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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-