Annual Financial Statements 2011 of Bank Austria

More documents

Recommendations

Info

Consolidated Financial Statements in accordance with IFRSs E – Risk report (CoNTINuED) E.7 – operational risk Operational risk (OpRisk) is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events (including legal risks). For example, compensation paid to customers for incorrect /inadequate product-related advice, IT system failures, damage to property, processing errors or fraud are subject to accurate and consolidated risk measurement and management (collection of loss data, external data, scenarios, indicators), on which the calculation of capital to be held for operational risk is 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. Over the years, UniCredit Bank Austria AG has taken numerous measures in the various divisions to manage and reduce operational risk. Thus 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 have been implemented among other measures. In line with other types of risk, UniCredit Bank Austria AG – like UniCredit – has built up a decentralised operational risk management framework based on representatives within divisions and at banking subsidiaries – Divisional OpRisk Managers (DORM) and OpRisk Managers – in addition to central operational risk management. While the main task of central risk management is to define the methods used and to perform risk measurement and analysis, decentralised risk managers are responsible for taking measures to reduce, prevent, or take out insurance against, risks. Activities in 2011 concentrated on further developing OpRisk management with a focus on mitigation actions to reduce future losses and involving OpRisk in relevant projects to a greater extent. A focal area in CEE was the analysis of derivatives sale processes by a working group established jointly with Market Risk. In this context the CEE banking subsidiaries were reviewed for compliance with the rules of the Derivatives Policy CEE rolled out in 2010 in order to identify and mitigate potential operational risk. The OpRisk soft limits for the Bank Austria Divisions and all major banking subsidiaries, introduced in 2010, are monitored and reported within the UniCredit Bank Austria AG OpRisk Committee. Overall, the organisation of operational risk management at UniCredit Bank Austria AG is well established at a high level of quality. 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. The analysis of the general ledger for operational risk relevance confirmed the extensive and complete operational risk data collection. A Permanent Working Group (PWG) was established in UniCredit Bank Austria AG to identify and implement possible measures to address existing and potential operational risk on the basis of an analysis of factors including loss events, key risk indicators, scenarios, projects and new products. In 2011, implementation of the PWG concept started at all AMA-compliant banking subsidiaries in CEE. Since 2008, the task of dealing with operational risk issues has been performed by a separate Operational Risk Committee (OpRiCo), whose meetings are held on a quarterly basis and are attended by the Chief Risk Officer, the Head of Strategic Risk Management & Control, the Head of UniCredit Operational Risk Management, Compliance, Internal Audit, the Divisional Operational Risk Managers and OpRisk representatives of CEE banking subsidiaries. The OpRiCo is a major step towards integrating operational risk in the bank’s processes; its main tasks are to report on current operational risk issues and developments, to approve operational risk-relevant documents, to report losses and serve as a body to which unresolved issues are referred. In 2012, activities with regard to operational risk will focus on • monitoring operational risk limits within the framework of the Operational Risk Committee, • analysing operational risk events related to credit risk and reporting them within the framework of the Operational Risk Committee, • supporting the units pursuant to the AMA rollout plan in carrying out the regulatory reviews in cooperation with UniCredit Group, • supporting the holding company in implementing measures resulting from the review by Banca d’Italia, • working to ensure that the Permanent Working Group becomes firmly established in UniCredit Bank Austria AG and completing the PWG rollout in major CEE legal entities with a view to better analysing loss events, indicators and scenarios through cooperation with the relevant functions and defining mitigation actions to reduce operational risk, • validating the implementation of the Derivatives Policy CEE at the CEE banking subsidiaries, • developing a process to identify OpRisk-relevant projects, • creating, firmly establishing and rolling out the reputational risk function in Bank Austria and in major CEE banking subsidiaries. Bank Austria · Annual Financial Statements 2011 154
Consolidated Financial Statements in accordance with IFRSs E – Risk report (CoNTINuED) E.8 – 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. E.9 – Financial investment risk and real estate risk In dealing with risks arising from the bank’s shareholdings and equity interests, 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; 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. Real estate risk measures the fluctuations in market value of bank-owned real estate on the basis of market prices and the volatility of related rent indices. E.10 – Legal risks We generally do not make provisions to the extent it is not possible to reliably predict the outcome of proceedings or to quantify possible losses. In cases where it is possible to estimate in a reliable manner the amount of the possible loss and such loss is deemed probable, we have made provisions in amounts we deem appropriate in light of the particular circumstances and in accordance with applicable accounting principles. In line with the above policy, provisions have been made in the amount of the estimated risk for the following pending legal proceedings: • UniCredit Bank Austria AG (“Bank Austria”) has joined as a process guiding intervening party in support of the defendant AKB Privatbank Zürich AG [formerly a subsidiary of Bank Austria and formerly Bank Austria (Schweiz) AG] in a suit in Switzerland relating to alleged claims of bundesanstalt für Vereinigungsbedingte sonderaufgaben “bvs” (formerly Treuhandanstalt), the legal successor to Deutsche Treuhandanstalt, the German public body for the new Länder reconstruction. Essentially it is asserted that the former subsidiary of Bank Austria in Switzerland participated in the embezzlement of funds from companies in the former East Germany. BvS lost the case in the court of first instance and fully won the appeal. Bank Austria filed an appeal against that judgment before the Court of Cassation of the Zurich Canton. In November 2011 the Court of Cassation granted Bank Austria’s appeal, revoked the judgment for the plaintiff issued by the Court of Appeal of Zurich and remanded the case back to the Court of Appeal (= second instance) for reconsideration. • the madoff fraud Several customers addressed enquiries and complaints against Bank Austria in connection with certain funds related to the fraudulent actions by Mr. Bernard L. Madoff. The following proceedings are relevant: austrian civil proceedings: In connection with the funds linked to the activities of Mr Madoff, many legal actions are pending with Austrian courts to date, with the claimed amount totalling € 130.5 million. In nine lawsuits Bank Austria succeeded at first instance, five at second instance as well and two overall are already legally binding. In one of those cases the Supreme Court revoked the judgment issued by the court of second instance in favour of the plaintiffs and remanded the case back to the court of first instance. Two interim judgments were handed down in favour of the plaintiffs, in one of those cases the claim has since been withdrawn and in the other case Bank Austria has appealed the interim judgment. criminal proceedings: Bank Austria has been named as a defendant in criminal proceedings in Austria which concern the Madoff case. These proceedings were initiated by a complaint filed by the FMA (the Austrian Financial Market Authority) to the Austrian prosecutor. Subsequently complaints were filed by purported investors in funds which were invested, either directly or indirectly, in Bernard L. Madoff Investments Securities LLC and Bernard L. Madoff Securities LLC (collectively referred to as “BMIS”). These complaints allege, amongst other things, that Bank Austria breached provisions of the Austrian Investment Fund Act as prospectus controller of the Primeo Fund. These criminal proceedings are still at the pre-trial stage. Bank Austria · Annual Financial Statements 2011 155
Page 1:
Annual Financial Statements 2011 of
Page 4 and 5:
Bank Austria at a Glance Income sta
Page 6 and 7:
Management Report Management Report
Page 8 and 9:
Page 10 and 11:
Page 12 and 13:
Page 14 and 15:
Page 16 and 17:
Page 18 and 19:
Page 20 and 21:
Page 22 and 23:
Page 24 and 25:
Page 26 and 27:
Page 28 and 29:
Page 30 and 31:
Page 32 and 33:
Page 34 and 35:
Page 36 and 37:
Page 38 and 39:
Page 40 and 41:
Page 42 and 43:
Page 44 and 45:
Page 46 and 47:
Page 48 and 49:
Page 50 and 51:
Page 52 and 53:
Page 54 and 55:
Page 56 and 57:
Page 58 and 59:
Page 61 and 62:
Consolidated Financial Statements i
Page 63 and 64:
Page 65 and 66:
Page 69:
Notes to the Consolidated Financial
Page 72 and 73:
Page 74 and 75:
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 97 and 98:
B - Notes to the income statement B
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106: Consolidated Financial Statements i
Page 107: Consolidated Financial Statements i
Page 167 and 168: F - Additional disclosures F.1 - Ti
Page 185 and 186: II. UniCredit Bank Austria AG Preli
Page 187 and 188: Management Report of UniCredit Bank
Page 207 and 208:
Management Report of UniCredit Bank
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
Financial Statements of UniCredit B
Page 215 and 216:
Financial Statements of UniCredit B
Page 217 and 218:
Notes to the Financial Statements o
Page 219 and 220:
Page 221 and 222:
Page 223 and 224:
Page 225 and 226:
Page 227 and 228:
Page 229 and 230:
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Shares in group companies and equit
Page 241 and 242:
Supervisory Board and Management Bo
Page 243 and 244:
Financial Statements for 2011 Bank
Page 245 and 246:
Financial Statements for 2011 An au
Page 247 and 248:
Financial Statements for 2011 Prüf
Page 249 and 250:
Financial Statements for 2011 Bank
Page 251 and 252:
Financial Statements for 2011 State
Page 253:
Investor Relations UniCredit Bank A
show all

Annual Financial Statements 2011 of Bank Austria

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?