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1 1 1 VORARLBERGER LANDESHYPO VORARLBERG BANKUND AG HYPOTHEKENBANK AKTIENGESELLSCHAFT

2 2 CONTENTS 1. Hypo Vorarlberg 2. Core market 3. Business development 4. Liquidity and funding 5. Summary 6. Contacts 7. Appendix

3 3 1. HYPO VORARLBERG Long-standing, straightforward and deeply rooted. For over 120 years, Hypo Vorarlberg has been a partner to the regional population and businesses.

4 4 HYPO VORARLBERG AT A GLANCE Largest single banking institution in Vorarlberg: 717 employees as an average, total assets of EUR 14.2 billion Strong distribution channels in our home market: 21 branches (17 in Vorarlberg) Leading corporate bank in Vorarlberg Approx. 90,000 retail customers Approx. 11,000 business customers High efficiency and productivity: Cost-income ratio % S&P Rating: A (positive Outlook) Moody s Rating: Baa1 (stable Outlook) Financial data: Total assets: Earnings before taxes: EUR 14.2 bn EUR 34.5 mn Cost-income ratio: % Total capital ratio: % CET1 ratio: % Bregenz St. Gallen Bolzano Wels Vienna Graz Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg

5 5 SOLID FOUNDATION Hypo Vorarlberg's core business, in addition to all basic banking services, includes corporate customer transactions, real estate financing and investments. Our three strategic pillars: Corporate bank Residential real estate bank Private bank Financing Subsidies Payment transactions Liquidity equalisation Interest rate and currency hedging Foreign transactions Financing Subsidies Real estate services Asset accumulation Investment advisory service In-house asset management Special funds Specialist for qualitative investment solutions (capital value maintenance concept, long-short strategies)

6 6 HYPO VORARLBERG'S IDENTITY The state's bank Hypo Vorarlberg was founded in 1897 by the Parliament of Vorarlberg. With the State of Vorarlberg as majority shareholder ( %), the bank acts in the interest of the people and corporates in its core regions. The region's bank Hypo Vorarlberg views itself as an independent regional bank, which has its core market in Vorarlberg and the adjacent Lake Constance region. The Bank has established itself in the core regions (Vienna, Graz, Wels) as a business partner for corporate clients and high net worth individuals. The Hypo Vorarlberg Group Hypo Vorarlberg is a comprehensive financial services group. Besides traditional banking products, we offer leasing, insurance and real estate products through our subsidiaries.

7 7 SHAREHOLDER STRUCTURE The State of Vorarlberg (AA+) holds % of the voting rights of Hypo Vorarlberg through Vorarlberger Landesbank-Holding The remaining voting rights are held by Austria Beteiligungsgesellschaft mbh, which is owned by: Landesbank Baden-Württemberg ( %) (A1/-/A-) and Landeskreditbank Baden-Württemberg - Förderbank ( %) (Aaa/AA+/AAA)

8 8 BUSINESS STRATEGY Hypo Vorarlberg's strategy will continue to be characterised by a high degree of continuity. Special attention will be devoted to further expanding our capital and permanently securing a supply of liquidity that is as costeffective as possible. Main focuses Organic growth Wealth Management Primary regions of growth in our private and corporate customers segments are eastern Austria (Vienna, Graz, Wels) and southern Germany. Based on the good development of our private banking and asset management, we are expanding the top segment of our investment business with wealthy private customers and entrepreneurs. Therefore the teams in Vorarlberg and Vienna were increased. Raising productivity We are taking various steps to improve productivity in retail banking. Digitalization Due to changes in customer expectations and chances caused by development of technology, the focus of Hypo Vorarlberg is the further improvement of sales- and distribution channels.

9 9 2. CORE MARKET Grey 'one-size-fits-all' solutions and fleeting finance fashions are not our style. We have a connection with the state of Vorarlberg its traditions, its people and its values.

10 10 ECONOMIC SITUATION AUSTRIAN FUNDAMENTALS Austria Eurozone in % e 2018e e 2018e Gross domestic product, real Inflation (HICP) Unemployment rate Current account balance Budget surplus/deficit (Maastricht) in % GDP Debt to GDP Ratings of Austria Long-term Short-term Outlook Moody's Aa1 P-1 Stable Standard & Poor's AA+ A-1+ Stable Fitch AA+ F1+ Stable DBRS AAA R-1 (high) Stable Sustainable country rating Sustainalytics #5 of 172 nations worldwide oekom research #11 of 57 countries worldwide Source: June 2017

11 11 ECONOMIC SITUATION VORARLBERG AND AUSTRIA Key data Austria Population: 8,700,471 Area: 83,879 km² Capital: Vienna No. of federal states: 9 Key data Vorarlberg Population: 384,147 Area: 2,601 km² Capital: Bregenz No. of municipalities: 96 Vorarlberg 2,601 km² 384,147 P* Salzburg 7,156 km² 545,815 P* Upper Austria 11,979 km² 1,453,948 P* Lower Austria 19,186 km² 1,653,691 P* Vienna 414 km² 1,840,226 P* Burgenland 3,962 km² 291,011 P* Tyrol 12,640 km² 739,139 P* Carinthia 9,538 km² 560,482 P* Styria 16,401 km² 1,232,012 P* * Population (P) Source: WKO statistics ( An overview of Austrian federal states, March 2017

12 12 ECONOMIC SITUATION VORARLBERG AND AUSTRIA In a multiple-year average, Vorarlberg's 2.0 % GDP growth is the highest in Austria. 1 For the medium term, the Austrian Economic Chamber (WKO) GDP forecasts growth of 1.7 % for 2017 and 1.7 % for For the EU (EU 28), it is predicting 1.9 % in 2017 and 1.9 % in 2018.² Real change in GDP ( in %, average per year) 1 Debt per capita 2016 in EUR 3 Vorarlberg 2.0% Carinthia 7,479 Burgenland 2.0% Lower Austria 4,973 Tyrol 1.9% Vienna 3,825 Upper Austria 1.8% Burgenland 3,651 Salzburg 1.5% Styria 3,601 Styria 1.5% Salzburg 3,576 AUSTRIA 1.4% Upper Austria 1,301 Lower Austria Carinthia 1.0% 1.4% AUSTRIA Vorarlberg Vienna 0.9% Tyrol 199,0 2000,0 4000,0 6000,0 8000,0 ¹ Source: WKO statistics ( Basis data for Austrian states, March Source: WKO statistics ( Economic growth change in real GDP in %, May Source: Staatsschulden ( Bundesländer pro Einwohner

13 13 ECONOMIC SITUATION VORARLBERG AND AUSTRIA Unemployment rate 2016 (Labour Force Concept) 1 Economic growth Vorarlberg Salzburg Tyrol Upper Austria Styria Lower Austria Carinthia Burgenland AUSTRIA Vienna 3.4% 3.4% 3.5% 4.4% 5.1% 5.2% 5.4% 5.7% 6.0% 11.3% 00% 02% 04% 06% 08% 10% 12% 05% 04% 03% 02% 01% 00% -01% -02% -03% -04% -05% Vorarlberg Austria At 3.4 %, the unemployment rate in Vorarlberg was far below the Austrian average for Austria has one of the lowest jobless rates in the euro zone. After the lower than average drop of GDP in 2009, Vorarlberg's economy managed a healthy recovery with above-average growth. ¹ Source: WKO statistics ( State statistics, June Source: WKO statistics ( Basis data for Austrian states, March 2017

14 14 ECONOMIC SITUATION VORARLBERG AND AUSTRIA Result Hardfacts Vorarlberg 90 Tyrol 87 Salzburg 69 Burgenland 64 Lower Austria 55 Upper Austria 54 Vienna 45 Carinthia 34 Styria Softfacts Vienna Lower Austria Upper Austria Vorarlberg Salzburg Tyrol Burgenland Styria Carinthia Vorarlberg +++ Tyrol +++ Lower Austria +++ Upper Austria +++ Vienna ++ Salzburg + Burgenland ~ Styria ~- Carinthia max. 100 points max. 80 points HARDFACTS Operational performance: Debt: Assets: profitability (3y), Maastricht result (ESVG RA13) level of debt incl. liabilities, level of debt excl. liabilites leverage, coverage SOFTFACTS Economic power: economic growth, GDP per inhabitant, purchasing power per inhabitant, gross revenues of employed persons Others: unemployment rate, population growth ( ) Source: HYPO NOE Gruppe Bank AG Bundesländer-Vergleich 2015 Österreich (Comparison of federal states of Austria 2015)

15 15 3. BUSINESS DEVELOPMENT A rosy outlook is painted in black figures. For over 120 years, our down-to-earth approach has been paying off.

16 16 BALANCE SHEET AS OF 30 June 2017 Assets (in million EUR) Liabilities and shareholders equity (in million EUR) 2.4 % 1.9 % 3.8 % 5.1 % 5.4% 7.6 % 340, ,0 545,0 720,0 758,0 1083,0 Other assets Cash and balances with central bank Trading assets and derivatives 1.7 % 5.2 % 7.9 % 4.2 % 199,0 270,936 1, ,0 Trading liabilities and derivatives Other - liabilities 8.4 % 1,184 - Financial assets - available for sale 20.1 % 3,151 Shareholders' equity 65.4 % 9,269 Loans and advances to bank Financial assets - at fair value Financial assets - held to maturity Loans and advances to customers 21.2 % 2,349 Amounts owed to banks Liabilities evidenced by certificates Financial liabilities - at fair value 39.6 % 5,405 Amounts owed to customers Total assets: EUR 14.2 billion Total liabilities: EUR 14.2 billion Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg

17 17 TOTAL ASSETS & RESULTS OF ORDINARY BUSINESS ACTIVITIES Total assets (in billion EUR) Results of ordinary business activities (in million EUR) 14, , , ,6 13,2 12, ,00 120,00 80,00 40, , H2017, * H2017 As of 30 June 2017, Hypo Vorarlberg s total assets were at EUR 14.2 billion. In the half year 2017 earnings before taxes amounted to EUR 34.5 million (2016: EUR million). Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg * includes premature repurchase of hybrid loans (Tier 1 capital) worth EUR 39.8 million in 2012

18 18 COST-INCOME-RATIO AND NPL RATIO Cost-income ratio 60% 59.21% 55.27% NPL ratio in % of the maximum risk of default 004% 3.47% 50% 40% 30% 20% 49.20% 49.40% 47.90% 45.90% 45.34% 47.10% 39.70% 003% 003% 002% 002% 1.90% 1.55% 1.57% 1.51% 2.71% 2.58% 1.99% 10% 001% 0% Since several years, Hypo Vorarlberg has one of the lowest costincome ratios of any Austrian bank. 001% 000% The definition of non-performing loans was changed at the beginning of the year 2014 as part of the introduction of Basel III. In December 2016 the NPLs amounted EUR 311,699 (2015: TEUR 565,108). Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg

19 19 BUSINESS SEGMENT DEVELOPMENT Corporate Customers Although risk costs were slightly higher than in the previous year, they still remained comparably low. Overall, the Corporate Customers segment generated earnings before taxes of TEUR 40,367 as at 30 June 2017 (2016: TEUR 35,242), up 14.5 % Private Customers The low interest level is also having an effect, as the Bank currently pays negative interest on its investments with the ECB. Overall, the Private Customers segment generated earnings before taxes of TEUR 1,115 in the period under review (2016: TEUR 3,185). Financial Markets Overall, the Financial Markets segment generated earnings before taxes of TEUR 3,856 as at 30 June The negative figure in the first half of 2016 (TEUR 21,448) was primarily due to remeasurement effects. The further development of the business area in 2017 will largely depend on events on the financial markets. Corporate Centre The Corporate Centre generated earnings before taxes of TEUR 10,819 as at 30 June 2017 (2016: TEUR 11,900). The negative net result from equity consolidation is attributable to a partial write-down of the investment in HYPO EQUITY Unternehmensbeteiligungen AG (HUBAG) in the first quarter Business segment results (in million EUR) Corporate Customers ,8 Private Customers Financial Markets Corporate Center Total (in million EUR) H2016: 28.9 H2017: 34.5 Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg

20 20 CAPITAL: BASEL III Consolidated capital resources in accordance with CRR as of 30 June 2017 Equity in accordance with the CRR amounted to EUR 1,228.7 million as at 30 June 2017 and therefore have again a significant coverage over the statutory minimum requirement. The total capital ratio of Hypo Vorarlberg is % and the common equity tier 1 ratio is %. in '000 EUR Common equity tier 1 capital (CET1) 1,000, ,496 Additional tier 1 capital (AT1) 9,610 9,219 Tier 1 capital 1,010,598 1,005,715 Tier 2 capital (T2) 218, ,814 Capital resources 1,228,725 1,246,529 Common equity tier 1 capital (CET1) 13.29% 13.21% Surplus of common equity tier 1 capital 662, ,009 Tier 1 capital ratio 13.42% 13.33% Surplus of tier 1 capital 558, ,065 Total capital ratio 16.32% 16.52% Surplus of total capital resources 626, ,995 Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg

21 21 PEER GROUP COMPARISON Return on equity (2016) Cost-income ratio (2016) RLB Steiermark SPK Oberösterreich BTV RLB 3.39% 4.40% 6.21% 6.40% RLB Oberösterreich Hypo Tirol RLB Steiermark BTV 71% 71% 67% 65% Hypo Tirol 6.85% SPK Oberösterreich 63% BKS 7.20% Hypo Niederösterreich 56% Oberbank 10.76% Hypo Vorarlberg 55% Hypo 15.20% Steiermärkische SPK 55% Steiermärkische 15.90% BKS 52% Hypo Vorarlberg 16.14% Oberbank 51% 000% 005% 010% 015% 020% For 2015, Hypo Vorarlberg's return on equity made it under the top in Austria. 0% 10% 20% 30% 40% 50% 60% 70% 80% Since several years, Hypo Vorarlberg has had one of the lowest cost-income ratios among Austria's banks. Hypo Vorarlberg's 2015 cost-income ratio of per cent put it in first place among its peers. Source: 2016 annual reports of Hypo Vorarlberg and the peer group

22 22 4. LIQUIDITY AND FUNDING Hypo Vorarlberg has pursued a sound business policy for many years. That policy has paid off especially in troubled times.

23 23 REGULATORY CAPITAL RATIOS BASEL III LCR Common equity tier 1 capital ratio (CET1) % Total capital ratio % Basel III requirements were already met in previous years. The current minimum requirement of the Managing Board at the end of year for CET1 ratio is 13 % and for the total capital ratio 16 %. in million EUR Assets 2,692 Outflows 1,572 Inflows 217 LCR 199 % Our liquidity coverage ratio (LCR) has reached 199 % in the half year 2017, already meeting the legal requirement of 100 %. NSFR The result of our net stable funding ratio (NSFR) as of 30 June 2017 is %. Leverage Ratio The result of our leverage ratio as of 30 June 2017 is 6.41 %. Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg

24 24 REFINANCING STRUCTURE Equity and liabilities (in million EUR) Capital market funding 30 August , , ,0 8000,0 6000,0 532, , , , ,535 4 % 5 % 9 % 11 % 35 % other liabilities amounts owed to banks saving deposits shareholder's equity and supplementary capital 10% 4% 2% 4% 10% 27% Senior unsecured (guaranteed) Senior unsecured (non guaranteed) Mortgage covered bonds Public sector covered bonds Tier ,0 demand and time deposits 43% Pfandbriefbank 2000,0 4796, % liabilities evidenced by certificates Wohnbaubank, Source: Internal diagram. Figures as of 31 December 2016 annual report and internal figure.

25 25 FUNDING Issues by currency Issues by maturity until 2022 (in million EUR) 8% 2% 1% , ,0 EUR CHF , ,720 2,791 JPY CZK , , ,482 89% ,834 Hypo Vorarlberg mainly issues in EUR and CHF. The Swiss market used to be one of the most important markets for medium to long-term funding by Hypo Vorarlberg. Due to the loss of the state deficiency guarantee and the associated forward looking issuance policy, EUR 1,029 million worth of issues will mature in * Including 300 milllion retained covered bonds Source: Internal diagram. Figures as of August 2017.

26 26 FUNDING PLANNING 2017 Private placements (EMTN, SSD, NSV) Public bonds Retail TLTRO 2 Plain vanilla and structured bonds in EUR and CHF (Senior unsecured and mortgage covered) Plain vanilla, structured bonds and Tier 2 bonds EUR 600 million EUR 800 million EUR 100 million EUR 1 billion EUR 2.5 bn (with a possible increase up to EUR 2.7 bn) Source: Internal diagram.

27 27 ISSUANCE STRATEGY In order to refinance our liabilities in 2017, Hypo Vorarlberg launched senior unsecured and covered benchmark issues in addition to private placements and retail funding. In April 2013, we very successfully issued a EUR 600 million benchmark mortgage covered bond. A EUR 500 million senior unsecured benchmark was issued in May In February 2015 a EUR 300 million sub-benchmark mortgage covered bond was issued successfully. In November 2015 Hypo Vorarlberg issued a TAP of this bond (Issue size EUR 200 million). For 2017 we are considering a green senior bond and at least one covered bond benchmark issue. The maturities for the planned senior unsecured and covered benchmark issues will presumably vary between two and ten years. TLTRO 2 brings a new refinancing instrument which could help us to refinance up to EUR 1.4 billion.

28 28 HYPO VORARLBERG RATING Ratings S&P Moody s Covered bonds S&P Moody s Long-term bank deposits A Baa1 Public sector covered bonds - Aa1 Short-term A-1 P-2 Mortgage covered bonds - Aa1 Outlook positive stable CR Assessment - A3 Subordinated debt - Ba1 CB Anchor (CRA + 1 notch) - A2 Sustainability Prime-Rating von oekom research 1 The rating for guaranteed liabilities applies to all transactions concluded before 2 April 2003 as well as to transactions concluded during the transitional period from 2 April 2003 to 1 April 2007 with a maturity no later than 30 September 2017.

29 29 MORTGAGE COVER POOL Data as of 30 June 2017 Legal Basis: Rating: LTV limit: Total issues in circulation in EUR equivalent: Total cover assets in EUR equivalent: Pfandbriefgesetz (Pfandbrief Law) Aa1 60 % (pursuant to articles of association) EUR 2,120 million EUR 3,733 million Nominal surplus cover in %: 76.1 % Number of loans: 16,085 Number of debtors: 11,109 Average cover value: EUR 232,000 Total cover assets CHF in %: 20.4 % Average length capital commitment: 15.0 years Average LTV (Moody s definition)*: 67.6 % Average LTV (Austrian definition)**: 53.4 % * LTV based on rating agency definition: (total receivables per borrower group + total prior encumbrances) total current property values ** LTV Austria Definition: (amount covered per receivable (including subtracted total of prior encumbrances)) current property value

30 EUR million 30 MORTGAGE COVER POOL Seasoning (consolidated) Location of properties by country 1000, ,000 84% 600, , ,000 16% Germany Austria - Maturity 12 months months months months 120 months Interest Type Property Type 3% 3% 14% 80% variable interests fixed interests, 1 to 2 years fixed interests, 2 to 5 years 46% 43% 11% commercial private residential residential, promoted fixed interests, > 5 years Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg

31 EUR million 31 MORTGAGE COVER POOL - REGIONAL DISTRIBUTION OF ASSETS IN AUSTRIA ,, ,, ,, ,, ,, ,, 0,, Vorarlberg Vienna Styria Lower Austria Upper Austria Salzburg Tyrol Carinthia Burgenland Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg commercial residential

32 32 5. SUMMARY

33 33 SUMMARY Largest single banking institution in Vorarlberg Home market in the economically sound Lake Constance region High efficiency and productivity with a cost-income ratio of % as of 30 June 2017 Conservative lending policy and well diversified loan portfolio High profitability in comparison to other Hypo banks figures for June 2017 show good earnings before taxes of EUR 34.5 million. Confirmation of our good credit quality by S&P (A- stable)

34 34 6. CONTACTS

35 35 CONTACTS General Hypo Vorarlberg Bank AG Hypo-Passage Bregenz Austria Phone: +43 (0) info@hypovbg.at Managing Board Michel Haller CEO Phone: +43 (0) Fax: +43 (0) michel.haller@hypovbg.at Dr. Wilfried Amann Member of the Managing Board Phone: +43 (0) Fax: +43 (0) wilfried.amann@hypovbg.at Dr. Johannes Hefel Member of the Managing Board Phone: +43 (0) Fax: +43 (0) johannes.hefel@hypovbg.at Treasury / Investor Relations Florian Gorbach, MSc Head of Treasury Alexander Boor Head of Funding & Investor Relations Sabine Nigsch Communication Phone: +43 (0) Fax: +43 (0) florian.gorbach@hypovbg.at Phone: +43 (0) Fax: +43 (0) alexander.boor@hypovbg.at Phone: +43 (0) Fax: +43 (0) sabine.nigsch@hypovbg.at

36 36 7. APPENDIX

37 37 KEY FIGURES OF HYPO VORARLBERG Change in '000 of EUR in 000 EUR in per cent Total assets 14,164,936 13,324, , Loans and advances to customers (L&R) 9,269,054 9,049, , Amounts owed to customers (LAC) 5,404,687 5,282, , Liabilities evidenced by certificates (LAC) 3,151,373 2,682, , Capital resources in accordance with CRR 1,246,529 1,246,529-17, thereof core capital / Tier 1 1,005,715 1,005,715-4, total capital ratio in accordance with CRR in per cent in '000 of EUR Change in 000 EUR in per cent Net interest income after loan loss provisions 85,835 87,881-2, Net fee and commission income 17,685 16, Net trading result 9,890 1,195 8,695 > 100 Administrative expenses -50,594-49, Operating result before change in own credit risk 33,276 49,015-15, Earnings before taxes 34,519 28,879 5, Key figures Change absolute in per cent Cost-income ratio (CIR) in per cent Return on equity (ROE) in per cent , Employees Source: Quarterly Report as of 30 June 2017 of Hypo Vorarlberg

38 38 PEER GROUP COMPARISON Loan loss provision / loans and advances to customers (2016) Solvency ratio (2016) BKS 001% BKS 14% SPK Oberösterreich 001% BTV 15% BTV 000% Hypo Tirol 15% Oberbank 000% Hypo Vorarlberg 17% Hypo Niederösterreich 000% RLB Oberösterreich 17% RLB Oberösterreich 000% Hypo Niederösterreich 17% Steiermärkische SPK 000% RLB Steiermark 19% Hypo Tirol 000% SPK Oberösterreich 19% Hypo Vorarlberg -001% Steiermärkische SPK 19% RLB Steiermark -001% Oberbank 19% 0% 5% 10% 15% 20% Source: 2016 Annual Reports of Hypo Vorarlberg and the peer group

39 39 PEER GROUP COMPARISON SENIOR RATING Bank Moody's Moody's Ausblick S&P S&P Ausblick Fitch Fitch Ausblick BAWAG P.S.K. A2 POSITIVE - - A- STABLE Hypo Vorarlberg Baa1 STABLE A- STABIL - - RLB Vorarlberg Baa1 STABLE RLB Tirol Baa1 STABLE Raiffeisenverband Salzburg Baa1 NEGATIVE Erste Bank A3 POSITIVE A- POSITIVE A- STABLE Uni Credit Bank Austria AG Baa1 STABLE BBB NEGATIVE BBB+ NEGATIVE RBI AG Baa1 POSITIVE BBB+ POSITIVE WD - RLB Steiermark Baa1 STABLE RLB Oberösterreich Baa2 STABLE RLB Niederösterreich Baa2 STABLE Hypo Tirol Baa2 POSITIVE BBB STABLE - - Österr. Volksbanken AG Baa2 STABLE - - BBB- POSITIVE / *- watch negative / * + watch positive WD = withdrawn Source: Bloomberg as of 01 August 2017

40 40 SECURITIES PORTFOLIO By currency (EUR 2.6 bn) By industry (EUR 2.6 bn) 4% 3% 1% EUR 4% 2% 3% 2% 6% 34% Öffentlich Banken Covered Bonds Banken CHF USD GBP 16% Banken mit Gewährträgerhaftun Banken mit Staatsgarantie Entwicklungsbanken Unternehmen 92% By current rating (EUR 2.6 bn) 33% By national economic risk (EUR 2.6 bn) Sonstiges 8% 5% 5% 3% 3% 3% 1% 2% Aaa 5% Aa1 27% Source:Internal diagram. Figures as of 30 June % Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 < Baa3 28% Österreich 34% Frankreich Deutschland Niederlande Schweiz 3% United Kingdom 3% Norwegen 4% Sonstige 7% 12% 9%

41 41 FUNDING Funding instruments Private placement of EMTN & registered securities Plain vanilla and structured bonds covered bonds and senior unsecured Public bonds Covered bonds and senior unsecured Retail Plain vanilla and structured bonds Hypo Vorarlberg is a flexible issuer that addresses both national and international investors. At present, we have a total outstanding volume of EUR 6.5 billion (as of 30 August 2017). Debt issuance programme Programme for offering structured securities Arranger: Landesbank Baden-Württemberg Volume: EUR 7,000,000,000 Bonds: Covered bonds, senior unsecured and subordinated Currencies: All currencies Stock market listing: Luxembourg, Vienna and/or as arranged Applicable law: German law Purpose: Bonds: Currencies: Stock market listing: Applicable law: Basic prospectus in German for retail customers Covered bonds and senior unsecured All currencies Vienna Austrian law EUR 150,000,000 Additional Tier 1 Notes Programme Prospekt für Wandelschuldverschreibungen der Hypo-Wohnbaubank

42 42 BENCHMARK MORTGAGE COVERED BOND DEBUT Transaction details Issuer: Hypo Vorarlberg Bank AG Rank: Mortgage covered bond Rating: Aaa (Moody's) Issue volume: EUR 600 million Denomination: EUR 100,000 Term: 7 years, from 23 April 2013 to 23 April 2020 Coupon: 1.250% p.a. (yearly, Act/Act) Re-offer spread: MS +20 bp Re-offer price/yield: %/1.359% p.a. Listing: Vienna Stock Exchange ISIN and WKN: XS and A1HJXT Bank syndicate: Barclays, Credit Agricole CIB, DZ Bank, LBBW, UniCredit Key points of the transaction After the road show concluded, Hypo Vorarlberg successfully issued a mortgage covered bond. The issue was announced on 16 April 2013 at 9:00 a.m. with IPTs of MS + low to mid-20s. The books were officially opened at MS +20/22 bps. With over EUR 2.1 billion and 120 individual investors, the order book was closed one hour later. In reaction to the strong demand, the originally planned issue volume of EUR 500 million was raised by EUR 100 million. The spread was fixed at MS +20 bps. Transaction spread trend Geographic distribution Germany: 69.6 % Austria: 10.3 % Scandinavia: 9.2 % Benelux: 3.1 % UK: 2.5 % Asia: 1.7 % Switzerland: 1.3 % Other: 2.3 % Investor distribution Banks: 49.9 % Asset managers: 26.7 % Insurances: 14.6 % Central banks/ official institutions: 8.2 % Businesses: 0.6 % Source: Bloomberg

43 43 SENIOR UNSECURED BENCHMARK Transaction details Issuer: Hypo Vorarlberg Bank AG Rank: Senior Unsecured Rating: A1 negative (Moody's) Issue volume: EUR 500 million Denomination: EUR 100,000 Term: 5 years, from 22 May 2014 to 22 May 2019 Coupon: 1.50% p.a. (annual, act/act ICMA) Re-offer spread: MS +82 bp Re-offer price/yield: %/1.581% p.a. Listing: Luxembourg ISIN and WKN: XS and A1ZJT3 Bank syndicate: BNP Paribas, Credit Agricole CIB, Erste Group, HSBC, LBBW Key points of the transaction Hypo Vorarlberg successfully priced its inaugural senior unsecured benchmark transaction after a pan-european roadshow in February. Due to negative news flow on Hypo Alpe Adria and the Ukraine crisis, the transaction was not executed directly after the roadshow. The issue was announced on 15 May 2014 at 9:05 a.m. with IPTs of MS bp. The high granular order book was building-up steadily. At 12:15 p.m. the books closed and the spread was fixed at MS +82 bp resulting in a coupon of 1.5 %. The order book closed with a final order volume over EUR 500 million from more than 100 investors. Geographic distribution Germany: 46.8 % Austria: 30.4 % Nordics: 7.2 % France: 4.8 % UK: 3.6 % Switzerland: 2.0 % CEE: 1.6 % Others: 3.6 % Investor distribution Banks: 49.7 % Regional Banks: 23.7 % Asset Managers: 18.1 % Insurance Companies: 8.0 % Central Banks: 0.5 % Transaction spread trend Source: Bloomberg

44 44 SUB-BENCHMARK MORTGAGE COVERED BOND Transaction details Issuer: Hypo Vorarlberg Bank AG Rank: Mortgage covered bond Rating: Aaa (Moody's) Issue volume: EUR 300 million Denomination: EUR 100,000 Term: 10 years, from 11 February 2015 to 11 February 2025 Coupon: % p.a. (yearly, act/act ICMA) Re-offer spread: MS +7 bp Re-offer price: % Listing: Vienna Stock Exchange ISIN: XS Bank syndicate: DZ Bank, LBBW, RBS Key points of the transaction Hypo Vorarlberg successfully issued a EUR 300 million mortgage covered bond. The issue was announced on 04 February 2015 at 9:15 a.m. with IPTs of MS +10 bps. The books were officially opened at MS +8 bps. With over EUR 700 million and 44 individual investors, the order book was closed approximately one hour later. The spread was fixed at MS +7 bps resulting in a coupon of %. Transaction spread trend Geographic distribution Germany: 53 % Austria: 39 % UK: 3 % Asia: 3 % Others: 2 % Investor distribution Regional banks: 29 % Central banks / official institutions: 28 % Banks: 24 % Asset managers: 10 % Insurances: 9 % Source: Bloomberg

45 45 TAP - SUB-BENCHMARK MORTGAGE COVERED BOND Transaction details Issuer: Hypo Vorarlberg Bank AG Rank: Mortgage covered bond Rating: Aaa (Moody's) Issue volume of the TAP: EUR 200 million Denomination: EUR 100,000 Term: 17 November 2015 to 11 February 2025 Coupon: % p.a. (yearly, act/act ICMA) Re-offer spread: MS +22 bps Re-offer price: % Listing: Vienna Stock Exchange ISIN: XS Bank syndicate: DZ Bank, LBBW, Erste Group Key points of the transaction Hypo Vorarlberg successfully issued a TAP of the EUR 300 million mortgage covered bond. The issue size of the TAP was EUR 200 million. The books were officially opened at MS +23 bps. With over EUR 270 million and 32 individual investors, the order book was closed approximately one and a half hour later. The spread was fixed at MS +22 bps. Transaction spread trend Geographic distribution Austria: 62.0 % Germany: 35.3 % UK: 1.2 % France: 1.0 % Switzerland: 0.5 % Investor distribution Banks: 33.8 % Central banks / official institutions: 32.5 % Insurances: 21.2 % Asset managers: 12.5 % Source: Bloomberg

46 46 RELATIONSHIP TO THE FEDERAL STATE State deficiency guarantee In the event of default, the state of Vorarlberg will cover all liabilities incurred by Hypo Vorarlberg in the past according to the following rules: Timely unlimited deficiency guarantee All liabilities entered into before 3 April 2003 All new liabilities entered into between 3 April 2003 and 1 April 2007, on the condition that the term does not extend beyond 30 September 2017 Timely limited deficiency guarantee No deficiency guarantee - All new liabilities entered into between 3 April 2003 and 1 April 2007 and with terms beyond 30 September All new Hypo Vorarlberg liabilities entered into after 1 April 2007

47 47 VERBAND DER ÖSTERREICHISCHEN LANDES- HYPOTHEKENBANKEN (Association of Landes-Hypothekenbanken) The Association's primary task is to preserve and promote the general interests of its members. Association of Austrian Landes-Hypothekenbanken 9 mortgage banks and HETA ASSET RESOLUTION AG 4 extraordinary members Joint institutions Fachverband der Landes-Hypothekenbanken (Professional Association of State Mortgage Banks) Specialist representation for the industry as part of the Austrian Economic Chamber, Federal Loan Division Hypo-Haftungs-Ges.m.b.H Mandated with overseeing statutory deposit insurance for the Professional Association of State Mortgage Banks Pfandbriefstelle der österreichischen Landes-Hypothekenbanken respectively Pfandbriefbank (Österreich) AG Joint issuing institution for mortgage banks Sum of trust liabilities as of 31 December 2014: EUR 5.49 billion Hypo Wohnbaubank AG Special bank for financing residential construction in Austria Hypo-Banken Holding Ges.m.b.H. Holding company for managing continuous mortgage bank investments

48 48 PUBLIC SECTOR COVER POOL Data as of 30 June 2017 Legal basis: Rating: Total issues in circulation in EUR equivalent: Total assets in EUR equivalent: Pfandbriefgesetz (Pfandbrief Law) Aa1 EUR million EUR million Nominal surplus cover: 52.8 % Weighted average life (WAL) for assets (contractual): 10.6 years Number of assets: 448 Number of debtors: 138 Number of guarantors: 47 Average asset volume per financing: EUR 2.2 million

49 49 DISCLAIMER All rights reserved for Hypo Vorarlberg Bank AG. This document was created by Hypo Vorarlberg Bank AG exclusively for the purpose of giving corporate presentation by Hypo Vorarlberg Bank AG. This presentation may only be shown to business customers and institutional clients. This document may not be changed or shared with third parties without the express consent of Hypo Vorarlberg Bank AG. Anyone in possession of this information or document is obliged to learn about the legal regulations governing possession and sharing of such information and comply with those regulations. This presentation may not be shared with or transmitted to any country with laws restricting the sharing or transmission of such information. This presentation is exclusively for general information purposes. It does not represent an offer to conclude an agreement on the provision of investment advisory services or the purchase of securities. Where this presentation cites information not originating from Hypo Vorarlberg Bank AG or not produced at its request, such information has been compiled from sources deemed trustworthy without being verified. For this reason, Hypo Vorarlberg Bank AG assumes no guarantee that such information is complete or correct. Hypo Vorarlberg Bank AG assumes no responsibility or liability whatsoever for expenses, losses or damage from or in connection with the use of all or part of the information contained in this presentation. This presentation may contain forward-looking statements concerning future expectations and other forward-looking statements or information about future predictions of developments based on current planning, opinions and/or assumptions. Such statements are made subject to known or unknown risks and uncertainties that are generally difficult to predict and beyond the control of Hypo Vorarlberg Bank AG. This may result in material differences between the results, performance and/or events implied in these statements and the actual results posted in the future. Hypo Vorarlberg Bank AG assumes no obligation to publicly update or revise its forward-looking statements on the basis of new information, future events or for other reasons.

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