The Company Bank Austria Creditanstalt

“In line with our slogan “Banking for success” we want to build and grow with our customers.
Open new markets, find new business partners, implement new technologies. What applies to our corporate customers also applies to ourselves: growth, productivity and efficiency. And the optimal employment of capital. Our private customers also attach increasing importance to efficient advisory services. To this end we must constantly adapt and keep fit. Profitability is a good signpost for promising future development.“

Erich Hampel, Chairman of the Managing Board of Bank Austria Creditanstalt AG

Bank Austria Creditanstalt is the bank for a growing Europe. Our company cares for over six million customers from twelve countries. Our network of operations extends over and beyond the former East-West borders. As a bank, we combine the experience obtained through our mature market in Austria with the opportunities offered by our growth market: in Austria, we want to expand our leading market position through enhanced performance and a modernisation process; in Central and Eastern Europe our goal is to become market leader.

These ambitious goals of Bank Austria Creditanstalt are the result of the bank’s evolution since its foundation: following the integration of Austria’s two leading banks in 1997, the bank became a pacesetter in the areas of consolidation, flexibility and market penetration, and modernisation. Its integration with HypoVereinsbank in 2000/2001 has been the only significant cross-border integration of banks in Europe to date. This move gave Bank Austria Creditanstalt the size and risk-bearing capacity it needed to effectively operate in CEE, which is what the bank envisaged from the very start. The IPO in 2003 served a twofold purpose for Bank Austria Creditanstalt: it strengthened its capital base and to a great extent made its business model and specific role within HVB Group transparent.

Today, Bank Austria Creditanstalt’s market value is about € 11 bn, with shareholders’ equity of € 6.6 bn. At year-end 2004, the bank had total assets of € 147 bn, and risk-weighted assets totalled € 71 bn. BA-CA is the leading bank in Austria with total assets of € 117 bn and a market share of 18%.

In CEE the bank operates with € 30 bn in total assets and maintains the most extensive network of offices. The bank’s market share is over 5% in five countries, and over 10% in two other countries (Poland and Bulgaria).

Bank Austria Creditanstalt operates in a defined region which is home to 125 million persons; the regions covered by the entire HVB Group have over 400 million inhabitants. In Austria we meet the needs of 1.8 million customers, and in CEE at present those of 4.5 million customers, of which 2.9 million are in Poland. Our vision is to operate in this market, which will in the not too distant future be just one single market with identical competitive conditions, as a bank with a network of regional units benefiting from supra-regional expertise. The interaction of decentralised and supra-regional responsibilities is the basic idea behind the “Bank of the Regions” concept. The first round of EU enlargement in May 2004 has brought us a great deal closer toward realising our vision. This is where our future lies; there is still much to do in the way of tapping potential.

The combination of Austria and CEE – a mature and a growing market, an overbanked and an underbanked market – also offers significant “synergies” in a broader sense, whose implications have not yet been recognised everywhere: the interaction provides us with new impetus: experience and capital from the early EU countries, new blood from the new EU countries and from the candidate countries, and both sides widen their respective horizons. We are also in the process of establishing a single market in our bank. We want to benefit from the larger pool of ideas through open exchange – yes, also through internal competition in regard to location.

As a listed company we live on the capital market. As a bank we selectively take risks into our books, that is our business, and for this purpose we raised capital on the market. In a time where capitalism is again the target of growing criticism, we want to clearly state that the commitment to the profitable employment of capital is not an external compulsion but a challenge which we will meet.

We want to create value! Increasing the value of our company for our owners and the bank’s net asset value through sustainable profitability in our customer business are one and the same thing; this is our primary objective.

We want to grow profitably! Through the optimal employment of the capital raised, we also fulfil an economic function. Our new value-based management system helps us to identify business sectors in which the return exceeds the cost of capital. It pinpoints the weaknesses and sharpens our focus on the areas in which profitability has to be increased. We are not thinking in shortsighted terms of today and tomorrow, nor in terms of stop and go. Instead, we have our sights on sustainable growth in earnings power and corporate value.

As bankers, we are dedicated to serving our customers! As a provider of services, we apply international standards in serving people in the countries in which we are active. We want to provide our customers with orientation in their respective markets and increase the transparency of the manifold opportunities open to them through our competence in advisory services. In this way both customer requirements and business efficiency coincide.

The retail segment encompassing private customers as well as small and medium-sized companies is of particular importance to us. In 2004 we thus started a retail initiative. This market segment is currently enjoying high growth rates and also promises high returns. We will increasingly make our expertise available to this market segment – expertise which we have built up in Austria in the fields of campaign management, dynamic target group segmentation and standardised product packages, in short in the “industrialisation of business”.

In corporate customer business in Austria, given the structure of the country’s economy, our primary target group is medium-sized companies. In this market segment we enjoy a competitive advantage in that, in addition to classic loans, we can offer capital market-related solutions, to which only large corporates had access until now. With our Integrated Corporate Finance approach we want to assist our corporate customers in moving closer to the capital market.

In international corporate customer business, a cooperation between international expertise and local customer service characterises our work throughout our core markets. As far as the increasing integration of industry and commerce are concerned, we offer customers not only our network of offices but also the necessary range of products. With our major cross-border solutions such as public private partnership models, syndications and company mergers, we contribute to improving the infrastructure of the enlarged internal market.

By way of successful proprietary trading our financial markets team has proved that it can handle risks, volatility and new markets just as efficiently as mainstream instruments. Implementing this expertise in customer business is one of the focal points of the International Markets segment.

We are working on developing a corporate culture characterised by performance and knowledge, by pleasure in work and by the claim of being among the very best. Internally we primarily want management through transparency. By disclosing and recognising performance, we provide assistance in self-monitoring. We keep the bank fit through benchmarking and learning from the best over and beyond the banking industry. We apply the same standards to all regions. By way of training and development, we want to enable our employees to be among the top performers, both individually and as a team. For this reason we will recognise and reward performance to a greater degree than until now.