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05.08.2004

Results for the first six months of 2004:
Bank Austria Creditanstalt's profits rise significantly

  • Profit after taxes up by 40 per cent to EUR 283 million
  • CEE business segment generates 86 per cent increase in net income before taxes, thus making the largest contribution to BA-CA's overall results
  • Good performance of BA-CA shares: up by 72 per cent since IPO

 

    Erich Hampel, CEO of Bank Austria Creditanstalt

 

 

Erich Hampel, CEO of Bank Austria Creditanstalt; Stefan Ermisch, CFO of Bank Austria Creditanstalt

Bank Austria Creditanstalt (BA-CA) significantly improved its results for the first half of 2004 compared with the same period in the previous year. Net income after taxes and minority interests increased by 39.9 per cent to EUR 283 million (first half of 2003:
EUR 202 million). The return on equity thus rose from 8.8 per cent to 9.4 per cent, although the equity base increased by 30 per cent.

Contributions to the improvement in profits came from all business segments of the bank.
Erich Hampel, CEO of Bank Austria Creditanstalt: "Our results for the first half of 2004 show that we are on track. Business development in Central and Eastern Europe is particularly satisfactory. In this region we are reaping the benefits of our strategy of expansion." 

Net income before taxes generated by the CEE business segment rose by 87 per cent to EUR 169.1 million. The CEE business segment accounts for 41 per cent of BA-CA's net income before taxes, thus making the largest contribution to Group profits. Business volume measured by total assets in the region also increased strongly, by 16 per cent to
EUR 25.1 billion. The BA-CA network in the region comprises some 870 offices in 11 countries. Moreover, through HVB Group, customers of Bank Austria Creditanstalt have access to markets in Russia, Ukraine, the Baltic states and all international financial centres.
 
Erich Hampel: "We aim to pursue strong growth in CEE by expanding existing units particularly in the coming years. We will open about 200 new branches by 2007. And we take a look at opportunities for further acquisitions. In this context, one thing is clear: an acquisition must make financial sense." With shareholders' equity in accordance with IAS of over EUR 6 billion, Bank Austria Creditanstalt has a strong capital base for further expansion in CEE.

Business in Austria also developed favourably. "Our customer-focused market initiative is proving effective. Our employees are making strong efforts in this respect," says Erich Hampel. "We are moving in the right direction in Austria. But we should not have any illusions. There is still a lot of work ahead of us: to ensure that the favourable development will continue in the future, we will have to further improve the cost structure."

The Bank Austria Creditanstalt share has given an excellent performance. Since 9 July 2003, the first day of trading in BA-CA shares on the Vienna Stock Exchange about a year ago, the BA-CA share price has risen by 72 per cent (offering price: EUR 29, closing price on 4 August: EUR 49,85). Thus the BA-CA share outperformed the ATX (plus 53 per cent) and the benchmark index for banks in the euro area (DJ EuroStoxx/Banks: 8 per cent) and has shown the strongest increase of all European bank shares in the DJ EuroStoxx over this period. 


Details of BA-CA's financial statements for the first half of 2004

Items in the income statement

Bank Austria Creditanstalt's net interest income amounted to EUR 1,181 million, an increase of 11.6 per cent over the first half of the previous year (2003: EUR 1,059 million). Net interest income excluding dividend income and income from equity interests grew by
10.2 per cent to EUR 1,059 million (2003: EUR 961 million). The net charge for losses on loans and advances was further reduced, by 5.8 per cent, to EUR 216 million (2003:
EUR 229 million). This reduction reflects Bank Austria Creditanstalt's tight risk management. Net interest income after the net charge for losses on  loans and advances thus rose by 16.4 per cent to EUR 965 million (2003: EUR 830 million). 

Net fee and commission income also showed a favourable trend, rising by 13.3 per cent to
EUR 615 million (2003: EUR 543 million). The net trading result was EUR 86 million, down by 54.1 per cent from the exceptionally strong performance in the first half of the previous year (2003: EUR 187 million).

General administrative expenses continued to declined slightly, by 2.0 per cent, to
EUR 1,215 million (2003: EUR 1,240 million). Bank Austria Creditanstalt's operating profit thus rose by 39.2 per cent to EUR 439 million (2003: EUR 315 million). Net income from investments was EUR 11 million (2003: EUR 19 million). This figure includes proceeds from the sale of shares in Wienerberger AG. Amortisation of goodwill amounted to EUR 36 million (2003: EUR 32 million).

Bank Austria Creditanstalt's net income before taxes reached EUR 412 million, an increase of 36.8 per cent over the previous year's level (2003: EUR 301 million). Minority interests declined to EUR 31 million (2003: EUR 33 million). Net income after taxes and minority interests was EUR 283 million, up by 39.9 per cent on the previous year (2003:
EUR 202 million). Adjusted for amortisation of goodwill, net income rose by 36.3 per cent to EUR 319 million (2003: EUR 234 million).

 This improvement in results had the following effects on key financial data:

  • The return on equity before taxes (ROE) rose to 13.7 per cent (2003: 13.1 per cent) although shareholders' equity increased substantially from EUR 4.7 billion to
    EUR 6.1 billion. 
  • The return on equity after taxes rose to 9.4 per cent (2003: 8.8 per cent).
  • The cash ROE –  i.e., the return on equity adjusted for amortisation of goodwill – was 12.7 per cent (2003: 12.6 per cent).
  • The cost/income ratio improved from 69.5 per cent to 65 per cent.
  • Earnings per share rose from EUR 3.55 (based on 114 million shares) to
    EUR 3.85 (based on 147 million shares).
  • The risk/earnings ratio (net charge for losses on loans and advances as a percentage of net interest income) improved significantly, from 21.6 per cent to
    18.3 per cent.
  • The Tier 1 capital ratio is 7.6 per cent, after 6.7 per cent as at 30 June 2003.


Business segment results

Bank Austria Creditanstalt divides its results into five business segments: Central and Eastern Europe, Private Customers Austria, Corporate Customers Austria, International Markets and Corporate Center.

Central and Eastern Europe

Besides Austria, the region of Central and Eastern Europe is BA-CA's core market. Bank Austria Creditanstalt operates the leading banking network in the region, with some 870 offices in 11 countries. In the first half of 2004, the network achieved high growth rates: net income before taxes generated by the banking subsidiaries of Bank Austria Creditanstalt grew strongly, to a total of EUR 230 million (2003: EUR 156 million). Bank BPH, BA-CA's Polish banking subsidiary, achieved a substantial increase of 66 per cent in its net income before taxes, which rose to EUR 112.2 million. Very strong growth in net income before taxes was also generated by the banking subsidiaries in Hungary (up by
89 per cent to EUR 38.7 million) and Romania (up by 136 per cent to EUR 10.8 million). The growth strategy in CEE is also reflected in the development of business volume: total assets of Bank Austria Creditanstalt's banking subsidiaries rose by 16 per cent to
EUR 25.1 billion (EUR 21.6 billion).

After amortisation of goodwill and after consolidation effects, net income before taxes in the CEE business segment amounted to EUR 169.1 million, after EUR 90.7 million in the previous year, an increase of 87 per cent. The ROE before taxes was 21 per cent (2003:
21.7 per cent), the cost/income ratio declined from 71.1 per cent to 58.3 per cent. 

The Private Customers Austria segment achieved net income before taxes of
EUR 90.4 million for the first half of 2004, an increase of 49.2 per cent over the previous year (2003: EUR 60.6 million). The return on equity was 20.6 per cent (2003: 16.8 per cent). The cost/income ratio declined to 78.5 per cent (2003: 81.7 per cent).

In the Corporate Customers Austria segment achieved net income before taxes of
EUR 100.7 million for the first half of 2004, an increase of 2,3 per cent over the previous year (2003: EUR 98.4 million). The return on equity was 8.8 per cent (2003: 9.8 per cent). The cost/income ratio was 54.2 per cent (2003: 55.6 per cent). 

The International Markets segment generated net income before taxes of EUR 49.2 million, an increase of 19.4 per cent over the previous year (2003: EUR 41.2 million). The return on equity reached 48.4 per cent (2003: 37.1 per cent). The cost/income ratio was 59.3 per cent (2003: 67.1 per cent).

Net income before taxes in the Corporate Center segment of Bank Austria Creditanstalt amounted to EUR 2.9 million (2003: EUR 11 million).


Inclusion of results in the business segments of HVB Group

Bank Austria Creditanstalt's net income before taxes is included in HVB Group's business segment results in the following way: amortisation of goodwill and calculated refinancing costs as well as other consolidation effects are deducted from the amount of EUR 412 million. The remaining amount of EUR 324 million is apportioned to HVB Group's business segments: EUR 290 million to the Austria and CEE segment, EUR 39 million to Corporates & Markets, and minus EUR 6 million to Other Items.

Balance sheet of Bank Austria Creditanstalt

As at 30 June 2004, Bank Austria Creditanstalt's total assets amounted to EUR 139 billion, an increase of 1.4 per cent over the year-end 2003 figure (31 December 2003:
EUR 137.1 billion). The increase resulted mainly from customer business:

On the assets side of the balance sheet, loans and advances to, and placements with, banks were reduced by 5.4 per cent to EUR 23.8 billion compared with the level at the end of the previous year (2003: EUR 25.1 billion). Trading assets declined by 13.8 per cent to
EUR 13.9 billion. Loans and advances to customers increased by 3.8 per cent to
EUR 78.9 billion (2003: EUR 76.0 billion). Investments rose by 11.0 per cent to EUR 17.7 billion (2003: EUR 15.9 billion).

On the liabilities side, amounts owed to banks declined slightly, by 1.0 per cent, to
EUR 38.7 billion (2003: EUR 39.1 billion). Amounts owed to customers rose by 2.4 per cent to EUR 55.1 billion (2003: EUR 53.8 billion). Liabilities evidenced by certificates increased by 6.8 per cent to EUR 18.6 billion (2003: EUR 17.4 billion). Shareholders' equity rose by 5.5 per cent to EUR 6.1 billion (2003: 5.8 billion).


Enquiries: 

Bank Austria Creditanstalt Press Relations
Martin Hehemann, tel.: +43 (0)5 05 05 57007; e-mail: martin.hehemann@ba-ca.com 
Peter N. Thier, tel.: +43 (0)5 05 05 52371; e-mail: peter.thier@ba-ca.com 

Income statement for the first six months of 2004

 

1 Jan. –
30 June 2004

1 Jan. –
30 June 2003

Change in EUR m

Change

in %

 

in EUR m

in EUR m

 

 

Net interest income

1,181

1,059

123

11.6

Losses on loans and advances

-216

-229

13

-5.8

Net interest income after losses on loans and advances


965


830


136


16.4

Net fee and commission income

615

543

72

13.3

Net trading result

86

187

-101

-54.1

General administrative expenses

-1,215

-1,240

25

-2.0

Balance of other operating income and expenses


-12


-4


-8


>100

Operating profit

439

315

124

39.2

Net income from investments

11

19

-9

-44.6

Amortisation of goodwill

-36

-32

-4

12.9

Balance of other income and expenses


-1


-1


0


-9.0

Net income before taxes

412

301

111

36.8

Taxes on income

-98

-66

-32

48.0

Minority interests

-31

-33

2

-4.8

Net income after taxes and minority interests


283


202


81


39.9

 

Income statement by quarter


 

 

Q2 2004

Q1 2004

Q4 2003

Q3 2003

Q2 2003

 

in EUR m

in EUR m

in EUR m

in EUR m

in EUR m

Net interest income

640

541

566

551

539

Losses on loans and advances

-107

-109

-111

-127

-101

Net interest income after losses on loans and avances


534


432


455


424


438

Net fee and commission income


319


297


296


296


273

Net trading result

29

57

3

31

78

General administrative expenses


-612


-604


-641


-598


-622

Balance of other operating income and expenses


-12


0


8


14


-1

Operating profit

257

181

121

166

166

Net income from investments


-22


33


95


6


0

Amortisation of goodwill

-18

-18

-19

-16

-16

Balance of other income and expenses


-1


0


-6


-1


-1

Net income before taxes

216

196

191

156

148

Taxes on income

-51

-47

-53

-36

-33

Minority interests

-15

-16

-8

-10

-14

Net income after taxes

and minority interests


150


133


130


110


101

 

Business segments H1 2004 / H1 2003

 Chart

 

Balance sheet at 30 June 2004

Assets

30 June 2004
in EUR m

31 Dec. 2003 in EUR m

Change

in EUR m

Change

in %

Cash and balances with central banks


2,467


2,286


181


7.9

Trading assets

13,907

16,140

-2,233

-13.8

Loans and advances to, and placements with, banks


23,777


25,130


-1,352


-5.4

Loans and advances to customers

78,875

75,997

2,878

3.8

- Loan loss provisions

-3,435

-3,490

55

-1.6

Investments

17,663

15,910

1,753

11.0

Property and equipment

1,110

1,120

-10

-0.9

Intangible assets

1,254

1,288

-34

-2.6

Other assets

3,343

2,674

669

25.0

Total assets

138,960

137,053

1,907

1.4

 

 

 

 

 

Liabilities and
shareholders' equity

30 June 2004
in EUR m

31 Dec. 2003 in EUR m

Change
in EUR m

Change
in %

Amounts owed to banks

38,738

39,133

-395

-1.0

Amounts owed to customers

55,129

53,824

1,306

2.4

Liabilities evidenced by certificates

18,585

17,399

1,186

6.8

Trading liabilities

7,609

8,560

-951

-11.1

Provisions

3,610

3,422

188

5.5

Other liabilities

3,440

3,118

322

10.3

Subordinated capital

5,321

5,419

-98

-1.8

Minority interests

394

362

32

8.9

Shareholders' equity

6,133

5,815

318

5.5

Total liabilities and
shareholders' equity


138,960


137,053


1,907


1.4