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120
110
100
90
80
70
60
50
40
30
20
10
0
20,000
15,000
10,000
5,000
0
Profit for the year in EUR m
32
42%
30 27
2000
Pre-tax profit for the year
34
30
2001
11,194
23
56
47
2002
32
After-tax profit for the year
1) Cost-income coefficient = General administrative expenses in relation to operating income
Total assets in EUR m
9.7%
8,703
2000
DEVELOPMENT OF THE
INVESTKREDIT GROUP 2000 – 2004
42%
8.4%
2001 2002
Total assets Return on equity – net profit 2)
2) Return on equity = ratio of net profit to average equity
44%
13,479
11.3%
72
48%
60
2003
41
Cost-income ratio 1) in %
99
2004
43%
54
Net profit Cost-income ratio 1)
16,475
2003
12.3%
84
Return on equity 2) in %
21,446
2004
14.6%
60%
50%
40%
30%
20%
10%
0%
20%
15%
10%
5%
0%

INVESTKREDIT GROUP 1)
in EUR m 2002 2003 2004
Change
2004
Net interest income 104.9 118.0 158.7 +34%
Pre-tax profit for the year 56.3 72.2 98.8 +37%
After-tax profit for the year 46.8 60.0 83.6 +39%
Total assets 13,479 16,475 21,446 +30%
Financing 2) 10,626 12,434 15,603 +25%
Core capital pursuant to the Austrian Banking Act 428 535 576 +8%
Core capital ratio 7.7% 7.9% 6.8%
Own funds pursuant to the Austrian Banking Act 710 799 904 +13%
Total capital ratio 12.8% 11.8% 10.7%
Number of employees (year-end) 372 415 503 +21%
INVESTKREDIT SHARES
Change
2002 2003 2004 2004
Earnings per share (in EUR) 5.06 6.45 8.55 +33%
Dividend per share (in EUR) 1.00 2.00 2.00 3)
Year-end price (in EUR) 41.25 51.40 129.54 +152%
High (in EUR) 43.65 51.40 129.54
Low (in EUR) 36.40 41.20 50.25
Market capitalisation (in EUR m) 261.2 325.4 820.4 +152%
Price-earnings ratio 8.2 8.0 15.2
RATINGS
KEY FIGURES AT A GLANCE 1)
long-term short-term
Investkredit Bank AG Moody’s Investors Service A2 P-1
Kommunalkredit Austria AG Fitch Ratings AA- F1+
Moody’s Investors Service Aa3 P-1
1) There is an 10-year overview of the key figures inside the cover.
2) Loans and advances, provisions for guarantees, trust loans, as well as bonds and other fixed-income securities
(except those issued by states and banks)
3) Proposal to the Annual General Meeting (4 May 2005)
Take advantage of the additional opportunities offered by the online version of this annual report. These
tables and others in the form of Excel files are available for downloading at www.investkredit.at/ar.

THE INVESTKREDIT GROUP
The specialist banking group at a glance
Investkredit Group structure
Investkredit Bank AG structure
Strategy and success factors
PERFORMANCE
Letter from the Board of Management
Investkredit shares
MANAGEMENT REPORT
Market environment for specialist banks
Development of earnings and of the business
Balance sheet and capital structure
Risk report
Responsibility
Corporate communications
Report on events after the balance sheet date
Outlook
SEGMENT REPORTING
Corporates
Local government
Real estate
CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS
Tables to the financial statements
Notes to the financial statements of the Investkredit Group
Auditor’s report and opinion
Report of the Supervisory Board
SUPPLEMENTARY DETAILS
Glossary of technical terms
Corporate communications services
Imprint
Investkredit Group’s locations
Detailed key figures
Photo concept for 2004
03
03
04
05
07
10
10
15
19
19
21
23
25
26
32
33
35
39
40
59
65
72
72
76
113
114
116
116
126
127
128
inside the cover
inside the cover

THE SPECIALIST BANKING
GROUP AT A GLANCE
Investkredit is a specialist banking group in Central
Europe. Its business opportunities lie in the
innovative market niches of its three segments
corporates, local government and real estate.
This combination gives Investkredit a unique position
in Austria and its core market. The Central
European core market encompasses Austria,
Czechia, Germany, Hungary, Poland, Slovakia,
Slovenia and Switzerland.
“In November 2004, two private equity funds –
Quadriga Capital and Lead Equities – took over
Palmers Textil AG, Austria’s market leader in lingerie.
To give the company a new boost to
achieving lasting success, it needs a
solid capital structure. The Investkredit
Group’s financing concept will ensure
that the company receives it.“
Thomas Weber
CEO
Palmers Textil AG
THE INVESTKREDIT GROUP
Investkredit Bank AG structured and
arranged the acquisition finance.
INVEST MEZZANIN provided the
mezzanine financing.
Long-term partnerships with important specialists
in their respective European market segments
(Dexia and EBRD) form an important base for its
activities.
Investkredit Group’s vision for the future shows
it as one of the three strongest providers in the relevant
market niches and being the quality leader
in these segments. Growth in the three segments
corporates, local government and real estate has
priority. It is not short-term maximisation of profits
but long-term improvement in value for all stakeholders
that is at the core of the Group’s corporate
strategy.
An explanation of the technical terms used is given in the glossary on page 116ff.
03

04
CORPORATES
LOCAL
GOVERNMENT
REAL ESTATE
INVESTKREDIT GROUP STRUCTURE
Investkredit Bank AG, Vienna
with branch offices in Frankfurt, Prague, Warsaw,
Bratislava and Budapest
Bank for Corporates
Wilfried Stadler, Klaus Gugglberger
www.investkredit.at
Europa Consult, Vienna
100%
Mergers & Acquisitions consulting
Robert Ehrenhöfer, Elisabeth Hackl, Markus König
www.europaconsult.at
Invest Mezzanine Capital Management, Vienna
100%
Mezzanine investor for medium-sized companies
Michael Fischer, Elisabeth Hackl
www.investmezzanin.at
INVEST EQUITY Beteiligungs-AG, Vienna
29.85%
Private equity funds
Helmut Bousek, Martin Prohazka
www.investequity.at
Kommunalkredit Austria AG, Vienna
50.78%
Specialist bank for public finance
Reinhard Platzer, Pascal Becker, Claudia Schmied
www.kommunalkredit.at
Kommunalkredit Beteiligungs- und
Immobilien GmbH, Vienna
50.78%
Holdings and Real estate
Bernhard Achberger, Barbara Baumgartner
Wolfgang Viehauser
www.kommunalkredit.at
Dexia Kommunalkredit Bank AG, Vienna
with subsidiaries in Prague, Warsaw and Zilina
24.96%
Public finance in Central and Eastern Europe
Reinhard Platzer, Pascal Becker
Leopold Fischer, Claudia Schmied
www.kommunalkredit.at
Dexia banka Slovensko a.s., Zilina, Slovakia
19.72%
Local government financing in Slovakia
Marc Lauwers, Gernot Daumann
Pavol ˇDuriník, Ján Sládeček
www.dexia.sk
Europolis Real Estate Asset Management GmbH
Vienna, with regional offices in Prague, Warsaw and Budapest
100%
Real estate project developments, real estate investments
and real estate asset management
Bernhard Mayer, Julius Gaugusch, Wolfgang Lunardon, Hubert Vögel
www.europolis.com
Europolis “E1”
5 EUROPOLIS CE Holdings, Vienna
65%
Real estate companies in Central and Eastern Europe
Bernhard Mayer, Julius Gaugusch, Hubert Vögel
www.europolis.com
as at March 2005
Investkredit International Bank p.l.c.
Sliema, Malta
100%
Deposit business in Malta
John Buttigieg, Walter Anscheringer
Thomas Heinisch, Joseph Said
www.investkredit.com.mt
VBV AG, Vienna
100%
Leasing financing and investments
Julius Gaugusch, Stefan Süssenbach
VBV Holding, Vienna
100%
Leasing financing and investments
Julius Gaugusch, Stefan Süssenbach
ETECH CONSULT, Vienna
100%
Consulting for technology, markets and subsidies
Josef Ernst, Martina Hölbling, Johann Salzmann
www.etech-consult.at
Kommunalkredit International Bank Ltd
Limassol, Cyprus
50.78%
International local government finance
Leopold Fischer, Willibald Schebesta
www.kib.com.cy
Kommunalkredit Public Consulting GmbH
Vienna
50.78%
Public sector support and consultancy projects
Bernhard Sagmeister, Bernhard Achberger
www.publicconsulting.at
Kommunalkredit Dexia
Asset Management AG, Vienna
25.90%
Asset management for public-sector and
institutional clients
Martha Oberndorfer, Jan Hein Alfrink
www.kdam.at
KOFIS LEASING, a.s., Bratislava, Slovakia
50.78%
Leasing financing in Slovakia
Peter Knaze, Dieter Kanduth
www.kofisleasing.sk
Europolis “E2”
2 EUROPOLIS CE Holdings, Vienna
65%
Real estate companies in Central and Eastern Europe
Bernhard Mayer, Julius Gaugusch, Hubert Vögel
www.europolis.com
Europolis “C1”
Europolis CE Amber, Vienna
100%
Real estate companies in Czechia and Hungary
Bernhard Mayer, Julius Gaugusch, Hubert Vögel
www.europolis.com

INVESTKREDIT BANK AG STRUCTURE
Wilfried Stadler
Tel. +43/1/53 1 35 Ext. 102, stadler@investkredit.at
CORPORATE LENDING
Gerhard Ehringer, Ext. 260, g.ehringer@investkredit.at
Elisabeth Hackl, Ext. 293, e.hackl@investkredit.at
Walter Riess, Ext. 462, w.riess@investkredit.at
Michael Smutny, Ext. 652, m.smutny@investkredit.at
CORPORATE LENDING DOMESTIC
Walter Riess, Ext. 462, w.riess@investkredit.at
Domestic 1
Ernst Neuhold, Ext. 465, e.neuhold@investkredit.at
Domestic 2
Angela Platzer, Ext. 563, a.platzer@investkredit.at
STRUCTURED FINANCE
Elisabeth Hackl, Ext. 293, e.hackl@investkredit.at
Corporate Finance
Markus König, Ext. 294, m.koenig@investkredit.at
Project Finance
Johannes Seiringer, Ext. 167, j.seiringer@investkredit.at
CORPORATE LENDING EUROPE
Michael Smutny, Ext. 652, m.smutny@investkredit.at
Frankfurt Branch
Roland Mittendorfer, Tel. +49/69/788 096-11
r.mittendorfer@investkredit.de
Representative Office Bratislava
Juraj Bielik, Tel. +421/2/5998-6520, juraj.bielik@investkredit.sk
Representative Office Budapest
Bence Nádasdy, Tel. +36/1/299 80 10-11, b.nadasdy@investkredit.hu
Representative Office Prague
Lukáˇs Ramzer, Tel. +420/2/360 40-601, ramzer@investkredit.cz
Representative Office in Poland
Hans Koeppen, Tel. +48/22/850 33-10, hans.koeppen@investkredit.pl
INTERNATIONAL BUSINESS
Walter Anscheringer, Ext. 352, ivg@investkredit.at
Karl Kinsky, Ext. 577, ivg@investkredit.at
CORPORATE COMMUNICATIONS
Hannah Rieger, Ext. 112, rieger@investkredit.at
Company Secretary and International Relations
Margot Coosmann-Binder, Ext. 111, m.coosmann-binder@investkredit.at
INTERNAL AUDIT
Anton Taubenschuß, Ext. 133, a.taubenschuss@investkredit.at
Hermann Angerer, Ext. 134, h.angerer@investkredit.at
PERSONNEL
Peter Wimmer, Ext. 190, p.wimmer@investkredit.at
Angelika Löw, Ext. 183, a.loew@investkredit.at
as at March 2005
Klaus Gugglberger
Tel. +43/1/53 1 35 Ext. 104, k.gugglberger@investkredit.at
PORTFOLIO AND RISK MANAGEMENT
Wolfgang Wainig, Ext. 430, wainig@investkredit.at
Johann Salzmann, Ext. 266, j.salzmann@investkredit.at
Financial Analysis
Thomas Mayer, Ext. 525, t.mayer@investkredit.at
Portfolio Management
Thomas Heinisch, Ext. 526, t.heinisch@investkredit.at
Syndications
Monika Sacher, Ext. 553, m.sacher@investkredit.at
Technical Consulting
Johann Salzmann, Ext. 266, j.salzmann@investkredit.at
REAL ESTATE FINANCE
Klaus Scheitz, Ext. 268, k.scheitz@investkredit.at
Market Analysis
Otto Kantner, Ext. 312, o.kantner@investkredit.at
TREASURY
Manfred Stagl, Ext. 140, m.stagl@investkredit.at
Rita Hochgatterer, Ext. 141, r.hochgatterer@investkredit.at
Money and Currency Market Dealings
Alfred Buder, Ext. 170, a.buder@investkredit.at
Capital Market
Rita Hochgatterer, Ext. 141, r.hochgatterer@investkredit.at
Settlement
Ferdinand Dietersdorfer, Ext. 142, f.dietersdorfer@investkredit.at
Asset and Liability Management
Manfred Stagl, Ext. 140, m.stagl@investkredit.at
ORGANISATION AND CONTROLLING
Julius Gaugusch, Ext. 330, gaugusch@investkredit.at
Gottfried Grechenig, Ext. 126, g.grechenig@investkredit.at
Gerald Stich, Ext. 592, g.stich@investkredit.at
Help Desk and Organisational Development
Gottfried Grechenig, Ext. 126, g.grechenig@investkredit.at
IT
Heinz Polke, Ext. 336, h.polke@investkredit.at
Accounting, Tax and Controlling
Gerald Stich, Ext. 592, g.stich@investkredit.at
LEGAL DEPARTMENT
Stefan Süssenbach, Ext. 195, suessenbach@investkredit.at
Matthias Hanzl, Ext. 191, hanzl@investkredit.at
05

STRATEGY AND
SUCCESS FACTORS
The distinctive features of a specialist banking
group
Investkredit is a specialist banking group in Central
Europe. It differentiates itself from universal
banks in its concentration on a
few special groups of cus-
IN CENTRAL EUROPE
tomers. These are corporates
and local authorities as well
as partners in real estate and financial markets.
In so doing, the Investkredit Group deliberately
abstains from mass business. This niche concept
of specialisation in individual financing and
advisory solutions results in the Group’s clear strategic
orientation towards its three market segments:
corporates, local government and real estate. This
combination gives Investkredit a unique positioning
in Europe. Its distinctive features allow it to quickly
grasp business opportunities and innovations.
UNIQUE POSITIONING
“Kromberg & Schubert is a successful group of
companies that is primarily engaged in the development
and production of electrical systems for
the automotive industry. The headquarter of
this globally active group is in Germany. The
capital- and know-how-intensive production
centres are concentrated in Austria, out of which
the Group’s Eastern European business is also run.
In September 2004 we issued a EUR 20 m Mittelstandsbond
with a term of five years
to finance our ongoing internationalisation.
The service we received from
Investkredit Bank AG was very convincing.”
Wolfgang Tupy, Commercial Manager
Kromberg & Schubert Austria Ges.m.b.H. & Co. KG
as well as Managing Director of the subsidiaries in
Hungary and Slovakia
As lead manager and arranger,
Investkredit Bank AG structured
and placed the 4.4% Kromberg &
Schubert 2004 – 2009 bond.
THE INVESTKREDIT GROUP / STRATEGY AND SUCCESS FACTORS
In transferring its experience in Austria to neighbouring
economic areas (Germany, Switzerland,
Poland, Czechia, Slovakia, Hungary), Investkredit
can take advantage of additional market opportunities.
Success factors
The majority of customers give the following reasons
for working with Investkredit:
> Specialisation and technical competence
> Short channels of communication
> Ability to make quick decisions
> Non-bureaucratic, rapid and reliable processing
With a staff comprised of 503 highly specialised
experts, the Investkredit Group is a relatively small
organisation. This size and a high degree of independence
in the management of the three segments
make transparency, speed and personal collaboration
in teams easier while working on the
various special solutions for the Group’s customers.
Flexibility and a focus on implementation are more
important here than unyielding group structures.
Vision for the future: to be specialised
market leader in Central Europe
Investkredit’s vision for the future is to count as one
of the specialised market leaders in its chosen niches
in Central Europe and to be quality leader.
The Investkredit Group’s medium-term goals
are:
> to strengthen customer relations through continuity,
competence and innovation
> to continue to concentrate on risk-appropriate
profit profiles
> to increase business volume by EUR 2 bn annually
> to achieve and maintain an RoE of 15% p.a.
> to improve the cost-income ratio to 40% by
2006
07

08 THE INVESTKREDIT GROUP / STRATEGY AND SUCCESS FACTORS
CORPORATES
Investkredit Bank AG offers its
financial services to corporates.
The Bank for Corporates is one
of Austria’s three leading longterm
financiers for large and
medium-sized corporate customers.
It enjoys long-term, stable
customer relations. Around
30% of the Top 1000 companies
are currently Investkredit’s customers.
In the view of its customers,
the Bank has for many
years led the field in “Technical
Competence”. Total assets
should grow by around EUR 1 bn
per year until 2007.
Investkredit Group’s customers
Investkredit has three target groups in its corporate
segment
> Corporates
> Real estate partners
> Financial market partners
LOCAL GOVERNMENT
In the case of the corporates, the focus is on customers
with sales in excess of EUR 15 m.
Investkredit Bank AG enjoys long-term stable customer
relationships and counts around 30% of
Austria’s Top 1000 companies amongst its customers.
Through its specialisa-
INVESTKREDIT: AMONG tion, Investkredit has succeeded
THE TOP 3 IN
in establishing itself as one of
CORPORATE LENDING
the three leading banks in
long-term corporate lending.
This applies both to market presence (i.e. share in
the number of customer relationships) as well as
market share. Investkredit reacted successfully to
increased competitive pressure by expanding its foreign
exchange and interest rate derivative business
in the corporate area. This was demonstrated by
Kommunalkredit Austria AG is
Austria’s number one specialist
bank in public finance. Together
with its subsidiaries, Kommunalkredit
has specialised in the
following areas: financing public-sector
infrastructure investments,
treasury management,
local government leasing, public
consulting, asset management
and managing safe custody deposits.
Along with its strategic
partner Dexia Crédit Local, Kommunalkredit
also does business
in the CEE states. Business should
expand by more than EUR 1 bn
per year until 2007.
REAL ESTATE
The real estate segment is
managed by Europolis. In less
than seven years it has become
one of the two largest investors
in commercial real estate in
the CEE region. The properties
have been awarded many real
estate prizes, and are amongst
the most highly valued in
Central and Eastern Europe.
The portfolios consist of office,
logistics and retail properties
in six countries. The value
of the portfolios, currently
EUR 900 m, should grow to
around EUR 2 bn by 2009.
the results of the Top 500 survey on the banking
connections of Austria’s 1,100 largest companies in
2004 done by the independent financial consultants
Schwabe, Ley & Greiner. In many niches, such as
mezzanine financing or low-volume bonds (Mittelstandsbonds),
Investkredit is market leader.
In all, around 800 Austrian companies are customers
of Investkredit Bank AG, of which around
600 are family businesses. A further 500 companies
are priority acquisition companies, and Investkredit
is in regular contact with them concerning new
financing opportunities. The aim is to strengthen
customer relationships with the existing customer
base and to expand them in terms of quality. In so
doing, Investkredit pays particular attention to consistently
exploiting all the potential for cross-selling.
In this connection, mainly services on the treasury
and advisory side are being expanded. On top of
that, one concrete goal of the next three years is to
raise market share by acquiring new customers. The
goal is to be amongst the Top 3 in at least one of
the Group’s selected specialised niches in the three
years to come.

The main factors for business success in the corporate
segment are
> technical competence – for years the Bank with
the highest marks (Schwabe, Ley und Greiner,
Top 500 and Top 2000 surveys)
> differentiation through innovative special
products – Mittelstandsbonds, securitisation of
receivables, providing financing similar to equity,
interest rate and currency management instru-
ments
> focussed selection of target markets
> high competence in structuring finance –
individual special solutions tailored to customers’
needs
> all-round customer support with qualitatively
high-value advisory services for special situations
(M&A activities)
> highly oriented towards customers with quick
non-bureaucratic lines of decision
> consistently managing credit risk and abiding
in a disciplined manner to well thought-out criteria
for granting loans
> has a culture of appreciative respect internally
and externally
Based on its strong position in the Austrian market,
Investkredit has been pushing internationalisation
in the direction of Central Europe for
four years. By building up local teams of experts in
the branch offices (Frankfurt, Bratislava, Budapest,
Prague, Warsaw) and consistently transferring
know-how, it should be possible in the medium
term to offer Investkredit’s complete range of services
throughout its core market. These steps will
enable the dynamic growth to continue over the
next few years as well, without Investkredit changing
its conservative risk profiles.
Around 60% of Austrian local authorities are
included amongst Kommunalkredit’s customers
in Austria. In its second-most important market –
Switzerland – it is one of the largest foreign finan-
THE INVESTKREDIT GROUP / STRATEGY AND SUCCESS FACTORS
09
ciers of the public sector. Kommunalkredit does
business in Central and Eastern European countries
together with its strategic partner Dexia Crédit
Local. Its investment in Slovakia (via Dexia Kommunalkredit
Holding), Dexia banka Slovensko, has a
market share of around 70%. Thanks to the successful
build-up of Dexia Kommunalkredit Polska,
Kommunalkredit is already a significant competitor
in the public sector segment in Poland just two
years after entering the market.
The reason for Kommunal- KOMMUNALKREDIT SUCCESS-
FUL AT HOME AND ABROAD
kredit’s lasting success at home
and abroad is the ongoing
development of tailor-made innovative products
that distinguish it significantly from its competitors.
In the real estate segment, Europolis was already
one of the three largest investors in commercial
real estate in Central and Eastern Europe, by
the end of 2004. Integrated into a network of
real estate developers and investors, it manages
real estate in Vienna, Prague,
Budapest, Warsaw, Bucharest EUROPOLIS IS ONE OF THE
THREE LARGEST INVESTORS
and Zagreb. The tenants of the
IN COMMERCIAL REAL ESTATE
buildings, who are Europolis’s
IN THE CEE REGION
customers, are well-known
national and international companies
like Société Générale, Nokia, IBM, HP, Oracle,
Ernst & Young, Linklaters, Siemens, Shell and
Unicorn. Europolis is convinced that satisfied tenants
create added value. Competent employees
put their commitment to quality into practice on
location. One of their most important principles is
transparency for tenants and landlords.

10
PERFORMANCE
DEAR SHAREHOLDER, DEAR INVESTKREDIT CUSTOMER,
WILFRIED STADLER
CEO and Chairman of the Board of Management
Born in Salzburg (1951); studied economics at the
Vienna University of Economics and Business Administration;
1977 to 1983 entrepreneurial experience in
his family-owned company; 1983 to 1986 Economics
Advisor with the Österreichischer Wirtschaftsbund;
since 1987 at Investkredit Bank AG, initially as
Relationship Manager in the Corporate Lending
Department, from 1992, Head of Corporate Lending
Department; 1990 to 1995 Member of the Board of
Management, Kommunalkredit Austria AG; since
1995, Member of the Board of Management,
Investkredit Bank AG, since 2002 CEO and Chairman
of the Board of Management.
KLAUS GUGGLBERGER
Member of the Board of Management
Born in Innsbruck (1954); studied social and economic
sciences at the University of Innsbruck; 1980
to 1986, Österreichische Volksbanken AG, latterly
as Senior Vice President and Head of the Special
Financing Department; 1986 to 1993, Österreichische
Länderbank/BA-CA-Group, inter alia Manager
of LB Leasing Gesellschaft m.b.H. and Chief Executive
Officer of Sovereign Leasing, Manchester,
England; since 1993, Head of Investkredit Bank AG’s
Structured Finance and Technical Consulting Department
(Corporate Finance, Financial Analysis and
Real Estate); since 2002 Member of the Board of
Management.
No sooner said than done: because examples of actual cases usually tell us more than lengthy descriptions,
this report will use such business cases to demonstrate what Investkredit as a specialist banking group typically
does and to whom it can be helpful. The figures are very pleasing on their own, and we hope that the
concept of livening up the report with tombstones – as advertisements of successful transactions are known
in banking circles – will make them even more enjoyable to read.
2004 was a key year in the ongoing development of the Investkredit Group. Consistent specialisation in
the three segments corporates, local government and real estate bore fruit and led to the best ever pre-tax
profit of EUR 99 m with a rise in total assets to EUR 21 bn. After taxes and deducting the minority interests
of our strategic partners Dexia and EBRD, net profit stood at the very pleasing record level of EUR 54 m.

PERFORMANCE / LETTER FROM THE BOARD OF MANAGEMENT
The decisive factor here is not just what the absolute figures show but the fact that they were achieved
within the framework of a sustained strategy of specialisation, in which quality and risk-awareness
always take precedence over growth.
Two fundamental factors in the overall conditions form the basis of the successful restructuring and expansion
of the Investkredit Group in recent years: the united European financial market made possible by the
euro and the expansion of the European Union.
First of all, the euro capital market, with the ever-larger scale of its transactions, promotes the professionalism
of all financial services thus opening up new scope for action by specialist banks in the euro capital market.
In connection with long-term financing, there are three types of banks that have proved successful internationally:
long-term financing banks for large and medium-sized companies, banks specialising in public
finance and real estate banks. These are the specialist banks under the umbrella of the Investkredit Group.
A strategically desirable side effect of this group structure is the spread of risks between asset classes that
are basically disconnected from each other.
Second, Austrian companies and banks in particular have taken advantage of the opportunities for growth
provided by the enlargement of the European Union in a way that has been much admired internationally.
The Investkredit Group supports the impressive development in Central Europe with long-term financing for
corporate, infrastructure, local government and real estate projects.
Despite the small free float, the rise in the Group’s value could also be seen on the stock exchange. In a
dramatic catching-up process, analysts and investors discovered all the potential in Investkredit. Market capitalisation
rose over the course of the year from EUR 325 m to EUR 820 m.
Subsidiaries and branch offices in the new EU member states made a significant contribution to the
Investkredit Group’s rapid expansion. A really decisive contribution to this disproportionately fast growth
came and is still coming from the expansion of well-proven strategic partnerships.
For instance, through Kommunalkredit’s initiative with the Dexia Group, the European market leader for
public finance, we were able to arrange the formation of an Eastern European bank, under the majority
ownership of Dexia. Kommunalkredit has a 49% share in this new bank. Thanks to this strategic alliance,
the extraordinary success of Kommunalkredit, in which Investkredit holds the majority of the shares, can
now be pursued in Central Europe as well. We share the pleasure of Kommunalkredit’s highly successful
management over this promising constellation, which will strengthen the competence in Eastern Europe of
Vienna as a banking centre.
Investkredit and its strategic partner, the EBRD, laid down a comparable plan in the real estate segment for
the future of the Europolis Group. Since the first Europolis portfolio has been successfully invested – earlier
than hoped for – a second Europolis fund will now follow in co-operation with the EBRD with, once again,
an investment volume of around EUR 1 bn. At the same time, we succeeded in selling at a substantial profit
parts of a number of projects in Hungary and Czechia to DIFA, one of Germany’s most important open real
estate funds. This transaction is the “proof of concept” that the strategy of betting on the positive effects
of EU accession was correct. Europolis remains portfolio manager and at the same time provides a link to
the start of another partnership for investments in the core Central European core markets.
11

12 PERFORMANCE / LETTER FROM THE BOARD OF MANAGEMENT
At the core of the specialist bank’s strategy for the corporate segment is the task of making opportunities
available for our corporate customers that are offered by the capital markets in addition to the classical longterm
financing instruments – including when the conventional rules of play on the capital markets, such as
in respect of company size, seem to present an obstacle. The most eye-catching example of this are “Mittelstandsbonds”,
a special bond product for companies that are fairly large but not yet sufficiently so for
the capital markets. Under the terms of our pioneer function for corporate bonds, we have opened up a
new market niche with these bonds.
By expanding our competence team on the customer side of our treasury, we succeeded in significantly
improving our capital structure management services. Accordingly, the annual poll among the Top 500
companies of customers by a renowned management consultancy not only puts us in first place for technical
competence but also amongst the top banks in interest rate and currency management.
Specialisation also includes a focus on acquisition and corporate finance transactions successfully executed
both in the Frankfurt branch as well as in Vienna. In the case of several corporate acquisitions by equity
funds, for the first time in Germany we took on the role of the arranger responsible for the whole financing.
Parallel to the increasing degree of specialisation, recognition by and co-operation with our partners in the
financial markets is also growing more important. This is aided not only by the International Business team
specialised in asset-backed securities (ABS) but also by the Capital Markets team with its excellent network.
Especially in the strongly growing syndicated loan business, i.e. joint participation in financing transactions,
Investkredit is becoming ever more sought after as a partner. Our expertise in assessing risk, reinforced by
our technical support team, has proven to be a particularly important strength here.
Our close ties to the corporate world encouraged us to develop an Internet-based platform for exchanging
long-term risks. This innovation (“Banks to Banks”) very quickly achieved recognition. We have resolved to
use this instrument to push our presence on the German market, where we see excellent market opportunities
for a bank specialising in medium-sized companies that is securely based in Central Europe. We can
then tie in the great initial successes of our branch offices in Warsaw, Prague, Bratislava and Budapest even
more closely with our business in Frankfurt.
In Central Europe, many of the successful transactions are also in the real estate segment. This segment
of the Bank’s long-term financing business was able to continue its high quality expansion with its promotion
to an independent business area. Finally, project and infrastructure finance, focussing on alternative
energy, telecommunications and PPP road construction and healthcare models, also became successfully
established in the market.
In the years of renewal for our banking group, we have all learnt that growth comes from acting in an innovative
and highly qualitative manner. Our explicit aim is therefore to further deepen the Investkredit Group’s
strategy of specialisation in all its fields of business. This is where we see the best prospects for adding value
for our customers, financial market partners and shareholders.

PERFORMANCE / LETTER FROM THE BOARD OF MANAGEMENT
A discussion held in the spring of 2004 about a possible capital increase led, as a result of the pleasing
improvements in value, to completely new strategic considerations by our shareholders at the time. Some
long-term shareholders decided to sell at attractive prices while others decided to take up these shares and
enter into a strategic partnership with Investkredit. At the time the balance sheet was being prepared, there
was still no certainty about the final structure.
But it is already clear that we can expect this concentration of the shareholder structure on strategically
interested shareholders to lead to an expansion of the range of our fields of business and an increase
in our capacity for risk – and so an overall increase in our capacity to provide services to our corporate customers.
Whatever happens, it is still our goal to continue to strengthen the Investkredit Group’s profitability
with competence and innovation, and by deepening our customer relations. Return on equity
should be maintained on a lasting basis at a level in excess of 15%.
The fact that we have been able to deliver so much good news over the year to our shareholders is due
above all to our excellent staff in all areas of the Bank. Only their competence and personal commitment
can ensure that we hold onto and further expand our success.
Wilfried Stadler Klaus Gugglberger
13

INVESTKREDIT SHARES
Investkredit shares – an attractive investment
Investkredit shares have been listed since 1990.
They are listed on the Prime Market of the Vienna
Stock Exchange. Share capital did not increase
in the year under review and stands at around
EUR 46 m.
Over the course of 2004, a marked increase in the
number of shares traded could be observed. With
“In August 2004 GEF Beteiligungs-AG took over
Leobersdorfer Maschinenfabrik AG, a manufacturer
of high-pressure piston compressor systems
with business activities all over the
world. The acquisition by INVEST
EQUITY is intended to reinforce the
company’s strategic positioning and
safeguard its production site.”
Ernst Huttar
Managing Director
Leobersdorfer Maschinenfabrik AG
INVEST EQUITY realised this acquisition
through its Greater Europe
Fund – GEF Beteiligungs-AG – and
was responsible for the structuring
and arranging of the acquisition
finance.
“In May 2004 the HELLA Group – Austria’s market
leader for protection systems against sun and rain
– acquired the RAU arabella Group in Germany.
Quick decision-making processes
based on professional and comprehensive
corporate analysis convinced
us to have Investkredit finance the
takeover.”
Martin Troyer
Managing Director
HELLA Sonnen- und Wetterschutztechnik GmbH
Investkredit Bank AG structured and
arranged the financing of the acquisition
as sole arranger.
PERFORMANCE / INVESTKREDIT SHARES
Key data per share as at 31.12.2004
Share capital EUR 46,000,110
Shares outstanding 6,330,000
ISIN Code AT0000748108
Reuters OIKV.VI
Bloomberg OEIKAVEquity
the rise in the share price, market capitalisation
more than doubled in 2004 from EUR 325 m to
EUR 820 m. Earnings per share
improved in 2004 by 33% to STRONG RISE IN MARKET
CAPITALISATION
EUR 8.55. This gave the priceearnings
ratio at the end of
2004 a figure of 15.2, having been only 8.0 at the
end of 2003. The book value per share at the end
of the year was EUR 61.99.
Performance of
Investkredit shares 2002 2003 2004
Earnings per share (EUR) 5.06 6.45 8.55
Dividend per share (EUR) 1.00 2.00 2.00 1)
Book value per share (EUR) 48.91 55.51 61.99
Year-end price (EUR) 41.25 51.40 129.54
High (in EUR) 43.65 51.40 129.54
Low (in EUR)
Market capitalisation
36.40 41.20 50.25
(in EUR m) 261.1 325.4 820.4
Dividend yield 2.4% 3.9% 1.5% 1)
Price-earnings ratio 8.2 8.0 15.2
1) Proposal
In the first quarter of 2004 two company reports
appeared for the first time on
Investkredit Bank AG, one by COMPANY REPORTS ON
INVESTKREDIT IN 2004
Erste Bank der oesterreichischen
Sparkassen AG and the
other by Raiffeisen Centrobank Aktiengesellschaft.
15
The year 2004 was undoubtedly an excellent one for
the Vienna Stock Exchange. The
altogether positive corporate ABOVE-AVERAGE PER-
FORMANCE OF INVESTKREDIT
results, but especially the hopes
SHARES +152%
about Eastern Europe inherent
in many Austrian shares, led to
occasionally spectacular gains. Both the ATX and the

16 PERFORMANCE / INVESTKREDIT SHARES
130
119
109
98
88
77
67
57
46
Prime Market accordingly performed substantially
better than most international stock exchange
indices. Investkredit shares even managed to outstrip
this performance with a rise of 152%. Increased
attention in the form of company reports and the
possibility of a capital increase in the spring of 2004
almost certainly contributed to this rise. The increase
in the share price reflects market confidence in the
potential for Investkredit to grow in value.
In 2004, Austria’s four major banking groups – BA-
CA, BAWAG/P.S.K., RZB and Erste Bank – were
Investkredit Bank AG’s main shareholders. They
have been joined together for many years with
Österreichische Volksbanken-
BANKS AS MAIN AG and Oesterreichische Kon-
SHAREHOLDERS
trollbank AG in a shareholders’
syndicate. This is the reason for
Investkredit Bank AG’s neutral position vis-à-vis the
Austrian universal banks. Wiener Städtische Allgemeine
Versicherung AG also held a substantial
holding of more than 7%. The free float (around
10% of the shares) is held by industrial companies,
institutional investors, private shareholders and the
staff of the bank. In the year under review almost
one third of the employees took up the Bank’s
SHARE PRICE MOVEMENTS IN 2004
offer to subscribe Investkredit shares. In aggregate
this led to 0.35% of the capital being held by
employees at year-end.
Under the Stock Corporation Act, companies are
only allowed to buy their own shares for precisely
defined purposes. The act includes a special rule
for banks, whereby – subject to it being approved
by the Annual General Meeting – they may buy
their own shares for securities trading purposes.
As in previous years, the Annual General Meeting
held on 5 May 2004 made such a resolution, that
Investkredit Bank AG may hold its own shares for
securities trading purposes until 5 November 2005
equivalent to a maximum of 5% of its share capital.
Almost 90% of the shares carrying the right to
vote were represented at this Annual General
Meeting.
On 28 December 2004, Österreichische Volksbanken-AG
(ÖVAG) published
that, in addition to 3.5% of ÖVAG THE LARGEST SHARE-
HOLDER SINCE FEBRUARY 2005
the shares it already held in
Investkredit Bank AG, it had
secured another 41.2% through options. These
shares were held at that point in time by
Investkredit shares in EUR Change in price in %
1/04 2/04 3/04 4/04 5/04 6/04 7/04 8/04 9/04 10/04 11/04 12/04
Investkredit shares ATX prime
EuroSTOXX banks
252%
232%
212%
191%
171%
151%
131%
110%
90%

Shareholders as at 31.12.2004
BA-CA-Group 28.1%
BAWAG/P.S.K. Group 22.4%
RZB 16.4%
Erste Bank 11.8%
Wiener Städtische 7.0%
ÖVAG 3.5%
OeKB 0.4%
Shares widely held, especially
by industrial companies 10.4%
100.0%*)
*) of which at least 95% in Austria
BAWAG/P.S.K., Erste Bank and Wiener Städtische
Versicherung. ÖVAG also announced that it was
interested in acquiring a majority and intends to
offer the other shareholders under the terms of a
public offer EUR 123 per share.
On 2 February 2005, ÖVAG exercised its call
options purchasing (pending approval by the antitrust
and supervisory authorities) about 41.5% of
Investkredit’s shares. Thus ÖVAG now holds about
45% of the share capital. In this connection, the
Takeover Commission set a deadline for the ÖVAG
to submit its takeover offer in accordance with the
Takeover Act of a maximum of 40 trading days on
the stock exchange from the date ÖVAG published
its intent to take over Investkredit. The offer
handed over to the Takeover Commission by ÖVAG
on 24 February 2005 is scheduled to be published
on 17 March.
The Board of Management’s proposal to the
Annual General Meeting to be held on 4 May
2005 is to use the net profit for 2004, specifically
EUR 13,268,049.87, for the
DIVIDEND PROPOSAL OF distribution of a dividend of
EUR 2.00 PER SHARE
EUR 2.00 per share (consisting,
as in 2003, of EUR 1.00 plus a
bonus of EUR 1.00). Altogether that makes a distribution
of EUR 12,660,000.00 or around 28% of
the eligible share capital of EUR 46,000,110.00.
PERFORMANCE / INVESTKREDIT SHARES
The proposed distribution, in relation to the price
of Investkredit shares on 30 December 2004 of
EUR 129.54, represents a dividend yield of 1.5%.
Financial Calendar 2005
1st quarter result 4 May 2005
Annual General Meeting 4 May 2005
Ex-date 11 May 2005
Dividend payment day 11 May 2005
1st half-year result 11 August 2005
1st-3rd quarter results 10 November 2005
INVESTOR RELATIONS CONTACTS
Margot Coosmann-Binder
Tel +43/1/53 1 35-111
m.coosmann-binder@investkredit.at
Hannah Rieger
Tel. +43/1/53 1 35-112
rieger@investkredit.at
17

MANAGEMENT REPORT 2004
MARKET ENVIRONMENT FOR
SPECIALIST BANKS
Stable conditions in general for financing
At +4.2%, the global economy grew in 2004 at a
pace that has not been seen for 15 years. Thanks
to booming US demand and the increased integration
of China, international trade expanded
strongly by +9.0%. This showed up significant imbalances:
Compared to the average for 2003,
demand pushed up oil prices by around 40%. The
EUR/USD rate rose as a result of the US current
account deficit and of central banks making
changes in their portfolios over the course of the
year, by just under +8% to EUR 1.36 by year-end.
This put a brake on economic recovery in the euro
“ Fischer Advanced Composite Components AG
(FACC) is Austria’s largest supplier of composite
components for the civil aerospace industry. To
support the company’s dynamic growth, FACC
issued a Mittelstandsbond in July 2004 for
EUR 15 m with a term of seven years. Once
again, Investkredit has proven its ability to meet
the needs of medium-sized industrial
companies with the innovative
corporate bond and thus to give
impressive support to their market
position.”
Walter Stephan
CEO
FACC AG
Investkredit Bank AG structured and,
as joint lead manager, placed the
5.5% FACC 2004 – 2011 bond.
area. With little movement in employment figures
and real losses in purchasing power as a result of
high oil prices, domestic demand remained weak.
Overall, growth in the euro area stood at a slow
1.8%. This means that growth was 2.6 percentage
points behind that of the United States.
The biggest expansion by the EU in its history in
May 2004 gave a positive boost to Investkredit’s
business in its core market. Against this background,
the Central European core market of
Investkredit as specialist banking group performed
comparatively dynamically. Poland (+5.7%) and
Slovakia (+5.0%) stuck to a robust rate of
growth, although the revaluation
of the zloty (Poland) and ABOVE-AVERAGE PERFORM-
ANCE IN INVESTKREDIT’S
boosts to inflation following EU
CORE MARKET
accession (Slovakia) provided
hurdles to be overcome in
international trade. Czechia (+3.9%) and Hungary
(+3.8%) also had stronger rates of growth
than the EU 25, with the Czech economy proving
distinctly ripe for capital investment. Even Germany’s
growth (+1.4%) was above expectations
and strong rises in exports made up in part for the
difficult situation on the labour market and uncertainty
amongst consumers following the restructuring
of the social security system.
19
The economy in Austria has had a significant
revival since the spring of 2004. At +1.9%, the
overall economy performed better than that of the
euro area as a whole. A continuing fall in unit
labour costs allowed an expansion of Austria’s
share in the global markets; despite the appreciation
of the euro, exports of
Austrian goods rose by +8.3% IMPROVED CLIMATE FOR
INVESTMENTS STRENGTHENED
in real terms. This was tied to
THE DEMAND FOR CREDIT
an expansion in Austrian industrial
production of more than
5.2%, lending support to the investments made by
companies: At +6.0%, capital expenditure on
equipment in Austria in 2004 expanded faster than
in the euro area. There was a particularly strong
increase in the demand for vehicles and machinery.

20 MANAGEMENT REPORT / MARKET ENVIRONMENT FOR SPECIALIST BANKS
In view of interest rates continuing to stay low,
investments throughout Europe were once again
financed more by loans. Whilst the demand for
credit from the public sector slowed down, there
was an acceleration in the granting of loans to the
private sector in 2004.
ECONOMIC PERFORMANCE IN
INVESTKREDIT’S CORE MARKET 2003 – 2005
Real growth p.a. 2003 2004e 2005e
Austria +0.8% +1.9% +2.2%
Germany -0.1% +1.4% +1.3%
Poland +3.8% +5.7% +4.8%
Slovakia +4.0% +5.0% +4.5%
Czechia +3.1% +3.9% +4.0%
Hungary +3.0% +3.8% +4.6%
Euro area +0.5% +1.8% +1.7%
Source: WIFO (Austrian Institute of Economic Research)
Financial markets in 2004
Expectations of rises in interest rates, the rise in oil
prices and an ongoing awareness of risk amongst
investors characterised the performance
of the stock markets
in 2004. The main indices rose
noticeably (Dow Jones +3.6%,
Stoxx50 +5.5%, DAX +5.9%). Realised gains,
however, lagged significantly behind the increases
in profits of listed companies. Along with energy
and raw materials stocks, financial service
providers were amongst the winners for the year
on the stock markets. Regionally, the rise in share
prices was, besides in Hungary and Czechia, particularly
dynamic on the Vienna Stock Exchange
(ATX +55.0%).
FAVOURABLE DEVELOPMENTS
ON THE STOCK MARKETS
In 2004, inflows of capital from Asia and the dollar
area pushed the prices of European government
and corporate bonds way up. Despite inflationary
pressure caused by the energy situation, interest
rates for 10-year benchmark bonds at the begin-
ning of 2005 were below the comparable figures
for the previous year. Total returns on European
government bonds (capital gain plus interest) came
to up to 8% in the course of
the year. Investments in corpo- BIG GAINS ON THE
BOND MARKETS
rate bonds also produced significant
gains. In this connection,
the additional fall in the spreads between
corporate and government paper was significant.
These credit spreads fell to an all-time low at the
end of 2004. This meant gains in value for
investors and favourable conditions both for
issuers of bonds as well as borrowers.
After years of record volumes of corporate bond
issues, 2004 – also as a result of the favourable
earnings being made by companies – was a year
for reporting a drop in the amount of issues
throughout Europe as well as in Austria. However,
a structural development is emerging as a new
and noteworthy trend which is not directly
reflected in the volume of issues – medium-sized
companies discovered and took advantage of
the opportunities provided by the capital
markets by issuing low-volume bonds (“Mittelstandsbonds”).
The specialisation of the Investkredit Group in
niche markets makes it difficult to make a precise
statement about market shares.
> Investkredit Bank AG is one of the three largest
providers of long-term finance to companies in
Austria.
> In local government, Kommunalkredit Austria AG
built on its position as the number one in the
market for public finance.
> In real estate, Europolis is one of the three largest
investors in commercial real estate in Central and
Eastern Europe.

DEVELOPMENT OF EARNINGS
AND OF THE BUSINESS
Results improved again
The Investkredit Group had its best ever result in
the year under review. Increases in volumes and
earnings in all three segments were responsible for
this success. Improved exploitation of the opportunities
for business in the Central European core
market raised total assets to EUR 21.4 bn.
Return on equity improved again to 14.6%.
180
150
120
90
60
30
0
FACTORS OF INCREASED EARNINGS IN 2004
in EUR m 2003 2004
Net interest income 118.0 158.7
Credit risk provisions (net) -8.5 -9.1
Other operating income 15.8 21.0
General administrative expenses
Balance of other income
-62.8 -75.2
and expenses 9.8 3.6
Pre-tax profit for the year 72.2 98.8
After-tax profit for the year 60.0 83.6
Net profit 40.8 54.1
DEVELOPMENT OF NET INTEREST INCOME 2000 – 2004
2000
0.97%
2001 2002
Net interest income Interest margin
MANAGEMENT REPORT / DEVELOPMENT OF EARNINGS AND OF THE BUSINESS
Noticeable improvement in net interest
income
Net interest income is the main component contributing
to the Investkredit Bank Group’s improved
results. Business expansion – above all into European
markets – has been the deciding factor.
Results improved in all three segments – corporates,
local government and real estate. Net interest
income has accordingly risen by EUR 40.6 m or
34% to EUR 158.7 m. The interest margin – net
interest income in relation to
average total assets – improved
from 0.79% to 0.84%. The
improvement in the interest
margin is especially due to disproportionately
high growth in the real estate segment.
This in turn can be explained by a significant
increase in rental earnings and favourable refinancing
conditions.
Improvement in credit risk provisions
(net) due to consistent risk management
Consistent credit risk management and a drop
in the number of insolvencies amongst the
Investkredit Group’s customers brought about
0.85% 0.79%
2003
2004
1.8%
1.5%
1.2%
0.9%
0.6%
0.3%
0%
21
BUSINESS EXPANSION BROUGHT
ABOUT IMPROVEMENT IN
NET INTEREST INCOME
Net interest income in EUR m Interest margin in%
0.98%
76
97
105
118
159
0.84%

22 MANAGEMENT REPORT / DEVELOPMENT OF EARNINGS AND OF THE BUSINESS
more or less stable credit risk provisions (net) of
EUR 9.1 m. The improved risk-earnings ratio (ratio
of credit risk provisions (net) to net interest
income) of 5.7% (after 7.2% in
UNCHANGING RISK 2003) is proof of the imple-
COSTS IN 2004
mentation of cautious credit
decisions. This key figure positions
Investkredit significantly better than the
industry average. The low level of direct write-offs
(EUR 1.0 m) is evidence of the Investkredit Group’s
careful valuation policies. The allocation to risk
provisions for loans and advances was EUR 16.8 m.
Total risk provisions for the lending business rose
from EUR 72.1 m to EUR 78.0 m.
Improvement in other operating income
Compared to the previous year, net fee and commission
income improved by 21% to EUR 11.6 m.
The main contributions came from administrating
the Austrian environmental support schemes, commission
income from property management and
corporate finance business. At
EUR 3.3 m, the trading result is
18% higher than in the previous
year, mainly due to an improvement
in trading in interest-rate
derivatives and foreign exchange. Financial investments
were strongly increased by the favourable
market environment – especially the improvement
in net income from securities. Compared to 2003,
the lower expense arising from assigning lower
valuations to holdings also had a favourable effect.
Overall net income from investments improved
by EUR 2.7 m or 81% to EUR 6.1 m.
NET FEE AND COMMISSION
INCOME – AN IMPORTANT
INCOME COMPONENT
Disproportionately low rise in general
administrative expenses
Business growth and the Investkredit Group’s
regional expansion led to a disproportionately low
increase in general administrative expenses of
20% to EUR 75.2 m. Compared to 31 December
2003, the number of employees at Investkredit
rose by 88 or 21%. Compared to that, the 18%
rise in personnel expenses to EUR 44.7 m was
disproportionately low. Other administrative
expenses in the year under review rose by 20%
from EUR 21.6 m to EUR 26.0 m. Increases were
especially marked in auditing
and consulting costs. These ADDITIONAL STAFF TAKEN
ON, ESPECIALLY FOR
were due to higher costs for
CENTRAL EUROPE
insurance, legal advice in connection
with transactions and
the costs for rating agencies. Depreciation and
revaluation of property and equipment rose by
38% to EUR 4.6 m. The cost-income ratio (ratio
of general administrative expenses to income)
improved from 48.2% to 43.4%. It remains well
below average for the industry.
Balance of other income and expenses
less significant than in previous years
At EUR 3.6 m, the balance of other income and
expenses is EUR 6.2 m lower than the figure for
the previous year. The change in value of derivatives
that are not there for trading purposes made
a relatively low contribution to the result in 2004.
Profit for the year up by a third
Pre-tax profit for the year came to EUR 98.8 m.
This is equivalent to a rise of 37% or EUR 26.6 m.
The expense item for taxes on income rose by
25% to EUR 15.3 m. This gives
a tax ratio for the Investkredit
Group of 15.4%. The increase
PER SHARE
in after-tax profit for the
year is even more marked – up
by 39% or 23.5 m – to EUR 83.6 m. After deducting
the minority interests of partners in subsidiaries
– especially Dexia Crédit Local and EBRD – net
profit came to EUR 54.1 m. This beat the figure
for the previous year by 33% or EUR 13.3 m. In a
similar manner, earnings per share increased
from EUR 6.45 to EUR 8.55. The improvement in
return on equity to 14.6% exceeded a significant
operating target for the year 2004 of increasing
RoE to 14%.
IMPROVED PROFIT FOR
THE YEAR AND EARNINGS

Investments in real estate and modern
workstations
Investments in property and equipment in the
year under review were concentrated on real
estate. Within the scope of Europolis's activities,
the Group invests in high-quality office and logistics
buildings as well as shopping centres. The purchase
of a logistics centre in Romania and investments
in expansion in Czechia and Hungary raised
the volume.
200
180
160
140
120
100
80
60
40
20
0
Investments 2004 in EUR m
Real estate used by third parties 40
Buildings used by the Group
Other office equipment
4
and furniture 3
Total investments 47
There were investments in renovating buildings
used by the Group. Altogether, investments in
buildings used by the Group and by third parties in
2004 came to EUR 44 m. The improvement in technically
equipping workstations was once again a
matter of importance for the Investkredit Group in
2004. The Group invested in modern IT and telecoms
systems at all its locations.
DEVELOPMENT OF INCOME AND EXPENSES 2003 AND 2004
in EUR m
144
MANAGEMENT REPORT / BALANCE SHEET AND CAPITAL STRUCTURE
BALANCE SHEET AND
CAPITAL STRUCTURE
Total assets significantly increased
Total assets rose by EUR 5.0 bn or 30% to
EUR 21.4 bn. This means that growth in 2004 once
again beat the steep growth of the previous years.
In the year under review, expansion was primarily
due to the local government
segment. The reason for the INCREASES IN VOLUME
IN ALL THREE SEGMENTS
increase in risk-weighted assets
being merely disproportionately
low lay in the relatively high proportion of publicsector
financing that only needed to be backed, if
at all, by a low level of own funds.
The largest growth on the assets side was in financial
investments. The securities financing transactions
that were booked under that item rose especially
strongly in the local government
segment. The propor- RECORD LEVEL
OF ISSUES IN 2004
tion they took up of total assets
rose from 33% to 37%. At 50%
(after 54% in the previous year), loans and advances
to customers remain the most significant
asset on the balance sheet. On the liabilities
side, securitised liabilities with a growth of 31%
2003 2004
183
-71
Income Expenses
Pre-tax profit
72
-84
99
23

24 MANAGEMENT REPORT / BALANCE SHEET AND CAPITAL STRUCTURE
20,000
16,000
12,000
8,000
4,000
0
1,200
1,000
800
600
400
200
0
DEVELOPMENT OF VOLUME 2000 – 2004
in EUR m
8,703
4,276
to EUR 14.1 bn continued to be the most important
source of refinancing for the Investkredit Group.
Issues to raise funds for new business in 2004
reached a record volume of around EUR 3.8 bn. In
connection with their debt issuance programmes,
Investkredit and Kommunalkredit carried out a
number of road shows, which once again raised the
number of investors. New benchmark bonds issued
by both banks were successfully placed in 2004.
The amounts owed to banks rose by EUR 1.1 bn
CAPITAL DEVELOPMENT 2000 – 2004
421
2000
272
551
358
2001 2002
to EUR 4.7 bn. This brings them – relative to total
assets – to 22%, as in the previous year.
Solid level of own funds
In the year under review the Investkredit Group’s capital
base was further strengthened – core capital rose
by 8% to EUR 576 m. This was primarily the result of
reserves being formed in companies within the
Investkredit Group. A capital increase by Kommunalkredit
Austria AG in January 2004 amounting to
around EUR 51 m was also a factor strengthening
own funds. The two main shareholders, Investkredit
and Dexia, contributed most to the increase of
35,000 to 225,000 shares. Investkredit Bank AG continues
to hold the majority and now has 50.78%.
Österreichischer Gemeindebund has come in as a
new shareholder with 0.22%. Dexia Crédit Local
holds 49% as before. The capital increase by
Investkredit International Bank p.l.c., Malta also raised
the Investkredit Group’s core capital by around
EUR 5 m. As a result of the increased volume of business
in 2004, the core capital ratio dropped from
7.9% to 6.8%. The total figure for own funds to be
taken into account as defined by § 23 of the Austrian
Banking Act rose to EUR 904 m. The total capital ratio
as at 31 December 2004 was 10.7% of the basis for
calculating it compared to 11.8% in the previous year.
in EUR m 12.8%
in %
9.9%
6.4%
11,194
5,281
13,479
5,551
10.4%
6.8%
16,475
6,775
21,446
8,444
2000 2001 2002 2003 2004
Total assets Risk weighted assets
710
7.7% 799 7.9%
2003
Own funds (tier 1+ 2 + 3) Core capital (tier 1) Total capital ratio Core capital ratio
428
11.8%
535
904
10.7%
6.8%
576
2004
12%
10%
8%
6%
4%
2%
0%

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
BALANCE SHEET STRUCTURE OF THE INVESTKREDIT GROUP
in %
RISK REPORT
31.12.2003 31.12.2004
13% 11%
2%
Risk Management in the Investkredit
Group
For every bank, managing economic risks is a decisive
competitive factor. Risk management means
the identification, measurement and management
of risks. Investkredit’s basic principles and methods
of risk management are docu-
CAREFUL RISK mented in various handbooks
MANAGEMENT AS A
and internal guidelines. These
are regularly updated to conform
to current developments.
The most important risk to which the Investkredit
Group is exposed is credit risk. Other risks that
may be encountered are market risks, liquidity
risks and operational risks. As a matter of principle,
measurement of risks is undertaken for all
kinds of risk in the form of value at risk. A structure
of limits deduced from the level of risk
MANAGEMENT REPORT / RISK REPORT
33% 22% 37% 22%
54%
ASSETS LIABILITIES ASSETS LIABILITIES
Loans and advances to customers Financial investments Other assets
Securitised liabilities Amounts owed to banks Equity Other liabilities
COMPETITIVE FACTOR
13% 10%
2%
65% 50% 66%
involved and a calculation of margins reflecting
that risks are part of the overall conditions relating
to doing business. Stress tests are also carried out
to simulate the unfavourable effects of extreme
market movements. In the context of risk management,
the amount of economic equity is the crucial
figure. In addition, determining the Bank's economic
equity is essential in assessing the risks it is
able to bear.
In connection with Basel II the legal framework for
risk management is also changing. The new rules,
both at the accounting as well as the organisational
processing level, present banks with new challenges.
Investkredit continues to pursue the goal of rapidly
meeting these requirements.
Details about the Investkredit Group’s risks are
contained in Notes (60) to (63) to the financial
statements.
25

26 MANAGEMENT REPORT / RESPONSIBILITY
Rating
External credit ratings give the credit and capital
markets transparent information for assessing risk.
The banks within the Investkredit Group have
received external ratings for many years. This rating
serves as a standardised
EXTERNAL RATINGS DEMON- way of grading creditworthi-
STRATE CREDITWORTHINESS
ness and is therefore an important
factor in banks’ refinancing.
The long-term rating by Moody’s for
Investkredit Bank AG was set at A2 at the beginning
of 2005 (previously A1). This reflects the
assessment by the rating agency of the uncertainty
over Investkredit’s shareholder structure in the
future. The Prime 1 short-term rating remained
unchanged. Kommunalkredit Austria AG’s ratings
of Aa3/P-1 also stayed the same. Investkredit’s
Bank Financial Strength Rating is C- and that of
Kommunalkredit B-. Kommunalkredit also has a
rating from Fitch: AA- in the long term and F1+ in
the short term. This continues to make Kommunalkredit
the only Austrian bank outside the public
sector with two double A ratings.
RESPONSIBILITY
Corporate Governance
Commitment by Investkredit Bank AG to
the Code of Corporate Governance
The Austrian Code of Corporate Governance acts
as a framework on which to base the responsible
management and supervision
MEASURES TO of a company. The aim is to cre-
PROMOTE TRUST
ate long-term and sustainable
value while taking the interests
of all parties into account whose welfare is tied in
with the success of the company. General explanations
on the code may be found at www.bmf.gv.at.
Because Investkredit Bank AG is a joint-stock company
managed by its Supervisory Board and Board of
Management in accordance with Austrian corporate
law and is listed on the stock exchange, voluntarily
committed itself as early as 2002 to adhere to the
Austrian Code of Corporate Governance – when it
first came into force. It renewed this self-imposed
obligation for 2004.
As a company with an international business, Investkredit
Bank AG considers it important to make the
principles of its corporate governance transparent to
shareholders, investors, customers, employees and the
public at home and abroad, and so to strengthen the
trust of all parties. The goal regarding responsible
management and control associated with the Code, as
well as a high level of transparency for all stakeholders,
corresponds with Investkredit Bank AG’s corporate
philosophy and is accepted throughout the company.
Explanations on the rules
The Code comprises three categories of rules:
> Legal Requirements (L) – these are rules based on
mandatory provisions in law;
> Comply or Explain (C) – refers to rules that should
be adhered to; failure to do so has to be
explained and/or accounted for;
> Recommendations (R) – are rules more in the
nature of recommendations, non-adherence to
which neither has to be declared nor explained.
Actual implementation in 2004
Following the changes to the Articles that were
decided in 2003 and accordingly implemented at
the Annual General Meeting in 2004, Investkredit
Bank AG continues to conform with all the
“Legal Requirements” of the Austrian Code of
Corporate Governance. As regards the Code’s
C Rules (“Comply or Explain”), Investkredit Bank AG
does not comply in two respects, the explanation
for which may be found in the specific shareholder
structure of the Bank:
> Rule 45 of the Code (Conflicts of Interest and
Self-dealing – Supervisory Board) foresees

members of supervisory boards not holding
seats on the boards of other companies that
compete with the company in question. As
almost 80% of Investkredit Bank AG’s shares in
2004 were in the hands of the big Austrian
banks, it is natural that they should have exercised
their rights as shareholders to appoint
members of the boards of management of their
banks as members of the Supervisory Board.
> Rule 51 (Qualifications of Members and Composition
of the Supervisory Board) of the Code
limits the number of members of the Supervisory
Board (excluding employees' representatives)
to a maximum of ten. The number of
shareholders' representatives in Investkredit
Bank AG's Supervisory Board in the year under
review stood at fourteen. There are various reasons
for this: the Syndicate Agreement basically
foresaw a seat for every shareholder owning
8% or more of the shares. Those banking
groups with a multiple of this percentage provided
a correspondingly higher number of
members to the Supervisory Board. The Chairman
of the Supervisory Board has to be a neutral
personality who is not particularly close to
any of the banks owning shares. Although only
13%, i.e. less than 25%, of the shares were in
the free float, Heinz Kessler has represented
these shareholders for many years on the
Supervisory Board. For historical reasons, two
representatives of Austria's state-run organisations
for granting subsidies to companies have
also been on the Supervisory Board.
Investkredit Bank AG has fully implemented the
Code’s C, L and R Rules listed under the sections
“Investor Relations and the Internet” and “Audit
of the Financial Statements” in the chapter on
“Transparency and Auditing”. Investkredit Bank AG
also complies, with one exception (R 31: separate
reporting on the compensation paid to each
member of the Board of Management), with all of
the Code’s other Recommendations. When there
are only two members on the Board of Manage-
MANAGEMENT REPORT / RESPONSIBILITY
ment, a breakdown of their pay would not be
material information.
In compliance with Rules 39 ff of the Code, the
Balance Sheet Committee deals each year in
depth with the results of the previous financial
year prior to the Supervisory Board meeting to
approve the balance sheet and makes a recommendation
to the Supervisory Board to agree to
the proposal by the Board of Management that the
annual financial statements be approved.
There were no reports of share transactions by
members of the Supervisory Board or of the Board
of Management in the year under review. Such
transactions must be reported to the Financial
Markets Supervisory Authority under the Austrian
Stock Exchange Act.
There is more information about corporate governance
on the Internet under www.investkredit.at
Report on personnel and
social issues
Headcount rose by 88 to 503
As at 31 December 2004, there were 503 employees
at the Investkredit Group (not counting members
of the Board of Management and those on
maternity leave), 21% more than in the previous
year. Above all, it was the
expansion into the enlarged
European core market that was
the reason for this growth. The
proportion of female employees in the Investkredit
Group stands at 55% and that of part-time staff
with contracts varying between 26% and 90% of
normal working hours at 11% or 56 people. Converted
to normal working hours, this gives a
notional headcount of 454 compared to 378 in the
previous year. An average age of around 36 shows
how dynamic the recent past has been. Low fluctuation
and working relationships intended to be
INVESTKREDIT – AN
ATTRACTIVE EMPLOYER
27

28 MANAGEMENT REPORT / RESPONSIBILITY
long-term with an average period of employment
of more than six years are evidence of its attraction
as an employer.
It is a fundamental concern of Investkredit that its
employees are able to release their individual development
potential in implementing innovative
services. The personal and
RESPECTFUL respectful support given to
COLLABORATION
customers by the Group’s relationship
managers and specialists
is very important. The quality of the range of
services is also a function of the close co-operation
between the Investkredit Group in Vienna and its
European branch offices.
Management culture with short lines of
decision
The niche strategy with specialist solutions for a
European core market confronts management with
new challenges time and again. In September
2004, Investkredit ran a twoday
seminar with external consultants
for more than 40 managers
on the subject of “Specialisation’s
Strength – How
Quality Management leads to Strong Profits”. The
Bank executives’ principles of conduct include
dealing transparently with management information.
Quick decision making processes in changing
markets lies at the heart of the Investkredit
Group’s management culture.
QUALITY AND TRANS-
PARENCY – TWO CORNER-
STONES OF MANAGEMENT
An extensive management information system provides
the basis for fine-tuning and ongoing decisions.
The expanded management team meets
monthly to discuss operational developments in
the various business areas. At the monthly “Bank
Steering Meeting” those in charge of the operating
fields of business decide on asset and liability
management and risk management issues.
The Asset Liability Committee (ALCO) is the central
element in the risk management process at
Kommunalkredit. At the regular ALCO meetings,
the Board of Management is informed about the
Bank’s overall risk situation; all significant general
requirements relevant to risk are defined; and
limits are allocated and monitored. The Asset Liability
Committee is responsible for optimising the
overall risk positions in respect of market assessment,
and agreeing on risk exposure in response to
the Bank’s ability to bear risk. ALCO’s management
aim is to optimise the economic value of equity
and net interest income.
Staff development as a factor in competitiveness
Integrating the new branch offices into the banking
group’s organisational culture presents an
intercultural challenge. The aim of staff development
is for the quality standards and processes to
be respected regardless of location. The regular inhouse
“International Day” in Vienna provides an
opportunity for exchange on technical and organisational
cultural issues.
The main focus of training in the year under review
was on advanced technical aspects of financing
and risk management. External experts also
assist with the Bank's internal programme. Overriding
everything, the issue of “knowledge management”
is seen as crucial. In the year under
review, internal seminars supported by external
systemic management consultants were held to
strengthen the collaboration between departments.
Generous amounts were included in the
budgets for developing technical and personalityoriented
qualifications in the year under review:
The Investkredit Group spent around EUR 1.0 m on
internal and external seminars and workshops.
This is equivalent to an average amount of
EUR 2,100 per employee.
Experts from all of the Investkredit Group’s fields of
business also speak at technical events, seminars
and conferences at home and abroad. A number
of employees also worked as lecturers on financial
topics at universities and technical colleges.

Social responsibility and
sustainability
Business success in tune with social
responsibility
Sustainability means connecting Investkredit’s
business aims with the demands of society. It also
means dealing in a responsible manner with the
environment. For banks, environmental awareness
involves being sparing in the use and disposal of
the resources involved in their operations. This
self-image is an integral part of local, regional and
global business activities. Sustainability is therefore
to be seen as a long-term
SUSTAINABILITY – strategy with the aim of creat-
PART OF INVESTKREDIT’S
ing value in an optimal man-
SELF-IMAGE
ner. For Investkredit as a specialist
bank for long-term
financing, sustainable business has always formed
a substantial part of its identity and its business
activity. Long-term orientation means actively
facing up to the risks and opportunities for customers
in a rapidly changing environment. Sustainability
finds its expression in the strategic
direction of the Group’s business activities and its
financial success in recent years. Management and
the entire staff support this attitude and their personal
commitment creates additional potential for
realising sustainable value added. In concrete
terms this attitude means that, in making its business
decisions, Investkredit also looks at how its
customers and partners view sustainability. Moreover,
Investkredit has traditionally always been
committed to issues relating to saving the environment
and resources. One example of this is
Kommunalkredit’s long-term work as manager
of Austria’s environmental support schemes.
Investkredit’s commitment to the implementation
of the Kyoto Protocol on CO2 reduction also conforms
to this self-image. Promoting alternative
sources of energy, such as wind power projects,
plays an important role in financing. In fixing
country limits, the Bank pays attention to respect
for human rights.
MANAGEMENT REPORT / RESPONSIBILITY
Corporate Social Responsibility – the
Investkredit Group as a dedicated member
of society
In the year under review, the Investkredit Group
spent in total around EUR 0.5 m for social sponsoring.
In so doing, it supported more than 100 projects
and activities in the social field. In terms of a
responsible corporate philosophy, the specialist
banking group is aware of its duties towards society.
It does not see this as an obligation but part
of its basic attitude.
> The main responsibility is to stakeholders (such
as owners, business partners, financial market
partners, customers, authorities and employees)
and is lived in a respectful manner.
> Responsibility also implies giving respect to
those people who feel pushed to the edge of
our society.
Investkredit’s social sponsoring concept has two
aims in mind:
> supporting projects that are initiated by social
institutions but of which the public is not yet sufficiently
aware and
> promoting the aims of organisations in urgent
and current need of every additional support.
Investkredit is also concerned not just to put partnerships
between business and non-profit making
organisations on a sound financial footing but,
above all, to promote them by jointly developing
and implementing ideas.
In concrete terms, Investkredit’s social commitment
extended in the year under review from the
support of healthcare and welfare
establishments in Austria INVESTKREDIT’S
COMMITMENT TO
(such as projects like the
SOCIAL RESPONSIBILITY
“Möwe” Children’s Refuge, the
“Gruft” Centre for the Homeless,
the Caritas “Am Himmel” Children’s Home, the
Austrian Autistic Charity, the “Haus der Künstler”, a
29

home for artists in Gugging, the CS Hospice on
Rennweg and the “Grüner Kreis” Association for the
Rehabilitation and Integration of Addicts) through
to lifesaving projects in Sudan or for street children
in India and Romania. Investkredit finds development
projects subsidising local small businesses
(micro-loans) particularly worthy of support. On the
“In 2004 evn naturkraft – the ecological generator of
electricity from water, wind and the sun – invested
in the construction of two wind parks
in order to expand its generation of
electricity from renewable resources.
In Investkredit we have a partner who is
not just there when there’s a tailwind.”
Alois Bürger
Managing Director
evn naturkraft Erzeugungs- und
Verteilungs GmbH & Co KG
Investkredit Bank AG provided the
outside funds amounting to EUR 20.3 m
for this investment under the terms of
a classic senior loan.
“From 2003 to 2004, WEB Windenergie Betriebsgesellschaft
Deutschland GmbH – a subsidiary of the
Austrian company, WEB Windenergie AG – invested
in the construction of a wind park with 15 wind
power turbines in Altentreptow (Mecklenburg-West
Pomerania, Germany). In the strongly expanding
field of renewable sources of energy, it is important
to be able to react flexibly and quickly. Investkredit
assisted us with its usual competence
in realising our largest wind park to
date – with a capacity to serve 15,000
households – by providing suitable
project finance.”
Andreas Pasielak
CFO
WEB Windenergie AG
Investkredit Bank AG arranged and
structured the investment finance
amounting to EUR 28.7 m as
mandated lead arranger.
MANAGEMENT REPORT / RESPONSIBILITY
occasion of the opening of the representative office
in Bratislava, a Roma initiative in the parish of
Jarovnice received a subsidy, just as various measures
were undertaken to support those affected by
the catastrophic flooding at the end of the year
(such as the Give Hope Initiative by the documentary
film duo Elisabeth Guggenberger and Helmut
Voitl or the financing of one of the “Kurier Houses”
in the “Austrian Village” in Sri Lanka).
The “Ver-rückte Perspektiven” (Displaced Perspec-
tives) exhibition at Investkredit Bank AG for the first
time created a joint platform for pictures from four
artistic initiatives by the Caritas of
the Archdiocese of Vienna. This SOCIAL RESPONSIBILITY AND
CULTURAL COMMITMENT
project represented a successful
link, well-received by the public,
between the Bank’s social and cultural commitment.
The exhibition gave rise to a “meaningful” Christmas
card, showing a piece of work by Sieglinde
Drescher, an artist living at Caritas’s Lanzendorf
Institution for People with Disabilities.
Investkredit’s cultural commitment is geared
towards giving an opening to modern art and letting
new ideas be seen. It includes its own collection
of contemporary art, which was also expanded in
the year under review by about 20 works of art, as
well as subsidies for individual artistic projects. The
“Alfred Czerny – Auf der Suche nach zeitloser
Schönheit” (Alfred Czerny – Searching for Timeless
Beauty) exhibition was tied in with the intention of
drawing the attention of a wider public to the work
of Alfred Czerny – who studied under Fritz
Wotruba. At the opening of the exhibition, a book
on the artist’s life’s work was presented.
2004 also saw the continuation of the INVEST Portrait
series with talented personalities from creative
industries. These included the talks moderated by
Nadja Mader with the actress Mijou Kovacs as well
as the documentary film duo Elisabeth Guggen-
31

32 MANAGEMENT REPORT / CORPORATE COMMUNICATIONS
berger and Helmut Voitl. The efforts to create
opportunities for business and culture to find a
common platform led to the sponsoring of the
RadioKulturhaus series “Zeitgenossen im Gespräch”
(Talks with Contemporaries).
This socio-cultural commitment also applies to Kommunalkredit,
which was main sponsor in 2004 for
the third time of the “Artistic Advent Calendar at
the Vienna City Hall”. This counts as one of the
biggest fundraisers in the “Licht ins Dunkel” (Turn
Darkness into Light) campaign.
CORPORATE
COMMUNICATIONS
Investkredit’s corporate communications are directed
on the one hand to its customers – that is to corporates,
local authorities and real estate as well as
financial market partners – and on the other hand
to shareholders, investors and analysts.
Corporate Communications with new
emphasis on technical issues in 2004
Topics of interest to customers and business partners
are at the core of Investkredit’s corporate
communications. The main aims are to improve
technical competence and to further develop the
claim to quality.
Investkredit Bank AG’s financing know-how was
promoted in the volume entitled “Die neue
Unternehmensfinanzierung” (The New Corporate
Lending) edited by Wilfried
TWO SPECIALIST BOOKS Stadler (published by Redline
PUBLISHED
Wirtschaft). The specialist book
is an anthology of 30 contributions
by financing specialists at Investkredit on
strategic financing decisions. The presentation of
the book in September in Vienna was a joint project
with the daily newspaper DER STANDARD. The
transformation from a banking- and lending-ori-
ented financing culture was also the main theme
of a series of workshops. Hosts and fellow organisers
were:
> POLOPLAST GmbH & Co. KG, Leonding, Upper
Austria
> Wimmer Hartstahl GmbH & Co KG, Thalgau,
Salzburg
> KNAPP Logistik Automation GmbH, Hart near
Graz, Styria
> Walter Bösch KG, Lustenau, Vorarlberg
> AL-KO Kober Ges.m.b.H., Ramsau, Tyrol
At the end of the year, Investkredit published a
second, expanded edition of its book put out by
MANZ-Verlag and entitled “InvestGlossar”. The
book contains definitions of 1,130 technical terms
used in corporate lending.
Family businesses are an important target group of
the Bank. Over 600 Austrian family businesses are
customers at Investkredit Bank AG. For the fourth
time now, the Bank sponsored
the WirtschaftsBlatt Prize in EVENTS ARRANGED FOR
CORPORATE CUSTOMERS
2004 for Austria’s best family
IN AUSTRIA
businesses, awarded at a specially
arranged major event.
Investkredit experts also published a series of
technical articles in the WirtschaftsBlatt (see
www.wirtschaftsblatt.at/familien).
In the year under review, technical workshops
were organised on “Mittelstandsbonds”, “Securitisation
of Trade Receivables”, “Kyoto. The Facts”
and “Acquisition Financing”. There was a series of
INVEST workshops all over Austria in the first half of
the year on “The Art of Financing Corporate Acquisitions”.
The following companies acted as co-hosts
for these technical events:
> Loacker Recycling GmbH, Götzis, Vorarlberg
> Steinbacher Dämmstoff GmbH, Erpfendorf, Tyrol
> KEBA AG, Linz, Upper Austria

As part of the traditional Alpbach financial symposium
in 2004 organised by Finance Trainer,
Investkredit ran a technical seminar on “Capital
Structure Management for the Sustainable Financing
of Corporate Strategy”.
The Investkredit Representative Office in Poland
arranged a series of workshops in the year under
review on EU subsidies in several regional cities
and in Warsaw. At the begin-
EVENTS ARRANGED ning of the year, celebrations
FOR CUSTOMERS IN
were held at the Austrian
THE CEE REGION
Embassy in Bratislava to honour
the opening of Investkredit’s
Representative Office in Slovakia. In January,
an evening reception marked the opening of
Danube House in Prague – the first office building
in the River City Prague Development. There
were around 600 guests and they each received a
book from Europolis showing the significant contribution
made to municipal architecture by this
project. In June Investkredit’s Frankfurt Branch
celebrated its third anniversary with more than 360
partners from the financial markets in the Alte
Oper. October celebrated the third anniversary of
Investkredit’s Representative Office in Prague.
In November Europolis’s Hungarian regional
office opened in the Info Park Research Center in
Budapest.
Investkredit uses its new syndication platform to
approach its partners in the financial markets
(mainly banks). It opens up a market for swapping
credit risks. You can find Banks to Banks on the
Internet at www.banks2banks.com.
A number of awards confirmed the pleasing feedback
about the Investkredit Group coming from
the market. In the opinion of its
ATTRACTIVE AWARDS GIVEN customers in the annual analy-
TO THE INVESTKREDIT GROUP
sis of Austria’s largest companies,
Investkredit Bank AG was
once again the bank to hold top place in the
“Technical Competence” category. As part of the
MANAGEMENT REPORT / REPORT ON EVENTS AFTER THE BALANCE SHEET DATE
victor 2004 banking prize, given by emotion
banking and the Danube University Krems, two of
the five main categories were awarded to the
Investkredit Group. In the main category “Customers”,
it was Investkredit and, in the main category
“Staff competence”, it was Kommunalkredit
that took the first prize. In September,
the Minister for Agriculture, Forestry, Environment
and Water Management gave Kommunalkredit
Dexia Asset Management AG (KDAM) the “Eco-
Label” for eleven funds. That makes the Kommunalkredit
Group the first bank to have received this
award for its funds. Recognition in the form of an
award as “Central & European Investment &
Finance Company of the Year” confirms the
quality of Europolis’s real estate portfolio. This
prestigious real estate prize was awarded in January
2004 in Warsaw on the occasion of the “CEE
Real Estate Quality Awards” ceremony. At the
2004 Alpbach Financial Symposium, the companies
present recognised Investkredit with its prize
for the most innovative financial services.
Over the past year the investor relations work at
Investkredit Bank AG was a consistent continuation
of the corporate communications activities aimed at
shareholders, investors and analysts.
These are based on the INVESTOR RELATIONS
commitment to the Code of
Corporate Governance as the prescribed set of rules
governing mandatory publications and active media
relations. You can find information on Investkredit
shares in the second chapter headed “Investkredit
shares” on page 15.
REPORT ON EVENTS AFTER
THE BALANCE SHEET DATE
In January 2005, DIFA, a German real estate fund
management company, took a 49% share in a
total of seven Europolis holding companies in
Czechia and Hungary. The investment package
33

includes four office buildings in Prague and
Budapest, two shopping centres in Teplice and
Mladá Boleslav, as well as two logistics buildings
on the edge of Budapest with a total usable floor
space of 230,000 m2 . DIFA also acquired 100% of
another property company called “Hadovka”. The
market value of these proper-
JANUARY 2005: ties is EUR 300 m. The EBRD
PARTNERSHIP WITH
has assigned all of its shares
DIFA SIGNED
while the Investkredit Group
has reduced its 65% holding in
seven properties to 51% via a newly formed holding
company. Working with DIFA forms the basis
for further acquisitions of real estate in the
CEE countries, especially in Hungary and Czechia,
where Europolis will represent DIFA exclusively.
On 28 December 2004, Österreichische Volksbanken-AG
(ÖVAG) published that, in addition to
3.5% of the shares it already held in Investkredit
“ In September, a ten-year profit sharing rights
financing was concluded with the Styrian Sattler
AG – Europe’s leading manufacturer of fabric for
awnings, truck tarpaulins, boat covers, sunscreens
and blinds, as well as a constructor of textile
biogas storage tanks and large roof structures
made of special membranes. With this financing
the company will reinforce and expand its market
position as well as optimise its capital structure.
Long-term investments made to strengthen competitiveness
and expand a company’s market position
require adequate financing in conjunction
with the capital structure optimisation.
Many years of trusting co-operation
with Investkredit provided the
right foundation for realising this
form of financing.”
Herbert Pfeilstecher
Member of the Board of Management and CFO
Sattler AG
Investkredit Bank AG arranged and
structured the profit sharing rights
financing as sole financier for the
period from 2004 to 2014.
MANAGEMENT REPORT / OUTLOOK FOR 2005
Bank AG, it had secured another 41.2% through
options. These shares were held at that point in time
by BAWAG/P.S.K., Erste Bank and Wiener Städtische
Versicherung. ÖVAG also announced that it was
interested in acquiring a majority and intends to
offer the other shareholders under the terms of a
public offer EUR 123 per share.
On 2 February 2005, ÖVAG exercised its call options
purchasing (pending approval by the antitrust
and supervisory authorities) about 41.5% of
Investkredit’s shares. Thus ÖVAG now holds about
45% of the share capital. In
this connection, the Takeover FEBRUARY 2005: ÖVAG
LARGEST SHAREHOLDER
Commission set a deadline for
the ÖVAG to submit its takeover
offer in accordance with the Takeover Act of
a maximum of 40 trading days on the stock
exchange from the date ÖVAG published its intent
to take over Investkredit. The offer handed over to
the Takeover Commission by ÖVAG on 24 February
2005 is scheduled to be published on 17 March.
OUTLOOK FOR 2005
Stable market environment in 2005
In 2005 international economic performance
will lose momentum somewhat. In the United
States (forecast: +3.8%), high current account and
budgetary deficits suggest more restrictive monetary
and fiscal policies. In China
(+8.2%), the government is
struggling to cool down the
overheated economy. World
trade will continue to develop dynamically against
this background (+7.2%) but not as much as in
2004. Despite the more stable oil prices, economic
growth in the euro area (+1.7%) is unlikely to
accelerate, especially with the strength of the euro
slowing it down. However, the focus of the economy
could well turn from exports to domestic
demand. The ECB is likely to keep interest rates at
STABLE EXPECTATIONS
FOR THE ECONOMY
35

36 MANAGEMENT REPORT / OUTLOOK FOR 2005
a low level. This should indicate stable conditions
for companies to make investments.
The long-term euro interest rates reached an alltime
low at the end of 2004. The interest rate
curve was flatter than it had been for years. This
indicates that the market was not expecting to be
confronted with any major rises in interest rates
over the long term. There could be a rise here in
2005 and, accordingly, a steeper interest structure
curve. The tight spreads on corporate bonds could
grow wider as well. Against this background, we
expect a more volatile trading environment.
Prospects for Investkredit’s core market continue to
be good. The latest forecasts give Poland,
Czechia, Slovakia and Hungary growth rates in
excess of 4%, once again more than twice as high
as those for the countries in the euro area. In Germany
(+1.3%), investment and consumer demand
remain modest but the phase of falling economic
performance appears to be over. In Austria
(+2.2%), despite there being less of a boost from
exports, growth will be more dynamic in 2005, as
the second stage of the tax reform will generate
domestic demand through relief for companies
and a rise in net income for their employees. Polls
of companies indicate low growth in investments
for the economy as a whole (+1.6%).
High corporate earnings and better creditworthiness,
but also a drop in the number of insolvencies,
as well as relief from the oil price and euro
exchange rate fronts, provide a positive base for
the forthcoming performance on the financial
markets. The US dollar will continue to remain
under pressure, especially against the euro and the
Japanese yen. A rise in the euro to above 1.40
looks altogether possible in the course of the year.
For 2005, analysts see – not just because of the
strong euro but also based on expected profits –
considerable upward potential for share prices on
the European stock markets.
The market environment for real estate finance
in Central Europe assumes that rental income will
continue to fall, and a drop in rents is to be
expected in most of the countries. The more
mature markets for office buildings, such as
Prague and Budapest, will tend to be exceptions to
this. This is an expression of the continuously
improving overall conditions in the countries of
Central Europe and the growing confidence of
investors in real estate.
Market opportunities for specialist niche
banks
This all means a financing environment for
Investkredit presenting new opportunities and
challenges for specialist solutions
in the European core market.
For the current year 2005,
Investkredit sees particularly
good business opportunities in the structuring of
financing solutions specially tuned to meet customers’
needs. Innovative instruments such as the
Mittelstandsbond, which was in such strong
demand in 2004, and a targeted expansion of specialist
segments, such as acquisition and project
finance, will give considerable support to the
development of the business. The ABS instrument
available to medium-sized companies for securitising
trade receivables will also be a focal point for
the business in 2005.
ORDERS LOOKING LIVELY FOR
INVESTKREDIT BANK AG
Additional boosts to growth are expected to come
from the business in the core market countries of
Germany, Poland, Slovakia, Czechia and Hungary,
which already contributed substantially to Investkredit’s
positive performance in 2004. The aim here
is for an intensification of direct contacts with
customers by the teams on the spot, in both corporate
lending and real estate finance, leading to an
increase in the number of mandates as arranger.
In 2004, overall economic performance in the euro
areas and, accordingly, the required budgetary

consolidation were below expectations. Taking the
forecasts of economic researchers into account,
2005 is also unlikely to see any relief for publicsector
budgets. At the same
KOMMUNALKREDIT time, the public sector in Cen-
FINANCES CEE
tral Europe will continue to
INFRASTRUCTURE
push the catching-up process,
and the infrastructure investments
required for this will put a substantial strain
on their budgets. This means high demand for
Maastricht-sparing financing solutions in the
future, both for the euro area as well as for the
accession countries. Kommunalkredit with its
know-how will be offering these more than ever.
Work on the market in the CEE area is being
pooled into a new bank – Dexia Kommunalkredit
Bank – in order to play a leading role in public
finance here too.
In the real estate segment the new E2 portfolio,
participating with the EBRD and co-operating with
DIFA, is an ideal combination for all concerned.
This will make more boosts to
EUROPOLIS: CONFIRMATION OF growth in the region possible.
ITS SUCCESSFUL STRATEGY –
In the future, Europolis’s func-
EXPANSION OF ITS POSITION AS
tion will consist of building up
PIONEER IN THE CEE REGION
and managing several portfolios
with various risk profiles as
asset manager. Europolis will be able to further
expand its pioneering position as investor, developer
and asset manager of commercial real estate
in the CEE region.
The focus in the existing E1 real estate portfolio
will be on the second construction phase of the
entire River City Prague project and completing the
other developments that have already started in
Czechia, Hungary and Croatia. The new E2 portfolio
will also be more devoted to the candidate
countries for the next expansion of the EU and
other Eastern European states, such as Ukraine.
The volume of Europolis’s real estate is expected to
grow by at least EUR 150 m in 2005.
MANAGEMENT REPORT / OUTLOOK FOR 2005
Outlook for the Investkredit Group
Implementing Investkredit’s strategy – positioning
itself in a lasting and qualitative way as a specialist
niche bank in a European core market – will involve
the following steps in 2005:
> The concentration on growth in Central Europe
has to contribute in the medium term to a relevant
position in the market. “Relevant” in
this context means being considered one of the
three leading providers in each niche. This
should see Investkredit developing overall into
a leading niche provider in Central Europe.
Growth in total assets should amount to
more than EUR 2 bn. A major factor here will
be the gradual introduction of the full range of
services in Central Europe.
> The expansion of volume should also lead to an
improvement in income. Investkredit is aiming
for a sustainable return on equity of 15%.
> At the same time, increasing economies of
scale should allow a further reduction in the
cost-income ratio from 43% to 40%.
Of central importance to the specialist banking
group’s strategy are the existing partnerships
with the market leaders specialising in the various
market segments (EIB and KfW in corporate
finance, Dexia in local government financing, and
the EBRD and DIFA in the real estate business).
37

Clear segment structure
In accordance with the IFRS format for primary
segment reporting, the Investkredit Group’s segments
are oriented towards the main target
groups of its business. In all three segments, the
breakdown corresponds to several separate legal
entities, so that it is possible to clearly distinguish
between them.
CORPORATES
Financing
Consulting
Treasury and asset management
The corporate segment consists of those companies
over which the “Bank for Corporates” is positioned.
Kommunalkredit and its subsidiaries form
the local government segment. In the real
estate segment Europolis’s properties are joined
together with the real estate management companies
in holding companies.
Karl Heinz Bohl
Commercial and Financial Manager
Salzburger Flughafen GmbH
SEGMENT REPORTING
LOCAL GOVERNMENT
Financing
Core market concept broken down by
region
Treasury and investment banking
Holdings
“Salzburger Flughafen GmbH runs the largest
Austrian regional airport. To implement strategic
investments for expanding the airport’s infrastructure
and to optimise the financing structure,
it issued a Mittelstandsbond in November 2004
with a face value of EUR 10 m and a term of
seven years. Success in the marketplace and
successful growth demand investment
and the financing suited to it;
this was one of the reasons we
chose to work with the experts at
Investkredit.”
As lead manager and arranger,
Investkredit Bank AG structured and
placed the 4.125% Salzburger
Flughafen 2004 – 2011 bond.
The corporate and local government segments
perform specialised banking transactions in
selected niches, such as long-term financing. A
number of responsibilities such as Treasury are
deliberately carried out in both segments – due to
the different specialisation in each. The real estate
REAL ESTATE
Real estate project developments
Forward purchase agreements
Real estate investments
Real estate asset management
segment looks after developments and investments
in its own buildings and properties and
manages the properties. Accordingly, financing of
real estate companies comes under the corporate
segment. For the IFRS format for secondary reporting,
a breakdown by region has been selected.
The Investkredit Group’s core market consists of
Austria and the “other core market”, made up
of the Central European countries of Germany,
Switzerland, Poland, Czechia, Hungary and Slovenia.
All other countries are allocated to “rest of
the world”.
39

40 SEGMENT REPORTING / CORPORATES
CORPORATES
Structure
The corporate segment consists of Investkredit
Bank AG as the Bank for Corporates, Investkredit
International Bank p.l.c., Invest Mezzanine Capital
Management, Europa Consult
CORPORATES – and additional companies that
INVESTKREDIT GROUP’S
manage investment transac-
CORE SEGMENT
tions on behalf of companies.
There were 246 employees
(49% of the Group) as at year-end 2004 in the corporate
segment.
Business approach
Owing to a rising demand from companies for differentiated
financing solutions tuned to their
specific needs, capital market instruments,
specialist instruments, such as mezzanine capital,
but also innovations in
OPTIMISING CORPORATES’ traditional, loan-oriented cor-
CAPITAL STRUCTURE
porate lending, have gained in
importance as an alternative
to the long-term loan. However, this broadened
spectrum and increased complexity of instruments
ALIGNMENT OF INSTRUMENTS WITH CORPORATE BALANCE SHEETS
Asset management
Intangible and
tangible assets
Financial investments
Current assets
place significantly higher demands on banks in
respect of their structuring and financing
know-how. Investkredit was quick to take
account of this development and built up an extensive
range of modern financing alternatives to
offer alongside classical financing. It is accordingly
in a position to offer overall solutions corresponding
to the specific needs of its customers and
contributing to the optimisation of companies’
capital structure. Capital structure management
is the name given to the process of optimising the
quality and costs of a company’s capital by actively
structuring the source and application of funds
side of its balance sheet. The structure of the corporate
balance sheets accordingly reflect Investkredit's
services in the corporate segment.
In the year under review, there was a substantial
organisational change. Structured finance is now
integrated into the corporate
lending department. For the NEW STRUCTURE FOR
GIVING SUPPORT TO
first time, this unites market,
CORPORATES
customer and product responsibility
for all corporate lending
instruments into one department. Supplemented
by Treasury services, the entire range of services
can now be offered as required and in a customer-
ASSETS LIABILITIES AND EQUITY
Derivatives
Own funds
Other equitylike
liabilities
Long-term outside funds
Short-term outside funds
Interest-rate and currency management instruments
Equity
financing
Mezzanine
financing
Loan financing
Corporate bonds
Mittelstandsbonds
Securitisation
of trade
receivables (ABS)

oriented manner from one source. The central
issue is the ever-stronger concentration of all
efforts on the needs of the customers. The aim is
to establish and expand in a targeted manner
Investkredit’s positioning as one of the leading
providers of specialist solutions with a market
presence characterised by high technical competence.
This comes from:
> consistently developing the Bank’s market leadership
in quality and technical competence
> differentiation through innovative and creative
specialist solutions
> quick, short lines of decision-making
> openly communicating as partners with cus-
tomers
As the Bank for Corporates, Investkredit strengthened
its real estate financing in the year under
review and created a separate
INCREASED SUPPORT FOR department for it. This is where
REAL ESTATE PARTNERS
the Bank deals with loan
financing for commercial real
estate projects. The focus is on the following types
of property:
> office buildings
> logistics buildings
> retail properties (shopping centres, specialised
stores and specialised shopping centres)
> management properties (hotels, sanatoriums and
spas)
Viewed from a financing perspective, Investkredit
Bank AG is primarily active in financing existing
properties (acquisition finance, refinancing). It also
finances real estate development projects.
Core market and
international locations
Along with a continuous widening of the range of
its services, recent years have witnessed a consistent
regional expansion of Investkredit’s area of
SEGMENT REPORTING / CORPORATES 41
activity. The Bank’s core market concept, which
foresees the establishment of offices in the neighbouring
countries, extended in 2004 to Hungary.
Now the Bank has a branch in Frankfurt and representative
offices in Prague, Warsaw, Bratislava
and Budapest. As at the reporting date, there
were 27 employees in the branch offices. Great
value is placed on upholding the same market,
work, risk, assessment and processing standards
that the specialist bank Investkredit has introduced
in the Austrian market. Market expansion follows
under the premise that no concessions will be
made in terms of pricing or risk but that success
will be found as a niche provider in specialisation.
Investkredit also positions itself in the region
as an independent partner for local banks. Whilst
the focus in the Frankfurt Branch was originally on
acquisition finance, the main feature at the representative
offices has been real estate finance and
syndicated corporate lending.
After three years, it has become clear that
Investkredit’s internationalisation strategy has
been very successful. Especially in real estate
finance, the Central European area has been the
primary engine of growth. In the course of
2004, the total level of outstanding foreign real
estate finance was for the first time higher in
volume than Austrian financing. The real estate
experts in Prague, Warsaw, Bratislava and Budapest
have very successfully placed Investkredit Bank AG
as one of the leading real estate financiers in their
respective countries.
Taking the positive experience gained in the Central
European real estate business as a starting
point, the aim is now to build up a similarly strong
position in the market niche acquisition finance.
The know-how available in Vienna and Frankfurt
provides a good basis for successfully internationalising
the acquisition finance business. The aim in
the medium term is to provide the complete range
of corporate lending services throughout the core
market.

“Together with financial investors, the management
of Melos GmbH acquired the company under
the terms of a management buy-out. Melos is
international market leader in the production of
rubber granules for flooring systems in sports,
leisure and commercial facilities. It is also market
leader in Germany for cable bedding compounds
used in the cable industry. The acquisition of the
company by its management confronts all involved
parties (financial investors, management, bank and
staff) with particular challenges. By virtue of its
volume alone, the financing is a major element
and requires intensive and constructive co-operation
with the bank involved. Reliability,
flexibility, professionalism and
quick decisions are a few of the
reasons why we work with the
experts at Investkredit Bank AG.”
Jörg Siekmann
CEO
Melos GmbH
Investkredit Bank AG’s Frankfurt am
Main Branch arranged and structured
the acquisition finance as joint
mandated lead arranger and provided
the senior secured credit facilities.
“In August 2004, Halder – financial investor for
medium-sized companies in Germany – and the company’s
management acquired PRÜM-Türenwerk GmbH
– a manufacturer of interior doors and doorframes –
under the terms of a management buy-out. A successful
closing of the leveraged buy-out of PRÜM-Türenwerk
GmbH required tailor-made acquisition finance
that would also ensure sufficient flexibility for more
growth even after closing of the transaction. In the
experts at Investkredit Bank AG we have found longterm
partners distinguished by their professionalism,
speed and reliability. As a medium-sized
company, PRÜM-Türenwerk GmbH has
benefited from Investkredit Bank AG’s
experience and specialisation in longterm
acquisition finance.”
Gerald Oertel
Investment Advisor
Halder Beteiligungsberatung GmbH
Investkredit Bank AG’s Frankfurt am
Main Branch arranged and structured the
acquisition finance as mandated lead
arranger and made the senior secured
credit facilities available.
SEGMENT REPORTING / CORPORATES
Performance at a glance
Based on net profit, the corporate segment
achieved EUR 22.2 m which accounts for 41% of
the Investkredit Group’s total result. The increase
compared to 2003 is mainly due to an improvement
in net interest income. Improvements in
credit risk provisions (net) and the trading result
also made a substantial contribution to the higher
segment profit.
FACTORS OF INCREASED EARNINGS IN 2004
in EUR m 2003 2004
Net interest income 60.3 66.7
Credit risk provisions (net) -7.5 -7.2
Other operating income -0.7 3.8
General administrative expenses
Balance of other income
-32.4 -34.8
and expenses 1.5 -1.7
Pre-tax profit 21.1 26.7
After-tax profit 17.3 25.8
Segment profit 16.2 22.2
Segment assets 6,036 7,154
Risk-earnings ratio 12.4% 10.9%
Cost-income ratio 51.9% 49.4%
Return on assets
Return on equity –
0.29% 0.39%
segment profit 8.8% 12.7%
Business expansion and the stronger concentration
on the Central European part of the core market
were key to the improvement in net interest
income. The interest margin could be kept at
1.01%. Despite a rise in expenses, the cost-income
ratio improved to below 50%. An important earnings
target – to raise the return on equity to a double-digit
percentage figure – was achieved with an
RoE of 12.7% in 2004.
43

44 SEGMENT REPORTING / CORPORATES
36
24
12
0
SEGMENT RESULT CORPORATES
in EUR m RoE in %
10.8%
19 19
After-tax profit Segment profit Return on equity (RoE) – Segment profit
Fields of business in the
corporate segment
FINANCING
Performance in the corporate segment in the year
under review was excellent, so
RECORD NUMBER OF FINANC- that financing (i.e. loan financ-
ING TRANSACTIONS SIGNED
ing, guarantees, trust loans and
securities financing) achieved a
record level of transactions signed.
FINANCING TRANSACTIONS SIGNED
Annual (in EUR m)
2000 553
2001 720
2002 780
2003 685
2004 1,128
up to 2004 (from 1957) 12,256
Compared to the previous year, there was an overall
increase of 65%, coming from Austria (+64%)
as well as the foreign core market (+88%) and the
5
3.2%
6
7.8%
15
14
8.8%
2000 2001 2002
2003
2004
17
16
12.7%
rest of the world (+19%). The following developments
made this successful performance possible:
> an increase in the demand for specialist solutions
in classical corporate lending
> a successful implementation of the niche strategy
in real estate, project and corporate finance
> an increase in the volume of transactions
signed in the core market outside Austria following
the regional extension of the specialist
banking business model into Central Europe
In the year under review, as in previous years, the
focus was on industrial financing. As in the previous
year, its share in newly signed financing business
reached 46%. The industries
that received the most FINANCING:
FACTS AND FIGURES
financing were oil and chemicals,
power utilities, wood processing,
paper and electricals. At EUR 3.5 m, the
average amount of a loan was significantly above
the figure for the previous year (EUR 2.9 m) but
below the figure for 2002 (EUR 4.1 m). The average
term (7.6 compared to 6.6 years in the pre-
26
22
12%
8%
4%
0%

vious year) was also noticeably and significantly
longer.
Expansion of financing for Austrian companies
The year 2004 was marked by a significant revival
in demand for long-term finance in the domestic
market. At around EUR 800 m, the volume of outgoing
payments – even against the background of
increasing internationalisation by Austrian companies
– was significantly above the level for the
previous year (around EUR 700 m). This volume
expansion was primarily achieved with capital market
instruments and specialist solutions. Consistently
applying the same rules for setting conditions
that reflected the risk involved led to an
improvement in the risk-reward structure, despite
a very competitive environment. This meant that
there was a rise in the contribution to income from
domestic business despite the slight drop in the
total volume of financing.
Capital market financing transactions and
Mittelstandsbonds as innovative instruments
Since 2004 there has been a remarkable trend in
the form of an interesting structural development:
Medium-sized companies discovered and took
advantage of the opportunities provided by the
capital markets. Mittelstandsbonds, i.e. the issue
of low-volume bonds, were much in demand. In cooperation
with Austria Wirtschaftsservice GmbH
(AWS), Investkredit has found an innovative way
that complies with capital market requirements to
adapt the demand in terms of volume for corporate
bonds to the needs of medium-sized as well as
larger Austrian companies. These securitised financing
transactions can have a volume starting as low
as EUR 5 m. Investkredit acts as arranger and bundles
the Mittelstandsbonds into a portfolio for a
structured issue on the capital market. Mittelstandsbonds
are accordingly well under the usual size
requirements. They are suited to medium-sized
companies that are too big to receive subsidised
financing according to the EU subsidy guidelines but
too small from the perspective of capital market
investors. On the one hand, this construction allows
medium-sized companies to gain access to new
sources of capital, especially in view of the forthcoming
changes under Basel II. This gives these
companies an equality of opportunity with the big
companies that comply with capital market requirements.
On the other hand, institutional investors
gain access to new ways of investing in mediumsized
companies.
Now that eight Mittelstandsbond issues have been
successfully placed, Mittelstandsbonds made up
around 50% of Austrian new issues in the year
under review.
FINANCING TRANSACTIONS COMPLETED IN 2004 BY THE CORPORATE SEGMENT
in terms of volume
Slovakia 3.7% Czechia 9.7%
Poland 10.4%
Germany 27.4%
Core market 87.7%
SEGMENT REPORTING / CORPORATES
Hungary 6.7%
Rest of Eastern Europe 6.0%
Rest of the EU 3.6%
Rest of Western Europe 0.9%
Rest of the World 1.8%
Austria 29.8%
45

Investkredit has set itself a goal of building up a
Mittelstandsbond portfolio with a volume of around
EUR 300 m within just three years. The total volume
of completed issues to date amounts to EUR 125 m,
of which around EUR 80 m were planned for the
Mittelstandsbond portfolio in 2004. The difference
was placed directly with institutional and major
investors. The average rating, as targeted, is BBBwith
an average term of 5.9 years.
Securitisation of trade receivables as a
new financing instrument
Supplementing the existing range of capital market
instruments, a new product was developed in cooperation
with IKB Deutsche Industriebank AG,
Düsseldorf, which gives Austrian companies the
opportunity to securitise their trade receivables
due from customers and placing them on the capital
market as ABS transactions. At EUR 15 m, the
“Greiner Packaging GmbH is a 100% subsidiary of
Greiner Holding AG and is itself parent company to
an internationally active group specialising in packaging
solutions made of plastics and plastic-cardboard
combinations. To optimise its financing structure
and raise capital for new investments in the
area of food packaging, a EUR 25 m bond was
issued in December 2004 with a term of five years.
In 2004, we invested around 15% of our sales.
Along with investments in the promising Eastern
European market, substantial sums poured into
expanding our Austrian location in Kremsmünster.
As a leading manufacturing company in plastics and
plastic-cardboard packaging for the food and nonfood
industries, it is important to stay
alert and up to date, to recognise new
trends, pick up on them and to ensure
that there are sufficient resources for
their implementation.”
Willi Eibner
CEO
Greiner Packaging International
As joint lead manager, Investkredit
Bank AG arranged, structured and
placed the 4.5% Greiner Packaging
2004 – 2009 bond.
SEGMENT REPORTING / CORPORATES
minimum volume for a transaction is significantly
below the international norm and should make this
instrument of interest to medium-sized companies
as an alternative to traditional financing.
Subsidy management for corporates
With the expansion of the European Union on
1 May 2004, the direct subsidisation via EU support
schemes of companies took on a new dimension
in the new member countries. As a result of
companies increasingly internationalising their
business and the consequent increasing significance
of European subsidies, there will be changes
in the behaviour of domestic and international
companies.
Investkredit supports companies both in preparing
and presenting projects to Austrian institutions providing
subsidies as well as in obtaining subsidies
in the expanded core market, and is one of the leading
Austrian banks in subsidy management. In the
field of subsidised financing transactions in Austria,
the bank specialised in administrating various
support schemes for Austrian companies, Austria
Wirtschaftsservice GmbH is Investkredit’s most
important partner. In 2004 Investkredit was once
again one of the main trustee banks processing ERP
financing for companies. Co-operation on global
loans with KfW in Frankfurt and the European
Investment Bank (EIB) in Luxembourg was continued
successfully in 2004.
Corporate finance services
There was more demand for corporate finance
services in 2004. The volume of outgoing payments
in 2004 amounted to
EUR 181 m. This is due both to
greater M&A activity by industrial
companies as well as
increased activity by domestic and international
private equity funds specialising in LBO transactions.
Investkredit offers its customers an extensive
range of products, including both consulting in
the case of M&A transactions as well as struc-
CONTINUOUS DEMAND FOR
CORPORATE FINANCE
47

48 SEGMENT REPORTING / CORPORATES
turing complex financing transactions. Working
closely with Investkredit Bank AG, specialised
subsidiaries, namely Europa Consult (M&A consulting),
INVEST MEZZANIN (mezzanine financing) and
INVEST EQUITY (private equity), provide parts of
the range of corporate finance products.
Now that Investkredit has become established in
recent years in Austria and, through its Frankfurt
Branch, in Germany, as a recognised specialist for
acquisition finance, it succeeded in 2004 in concluding
its first transactions in this field of business
in the neighbouring CEE markets as well. The aim
is to be positioned as one of the market leaders in
providing corporate finance services to mediumsized
companies in Central Europe.
Mezzanine financing via INVEST MEZZANIN
In the year under review, INVEST MEZZANIN’s
investment focus was once again on financing
profitable SMEs undergoing a process of change.
Management buy-outs/manage-
MEZZANINE CAPITAL ment buy-ins as well as financing
for acquisitions and expan-
INSTRUMENT FOR
sion are the main reasons for
taking up mezzanine financing
here. INVEST MEZZANIN currently
manages two funds with a total volume of
EUR 60 m, of which the first fund, Invest Mezzanin I,
is already fully invested. There were four new
investments in the year under review in the followup
fund Invest Mezzanin II – including for the first
time a transaction in the CEE area.
ESTABLISHED AS A FINANCING
MEDIUM-SIZED COMPANIES
INVEST EQUITY
As planned, INVEST EQUITY succeeded in completing
the first closing in September 2004 of its
new, third private equity fund,
the “Greater Europe Fund”
with a volume of EUR 32 m. In
so doing, it attracted wellknown
new investors from
home and abroad. Together with the parallel IED
Fund, it now has own funds available for invest-
STILL MAINTAINING A STRONG
POSITION IN THE AUSTRIAN
PRIVATE EQUITY MARKET
ment of EUR 44 m. On the investment side, as part
of the chosen investment strategy (acquisition of
established, profitable medium-sized companies),
the first deal in August 2004 was the acquisition
of Leobersdorfer Maschinenfabrik. Shortly thereafter,
a second followed with the acquisition of
Kolbe, a German producer of advertising materials.
Earnings in the year under review from
INVEST EQUITY’s first fund – Invest Equity Beteiligungs-AG
– were satisfactory. There continues to
be intensive strategic support for the investments
held by this fund.
Project finance
As a specialist banking group for long-term financing,
Investkredit has particular competence in the
field of project finance. The focus was on industrial
project finance transactions
and the structuring of and
consulting on the financing of
public private partnerships.
In 2004, advice was given to
the industrial syndicate that secured the contract
for Austria's nationwide digital radio network for
public safety agencies BOS (Adonis II). A healthcare
project – the “Klinik Wilhering” rehabilitation
clinic – was also realised in the form of a PPP project.
This underscores Investkredit’s competence
when it comes to supporting private investments in
the healthcare sector. For the first time, in the tender
for the ring road around Vienna, a motorway
project will be realised in the form of a PPP project.
Investkredit helped to develop the underlying concept.
Furthermore, Investkredit is a member of a
syndicate bidding for construction of the motorway
to Northern Austria. Boosts to growth also
come from the financing of wind power projects.
In the year under review, there were 13 wind
power projects with a volume of EUR 111 m.
FOCUS ON WIND POWER
PROJECTS AND PUBLIC
PRIVATE PARTNERSHIPS
Real estate finance
Financing real estate is an important element in
Investkredit Bank AG’s business approach and
expansion strategy. The year 2004 was charac-

terised by dynamic growth. For example, there were
the following transactions: financing (including
financing for expansion) of a logistics project in
Lodz (Poland) on behalf of a well-known international
real estate developer;
SPECIALIST acquisition finance for a logis-
REAL ESTATE BANK
tics park in Romania on behalf
of the Europolis Group; and
refinancing of extensive shopping centre portfolios
in Czechia and Hungary. These transactions demonstrate
the increase in nationwide logistics and retail
projects that can be observed in all Central and
Eastern European countries. By contrast, activity
concerning office buildings and hotels is restricted
to the refinancing of and acquisition finance for
such properties in the respective capital cities of
Central and Eastern Europe. Outstanding loan receivables
have achieved a volume in excess of
EUR 700 m, an increase of around 25% compared
to 2003. This expansion is proportionately reflected
in earnings: the profitability of the Bank’s real
estate portfolio is above-average.
Financing transactions in the expanded
core market and other parts of Europe
The focus of the business in the year under review
was on real estate finance and
SPECIALIST NICHE corporate lending in specialist
BUSINESS FOR THE
niches. As a result of good
REST OF EUROPE
co-operation with local banks,
Investkredit concluded a large
number of syndicated transactions. Investkredit is
seen as a supplementary banking partner, not
involved in the day-to-day business, and perceived
by local banks for its focussing on long-term
financing.
Investkredit has also participated more in interna-
tional financing syndicates in the region making
up the “rest of Europe”. The regional focus here
extends beyond the borders of the core market.
Only arrangers that have an excellent hold on the
market concerned and a good reputation in the
field of business in question act as partners here.
SEGMENT REPORTING / CORPORATES
With such transactions Investkredit pays attention
to obtaining an acceptable risk-reward ratio. This
investment approach also serves in diversifying the
portfolio and as a potential source for syndicated
transactions on behalf of Austrian banking partners.
The Frankfurt Branch performed well again in the
year under review. Eighteen syndicated acquisition
finance and corporate lending transactions were
signed. The branch succeeded in implementing its
desired positioning as a quality provider in the arranging
of leveraged buy-out transactions in the midcap
segment. For two transactions, the Frankfurt
team received the mandate as arranger.
In the second half of 2004 the branch entered into
direct business relationships with corporate customers
for long-term financing transactions. As a
specialist bank for corporates,
Investkredit sees market oppor- GOOD PERFORMANCE BY
THE EUROPEAN OFFICES
tunities as a competent and reliable
banking partner, supplementing
customers’ regular banks in the long-term
financing field and also offering its experience in
Central Europe.
The Representative Office Prague’s good net-
work in the local banking market led to participation
in five local corporate lending transactions.
Investkredit also participated as a syndicate partner
in two acquisition finance transactions in the
energy sector. Real estate continued to be the main
component of business in Czechia. In addition to
various refinancing deals for the Europolis Group
five new transactions were signed.
In the Polish market, the Representative Office
in Warsaw saw dynamic growth in real estate
finance and corporate lending. Fifteen transactions
were signed. The EUR 114 m of business done
through the Representative Office in Warsaw gave
it the highest growth of all the Eastern European
branch offices.
49

“AIG/Lincoln Polska – a Polish branch of AIG/Lincoln
Eastern Europe LLC. – is developing Riverside Park,
an office project comprising over 12,000 m2 of office
rentable area located in Warsaw’s governmental and
diplomatic quarter. The building should be completed
in mid-2005. We are happy to confirm that the cooperation
between our company and Investkredit
Bank AG was very effective. We have been given
competent and professional service.
We believe that their professionalism
during the negotiation process places
the bank among our strongest financial
partners.”
Miroslaw Szydelski
Investment Director
AIG/Lincoln Polska
Investkredit Bank AG, as sole lender,
structured and arranged the loan
financing for this development.
“Henryk Bury-Mielec Sp. z o.o., part of the THB
Bury Group and manufacturer of hands free telephone
and car navigation equipment, completed
the construction in 2004 of its production facilities
in the Polish town of Mielec. We are pleased to
express our opinion about the effective co-operation
and a very good relationship between our
company and Investkredit Bank AG. Our positive
opinion is based on the very competent and complex
service of the Bank’s staff. The negotiations
and discussions about the conditions of the Bank’s
products were conducted by very competent and
flexible persons, who were able to advise our company
in choosing which of the Bank’s products are
best geared to meet our needs. Investkredit Bank AG’s
long-term loan helped strengthen the company’s
position and ensure our business evolution
and further growth. We believe
that Investkredit Bank AG will have an
important and a lasting position among
our financial partners.”
Bernadetta Dzik
Financial Director
Henryk Bury-Mielec Sp. z o.o.
Investkredit Bank AG arranged the
long-term financing of these facilities
for an amount of EUR 4.2 m in the form
of a covenant-driven senior loan with a
sliding-scale repayment structure.
SEGMENT REPORTING / CORPORATES
In the first full year of trading by the Representative
Office Bratislava, there was success in particular
in the real estate finance and corporate lending
market. The representative office already did
sufficient business as intermediary to cover its costs
in its first year.
In 2004 preparations were made to set up the Representative
Office Budapest as a fourth branch
office in Eastern Europe. The first business in real
estate finance was concluded in the fourth quarter.
International business continues to be
directed towards asset-backed securities
In international business – outside the expanded
core market as defined by the bank – the focus for
new business over the last
financial year was once more
on asset-backed securities.
There was an especially strong
demand for these instruments in the second half of
the year. This led, on the one hand, to a noticeable
squeezing of margins and, on the other, to lower
allocations of new issues.
GREAT DEMAND IN THE
MARKET FOR ABSs
Investments were concentrated on senior tranches
with Aaa and Aa ratings. More than half of the
new business was in non-USD-denominated transactions.
Investkredit also preferred
transactions unlikely to tie up TOTAL VOLUME OF
ABSs MAINTAINED
capital for long. It also invested
more in transactions with underlying
highly granular portfolios. In terms of numbers
as well as volume, these made up roughly half of all
the transactions concluded in 2004.
Overall, the market was characterised by excess
liquidity and a high level of redemptions. Due to
Investkredit’s good hold on international structured
products, it was able to maintain its total
volume of asset-backed securities. In addition
to the investments in asset-backed securities,
Investkredit entered into a number of project
finance and corporate lending transactions on a
51

52 SEGMENT REPORTING / CORPORATES
highly selective basis. This prevented a drop in
weighted average margins.
The quality of the complete portfolio – expressed in
terms of its weighted average rating – remained virtually
unchanged in relation to the previous year. The
proportion of transactions in the portfolio as a whole
classified as sub investment grade fell below 5%.
The table shows the overall level of financing in the
corporate segment. By contrast to previous years,
there were increases in all regional markets. The
biggest growth – in absolute numbers too – was in
the Central European core market.
Credit risk management and syndication
The care that Investkredit takes in its credit risk
management is demonstrated, on the one hand, by
the low rates of default and, on the other, in the
employment of the most mod-
CAUTIOUS CREDIT ern and innovative methods.
RISK MANAGEMENT
For instance, a portfolio model
has been used since 1999 to
calculate credit risk and diversification. In line with
its core competence in risk management and legal
requirements, all responsibilities for risk assessment,
analysis, management and hedging have
been centralised in the “Portfolio and Risk Management”
department. This ensures an objective
assessment of creditworthiness and collateral as
well as a consistent ongoing management of the
portfolio and hedging of risk. The following decisive
measures were laid down in 2004 to improve
hedging and management of credit risks: the Banks
to Banks syndication platform was set up and relevant
competencies in portfolio and risk management
were centralised in the organisation in anticipation
of regulatory requirements.
Banks to Banks – Investkredit’s innovative
syndication platform
In order to be able to employ measures used in portfolio
management for the illiquid lending business as
well, Investkredit developed in
Banks to Banks an efficient platform
for swapping credit risks.
This makes opportunities that are otherwise only
available with large international financing transac-
www.banks2banks.com
FINANCING IN THE CORPORATE SEGMENT
Austria Other Core Market Rest of the World Total
in EUR m 2004 2003 Change 2004 2003 Change 2004 2003 Change 2004 2003 Change
Loans1) Securities
2,267 2,236 +1% 971 637 +52% 613 584 +5% 3,852 3,458 +11%
financing2) 309 327 -5% 97 52 +88% 1,336 1,199 +11% 1,743 1,578 +10%
Total financing 2,577 2,563 +1% 1,068 689 +55% 1,950 1,783 +9% 5,595 5,035 +11%
1) Loans and advances to customers, trust loans and provision for guarantees
2) Bonds and other fixed-income securities (except those issued by states and banks)
tions accessible for all of the Bank’s lending business.
That solves the conflict between seeking a balanced
loan portfolio and focussing on target groups and
industries. Portfolio management sets limits, according
to which individual risks are restricted by grades
of creditworthiness and amounts exceeding these
limits are assigned to financial partners. This allows
Investkredit, on the one hand, to offer its customers
a high level of commitment and, on the other, to
keep its risks balanced. The high level of interest
shown by the banks approached demonstrates that
the items offered are very attractive to financial market
partners. Within a few months of being on the
market, more than a dozen Austrian banks have
become members of the Banks to Banks syndication
platform.
The www.banks2banks.com platform sets new
standards for the long-standing syndication busi-

ness: High-quality documentation of the cases for
syndication, a uniform contract and fast exchange of
information via the Internet enable business to be
processed safely and cost-efficiently. In the medium
term, Investkredit wants to use this to create a marketplace
for credit risks and take account of its development
into a risk-trading bank.
CONSULTING
As a bank specialised in meeting the needs of corporates,
Investkredit aims not just to provide its
customers with financing instruments. Building on
its long-term expertise and experience, it supports
companies with extensive consulting services. In
many cases, the consulting is directly connected
to financing. But consulting services are also
increasingly in demand as independent services.
Investkredit’s consulting activities are therefore
partly offered through subsidiaries with their own
market presence. On the one hand, this allows an
additional group of customers to be addressed,
who would not be accessible with financing
products alone. On the other hand, it strengthens
Investkredit’s strategic positioning as a specialist
bank capable of developing high-quality solutions
optimally tuned to customers’ needs.
Technical competence through ETECH
CONSULT
Investkredit uses ETECH CONSULT, a 100% consulting
subsidiary, to offer its customers its technical
competence in market and risk assessment. In many
cases, a long-standing topic at Investkredit is brought
up: consulting on subsidies. On the one hand,
ETECH CONSULT supports customers in applying for
subsidies as well as grants and on the other hand, it
runs whole subsidy programmes – such as the
National Agency for the EU Youth Programme – on
behalf of the public sector.
With its management of the A3 “Austrian Advance
Automotive Technology” programme on behalf of
the Federal Ministry for Transport, Innovation and
SEGMENT REPORTING / CORPORATES
Technology, ETECH CONSULT made a substantial
contribution to this increasingly important area in
the Austrian economy.
53
Market and industry surveys are a growing
focus of the work at ETECH CONSULT. As part of
the “go international” initiative launched by the
Federal Ministry for Economic Affairs and Labour,
the Austrian Federal Economic Chamber and the
Oesterreichische Kontrollbank, a market survey was
prepared on the construction industry
in Central Europe high- INDUSTRY SURVEYS REINFORCED
lighting various business development
opportunities for Austrian entrepreneurs. For
such surveys, which are either carried out on behalf
of public-sector establishments or individual companies,
ETECH CONSULT has recourse to the Bank’s
core competencies.
EUROPA CONSULT – the Investkredit
Group’s M&A consultancy
Europa Consult is the Investkredit Group’s M&A
consultancy company and its strategic focus is on
advising medium-sized family businesses on buying
and selling companies as
well as on structuring complex
financing transactions.
Solutions to succession issues
have become an increasingly
important item when giving advice to family businesses.
Europa Consult accordingly makes a substantial
contribution to positioning Investkredit as
the Bank for Family Businesses.
M&A CONSULTANCY FOR
FAMILY BUSINESSES CONTINUES
TO BE IN DEMAND
In the year under review, Europa Consult, besides
taking on 15 management buy-out mandates, also
assisted a number of entrepreneurs in a consulting
capacity with the sale of their companies.
Kyoto Competence Centre expanded further
The Investkredit Group’s Kyoto Competence Centre
(Kyo-Ko) helps Austrian industry face up to the
challenges related to the Kyoto Protocol and the
system of trading in emissions in the EU. The Kyo-

Ko sees itself as a partner in all matters related to
climate protection and advises companies on climate
strategy best suited to their requirements
as well as on the subsidisation of operational
measures to protect the environment.
The Kyo-Ko also assists companies affected by the
trade in emissions in obtaining
INVESTKREDIT BANK AG the requisite certificates. In the
A FOUNDING MEMBER
year under review, it held many
OF ECRA
discussions with companies and
ran the “Kyoto. The facts” series
of technical workshops and seminars on the topic
“Challenges for Companies – the European Trade in
Emissions”. Kommunalkredit Public Consulting – a
100% subsidiary of Kommunalkredit Austria AG –
acts as programme manager for the implementation
of the Austrian JI/CDM Programme (Joint
Implementation/Clean Development Mechanism
Programme). Moreover, Investkredit Bank AG is a
founding member of the privately organised service
registry, ECRA Emission Certificate Registry Austria
GmbH.
A consulting company set up for publicprivate
partnerships
Against a background of intense discussions about
possible ways for the public and private sectors to
“In November 2004, the EWE-FM Group, Austria’s
innovative kitchen manufacturer, entered into a
strategic partnership with the European market
leader Nobia, involving a takeover of 100% of its
shares by Nobia. This sort of project cannot be
brought to fruition without mutual respect and
appreciation between consultants and
client. For this I should like once again
to thank the Managing Director of
Europa Consult, Robert Ehrenhöfer,
and his staff.”
Wilhelm Pacher
Managing Director
EWE-FM Group
Europa Consult advised the shareholders
of the EWE-FM Group in all the tactical
and financial aspects concerning the
strategic development and implementation
of this transaction.
SEGMENT REPORTING / CORPORATES
co-operate in public-private partnerships, Investkredit
and Kommunalkredit have jointly set up
the PublicPrivate consulting platform. In this way,
Investkredit’s know-how in advising companies
and structuring complex corporate lending and
project finance transactions can be optimally combined
with Kommunalkredit’s long-term experience
in the public sector. Target groups are both
companies as well as the public sector and PublicPrivate
develops specialist solutions for them
within the scope of an all-encompassing consulting
and financing approach.
TREASURY AND
ASSET MANAGEMENT
Interest-rate and currency management
for corporate customers
In a scenario of economic recovery with low interest
rates and an ongoing weakening of the US dollar,
the financial markets in
2004 offered interesting oppor- DERIVATIVES FOR
tunities for Investkredit’s corporate
customers. Real estate
investors were able to take
advantage of the flat interest rate curve, especially
for making an optimal hedge against future rises in
interest rates. The currencies of the Central European
countries performed differently, due to their
individual economic profiles. These currencies
demonstrated a general trend of a strengthening
against the euro which benefited exporters to these
countries and international investors. Subsidiaries
producing goods locally, however, were faced with
a challenge in view of the relatively high exchange
rates. The all-round servicing of Investkredit’s customers
on all topics related to interest-rate and
currency management is the strategic focus of
its money and foreign exchange trading. This
focus is supported by experienced experts and a
modern risk management system.
HEDGING RISK CONTINUE
TO BE IN DEMAND
The instruments used in this interest-rate and currency
management included forward hedging
(currency futures contracts, forward rate agree-
55

56 SEGMENT REPORTING / CORPORATES
ments and interest-rate swaps) and, increasingly,
option structures (currency options, caps, floors
and swaptions). In view of their asymmetrical risk
profile, these instruments are particularly suited to
hedge against the occurrence of a worst-case scenario
in uncertain times, without giving up the
opportunity to gain from an advantageous development
on the financial markets.
Trading activity strengthened
The Bank’s active presence on the international
financial markets not only provides a solid basis for
giving support to customers but also follows the
goal of generating a stable trading result. The significance
of proprietary trading was demonstrated
by the centralisation of all trading activities
into a single modern dealing room and the implementation
of an extensive risk management system.
The opportunities presented by the spot and forward
markets were used in money and foreign
exchange trading. Proprietary trading in securities
also intensified. Here the focus – as in previous
years – was on liquid, first-class bonds from the
euro area and the US. Because of the positive
trends throughout the year, the trade in shares
repeatedly presented attractive opportunities. In
order to meet the requirements laid down by
Asset Liability Management, investments for
the banking book are made in highly rated marketable
securities, taking account of the requirements
for spreads.
Institutional customer relations expanded
Meeting the asset management needs of banks,
insurance companies, foundations and capital
investment companies in a way that is targeted
and individually focussed is a major part of
Investkredit’s capital market activities. Structured
issues, especially in borrowers’ notes as defined
under German law, are adapted to meet customers’
yield requirements according to the prevailing
interest-rate environment. In 2004 the flat
and low interest-rate curve presented a particular
challenge in this area.
Asset management
The Bank’s customers continue to be primarily
interested in investments in fixed-income securities,
floaters and money-market
instruments. Whilst term
INSTRUMENTS
deposits at Investkredit International
Bank p.l.c. fell slightly
from EUR 206 m to EUR 191 m, there was – doubtless
partly a result of the low level of interest rates
– a noticeable rise in the demand for structured
securities.
FOCUS ON FIXED-INCOME
Custody account services
In the year under review, the number of securities
custody deposit accounts at Investkredit rose by
7%. Based on disposals that had long been planned
and regular redemptions, there was a fall in the
aggregate volume of securities held. At year-end,
assets under management came to EUR 1.2 bn
(previous year: EUR 1.5 bn).
New refinancing programme
Investkredit set up an issuance programme in March.
The aim of this debt issuance programme is to
broaden the international investor base as well
as to be able to react more quickly to changing
market conditions with the
prompt launching of securities
issues. The first benchmark issue
was the 3.75% fixed-income
bond with a term of seven years
and an issue volume of EUR 600 m. The issue
was well received in the European market to an
above-average degree. In the course of the year,
Investkredit made another 13 issues, of which four
were borrower’s notes for an aggregate amount of
EUR 27 m and two issues for EUR 30 m under the
global issuance programme. Seven smaller issues –
adapted to meet customer needs and market conditions
– brought the refinancing volume for the
year up to around EUR 710 m.
INTERNATIONAL CAPITAL
MARKETS USED TO
INVESTKREDIT’S BENEFIT
www.InvestDirekt.at
This online account service allows Investkredit
customers to call up their accounts and custody

accounts via the Internet. Qualitative information,
such as on current market values for securities and
derivatives as well as outstanding loans including
accrued interest, are the specialities of this service.
InvestDirekt is also being increasingly used by customers
in the European markets. The service is
available 24 hours a day in German and English. In
the year under review, the number of customers
using InvestDirekt remained stable at 14%.
Corporates: strategy
and outlook
Lively order book for financing
Investkredit Bank AG’s strategic positioning in its
Central European market again offers innovative
perspectives for growth in 2005. The aim is to
deepen the level of specialisation at the Bank for
Corporates in all its fields of business and throughout
the core market.
Based on loans that have already been contractually
agreed, internal approvals and loans being
processed, the outgoing payment potential as
at 31 December 2004 in the corporate segment
works out at more than EUR 1.3 bn, which is
already 60% more than all of the outgoing payments
in 2004.
The Bank also expects an ongoing lively volume of
business in mezzanine financing – because of the
rise in the number of M&A transactions and, at the
same time, the rise in corporate valuations.
Based on the real estate loans that have already
been approved but not yet added in, Investkredit
calculates that the total volume of loans to finance
real estate will reach the target set for 2005 of
EUR 1 bn. The expansion will be in the existing
core market as well as in new countries, such as
Romania. Whilst the number of opportunities for
growth and investment is falling in the capital
cities – especially in the case of office buildings – a
stronger trend towards retail projects in the
regions is to be expected.
SEGMENT REPORTING / CORPORATES
Favourable perspectives for consulting
With the expected revival in the economy and an
increase in M&A activity – both on the part of
industrial as well as financial investors – a rise in the
demand for qualified consulting services may be
expected in 2005. Europa Consult will meet this by
assisting both buyers and sellers. Along with its
long-standing focus on the management of subsidy
programmes, ETECH CONSULT will lay its focus in
2005 on surveys and market assessments.
Promoting treasury services for companies
In a market environment that will maintain its
volatility in 2005, tailor-made solutions for managing
financial market risks will continue to be in
demand. The related increase in proprietary trading
should allow for an improvement in the result.
For refinancing Investkredit Bank AG, the currently
favourable conditions provide a good environment
for exploiting the issuance programme. These relate
both to public issues as well as domestic and international
private placements.
57

LOCAL GOVERNMENT
Structure
The local government segment encompasses
Kommunalkredit Austria AG as
KOMMUNALKREDIT: SPECIALIST the specialist bank for public
BANK FOR PUBLIC FINANCE
finance and its subsidiaries, of
which the most important are
Kommunalkredit International Bank Ltd and Dexia
Kommunalkredit Holding as sole shareholder of the
“As an innovative issuing house, Kommunalkredit
Austria AG has developed a modern covered bond
product (the Kommunalkredit Austria Covered
Bond “KACB”) based on Austrian law, and successfully
introduced it to the international capital
markets. With this, Kommunalkredit Austria AG
has become the only bank without public backing
in Austria to have a refinancing instrument at its
disposal with a AAA rating from a rating agency
(Moody’s). In 2004 Kommunalkredit issued two
further benchmark transactions – one for EUR 1 bn
and one for CHF 500 m. The KACBs were in strong
demand as investment instruments, especially
from central banks and other investors seeking
the highest degree of creditworthiness. Our goal
is to place liquid investment instruments at our
investors’ disposal that cover the whole range of
maturities.”
“Viewed internationally, Kommunalkredit Austria AG
counts as one of the Top 50 issuers of structured
medium term notes (EMTNs). In 2004 the bank
completed 97 transactions with a total face value
of around EUR 1.3 bn. These issues were placed
with investors around the world – from Asia to the
Middle East and right across Europe
and South America. One of our core
competencies is to make tailor-made
investment instruments available to
our investors.”
Reinhard Platzer
CEO and Chairman of the Executive Board
Kommunalkredit Austria AG
Slovak Dexia banka Slovensko (formerly Prvá
Komunálna Banka). With two double A ratings
(Moody’s and Fitch), Kommunalkredit is the bestrated
Austrian bank outside the public sector. There
SEGMENT REPORTING / LOCAL GOVERNMENT
were 224 employees (that is 45% of the whole
Group) in the Kommunalkredit Group at year-end
2004. Kommunalkredit Austria AG strengthened its
own funds in January 2004 with a capital increase
amounting to around EUR 51 m. The two main
shareholders, Investkredit and Dexia, contributed
most to the increase of 35,000 to 225,000 shares.
Österreichischer Gemeindebund has come in as a
new shareholder with 0.22%. At 31 December 2004,
Investkredit Bank AG now holds 50.78% of the
shares.
Business approach
In 2004 Kommunalkredit Austria AG continued to
expand its position as number one in the public
finance segment. It pursues this specialisation in
its foreign commitments as
well. Both cross-border financ- KOMMUNALKREDIT WITH A
STRONGER MARKET PRESENCE
ing as well as consulting and
financial services provided by
the Kommunalkredit subsidiaries showed growth
in volume and earnings in 2004. Setting up Dexia
Kommunalkredit Bank, which will be responsible
for the dynamic CEE market, will give substantial
support to the Kommunalkredit Group’s expansion
policy.
The reason for Kommunalkredit’s lasting success at
home and abroad is the ongoing development of
tailor-made innovative products that distinguish it
significantly from its competitors.
Core market and
international locations
Around 60% of Austrian local authorities are
included amongst Kommunalkredit’s customers in
Austria. In its second core market – Switzerland –
it is one of the largest foreign financiers of the public
sector. Kommunalkredit does business in Central
and Eastern European countries together
with its strategic partner Dexia Crédit Local. Its
investment in Slovakia (via Dexia Kommunalkredit
Holding), Dexia banka Slovensko, has a market
59

60 SEGMENT REPORTING / LOCAL GOVERNMENT
36
30
24
18
12
share of around 70%. Thanks to the successful
build-up of Dexia Kommunalkredit Polska, Kommunalkredit
is already a significant competitor in the
public sector segment in Poland just over two years
after entering the market.
6
0
Performance at a glance
In the year under review the profit in the local
government segment continued to improve to
EUR 16.3 m. This means that the local government
segment accounted for 29% of the consolidated
result. With a 17.3% after-tax return on equity, the
local government segment is the most profitable in
the Group. As in previous years, Kommunalkredit
pursued a dynamic growth policy in 2004,
which materialised above all in an expansion of its
business within the European Union and in Central
Europe. Both the volume of business as well as the
income figures reached new record levels.
The rise in net interest income was particularly
strong. Due to higher assets, more favourable refinancing
conditions and improved earnings from
asset/liability management net interest income
could be increased by 42% to EUR 49.6 m. Other
items included under other operating income, that
SEGMENT RESULT LOCAL GOVERNMENT
with a total of EUR 12.0 m made a substantial contribution
to the overall success, were net income
from investments and the balance of other operating
income and expenses – the latter includes in
particular the valuation of the financial investments
and derivatives in accordance with IAS 39.
Owing to the drop in corporation tax from 34% to
25% that becomes effective in Austria in 2005, it
has been possible to substantially reduce the
deferred taxes under IFRS. Combined with the pleasing
contributions to earnings from the foreign subsidiaries
in the local government segment, this contributed
to a reduction in tax payments. The aftertax
result accordingly rose to EUR 32.0 m, beating
the previous year’s figure of EUR 26.3 m by 22%.
The Kommunalkredit Group’s total assets rose by
45% or EUR 4.4 bn to EUR 14.2 bn. The main factors
here were the strong increase in the volume of
securities financing transactions and significant
growth in the lending business.
Refinancing is almost exclusively under the debt
issuance programme, which has a volume of
EUR 11 bn and which was supplemented by the
Kommunalkredit International Bank’s EUR 5 bn
in EUR m RoE in %
12.4%
2000
7
18
19.1%
17.9%
10 10 10
2001 2002
2003
After-tax profit Segment profit Return on equity (RoE) – Segment profit
20
26
20.0%
13
32
2004
17.3%
16
24%
20%
16%
12%
8%
4%
0%

FACTORS OF INCREASED EARNINGS IN 2004
in EUR m 2003 2004
Net interest income 34.8 49.6
Credit risk provisions (net) -1.0 -0.7
Other operating income 16.1 17.5
General administrative expenses
Balance of other income
-24.5 -33.5
and expenses 8.2 5.0
Pre-tax profit 33.6 38.0
After-tax profit 26.3 32.0
Segment profit 13.4 16.3
Segment assets 9,756 14,169
Risk-earnings ratio 2.8% 1.3%
Cost-income ratio 55.0% 55.7%
Return on assets
Return on equity –
0.31% 0.27%
segment profit 20.0% 17.3%
commercial paper programme. Two covered bonds
with a AAA rating were issued in 2004, which
was linked to a further reduction in the cost of
refinancing. Private placements also continued to
be in much demand and were made at very
favourable conditions. With more than 100 issues,
securitised liabilities rose by EUR 3 bn to a total of
EUR 10.8 bn.
Despite extensive investments in continued expansion,
the cost-income ratio (55.7%) and return on
equity (17.3%) remained at a very good level for
the year 2004 compared to both domestic and
international banks.
Alongside the existing ratings from Moody’s and
Fitch, which remain stable at an excellent Aa3/AA-
(the best bank rating in Austria for a bank without
state backing), Moody’s gave Kommunalkredit’s
covered bonds the top AAA rating. This not only
confirms the bank’s clear strategic direction and
successful business development but also provides
the basis for ongoing, above all international,
growth.
Fields of business in the
local government segment
FINANCING
SEGMENT REPORTING / LOCAL GOVERNMENT
Above all, Kommunalkredit achieved further
growth in terms of volume and earnings with
products demanding a lot of know-how in financial
engineering, leasing and Maastricht and with
structured products. Domestic as well as international
project finance deals
receiving much recognition SUCCESS IN THE PURCHASE
OF RECEIVABLES
were concluded to finance
infrastructure and healthcare
projects. Purchases of receivables proved to be a
successful product. Kommunalkredit’s know-how
in this field is much in demand both in Austria and
internationally. Customers gain access in this way
to an economical form of refinancing.
Targets set for 2004 in the local government leasing
market segment were all achieved. Meanwhile,
Kommunalkredit uses its Kommunalleasing subsidiary
to finance leasing projects in all of Austria’s
Provinces. Because of the significant increase in
leasing transactions concluded, it succeeded in
expanding and reinforcing its position in the market.
In Switzerland, where Kommunalkredit is the
strongest foreign bank in local government
finance, it succeeded in expanding its market presence
despite increased competition by local banks
and insurance companies.
Working the market in the CEE countries was both
cross-border from Vienna but also via subsidiaries
(in Poland, Czechia, Slovakia and Cyprus). Kommunalkredit
– very successfully – offers an extensive
range of products and expert know-how. It
extended its co-operation with the European
Investment Bank into the CEE area and greatly
expanded it.
61

62 SEGMENT REPORTING / LOCAL GOVERNMENT
FINANCING COMPLETED IN 2004 BY THE LOCAL GOVERNMENT SEGMENT
in terms of volume
Hungary 1.3% Rest of the EU 29.4%
Czechia 8.7% Rest of Europe 1.4%
Slovakia 1.0%
Switzerland 6.5%
Poland 9.0%
Core market 50.4%
Loans and advances to customers rose as a result
of a new stronger focus within the lending business
on the infrastructure and healthcare sector
as well as structured financing transactions and
other products – from EUR 6.0 bn to EUR 7.6 bn.
A regional breakdown of this increase shows it
occurring above all in Austria, Switzerland and the
rest of Western Europe but there was also a pleasing
rise in the new EU member countries in Central
Europe. Growth in the securities field, where
financial investments rose from EUR 2.9 bn to
EUR 5.2 bn, was mainly in Western Europe and in
selected non-European countries with very good
ratings. All in all, as at 31 December 2004 the reinforcement
of the internationalisation strategy
meant that, for the first time, there were more
financing transactions outside than inside Austria.
This can be clearly seen in the table entitled
“Financing in the local government segment”.
Rest of the World 18.8%
Austria 16.9%
Germany 7.0%
TREASURY AND INVESTMENT
BANKING
Kommunalkredit’s securities portfolio grew in the
course of the year by more than EUR 1 bn. Above
all, it was investments in government bonds (Eastern
Europe, Asia and other emerging markets) and
bank bonds that generated satisfactory yields.
Overall around EUR 3.1 bn were taken up through
the capital market in 2004 to finance the public
sector. Kommunalkredit carried out more than
100 refinancing transactions – mainly through its
EUR 11 bn debt issuance programme.
Kommunalkredit’s covered bonds (KACBs) developed
nicely in 2003 and with the AAA rating they
were given by a rating agency, became well established
on the capital market. Right at the beginning
FINANCING IN THE LOCAL GOVERNMENT SEGMENT
Austria Other Core Market Rest of the World Total
in EUR m 2004 2003 Change 2004 2003 Change 2004 2003 Change 2004 2003 Change
Loans 1) Securities
4,475 4,056 +10% 1,816 1,030 +76% 1,332 918 +45% 7,622 6,003 +27%
financing 2) 166 106 +56% 269 92 +193% 1,301 594 +119% 1,736 792 +119%
Total financing 4,641 4,162 +12% 2,084 1,122 +86% 2,633 1,512 +74% 9,358 6,796 +38%
1) Loans and advances to customers, trust loans and provision for guarantees
2) Bonds and other fixed-income securities (except those issued by states and banks)

of the year, this was reinforced with the issue of two
further benchmark transactions, one with a volume
of EUR 1 bn and one with a
AAA RATING FOR KOMMUNAL- volume of CHF 500 m. A road
KREDIT COVERED BONDS
show across Europe was organised
again in 2004 to broaden
the investor base. This further promoted Kommunalkredit’s
successful funding activities.
There were in total five public syndicated issues in
EUR and CHF. Two of these were KACBs, a further
two were CHF issues and one was a retail-oriented
EUR bond. The remainder of the refinancing transactions
were private placements, primarily for
international investors.
HOLDINGS
Companies newly set up in 2004 included Kommunalkredit
Dexia Asset Manage-
THE KOMMUNALKREDIT ment AG, Kommunalkredit
GROUP IS GROWING
Depotbank AG, Kommunalnet
E-Government Solutions GmbH
and Public Private Financial Consulting GmbH & Co
OEG (all based in Vienna).
Business developments at the bank holdings Kommunalkredit
International Bank Ltd (KIB) in Limassol,
Cyprus and Dexia banka Slovensko (DBS) in
Zilina, Slovakia have been very pleasing. With ratings
from both Moody's and Fitch, KIB is the bestrated
bank in Cyprus.
Dexia Kommunalkredit Polska in Warsaw, which is
intended to be transformed into a bank in 2005, is
also heading in a successful direction. It applied to
the Polish banking regulator for the requisite banking
licence in 2004.
Also in 2004, the first steps were taken to set up a
new bank, Dexia Kommunalkredit Bank. In
order to take advantage of the potential for
SEGMENT REPORTING / LOCAL GOVERNMENT
growth arising in public finance as a result of the
accession of the ten primarily Central and Eastern
European countries to the European Union, Dexia
and Kommunalkredit have decided to expand their
market activities in these countries by setting up a
new joint banking subsidiary.
Kommunalkredit Public Consulting, specialising in
consulting services, and TrendMind (the Kommunalkredit
Group’s IT service provider) succeeded in
further expanding their portfolio of customers.
Local government: strategy
and outlook
Activities in 2005 will centre on the setting up of
Dexia Kommunalkredit Bank (Dexia-Kom). The plan
is for banking operations to commence at the end
of the first quarter of 2005.
Dexia-Kom will manage and DEXIA KOMMUNALKREDIT
BANK BEING SET UP
expand business in those countries
where the two parent
banks already have their own companies on the
spot (Czechia, Slovakia and Poland). It will also
offer cross-border financing transactions in the
other countries of Central and Eastern Europe.
Segmentation and increased specialisation should
also lead to a reinforcement of Kommunalkredit’s
market position in Austria. The required refinancing
volume will be achieved by the issue of benchmark
transactions (Kommunalkredit Covered
Bonds).
63

REAL ESTATE
Structure
The real estate segment is managed by Europolis.
In less than seven years it has become one of the
three market leaders in com-
TAKING ADVANTAGE OF THE mercial real estate in the CEE
GROWTH MARKET IN CENTRAL
region. The European Bank for
AND EASTERN EUROPE
Reconstruction and Development
(EBRD) in London and –
since January 2005 – the German real estate fund
management company DIFA in Hamburg participate
in the Europolis portfolios. They are managed
“In September 2004, under the terms of a forward
purchase agreement, Europolis acquired the
CEFIN LOGISTICS PARK from CEFIN REAL ESTATE
ROMANIA SRL at a value of up to EUR 75 m.
Investkredit Bank AG structured the senior debt
financing for this acquisition and managed the
entire underwriting of the complete amount of
EUR 56 m. A substantial part of our success
depends on quick action and the absolute reliability
of our commitments. Both are made easier
through our co-operation with Investkredit.”
“Europolis is responsible for building up another
real estate portfolio (E2) of EUR 1 bn in the region
of Central, South-Eastern and Eastern Europe.
Investkredit Bank AG and the European Bank for
Reconstruction and Development (EBRD) have
made EUR 300 m of own funds available for this.
Investkredit Bank AG’s contribution is EUR 225 m,
the other EUR 75 m are coming from
the EBRD. These additional own funds
in the E2 portfolio will enable us to
pursue our dynamic growth in Central
Europe.”
Bernhard Mayer
Chairman of the Board of Management
Europolis Real Estate Asset Management GmbH
by Europolis Real Estate Asset Management GmbH
in Vienna and its subsidiaries in Prague, Warsaw
and Budapest. As at year-end 2004, the Europolis
companies had 33 employees or 7% of the
Investkredit Group. Besides the management companies,
the real estate segment includes seven
Austrian holding companies – all indirectly owned
by Investkredit Bank AG – and 38 more companies.
Business approach
SEGMENT REPORTING / REAL ESTATE
In the year under review, Europolis further
expanded the real estate segment. Owing to the
high level of investment in
recent years, DTZ Research con- LARGEST INVESTOR IN
OFFICE BUILDINGS IN CENTRAL
siders Europolis to be one of
AND EASTERN EUROPE
the three market leaders for
investment in this region,
based on the total volume invested. In office properties,
Europolis is number one.
The Europolis Group has specialised in four fields
of business:
> real estate project developments
> forward purchase agreements
> real estate investments and
> real estate asset management
It concentrates on office buildings, shopping and
logistics centres. Projects are always selected on
the basis of their long-term
secured income. That is why CONCENTRATING ON
FOUR FIELDS OF BUSINESS
attention is paid to quality of
location, quality of the buildings,
creditworthiness of the tenants and the longterm
contractual safeguarding of the rental payments.
All of the projects conform to international
investment standards.
65

66 SEGMENT REPORTING / REAL ESTATE
Core market and
international locations
In 1997 Europolis was early to define Central
Europe as its core market. There is one property
that is managed in Austria – the
EARLY TO INVEST Akadamiehof on the Karlsplatz
IN CENTRAL EUROPE
in Vienna. The main business is
in Poland, Czechia and Hungary.
The investments and developments in these three
countries required that Europolis establish regional
offices in the three capital cities. This should create
a closer contact with the tenants and the markets.
The first E1 portfolio primarily holds properties in
Poland, Czechia and Hungary. But the E1 portfolio’s
regional focus also includes investments in
Romania and Croatia. The E2 real estate portfolio
that started at the end of 2004 enables investments
to be made in countries like Bulgaria, Serbia,
Montenegro, Bosnia-Herzegovina, Macedonia, the
Ukraine, Russia as well as in the CEE core market.
14%
12%
10%
8%
6%
4%
2%
0%
Rents for office properties in Central European
countries settled in 2004 at a lower, more sustain-
Yields in Warsaw
Rental income in Warsaw
Yields in Budapest
Rental income in Budapest
able level. The altogether improved overall conditions
have lessened investors’ yield expectations. In
the best locations, yields in 2004 – according to
DTZ Research – reached around 8% in Budapest
and Prague and around 8.5% in Warsaw.
This change in yields confirms that Europolis
worked profitably on the markets in question at the
right time. One may forecast analogous developments
for the countries in Eastern and South-Eastern
Europe.
Performance at a glance
Based on the segment profit of EUR 15.6 m, the
real estate segment accounted for 29% of the consolidated
result.
The investments made back in the second half of
2003 and the completion of a number of properties
showed up in 2004 in the form of significantly
higher rental income. Moreover, the valuation
of the real estate at market values brought a
EUR 10.0 m increase in the values previously set.
CHANGES IN RENTAL INCOME AND YIELDS IN CENTRAL EUROPE (1999 – 2005)
Yields in % Rental income in EUR/m 2 p.m.
12.0
10.0
11.0
11.0
9.3
9.5
10.0
9.0
9.0
1999 2000 2001 2002 2003 2004
9.5
8.7
8.8
9.3
8.3
8.5
8.5
Yields in Prague
7.8
Rental income in Prague
7.8 7.5 7.5 7.5
2005e
35
30
25
20
15
10
5
0

40
30
20
10
FACTORS OF INCREASED EARNINGS IN 2004
in EUR m 2003 2004
Net interest income 23.1 42.5
Credit risk provisions (net) 0.0 -1.2
Other operating income 2.1 1.3
General administrative expenses
Balance of other income
-6.4 -7.0
and expenses -1.0 -1.5
Pre-tax profit 17.7 34.1
After-tax profit 16.5 25.7
Segment profit 11.4 15.6
Segment assets 682 763
Risk-earnings ratio 0.1% 2.9%
Cost-income ratio 25.4% 15.6%
Return on assets
Return on equity –
3.13% 3.55%
segment profit 14.2% 15.1%
0
There was an 84% overall improvement in net
interest income after refinancing expenses, bringing
it to EUR 42.5 m. That provided the basis for
the improvement in the result: Pre-tax profit
improved by 93% and the segment profit by 37%.
SEGMENT RESULT REAL ESTATE
SEGMENT REPORTING / REAL ESTATE
Fields of business in the
real estate segment
REAL ESTATE PROJECT
DEVELOPMENTS
“River City Prague” real estate project
developments
In real estate project developments, due to the
excellent rental level at “Danube House”, construction
of “Nile House” began
early in 2004. The completion
of this second office building in
the “River City Prague” project
is scheduled for the end of
2005. It has a usable floor space of 19,350 m2 “DANUBE HOUSE”
.
Work has started on the third stage of the “River
City Prague” project under the name of “Amazon
Court”. A Danish team of architects, Schmidt,
Hammer & Lassen, won the competition for this
mixed-use building. As well as office space that
can be flexibly arranged in the building, there will
also be retail space on the ground floor. Construction
should commence in the middle of 2006.
2000 2001 2002
2003
2004
After-tax profit Segment profit Return on equity (RoE) – Segment profit
“NILE HOUSE” CARRIES
ON THE SUCCESS OF
in EUR m RoE in %
2.0%
1
1
11
16.7%
7
14
15.6%
8
18
11
34
14.2% 15.1%
16
20%
15%
10%
5%
0%
67

68 SEGMENT REPORTING / REAL ESTATE
FORWARD PURCHASE
AGREEMENTS
Most important instrument for acquisition:
the forward purchase agreement
This field of business (forward purchase agreements
are guarantees before construction that
properties will be taken over from developers
when they are completed and when an agreed
rental level has been reached) saw the signing in
September 2004 of a purchase agreement for
“Cefin Logistics Park” near Bucharest with a
volume of up to EUR 75 m. Europolis’s partner for
this project is Cefin Real Estate
Romania, a subsidiary of Cefin
Holding SA in Luxembourg,
which is specialised in real
estate project developments in
Central and Eastern Europe. With more than
150,000 m2 IN A ROMANIAN
LOGISTICS PARK
of storage and office space in the final
stage of construction, “Cefin Logistics Park” is
considered to be the most substantial contribution
to the development of the logistics market in
Bucharest. The unique location and high standard
of workmanship make this real estate project
stand out. The project is Europolis’s largest investment
in a logistics park. With two logistics parks in
Hungary and one in Poland, Europolis has some
important shares in this market segment of the
CEE region.
LARGEST INVESTMENT
In December 2004, Porr Technobau & Umwelt AG
and Minik d.o.o. signed a contract with Europolis
for the construction of the “Zagreb Tower” office
building in Zagreb. The “Zagreb Tower” project is
a particularly high-value office building for this
region, with costs amounting to EUR 50 m. Construction
started on 6 December 2004, the day the
contract was signed. Around 26,000 m2 of usable
floor space in this forward-looking office building
should be completed by the end of 2006.
Investkredit Bank AG acts as senior lender in the
construction phase of this real estate project with
landmark character.
REAL ESTATE INVESTMENTS
No real estate investments in 2004
There were no transactions in the real estate
investment field of business, as none of the investments
offered on the market complied with the
investment guidelines.
REAL ESTATE
ASSET MANAGEMENT
Amount of real estate held expanded
Growth in 2004 brought the market value of real
estate in the Investkredit Group up from around
EUR 597 m at the end of 2003 to EUR 641 m at the
end of 2004.
At year-end 2004, the real estate portfolio consisted
of 18 investment properties, of which
> 1 was in Vienna (the “Akademiehof” office
building)
> 6 were in Warsaw (“Warsaw Towers”, “Saski
Point”, “Saski Crescent”, “Sienna Center”,
“Bitwy Warszawskiej Business Centre” and the
“Alliance Logistics Center”)
> 4 were in Budapest (“City Gate”, “Infopark
FINANCING IN THE REAL ESTATE SEGMENT
Austria Other Core Market Rest of the World Total
in EUR m 2004 2003 Change 2004 2003 Change 2004 2003 Change 2004 2003 Change
Loans1) 0 0 9 6 +50% 0 0 9 6 +50%
Buildings 15 20 -25% 599 553 +8% 27 25 +11% 641 597 +7%
Total financing 15 20 +25% 608 558 +9% 27 25 +11% 650 603 +8%
1) Loans and advances to customers, trust loans and provision for guarantees

Research Center”, “Airport Business Park” and
“M1 Business Park”)
> 3 were in Prague (“Danube House”, “Hadovka
Office Park” and “Technopark”)
> 2 more were in Czechia (shopping centres in
Mladá Boleslav and Teplice) and
> 2 were in Bucharest (the “Europe House” office
building and the “Cefin Logistics Park”)
The total space to let (office/commercial space
in logistics and shopping centres) held by the
Europolis Group rose in the year under review to
more than 400,000 m2 .
The chart entitled “Breakdown according to
usage” shows the important role that office properties
play in Europolis’s business.
As at year-end 2004, there were also in house
developments and forward purchase agreements
being developed, with planned costs of acquisition
amounting to EUR 261 m.
Real estate asset management has success
in letting space
The real estate asset management field of business
is responsible for the proactive management of the
various investment properties. The aim is to raise
the value of the real estate. Business policy sets the
letting of all available space as its priority. An
important criterion is that it should be attractive to
tenants over the long term. This is why particular
BREAKDOWN ACCORDING TO USAGE
Market values in EUR m
Office properties
EUR 468 m
Total market value
EUR 641 m
SEGMENT REPORTING / REAL ESTATE
attention is paid to the state of the technology.
Moreover, those responsible have to find a financing
structure that is suited to each of the risk
profiles. Another focus is taking advantage of
Europolis’s market position, allowing savings in
facility management to be made.
Low fluctuation and the signing of new rental
agreements/extension of large existing ones show
how successful asset management has been. In
Prague, 3,120 m2 were newly let in “Danube
House” in the first quarter. By
year-end 2004 the rental level
had reached around 75%.
Europolis succeeded in winning
IBM over as a tenant for around
6,000 m2 in “City Gate”. A food store chain
expanded its existing space in the “Airport Business
Park” logistics centre by 8,800 m2 . Existing tenants
in the “M1 Business Park” logistics park have also
expanded their space by around 4,500 m2 SIGNIFICANT INCREASE
IN RENTAL INCOME
COMPARED TO 2003
. In general,
very high demand for logistics space was
noticeable in Hungary. In Poland too, successful lettings
– especially in the “Sienna Center” – were
booked in the E1 portfolio.
In total, in the year under review, the area of space
let as a result of new lettings and extensions,
increased by more than 20,000 m2 . Consequently,
there was a corresponding increase in
rental income compared to 2003. The vacancy rate
in completed properties is 12%.
Shopping centres
EUR 61 m
Logistics centres
EUR 112 m
69

70 SEGMENT REPORTING / REAL ESTATE
EUROPOLIS’S REAL ESTATE
Date of Market
Project Company Location acquisition value in Space
EUR m in m2 Akademiehof E.I.A. eins Immobilieninvestitionsgesellschaft
mbH AT Vienna 01.01.1996 15.0 5,516
River City – Danube House RCP Alfa s.r.o. CZ Prague 30.09.1999 54.9 21,355
River City – Nile House RCP Delta s.r.o. CZ Prague 30.09.1999 25.2 1)
River City – Amazon Court RCP Epsilon s.r.o. CZ Prague 30.09.1999 6.7 1)
River City – Hotel RCP Beta s.r.o. CZ Prague 30.09.1999 3.6 1)
River City –
Yukon Residence
RCP Gama s.r.o. CZ Prague 30.09.1999 3.6 1)
River City – Infrastructure RCP ISC s.r.o. CZ Prague 30.06.2000 4.2 0
Hadovka Office Park Europolis Hadovka s.r.o. CZ Prague 31.03.2000 52.5 24,842
Technopark EUROPOLIS Technopark s.r.o. CZ Prague 01.01.2002 16.0 8,629
Olympia Center Olympia Mladá Boleslav s.r.o. CZ Mladá 31.12.2003 28.2 21,258
Mladá Boleslav Boleslav
Olympia Center Teplice Olympia Teplice s.r.o. CZ Teplice 31.12.2003 32.8 26,081
City Gate International Business Center Rt H Budapest 31.12.1999 41.0 23,909
Infopark Research Center Europolis Infopark Property
Management Kft.
H Budapest 31.12.2000 27.2 13,638
Airport Business Park Europolis ABP Kft. H Budapest 31.12.2003 52.4 64,482
M1 Business Park Europolis M1 Kft. H Budapest 31.12.2003 34.6 43,813 2)
Warsaw Towers Warsaw Towers Sp. z o.o. PL Warsaw 30.09.2000 48.3 20,954
Saski Point EUROPOLIS Saski Point Sp. z o.o. PL Warsaw 30.06.2001 23.9 7,802
Saski Crescent Poland Business Park VII
Sp. z o.o.
PL Warsaw 31.12.2003 35.4 15,387
Sienna Center EUROPOLIS
Sienna Center Sp. z o.o.
PL Warsaw 30.09.2002 43.0 20,652
Bitwy Warszawskiej
Business Centre
Coral Bud Sp. z o.o. PL Warsaw 31.12.2002 42.6 20,336
Alliance Logistics
Center A, B, D
E30 Holding Sp. z o.o. PL Warsaw 31.12.2002 15.7 36,677
Alliance Logistics Center E E30 Industrial Center V
Sp. z o.o.
PL Warsaw 31.12.2003 6.9 16,045
Europe House Victoria International
Property SRL
RO Bucharest 31.12.2003 24.8 14,406
Cefin Logistics Park Cefin Logistic Park Beta S.R.L. RO Bucharest 31.12.2004 2.5 1)
Aggregate 641.0 405,782
1) under development
2) currently completed space

EUROPOLIS’S REAL ESTATE BY REGION
Poland 33.7%
Hungary 24.2%
Core market 95.7%
Real estate: strategy and
outlook
The year 2005 will once more be characterised by
the new EU member countries’ integration process
and preparatory work by the candidates in the second
round. The overall conditions in the new EU
member countries – for example, in respect of
investment standards, levels of rents and financial
services – largely already conform to Western European
standards. The candidate countries are still in
the midst of a catching-up process, whereby the
psychological effects of the anticipated full membership
are already making themselves felt. This
can be continuously observed in macroeconomic
developments.
Europolis has to date been successful in implementing
its investment strategy and, in DIFA has
gained – earlier than planned – an investor with a
long-term view for properties in Czechia and Hungary.
In 2005 – together with the EBRD – a start
will be made on building up the E2 portfolio.
Europolis intends to expand its pioneering position
in the CEE region. Together with the EBRD, it can
focus on working on the less developed markets in
Central and South-Eastern Europe. DIFA is the
SEGMENT REPORTING / REAL ESTATE
Romania 4.3%
Austria 2.3%
Czechia 35.5%
best-suited partner for Hungary and Czechia. At
the same time, the existing investment guidelines –
“Class A” standard and a financing structure to
conform to the risk profile – will be maintained. In
gaining DIFA as an investor, Europolis has taken an
important step towards the creation of an independent
asset management company. The aim for
the future is to add the management of portfolios
in which the Investkredit Group does not have an
investment. In view of the tight local supply of
high-quality real estate investments, there will
once again be a boost to forward purchase agreements
in 2005. The volume of Europolis’s real
estate is expected to grow by at least EUR 150 m
in 2005.
The new co-operative ventures with the EBRD and
DIFA have set the pattern for Europolis’s stronger
positioning as one of the three
leading asset managers in this NEW MANAGEMENT
COMPANY PLANNED IN
region. Europolis manages sev-
ROMANIA FOR 2005
eral high-quality real estate
portfolios with varying risk profiles.
The additional business in Romania requires
the formation of a new management company in
Bucharest.
71

72
FINANCIAL STATEMENTS OF THE
INVESTKREDIT GROUP FOR 2004
INCOME STATEMENT OF THE INVESTKREDIT GROUP
INCOME STATEMENT Change
IN EUR 1,000 Notes 1.1. – 31.12.2004 1.1. – 31.12.2003 in %
Interest and similar income 1,396,859 1,096,319 27%
Income from associates 6,873 4,546 51%
Interest and similar expenses -1,245,080 -982,821 27%
Net interest income (18), (19) 158,651 118,044 34%
Credit risk provisions (net) (20) -9,121 -8,434 8%
Fee and commission income 22,367 16,199 38%
Fee and commission expenses -10,797 -6,612 63%
Net fee and commission income (21) 11,570 9,587 21%
Trading result (22) 3,307 2,806 18%
Net income from investments (23) 6,100 3,362 81%
General administrative expenses (24) -75,230 -62,914 20%
Balance of other income and expenses (25) 3,559 9,797 -64%
Balance of extraordinary income and expenses 0 0 -
Pre-tax profit for the year 98,836 72,249 37%
Taxes on income (26) -15,263 -12,214 25%
After-tax profit for the year 83,574 60,034 39%
Minority interests -29,463 -19,225 53%
Net profit for the year 54,111 40,809 33%
Change
in EUR Notes 1.1. – 31.12.2004 1.1. – 31.12.2003 in %
Earnings per share (28) 8.55 6.45 33%
As at 31 December 2004, as in the previous year, there were no outstanding exercisable conversion or option rights.
The undiluted earnings per share therefore correspond with the figures given.
Take advantage of the additional opportunities offered by the online version of this annual report. These
tables and others in the form of Excel files are available for downloading at www.investkredit.at/ar. In
addition, with the click of a mouse you can move directly from any balance sheet item to the relevant
details in the Notes.

BALANCE SHEET OF THE INVESTKREDIT GROUP
ASSETS Change
IN EUR 1,000 Notes 31.12.2004 31.12.2003 in %
Cash reserve (29) 61,824 18,295 238%
Loans and advances to banks (30) 1,724,374 1,279,645 35%
Loans and advances to customers (31) 10,772,856 8,851,695 22%
Risk provisions for loans and advances (7), (33) -78,030 -72,118 8%
Trading assets (8), (34) 172,993 173,266 0%
Financial investments (35) 7,934,581 5,440,481 46%
Shares in associates (35) 73,452 60,626 21%
Property and equipment (37) 684,266 639,172 7%
Other assets (39) 99,746 83,784 19%
Total assets 21,446,062 16,474,846 30%
LIABILITIES AND EQUITY Change
IN EUR 1,000 Notes 31.12.2004 31.12.2003 in %
Amounts owed to banks (40) 4,717,604 3,604,072 31%
Amounts owed to customers (41) 693,112 645,150 7%
Securitised liabilities (42) 14,119,622 10,761,497 31%
Provisions (43) 68,196 57,860 18%
Other liabilities (45) 643,979 446,263 44%
Subordinated capital (46) 544,631 402,487 35%
Minority interests (47) 266,626 206,165 29%
Equity (47) 392,292 351,352 12%
Total liabilities and equity 21,446,062 16,474,846 30%
73

74
STATEMENT OF CHANGES IN EQUITY
Subscribed Capital Retained Hedging Profit for Total =
in EUR 1,000 capital reserves earnings reserve the year Equity
as at 1.1.2003 46,000 61,047 193,042 -16,133 25,670 309,626
Allocation to retained earnings 25,846 -25,846 0
Profit for the year 40,809 40,809
Currency translation 1,569 1,569
Change in the hedging reserve -653 -653
as at 31.12.2003 46,000 61,047 220,457 -16,786 40,634 351,352
Subscribed Capital Retained Hedging Profit for Total =
in EUR 1,000 capital reserves earnings reserve the year Equity
as at 1.1.2004 46,000 61,047 220,457 -16,786 40,634 351,352
Distribution of profit and emoluments -12,665 -12,665
Allocation to retained earnings 27,969 -27,969 0
Profit for the year 54,111 54,111
Effects of changes in consolidated companies -5,011 -5,011
Currency translation 5,093 5,093
Change in the hedging reserve -588 -588
as at 31.12.2004 46,000 61,047 248,507 -17,374 54,111 392,292
Reported subscribed capital and retained earnings conform to the separate financial statements of Investkredit
Bank AG. The dividend of EUR 6,330,000 for the preceding financial year has already been deducted in the figures
giving the status as at 1 January 2003. Effects of changes in consolidated companies are mainly the result of the
acquisition of Cefin Logistics Park Beta S.R.L., Bucharest.
Currency translation developed as follows:
as at 1.1.2004 Addition as at 31.12.2004
1,569 3,524 5,093
For explanations of the statement of changes in equity, see Note 47.

CASH FLOW STATEMENT
in EUR 1,000 2004 2003
Profit for the year (before minority interests) 83,574 60,034
Non-cash items included in profit for the year, and adjustments to
reconcile profit for the year to cash flows from operating activities
Depreciation/revaluation gains on property and
equipment, intangible and financial assets -1,613 11,490
Transfer to/release of provisions and risk provisions for loans and advances 16,247 6,747
Profit/loss from the disposal/valuation of financial assets and property and equipment -6,100 -3,362
Unrealised gains and losses from changes in rates of exchange -66,382 63,796
Other adjustments (net) -26,564 97,017
Changes in assets and liabilities from operating activities
after adjustments for non-cash components
Loans and advances to banks -444,729 -385,740
Loans and advances to customers -1,921,161 -1,364,972
Trading portfolio 295 -1,419
Current assets -2,496,849 -1,148,350
Other assets from operating activities -15,932 -2,459
Amounts owed to banks 1,113,532 1,063,419
Amounts owed to customers 47,962 170,053
Securitised liabilities 3,358,125 1,756,868
Other liabilities from operating activities 215,016 -95,060
Interest and dividends received 1,372,958 1,100,865
Interest paid -1,230,656 -982,821
Extraordinary amounts paid in 0 0
Extraordinary amounts paid out 0 0
Income tax payments -13,491 -10,593
Cash flows from operating activities -15,766 335,513
Proceeds from the disposal of
Financial investments 257,286 237,712
Property and equipment and intangible assets 3,586 7,225
Payments for the acquisition of
Financial investments -267,385 -288,781
Property and equipment and intangible assets -63,674 -309,294
Effects of changes in consolidated companies 0 16,282
Cash flows from investing activities -70,188 -336,856
Proceeds from capital increases 0 0
Dividend payments -12,660 -6,330
Changes in resources from other financing activities 142,143 20,365
Cash flows from financing activities 129,483 14,035
Cash and cash equivalents at the end of the previous period 18,295 5,603
Cash flows from operating activities -15,766 335,513
Cash flows from investing activities -70,188 -336,856
Cash flows from financing activities 129,483 14,035
Cash and cash equivalents at the end of period 61,824 18,295
For explanation of cash and cash equivalents, see Note 29. Effects of changes in consolidated companies arise from
minority interests in the new holdings in the real estate segment.
75

76 NOTES / ACCOUNTING AND VALUATION PRINCIPLES
NOTES TO THE FINANCIAL STATEMENTS OF THE INVESTKREDIT GROUP
Accounting and Valuation Principles
(1) General Principles
Investkredit Bank AG is a specialist bank with its registered office in 1013 Vienna, Austria. The Investkredit Group
has positioned itself as a specialist banking group in an expanded Central European core market. Its business is
mainly directed at corporates, local government and real estate. The Consolidated Financial Statements of
Investkredit Bank AG were prepared on the basis of the International Financial Reporting Standards (IFRS) adopted
and published by the International Accounting Standards Board (IASB). The statements qualify under the relevant
legislation for exemption from the requirement to present consolidated financial statements according to Austrian
commercial law. Accounting is carried out using uniform accounting and valuation methods throughout the
Group. In its accounting and valuations, the Investkredit Group applies all the IFRS and IAS valid as at the reporting
date, as well as the International Financial Reporting Committee (IFRIC) interpretations.
(2) Consolidated companies
A list of all companies included in the Financial Statements of the Investkredit Group is presented under Note 36
(Disclosure of equity investments). The group of fully consolidated affiliated companies includes not only the parent
company, Investkredit Bank AG (hereinafter referred to as “Investkredit”), but also 65 Austrian and foreign
companies (as compared with 61 in the previous year), the most important of which are Kommunalkredit Austria
AG (hereinafter referred to as “Kommunalkredit”), Kommunalkredit International Bank Ltd, Cyprus, and
Investkredit International Bank p.l.c., Sliema, Malta. In the financial year, the following eleven companies were
included for the first time:
Total assets Net interest
Acquisition per IFRS as at income as at
cost 31.12.2004 31.12.2004 Holding First included
Company in EUR m in EUR m in EUR m in % on
KOFIS LEASING, a.s., Bratislava 3.1 30.9 3.6 50.78% 30.06.2004
Kommunalkredit Depotbank AG, Vienna
Europolis Real Estate Asset Management
6.0 58.0 0.3 50.78% 30.06.2004
Vagyonkezelo Kft., Budapest 0.0 0.5 0.0 100.00% 30.06.2004
Europolis Romlog Company S.R.L., Bucharest 0.0 6.9 -0.1 65.00% 31.12.2004
Cefin Logistik Park Beta S.R.L., Bucharest 6.7 2.7 0.0 58.50% 31.12.2004
EUROPOLIS CE Lambda Holding GmbH, Vienna 0.0 0.0 0.0 75.00% 31.12.2004
EUROPOLIS CE Omikron Holding GmbH, Vienna 0.0 0.0 0.0 65.00% 31.12.2004
EPC Omikron Limited, Limassol (CY) 0.0 0.0 0.0 65.00% 31.12.2004
EPC Lambda Limited, Limassol (CY) 0.0 0.0 0.0 75.00% 31.12.2004
EUROPOLIS CE Amber Holding GmbH, Vienna
Kommunalkredit Capital I Limited,
0.0 0.0 0.0 100.00% 31.12.2004
St. Helier (Jersey) 0.0 80.2 0.0 50.78% 31.12.2004
Further details in accordance with IFRS 3.66 have been omitted because they are insignificant.

NOTES / ACCOUNTING AND VALUATION PRINCIPLES
During the financial year the following seven companies left the group of fully consolidated companies:
Company Reason for leaving
International Business Center Rt., Budapest Merger
EUROPOLIS Pekarska s.r.o., Prague Merger
E30 Industrial Center I Sp. z o.o., Warsaw Merger
E30 Industrial Center II Sp. z o.o., Warsaw Merger
E30 Industrial Center IV Sp. z o.o., Warsaw Merger
M1 Kft., Budapest Merger
ABP Kft., Budapest Merger
Thirty companies (28 in the previous year) whose overall influence on the assets, financial position and profitability
of the Group is only of minor significance were not consolidated. The total assets of these companies amount
to less than 2.0% of the Group’s total assets. In the Investkredit Group’s Financial Statements, nine associates (ten
in the previous year) were accounted for under the equity method. In the financial year, no companies were
included for the first time. KOFIS LEASING, a.s., Bratislava, changed from being accounted for under the equity
method to joining the group of fully consolidated companies. In view of their relative insignificance, 13 (previous
year: ten) investments in associates are shown at book value.
Number of companies included in the Group 31.12.2004 31.12.2003
Fully consolidated companies 65 61
Companies included at equity 9 10
Affiliated companies at cost 30 28
Associates at cost 13 10
Other investments 12 11
Total 129 120
Effects of changes in consolidated companies in the year under review resulted in an increase in total assets of
around EUR 90 m.
(3) Consolidation principles
The consolidation action taken in the context of preparing the Group Financial Statements includes capital consolidation,
consolidation under the equity method, debt consolidation, the consolidation of expenses and income and
the elimination of intra-Group results. The fully consolidated companies present their annual financial statements
uniformly as at 31 December. Capital consolidation is carried out at cost. In that process, the historical costs for
investments in the Group Company are offset against the proportionate equity capital of the subsidiary at the time
of the transfer of control over the company. Intra-Group receivables, liabilities, expenses and income as well as intra-
Group profits are eliminated, unless they are immaterial.
Associates are accounted for under the equity method and are reported under financial investments as investments
in companies accounted for under the equity method. Local financial statements are used for valuation under the
equity method. Alignment with the uniform Group valuation methods is undertaken only in the event of significant
measurement differences in leasing business, but not otherwise. The annual results of associates are taken from the
latest annual financial statements available, so that changes in equity are reflected in the same year. Dividends distributed
are cancelled. Annual profits are shown in the Income Statement under income from associates.
77

78 NOTES / ACCOUNTING AND VALUATION PRINCIPLES
(4) Currency translation
Assets and liabilities in foreign currencies are converted at the indicative rates of exchange announced by the European
Central Bank on the reporting date (31 December 2004):
Currency Mid-rate Currency Mid-rate Currency Mid-rate
AUD 1.7459 DKK 7.4388 PLN 4.0845
CAD 1.6416 GBP 0.70505 ROL 39,390
CHF 1.5429 HUF 245.97 SEK 9.0206
CYP 0.5800 JPY 139.65 SKK 38.745
CZK 30.464 NOK 8.2365 USD 1.3621
(5) Loans and advances
Loans and advances to banks and customers, as long as they are original loans, are reported at their nominal
amount or their acquisition cost. Loans and advances to customers acquired in the secondary market, as long as
they are allocated to loans available for sale, are reported at their fair value. Loans and advances to customers
acquired on the secondary market but not allocated to loans available for sale are reported at their acquisition
cost. Individual valuation adjustments are made to take into account recognisable delcredere and sovereign risks.
Valuation adjustments are not offset against the corresponding loans and advances but are shown openly in the
Balance Sheet.
(6) Leasing business
As a rule, fixed assets serving for leasing purposes are classified as finance leases and are entered in the Group
Balance Sheet in accordance with IAS 17 under the individual categories of receivables and at the present value
of the discounted leasing claims.
(7) Risk provisions
Risk provisions in the lending business cover impairment losses (for financial loans) and provisions (for quarantee
loans) for all recognisable credit and sovereign risks. In its credit risk management, Investkredit Group uses a financial
standing assessment system and an internal rating procedure. Accordingly, every active customer is allocated
an external or internal rating. The internal grading corresponds to Standard & Poor’s standard rating scale/the
composite rating scale and takes place in several stages. The business development of all companies is continuously
analysed and the credit risk is regularly evaluated. That makes it possible to classify assets in the banking
book and off-balance-sheet business fully according to criteria of creditworthiness and collateral. In the case of
problematic positions, a special management team provides intensive support.
(8) Trading assets
Securities, derivative financial instruments and other items of the trading portfolio are reported at fair value on
the balance sheet date, according to IAS 39. In the case of listed instruments, the stock exchange price is taken
as the fair value. The value of unlisted instruments is measured by the cash value method (the cash value of discounted
future cash flows) or by the use of suitable option price models (the value resulting from the application
of option price formulae according to the Garman-Kohlhagen, Black-Scholes or Hull-White models). All results
under these items are reported in the Income Statement under net trading result. To measure the market risk,
value at risk (VAR) is calculated according to a model based on a confidence level of 99% and a holding period
of 1 day. There are VAR limits for the interest-rate risk, the share price risk and the currency risk. The standard pro-

NOTES / ACCOUNTING AND VALUATION PRINCIPLES
cedure is applied for the regulatory reporting system. Interest-rate risks arising outside of trading activities are
analysed continuously, using the value at risk of the banking book and interest simulations.
(9) Financial investments
All fixed-interest and variable-yield securities, investments in unconsolidated affiliated companies, associates and
other investments not attributed to the trading book are entered under this item. The items are either “held to
maturity” or are “available for sale”.
1. Held to maturity: Fixed-interest securities are valued at cost. If the cost differs from the repayment amount,
the difference is written back, affecting the Income Statement proportionately over time. If the credit standing
of the security debtor indicates a permanent impairment, the item is written off as necessary. Effects on
the Income Statement are shown under net income from investments.
2. Available for sale: Securities that are attributed neither to fixed assets nor to the trading portfolio have the
function of a liquidity reserve (available for sale) and are entered at the fair value on the balance sheet date.
Variable-yield securities are usually placed in this category and valued at the fair value. They are recorded in
the balance sheet under financial investments, and effects on the Income Statement are shown under net
income from investments.
3. Significant associates are accounted for under the equity method. Investments in unconsolidated affiliates as
well as other investments are valued at cost. In the event of permanent impairment, the relevant item is written
down.
(10) Derivative transactions
The fair value of derivatives is calculated according to recognised methods in every case. Derivatives are treated
differently according to their category, applying IAS 39:
1. Derivates in the trading portfolio are recognised as trading assets or trading liabilities. If they show positive
fair values, including deferred interest (dirty price), they are recognised as trading assets. Trading liabilities
include negative fair values. Trading assets are not offset against trading liabilities (netting). The change in
the dirty price is shown as affecting results under the trading result.
2. Derivatives intended to protect the fair value of banking book items (fair value hedges) are also shown at
their fair value (dirty price) under financial investments or other liabilities. Changes in the fair value of the
items to be protected are entered with an effect on the Income Statement under the net income from investments
in the same way as the derivatives in this category.
3. Derivatives intended to hedge payment flows arising out of balance sheet items (cash flow hedges) are also
reported under financial investments or other assets at their fair value (dirty price). The change in fair value
is, however, netted against the reserves for hedging purposes with no effect on the Income Statement.
4. Other derivatives are intended to protect against banking book market risks, but it is not possible to show
a microhedge because hedging is conducted in relation to a whole portfolio (macrohedge). In applying IAS
39, the fair values under this category are also reported in the Balance Sheet: positive dirty prices are shown
under loans and advances to banks and negative dirty prices under amounts owed to banks. The change in
the value of these derivatives on a clean-price basis is presented in the Income Statement under balance of
income and expenses. Since the Bank uses derivatives to control the interest-rate risk at a global level, but
since the effect of fair value changes of items protected at a macro level according to IAS 39 cannot be
shown in the Income Statement, this part of the result is only of limited informative value.
79

80 NOTES / ACCOUNTING AND VALUATION PRINCIPLES
(11) Goodwill
Significant positive differences arising from capital and equity consolidation after 1 January 1995 are allocated to
the subsidiary's assets. Other positive amounts are entered as goodwill and are written off over a period of five to
fifteen years. Goodwill arising after 1 April 2004 is no longer amortised over a set time period; instead it is tested
for impairment. The results are presented as intangible assets under other assets. Differences which arose up to
31 December 1994 were offset against retained earnings. Amortisation of goodwill is shown under other operating
results. Negative differences arising out of capital and equity consolidation, where negative effects at the time
of acquisition could be foreseen at the time IFRS consolidated financial statements were first prepared, are now
reported as “negative goodwill” under intangible assets. Negative differences that have arisen since 1 April 2004
are immediately shown on the Income Statement.
(12) Property and equipment
Property and equipment comprises land and buildings used by the Bank and by outside parties as well as office
furniture and equipment. Land and buildings used by the Bank serve mainly for the Bank’s own operations. The
item “land and buildings used by outside parties” includes those that function as investments and are let to outside
parties.
1. Land and buildings used by the Bank as well as office furniture and equipment are entered at acquisition
cost less planned straight-line depreciation. The assumed projected periods of use are:
Buildings 45 to 50 years
Office furniture and equipment 3 to 10 years
Vehicles 8 years
IT investments 2.5 to 5 years
2. Low-value assets costing up to EUR 400.00 are fully written off in the year they are acquired.
3. Land and buildings used by third parties that function as investments are recognised at their fair value in
accordance with IAS 40. Land and buildings inside Austria are valued internally according to the Royal Institution
of Chartered Surveyors’ (RICS) standard. Land and buildings abroad are valued by external experts
according to guidelines that are recognised not only by the IVSC (International Valuation Standards Committee)
but also by TEGOVA (The European Group of Valuers' Associations). The gross rental method is used in
calculations, on the basis of current rental lists and assumptions concerning market developments and interest
rates. The change in the value of buildings between balance sheet dates is carried in the Income Statement
under net interest income.
(13) Intangible assets
Intangible assets include goodwill as well as software purchases. Goodwill purchased between 1 January 1995 and
31 March 2004 is written off over a period of ten to 15 years, and similar items arising before 1 January 1995 are
offset against equity. Goodwill purchased since 1 April 2004 is only subject to an annual impairment test. Software
is written off by the straight-line method over four years. Intangible investments are presented under other
assets.
(14) Liabilities
Liabilities are capitalised at cost. Premiums and discounts are distributed over the term of the debt. Zero coupon
bonds are shown at their cash value.

(15) Trading liabilities
NOTES / ACCOUNTING AND VALUATION PRINCIPLES
Trading liabilities include the negative fair values arising out of derivative financial instruments and are shown
under other liabilities. They are entered at their fair value.
(16) Provisions for personnel expenses
Provisions for pensions, severance payments and jubilee bonus obligations are calculated annually by an independent
actuary according to the projected unit credit method, in accordance with IAS 19. The Bank used the “AVÖ
1999-P Rechnungsgrundlagen für die Pensionsversicherung Pagler & Pagler” (Principles of calculating pension
insurance) in the version intended for employees as the biometric base for its calculations. The most significant
parameters are a rate of interest of 4.75% (4.95% in the previous year) for calculation purposes, a rate of increase
in earnings and pensions of 2.0%, a career trend of 1.5%, a fluctuation rate of 4.5% for those with contracts
entitling them to severance pay, a fluctuation rate of 9.0% for those with contracts not entitling them to severance
pay as well as the unchanged assumed age for pension entitlement for women of 60 and 65 for men applying
the ASVG transitional rules under the 2003 Ancillary Budget Act. As employees’ pension entitlements were
transferred to a pension fund in previous years, from now on this provision will include the rights of employees
who were already retired at the time of the transfer as well as claims by active employees for disability and widows’
pensions. Severance provisions are formed for legal and contractual claims. A provision in cash for jubilee
bonuses has been formed for cash paid to employees to reward certain anniversaries of long-term service. Other
provisions are formed in the amount of projected use in each case.
(17) Current and deferred taxes
Taxes on income are accounted for and calculated in accordance with IAS 12. Current income tax assets and liabilities
are stated according to local tax rates. Tax assets are shown under other assets, and tax liabilities under
other liabilities or provisions. The liability concept is used for the calculation of deferred taxes, and all temporary
differences in amount are taken into consideration. Under this concept, the values of assets and liabilities in the
IFRS Balance Sheet are compared with the values that are applicable to taxation of the consolidated company in
question. Differences between these values lead to temporary differences in value, for which deferred taxation
items must be formed on the assets or liabilities side – irrespective of the time of their release. Deferred tax assets
and deferred tax liabilities are then offset, if the claims exist for each company against the same tax authority.
Deferred tax assets or unused tax losses carried forward are recorded in the Balance Sheet if they will probably be
used in relation to future profits.
81

82 NOTES / INCOME STATEMENT
Notes to the Investkredit Group Income Statement
(18) Segment reporting
The primary aim of segment reporting is to show the components making up the Investkredit Group's result broken
down into the following areas of business:
> Corporates (financing, consulting, treasury and asset management)
> Local government (financing, treasury and investment banking, holdings)
> Real estate (real estate project developments, forward purchase agreements, real estate investments,
real estate asset management)
“Others” cover bookings from consolidation. The setting off of prices for services provided by segments to each
other may arise through financing as well as the provisions of services: rates of interest that conform to the markets
are applied between the segments. Investkredit Bank AG provides services to its subsidiaries at cost.
Presentation of results by segment 2004
in EUR m Corporates
Local
government Real estate Others Total
Interest and similar income 351.3 973.3 86.6 -7.5 1,403.7
Interest and similar expenses -284.7 -923.8 -44.1 7.5 -1,245.1
Net interest income 66.7 49.6 42.5 0.0 158.7
Credit risk provisions (net) -7.2 -0.7 -1.2 0.0 -9.1
Fee and commission income 6.8 14.1 3.4 -2.0 22.4
Fee and commission expenses -5.2 -4.5 -1.4 0.4 -10.8
Net fee and commission income 1.7 9.6 2.0 -1.6 11.6
Trading result 2.1 0.9 0.2 0.0 3.3
Net income from investments 0.0 7.0 -0.9 0.0 6.1
General administrative expenses -34.8 -33.5 -7.0 0.0 -75.2
Balance of other income and expenses -1.7 5.0 -1.5 1.7 3.6
Balance of extraordinary income and expenses 0.0 0.0 0.0 0.0 0.0
Pre-tax profit for the year 26.7 38.0 34.1 0.1 98.8
Taxes on income -0.8 -6.0 -8.5 0.0 -15.3
After-tax profit for the year 25.8 32.0 25.7 0.1 83.6
Minority interests -3.7 -15.8 -10.0 0.0 -29.5
Net profit 22.2 16.3 15.6 0.1 54.1
Segment assets 7,154 14,169 763
Segment liabilities 6,988 14,054 668
Average equity 175 94 103 372
Interest margin 1.01% 0.41% 5.88% 0.84%
Risk-earnings ratio 10.9% 1.3% 2.9% 5.7%
Cost-income ratio 49.4% 55.7% 15.6% 43.4%
Return on assets 0.39% 0.27% 3.55% 0.44%
Pre-tax return on equity 26.6%
Return on equity – net profit 12.7% 17.3% 15.1% 14.6%
Employees (reporting date) 246 224 33 503

Presentation of results by segment 2003 (for comparison)
Local
NOTES / INCOME STATEMENT
in EUR m Corporates government Real estate Others Total
Interest and similar income 333.3 720.4 52.2 -5.1 1,100.9
Interest and similar expenses -273.0 -685.6 -29.2 5.0 -982.8
Net interest income 60.3 34.8 23.1 -0.1 118.0
Credit risk provisions (net) -7.5 -1.0 0.0 0.0 -8.5
Fee and commission income 4.2 10.3 3.7 -2.0 16.2
Fee and commission expenses -3.3 -1.8 -1.8 0.3 -6.6
Net fee and commission income 0.9 8.5 1.9 -1.7 9.6
Trading result 1.3 1.2 0.2 0.0 2.8
Net income from investments -2.9 6.4 0.0 0.0 3.4
General administrative expenses -32.4 -24.5 -6.4 0.5 -62.9
Balance of other income and expenses 1.5 8.2 -1.0 1.2 9.8
Balance of extraordinary income and expenses 0.0 0.0 0.0 0.0 0.0
Pre-tax profit for the year 21.1 33.6 17.7 -0.1 72.2
Taxes on income -3.8 -7.3 -1.2 0.0 -12.2
After-tax profit for the year 17.3 26.3 16.5 -0.1 60.0
Minority interests -1.2 -12.9 -5.1 0.0 -19.2
Net profit 16.2 13.4 11.4 -0.1 40.8
Segment assets 6,036 9,756 682
Segment liabilities 5,854 9,682 588
Average equity 184 67 80 330
Interest margin 1.01% 0.41% 4.37% 0.79%
Risk-earnings ratio 12.4% 2.8% 0.1% 7.2%
Cost-income ratio 51.9% 55.0% 25.4% 48.2%
Return on assets 0.29% 0.31% 3.13% 0.40%
Pre-tax return on equity 21.9%
Return on equity – net profit 8.8% 20.0% 14.2% 12.3%
Employees (reporting date) 222 163 30 415
83

84 NOTES / INCOME STATEMENT
Segment result by region 2004
Secondary segment reporting is by region. The presentation of results by region is based on the location of the
business. The core market includes Austria, Czechia, Germany, Hungary, Poland, Slovakia, Slovenia and Switzerland.
Other Rest of
in EUR m Austria Core Market the World Others Total
Interest and similar income 1,230.4 103.5 125.2 -55.4 1,403.7
Interest and similar expenses -1,143.9 -49.9 -106.9 55.7 -1,245.1
Net interest income 86.6 53.6 18.2 0.2 158.7
Credit risk provisions (net) -7.5 -1.6 -0.1 0.0 -9.1
Fee and commission income 20.9 0.8 1.2 -0.6 22.4
Fee and commission expenses -7.7 -3.0 -0.5 0.5 -10.8
Net fee and commission income 13.2 -2.2 0.7 -0.2 11.6
Trading result 4.9 -2.5 1.1 -0.2 3.3
Net income from investments 5.5 -0.3 0.9 0.0 6.1
General administrative expenses -64.8 -9.1 -2.1 0.7 -75.2
Balance of other income and expenses 3.3 -1.3 2.3 -0.7 3.6
Balance of extraordinary income and expenses 0.0 0.0 0.0 0.0 0.0
Pre-tax profit for the year 41.2 36.6 21.1 -0.2 98.8
Taxes on income -1.3 -11.9 -2.1 0.0 -15.3
After-tax profit for the year 40.0 24.7 19.0 -0.2 83.6
Minority interests -12.0 -9.9 -7.5 0.0 -29.5
Net profit 28.0 14.8 11.5 -0.2 54.1
Segment assets 16,952 747 3,746
Segment liabilities 16,786 634 3,651
Average equity 184 102 86 372
Interest margin 0.56% 7.20% 0.67% 0.84%
Risk-earnings ratio 8.6% 2.9% 0.5% 5.7%
Cost-income ratio 61.9% 18.5% 10.5% 43.4%
Return on assets 0.26% 3.32% 0.70% 0.44%
Pre-tax return on equity 26.6%
Return on equity – net profit 15.2% 14.5% 13.4% 14.6%
Employees (reporting date) 408 77 18 503

Presentation of results by region 2003 (for comparison)
Other Rest of
NOTES / INCOME STATEMENT
in EUR m Austria Core Market the World Others Total
Interest and similar income 1,021.4 58.3 47.9 -26.8 1,100.9
Interest and similar expenses -942.2 -30.9 -36.4 26.7 -982.8
Net interest income 79.3 27.4 11.5 -0.1 118.0
Credit risk provisions (net) -8.4 0.0 0.0 0.0 -8.5
Fee and commission income 16.2 1.0 0.2 -1.2 16.2
Fee and commission expenses -5.2 -1.4 -0.1 0.1 -6.6
Net fee and commission income 11.1 -0.4 0.0 -1.1 9.6
Trading result 10.9 -8.3 0.1 0.1 2.8
Net income from investments 2.4 0.1 0.9 0.0 3.4
General administrative expenses -55.9 -5.8 -1.7 0.5 -62.9
Balance of other income and expenses 7.6 -0.9 2.3 0.8 9.8
Balance of extraordinary income and expenses 0.0 0.0 0.0 0.0 0.0
Pre-tax profit for the year 47.0 12.0 13.0 0.2 72.2
Taxes on income -10.5 -0.8 -1.0 0.0 -12.2
After-tax profit for the year 36.5 11.3 12.0 0.2 60.0
Minority interests -9.8 -4.0 -5.4 0.0 -19.2
Net profit 26.7 7.3 6.6 0.2 40.8
Segment assets 14,013 742 1,720
Segment liabilities 13,829 652 1,643
Average equity 201 68 62 330
Interest margin 0.60% 5.07% 0.98% 0.79%
Risk-earnings ratio 10.7% 0.1% 0.2% 7.2%
Cost-income ratio 55.2% 30.9% 14.7% 48.2%
Return on assets 0.27% 2.08% 1.03% 0.40%
Pre-tax return on equity 21.9%
Return on equity – net profit 13.3% 10.7% 10.7% 12.3%
Employees (reporting date) 368 34 13 415
A substantial portion of the foreign business is generated in Austria. A regional breakdown of assets and liabilities
is shown below:
31.12.2004 31.12.2003
in EUR m Assets Liabilities Assets Liabilities
Austria 8,060 15,558 7,454 12,752
Other Core Market 5,711 2,219 3,768 1,682
Rest of Europe 5,016 3,573 3,320 1,920
North America 2,153 92 1,737 66
Other regions 506 4 196 55
Total Rest of the World 7,675 3,669 5,253 2,041
Aggregate 21,446 21,446 16,475 16,475
85

86 NOTES / INCOME STATEMENT
(19) Net interest income
in EUR m 1.1. – 31.12.2004 1.1. – 31.12.2003
Interest income 1,314.0 1,047.5
Lending business and money market 1,037.8 855.3
Fixed-income securities 271.5 178.0
Shares and other variable-yield securities 2.7 12.1
Investments in affiliated companies 0.8 0.9
Investments in other companies 1.2 1.2
Income from investments in associates 6.9 4.5
Interest expenses -1,223.9 -974.4
Deposits -795.9 -637.8
Securitised liabilities -399.9 -313.8
Subordinated capital -28.2 -22.7
Earnings from rental and leasing business 61.7 40.3
Leasing earnings 0.4 0.3
Rental earnings incl. write-ups of rental properties 82.5 48.5
Depreciation of property leased and other leasing expenses -0.2 -0.2
Depreciation of property rented -20.9 -8.3
Aggregate 158.7 118.0
The interest expense arising from securitised liabilities includes expenses related to three hybrid tier 1 transactions
amounting to EUR 3.9 m. (2003: EUR 2.8 m).
(20) Credit risk provisions (net)
in EUR m 1.1. – 31.12.2004 1.1. – 31.12.2003
Allocation to risk provisions for loans and advances -16.8 -16.5
Release of risk provisions for loans and advances 8.3 7.8
Direct write-offs -1.0 0.0
Amounts received against loans and advances written off 0.3 0.1
Currency adjustments 0.1 0.2
Aggregate -9.1 -8.5
(21) Net fee and commission income
in EUR m 1.1. – 31.12.2004 1.1. – 31.12.2003
Lending business 2.8 1.3
Securities business 0.4 0.4
Payment transactions -1.3 -1.1
Administration of Austrian environmental support schemes 7.4 6.9
Other service business 2.2 2.1
Aggregate 11.6 9.6
Administration of Austrian environmental support schemes are services rendered by the Kommunalkredit Group –
through Kommunalkredit Public Consulting GmbH, Vienna – on behalf of the Republic of Austria.

(22) Trading result
NOTES / INCOME STATEMENT
in EUR m 1.1. – 31.12.2004 1.1. – 31.12.2003
Securities trading 3.7 1.4
Currency trading 0.5 -0.1
Interest-rate derivatives -1.6 1.5
Currency derivatives 1.5 -0.2
Securities derivatives 0.0 0.1
Other financial instruments -0.8 0.0
Aggregate 3.3 2.8
The trading result contains net results from the disposal and valuation of items in the trading portfolio, interest
and dividend earnings in the trading portfolio as well as refinancing expenses for the trading portfolio. The trading
portfolio is assessed on a fair value basis.
(23) Net income from investments
This item includes the results from the disposal and valuation of securities in financial investments, investments in
affiliated companies and associates and other investments.
in EUR m 1.1. – 31.12.2004 1.1. – 31.12.2003
Net income from securities 6.0 5.4
Net income from associates
Net income from investments in affiliated companies and
-1.1 -0.6
other investments 1.2 -1.4
Aggregate 6.1 3.4
Net income from securities includes disposal gains amounting to EUR 7.1 m (2003: EUR 5.5 m).
(24) General administrative expenses
in EUR m
Personnel expenses
1.1. – 31.12.2004 1.1. – 31.12.2003
Salaries -29.3 -25.1
Social security contributions -7.6 -6.4
Expenses for retirement and employee benefits -7.8 -6.4
Total personnel expenses -44.7 -37.9
Other administrative expenses -26.0 -21.6
Depreciation and revaluations of property and equipment -4.6 -3.3
Aggregate -75.2 -62.9
The amount also includes expenses for the let real estate properties amounting to EUR 7.0 m (2003: EUR 6.4 m).
Expenses for unlet property were negligible.
87

88 NOTES / INCOME STATEMENT
(25) Balance of other income and expenses
in EUR m 1.1. – 31.12.2004 1.1. – 31.12.2003
Income from strategic derivatives 4.0 17.3
Secondment of personnel and infrastructure to third parties 0.2 0.6
Release of unutilised provisions from previous periods 0.1 0.1
Final consolidation 0.2 0.0
Other 3.7 0.6
Other operating earnings 8.1 18.6
Amortisation of intangible assets -1.4 -1.0
Other tax -0.9 -0.8
Expenses on strategic derivatives 0.0 -5.2
Expenses of representative offices -0.5 -0.6
Other -1.7 -1.1
Other operating expenses -4.6 -8.8
Aggregate 3.6 9.8
As explained under (10), strategic derivatives are those that are not used for trading purposes.
(26) Taxes on income
in EUR m 1.1. – 31.12.2004 1.1. – 31.12.2003
Current tax expense -13.5 -10.6
Deferred tax expense -1.8 -1.6
Aggregate -15.3 -12.2
The actual taxes were calculated on the basis of the tax results for the financial year at the local tax rates applicable
to the Group Company in question. The following table shows the relation between the expected and actual
taxes on income:
in EUR m 1.1. – 31.12.2004 1.1. – 31.12.2003
Pre-tax profit for the year
Income tax expense expected for the financial year
98.8 72.2
at the statutory tax rate (34%) -33.6 -24.6
Effects of differing tax rates 10.7 5.7
Tax reductions due to tax-exempt earnings on investments 3.0 6.9
Tax reductions due to other tax-exempt income 6.7 4.0
Tax increases due to non-deductible expenses -1.8 -1.3
Tax expense/income not attributable to the reporting period
Effects on deferred taxes resulting from the reduction of the
0.7 -0.8
income tax rate to 25% starting 1 January 2005 -2.6 0.0
Losses carried forward not yet taken into account 2.9 0.0
Other tax effects -1,4 -2.3
Aggregate -15.3 -12.2

(27) Appropriation of profits
NOTES / INCOME STATEMENT
The Board of Management will propose to the Annual General Meeting on 4 May 2005 that the net profit for the year
of 2004 in the separate financial statements for Investkredit, amounting to EUR 13,268,049.87, be used to pay a
dividend of EUR 2.00 per share including bonus. The total distribution is EUR 12,660,000.00. That is some 28% of the
dividend-bearing share capital for 2004, amounting to EUR 46,000,110.00. After payment of the Supervisory Board
emoluments, the remainder of some EUR 0.5 m will be carried forward.
(28) Earnings per share
According to IAS 33, earnings per share are calculated by dividing the net profit for the year by the average number
of shares outstanding.
31.12.2004 31.12.2003
Net profit for the year in EUR m 54.1 40.8
Average number of no-par value shares issued 6,330,000 6,330,000
Earnings per share in EUR 8.55 6.45
The adjusted earnings per share take into account the potential dilution effect arising out of the exercise of
conversion and option rights. The adjusted earnings per share for 2004 and 2003 show no deviation from the
figures given.
89

90 NOTES / BALANCE SHEET
Notes to the Investkredit Group Balance Sheet
(29) Cash reserve
This item consists solely of cash and balances with central banks and is identical to the cash and cash equivalents
in the Cash Flow Statement.
(30) Loans and advances to banks
Repayable on demand Other
in EUR m 31.12.2004 31.12.2003 31.12.2004 31.12.2003
Austrian banks 110 123 326 397
Foreign banks 419 156 869 603
Aggregate 529 280 1,195 1,000
(31) Loans and advances to customers
Repayable on demand Other
in EUR m 31.12.2004 31.12.2003 31.12.2004 31.12.2003
Austrian customers 78 48 6,187 5,742
Corporates 47 19 2,031 1,912
Public sector 0 3 3,994 3,686
Others 31 26 161 144
Foreign costumers 52 21 4,456 3,041
Corporates 51 20 2,009 1,819
Public sector 0 0 2,265 1,162
Others 1 0 181 60
Aggregate 130 69 10,643 8,783
This item includes loans and advances of EUR 19.3 m (2003: EUR 1.0 m) in respect of finance lease contracts. The
total of leasing instalments outstanding and residual values not guaranteed is EUR 19.6 m (2003: EUR 1.1 m) and
the aggregate of the interest components not yet earned is EUR 0.4 m (2003: EUR 0.1 m).
(32) Loans and advances to affiliated companies and companies in which an equity
investment is held
Affiliated companies Companies in which an
equity investment is held
in EUR m 31.12.2004 31.12.2003 31.12.2004 31.12.2003
Loans and advances to banks 0 0 0 0
Loans and advances to customers 78 81 117 26
Other assets 11 10 55 42
Aggregate 90 91 172 68

(33) Risk provisions for loans and advances
NOTES / BALANCE SHEET
Risk provisions are related to loans and advances to customers and contingent liabilities. They only cover credit
risks. The assessment basis for valuation adjustment also includes deferred interest as at the balance sheet date.
Provisions for country risks included in this item are directly allocated to the borrowers. Global valuation adjustments
were not undertaken. The amount of loans and advances bearing no interest and earnings was EUR 26 m
(2003: EUR 41 m).
in EUR m 31.12.2004 31.12.2003
As at 1 January
Additions
72 75
Allocations to risk provisions for loans and advances
Releases
17 17
Earmarked use -3 -12
Release of risk provisions for loans and advances -8 -8
Currency adjustments 0 0
As at 31 December 78 72
(34) Trading assets
in EUR m 31.12.2004 31.12.2003
Bonds and other fixed-income securities 8 18
Money market paper 0 0
Bonds
of which:
8 18
Listed bonds 8 17
Shares and other variable-yield securities 0 3
Shares 0 1
Investment certificates 0 2
Other
of which:
0 0
Listed shares and other variable-yield securities 0 1
Own shares and other variable-yield securities 0 0
Positive fair values from derivative financial instruments 165 153
Other trading portfolio items 0 0
Aggregate 173 173
91

92 NOTES / BALANCE SHEET
(35) Financial assets and shares in associates
in EUR m 31.12.2004 31.12.2003
Bonds and other fixed-income securities 7,347 5,025
Money market paper 0 0
Bonds 6,886 4,579
Treasury bills
of which:
462 446
Listed bonds 7,187 4,946
Shares and other variable-yield securities 178 174
Shares 12 8
Investment certificates
of which:
166 167
Listed shares and other variable-yield securities 49 47
Own shares and other variable-yield securities 1 1
Other securities and derivatives for hedging purposes 389 227
Investments in unconsolidated affiliated companies 13 10
Other investments 7 4
Total financial investments 7,935 5,440
Shares in companies accounted for under the equity method 64 51
Other investments in associates 9 9
Total shares in associates 73 61
Aggregate 8,008 5,501
Financial investments include securities belonging to the category “available for sale” in the amount of EUR 4,776 m
(2003: EUR 3,136 m). Investments in companies accounted for under the equity method include a EUR 23 m (2003:
EUR 20 m) bank investment. The schedule in Note 36 (Disclosure of equity investments) contains a complete list and
classification of all holdings in unconsolidated affiliated companies, companies accounted for under the equity method
and other investments. This list, furthermore, informs about the proportionate investments, equity and annual results.
The development and composition of all financial investments (excluding those securities classified as available for sale)
is disclosed in Note 38 (Schedule of fixed asset transactions). The Investkredit Group investments include mainly banks
and financial institutions as well as real-estate companies. For corporate tax and VAT purposes, the following companies
are considered a single entity with the Bank:
> VBV beta Anlagen Vermietung Gesellschaft mbH, Vienna
> Europolis Real Estate Asset Management GmbH (previously Europolis Invest Immobilien Management GmbH), Vienna
> Invest Mezzanine Capital Management GmbH, Vienna

(36) Disclosure of equity investments
Name and registered office
1. Affiliated companies
1.1. Fully consolidated affiliated companies
Corporate segment
NOTES / BALANCE SHEET
Austrian Banking Act Investment Percentage holding Financial information
Category 1)
dormant
2)
direct indirect
excl. incl.
dormant holding
% 3) %
Latest
available
financial
statements
as at
(Negative) equity
as defined in
§ 244 (3) Austrian
Commercial Code
EUR m
Net
earnings
for the
year
EUR m
Investkredit International Bank p.l.c., Sliema/Malta B X X 23.53% 8) 31.12.2004 57.9 5.8
Investkredit Funding Ltd., St. Helier (Jersey) FI X 23.53% 8) 31.12.2004 0.0 0.0
Investkredit Funding II Ltd., St. Helier (Jersey) FI X 23.53% 8) 31.12.2004 0.0 0.0
Europa Consult GmbH, Vienna OI X 100.00% 31.12.2004 1.0 0.7
VBV Anlagenvermietungs- und Beteiligungs-Aktiengesellschaft,
Vienna FI X 100.00% 31.12.2004 35.1 -1.5
VBV beta Anlagen Vermietung Gesellschaft mbH
(single entity for tax purposes), Vienna FI X 100.00% 31.12.2004 47.4 0.0
VBV Holding GmbH, Vienna FI X X 100.00% 31.12.2004 6.8 3.1
VBV Vermögensanlagen und Beteiligungen Verwaltungs-
GmbH Investitionsgüter-Vermietungs OHG, Vienna FI X 100.00% 31.12.2004 28.5 3.3
„VBV iota“ – IEB Holding GmbH, Vienna OI X 33.33% 31.12.2004 27.0 5.3
Local government segment
Kommunalkredit Austria AG, Vienna B X 50.78% 31.12.2004 183.8 16.8
KOFIS LEASING, a.s., Bratislava FI X 50.78% 31.12.2003 5.3 0.6
Kommunalkredit Beteiligungs- und
Immobilien GmbH, Vienna BS X 50.78% 31.12.2004 8.2 0.6
Kommunalkredit Finance a.s., Prague FI X 50.78% 31.12.2004 0.8 0.1
Kommunalkredit Capital I Limited, St. Helier (Jersey) FI X 50.78% 31.12.2004 0.0 0.0
Kommunalkredit International Bank Ltd, Limassol B X 50.78% 31.12.2004 49.9 8.9
Kommunalkredit Depotbank AG, Vienna B X 50.78% 31.12.2004 6.2 0.3
Kommunalkredit Public Consulting GmbH, Vienna OI X 50.78% 31.12.2004 0.7 0.3
Real estate segment
VBV Holding GmbH & Co Quarta OEG, Vienna BS X 100.00% 31.12.2004 0.0 0.0
VBV Holding GmbH & Co Secunda OHG, Vienna BS X 100.00% 31.12.2004 6.4 1.6
VBV Holding GmbH & Co Tertia OHG, Vienna BS X 100.00% 31.12.2004 27.0 3.9
Cefin Logistic Park Beta S.R.L., Bucharest OI X 58.50% 31.12.2004 2.0 0.0
Coral Bud Sp. z o.o., Warsaw OI X 65.00% 31.12.2004 21.7 7.7
Europolis Real Estate Asset Management GmbH
(previously Europolis Invest Immobilien Management GmbH),
(single entity for tax purposes), Vienna OI X 100.00% 31.12.2004 0.1 0.0
Europolis Real Estate Asset Management Sp. z o.o. (previously
EUROPOLIS INVEST Management Sp. z o.o.), Warsaw OI X 100.00% 31.12.2004 0.3 0.0
Europolis Real Estate Asset Management s.r.o. (previously
EUROPOLIS INVEST Management s.r.o.), Prague OI X 100.00% 31.12.2004 0.0 0.0
Europolis Real Estate Asset Management Kft., Budapest OI X 100.00% 31.12.2004 0.0 0.0 17)
E.I.A. eins Immobilieninvestitionsgesellschaft mbH, Vienna OI X X X 100.00% 100.00% 31.12.2004 -0.8 -0.8
EPC One Limited, Limassol OI X 65.00% 31.12.2004 0.1 0.0
EPC Two Limited, Limassol OI X 65.00% 31.12.2004 1.2 0.2
EPC Three Limited, Limassol OI X 65.00% 31.12.2004 3.6 1.0
EPC Omikron Limited, Limassol OI X 65.00% 31.12.2004 0.0 0.0 16)
EPC Lambda Limited, Limassol OI X 75.00% 31.12.2004 0.0 0.0 16)
EUROPOLIS CE Alpha Holding GmbH, Vienna BS X 65.00% 31.12.2004 23.2 0.6
EUROPOLIS CE Amber Holding GmbH, Vienna BS X 100.00% 31.12.2004 0.0 0.0 15)
EUROPOLIS CE Beta Holding GmbH, Vienna BS X 65.00% 31.12.2004 16.8 -5.9
EUROPOLIS CE Delta Holding GmbH, Vienna BS X 65.00% 31.12.2004 11.9 -0.2
EUROPOLIS CE Gamma Holding GmbH, Vienna BS X 65.00% 31.12.2004 3.7 -0.4
EUROPOLIS CE Lambda Holding GmbH, Vienna BS X 75.00% 31.12.2004 0.0 0.0 14)
EUROPOLIS CE Omikron Holding GmbH, Vienna BS X 65.00% 31.12.2004 0.0 0.0 14)
EUROPOLIS E30 Holding Sp. z o.o., Warsaw 9) OI X 65.00% 31.12.2004 1.4 -1.1
E30 Industrial Center V Sp. z o.o., Warsaw OI X 65.00% 31.12.2004 2.0 1.1
EUROPOLIS ABP Kft., Budapest 13) OI X 65.00% 31.12.2004 3.8 4.2
Europolis City Gate Kft. (previously EUROPOLIS Holding Kft.),
Budapest 10) OI X 65.00% 31.12.2004 1.9 5.0
EUROPOLIS Hadovka s.r.o., Prague OI X 65.00% 31.12.2004 3.9 2.0
Europolis Infopark Kft., Budapest OI X 65.00% 31.12.2004 3.7 2.7
EUROPOLIS M1 Kft., Budapest 11) OI X 65.00% 31.12.2004 1.6 1.0
EUROPOLIS Poland Business Park VII Holding Sp. z o.o.,
Warsaw OI X 65.00% 31.12.2004 0.9 1.1
Europolis Property Romania S.R.L., Bucharest OI X 65.00% 31.12.2004 2.3 0.0
93

94 NOTES / BALANCE SHEET
Name and registered office
Austrian Banking Act Investment Percentage holding Financial information
Category 1)
dormant
2)
direct indirect
excl. incl.
dormant holding
% 3) %
Latest
available
financial
statements
as at
(Negative) equity
as defined in
§ 244 (3) Austrian
Commercial Code
EUR m
EUROPOLIS Property Sp. z o.o., Warsaw OI X 65.00% 31.12.2004 1.1 2.0
EUROPOLIS Romlog Company S.R.L., Bucharest OI X 65.00% 31.12.2004 0.0 0.0
EUROPOLIS Saski Point Sp. z o.o., Warsaw OI X 65.00% 31.12.2004 10.7 2.9
EUROPOLIS Sienna Center Sp. z o.o., Warsaw OI X 65.00% 31.12.2004 -15.9 9.9
EUROPOLIS Technopark s.r.o., Prague OI X 65.00% 31.12.2004 -0.0 0.0
Olympia Teplice s.r.o., Prague 12) OI X 65.00% 31.12.2004 1.6 1.5
Olympia Mladá Boleslav s.r.o., Prague 12) OI X 65.00% 31.12.2004 1.3 1.7
Poland Business Park VII Sp. z o.o., Warsaw OI X 65.00% 31.12.2004 11.9 4.1
RCP Alfa s.r.o., Prague OI X 65.00% 31.12.2004 5.8 0.6
RCP Beta s.r.o., Prague OI X 65.00% 31.12.2004 2.5 0.0
RCP Delta s.r.o., Prague OI X 65.00% 31.12.2004 7.6 -0.2
RCP Epsilon s.r.o., Prague OI X 65.00% 31.12.2004 5.7 0.0
RCP Gama s.r.o., Prague OI X 65.00% 31.12.2004 3.3 0.0
RCP Holding GmbH, Vienna BS X 65.00% 31.12.2004 23.0 0.0
RCP ISC s.r.o., Prague OI X 65.00% 31.12.2004 0.0 0.3
Victoria International Property SRL, Bucharest OI X 65.00% 31.12.2004 -1.0 3.4
WARSAW TOWERS Sp. z o.o., Warsaw OI X 65.00% 31.12.2004 19.2 1.7
Net
earnings
for the
year
EUR m
1.2. Affiliated companies included at cost
CALG Vomido Grundstückverwaltung GmbH, Vienna OI X X X 100.00% 100.00% 31.12.2003 0.0 0.0
ETECH Management Consulting Gesellschaft mbH, Vienna OI X 100.00% 31.12.2004 0.0 0.0 7)
Invest Mezzanine Capital Management GmbH
(single entity for tax purposes), Vienna OI X 100.00% 31.12.2004 0.0 0.0
Public Private Financial Consulting GmbH (previously
CALG Secunda Grundstückverwaltung GmbH), Vienna FI X X X 100.00% 100.00% 31.12.2004 0.0 0.0
VBV sechs Anlagen Vermietung Gesellschaft mbH, Vienna FI X X X 100.00% 31.12.2004 0.1 0.1 7)
VBV vier Anlagen Vermietung Gesellschaft mbH, Vienna FI X X X 100.00% 31.12.2003 0.0 0.2
Europolis CE Kappa Holding GmbH, Vienna BS X 100.00%
EPC Amber Limited, Limassol OI X 100.00%
EPC Kappa Limited, Limassol OI X 100.00%
Investkredit Management s.r.o., Prague OI X 100.00%
Schloss Gabelhofen Hotelbetriebsgesellschaft mbH, Vienna OI X 100.00%
Schloss Krumbach Hotelbetriebsgesellschaft mbH, Vienna FI X 100.00%
VBV acht Anlagen Vermietung Gesellschaft mbH, Vienna OI X 100.00%
VBV elf Anlagen Vermietung Gesellschaft mbH, Vienna OI X 100.00%
VBV gamma Anlagen Vermietung Gesellschaft mbH, Vienna FI X 100.00%
VBV Holding GmbH & Co Prima, Vienna OI X 100.00%
Immo-Lease Grundstücksverwaltungs-GmbH, Vienna FI X 99.69%
Public Private Financial Consulting GmbH & Co OEG, Vienna FI X 75.39%
VBV zwölf Anlagen Vermietung Gesellschaft mbH, Vienna OI X 75.00%
WIKA Leasing-Gesellschaft mbH, Vienna FI X 75.00%
Europolis Estate Sp. z o.o., Warsaw OI X 65.00%
EUROPOLIS IPW Kft., Budapest OI X 65.00%
EUROPOLIS Property s.r.o., Prague OI X 65.00%
Kommunalkredit Leasing s.r.o., Prague FI X 50.78%
Kommunalkredit Vermögensverwaltungs-GmbH, Vienna OI X 50.78%
Kommunalkredit Vermögensverwaltungs OEG, Vienna OI X 50.78%
Trend Mind IT Dienstleistung GmbH, Vienna OI X 50.78%
Kommunalkredit Dexia Asset Management AG, Vienna FI X 25.90%
IED – Beteiligungen GmbH, München OI X 23.53%
IED Holding Ltd., Sliema/Malta OI X 23.53%
2. Associates
2.1. Associates included at equity
IMMORENT-BUSTA Grundverwertungsgesellschaft
mbH, Vienna FI X X X 50.00% 99.44% 31.12.2003 0.0 0.2
Immorent-VBV Grundverwertungs-Gesellschaft mbH, Vienna FI X 100.00% 5) 31.12.2003 0.1 0.1
VBV delta Anlagen Vermietung Gesellschaft mbH, Vienna OI X 40.00% 31.12.2004 0.7 0.6
INVEST EQUITY Beteiligungs-AG, Vienna OI X 29.85% 31.12.2004 20.4 2.4 7)
„Die Erste“ Büro- und Gewerbezentren Errichtungs-
und Betriebs-Gesellschaft mbH, Linz OI X 25.50% 31.12.2004 2.4 0.0
Kommunalleasing GmbH, Vienna FI X 25.39% 31.12.2003 1.3 -0.1
Leasing 431 Grundstückverwaltung Gesellschaft mbH, Vienna FI X 25.15% 31.12.2002 12.5 2.5
Dexia Kommunalkredit Holding AG (previously
Dexia Kommunalkredit Holding Gesellschaft mbH), Vienna BS X 24.96% 31.12.2004 31.3 3.2
Dexia banka Slovensko a.s., Zilina (SK) B X 19.72% 31.12.2004 48.6 9.1

Name and registered office
NOTES / BALANCE SHEET
2.2. Associates included at cost
IMMORENT-IBA Leasinggesellschaft mbH, Vienna FI X X X 50.00% 93.59% 31.12.2003 0.2 0.2
GEF Beteiligungs-AG, Vienna OI X X 39.23% 31.12.2004 28.4 0.0
INVEST EQUITY Management Consulting GmbH, Vienna OI X 30.00% 31.12.2004 0.4 0.2 7)
Lead Equities Mittelstandsfinanzierungs AG, Vienna OI X 20.41% 31.12.2003 31.6 -0.8
AGCS Gas Clearing and Settlement GmbH, Vienna OI X 20.00% 31.12.2003 4.0 0.9
Betriebsanlagen & Wirtschaftsgüterleasing GmbH, Vienna FI X 50.00%
CALG 435 Grundstückverwaltung Gesellschaft mbH, Vienna FI X 50.00%
INVEST EQUITY Holding eins Gesellschaft mbH, Vienna OI X 39.23%
LMF Holding GmbH, Vienna OI X 39.23%
Leobersdorfer Maschinenfabrik AG, Vienna OI X 39.23%
LBL drei Grundstückverwaltung-GmbH, Vienna FI X 33.20%
Kommunalnet I-Government Solutions AG, Vienna OI X 25.39%
Dexia Kommunalkredit Polska Sp. z o.o.
(previously Kommunalkredit Polska Sp. z o.o.), Warsaw B X 24.96%
3. Other investments included at cost
ECRA Emission Certificate Registry GmbH, Vienna OI X 12.50% X X X 6)
APCS Power Clearing and Settlement AG, Vienna OI X 10.00% 31.12.2003 3.6 0.8
Infrastruktur Planungs- und Entwicklungs GmbH, Vienna OI X 10.00% X X X 4)
gamma II Beteiligungs-AG, Vienna OI X 8.70% 31.12.2003 2.9 -0.3
Venture Capital in treuhändiger Verwaltung der Venture
Finanzierungsgesellschaft m.b.H. in Liqu., Vienna OI X 5.78% X X X 4)
WED Holding GmbH, Vienna OI X 5.77% X X X 4)
Kasberg Lift - GmbH & Co KG, Grünau OI X 4.88% X X X 4)
Austrian Research Centers GmbH, Vienna OI X 0.93% X X X 4)
Aviation Holdings plc, London OI X 0.37% X X X 4)
Einlagensicherung der Banken und Bankiers GmbH, Vienna OI X X 0.15% X X X 4)
Oikokredit International Share Foundation, Amersfoort (NL) OI X 0.01% X X X 4)
IMS – Ionen Mikrofabrikations Systeme Gesellschaft m.b.H., Vienna OI X 19.20%
1) B = Bank, FI = Financial institution, BS = Bank-related service, OI = Other investments
2) Share in the capital incl. dormant holding
3) Incl. indirect but excl. dormant holdings
4) Insignificant investments
5) No controlling influence
6) New entry
7) According to provisional annual financial statements
8) Controlling influence
9) Merged with 30 Industrial Center I Sp. z o.o., E30 Industrial Center II Sp. z o.o. and E30 Industrial Center IV Sp. z o.o., Warsaw
10) Merged with International Business Center Rt., Budapest
11) Merged with M1 Kft., Budapest
12) Merged with Europolis Pekarska s.r.a., Prague followed by split-up
13) Merged with ABP Kft., Budapest
14) Abridged financial year from 20 September to 31 December 2004
15) Abridged financial year from 16 November to 31 December 2004
16) Abridged financial year from 5 August to 31 December 2004
17) Abridged financial year from 13 May to 31 December 2004
(37) Property and equipment
Austrian Banking Act Investment Percentage holding Financial information
Category 1)
dormant
2)
direct indirect
excl. incl.
dormant holding
% 3) %
Latest
available
financial
statements
as at
(Negative) equity
as defined in
§ 244 (3) Austrian
Commercial Code
EUR m
Net
earnings
for the
year
EUR m
in EUR m 31.12.2004 31.12.2003
Land and buildings used by the Group 34 32
Land and buildings used by third parties 642 600
Office furniture and equipment 9 8
Aggregate 684 639
The development and composition of property and equipment is presented under Note 38 (Schedule of fixed asset
transactions). Low-value assets are entered in the schedule of fixed asset transactions as additions and disposals
in the year of acquisition. The balance sheet item of land and buildings used by the Group includes a land value
95

96 NOTES / BALANCE SHEET
of EUR 6 m (2003: EUR 6 m). The increase from EUR 600 m to EUR 642 m in the item land and buildings used by
third parties is mainly due to the addition of office and logistics buildings in Budapest, Prague and Bucharest. The
difference between the fair value and the carrying amount in the items in the individual balance sheets which
cover all land and buildings used by third parties comes to EUR 88.6 m (2003: EUR 106.1 m).
(38) Schedule of fixed asset transactions
At cost Currency Additions Disposals At cost
as at trans- as at
in EUR m 1.1. lation 31.12.
Property and equipment 658 -7 44 -2 693
Land and buildings 638 -7 41 -1 671
Office furniture and equipment 20 0 3 -1 22
Intangible assets 5 0 4 -1 8
Goodwill 3 0 3 -1 5
Other
Financial investments
3 0 1 0 4
(excluding securities available for sale) 1,831 -9 267 -257 1,832
Other affiliated companies 53 0 3 0 57
Companies accounted for under the equity method 74 0 24 -3 95
Other investments 16 0 5 -2 20
Fixed-income securities 1,687 -9 235 -252 1,661
Variable-yield securities 0 0 0 0 0
Other financial investments 0 0 0 0 0
Aggregate 2,494 -15 316 -261 2,534
Accumu- Accumu- Carrying Current Current Carrying
lated lated amount depre- write- amount
in EUR m depreciation write-ups 31.12. ciation ups 1.1.
Property and equipment -53 44 684 -26 29 639
Land and buildings -40 44 676 -22 29 631
Office furniture and equipment -13 0 9 -4 0 8
Intangible assets -4 0 4 -1 0 2
Goodwill -2 0 3 -1 0 2
Others
Financial investments
-3 0 1 -1 0 1
(excluding securities available for sale) -101 18 1,749 -9 5 1,763
Other affiliated companies
Companies accounted for under the
-43 0 13 0 0 10
equity method -41 9 64 -1 5 51
Other investments -3 0 17 0 0 13
Fixed-income securities -14 8 1,655 -8 0 1,688
Variable-yield securities 0 0 0 0 0 0
Other financial investments 0 0 0 0 0 0
Aggregate -158 62 2,437 -36 34 2,404
Current depreciation does not include any unscheduled depreciation amounts. Additions to the land and buildings
in the amount of EUR 38 m were related to the development and acquisition of real estate project companies.

(39) Other assets
NOTES / BALANCE SHEET
in EUR m 31.12.2004 31.12.2003
Intangible assets 4 2
Other assets 62 59
Prepaid expenses 33 23
Aggregate 100 84
The development and composition of the intangible assets is presented in Note 38 (Schedule of fixed asset transactions.
The intangible assets include goodwill amounting to EUR 3 m (2003: EUR 2 m) that has been checked for
the sustainability of the value assigned to it. Other assets include deferred tax assets of EUR 14 m (2003: EUR 16 m).
Please refer to the table in Note 44 for a breakdown of and information on deferred taxes.
(40) Amounts owed to banks
Repayable on demand Other liabilities
in EUR m 31.12.2004 31.12.2003 31.12.2004 31.12.2003
Austrian banks 70 98 1,552 1,238
Foreign banks 51 35 3,045 2,233
Aggregate 121 133 4,597 3,471
(41) Amounts owed to customers
Repayable on demand Other liabilities
in EUR m 31.12.2004 31.12.2003 31.12.2004 31.12.2003
Austrian customers 108 57 332 339
Corporates 41 24 245 302
Public sector 3 0 81 20
Others 64 32 6 17
Foreign customers 46 51 208 199
Corporates 15 21 54 56
Public sector 0 0 0 0
Others 30 30 154 142
Aggregate 153 107 540 538
(42) Securitised liabilities
of which listed
in EUR m 31.12.2004 31.12.2003 31.12.2004 31.12.2003
Bonds issued 14,052 10,704 10,957 9,358
Money market paper issued 0 0 0 0
Other securitised liabilities 67 58 0 0
Aggregate 14,120 10,761 10,957 9,358
Securitised liabilities include covered bonds in the amount of EUR 2,648 m. In 2005, bonds issued amounting to
EUR 3,348 m will fall due.
97

98 NOTES / BALANCE SHEET
(43) Provisions
in EUR m 31.12.2004 31.12.2003
Provisions for current taxes 8 11
Provisions for deferred taxes 10 6
Provisions for personnel expenses 37 33
Other provisions 14 8
Aggregate 68 58
The provisions changed as follows:
As at Reclassi- As at
in EUR m 1.1.2004 Utilisation Release Allocation fication 31.12.2004
Provisions for current taxes 11 -7 -2 7 0 8
Provisions for deferred taxes 6 -2 0 3 3 10
Provisions for personnel expenses 33 0 0 4 0 37
Other provisions 8 -6 -1 5 7 14
Aggregate 58 -16 -3 19 10 68
Please refer to the table in Note 44 for a breakdown of and information on deferred taxes.
Personnel provisions changed as follows:
Jubilee
in EUR m
Present value of defined benefit obligations –
Pension Severence bonus Subtotal Leave Total
DBO – as at 1.1.2004 57 7 1 65
- Plan assets -36 0 0 -36
Provisions for personnel expenses as at 1.1.2004 21 7 1 29 4 33
Service cost 1 1 0 1
Interest cost 3 0 0 3
Payments -2 -1 0 -4
Change in plan assets -3 0 0 -3
Actuarial result -5 -1 0 -5
DBO as at 31.12.2004 62 7 1 71
- Plan assets
Provisions for personnel expenses
-38 0 0 -38
as at 31.12.2004 24 7 1 33 4 37
The pension provisions are the result of obligations arising from direct promises or individual contracts. In previous
years, staff pension entitlements were transferred to a pension fund and are shown as plan assets in the table.
The provision includes the rights of employees who were already retired at the time of the transfer as well as claims

NOTES / BALANCE SHEET
by active employees for disability and widows’ pensions. The full actuarially calculated obligation for pensions is
EUR 62.4 m (2003: EUR 56.6 m), of which entitlements amounting to EUR 38.3 m (2003: EUR 35.7 m) have been
transferred to the pension fund, resulting in provisions of EUR 24.1 m (2003: EUR 20.9).
As at 31 December 2004, other provisions included EUR 6.6 m retroactive purchase price adjustments in real estate
companies, EUR 2.4 m bonuses for participating in the preparation of the Balance Sheet and EUR 0.7 m auditing
and consulting expenses.
(44) Deferred tax assets and liabilities
Deferred tax assets and liabilities include taxes arising from temporary differences between the figures reported
under IFRS and the figures determined as taxable profits at the Group Companies. Deferred taxes arose in the following
items:
Deferred tax assets Deferred tax liabilities
in EUR m 31.12.2004 31.12.2003 31.12.2004 31.12.2003
Loans and advances to banks/customers 9 2 162 183
Financial investments 22 29 95 36
Property and equipment 0 1 0 0
Amounts owed to banks/customers 154 182 15 5
Provisions for personnel expenses 4 4 0 0
Other provisions 0 0 0 0
Risk provisions for loans and advances 0 0 0 0
Trading portfolio 0 0 0 0
Other items 72 12 3 14
Tax losses carried forward 18 17 0 0
Aggregate 279 247 274 238
Net 5 10
Deferred tax items were not formed for temporary differences in relation to shares in subsidiaries amounting to
EUR 72.1 m (2003: EUR 52.8 m) since the requirements under IAS 12.39 were satisfied.
(45) Other liabilities
in EUR m 31.12.2004 31.12.2003
Trading liabilities 157 134
Prepaid expenses 13 8
Leasing liabilities 0 0
Other liabilities 474 304
Aggregate 644 446
The trading liabilities include the negative fair values arising from derivative financial instruments amongst the open trading
positions. Deferred income mainly includes accruals of interest subsidies connected to the Top scheme. Other liabilities
include fair values arising from derivative financial instruments amounting to EUR 346.9 m (2003: EUR 278.6 m) as
well as tax liabilities of EUR 1.6 m (2003: EUR 2.9 m).
99

100 NOTES / BALANCE SHEET
(46) Subordinated capital
of which listed
in EUR m 31.12.2004 31.12.2003 31.12.2004 31.12.2003
Profit participation rights capital 0 0 0 0
Supplementary capital 202 153 109 102
Other subordinated liabilities 343 250 185 187
Aggregate 545 402 294 290
Expenses related to subordinated liabilities in the financial year amounted to EUR 28.2 m (2003: EUR 22.7 m).
Claims of creditors to the repayment of these liabilities are subordinated in relation to other creditors and, in the
event of bankruptcy or liquidation, may be paid back only after all non-subordinated creditors have been satisfied.
The most significant subordinated liabilities are:
Face value in Interest
Currency in m EUR m rate Issuer/type
EUR 80 80.1 5.000% Kommunalkredit Tier Deposit 2004 – 2034
JPY 7,000 50.8 4.130% Financing by American Family Life Assurance Company of Columbus (AFLAC)
EUR 50 50.0 3.892% Investkredit supplementary capital bond 2002
JPY 5,000 36.3 5.000% Kommunalkredit supplementary capital bond 2002 – 2032
JPY 5,000 36.2 3.850% Kommunalkredit supplementary capital bond 2004 – 2034
EUR 30 31.7 7.000% Investkredit supplementary capital bond 2001
ATS 300 23.2 6.500% Investkredit bond issue 1997 – 2012
ATS 300 22.8 7.500% Investkredit bond issue 1993 – 2005
ATS 200 15.7 8.250% Investkredit bond issue 1995 – 2005
(47) Equity and minority interests
The authorised capital of EUR 46,000,110.00 is divided into 6,330,000 bearer shares. The Board of Management is
empowered until 23 May 2006, with the approval of the Supervisory Board, to increase the authorised capital by a
maximum of EUR 3,052,140.00 in one or several stages by the issue of up to 420,000 new bearer shares.
Investkredit traded in its own shares during the financial year to smooth out movements in the share price. As at
31 December 2004 Investkredit’s portfolio held 8,133 of its own shares with a book value of EUR 0.9 m. Due to the
insignificance of the figure, this was not shown as a reduction in equity but under financial assets. The maximum
number of the company's own shares held by Investkredit during the financial year was 131,767.
Minority interests are in the hands of the following partners:
in EUR m 31.12.2004 31.12.2003
Dexia Crédit Local S.A., Paris 104 67
Holders of the hybrid tier 1 capital issue, Jersey 50 50
European Bank for Reconstruction and Development (EBRD), London 52 49
Other minority interests 61 40
Aggregate 267 206
Investkredit Bank AG is also the parent company of the banking group as defined in the Austrian Banking Act.
Forty-three real estate companies that are consolidated under IFRS are not included in the Group under the Austrian
Banking Act, whereas eight financial institutions that are not consolidated under IFRS (owing to their relative

NOTES / BALANCE SHEET
insignificance) are included. A breakdown of and the changes in the Investkredit Group's own funds as determined
under the Austrian Banking Act are given below:
Assessment basis pursuant to § 22 (2) Banking Trading Total Proportion Compared
Austrian Banking Act (in EUR m) book book 2004 to 2003
Risk-weighted assets
Risk and counterpart-weighted
7,028 7,028 83.2% 5,660
off-balance-sheet transactions 911 911 10.8% 628
Special off-balance-sheet transactions 150 150 1.8% 165
Trading book 355 355 4.2% 302
Assessment basis, aggregate 8,089 355 8,444 100.0% 6,755
Own funds requirement, banking book 1) 647 647 71.6% 516
Own funds requirement, trading book 2) 28 28 3.1% 24
Own funds requirement, currency risk 2) 0 0 0.0% 0
Total = Required own funds 647 28 676 77.2% 3) 540
Actual own funds
Paid up capital 46 46 46
Reserves 273 273 268
Minority interests in subsidiaries 155 155 119
Innovative instruments 102 102 102
Core capital (tier 1) 576 576 535
Supplementary own funds
Carrying amount of investments
331 331 274
(holdings of more than 10%) -31 -31 -31
Own funds (tier 1 and tier 2) 876 0 876 778
Tier 3 28 28 22
Aggregate own funds 876 28 904 100.0% 799
Free own funds 228 25.2% 259
1) 8% of the assessment basis
2) Standard procedure according to capital adequacy requirements
3) Share in own funds
This gives a consolidated own fund ratio (ratio of own funds to the assessment basis) of 10.7% compared to
11.8% in 2003. The consolidated core capital ratio is 6.8% compared to 7.9% in the previous year.
Investkredit is preparing for the New Basel Capital Accord (“Basel II”). The aim in future is for the level of equity
required to back credit risk to be based on an internal rating approach. For this, it is necessary to categorise loans
> under portfolio categories
> under external and internal ratings – as they have been since 1999
> under probability of default (PD) and
> under loss given default (LGD)
In future, equity will also have to be available to cover operational risk. Overall, the requirement for own funds at
Investkredit should be about the same as it is today.
101

102 NOTES / OTHER DETAILS AND RISK REPORT
Other details and Risk Report
(48) Information on the Cash Flow Statement
The Cash Flow Statement shows the status and development of cash flows in the Investkredit Group. The cash holdings
recorded include cash in hand and balances with central banks, strictly interpreted.
(49) Breakdown of remaining maturities
Breakdown of remaining maturities as at 31 December 2004
Repayable Up to 3 months 1 to 5 More than
in EUR m on demand 3 months to 1 year years 5 years
Loans and advances to banks 529 384 108 383 320
Loans and advances to customers 130 162 234 2,299 7,947
Securities – trading assets 0 0 0 8 0
Securities – available for sale 66 44 169 1,626 2,870
Securities – held to maturity 116 33 174 995 564
Securities – microhedges 0 6 3 223 1,025
Aggregate 841 629 688 5,534 12,726
Amounts owed to banks 121 2,197 586 540 1,275
Amounts owed to customers 153 206 44 70 220
Securitised liabilities 128 2,353 948 6,416 4,274
Subordinated capital 9 16 23 19 478
Aggregate 412 4,772 1,600 7,045 6,246
Breakdown of remaining maturities as of 31 December 2003 (for comparison purposes)
Repayable Up to 3 months 1 to 5 More than
in EUR m on demand 3 months to 1 year years 5 years
Loans and advances to banks 280 340 83 340 237
Loans and advances to customers 69 104 335 1,893 6,450
Securities – trading assets 3 0 0 6 12
Securities – available for sale 68 15 46 1,110 1,898
Securities – held to maturity 122 93 49 612 590
Securities – microhedges 0 2 33 81 262
Aggregate 542 554 546 4,042 9,449
Amounts owed to banks 133 1,570 599 463 839
Amounts owed to customers 107 245 25 56 213
Securitised liabilities 0 778 500 6,577 2,906
Subordinated capital 0 16 7 59 320
Aggregate 240 2,608 1,131 7,155 4,279
Remaining maturity is the period between the balance sheet date and the date on which the receivable or liability
becomes contractually due, and, in the case of partial amounts, is calculated separately for each part. Deferred
interest is accounted for under the period “up to 3 months”.

NOTES / OTHER DETAILS AND RISK REPORT
(50) Loans and advances and amounts owed to affiliated companies and companies in
which an equity investment is held
in EUR m
Loans and advances to banks
31.12.2004 31.12.2003
Affiliated companies 0 0
Investments
Loans and advances to customers
0 0
Affiliated companies 78 81
Investments
Amounts owed to banks
117 26
Affiliated companies -50 -50
Investments
Amounts owed to customers
0 0
Affiliated companies -8 -6
Investments -16 -15
(51) Subordinated assets
The following subordinated assets are included amongst those reported on the Balance Sheet:
in EUR m 31.12.2004 31.12.2003
Loans and advances to banks 10 14
Loans and advances to customers 0 0
Fixed-income securities 49 51
Variable-yield securities 0 0
Aggregate 59 64
(52) Assets assigned as collateral
The Investkredit Group has assigned loans and advances to customers amounting to EUR 217 m (2003: EUR 258 m)
and securities amounting to EUR 90 m (2003: EUR 47 m) as security for global loans by the European Investment
Bank, Luxembourg. It has assigned loans and advances to customers in the amount of EUR 67 m (2003: EUR 13 m)
to Oesterreichische Kontrollbank Aktiengesellschaft. For trading at the Frankfurt and London Stock Exchanges,
EUR 6 m (2003: EUR 6 m) have been furnished as security. Loans with a face value of EUR 3,626 m and securities
with a face value of EUR 303 m were dedicated as at 31 December 2004 to covered bonds issued by Kommunalkredit
Austria AG. Disposal over these is only possible with the approval of a State Commissioner.
103

104 NOTES / OTHER DETAILS AND RISK REPORT
(53) Contingent liabilities and other off-balance-sheet items
in EUR m
Contingent liabilities
31.12.2004 31.12.2003
ERP bills 124 129
Guarantees 1,908 432
Others 0 0
Aggregate 2,032 561
Other obligations
Credit lines and advance commitments 1,158 708
Liabilities from repurchase agreements 0 0
Others 0 0
Aggregate 1,158 708
(54) Other obligations
Investkredit Bank AG, Kommunalkredit Austria AG and Kommunalkredit Depotbank AG are required pursuant to
§93 of the Austrian Banking Act to undertake proportionate safeguarding of depositors’ accounts in the framework
of the relevant programme of Banken und Bankiers GmbH, Vienna. On the basis of leasing agreements,
obligations in the amount of EUR 1.1 m will be incurred in the year 2005 (previous year for 2004: EUR 0.8 m).
The corresponding liabilities for the years 2005 – 2009 are EUR 4.2 m (previous year for 2004 – 2008: EUR 3.1 m).
(55) Trust activities
The breakdown of trust activities not shown in the Balance Sheet is as follows:
in EUR m 31.12.2004 31.12.2003
Loans and advances to banks 4 2
Loans and advances to customers 101 132
Financial investments 3 3
Trust assets 108 136
Amounts owed to banks 0 0
Amounts owed to customers -108 -136
Trust liabilities -108 -136
(56) Assets and liabilities in foreign currency
31.12.2004 31.12.2003
in EUR m Assets Liabilities Assets Liabilities
USD 2,766 2,173 2,185 2,388
GBP 487 215 219 138
CHF 1,607 1,588 1,274 1,152
JPY 353 1,012 148 604
Other 1,023 433 754 351
Total foreign currency 6,236 5,420 4,581 4,632
EUR 15,210 16,026 11,894 11,843
Aggregate 21,446 21,446 16,475 16,475

(57) Derivative financial transactions
The structure of open derivative financial transactions is as follows:
NOTES / OTHER DETAILS AND RISK REPORT
Nominal amount at 31.12.2004 Nominal amount
Remaining maturity Fair Fair Trading
Up to 1 to 5 Over 5 Total value value Total portfolio
in EUR m 1 year years 5 years 2004 positive negative 2003 2004
Interest-rate related business
OTC products
7,278 13,207 13,410 33,895 659 -1,231 26,524 12,478
Forward rate agreements (FRAs) - 340 - 340 1 -1 153 340
Interest-rate swaps 7,221 12,307 12,885 32,413 650 -1,225 25,107 11.404
Interest-rate options – purchase 28 334 261 624 8 - 646 419
Interest-rate options – sale 28 226 264 518 - -6 611 314
Other interest-rate contracts - - - - - - - -
Products traded on the stock exchange
Interest-rate futures 0 - - 0 - - 8 0
Currency related business
OTC products
3,424 649 805 4,879 85 -196 4,070 1,812
Foreign exchange futures 336 11 - 347 10 -21 38 90
Currency swaps
Foreign exchange options –
2,744 554 805 4,103 71 -172 3,683 1,293
purchase 160 42 - 203 4 -0 156 203
Foreign exchange options – sale 184 42 - 226 0 -4 193 226
Other currency contracts - - - - - - - -
Securities related business
OTC products
48 17 1 65 22 -22 95 -
Shares-/Index futures – purchase 22 - - 22 - -22 - -
Shares-/Index futures – sale 22 - - 22 22 - - -
Shares-/Index options – purchase - 17 - 17 - - 91 -
Shares-/Index options – sale 3 - 1 4 - - 4 -
Products traded on the stock exchange
Shares-/Index futures - - - - - - - -
Shares-/Index options - - - - - - - -
Other business
OTC products
555 1,011 504 2,070 34 -40 4,168 -
Options 555 1,011 504 2,070 34 -40 4,168 -
Aggregate 11,305 14,884 14,720 40,909 801 -1,491 34,857 14,289
105

106 NOTES / OTHER DETAILS AND RISK REPORT
(58) Fair value balance sheet
Fair value
Value Banking Available Trading Micro
in EUR m of item book for Sale book hedge Aggregate
Cash reserve 62 62 0 0 0 62
Loans and advances to banks 1,724 1,535 122 0 84 1,742
Loans and advances to customers 10,773 5,757 3,196 0 1,855 10,808
Risk provisions for loans and advances -78 -78 0 0 0 -78
Trading assets 173 0 0 173 0 173
Financial investments 8,008 2,053 4,776 0 1,259 8,088
Property and equipment 684 684 0 0 0 684
Other assets 100 100 0 0 0 100
Aggregate 21,446 10,113 8,094 173 3,199 21,579
Amounts owed to banks 4,718 4,008 0 0 713 4,722
Amounts owed to customers 693 530 0 0 182 713
Securitised liabilities 14,120 7,795 0 0 6,169 13,964
Provisions 68 68 0 0 0 68
Other liabilities 644 88 0 157 434 679
Subordinated capital 545 268 0 0 346 614
Minority interests 267 323 0 0 0 323
Equity 392 497 0 0 0 497
Aggregate 21,446 13,578 0 157 7,844 21,579
(59) Risk management
The management of risks is a decisive competitive factor for a bank. At Investkredit, risk management is seen as
the identification, measurement and management of risks. Investkredit’s basic principles and methods of risk management
are documented in various manuals and internal guidelines and are regularly updated to conform to
both the latest regulatory developments and technical developments on the market. As part of the banking risks,
the credit risk constitutes the most essential risk the Investkredit Group is exposed to. Other risks that may be
encountered are market risks, liquidity risks and operational risks. As a matter of principle, the measurement of
risk is undertaken for all kinds of risk in the form of value at risk by units that are functionally and organisationally
independent from those making the business decisions. A structure of limits deduced from the level of risk
involved and a calculation of margins reflecting that risk are part of the decisive overall conditions when completing
transactions. Stress tests are also carried out to simulate the unfavourable effects of extreme market movements.
In the context of risk management, the amount of economic equity is the crucial figure, helping both to
assess the amount of risk the Bank is able to bear and the level of risk conformity of its performance. Moreover,
quantitative methods for determining economic equity are continuously supported by qualitative analyses of the
market environment and factors that apply specifically to the Bank. Determining the Bank's economic equity is
essential in assessing the amount of risk it is able to bear.
In addition, the legal framework for risk management is changing (keyword: Basel II). The new rules present banks
with new challenges in respect of risk management, both at the accounting as well as the organisational processing
level. Investkredit continues to pursue the goal of rapidly meeting these requirements.

(60) Market risk arising from trading activity
NOTES / OTHER DETAILS AND RISK REPORT
Market risk refers to negative fluctuations in the value of the Bank’s portfolio due to changes in market price. To
be exact, Investkredit differentiates between interest-rate, currency and share price risk. The interest-rate risk with
debt instruments arises above all in bond trading and trading in interest-rate swaps and futures. At a level
restricted to a few financial centres, there is also trade in share price risks – shares and investment funds. Foreign
currency risks vis-à-vis the euro base currency arise mainly from positions and options in US dollars, Swiss francs
and Japanese yen; other currencies do not play a significant role in trading. The Bank constantly establishes the
market risks inherent in its trading activities – broken down into risks from debt instruments, share prices and foreign
currencies – and evaluates them at the close of the business. It uses a variance/co-variance approach for the
interest-rate and foreign currency risk whilst the basis for calculating the share price risk is data on volatility provided
by the markets and/or in house. There are precise rules in a risk management manual for transacting trading
business. These also include limits for the value at risk. Along with the value-at-risk limits, there are also limits
on the volume of trading and, depending on the type of business, basis-point values as well as gamma and
vega risks in the option-book area. The risk in the form of value at risk with a holding duration of one day and a
99% level of confidence may be broken down as follows:
Average Average
in EUR m 2004 31.12.2004 2003 31.12.2003
Debt issues 0.3 0.3 0.7 0.8
Share price risks 0.2 0.0 0.1 0.2
Currencies 0.1 0.1 0.1 0.0
Aggregate 0.5 0.4 0.9 1.0
(61) Market risk in the banking book
With changing market interest rates, the bank may encounter interest-rate risks if it holds a surplus of fixed-rate
positions. The interest-rate risk is, however, assessed continuously in the light of the interest-risk item. For this purpose,
fixed-rate assets and liabilities, as well as derivative instruments are entered into maturity bands according
to their respective interest-lockup period. As a consequence, a gap analysis using different scenarios is carried out
and the value at risk is calculated by means of the RiskMetrics method (confidence level of 99%, holding period
of 1 month). An Asset & Liability Committee set up at both Investkredit Bank AG and Kommunalkredit Austria AG
is responsible for managing interest-rate risk for the bank book at their meetings that are held at least once a
month. At these meetings estimates of interest rates and the risk effects movements would have in the form of
changes to cash values as well as stress scenarios are discussed and appropriate management measures are
decided upon.
Similar methods are used to assess liquidity risks, enabling the bank to meet its payments when they are due, as
well as to procure sufficient means under the expected conditions if the need occurs. The liquidity balance sheet
allows those responsible to identify liquidity risks within future maturity bands. Refinancing with matching maturity
dates, thus minimising liquidity risks, is a major aim for those managing the Bank and planning new issues.
Price risk in the real estate area represents another market risk in the banking book. This refers to negative fluctuations
in value based on the fair value of real estate properties. Location, levels of empty units, length of time required
to find new tenants and cluster effects in certain regions could be mentioned as the major factors of this risk. Because
the real estate market has a lower level of liquidity, it is particularly difficult to determine the fair value. This aspect
is accounted for by applying a more conservative allocation of fair values and keeping a larger risk buffer.
107

108 NOTES / OTHER DETAILS AND RISK REPORT
(62) Credit risk
Credit risk is the risk that debtors are not able to meet their payments. This comprises non-payment risks, country
risks and default risks. The Bank's rating system first takes into account the non-payment risk of a debtor. Every active
customer is allocated an external or internal rating. Since the beginning of the Nineties, Investkredit has had a standardised
procedure for grading the risk level of all customers into classes of creditworthiness. The Bank has been
continuously refining it since then. There are eight internal classes of performing loans and two for non-performing/dubious
loans. The internal grading corresponds to Standard & Poor’s standard rating scale and takes place in
several stages. Changes to key figures in the balance sheet or other information such as the level of debt at local
authorities can bring about changes in grading at any time. The only exception to the basic rule that a rating has
to be renewed at least once a year is for local government loans under EUR 0.4 m. Where there is an external rating
from S&P, Moody’s or Fitch Ratings, the Bank takes the worst rating awarded by these agencies. The prerequisite
for decisions on loans is the existence of an internal rating, a credit-risk position and a margin calculation.
A credit-risk position values collateral and calculates the uncovered risk for each borrower before a loan is granted,
at least once a year thereafter and before any decision is made. There are explicit rules for the evaluation of collateral.
Before any financing is offered, those responsible have to ascertain the conditions adequate to the risk entailed as
a basis for Investkredit's concepts of margins.
The credit risk in the real estate segment comprises the rental obligations. If a tenant moves out, the loss of those
rental payments represents a cash value reduction of the real estate project. The experts’ estimates on the project
level allow for this risk.
Those in charge of managing credit risk have their own manual listing the principles for handling credit risk, risk
policies, the procedural steps necessary, and for presenting and limiting credit risk. The credit-risk limits are guided
by the internal ratings and maturities and apply both to new business and the existing loan portfolio. Specific rules
are laid down in organisational regulations, regulations governing the structural organisation, the internal regulations
for the Board of Management and the internal regulations for the Credit Committee. The portfolio risks,
together with the key performance figures are summarised in the quarterly credit risk report that serves as a
management instrument for the credit risk in the Bank’s portfolio. The Bank increasingly uses instruments such as
syndication and credit derivatives to actively manage the credit risk with the goal of maximising the RORAC.
The allocations to internal ratings allow the assets in the banking book and off-balance-sheet transactions to be completely
broken down by creditworthiness and collateral. The following table shows the portfolio composition (assets
and contingent liabilities in the form of guarantees and other off-balance-sheet commitments) classified by rating
categories – before taking into account collateral and the netting of balance sheet items:
31.12.2004 31.12.2003
in EUR m Volume Proportion Volume Proportion
AAA 3,949 16% 3,688 21%
AA 6,854 28% 4,702 27%
A 8,146 33% 5,154 29%
BBB 3,448 14% 2,052 12%
BB 1,569 6% 1,439 8%
B 274 1% 306 2%
CCC 247 1% 243 1%
D 26 0% 31 0%
Aggregate 24,512 100% 17,615 100%

(63) Operational risks
NOTES / OTHER DETAILS AND RISK REPORT
Operational risks are defined as the “risks of losses due to the inadequacy and/or failure of internal procedures,
human resources and systems or external circumstances” and thus include fraud, mistakes, insufficient documentation,
computer errors, computer crashes, legal risks, etc. The changes in the area of capital adequacy require quantification
and backing of operational risk. Investkredit has decided to use the basic indicator approach to measure
this risk. Organisational principles of the more advanced procedures should be adhered to as well. The guidelines
and methods for identifying, measuring and reporting are documented in the operational risk manual. The goal is
to minimise or avoid these risks. To keep the risk of damages caused with malicious intent by employees as low as
possible, control systems and the requirement for at least two people to be involved apply to all transaction-dependent
procedures. As well as naming one central and several local OpRisk managers, the manual also gives a definition
of operational risk, a database of damages, of key risk indicators, and the dividing lines between operational
and other kinds or risks such as market and credit risks.
(64) Information on employees
Average Average
Employees of the Group 2004 31.12.2004 2003 31.12.2003
Austria 376 408 342 368
International 79 95 36 47
Aggregate 454 503 378 415
The average number of staff during the financial year has been weighted to reflect the extent of employment of
part-time staff.
(65) Information on emoluments of and loans to members of the Boards
The following table gives details of the total payments made to members of the Board of Management and the
Supervisory Board as well as severance and pension payments to members of the Board of Management, Senior
Managers and other employees (including changes in pensions and provisions):
in EUR m
Total emoluments of
2004 2003
Active Members of the Board of Management 0.7 0.7
Fixed pay 0.5 0.5
Variable pay 0.2 0.2
Former Members of the Board of Management 0.2 0.2
Members of the Supervisory Board
Severance payments for
0.1 0.1
Board of Management, Senior Managers 1.0 0.2
Other employees
Pension expenses for
0.5 0.6
Board of Management, Senior Managers 5.1 3.9
Other employees 1.3 1.2
As at 31 December 2004 there were no outstanding loans to members of the Board of Management and the
Supervisory Board. There were also no Investkredit guarantees for such persons. Members of the Board of Management
have no management stock option plans.
109

110 NOTES / OTHER DETAILS AND RISK REPORT
(66) Information on the Boards
Supervisory Board
Geiserich E. Tichy
Chairman
Karl Samstag
(until 5 May 2004)
Vice Chairman
(until 5 May 2004 )
CEO and Chairman of the Board of
Management, Bank Austria Creditanstalt
AG (until 26 January 2004)
Erich Hampel
(from 5 May 2004)
Vice Chairman
(from 5 May 2004)
CEO and Chairman of the Board of
Management, Bank Austria Creditanstalt
AG (from 26 January 2004)
Johann Zwettler
Vice Chairman
CEO and Chairman of the Board of
Management, Bank für Arbeit und
Wirtschaft Aktiengesellschaft
Karl Sevelda
Vice Chairman
(from 5 May 2004)
Member of the Board of Management,
Raiffeisen Zentralbank Österreich
Aktiengesellschaft
State Commissioner
Alexander Gancz
State Commissioner
(until 1 August 2004)
Kurt Bayer
State Commissioner
(from 1 August 2004)
Federal Ministry of Finance
Board of Management
Wilfried Stadler
CEO and Chairman of the Board of Management
First appointed to the Board: 1 July 1995
Until: 30 June 2010
Mandates at other supervisory boards (as at 31 March 2005):
Österreichische Hotel- und Tourismusbank GmbH
Rundfunk und Telekom Regulierungs GmbH (Chairman)
Wienstrom GmbH
Trodat Holding GmbH
Die Furche Zeitschriftenbetriebs GmbH & Co. KG (Chairman)
ATP Planungs- und Beteiligungs AG
Elisabeth Bleyleben-Koren
Vice Chairperson
(until 5 May 2004)
Deputy CEO and Vice Chairperson of
the Board of Management, Erste Bank
der oesterreichischen Sparkassen AG
Willibald Cernko
(from 5 May 2004)
Member of the Board of Management,
Bank Austria Creditanstalt AG
Karl Fink
Deputy CEO, WIENER STÄDTISCHE
Allgemeine Versicherung Aktiengesellschaft
Herwig Hutterer
Friedrich Kadrnoska
(until 5 May 2004)
Deputy CEO and Vice Chairman of
the Board of Management,
Bank Austria Creditanstalt AG
(until 26 January 2004)
Heinz Kessler
Stephan Koren
CEO and Chairman of the Board of
Management, Österreichische
Postsparkasse Aktiengesellschaft
Kurt Löffler
Managing Director ERP Fund
Christa Jessenitschnig
Deputy State Commissioner
(until 1 September 2004)
Anita Gratzl-Baumberger
Deputy State Commissioner
(from 1 September 2004)
Federal Ministry of Finance
Franz Pinkl
(from 5 May 2004)
CEO and Chairman of the Board
of Management, Österreichische
Volksbanken-Aktiengesellschaft
Regina Prehofer
Member of the Board of Management,
Bank Austria Creditanstalt AG
Karl Stoss
(until 5 May 2004)
Member of the Board of Management,
Raiffeisen Zentralbank Österreich Aktiengesellschaft
(until 30 September 2004)
Manfred Url
(from 5 May 2004)
Member of the Board of Management,
Raiffeisen Zentralbank Österreich
Aktiengesellschaft
Wolfgang Agler
Employees’ representative
Gabriele Bauer
Employees’ representative
Helmut Hinek
Employees’ representative
(from 1 October 2004)
Otto Kantner
Employees’ representative
Hermine Lessiak
Employees’ representative
Martina Plessl
Employees’ representative
Klaus Gugglberger
Member of the Board of Management
First appointed to the Board: 1 January 2002
Until: 30 June 2010
Mandates at other supervisory boards (as at 31 March 2005):
APCS Power Clearing und Settlement AG
AGCS Gas Clearing and Settlement AG
Lead Equities Mittelstandsfinanzierungs AG
(Vice Chairman)
gamma II Beteiligungs-AG (Chairman)

(67) Events after the balance sheet date
NOTES / OTHER DETAILS AND RISK REPORT
In January 2005, DIFA, a German real estate fund management company, took over a 49% share in a total of
seven holding companies of the subsidiary Europolis in Czechia and Hungary. The investment package includes
four office buildings in Prague and Budapest, two shopping centres in Teplice and Mladá Boleslav, as well as two
logistics buildings on the edge of Budapest with a total usable floor space of 230,000 m2 . DIFA also acquired
100% of another holding company called “Hadovka”. The fair value of these properties is EUR 300 m. The EBRD
has assigned all of its shares while the Investkredit Group has reduced its 65% holding in seven properties to 51%
via a newly formed holding company. Working with DIFA forms the basis for further real estate acquisitions in the
CEE countries, especially in Hungary and Czechia, where Europolis will be DIFA’s exclusive representative.
Dexia Kommunalkredit Holding has applied for a banking licence. Operations are set to begin before the end of the
first quarter of 2005 under the name Dexia Kommunalkredit Bank. This bank will be responsible for the Central
and Eastern European business of the Kommunalkredit Group and the Dexia Group. At the beginning of 2005,
Kommunalkredit Austria AG made a further issue of covered bonds with a face value of EUR 1 bn.
On 28 December 2004, Österreichische Volksbanken-AG (ÖVAG) published that, in addition to the 3.5% of the
shares it already held in Investkredit Bank AG, it had secured another 41.2% through options. These shares were
held at that time by BAWAG/P.S.K., Erste Bank and Wiener Städtische Versicherung. ÖVAG also announced that
it was interested in acquiring a majority and intends to offer the other shareholders under the terms of a public
offer EUR 123 per share. On 2 February 2005, ÖVAG exercised its call options, purchasing (pending approval by
the anti-trust commission and supervisory authorities) about 41.5% of Investkredit’s shares. Thus ÖVAG now holds
about 45% of the share capital. In this connection the Takeover Commission set a deadline for ÖVAG to submit
its takeover offer in accordance with the Takeover Act of a maximum of 40 trading days on the stock exchange
from the date ÖVAG published its intent to take over Investkredit. The offer handed over to the Takeover Commission
by ÖVAG on 24 February 2005 is scheduled to be published on 17 March.
(68) The transition to IFRS
The primary objective of IFRS financial statements is to provide investors with information on a company's financial
position and performance. On the other hand, the main emphasis in financial statements pursuant to the Austrian
Commercial Code is on the protection of creditors. These differing goals result in differences in accounting methods
and also in reporting.
Risk provisions for loans and advances Risk provisions for loans and advances are shown openly on the assets
side as a reduction, according to usual international practice.
Trading assets and liabilities Trading portfolio items, which are contained in several different balance sheet
items pursuant to the Austrian Commercial Code, are summarised under IFRS rules under trading assets or trading
liabilities. These items also contain the fair values of derivative financial instruments.
Financial investments The item “financial investments” covers equity investments, securities serving as financial
assets as well as securities in the liquidity reserve. Securities under current assets, which are valued under the Austrian
Commercial Code at the lower of cost and fair value, are stated under IFRS at fair value.
Derivative transactions Derivatives are treated differently according to category, applying IAS 39. Derivatives in
the trading portfolio are recognised as trading assets or trading liabilities. They are accounted for at their fair value,
the same practice as under the Austrian Commercial Code. Derivatives in the banking book are treated, depending
on their purpose, as fair value hedges, cash flow hedges or macrohedges, and considerable differences arise
vis-à-vis the Austrian Commercial Code through accounting at fair value.
Personnel provisions Provisions for pensions and similar commitments are based according to the Austrian Commercial
Code on the statistical accumulation procedure and under the IFRS on the dynamic defined benefit obli-
111

112 NOTES / OTHER DETAILS AND RISK REPORT
gations procedure. Future developments of salaries and pensions are taken into account in the calculation. The
discount factor is oriented according to the capital market.
Deferred taxes According to the Austrian Commercial Code, deferred tax liabilities that arise through differences
between the result under commercial law and the tax result are entered as liabilities, while there is an option for
the entry of deferred assets on the assets side. Pursuant to IAS 12, deferred taxes are formed according to temporary
balance sheet differences. Deferred tax assets or liabilities therefore arise differently under the IFRS balance
sheet approach and the Austrian tax assessment system – irrespective of the time of their release.
Equity Minority interests are entered in a separate balance sheet item. The Bank's own shares are shown in the
trading portfolio but are deducted from equity capital for the calculation of profit per share. The equity capital
item includes the hedging reserve, which contains the changes in derivative transactions on the banking book.
Changes in the fair value of real-estate investments, which have no effect on the Income Statement and are due
to initial consolidation, are shown in equity capital pursuant of IAS 40.
Real estate investments Real estate that is not used for the Bank's own business operations and is not leased is
recorded according to the Austrian Commercial Code at acquisition cost and according to IAS 40 at fair value.
Changes in fair values under IFRS are reported with effect on the Income Statement.
(69) Date of release for publication
These Annual Financial Statements will be presented to the Supervisory Board on 31 March 2005 for its determination
and approval.
The Board of Management of Investkredit Bank AG
Wilfried Stadler Klaus Gugglberger
Vienna, February 2005

AUDITOR’S REPORT AND OPINION
We have audited the attached consolidated financial statements of Investkredit Bank AG as at 31 December
2004. The company's management is responsible for these consolidated financial statements. Our responsibility
lies in the rendering of an audit opinion on these financial statements on the basis of the audit performed by us.
We carried out our audit with due attention to the International Standards on Auditing (ISA) of the IFAC (International
Federation of Accountants) and the prevailing Austrian rules for the orderly execution of audits. These standards
require that the audit be planned and executed in such a way that a reasonably sure judgement may be
given as to whether the financial statements are free of any substantially incorrect statements. The amounts stated
and the statements made in the financial statements were verified by means of an audit based on spot checks.
The audit also included our evaluation of the accounting principles applied and the essential estimates made by
management as well as an assessment of the overall tenor of the financial statements. We think that our audit
constitutes a sufficient basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the net assets and financial
position of the Group as of 31 December 2004 as well as the results of operations and cash flows for the preceding
year in accordance with the International Financial Reporting Standards (IFRS).
Under Austrian commercial regulations, the group management report and evidence for exemption from the
necessity of preparing consolidated financial statements under Austrian law have to be verified.
We confirm that the group management report is in accordance with the consolidated financial statements and that
the legal requirements for exemption from the obligation to prepare consolidated financial statements under Austrian
law have been fulfilled.
KPMG Alpen-Treuhand GmbH
Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna
Wilhelm Kovsca Johann Perthold
Chartered Accountants and Tax Consultants
Vienna, 28 February 2005
113

114
REPORT OF THE SUPERVISORY BOARD
GEISERICH E. TICHY
Chairman of the Supervisory Board
Born in Bratislava in 1934; studied social and economic
sciences at the Vienna University of Economics
and Business Administration; since 1966 chartered
accountant and tax consultant and since 1968 sworn
statutory auditor. From 1961 he worked as business
trustee, 1969 to 1979 partner and manager of
Prof. Falkenberg Wirtschaftsprüfungs- und Steuerberatungsges.m.b.H.,
1979 to 1996 Member of the
Board of Management of SOT Süd-Ost Treuhand,
1996 to 1999 Managing Partner of Europa Treuhand
Ernst & Young Wirtschaftsprüfungs- und Steuerberatungsges.m.b.H.,
since 1999 Chairman of the
Supervisory Board of Investkredit Bank AG and
Chairman of the Shareholders’ Syndicate. From
1972 university lecturer, in 1984 he received his
associate professorship, in 1986 full professorship,
has taught at the Vienna University of Economics
and Business Administration, the Centre for Business
Management of the University of Vienna,
extensive seminar and lecturing activity, countless
publications on the topics of tax and corporate
valuations.
In 2004, the Supervisory Board and its committees have performed the duties required of them by law and
under the Articles. The Board of Management has regularly kept the Supervisory Board informed of the
course of business and the Bank’s situation.
Apart from acting as a whole, the Supervisory Board also has four committees: the Credit Committee consists
of eight members. It assesses and decides on credit risks and risks arising from holdings that exceed the
authority of the Board of Management. Members of the Committee for Checking and Preparing Approval of
the Annual Financial Statements are identical to those of the Supervisory Board. The Personnel and Strategy
Committees are made up of the Presidium of the Supervisory Board and of two employees' representatives,
respectively.
Five meetings of the Supervisory Board were held to finalise applications for resolutions to be made, as
well as thoroughly discuss important business issues. All of the members of the Supervisory Board were personally
present at more than half of the meetings. Six meetings of the Credit Committee and one meeting
of the Committee for Checking and Preparing Approval of the Annual Financial Statements were also held.

REPORT OF THE SUPERVISORY BOARD
KPMG Alpen-Treuhand GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna undertook the
audit of these Annual Financial Statements and the Management Report. The final result of this audit did not
give cause for any reservations so that an unqualified audit opinion was given.
The Consolidated Financial Statements for 2004 including the Notes prepared in accordance with International
Financial Reporting Standards (IFRS) and the Group Management Report were audited by KPMG
Alpen-Treuhand GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna. The audit did not
give cause for any reservations and all legal regulations were complied with.
In the opinion of the auditor, the Consolidated Financial Statements generally give a true and fair view of
the net assets and financial position of Investkredit Bank AG and its subsidiaries as at 31 December 2004
and 31 December 2003 as well as the results of operations and cash flows for the financial years 2004 and
2003 in accordance with the International Financial Reporting Standards (IFRS).
The auditors confirm that the Consolidated Financial Statements fulfil the legal requirements for exemption
from the obligation to prepare Consolidated Financial Statements in accordance with Austrian law. The
auditor’s representatives took part in the Supervisory Board meeting on 31 March 2005 to approve the Balance
Sheet and were available to answer questions from the Supervisory Board.
The Supervisory Board noted with approval the results of the audit and consented to the Annual Financial
Statements for 2004 (thereby confirming them in accordance with § 125 (2) of the Stock Corporation Act)
as well as the Management Report and the proposal for the distribution of profit. The Supervisory Board also
noted with approval the results of the audit of the Consolidated Financial Statements.
The Supervisory Board
Geiserich E. Tichy
Chairman
Vienna, 31 March 2005
115

116
GLOSSARY OF TECHNICAL
TERMS
ABS
Asset Backed Securities. Documentary evidence of
payment entitlement in tradable securities. Asset
backed securities arise through the combination of
certain financial assets (securitisation).
ACQUISITION FINANCE
Financing in connection with corporate acquisitions
and LBO transactions.
AFFILIATED COMPANIES
Companies on whose business policies a controlling
influence can be exercised.
ASSESSMENT BASIS ACCORDING TO
THE AUSTRIAN BANKING ACT
Total of the risk-weighted assets, off-balance-sheet
and special off-balance-sheet items in the banking
book, calculated according to the Austrian Banking
Act (BWG).
ARRANGER
A bank that arranges a financing (whether in the
form of a bond issue or a loan). It is responsible for
the structuring of a transaction, preparing the documentation
and for the placement.
ASSOCIATES
Companies on whose business policies Group management
can exercise significant but not controlling
influence. They are accounted for under the equity or
the cost method.
AUSTRIAN BANKING ACT
Austrian federal law governing banking in Austria.
AVAILABLE FOR SALE
A category of securities that function as a liquidity reserve
under IFRS.
BANKING BOOK
Includes all on- and off-balance-sheet items of a
SUPPLEMENTARY DETAILS
bank's balance sheet that are not attributed to the
trading book.
BANKS TO BANKS
Name of Investkredit’s Syndication Platform. Investkredit’s
own information and processing portal for
syndications with partners in the financial markets on
the Internet. www.banks2banks.com
BASEL II
Shorthand for the proposed New Basel Capital Accord,
expected to come into force in 2006/2007. By
contrast to “Basel I”, the currently prevailing obligation
to back loans with own funds, the amount of
own funds required to back a loan will in future depend
on the creditworthiness of each borrower. The
decisive criterion will be ratings – internal and external.
BOND
Medium- to long-term securitised financing on the
capital markets in a form that is generally eligible for
the stock market. Issuers include the public sector
(government bonds), banks (bank bonds) and companies
(corporate bonds).
BORROWERS’ NOTES
Loans made with borrowers’ notes are long-term
(large) loans taken up by industrial companies, publicsector
entities or certain banks with special responsibilities
(directly or indirectly via a bank) primarily from
capital-collecting agencies (typically insurance companies)
and for which borrowers’ notes (“schuldscheins”)
are issued as evidence.
CAP
Contractual agreement on an upper interest-rate limit
for a specific amount of capital against payment of a
one-off fee (cap premium).
CAPITAL ADEQUACY COSTS
Costs to banks per commitment/creditworthiness arising
under capital adequacy requirements. Like standard
risk costs, they are a fixed element in the calculation
of margins.

CAPITAL ADEQUACY DIRECTIVE
EU Directive on the appropriate provision of equity, in
particular with regard to market risks arising out of
the trading activities of banks and securities firms.
CASH FLOW STATEMENT
Calculation and disclosure of flows of payments,
which a company has generated or consumed in a financial
year out of current business, investment and
financing activity.
CLEAN PRICE
Price of a financial instrument without accrued interest.
CONFIDENCE LEVEL
Measure to describe how certain a statement is. Probability
that a potential loss lies within a range that is
stated as value at risk; the Investkredit Group calculates
it at 99%.
CORE CAPITAL
Term used to describe a bank’s equity. Tier 1, paid-in
capital and capital generated as well as differential
amounts resulting from capital consolidation, less intangible
assets.
CORE CAPITAL RATIO
Ratio of a bank’s core capital to the basis for assessment
(risk-weighted assets including the multiple of
12.5 times required for the trading book).
CORPORATE BOND
Bonds issued by companies on the capital markets.
CORPORATE FINANCE
Corporate banking business including, alongside investment
banking, the structuring of the financing of
special entrepreneurial situations, such as acquisition
strategies, globalisation, MBO/MBI.
CORPORATE GOVERNANCE
Effectively, internationally accepted standards for
managing companies that promote shareholder confidence.
CORPORATE GOVERNANCE CODE
Set of regulations for managing and supervising
(mainly listed) joint-stock companies.
CORPORATE LENDING
Raising and placing capital. Corporate lending instruments
range from internal to external funding. As the
Bank for Corporates, Investkredit concentrates on external
funding: own financing, hybrid financing (mezzanine
capital) and external financing.
COST-INCOME RATIO (CIR)
Indicator of the cost efficiency of companies under
IFRS: The ratio of general administrative expenses to
income (the total of net interest income, net fee and
commission income, the trading result and net income
from investments).
COVENANT
A statement of obligation. An agreement, under
which a borrower is obliged to fulfil certain terms and
conditions during the term of a loan transaction or to
guarantee that certain events will not occur. There is
a distinction between legal and financial covenants.
COVERED BOND
Bond covered by goods.
GLOSSARY
CREDIT DEFAULT SWAP
A credit derivative, similar in structure to a conventional
guarantee. One party (the secured party) makes
a recurrent payment to the other party (transferor of
title) that is essentially determined according to the
nominal value of an underlying financial instrument
(e.g. a bond) and the rating of the relevant address.
In the event of default, the transferor makes good the
loss.
CREDIT EQUIVALENT
Also called credit risk equivalent. Procedure for translating
volatile claims against customers for purposes
of comparability into an equivalent constant claim
over time with regard to risk content. The credit
equivalent consists of the current commitment, a
share of unused credit lines and, in the case of deriv-
117

118 GLOSSARY
atives, sometimes a surcharge for the possible future
increase in the claim. It also corresponds to the
amount for the relevant regulatory credit risk (riskweighted
assets), which must be backed by equity.
CREDIT RISK
The risk of loss following default by a counterparty
that no longer meets its contractually agreed payment
commitments. Credit risk includes default and
sovereign risks as well as worsening of borrowers’
creditworthiness.
CREDIT VALUE AT RISK (CREDIT VAR)
Maximum possible default with a given probability. A
term used by banks in risk management.
CREDITWORTHINESS
The probability with which a current or potential borrower
will be able to generate the economically necessary
profits and to maintain the required ability to pay.
CURRENCY SWAP
Agreement between two contracting parties to exchange
capital and interest payments over a specific
period in different currencies.
DEBT ISSUANCE PROGRAMME
An overall schedule of issues with all kinds of maturities
agreed with an arranging bank.
DEFAULT
Non-performance in a contractual relationship.
DELCREDERE RISK
Delcredere or debtor risk is the risk of a debtor or its
guarantor not being willing or able to pay.
DERIVATIVES
Also called derivative instruments. Financial instruments
that are not shown on the balance sheet and
are therefore not assets as such but are derived from
them. Their valuation is mainly based on the price,
price volatility and price expectations of the underlying
basic instrument (such as shares, bonds, foreign
currencies, and indices). The chief derivatives are
swaps, options and futures.
DIRTY PRICE
The price of a financial instrument including deferred
or accrued interest.
DIVIDEND PER SHARE
The amount of distributed profits attributable to one
share.
DIVIDEND YIELD
Ratio of dividend per share to the share price.
EBRD
European Bank for Reconstruction and Development,
London. Bank set up in 1991 to finance the economic
reconstruction of countries in Central and Eastern
Europe.
ECONOMIC VALUE OF EQUITY (EVE)
Key figure reflecting the economic value of a company.
EIB
European Investment Bank. The European Investment
Bank is the investment bank of the EU, which is intended
to contribute to the balanced development of
the Community by means of long-term financing
transactions (individual and global loans as well as
risk capital financing transactions). Its shares are held
by all of the member states of the EU. Investkredit is
one of the EIB’s partner banks in Austria.
EQUITY INVESTMENTS
Holdings that are significant but not controlled are reported
in the consolidated balance sheet at the level of
pro rata own funds in such holdings. The consolidated
income statement shows the company’s profit/loss for
the year pro rata to the level of the holding.
EQUITY RISK PREMIUM (ERP)
Also called Share Risk Premium. Difference between
the return on equity and on the form of investment
with the least risk (generally government bonds).

EUROSTOXX BANKS
This is the stock index that includes all of the most important
bank stocks in the euro area.
EXTERNAL RATING
Rating awarded by rating agencies (e.g. Moody's,
S&P, Fitch Ratings).
FAIR VALUE
The amount at which assets or liabilities could be
traded between knowledgeable, willing parties in an
arm's length transaction. The fair value is regularly
identical to the market price.
FINANCE LEASE
Also called financial leasing. In the case of financial
leasing the lessee receives the right to use a durable
item for a fairly long term, fixed in advance in return
for the payment of leasing instalments. Financial leasing
is when all of the risks and advantages related to
the leased item are transferred – admittedly not de
jure but de facto – from the lessor to the lessee. With
financial leasing transactions, the term of the lease
coincides with all or most of the useful life of the
leased item. At the end of the lease, the lessee is frequently
entitled to acquire the item for a symbolic
price. The lessor acts purely as a financial intermediary.
Financial leasing may be further broken down
into full and partial amortisation leasing.
FITCH RATINGS
International rating agency with its main registered
offices in London and New York.
FIXED DEPOSIT
A deposit placed on a separate account on the basis
of an agreement with an investor in respect of
amount, maturity and rate of interest.
FLOOR
Contractual agreement on the lowest rate of interest
payable for a predetermined amount of capital in return
for the payment of a one-off fee (the floor premium).
GLOSSARY
FOREIGN EXCHANGE OPTION
In purchasing a foreign exchange option, the buyer
acquires the right, but not the obligation, to buy (call
option) or to sell (put option) a certain amount of foreign
currency at a rate of exchange agreed at the
time of the transaction (the base or strike price).
FORWARD PURCHASE AGREEMENT
Agreement on the purchase of a specific item in the
future at conditions defined in advance (such as the
purchase of a property from a project developer following
completion and the achievement of a certain
level of occupancy).
FULLY CONSOLIDATED COMPANIES
Affiliated companies are fully consolidated if they are
not insignificant. In the course of consolidation, assets,
liabilities, income and expenses are fully incorporated
into the consolidated financial statements after
deduction of consolidation items.
FUTURES
Listed contracts standardised with regard to amount,
quality and date of delivery in which an item traded
in the money, capital, precious metals or foreign exchange
markets is to be delivered or purchased at the
price determined by the stock exchange. Frequently,
in such contracts (for example, on the basis of share
indices), a margin payment is paid in order to meet
the existing commitment (instead of a physical delivery
or purchase of securities).
GLOBAL LOAN
The European Investment Bank (EIB) gives global
loans to partner banks to finance investments by
SMEs or investments for the protection of the environment,
for the infrastructure or energy.
HEDGING
Procedure under which an existing risk item is neutralised
by a countervailing transaction.
119

120 GLOSSARY
HELD TO MATURITY
Category of securities that are assigned to fixed assets
under IFRS and held until they fall due.
HYBRID CAPITAL
Fully paid-in supplementary capital, subordinated
capital, profit-sharing rights as well as a certain
amount of core capital, such as, for example, capital
contributions by dormant partners. In the case of
banks, the capital of a subsidiary that meets certain
criteria and, for capital adequacy purposes, may be
counted as part of a banking group's core capital.
IFRS
International Financial Reporting Standards. Since
May 2002, IFRS has been the overall term covering
both the previous IAS as well as the newly issued IFRS.
Together with the existing IAS and the interpretations
issued by the International Financial Reporting Interpretations
Committee (IFRIC), these standards form a
regulatory framework for international accounting.
IMPAIRMENT TEST
Systematic method for checking necessary unscheduled
depreciation of assets/groups of assets. This
method became known in connection with the amortisation
of goodwill. The cash value of future cash
flows of assets/groups of assets are checked regularly,
or for a particular reason, to see if the value assigned
to them is sustainable. If necessary these assets/
groups of assets are written down to the lower attributable
value.
INTEREST-RATE AND CURRENCY-MANAGEMENT
INSTRUMENTS
Derivative financial instruments that are used to actively
manage interest-rate and currency risks (such as
interest-rate swaps, currency swaps, Forward Rate
Agreements, floors, swaptions, foreign exchange options,
etc.).
INTEREST-RATE OPTION
The right to receive or pay a specified rate of interest
at a specified time.
INTEREST-RATE RISK
Risk of a reduction in revenue or an increase in costs
and a loss in value resulting from a change in interest
rates.
INTEREST-RATE SWAP
Agreement between two contracting parties to exchange
interest payments in the same currency over a
specified period (without movement of funds).
INTERNAL FINANCING
Financing by binding a company's own funds and
holding back distributable but undistributed profits.
INTERNAL RATING
Rating of a corporate by a bank claiming to a qualitatively
comparable rating to the established rating
agencies.
INVESTMENT GRADE
AAA (S&P, Fitch Ratings)/Aaa (Moody's) to BBB- (S&P,
Fitch Ratings)/Baa3 (Moody's). The default risk is low
in this range.
INVESTMENT LOANS
Medium- and long-term loans to finance tangible and
intangible investments.
JOINT LEAD MANAGER
See lead manager.
JOINT MANDATED LEAD ARRANGER
See arranger.
KfW
Kreditanstalt für Wiederaufbau, Frankfurt. The fields of
business of KfW, Germany’s subsidy bank, include investment
finance, export and project finance, financial
co-operation with developing countries as well as consulting
and other services. By providing refinancing
funds at favourable terms, KfW, as well as subsidising
German business, also supports loans to medium-sized
companies in other European countries, including Austria,
via, amongst others, Investkredit.

KYOTO PROTOCOL
Protocol to the Framework Convention on Climate
Control (UNFCCC) that was agreed 1997 at the Third
Conference of the Parties (COP 3). This agreement
contains, above all, the obligation under international
law on the countries listed in Annex B to the Protocol
to reduce their emissions of greenhouse gases by an
aggregate of at least 5.2% compared to the base
year 1990/1995.
LBO
Leveraged Buy-out. Acquisition of a company by
means of a new company specially set up for this purpose,
using more than 50% external financing.
LEAD MANAGER
Financial institution that takes on the organisation of
a financing or a transaction by a syndicate and coordinates
the financing partners and/or investors.
LIQUIDITY RISK
This describes the danger of not being able to free
funds tied up in an investment at any time of the investor's
choosing. Special attention has to be paid to
the liquidity risk in the case of funds invested in developing
markets or shares with narrow markets.
LOAN FINANCING
External financing of a company by means of the issue
of bonds, bank loans and/or trade finance.
MACROHEDGE
Securing a portfolio of financial instruments, as a
rule, by several derivatives.
MANAGEMENT BUY-IN (MBI)
Acquisition of a company by external management
with the support of a bank providing finance and usually
one financial investor.
MANAGEMENT BUY-OUT (MBO)
Acquisition of a company by existing management,
usually with the support of an investor.
MANDATED LEAD ARRANGER
See arranger.
MARGIN
Interest-rate spread. The premium on top of the
“base rate” that is usually expressed in so-called “basis
points” and covers the bank's standard risks, costs
of own funds, liquidity and other costs.
MARKET CAPITALISATION
Corporate value expressed in terms of the prevailing
aggregate value of outstanding shares.
MARK-TO-MARKET VALUATION
Valuation of financial instruments at current market
prices regardless of acquisition costs and taking unrealised
gains into account.
MARKET RISK
The danger of losses in value caused by unexpected
changes in market prices (interest, share prices, exchange
rates, prices of goods) before the affected positions
can be closed out or hedged.
MEDIUM TERM NOTES (MTN)
Medium-term notes.
GLOSSARY
M&A (MERGERS & ACQUISITIONS)
The business of buying, selling and merging companies
– a synonym for advisory activities relating to the
transfer of whole companies or shares in companies
as well as parts of businesses and subsidiaries.
MEZZANINE FINANCING
Chiefly subordinated financing that takes functions
similar to equity. Mezzanine capital occupies a position
between equity and borrowing in the financing
structure.
MICROHEDGE
Securing a financial instrument with a derivative.
MID-CAP-SEGMENT
In Germany this refers to medium-sized transaction
volumes.
121

122 GLOSSARY
MITTELSTANDSBONDS
Mittelstandsbonds – a new financing service provided
by Investkredit Bank AG – are private placements,
with a volume of EUR 5 m upwards, issued by
medium-sized companies. In a second step, these private
placements are bundled into a portfolio – the socalled
“Mittelstandsbond Portfolio” – and made accessible
to institutional investors via the issue of
credit-linked notes of varying levels of risk quality.
This bundling leads to risk diversification and the
achievement of the minimum volumes required for
the capital market.
MOODY’S INVESTORS SERVICE (MOODY’S)
US rating agency.
NON-INVESTMENT GRADE
Also known as sub-investment grade. BB+ (S&P, Fitch
Ratings)/Ba1 (Moody's) to D. Investments in this
range (e.g. high-yield or junk bonds) carry a higher
default risk.
OPERATIONAL RISK
A term used by banks in risk management. The risk of
direct or indirect losses resulting from the failure or
inadequacy of internal procedures, human error, system
failure or external events.
OPTION
The right to purchase (call option) an underlying item
(e.g. securities or foreign currency) from a contracting
party (option seller) or to sell (put option) it to such
party (option writer) at a previously fixed price at a
particular time or in the course of a particular period
in time.
OTC DERIVATIVES
Financial instruments (derivatives) that are not standardised
or listed on a stock exchange but are traded
directly between market participants – over the
counter.
OUTSIDE FINANCING
External financing of companies in the form of bond
issues, bank loans or trade finance transactions.
OWN FUNDS
A company’s risk-bearing capital – in the case of
banks, equity as defined by banking supervisory regulations.
According to the Austrian Banking Act, own
funds are made up of paid-up capital, capital earned
as well as the differential amounts and shares of
other shareholders that arise through capital consolidation
(= core capital/tier 1), supplementary and subordinated
capital (supplementary elements/tier 2) and
unallocated tier 2 capital (= tier 3 capital, mainly
short-term subordinated liabilities).
OWN FUNDS TO BE TAKEN INTO ACCOUNT
Total of a bank’s core capital (tier 1) and supplementary
own funds (tier 2), excluding deductions. This
item covers the own funds required for the banking
book (solvency) and is used as a regulatory measure
for limiting large exposures and for other regulatory
standards. Tier 3 capital is not part of own funds to
be taken into account, and can be used only to cover
the regulatory capital requirement for the trading
book and for the open foreign exchange position pursuant
to the Austrian Banking Act.
PORTFOLIO
Part or all of a collection of assets (e.g. securities,
loans, holdings or real estate). The primary aim of
building up a portfolio is risk diversification. Securities:
a collection of similar transactions, especially of
securities and/or derivatives viewed from a risk/reward
perspective.
PPP
Public-Private Partnership. Co-operation between the
public and private sectors in implementing infrastructure
projects with the goal of structuring the provision
of public services more efficiently by applying the
methods used in the private sector and tapping private
sources of finance.
P/E RATIO
Price-earnings ratio. A frequently used key figure to
compare and value shares. The p/e ratio is the ratio of
the share price to the amount of profit per share generated
by a company. Earnings per share are calcu-

lated by reference to the ratio between the net profit
for the year and the number of outstanding shares.
The p/e ratio is the result of dividing the share price
by the earnings per share.
PRIME MARKET
Generally: the primary or issue market, i.e. the initial
issue of securities and their sale to investors. Shares on
the Vienna Stock Exchange, which are licensed for official
or semi-official trading and conform to particular
additional requirements, are included in the Prime
Market segment.
PRIVATE EQUITY
Equity financing transactions aimed at companies in
mature markets during periods of change or growth.
PROFIT SHARING RIGHTS
Rights granted contractually as would normally pertain
to partners or shareholders, but without entitling
the holder to voting rights, against the payment of
a deposit (cash or payment in kind). This involves,
above all, the rights to participate in profits, co-determination
and receiving information. The motive behind
issuing profit sharing rights certificates is generally
to raise capital. Such capital is generally recognised
as equity.
PROFIT SHARING RIGHTS FINANCING
Financing in the form of rights to participate in profits.
See profit sharing rights.
PROJECT FINANCE
The financing of a particular investment project carried
out by a special-purpose company specifically set
up to carry out the project. The loan is paid back out
of the project company's cash flows. The object of
the investment itself is taken as collateral with the
lender having only limited or no recourse at all to the
project's sponsors. The project partners bear those
risks that they can best control.
RATING
Standardised assessment of a company's creditworthiness.
Statement of the probability of a company to
default or delay payment.
GLOSSARY
RATING AGENCY
Agency that assesses companies’ creditworthiness resulting
in ratings. Market leaders amongst the international
rating agencies are: Moody’s Investors Service
(Moody’s) (US), Standard & Poor’s (S&P) (US) and
Fitch Ratings (UK, US).
RATING REPORT
Investkredit uses its rating report to rate a company’s
creditworthiness. It consists of an analysis of the annual
financial statements, Investkredit's rating, an industry
comparison and definitions of key figures.
REAL ESTATE FINANCING
The financing of all costs arising in connection with
an investment in a piece of real estate. This includes
the development and acquisition costs of a piece of
real estate.
RETURN ON ASSETS (ROA)
Total return on capital, the ratio of pre-tax profit for
the year to average risk-weighted assets.
RETURN ON EQUITY (ROE)
Key figure on a company's income situation: ratio of
profit for the year to average equity.
RISK ASSETS
Banking term. Total of the assets in the banking book
weighted by counterparty risk.
RISK MANAGEMENT
Systematic identification, measurement and management
of risks.
RISK-WEIGHTED ASSETS
Weighted sum based on the risk weighting of the
transactions on and off the balance sheet underlying
the bank’s balance sheet. The result of multiplying the
exposure at default (expected loss upon default/unsecured
portion) by the risk weighting derived from the
rating system (e.g. standard figure depending on a
company’s rating would be 20%, 50%, 100% or
150%).
123

124 GLOSSARY
SEGMENT REPORTING
Term used in IFRS accounting. Disclosure of a company's
assets and income classified by operational divisions
(fields of business) and geographical characteristics
(regions).
SENIOR LOAN
Bank liability (in the form of senior debt) that has to
be serviced before junior debt, mezzanine capital and
risk capital.
SENIOR SECURED CREDIT FACILITIES
Senior secured external financing transactions.
SPREAD
Interest premium, margin measured in basis points.
STANDARD RISK COSTS
Costs covering the expected losses from claims. Based
on historical experience, they cover the loss from loan
defaults to be expected within a year. Along with capital
adequacy costs, they are a fixed component in calculating
the margins on loans.
STRUCTURED FINANCING
The co-ordinated use of loan financing (combined
with funding programmes and interest-rate and currency-management
instruments), equity and mezzanine
or securitised financing instruments. Optimisation
of financing conditions from a tax and company law
aspect.
SUBORDINATED CAPITAL
According to the Austrian Banking Act, this forms
part of supplementary own funds (tier 2), economically
situated between equity and external capital. In
the event of loss, it ranks above equity. In order to be
recognised under the Austrian Banking Act, it has to
fulfil certain criteria relating to maturity and conditions.
SUPPLEMENTARY CAPITAL
According to the Austrian Banking Act, this forms
part of supplementary own funds (tier 2), more similar
to own funds than subordinated capital. In the
event of loss, it is liable after equity. In order to be
recognised under the Austrian Banking Act, it has to
fulfil certain criteria relating to maturity and conditions;
in particular, it may only be repaid after deduction
of all net losses incurred before it matures.
SWAP
Exchange of payment flows.
SYNDICATION
A form of financing, above all for major international
loans. The financing is undertaken by a syndicate of
banks rather than a single bank.
SYNDICATED LOAN
Loan that is granted in portions shared by several
banks.
TIER 1
See core capital.
TIER 2
Supplementary own funds. See own funds.
TIER 3
Third-ranking funds for banks – liable short-term subordinated
capital; only to be used to fulfil the capital
adequacy requirements of the securities trading book
and foreign currency exposure.
TRADING BOOK
Items of a bank’s proprietary trading in financial instruments
that it holds for the purpose of resale or
has taken over to make short-term use of existing or
expected differences between purchase and selling
prices or fluctuations in prices and interest rates.
Items outside the trading book are reported in the
banking book.
TRADING RESULT
Balance of earnings and expenses from a bank’s proprietary
trading in securities, financial instruments
(especially derivatives), foreign exchange and precious
metals that are valued at prices (mark-to-market valuation).
This item also includes that part of current interest,
dividends and refinancing components that is
to be attributed to trading activities.

UNDERWRITING
The obligation on a lender or arranger to make a specific
portion of a financing transaction available, regardless
of whether or not it succeeds in placing a
part of that portion with other lenders.
VALUE-AT-RISK CONCEPT
A term used by banks in credit risk management. Procedure
for calculating potential losses arising from
changes in market prices. Value at risk states the loss
that will not be exceeded under normal market conditions
on the assumption of previously determined
probability (confidence level) within a defined liquidity
period (for example, one day).
VOLATILITY
Indicator of the change in interest rates or prices over
time, in mathematical terms the annualised standard
deviation in interest rates and prices.
GLOSSARY
Further technical terms in German can be found in the glossary database at www.investkredit.at and in “Invest-
Glossar”, Second Edition, published by MANZ, Vienna 2004.
125

126 CORPORATE COMMUNICATIONS SERVICES
CORPORATE COMMUNICATIONS SERVICES
This annual report gives an overview of the Investkredit Group as well as the results for the financial year 2004.
Further technical information on Investkredit and its services may be found in the following publications:
Financial reports
The Annual Report appears once a year in German and English. Besides the Management Report and consolidated
financial statements certified by the auditor, it contains important information on the Investkredit Group
and the year under review. Interim Reports appear three times a year in German and English at the close
of the first, second and third quarters. In these, Investkredit publishes its results for each quarter including
commentary on the course of business and various business activities.
Specialist books
The New Corporate Lending
Strategic Financing with Bank- and Capital Markets-Oriented Instruments published by Wilfried Stadler,
Redline Wirtschaft, Frankfurt, 2004, ISBN 3-636-01086-7
The book is a collection of expert contributions by 30 experienced financing specialists
in the Investkredit Group. It gives the theoretical background to strategic financing
decisions. Starting with the new rules of play – from the bank-oriented to the capital
markets-oriented financing culture – the book covers a range of topics through to
subsidised corporate lending in the enlarged Europe.
InvestGlossar Second Edition
From “AAA” to “Zylinder-Option”. 1,130 German terms from the world of finance published by Investkredit
Bank AG: Second Edition, Manz, 2004, ISBN 3-214-15529-6
The second updated and expanded edition of Investkredit Bank AG’s InvestGlossar contains
1,130 technical terms from the world of corporate lending. It provides companies
and CFOs a handy reference work for modern financial management. The book also
takes account of important definitions related to investment subsidies in an expanded
Europe and the Kyoto Protocol.

Information on the Internet
CORPORATE COMMUNICATIONS SERVICES / IMPRINT
On Investkredit Bank AG’s website www.investkredit.at under “Investor Relations”, up-to-date and extensive
information on the Investkredit Group may be found, such as
> Data about the shares: key data, price movements, dividend information, shareholders, etc.
> Financial reports: annual and interim reports, both interactive and as downloads
> Corporate governance: Board of Management, Supervisory Board, statement of obligation, implementation
> Service: contacts, addresses, ordering service, press and photo archives, financial and events calendar
Online Annual Report
The 2004 Annual Report is also available in a user-friendly online edition on the Internet, in English under
www.investkredit.at/ar and in German under www.investkredit.at/gb. Along with quick access to information
and search functions, you can find specific tables via downloads in Excel and PDF format.
Investor Relations
Investkredit Bank AG, Renngasse 10, A-1013 Vienna
Margot Coosmann-Binder
Tel. +43/1/53 1 35-111
Fax +43/1/53 1 35-983
m.coosmann-binder@investkredit.at
IMPRINT
Hannah Rieger
Tel. +43/1/53 1 35-112
Fax +43/1/53 1 35-983
rieger@investkredit.at
Published by: Investkredit Bank AG, A-1013 Vienna, Renngasse 10
Tel. +43/1/53 1 35-0, Fax +43/1/53 1 35-983, www.investkredit.at, invest@investkredit.at
Editor: Hannah Rieger, Tel. +43/1/53 1 35-112, rieger@investkredit.at
Information on the Financial Statements: Julius Gaugusch, Tel. +43/1/53 1 35-330, gaugusch@investkredit.at
Graphic design and layout: CCP, Heye Werbeagentur GmbH, A-1160 Vienna, Thaliastraße 125B
Photographs: Tombstones by Bernhard Angerer, Portraits by Suzy Stöckl
Printed by: Druckerei Paul Gerin, A-2120 Wolkersdorf, Wienerfeldstraße 9
To order publications: Investkredit Bank AG, Corporate Communications Department, A-1013 Vienna, Renngasse 10
Tel. +43/1/53 1 35-0, Fax +43/1/53 1 35-983, invest@investkredit.at
Note: In adding up amounts and percentages, differences may arise as a result of rounding figures up or down.
The English translation is provided for your convenience, the German original being the authentic text.
Publication deadline: 16 March 2005
127

AUSTRIA
•
Frankfurt
Investkredit Bank AG
Renngasse 10
A-1013 Vienna
Tel. +43/1/53 1 35-0
Fax +43/1/53 1 35-983
invest@investkredit.at
Kommunalkredit Austria AG
Türkenstraße 9
A-1092 Vienna
Tel. +43/1/31 6 31-0
Fax +43/1/31 6 31-105
kommunal@kommunalkredit.at
Europolis Real Estate
Asset Management GmbH
Kolingasse 12
A-1090 Vienna
Tel. +43/1/319 72 00
Fax +43/1/319 72 00-10
vienna@europolis.at
GERMANY
Investkredit
Frankfurt am Main Branch
Lindenstraße 5
D-60325 Frankfurt a.M.
Tel. +49/69/78 80 96-0
Fax +49/69/78 80 96-29
invest@investkredit.de
HUNGARY
Investkredit, Representative
Office Budapest
Köztelek u. 6.
H-1092 Budapest
Tel. +36/1/299 80-10
Fax +36/1/299 80-19
invest@investkredit.hu
Europolis Real Estate
Asset Management Kft.
Köztelek u. 6.
H-1092 Budapest
Tel. +36/1/299 70-90
Fax +36/1/299 70-99
budapest@europolis.hu
as at March 2005
INVESTKREDIT GROUP’S LOCATIONS
•
Prague
Vienna
Malta
POLAND
Investkredit, Representative
Office in Poland
ul. Sienna 39
PL-00-121 Warsaw
Tel. +48/22/850 33-00
Fax +48/22/850 33-01
invest@investkredit.pl
Dexia Kommunalkredit
Polska sp. z o.o.
ul. Sienna 39
PL-00-121 Warsaw
Tel. +48/22/654-3584
Fax +48/22/654-9025
j.rynski@dkp.com.pl
Europolis Real Estate
Asset Management Sp. z o.o.
ul. Sienna 39
PL-00-121 Warsaw
Tel. +48/22/850 33-20
Fax +48/22/850 33-21
warsaw@europolis.pl
•
•
Warsaw
• Zilina
Bratislava
•
Budapest
•
CZECHIA
Investkredit, Representative
Office Prague
Praha City Center
Klimentská 1216/46
CZ-110 02 Prague 1
Tel. +420/236 040-600
Fax +420/236 040-610
invest@investkredit.cz
Kommunalkredit Finance a.s.
Karlova 144/27
CZ-110 00 Prague 1
Tel. +420/221 146-312
Fax +420/221 146-310
f.mach@kommunalkredit.cz
Europolis Real Estate
Asset Management s.r.o.
Karolinská 650/1
CZ-186 00 Prague 8
Tel. +420/233 109-310
Fax +420/233 109-311
prague@europolis.cz
SLOVAKIA
Investkredit, Representative
Office Bratislava
Hurbanovo nám. 3
SK-811 06 Bratislava
Tel. +421/2/5998-6519
Fax +421/2/5998-6526
invest@investkredit.sk
Dexia banka Slovensko a.s.
Hodˇzova 11
SK-010 11 Zilina
Tel. +421/41/5111-135
Fax +421/41/5111-530
info@dexia.sk
KOFIS LEASING, a.s.
Mlynské nivy 48
SK-821 09 Bratislava
Tel. +421/2/582 39-601
Fax +421/2/582 39-609
kofisleasing@kofisleasing.sk
CYPRUS
MALTA
Cyprus
Kommunalkredit
International Bank Ltd
25 Spyrou Araouzou Street
CY-3036 Limassol, Cyprus
Tel. +357/25/820-350
Fax +357/25/820-352
kib@kib.com.cy
Investkredit
International Bank p.l.c.
Airways House, High Street
Sliema SLM15, Malta
Tel. +356/21/335-916
Fax +356/21/335-913
invest@investkredit.com.mt
•

INVESTKREDIT GROUP
KEY FIGURES
1995 – 2004
ANNUAL FINANCIAL STATEMENTS
Austrian Commercial Code IFRS IFRS IFRS IFRS IFRS
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Net interest income (in EUR m) 39.9 43.9 49.3 51.1 62.1 76.4 96.9 104.9 118.0 158.7
Pre-tax profit for the year (in EUR m) 7.9 3.4 11.9 13.7 24.3 32.4 33.8 56.3 72.2 98.8
Net profit (in EUR m) 6.6 1.6 7.2 8.2 17.3 26.8 23.1 32.0 40.8 54.1
Core capital pursuant to the
Austrian Banking Act (in EUR m) 200.6 194.2 209.0 227.9 247.5 272.0 358.3 428.1 535.1 575.9
Own funds pursuant to the
Austrian Banking Act (in EUR m) 279.7 286.0 330.4 372.2 422.0 421.5 550.8 709.7 799.4 903.5
Total assets (in EUR m) 3,885 4,210 4,750 5,298 6,920 8,703 11,194 13,479 16,475 21,446
Number of employees (year-end) 223 225 232 244 269 290 320 372 415 503
Market capitalisation (in EUR m) 156.1 157.2 187.7 204.7 206.0 221.6 230.7 261.1 325.4 820.0
Core capital ratio 8.3% 7.6% 8.1% 8.1% 7.4% 6.4% 6.8% 7.7% 7.9% 6.8%
Total capital ratio 11.6% 11.2% 12.7% 13.2% 12.6% 9.9% 10.4% 12.8% 11.8% 10.7%
Interest margin1) 1.04% 1.09% 1.10% 1.02% 1.02% 0.98% 0.97% 0.85% 0.79% 0.84%
Risk-earnings ratio2) 30.5% 39.0% 25.8% 21.2% 11.9% 8.6% 8.8% 11.8% 7.2% 5.7%
Operating income per employee (in EUR m) 0.23 0.26 0.26 0.26 0.24 0.29 0.33 0.31 0.31 0.34
Profit for the year per employee (in EUR m) 0.04 0.02 0.05 0.06 0.09 0.11 0.11 0.15 0.17 0.20
Cost-income ratio3) 58.4% 53.6% 51.4% 51.8% 54.0% 42.5% 41.8% 44.3% 48.2% 43.4%
Return on risk-weighted assets4) 0.33% 0.14% 0.46% 0.51% 0.79% 0.85% 0.71% 1.04% 1.17% 1.30%
Return on assets5) 0.20% 0.06% 0.20% 0.20% 0.32% 0.39% 0.30% 0.38% 0.40% 0.44%
Pre-tax return on equity6) 4.0% 1.7% 5.9% 6.3% 9.9% 11.8% 12.2% 19.8% 21.9% 26.6%
Return on equity – net profit7) 3.4% 0.8% 3.7% 3.7% 7.0% 9.7% 8.4% 11.3% 12.3% 14.6%
Earnings per share (in EUR) 1.53 1.08 1.36 1.42 2.73 4.23 3.65 5.06 6.45 8.55
1) Ratio of net interest income to average total assets
2) Credit risk provisions (net)/net interest income
3) Cost-income coefficient = General administrative expenses in relation to operating income
4) Risk-weighted all-in equity return = Ratio of pre-tax profit to average risk-weighted assets
5) All-in equity return = Ratio of after-tax profit to average total assets
6) Return on equity = Ratio of pre-tax profit to average equity
7) Return on equity based on net profit = After-tax profit and minority interests in relation to average equity

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PHOTO CONCEPT FOR 2004: THE REPORT
VISUALLY REFLECTS THE BUSINESS
The intention of the 2004 annual report is to make
Investkredit’s business tangible, conveying the essence
of the specialist banking group. The reader is guided
through the annual report by 19 selected transactions –
photographed as tombstones.
It is standard practice in the financial world to publish
successful transactions in the form of such tombstones.
They are produced as advertisements or as actual objects
for display.
To make Investkredit’s function clear in these complex
types of financing, the report has – unlike in real tombstones
– deliberately dispensed with the names of other
financing partners. Quotes from customers and statements
by the Group explain these 19 examples from
Investkredit’s day-to-day business.
Investkredit thanks all customers and partners for their cooperation
and for agreeing to the publication.