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Ensuring liquidity for
corporate customers
in connection with
Basel II
Positive order situation
for the Investkredit Group
Further growth of
volume and earnings
as a target
Management discussion
On the whole, Investkredit enjoys a favourable financing environment. However, a higher order
intake level contrasts with higher credit risk costs. This is due to downgrading by rating agencies for
to economic reasons and higher risk premiums. The trend of corporates towards medium- to longterm
protection of liquidity will continue in the current year. Two factors illustrate this assessment: On
the one hand, there is some uncertainty among businesses in connection with the policy approach
that will be taken by major banks. On the other hand, by anticipating Basel II provisions changes in
the financing culture will lead to a reassessment of the aspect “security in financing“. As a specialist
bank for corporates, Investkredit is well prepared to deal with these developments in the financial
markets in an adequate way. Investkredit regards it as part of its mission to take the macroeconomic
implications of financing into consideration and promotes a more relaxed approach and cultural
awareness of the issue.
The volume of loans already under contract, internal approvals and currently being processed results
in a payment potential of more than EUR 600 m in the corporate segment as of 31 December 2001.
In the local government segment, the order situation is also regarded as positive for the year 2002,
since the financing requirements of local governments in Austria and in the adjoining states can be
considered stable. In the real-estate area, more than 20 potential investments in Central and Eastern
Europe are being evaluated.
OUTLOOK. Continuing its business strategy, Investkredit plans to achieve additional increases in
the business volume. The balance sheet total is targeted to increase annually by some EUR 1 to 2 bn
within the next three years. This growth and the further improvement of margins – particularly in
business with domestic corporates – is expected to result in a double-digit rise of net interest income.
Investments in regional expansion and securities competence in the field of corporate bonds are to be
utilised for developing the market position and for increasing results in the corporate segment. In the
local government and real-estate areas, investments in Central and Eastern Europe are to be continued,
the Europolis Group intends to develop its position as one of the most important real-estate investors
in Central and Eastern Europe together with the EBRD. Earnings per share are expected to rise again
and attain more than EUR 4.00 in 2002. Further aims are to achieve a sustained increase in the return
on equity. An expansion of the existing business segments, coupled with a continued focus on specialisation
is expected to contribute to an improvement of the cost-income ratio to less than 40% by the
year 2004.
THE BANK FOR CORPORATES
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