Bank Austria Hypothekenpfandbriefe (Mortgage Bonds) November 2011
Agenda UniCredit / Bank Austria: Overview Mortgage Bond of Bank Austria Austrian Legal Framework Pfandbriefe 2
Agenda UniCredit / Bank Austria: Overview UniCredit Bank Austria Mortgage 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 rating) Rank & Market Share #1 with c. 16% Loans ( bn) 63.5 Deposits ( bn) 47.5 FTE (#) 7,908 Germany (AAA 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 (A 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)
Agenda UniCredit / Bank Austria: Overview UniCredit Bank Austria Mortgage 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 30 September 2011)
Net Operating Profit and Net Profit Net operating profit q/q stable with lower LLP and some one-offs compensating for the impairment of Greek bonds Net Operating Profit (1) ( mn) Net Profit (2) ( mn) +8% 1,237 1,330 724 450 475 425 431 298 4 3Q10 4Q10 1Q11 2Q11 3Q11 1-9/2010 1-9/2011 1-9/2010 1-9/2011 7 Net Operating Profit 9M11 +8% above previous year also due to lower loan loss provisions Net Profit attributable to the owners of the parent company of 4 mn due to impairments on Greek bonds (UniCredit Group incl. Bank Austria voluntarily participating in both programmes for Greece, the IIF Programme (2Q11) and the EU Programme (3Q11) 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) Net Operating Profit by region ( mn) Operating income Costs LLP 1,237 1,330 CEE Austrian Business CC&GBS 450 475 425 431 1,237 +8% 1,330 450 298 475 425 431 356 298 212 354 375 418 925 1,146 5,289 5,263 1,788 1,780 1,801 1,744 1,717 156 199 179 157 147 449 483-63 -113-59 -107-134 -137-299 -921-956 -950-990 -957-418 -526-376 -329-330 3Q10 4Q10 1Q11 2Q11 3Q11-2,739-1,314-2,897-1,035 3Q10 4Q10 1Q11 2Q11 3Q11 1-9/2010 In Q3, positive development in core revenues (net interest, fees) 1-9/2011 Increase in costs due to business expansion and bank levies in Austria and Hungary 8 1-9/2010 1-9/2011 Reduction of loan loss provisions confirmed, in particular in CEE
Balance Sheet Balance sheet ( mn) as at 30.09.2011 Loans and receivables with banks 197,668 27,617 197,668 31,963 Deposits from banks Loans and receivables with customers 131,125 103,209 Deposits from customers Other Financial Assets Other Assets 28,424 10,502 30,610 14,601 17,285 Debt securities in issue Other Liabilities Equity Assets Liabilities In Q3, total assets and loans to banks significantly up Deposits up vs. Q2 by 5 bn 9 Equity decreased slightly q/q due to goodwill impairments in Q3
Business Volumes Positive commercial performance in CEE and Austria Loans to Customers ( mn) CEE Österreich Deposits with Customers ( mn) CEE Österreich 127,689 130,120 +2.7% 128,553 131,617 0% 131,125 97,693 100,287 +5.6% 98,495 98,224 +5% 103,209 63,872 66,308 65,462 67,444 67,632 50,262 53,750 51,836 51,518 55,756 63,817 63,811 63,092 64,174 63,492 47,431 46,537 46,660 46,706 47,453 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 Loan/Direct Funding Ratio 1Q11 2Q11 3Q11 101.7% 101.8% 100.6% 102.2% 98.0% 10 Loans to customers: Stable quarter on quarter, increase of over 3 bn (+2.7%) y/y mainly in CEE and F&SME Deposits with customers: strong increase in CEE vs. Q2 ( +5 bn, +5%) Loan-to-direct funding ratio: Ratio of customer loans/primary resources (customer deposits and debt securities in issue) improved further to even below 100%, ensuring a healthy equilibrium of business volumes and a sound base for further business development
Capital position RWA slightly down due to lower credit risk Capital Ratios Total Capital 9.19% Tier 1 6.82% Core Tier 1 6.52% 2008 10.92% 8.68% 8.33% 2009 12.13% 10.35% 10.04% 2010 12.31% 10.75% 10.42% Sept. 2011 Core Tier 1 ratio stands at 10.42% hereby exceeding the ratios of most Austrian competitors Safe capital base as Bank Austria unlike its main competitors did not take up state capital which would be to be repaid at a later stage Deleveraging of RWA (-7% since the end of 2008) also contributed to strengthening of capital ratios Regulatory Capital ( bn) Risk-Weighted Assets ( bn) Total Capital Hybrids Tier 1 Core Tier 1 12.3 3.2 0.4 8.7 12.5 2.6 0.4 9.5 15.5 2.3 0.4 12.8 15.2 1.9 0.4 12.9 Total RWA Market risk Operational risk Credit risk 133.2 5.6 9.7 118.0 114.4 3.0 9.7 101.6 127.9 2.8 11.7 113.3 123.7 1.6 11.7 110.5 11 2008 2009 2010 Sept. 2011 2008 2009 2010 Sept. 2011
Rating Overview Moody's S&P Fitch Short Term Long Term Subordinated Short Term Long Term Subordinated Short Term Long Term Subordinated P-1 A2 A3 A-1 A A- - - - Bank Austria 1) Under review for downgrade negative outlook UniCredit S.p.A. P-1 A2 A3 A-1 A A- F1 A A- Under review for downgrade negative outlook On watch Moody's S&P Fitch Bank Austria - Public Sector Covered Bond Bank Austria - Mortgage Covered Bond Aaa - - - - - (as of 23 November 2011) 1) 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 are guaranteed by the City of Vienna.
Agenda UniCredit / Bank Austria: Overview Mortgage Bond of Bank Austria Austrian Legal Framework Pfandbriefe 13
Parameters of the Cover Pool and Issues Total Value of the Cover Pool as of 30 th September 2011 in EUR equivalent: 3,952 mn thereof in EUR: 2,776 mn thereof in CHF: 1,180 mn thereof substitute cover in EUR: 68 mn Parameters of Cover Pool Weighted Average Life (in years incl. Amortization) 10.5 Contracted Weighted Average Life (in years) 13.2 Average Seasoning (in years) 6.0 Total Number of Loans 27,438 Total Number of Debtors 24,709 Total Number of Mortgages 24,457 Average Volume of Loans (in EUR) 141,555 Stake of 10 Biggest Loans 18.9% Stake of 10 Biggest Debtors 21.9% Stake of Bullet Loans 46.0% Stake of Fixed Interest Loans 5.9% Nominal Over-Collateralisation: 72,6 %* Total Value of Sold Covered Bonds as of 30 th September 2011 in EUR: 2,290 mn Parameters of Issues: Total Number 96 Average Maturity (in years) 6.7 Average Volume (in EUR) 23,856,114 14 * 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 3,712 mn, thus the overcollateralization is 62.08%.
Maturity Structure of Cover Pool and Issues Maturity of Assets in the Cover Pool in mn EUR in % Maturity up to 12 months 107 2.7% Maturity 12-60 months 565 14.3% thereof Maturity 12-36 months 201 5.1% thereof Maturity 36-60 months 364 9.2% Maturity 60-120 months 799 20.2% Maturity longer than 120 months 2,481 62.8% Total 3,952 100.0% Maturity of Issued Covered Bonds in mn EUR in % Maturity up to 12 months 368 16.1% Maturity 12-60 months 668 29.2% thereof Maturity 12-36 months 422 18.4% thereof Maturity 36-60 months 245 10.7% Maturity 60-120 months 850 37.1% Maturity longer than 120 months 404 17.6% Total 2,290 100.0% 15
Regional Breakdown of Mortgages in EU Regional Breakdown EU in mn EUR in % Austria 3,329 84.2% Slovenia 122 3.1% Czech Republic 167 4.2% Poland 172 4.4% Germany 60 1.5% Hungary 72 1.8% Romania 18 0.5% Slovakia 11 0.3% Total EU 3,952 100.0% 16
Assets Volume Breakdown Volume Breakdown by Size of Loans in mn EUR Number 1,748 26,832 1,076 22,023 672 4,809 564 523 76 197 thereof 500,000-1,000,000 116 161 thereof 1,000,000-5,000,000 371 165 above 5,000,000 1,641 83 Total 3,952 27,438 below 300,000 thereof under 100,000 thereof 100,000-300,000 300,000-5,000,000 thereof 300,000-500,000 17
Mortgages* Breakdown by Type of Use Mortgages Breakdown by Type of Use Residential Number 1,675 25,072 Residential subsidized 392 771 Residential used for business purposes 240 1,139 1,577 456 thereof Office 862 123 thereof Trade 384 48 thereof Tourism 162 78 3 34 166 173 3,884 27,438 Commercial thereof Agriculture thereof mixed Use / Others Total 18 in mn EUR * Without substitute cover (consists of bonds)
Agenda UniCredit / Bank Austria: Overview Mortgage Bond of Bank Austria Austrian Legal Framework Pfandbriefe 19
Austrian Legal Framework Mortgage and Public Sector Pfandbriefe Austrian Covered Bonds Pfandbriefe Hypothekenbankgesetz (Mortgage Banking Act 1899) Pfandbriefgesetz (Pfandbrief Law 1938) Bank Austria 20 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 21 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 Franz Stegmüller Head of Strategic Funding Tel. +43 (0) 50505 82639 franz.stegmueller@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 22
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