Annual Financial Statements 2011 of Bank Austria

Consolidated Financial Statements in accordance with IFRSs
D – Segment reporting (CoNTINuED)
D.2 – Description of segment reporting
The segment reporting format is based on the internal reporting structure of business segments, which reflects management responsibilities in the
Bank Austria Group in 2011. 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.
Starting with the reporting period in 2011, segment reporting was adjusted to the new structure of the Group’s income statement. Goodwill impairment
and the Purchase Price Allocation effect are now shown immediately before net profit attributable to the owners of Bank Austria.
The definition of business segments is primarily based on organisational responsibility for customers.
Family & SME Banking
Responsibility for the Family & SME Banking segment covers Bank Austria’s business with private customers (except Private Banking customers) and
small and medium-sized enterprises (SMEs) with a turnover of up to € 50 m. Also included in this Division are the credit card business and factoring
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 product lines Financing & Advisory (classic and structured lending business and capital market
advisory services), Global Transaction Banking (including payment transactions, trade finance, cash management) and Markets (Treasury). Control is
performed through a matrix organisation based on customer segments: international corporates, corporate customers whose turnover exceeds € 50 m,
real estate, public sector and financial institutions.
The Corporate & Investment Banking segment includes a number of subsidiaries – e.g. the Bank Austria Real Invest Group, Bank Austria Wohnbau-
bank AG and smaller subsidiaries in CEE countries with a focus on investment banking – as consolidated companies.
Central Eastern Europe (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).
Corporate Center
The Corporate Center comprises all equity interests that are not assigned to other segments and it also includes the contribution from UniCredit
Leasing, in which Bank Austria has a shareholding interest of 31.01% accounted for under the equity method. Funding costs relating to consolidated
subsidiaries and equity not allocated to business segments are also assigned to the Corporate Center. Also included are inter-segment eliminations,
other items which are not to be assigned to other business segments, and impairment losses on goodwill.
Methods
Net interest 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 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.
Overhead costs are allocated to the business segments according to a key of distribution applied within the Group on a uniform basis (50% costs,
20% revenues, 20% FTEs and 10% proportionately).
In 2011, capital allocated to the business segments in UniCredit Bank Austria AG, based on the Tier 1 capital ratio, is 7% of risk-weighted assets of
the preceding quarter. Capital allocation to subsidiaries reflects actual IFRS capital. The adjustment item with respect to the consolidated IFRS capital
of the Bank Austria Group is reflected in the Corporate Center.
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