Annual Financial Statements 2010 of Bank Austria

Consolidated Financial Statements in accordance with IFRSs
D – Segment reporting (CoNTINuED)
D.2 – Description of segment reporting
As in previous periods, the segment reporting format is based on the internal reporting structure of business segments, which reflects management
responsibilities in the Bank Austria Group in 2010. The business segments are presented as independent units with their own capital resources and
responsibility 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.
Family & SME Banking
Responsibility for the Family & SME Banking Division covers Bank Austria’s business with private customers (except Private Banking customers) and
small businesses and the credit card business.
Private Banking
Private Banking has responsibility for private customers with investments exceeding € 500,000. Schoellerbank AG and various other small subsidiaries
are also included in the Private Banking Division.
Corporate & Investment Banking
The Corporate & Investment Banking segment covers the sub-segments large customers (international corporates, financial institutions, public sector)
and real estate, business with medium-sized companies and customers using specific products as well as treasury activities. The Corporate & Investment
Banking Division includes, beside others, Bank Austria Wohnbaubank AG and the Bank Austria Real Invest Group as consolidated companies.
Responsibility for the CAIB subsidiaries in the CEE countries – with the exception of UniCredit CAIB Poland S.A., which continues to be allocated to the
Corporate & Investment Banking business segment – was transferred to the CEE business segment in the first quarter of 2010. UniCredit CAIB and
UniCredit CAIB Securities UK Ltd. are included in the consolidated results of the Bank Austria Group until the end of May 2010. After the integration of
customer-driven investment banking activities of UniCredit CAIB into Bank Austria, proprietary trading activities remaining within CAIB and UniCredit CAIB
Securities UK Ltd. were sold to UniCredit Bank AG (the former Bayerische Hypo- und Vereinsbank AG), Munich, in June 2010.
CEE
The CEE business segment includes the commercial banking units of the Bank Austria Group in the region of Central and Eastern Europe (including
Turkey and Kazakhstan). The CAIB subsidiaries in the CEE countries – with the exception of UniCredit CAIB Poland S.A., which remains within the
Corporate & Investment Banking business segment – were allocated to the CEE business segment in the first quarter of 2010.
Corporate Center
Corporate Center covers all equity interests that are not assigned to other segments and it also includes the contribution from UniCredit Global Leasing,
in which Bank Austria has a shareholding interest of 31.01% accounted for under the equity method. Also included are inter-segment eliminations and
other items which are not to 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, before deduction of minority interests, earned by
the respective segment.
The interest rate applied to investment of equity allocated to the business segments is determined for one year in advance as part of the budgeting
process. It is composed of a “risk-free” interest rate plus a margin of the historical average (6 years) of the 5-year CDS spread of UniCredit.
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