Bank Austria Öffentliche Pfandbriefe (Public Sector Covered Bonds) May 2012
Agenda UniCredit / Bank Austria: Overview Public Sector Covered Bond of Bank Austria Austrian Legal Framework Pfandbriefe 2
Agenda UniCredit / Bank Austria: Overview UniCredit Bank Austria Public Sector Covered Bond of Bank Austria Austrian Legal Framework Pfandbriefe 3
UniCredit A unique positioning in mature Western European markets and fast growing CEE economies Austria (AAA sovereign rating) Rank & Market Share #1 with c. 16% Loans ( bn) 63.5 Deposits ( bn) 47.5 FTE (#) 7,908 Germany (AAA sovereign rating) Rank & Market Share #3 with c. 3% Loans ( bn) 136.4 Deposits ( bn) 105.2 FTE (#) 19,552 Sept. 11 RWA breakdown Austria 7 Italy 37 % Germany 25 5 7 18 Poland Other CEE Italy (A3 sovereign rating) Rank & Market Share #2 with c. 13% Loans ( bn) 279.7 Deposits ( bn) 161.4 FTE (#) 61,694 Rank & Market Share #1 with c. 7% Loans ( bn) 88.4 Deposits ( bn) 79.5 FTE (#) 71,399 Sept. 11 Deposits breakdown CEE Countries & Poland % Italy 33 Other 8 12 14 CEE Austria 6 27 Germany Poland 4 Unique European Franchise Main bank for 20m families and 2m businesses Data as of September 2011, Market share calculated on Loans (as of June 2011), Moody s Country Ratings as of February 2012
Agenda UniCredit / Bank Austria: Overview UniCredit Bank Austria Public Sector Covered Bond of Bank Austria Austrian Legal Framework Pfandbriefe 5
Bank Austria at a Glance Best-capitalised Banking Group in Austria ~ 1.8 mn Customers in Austria ~ 18% Customer Share Retail Segment Member of UniCredit Bank Austria - strong in Austria and CEE Up to 89% Customer Share in Corporates Presence in 18 CEE Countries ~3,000 Outlets in A & CEE ~60,000 FTE in A & CEE 6 CEE = Central and Eastern Europe FTE = Full-Time Equivalent (As of 31 March 2012)
Net Operating Profit and Net Profit Net operating profit significantly higher q/q and y/y Net Operating Profit (1) ( mn) Net Profit (2) ( mn) +20% +17% 566 399 566 473 340 473 424 431 401 1Q11 2Q11 3Q11 4Q11 1Q12 1-3/2011 1-3/2012 1-3/2011 1-3/2012 Net Operating Profit +20% above previous year also due to lower loan loss provisions and a one-off effect (buy-back of hybrid instruments in 1Q12) Net Profit attributable to the owners of the parent company: 399 mn (+17% y/y) 7 1) Operating Profit after Net Write-downs of Loans 2) Net Profit attributable to the owners of the parent company
Net Operating Profit Details Benefits from positive evolution of LLP Net Operating Profit Composition ( mn) Share of Divisions Net Operating Profit by region (%) Operating income Costs LLP 473 424 431 401 566 473 566 Austria 29% 1,783 1,811 1,783 1,725 1,717 1,723 1,811 71% CEE -934-972 -957-1,005-961 -376-329 -330-317 -284 1Q11 2Q11 3Q11 4Q11 1Q12-934 -376-961 -284 Stable development of core revenues (net interest, fees) Increase in costs due to business expansion and bank levies in Austria and CEE 8 1-3/2011 1-3/2012 Reduction of loan loss provisions confirmed, in particular in CEE
Balance Sheet Balance sheet ( mn) as at 31 March 2012 Loans and receivables with banks 200,874 27,094 200,874 32,715 Deposits from banks Loans and receivables with customers 133,361 105,423 Deposits from customers 30,269 Debt securities in issue Other Financial Assets Other Assets 29,660 10,760 13,907 18,561 Other Liabilities Equity Assets Liabilities 9 Total assets increased slightly to 201 bn in 1Q12 ( 199.2 bn at YE11) Classical commercial bank - customer loans and customer deposits represent a high share in the overall balance sheet Solid capital base of 18.6 bn
Business Volumes Positive commercial performance in CEE and Austria Loans to Customers ( mn) CEE Austria Deposits from Customers ( mn) CEE Austria 128,577 131,617 +3.7% 131,125 134,914 133,361 98,518 98,224 +7.0% 103,209 104,728 105,423 65,462 67,444 67,632 70,352 71,025 51,836 51,518 55,756 57,140 56,447 63,115 64,174 63,492 64,562 62,335 46,682 46,706 47,453 47,588 48,976 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 Loans/Direct Funding Ratio 4Q11 1Q12 100.6% 102.2% 98.0% 100.2% 10 Loans to customers up by nearly +5 bn (+3.7%) y/y mainly due to increase in CEE Deposits with customers increased by nearly +7 bn (+7%) y/y, especially in CEE Loans/Direct Funding Ratio: Ratio of customer loans/primary resources (customer deposits and debt securities in issue) below 100%, ensuring a healthy equilibrium of business volumes and a sound base for further business development
Capital position Stable development of RWA and of Core Tier 1 Ratio Capital Ratios Total Capital 10.92% 12.13% 10.35% 12.68% 10.88% 12.23% 10.72% Core Tier 1 ratio stands at 10.50% hereby exceeding the ratios of most Austrian competitors Tier 1 8.68% Safe capital base as Bank Austria unlike its Core Tier 1 8.33% 10.04% 10.55% 10.50% main competitors did not take up state capital which would be to be repaid at a later stage 2009 2010 2011 1Q12 Stable development of RWA Regulatory Capital ( bn) Risk-Weighted Assets ( bn) Total Capital Hybrids Tier 1 Core Tier 1 12.5 2.6 0.4 9.5 15.5 2.3 0.4 12.8 15.9 2.3 0.4 13.2 15.4 1.9 0.3 13.2 Total RWA Market risk Operational risk Credit risk 114.4 3.0 9.7 101.6 127.9 2.8 11.7 113.3 1) 125.2 4.1 11.9 109.2 125.6 3.6 12.8 109.2 11 2009 2010 2011 1Q12 2009 2010 2011 1Q12 1) Increase vs. 2009 driven by CEE and CHF loans
Rating Overview Moody's S&P Fitch Short Term Long Term Subordinated 1) Short Term Long Term Subordinated 1) Short Term Long Term Subordinated 1) P-1 A2 A3 A-1 A A- - - - Bank Austria 2) Under review for downgrade negative outlook UniCredit S.p.A. P-1 A2 A3 A-2 BBB+ BBB F2 A- BBB+ Under review for downgrade Negative outlook Negative outlook Moody's S&P Fitch Bank Austria - Public Sector Covered Bond Bank Austria - Mortgage Covered Bond Aaa (under review for downgrade) - - - - - (as of 10 May 2012) 1) Subordinated (Lower Tier II) 2) Grandfathered debt is rated Aa2 (senior debt) and respectively Aa3 (subordinated debt) by Moody s and AA+ (senior and subordinated debt) 12 by Standard & Poor s. This relates to securities issued before 31 Dec. 2001 which benefit from a secondary liability by the City of Vienna.
Agenda UniCredit / Bank Austria: Overview Public Sector Covered Bond of Bank Austria Austrian Legal Framework Pfandbriefe 13
Executive Summary Bank Austria Public Sector Cover Pool Aaa Rating by Moody s Strong and long existing legal framework for Austrian Pfandbriefe Average volume of loans is approx. 1.7 mn Average seasoning is 4.7 years 14
Parameters of Cover Pool and Issues Total Value of the Cover Pool as of 31 st March 2012 in EUR equivalent: 6,859 mn thereof in EUR: 4,199 mn thereof in CHF: 1,007 mn thereof public sector bonds in EUR equivalent: 1,653 mn Parameters of Cover Pool Weighted Average Life (in years incl. Amortization) 7.8 Contracted Weighted Average Life (in years) 10.1 Average Seasoning (in years) 4.7 Total Number of Loans 4,122 Total Number of Debtors 1,314 Total Number of Guarantors 259 Average Volume of Loans (in EUR) 1,664,107 Stake of 10 Biggest Loans 30.3% Stake of 10 Biggest Guarantors 49.5% Stake of Bullet Loans 55.7% Stake of Fixed Interest Loans 27.2% Moody s Rating: Aaa Nominal Over-Collateralization: 32.1%* Present Value Over-Collateralization: 27.9% Total Value of Sold Covered Bonds as of 31 st March 2012 in EUR: 5,193 mn thereof in CHF: 216 mn Parameters of Issues: Total Number 57 Average Maturity (in years) 4.9 Average Volume (in EUR) 91,110,593 15 * Austrian Mortgage Banking Act requires a nominal over-collateralisation of 2%. The basis for its calculation is a cover pool value reduced by legally defined haircuts. Taking these haircuts into consideration, the cover pool value amounts to EUR 6,642 mn, thus the overcollateralization is 27.9%. Additionally, in its Articles of Association, UniCredit Bank Austria commits itself to an over-collateralisation on a present value basis.
Maturity Structure of Cover Pool and Issues Maturity of Assets in the Cover Pool in mn EUR in % Maturity up to 12 months 1,253 18.3% Maturity 12-60 months 1,384 20.2% thereof Maturity 12-36 months 827 12.1% thereof Maturity 36-60 months 556 8.1% Maturity 60-120 months 1,299 18.9% Maturity longer than 120 months 2,924 42.6% Total 6,859 100.0% Maturity of Issued Covered Bonds in mn EUR in % Maturity up to 12 months 599 11.5% Maturity 12-60 months 3,162 60.9% thereof Maturity 12-36 months 1,802 34.7% thereof Maturity 36-60 months 1,360 26.2% Maturity 60-120 months 1,010 19.4% Maturity longer than 120 months 423 8.1% Total 5,193 100.0% 16
Regional Breakdown of Assets* in Austria Regional Breakdown Austria in mn EUR in % Vienna 1,597 23.3% Lower Austria 1,023 14.9% Upper Austria 768 11.2% Salzburg 144 2.1% Tyrol 321 4.7% Styria 522 7.6% Carinthia 823 12.0% Burgenland 235 3.4% Vorarlberg 216 3.1% Republic of Austria 1,210 17.6% Total Austria 6,859 100.0% Regional Breakdown Austria Republic of Austria 17.6% Vienna 23.3% Vorarlberg 3.1% Burgenland 3.4% Carinthia 12.0% Lower Austria 14.9% 17 * Considering Guarantors Styria 7.6% Tyrol 4.7% Salzburg 2.1% Upper Austria 11.2%
Volume Breakdown by Size of Assets Volume Breakdown by Size of Assets in mn EUR Number below 300,000 266 2,426 thereof under 100,000 57 1,297 thereof 100,000-300,000 209 1,129 300,000-5,000,000 1,664 1,553 thereof 300,000-500,000 199 507 thereof 500,000-1,000,000 348 494 thereof 1,000,000-5,000,000 1,117 552 above 5,000,000 4,930 143 Total 6,859 4,122 18
Assets Volume Breakdown by Type of Debtor / Guarantor Assets: Type of Debtor / Guarantor in mn EUR Number 213 4 Federal States 1,144 449 Municipalities 1,332 2,739 997 157 2,170 294 State Guaranteed by State Guaranteed by Federal States 19 Guaranteed by Municipalities 777 498 Other 226 175 Total 6,859 4,316
Agenda UniCredit / Bank Austria: Overview Public Sector Covered Bond of Bank Austria Austrian Legal Framework Pfandbriefe 20
Austrian Legal Framework Mortgage and Public Sector Pfandbriefe Austrian Covered Bonds Pfandbriefe Hypothekenbankgesetz (Mortgage Banking Act 1899) Pfandbriefgesetz (Pfandbrief Law 1938) Bank Austria 21 Remark: Austrian Mortgage Pfandbriefe also follow the same legal regulation as Public Sector Pfandbriefe Fundierte Schuldverschreibungen Law of 1905
Comparison Austria vs. Germany Criteria of Pfandbrief law / Hypothekenbankgesetz Pfandbrief law in place 22 Austria Germany Mortgage and public sector collateral assets in separate pools Cover register Collateral assets limited to Europe X Legally required minimum overcollateralization Cover pool monitoring (Trustee) Special proceedings in case of insolvency Pfandbriefe remain outstanding in case of issuer s bankruptcy NPV matching * * if included in the Articles of Association of the respective credit institution Austrian Hypothekenbankgesetz was initially based on the German legislation Important changes to the German "Pfandbrief" legislation were followed by the Austrian "Hypothekenbankgesetz", which continues to reflect the principal features of the German "Pfandbriefgesetz Main differences in the current version are: German law also allows collateral assets from non-european countries German law includes compulsory NPVmatching, whereas in Austrian law NPVmatching is voluntary (Bank needs to setup a self-commitment in its articles of association which is the case for Bank Austria s Public Sector Cover Pool)
Your Contacts CFO Finance UniCredit Bank Austria AG Corporate & Investment Banking UniCredit Bank Austria AG Thomas Ruzek Head of Strategic Funding Tel. +43 (0) 50505 82560 thomas.ruzek@unicreditgroup.at Gabriele Wiebogen Head of Long Term Funding Tel. +43 (0) 50505 82337 gabriele.wiebogen@unicreditgroup.at Günther Stromenger Head of Corporate Relations Tel. +43 (0) 50505 57232 guenther.stromenger@unicreditgroup.at Impressum UniCredit Bank Austria AG CFO Finance A-1010 Wien, Schottengasse 6-8 23
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