Erste Bank JPMorgan Merrill Lynch International

individual subsidiaries are responsible for fulfilling local equity capital regulations. In growth phases
the equity capital stock of subsidiaries is ensured by Wiener Städtische AG and by profit retention.
Compliance with the provisions concerning equity capital stock is monitored by the national supervisory
agencies and the adjusted equity capital stock by the Austrian supervisory agency for the
financial market. Wiener Städtische AG and all of its Group companies received sufficient funds at a
consolidated basis at all legally prescribed balance sheet dates.
On March 27, 2008, based on the financial statements and the consolidated financial statements
at December 31, 2007, S&P’s awarded Wiener Städtische AG an IFSR of “A+ with positive outlook”
and the Counterparty Credit Rating (CCR) of “A+”, see “Business – Credit Rating”.
Dividends
In 2007, 2006 and 2005, Wiener Städtische AG distributed dividends for fiscal years 2006, 2005
and 2004 totaling EUR 86.1 million, EUR 69.3 million, and EUR 39.8 million respectively, which
corresponds to a distribution rate of 32.6% (2006), 34.9% (2005), and 32.7% (2004), respectively, of
the consolidated profit for the period.
The Vienna Insurance Group pursued a dividend policy in the CEE region, according to which the
earnings will be retained and used for further growth of the respective country.
Debt financings
In January 2005, Wiener Städtische AG issued supplementary capital bonds maturing in 2022 in
the total nominal amount of EUR 180 million (“supplementary capital bonds”), and variable capital
bonds in the total nominal amount of EUR 120 million (“variable supplementary capital bonds”). The
supplementary capital bonds have a fixed interest rate of 4.625% for the first 12 years and thereafter
the interest rate is equal to the six-month Euribor plus a 1.90% margin. During the first year, the
variable supplementary capital bonds have a fixed interest rate of 4.25%, and thereafter accrue
interest at variable rates. During the following eleven years, the rate is linked to the 10-year Constant
Maturity Swap (“CMS”), plus a 0.085% margin (at a minimum, however, 2% per annum), and as of the
13th year, it is linked to the six-month Euribor plus a 2.02% margin. Wiener Städtische AG may
redeem both issues at the earliest after 12 years.
In 2004, DONAU issued supplementary additional capital bonds without a fixed term in an
aggregate nominal amount of EUR 61.5 million. In 1999, DONAU issued supplementary capital bonds
without a fixed term in an aggregate amount of EUR 14 million.
In 1998, UNION (into which BA-CA Versicherung was merged in 2007) issued additional capital
bonds without fixed term in an aggregate nominal amount of EUR 8.7 million. In 2001, additional
capital bonds without fixed term in an aggregate nominal amount of EUR 9.0 million. In 2004, UNION
floated a supplementary equity loan in a volume of EUR 25 million, whose term is 10 years.
In 1998, BA-CA Versicherung issued a capital bond without a fixed term in an aggregate nominal
amount of EUR 7.3 million. In 2001, additional capital bonds in an amount of EUR 6.0 million were
issued. In 2004, BACA Versicherung issued supplementary capital bonds with a 10-year term in an
amount of EUR 25 million.
In addition, the Vienna Insurance Group took out loans from Bank Austria Creditanstalt AG and
Erste Bank AG that mature in 2011. As of December 31, 2007, the amount outstanding on these
loans is EUR 53.5 million.
The increase in the Group’s liabilities is predominantly due to the first-time consolidation of nonprofit
housing development companies, which primarily finance their residential buildings using bank
loans and government grants.
Investments
The most significant investments of the Vienna Insurance Group in fiscal years 2007, 2006 and
2005 were investments in insurance companies. The following table provides an overview of the most
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