested volume 

will decline to about one-half of the 2007 exposure level. 

In addition to the hedge fund investments on Cayman Island, Bank 

Austria invested in hedge funds as part of CAIB’s equity trading operations. 

These investments are primarily driven by equity long/short 

strategies and are mainly aimed at diversifying the equity trading 

book of CAIB. CAIB’s equity trading position and the hedge fund posi- 

Backtesting results for the regulatory trading book 2006–2008 (€ m) 

50 

40 

30 

20 

10 

0 

–10 

–20 

–30 

–40 

–50 

Jan. 06 

Feb. 06 

March 06 

April 06 

May 06 

June 06 

July 06 

Aug. 06 

Sept. 06 

Oct. 06 

Nov. 06 

Dec. 06 

Jan. 07 

Feb. 07 

March 07 

April 07 

May 07 

June 07 

July 07 

Aug. 07 

Sept. 07 

Oct. 07 

Nov. 07 

Dec. 07 

Jan. 08 

Feb. 08 

March 08 

April 08 

May 08 

June 08 

July 08 

Aug. 08 

Sept. 08 

Oct. 08 

Nov. 08 

Dec. 08 

Model result 

Change in value 

tions were considerably reduced in view of the current crisis. Measured 

by the stress test, the risk contribution from these areas is now 

of low significance for the Group, even on dramatic stress assumptions. 

A further reduction of these positions is planned for the coming 

financial year. 

capital requirements for market risk 

Bank Austria’s risk model is subjected to daily backtesting in accordance 

with regulatory requirements. The model results are compared 

with changes in value on the basis of actually observed market fluctuations. 

As the number of backtesting excesses (negative change in 

value larger than model result) has been within the range permitted 

by law ever since the model was introduced, the multiplier need not 

be adjusted. In 2008, there was only one backtesting excess, despite 

the exceptional market environment. An increase in volatility leads to 

higher VaR levels in the model in time, appropriately covering the 

backtesting fluctuations. 




market risk management in cee 

At Bank Austria, market risk management covers the activities in 

Vienna and the positions at the bank’s subsidiaries, especially in 

Central and Eastern Europe. These subsidiaries have local risk management 

units with a reporting line to Risk Management in UniCredit 

Bank Austria AG. Uniform processes, methods, rules and limit systems 

ensure consistent group-wide risk management adjusted to 

local market conditions. 

The “NoRISK” risk model has been implemented locally at major units 

(Czech Republic, Slovakia, Hungary, Croatia, Bulgaria, Russia, Turkey), 

and a daily risk report is made available to the other units. The web 

application “ERCONIS” records the daily business results of treasury 

activities in CEE. In line with a total-return approach, measurements 

of the performance of subsidiaries include income generated by the 

subsidiaries and the valuation results of the banking book. 

To avoid risk concentrations in the market risk position, especially in 

tight market conditions, Bank Austria has implemented at its subsidiaries 

Value-at-Risk limits and position limits for exchange rate risk, 

interest rate risk and equity risk, which are monitored daily. The 

monitoring of income trends at subsidiaries by means of stop-loss 

limits provides an early indication of any accumulation of position 

losses. 

The timely and continuous analysis of market risk and income is the 

basis for integrated risk-return management of treasury units at subsidiaries. 

Value at Risk of banks in CEE (€ m) 

yeAr-eND 2008 fIgUreS 

AverAge var 2008 var mINImUm fX var Ir var SPreAD var 

Bulgaria –3.93 –8.21 –0.26 –2.25 –8.28 

Baltics –0.28 –0.26 –0.01 –0.26 0.00 

Czech Republic –4.31 –7.23 –0.40 –0.92 –7.03 

Croatia (incl. Bosnia) –7.08 –13.46 –0.25 –6.43 –11.96 

Hungary –3.90 –10.53 –0.13 –1.74 –10.59 

Kazakhstan –26.97 –42.32 –0.63 –41.58 –1.86 

Romania –1.52 –3.61 –0.37 –3.58 0.00 

Russia –5.96 –6.34 –1.55 –4.56 –3.42 

Serbia –0.22 –0.16 –0.11 –0.10 0.00 

Slovakia –1.00 –1.51 –0.08 –1.31 –0.79 

Slovenia –1.23 –2.20 –0.05 –0.14 –2.14 

Turkey –29.05 –48.44 –0.09 –19.96 –53.18 

Ukraine –13.77 –23.55 –0.59 –23.36 –0.31 

cee –48.96 –82.02 –1.48 –66.57 –61.53 

Market risk limit utilisation in CEE was comfortably within the limit 

until September 2008. With risk positions remaining constant or 

falling, Value at Risk declined slightly as volatility partly receded after 

the initial signs of a crisis had appeared in the second half of 2007. 

Then the crisis flared up with the collapse of Lehman Brothers. CDS 

spreads on CEE government debt multiplied, local currencies depreciated 

and interest rates rose in almost all non-euro countries in CEE. 

All these factors led to previously unknown peaks in the Value-at- 

Risk time series in partly illiquid markets, despite a downward trend 

in risk positions. Although volatility declined slightly by year-end 

2008, Value at Risk in the entire CEE region was still about 60% 

above the originally established limits. 

Interest-rate and credit-spread volatility contributes to the current 

Value at Risk in CEE in more or less equal measure. The trading book 

accounts for a very small part of market risk in CEE; the main part 

relates to credit and government bond positions held in the banking 

books. 



As a result, CEE accounted for about 80% of the Bank Austria 

Group’s market risk. 

management of balance sheet structure 

Credit risk, market risk and liquidity risk as well as contribution 

margins from customer transactions are attributed to the bank’s 

business divisions in line with the principle of causation through a 

matched funds transfer pricing system applied throughout the Group. 

The Asset/Liability Management function ensures that the bank’s 

overall liquidity and interest rate gap structure is optimised, with the 

results from interest maturity transformation being reflected in the 

Markets & Investment Banking Division. Factors taken into account in 

this context include the costs of compensation for assuming interest 

rate risk, liquidity costs and country risk costs associated with foreign 

currency financing at CEE subsidiaries. Liquidity costs and country 

risk costs rose strongly in the second half of 2008, based on the 

average funding mix in the Group. 

Products for which the material interest-rate and capital maturity is 

not defined, such as variable-rate sight and savings deposits, are 

modelled in respect of investment period and interest rate sensitivity 

by means of analyses of historical time series, and taken into 

account in the bank’s overall risk position. Interest rate sensitivities 

are determined and taken into account in hedging activities, which 

results in a positive contribution to profits from customer business. 

To assess its balance sheet structure, the bank uses the Value-at- 

Risk approach, complemented by a scenario analysis covering subsequent 

quarters and years. The bank thus also follows the Basel II 

recommendation concerning the simulation of future net interest income 

under different interest rate scenarios (“earnings perspective”). 

In the earnings perspective analysis, simulations of the future development 

of net interest income and of the market value of the banking 

book are generally based on assumptions regarding volume and 

margin developments under different interest rate scenarios. Parallel 

interest rate shocks as well as inversions and low-interest-rate scenarios 

can be analysed to identify their possible impact on the bank’s 

net interest income and market value. 

The analyses performed as at September 2008 show that a decline 

in interest rates in all currencies would have the strongest impact on 

the bank’s net interest income. This is a typical feature of commercial 

banks, given the interest rate remanence on the liabilities side of 

banks’ balance sheets (sight deposits, equity). 

The Basel II rules require the measurement at Group level of “interest 

rate risk in the banking book” in relation to the bank’s capital by 

comparing a change in the market value of the banking book after a 

2% interest rate shock with the bank’s net capital resources. In the 

event that such an interest rate shock absorbs more than 20% of a 

bank’s net capital resources, the bank supervisory authority could 

require the bank to take measures to reduce risk. 

A 2% interest rate shock would absorb about 5% of the Group’s net 

capital resources; this calculation also includes the current investment 

of equity capital as an open risk position. This means that the 

figure for Bank Austria is far below the outlier level of 20%. 

(66b) Liquidity risk 

In line with Group standards, the Bank Austria Group deals with liquidity 

risk as a central risk in banking business by introducing and 

monitoring short-term and medium-term liquidity requirements 

(warning level). In this context the liquidity situation for the next few 

days and months and also for longer periods is analysed against a 

standard scenario and stress scenarios. Methods and procedures of 

liquidity analysis, analyses of the degree of liquidity of customer positions, 

management responsibilities and reporting lines in this area 

have been laid down in the liquidity policy, which is also applicable at 

Bank Austria’s CEE units and includes a contingency plan in the 

event of a liquidity crisis. 

In medium-term and long-term liquidity management, liquidity inflows 

over 1 year (limit) and over 5 years (warning level) must cover a minimum 

of 90% of expected liquidity outflows during these periods. 

This limit and warning level must be observed at Group level and for 

each banking subsidiary. At Bank Austria Group level (incl. CEE), the 

relevant figures as at year-end 2008 were 0.98 for >1 year and 

0.96 for >5 years. 

For the purpose of short-term liquidity management, volume limits 

have been implemented in the Bank Austria Group and in all banks 

for maturities up to three months, which limit all Treasury transactions 

and the securities portfolio of the respective bank. Additionally, 

limits have been established for Bank Austria for open maturities in 

various currencies to keep down follow-up funding risk in the event 

that foreign currency markets dry up. 

These limits were essentially observed. However, the liquidity strain in 

the wake of the Lehman Brothers crisis led to overdrafts in some 

areas, which were covered through increased tender operations and 

Group backing. 




Funding the CEE subsidiaries is one of the main functions of the 

Group’s liquidity management. Long-term funds are made available 

to the subsidiaries for their business on the basis of a funding plan. 

Bank Austria adhered to its funding plan despite the market turbulence. 

Liquidity costs are part of the reference rate system. The applicable 

alternative costs are debited or, on the basis of an opportunity approach, 

credited to the various products on the assets side and the 

liabilities side which have an effect on liquidity. In the current controlling 

process this ensures the proper pricing of our business. 

(66c) Counterparty risk 

For the purposes of portfolio management and risk limitation in the 

derivatives business with banks and customers, and on the basis of 

the internal market risk model, Bank Austria has set up a Monte 

Carlo path simulation to estimate the potential future exposure at 

portfolio level for each counterparty. The calculations are based on 

market volatility, correlations between specific risk factors, future 

cash flows and stress considerations. Netting agreements and collateral 

agreements are also taken into account for simulation purposes. 

The simulation calculations are performed for all major types of 

transactions, e.g. forward foreign exchange transactions, interest 

rate instruments, equity-related instruments and credit derivatives. 

Commodity derivatives, securities lending transactions and repurchase 

agreements are currently taken into account with an add-on 

(depending on volatility and maturity); securities lending transactions 

and repurchase agreements will be integrated in the Monte Carlo 

simulation model in 2009. The bank applies a confidence interval of 

97.5%. 

At the end of 2008, derivative transactions of the Bank Austria Group 

(without intra-group transactions) resulted in the following exposures: 

Exposures (€ m) 

Banks 4,790 

Corporates/Retail 1,881 

CEE 1,019 

TOTAL 7,690 

Line utilisation for derivatives business is available online in WSS 

(“Wallstreet”), the central treasury system, on a largely group-wide 

basis. In addition to determining the potential future exposure for the 

purpose of internal risk control, the path simulation also enables the 

bank to calculate the average exposure and the modified average 

exposure pursuant to Basel II, as well as the effective maturity of the 

exposure to each counterparty. This makes it possible to integrate 

counterparty risk in an internal model compliant with Basel II for the 

computation of capital requirements. 

Bank Austria additionally limits the credit risk arising from its derivatives 

business through strict use of master agreements, the definition 

and ongoing monitoring of documentation standards by legal experts, 

and through collateral agreements and break clauses. Management 

takes proper account of default risk, especially in view of the 

increase in business volume, despite the good average credit rating 

of our business partners in the derivatives business. 

(66d) Credit risk 

Trends in net writedowns of loans and provisions for guarantees and 

commitments varied considerably in the course of 2008. The first 

nine months showed very satisfactory developments, especially in the 

Corporates Division with a net release of a double-digit million euro 

amount. In the fourth quarter, however, the impact of the financial 

crisis and its initial direct effects on the real economy became discernible. 

Although risk was immediately limited, the collapse of Lehman Brothers, 

the banking crisis, general financial problems in Iceland and the 

deteriorating economic environment had an adverse impact on net 


in the Bank Austria Group. At € 1,012 m, the provisioning charge for 

2008 was some two-thirds higher than the pro-forma figure for 2007 

including the new subsidiaries in Kazakhstan and Ukraine. 

In the Retail Division, net writedowns of loans and provisions for 

guarantees and commitments were about € 206 m for UniCredit 

Bank Austria AG, a figure that was yet again below budget and 

slightly better than in the previous year. Risk-reducing measures 

taken in this business segment more than offset the insolvency- 

related impact resulting from the gradually discernible effects of the 

economic downturn. 

After a very good first nine months, the Corporates Division was hit 

in the fourth quarter by the financial crisis and its initial impact on 

the real economy. Provisions required to be made for banks in Iceland 

and other countries, and in the Multinational Corporates sector, 

brought the provisioning charge for UniCredit Bank Austria AG to 

about € 100 m, a level that is above budget and about one-third 

higher than the low figure for the previous year. 



The Markets and Investment Banking Division had to make significant 

provisions – for the first time in many years, and especially in 

the fourth quarter – of € 130.6 m in AIB and € 34.5 m in UniCredit 

Bank Austria AG. AIB was required to make provisions for transactions 

with banks which collapsed (primarily Lehman Brothers and 

Iceland), for Russian equity repurchase transactions which became 

irrecoverable as a result of the crisis in financial markets, and for 

individual assets from the reclassified ABS portfolio; UniCredit Bank 

Austria AG made provisions for financing transactions with customers 

in the commodities sector. 


at banking subsidiaries in Central and Eastern Europe rose to 

about € 537 m in 2008. The two subsidiaries Ukrsotsbank (Ukraine) 

and ATF (Kazakhstan), where the provisioning charge reached a combined 

€ 214 m, were consolidated for the first time. For this reason, 

the figure for CEE banking subsidiaries is not directly comparable 

with the previous year’s level (€ 211 m). 

The strongest increase in net writedowns of loans and provisions for 

guarantees and commitments compared with 2007 was seen in 

Russia and Romania, where the provisioning charge rose by € 36 m 

(Russia) and € 22 m (Romania), respectively. Banking operations in 

the Baltic countries also recorded a significant increase of € 11 m. 

While countries in Central Europe (Czech Republic, Hungary, Slovakia 

and Slovenia) started to feel the impact of the economic and financial 

crisis (with Hungary hit hardest), net writedowns of loans and provisions 

for guarantees and commitments in this region were only 

€ 15 m higher than in the previous year. The provisioning charge in 

Croatia, Serbia and Bulgaria was more or less stable. 


in Turkey and Bosnia rose by € 18 m (Turkey) and € 8 m 

(Bosnia), respectively. In this context it should be noted that a one-off 

effect in Bosnia resulted in an atypically low provisioning charge of 

€ 1 m in 2007. 

Breakdown of financial assets by portfolio and credit quality (carrying value) (€ m) 

POrTfOLIO/qUALITy 

NON- 

PerfOrmINg 

LOANS 

DOUbTfUL 

ASSeTS 

reSTrUcTUreD 

eXPOSUreS PAST-DUe cOUNTry rISk OTher ASSeTS TOTAL 

Financial assets held for trading – – – – – 4,489 4,489 

Available-for-sale financial assets – 3 – – – 10,031 10,034 

Held-to-maturity financial instruments – – – – – 5,754 5,754 

Loans and receivables with banks 31 7 – – – 19,985 20,023 

Loans and receivables with customers 1,374 1,560 217 128 – 128,693 131,973 

Financial assets at fair value through profit or loss – – – – – 567 567 

Financial instruments classified as held for sale 26 12 – 14 – 33,054 33,106 

Hedging instruments – – – – – 85 85 

TOTAL 31 Dec. 2008 1,431 1,583 217 142 – 202,657 206,030 




Breakdown of financial assets by portfolio and credit quality (gross and net values) (€ m) 

POrTfOLIO/qUALITy 

grOSS 

eXPOSUre 

ImPAIreD ASSeTS OTher ASSeTS 

SPecIfIc 

WrITeDOWNS 

POrTfOLIO 

ADjUSTmeNTS 

NeT 

eXPOSUre 

grOSS 

eXPOSUre 

On- and off-balance sheet exposure to banks: gross and net values (€ m) 

AmOUNTS AS AT 31 Dec. 2008 

eXPOSUre TyPeS/AmOUNTS grOSS eXPOSUre SPecIfIc WrITeDOWNS POrTfOLIO ADjUSTmeNTS NeT eXPOSUre 

balance sheet exposure 

Non-performing loans 60 29 – 31 

Doubtful loans 41 33 – 8 

Restructured exposures – – – – 

Past due – – – – 

Country risk 7 X – 7 

Other assets 23,863 X 3 23,860 

TOTAL 23,972 62 3 23,907 

On- and off-balance sheet exposure to customers: gross and net values (€ m) 


POrTfOLIO 

ADjUSTmeNTS 

NeT 

eXPOSUre 

TOTAL (NeT 

eXPOSUre) 

banking group 

Financial assets held for trading – – – – 4,489 X 4,489 4,489 

Available-for-sale financial assets 4 1 – 3 10,035 4 10,031 10,034 

Held-to-maturity financial instruments – – – – 5,754 – 5,754 5,754 

Loans and receivables with banks 101 62 – 38 19,985 – 19,985 20,023 

Loans and receivables with customers 6,483 3,204 – 3,280 129,366 672 128,693 131,973 

Financial assets at fair value 

through profit or loss – – – – 567 X 567 567 

Financial instruments classified 

as held for sale 185 133 – 52 33,059 5 33,054 33,106 

Hedging instruments – – – – 85 X 85 85 

TOTAL 31 Dec. 2008 6,773 3,400 – 3,373 203,339 682 202,657 206,030 

eXPOSUre TyPeS/AmOUNTS grOSS eXPOSUre SPecIfIc WrITeDOWNS POrTfOLIO ADjUSTmeNTS NeT eXPOSUre 

balance sheet exposure 

Non-performing loans 3,873 2,499 – 1,374 

Doubtful loans 1,986 424 – 1,562 

Restructured exposures 470 252 – 217 

Past due 157 29 – 128 

Country risk – X – – 

Other assets 143,660 X 674 142,987 

TOTAL 150,147 3,204 674 146,269 



credit risk methods and instruments 

Very important factors in the credit approval process are a detailed 

assessment of risk associated with each loan exposure, and the customer’s 

credit rating in particular. Every lending decision is based on 

a thorough analysis of the loan exposure, including an evaluation of 

all relevant factors. Following the initial loan application, the bank’s 

loan exposures are reviewed at least once a year. If the borrower’s 

creditworthiness deteriorates substantially, shorter review intervals 

are obligatory. 

For internal credit assessment in Austria and by Bank Austria’s banking 

subsidiaries in CEE, the bank uses various rating and scoring 

models (for calculating the parameters PD, LGD and EAD on the 

basis of models specifically developed for these purposes)* for the 

customer/business segments to be assessed, in line with the various 

asset classes pursuant to Section 22b of the Austrian Banking Act, 

the Solvency Regulation and Directive 2006/48/EC of the European 

Parliament and of the Council of 14 June 2006 relating to the taking 

up and pursuit of the business of credit institutions. There are country-specific 

or region-specific models (e.g. for corporate customers, 

retail customers) and global models (e.g. for sovereigns, banks, multinational 

corporates). The assessment of a loan exposure is based 

on data from the respective company’s financial statements and on 

qualitative factors. 

The various rating and scoring models provide the basis for efficient 

risk management of the Bank Austria Group and are embedded in all 

decision-making processes relating to risk management. They are 

also a key factor for capital required to be held against risk-weighted 

assets. Great attention is given to consistency in the presentation for 

supervisory purposes and the requirements of internal control. 

All internal rating and scoring systems are monitored on an ongoing 

basis and are subject to regular validation on an annual basis, including 

a review to verify if the rating/scoring system provides a correct 

representation of the risks to be measured. All model assumptions 

are based on multi-year statistical averages for historical defaults 

and losses, with increased attention to be given to the potential 

*) PD = Probability of Default; LGD = Loss Given Default; EAD = Exposure at Default 

impact of turbulence in international financial markets. In this context, 

credit risk stress tests, which are required by bank supervisory 

authorities and are carried out on a regular basis, are an essential 

instrument for assessing future risks in an unfavourable economic 

environment. Such tests enable the Management Board to assess 

the adequacy of regulatory capital and economic capital on the 

basis of different stress scenarios. 

With risk-adjusted pricing and a stronger focus on risk management, 

we aim to constantly improve the diversification and the risk/ 

earnings ratio of the portfolio. For real estate customers, the customer-related 

rating is complemented by a transaction rating. 

Bank Austria uses a scoring system for retail customers. The automated 

rating tool is used for assessing, monitoring and managing 

the large number of loan exposures to private customers, small 

businesses, independent professionals and small non-profit organisations. 

Retail scoring comprises an application scoring procedure 

based on effective and recognised mathematical and statistical 

methods, and a behaviour scoring procedure taking into account 

such factors as amounts received in the account and customers’ 

payment practices. The scoring system for retail customers provides 

information that is updated on a monthly basis. This gives the 

bank an efficient tool for lending decisions and early recognition of 

risk. Automated data processing helps Bank Austria to reduce costs 

required for credit control while accelerating lending decisions. 

Credit risk-related activities in 2008 included the IRB4CEE project, 

through which the CEE subsidiaries were prepared for and supported 

in the gradual switch from the standardised approach to the 

IRB approaches. After detailed plans of the required implementation 

measures and milestones had been made in close cooperation with 

Strategic Risk Management specialists at Bank Austria, the CEE 

units started with the implementation and completion of appropriate 

rating systems and of the required time-series collections. The 

models used are regularly revalidated by Bank Austria’s experts to 

ensure consistent, group-wide implementation of the rating systems. 




Balance-sheet and off-balance sheet exposure by external rating class (book values) (€ m) 

eXTerNAL rATINg cLASSeS 


AAA/AA– A+/A– bbb+/bbb– bb+/bb– b+/b– 

LOWer 

ThAN b– 

ImPAIreD 

ASSeTS NO rATINg TOTAL 

On-balance-sheet exposures 42,831 21,964 24,062 22,013 5,736 960 3,360 67,598 188,522 

Banks 23,227 4,553 1,869 1,260 391 9 63 6,474 37,846 

Customers 19,604 17,410 22,193 20,753 5,344 951 3,297 61,124 150,676 

Derivative contracts 14,403 8,461 737 324 139 1 13 30,516 54,593 

Banks 14,253 8,182 309 67 24 1 – 20,554 43,389 

Customers 150 279 428 257 115 – 13 9,963 11,204 

financial derivative contracts 13,907 8,445 506 321 139 1 13 30,278 53,608 

Banks 13,772 8,166 78 64 24 1 – 20,315 42,419 

Customers 135 279 428 257 115 – 13 9,963 11,189 

credit derivatives 496 16 231 3 – – – 238 985 

Banks 482 16 231 3 – – – 238 970 

Customers 15 – – – – – – 15 

guarantees given 2,769 2,630 3,390 2,112 548 152 182 10,775 22,557 

Banks 2,287 76 274 236 121 5 2 289 3,290 

Customers 482 2,554 3,115 1,876 428 147 179 10,485 19,267 

Other commitments to disburse funds 405 2,464 2,499 1,679 363 131 58 13,682 21,281 

Banks 1 57 1 – – – – 136 195 

Customers 404 2,408 2,499 1,678 363 131 58 13,546 21,086 

TOTAL 60,407 35,519 30,688 26,128 6,786 1,244 3,612 122,570 286,954 



Balance-sheet and off-balance sheet exposure by internal rating class (book values) (€ m) 

INTerNAL rATINg cLASSeS 

g h I j 


INTerNAL rATINg cLASSeS 

A b c D e f 

On-balance-sheet exposures 41,481 18,442 16,212 19,200 11,654 10,451 

Banks 21,100 5,152 501 945 1,549 175 

Customers 20,380 13,289 15,711 18,256 10,106 10,275 

Derivative contracts 18,819 5,306 5,440 779 397 840 

Banks 18,646 4,985 5,072 158 85 – 

Customers 172 321 369 622 311 840 

financial derivative contracts 18,322 5,290 5,209 779 397 840 

Banks 18,165 4,969 4,840 158 85 – 

Customers 158 321 369 622 311 840 

credit derivatives 496 16 231 – – – 

Banks 482 16 231 – – – 

Customers 15 – – – – – 

guarantees given 2,990 2,295 2,714 3,087 941 1,974 

Banks 2,277 150 31 143 44 181 

Customers 713 2,145 2,683 2,944 897 1,792 

Other commitments to disburse funds 624 2,304 2,419 2,814 923 1,859 

Banks 117 58 – 9 – – 

Customers 507 2,246 2,419 2,804 923 1,859 

TOTAL 63,913 28,346 26,785 25,880 13,915 15,123 


ImPAIreD 

ASSeTS 

NO 

rATINg TOTAL 

On-balance-sheet exposures 6,370 7,292 7,251 2,453 3,360 44,356 188,522 

Banks 152 375 290 7 63 7,538 37,846 

Customers 6,218 6,917 6,961 2,447 3,297 36,818 150,676 

Derivative contracts 63 417 272 34 13 22,213 54,593 

Banks 3 – 24 – – 14,416 43,389 

Customers 60 417 248 34 13 7,797 11,204 

financial derivative contracts 61 417 272 34 13 21,975 53,608 

Banks 1 – 24 – – 14,178 42,419 

Customers 60 417 248 34 13 7,797 11,189 

credit derivatives 3 – – – – 238 985 

Banks 3 – – – – 238 970 

Customers – – – – – – 15 

guarantees given 708 927 1,074 410 182 5,258 22,557 

Banks 114 46 109 5 2 189 3,290 

Customers 594 881 965 405 179 5,069 19,267 

Other commitments to disburse funds 656 739 830 282 58 7,774 21,281 

Banks – – – – – 10 195 

Customers 656 739 830 282 58 7,763 21,086 

TOTAL 7,797 9,375 9,427 3,179 3,612 79,601 286,954 




credit Treasury 

Since the implementation of Credit Treasury (CT; former Active 

Credit Portfolio Management ACPM) a predefined corporate segment 

of customers is actively managed according to capital market 

principles, in addition to the unchanged credit process for credit 

risks. By mapping the credit risk from customer business through 

a reference structure derived from maturity-matched market prices, 

a risk-adequate pricing of this portfolio segment is secured, accompanied 

by efficient capital market control. In Credit Treasury, the risk 

positions are aggregated and the bank’s credit risk profits are optimised. 

By actively hedging and re-investing, Credit Treasury is to 

widen the portfolio’s diversification, and contributes to an improvement 

of the risk-return profile. 

The quarterly Credit Treasury Committee, analogously to the Market 

Risk Committee (MACO), serves to actually steer business in regard 

to the risk-return situation in Credit Treasury as well as to adapt 

limits and to decide on positions. 

In 2008, Credit Treasury again executed two synthetic securitisations 

relating to Austrian and international corporate loans. 

(66e) Operational risk 

Analogous to Basel II, operational risk is defined as the risk of 

losses due to human error, flawed management processes, natural 

and other catastrophes, technological failures and external events. 

For example, in the future, IT system failures, damage to property, 

processing errors or fraud will be subject to more accurate and 

consolidated risk measurement and management, on which the 

calculation of risk capital will be based. 

Loss data are collected, and processes are optimised, in close coordination 

and cooperation with other departments and units including 

Internal Audit, the Compliance Office, Legal Affairs and the insurance 

sector. Also to be considered is the fact that Bank Austria has 

always taken numerous measures in the various divisions to manage 

and reduce operational risk. Examples are data security measures, 

measures to ensure the confidentiality and integrity of stored 

data, access authorisation systems, the two-signatures principle, 

and a large number of monitoring and control processes as well as 

staff training programmes. 

In the same way as for other types of risk, in addition to central risk 

controlling, Bank Austria – like UniCredit – has built up a decentralised 

risk management network of contacts within departments and 

at subsidiaries (OpRisk Managers). While the main task of central 

risk management is to define the methods used and to perform risk 

measurement and analysis, local risk managers are responsible for 

taking measures to reduce, prevent, or take out insurance against, 

risks. 

Activities in 2008 focused on meeting requirements that were 

imposed by the Austrian Financial Market Authority (FMA) after its 

on-site supervisory assessment of the advanced approach, and on 

preparing and supporting regulatory reviews at banking subsidiaries. 

Quite generally, the organisation of operational risk management at 

Bank Austria has been established at a high quality level. A network 

of independent functions and teams are involved in managing and 

controlling risks, providing the Management Board with sufficient 

information on the risk situation and enabling the Management 

Board to manage risk. Improvements with regard to the extended 

documentation requirements for scenarios, risk indicators and the 

analysis of the general ledger for operational risk relevance as well 

as an ongoing expansion and strengthening of the functions of divisional 

Operational Risk Managers took place in the course of 2008. 

The task of dealing with operational risk issues was transferred 

from the Asset/Liability Committee (ALCO) to a separate Operational 

Risk Committee, whose meetings are held on a quarterly 

basis and are also attended by the divisional Operational Risk 

Managers and representatives of CEE banking subsidiaries. The introduction 

of the OpRisk Committee is a major step forward towards 

integrating operational risk in the bank’s processes; its main tasks 

are to track progress and serve as a body to which unresolved 

issues are referred. 

In 2009, activities with regard to operational risk will focus on 

� completing implementation of the requirements under the 

regulatory reviews in Italy, Austria and Croatia, 

� supporting the units pursuant to the AMA rollout plan in 

implementing the regulatory reviews for Basel II implementation 

in cooperation with UniCredit Group, 

� further analysis of the existing insurance coverage of our Group 

and preparation of a data protection strategy. 



(66f) Business risk 

Business risk is defined as unexpected adverse changes in business 

volume and/or margins which cannot be attributed to other types of 

risk. Adverse changes result mainly from a significant deterioration in 

market conditions, changes in the competitive position or customer 

behaviour, and from changes in the legal environment. 

Business risk measurement thus measures the influence of external 

factors on a decline in profits and the effect on the market value. 

As part of general income and cost management, operational management 

of business risk is the responsibility of the individual business 

units. 

(66g) Risks arising from the bank’s shareholdings 

and equity interests 

In dealing with this type of risk, Bank Austria takes into account 

market price fluctuations in its equity holdings in listed and unlisted 

companies. 

Not included are equity interests in consolidated subsidiaries of the 

Group because risks associated with such companies are determined 

and recorded under the various other risk types. 

The portfolio includes various strategic investments and real estate 

companies; real estate holding companies are taken into account in 

real estate risk. 

Generally, Value at Risk is determined on the basis of market values 

and volatilities of the relevant equity interests. For shares in unlisted 

companies the bank uses book values and volatilities of relevant 

stock exchange indices and takes account of residual variances. 

(67) Legal risks 

Provisions have been made for pending legal risks in line with the 

estimated probability of costs arising from litigation. 

No provisions have been made, inter alia, for the following pending 

legal proceedings due to the low probability of claims being lodged. 

An outflow of funds cannot, however, be excluded in these cases, 

either: 

� Action brought by the German Bundesanstalt für vereinigungsbedingte 

Sonderaufgaben (BVS) in Switzerland for repayment of 

credit balances held, and disposed of, by the Communist Party of 

Austria (KPÖ) at the former banking subsidiary in Zurich. 

� Action brought by Valauret S.A. in Paris on the grounds of alleged 

involvement of Creditanstalt AG (now UniCredit Bank Austria AG) in 

wilful deception in connection with a French joint stock company as 

a result of which the plaintiffs incurred losses through a loss in value 

of shares acquired by it in the joint stock company. 

� In connection with the investments affected by the Madoff case, 

several customers addressed enquiries and complaints to Bank Austria, 

but Bank Austria has not been served with any statement of 

claims in this context. Investors concerned are said to have brought 

actions before a US court against parties including Bank Austria as 

shareholder of Bank Medici AG; in this case, too, Bank Austria has 

not been served with any statement of claims. 

(68) Information on the squeeze-out 

pursuant to the Austrian Federal Act 

on the Squeeze-out of Minority Shareholders 

(Gesellschafterausschluss- 

gesetz) of the holders of bearer shares 

in UniCredit Bank Austria AG 

The company’s Annual General Meeting on 3 May 2007 adopted a 

resolution concerning the planned squeeze-out. The legal actions for 

rescission and declaration of nullity brought against various resolutions 

adopted at the Annual General Meeting on 3 May 2007 were 

terminated in spring 2008. The squeeze-out was entered in the 

Register of Firms on 21 May 2008. After that date, former minority 

shareholders initiated proceedings for a review of the cash compensation 

offered by UniCredit. 

(69) Financial derivatives 

Derivatives shown in the following tables are classified as financial 

derivatives and credit derivatives, according to the underlying financial 

instrument. In these categories, a distinction is made between 

trading book and banking book and between different counterparties. 

UniCredit Bank Austria’s business volume in derivatives focuses on 

interest rate contracts. 




Over-the-counter transactions are individual agreements concerning 

volume, maturities and underlying instrument. In large-volume interbank 

trading, these agreements reflect international practice, while 

in customer business they are usually adjusted to specific needs. 

Exchange-traded contracts are always standardised in respect of 

volume and maturity date. 

Derivatives are mainly used for trading purposes. Market participants 

include banks, securities houses, mutual funds, pension funds and 

corporate customers. Customers can use these instruments to hedge 

risk positions against unfavourable price fluctuations and, depending 

on the strategies pursued by customers, they can benefit from 

changes in prices, exchange rates and interest rates. 

UniCredit Bank Austria AG is a business partner in plain-vanilla and 

structured transactions for international and local banks as well as 

for institutional and corporate customers. 

As at 31 December 2008, the total volume of derivative financial instruments 

(excluding credit derivatives) was € 80 bn in the trading 

book and € 4 bn in the banking book. Interest rate contracts account 

for the largest proportion of total volume. Securities-related transactions, 

credit derivatives and other derivatives account for a comparatively 

small proportion of total volume, but the significance of 

such derivatives has been growing over the past years. 

For the purposes of portfolio and risk management, contracts are 

valued at current prices using recognised and tested models. Market 

values show the contract values as at the balance sheet date, positive 

market values indicate the potential default risk arising from the 

relevant activity. For the purposes of credit risk management, derivatives 

are taken into account with their respective positive market 

value and an add-on depending on the product, currency and maturity. 

Add-ons applied in internal credit risk management for the potential 

future exposure are based on the current market volatility relative 

to the remaining period to maturity of the transactions. Given the 

underlying confidence interval of 97.5%, these add-ons are in most 

cases clearly above the relevant levels pursuant to the Austrian 

Banking Act. 


(“Wallstreet”), the central treasury system, on a largely Group-wide 

basis. For smaller units not connected to the central system, separate 

lines are allocated and monitored. Group-wide compliance with 

lines approved in the credit process is thus ensured at any time. 

UniCredit Bank Austria AG additionally limits the credit risk arising 

from its derivatives business through strict use of master agreements, 

through collateral agreements and break clauses. In combination 

with the very good average credit rating of our business partners 

in the derivatives business, management takes proper account of default 

risk. 



Total volume of outstanding financial derivative transactions as at 31 December 2008 

Regulatory portfolio – notional amounts (€ m) 

TrADINg bOOk bANkINg bOOk 

LISTeD UNLISTeD UNLISTeD 

Forward rate agreements – 7,665 367 

Interest rate swaps – 27,018 3,020 

Domestic currency swaps – 3,062 10 

Currency interest rate swaps – 1,940 107 

Basis swaps – 4,053 – 

Stock index swaps – – – 

Commodity index swaps 23 104 – 

Futures 87 674 – 

Cap options – 4,357 30 

Floor options – 844 – 

Other options – 13,241 2 

Forwards 3 16,790 153 

Other derivative contracts – 125 – 

TOTAL 113 79,874 3,689 

OTC financial derivatives: positive and negative fair value (€ m) 

POSITIve 

fAIr vALUe 

grOSS AmOUNT 

NegATIve 

fAIr vALUe 

grOSS AmOUNT 

regulatory trading book 2,652 2,123 

Central governments and banks 93 12 

Public bodies 14 2 

Banks 1,221 1,386 

Financial companies 39 48 

Insurance companies 5 17 

Non-financial enterprises 1,175 628 

Other entities 105 30 

banking book 89 128 

Central governments and banks – – 

Public bodies 1 – 

Banks 83 76 

Financial companies – – 

Insurance companies – – 

Non-financial enterprises 2 50 

Other entities 3 2 

TOTAL 2,741 2,251 




Credit derivatives (€ m) 

NOTIONAL AmOUNT 

OTC derivatives – residual life: notional amount (€ m) 

UP TO 1 yeAr 

POSITIve 

fAIr vALUe NOTIONAL AmOUNT 

NegATIve 

fAIr vALUe 

regULATOry TrADINg bOOk 7 – – – 

Purchases of protection – counterparty 7 – – – 

Central governments and central banks – – – – 

Public bodies – – – – 

Banks – – – – 

Financial companies – – – – 

Insurance companies 7 – – – 

Non-financial enterprises – – – – 

Other entities – – – – 

Sales of protection – counterparty – – – – 

Central governments and central banks – – – – 

Public bodies – – – – 

Banks – – – – 

Financial companies – – – – 

Insurance companies – – – – 

Non-financial enterprises – – – – 

Other entities – – – – 

bANkINg bOOk – – – – 

TOTAL 7 – – – 

frOm 1 TO 5 

yeArS Over 5 yeArS TOTAL 

financial derivatives 

Trading book 39,009 26,725 14,080 79,813 

Financial derivative contracts on debt securities and interest rates 15,735 20,931 11,807 48,472 

Financial derivative contracts on equity securities and share indices 189 185 491 865 

Financial derivative contracts on exchange rates and gold 21,806 5,557 1,783 29,146 

Financial derivative contracts on other underlying assets 1,279 51 – 1,330 

banking book 1,119 1,096 1,477 3,692 

Financial derivative contracts on debt securities and interest rates 954 988 1,477 3,418 

Financial derivative contracts on equity securities and share indices – 2 – 2 

Financial derivative contracts on exchange rates and gold 166 107 – 272 

Financial derivative contracts on other underlying assets – – – – 

credit derivatives 

Trading book 7 – – 7 

Credit derivatives with qualified reference obligation – – – – 

Credit derivatives with not qualified reference obligation 7 – – 7 

banking book – – – – 

Credit derivatives with qualified reference obligation – – – – 

Credit derivatives with not qualified reference obligation – – – – 

TOTAL 40,135 27,821 15,557 83,513 


Information required under Austrian law 

(70) Consolidated capital resources and regulatory capital requirements 

The following tables show the capital requirements for the Bank Austria 

group of credit institutions pursuant to Section 30 of the Austrian 

Banking Act as at the balance sheet date of 2008 and 2007, as well 

as the various components of Bank Austria’s capital resources as at 

the end of 2008 and 2007: 

Net capital resources of the Bank Austria group of credit institutions (€ m) 


bASeL II 

31 Dec. 2007 

bASeL I 

Paid-in capital (less own shares) 1,469 1,468 

Reserves and minority interests 9,032 8,912 

Intangible assets –718 –702 

core capital (Tier 1, under basel I) 9,783 9,678 

Deductions from Tier 1 capital (in particular 50% deduction pursuant to Section 23 (13) 3 to 4d 

of the Austrian Banking Act) 3) –702 – 

core capital (Tier 1, under basel II) 9,081 9,678 

Net subordinated liabilities 3,439 3,893 

Revaluation reserves and undisclosed reserves 128 141 

Supplementary capital resources (Tier 2, under basel I) 3,567 4,034 

Deductions from Tier 2 (50% deduction pursuant to Section 23 (13) 3 to 4d) 3) –697 – 

Supplementary capital resources (Tier 2, under basel II) 2,870 4,034 

Deductions from Tier 1 and Tier 2 (under Basel II only deduction pursuant to Section 23 (13) 4a) 4) –139 –1,153 

Net capital resources (excl. Tier 3) 11,812 12,559 

Tier 3 (re-assigned subordinated capital) 439 606 

NeT cAPITAL reSOUrceS (INcL. TIer 3) 12,251 13,165 

Capital requirements of the Bank Austria group of credit institutions (€ m) 


bASeL II 

31 Dec. 2007 

bASeL I 

basel I 

Banking book 8,833 

Trading book 606 

basel II 

a) Credit risk pursuant to standardised approach 7,368 

b) Credit risk pursuant to internal ratings-based (IRB) approach 2,072 

Credit risk 9,440 

Operational risk 773 

Position risk – debt instruments, equities, foreign currencies and commodities 439 

Settlement risk 7 

cAPITAL reqUIremeNT 10,659 9,439 

Total RWA 133,239 117,993 

Capital ratios 


bASeL II 

31 Dec. 2007 

bASeL I 

Tier 1 capital ratio, based on all risks 6.82% 8.20% 

Total capital ratio, based on all risks 1) 9.19% 11.16% 

Tier 1 capital ratio, based on credit risk 7.70% 8.76% 

Total capital ratio, based on credit risk 2) 9.35% 11.37% 

1) Net capital resources (incl. Tier 3) as a percentage of the risk-weighted assessment basis for all risks 

2) Total capital resources less requirement for trading book, commodities risk, exchange rate risk and operational risk as a percentage of the risk-weighted assessment basis for credit risk 

3) Capital components in non-consolidated companies and “shortfall” 

4) Capital components in insurance companies 



Concluding Remarks of the Management 

Board of UniCredit Bank Austria AG 

The Management Board of UniCredit Bank Austria AG has prepared 

the consolidated financial statements for the financial year beginning 

on 1 January 2008 and ending on 31 December 2008, in accordance 

with International Financial Reporting Standards (IFRSs) published 

by the International Accounting Standards Board as adopted 

by the European Union. The management report of the Group was 

prepared in accordance with the Austrian Commercial Code and is 

consistent with the consolidated financial statements. 

Vienna, 9 March 2009 

The Management Board 

Erich Hampel 

(Chairman) 

The consolidated financial statements and the management report of 

the Group contain all required disclosures; in particular, events of 

special significance which occurred after the end of the financial year 

and other major circumstances that are significant for the future 

development of the Group have been appropriately explained. 

Helmut Bernkopf Federico Ghizzoni Ralph Müller 

Carlo Vivaldi Stephan Winkelmeier Robert Zadrazil 


Consolidated Financial Statements of the 

Bank Austria Group for 2008 

Statement by Management 

We state to the best of our knowledge that the consolidated financial 

statements prepared in accordance with the relevant financial reporting 

standards provide a true and fair view of the financial position 

and performance of the Group, and that in the Management Report 

of the Group the business trends including business results and the 


The Management Board 

Erich Hampel 

(Chairman) 

position of the Group have been presented in such a way as to provide 

a true and fair view of the financial position and performance of 

the Group, and that it describes the material risks and uncertainties 

to which the Group is exposed. 

Helmut Bernkopf Federico Ghizzoni Ralph Müller 

Carlo Vivaldi Stephan Winkelmeier Robert Zadrazil 



Report of the Auditors 

Auditors’ report 

We have audited the consolidated financial statements of UniCredit 

Bank Austria AG, Vienna, for the financial year from 1 January 2008 

to 31 December 2008. These consolidated financial statements comprise 

the consolidated balance sheet at 31 December 2008, the consolidated 

income statement, the cash flow statement of the Group 

and the statement of changes in equity of the Group for the financial 

year ended 31 December 2008, and a summary of significant accounting 

policies and other explanatory notes. 

Management’s responsibility for the consolidated 

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 endorsed by the 

European Union. This responsibility includes: designing, implementing 

and maintaining internal controls relevant to the preparation and fair 

presentation of consolidated financial statements that are free from 

material misrepresentation, whether due to fraud or error; selecting 

and applying appropriate accounting policies; and making estimates 

that are reasonable in the circumstances. 

Auditors’ responsibility 

Our responsibility is to express an opinion on these consolidated financial 

statements based on our audit. We conducted our audit in 

accordance with the laws and regulations applicable in Austria and in 

accordance with International Standards on Auditing (ISAs), issued by 

the International Auditing and Assurance Standards Board (IAASB) of 

the International Federation of Accountants (IFAC). Those standards 

require that we comply with ethical requirements and plan and perform 

the audit to obtain reasonable assurance whether the financial 

statements are free from material misrepresentation. 

An audit involves performing audit procedures to obtain evidence 

about the amounts and disclosures in the consolidated financial 

statements. The procedures selected depend on the auditors’ 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 auditors consider internal 

control relevant to the preparation and fair presentation of the 

consolidated financial statements in order to design audit procedures 

that are appropriate in the circumstances, but not for the purpose of 

expressing an opinion on the effectiveness of the Group’s internal 

control. An audit also includes the assessment of the appropriateness 

of the applied accounting policies used and the reasonableness of 

significant accounting estimates made by management, as well as 

evaluating the overall presentation of the consolidated financial statements. 

We believe that the audit evidence we have obtained is sufficient and 

appropriate to provide a basis for our opinion. 

Opinion 

Our audit did not give rise to any objections. Based on the results of 

the audit, in our opinion, the consolidated financial statements comply 

with the laws and regulations and present fairly, in all material respect, 

the financial position of the Group as at 31 December 2008 

and of its financial performance and its cash flows for the financial 

year from 1 January 2008 to 31 December 2008 in accordance with 

International Financial Reporting Standards (IFRSs) as adopted by the 

European Union. 


Report on other legal and regulatory requirements 

Laws and regulations applicable in Austria require us to perform 

audit procedures to ascertain whether the management report of the 

Group is consistent with the consolidated financial statements, and 

whether the other disclosures made in the management report of the 

Group do not give rise to misconception of the position of the Group. 

In our opinion, the management report of the Group is consistent 

with the consolidated financial statements.1 

Vienna, 27 April 2009 

Austrian Savings Bank Auditing Association 

Auditing Board 

(Bank Auditors) 

Erich Kandler Friedrich O. Hief 

Public Accountant Public Accountant 

KPMG Austria GmbH 

Wirtschaftsprüfungs- und Steuerberatungsgesellschaft 

Bernhard Gruber Martin Wagner 

Public Accountant Public Accountant 

In case that the consolidated financial statements are disclosed or handed over to a third party in a version which differs from that (unabbreviated German version) certified by us (e.g. abbreviated 

version or translation), our prior approval is necessary if our audit opinion is included or our audit is mentioned. 


Bank Austria - Jahresfinanzbericht 2008 1 

1 


II. UniCredit Bank Austria AG 

Contents 


of UniCredit Bank Austria AG for 2008 132 

Management Report of UniCredit Bank Austria AG 133 

Financial Statements of 

UniCredit Bank Austria AG for 2008 151 

Notes to the Financial Statements of 

UniCredit Bank Austria AG 156 

List of shares in group companies and 

equity interests of UniCredit Bank Austria AG 177 


Board of UniCredit Bank Austria AG 180 

Signatures of the 

Management Board/Auditors Report 182 


Investor Relations, ratings, financial calendar, imprint 188 



of UniCredit Bank Austria AG for 2008 

UniCredit Bank Austria Aktiengesellschaft, the parent company 

of the Bank Austria Group, presents its balance sheet as at 

31 December 2008 and its profit and loss account for the year 

ended 31 December 2008, as well as the management report 

and the notes pursuant to Austrian law. 

The consolidated financial statements of the Bank Austria 

Group for the financial year beginning on 1 January 2008 and 

ending on 31 December 2008 were prepared in accordance 

with International Financial Reporting Standards (IFRSs) 

published by the International Accounting Standards Board as 

adopted by the European Union. The annual report of the 

UniCredit Bank Austria Group, which includes, inter alia, the 

consolidated financial statements, as well as the Group’s 

management report and notes can be obtained, free of charge, 

under Investor Relations on the Internet (for contact details see 

page 170). 

The two reporting formats – under IFRSs and under the 

Austrian Banking Act (BWG) – cannot be compared with one 

another because 

the operations covered by the financial statements differ 

(consolidated financial statements versus separate financial 

statements of the Group’s parent company), and the valuation 

and accounting principles are also different. The annual report 

of the Group gives readers information on the status of the 

group of companies controlled by UniCredit Bank Austria AG. 

The consolidated financial statements provide international 

comparability, a fair value-based presentation of the financial 

position and performance, and more detailed information, for 

example through segment reporting. 

UniCredit Bank Austria AG’s separate financial statements, 

prepared in accordance with Austrian rules, fulfill other 

important functions, especially under supervisory aspects. 

They are also the basis for determining the profit available for 

distribution under Austrian law and the dividend of UniCredit 

Bank Austria AG. In making an economic evaluation of the 

bank, users of the separate financial statements should take 

into account especially the extensive financial relations 

between the parent company and its banking subsidiaries. For 

this reason the financial statements of the Group provide more 

comprehensive information. 


Management Report of UniCredit Bank Austria AG 

Management Report of 


Development of UniCredit Bank Austria 2008 

1. . Business developments and economic situation 

1.1. Structural changes in the Bank Austria Group 

The following subsidiaries were included in the group of 

consolidated companies of the Bank Austria Group as from 1 

January 2008: 

� FactorBank Aktiengesellschaft, Vienna 

� HYPERION Immobilienvermietungsgesellschaft 

m.b.H., Vienna 

� Teledata Consulting und Systemmanagement 

Ges.m.b.H., Vienna 

� Treuconsult Beteiligungsgesellschaft m.b.H., Vienna 

� Informations Technologie Austria GmbH (accounted 

for under the proportionate consolidation method), Vienna 

On 25 June 2007, the Management Board of UniCredit Bank 

Austria AG approved the acquisition of Joint Stock Commercial 

Bank for Social Development Ukrsotsbank, Kiev, Ukraine, 

(Ukrsotsbank). On 21 January 2008, the bank acquired a 94.20 per 

cent shareholding interest. A shareholding interest of 8.05 per cent 

was acquired directly by the bank, and a shareholding interest of 

86.15 per cent was acquired indirectly through Private Joint Stock 

Company “Ferrotrade International“ (a wholly-owned subsidiary of 

UniCredit Bank Austria AG), which has its headquarters in Kiev. As 

a result of a capital increase at Ukrsotsbank on 29 July 2008, the 

direct and indirect shareholding interests rose to a total of 94.47 per 

cent. The two companies have been included in the group of 

consolidated companies of the Bank Austria Group as from 1 

January 2008. 

In the course of the new corporate branding process, the banking 

subsidiary International Moscow Bank (IMB), Moscow, was 

renamed UniCredit Bank in January; it is now operating under the 

name of ZAO UniCredit Bank. On 20 May 2008, a capital increase 

of EUR 207.1 m was carried out at that bank, in which UniCredit 

Bank Austria AG holds all of the shares. 

Two capital increases, of EUR 67.2 m on 25 March 2008 and of 

EUR 96.8 m on 12 June 2008, as well as purchases of shares from 

minority shareholders in the period from April to June 2008 

increased the shareholding interest in JSC ATF Bank, Almaty, 

Kazakhstan, from 92.88 per cent to 99.60 per cent. 

On 20 May 2008, a capital increase of EUR 39.0 m was carried out 

at UniCredit Bank Serbia JSC, Belgrade, Serbia. UniCredit Bank 

Austria AG’s shareholding interest thereby rose from 99.89 per cent 

to 99.92 per cent. 

Two of UniCredit Bank Austria AG’s Bosnian banking subsidiaries – 

HVB Central Profit Banka d.d., Sarajevo, and UniCredit 

Zagrebačka banka d.d., Mostar – were integrated to form the new 

UniCredit Bank d.d., Mostar, in March 2008. 

The following subsidiaries were included in the group of 

consolidated companies as from 1 April 2008: 

� “Artist“ Marketing Entertainment GmbH, Vienna 

� MY Beteiligungs GmbH, Vienna 

� MC Marketing GmbH, Vienna 

� MC Retail GmbH, Vienna 

The banking subsidiary Nova banjalučka banka a.d., Banja Luka, 

in Bosnia and Herzegovina was renamed UniCredit Bank a.d. Banja 

Luka in June 2008. 

On 4 September 2008, UniCredit Bank Austria AG sold a 

shareholding interest of 4.65 per cent in UniCredit Tiriac Bank 

S.A., Bucharest, thereby reducing its shareholding interest from 

55.21 per cent to 50.56 per cent. This measure was a contractual 

part of the agreement on the merger of HVB Tiriac Bank S.A. with 

UniCredit Romania S.A. from the year 2007. 

In the third quarter of 2008 the hive-down of UniCredit Bank Austria 

AG's trading activities to UniCredit CAIB AG, Vienna, was 

approved by the supervisory authorities and entered in the Austrian 

Register of Firms. This means that with effect from 1 October 2008 

trading in the fixed income, currency, credit and equity markets is 

performed by UniCredit CAIB AG, replacing Bank Austria as legal 

entity for such trading activities. 

On 28 August 2008, a capital increase of EUR 129.9 m was carried 

out at Koç Finansal Hizmetler A.Ş., Turkey, a company in which 

Bank Austria holds a 50 per cent interest. 

On 27 September 2008, the name of Bank Austria Creditanstalt 

AG was changed to UniCredit Bank Austria AG. The new address 

of the company is Schottengasse 6-8, 1010 Vienna. 

On 30 September 2008, UniCredit Bank Austria AG sold its property 

in Vordere Zollamtsstrasse 13 and the property in Am Hof 2 held via 

a subsidiary, GANYMED Immobilienvermietungsgesellschaft m.b.H, 

Vienna. 

At the beginning of October 2008, Informations Technologie 

Austria GmbH (IT-Austria), Vienna, transferred its mainframe 

computers used for Group operations to Bank Austria Global 

Information Services GmbH (BAGIS), Vienna, as part of 

restructuring activities. In return, UniCredit Bank Austria AG 

transferred a 20 per cent equity interest in BAGIS to IT-Austria. The 

company has been included in the group of consolidated companies 

of the Bank Austria Group since 1 December 2008. 

On 16 October 2008, UniCredit Bank Austria AG and four other 

Austrian banks agreed to provide adequate liquidity to Constantia 

Privatbank AG (CPAG), Vienna, a bank faced with a liquidity 

squeeze. For this purpose the five leading banks make available 

EUR 400 m under a guarantee of the Republic of Austria. 

Oesterreichische Nationalbank (OeNB), Austria’s central bank, 

provides another EUR 50 m. Moreover, this consortium, in which 

UniCredit Bank Austria AG holds an indirect equity interest of 24.99 

per cent, took over all shares in CPAG. 



In October, the Austrian parliament passed legislation to strengthen 

the liquidity of banks by providing support to the extent of EUR 75 

billion. A clearing agency (Oesterreichische Clearingbank AG) 

with a full banking licence was established under a partial guarantee 

of the Republic of Austria to handle the provision of liquidity. Money 

market certificates (commercial paper) are issued with a direct 

guarantee of the Republic of Austria up to a maximum of EUR 5 bn. 

In December 2008, UniCredit Bank Austria AG took an equity 

interest of 20.75 per cent in Oesterreichische Clearingbank AG. 

Purchases of shares from minority shareholders in the period from 

June to December 2008 increased UniCredit Bank Austria AG’s 

shareholding interest in UniCredit Bulbank AD, Sofia, Bulgaria, 

from 90.30 per cent to 92.08 per cent. 

Since 1 December 2008, the Cypriot investment management 

company Lowes Limited, a subsidiary of UniCredit Aton 

International Limited, Nicosia, Cyprus, has been consolidated in the 

Bank Austria Group. 

UniCredit Bank Austria AG transferred the consolidated company 

caibon.com Internet Service GmbH, Vienna, to BA-CA 

Infrastructure Finance Advisory GmbH, Vienna, on 11 December 

2008. The company is wholly owned via ZETA Fünf Handels 

GmbH, Vienna. 

On 30 December 2008, UniCredit Bank Austria AG sold its equity 

interest in Pioneer Investments Austria GmbH, Vienna, to 

Pioneer Global Asset Management S.p.A, Milan, Italy. 

On 30 December 2008, UniCredit Bank Austria AG sold the profitsharing 

rights which it held in B&C Holding to B&C 

Beteiligungsverwaltungs GmbH, Vienna, a wholly owned subsidiary 

of B&C Privatstiftung, Vienna. Part of the overall package are profitsharing 

rights in B&C’s shareholding in Allgemeine Baugesellschaft 

A. Porr AG, which continue to be held by Bank Austria, and a final 

dividend due to UniCredit Bank Austria AG under the profit-sharing 

rights. Furthermore, an additional potential deferred payment 

amount has been agreed between UniCredit Bank Austria AG and 

B&C Privatstiftung which is conditional on repayment of the 

acquisition financings by B&C and will depend on the future 

performance and earnings of Lenzing Aktiengesellschaft, Lenzing, 

Upper Austria, and Semperit. Aktiengesellschaft Holding, Vienna, 

industrial companies in which B&C holds controlling interests. 

UniCredit Menkul Degerler AS, a brokerage firm, commenced 

operations in Turkey in the fourth quarter of 2008. The company is 

included in the Bank Austria Group via the Yapı Kredi Group, which 

is accounted for under the proportionate consolidation method. 

“JOHA“ Gebäude-Errichtungs- und -Vermietungsgesellschaft 

m.b.H., Leonding, Upper Austria, was included in the group of 

consolidated companies of Bank Austria as from the end of 2008. 

1.2. Business developments 

Changes in total assets 

As at 31 December 2008, UniCredit Bank Austria AG’s total assets 

were EUR 147.8 bn, up by EUR 3.6 bn or 2.5 per cent compared 

with the balance sheet as at 31 December 2007. 

Selected balance sheet items as a proportion of the balance 

sheet total 

compared with the previous year 

31 Dec 2008 31 Dec 2007 

Assets 

Loans and advances to credit institutions (item 3) 27.0% 22.8% 

Loans and advances to customers (item 4) 49.6% 47.9% 

Securities including shares (items 5 and 6) 4.2% 10.7% 

Shares in group companies (item 8) 12.6% 10.9% 

Liabilities 

Amounts owed to credit institions (item1) 33.0% 33.2% 

Amounts owed to customers (item 2) 33.3% 35.8% 

Debts evidenced by certificates (item 3) 17.4% 12.6% 

Effects resulting from the transfer of the trading activities of 

UniCredit Bank Austria AG to UniCredit CAIB AG, Vienna 

The net effect from the transfer of the assets and liabilities to 

UniCredit CAIB AG and from funding and reinvestment totalled EUR 

12.4 bn and is composed as follows: 

EUR m 

30 June 2008 1 July 2008 

Net effect 

from transfer 

Total assets of UniCredit Bank Austria AG 158,971 146,612 -12,359 

Assets 

Loans and advances to credit 

institutions (item 3) 

43,921 41,077 -2,845 

Loans and advances to customers (item 4) 71,556 71,132 -424 

Securities including shares (items 2, 5 and 6) 17,146 8,324 -8,822 

Equity interests and shares in group companies 

(items 7 and 8) 

21,127 22,967 1,839 

Other assets 

Liabilities and equity 

5,220 3,112 -2,108 

Amounts owed to credit institutions (item 1) 58,081 47,175 -10,906 

Amounts owed to customers (item 2) 52,337 51,438 -899 

Debts evidenced by certificates 

(items 3, 7 and 8) 

25,781 25,690 -91 

Other liabilities 6,680 6,218 -462 

Fund for general banking risks 2,454 2,454 

Equity and profit 13,638 13,637 -1 

Total 158.971 146,612 -12,359 



Changes in selected balance sheet items compared with the 

previous year 

Cash in hand and balances with central banks increased by EUR 

381.8 m to a total of EUR 1,213.9 m, primarily on account of higher 

balances with Oesterreichische Nationalbank, Austria’s central 

bank. 

Treasury bills and similar securities rose by EUR 0.9 bn to EUR 3.1 

bn; the increase related mainly to the euro positions in Federal 

Government bonds. 

Within loans and advances to credit institutions, placements 

repayable on demand declined by EUR 4.4 bn to EUR 3.0 bn, 

primarily as a result of the transfer of the trading activities to 

UniCredit CAIB AG. Other loans and advances increased by EUR 

11.4 bn. Overall, this balance sheet item rose by EUR 7.0 bn or 

21.4 per cent to reach EUR 39.9 bn. 

Loans and advances to customers rose by EUR 4.3 bn or 6.2 per 

cent to EUR 73.4 bn, mainly as a result of an increase in foreign 

loans and advances denominated in euro and foreign currency. 

The portfolios of bonds and other fixed-income securities as well as 

shares declined by a total of EUR 9.3 bn or 59.9 per cent, reaching 

a volume of EUR 6.2 bn. The decrease was mainly due to the 

transfer of the trading activities to UniCredit CAIB AG and the 

sale of the profit-sharing rights in B&C Holding. 

Equity interests and shares in group companies increased by EUR 

2.7 bn to EUR 21.5 bn, mainly as a result of 

� the acquisition of shares in Oesterreichische 

Clearingbank AG and Ukrsotsbank, 

� capital increases carried out at Koç Finansal Hizmetler 

A.Ş., Turkey; JSC ATF Bank, Almaty, Kazakhstan; 

Ukrsotsbank; ZAO UniCredit Bank (the former IMB); and 

BA-CA Markets & Investment Beteiligung Ges.m.b.H. in 

connection with the transfer of the trading activities to 

UniCredit CAIB AG. 

The decline of EUR 2.5 bn or 49.4 per cent to EUR 2.5 bn in the 

other asset items resulted mainly from the transfer of the trading 

activities in derivatives to UniCredit CAIB AG. 

On the liabilities side, amounts owed to credit institutions rose by 

EUR 1.0 bn or 2.1 per cent, as amounts repayable on demand 

declined by EUR 5.3 bn, mainly as a result of the transfer of the 

trading activities to UniCredit CAIB AG, and this decline was more 

than offset by the increase of EUR 6.3 bn in amounts owed to credit 

institutions with longer maturities. 

Amounts owed to customers decreased by EUR 2.4 bn or 4.7 per 

cent, mainly reflecting a decline in savings deposits. Debts 

evidenced by certificates increased by EUR 7.6 bn or 41.6 per cent 

to EUR 25.8 bn. 

The decline in other liabilities is to be seen mainly in connection 

with the transfer of the liabilities held for trading in derivatives to 

UniCredit CAIB AG derivatives in the banking and trading books. 

Other provisions decreased by EUR 163.8 m or 22.7 per cent, 

mainly on account of 

� the use of provisions made in 2006 for reorganising and 

restructuring the Retail, Corporates, Markets & 

Investment Banking and Global Banking Services 

divisions, Support Services and Risk Management 

� the use and release of provisions for legal risks 

� the release of provisions for bonus payments 

In previous years, allocations were made to the fund for general 

banking risks for reasons of prudence in order to cover risks 

associated with banking business for which neither a value 

adjustment nor a provision had to be made. In 2008, a release of 

EUR 1,518.3 m was made from the fund for general banking risks 

to cover writedowns on equity interests. As at 31 December 2008, 

the amount remaining in the fund, which was set up in previous 

years on the basis of Section 57 (3) of the Austrian Banking Act, 

was EUR 935.6 m, which will be available in the future to cover 

losses immediately and without restriction. 

Subordinated liabilities declined by EUR 49.7 m or 1.2 per cent to 

EUR 4.1 bn. Supplementary capital decreased by EUR 12.7 m or 

2.4 per cent to EUR 0.5 bn. 

Details of the profit and loss account for 2008 

Net interest income in the reporting period was EUR 1,039.3 m, 

down by EUR 376.4 m or 26.6 per cent, mainly on account of the 

transfer of trading activities to UniCredit CAIB AG effective 1 July 


Income from securities and equity interests was down by EUR 

284.4 m to EUR 889.8 m, a decrease primarily reflecting one-off 

dividend income in the previous year which resulted from the 

release of capital reserves at subsidiaries. 

The repercussions of the global financial crisis led to a decline of 

EUR 164.7 m or 19.3 per cent in net fee and commission income, 

and to the net loss of EUR 270.5 m on trading activities. 



Other operating income increased by EUR 9.0 m or 7.5 per cent to 

EUR 129.6 m, primarily on account of higher compensation for 

group services. 

Overall, operating income fell by EUR 964.7 m or 28.0 per cent to 

EUR 2,476.3 m. 

General administrative expenses rose by EUR 79.2 m or 5.2 per 

cent. The increase mainly reflects the adjustment, on 1 May 2007, 

of the internal service agreement on the BA-CA pension equivalent 

(ASVG equivalent) to changes in the legal framework, which led to 

one-off income in the previous year from a partial release, 

recognised in the profit and loss account, of the pension provision. 

Wages and salaries as well as other administrative expenses 

declined by a total of EUR 36.6 m or 3.2 per cent to EUR 1,115.8 

m. 

Other operating expenses fell by EUR 49.8 m to EUR 100.1 m. This 

decline resulted mainly from the fact that, due to the transfer of 

trading activities, this item no longer reflected income passed on 

under the agency agreements with UniCredit CAIB AG, Vienna, and 

CA IB International Markets Ltd., London, in the second half of 


Overall, operating expenses rose by EUR 20.5 m or 1.2 per cent 

to EUR 1,766.7 m. 

As a result of the effects of the transfer of the trading activities, oneoff 

income recorded in the previous year and the repercussions of 

the financial crisis, operating results fell by 58.1 per cent to EUR 

709.6 m. 

Risk costs associated with customer business increased in 2008 

and writedowns were made on the securities portfolio. The related 

charges were not offset by income from the second variable profitrelated 

component of the purchase price for Bank BPH S.A., 

Kraków, Poland. Therefore the net expense from the disposal and 

valuation of loans and advances, securities as well as contingent 

liabilities and commitments rose by EUR 108.6 m to EUR 165.1 m 

compared with the previous year. 

The net expense from the disposal and valuation of securities 

valued as financial fixed assets amounted to EUR 2,066.4 m, 

mainly reflecting 

� negative results, shown in losses on disposal, from the 

profit and loss transfer agreement with UniCredit CAIB 

AG, Vienna, and provisions for the equity interests in 

Joint Stock Commercial Bank for Social Development 

Ukrsotsbank, Kiev, Ukraine, (Ukrsotsbank); in Private 

Joint Stock Company “Ferrotrade International“, Kiev, 

Ukraine; in Koç Finansal Hizmetler A.Ş., Turkey; in JSC 

ATF Bank, Almaty, Kazakhstan; and in UniCredit Bank 

Cayman Islands Ltd., Cayman Islands, 

� which were not offset by gains on the sale of shares in 

GANYMED Immobilienvermietungsgesellschaft m.b.H., 

Vienna, (“Am Hof 2“ property); in Pioneer Investments 

Austria GmbH, Vienna; in UniCredit CAIB Polska S.A., 

Warsaw, Poland; and in UniCredit CAIB Securities UK, 

London. 

Results from ordinary business activities were a loss of EUR 

1,521.9 m. The loss was offset by a partial release of the fund for 

general banking risks, resulting in an annual surplus of EUR 100 

thsd. 

1.3. Branches 

On 29 December 2006, UniCredit Bank Austria set up a permanent 

establishment in Milan, Via Tortona 33, which is exclusively 

engaged in the management and controlling of the equity interests 

of UniCredit that were transferred by way of contribution in kind. 

Therefore these activities are not banking activities. 



1.4. Financial and non-financial performance indicators 

Financial performance indicators 

2008 2007 2006 2005 2004 

Tier 1 capital ratio 18.7% 20.1% 14.1% 10.8% 10.6% 

Return on equity before taxes 0.0% 12.3% 13.8% 8.3% 4.4% 

Return on equity after taxes 0.0% 12.2% 13.6% 7.9% 4.4% 

Cost/income ratio 70.1% 48.5% 69.8% 67.9% 74.6% 

Risk/earnings ratio 18.1% 10.0% 24.0% 22.2% 19.9% 

For definitions see page 12. 

The Tier 1 capital ratio declined slightly compared with the 

previous year. 

The figures for return on equity before taxes and return on 

equity after taxes indicate that the negative results from ordinary 

business activities were only offset by a release of the fund for 

general banking risks. 

The significant decline in the cost/income ratio in the previous 

year was mainly due to large dividend payments following the 

release of capital reserves at group companies and to one-off 

income recognised in general administrative expenses following the 

adjustment of the internal service agreement on the BA-CA pension 

equivalent (ASVG equivalent) to changes in the legal environment. 

The cost/income ratio for 2008, at 70.1%, was more or less 

unchanged compared with 2006. 

A multi-year comparison of the risk/earnings ratio, which in the 

previous year reflected the favourable trend in risk costs associated 

with customer business in particular, shows a steady development. 

Non-financial performance indicators 

The bank has: 

2008 2007 2006 2005 2004 

Domestic branches 304 313 333 349 360 

Foreign branches (without banking 

business) 

1 1 - - - 

Outlets at companies 3 7 8 8 8 

Head office 1 1 1 1 1 

Total 309 322 342 358 369 

As the process of combining branches continued, the total number 

of branches declined further in the reporting year. 

Under the place-of-work principle applied to UniCredit Bank Austria 

AG and its subsidiaries, staffing levels and staff costs are recorded 

by those companies in which the employees work. On the basis of 

this principle, staffing levels are as follows: 

Headcount 1) 

of which: workers other 

than salaried staff 

31 Dec 2008 

Annual 

average for 


31 Dec 2007 31 Dec 2006 31 Dec 2005 31 Dec 2004 

6,599 7,005 7,236 7,512 7,369 8,533 

0 0 0 0 0 310 

Full-time equivalents 1) 6,072 6,497 6,711 6,978 6,874 7,869 

of which: workers other 

than salaried staff 

0 0 0 0 0 159 

1) excluding apprentices and employees on unpaid maternity or 

paternity leave, but including workers other than salaried staff and 

employees delegated under the place-of-work principle 

Staff numbers continued to decline compared with the previous 

year. The increase in staffing levels in 2006 was exclusively due to 

the first-time application of UniCredit reporting guidelines, which 

require that staff members (237 persons) who terminated their 

active employment relationship as at 31 December 2006 are also 

included in the reporting-date figure. 

The shared values and rules of behaviour defined in the Group-wide 

Integrity Charter (with six core values: fairness, transparency, 

respect, reciprocity, freedom to act, and trust) guide the behaviour 

of each employee and also serve as guidelines for HR Community 

strategies. 

People Survey 

Maintaining a dialogue with and listening to people are cornerstones 

of the Group’s identity as set out in our Integrity Charter. These are 

also the basic qualities for an effective process of shared growth. 

The opinions of our employees help us identify our strengths and 

potential areas of improvement. In this way we obtain important 

information for planning concrete measures to improve day-to-day 

activities. The People Survey also helps us to see what we have 

already achieved and what challenges we will have to meet in the 

future. 

Executive Development Programme (EDP) and Talent Pool 

The Executive Development Programme (EDP) and the Talent Pool 

include top executives and key talents for management functions in 

UniCredit Group. Specific EDP and talent processes support 

medium-term career planning and target-oriented development 

planning for each executive and each talent together with their 

superiors. 



Job Families 

Based on a given structure, an overview of all activities within Bank 

Austria in terms of job profiles has been prepared in cooperation 

with executives; jobs requiring similar professional and personal 

qualities have been bundled into job families. This means that 

career and development opportunities are set out in a transparent 

manner for all employees. 

Performance Management 

At Bank Austria, Performance Management is aimed at consistently 

promoting employee development through transparent and fair 

assessment of performance and well-balanced market-oriented and 

transparent incentives. These objectives are to be achieved with the 

instruments of Management by Objectives (MbO) and the 

AnnualPerformanceDialogue (APD). 

� Employees are to be managed on the basis of annual 

targets derived from targets for the bank as a whole. We 

thereby aim to ensure that together we will achieve the 

targets for the entire bank by means of the Management 

by Objectives (MbO) instruments integrated in Bank 

Austria Performance Management. 

� Transparent competence criteria applied in 

AnnualPerformanceDialogue (APD) support the 

personal feedback process between employees and their 

superiors. 

HR cost management 

The EDP and the Talent Pool as well as Performance Management 

in combination with our HR cost management ensure the efficient 

allocation, in line with current market requirements, to fields of 

activities and financial compensation for all employees. 

Definitions of performance indicators 

Tier 1 capital ratio: regulatory Tier 1 capital divided by riskweighted 

assets (banking book) pursuant to the Austrian 

Banking Act (BWG) 

Return on equity before taxes: annual surplus before taxes 

divided by average equity 

Return on equity after taxes: annual surplus divided by average 

equity 

Equity: subscribed capital, capital reserves, revenue reserves, 

reserve pursuant to Section 23 (6) of the Austrian Banking Act 

(BWG), untaxed reserves 

Average equity: equity as at 1 January of the reporting year + 

equity as at 31 December of the reporting year divided by 2 

Cost/income ratio: general administrative expenses (including 

depreciation) divided by operating income including the 

balance of other operating income/expenses 

Risk/earnings ratio: net income/expenses from the disposal and 

valuation of loans and advances divided by net interest 

income including income from securities and equity interests 



1.5. Capital resources and capital requirements 

Capital resources of UniCredit Bank Austria AG as at 31 December 

2008 pursuant to the Austrian Banking Act (BWG) 

Tier 1 capital (before deductions) accounts for 89.1 per cent of net 

capital resources. 

The comparative figures show the development of capital 

resources: 

EUR m 


Share capital 1,469 1,469 

Capital reserves 7,547 7,547 

Other reserves eligible as Tier 1 capital 3,566 3,567 

Fund for general banking risks 936 2,454 

Less: shares in a controlling company 0 -1 

Less: intangible assets -128 -203 

Tier 1 capital 13,390 14,833 

Net revaluation reserve 181 320 

Net supplementary capital 505 516 

Net subordinated capital 2,620 3,002 

Tier 2 capital 3,306 3,838 

Less: carrying value of shares and substitute capital where the 

equity interest is 10% or less (excess over free amount) 

Less: carrying value of shares and substitute capital where the 

0 

equity interest exceeds 10% 

(first loss position included in 2007) 

-1,193 -1,114 

Less: subordinated claims where the holdings exceed 10% -45 0 

Less: carrying value of equity interests and capital components of 

insurance companies 

-82 -82 

Less: settlement risk -40 0 

Less: IRB provision shortfall -305 0 

Less: securitisation exposures with a risk weighting of 1,250% not 

included in risk-weighted assets 

-3 0 

Net capital resources for banking-book solvency 15,028 17,475 

Tier 3 capital (to the extent required for the trading book and 

the open foreign exchange position) 

230 494 

Capital requirements 

UniCredit Bank Austria AG has maintained part of its portfolio in the 

A-IRB since 31 March 2008. Therefore it is not possible to indicate 

comparative figures for capital requirements: 

EUR m 


Capital requirement for 

credit risk pursuant to Sections 22a-22h of the 

Austrian Banking Act (BWG) 

5,744 

settlement risk 1 

position risk - debt instruments, equities, foreign 

currencies and commodities 

230 

operational risk 221 

switch to Basel II rules (Section 103e, no. 6, of the 

Austrian Banking Act (BWG)) 

6 

Total capital requirement 6,202 6,406 

Net capital resources (before deductions) composed of Tier 1 

capital and Tier 2 capital (EUR 16,696 m) exceed by 190.7% the 

capital requirement for credit risk (EUR 5,744 m). 

Tier 1 capital amounts to EUR 13,390 m and would on its own 

suffice to cover the entire capital requirement. 

1.6. Information about the share capital and the exercise of 

special rights 

The subscribed capital of UniCredit Bank Austria AG as at 31 

December 2008 amounted to EUR 1,468,770,749.80 and consisted 

solely of ordinary shares. 

Pursuant to a resolution passed at the Annual General Meeting on 

19 May 2005, the Management Board is authorised, in accordance 

with Section 169 of the Austrian Joint Stock Companies Act, to 

increase the share capital by up to EUR 534,460,374.90 by issuing 

up to 73,515,870 new no-par value shares against contributions in 

cash or in kind, excluding or not excluding subscription rights, until 

21 June 2010. 

As at 31 December 2008, the amount of additional authorised 

capital was up to EUR 134,610,374.90. 

As at 31 December 2008, UniCredit held a direct interest of 99.995 

per cent in UniCredit Bank Austria AG. 

The registered shares held by “Privatstiftung zur Verwaltung von 

Anteilsrechten” (“AV-Z Stiftung”, a private foundation under Austrian 

law) and by “Betriebsratsfonds des Betriebsrats der Angestellten 

der UniCredit Bank Austria AG Großraum Wien” (the Employees’ 

Council Fund of the Employees’ Council of UniCredit Bank Austria 

AG for the Vienna area) have a long tradition and carry special 

rights for historical reasons: for specific important resolutions to be 

adopted at a general meeting of shareholders, the registered 

shareholders have to be present when the resolutions are adopted. 

The relevant resolutions are specified in Article 20 (13) and (14) of 

the bank’s Articles of Association. 

There is a syndicate agreement – the Restated Bank of the Regions 

Agreement (ReBORA) – between UniCredit, “AV-Z Stiftung” and 

“Betriebsratsfonds des Betriebsrats der Angestellten der UniCredit 

Bank Austria AG Großraum Wien”. 

In the Restated Bank of the Regions Agreement, “AV-Z Stiftung” 

and “Betriebsratsfonds des Betriebsrats der Angestellten der 

UniCredit Bank Austria AG Großraum Wien” have given an 

undertaking to UniCredit to the effect that if they want to sell 

UniCredit Bank Austria AG shares, they will first offer such shares 

held by them to UniCredit. If UniCredit does not accept the offer, the 

relevant contracting party could sell the UniCredit Bank Austria AG 

shares to a third party. In this case UniCredit has a right of 

preemption. 

For the duration of this agreement (10 years), “AV-Z Stiftung” has a 

right to nominate two members of the Supervisory Board of 

UniCredit Bank Austria AG, and thereafter one member of the 

Supervisory Board for the duration of the guarantee issued by 

“AV-Z Stiftung” and the Municipality of Vienna. 

There are no agreements on compensation between UniCredit 

Bank Austria AG and the members of its Management Board and 

its Supervisory Board or its staff members in the event of a public 

takeover bid. 



1.7. Proposal for the appropriation of profits for the 2008 

financial year 

After release of the fund for general banking risks in the amount of 

EUR 1,518.3 m, the annual surplus for the financial year beginning 

on 1 January 2008 and ending on 

31 December 2008 was EUR 100 thsd. The profit brought forward 

from the previous year was EUR 1.9 m. Thus the profit available for 

distribution was EUR 2.0 m. 

The Management Board proposes to the Annual General Meeting 

that no dividend be paid on the share capital of EUR 

1,468,770,749.80 and that the total profit of EUR 2.0 m available for 

distribution be carried forward to new account. 

1.8. Information on the squeeze-out pursuant to the Austrian 

Federal Act on the Squeeze-out of Minority Shareholders 

(Gesellschafterausschlussgesetz) of the holders of bearer 

shares in UniCredit Bank Austria AG 

The company’s Annual General Meeting on 3 May 2007 adopted a 

resolution concerning the planned squeeze-out. The legal actions 

for rescission and declaration of nullity brought against various 

resolutions adopted at the Annual General Meeting on 3 May 2007 

were terminated in spring 2008.The squeeze-out was entered in the 

Register of Firms on 21 May 2008. After that date, former minority 

shareholders initiated proceedings for a review of the cash 

compensation offered by UniCredit. 

1.9. Settlement offer to Bank Austria pensioners 

In the first half of 2008, UniCredit Bank Austria AG made a 

settlement offer to those employees who terminated their 

employment relationship because of retirement within eight years 

(in the period from 1 January 2000 to 31 December 2007) after the 

rights to future pension benefits were transferred to the pension 

fund. The settlement offer was accepted by over 99 per cent of the 

plaintiffs and by a large majority of the former employees who are 

comparable with the plaintiffs. As a result, the related proceedings 

were settled amicably. 

2. Report on risk management, risks, third-party guarantees 

and future developments 

Overall risk management 

UniCredit Bank Austria AG identifies, measures, monitors and 

manages all risks of the Bank Austria Group. In performing these 

tasks, the bank works closely with the risk control and risk 

management units of UniCredit. In this context, Bank Austria 

supports UniCredit's ongoing projects which are aimed at 

establishing uniform group-wide risk controlling procedures. 

UniCredit Bank Austria AG divides the monitoring and controlling 

processes associated with risk management into the following 

categories: market risk, liquidity risk, counterparty risk, credit risk 

(including real estate risk), operational risk, business risk, and risks 

arising from the bank's shareholdings and equity interests. 

The Management Board determines the risk policy and approves 

the principles of risk management, the establishment of limits for all 

relevant risks, and the risk control procedures. 

In performing these tasks, the Management Board is supported by 

specific committees and independent risk management units. Risk 

management activities are combined within a management function 

at Management Board level directed by the Chief Risk Officer 

(CRO); after completion of adjustments of the CRO organisation to 

the UniCredit Group’s divisional structure, secondary lending 

decisions for corporate customers are made in the Corporate Risk 

and MIB & Market Risk departments and in the Local Industry 

Teams, and for retail customers in the Retail Risk department. The 

Special Accounts Management department deals with problem 

loans. These organisational units are supported by the Strategic 

Risk Management & Control department. Credit risk control of the 

CEE business units is performed by the CEE Risk Control 

department and by the CEE Risk Monitoring and CEE Policies & 

Guidelines units. The unit for active credit portfolio management 

(Credit Treasury) reports directly to the Chief Financial Officer 

(CFO). 

Cross-divisional control 

The Asset/Liability Committee (ALCO) is responsible for the 

management of balance-sheet structure positions, it controls 

liquidity risk and deals with cross-divisional risk management issues 

arising between sales units and overall bank management while 

also addressing the results of the credit portfolio model. Control of 

market risk of the trading books is ensured by the Market Risk 

Committee (MACO), which meets once a week. MACO deals with 

short-term business management issues relating to the 

presentation and discussion of the risk/earnings position of Markets 

& Investment Banking and with limit adjustments, product approvals 

and positioning decisions. MACO also deals with methodological 

issues concerning the determination of counterparty risk. In 

addition, the general framework and limits for banking subsidiaries 

are defined by MACO. Credit risk is assessed by the credit 

committee. The newly established Operational Risk Committee 

meets on a quarterly basis to deal with operational risk issues. 

The Management Board of UniCredit Bank Austria AG sets risk 

limits for market risk activities of the entire Bank Austria Group at 

least once a year. MACO, which holds a meeting every week, 



makes limit decisions at the operational level and analyses the risk 

and earnings positions of the bank's Markets & Investment Banking 

units. ALCO performs analyses and makes decisions with regard to 

business activities closely connected with customer business (in 

particular, balance sheet structure, liquidity, and risk management 

issues arising between sales units and overall bank management). 

The decisions and results of these committees are reported directly 

to the bank's full Management Board. Risk Management, which is 

separate from the business divisions up to Management Board 

level, is in charge of preparing analyses and monitoring compliance 

with limits. The final stage of work on modelling counterparty risk 

calculations was completed in the course of 2008. In the third 

quarter of 2008, the model – developed by Bank Austria itself – was 

examined by an external expert pursuant to the Austrian Banking 

Act. The expert opinion confirms compliance with the Basel II 

standards, which have also been incorporated in local law. 

Following coordination activities with UniCredit Group, the process 

of approval by the supervisory authorities will start in the first 

quarter of 2009. 

The Bank Austria Group applies the principle of value-based 

management. In line with this principle, for pricing purposes in 

business and customer relations (micro control), capital employed 

(comprising both the Tier 1 capital required pursuant to the Austrian 

Banking Act and economic capital) is expected to yield a specific 

return. 

Beyond compliance with the regulatory capital rules pursuant to the 

Austrian Banking Act, economic capital is intended to reflect the 

bank's specific risk profile in a comprehensive and more consistent 

way. For micro-control purposes, economic capital for credit risk is 

calculated using value-at-risk methodologies. These unexpected 

losses over a period of one year are calculated with a confidence 

level of 99.95 per cent. 

Additionally, value-at-risk methodologies are used in the Bank 

Austria Group for calculating or planning economic capital for all 

specified types of risk (market risk, credit risk, risks arising from 

shareholdings and equity interests, real estate risk, operational risk, 

business risk). 

The Bank Austria Group is included in the risk monitoring and risk 

management system of the entire UniCredit Group. This ensures 

overall risk management across the Group. Examples in this 

context are global MIB risk reporting and the global MIB limits in the 

area of market risk. 

Management of balance sheet structure 

Credit risk, market risk and liquidity risk as well as contribution 

margins from customer transactions are attributed to the bank's 

business divisions in line with the principle of causation through a 

matched funds transfer pricing system applied throughout the 

Group. The Asset/Liability Management function ensures that the 

bank's overall liquidity and interest rate gap structure is optimised, 

with the results from interest maturity transformation being reflected 

in the Markets & Investment Banking Division. Factors taken into 

account in this context include the costs of compensation for 

assuming interest rate risk, liquidity costs and country risk costs 

associated with foreign currency financing at CEE subsidiaries. 

Liquidity costs and country risk costs rose strongly in the second 

half of 2008, based on the average funding mix in the Group. 

Products for which the material interest-rate and capital maturity is 

not defined, such as variable-rate sight and savings deposits, are 

modelled in respect of investment period and interest rate sensitivity 

by means of analyses of historical time series, and taken into 

account in the bank's overall risk position. Interest rate sensitivities 

are determined and taken into account in hedging activities, which 

results in a positive contribution to profits from customer business. 

To assess its balance sheet structure, the bank uses the Value-at- 

Risk approach, complemented by a scenario analysis covering 

subsequent quarters and years. The bank thus also follows the 

Basel II recommendation concerning the simulation of future net 

interest income under different interest rate scenarios ("earnings 

perspective"). 

In the earnings perspective analysis, simulations of the future 

development of net interest income and of the market value of the 

banking book are generally based on assumptions regarding 

volume and margin developments under different interest rate 

scenarios. Parallel interest rate shocks as well as inversions and 

low-interest-rate scenarios can be analysed to identify their possible 

impact on the bank's net interest income and market value. 

The analyses performed as at September 2008 show that a decline 

in interest rates in all currencies would have the strongest impact on 

the bank's net interest income. This is a typical feature of 

commercial banks, given the interest rate remanence on the 

liabilities side of banks’ balance sheets (sight deposits, equity). 

The Basel II rules require the measurement at Group level of 

"interest rate risk in the banking book" in relation to the bank's 

capital by comparing a change in the market value of the banking 

book after a 2 per cent interest rate shock with the bank's net 

capital resources. In the event that such an interest rate shock 

absorbs more than 20 per cent of a bank's net capital resources, 

the bank supervisory authority could require the bank to take 

measures to reduce risk. 

A 2 per cent interest rate shock would absorb about 5 per cent of 

the Group's net capital resources; this calculation also includes the 

current investment of equity capital as an open risk position. This 

means that the figure for Bank Austria is far below the outlier level 

of 20 per cent. 

Credit Treasury 

Since the implementation of Credit Treasury (CT; former Active 

Credit Portfolio Management ACPM) a predefined corporate 

segment of customers is actively managed according to capital 

market principles, in addition to the unchanged credit process for 

credit risks. By mapping the credit risk from customer business 



through a reference structure derived from maturity-matched market 

prices, a risk-adequate pricing of this portfolio segment is secured, 

accompanied by efficient capital market control. In Credit Treasury, 

the risk positions are aggregated and the bank’s credit risk profits 

are optimised. By actively hedging and re-investing, Credit Treasury 

is to widen the portfolio’s diversification, and contributes to an 

improvement of the risk-return profile. 

The quarterly Credit Treasury Committee, analogously to the 

Market Risk Committee (MACO), serves to actually steer business 

in regard to the risk-return situation in Credit Treasury as well as to 

adapt limits and to decide on positions. 

In 2008, Credit Treasury again executed two synthetic 

securitisations relating to Austrian and international corporate loans. 

2.2. Risks 

Market risk 

Market risk management encompasses all activities in connection 

with our Markets & Investment Banking operations and 

management of the balance sheet structure in Vienna and at Bank 

Austria's subsidiaries. Risk positions are aggregated at least daily, 

analysed by the independent risk management unit and compared 

with the risk limits set by the Management Board and the 

committees (including MACO) designated by the Management 

Board. At Bank Austria, market risk management includes ongoing 

reporting on the risk position, limit utilisation, and the daily 

presentation of results of Markets & Investment Banking operations. 

Bank Austria uses uniform risk management procedures throughout 

the Group. These procedures provide aggregate data and make 

available the major risk parameters for the various trading 

operations once a day. Besides Value at Risk, other factors of equal 

importance are stress-oriented sensitivity and position limits. 

Additional elements of the limit system are loss-warning level limits 

and options-related limits applied to trading and positioning in nonlinear 

products. 

Bank Austria's risk model ("NoRISK") was developed by the bank 

and has been used for many years. The model is applied and 

further refined by MIB & Market Risk. Ongoing refinement work 

includes reviewing the model as part of backtesting procedures, 

integrating new products, implementing requirements specified by 

the Management Board and by MACO, and adjusting the system to 

general market developments. A major factor to be noted in this 

context is the market risk stress considerations against the 

background of the current financial market situation. A product 

introduction process has been established in which risk managers 

play a decisive role in approving a new product. The "NoRISK" risk 

model, approved by the supervisory authorities since 1998, is used 

for computing capital requirements; in contrast to the internal risk 

management process, the computation of capital requirements 

takes into account the statutory parameters (confidence interval of 

99 per cent, 10-day holding period) and additionally the multiplier 

determined as part of the model review is applied. The model, 

which has so far been used for UniCredit Bank Austria AG and the 

Bank Austria Group, also received regulatory approval for use for 

UniCredit CAIB AG, Vienna, in 2008. The risk model covers all 

major risk categories: interest rate risk and equity position risk (both 

general and specific risk), exchange rate risk and commodities 

position risk. The structure of the standard risk report presented at 

MACO’s weekly meetings corresponds to the weekly UniCredit-wide 

MIB risk report and thus covers the same (stress) sensitivities in 

addition to VaR figures. Regular and specific stress scenario 

calculations complement the information provided to MACO/ALCO 

and the Management Board. Macro scenarios show the potential 

adverse impacts of global developments with specific effects on the 

respective risk categories, while stress sensitivities of individual risk 

factors or groups of risk factors show the potential adverse impacts 

on partial market segments. Stress scenarios are based on 

assumptions of extreme movements in individual market risk 

parameters. The bank analyses the effect of such fluctuations and a 

liquidity disruption in specific products and risk factors on the bank's 

results. These assumptions of extreme movements are dependent 

on currency, region, liquidity and the credit rating, and are set by 

MIB & Market Risk on a discretionary basis after consultation with 

experts in other areas of the bank (e.g. research, trading). 

In addition to the risk model results, income data from market risk 

activities are also determined and communicated on a daily basis. 

These data are presented over time and compared with current 

budget figures. Reporting covers the components reflected in IFRSbased 

profit and the marking to market of all investment positions 

regardless of their recognition in the IFRS-based financial 

statements ("total return"). The results are available to Bank 

Austria's trading and risk management units via the accessprotected 

Intranet application "ERCONIS", broken down by portfolio, 

income statement item and currency. The regulatory approach to 

prudent valuation in the trading book is also implemented primarily 

by MIB & Market Risk and further developed on an ongoing basis 

through cooperation within UniCredit Group. 

In Vienna, Bank Austria uses the "MARCONIS" system developed 

by the bank itself to completely and systematically review the 

market conformity of its trading transactions. This tool is also used 

by almost all CEE banking subsidiaries with market risk activities. 

Value-at-risk movements (1 day, confidence interval of 99 per cent) 

in 2008 reflected the banking crisis, which led to an exceptionally 

strong increase in volatility in the wake of the Lehman Brothers 

insolvency. In the fourth quarter of 2008, VaR rose significantly 

although Bank Austria’s risk positions were more or less left 

unchanged or reduced. In the trading book, VaR doubled to about 

EUR 40 m in the fourth quarter as compared with the first half of 

2008. Overall VaR, including banking book positions, temporarily 

even quadrupled (EUR 160 m) in the fourth quarter. The higher VaR 

levels were mainly caused by an increase in interest-rate and 

spread volatility. In the interest rate sector, most of the increase 

was due to the positions of our CEE/SEE subsidiaries, which hold 

long-term interest rate positions from customer business and partly 

also in sovereign bonds in the banking book. The fact that there are 

no comparable trading positions in these currencies in the Group 

explains the wide difference between VaR of the trading book and 

overall VaR. The strong increase in overall VaR in credit spreads 

was also mainly due to the banking book positions of the 

subsidiaries (e.g. Turkish sovereign bonds in the held-to-maturity 

portfolio). In the peak area of the VaR curve, the credit-spread 

trading VaR of the subsidiaries is lower than one-tenth of the 



comparative amount if the banking book position of the subsidiaries 

is included in the calculation. 

The results of the internal model based on VaR (1 day, confidence 

interval of 99 per cent) in 2008 moved between EUR 36.6 m and 

EUR 167.4 m for the Bank Austria Group. The average Total Return 

VaR was EUR 65.1 m, significantly higher than the comparative 

figure for the previous year (EUR 35.2 m) although the positions 

were reduced in terms of sensitivity. The average VaR in the trading 

book in 2008 only rose to a level of EUR 21.2 m (from EUR 12.3 m 

in the previous year). As in previous years, the risk report includes 

the non-trading driven equity positions of the bank's investment 

books and the hedge-fund positions. Credit spread risk and interest 

rate risk account for most of the total risk of the Bank Austria 

Group. Since January 2007, commodity risk has only been 

assumed in the Bank Austria Group on a back-to-back basis. 

In addition to VaR, risk positions of the Bank Austria Group are 

limited through volume limits. As part of daily risk reporting, detailed 

"Trader Reports" are prepared for a large number of portfolios, with 

updated and historical information made available to all risk-takers 

and the responsible senior management via the Intranet. The 

comprehensive statistical data on VaR made available in addition to 

limit-relevant 99 per cent quantile figures include the average of 

scenario results beyond the 99 per cent quantile mark, providing an 

indication of the magnitude of events for which the probability of 

occurrence is very low. In addition to limit-relevant overall simulation 

runs, the results of about 30 partial simulation runs are recorded 

daily in the risk database. Partial simulation runs simulate specific 

risk classes while keeping others constant. The combination of 

portfolios and partial simulation runs enables the bank to analyse all 

major risk components on a daily basis and over time. 

Significant interest rate positions continue to be held in KZT, TRY, 

HRK and RUB, reflecting the size of our subsidiaries; most of the 

related interest rate sensitivity is in the banking book (not in the 

trading book). The USD position is also related to the banking book 

position of our banking subsidiaries. In 2008, the EUR interest rate 

position was held at a low level compared with previous years. 

Among the other highly developed markets, only the CHF position is 

of major significance. 

By analogy to the detailed presentation of basis point positions in 

the interest rate sector, daily reporting presents details of credit 

spread by curve and maturity band (the bank currently uses more 

than 550 credit spread curves for its risk calculations). 

Measured by the total basis-point value, the Bank Austria Group’s 

credit spread position in 2008 moved between EUR 6 m and EUR 9 

m and was thus lower than the relevant levels in the previous year. 

In 2008, the average credit spread position in corporates and 

financials was reduced. Treasury-near instruments now account for 

the largest part of the credit spread positions. 

Bank Austria has invested in hedge funds through its subsidiary 

UniCredit Bank Cayman Islands Ltd., Cayman Islands, since 1999; 

the name of the company was changed to Alpine Cayman Islands 

Ltd. on 21 January 2009. While the focus is on market-neutral and 

event-driven strategies and leverage is comparatively low, the 

financial crisis had a negative impact on results of the hedge funds 

in 2008. Measured by the stress test, the risk contribution is now of 

low significance, even on dramatic stress assumptions. A further 

reduction of these positions is planned for the coming financial year. 

Information on the amount of market risks of UniCredit Bank Austria 

AG is contained in the notes to the financial statements. 

Market risk management in CEE 

At Bank Austria, market risk management covers the activities in 

Vienna and the positions at the bank's subsidiaries, especially in 

Central and Eastern Europe. These subsidiaries have local risk 

management units with a reporting line to Risk Management in 

UniCredit Bank Austria AG. Uniform processes, methods, rules and 

limit systems ensure consistent group-wide risk management 

adjusted to local market conditions. 

The "NoRISK" risk model has been implemented locally at major 

units (Czech Republic, Slovakia, Hungary, Croatia, Bulgaria, 

Russia, Turkey), and a daily risk report is made available to the 

other units. The web application "ERCONIS" records the daily 

business results of treasury activities in CEE. In line with a totalreturn 

approach, measurements of the performance of subsidiaries 

include income generated by the subsidiaries and the valuation 

results of the banking book. 

To avoid risk concentrations in the market risk position, especially in 

tight market conditions, Bank Austria has implemented at its 

subsidiaries Value-at-Risk limits and position limits for exchange 

rate risk, interest rate risk and equity risk, which are monitored 

daily. The monitoring of income trends at subsidiaries by means of 

stop-loss limits provides an early indication of any accumulation of 

position losses. 

The timely and continuous analysis of market risk and income is the 

basis for integrated risk-return management of treasury units at 

subsidiaries. 

Liquidity risk 

In line with Group standards, the Bank Austria Group deals with 

liquidity risk as a central risk in banking business by introducing and 

monitoring short-term and medium-term liquidity requirements 

(warning level). In this context the liquidity situation for the next few 

days and months and also for longer periods is analysed against a 

standard scenario and stress scenarios. Methods and procedures of 

liquidity analysis, analyses of the degree of liquidity of customer 

positions, management responsibilities and reporting lines in this 

area have been laid down in the liquidity policy, which is also 

applicable at Bank Austria's CEE units and includes a contingency 

plan in the event of a liquidity crisis. 

In medium-term and long-term liquidity management, liquidity 

inflows over 1 year and over 5 years must cover a minimum of 90 

per cent of expected liquidity outflows during these periods. This 

warning level must be observed at Group level and for each banking 

subsidiary. At Bank Austria Group level, the relevant figures as at 

year-end 2008 were 0.98 for >1 year and 0.96 for >5 years. 



For the purpose of short-term liquidity management, volume limits 

have been implemented in the Bank Austria Group and in all banks 

for maturities up to three months, which limit all Treasury 

transactions and the securities portfolio of the respective bank. 

Additionally, limits have been established for Bank Austria for open 

maturities in various currencies to keep down follow-up funding risk 

in the event that foreign currency markets dry up. 

These limits were essentially observed. However, the liquidity strain 

in the wake of the Lehman Brothers crisis led to overdrafts in some 

areas, which were covered through increased tender operations and 

Group backing. 

Funding the CEE subsidiaries is one of the main functions of the 

Group’s liquidity management. Long-term funds are made available 

to the subsidiaries for their business on the basis of a funding plan. 

Bank Austria adhered to its funding plan despite the market 

turbulence. 

Liquidity costs are part of the reference rate system. The applicable 

alternative costs are debited or, on the basis of an opportunity 

approach, credited to the various products on the assets side and 

the liabilities side which have an effect on liquidity. In the current 

controlling process this ensures the proper pricing of our business. 

Counterparty risk 

For the purposes of portfolio management and risk limitation in the 

derivatives business with banks and customers, and on the basis of 

the internal market risk model, Bank Austria has set up a Monte 

Carlo path simulation to estimate the potential future exposure at 

portfolio level for each counterparty. The calculations are based on 

market volatility, correlations between specific risk factors, future 

cash flows and stress considerations. Netting agreements and 

collateral agreements are also taken into account for simulation 

purposes. 

The simulation calculations are performed for all major types of 

transactions, e.g. forward foreign exchange transactions, interest 

rate instruments, equity-related instruments and credit derivatives. 

Commodity derivatives, securities lending transactions and 

repurchase agreements are currently taken into account with an 

add-on (depending on volatility and maturity); securities lending 

transactions and repurchase agreements will be integrated in the 

Monte Carlo simulation model in 2009. The bank applies a 

confidence interval of 97.5 per cent. 


("Wallstreet"), the central treasury system, on a largely group-wide 

basis. In addition to determining the potential future exposure for 

the purpose of internal risk control, the path simulation also enables 

the bank to calculate the average exposure and the modified 

average exposure pursuant to Basel II, as well as the effective 

maturity of the exposure to each counterparty. This makes it 

possible to integrate counterparty risk in an internal model 

compliant with Basel II for the computation of capital requirements. 

Bank Austria additionally limits the credit risk arising from its 

derivatives business through strict use of master agreements, the 

definition and ongoing monitoring of documentation standards by 

legal experts, and through collateral agreements and break clauses. 

Management takes proper account of default risk, especially in view 

of the increase in business volume, despite the good average credit 

rating of our business partners in the derivatives business. 

Credit risk 

Trends in provisioning for credit risks varied considerably in the 

course of 2008. The first nine months showed very satisfactory 

developments, especially in the Corporates Division with a net 

release of a double-digit million euro amount. In the fourth quarter, 

however, the impact of the financial crisis and its initial direct effects 

on the real economy became discernible. 

Although risk was immediately limited, the collapse of Lehman 

Brothers, the banking crisis, general financial problems in Iceland 

and the deteriorating economic environment had an adverse impact 

on the provisioning charge in the Bank Austria Group. 

In the Retail Division, the provisioning charge for UniCredit Bank 

Austria AG was yet again below budget and slightly better than in 

the previous year. Risk-reducing measures taken in this business 

segment more than offset the insolvency-related impact resulting 

from the gradually discernible effects of the economic downturn. 

After a very good first nine months, the Corporates Division was hit 

in the fourth quarter by the financial crisis and its initial impact on 

the real economy. Provisions required to be made for banks in 

Iceland and other countries, and in the Multinational Corporates 

sector, brought the provisioning charge for Bank Austria to a level 

that is above budget and about one-third higher than the low figure 

for the previous year. 

Credit risk methods and instruments 

Very important factors in the credit approval process are a detailed 

assessment of risk associated with each loan exposure, and the 

customer’s credit rating in particular. Every lending decision is 

based on a thorough analysis of the loan exposure, including an 

evaluation of all relevant factors. Following the initial loan 

application, the bank’s loan exposures are reviewed at least once a 

year. If the borrower’s creditworthiness deteriorates substantially, 

shorter review intervals are obligatory. 

For internal credit assessment in Austria and by Bank Austria’s 

banking subsidiaries in CEE, the bank uses various rating and 

scoring models (for calculating the parameters PD, LGD and EAD 

on the basis of models specifically developed for these purposes) 1 

for the customer/business segments to be assessed, in line with the 

various asset classes pursuant to Section 22b of the Austrian 

Banking Act, the Solvency Regulation and Directive 2006/48/EC of 

1 PD = Probability of Default; LGD = Loss Given Default; EAD = 

Exposure at Default 



the European Parliament and of the Council of 14 June 2006 

relating to the taking up and pursuit of the business of credit 

institutions. There are country-specific or region-specific models 

(e.g. for corporate customers, retail customers) and global models 

(e.g. for sovereigns, banks, multinational corporates). The 

assessment of a loan exposure is based on data from the 

respective company’s financial statements and on qualitative 

factors. 

The various rating and scoring models provide the basis for efficient 

risk management of the Bank Austria Group and are embedded in 

all decision-making processes relating to risk management. They 

are also a key factor for capital required to be held against riskweighted 

assets. Great attention is given to consistency in the 

presentation for supervisory purposes and the requirements of 

internal control. 

All internal rating and scoring systems are monitored on an ongoing 

basis and are subject to regular validation on an annual basis, 

including a review to verify if the rating/scoring system provides a 

correct representation of the risks to be measured. All model 

assumptions are based on multi-year statistical averages for 

historical defaults and losses, with increased attention to be given 

to the potential impact of turbulence in international financial 

markets. In this context, credit risk stress tests, which are required 

by bank supervisory authorities and are carried out on a regular 

basis, are an essential instrument for assessing future risks in an 

unfavourable economic environment. Such tests enable the 

Management Board to assess the adequacy of regulatory capital 

and economic capital on the basis of different stress scenarios. 

With risk-adjusted pricing and a stronger focus on risk 

management, we aim to constantly improve the diversification and 

the risk/earnings ratio of the portfolio. 

For real estate customers, the customer-related rating is 

complemented by a transaction rating. 

Bank Austria uses a scoring system for retail customers. The 

automated rating tool is used for assessing, monitoring and 

managing the large number of loan exposures to private customers, 

small businesses, independent professionals and small non-profit 

organisations. Retail scoring comprises an application scoring 

procedure based on effective and recognised mathematical and 

statistical methods, and a behaviour scoring procedure taking into 

account such factors as amounts received in the account and 

customers' payment practices. The scoring system for retail 

customers provides information that is updated on a monthly basis. 

This gives the bank an efficient tool for lending decisions and early 

recognition of risk. Automated data processing helps Bank Austria 

to reduce costs required for credit control while accelerating lending 

decisions. 

Credit risk-related activities in 2008 included the IRB4CEE project, 

through which the CEE subsidiaries were prepared for and 

supported in the gradual switch from the standardised approach to 

the IRB approaches. After detailed plans of the required 

implementation measures and milestones had been made in close 

cooperation with Strategic Risk Management specialists at Bank 

Austria, the CEE units started with the implementation and 

completion of appropriate rating systems and of the required time- 

series collections. The models used are regularly revalidated by 

Bank Austria’s experts to ensure consistent, group-wide 

implementation of the rating systems. 

Operational risk 

Analogous to Basel II, operational risk is defined as the risk of 

losses due to human error, flawed management processes, natural 

and other catastrophes, technological failures and external events. 

For example, in the future, IT system failures, damage to property, 

processing errors or fraud will be subject to more accurate and 

consolidated risk measurement and management, on which the 

calculation of risk capital will be based. 

Loss data are collected, and processes are optimised, in close 

coordination and cooperation with other departments and units 

including Internal Audit, the Compliance Office, Legal Affairs and 

the insurance sector. Also to be considered is the fact that Bank 

Austria has always taken numerous measures in the various 

divisions to manage and reduce operational risk. Examples are data 

security measures, measures to ensure the confidentiality and 

integrity of stored data, access authorisation systems, the twosignatures 

principle, and a large number of monitoring and control 

processes as well as staff training programmes. 

In the same way as for other types of risk, in addition to central risk 

controlling, Bank Austria – like UniCredit – has built up a 

decentralised risk management network of contacts within 

departments and at subsidiaries (OpRisk Managers). While the 

main task of central risk management is to define the methods used 

and to perform risk measurement and analysis, local risk managers 

are responsible for taking measures to reduce, prevent, or take out 

insurance against, risks. 

Activities in 2008 focused on meeting requirements that were 

imposed by the Austrian Financial Market Authority (FMA) after its 

on-site supervisory assessment of the advanced approach, and on 

preparing and supporting regulatory reviews at banking 

subsidiaries. 

Quite generally, the organisation of operational risk management at 

Bank Austria has been established at a high quality level. A network 

of independent functions and teams are involved in managing and 

controlling risks, providing the Management Board with sufficient 

information on the risk situation and enabling the Management 

Board to manage risk. Improvements with regard to the extended 

documentation requirements for scenarios, risk indicators and the 

analysis of the general ledger for operational risk relevance as well 

as an ongoing expansion and strengthening of the functions of 

divisional Operational Risk Managers took place in the course of 


The task of dealing with operational risk issues was transferred from 

the Asset/Liability Committee (ALCO) to a separate Operational 

Risk Committee, whose meetings are held on a quarterly basis and 

are also attended by the divisional Operational Risk Managers and 

representatives of CEE banking subsidiaries. The introduction of the 

OpRisk Committee is a major step forward towards integrating 



operational risk in the bank’s processes; its main tasks are to track 

progress and serve as a body to which unresolved issues are 

referred. 

In 2009, activities with regard to operational risk will focus on 

� completing implementation of the requirements under the 

regulatory reviews in Italy, Austria and Croatia, 

� supporting the units pursuant to the AMA rollout plan in 

implementing the regulatory reviews for Basel II 

implementation in cooperation with UniCredit Group, 

� further analysis of the existing insurance coverage of our 

Group and preparation of a data protection strategy, 

Business risk 

Business risk is defined as unexpected adverse changes in 

business volume and/or margins which cannot be attributed to other 

types of risk. Adverse changes result mainly from a significant 

deterioration in market conditions, changes in the competitive 

position or customer behaviour, and from changes in the legal 

environment. 

Business risk measurement thus measures the influence of external 

factors on a decline in profits and the effect on the market value. 

As part of general income and cost management, operational 

management of business risk is the responsibility of the individual 

business units. 

Risks arising from the bank’s shareholdings and equity 

interests 

In dealing with this type of risk, Bank Austria takes into account 

market price fluctuations in its equity holdings in listed and unlisted 

companies. 

Not included are equity interests in consolidated subsidiaries of the 

Group because risks associated with such companies are 

determined and recorded under the various other risk types. 

The portfolio includes various strategic investments and real estate 

companies; real estate holding companies are taken into account in 

real estate risk. 

Generally, Value at Risk is determined on the basis of market 

values and volatilities of the relevant equity interests. For shares in 

unlisted companies the bank uses book values and volatilities of 

relevant stock exchange indices and takes account of residual 

variances. 

Legal risks 

Provisions have been made for pending legal risks in line with the 

estimated probability of costs arising from litigation. 

No provisions have been made, inter alia, for the following pending 

legal proceedings due to the low probability of claims being lodged. 

An outflow of funds cannot, however, be excluded in these cases, 

either: 

� Action brought by the German Bundesanstalt für 

vereinigungsbedingte Sonderaufgaben (BVS) in Switzerland 

for repayment of credit balances held, and disposed of, by the 

Communist Party of Austria (KPÖ) at the former banking 

subsidiary in Zurich. 

� Action brought by Valauret S.A. in Paris on the grounds of 

alleged involvement of Creditanstalt AG (now UniCredit Bank 

Austria AG) in wilful deception in connection with a French joint 

stock company as a result of which the plaintiffs incurred 

losses through a loss in value of shares acquired by it in the 

joint stock company. 

� In connection with the investments affected by the Madoff 

case, several customers addressed enquiries and complaints 

to Bank Austria, but Bank Austria has not been served with 

any statement of claims in this context. Investors in the Herald 

Fund are said to have brought actions before a US court 

against parties including Bank Austria as shareholder of Bank 

Medici AG; in this case, too, Bank Austria has not been served 

with any statement of claims. 

Current status of Basel II implementation in the Bank Austria 

Group 

In spring 2003, Bank Austria set up a group-wide programme to 

create the conditions for compliance with the new rules, effective 

since 2007, for holding adequate capital against risk-weighted 

assets. 

UniCredit Bank Austria AG decided, based on the discretion for 

credit institutions defined in the EU Directive and in line with the 

approach taken by the Group, to use the option to start employing 

Basel II at the beginning of 2008. 

Since the beginning of 2003, the focus of the programme has been 

on refining credit risk systems to meet the standards of the 

Advanced IRB approach, setting up a group-wide data base for the 

purposes of regulatory reporting and on creating the basis for 

ongoing implementation activities. Operational risk activities also 

commenced in this period. The Basel II project comprises UniCredit 

Bank Austria AG and all Austrian and foreign subsidiaries belonging 

to the group of consolidated companies, all risk categories (credit 

risk, operational risk and market risk) and all three pillars of Basel II. 

From the different approaches that may be chosen in the area of 

credit risk under Basel II, the Bank Austria Group – in line with the 

decision taken by UniCredit Group – has opted for the advanced 

internal ratings-based (A-IRB) approach. Within the sub-group, the 



switch to the advanced approach will take place in stages – defined 

in the IRB roll-out plan. The roll-out plan was submitted to all 

competent regulators and found to be appropriate by them. 

In the first phase, the focus was on UniCredit Bank Austria AG, 

which has maintained the major part of its portfolio in the A-IRB 

since 31 March 2008. The prerequisite for doing so was the 

approval by the competent supervisory authorities, which was given 

in time before the first IRB Basel II report as at 31 March 2008 (for 

the first two months of 2008, Bank Austria computed risk-weighted 

assets for regulatory purposes using the standardised approach). 

As mentioned above, Basel II implementation has been established 

as a Group-wide programme. Since the acquisition of HVB Group 

by UniCredit Group in 2005, UniCredit has been responsible for 

Group-wide decisions and Group guidelines also in the Basel II 

environment, as well as for the development of Group-wide rating 

systems. For example, Group-wide homogeneous portfolios have 

been defined for which uniform rating models are used across the 

Group, such as those for countries, banks and multinational 

companies, or are planned to be used for other portfolios. The 

Group has also selected and (further) developed specific system 

components as Group-wide solutions for the calculation of loss 

parameters and risk-weighted assets. 

Close cooperation ensures Group-wide consistency in the 

implementation of Basel II. Group standards have already been 

prepared and adopted by the UniCredit Group holding company in 

cooperation with the major legal entities, and are used as an 

instrument for uniform Group-wide implementation, taking into 

consideration the local legal requirements and safeguarding Group 

interests. Such Group standards will also continue to be gradually 

extended and complemented. Integrating these Group standards in 

the processes and organisational set-up of all business divisions 

and Group units was one of Bank Austria’s major tasks in the past 

year and remains an important item on the bank’s agenda, 

especially because local features and legal requirements must be 

taken into account in ensuring Basel II compliance. These Group 

standards will also be rolled out step by step in the relevant CEE 

subsidiaries. 

With the transfer of ownership of HVB Group to the Italian banking 

group, the Italian banking supervisory authority – Banca d’Italia (the 

Bank of Italy) – became the new home supervisor of UniCredit 

Group. Since then the Bank of Italy has been responsible for all 

approvals at Group level, while local supervisory authorities are 

responsible for local topics in the legal entities and for local on-site 

examinations. All regulatory issues are being dealt with in close 

cooperation between home and host regulators. 

The supervisory assessment of the A-IRB for the local models in 

UniCredit Bank Austria AG took place in 2007 and was completed 

with very satisfactory results. This was followed at the beginning of 

2008 by an assessment of the local implementation and use of the 

Group-wide rating models already developed for banks and 

countries/sovereigns. Again, the review produced good results, with 

UniCredit Bank Austria AG thus meeting the requirements for the 

Bank of Italy’s approval (consequently granted) of the use of the 

internal ratings-based approach in calculating UniCredit Bank 

Austria AG’s assessment basis for regulatory capital from 31 March 


Since 30 September 2008, in line with the roll-out plan, the A-IRB 

approach has also been used in respect of another portion of the 

portfolio, namely multinational corporates, for which a Group-wide 

model was developed. In this context the supervisory approval 

process took place in summer 2008. 

The bank is planning to introduce various other Group-wide rating 

models in the next few years while also further refining and 

developing local models. 

The Group has also chosen the most elaborate approach, the 

advanced measurement approach (AMA), in respect of operational 

risk – UniCredit Bank Austria AG has used the AMA since the 

beginning of 2008. 

Austrian subsidiaries 

All Austrian subsidiaries in the new Group structure started to use 

the standardised approach in 2008. From a current perspective, for 

reasons of materiality, it is not planned to switch to one of the IRB 

approaches. 

In the area of operational risk, Schoellerbank Aktiengesellschaft, 

Vienna, has chosen the advanced measurement approach (AMA). It 

is planned to obtain approval for this approach in the course of 

2009. 

CEE subsidiaries 

The CEE subsidiaries have used the Basel II standardised 

approach since the beginning of 2008. Given the Group’s decision 

to use the IRB approach, there are of course plans to switch to the 

advanced IRB approach at most of the CEE subsidiaries; as an 

intermediate step, all subsidiaries will start with the Foundation IRB 

approach (F-IRB) between 2010 and 2012. A detailed roll-out plan 

for the gradual switch to the IRB approaches was drawn up with all 

CEE subsidiaries at the beginning of 2008 and communicated to 

the supervisory authorities involved. 2009 will see supervisory IRB 

assessments at those subsidiaries which are planning to start using 

the F-IRB in 2010. 

Measures have been initiated together with the two new 

subsidiaries in Kazakhstan and Ukraine to ensure step-by-step 

compliance with the standardised approach. 

In the area of operational risk, the AMA at UniCredit Bank Czech 

Republic a.s. was approved and on-site assessments took place in 

UniCredit Bank Slovakia a.s., UniCredit Bank Hungary Zrt. and 

UniCredit Banka Slovenija d.d. UniCredit Bank Czech Republic a.s. 

will use the AMA as from the beginning of 2009; approval for 

UniCredit Bank Slovakia a.s., UniCredit Bank Hungary Zrt. and 

UniCredit Banka Slovenija d.d. is planned to be obtained in the 

course of 2009. 

Following an implementation phase which lasted about five years, 

UniCredit Bank Austria AG has successfully completed work on 

meeting the legal requirements under the EU’s Capital 

Requirements Directive in connection with Basel II. In the next few 

years, in addition to ongoing compliance-related activities in 



UniCredit Bank Austria AG, the bank will roll out the quality 

standards for risk management instruments, reporting and 

compliance in the sub-group with a view to ensuring uniform Groupwide 

implementation and Group-wide consistency. 

2.3. Third-party guarantees 

Under Section 92 (9) of the Austrian Banking Act (BWG), 

“Privatstiftung zur Verwaltung von Anteilsrechten“ (“AV-Z 

Stiftung“) serves as deficiency guarantor for all liabilities of 

UniCredit Bank Austria AG in the event of the company’s 

insolvency. 

After the change in the legal form of Anteilsverwaltung- 

Zentralsparkasse into a private foundation (“AV-Z Stiftung“) in 2001, 

the Municipality of Vienna serves as deficiency guarantor for all 

outstanding liabilities, and obligations to pay future benefits, of 

UniCredit Bank Austria AG (then Bank Austria Aktiengesellschaft) 

which were entered into prior to and including 31 December 2001. 

2.4. Outlook for 2009 

The banking environment 

The global economy is in deep recession. After growth of 5% in 

2007 and over 3% in 2008, world GDP (at purchasing power 

parities) will stagnate for the first time in the post-war period. 

Economic growth in China and in the Asian emerging markets is 

expected to reach 5½% and 5%, respectively, which is a serious 

setback for these countries. The US economy has shown a 

downward trend since the end of 2007; recent indicators confirm 

that it continues to shrink, despite unprecedented rescue and 

support programmes. Economic performance in the euro area will 

decline by 2.3% in 2009, a development which also reflects the 

repercussions of the oil-price hike and the euro’s strength until 

summer 2008. At the beginning of 2009, the synchronous global 

downturn in manufacturing seen in the final quarter of 2008 is 

spilling over from key industries to all sectors of the economy, via 

demand for capital goods, employment, incomes and demand for 

consumer goods. It is not yet possible to say how far this 

development has progressed and at what point we are now. And it 

is not clear for how long we will have to expect further adverse 

impacts and valuation losses in financial markets. One of the few 

positive factors in this scenario is the pragmatic approach taken by 

economic policymakers and their readiness to intervene. 

The Austrian economy felt the full impact of the global economic 

downturn around the turn of the year, with the country-specific time 

lag. The rate of growth in Q4 2008 compared with the preceding 

quarter was negative, at – 0.2%, for the first time since the 

beginning of 2001. For the first quarter of 2009 we expect GDP to 

shrink by at least 1%. The volume of orders from abroad has fallen, 

which means that the first few months of 2009 may see a double- 

digit drop in exports compared with the previous year. Investment 

activity is also being reduced in view of the unfavourable 

international environment. We assume that Austria’s economic 

performance in 2009 will decline by 1.6%, after GDP growth of 1.8% 

in 2008. While there are currently no signs of a turnaround, we 

expect that economic activity will recover slightly towards the end of 

2009. Next year may see moderate growth of 0.7%. This scenario is 

based on hopes that the ECB, which has already eased its 

monetary policy, will continue to pursue this course with all 

instruments currently available or yet to be created, and that the 

Austrian government’s economic stimulus package will start to have 

tangible effects as the year progresses. The risk of an even sharper 

downturn is still higher than any risk of inflation. For the banking 

sector this means that the trends recorded in credit demand and 

savings deposits in the last few months of 2008 will intensify in 

2009. Credit demand will lose momentum, credit ratings will 

deteriorate, and there will be a shift from medium-term and longterm 

loans for investment projects to short-term loans. We assume 

that lending volume will decline due to lower demand. Bank 

deposits will grow at a slightly lower rate than in 2008, with the 

inflow of deposits from the business sector slowing down. As 

incomes grow more slowly and public awareness of the recession 

rises, the already high savings ratio will increase further, from 

12.3% to 13.1% in 2009. Given the uncertain market outlook, 

holdings of financial assets will continue to focus on short-term 

bank deposits and especially top-quality bond issues, entailing 

further structural adjustments in the area of mutual funds. 

For 2009 we forecast a 0.8% contraction of GDP for the entire 

region of Central and Eastern Europe, with major countries falling 

into recession. This development in Central European countries like 

Poland, the Czech Republic, Slovakia and Slovenia, which have 

been characterised by a relatively sound macroeconomic 

environment, will be driven mainly by a slowdown in external 

demand. South-East European countries, the Baltics and Hungary 

will have to cope with domestic weaknesses in addition to the global 

slowdown – i.e. high current account deficits and external 

indebtedness – which in the current environment further bleakens 

their short-term prospects as external financing is difficult to obtain 

and rather expensive. Kazakhstan, Russia and Ukraine will be 

affected by a lack of external funding, as well as by a fall in 

commodities prices due to the first two economies' dependence on 

energy production and Ukraine's reliance on steel. 

The banking system has a key role in the current environment as 

consumption and investment growth were in past years mainly 

financed through local bank loans to households and the corporate 

sector. Apart from macroeconomic factors, the local banking 

sectors differ in their external financing needs and the respective 

level of foreign exchange lending. Several measures have already 

been implemented by local governments and national banks, as 

well as by international institutions, in order to restore external and 

internal confidence in banks (e.g. by introducing deposit guarantee 

schemes), inject liquidity into the banking system and support 

economic growth. This is especially the case in Russia and 

Kazakhstan, where major initiatives have been taken by the local 

governments to support the banking sector, and in Ukraine, 

Hungary and Latvia, where the IMF's intervention has also been 

required. 

We expect all these measures to have an effect in the medium to 



long term, and the CEE region to start recovering in 2010, with GDP 

increasing by 2.7%. Turkey and the Czech Republic are in a 

relatively stronger position as their banking systems are less 

leveraged and have a lower share of foreign-currency loans to the 

private sector. These countries could benefit from a significant 

easing of monetary policy aimed at stimulating domestic demand, 

and they could record some recovery of economic growth already in 

the second half of 2009. Even if we had to again slightly reduce our 

forecasts, two positive factors remain: first, during both the upswing 

and cyclical downturn, the CEE region is performing better than 

West European countries. Second, the regional diversification of 

our subsidiaries is a major asset: we have a stronger presence in 

those countries where the economic downturn will be least 

pronounced. 

Growth and inflation in our core markets 

2007 2008 2009 2010 

Economic growth (real GDP, % change 

over previous year) 

CEE region 6.70% 4.30% -0.80% 2.70% 

CEE region, weighted*) 6.30% 3.80% -0.40% 2.60% 

Mature markets (I, G, A) 2.20% 0.50% -2.40% 0.70% 

Austria 

Inflation (annual average, % change over 

previous year) 

3.10% 1.80% -1.60% 0.70% 

CEE region 7.40% 11.30% 6.90% 6.50% 

CEE region, weighted*) 5.50% 8.50% 4.90% 4.50% 

Mature markets (I, G, A) 2.10% 2.90% 0.90% 1.90% 

Austria 2.20% 3.20% 0.90% 1.60% 

*) Average for CEE countries weighted by shares of our UniCredit 

banking subsidiaries. UniCredit Group forecasts as at February 

2009. 17 CEE countries including Poland. 

Outlook for Bank Austria’s performance in 2009 

The economic environment described above suggests that 2009 will 

be a very difficult year. Uncertainty about the economic outlook has 

increased until recently, and the volatility of recent financial market 

indicators does not provide a sound foundation on which to base 

expectations. It is not possible to say when the downturn will touch 

bottom and how strong its impact on credit demand, default risk and 

propensity to invest will be. The strain on the financial sector has 

not yet eased, and unpleasant surprises are possible at any time. 

Credit spreads demanded by the market – in respect of countries, 

companies and especially banks – rose again in the last few weeks 

of the reporting season, after having eased somewhat around the 

turn of the year. On the basis of available data, we cannot provide a 

sound forecast of results for 2009. 

Bank Austria – and the entire UniCredit Group – confirmed its longterm 

strategy on several occasions during the past year while 

adjusting its implementation to the new conditions. In view of the 

weak revenue trend expected in Austria, and as economic 

performance and revenue growth in CEE lose momentum, 

implementing the cross-regional business model is essential. Using 

a customer-focused, multi-local sales approach, we aim to enhance 

our competitiveness by bundling product know-how in international 

business. The planned transfer of UniCredit CAIB to HVB is to be 

seen in this light, a move which will create a strong provider of 

customer-oriented investment banking services of European 

stature. Bank Austria’s risk profile is thereby becoming focused on 

commercial banking. But we can also offer our large corporate 

customers effective solutions based on the capital market expertise 

of a major international player using economies of scale. We are 

also intensifying our efforts to create a cross-regional infrastructure 

for production within Global Banking Services, ranging from backoffice 

and administrative activities all the way to information and 

communication technology. This will help us unlock cost and 

revenue synergies from 2009 onwards. We further tightened cost 

management in several cost-reduction steps in 2008 and 2009 and 

thereby adjusted it to the revenue outlook. We will fully maintain our 

long-term commitment to CEE and gradually implement our 

divisional structure there. The slowdown in 2009 is a cyclical 

phenomenon while convergence of Eastern and Western Europe, 

European integration, is a structural process offering large potential 

for value creation in the medium term. 

3. Events after the balance sheet date 

In December 2008, UniCredit Bank Cayman Islands Ltd., 

Cayman Islands, returned its banking licence and filed an 

application to change its name. On 21 January 2009, the change of 

its name to Alpine Cayman Islands Ltd. was entered in the local 

register of companies. 

With effect from 1 January 2009, UniCredit Bank Austria AG 

transferred its equity interests in two wholly-owned companies – 

BA-CA Administration Services GmbH, Vienna, and Banking 

Transaction Services s.r.o., Prague, Czech Republic – to 

UniCredit Processes & Administration Società per Azioni, 

Cologno Monzese, Italy, a company wholly owned by UniCredit 

S.p.A, Rome, Italy, and received a 28.81 per cent shareholding 

interest in UniCredit Processes & Administration Società per Azioni. 

The objective is to reorganise and transfer back-office processes to 

Poland and Romania. 

With effect from 1 January 2009, UniCredit Global Leasing S.p.A., 

Milan, Italy, in which UniCredit Bank Austria AG held a 32.59 per 

cent interest and UniCredit S.p.A. held a 67.41 per cent interest, 

merged with Locat S.p.A, Bologna, Italy, the UniCredit Group’s 

Italian leasing company. At the same time, the absorbing company 

Locat S.p.A. was renamed UniCredit Leasing S.p.A. UniCredit 

Bank Austria AG now has a 31.01 per cent shareholding interest in 

that company. 

On 12 February 2009, the UniCredit Board of Directors 

� authorised Bank Austria, upon demand of the National 

Bank of Ukraine (NBU), to increase Ukrsotsbank’s capital 



resources by way of a capital increase and issues eligible 

for inclusion in Tier 2 capital totalling up to EUR 100 m. 

These capital measures are to be implemented in the first 

half of 2009; 

� authorised Bank Austria, upon demand of the Agency of 

the Republic of Kazakhstan on the Regulation and 

Supervision of the Financial Market and Financial 

Organisations (AFN), to increase the capital resources of 

JSC ATF Bank by way of a capital increase of up to EUR 

150 m. This capital measure is to be implemented in the 

first half of 2009; 

� authorised Bank Austria to acquire the remaining minority 

interests in UniCredit Bank Serbia JSC of 0.08 per cent. 

When completed, this measure will bring UniCredit Bank 

Austria AG’s shareholding interest to 100 per cent. 


Hampel 

(Chariman) 

Bernkopf Ghizzoni 

Müller 

Vivaldi Winkelmeier 

Zadrazil 


Financial Statements of UniCredit Bank Austria AG for 2008 

Financial Statements of UniCredit 

Bank Austria AG for 2008 

Balance Sheet at 31 December 2008 

Assets 


Change 

in € 1,000 in € 1,000 in € 1,000 in % 

1. Cash in hand and balances with central banks 1,213,852 832,052 381,800 45.9 

2. Treasury bills and other bills eligible for 

refinancing at central banks 

a) treasury bills and similar securities 

b) other bills eligible for refinancing 

at central banks 

3,090,683 2,183,160 907,523 41.6 

3,090,683 2,183,160 907,523 41.6 

--- --- --- --- 

3. Loans and advances to credit institutions 39,927,253 32,889,376 7,037,877 21.4 

a) repayable on demand 2,968,061 7,344,552 -4,376,491 -59.6 

b) other loans and advances 

4. Loans and 73,356,461 advances to customers 69,080,632 4,275,829 6.2 

36,959,192 25,544,824 11,414,368 44.7 

5. Bonds and other 

fixed-income securities 5,711,326 12,648,587 -6,937,261 -54.8 

a) issued by public borrowers 603,790 1,135,297 -531,507 -46.8 

b) issued by other borrowers 5,107,536 11,513,290 -6,405,754 -55.6 

of which: own bonds 

6. Shares and 494,079 other variable-yield 2,812,883 securities -2,318,804 -82.4 

1,535,405 321,511 1,213,894 >100 

7. Equity interests 2,819,044 3,030,702 -211,658 -7.0 

of which: in credit institutions 

261,717 237,109 24,608 10.4 

8. Shares in group companies 18,688,970 15,717,050 2,971,920 18.9 

of which: in credit institutions 

9,795,146 9,773,199 21,947 0.2 

9. Intangible127,981 fixed assets 202,600 -74,619 -36.8 

10. Tangible fixed assets 

of which: land and buildings used by the credit institution 

305,908 351,391 -45,483 -12.9 

for its own business operations 

171,646 224,162 -52,516 -23.4 

11. Own shares and 

shares in a controlling company --- 990 -990 -100.0 

Number of BA-CA shares 

--- 7,019 -7,019 -100.0 

Number of UniCredito S.p.A. shares 

--- --- --- --- 

Number of HVB shares 

--- --- --- --- 

12. Other assets 1,995,380 4,250,402 -2,255,022 -53.1 

13. Prepaid expenses 86,233 168,481 -82,248 -48.8 

147,817,170 144,168,306 3,648,864 2.5 


Liabilities and Shareholders' Equity 


Change 

in € 1,000 in € 1,000 in € 1,000 in % 

1. Amounts owed to credit institutions 48,801,717 47,801,358 1,000,359 2.1 

a) repayable on demand 2,171,443 7,429,769 -5,258,326 -70.8 

b) with agreed maturity dates or periods of notice 46,630,274 40,371,589 6,258,685 15.5 

2. Amounts owed to customers 49,184,358 51,599,377 -2,415,019 -4.7 

a) savings deposits 16,551,358 18,455,279 -1,903,921 -10.3 

aa) repayable on demand 3,793,879 4,693,466 -899,587 -19.2 

bb) with agreed maturity dates or periods of notice 12,757,479 13,761,813 -1,004,334 -7.3 

b) other liabilities 32,633,000 33,144,098 -511,098 -1.5 

aa) repayable on demand 17,661,644 17,276,028 385,616 2.2 

bb) with agreed maturity dates or periods of notice 14,971,356 15,868,070 -896,714 -5.7 

3. Debts evidenced by certificates 25,779,541 18,210,180 7,569,361 41.6 

a) bonds issued 13,346,696 10,940,803 2,405,893 22.0 

b) other debts evidenced by certificates 12,432,845 7,269,377 5,163,468 71.0 

4. Other liabilities 2,248,486 2,284,600 -36,114 -1.6 

5. Deferred income 46,619 40,028 6,591 16.5 

6. Provisions 3,603,323 3,690,094 -86,771 -2.4 

a) provisions for severance payments 245,675 274,079 -28,404 -10.4 

b) pension provisions 2,733,780 2,628,336 105,444 4.0 

c) provisions for taxes 65,300 65,300 

d) other 558,568 722,379 -163,811 -22.7 

6.A Special fund for general banking risks 935,562 2,453,815 -1,518,253 -61.9 

7. Subordinated liabilities 4,117,356 4,167,041 -49,685 -1.2 

8. Supplementary capital 516,314 528,984 -12,670 -2.4 

9. Subscribed capital 1,468,771 1,468,771 --- --- 

10. Capital reserves 7,546,970 7,546,970 --- --a) 

subject to legal restrictions 6,126,210 6,126,210 --- --- 

b) other 1,420,760 1,420,760 --- --- 

11. Revenue reserves 1,379,612 1,375,369 4,243 0.3 

a) for own shares and 

shares in a controlling company 

--- 990 -990 -100.0 

b) statutory reserve 14,535 14,535 --- --c) 

reserves provided for by the Articles of Association 

--- --- --- --- 

d) other reserves 1,365,077 1,359,844 5,233 0.4 

12. Reserve pursuant to Section 23 (6) 

of the Austrian Banking Act (BWG) 2,108,713 2,108,713 --- --- 

13. Accumulated profit 1,974 810,001 -808,027 -99.8 

14. Untaxed reserves 77,854 83,005 -5,151 -6.2 

a) valuation reserve resulting from special depreciation 77,854 83,005 -5,151 -6.2 

b) other untaxed reserves --- --- --- --- 

aa) investment reserve pursuant to Section 9 

of the Austrian Income Tax Act (EStG) 1988 --- --- --- --bb) 

investment allowance pursuant to Section 10 

of the Austrian Income Tax Act (EStG) 1988 --- --- --- --cc) 

rent reserve pursuant to Section 11 

of the Austrian Income Tax Act (EStG) 1988 --- --- --- --dd) 

reserve transferred pursuant to Section 12 

of the Austrian Income Tax Act (EStG) 1988 --- --- --- --- 

147,817,170 144,168,306 3,648,864 2.5 


Items shown below the Balance Sheet 

Assets 


Change 

in € 1,000 in € 1,000 in € 1,000 in % 

1. Foreign assets 51,355,647 73,298,933 -21,943,286 -29.9 

Liabilities and Shareholders' Equity 


Change 

in € 1,000 in € 1,000 in € 1,000 in % 

1. Contingent liabilities 14,206,757 14,040,019 166,738 1.2 

of which: 

a) acceptances and 

endorsements --- --- --- --b) 

guarantees and assets pledged as 

collateral security 

14,206,757 14,040,019 166,738 1.2 

2. Commitments 5,490,802 5,015,784 475,018 9.5 

of which: commitments arising from repurchase agreements 

7,267 209,084 -201,817 -96.5 

3. Liabilities arising 1,239 from transactions 52,457on a trust basis -51,218 -97.6 

4. Eligible capital pursuant to Section 23 para. 14 15,028,325 17,969,312 -2,940,987 -16.4 

of which: Own funds pursuant to Section 23 para. 14 no. 7 

230,072 494,321 -264,249 -53.5 

5. Capital requirement pursuant to Section 22 para. 1 6,202,304 6,406,444 -204,140 -3.2 

of which: Capital requirement pursuant to Section 22 para. 1 nos. 1 

and 4 

6. Foreign23,503,764 liabilities 49,226,607 -25,722,843 -52.3 

5,744,167 5,912,123 -167,956 -2.8 


Profit and Loss Account for the 

year ended 31 December 2008 

2008 *) 2007 

Change 

in € 1,000 in € 1,000 in € 1,000 in % 

1. Interest and similar income 5,817,162 5,461,051 356,111 6.5 

of which: from fixed-income securities 

551,909 778,706 -226,797 -29.1 

2. Interest and similar expenses -4,777,855 -4,045,358 732,497 18.1 

I. NET INTEREST INCOME 1,039,307 1,415,693 -376,386 -26.6 

3. Income from securities and equity interests 889,752 1,174,110 -284,358 -24.2 

a) income from shares, other ownership interests and 

variable-yield securities 481,235 78,137 403,098 >100,0 

b) income from equity interests 18,509 17,296 1,213 7.0 

c) income from shares in group companies 

390,008 1,078,677 -688,669 -63.8 

Net fee and commission income 

(sub-total of items 4 and 5) 

688,174 852,865 -164,691 -19.3 

4. Fee and commission income 885,414 1,030,504 -145,090 -14.1 

5. Fee and commission expenses -197,240 -177,639 19,601 11.0 

6. Net profit on trading activities -270,507 -122,205 148,302 >100,0 

7. Other operating income 129,570 120,549 9,021 7.5 

II. OPERATING INCOME 2,476,296 3,441,012 -964,716 -28.0 

8. General administrative expenses -1,592,942 -1,513,770 79,172 5.2 

a) staff costs -925,159 -832,960 92,199 11.1 

wages and salaries -448,002 -471,580 -23,578 -5.0 

expenses for statutory social-security contributions 

and compulsory contributions related to 

wages and salaries 

-103,807 -107,425 -3,618 -3.4 

other employee benefits -14,420 -12,270 2,150 17.5 

expenses for retirement 

benefits -237,800 -193,987 43,813 22.6 

allocation to the pension provision -89,004 -2,845 86,159 >100,0 

expenses for severance payments 

and payments to severance-payment funds 

-32,126 -44,853 -12,727 -28.4 

b) other administrative expenses -667,783 -680,810 -13,027 -1.9 

9. Depreciation and amortisation 

of asset items 9 and 10 -73,642 -82,497 -8,855 -10.7 

10. Other operating expenses -100,125 -149,910 -49,785 -33.2 

III. OPERATING EXPENSES -1,766,709 -1,746,177 20,532 1.2 

IV. OPERATING RESULTS 709,587 1,694,835 -985,248 -58.1 


11./12. Net income/expenses from the disposal and 

valuation of loans and advances, securities 

2008 *) 2007 

Change 

in € 1,000 in € 1,000 in € 1,000 in % 

as well as contingent liabilities and commitments -165,093 -56,468 108,625 >100,0 

13./14. Net income/expenses from the disposal and 

valuation of securities valued as financial 

fixed assets, and of shares in group companies 

and equity Interests -2,066,391 -169,280 1,897,111 >100,0 

V. RESULTS FROM ORDINARY BUSINESS ACTIVITIES -1,521,897 1,469,087 -2,990,984 >100,0 

15. Extraordinary income 1,518,252 --- 1,518,252 

of which: release to special fund for general banking risks 1,518,252 --- 1,518,252 

16. Extraordinary expenses --- -303,738 303,738 100.0 

of which: allocation to special fund for general banking risks --- -303,738 303,738 100.0 

17. Extraordinary results 1,518,252 -303,738 1,821,990 >100,0 

(sub-total of items 15 and 16) 

18. Taxes on income 3,154 -7,671 10,825 >100,0 

19. Other taxes not included under item 18 591 4,656 -4,065 -87.3 

VI. ANNUAL SURPLUS 100 1,162,334 -1,162,234 -100.0 

20. Movements in reserves --- -354,649 354,649 100.0 

VII. PROFIT FOR THE YEAR 100 807,685 -807,585 -100.0 

21. Profit brought forward from previous year 1,874 2,316 -442 -19.1 

VIII. ACCUMULATED PROFIT 1,974 810,001 -808,027 -99.8 

'*) due to the carve-out of the trading activities into UniCredit CAIB AG the figures for 2008 include only the related results for the first six 

months. 


Notes to the balance sheet 

Notes to the Financial Statements 

1. General information 

On 27 September 2008, the company name Bank Austria 

Creditanstalt AG was changed to UniCredit Bank Austria AG. The 

company's new address is Schottengasse 6-8, A-1010 Vienna, 

Austria. 

The financial statements of UniCredit Bank Austria AG for the 2008 

financial year were prepared pursuant to the provisions of the 

Austrian Commercial Code (Unternehmensgesetzbuch – UGB) in 

its currently applicable version and in compliance with the rules of 

the Austrian Banking Act (Bankwesengesetz – BWG) and the 

Austrian Joint Stock Companies Act (Aktiengesetz – AktG) that 

are applicable to credit institutions. The formats of the balance 

sheet and of the profit and loss account comply with the forms in 

Annex 2 to Section 43 of the Austrian Banking Act. 

As the securities issued by UniCredit Bank Austria AG are admitted 

for trading on a regulated exchange in the European Union, 

UniCredit Bank Austria AG prepares its consolidated financial 

statements as a credit institution in accordance with International 

Financial Reporting Standards (IFRSs). The consolidated financial 

statements are published on the Internet (www.bankaustria.at). 

UniCredit Bank Austria AG is a subsidiary included in the 

consolidated financial statements of UniCredit S.p.A. 

The consolidated financial statements prepared by the Group’s 

parent company are published at the following address: UniCredit 

S.p.A., registered office: Via A. Specchi 16, 00100 Rome, Italy. 

They are published on the Internet at www.unicreditgroup.eu. 

In the third quarter of 2008, the supervisory authorities approved 

the transfer of the trading activities of UniCredit Bank Austria AG to 

UniCredit CAIB AG, Vienna, and the transfer was entered in the 

Register of Firms. UniCredit CAIB AG has consequently conducted 

all trading activities in the markets for fixed-income securities, 

currencies, loans and shares with effect from 1 October 2008, and 

it has replaced Bank Austria as the legal entity previously 

responsible for such trading activities. 

Effects resulting from the transfer of the trading activities of 

UniCredit Bank Austria AG to UniCredit CAIB AG, Vienna 

The net effect from the transfer of assets and liabilities to UniCredit 

CAIB AG and funding and reinvestment was EUR 12.4 bn and is 

broken down in the following table: 

Effects resulting from the transfer of the trading activities of UniCredit Bank Austria AG 

to UniCredit CAIB AG, Vienna: 

Amounts in EUR m 30 June 2008 1 July 2008 

Bank Austria - Annual Financial Statements 2008 156 

Net effect of 

transfer 

Total assets of UniCredit Bank Austria AG 158,971 146,612 -12,359 

Assets 

Loans and advances to credit institutions (item 3) 43,921 41,077 -2,845 

Loans and advances to customers (item 4) 71,556 71,132 -424 

Securities including shares (items 2, 5 and 6) 17,146 8,324 -8,822 

Equity interests and shares in group companies (items 7 and 8) 21,127 22,967 1,839 

Other asset items 5,22 3,112 -2,108 

Liabilities and equity 

Amounts owed to credit institutions (item 1) 58,081 47,175 -10,906 

Amounts owed to customers (item 2) 52,337 51,438 -899 

Debts evidenced by certificates (items 3, 7 and 8) 25,781 25,69 -91 

Other liabilities items 6,68 6,218 -462 

Fund for general banking risks 2,454 2,454 

Equity and profit 13,638 13,637 -1 

2. Accounting and valuation methods 

158,971 146,612 -12,359 

2.1. General rule 

The financial statements were prepared on the basis of generally 

accepted accounting principles and in compliance with the general 

requirement of giving a true and fair view of the company’s assets 

and liabilities, its financial position and results. Assets and liabilities 

were valued in accordance with the principle of individual valuation 

on a going concern basis. The principle of prudence was observed 

with due regard to the special characteristics of banking business 

operations. 

2.2. Accounting and valuation methods 

2.2.1. Foreign currency translation 

Assets and liabilities denominated in foreign currencies were stated 

in the balance sheet at the European Central Bank’s reference 

rates as at 31 December 2008. Expenses and income in foreign 

currencies were translated at the ECB’s end-of-month reference 

rates. The euro denominations were translated as at 1 January 

2002 at the rates fixed on 31 December 1998. Forward transactions 

that had not been settled at the balance sheet date were translated 

at the forward rate. 

2.2.2. Loans and advances 

Provisions were made for identifiable lending risks. To the extent 

that it was possible to combine individual risk assets into groups, 

provisions were made on a portfolio basis. 

2.2.3. Securities 

Securities intended to be held as long-term investments were 

valued at cost. Use was made of the optional rule contained in 

Section 56 (2) and (3) of the Austrian Banking Act (spreading 

premiums/discounts in the profit and loss account over the period 

to maturity). The relevant amounts of premiums and discounts are 

indicated in item 4 of the notes to the balance sheet (4.6. 

Differences between cost and repayable amount of bonds and 

other fixed-income securities). 

Securities held in the trading book were marked to market. Other 

securities held as current assetswere valued at cost or market, 

whichever was lower. Own issues that were repurchased were 

stated in the balance sheet at average cost.

Details are given in item 4 of the notes to the balance sheet (4.7. 

Differences between cost and market value of securities admitted 

to trading on an exchange which are not held as financial fixed 

assets). 

2.2.4. Equity interests and shares in group companies 

Equity interests and shares in group companies were stated at 

cost. In the case of permanent diminutions in value, writedowns 

were made in respect of listed and unlisted companies. 

Impairment test 

The recognised goodwill relating to equity interests in CEE was 

tested for impairment in the fourth quarter of 2008. For this purpose 

the recoverable amount was compared with the respective carrying 

amount. 

The recoverable amount is determined on the basis of the value in 

use. Value in use is calculated using a discounted cash flow model, 

more specifically a dividend discount model (DDM) adjusted to the 

specific characteristics of banking business and regulatory capital 

requirements. 

The DDM model used in the entire UniCredit Group takes account 

of 3 phases: 

Phase 1 (2009–2011) is based on the current budget for 2009 and 

the projection figures in the 3-Year Plan, which were originally 

adopted by management in June 2008 and revised in response to 

the financial crisis. 

Phase 2 (2011/12–2017): Proceeding from strong business growth 

which may be achieved depending on the respective market 

potential, an adjustment of growth potential to EU averages is 

made towards the end of phase 2. 

Phase 3: Calculation of the present value of a perpetual annuity on 

the assumption of a long-term growth rate which takes sustained 

long-term economic growth and the inflation rate into account. 

The expected cash flows are discounted at the country-specific rate 

of cost of capital, which is determined on the basis of the long-term 

risk-free interest rate of the local currency, the UniCredit Group 

debt risk premium and UniCredit equity risk premium, and the 

specific country risk premium. 

The country-specific rate of cost of capital in Phase 1 is between 

9.1% in the euro area (Slovenia, Slovakia) and 25.9% for Ukraine. 

The rate of cost of capital for Kazakhstan is 21%. From Phase 2, 

the rates are gradually adjusted to the 11.5% rate of cost of capital 

used as a standard rate in Phase 3. 

After 2008, the economic environment will remain difficult in 2009. 

The projections for 2010 to 2013 are based on expectations of 

strong growth in volume and profits. According to these projections, 

profit growth in Ukraine in 2011 is expected to reach 44.8%, 

thereafter declining slightly to 38.3% in 2013. In Kazakhstan, profit 

growth in 2011 is forecast to be 37.2%, with a subsequent 

slowdown to 29.2 % in 2013. In subsequent years, the growth rates 

are gradually adjusted to long-term growth opportunities in the EU 

area (2% – Phase 3, basis for perpetual annuity). 

For model plausibility purposes, an external valuation of our 

banking subsidiaries in Ukraine and Kazakhstan was carried out in 

conformity with IAS 36, which arrived at the same company value in 

Ukraine and at a higher company value (+4.5%) in Kazakhstan. 

2.2.5. Intangible assets 

Intangible assets were valued at cost. The rate of amortisation 

applied to computer software was between 16.67% p.a. and 25% 

p.a., in line with its ordinary useful life. 

2.2.6. Tangible fixed assets 

Land, buildings and office furniture and equipment were stated at 

cost. The rate of depreciation applied to buildings was between 

1.49% p.a. and 5% p.a. and for furniture and equipment between 

10% p.a. and 25% p.a., in line with their ordinary useful lives. 

2.2.7. Low-value assets 

Low-value assets were fully depreciated in the year of acquisition. 

2.2.8. Derivatives 

Derivatives in the banking book were recognised at amortised cost. 

Derivatives assigned to the trading book were marked to market. 

To the extent that derivatives were interest-rate hedging 

transactions, related income was included in net interest income. 

2.2.9. Liabilities 

Liabilities were stated in the balance sheet at the repayable 

amount. Premiums and discounts in connection with own issues 

are spread over the period to maturity. 

2.2.10. Provisions 

Provisions were recognised in the amount required pursuant to 

generally accepted accounting principles. 

Provisions for severance payments and pensions 

Provisions for pension obligations and severance-payment 

obligations are recognised pursuant to the Chamber of Public 

Accountants' expert opinions KFS – RL 2 and 3, using the 

projected unit credit method in accordance with IAS 19. Pursuant to 

the corridor method, that part of the actuarial gains and losses 

which relates to the respective provisions and exceeds the corridor 

is spread over the average remaining period of service of the 

employees concerned and recognised as an expense. 

As at 1 May 2007, the internal service agreement on the Bank 

Austria pension equivalent (ASVG equivalent) was adjusted to 

changes in the legal environment – in particular, by raising the 

minimum retirement age, introducing specific reductions and 

reducing widows’ pensions. 

Under a commitment to provide defined benefits, UniCredit Bank 

Austria AG continues to recognise a pension provision for the 

entitlements of employees who retired before the pension reform as 

at 31 December 1999 became effective, and – as a special feature 

of UniCredit Bank Austria AG’s staff regulations – for the future 

benefits equivalent to those under mandatory insurance, earned by 

active employees and pensioners for whom UniCredit Bank Austria 

AG has assumed the obligations of the mandatory insurance 

scheme pursuant to Section 5 of the Austrian General Social 

Security Act (ASVG). 


The following are also covered by the provision: 

– disability risk and rights to future benefits based on early 

retirement and pension entitlements of surviving dependants, 

less reimbursement from the pension funds, 

– pension entitlements based on direct benefit commitments 

contained in individual employment contracts, and 

– rights to future benefits relating to additional pension payments 

for employees performing manual work. 

The present value of pension obligations and severance-payment 

obligations and of anniversary bonuses is determined with due 

regard to internal service regulations, on the basis of the following 

actuarial assumptions: 

– Discount rate: 5.75% p.a. (2007: 5.25% p.a.) 

– Increases under collective bargaining agreements: 2.80% p.a. 

(2007: 2.45% p.a.) (assumption of increases for employees and 

pensioners) 

– Career trends including regular salary increases under the current 

collective bargaining agreement for employees of Austrian banks 

and the effects of the transitional rules under the 2005 reform of 

UniCredit Bank Austria AG’s service regulations. The rate 

applied in calculating non-regular salary increases was 0.25% 

p.a. (2007: 0.25% p.a.). (Assumption of increases for 

employees.) 

– No discount for staff turnover 

– Retirement age: for employees enjoying “permanent tenure” 

status under the internal services regulations on the payment of 

a Bank Austria pension equivalent to a mandatory social-security 

pension, dated 30 December 1999 (as amended on 1 May 

2007), the retirement age is 60 for men and 55 for women, with 

the transition to the retirement age of 65 being taken into 

account. For all other staff members the new retirement age of 

65 – for both men and women – under the applicable rules (2003 

Pension Reform) was taken into account, with the transitional 

rules of the 2003 Pension Reform. If the corridor pension rule 

results in a lower retirement age, the lower age was used as 

retirement age. 

– 2008 P statistical tables for salaried staff (Aktuarverein 

Österreich, life expectancy tables for salaried staff) 

No provisions are made for defined-contribution plans. Payments 

agreed to be made to a pension fund for defined-contribution plans 

are recognised as an expense. 

3. Changes in accounting and valuation methods, 

reclassifications 

No changes in accounting and valuation methods were made 

compared with the previous year. 


4. Notes to the balance sheet 

4.1. Breakdown by maturity 

Breakdown by maturity 

Loans and advances to credit institutions 

4.2. Assets and liabilities denominated in foreign currencies 

As at 31 December 2008, foreign currency assets amounted to 

EUR 34,077,555,591.56 or 22.89% of total assets (31 December 

2007: EUR 30,864,530 thsd or 21.41% of total assets). 


(in EUR) (in EUR thsd) 

up to three months 18,461,472,441.27 9,588,357 

over three months and up to one year 7,095,007,981.71 5,090,711 

over one year and up to five years 6,492,570,836.12 8,573,470 

over five years 4,910,140,458.15 2,292,286 

Loans and advances to customers 





Amounts owed to credit institutions 

Amounts owed to customers 





a) Savings deposits *) 





b) Other amounts owed to customers 



over one year and up to five years 1,145,129,810.90 909,578 


Other debts evidenced by certificates 

up to three months 890,150,705.72 1,780,975 

over three months and up to one year 951,958,110.30 451,149 



*) For savings deposits, the expected deposit period was used as the remaining period pursuant to 

Section 25 of the Austrian Banking Act. Recognised statistical methods were used for the calculation. 

Foreign currency liabilities amounted to EUR 34,156,700,220.23 or 

22.94% of the balance sheet total 

(31 December 2007: EUR 30,943,697 thsd or 21.46% of the 

balance sheet total). 


4.3. Loans and advances to, and amounts owed to, group 

companies and companies in which an equity interest is held 

Loans and advances 

4.4. Group companies and companies in which an equity 

interest is held 

Those companies in which UniCredit Bank Austria AG holds at 

least 20% of the share capital – directly or through group 

companies – are listed in the notes to the financial statements 

(Annex 1) pursuant to Section 238, item 2, of the Austrian 

Commercial Code. 

Most of the business relations with group companies were 

customary banking relationships. 

Equity capital substitutes were used for some financings. 

At the balance sheet date, UniCredit Bank Austria AG maintained 

single entity agreements for tax purposes with the following 

companies: 

� Asset Management GmbH 

� BA-CA Administration Services GmbH 

� BA Betriebsobjekte GmbH 

� BACA Immobilien Entwicklungs- und Verwertungs GmbH 

� BA-CA Markets & Investment Beteiligung GmbH 

� Bank Austria Finanzservice GmbH 

� Bank Austria Real Invest GmbH 

� Bank Austria Creditanstalt Wohnbaubank AG 

� Bank Austria Trade Service GmbH 

� BANKPRIVAT AG 

� CABET Holding AG 

� DOMUS Facility Management GmbH 

� HYPERION Immobilienvermietungsgesellschaft m.b.H. 

� Industrie-Immobilien-Verwaltung GmbH 

� Lassallestraße Bau-, Planungs- und Errichtungs GmbH 

� Human Resources Service and Development GmbH 

(previously Manfred Handbüchler GmbH) 

� MC Marketing GmbH 

� MY Beteiligungs GmbH 

31 Dec. 2008 31 Dec. 2007 31 Dec. 2008 31 Dec. 2007 31 Dec. 2008 

(in EUR) (in EUR thsd) (in EUR) (in EUR thsd) (in EUR) 

Loans and advances to credit institutions 34,596,103,803.00 15,446,940 652,811,988.00 783,206 0.00 

Loans and advances to customers 7,603,409,026.00 6,258,227 65,478,570.00 196,419 4,094,104.78 

Bonds and other fixed-income 

securities 2,549,346,629.67 1,368,441 96,183,959.02 72,771 0.00 

Amounts owed 

Group companies 

Companies in which an 

equity interest is held 

Key management 

personnel 

Amounts owed to credit institutions 26,088,025,482.00 13,455,456 13,432,923,960.00 11,908,376 0.00 

Amounts owed to customers 1,740,662,481.00 1,576,401 301,326,777.00 205,742 11,323,144.95 

� RE St.Marx Holding GmbH 

� card complete Service Bank AG (previously VISA-SERVICE 

Kreditkarten Aktiengesellschaft) 

� WAVE Solutions Informations Technology GmbH 

� Z Leasing POLLUX Immobilien Leasing GmbH 

� Z Leasing RIGEL Immobilien Leasing GmbH 

� Z Leasing SIRIUS Immobilien Leasing GmbH 

� ZETA Fünf Handels GmbH 

4.5. Securities 

Of UniCredit Bank Austria AG's total holdings of securities as at 31 

December 2008, financial fixed assets accounted for EUR 

5,445,146,145.67 (31 December 2007: EUR 6,907,266 thsd) and 

current assets including the trading portfolio accounted for EUR 

5,569,953,760.30 (31 December 2007: EUR 12,531,136 thsd). 


4.5.1. The following breakdown shows securities admitted to 

trading on an exchange 

4.5.2. The following table shows securities admitted to trading 

on an exchange, broken down into fixed (long-term) and 

current assets: 

The classification pursuant to Section 64 (1) 11 of the Austrian 

Banking Act is based on resolutions adopted by the Management 

Board. 

4.5.3. Financial instruments carried as financial fixed assets 

for which the carrying amounts are higher than their fair 

values (Section 237a (1) 2 of the Austrian Commercial Code): 

All of the unrecognised losses arising on bonds and shares resulted 

from market price fluctuations. 

There was no indication of a sustained deterioration in the issuers’ 

creditworthiness. 

31 Dec. 2008 31 Dec. 2007 31 Dec. 2008 31 Dec. 2007 

(in EUR) (in EUR thsd) (in EUR) (in EUR thsd) 

Bonds and other fixed-income securities 2,129,230,713.63 3,131,998 3,582,094,793.57 9,516,589 

Shares and other variable-yield securities 0.00 26,306 26,613,633.64 196,028 

Total 2,129,230,713.63 3,158,304 3,608,708,427.21 9,712,617 

Treasury bills and similar securities 

Bonds and other fixed-income securities 

Shares and other variable-yield securities 

Equity interests 

Shares in group companies 

Listed Not listed 

31 Dec. 2008 31 Dec. 2007 31 Dec. 2008 31 Dec. 2007 

(in EUR) (in EUR thsd) (in EUR) (in EUR thsd) 

Bonds and other fixed-income securities 1,537,462,452.34 9,484,520 4,173,863,054.85 3,164,067 

Shares and other variable-yield securities 22,832,358.35 114.485 3,781,275.29 107.849 

Equity interests 293,127,109.70 286.540 0.00 0 

Shares in group companies 4,111,582,926.70 3,860,713 0.00 0 

Total 5,965,004,847.09 13,746,258 4,177,644,330.14 3,271,916 

Fixed assets Current assets 

Book value Unrecognised losses Book value Unrecognised losses 

31 Dec. 2008 31 Dec. 2008 31 Dec. 2007 31 Dec. 2007 

(in EUR) (in EUR) (in EUR thsd) (in EUR thsd) 

2,747,956,606.36 -13,399,513.66 746,561 -8,187 

2,129,230,713.61 -36,843,695.53 1,076,405 -33,372 

127,822,970.30 0.00 9,019 -872 

232,761,360.90 -168,522,696.04 200,837 -67,198 

- - - - 


4.6. Differences between cost and repayable amount of bonds 

and other fixed-income securities 

In the case of bonds and other fixed-income securities which are 

held as financial fixed assets and for which cost exceeds the 

amount repayable, the difference is amortised over the period to 

maturity pursuant to Section 56 (2) of the Austrian Banking Act. At 

year-end, the difference to be amortised over the remaining 

maturity amounted to EUR 29,596,178.43 (31 December 2007: 

EUR 33,284 thsd). 

In the case of bonds and other fixed-income securities which are 

held as financial fixed assets and for which cost is lower than the 

amount repayable, a write-up is made for the difference over the 

period to maturity pursuant to Section 56 (3) of the Austrian 

Banking Act. Until the balance sheet date, write-ups made in 

respect of such differences amounted to EUR 8,967,590.20 (31 

December 2007: EUR 8,299 thsd). 

4.7. Differences between cost and market value of securities 

admitted to trading on an exchange which are not held as 

financial fixed assets 

As at 31 December 2008, the market value of securities held in the 

trading portfolio and marked to market was EUR 7,388,956.29 (31 

December 2007: EUR 26,478 thsd) higher than cost. 

At the balance sheet date, the market value of listed securities held 

to comply with liquidity requirements was EUR 27,279,450.33 (31 

December 2007: EUR 70,392 thsd) higher than the carrying 

amount. 

4.8. Bonds becoming due in the subsequent year 

Assets held in the form of bonds and other fixed-income securities 

in the amount of EUR 1,193,984,846.15 (31 December 2007: EUR 

1,177,707 thsd) will become due in 2009. Of the bonds issued, 

securities in the amount of EUR 2,876,470,341.83 (31 December 

2007: EUR 2,109,978 thsd) will become due in 2009. 

4.9. Securities held in the trading book 

In the 2008 financial year, UniCredit Bank Austria AG maintained a 

trading book within the meaning of Section 22n-q of the Austrian 

Banking Act. The volume of the trading book after the transfer of 

trading activities to UniCredit CAIB AG amounted to EUR 

125,696,483,818.80 (31 December 2007: EUR 1,663,059,450 

thsd). Of this total, securities carried in the balance sheet 

accounted for EUR 307,166,863.68 (31 December 2007: EUR 

9,112,518 thsd), money market instruments placed and taken were 

EUR 16,639,772,365.34 (31 December 2007: EUR 57,155,331 

thsd), and other financial instruments accounted for EUR 

108,749,544,589.08 (31 December 2007: EUR 1,596,791,602 

thsd). 

Securities and money market instruments were included at book 

value, and other financial instruments (financial derivatives) at the 

notional amounts. The inclusion of financial derivatives complies 

with the reporting guideline applicable to VERA (Report on 

Condition and Income), under which interest rate swaps and 

currency swaps as well as forward foreign exchange transactions 

are to be reported as assets or liabilities. Compared with 

transaction-based inclusion, this results in an additional volume of 

EUR 27,108,642,094.86. 

4.10. Own shares 

As part of our securities business with customers, we purchased 

202,228 UniCredit Bank Austria AG ordinary shares at an average 

price of EUR 140.21 and sold 209,247 shares at an average 

price of EUR 139.98. 

As at 31 December 2008, UniCredit Bank Austria AG held no 

shares in UniCredit Bank Austria AG (31 December 2007: 7,019 

shares). 

4.11. Shares in a controlling company 

As part of our securities business with customers, we purchased 

2,761,749 Unicredit S.p.A. ordinary shares at an average price of 

EUR 4.83 and sold, or transferred to UniCredit CAIB AG, 2,761,749 

shares at an average price of EUR 4.83. 

At the balance sheet date, we did not hold any UniCredit S.p.A. 

shares. 

4.12. Repurchased own subordinated bonds and 

supplementary capital 

At the balance sheet date, UniCredit Bank Austria AG’s own 

portfolio included subordinated bonds issued by the bank itself with 

a total carrying amount of EUR 3,499,316.36 (31 December 2007: 

EUR 7,189 thsd), and no supplementary capital (31 December 

2007: EUR 2,380 thsd). 

4.13. Trust transactions 

The balance sheet items “Loans and advances to customers”, 

“Amounts owed to credit institutions” and “Amounts owed to 

customers” included trust transactions totalling EUR 

501,188,112.19 (31 December 2007: EUR 527,252 thsd) in respect 

of which there is no right of separation in the event of insolvency. 

4.14. Assets sold under repurchase agreements 

As at 31 December 2008, the book value of assets transferred 

under repurchase agreements was EUR 570,051,062.49 (31 

December 2007: EUR 2,116,922 thsd). The relevant assets 

continue to be recognised as assets, the consideration received is 

included in liabilities. 


4.15. Subordinated assets 

Loans and advances to credit institutions 

of which: equity interests 

of which: group companies 

Loans and advances to customers 



Bonds and other fixed-income securities 



4.16. Intangible fixed assets and tangible fixed assets 

The item “Intangible fixed assets” includes software in the amount 

of EUR 25,748,096.90 (2007: 

EUR 35,241 thsd) which was acquired from a group company. At 

the balance sheet date, the land value of property was EUR 

72,465,530.12 (31 December 2007: EUR 77,037 thsd). 

Movements in fixed assets of UniCredit Bank Austria AG 

Cost (in EUR) 

31 Dec. 2007 Additions Disposals Transfers 31 Dec. 2008 

Securities 6,372,016,712.20 1,579,068,657.20 2,834,309,185.49 0.00 5,116,776,183.91 

Equity interests 3,110,392,358.77 181,016,353.58 6,983,380.88 4,680,373.70 3,289,105,705.17 

Shares in 

group companies 16,936,721,199.96 4,836,291,468,94 857,597,883.32 -4,680,373.70 20,910,734,411.88 

Intangible 

fixed assets 683,938,005.00 29,225,039.70 232,839,036.43 0.00 480,324,008.27 

Tangible fixed assets 

a) Land and buildings 335,076,284.53 6,470,624.13 93,146,645.61 134,875.43 248,535,138.48 

b) Other tangible fixed assets 447,521,043.28 36,052,185.91 24,030,784.06 -134,875.43 459,407,569.70 

Totals 27,885,665,603.74 6,668,124,329.46 4,048,906,915.79 0.00 30,504,883,017.41 

Carrying value (in EUR) 

Write-ups 

Accumulated 

write-downs/ 

depreciation 

Carrying value 


Carrying value 

31 Dec. 2007 

Write-downs/ 

depreciation 

in 2008 

Securities -33,665,893.64 1) 0.00 5,083,110,290.27 6,331,939,895.82 0.00 

Equity interests 198,358.58 470,259,323.22 2,819,044,740.53 3,030,702,452.49 390,691,508.38 

Shares in 

group companies 0.00 2,221,765,875.63 18,688,968,536.25 15,717,050,228.60 1,241,658,360.79 

Intangible 

fixed assets 0.00 352,342,976.12 127,981,032.15 202,600,017.74 40,360,576.29 

Tangible fixed assets 

a) Land and buildings 0.00 64,329,685.75 184,205,452.73 237,288,942.34 5,483,108.72 

b) Other tangible fixed assets 7,615.56 337,712,537.94 121,702,647.32 114,101,792.06 27,798,742.98 

Totals -33,459,919.50 3,446,410,398.66 27,025,012,699.25 25,633,683,329.05 1,705,992,297.16 

1) Premiums/discounts are spread over the period to maturity. 



1,512,794,028.74 1,296,431 

2,447,758.35 1.817 

1,483,196,270.39 1,279,665 

504,735,392.50 384.201 

637,452.95 716 

285,541,718.42 250,587 

74,826,604.73 691,186 

0.00 0 

5,683,815.47 8,560 


4.17. Movements in fixed assets 

Equity interests include those silent holdings which are recognised 

in the item “Loans and advances to customers”. Securities 

comprise those included in the items “Treasury bills and other bills 

eligible for refinancing at central banks”, “Bonds and other fixedincome 

securities”, and “Shares and other variable-yield securities”. 

Movements in fixed assets are shown in Annex 2 at the end of the 

notes to the financial statements. 

4.18. Leasing activities 

While UniCredit Bank Austria AG was not directly active as lessor 

in the leasing business in 2008, its activities included the extension 

of loans to leasing companies. 

4.19. Total expenses for the use of tangible fixed assets not 

carried as assets 

Obligations arising from the use of tangible fixed assets not carried 

as assets in the balance sheet (under leasing and rent agreements) 

which will become due in the subsequent period and in the 

subsequent five years are indicated in the table below: 

Obligations under leasing and rent agreements 



for the subsequent business year 71,912,382.13 76,473 

for the subsequent five business years 343,218,037.08 394,219 

4.20. Other assets 

4.20.1. Other assets 

This item includes positive or negative fair values, both reflected 

and not reflected in income, in the amount of EUR 

1,121,930,804.36 (31 December 2007: EUR 3,192,447 thsd) from 

derivative products. 

Dividends receivable from group companies with which there are 

profit pooling arrangements totalled EUR 379,840,321.74 (31 


Claims against the Austrian tax office for companies (Finanzamt für 

Körperschaften) totalled EUR 198,178,374.13 (31 December 2007: 

EUR 107,851 thsd). 

Other assets also include accrued interest and fees and 

commissions, in the amount of EUR 17,920,153.29 (31 December 

2007: EUR 29,119 thsd). 

4.20.2. Deferred expenses 

Deferred expenses include the difference of EUR 11,972,086.00 

(31 December 2007: EUR 23,952 thsd) resulting from the 

conversion of the company pension scheme financing system in 

1999 to a defined-contribution pension fund, spread over ten years 

and recognised as an expense on this basis. 

An advance rent payment of EUR 38,356,022.32 (31 December 

2007: EUR 40,258 thsd) for the property in Lassallestrasse 5, 1020 

Vienna, and advance rent payments of EUR 15,013,081.79 

(31 December 2007: EUR 17,287 thsd) for various properties are 

also included in this item. 

4.21. Other liabilities 

This item includes positive or negative fair values, both reflected 

and not reflected in income, in the amount of EUR 

1,431,776,904.63 (31 December 2007: EUR 2,018,521 thsd) from 

derivative products. 

Liabilities resulting from the settlement of Austrian capital yields tax 

(Kapitalertragsteuer – KESt) totalled EUR 32,405,051.25 (31 


Liabilities arising from short positions amounted to EUR 42,600.00 

(31 December 2007: EUR 55,408 thsd). 

Other liabilities also include accrued expenses in the amount of 

EUR 13,508,000.00 (31 December 2007: EUR 15,103 thsd). 

The item also comprises liabilities of EUR 598,907,346.59 (31 

December 2007: EUR 0) from the assumption of losses, of which 

EUR 598,309,353.51 relate to BA-CA Markets & Investment 

Beteiligung GmbH. 

4.22. Provisions 

4.22.1. Provisions for pensions and severance payments 

The discount rate applied in 2008 was 5.75%. The valuation of 

provisions results in a deficit of EUR 487,566,000.00 (2007: EUR 

584,700 thsd) compared with the amount of provisions stated in the 

balance sheet. 

The excess amount of EUR 146,692,000.00 resulting in the 

reporting year from the application of the corridor method will be 

spread over the average remaining service period in the 

subsequent year and recognised as an expense on this basis 

[2009: EUR 24,099,000.00 (pensions) and EUR 349,000.00 

(severance payments)]. The amounts recognised as expenses in 

2008 were EUR 39,690,000.00 (pensions) and EUR 812,220.00 

(severance payments). 

In the financial year, pension provisions increased by EUR 

105,444,141.67. The regular allocation to pension provisions was 

EUR 10,133,010.69 (2007: EUR 27,165 thsd). The amount 

transferred from the restructuring provision to the pension 

provisions was EUR 75,883,000.00. In the balance sheet at 

31 December 2008, pension provisions were stated at EUR 


In the financial year, provisions for severance payments were 

reduced by EUR 28,403,778.81 (2007: up by EUR 13,936 thsd). 

The amount transferred from the restructuring provision to the 

provisions for severance payments was EUR 10,469,132.17. In the 

balance sheet at 31 December 2008, provisions for severance 

payments were stated at EUR 245,675,035.94 (31 December 2007: 

EUR 274,079 thsd). 


4.22.2. Other provisions 

Other provisions totalled EUR 558,567,830.56 (31 December 2007: 

EUR 722,379 thsd), including provisions of EUR 263,842,251.52 

(31 December 2007: EUR 318,862 thsd) for pending losses arising 

from lending and securities business, for risks related to equity 

interests, for litigation risks and for guarantee obligations, as well 

as EUR 4,955,641.90 (31 December 2007: EUR 101,468 thsd) for 

restructuring. Provisions for staff and non-staff expenses amounted 

to EUR 289,769,937.14 (31 December 2007: EUR 302,049 thsd), 

including provisions for anniversary payments, bonuses for the 

company’s own employees, and legal costs and experts’ fees. 

4.23. Subordinated liabilities assumed 

Subordinated liabilities assumed during the year did not exceed 

10% of the total amount of existing subordinated liabilities. 

As at 31 December 2008, subordinated liabilities included 10 

schilling-denominated bonds. Also included were 49 bonds and 4 

time deposits, most of which have maturities exceeding ten years. 

The bonds and time deposits are denominated in EUR, USD, CHF, 

JPY and GBP. 

The total amount of subordinated capital stated in the balance 

sheet at 31 December 2008 was EUR 4,117,356,397.22 (31 

December 2007: EUR 4,167,041 thsd), including accrued interest 

payable and interest allocated to zero-coupon bonds. 

The concept of subordination is defined in Section 51 (9) of the 

Austrian Banking Act. 

4.24. Fund for general banking risks 

The fund for general banking risks decreased by an amount of EUR 

1,518,252,269.39. The total amount of the fund for general banking 

risks was EUR 935,562,463.61 as at 31 December 2008 

(31 December 2007: EUR 2,453,815 thsd). 

4.25. Equity 

4.25.1. Subscribed share capital 

The share capital of UniCredit Bank Austria AG as at 31 December 

2008 remained unchanged over the previous year and amounted to 

EUR 1,468,770,749.80, divided into 10,100 registered no-par value 

shares carrying voting rights and 202,021,640 no-par value bearer 

shares carrying voting rights, with each no-par value share 

representing the same proportion of the share capital. 

4.25.2. Authorised capital 

Pursuant to a resolution passed at the Annual General Meeting on 

19 May 2005, the Management Board is authorised, in accordance 

with Section 169 of the Austrian Joint Stock Companies Act, to 

increase the share capital by up to EUR 534,460,374.90 by issuing 

up to 73,515,870 new no-par value shares against contributions in 

cash or in kind, excluding or not excluding subscription rights, until 

21 June 2010. As at 31 December 2008 the amount of additional 

authorised capital was up to EUR 134,610,374.90. 

4.25.3. Capital reserves 

As at 31 December 2008, capital reserves were stated at EUR 

7,546,969,443.67, unchanged over the previous year. 

Movements in valuation reserve and other untaxed reserves as at 31 December 2008 in EUR 

1. Valuation reserve resulting from special depreciation 

Reserve pursuant to Section 12 of the Austrian Income Tax Act (EStG) 

31 Dec. 2007 Transfers Allocations Releases 31 Dec. 2008 

Securities 5,151,293.07 0.00 0.00 -5,151,293.07 0.00 

Equity interests 83,153.22 0.00 0.00 0.00 83,153.22 

Shares in group companies 77,210,933.06 0.00 0.00 0.00 77,210,933.06 

Land and buildings 27,877,30 0.00 0.00 0.00 27,877.30 

Other tangible fixed assets 76,208.80 0.00 0.00 0.00 76,208.80 

Valuation reserve pursuant to 

Sections 8 and 122 of the Austrian Income Tax Act (EStG) 

82,549,465.45 0.00 0.00 -51,510,293.07 77,398,172.38 

Land and buildings 455,546.00 0.00 0.00 0.00 455,546.00 

Other tangible fixed assets 0.00 0.00 0.00 0.00 0.00 

455,546.00 0.00 0.00 0.00 455,546.00 

Total 1 83,005,011.45 0.00 0.00 -5,151,293.07 77,853,718.38 

2. Unversteuerte Other untaxedRücklagen reserves 

Untaxed reserves 0.00 0.00 0.00 0.00 0.00 

Total 2 0.00 0.00 0.00 0.00 0.00 

Aggregate total 83,005,011.45 0.00 0.00 -5,151,293.07 77,853,718.38 


4.25.4. Revenue reserves 

There was no reserve for own shares and shares in a controlling 

company as at the balance sheet date (31 December 2007: EUR 

990 thsd). The statutory reserve was shown unchanged at 

EUR 14,534,566.84. 

As at 31 December 2008, other reserves were stated at EUR 


4.25.5. Reserve pursuant to Section 23 (6) of the Austrian 

Banking Act (BWG) 

The reserve pursuant to Section 23 (6) of the Austrian Banking Act 

(BWG) totalled EUR 2,108,713,056.25 as at 31 December 2008, 

unchanged over the previous year. 

4.28. Assets pledged as security 

Assets pledged as security pursuant to Section 64 (1) 8 of the Austrian Banking Act (BWG) 

4.25.6. Untaxed reserves 

The valuation reserve resulting from special depreciation was 

reduced by EUR 5,151,293.07 to EUR 77,853,718.38. 

The composition of and changes in untaxed reserves are given in 

Annex 3 at the end of the notes to the financial statements. 

4.26. Supplementary capital pursuant to Section 23 (7) of the 

Austrian Banking Act (BWG) 

As at 31 December 2008, supplementary capital totalled EUR 

516,313,713.17 (31 December 2007: EUR 528,984 thsd). 

4.27. Cross-holdings 

There are no cross-holdings within the meaning of Section 240, 

item 9, of the Austrian Commercial Code. 



Cover fund for deposits held in trust for wards and included in liabilities item 2a) 112,940,919.62 102.077 

Cover fund for mortgage bonds and public sector mortgage bonds included in liabilities item 3a) 4,351,165,904.69 2,759,558 

for own bonds and medium-term notes included in item 3a) 66,898,139.46 71,300 

Total 4,531,004,963.77 2,932,935 

Security provided in favour of Oesterreichische Kontrollbank AG for the settlement of securities transactions 59,657,241.53 150.134 

Margin requirement in favour of various business partners 163,086,869.55 839.729 

Claims etc. assigned in favour of OeKB, security deposit with Oesterreichische Nationalbank 12,790,693,168.80 4,821,145 

Claims assigned in favour of European Investment Bank, KfW, Oesterreichische Nationalbank; securities pledged3,681,091,738.05 2,689,761 

Security provided in favour of clearing systems (Cedel, Euroclear, Xetra) 327,732,852.28 382.898 

Security provided in favour of foreign banks for securities lending transactions, and collateral agreements 0.00 30,560 

Off-balance sheet transactions 5,591,418,499.67 5,539,231 

Assets pledged in favour of foreign credit institutions and financial institutions which are group companies 1,966,711,268.91 448.547 

Total 24,580,391,638.79 14,902,005 

Aggregate total 29,111,396,602.56 17,834,940 

The balance sheet item “Savings deposits“ includes deposits held 

in trust for wards in the amount of EUR 107,157,996.05 (31 



4.29. Derivatives business 

In the presentation of business volume in the tables, volumes are 

broken down into financial derivatives and credit derivatives, 

according to the underlying financial instrument. In these categories 

of transactions, a distinction is made between the trading book and 

the banking book, and between the counterparty classes. At 

UniCredit Bank Austria AG, derivatives transactions focus on 

interest rate contracts. 

Over-the-counter transactions are individual agreements 

concerning volume, maturities and underlying instrument. In largevolume 

inter-bank trading, these agreements reflect international 

practice, while in customer business they are usually adjusted to 

specific needs. Exchange-traded contracts are always standardised 

in respect of volume and maturity date. 

Following the transfer of trading operations, UniCredit Bank Austria 

AG is responsible for customer trading activities. For the bank's 

own purposes, derivatives are used mostly to hedge market risk 

and credit spread risk associated with new issue business. In 

business with customers, market participants include banks, 

securities houses, mutual funds, pension funds and corporate 

customers. 

As from the second half of 2008, UniCredit CAIB AG acted as the 

business partner for covering transactions for the bank’s own 

account and customer-driven transactions. 

As at 31 December 2008, the total volume of financial derivatives 

amounted to EUR 163,707 m. The trading book accounted for EUR 

70,449 m of this amount, and the banking book for EUR 93,258 m. 

Positive market values totalled EUR 4,046 m, and negative market 

values totalled EUR 3,700 m. The total volume of credit derivatives 

was EUR 2,659 m as at 31 December 2008. The positive market 

values of EUR 2.5 m and the negative market values of EUR 129.9 

m were included in the trading book. The year-on-year decline in 

derivative instruments is explained by the transfer of trading 

activities to UniCredit CAIB AG in the third quarter of 2008. 

For portfolio management and risk management purposes, 

contracts are valued at current prices using recognised and tested 

models. Market values show the contract values as at the balance 

sheet date, positive market values indicate the potential default risk 

arising from the relevant activity. 

For the purposes of credit risk management, derivatives are taken 

into account with their respective positive market value and an addon 

depending on the product, currency and maturity. Add-ons 

applied in internal credit risk management take into account the 

potential future exposure, based on the current market volatility, 

relative to the remaining period to maturity of the transactions. 

Given the underlying confidence interval of 97.5%, these add-ons 

are in most cases clearly above the relevant levels pursuant to the 

Austrian Banking Act. 


(“Wallstreet”), the central treasury system, on a largely group-wide 

basis. For smaller units not connected to the central system, 

separate lines are allocated and monitored. Group-wide compliance 

with lines approved in the credit process is thus ensured at any 

time. 

UniCredit Bank Austria AG additionally limits the credit risk arising 

from its derivatives business through the consistent use of master 

agreements, through collateral agreements and break clauses. In 

combination with the very good average credit rating of our 

business partners in the derivatives business, management takes 

proper account of default risk. 

Details of derivatives transactions and of the uniform Group-wide 

method of recording them for risk measurement and risk 

management purposes are given in Annex 4. 


A.1 Trading book: notional amounts 

Listed Unlisted Total Listed Unlisted Total 

1. FRAs 0.00 0.00 0.00 0.00 23,910,719,792.24 23,910,719,792.24 

2. Interest rate swaps 0.00 17,242,232,715.14 17,242,232,715.14 0.00 421,953,381,619.62 421,953,381,619.62 

3. Domestic currency swaps 0.00 1,557,530,844.67 1,557,530,844.67 0.00 15,513,692,568.48 15,513,692,568.48 

4. Currency interest rate swaps 0.00 531,580,612.23 531,580,612.23 0.00 6,079,016,551.79 6,079,016,551.79 

5. Basis swaps 0.00 8,543,622,579.70 8,543,622,579.70 0.00 7,554,897,914.95 7,554,897,914.95 

6. Stock index swaps 0.00 52,050,000.00 52,050,000.00 48,787,029.78 363,909,867.01 412,696,896.79 

7. Commodity index swaps 0.00 44,212,756.30 44,212,756.30 0.00 18,916,267.82 18,916,267.82 

8. Futures 0.00 0.00 0.00 694,455,272.77 0.00 694,455,272.77 

9. Cap options 0.00 6,320,638,888.94 6,320,638,888.94 0.00 12,823,041,080.93 12,823,041,080.93 

10. Floor options 0.00 1,124,631,525.36 1,124,631,525.36 0.00 3,815,495,382.19 3,815,495,382.19 

11. Other Options 0.00 17,811,690,385.75 17,811,690,385.75 68,970,622,800.00 68,073,486,123.90 137,044,108,923.90 

12. Forwards 0.00 17,220,709,399.60 17,220,709,399.60 0.00 57,536,452,654.92 57,536,452,654.92 

13. Other derivative contracts 0.00 0.00 0.00 0.00 0.00 0.00 

TOTAL 0.00 70,448,899,707.69 70,448,899,707.69 69,713,865,102.55 617,643,009,823.85 687,356,874,926.40 

A.2.1 Banking book: notional amounts 

31 December 200831 December 2007 

31 December 2008 31 December 2007 

Listed Unlisted Total Listed Unlisted Total 

1. FRAs 0.00 0.00 0.00 0.00 231,518,704.30 231,518,704.30 

2. Interest rate swaps 0.00 79,719,805,946.85 79,719,805,946.85 0.00 268,467,010,918.69 268,467,010,918.69 

3. Domestic currency swaps 0.00 7,281,629,475.71 7,281,629,475.71 0.00 9,987,935,020.28 9,987,935,020.28 

4. Currency interest rate swaps 0.00 180,270,175.93 180,270,175.93 0.00 6,914,393,808.03 6,914,393,808.03 

5. Basis swaps 0.00 4,202,978,744.28 4,202,978,744.28 0.00 4,109,512,677.60 4,109,512,677.60 

6. Stock index swaps 0.00 0.00 0.00 0.00 0.00 0.00 

7. Commodity index swaps 0.00 0.00 0.00 0.00 0.00 0.00 

8. Futures 0.00 0.00 0.00 0.00 0.00 0.00 

9. Cap options 0.00 1,309,234,455.08 1,309,234,455.08 0.00 1,254,973,663.99 1,254,973,663.99 

10. Floor options 0.00 412,287,425.50 412,287,425.50 0.00 267,798,434.00 267,798,434.00 

11. Other options 0.00 151,660,900.74 151,660,900.74 0.00 194,911,553.34 194,911,553.34 

12. Forwards 0.00 0.00 0.00 0.00 0.00 0.00 

13. Other derivative contracts 0.00 0.00 0.00 0.00 0.00 0.00 

TOTAL 0.00 93,257,867,124.09 93,257,867,124.09 0.00 291,428,054,780.23 291,428,054,780.23 


A.4 OTC financial derivatives: positive fair value - counterparty risk 

A. Trading book 

Gross amount Gross amount 

A.1 Central governments and central banks 82,899,026.17 30,382,408.88 

A.2 Other Public bodies 14,071,114.90 8,127,443.67 

A.3 Banks 878,453,420.85 6,149,483,035.71 

A.4 Financial institutions 16,603,222.62 69,492,118.42 

A.5 Insurance companies 4,604,747.30 7,975,625.81 

A.6 Non-financial enterprises 927,881,081.07 1,008,222,987.74 

A.7 Other entities 0.00 0.00 

Total A 1,924,512,612.91 7,273,683,620.23 

B. Banking book 

B.1 Central governments and central banks 0.00 0.00 

B.2 Other Public bodies 0.00 0.00 

B.3 Banks 2,120,019,122.25 1,082,045,181.05 

B.4 Financial institutions 0.00 12,942,590.86 

B.5 Insurance companies 0.00 0.00 

B.6 Non-financial enterprises 1,495,963.03 36,600,894.91 

B.7 Other entities 0.00 0.00 

Total B 2,121,515,085.28 1,131,588,666.82 

Total (A+B) 4,046,027,698.19 8,405,272,287.05 

A.5 OTC financial derivatives: negative fair value - financial risk 

A. Trading book 


Gross amount Gross amount 

A.1 Central governments and central banks 12,028,104.08 20,715,959.66 

A.2 Other Public bodies 2,029,416.22 8,263,804.50 

A.3 Banks 1,735,540,137.08 4,867,211,517.03 

A.4 Financial institutions 40,350,552.79 32,003,457.44 

A.5 Insurance companies 16,208,870.06 9,008,622.84 

A.6 Non-financial enterprises 573,622,197.51 804,397,117.96 

A.7 Other entities 0.00 0.00 

Total A 2,379,779,277.74 5,741,600,479.43 

B. Banking book 

B.1 Central governments and central banks 0.00 0.00 

B.2 Other Public bodies 0.00 0.00 

B.3 Banks 1,270,199,143.60 1,493,089,088.26 

B.4 Financial institutions 0.00 0.00 

B.5 Insurance companies0.00 0.00 

B.6 Non-financial enterprises 49,599,839.53 110,814,155.71 

B.7 Other entities 0.00 0,00 

Total B 1,319,798,983.13 1,603,903,243.97 

Total (A+B) 3,699,578,260.87 7,345,503,723.40 



A.6 OTC financial derivatives - residual life: notional amount 

A. Trading book 24,789,949,831.55 24,841,456,375.26 20,817,493,500.88 70,448,899,707.69 

Up to 1 year From 1 to 5 years Over 5 years Total 

A.1 Financial derivative contracts on debt securities and interest rates 3,690,356,637.67 17,408,888,351.38 19,387,155,457.23 40,486,400,446.28 

A.2 Financial derivative contracts on equity securities and share indices 272,497,420.00 1,188,069,303.72 434,084,283.84 1,894,651,007.56 

A.3 Financial derivative contracts on exchange rates and gold 18,400,170,442.36 6,079,874,999.06 996,253,759.81 25,476,299,201.23 

A.4 Financial derivative contracts on other underlying assets 2,426,925,331.52 164,623,721.10 0.00 2,591,549,052.62 

B. Banking book 14,343,549,436.16 15,929,447,560.40 62,984,870,127.53 93,257,867,124.09 

B.1 Financial derivative contracts on debt securities and interest rates 14,097,836,531.83 13,871,138,934.96 57,788,931,104.92 85,757,906,571.71 

B.2 Financial derivative contracts on equity securities and share indices 6,685,900.74 31,375,000.00 0.00 38,060,900.74 

B.3 Financial derivative contracts on exchange rates and gold 239,027,003.59 2,026,933,625.44 5,195,939,022.61 7,461,899,651.64 

B.4 Financial derivative contracts on other underlying assets 0.00 0.00 0.00 0.00 

Total 39,133,499,267.71 40,770,903,935.66 83,802,363,628.41 163,706,766,831.78 

A. Trading book 352,021,903,413.11 185,183,652,776.08 80,447,670,778.39 617,653,226,967.58 

Up to 1 year From 1 to 5 years Over 5 years Total 

A.1 Financial derivative contracts on debt securities and interest rates 249,708,752,087.49 152,418,432,679.26 75,798,917,423.11 477,926,102,189.86 

A.2 Financial derivative contracts on equity securities and share indices 1,888,216,680.98 1,396,267,598.49 595,551,340.00 3,880,035,619.47 

A.3 Financial derivative contracts on exchange rates and gold 100,409,449,110.04 31,358,571,765.11 3,896,562,015.28 135,664,582,890.43 

A.4 Financial derivative contracts on other underlying assets 15,485,534.60 10,380,733.22 156,640,000.00 182,506,267.82 

B. Banking book 215,529,602,644.76 34,508,317,024.07 41,379,917,967.67 291,417,837,636.50 

B.1 Financial derivative contracts on debt securities and interest rates 214,334,421,527.29 26,852,686,404.89 33,618,132,432.39 274,805,240,364.57 

B.2 Financial derivative contracts on equity securities and share indices 34,850,652.60 38,060,900.74 0.00 72,911,553.34 

B.3 Financial derivative contracts on exchange rates and gold 1,160,330,464.87 7,617,569,718.44 7,761,785,535.28 16,539,685,718.59 

B.4 Financial derivative contracts on other underlying assets 0.00 0.00 0.00 0.00 

Total 567,551,506,057.87 219,691,969,800.15 121,827,588,746.06 909,071,064,604.08 

B.2 Credit derivatives: positive fair value - counterparty risk 

A. TRADING BOOK 12,400,000.00 2,484,916.61 9,620,499,699.99 111,732,822.92 


31 Dec. 2007 

Notional amount Positive fair value Notional amount Positive fair value 

A.1 Purchases of protection - counterparty: 12,400,000.00 2,484,916.61 8,268,312,938.83 106,457,249.58 

1. Central governments and central banks 0.00 0.00 0.00 0.00 

2. Other Public bodies 0.00 0.00 0.00 0.00 

3. Banks 5,400,000.00 2,415,479.02 8,268,312,938.83 106,457,249.58 

4. Financial Institutions 0.00 0.00 0.00 0.00 

5. Insurance companies 7,000,000.00 69,437.59 0.00 0.00 

6. Non-financial enterprises 0.00 0.00 0.00 0.00 

7. Other entities 0.00 0.00 0.00 0.00 

A.2 Sales of protection - counterparty: 0.00 0.00 1,352,186,761.16 5,275,573.34 



3. Banks 0.00 0.00 1,332,186,761.16 5,225,019.33 

4. Financial Institutions 0.00 0.00 0.00 0.00 

5. Insurance companies 0.00 0.00 20,000,000.00 50,554.01 

6. Non-financial enterprises 0.00 0.00 0.00 0.00 


B. BANKING BOOK 0.00 0.00 0.00 0.00 

TOTAL 12,400,000.00 2,484,916.61 9,620,499,699.99 111,732,822.92 



B.3 Credit derivatives: negative fair value - financial risk 

A. TRADING BOOK 

A.1 Purchases of protection - counterparty 

B4. Credit derivatives - residual life: notional amount 

Notional amount 

Negative 

fair value 

A. Trading book 542,000,000.00 1,338,484,000.00 778,800,000.00 2,659,284,000.00 

Up to 1 year From 1 year to 5 years Over 5 years Total 

A.1 Credit derivatives with qualified reference obligation 0.00 0.00 0.00 0.00 

A.2 Credit derivatives with not qualified reference obligation 542,000,000.00 1,338,484,000.00 778,800,000.00 2,659,284,000.00 

B. Banking book 0.00 0.00 0.00 0.00 

B.1 Credit derivatives with qualified reference obligation 0.00 0.00 0.00 0.00 

B.2 Credit derivatives with not qualified reference obligation 0.00 0.00 0.00 0.00 

Total 542,000,000.00 1,338,484,000.00 778,800,000.00 2,659,284,000.00 

A. Trading book 787,540,112.79 13,188,390,401.73 1,842,669,051.06 15,818,599,565.58 

Up to 1 year From 1 year to 5 years Over 5 years Total 

A.1 Credit derivatives with qualified reference obligation 0.00 0.00 0.00 0.00 

A.2 Credit derivatives with not qualified reference obligation 787,540,112.79 13,188,390,401.73 1,842,669,051.06 15,818,599,565.58 

B. Banking book 0.00 0.00 0.00 0.00 

B.1 Credit derivatives with qualified reference obligation 0.00 0.00 0.00 0.00 

B.2 Credit derivatives with not qualified reference obligation 0.00 0.00 0.00 0.00 

Total 787,540,112.79 13,188,390,401.73 1,842,669,051.06 15,818,599,565.58 


31 Dec. 2007 

Notional amount 

Negative 

fair value 



3. Banks 2,646,884,000.00 129,913,483.10 6,157,099,865.60 73,281,684.00 

4. Financial institutions 0.00 0.00 0.00 0.00 

5. Insurance companies 0.00 0.00 0.00 0.00 

6. Non-financial enterprises 0.00 0.00 41,000,000.00 481,352.58 


TOTAL 2,646,884,000.00 129,913,483.10 6,198,099,865.60 73,763,036.58 



4.30. Market risk 

Market risk management at UniCredit Bank Austria AG 

encompasses the identification, measurement, monitoring and 

management of all market risks resulting from the banking 

business. The processes and methods used for measuring risk, 

defining and reviewing limits and for trading activities have been 

summarised in the Financial Markets Rulebook, which is available 

via the Intranet. 

UniCredit Bank Austria AG uses uniform Group-wide risk 

management procedures. These procedures provide aggregate 

data and make available the major risk parameters for the various 

trading operations at least once a day. Besides Value at Risk (VaR; 

for internal risk measurement on the basis of a one-day holding 

period and a confidence interval of 99%), other factors of equal 

importance are stress-oriented volume and position limits. 

Additional elements of the limit system are loss-warning level limits, 

sensitivity and options-related limits applied to trading and 

positioning in non-linear products. 

UniCredit Bank Austria AG’s risk model (“NoRISK”) was developed 

by the bank and has been used for many years. The model is 

applied and further refined by Strategic Risk Management. 

As at 31 December 2008, VaR at UniCredit Bank Austria AG for the 

respective risk categories was as follows: 

Amounts in EUR: 

Exchange rate risk, overall -81,980.62 

Equity position risk, trading book 0.00 

Interest rate position risk, trading and banking books -3,742,553.04 

Credit spread risk -40,809,137.55 

Overall market risk arising from the above components -46,218,385.88 

The risk measurement model has additionally been used for the 

purpose of determining the capital requirements pursuant to the 

Austrian Banking Act (implementation of the Capital Adequacy 

Directive). Under this model, VaR for the trading book has also 

been calculated for a two-week holding period. This calculation 

takes into account the quantitative standards required by the 

regulatory authorities (one-sided confidence interval of 99%, 

multiplier 3, average for the past 60 business days, add-on in the 

amount of the specific risk). 

As at 31 December 2008, this resulted in the following capital 

requirements at UniCredit Bank Austria AG: 

Amounts in EUR: 

Risk associated with the open foreign exchange position 5,059,579.72 

General and specific risk in debt instruments 295,850,811.19 

General/specific risk in equities 0.00 

Overall risk (not equal to the sum of the above risk categories) 230,071,629.98 

Within the Bank Austria Group, the reliability and accuracy of the 

internal model is monitored by daily backtesting, comparing the 

VaR amounts with the actually observed fluctuations in market 

parameters and in the total value of the trading books. In 2008, 

there was only one backtesting excess, despite the exceptional 

market environment. An increase in volatility leads to higher VaR 

levels in the model in time, appropriately covering the backtesting 

fluctuations. The results of backtesting have so far continued to 

confirm the accuracy and reliability of the model and the model 

multiplier of 3. 

Value-at-risk calculations are complemented by various stress 

scenarios to identify the potential effects of stressful market 

conditions on the Group’s earnings. The assumptions made under 

such stress scenarios include extreme movements in prices or 

rates and a dramatic deterioration in market liquidity. Crisis tests 

were adjusted to the new market environment on a timely basis. In 

this context, a new financial crisis scenario was created for the 

regulatory stress test in the third quarter; the scenario takes into 

account developments following the Lehman Brothers insolvency in 

mid-September 2008 and lower market liquidity in financials. 

Following the spin-off of UniCredit CAIB AG from UniCredit Bank 

Austria AG, the market risk of the trading book is now largely 

concentrated in the former company, where the application of 

market risk methods and systems is similar to that of UniCredit 

Bank Austria AG. 

Market risks resulting from the general balance sheet structure and 

the positioning of asset-liability management are additionally 

determined and regularly analysed by means of simulations of net 

interest income volatility. In addition to the business volume at the 

reporting date, these simulations are based on various interest rate 

scenarios, assumptions regarding new business, demand 

behaviour and general developments affecting margins in those 

market segments which are of greatest importance to UniCredit 

Bank Austria AG. Modelling over the projection period provides 

indications of trends in net interest income and enables the bank to 

identify risks at an early stage and to take appropriate measures. 

In addition to calculating VaR for trading activities, the bank uses 

the Value-at-Risk method for measuring market risk in the banking 

book. 

4.31. Contingent liabilities 

Contingent liabilities of UniCredit Bank Austria AG shown below the 

line in item 1 on the liabilities side amounted to EUR 

14,206,765,676.52, an increase of EUR 166,746,483.39 or 1.19% 

over the previous year. 



Acceptances and endorsements 0.00 0.00 

Guarantees and assets pledged as 

collateral security 14,206,756,676.52 14,040,019 

Guarantees in connection with retirement planning products 

benefiting from a state premium pursuant to Section 108 h (1) 

3 and subsequent sections of the Austrian Income Tax Act 

(EStG) 

In connection with retirement planning products benefiting from a 

state premium, UniCredit Bank Austria AG has incurred nominal 

capital guarantee obligations defined by law. Under the 

“VorsorgePlus-Plan” product (a mutual fund managed by Pioneer 

Investments Austria GmbH), the bank guarantees the investor that 


in the case of repayment through regular payments to the investor, 

the amount available for repayment will not be lower than the sum 

of amounts paid in plus premiums (variable in a range between 

8.5% and 13.5%, and index-linked) credited to the account 

pursuant to Section 108 g of the Austrian Income Tax Act. 

As at 31 December 2008, amounts paid in for retirement planning 

products benefiting from a state premium totalled EUR 

85,409,459.66 (including state premiums credited for the years 

2003 to 2007 in the amount of EUR 4,944,790.66, but excluding 

premiums for 2008); this compares with the fund’s net asset value 

of EUR 89,793,031.59. This means that the guarantee obligation, 

which amounted to EUR 85,409,459.66, was covered as at the 

relevant date. 

Risk management is based on a CPPI model reflecting the 

stochastic characteristics of the proportions of equity and bond 

investments. Daily marking to market of the related options carried 

in the bank’s trading book ensures that, if necessary, a sufficient 

provision is made immediately for any losses. The valuation 

functions are integrated in the OPUS system. Risk indicators are 

determined by the Credit Structured Products unit. 

4.32. Letters of comfort and undertakings 

In addition to the contingent liabilities shown below the balance 

sheet in item 1 on the liabilities side, there are the following letters 

of comfort and undertakings: 

For 12 subsidiaries of UniCredit Bank Austria AG, guarantees were 

issued in favour of S.W.I.F.T. 

Letters of comfort for a total amount of EUR 8.4 bn were issued in 

connection with international leasing transactions; given the nature 

of collateral for these transactions, it is not expected that claims will 

be lodged against UniCredit Bank Austria AG because the rights to 

payment undertaking amounts serving as collateral and held with 

the leasing companies or with UniCredit Bank Austria AG, or the 

rights to other security of stable value, have been transferred to the 

leasing companies. 

The following four letters of comfort are included at a value of EUR 

1 in the item below the balance sheet: 

For Infrastruktur Planungs- und Entwicklungs GmbH a letter of 

comfort was issued in favour of Autobahnen-und Schnellstraßen- 

Finanzierungs-Aktiengesellschaft (ASFINAG) as part of the 

company’s bid for the “PPP Ostregion-Paket 1” project. 

A letter of comfort was issued for BA-CA Wien Mitte GmbH / 

Salima Wien-Mitte Projektentwicklung GmbH in favour of the 

Austrian Federal Railways (ÖBB) in connection with the redesign of 

the former Wien Mitte bus terminal. 

Two additional letters of comfort were issued for the floating of 

hybrid capital of BA-CA Finance (Cayman) Limited as well as of 

BA-CA Finance (Cayman 2) Limited. 

Furthermore, a commitment has been imposed on UniCredit Bank 

Austria AG under its membership, as prescribed in Sections 93 and 

93a of the Austrian Banking Act, in Sparkassen Haftungs AG, a 

company which is the deposit insurance institution of the Austrian 

savings bank sector. 

4.33. Commitments 

Commitments 

Liabilities arising from sales with an option to repurchase pursuant to 



Section 50 (3) and (5) of the Austrian Banking Act (BWG) 7,267,283.44 209,084 

Underwriting commitments in respect of securities 69,887,223.27 80,463 

Call/put options sold (pursuant to Annex 1 to Section 22, item 1 j) 607,141,795.92 462,856 

Irrevocable loan commitments not yet utilised (credit facilities, 

commitments to lend, obligations to purchase securities, obligations to 

provide guarantees or acceptance facilities) 3,887,720,449.01 4,204,298 

Any other irrevocable transactions that may give rise to credit risk 

and have not been mentioned above 918,785,882.19 59,084 

TOTAL COMMITMENTS 5,490,802,633.83 5,015,785 

5. Notes to the profit and loss account 

5.1. Breakdown of income at foreign permanent 

establishments 

On 29 December 2006, UniCredit Bank Austria AG set up a 

permanent establishment in Milan, Via Tortona 33, which is 

exclusively engaged in the management and controlling of the 

equity interests of UniCredit that have been transferred by way of 

contribution in kind. Therefore these activities are not banking 

activities. In 2008, net interest income including dividend income 

totalled EUR 39,350,038.91 (2007: EUR 4,227 thsd). 

5.2. Income from equity interests and group companies 

The item “Income from shares in group companies“ included 

income from profit-pooling arrangements in the amount of EUR 

254,253,565.52 (2007: EUR 782,303 thsd). 

Within income and expenses arising from the valuation and 

disposal of equity interests, group companies accounted for a 

balance of minus EUR 1,450,933,656.28 (2007: minus EUR 

233,617 thsd). No income was realised on the sale of shares in 

profit-pooling arrangements. 

5.3. Income from administrative and agency services provided 

to third parties 

In 2008, income from safe-custody services and from intermediary 

services relating to insurance, building-society savings agreements 

and real estate totalled EUR 70,191,917.96 (2007: EUR 78,092 

thsd). 

5.4. Other operating income 

Other operating income included compensation for group services, 

releases of provisions for litigation risks, gains on other assets and 

rent income from real estate as well as all income not directly 

related to banking operations. 


5.5. Expenses for subordinated liabilities 

In the reporting year, the total amount of expenses for subordinated 

liabilities and supplementary capital was EUR 258,974,783.35 

(2007: EUR 261,286 thsd). 

5.6. Other operating expenses 

Other operating expenses related primarily to expenses on banking 

operations not arising from lending business, and expenses arising 

from the agency agreements with CAIB International Markets Ltd., 

London (until 30 June 2008), UniCredit CAIB AG, Vienna (until 30 

June 2008), and BANK PRIVAT AG, Vienna, and from provisions 

for risks. 

5.7. Extraordinary income 

Extraordinary income resulted from the release of EUR 

1,518,252,269.39 in the fund for general banking risks (2007: 

allocation of EUR 303,737,733.00). 

5.8. Write-ups omitted 

In the financial year, no write-ups (2007: EUR 0 m) were omitted to 

avoid tax consequences. 

5.9. Effects of the change in untaxed reserves 

The release of valuation reserves did not result in any income tax 

expense for the 2008 financial year (2007: EUR 12 thsd). 

5.10. Taxes on income 

Pursuant to the provisions on group taxation in Section 9 of the 

Austrian Corporation Tax Act (KStG), a group of companies existed 

as at 31 December 2008 which consisted of UniCredit Bank Austria 

AG as group holding company and 47 companies as group 

members (32 companies with profit and loss transfer agreements 

and 15 companies to which the amount of EUR 3,846,526.43 

(2007: EUR 5,952 thsd) was charged in 2008 pursuant to tax 

compensation agreements). 

As a result of the above-mentioned tax compensation payments 

being charged to group members, the item “Taxes on income” 

shows net income of EUR 3,153,758.21 for the 2008 financial year 

(2007: income tax expense of EUR 7,671 thsd). 

5.11. Deferred tax 

No use was made of the option to carry deferred taxes as an asset. 

The amount of deferred taxes which may be carried as an asset 

pursuant to Section 198 (10) of the Austrian Commercial Code but 

is not separately shown in the balance sheet and which will 

probably reduce the tax charge in future years was EUR 

120,779,000.00 (2007: EUR 144,476 thsd). 

6. Information on staff, Management Board and Supervisory 

Board 

6.1. Staff 

The average number of salaried staff (full-time equivalent) 

employed in 2008 was 6,497 (2007: 6,781) and the average 

number of other employees was 0 (2007: 0). 

6.2. Expenses for severance payments and pensions 

Expenses for severance payments and pensions relate to the items 

“expenses for retirement benefits“, “allocation to the pension 

provision“ and “expenses for severance payments and payments to 

severance payment-funds“. In the 2008 financial year, allocations 

and payments for members of the Management Board and senior 

executives as well as their surviving dependants totalled EUR 

12,586,472.04 (2007: EUR 11,834 thsd); allocations and payments 

for other employees and their surviving dependants totalled EUR 

346,343,587.47 (2007: EUR 229,850 thsd). The amounts include 

payments to pension funds amounting to EUR 111,600.96 (2007: 

EUR 96 thsd) for active members of the Management Board and 

EUR 176,025.48 (2007: EUR 12 thsd) for former members of the 

Management Board. 

Due to changes in the definition of executive employees pursuant 

to legislation relating to employees, the figures for 2007 have been 

adjusted accordingly. 

6.3. Emoluments of Management Board members and 

Supervisory Board members 

The emoluments paid in the 2008 financial year by UniCredit Bank 

Austria AG to Management Board members (excluding payments 

into pension funds) totalled EUR 3,975,168.51 (comparable 

emoluments in 2007 totalled EUR 7,621 thsd). Of this total, EUR 

2,727,923.22 (2007: EUR 1,878 thsd) related to fixed salary 

components and EUR 1,247,245.29 (2007: EUR 5,743 thsd) 

related to variable salary components. Several Management Board 

members receive their emoluments from companies outside the 

Bank Austria group of consolidated companies. These 

emoluments, which Management Board members were granted for 

activities in group companies in the 2008 financial year, amounted 

to EUR 5,793,773.90 (2007: EUR 5,059 thsd). These Management 

board members also received compensation for activities not 

associated with the Bank Austria Group, but which are in the 

interest of UniCredit Group. 

Payments to former members of the Management Board and their 

surviving dependants (excluding payments into pension funds) 

totalled EUR 21,684,739.57, mostly as one-off payments. Of this 

total, EUR 4,713,102.74 was paid to former Management Board 

members of Creditanstalt AG, which merged with Bank Austria in 

2002, and their surviving dependants; EUR 1,978,216.07 was paid 

to former Management Board members of Österreichische 

Länderbank AG, which merged with Zentralsparkasse in 1991, and 

their surviving dependants. The comparative figure for the previous 

year was EUR 9,641,612.90. Emoluments for activities in group 

companies paid to this group of persons amounted to EUR 

536,334.71 (2007: EUR 530 thsd). 

The emoluments of the Supervisory Board members active in the 

2008 financial year totalled EUR 342,121.59 (2007: EUR 324 thsd) 

for UniCredit Bank Austria AG and EUR 3,426.83 (2007: EUR 7 

thsd) for the two credit associations. 

6.4. Loans and advances to Management Board members and 

Supervisory Board members 

Loans to Management Board members are stated at EUR 

408,489.00 (2007: EUR 266 thsd). Account overdrafts granted to 


members of the Management Board amounted to EUR 28,527.91 

(2007: EUR 64 thsd). 

Loans to Supervisory Board members amounted to EUR 

2,806,504.64 (2007: EUR 717 thsd). Overdraft facilities and 

account overdrafts granted to members of the Supervisory Board 

totalled EUR 309,442.82 (2007: EUR 524 thsd). Repayments 

during the business year totalled EUR 126,666.84 (2007: EUR 32 

thsd). 

Loans and advances to the Supervisory Board include those made 

to members of the Employees’ Council who are members of the 

Supervisory Board. The maturities of the loans range from five to 

fifteen years. The rate of interest payable on these loans and 

advances is the rate charged to employees of UniCredit Bank 

Austria AG. 

6.5. Share-based payments 

The Management Board and selected executives of UniCredit Bank 

Austria AG participate in the UniCredit share-based payment 

scheme of UniCredit Group. The share-based payment 

arrangements relate to Stock Options and Performance Shares for 

activities in UniCredit Bank Austria AG based on shares in the 

parent company UniCredit S.p.A. 

UniCredit calculates the economic value of the share-based 

payment arrangements on a uniform basis for the entire Group 

(Hull & White evaluation model) and provides the Group companies 

with relevant information. In UniCredit Bank Austria AG, the total 

amount recognised in the profit and loss account as at 31 

December 2008 was EUR 3,341,886.64 (2007: EUR 2,235 thsd). 

The number and distribution of Stock Options granted in the 

respective financial years, the exercise price, the maturity, the 

periods during which Stock Options may be exercised, the 

transferability of Stock Options, the minimum holding period 

(blocking period), the conditions of transferability and exercise, and 

the fair value for Management Board members and executives as 

at 31 December 2008 can be seen from Annex 6. 

6.6. Names of Management Board members and Supervisory 

Board members 

A list of the members of the Management Board and of the 

members of the Supervisory Board is given in Annex 5 at the end of 

the notes to the financial statements. 


1. Stock Options 

MANAGEMENT 

BOARD/SENIOR 

EXECUTIVES 

YEAR IN WHICH 

STOCK OPTIONS 

WERE GRANTED 

NUMBER OF 

SHARES THAT 

MAY BE 

PURCHASED 

EXERCISE PRICE MATURITY 

PERIOD DURING 

WHICH STOCK 

OPTIONS MAY BE 

EXERCISED 

TRANSFER- 

ABILITY 

BLOCKING 

PERIOD 

FAIR VALUE AS 

AT 31 DEC. 2008 

IN € 

Management Board 2004 160,500 4.018 3. Sept. 2008 9 years 1) no 160,179.00 

2005 611,000 4.817 25. Nov. 2009 9 years 1) no 479,776.03 

2006 535,500 5.951 28 June 2010 9 years 1) no 401,178.43 

2007 740,803 7.094 13 July 2011 6 years 1) no 242,721.64 

2008 1,979,911 4.185 25 June 2012 6 years 1) no 141,954.11 

Senior executives 2005 393,500 4.817 25. Nov. 2009 9 years 1) no 308,988.32 

MANAGEMENT 

BOARD/SENIOR 

EXECUTIVES 

2006 310,500 5.951 28 June 2010 9 years 1) no 232,616.06 

2007 375,576 7.094 13 July 2011 6 years 1) no 170,234.22 

2008 885,015 4.185 25 June 2012 6 years 1) no 63,453.11 

Stock Options granted by UniCredit to the members of the Supervisory Board do not constitute remuneration for activities on the Supervisory Board of UniCredit Bank 

Austria AG and are therefore not included in the above table. 

Stock Options exercised in 2008 

No Stock Options were exercised by members of the Management Board or by senior executives. 

2. Performance Shares 

YEAR IN WHICH 

PERFORMANCE 

SHARES WERE 

GRANTED 

NUMBER OF 

ALLOCATED 

PERFORMANCE 

SHARES 

CONDITIONS MATURITY 

PERIOD FOR 

WHICH 

PERFORMANCE 

SHARES ARE 

ALLOCATED 

TRANSFER- 

ABILITY 

BLOCKING 

PERIOD 

FAIR VALUE AS 

AT 31. DEC 2008 

IN € 

Management Board 2005 220,000 3) 31 Dec. 2008 unlimited no no 471,130.00 

2006 197,500 4) 31 Dec. 2009 unlimited 2) no 4) 


2008 435,688 7) 31 Dec. 2011 unlimited 8) no 7) 

Senior executives 2005 160,000 3) 31 Dec. 2008 unlimited no no 342,640.00 

1) 

2) 

3) 

4) 

5) 

6) 

7) 

8) 



2008 247,177 7) 31 Dec. 2011 unlimited 8) no 7) 

Performance Shares granted by UniCredit to the members of the Supervisory Board do not constitute remuneration for activities on the Supervisory Board of UniCredit 

Bank Austria AG and are therefore not included in the above table. 

Performance Shares allocated in 2008 

Performance Shares were allocated to members of the Management Board and to senior executives. 

Conditions of transferability and exercise 

Stock Options are restricted to the beneficiary's name and cannot be sold, assigned, plegded or transferred in any way. In the event of the 

beneficiary's death, claims under Stock Options may be transferred in full or in part to the beneficiary's heirs. 

The rights under Performance Shares are restricted to the beneficiary's name and cannot be assigned, pledged or transferred in any way. These 

rights terminate automatically in the event of the beneficiary's death in the 3-year Performance Period (2007-2009). 

These rights become vested only if 3 out of 5 internal key indicators of UniCredit Group or of the relevant Division are met in the year of 

allocation/maturity (2006-2008). The targets of UniCredit Group include the EVA (Economic Value Added), the cost/income ratio, ROE (return on 

equity), total customer assets and liabilities, and the doubtful loans/loans ratio. The key indicators of the Divisions differ according to Division. 


allocation/maturity (2007-2009). The targets of UniCredit Group include EVA (Economic Value Added), EPS (earnings per share), the cost/income 

ratio, the revenues/RWA ratio (RWA = risk-weighted assets) and the loan loss provisions/RWA ratio. Fair values can only be determined in the 

respective year of allocation/maturity. The key indicators for the Divisions differ according to Division. 


allocation/maturity (2008-2010). The targets of UniCredit Group include EVA (Economic Value Added), the cost/income ratio, EPS (earnings per 

share), total revenues and the cost of risk. The key indicators for the Divisions differ according to Division. Fair values can only be determined in 

the respective year of allocation/maturity. 

The rights under Performance Shares are restricted to the beneficiary's name and cannot be assigned, pledged or transferred in any way. In the 

event of the beneficiary's death, claims under Performance Shares may be transferred in full or in part to the beneficiary's heirs. 

These rights become vested depending on the degree to which 3 internal key indicators of UniCredit Group are met in the year of 

allocation/maturity (2009-2011). 

These key indicators are TSR (Total Shareholder Return), relating to 50% of the Performance Shares; EVA (Economic Value Added), relating to 

25% of the Performance Shares; and EPS (earnings per share), also relating to 25% of the Performance Shares. Fair values can only be 

determined in the respective year of allocation/maturity. 

The rights under Performance Shares are restricted to the beneficiary's name and cannot be assigned, pledged or transferred in any way. In the 

event of the beneficiary's death, the beneficiary's heirs are entitled to a cash payment amounting to the market value of the Performance Shares 

on the date of the beneficiary's death, on the assumption that the conditions to be met for receiving Performance Shares were met to the extent of 

100%. 


Shares in group companies and equity 

interests of UniCredit Bank Austria AG 

List of shares in group companies and equity interests pursuant 

to Section 238 of the Austrian Commercial Code 

Shares in group companies (consolidated) 

NAME AND DOMICILE OF COMPANY 

TOTAL 

INTEREST IN % 

EQUITY IN € 

AS UniCredit Bank, Latvia, Riga, LV 100.00 64,708,688.41 -2,538,387.69 1,114,762,154.45 31.12.2008²) 

Asset Management GmbH, Vienna, AT 1) 100.00 21,705,466.00 14,194,528.00 31,703,755.00 31.12.2008²) 

AWT International Trade AG, Vienna, AT 100.00 177,053,155.00 5,952,015.00 180,222,254.00 31.12.2008²) 

NET INCOME / 

LOSS IN € 

TOTAL ASSETS IN € 

BALANCE SHEET 

DATE 

BA-CA Administration Services GmbH, Vienna, AT 1) 100.00 5,756,411.00 2,060,129.00 14,372,354.00 31.12.2008²) 

BA-CA Markets & Investment Beteiligung Ges.m.b.H., Vienna, AT 1) 100.00 5,864,295,015.00 -103,190.00 5,864,381,515.00 31.12.2008²) 

Bank Austria Creditanstalt Wohnbaubank AG, Vienna, AT 1) 100.00 50,779,444.00 6,373,775.00 4,351,460,244.00 31.12.2008²) 

Bank Austria Global Information Services GmbH, Vienna, AT 80.00 6,135,922.63 n.a. 13,693,963.46 31.12.2008²) 

Bank Austria Real Invest GmbH, Vienna, AT 1) 94.95 120,717,699.00 26,002,110.00 134,697,706.00 31.12.2008²) 

Bank Austria Trade Services Gesellschaft m.b.H., Vienna, AT 1) 100.00 4,002,087.00 3,250,311.00 4,005,016.00 31.12.2008²) 

Banking Transaction Services s.r.o., Prague 1, CZ 100.00 2,179,083.04 400,009.41 5,466,366.11 31.12.2008²) 

BANKPRIVAT AG, Vienna, AT 1) 100.00 30,633,476.00 18,817,476.00 42,475,877.00 31.12.2008²) 

CABET-Holding-Aktiengesellschaft, Vienna, AT 1) 100.00 749,200,220.00 113,031,227.00 805,445,827.00 31.12.2008²) 

card complete Service Bank AG, Vienna, AT 1) 50.10 93,075,501.19 65,182,259.00 422,628,229.05 31.12.2008²) 

Domus Bistro GmbH, Vienna, AT 100.00 280,478.94 189,645.00 3,930,906.10 31.12.2008²) 

Domus Clean Reinigungs GmbH, Vienna, AT 100.00 19,323.52 7,744.00 1,939,780.87 31.12.2008²) 

DOMUS FACILITY MANAGEMENT GmbH, Vienna, AT 1) 100.00 501,529.61 162,257.00 10,064,242.24 31.12.2008²) 

Eurolease RAMSES Immobilien Leasing Gesellschaft m.b.H. & Co OG, Vienna, AT 99.50 15,193,260.00 1,234,238.00 57,263,096.00 31.12.2008²) 

FactorBank Aktiengesellschaft, Vienna, AT 100.00 7,784,433.45 539,884.00 109,881,677.69 31.12.2008²) 

HYPERION Immobilienvermietungsgesellschaft m.b.H., Vienna, AT 1) 99.00 51,302,436.00 1,653,230.00 54,430,948.00 31.12.2008²) 

Joint Stock Commercial Bank for Social Development Ukrsotsbank, Kiev, UA 94.47 412,343,621.57 81,969,629.77 4,494,755,687.00 31.12.2008²) 

JSC ATF BANK, Almaty, KZ 99.60 550,673,113.91 -45,654,729.84 5,922,611,392.58 31.12.2008²) 

Lassallestraße Bau-, Planungs-, Errichtungs- und Verwertungsgesellschaft m.b.H., Vienna, AT 1) 99.00 1,357,419.00 -402,158.00 153,591,346.00 31.12.2008²) 

MC Marketing GmbH, Vienna, AT 1) 100.00 145,343,803.00 389,202.00 145,411,093.00 31.12.2008²) 

MY Beteiligungs GmbH, Vienna, AT 1) 100.00 60,000,192.00 -2,320.00 60,010,699.00 31.12.2008²) 

Private Joint Stock Company "Ferrotrade International", Kiev, UA 100.00 81,198,069.68 -21,054.19 81,199,443.96 31.12.2008²) 

Schoellerbank Aktiengesellschaft, Vienna, AT 100.00 71,233,808.72 10,297,337.00 2,206,074,280.80 31.12.2008²) 

UniCredit Bank a.d. Banja Luka, Banja Luka, BA 90.92 35,007,709.89 863,469.68 322,944,037.22 31.12.2008²) 

UniCredit Bank Cayman Islands Ltd.., Georgetown, Grand Cayman Islands, KY 100.00 112,222,318.09 -171,204,701.44 1,023,826,938.34 31.12.2008²) 

UniCredit Bank Czech Republic, a.s., Prague 1, CZ 100.00 1,007,066,242.79 182,913,200.48 10,369,580,302.96 31.12.2008²) 

UniCredit Bank d.d., Mostar, BA 89.98 180,501,044.07 19,265,837.00 1,684,406,517.03 31.12.2008²) 

UniCredit Bank Hungary Zrt., HU 100.00 551,458,267.51 104,494,323.00 6,572,450,213.06 31.12.2008²) 

UniCredit Bank Serbia JSC, Belgrade, RS 99.92 231,572,861.98 32,263,670.13 1,002,367,618.67 31.12.2008²) 

UniCredit Bank Slovakia a.s., Bratislava, SK 99.03 468,315,314.78 71,777,159.03 4,652,372,707.59 31.12.2008²) 

UniCredit Banka Slovenija d.d., Ljubljana, SI 99.99 179,171,459.23 18,483,549.00 2,891,241,146.57 31.12.2008²) 

UniCredit Bulbank AD, Sofia, BG 92.07 694,863,069.33 149,536,269.56 5,623,745,542.49 31.12.2008²) 

UniCredit Tiriac Bank S.A., Bucharest, district 1, RO 50.61 451,827,753.58 89,536,269.24 4,337,988,163.09 31.12.2008²) 

UNIVERSALE International Realitäten GmbH, Vienna, AT 100.00 185,818,320.00 730,503.00 318,030,507.00 31.12.2008²) 

WAVE Solutions Information Technology GmbH, Vienna, AT 1) 100.00 1,261,566.00 410,786.00 47,500,603.00 31.12.2008²) 

Z Leasing POLLUX Immobilien Leasing Gesellschaft m.b.H., Vienna, AT 1) 99.80 3,808,192.00 250,640.00 5,953,850.00 31.12.2008²) 

Z Leasing RIGEL Immobilien Leasing Gesellschaft m.b.H., Vienna, AT 1) 99.80 2,517,070.00 -241,729.00 11,229,034.00 31.12.2008²) 

Z Leasing SIRIUS Immobilien Leasing Gesellschaft m.b.H., Vienna, AT 1) 99.80 -205,751.00 -338,845.00 7,069,151.00 31.12.2008²) 

Zagrebacka Banka d.d., Zagreb, HR 84.21 1,830,175,263.27 207,519,825.44 12,176,638,173.07 31.12.2008²) 

ZAO UniCredit Bank, Moscow, RU 100.00 1,266,028,699.80 266,059,065.28 14,228,921,703.37 31.12.2008²) 

ZETA Fünf Handels GmbH, Vienna, AT 1) 100.00 429,491,064.00 n.a. 429,496,543.00 31.12.2008²) 

Interests in companies accounted for under the proportionate consolidation method 


TOTAL 

INTEREST IN % 

EQUITY IN € 

Informations-Technologie Austria GmbH, Vienna, AT 50.00 17,739,470.45 803,111.00 113,444,548.21 31.12.2008²) 

Koc Finansal Hizmetler AS, Istanbul, TR 50.00 2,013,674,174.89 94,629,779.41 2,055,681,401.71 31.12.2008²) 

NET INCOME / 

LOSS IN € 


BALANCE SHEET 

DATE 


Interests in associated companies accounted for under the equity method 


TOTAL 

INTEREST IN % 

EQUITY IN € 

NET INCOME / 

LOSS IN € 


BALANCE SHEET 

DATE 

Bank für Tirol und Vorarlberg Aktiengesellschaft, Innsbruck, AT 47.38 538,747,000.00 48,579,000.00 8,499,200,000.00 31.12.2008²) 

BKS Bank AG, Klagenfurt, AT 36.03 442,623,000.00 45,649,000.00 6,129,100,000.00 31.12.2008²) 

NOTARTREUHANDBANK AG, Vienna, AT 25.00 21,338,000.00 7,484,000.00 970,999,000.00 31.12.2008²) 

Oberbank AG, Linz, AT 33.33 898,320,000.00 111,264,000.00 15,200,000,000.00 31.12.2008²) 

Oesterreichische Clearingbank AG, Vienna, AT 20.75 179,496,000.00 -504,000.00 1,493,617,000.00 31.12.2008²) 

Oesterreichische Kontrollbank Aktiengesellschaft, Vienna, AT 49.15 451,009,000.00 21,097,000.00 39,400,000,000.00 31.12.2008²) 

Österreichische Hotel- und Tourismusbank Gesellschaft m.b.H., Vienna, AT 50.00 24,626,000.00 930,000.00 952,401,000.00 31.12.2008²) 

UniCredit Global Leasing S.p.A., Milan, IT 32.59 648,292,895.00 n.a. 2,294,186,911.00 31.12.2008²) 

Unconsolidated companies 


A) Group companies 

TOTAL 

INTEREST IN % 

EQUITY IN € 

"Diners Club CEE Holding AG", Vienna, AT 99.80 3,596,163.58 198,803.02 30,010,186.18 31.12 2007 

Alfa Holding Ingatlanszolgaltato Kft., Györ, HU 95.00 476.19 -1,162.35 3,933.26 31.12 2006 

BA Betriebsobjekte GmbH, Vienna, AT 1) 100.00 15,882,881.98 1,611,088.15 30,031,220.47 31.12 2007 

BA GVG-Holding GmbH, Vienna, AT 100.00 39,302.79 -9,374.88 1,235,537.54 30.09 2007 

BA Private Equity GmbH, Vienna, AT 100.00 1,477,679.90 83,129.42 2,510,629.41 31.12 2007 

BACA Export Finance Limited, London, GB 100.00 212,510.00 4,263,590.00 1,029,985.00 31.12 2007 

BA-CA Vienna Mitte Holding GmbH, Vienna, AT 100.00 36,331,360.68 5,125.48 36,336,429.20 31.12 2007 

BACAI (in Liquidation), London, GB 100.00 1.05 0.00 1.05 31.12 2007 

Baltic Business Center Sp.z.o.o., Gdynia, PL 62.00 -17,398,932.78 892,262.43 2,432,801.49 31.12 2007 

NET INCOME / 

LOSS IN € 


BALANCE SHEET 

DATE 

Bank Austria Aktiengesellschaft & Co EDV Leasing OHG, Vienna, AT 100.00 434,201.11 -15,167.79 16,991,901.00 31.12 2007 

Bank Austria Creditanstalt Immobilien Entwicklungs- und VerwertungsgmbH, Vienna, AT 1) 100.00 24,500.00 72,927.08 554,113.28 31.12 2007 

Bank Austria Creditanstalt Immobilienberatungs- und Service GmbH, Vienna, AT 93.26 -199,698.52 63,773.00 747,620.71 31.12 2007 3) 

Bank Austria Creditanstalt Versicherungsdienst GmbH, Vienna, AT 81.00 184,743.52 9,173.69 1,460,131.81 31.12 2007 

Bank Austria Finanzservice GmbH, Vienna, AT 1) 100.00 1,525,300.69 24,008.58 6,967,113.71 31.12 2007 

Bank Austria-CEE BeteiligungsgmbH, Vienna, AT 100.00 30,711.51 -4,848.49 31,971.51 31.12 2007 

Bank Rozwoju Energetyki i Ochrony Swodowiska S.A. MEGABANK in Liquidation, Warsaw, PL 100.00 -4,361,848.29 97,251.66 75,760.74 31.12 2007 

BFAG - Holding Gesellschaft m.b.H., Vienna, AT 100.00 23,905.27 -1,702.73 24,925.27 31.12 2007 

Buchstein Immobilienverwaltung Gesellschaft m.b.H., Vienna, AT 100.00 24,678.33 -3,052.92 26,038.00 31.12 2007 

Cards & Systems EDV-Dienstleistungs GmbH, Vienna, AT 58.00 2,042,072.20 973,482.53 7,148,542.93 31.12 2007 

EK Mittelstandsfinanzierungs AG, Vienna, AT 98.00 33,888,685.48 -1,234,459.29 34,588,316.55 31.12 2007 

Erzet-Vermögensverwaltungsgesellschaft m.b.H., Vienna, AT 100.00 208,615.82 979.93 209,875.82 30.11 2007 

Financial Risk Management GmbH, Vienna, AT 100.00 137,529.65 53,626.00 346,560.55 31.12 2007 

FONTANA Hotelverwaltungsgesellschaft m.b.H., Vienna, AT 100.00 -19,163.27 -18,699.93 0.00 31.12 2007 

Gründerfonds GmbH & Co KEG, Vienna, AT 100.00 9,102,482.41 -22,044.90 9,220,971.17 31.12 2007 

GUS Consulting GmbH, Vienna, AT 100.00 2,588,575.39 784,070.68 21,587,658.43 31.12 2007 

Human Resources Service and Development GmbH, Vienna, AT 1) 100.00 -7,921.33 -50.00 1,236,670.67 31.12 2007 

Immobilien Rating GmbH, Vienna, AT 86.19 462,751.00 235,444.07 1,137,159.91 31.12 2007 3) 

Industrie-Immobilien-Verwaltung Gesellschaft m.b.H., Vienna, AT 1) 99.90 150,866.83 3,302.01 155,917.83 31.12 2007 

Infrastruktur Holding GmbH, Vienna, AT 100.00 24,465.98 -3,657.94 25,725.98 31.12 2007 

KLEA ZS-Immobilienvermietung G.m.b.H., Vienna, AT 99.80 2,507,587.91 -108,379.11 4,890,321.98 31.12 2007 

KLEA ZS-Liegenschaftsvermietung G.m.b.H., Vienna, AT 99.80 1,270,037.75 -288,823.67 8,281,224.57 31.12 2007 

Mezzanin Finanzierungs AG, Vienna, AT 56.67 31,102,448.80 676,696.75 31,887,088.37 31.12 2007 

MY Drei Handels GmbH, Vienna, AT 100.00 22,814.87 2,339.84 23,654.87 31.12 2007 

Paytria Unternehmensbeteiligungen GmbH, Vienna, AT 100.00 313,406.03 -13,598.58 322,009.03 31.12 2007 

RAMSES-Immobilienholding GmbH, Vienna, AT 99.80 30,653.24 4,346.76 32,604.92 31.12 2007 

RE-St.Marx Holding GmbH, Vienna, AT 1) 100.00 20,955.18 1,706,162.86 1,730,838.04 31.12 2007 

SFB Stockerauer Finanzierungsberatungs- und Beteiligungs GmbH, Vienna, AT 99.80 -209,195.58 -106,547.42 1,392,151.02 31.12 2007 

Sigma Holding Ingatlanszolgaltato Kft., Budapest, HU 95.00 -456,539.18 -2,707.16 424,975.63 31.12 2006 

Sinera AG, Zug, CH 100.00 93,192.31 11,220.82 95,363.45 31.12 2007 

THETA Fünf Handels GmbH, Vienna, AT 100.00 -8,068.57 -13,226.86 1,000,000.00 31.12 2007 

WED Holding Gesellschaft m.b.H., Vienna, AT 48.06 11,549,201.08 26.46 11,753,225.24 31.12 2007 

WED Viennaer Entwicklungsgesellschaft für den Donauraum Aktiengesellschaft, Vienna, AT 100.00 18,366,570.60 -1,817.59 19,159,316.24 31.12 2007 

WEILBURG Grundstückvermietungsgesellschaft m.b.H., Vienna, AT 99.99 809,566.86 -540,726.09 9,945,770.85 31.12 2007 

Wirtschaftsverein der MitarbeiterInnen der Bank Austria Creditanstalt, reg.Gen.m.b.H., Vienna, AT 54.66 262,348.56 -1,186,689.84 4,084,185.91 31.12 2007 


Unconsolidated companies 


B) Associated companies 

TOTAL 

INTEREST IN % 

EQUITY IN € 

NET INCOME / 

LOSS IN € 


BALANCE SHEET 

DATE 

"Gesfö" Gemeinnützige Bau- und Siedlungsgesellschaft m.b.H., Vienna, AT 25.00 6,122,102.41 412,014.30 14,074,813.00 31.12 2007 

"Sparkassen-Haftungs Aktiengesellschaft", Vienna, AT 28.26 220,307.67 -2,186.69 223,084.67 31.12 2007 

BANK MEDICI AG, Vienna, AT 25.00 8,033,094.73 472,298.56 28,266,119.25 31.12 2007 

HVB Banca pentru Locuinte S.A., Bucharest, RO 45.00 7,720,533.25 -2,367,577.87 12,902,300.56 31.12 2007 

Mizuho Corporate Bank - BA Investment - ConsultingGmbH, Vienna, AT 50.00 1,004,619.06 1,884.03 1,124,422.11 31.12 2007 

MY Fünf Handels GmbH, Vienna, AT 50.00 49,607.29 -3,910.11 50,885.92 31.12 2007 

Österreichische Wertpapierdaten Service GmbH, Vienna, AT 29.30 36,335.42 0.00 1,428,138.98 31.12 2007 

PayLife Bank GmbH, Vienna, AT 23.86 61,659,403.57 17,764,590.25 394,445,966.78 31.12 2007 

Viennaer Kreditbürgschaftsgesellschaft m.b.H., Vienna, AT 24.49 5,077,893.74 1,503.03 8,019,949.62 31.12 2007 

C) Other companies 

Banco Interfinanzas S.A. , Buenos Aires, AR 50.00 8,806,447.45 -3,052,740.17 79,662,411.35 31.12 2007 

bareal Immobilientreuhand GmbH, Vienna, AT 50.00 546,978.13 829,826.09 1,149,410.77 31.12 2007 

CREDANTI HOLDINGS LIMITED, Nicosia, CY 30.00 49,987,155.00 1,416,991.00 50,098,623.00 31.12 2007 

Gustav-Kramer-Straße 5C Verwaltungs GmbH, Vienna, AT 25.50 37,201.91 -11,836.71 37,701.91 31.12 2007 

Kapital-Beteiligungs Aktiengesellschaft, Vienna, AT 20.00 8,831,747.59 266,203.88 9,497,472.57 30.09 2007 

Projektentwicklung Schönefeld Verwaltungsgesellschaft mbH, Stuttgart, DE 50.00 27,750.65 -796.54 29,536.89 31.12 2007 

SP Projektentwicklung Schönefeld GmbH & Co.KG, Stuttgart, DE 50.00 20,489,434.41 -9,073,936.32 21,336,919.81 31.12 2007 

UBF Mittelstandsfinanzierungs AG in Abwicklung, Vienna, AT 24.10 11,800,254.13 5,659,467.92 12,022,558.41 31.12 2007 

The total percentage held comprises all shares held by consolidated companies and other group companies but not shares held on a trust basis. 

Euity: equity pursuant to Section 229 of the Austrian Commercial Code. 

Net income/loss before movements in reserves and appropriation of profits. 

1 ) Profit pooling arragement with UniCredit Bank Austria AG. 

² ) Figures in accordance with IFRSs. 

3) Shares held via UniCredit Global Leasing S.p.A. are taken into account in proportion to UniCredit Bank Austria AG's ownership interest in UniCredit Global Leasing S.p.A.. 



Board of Unicredit Bank Austria AG 

Supervisory Board 

1 January 2008 – 31 December 2008 

Chairman: Alessandro PROFUMO 

Deputy Chairman: Franz RAUCH 

Members: Vincenzo CALANDRA BUONAURA (until 31 July 2008) 

Claudio CONSOLO (from 31 July 2008) 

Sergio ERMOTTI 

Paolo FIORENTINO 

Dario FRIGERIO 

Roberto NICASTRO 

Vittorio OGLIENGO 

Karl SAMSTAG 

Gerhard SCHARITZER 

Wolfgang SPRIßLER 

Delegated by the Employees`Council: Wolfgang HEINZL 

Chairman of the Employees`Council 

Adolf LEHNER 

First Deputy Chairman of the Employees`Council 

Emmerich PERL 

Second Deputy Chairman of the Employees`Council 

Martina ICHA (until 27 May 2008) 

Member of the Employees`Council 

Riccardo HOFER (from 04 November 2008) 


Heribert KRUSCHIK (until 03 November 2008) 


Josef REICHL 


Karin WISAK-GRADINGER (from 28 May 2008) 

Mitglied des Zentralbetriebsrates 


Management Board 

1 January 2008 – 31 December 2008 

Chairman / Chief Executive Officer: Erich HAMPEL 

Members: Helmut BERNKOPF (from 16 September 2008) 

Federico GHIZZONI 

Thomas GROSS (until 31 October 2008) 

Wilhelm HEMETSBERGER (until 31 May 2008) 

Werner KRETSCHMER (until 31 December 2008) 

Ralph MÜLLER 

Regina PREHOFER (until 15 September 2008) 

Carlo VIVALDI 

Stephan WINKELMEIER (from 07 November 2008) 

Robert ZADRAZIL 


Translation of the facsimile on page 184 / Auditors` Report on the Financial Statements 2008 

Financial Statements for 2008 



Auditors’ Report on the Financial Statements for 2008 

We have audited the financial statements of UniCredit Bank Austria AG for the 2008 financial year including the accounting records. The 

accounting records, the preparation and content of these financial statements and of the management report in accordance with the 

provisions of the Austrian Commercial Code, with the supplementary provisions of the Austrian Banking Act and with the Articles of 

Association are the responsibility of management of UniCredit Bank Austria AG. Our responsibility is to express an opinion on the financial 

statements based on our audit and to state whether the management report is consistent with the financial statements. 

We conducted our audit in accordance with legal provisions applicable in Austria and with Austrian generally accepted auditing principles. 

These principles require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 

from material misstatement, and to make a statement as to whether the management report is consistent with the financial statements. In 

planning the audit procedures, we considered our knowledge of the business and of the economic and legal environment in which UniCredit 

Bank Austria AG operates as well as expectations of possible errors. 

An audit includes examining, largely on a test basis, evidence supporting the amounts and disclosures in the accounting records and 

financial statements. An audit also includes assessing the accounting principles applied and significant estimates made by management, 

as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 

Our audit did not give rise to any objections. In our opinion, based on the findings of the audit, the financial statements comply with the 

legal provisions, with the supplementary provisions of the Austrian Banking Act and with the Articles of Association, and give a true and fair 

view of the financial position of UniCredit Bank Austria AG as at 31 December 2008 and of the performance of UniCredit Bank Austria AG 

for the 2008 financial year in accordance with Austrian generally accepted accounting principles. The management report is consistent with 

the financial statements. 

Savings Bank Auditing Association 

Auditing Board 

(Bank Auditors) 

Erich Kandler 

Public Accountant 

Friedrich O. Hief 


Vienna, 27 April 2009 

KPMG Austria GmbH 

Wirtschaftsprüfungs- und 

Steuerberatungsgesellschaft 

Martin Wagner 


Bernhard Gruber 


If the financial statements are to be published or forwarded in a form other than that on which the opinion has been expressed, this will require a prior 

new statement by us if our opinion is quoted or a reference to our audit is made in this connection. 





Translation of the facsimile on page 187 


Statement by Management 

We state to the best of our knowledge that the financial statements prepared in accordance with the relevant financial reporting standards 

provide a true and fair view of the financial position and performance or the issuer, and that in the Management Report the business trends 

including business results and the position of the issuer have been presented in such a way as to provide a true and fair view of the 

financial position and performance of the issuer, and that it describes the material risks and uncertainties to which the issuer is exposed. 


The Management Board: 

Erich Hampel 

(Chairman) 

Helmut Bernkopf Federico Ghizzoni Ralph Müller Carlo Vivaldi Stephan Winkelmeier Robert Zadrazil 



Investor Relations 

Investor Relations of UniCredit Bank Austria AG 

Renngasse 2, 1010 Vienna, Austria 

Tel: (+43) (0)5 05 05-87230 Fax: (+43) (0)5 05 05-87623 

e-mail: IR@unicreditgroup.at Internet: http://ir.bankaustria.at 

Günther Stromenger 

Tel: (+43) (0)5 05 05-872 30 

Thomas Kirin 

Tel: (+43) (0)5 05 05-527 74 

Ratings 

Long-Termin Subordinated Liabilities Short Term 

Moody`s 1) A1 A2 P-1 

Standard & Poor`s 2) A A- A-1 

1) Grandfathered debt is rated Aa2, subordinated debt rating is Aa3. 

2.) Grandfathered debt remains rated AA+, subordinated debt rating is AA+. 

Financial Calender 

13 May 2009 Results for the first three months of 2009 

5 August 2009 Results for the first six months of 2009 

11 November 2009 Results for the first nine months of 2009 

All Information is available electronically at http://ir.bankaustria.at 

Imprint Note and disclaimer 

Publisher: 


A-1010 Vienna, Schottengasse 6-8 

Tel.: +43 (0)5 05 05-0 

Fax: +43 (0)5 05 05-56155 

Internet: www.bankaustria.at 

e-mail: info@unicreditgroup.at 

BIC: BKAUATWW 

Austrian routing code: 12000 

Austrian Register of Firms: FN 150714p 

VAT registration number: ATU 51507409 

This edition of the Consolidated Financial Statements and 

Management Report of the Group and of the Financial Statements 

and Management Report of UniCredit Bank Austria AG is prepared for 

the convenience of our English-speaking readers. It is based on the 

German original, which is the authentic version and takes precedence 

in all legal aspects.

Annual Financial Statements 2008 of Bank Austria

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