Annual Report of Raiffeisen-Landesbank Tirol AG

Transcription

1 Annual Report of Raiffeisen-Landesbank Tirol AG

2 Annual Report Marktplatz branch Contents Foreword by the Board of Managing s 04 Overview by the Board of Managing s & Supervisory Board 06 Foreword by the Chairman of the Supervisory Board 07 Raiffeisen-Landesbank Tirol AG 08 Employees 10 Raiffeisen in Tyrol 12 Raiffeisen in Austria 14 Tyroleans appreciate local banking partners more and more 16 Interview with Dr Hannes Schmid, Chairman of the Board of Managing s of RLB Tirol AG 18 "2011 is the year of tangible assets and shares" 30 Interview with Peter Brezinschek, Chief Analyst at Raiffeisen Research Annual fi nancial statements 32 Bank branches 50

3 04 Foreword by the Board of Managing s Foreword by the Board of Managing s 05 Foreword by the Board of Managing s Dear Ladies and Gentlemen, The global economy continued its upturn in 2010, to the benefi t of international fi nancial markets. Although this trend was overshadowed in Europe by the Greece and Ireland crisis for a short period, a further negative impact on the Euro was prevented through the decisive action of all the European countries. The EU bailout facility of EUR 750 billion and stringent conditions in relation to budget consolidation in the affected countries made it clear that every means would be used to strengthen the Euro. Due to this cooperation the Euro has passed its toughest test to date. In 2010 the economy posted positive performance in Austria, too, driven primarily by the enormous economic upswing in Germany, with Tyrol also doing well. Raiffeisen-Landesbank Tirol AG can look back on a very good year in Despite strong competition and a continuing low level of interest rates, we succeeded in increasing our earnings from ordinary business activities to a peak result, at EUR m. This demonstrates the depth of customers' trust in Raiffeisen-Landesbank Tirol AG and consequently in the work of our employees, endorsing our strategy of consistent customer orientation. Stabilisation of operating expenses and of the need to make provisions for loans is yet another sign that we have done our homework professionally in the crisis years and have positioned the company very well for the future and for the challenges ahead. Reinhard Mayr Dr Hannes Schmid Chairman of the Board of Managing s Gobert Sternbach We are very pleased that we have again succeeded in extending our leading market position in Tyrol, together with the 81 Tyrol Raiffeisen banks. As an alliance we are by far the largest and most powerful banking group in the federal state. Backed up by more than 262 bank branches throughout the region, we provide the local population and business with high-quality fi nancial services. The Raiffeisen Banking Group Tyrol also provides more than 2,700 jobs, making it one of the largest and most attractive employers in Tyrol. We thank our customers, partners, owners and employees for the trust placed in us and we look forward to successful cooperation in Dr Hannes Schmid Chairman of the Board of Managing s Reinhard Mayr Gobert Sternbach

4 06 Overview by the Board of Managing s & Supervisory Board Foreword by the Chairman of the Supervisory Board 07 Overview by the Board of Managing s and Supervisory Board Foreword by the Chairman of the Supervisory Board Board of Managing s of Raiffeisen-Landesbank Tirol AG Dr Hannes Schmid Chairman of the Board of Managing s Gobert Sternbach Reinhard Mayr Dr Hans Unterdorfer Dear Ladies and Gentlemen, The Raiffeisen Banking Group Tyrol is the largest and most powerful banking group in the federal state. Almost every second private customer has confi dence in the quality of advice and fi nancial services provided by Raiffeisen. For local business, too, Raiffeisen is a reliable and competent partner, creating the general fi nancial framework required to implement ideas successfully. Supervisory Board of Raiffeisen-Landesbank Tirol AG Josef Graber Chairman of Raiffeisen Regional Bank Hall in Tyrol Peter-Roman Bachler Deputy-Chairman of Raiffeisenbank Kitzbühel Josef Chodakowsky of Raiffeisenbank St. Anton am Arlberg Martin Lorenz Managing of Bergbahnen Silvretta Galtür Meinhard Mayr of Raiffeisen District Bank Schwaz Gallus Reinstadler of Raiffeisenbank Pitztal Johannes Gomig, MBA Deputy-Chairman of Raiffeisenbank Reutte Berthold Blassnig of Raiffeisenbank Defereggental Dr Anna Hosp Employee, D. Swarovski & Co. Andreas Mantl of Raiffeisenbank Wipptal Dr Michael Misslinger of Raiffeisenbank Wörgl Kufstein Johann Thaler Mayor of Reith i. Alpbachtal Raiffeisen-Landesbank Tirol AG has played a very important role in the Raiffeisen Banking Group for more than 115 years. It is the leading institution and dependable cooperation partner for Tyrol Raiffeisen banks. It is also an expert and professional fi nancial partner for its private and corporate customers. The successful strategy of recent years has been pursued consistently and a peak result was generated. This is all the more remarkable bearing in mind the constant change that is taking place. The cornerstones of this performance are professional management and the outstanding commitment of all the bank's employees. Collaboration between the Board of Managing s and the Supervisory Board was also highly constructive in 2010 and benefi ted Raiffeisen-Landesbank Tirol AG as well as the entire Raiffeisen Banking Group Tyrol. I would like offer my warmest thanks to the whole Board of Managing s, all management personnel, operating staff and employees for this productive cooperation and high degree of dedication. Delegates from the Staff Council Doris Bergmann, Innsbruck Roman Sautner, Jenbach Erika Zingerle, Innsbruck Heinz Hofer, Lienz Rudolf Staffler, Tristach Dr Markus Zorn, Rum State Commissioners Court Counsellor Dr Michael Manhard Federal Ministry of Finance, Vienna AD Andreas Umlauf Federal Ministry of Finance, Vienna Dir. Josef Graber Chairman of the Supervisory Board

5 08 Raiffeisen-Landesbank Tirol AG Raiffeisen-Landesbank Tirol AG 09 Raiffeisen-Landesbank Tirol AG As the top-level institution of the Tyrol Raiffeisen banks, Raiffeisen-Landesbank Tirol AG stands for the timeless Raiffeisen values: security, proximity and trust. It represents by far the most important and most powerful banking group in our federal state. Tradition forms a solid basis for the success of RLB Tirol AG, established in 1895 as Raiffeisen-Zentralkasse. The expertise of our employees is again the best basis for continuing the unique success story of the Raiffeisen idea. Customer satisfaction is the key to success. For this reason, products are generally prepared in an individual and tailored way following expert advice that deals in detail with the personal wishes and needs of the customer. The fact that RLB Tirol AG comes up with innovative products and solutions in addition to professional services is a refl ection of this "real-world" customer orientation. Raiffeisen-Landesbank Tirol AG accompanies its customers in every phase of life to meet their specifi c needs, for example as a responsible partner for young people, when establishing a household, when building a house or buying property, or as a partner for the large number of corporate customers which benefi t from the high standard of advice and service. Major stakes held by RLB Tirol AG The in-depth training and social skills combined with professional expertise of staff are crucial to an effective partnership for both sides. To this end, RLB Tirol AG employs the entire know-how of the Raiffeisen network and the extensive range of services offered by the subsidiaries. Raiffeisen-Landesbank Tirol AG's links with the people of Tyrol fi nd expression not only in the banking services that it offers. As a successful banking institution it takes active responsibility for Tyrol as a place to live and sponsors a wide range of activities relating to sport, culture, social facilities and education/science. Social facilities such as the Red Cross, the Tyrol hospice movement, the Caritas and Seraphisches Liebeswerk charitable organisations are supported alongside art and culture. The Innsbruck Alte Musik (Old Music) festival, the RLB Kunstbrücke (art bridge) with three exhibitions each year by both young and established artists, the RLB Art Award every two years and the ever-popular New Orleans Festival are only a few examples. Marktplatz branch: modern open-plan architecture. Innsbruck linked with the Market The re-design of the Marktplatz branch demonstrates how Raiffeisen-Landesbank Tirol AG is continuing its strategy of consistent customer orientation. The Obermoser fi rm of architects was in charge of the project, as already well-proven in many cases. Architect Hans Obermoser has again succeeded brilliantly in creating a functional space with a pleasant ambiance, which customers appreciate. Tyrol fi rms were engaged for the construction work, with almost all the EUR 2 million value benefi ting local companies. Raiffeisen Zentralbank Österreich AG Raiffeisen-Leasing GmbH Raiffeisen & Steinmayr Tirol Consult RACON West Software GmbH LOGIS IT Service GmbH The Marktplatz branch is probably the most modern facility of its kind in Innsbruck. The 530 square metres of fl oor space is used to provide everything for meeting customer requirements. The modern open-plan architecture highlights that customers are at the centre of our activities. Due to its proximity to the market place (Marktplatz) and the market hall (Markthalle), some of the busiest places in Innsbruck, it is no wonder that the Marktplatz branch has also come to be known as the "Markt". Just beside the market: the Marktplatz branch. Innsbruck's Mayor, Christine Oppitz-Plörer (centre), says it is a major enhancement to the infrastructure. On the right Dr Hannes Schmid, left branch manager Peter Eckert. AlpenBank AG Raiffeisen Capital Management Raiffeisen Bau Tirol Raiffeisen Wohnbaubank More than "art within architecture" space for art Raiffeisen Bausparkasse PayLife Bank Unser Lagerhaus Warenbeteiligungs-GmbH AQUA DOME Tyrol Längenfeld thermal spa It has long been of great importance to the Tyrol Raiffeisen banks and Raiffeisen-Landesbank Tirol AG to promote Tyrol art and culture. This objective has been continued at the Marktplatz branch. The principal prize-winner of the RLB Art Award 2010, the Halle media artist Annja Krautgasser, has added artistic features to the premises through her wall paintings.

6 10 Employees Employees 11 Thanks are due to our employees Andrea ABENTUNG, Manuela ABFALTER, Manfred ACHRAINER, Iris AIGNER, Pauline AIGNER, Walter ALTSTAETTER, Karin Brigitte AMMER, Hubert AMON, Maria AMORT, Christian ANDREATTA, Reinhard ANGERMANN, Sabine ARL, Anita ARLT*, Harald ASCHABER*, Patricia ASSMAIR, Eva ASTL, Markus AUER*, Cornelia AUER, Roland AUER, Sibylle AUER, Bernhard AUGSCHOELL, Marina BABIC, Petra BACHLECHNER, Hildegard BACHMAIR, Doris BADSTUBER*, Stefanie BALLWEBER, Hubert BARBIST, Monika BARISITZ*, Heinz BAUMANN, Gerald BEER, Petra BENEDIKTER, Maximilian BERGHAMMER, Doris BERGMANN, Elisabeth BERNHARDT, Verena BERN- LOCHNER, Christian BEVELANDER, Markus BLASSNIG, Claudia BLIEM, Gerhard BLOEB, Stefan BODNER, Ingo BOEHLER, Susann BOEKDRUKKER, Josef BRANDAUER, Eva Maria BRASCHLER, Christian BRAUNEGGER, Barbara BRIDA, Richard BRUGGER, Birgit BRUNNER, Karl BRUNNER, Sabine BUDISCHOWSKY-ANICH, Admira CAUSEVIC, Guenther CHRONST, Gerhard CRAMER, Carolin CZERMAK, Christoph CZICHNA, Daniela DAMIANSCHITZ*, Martin DANLER, Monika DANNINGER*, Peter DARNHOFER*, Andreas DEGENHART, Daniela DEISER, Agnes DEISER, Anna DEISER, Silvia DELLASEGA*, Andreas DIERIGL, Nadine DOETLINGER, Arno DRAXL, Verena DRESEN, Elisabeth DUENSER, Markus DUFTNER, Peter DULLNIG, Claudia DULLNIG, Sandra EBERL, Peter ECKERT, Andreas EGGER, Oliver EGGER, Nicole EGGER, Inge EGGER, Herbert EICHHORN, Irene EISENBEUTL, Christina ELLER, Silvia ELLER, Thomas ELZENBAUMER, Barbara ENGENSTEINER*, Christian ENGL, Elisabeth ENGL, Ilse ERLACHER, Hansjoerg ERLER*, Martin EXENBERGER, Genovefa FALKNER, Sabine FALSCHLUNGER, Daniel FASCHING, Petra FEICHTNER, Meinhard FIDLER, Stephanie FILL, Johann FINK, Helga FINNER, Christian FOIDL*, Grete FRIEDRICH, Roland FRIESS, Sonja FRINGER, Thomas FRISCHAUF, Ludwig FROECH, Elke FUERHOLZER, Manuela FUNK, Alexander GAENSLUCKNER*, Angelika GALLY*, Jörg GAMROTH, Wilfried GANDER, Alfons GANEIDER, Manfred GAPP, Christine Maria GAPP, Birgit GASSER, Viktoria GASSER, Roland GASSER BERGER, Walter GAUGG, Johannes GEILER, Manuela GEILER, Christine GEISLER*, Petra GEISSLER, Eleonore GERBER-EICHHORN, Claudia GINER, Hermann GIRSTMAIR, Michael GLANZ, Marina GLATZL, Ingrid GLATZL, Domenik GLOECKNER*, Stefan GOGL, Peter GOLLER, Martin GOREIS, Helga GRABNER, Dagmar GRANZER, Arthur GREIDERER, Daniela GREIDERER, Markus GRIMM*, Erich GRISSMANN, Klaus Michael GROSSGUT, Franz GRUBER, Andrea GRUBER, Christina GRUBER, Manuela GRUBER, Evi GRUBER, Angela GRUENBACHER, Christian GSCHLIESSER, Desiree GSPAN, Gerhard GSTREIN, Bernhard GSTREIN, Siegmund GUTTERNIG, Christa HABERKORN, Olivia-Lorea HABERL*, Michael HAGER, Michaela HAIDLER, Elisabeth HAIRER, Gabriele HANDL, Johannes HAPP*, Susanne HAUN, Gabriele HAUSER*, Karin HAUSER, Florian HAUSER, Elisabeth HAUSER, Thomas HECHENBERGER, Julia HEEL, Martin HEIDEGGER, Alexander HEINDL, Martina HEISS*, Alexander HEISS, Karoline HEISS, Albert HELL, Helene HELLRIGL, Eric HENSEN, Heidi HINTNER, Christian HIRNER, Sabrina HIRSCHBERGER, Erika HOCHSCHWARZER, Erwin HOEGER, Nicole HOERTNAGL*, Klaus HOERTNAGL, Christian HOERTNAGL, Victoria HOERTNAGL, Heinz-Johann HOFER, Christine HOFER, Martina HOFER, Gregor HOHENAUER, Simon HOLZ- HAMMER, Hans HOLZKNECHT, Dagmar HOLZMANN, Sonja HOLZTRATTNER, Maria HOPPICHLER, Dietmar HOSP, Brigitte HOSP, Astrid HOY, Petra HUBER, Maria-Luise HUBER, Albert HUEBER, Hannelore HUEBLER, Helmut HUPFAUF, Gerhard HUPFAUF, Rosemarie HUPFAUF, Lukas HUTER, Elisabeth IGHODARO, Margaritha ISEP, Claudia JAEGER, Eva JAEKEL, Joachim JAMNIG, Sascha JANESCH*, Ingrid JANICKI, Christine JANTSCHER, Sabaha JASARAGIC, Maria JEITLER, Monika JENEWEIN, Johann JUNGMANN, Carolin KAIL, Sylvia KAINZ, Daniel KALDINAZZI, Johannes KAMPFER, Claudia KAPELLER, Markus KAPFERER, Barbara KAPPACHER, Sabrina KASERER, Simone KASTL, Margarita KATSCHNIG, Helmut KELMER*, Werner KERBER, Regina KIRCHMAIR, Angelika KIRCHMAIR, Heidi KIRSCHNER, Johannes KLAUNZER, Andreas KLAUNZER, Ludwig Josef KLEINDL, Roger KLIMEK, Klaus KLINGENSCHMID, Karin KLINGENSCHMID, Jasmin KLINGENSCHMID, Christian KLOCKER, Katrin KLOTZ, Michael KLUCKNER, Natalie KLUCKNER, Sandra KNAUS, Christian KNEISL*, Silvia KOFLER*, Josef KOFLER, Mario KOFLER, Robin KOFLER, Peter KOFLER, Werner KOLB, Gabriele KOLLREIDER, Johann KOLLREIDER, Claudia KONRAD-HUBER, Nebojsa KOSTIC, Juergen KRABACHER, Annemarie KRALL, Franz KRANEWITTER, Eva KRAPF, Daniela KRIEBER, Sandra KRIEGL, Rosmarie KRISMER, Peter KRITZINGER, Johannes KROELL, Waltraud KROELL, Birgit KRUG, Karoline KUEN, Reinhard KUGLER, Sabine KUHN, Melek KULOGLU*, Wolfgang KUNZ, Sandy KUSS, Julia LACHBERGER, Bernhard LADNER, Klaus LAMPRECHT, Catrin LAMPRECHT, Stefan LANG, Brigitte LARCHER, Karin LARCHER, Sandra LARCHER, Bettina LAX, Dominik LEBEDA, Brigitte LECHLEITNER, Martin LECHNER, Manuela LECHNER, Wolfgang LEHNHART, Andreas LEITINGER, Helga LEITNER, Tamara LENER, Christiane LEUPRECHT, Renate LEZUO, Martin LINSER*, Gottfried LIRK, Sharon LONER, Thomas LOTRITSCH, Verena LUNG, Patricia LUTZ*, Konstantin LUTZ, Peter MACHAT, Claudia MADL-SCARTEZZINI, Fahrija MAGLIC, Martina MAIACHER, Monika MAIER, Hubert MAIR, Kurt MAIR, Dorothea MAIR, Ulrike MANFREDA, Claudia MARCOLINI, Gregor MARGREITER, Norbert MARGREITER, Christine MARKSTEINER, Anton MARKT, Josef MARTINER, Ingrid MASSANI, Martin MAURER, Josef MAYR, Christoph MAYR, Helmut MAYR, Karlheinz MAYR, Renate MEDINA-HOFER, Margit METZLER, Manfred MIGLAR, Carola MIGLAR, Daniel MIKULA, Monika MIMM, Bernhard MITTERMAIR, Manfred MLADEK, Stefan MOLL, Hubert MONAI, Markus MOR, Eva MRAK, Michael MUEHLBACHER, Werner MUELLER, Hubert MUESSIGGANG, Angelika MUESSIGGANG, Hasiba MUSIC, Senija MUSTAFIC, Patrik MUXEL, Susanne NAGELE, Justina NAGILLER, Josef NAGL, Julia NAGL, Ibolya NAGY, Ursula NASCHBERGER*, Jasmine NEUHAUSER, Alexander NEUNER, Birgit NEUNER, Andreas NEUNER, MBA*, Julia NEURAUTER, Barbara NEURAUTER, Franziska NIESCHER, Walter NITZLNADER, Ruth NOCKER-LEDERER, Bernd NOEHRER, Barbara OBERDANNER, Helmut OBERER- LACHER, Frank OBERHAUSER, Stefan OBERHOFER, Georg OBERMUELLER, Guenter OBERZAUCHER, Christian OBEX, Monika OETTL, Doris OFNER, Michaela ORTNER, Monika ORTNER, Christoph ORTNER, Michaela OSS, Karin OSTERMANN, Marie-Theres PANCHERI, Nicole PARDATSCHER, Konrad PARDELLER, Christina PARTL, Thomas PATSCH, Brigitte PEDRINI*, Marina PEDRINI, Julia PENZ, Cornelia PERKOUNIGG, Romina PEROTTI, Edgar PFEIFER*, Sabine PFERSCHI, Eva PFITSCHER, Monika PFLANZNER*, Martina PFLEGER, Birgit PFURTSCHELLER, Monika PFURTSCHELLER, Marcus PICHLER, Maria PIEGGER, Eugenio PIGNATTI, Arlette PILS, Gabriele PINGGERA, Edith PIRKNER M.A., Verena PITTL, Friedrich PITTRACHER*, Josef PITTRACHER, Marlies PLANK, Karoline PLANK, Markus PLATTNER, Nicole PLATTNER, Alexandra PLUNGER, Christine POCK, Eveline POLIN, Karin PRANGER, Martin PRANT- ER, Ines PRINZ, Gabriela PROBST, Gerhard PROSEN, Christian PRUGGER, Nicole PUCKL*, Nicole PUCKL, Gertraud PUELACHER, Dietmar PUTSCHNER, Andreas RAASS, Renate RAASS, Isa RABL, Michael RAGGL, Bettina RAGGL, Angela RAGGL, Elfi RAINALTER, Dieter RASPOTNIK, Christiane RECHEIS, Wolfgang REDL, Marco REGENSBURGER, Karoline REIDER, Stefanie REIMEIR*, Petra REISTER-WALLNOEFER, Fraenk REITER, Gabriella REUTER, Christina RHOMBERG, Petra RIEDL, Brigitte RIETH, Silvia RIETZLER, Gerhard RIML, Christa ROESNER, Stefan ROFNER*, Alberta ROHRACHER, Gerhard ROSENDORFER, Marion ROSINA, Ingrid ROTT, Christine ROTTENSTEINER, Monika RUDISCH, Helmuth RUECH, Markus RUECH, Thomas RUETZ, Bibiane RUETZ, Stefan RUF, Klaus SAIGER, Manfred SAILER, Patricia SANTA, Thomas SATTLEGGER, Thomas SAURER, Clemens SAURER, Roman SAUTNER, Sylvia SCHAMBERGER, Sandra SCHANDL, Werner SCHARF, Stefan SCHARF, Rita SCHEIBER, Annemarie SCHEIRING*, Sandra SCHELL- HORN, Matthias SCHIESTL, Monika SCHLATTER, Renate SCHLEICH, Markus SCHLENCK, Claudius SCHLENCK, Claudia SCHLITTLER, Martin SCHMADL*, Michael SCHMID, Ferdinand SCHMID, Harald SCHMIDER, Karin SCHNAUFERT, Thomas SCHNEEBERGER, Brigitte SCHNEIDER, Richard SCHNELLER, Daniel SCHNIEDERS, Romed SCHOEPF, Hannes SCHREINER, Maria SCHWARZ, Markus SCHWINGHAMMER, Wolfgang SCHWITZER, Hubert SEDLMAYR, Andrea SEEHAUSER, Manuela SEELAUS*, Petra SEELAUS, Thomas SEIDL*, Christian SEISER, Sefi ka SEJDINOVIC, Peter SENFTER, Rudolf SENN, Kerstin SIEBENHÜNER, Christine SIEBERER, Caecilia SILGENER, Michaela SILVESTRI, Senguel SOLAK, Emanuel SORAPERRA-AUGUSZTINYI, Renate SPARBER, Soeren SPECHT, Sonja SPECHTENHAUSER, Christoph SPOECK, Petra SPOERR, Armin SPRENGER, Markus STABENTHEINER, Rudolf STAFFLER, Carmen STANGLECHNER, Gerhard STAUD*, Martin STECHER, Gertrud STECHER, Gebhard STEINACHER, Claudia STEINER, Christian STEINER, Patrick STEINKELLNER, Michael STEINLECHNER, Elisabeth STEINRINGER, Nicole STOISER, Melitta STOLZ, Johannes STOTTER, Inge STROBL, Doris STROBL, Karin STROBL, Elisabeth Charlotte STUBLER, Peter TAUTSCHER, Barbara TAUTSCHER, Johanna TEMPELE, Patrizia THALER, Birgit THALER, Jacqueline THALER, Johann THALER, Helmut THEYER, Elisabeth THOENI*, Sandra THOENY, Daniela THURNER, Markus TOLLINGER, Herwig TRAUNER, Christoph TRAUNFELLNER, Dietmar TRIENDL, Othmar TRIENDL, Katrin TROYER-SOCHER, Notburga TSCHUGG, Claudia TUNNER*, Simone UNGERANK, Brigitte UNSINN, Gerd UNTER- LECHNER, Johannes UNTERLUGGAUER, Thomas UNTERPERTINGER, Margreth UNTERWEGER, Marleen VAN BARMEN T LOO, Andrea VERDROSS, Olivia VESELY, Iris VOETTER*, Benjamin VOGLER, Alfred VOLDERAUER, Veronika VOLDERAUER, Patrick WACK- ERLE*, Kerstin WALKER, Johann Peter WALLNER, Christine WALLNOEFER, Stephan WALSER, Vanessa WALTER, Sonja Fernanda WANKMUELLER, Barbara WARSCHER, Thomas WASS, Sabine WASS, Philipp WEBER, Thomas WECHSELBERGER, Bernd WEI- DENTHALER, Thomas WEIDINGER, Nadine WEISIELE, Michael WEISS, Sonja WEITZER, Christine WEIXLER, Evelin WENDE, Wolfgang WENINGER, Detlev WENKO, Manuela WENTZ, Ramona WERTH, Daniel WHITE, Markus WIDMANN, Ulrike WIDMOSER, Ingrid WIEDER- MANN*, Johannes WIESER, Melanie WILD, Urban WINDBICHLER, Elisabeth WINKLER*, Regina WINKLER, Andrea WITTING, Thomas WOEBER, Claudia WOLF*, Maria WOLF, Brigitte WOLFSCHLUCKNER, Martina WOMBACHER, Andreas WOPFNER, Claudia WOTZEL, Maria WURZER, Hubert WURZER, Nazmiye YAYAN*, Hannes ZACCHIA, Patrick ZANGERL, Andrea ZANKL, Elfriede ZECHNER, Petra ZEILLINGER, Aegidius ZETTINIG, Angelika ZIFREIND, Werner ZIMA, Stefan ZIMMER, Renate ZIMMERMANN, Erika ZINGERLE, Sabine ZOEHRER, Christian ZOLLER, Markus ZORN, Markus ZWIEFELHOFER * Joined RAD (Raiffeisen Abwicklungs- und Dienstleistungsgesellschaft mbh) on 1 April 2010

7 OBERAU 12 Raiffeisen in Tyrol Raiffeisen in Tyrol 13 Raiffeisen Banking Group Tyrol With 81 independent local Raiffeisen banks, the top-level institution Raiffeisen-Landesbank Tirol AG and a total of 262 bank branches, the Tyrol Raiffeisen banks represent by far the largest and most powerful banking group in the federal state of Tyrol. Raiffeisen stands for competence, quality of advice and values such as security, proximity and trust. A customer share of almost 50 per cent indicates how much customers appreciate this. With some 2,750 employees, Raiffeisen is also one of the largest private employers and a signifi cant economic factor in the federal state. The Raiffeisen Banking Group Tyrol can also boast excellent collaboration. Synergies are used systematically and strengths are combined, to the benefi t of customers above all. This enables all Tyrol Raiffeisen banks to offer a comprehensive range of topquality services, in addition to professional advice. In this respect, Tyrol Raiffeisen banks can access the specialised products of subsidiaries and other companies in which a stake is held. In addition to Raiffeisen-Landesbank Tirol AG, these include the securities fund company Raiffeisen Capital Management, the insurance company Raiffeisen Versicherung, Raiffeisen Leasing and the building society Raiffeisen Bausparkasse. Raiffeisen also stands for co-determination and regionalism. The Tyrol Raiffeisen banks are owned by 118,430 members in the regions, who act as co-owners and hold a voting right at general meetings. The success of the Raiffeisen Banking Group Tyrol can be expressed in the following fi gures: consolidated total assets were EUR 9.8 billion (excluding RLB Tirol AG) as at the reference date (31 December 2010). On that date, Tyrol Raiffeisen banks managed initial deposits, consisting of demand, time and savings deposits, of EUR 6.9 billion. Tyrol Raiffeisen banks are also leaders in the fi nancing of private and corporate customers. As at the reference date (31 December 2010), total lending amounted to EUR 6.1 billion. Tyrol's Raiffeisen Club provides support to young people in their fi nancial development. The largest leisure association in Western Austria offers 91,000 Raiffeisen Club members attractive concessions at the bank, at concerts, sporting and cultural events and at around 400 cooperation partners. In 2010 alone, the Tyrol Raiffeisen banks have provided local people with about fi ve million Euro to promote sport, culture, education and for social facilities, as in previous years. The Raiffeisen Home Centre in the Energiehaus park beim DEZ shopping centre in Innsbruck. Raiffeisen Home Centre a centre of competence Building, renovating and home-making are topics that Tyrol people spend a lot of time on. In many cases the investment in one's "own four walls" is a life-long task. Raiffeisen guarantees a high standard of comprehensive advice in each individual and detailed discussion of housing options. The Tyrol Raiffeisen banks have constructed a unique centre of competence at the Raiffeisen Home Centre in the Energiehaus park in Innsbruck. The showhouse park offers everyone the opportunity to view current trends in relation to energy-effi cient building and renovating. At the Raiffeisen Home Centre, visitors can obtain advice on fi nancing, with subsequent referral to their local Raiffeisen bank. They can also get in-depth information on subsidies or similar possibilities through the public purse. Experts and technical specialists also provide free information on everything related to housing (tax and legal matters, property, building and renovating, energy, feng shui, geothermal energy, ventilation). Advisory meetings with specialists are also offered without charge at the Raiffeisen Home Centre.

8 14 Raiffeisen in Austria Raiffeisen in Austria 15 Raiffeisen Banking Group Austria The Raiffeisen Banking Group Austria (RBG) forms the densest branch network in the country, with 535 independent local Raiffeisen banks, a total of 1,689 bank branches, eight regional headquarters at federal state level and Raiffeisen Zentralbank Österreich AG (RZB) as the top-level institution, providing the Tyrol population throughout the region with banking services suited to customers' needs. Local Raiffeisen banks are independent cooperatives and are owned by their members from the region. Around 1.7 million Austrians are members of Raiffeisen banks and consequently co-owners of "their" Raiffeisenbank. Almost half of all Austrians are customers of a Raiffeisen bank. As modern universal banks, Austrian Raiffeisen banks offer their customers an all-inclusive range of customer care and services. Together as an alliance and in cooperation with the specialised subsidiaries and other companies in which RZB holds a stake, every Raiffeisen bank can meet each customer's individual requirements. The comprehensive range of services includes the fi nancial services of special-purpose Raiffeisen companies, such as the securities fund company Raiffeisen Capital Management, the insurance company Raiffeisen Versicherung, Raiffeisen-Leasing and the building society Raiffeisen Bausparkasse, all of which are among the market leaders in Austria. Established in 1927, Raiffeisen Zentralbank Österreich AG (RZB) is the top-level institution of the Raiffeisen Banking Group Austria (RBG). It acts as the head of the entire RZB Group, including Raiffeisen Bank International AG (RBI). RZB acts as a hub between Raiffeisen Banking Group Austria and RBI with its network in Central and Eastern Europe (CEE). As the parent of the listed company Raiffeisen Bank International AG and head of the RZB Group, RZB operates one of the largest banking networks in CEE. 17 markets in the region are covered by subsidiary banks, leasing fi rms and a series of other fi nancial services companies. 59,000 employees provide services for 15 million customers in some 3,000 branches. In Austria it specialises in commercial and investment banking, providing fi nancial services to the top 1,000 companies in the country. It sees itself as the Corporate Finance bank for this group of customers and as a leading provider of export fi nance. One of the largest banking groups in CEE RZB had already been involved in CEE long before the political upheavals in the region and the fall of the Iron Curtain. As early as 1986 it established its fi rst subsidiary bank in Hungary. As a result, RZB has more than 20 years' experience of banking in CEE. It has combined its banking network, one of the largest in the region, into RBI. 17 markets are covered by subsidiary banks, leasing fi rms and a series of other fi nancial services companies. In addition to the products and services in its core business, RBI also offers a number of fi nancially-related services through specialised companies on the markets of CEE. Examples include mergers & acquisitions, privatisation and consulting, equity capital investments, property development, project management and fund management. Niche player on international markets On international markets outside CEE, RBI has a presence as a niche player and, through its representative offi ces and branches, it offers a range of products specifi cally tailored to the particular needs of its customers. With branches in Singapore, Beijing and Xiamen as well as representative offi ces in Harbin, Hong Kong, Zhuhai, Seoul, Mumbai and Ho Chi Minh City, RBI has the strongest presence in Asia of all Austrian banks. RBI is also well positioned in international fi nancial centres through offi ces in New York and London, a bank in Malta and representation in Brussels, Frankfurt/Main, Paris, Madrid, Milan, Stockholm, Chicago and Houston. This underscores its function as an east-west hub. Raiffeisen stands for security and trust The Raiffeisen Banking Group stands for security of customer money like no other bank. The statutory deposit guarantee currently assures savings accounts up to EUR 20, In this respect Raiffeisen has provided an additional safety net. It extends far beyond the statutory provisions and requirements, since Raiffeisen deposits are secured through the Raiffeisen Customer Guarantee Collective Austria. When it introduced the Raiffeisen Customer Guarantee Collective Austria (RKÖ), the Raiffeisen Banking Group was in the vanguard of deposit security. The RKÖ Collective was formed in In times of globalisation and large-scale mergers, its purpose is to give legally binding effect to principles that had been an unwritten rule within the Raiffeisen Banking Group right from the start. The RKÖ Collective guarantees up to 100 per cent of customer deposits in addition to Austria's statutory deposit guarantee. The RKÖ Collective comprises the individual customer guarantee collectives at federal state level, all amalgamated at federal level. In the event that a customer guarantee collective at federal state level is unable to cover all the protected customer claims (which has so far never occurred), the members of Raiffeisen Customer Guarantee Collective Austria use their fi nancial reserves to fulfi l all the customer deposits and in-house issues of the relevant institution, up to 100 per cent. More than four out of fi ve Raiffeisen banks belong to the Raiffeisen Customer Guarantee Collective, with the result that more than 90 per cent of all customer deposits are secured in the RKÖ Collective. By doing so, Raiffeisen sets in stone that for which the trademark Giebelkreuz, a symbol of protection, has always stood, namely security and trust. In the 125-year history of the Raiffeisen Banking Group in Austria, no customer has ever lost a single cent of savings or giro account deposits with Raiffeisen. Structure of the Raiffeisen Banking Group Austria 535 Raiffeisen banks 8 Raiffeisen regional headquarters Top-level institution Group head Raiffeisen Zentralbank 15 network banks Other RZB shareholders Freefl oat RBI most signifi cant investment held by the RZB Group Corporate Responsibility of RZB With total assets of around EUR billion as at 30 September 2010, Raiffeisen Bank International AG is the third-largest bank and one of the leading commercial and investment banks in the country. It was formed in 2010 from the merger of the main fi elds of business of RZB with Raiffeisen International Bank-Holding AG. The merged bank has been strengthened in its position as one of the leading universal banks in the region through the broad distribution network of Raiffeisen International in CEE and the comprehensive product range of RZB. In addition to Austria, RBI also considers CEE to be its home market. As a signatory to the UN Global Compact, RZB takes responsibility for people, society and the environment. It provides information about its Corporate Responsibility activities in a report which it produces in compliance with the internationally recognised standards of the Global Reporting Initiative.

9 16 Interview with Dr Hannes Schmid Interview with Dr Hannes Schmid 17 Tyroleans appreciate Raiffeisen as a local banking partner Dr Hannes Schmid, Chairman of the Board of Managing s of Raiffeisen- Landesbank Tirol AG, sees endorsement of Tyrol Raiffeisen banks' regional business model in both good and bad business years. Even though regulations in the banking sector are becoming more stringent, with an increasingly adverse impact, the outlook for Raiffeisen banks is good, since Tyroleans appreciate a local, reliable and long-term banking partner. How did the Tyrol Raiffeisen banks get through the difficult past few years of the economic and financial crisis? DR HAN- NES SCHMID: Everywhere in the world, 2008 and 2009 were economically challenging years, which the Tyrol Raiffeisen banks overcame very well on balance. Our success in coping professionally with these two years is primarily due to the fact that we have such a solid customer-oriented business model. This model is specifi cally aligned with the needs of customers and is based on Tyrol's economic cycle. As a simplifi cation, this means that we collect local deposits and grant our loans to local borrowers or, as the case may be, to small and medium-size enterprises (SMEs). We have also borne our full share of the political initiatives to stimulate investment in construction and renovation and in SMEs. This focus has been received very well by Tyroleans and by local businesses. Tyrol's renovation of residential properties and regional businesses as a factor in stability? Defi nitely. Private work on residential properties and construction/renovation have stimulated Tyrol's economy signifi cantly. Jobs have been maintained in Tyrol as a result. Tourism has also been a key factor in success during the crisis. Many of our customers are in the tourist trade, in which we have fi nanced very many investments. Tourism in particular made an outstanding contribution to performance in 2010 and was successful in countering the diffi cult general economic situation. On an equal footing Have Tyrol Raiffeisen banks come through the crisis better than other financial institutions? Yes indeed. After all, we do not operate in the global fi nancial business, but in Tyrol. The bottom line is: "If Tyrol people are doing well, and Tyrol companies are doing well, then Raiffeisen banks are also doing well!" We are on an equal footing with our customers. As far as corporate customers are concerned, our main clients are SMEs, customers whom we understand and can help a lot. Although major international enterprises are also Raiffeisen customers, they are not part of our core target groups. Some politicians have claimed that the banks were responsible for the financial crisis, as a result of which the bank tax was introduced as a kind of compensation. I don't consider the bank tax to be a punishment for the originators of the crisis, as is sometimes presented in the political arena. If that were the case, the wrong ones would be affected. We, the Raiffeisen organisation, do not consider ourselves responsible in any way for what has happened during the global fi nancial crisis. Our business model is based on the local regional value-added chain. This has nothing at all to do with risky international speculation, the cause of the fi nancial crisis. So what do you think of the bank tax? I believe that every Austrian is interested in balancing the budget. Of course, this is also in the interests of every business enterprise and consequently in the interests of the banking sector. Policymakers should nevertheless ensure that the revenue from the bank tax is not used exclusively to reduce the budget defi cit, but particularly for investment in the future. I am convinced that the revenue from the bank tax would be used better and with longer-lasting effect in an education initiative in Austria. What are the greatest concerns of the Raiffeisen banks in the next few months? The bank tax affects Austrian banks to quite a large extent. There are also new regulations for the deposit guarantee, even though Raiffeisen already guarantees the deposits of its customers up to 100% through the Customer Guarantee Collective. However, Raiffeisen banks are affected even more through over-regulation at European level. The fl ood of banking rules e.g. for a Credit Suisse, UBS, BNP Paribas or Deutsche Bank apply to the same extent for a local Raiffeisenbank. It is certainly a noble objective for the European legislator to create the same general framework through one regulation for all banks. The accompanying over-administration or over-regulation is a big problem for relatively small banking institutions, however, and is also a competitive disadvantage adversely affecting local customers. "Classic robbery operations" Requirements in the banking sector will become more stringent in future, e.g. through the "Basel III" banking convention. Loans must be backed up by the banks with more equity capital. Can a small Tyrol business count on receiving just as much credit finance in future as has been the case so far? In principle yes, if the statutory requirements are met and the repayments are feasible from a business management viewpoint. On the other hand, those companies that are already at their limit in relation to repayments will in future fi nd it diffi cult to access funds. At all events there will be no relief measures due to the new rules. Nonetheless, Basel III will not strike "like a cudgel", as sometimes claimed in the media: there are transitional phases, after all. Basel III is not an event like the bank tax or the capital gains tax on securities, which were introduced in a "cloak-anddagger" operation to a certain extent. What advice can you give to the savers and borrowers in Tyrol, then? The key is: "Seek advice from the experts at Raiffeisenbank!" Tyrol Raiffeisen banks have proved themselves as a stable, reliable partner with personal proximity and with the security that is guaranteed by the whole Raiffeisen organisation. We did not engage in speculation before and during the fi nancial crisis, and we will not do so in future. Our business model is based on customer needs. Feedback proves us right: on the one hand there is great mistrust directed at banks in general, while on the other there is an extremely positive attitude towards personal Raiffeisen account managers. This is precisely where the success of the Raiffeisen organisation is to be found: we have a local presence, with local decision-makers. All this proved its effectiveness at times when it was diffi cult during the crisis. Will that also be endorsed by customers, or will they quickly forget the lessons from the financial crisis and return to investing in risky prospects of returns? It would be wonderful if the stable value system of a local value-added chain could be anchored permanently in people's consciousness. The temptations of the international capital market, with all its big promises, nevertheless continue to arouse a human trait that has always existed, namely, greediness. Despite this, people have recognised in recent times that even apparently "unsinkable ships" such as whole countries can be called into question. This has greatly strengthened our local business model. Our customers now appreciate the stability, security and reliability of Raiffeisen even more. What are your biggest concerns in the near future? Over-regulation in the banking sector is certainly a concern. It takes up our employees' time, which we would prefer to use for customers. For this reason it is very important that we nonetheless increase the personal quality of service for Tyroleans and maintain it in the long term. Consequently we will not only invest in bank branches and IT, but especially in our employees.

10 18 Interview with Dr Hannes Schmid "The Raiffeisen organisation is well equipped for the future with its stability, customer proximity and customer orientation. We will not diverge from this business philosophy even in future." Local services: others are closing down, Raiffeisen remains So Raiffeisen won't see any of the staff cuts that other banks are implementing? We are certainly not planning on any staff cuts. We will instead, as already mentioned, invest in training our employees with a view to focusing even more on customers. Other companies are tending to cut back on local services and closing branches. What do you think of this? Personally, I can hardly believe how quickly local services are being abandoned by some institutions and companies. In contrast, Tyrol Raiffeisen banks believe in their model for success, in proximity to customers, and will continue to focus on their local markets with high-quality fi nancial services. We have an excellent structure for meeting customer needs effi ciently. This not only involves personal contact but also highly sophisticated technologies, e.g. Raiffeisen online banking. No cuts in sponsoring How have savers and borrowers in Tyrol managed in the last few difficult years? Tyrol has proved that stable development is possible even in times of diffi culty. Our enterprises have responded very rapidly and adapted to the new circumstances. This can be seen as praise for the entrepreneurial spirit in Tyrol, although for some SMEs, not all the post-crisis pain is now past. In relation to tourism, the investment in quality tourism appears to guarantee success in the future. Raiffeisen banks have demonstrated that they have successfully overcome the crisis with their business model. Another aspect that has also been viewed very positively by the people in our federal state is the fact that we have not cut back on our sponsorship of initiatives, clubs etc. We have continued our sponsorship programme unchanged at fi ve million Euro per year. While many other institutions or fi rms have stopped or greatly reduced their sponsorship involvement during the economic crisis, Raiffeisen has not done so. As a consequence, we feel that Tyroleans have been become very much more aware of the importance of a local banking business. This is now appreciated very much more than previously. What is the outlook for the near future? Are high rates of inflation a threat together with interest rate hikes, which would be unpleasant for borrowers? Current trends, with rising prices for commodities and energy, naturally tend to increase the rate of infl ation. Due to the high levels of government debt, however, we do not expect any steep rise in interest rates. We can reckon on relatively stable interest rates for some time to come. I do note see Euribor rising to four per cent in the foreseeable future. What can Tyroleans expect in future from their Raiffeisenbank? Our multi-level system is an ideal confi guration for our customers: local users have available their local Raiffeisen bank as a banking partner. Anyone with regional operations can turn to the Raiffeisen-Landesbank. And for international projects, Raiffeisen Bank International is an ideal partner. The message is clear at all levels: "Speak with your Raiffeisen advisor about your fi nancial future." We can advice businesses and private customers in all phases according to their particular needs. The Raiffeisen organisation is well equipped for the future with its stability, customer proximity and customer orientation. We will not diverge from this business philosophy even in future. Thank you very much for the interview.

11 20 21 Macroeconomic development in 2010 Upward trends with moderate growth In the past year 2010, the global economy continued its upturn after the economic and fi nancial crisis. In the course of the year it nevertheless became clear that each particular economic region performed very differently. While Germany and emerging markets were the engines of global economic growth, the EU's Mediterranean countries battled with major problems. Despite an intact upwards trend, the rather modest economic growth in the United States remained far behind previous recovery phases after recessions. Concerns about a "double-dip" in the USA, i.e. another fall back into recession, grew as the year progressed. In the last few months of the year, however, some important economic indicators turned out to be better than expected, and growth should level off at about 2.8 per cent. The Eurozone also continued its economic recovery in 2010, although the gap between core countries and periphery became ever wider. It became clear at the latest on onset of the Greece crisis in the spring that the PIGS states (Portugal, Ireland, Greece and Spain) in particular had been living above their means for many years. In the wake of the fi nancial crisis, ailing banks and the property markets had to be supported with billion-euro bailout packages, resulting in an explosion of public debt in these countries. The Maastricht criteria could no longer be met. Swingeing consolidation of national budgets in the PIGS states combined with tax increases led in some cases to recessive tendencies in those countries. The trend in Germany was exactly the opposite. The largest member country of the Eurozone reaped the rewards of its long-standing policy of strengthening the competitiveness of the domestic economy and benefi ted from the boom in demand from emerging markets. In 2010 Germany should have achieved economic growth of more than 3.5 per cent, the biggest rise since the country was re-unifi ed. Austria was a benefi ciary of the economic power in Germany, its most important trading partner, and of the noticeable recovery in Eastern Europe. It should have obtained growth of about 1.9 per cent. The Euro in the course of the year an emotional roller-coaster ride In the course of 2010 the Euro went through a proper rollercoaster ride of the emotions. In the fi rst few months the European single currency lost about 20 per cent against the US Dollar. Following the announcement of the Euro bailout facility of EUR 750 billion, it then recovered, only to fall again at the start of the Ireland crisis. The Euro rate against the Swiss Franc was almost invariably downwards throughout As a result the Franc, along with gold, became a "safe haven" for unnerved investors. Expansive monetary policy by the central banks The central banks did not introduce the expected change in their monetary policy in Even at the start of the year, many fi nancial market analysts still expected that the central banks would gradually tighten their extremely expansive monetary policy in the course of the year. The fi rst rises in key interest rates were even forecast for the 4th quarter. It nevertheless turned out quite differently. Both the US central bank, the Federal Reserve (Fed), and the European Central Bank (ECB) have not only maintained their expansive monetary policy line throughout the whole year, but even expanded it. This applies in particular to the Fed, which launched a second quantitative easing programme from November. This means that it intends to buy up US government bonds worth up to USD 600 billion by the spring of 2011, to keep interest rates low and to stimulate the economy further. In view of the turbulence in the Eurozone, the ECB also had to give up its staunch rejection of "special measures". Since the onset of the Greece crisis, it had been compelled to buy up Euro government bonds. In comparison with the Fed, however, it tread very carefully in this respect. Sharp price rise for industrial commodities, gold and silver top performers Prices for industrial commodities continued their upward trend due to strong demand, especially from China. In contrast, the price of oil remained for a long time at an almost unchanged level, only at year-end rising by a good 10 per cent. Because of the prevailing uncertainty, gold was one of the absolute top performers in the past year. On a Euro basis, the price increased 40 per cent in comparison with the end of The price of silver also went up substantially, almost doubling in the course of the year. Two worlds on equity markets In the past year, equity markets repeatedly came under pressure from the public debt crises. The steps taken by the Chinese government to counter overheating of the country's economy also had an adverse effect. The predominantly very positive corporate data invariably prevented a sell-off on stock markets. Instead, the equity markets saw a sideways movement for months on end. Concerns about the US economy caused uncertainty at times. As the economic data improved increasingly from September, fear of recession subsided in the USA. Together with the announcement of a further massive loosening of monetary policy, this was the starting signal for an upwards trend on global equity markets in the fi nal months of the year. The actual motor driving the price of equities was the very good corporate data, both in Europe and in the USA. The quarterly fi gures for companies in 2010 were very much better than had been expected by the market. Accordingly the profi t expectations were constantly corrected upwards, increasing the attractiveness of shares. There is, however, a very wide difference in equity performance in This is revealed particularly in Europe. The German DAX index in particular benefi ted from the strength of the domestic economy, especially exports. The Austrian ATX also returned above-average performance, driven by the good profi ts reported by companies and early purchases of shares due to the price gain tax applicable from 2011 onwards. A disappointing "underperformer" on the other hand was the key European index, EuroStoxx50, which closed the year down on balance. The split nature of the European economy is refl ected in the EuroStoxx50, especially the latent risks in the European banking sector, which remain at a high level. Southern European stock markets (Spain, Italy, Greece) tended to be particularly weak, due to the public debt crisis. Surprisingly, even the stock markets in some emerging markets were hardly able to benefi t from the uninterrupted strength of their national economies in For example, the Brazilian Bovespa closed the year with almost no change and the Hang Seng China Index even remained in negative territory. Turbulence on bond markets The national debt crisis in the Eurozone naturally had a serious effect on the Euro bond market. At times there was proper turmoil on the Euro bond market due to concerns that the Greece crisis would spread to other Euro states. As a result, the risk premiums of Euro bonds issued by these governments truly exploded in comparison with the German benchmark. The bailout facility of more than EUR 750 billion was unable to calm down the market for European government bonds on a long-lasting basis. As it turned out, Ireland was the fi rst Eurostate to fl ee to the refuge of the bailout facility. Initially German government bonds, seen as a safe investment, benefi ted from the uncertainty in the Eurozone. The yield on 10-year German government bonds fell from over 3 per cent to about 2 per cent at times. In the last months of the year, however, the interest rate climbed back up to 3 per cent. Greek government bonds, on the other hand, most recently had yields of more than 12 per cent per year. Austrian economy Austria was a benefi ciary of the economic power in Germany, its most important trading partner, and of the noticeable recovery in Eastern Europe. It should have obtained growth of about 1.9 per cent. Over the next two years a slight acceleration in the rate of growth is expected, to 2.1 and 2.3 per cent, respectively. The main force behind the upturn was strong growth in exports. In real terms the export of goods increased by 10.5 per cent yearon-year, with a signifi cant rise in demand from Asian countries. Following this strong recovery, export growth is expected to weaken to 7 per cent for the coming year. On the other hand, domestic demand performed less well. In view of lower capacity utilisation as the fi nancial crisis unfolded, growth in plant and equipment investments did not return to positive territory until mid-2010, much later than in previous upturn periods. Private households also remained reluctant to spend due to the weak development of real wages in the past year. The Austrian labour market was a positive surprise, with 35,000 more people now in employment. This meant that unemployment was reduced from 4.8 per cent in 2009 to 4.3 per cent in The rate of infl ation rose again slightly in 2010 in line with the economic recovery, to 1.7 per cent. The main factors were rising prices for energy and food. The tax increases introduced as part of budget consolidation will be a factor in the infl ation rate accelerating to 2.2 per cent for the year 2011.

12 22 23 Business development Raiffeisen-Landesbank Tirol AG can look back on a satisfactory year in 2010, despite intense competition. Earnings from ordinary business activities increased further, in spite of a signifi cant drop in net interest income. This was primarily achieved through reducing operating expenses. There was also a fall in the need to make provisions for credit risk management. This indicates that the economy in Tyrol performed very well in 2010 and the fall-out from the crisis is slowly being overcome. In contrast, there was an increased need to make provisions for securities and investments. Total assets in EUR million ,120 5,086 4,882 4,758 5,047 6,654 7,296 7,182 Use of funds/asset structure Change EUR m Per cent EUR m Per cent EUR m Per cent Receivables from banks 2, % 2, % % Receivables from customers 2, % 2, % % Securities 1, % 1, % % Shareholdings including shares in affiliated companies % % % Other assets % % % Assets 7, % 7, % % The slight decrease in assets of 1.6 per cent (EUR m) to EUR 7, m was primarily due to an decrease in the securities in the company's own possession and a fall in receivables from banks. Securities in the company's possession fell by 6.4 per cent (EUR m) to EUR 1, m and receivables from banks decreased 3.2 per cent (EUR m) to EUR 2, m. Other assets also declined to a lesser extent, by 13.4 per cent (EUR m) to EUR m, and shareholdings including shares in affi liated companies fell by 1.6 per cent (EUR 3.4 m) to EUR m. Receivables from customers rose 4.2 per cent (EUR m) to EUR 2, m. Receivables from customers consisted of the following as at year-end 2010: Industry comparison Change compared to total lending EUR k EUR k Per cent Per cent Agriculture, forestry and co-operatives 23,168 23, % 0.9 % Transport 140, , % 5.4 % Commerce 539, , % 20.9 % Industry 161, , % 6.3 % Employed, private individuals 486, , % 18.9 % Tourism, leisure industry 352, , % 13.7 % Public bodies and social security 203, , % 7.9 % Freelancers, self-employed 55,185 49, % 2.1 % Retailing 149, , % 5.8 % Other (housing associations and other non-banks) 465, , % 18.1 % Total 2,577,884 2,474, % % Equity capital (in accordance with Section 23 BWG (Austrian Banking Act)) Change EUR k EUR k EUR k EUR k Per cent Subscribed capital 84,950 84,950 80,000 Reserves 265, , ,718 Intangible assets Core capital 350, , ,704 7, % Secondary capital 13,752 13,752 7,043 Supplementary equity 13,752 13,752 7, % Equity before deductions 364, , ,747 7, % Deduction in accordance with Section 23 (13) BWG (Austrian Banking Act) Short-term secondary capital Actual equity 364, , ,882 7, % Equity ratio in accordance with Section 22 BWG (Austrian Banking Act) (> 8 %) % % 9.68 % The equity held by Raiffeisen-Landesbank Tirol AG increased by 2 per cent (EUR 7.32 m) to EUR m in the year under review. The equity ratio is per cent, well above the statutory equity quota of 8 percent as required under Section 22 (1) BWG (Austrian Banking Act).

13 24 25 Net margin Cost/income ratio Income situation Personnel Return on equity 0.59 % 0.57 % 0.67 % % % % Total profi tability % 5.05 % 4.81 % 0.25 % 0.23 % 0.23 % The net margin is 0.59 per cent, the cost/income ratio is per cent, the return on equity is 5.08 per cent and total profi tability is 0.25 per cent. Source of funds/capital structure Change EUR m Per cent EUR m Per cent EUR m Per cent Liabilities to banks 4, % 4, % % Giro deposits % % % Savings deposits % % % Certificated liabilities 1, % 1, % % Equity capital % % % Other liabilities % % % Liabilities 7, % 7, % % On the liabilities side, the decrease in total assets is attributable to a signifi cant fall in liabilities to banks. These have fallen by 8.8 per cent (EUR m) to EUR 4, m. The following increased: certifi cated liabilities by 10.4 per cent (EUR m) to EUR 1, m, other liabilities by 57.5 per cent (EUR m) to EUR m, giro deposits by 6.6 per cent (EUR m) to EUR m, savings deposits by 3.3 per cent (EUR m) to EUR m and equity capital by 2.1 per cent (EUR 7.31 m) to EUR m. Operating income fell in 2010 by 4.5 per cent (EUR 5.19 m) to EUR m. This was particularly due to the signifi cant fall in net interest income by 9.8 per cent (EUR 6.02 m) to EUR m. Income from commission also fell slightly by 2.4 per cent (EUR 0.60 m) to EUR m, and other operating income by 4.8 per cent (EUR 0.59 m) to EUR m. Income from fi nancial transactions increased by 70.6 per cent (EUR 1.27 m) to EUR 3.07 m, and income from securities and investments by 5.5 per cent (EUR 0.75 m) to EUR m. Operating expenses have fallen by 8.6 per cent (EUR 6.25 m) to EUR m. This is due principally to the decrease in other operating expenses by 81.4 per cent (EUR 5.25 m) to EUR 1.2 m and in personnel expenses by 8.2 per cent (EUR 3.40 m) to EUR m. Depreciation of assets also decreased slightly by 6.4 per cent (EUR 0.23 m) to EUR 3.38 m. Other administrative expenses saw an increase of 12.4 per cent (EUR 2.63 m) to EUR m. The balance from provisions for receivables and allocation to provisions for contingent liabilities, as well as income from the reversal of provisions for receivables and from provisions for contingent liabilities decreased appreciably by 17.1 percent (EUR 4.13 m) to EUR m. There is a contrary trend in the balance resulting from provisions for securities that are valued like fi nancial investments, and for investments, as well as income from provisions for securities that are valued like fi nancial investments, and for investments. This balance increased by EUR 4.27 m to EUR 4.78 m. Despite the continuing diffi cult economic climate, we managed to increase the earnings from ordinary business activities by 5.5 per cent (EUR 0.92 m) to EUR m. In the 2010 fi nancial year, Raiffeisen-Landesbank Tirol AG had an average of employees ( salaried employees and wage-earners). The 10 per cent decrease in comparison with 2009 is due chiefl y to the outsourcing of payments, back offi ce, balance sheet analysis and property valuation to our newly established subsidiary for settlement and services, Raiffeisen Abwicklungs- und Dienstleistungsgesellschaft (RAD). Income statement Change EUR m EUR m EUR m Per cent Net interest income % Income from securities and investments % Income from commission % Income / expenses from fi nancial transactions % Other operating income % Operating income % Personnel expenses % Other administrative expenses (cost of materials) % Depreciation of assets % Other operating expenses % Operating expenses % Operating result % Balance of reversals from / allocations to the provisions for receivables % Balance of reversals from / allocations to the provisions for securities, investments % Earnings from ordinary business activities % Bank branches As at 31 December 2010, Raiffeisen-Landesbank Tirol AG was represented in the market territory by 23 branches, fi ve of which are self-service. The employees at our branches look after more than 65,400 private and commercial customers.

14 26 27 Risk Report Modern risk management Organisation of risk management Market risk Operational risk Active risk management is a major priority for Raiffeisen-Landesbank Tirol AG to secure its long-term success. In compliance with statutory requirements (BWG (Austrian Banking Act) and Basel II), Raiffeisen-Landesbank Tirol AG has set itself the objective of guaranteeing the security and profi tability of the bank in the interests of its customers and owners, by using up-to-date methods and appropriate risk management and controlling systems. Our experience in 2010 has confi rmed that the risk policy, risk management and their organisation are appropriate. Principles of risk policy The principles of risk policy are defi ned by the Board of Managing s, and are regularly reviewed and modifi ed as necessary: The Board of Managing s and all the employees feel an obligation to comply with the principles of risk policy and make their day-to-day decisions in line with these directives. If the risks are unclear or there are doubts about methodology, the principle of prudence is employed. The introduction of new business areas or products is generally preceded by an appropriate analysis of the specifi c business risks involved (product launch process). Principles of risk management Our risk management approach is based on the following principles: The Board of Managing s bears overall responsibility for risk management supervision within Raiffeisen-Landesbank Tirol AG, while the Supervisory Board reviews the bank's risk policy at regular intervals. Loan, market, liquidity and operational risks are managed as a coordinated process at all the relevant levels of the bank. The risk committee prepares and proposes the risk strategy, the limitation of risk capital within the scope of risk-bearing capacity as well as risk capital allocation. Risk management is organised in a manner that prevents confl icts of interest on both a personal and organisational level (separation of front offi ce/back offi ce). The duties and organisational procedures involved in the measurement, monitoring and reporting of risks are undertaken by the restructured Risk Management organisational unit and are described on the Intranet and in the relevant manuals. Credit risk The credit risk is calculated for counterparts (private and commercial customers, banks, countries), investments and concentrations of positions. The extension of loans, i.e. the specifi c acceptance of risk, is one of the core business areas of Raiffeisen-Landesbank Tirol AG. The risk presented by a borrower is considered along two dimensions on an ongoing basis. This involves an ongoing assessment of the business situation using an in-house rating system on the one hand, and the evaluation of collateral to reduce risk on the other. Different weightings are given to the risk content of loans in the relevant calculations. The Risk Management organisational unit supports the sales units in checking, measuring and controlling the credit risk, as well as managing distressed loans in conjunction with the Receivables Management organisational unit. An established component of reporting is a range of closing date reports and forecasts of the risk profi le, which are prepared in the course of periodic risk committee meetings. This ensures a risk management process that is active at every stage. The tasks and organisational procedures related to credit risk, as well as the credit risk strategy approved by the Board, are clearly described on the Intranet and in the credit manual. They have also been communicated to all personnel with executive functions and are additionally available online. This ensures that in each particular case, only risks that comply with the risk policy are actually incurred. In addition, suffi cient provisions are formed for existing risks in line with the principle of commercial prudence. On the basis of supervisory requirements and recommendations, and to provide business management benefi ts, Raiffeisen- Landesbank Tirol AG has set itself the task of continually developing and improving the risk management process as well as risk assessment and control methods. Market risk consists of the risks incurred through interest rate changes, currencies and prices resulting from positions held in securities, interest rates and foreign exchange. Market risk arises both in trading and banking book transactions. Raiffeisen-Landesbank Tirol AG uses a combination of various risk parameters in order to control market risks and set appropriate limits. Market risk is managed by the Treasury organisational unit, where all interest rate, currency and price positions are systematically compiled and appropriately controlled. In addition to the lending business, the bank's own transactions are one of its core business areas. The Risk Management organisational unit supports the Treasury organisational unit in the control of market risks. Measuring and monitoring the market risks and regular reporting constitute the principal areas of responsibility. Special attention is paid to the systematic monitoring of strategy and hedge positions as part of dynamic risk monitoring. Daily risk/performance analyses and reports ensure that the Treasury organisational unit can apply the appropriate control measures. Liquidity risk The refi nancing of loans at matching maturities is highly important at Raiffeisen-Landesbank Tirol AG. This strategy is supplemented by a liquidity parameters system and the corresponding limits, with a distinction made between short-term (operational) and long-term (strategic) liquidity control. The Risk Management organisational unit monitors compliance with these limits. A suffi cient supply of short-term and long-term liquidity for possible bottlenecks is included in the bank's liquidity plans and this topic is regularly discussed by the risk committee. In order to strengthen its liquidity position, Raiffeisen-Landesbank Tirol AG places great emphasis on its issuing activities and the portfolio of securities that can be refi nanced, among other measures. Additional control instruments are being developed in the context of proactive liquidity control. The management of operational risks is also performed in the risk management organisational unit. All risks that could arise due to errors in systems, processes, employee misconduct or external events, are analysed, assessed and suitable counter-measures are applied. The equity requirement for operational risk is calculated using the basic indicator method. Risks are presented and processed using modern computer systems. Supplemented through regular checks by Internal Audit and periodic reporting, appropriate risk management of operational risks is assured. Risk-bearing capacity As part of overall risk control at the bank, the potential for covering risks is balanced against all major risks, which are determined using the latest methods and appropriate systems. The annual risk-bearing capacity fi gure represents the limit for the total bank risk. Non-quantifi able risks are taken into account by means of a "risk buffer" as well as the actual measured risks. All risk-related information is included in the monthly risk-bearing capacity analyses. They determine total bank risk in various scenarios in order to ensure that suffi cient capital would be available in diffi cult situations. The key factors in Raiffeisen-Landesbank Tirol AG risk management processes are credit and market risks, as the focus of bank business is on retail and commercial customers and treasury transactions. The credit risk is analysed using probabilities of default, while the market risk resulting from trading books and banking books is calculated using sensitivity parameters. As well as market-related risks, operational risks are recorded and calculated within the scope of overall bank management. On the one hand the purpose is to describe all the risks, and to accommodate the developments relating to Basel II on the other. The analysis of risk-bearing capacity is therefore the starting point for limiting risk activities to an acceptable level, with the aim of securing the continued viability of Raiffeisen-Landesbank Tirol AG as a problem-free entity and appropriately utilising its income potential.

15 28 29 Deposit security Outlook for 2011 Solidarity Association of the Tyrol Raiffeisen fi nancial organisation Together with Raiffeisen-Landesbank Tirol AG, the Raiffeisen banks of the Raiffeisen Banking Group Tyrol have set up a Solidarity Association which ensures, through appropriate measures, that association members who have run into fi nancial diffi culties receive help. Raiffeisen Customer Guarantee Collective Austria This association, consisting of Raiffeisen banks, Raiffeisen regional banks, Raiffeisen Zentralbank Österreich AG and Raiffeisen Bank International AG, provides a mutual guarantee on all customer deposits and the banks' own securities issues, irrespective of the amount. The customer guarantee collective is organised on two levels: at regional level on the one hand, and the Federal Guarantee Collective on the other. The Customer Guarantee Collective thus ensures security for customers, over and above the statutory deposit guarantee. The global economy and particularly the economy in Tyrol performed positively in We expect this trend to continue in This forecast is backed up by a number of early indicators pointing to strong economic performance on the part of national economies. A factor creating uncertainty is the debt crisis in several countries. Nevertheless, stable corporate performance and the solid economic trend should ensure that the general upward trend is maintained. In 2011, Raiffeisen-Landesbank Tirol AG will continue along the path of risk-aware and earnings-oriented growth, with a consistent focus on the customer business. Our customer orientation, from strategy to daily operations, is also our opportunity for success in the future. An additional focus in private customer business is on improving profi tability, and on boosting sales effi ciency in private banking and corporate customer business. Tyrol Raiffeisen banks are our owners and our most important customers. In 2011 it remains our declared objective to sustain an increase in their satisfaction with the services provided by Raiffeisen-Landesbank Tirol AG. In order to do so, we will implement the agreed measures to deliver improvement and focus further on consulting services. The aim is to use synergies even better and to consolidate our market position as the leading banking group in Tyrol. The commitment of our employees is crucial to the success of Raiffeisen-Landesbank Tirol AG and they ensure that we maintain our lead. As a result, specifi c advancement of our staff is particularly important to us. In the past few years the company increased its productivity gradually, while bearing in mind our customer orientation. It remains important to pursue this path consistently in the year ahead. In this respect we pay special attention to developing management staff. There are no comments on research and development due to industry considerations. We have not become aware of any events of special signifi cance that occurred after the close of the 2010 fi nancial year. Raiffeisen-Landesbank Tirol AG, the top-level institution of the Raiffeisen Banking Group Tyrol, will continue to pursue the highly successful strategy of recent years consistently in Deposit security institutions of the Raiffeisen Banking Group Austria The member institutions of the Raiffeisen Banking Group Tyrol are jointly members of the Austrian Raiffeisen deposit security organisation egen through the Raiffeisen deposit security agency Tirol egen. This deposit security cooperative is the liable institution for the entire Raiffeisen Banking Group in accordance with Sections 93, 93a and 93b BWG (Austrian Banking Act). For the purpose of deposit security, an appropriate early-warning system has been implemented in the Raiffeisen Banking Group Austria. Based on a comprehensive reporting system, it carries out continuous analyses and observations of income and risk development of all member institutions. The Board of Managing s of Raiffeisen-Landesbank Tirol AG Dr Hannes Schmid Chairman of the Board of Managing s Reinhard Mayr Gobert Sternbach Dr Hans Unterdorfer

16 is the year of tangible assets and shares" Peter Brezinschek, Chief Analyst at Raiffeisen Research, is optimistic about economic development and sees excellent opportunities for Austrian investors on fi nancial markets this year. He advises investing in shares and tangible assets above all. The economy in Europe has regained momentum. Has the economic crisis finally been overcome, will the upward trend be sustained? PETER BREZINSCHEK: Following the upturn in 2010, which was primarily export-driven, it has been the case since autumn 2010 that capital investments have gained momentum worldwide due to the confi dent assessments made by companies. These investments are now providing a second line of support to the economy, especially in Germany and Austria. Together with corporate earnings that are on the rise again, this means that in 2011, and in 2012, investment will probably drive growth. It will also create jobs, resulting in more private spending power. This should give the whole upswing a certain breadth. It can already be said that the upturn has developed its own dynamics, making us confi dent that it will continue through to Admittedly this is not all the same throughout Europe. We have very different pictures: in countries with high levels of debt, economic momentum is much weaker. Are you not concerned that the crisis will hit again the oftmentioned and feared "double-dip"? Falling back into recession has turned out to be a fear-inducing myth. Although the UK, for example, shrank in the fourth quarter of 2010, it should improve this year. The major tax-cutting measures introduced by the Obama administration also takes pressure off private spending in the USA in "More debt, less unemployed a fairy tale" Some experts claim: although the economic crisis is over, we are now faced with collapse in high-debt countries such as Greece. What would this mean for Austria? "Collapse" is too negative a word. It is very much the case, however, that highdebt countries are faced with a signifi cantly more challenging economic environment than those with solid public fi nances. In 2010, and even in 2009, Greece had a declining economic output and must now accept another shrinkage because the country has lived above its means for too long. The proposition that "More debt means less unemployment" is unfortunately a fairy-tale and not an economic fact, because very high debt invariably entails high repayments and tough restructuring measures. This restructuring also costs growth. Here in Austria we are still on the comfortable side because we do not have these excessive burdens of debt, and as a result we can also participate fully in the upturn. Last year our exports saw double-digit percentage growth and will continue to grow strongly this year. Because it has a sound economic structure and its industry and exports are highly competitive, Austria is in a position to take full advantage of the international upturn. If central banks increase interest rates, then high-debt states will crash. If the banks don't increase them, there is the threat of high inflation? Which is worse for us? And so what will the central banks do? The central banks in the USA, UK, Japan and in the Eurozone continue to hold rates at historically low levels. In the next twelve months there will be a movement towards normalisation. We believe that the interest rates will be slowly adjusted by the central banks to the circumstances. The European Central Bank (ECB) has announced the fi rst interest rate increase for April, which should be followed by others in the second half of the year. We expect that the Federal Reserve will follow the ECB in the second half of the year with further interest rate hikes. However, even interest rates at a percentage point higher will not slow down the economy. This could become very expensive for Euro peripheral countries. As a result the longer-term capital market rates will experience a further rise, as has been the case for some time, because infl ation rates are going up not only in Europe, but also in the USA and especially in emerging markets. In the case of Asia and Latin America, for example, but also in Eastern Europe, it is very likely that further interest rate increases will be applied in order to combat infl ation in So overall, there will be interest rate hikes, but they will be moderate? But could that not jeopardise the upturn? Actually, based on the high growth fi gures for Germany and Austria, key interest rates shouldn't be around one per cent, but should probably be 3.5 per cent. But in the Eurozone we have to compromise between the strong economies and those with problems, such as Spain and Greece, where there is still stagnation. As a result, at present the European Central Bank does not intend to respond to the temporary rise in the infl ation rate above the 2 per cent mark with drastic interest rate rises, but to react moderately. Germany and Austria benefi t from this. With low interest rates to aid business, we are in the same privileged situation as Spain, Italy, Greece were ten years ago, when they adopted the Euro and the ECB took the "sick giant", Germany, into consideration. Of course, this now gives us the chance to take out loans that are low-cost relative to expected returns, and to invest. What if the high-debt EU countries cannot extricate themselves from the crisis? They must get out of it, it's as simple as that. You can't cover old debts by taking on more and more new debt. Creditors have become very alert in this respect, and at some stage want to get their money back again. For this reason the high-debt countries will have to cut back even more on their spending. In 2012 too, many of these countries will still be far from meeting Maastricht stability criteria. Public debt will continue to rise, and that is not a confi dence-inspiring sign that the fi nancial markets will reward. On the contrary, high-debt countries must pay higher interest rates for their public debts. It is clear that the restructuring measures that have so far been announced do not go far enough. More ambitious action is defi nitely required. In that case, investors would look at government bonds with more trust. Are you not concerned that the Eurozone could break up? I don't fear that it will collapse. I assume that high-debt countries will learn from their mistakes and will prioritise restoring their competitiveness. Once this has been restored, they will be competitive again on international markets. They can then bring in tax revenues and reduce their high current account defi cits, so these countries must also take out fewer international loans. Finance minister benefi ts from Greece for the time being But with these high levels of national debt, is it still possible at all to invest in government bonds? It must be said that, overall, we are in a phase where yields are at historically low levels. Austrian yields in the ten-year range, at just under 3.6 per cent, are far lower than before the fi nancial markets crisis, when they were 4.6 per cent:in other words: Austria's fi nance minister has so far benefi ted from the Greece crisis. He is paying very low interest on government debt because the capital market rates are much lower than they would have been if Griechenland und Portugal did not have these diffi culties. Germany is the biggest benefi ciary in this respect. So do not buy government bonds in the current climate of low interest rates? The economy has recovered, capital market yields are linked to the economy, so yields on government bonds must tend to rise in the next twelve months. Because of the low yields, I consider investment in government bonds to be hardly worthwhile at present, when it can be expected that the yield on Austrian government bonds will, at some stage, again have a four before the decimal point as a sign of a strong economy. If you invest now in low-interest government bonds, you would probably incur losses on the price as soon as interest rates rise again somewhat. What are the alternatives? There are highly attractive corporate bonds which, in our opinion, would be a wiser choice including from borrowers with a good rating, yields between 4.5 and 5.5 per cent, and with maturities that are not too long. In the same breath one could also mention Raiffeisen bonds with rising interest coupons. However, our special recommendation is: during periods

17 32 "Because it has a sound economic structure and its industry and exports are highly competitive, Austria is in a position to take full advantage of the international upturn." in which the economic upturn has not yet fully run its course and the upswing will continue into 2012, shares and tangible assets are generally better, partly because the price trend in the energy and agricultural sectors is going up. In that case an investment in tangible assets is, of course, a good course of action. Firstly the bulls come Shares have already risen sharply in recent months. Can it continue upwards? We see further gains on the ATX. This year we expect the index to go in the direction of 3,200 points, as a very moderate valuation. In the German share index, the DAX, there is still upside, as in the case of Eurostoxx 50 or Standard & Poor s or in emerging markets. We believe that equity investments are very interesting specifi cally in the fi rst half of the year, I'd like to emphasise that. In the second half of the year the bears could already be lurking and they could fi re off an occasional attack against the bulls. This possibility cannot be excluded in the second half of the year. The strongest economic impetus should nevertheless occur in the fi rst half of the year. What type of investment funds can be recommended for this year? For example equity funds investing in emerging markets, in Eastern Europe. It should also be remembered that, in emerging markets, investors can also benefi t from the positive performance of currencies when holding positions in bond funds. Commodity holdings are also interesting. I believe that the energy sector in particular could see quite a lot of potential over the next few years. This could be used, for example, to round off a portfolio depending on tolerance for risk, which is always the top priority. Naturally, care needs to be taken: for some people, an emergingmarket fund is out of the question, because price fl uctuations of 10 or 20 per cent cannot be tolerated, because this would stretch nerves to breaking point. For others, a price drop of this magnitude would be welcomed as an opportunity to buy. Thank you very much for the interview. What other investments could then be worthwhile in the near future: commodities, property, art? Why not? These are all tangible assets, and I think that 2011 is generally the year of tangible assets. This should also continue beyond I believe that a relatively long-term investment could be made in these trends over the next few years, as a good mix in a very broadly diversifi ed portfolio.

18 34 35 Balance Sheet as at 31 December 2010 Assets Balance Sheet as at 31 December 2010 Liabilities EUR EUR EUR k EUR k 01. Cash in hand, balances at central banks and post giro offi ces 16,282, , Public-sector debt issues and bills of exchange eligible for refi nancing at the Austrian Central Bank: a) Public-sector debt issues and similar securities 909,835, ,503 b) Bills of exchange eligible for refi - nancing at central banks ,835, , Receivables from banks a) Payable on demand 820,911, ,430 b) Other receivables 1,928,327, ,749,239, ,001,446 2,838, Receivables from customers 2,577,883, ,474, Bonds and other fi xed-interest securities a) From public-sector issuers b) From other issuers 543,736, ,736, , ,043 of which: the bank's own bonds (0.00) (0) 06. Shares and other nonfi xed-interest securities 66,408, , Investments 186,555, ,975 of which: in banks (179,801,928.31) (179,810) 08. Shares in affi liated companies 22,359, ,342 of which: in banks (0.00) (0) 09. Intangible fi xed assets Tangible assets 47,744, ,935 of which: land and buildings used by the bank for its own operations (22,583,436.82) (23,486) 11. Own shares or interests and shares in companies where a controlling or majority holding is held of which: nominal value (0.00) (0) 12. Other assets 60,903, , Subscribed capital that has been called in, but not yet paid up Deferred expenses 998, of which: deferred taxes in accordance with Section 198 (10) UGB (Austrian Commercial Code) (0.00) (0) TOTAL assets 7,181,947, ,295, EUR EUR EUR k EUR k 01. Liabilities to banks: a) Payable on demand 1,696,423, ,736,816 b) With an agreed term or period of notice 2,315,875, ,012,299, ,660,565 4,397, Liabilities to customers: a) Savings deposits 606,778, ,302 of which: aa) Payable on demand (0.00) (0) bb) With an agreed term or period of notice (606,778,173.72) (587,302) b) Other liabilities 797,059, ,403,837, ,746 1,335,048 of which: aa) Payable on demand (467,387,496.59) (506,744) bb) With an agreed term or period of notice (329,672,042.20) (241,002) 03. Certifi cated liabilities: a) Bonds issued b) Other certifi cated liabilities 1,188,184, ,188,184, ,075,886 1,075, Other liabilities 149,033, , Deferred expenses 2,570, , Provisions: a) Provisions for severance payments 7,799, ,587 b) Provisions for pensions 23,547, ,294 c) Provisions for taxes d) Other 22,329, ,676, ,043 49, 'A' fund for general bank risks Subordinated liabilities Supplementary capital 13,847, , Subscribed capital 84,950, , Capital reserves: a) Committed 79,342, ,343 b) Uncommitted ,342, , Revenue reserves: a) Statutory reserves 8,495, ,495 b) Reserves required under Articles of Association c) Other reserves 103,595, ,090, , ,615 of which: Committed reserves (11,641,930.57) (11,642) Reserves stipulated in Section 225 (5) UGB (Austrian Commercial Code) (0.00) (0) 12. Liability reserves stipulated in Section 23 (6) BWG (Austrian Banking Act) 67,200, , Profi t for the year 7,649, , Untaxed reserves a) Valuation reserve due to special depreciation 7,265, ,429 b) Other untaxed reserves ,265, ,429 of which: aa) Investment reserve under Section 9 EStG (Austrian Income Tax Act) 1988 (0.00) (0) bb) Investment exempt amount under Section 10 EStG (Austrian Income Tax Act) 1988 (0.00) (0) cc) Rent reserve under Section 11 EStG (Austrian Income Tax Act) 1988 (0.00) (0) dd) Transfer reserve under Section 12 EStG (Austrian Income Tax Act) 1988 (0.00) (0) TOTAL liabilities 7,181,947, ,295,886

19 36 37 Below-the-line items Income Statement 2010 Page 1 Balance sheet as at 31 December 2010 Balance sheet as at 31 December 2009 EUR EUR EUR k EUR k re ASSETS: 01. Foreign assets 615,999, ,150 re LIABILITIES: 01. Contingent liabilities 213,447, ,999 of which: a) Accepted and endorsed bills sold (0.00) (0) b) Liabilities resulting from guarantees and liability arising from the furnishing of collateral (213,175,356.42) (186,886) 02. Credit risks 248,469, ,942 of which: Liabilities arising from repos (0.00) (0) 03. Liabilities arising from trust companies Deductible equity in accordance with Section 23 (14) 364,598, ,284 of which: equity in accordance with Section 23 (14) 7 (0.00) (0) 05. Mandatory equity in accordance with Section 22 (1) 270,942, ,970 of which: mandatory equity in accordance with Section 22 (1) 1 and 4 (270,942,507.80) (270,962) 06. Foreign liabilities 1,286,210, ,327, Hybrid capital in accordance with Section 24 (2) 5 and EUR EUR EUR k EUR k 01. Interest and interest-related income 161,645, ,611 of which: from fi xed-interest securities (27,870,270.58) (51,194) 02. Interest and interest-related expenses 106,018, ,962 I. Net interest income 55,627, , Income from securities and investments a) Income from shares, other stocks rights and non-fi xed-interest securities 1,344, ,569 b) Income from investments 11,936, ,778 c) Income from shares in affi liated companies 999, ,279, ,185 13, Income from commission 31,501, , Expenses on commission 7,340, , Income / expenses from fi nancial transactions 3,070, , Other operating income 11,827, ,420 II. Operating income 108,965, , General administrative expenses a) Personnel expenses 38,132, ,528 of which: aa) Wages and salaries (25,282,255.16) (27,006) ab) Expenses for mandatory social security contributions and payroll taxes and mandatory contributions (6,597,818.68) (7,035) ac) Other social security expenses (1,010,597.58) (1,071) ad) Expenses for pension schemes and support (3,787,251.35) (3,629) ae) Allocations to Pension provisions (257,241.33) (1,702) af) Expenses for severance payments and contributions to occupational employee pension funds (1,197,728.39) (1,085) b) Other administrative expenses (cost of materials) 23,873, ,005, ,237 62, Provisions for assets contained in items 09 and 10 on the assets side 3,374, , Other operating expenses 1,196, ,453 III. Operating expenses 66,577, ,837 IV. Operating result 42,388, ,327

20 38 39 Income Statement 2010 Page EUR EUR EUR k EUR k IV. Operating result (carried forward) 42,388, , /12. Balance from provisions for receivables and allocations to provisions for contingent liabilities, as well as income from the reversal of provisions for receivables and from provisions for contingent liabilities -19,979, , /14. Balance resulting from provisions for securities that are valued like fi nancial investments, and for investments, as well as income from provisions for securities that are valued like fi nancial investments, and for investments -4,780, Notes: Accounting and valuation principles General principles The annual fi nancial statements were prepared in line with the principles of orderly accounting, as well as the generally accepted standard that a true and fair view of the assets, fi nancial position and income situation of the company be provided. The principle of completeness was observed during the preparation of the annual fi nancial statements. The principle of individual valuation was observed during the valuation of assets and debts and the going concern principle was assumed. Securities Fixed-interest securities held as fi xed assets were valued according to the moderated lower of cost or market principle in accordance with Section 56 (2) BWG (Austrian Banking Act). Other securities held as fi xed assets were valued according to the strict lower of cost or market principle. Securities serving as cover stock for trust funds were regarded as fi xed assets and valued according to the strict lower of cost or market method in accordance with Section 2 (3) Austrian Trust Fund Security Regulation. V. Earnings from ordinary business activities 17,628, , Extraordinary income of which: withdrawals from the fund for general bank risks (0.00) (0) 16. Extraordinary expenses of which: allocations to the fund for general bank risks (0.00) (0) 17. Extraordinary result (subtotal of items 15+16) Income taxes -2,256, , Other taxes, unless reported in item , VI. Net profi t 14,957, , Movements in reserves -7,311, ,494 of which: allocation to the liability reserves (0.00) (-250) reversal from the liability reserves (0.00) (0) VII. Net income 7,645, , Profi t brought forward 4, The principle of prudence was observed insofar as only those profi ts realised as at the balance sheet date were reported. All identifi able risks and impending losses were taken into account. Currency translation The currencies of the member states in the European Monetary Union were reported at the fi xed conversion rate. In accordance with Section 58 (1) BWG (Austrian Banking Act), amounts in foreign currencies are converted at ECB reference rates. If these are not published, such amounts are converted at mean foreign exchange rates (RZB fi xing). Forward transactions are converted at the forward rate on the balance sheet date in accordance with Section 58 (2) BWG (Austrian Banking Act). Securities held as trading stock and as current assets were valued according to the strict lower of cost or market method in accordance with Section 207 UGB (Austrian Commercial Code). Current asset securities acquired as cover for the bank's own issues were valued at market value. The securities derived from the bank's own issues held in current assets were reported at the repayment amount. Loans, contingent liabilities and credit risks Specifi c provision for bad debts or provisions were made for identifi able risks with borrowers. Additional charges are recognised as income in the year of granting the loan. A general provision for bad debts is applied in the case of selected industry risks. Investments Investments are valued at cost of acquisition. Extraordinary depreciation was applied where an impairment that is expected to be permanent occurred as a consequence of continuing losses, reduced equity and/or reduced income. VIII. Profi t for the year 7,649, ,404