Our Financial Targets and Their Implementation

“In order to be among the best, our performance has to meet the demands and expectations of our customers and shareholders. Our success is determined by competition for customers and capital.
Our customers expect top performance, innovation and reliability, and our shareholders expect a return matching the best in the market. For this reason we have firmly established a value-based management system (AVE) in the Group, in order to achieve our financial goals by targeted allocation of capital. The trend in our market capitalisation shows that we are going in the right direction.”

Stefan Ermisch, Managing Board member, Chief Financial Officer

Bank Austria Creditanstalt wants to be the leading bank in its core markets and core business. We fulfil an important task in HVB Group with our business model, which combines the mature Austrian market with growth markets. The stock market has clearly recognised this vision. Our owners and investors value Bank Austria Creditanstalt at € 11 bn, an increase of 85% since the beginning of 2004. This high stock market valuation anticipates future strong growth in profits.

We want to improve our performance in customer business and continue to develop our business portfolio to fulfil these expectations. Top-down requirements, i.e. the value growth we seek to achieve as expressed in planning targets, and numerous concrete bottom-up measures for enhancing earnings from our business are thus two aspects of the same topic. Through our newly structured planning and monitoring process we combine these two aspects – external demands and internal performance.

In line with the principle of value-based management we want to create value for our owners. This is not a one-dimensional concept. It includes not only the restructuring aspect but especially also the growth aspect. To create value we will expand in those business segments and sectors which generate a return above the cost of capital, and we will primarily allocate capital to these areas. In business segments and areas with inadequate returns we will do our utmost to raise the ROE to a level above the cost of capital.

The bank’s multi-stage management system uses the benchmarks of our medium-term planning, which are derived from a comparison across benchmark banks in our peer group, in line with capital market practice. Controlling operationalises these targets at the level of group and segment management (macro level) and breaks them down to the individual product level (micro level).