Annual Financial Statements 2011 of Bank Austria

Management Report
Management Report (CONTINUED)
� The following non-operating items were deducted from the net
operating profit in 2011 to obtain the profit before tax:
Allocations to provisions for risks and charges in 2011 were
€ 136 m, unchanged over the previous year. This amount was
mainly set aside for pending legal risks, most of it for the legal
proceedings in Switzerland which are still under way (formerly
AKB Privatbank AG/alleged claims by Bundesanstalt für vereinigungsbedingte
Sonderaufgaben, BvS); further details are provided
in Section E.10 of the risk report on pages 155 to 156.
The item net income from investments moved into negative
territory in 2011 (– € 277 m) from net income of € 61 m (recast)
in the previous year. In addition to a generally good performance
of financial and real estate investments, positive factors included
a one-off effect from a revaluation gain resulting from the restructuring
of the Moscow Interbank Currency Exchange (MICEX)
Group, in which our Russian banking subsidiary holds an equity
interest, and realised gains in connection with an addition to our
shareholding in CA Immo, a real estate investment company, as
well as income from the sale of industrial shareholdings held by
B&C Holding based on the terms and conditions of sale (Lenzing
AG earn-out); these factors totalled € 154 m.
The most important factor which had a negative impact were the
write-downs on holdings of greek government bonds. The European
Council decisions made on 21 July 2011 to support Greece
were for the first time accompanied by an offer for the participation
of private investors, made in the middle of 2011, suggesting an
impairment of the exposure to Greek government bonds. In the
consolidated financial statements for the first six months of 2011,
Bank Austria therefore made a write-down on its holdings of
Greek government bonds, which the parent company UniCredit
Bank Austria AG and CEE banking subsidiaries have held in the
banking book for a long time. The European Council’s statements of
intent of 26 October 2011 made a more extensive debt restructuring
appear more likely. Therefore a write-down on the holdings of
Greek government bonds to the mid-market prices prevailing as
at 30 September 2011 (fair value level 1) was made in the consolidated
financial statements for the first nine months of 2011.
Changes in major items of the income statement for 2011 compared with 2010 (increase/decrease in € m)
Net interest income 1)
Net fees and commissions
Net trading, hedging and fair value income, and net other expenses/income
Operating income
Costs: current operating expenses
Costs: bank levies
Net write-downs of loans and provisions for guarantees and commitments
Net operating profit 2)
Non-operating items 3)
Greece-related effect
Profit before tax
Other items: income tax and non-controlling interests
Goodwill impairment and PPA
Recasting difference 4)
–396
–377
Net profit (as published)
–538
1) Net interest + dividend income and other income from equity investments. / 2) Operating profit less net write-downs of loans and provisions for guarantees and commitments. / 3) Provisions
for risks and charges (change: –€ 0 m), integration/restructuring costs (–€ 24 m), net income from investments (without Greece-related effect: +€ 58 m) compared with the previous year. /
4) All comparative figures for 2010 except net profit (bottom line) have been recast to reflect the current consolidation perimeter. Of the total amount of the change in net profit compared with
the unadjusted figure for the previous year (–€ 500 m), –€ 38 m relates to changes in the consolidation perimeter (recasting difference).
–165
–136
–102
–83
–38
–71
–600 –500 –400 –300 –200 –100 0 100 200 300
400 500
–6
+24
+34
+42
+197
+488
Bank Austria · Annual Financial Statements 2011
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