Annual Financial Statements 2010 of Bank Austria

More documents

Recommendations

Info

Management Report Management Report (CONTINUED) € 2.4 bn, in parallel with developments on the assets side. hedging derivatives used for hedging customer business and the bank’s own positions developed in similar fashion on both the assets side (+€ 2.3 bn) and the liabilities side (+€ 2.7 bn) to reach comparable levels – an effect resulting from the assumption of functions previously performed by CAIB; on the liabilities side they amounted to € 2.9 bn. deposits from customers were up € 3.2 bn or 3.3% to € 100 bn. The increase took place in the area of short-term customer deposits and was heavily dependent on the interest rate environment in our markets. Deposits in Austrian-based customer business contracted by 5.6% – partly on account of high interest rate sensitivity. This compared with growth of € 6.1 bn or 12.8% in Bank Austria’s CEE Division. Based on a breakdown of countries, the rise in deposits was more broadly spread across the CEE region than that of loans. It was again Turkey and Russia which accounted for most of the increase, not only by virtue of their prominent role in the region, but also because these countries achieved the strongest growth rates both in euro and in local currency terms. The appreciation of the respective local currencies accounted for about one-half of the increase in deposits in CEE. In 2010, debt securities in issue (€ 27.6 bn) were somewhat below the level of year-end 2009 (– € 1.3 bn/–4.4%). The decline is explained by the redemption of issues before maturity in business with large corporate customers. As of 31 December 2010, primary funds – i.e. deposits from customers and debt securities in issue – totalled € 127.8 bn, 1.6% above the level of year-end 2009, which represented two-thirds (66.2%) of the balance sheet total. This means that loans and receivables with customers are almost entirely covered by primary funds. The ratio of customer loans to primary funds, based on a comparison of year-end 2010 with year-end 2009, again increased slightly (102% after 98% in 2009). This is due to developments in CEE, where, after a number of years characterised by deleveraging and intense competition for deposits, 2010 again saw a more expansive approach in lending business. As at 31 December 2010, equity amounted to € 17.5 bn, a € 3.1 bn (+21.5%) increase over the level at year-end 2009. Measured as a proportion of total liabilities and equity, it rose from 7.4% to 9.1%. The € 3,087 m growth in equity was achieved partly by a € 2,000 m capital increase, which was made available in March 2010 by our parent company UniCredit from funds generated by its capital increase. The remaining amount of the increase in equity resulted from income and expenses recognised in equity, which were a net amount of € 1,147 m, including the net profit (€ 798 m). In 2010, UniCredit Bank Austria AG did not pay any dividends for the 2009 financial year. As at 31 December 2010, shareholders’ equity excluding minority interests was € 16.9 bn, up by € 3.1 bn or 22.2% on year-end 2009. Capital resources pursuant to the Austrian Banking Act Risk-weighted assets (RWAs) as at the end of December 2010 were € 127.9 bn, up by € 13.5 bn or 11.8% on year-end 2009. Of the total increase, € 7.3 bn related to the portfolios maintained under the internal ratings-based (IRB) approach and € 4.4 bn to loans and receivables measured pursuant to the standardised approach. The overall increase resulted from an adjustment of risk parameters required in view of economic developments and from the higher exchange rates of most CEE currencies as at 31 December 2010. As a result of higher RWAs, the capital requirement for credit risk increased to € 9.1 bn (+11.5%) and the capital requirement for all types of risk rose to € 10.2 bn (+11.8%). Net capital resources as at the end of the reporting period were € 15.5 bn, up by € 3.0 bn or 24.2%. The increase resulted mainly from the capital increase of € 2.0 bn at UniCredit Bank Austria AG in the first quarter of 2010, and partly from adjustments of the carrying amount of equity interests and from exchange rate movements. Capital ratios as at 31 December 2010 improved significantly compared with the end of 2009. The Core Tier 1 capital ratio (Tier 1 capital ratio without hybrid capital) based on all risks rose from 8.33% to 10.04%. The Core Tier 1 capital ratio based on credit risk increased from 9.37% to 11.33%. Capital ratios 31 dEC. 2010 31 dEC. 2009 based on all risks 1) Tier 1 capital ratio 10.35% 8.68% ... without hybrid capital (Core Tier 1 capital ratio) 10.04% 8.33% Total capital ratio 12.13% 10.92% based on credit risk 2) Tier 1 capital ratio 11.68% 9.76% ... without hybrid capital (Core Tier 1 capital ratio) 11.33% 9.37% Total capital ratio 12.67% 11.29% 1) Credit risk, operational risk, position risk and settlement risk. / 2) Capital resources less requirement for the trading book and for commodities risk, exchange rate risk and operational risk as a percentage of the risk-weighted assessment basis for credit risk. Bank Austria · Annual Financial Statements 2010 22
Management Report Management Report (CONTINUED) Financial and non-financial performance indicators Volume and profitability � Average loans and receivables with customers (net of loan loss provisions, stated at € 127.5 m in the statement of financial position), were only slightly above the level of 2009 (+0.3%) despite a vigorous upturn from quarter to quarter (Q4 2010/Q4 2009 +4.1%). The development in Austria and CEE reflects the U-shaped trend already referred to in this report. In Austria, lending volume almost matched the previous year’s figure in a comparison of Q4 2010 with Q4 2009 (–0.9%), but the average figure for 2010 as a whole was still 2.8% lower than in 2009. In CEE (supported by the appreciation of CEE currencies in recent months), lending volume expanded from quarter to quarter (Q4 2010/Q4 2009 +9.6%) to exceed the previous year’s level in annual average terms (+3.4%). The bank’s unweighted lending volume is of more or less equal significance in both of its key regions, Austria and CEE. Resources and profitability in 2010 BANk AUStrIA AUStrIA 1) CEE relative size Average loans to customers (€ bn) 127.5 66.0 61.8 Change over previous year +0.3% –2.8% +3.4% Average RWAs under Basel 2 (€ bn) 122.9 43.4 74.3 Change over previous year +2.9% +1.0% +4.7% Operating income (€ m) 7,208 2,525 4,649 Change over previous year +0.8% – 9.1% +0.6% Profitability and value creation ROE before tax 2) 6.7% 18.1% 9.6% marginal EVA, € m 3) 194 276 12 marginal RARORAC 2.28% 8.96% 0.17% Equity Average equity (€ bn) 4) 17.0 4.4 11.1 Change over previous year +20.0% +15.9% +11.4% 1) Family & SME Banking (F&SME), Private Banking (PB) and Corporate & Investment Banking (CIB) Divisions; the difference of the total amount is shown in the Corporate Center (see section D.2 on segment reporting in the notes to the consolidated financial statements on page 142 of this report / 2) ROE = profit before tax/institutional capital. / 3) Calculated on the basis of capital allocated under Basel 2. / 4) Subsidiaries are included at actual IFRS capital. Average risk-weighted assets (€ 122.9 bn, RWAs under Basel 2) showed a similar trend from quarter to quarter. The U-shaped trend was more pronounced: in the fourth quarter of 2010, risk-weighted assets in Austria and CEE exceeded the previous year’s level by 13.4% and 11.3%, respectively. In average terms for the year, they were 1.0% (Austria) and 4.7% (CEE) above the levels seen in 2009. A factor to be noted in this context is the restructuring of investment banking activities: in Austria, market risk declined by 56%, and in the bank overall, including CEE, it decreased from € 4.3 bn to € 2.8 bn (–35%). Risk-weighted lending volume increased by an average 4.1% in the three Austrian customer business segments (this was influenced by a special effect induced by the appreciation of the Swiss franc; see the Family & SME Banking segment report). In CEE, average RWAs rose by 4.7%. In terms of absolute size, the RWAs of the CEE business segment are about 1.7 times those of Austriabased business, reflecting the different level of risk associated with more or less equally large loan exposures in both regions. Average equity rose by 20.0% to € 17.0 bn in the reporting year, largely as a result of the capital increase in March 2010, and of profit generated in 2010. return on equity (ROE before tax) was 6.7%, once again lower than for 2009 as a whole (9.1%) and also below long-term averages (2005 –2009: 14.0%). The decline was due to the increase in equity and to the weak profit performance reflecting the high non-operating items to be deducted from operating profit. Economic Value Added (EVA), a key indicator of the bank which is also used for customer business below the divisional level, measures value creation beyond the cost of capital. In more precise terms, EVA is defined as net operating profit after tax, adjusted for one-off effects, less minimum return required by the market on equity capital employed; marginal refers to the exclusion of goodwill. Under the new methodology, the equity capital which is expected to generate a return is no longer defined as IFRS equity but as capital derived from average risk-weighted assets by using the target Tier 1 capital ratio. For this reason the risk-adjusted return may be higher than return on equity, which is based on institutional capital. Inter-segment relations and differences in the total compared with the EVA for the bank as a whole, which is calculated separately, are reflected in the Corporate Center. In 2010, Bank Austria generated an EVA of € 194 m, significantly more than in 2009 (€ 105 m), despite increases in average riskweighted assets and equity capital expected to generate a return (calculation based on a Tier 1 capital ratio of 7.2% and a cost of capital of 10.18%). Marginal rArOrAC was 2.28% (2009: 1.29%), significantly below the bank’s target. EVA in Austrian customer business was € 276 m, in CEE € 12 m. In both parts of the bank’s operations, EVA declined as risk-weighted assets and equity capital employed rose and the cost of capital increased. EVA in the Corporate Center remained negative, though improving strongly. � The number of employees (in terms of full-time equivalents – FTEs) declined slightly, from 60,437 at the end of 2009 (restated) to 59,653 FTEs at the end of December 2010 (down by 784 FTEs, –1.3%). In Austrian customer business, staffing levels rose by 124 FtEs (+2.2%). Staff numbers in the F&SME and PB business segments increased by 81 FTEs and 33 FTEs, respectively. This was partly due to consolidation effects, and mostly to our “Best Start” youth initiative and in increases in the number of customer relation- Bank Austria · Annual Financial Statements 2010 23
Page 1: Annual Financial Statements 2010 of
Page 4 and 5: Bank Austria at a Glance Income sta
Page 6 and 7: Management Report Consolidated Fina
Page 8 and 9: Management Report Management Report
Page 50: Management Report Management Report
Page 53 and 54: Consolidated Financial Statements i
Page 57: Consolidated Financial Statements i
Page 60 and 61: A - Accounting policies A.1 - Infor
Page 74 and 75:
Consolidated Financial Statements i
Page 76 and 77:
Page 78 and 79:
Page 80 and 81:
Page 82 and 83:
Page 84 and 85:
Page 86 and 87:
Page 88 and 89:
Page 90 and 91:
Page 92 and 93:
Page 94 and 95:
Page 96 and 97:
Page 98 and 99:
Page 100 and 101:
Page 102 and 103:
Page 104 and 105:
Page 106 and 107:
D - Segment reporting D.1 - Reconci
Page 108 and 109:
Page 110 and 111:
Page 112 and 113:
Page 114 and 115:
Page 116 and 117:
Page 118 and 119:
Page 120 and 121:
Page 122 and 123:
Page 124 and 125:
Page 126 and 127:
Page 128 and 129:
Page 130 and 131:
Page 132 and 133:
Page 134 and 135:
Page 136 and 137:
Page 138 and 139:
Page 140 and 141:
F - Additional disclosures F.1 - Ti
Page 142 and 143:
Page 144 and 145:
Page 146 and 147:
Page 148 and 149:
Page 150 and 151:
Page 152 and 153:
Page 154 and 155:
Page 156 and 157:
Page 159 and 160:
II. UniCredit Bank Austria AG Preli
Page 161 and 162:
Management Report of UniCredit Bank
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Financial Statements of UniCredit B
Page 187 and 188:
Page 189 and 190:
Page 191 and 192:
Notes to the Financial Statements 2
Page 193 and 194:
Notes to the Financial Statements P
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Notes to the Financial Statements D
Page 205 and 206:
Page 207 and 208:
Notes to the Financial Statements T
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
Shares in group companies and equit
Page 215 and 216:
Supervisory Board and Management Bo
Page 217 and 218:
Financial Statements for 2010 Trans
Page 219 and 220:
Financial Statements for 2010 Prüf
Page 221 and 222:
Financial Statements for 2010 Bank
Page 223 and 224:
Financial Statements for 2010 State
show all

Annual Financial Statements 2010 of Bank Austria

Create successful ePaper yourself

Delete template?

Save as template?