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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