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THE BANK FOR CORPORATES 24 Corporates Dealing with corporates’ concerns New publications Workshops organised in the year under review Financing: facts & figures Investkredit as a financier for industry vative power and management help to ascertain the customer’s credit standing. The discussion of corporates’ self-assessment and their external assessment lends a new quality to customer relations. The spectrum of issues handled by Investkredit’s customer service officers is becoming more and more sophisticated. Long-term, open partnerships with customers provide the basis to discuss forwardlooking issues of corporate financing from a variety of perspectives at an early stage. Investkredit’s specialised publications, which support the know-how management of customers and employees alike, clearly illustrate the preparations made to address corporates’ concerns. In the year under review, Investkredit published the following financial information brochures: Interest-rate and currency management instruments – a financial information brochure provided by the Bank for Corporates The future of corporate financing in the euro area Securities financing for corporates – a vademecum for the bond market The business administration, management and technology experts as well as the lawyers at Investkredit are currently devising financing solutions which go beyond the bank’s day-to-day business. The structuring of financing is of major importance for the implementation of business projects. In this respect, clear responsibilities within the bank and fast decision-making procedures are among the factors underlying the success of Investkredit. In the year under review, various suggestions and ideas of our customers stimulated Investkredit to organise INVEST Workshops on the following topics: “Aid schemes for corporates in Upper Austria and Salzburg. Innovation – co-operation – projects“ “Loans with treasury elements“ “Change in ownership – a strategic approach for corporates“ “Corporate pension schemes“ “The future of corporate financing in the euro area. Markets – instruments – recommendations“ Financing transactions with corporates Annual 1997 1998 1999 2000 2001 to 2001 (cumulative from 1957) Financing (in EUR m) 415 308 500 553 720 9,663 Investments (in EUR m) 1,135 1,090 1,323 2,296 7,706 39,936 In 2001, Investkredit contracted EUR 720 m of financial loans. In the important area of capital investment financing, a volume of EUR 7.7 bn (see table “Financing transactions with corporates“) was cofinanced by Investkredit in 2001. The average amount of loans in 2001 was EUR 3.2 m, which was considerably higher than the average for 2000 (EUR 2.9 m). Maturity at 9.6 years has decreased on average from 2000 (10.1 years). Investkredit’s importance as a financing partner for industrial corporates becomes visible in the fact that 47% of the bank’s new financing transactions concluded in 2001 were accounted for by industrial corporates. The sectors of industry that received the largest share of financing in the year 2001 were the petroleum and chemical engineering industries, the non-metal mineral products industry, the ceramics and glass industries, and the electrical engineering industry.
Deal structuring in the context of project financing transactions Credit rating and collateralisation determine loan terms Prudent loan management The trend towards large-volume financing transactions with industrial corporates was continued in the reporting year. Against the background of portfolio control by banks, the syndicated financing business has grown in significance. In the future, Investkredit will extend its function in underwriting partnerships, as shown today in the strong increase investment volumes. 2001 saw an increase in the level of project financing transactions. Starting out from the establishment of independent companies these types of loans are serviced out of the relevant project’s sources of earnings. The bank’s tasks in relation to structuring such deals range from the legal planning of the transaction to economic feasibility studies and ongoing project controlling. These models are mainly applied to real-estate transactions and public-private partnerships. The arrangement of loan terms depends on specific credit ratings and the provision of security. While liquidity is agreed on a long-term basis, the interest rate adjustment is in many cases related to covenants, i.e. the credit margin is developing according to the relevant corporate’s rating. The settlement of margins is thus linked to the dynamism of the corporate’s economic development. In many cases the corporates have anticipated the interest rate cuts of the European Central Bank and have taken out variable-interest loans. In contrast, towards the end of the year, an increased interest in fixed-rate loans was seen. The cyclical downturn in the second half of 2001 has also contributed to the fact that Investkredit paid special attention to its loan management. In individual cases it became necessary to increase collaterals. The importance of a contractual safeguarding of liquidity is pointed out in detail when talking to our customers. In accordance with the accounting and valuation principles, the required level of individual value adjustments has increased along the cyclical curve. The following table shows the regional breakdown of the lending business in the reporting year and cumulated since 1957. Regional breakdown of financing transactions with corporates Regions Financing 2001 Financing 1957 – 2001 in EUR m Share in EUR m Share Vienna 163 23 % 2,446 25 % Lower Austria 62 9 % 1,619 17 % Upper Austria 46 6 % 1.394 14 % Styria 26 4 % 856 9 % Tyrol 76 10 % 825 9 % Salzburg 23 3 % 485 5 % Carinthia 6 1 % 421 4 % Vorarlberg 40 6 % 407 4 % Burgenland 2 0 % 45 1 % Total – Austria 444 62 % 8,498 88 % Europe 86 12 % 427 4 % Rest of world 190 26 % 738 8 % Total – international business 276 38 % 1,165 12 % Grand total 720 100 % 9,663 100 % In the year under review, Vienna, Tyrol and Lower Austria had the largest share of financing. In terms of cumulative regional financing, Vienna, Lower Austria and Upper Austria are still in the lead. Corporates THE BANK FOR CORPORATES 25
Page 1 and 2: THE BANK FOR CORPORATES. Annual Rep
Page 3 and 4: CONTENTS. Investkredit at a glance.
Page 5 and 6: INCOME DEVELOPMENT OF THE INVESTKRE
Page 7 and 8: LETTER FROM THE BOARD OF MANAGEMENT
Page 9 and 10: Letter from the Board of Management
Page 11 and 12: Board of Management. ALFRED REITER
Page 13 and 14: INVESTKREDIT SHARES. Investkredit s
Page 15 and 16: MANAGEMENT DISCUSSION. The members
Page 17 and 18: Management style allows for quick d
Page 19 and 20: Increase in business volume and ear
Page 21 and 22: Significantly improved capital rati
Page 23 and 24: Ensuring liquidity for corporate cu
Page 25: A euro financial market is emerging
Page 29 and 30: Competent consulting on aid-related
Page 31 and 32: Assistance in the acquisition and d
Page 33 and 34: Issuing focus on strengthening equi
Page 35 and 36: 60% of Austrian local authorities a
Page 37 and 38: Benefiting from advantages of Centr
Page 39 and 40: FINANCIAL STATEMENTS OF THE INVESTK
Page 41 and 42: STATEMENT OF CHANGES IN EQUITY. For
Page 43 and 44: Notes to the financial statements o
Page 45 and 46: (5) LOANS AND ADVANCES. Loans and a
Page 47 and 48: a fluctuation rate of 0% and assume
Page 49 and 50: (23) GENERAL ADMINISTRATIVE EXPENSE
Page 51 and 52: (32) RISK PROVISIONS. Risk provisio
Page 53 and 54: BWG- Investment Extent of investmen
Page 55 and 56: (36) PROPERTY AND EQUIPMENT. in EUR
Page 57 and 58: (42) PROVISIONS. in EUR m 31.12.200
Page 59 and 60: Expenses related to all subordinate
Page 61 and 62: Local go- Real Disclosure in EUR m
Page 63 and 64: (51) SUBORDINATED ASSETS. The asset
Page 65 and 66: (58) FAIR VALUE BALANCE SHEET. Fair
Page 67 and 68: (65) INFORMATION ON EMOLUMENTS OF A
Page 69 and 70: Equity capital. Equity held by outs
Page 71 and 72: REPORT OF THE SUPERVISORY BOARD. In
Page 73 and 74: Cost-income ratio. Index of the cos
Page 75 and 76: Own funds to be taken into account.
Page 77 and 78:
INVESTOR RELATIONS. Margot Binder P
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