Annual Report 2007

Both hard and soft facts are employed as creditworthiness
criteria. In corporate customer business, soft facts are de fined
systematically during discussions with the company and then
assessed.
Since 2005, a scoring system has been employed for the auto -
matic classification of small volume business with employed
retail customers.
This credit rating system is also utilised by subsidiaries in this
customer segment.
Liquidity risk
Liquidity risk means not being able to fulfil one’s payment
obligations by the due date or, in the case of a liquidity short -
age, of not being able to acquire enough liquidity at the terms
expected.
Maturity-matching refinancing has a high priority in Raiffeisenlandesbank
Oberösterreich. This is reflected in the liquidity
gap analysis.
This is used for the calculation of monthly scenarios, which
define the closure expenditure required for open liquidity items.
The sufficient supply of short- and medium-term liquidity
in possible bottleneck situations is shown in the liquidity
hedging plan.
Operational risks
Raiffeisenlandesbank Oberösterreich defines operational risk
as being the risk of losses derived from the inadequacies or
failure of internal procedures, people and systems, or external
events.
Raiffeisenlandesbank Oberösterreich uses both organisa tional
and computer technology methods in order to best limit this
type of risk. A high degree of security is attained by means of
limit systems, competence regulations, a risk-adequate in -
ternal control system, a comprehensive security manual as
a behaviour code and directive, as well as scheduled and
unscheduled audits by Internal Auditing.
The operative management of this type of risk involves risk
discussions and analyses with managers (early warning system)
and the systematic registration of errors in a database for analysis
(ex-post analysis).
Risk-bearing capacity analysis
The risk bearing capacity analysis compares the Group risk
with the available risk coverage (operating result, hidden reserves,
provisions and equity), in order to furnish the certainty
that even in the very unlikely case of an extreme situation,
sufficient capital for risk coverage would be available.
The comparison of the Group risk with the available coverage
provides the risk-bearing capacity.
OeNB Audit 2007
The extensive audit carried out during the 2007 financial year
by OeNB of the business operations of Raiffeisenlandesbank
Oberösterreich, confirmed that the risk management already
complied with the requirements of Basel II, even before
Basel II came into effect.
OUTLOOK
Raiffeisenlandesbank Oberösterreich is in the process of
further expanding its risk-bearing ability and competitiveness.
The cost/income ratio is being reduced further by exercising
tight cost and income management, which also increases the
bank’s positive creative power.
State-of-the-art financial services for our customers
In the past, Raiffeisenlandesbank Oberösterreich has built up
many innovative business fields. With inventive and modern
financial services, we focus on sustainability and value-added,
as well as a continuous and lasting upward trend. Due to the
large capital resources available and the positive results, we
are in a position of systematically being able to expand our
special customer orientation. Our predominant marketing principle
is to assist the retention and enlargement of the financial
leeway of our customers.
54 Annual Report 07