Network and Position

With almost 1,000 offices in 11 countries, Bank Austria Creditanstalt has the most extensive network in Central and Eastern Europe. Including some 400 branches in Austria, the bank’s network extends from Lake Constance to the Black Sea, and from the Baltic to the Southern Adriatic. More than 4.5 million customers in CEE are served by about 18,000 employees. We aim to further expand this network through organic growth and, as and when opportunities arise, through acquisitions. In 2004 Bank Austria Creditanstalt made use of acquisition opportunities in Bulgaria (Hebros Bank) and in Serbia and Montenegro (Eksimbanka). Using our long-standing integration experience we will integrate these two banks into our existing network.

Further expansion of the position in CEE
In 2004 we continued to further expand our position in Central and Eastern Europe. In major markets like Poland and Bulgaria we are among the top 3 banks, with a market share (measured by total assets) of around 10%. In other CEE countries, Bank Austria Creditanstalt has a market share of at least 5%; only in Romania is the figure somewhat lower. We are thus close to achieving our target of reaching a market share of between 5% and 10% in each country. Bank Austria Creditanstalt’s results have increased in line with the high rates of economic growth in the various countries, some of which far exceed 4%, and the related expansion of business. Over the past three years, the combined net income before taxes of all consolidated banking subsidiaries has increased by one-third annually, to € 486 m at the end of 2004. In the same period, total assets grew by 12.5 % annually to € 29.4 bn. Thus the income components rose more strongly than the volume components. As at the end of 2004, the ROE was 18.9%, up from 14.4% for 2003. Growth is also reflected in rising business volume: lending grew by one-quarter to € 17.4 bn. Deposits increased at almost the same pace, rising by 24% to € 16.9 bn.

The CEE business segment is characterised by expansion and productivity growth: net income before taxes generated by the business segment in 2004 was € 362 m, more than double the figure of € 151 m for the previous year. In 2004, the CEE business segment made a contribution of over 43% to the bank’s overall net income before taxes, while only 27% of total equity was allocated to the business segment. The ROE thus rose from 17.3% to 21.5%. We are on track towards reaching our ROE target of 25% by the end of 2006. Details of the CEE segment result are given in the Management Report of the Group.