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04.08.2006

Results for the first six months of 2006:
Bank Austria Creditanstalt's operating profit up by 49 per cent

  • Operating profit of Bank Austria Creditanstalt rises to EUR 854 million
  • BA-CA improves performance in all business segments
  • Consolidated net income rises to EUR 1.3 billion, including the capital gain on the sale of HVB Splitska banka
  • Board decisions have been taken on the transfer of units in Central and Eastern Europe between BA-CA and UniCredit: BA-CA also assumes responsibility for operations in Turkey

Bank Austria Creditanstalt (BA-CA) significantly improved its results in the first half of 2006. Operating profit rose by 49.1 per cent to EUR 854 million (first half of 2005: EUR 573 million). Net income after taxes and minority interests reached EUR 1,316 million (2005: EUR 453 million). This figure includes the capital gain on the sale of HVB Splitska banka, the Croatian banking subsidiary. Adjusted for this one-off effect, the return on equity after taxes and minority interests was 18.3 per cent (2005: 13.7 per cent). The cost/income ratio improved to 57 per cent (2005: 61.9 per cent).

BA-CA's CEO Erich Hampel: "We have achieved excellent results for the first six months. A particularly gratifying feature is the stronger operating performance. Bank Austria Creditanstalt's earnings power has further improved. This is the result of a clear strategy which we have consistently pursued for many years: we are fully concentrating on our core markets in Austria and Central and Eastern Europe.“

All business segments of BA-CA contributed to the improvement in results. The Central and Eastern Europe (CEE) business segment increased its operating profit by 49 per cent to EUR 386 million (2005: EUR 259 million). Net income after taxes – adjusted for the effect  from the sale of HVB Splitska banka – rose by 45 per cent to EUR 293.2 million (2005: EUR 202 million). The sale was effected to comply with merger control regulations. BA-CA will use the gain for further investment in CEE. UniCredit will transfer Zagrebačka banka, the clear market leader in Croatia, to Bank Austria Creditanstalt.

Customer business in Austria comprises three business segments: Private Customers, SMEs, and Large Corporates and Real Estate. The combined operating profit of the Austrian customer business segments rose by 43.7 per cent to EUR 355 million (2005: EUR 247 million). The combined net income after taxes of the three business segments improved by 34.3 per cent to EUR 274 million (2005: EUR 204 million). Erich Hampel: "There is still a lot of work ahead of us in respect of business in Austria but we are making tangible progress."

The International Markets business segment – comprising the bank's activities in money and capital markets – improved its operating profit by 45.5 per cent to EUR 112 million (2005: EUR 77 million). Net income after taxes increased by 43.3% to EUR 96 million (2005: EUR 67 million).

The current integration in UniCredit Group is strengthening BA-CA's market position on a sustainable basis. Within UniCredit Group, BA-CA assumes responsibility for business in Central and Eastern Europe (CEE) as holding company for the Group's CEE operations. The number of markets for which BA-CA will be responsible will rise from 12 to a total of 24, with more than 300 million inhabitants. Board decisions are now being taken on the transfer of units between UniCredit and BA-CA: UniCredit will transfer its subsidiaries in the Czech Republic, in Slovakia, Croatia, Romania and Bulgaria, as well as its units in Turkey, as a contribution in kind to BA-CA. In return for these transfers, UniCredit will receive shares in Bank Austria Creditanstalt. The transfers will be made at market prices. BA-CA will sell its interest in Bank BPH, the Polish bank, to UniCredit at the market price. In autumn 2006, Board decisions will be taken on the transfer of HypoVereinsbank's interest in International Moscow Bank (IMB) in Russia and of HypoVereinsbank's units in the Baltic countries.

As at 30 June 2006, shareholders' equity of BA-CA in accordance with IASs was EUR 8.2 billion, up by 9 per cent on the year-end 2005 figure (31 December 2005: EUR 7.5 billion). This means that BA-CA has by far the strongest capital base of any bank in Austria. The Tier 1 capital ratio declined slightly, to 7.9 per cent (31 December 2005: 8.3 per cent). At this level it continues to be substantially higher than the minimum level of 4 per cent required by law. 

Details of BA-CA's financial statements for the first half of 2006

Items in the income statement
Net interest income was EUR 1,333 million, up by 4 per cent on the figure for the first half of the previous year (2005: EUR 1,282 million). The net charge for losses on loans and advances declined slightly, to EUR 195 million (2005: EUR 208 million). Thus net interest income after losses on loans and advances amounted to EUR 1,139 million, an increase of 6.1 per cent over the first half of the previous year (2005: EUR 1,074 million).

BA-CA achieved substantial increases in net fee and commission income and in the net trading result. Net fee and commission income rose by 30.7 per cent to EUR 871 million (2005: EUR 666 million), reflecting strong growth in sales of securities, especially guarantee products. The net trading result more than doubled to EUR 239 million (2005: EUR 118 million). General administrative expenses rose by 9.5 per cent to EUR 1,391 million (2005: EUR 1,271 million). This increase was mainly due to the fact that CA IB Corporate Finance, CA IB International Markets and Banca Comerciala Ion Tiriac were added to the group of consolidated companies.

The operating profit generated by BA-CA reached EUR 854 million, an increase of 49.1 per cent over the previous year's figure of EUR 573 million. Net income from investments amounted to EUR 705 million (2005: EUR 40 million), including the capital gain of EUR 684 million on the sale of HVB Splitska banka. Net income before taxes was EUR 1,549 million; adjusted for the effect from the sale of HVB Splitska banka, it amounted to EUR 865 million, an increase of 42 per cent over the figure for the first half of the previous year (2005: EUR 611 million). Net income after taxes and minority interests was EUR 1,316 million; the adjusted figure was EUR 632 million, 39 per cent higher than for the same period of the previous year (2005: EUR 453 million).

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

  • The adjusted return on equity before taxes rose to 22.8 per cent (2005: 17.3 per cent).
  • The adjusted return on equity after taxes and minority interests rose to 18.3 per cent (2005: 13.7 per cent).
  • The cost/income ratio improved to 57 per cent (2005: 61.9 per cent).
  • Earnings per share in the first six months increased from EUR 3.09 to EUR 4.30 (adjusted).
  • The risk/earnings ratio (net charge for losses on loans and advances as a percentage of net interest income) improved from 16.2 per cent to 14.6 per cent.

Business segment results
Bank Austria Creditanstalt divides its results into five business segments: Central and Eastern Europe (CEE), Private Customers Austria, SMEs Austria, Large Corporates and Real Estate, and International Markets. The bank also shows results for its Corporate Center.

Business in Central and Eastern Europe (CEE) developed very favourably in the first half of 2006. The combined net income before taxes of BA-CA's banking subsidiaries in CEE totalled EUR 422 million, an increase of 43 per cent (2005: EUR 296 million). After consolidation effects and deduction of taxes, and adjusted for the effect from the sale of HVB Splitska banka, the CEE business segment generated net income after taxes of EUR 293.2 million, 45 per cent more than in the first half of the previous year (2005: EUR 202 million). The return on equity after taxes and before deduction of minority interests was 23 per cent (2005: 20.6 per cent). The cost/income ratio declined from 54.3 per cent to 51.7 per cent.

In the first half of 2006, the Private Customers Austria segment achieved a net income after taxes of EUR 81 million, an increase of 20.9 per cent over the previous year (2005: EUR 67 million). The return on equity after taxes and before deduction of minority interests was 17 per cent (2005: 15.1 per cent), the cost/income ratio 71.6 per cent (2005: 77.5 per cent).

The SMEs Austria business segment generated net income after taxes of EUR 51 million, tripling the figure recorded in the previous year (2005: EUR 17 million). In this business segment BA-CA's management developed an extensive working programme with a view to improving results on a sustainable basis. The return on equity after taxes and before deduction of minority interests reached 10.7 per cent (2005: 3.6 per cent). The cost/income ratio was 58.5 per cent (2005: 62.3 per cent).

Net income after taxes generated by the Large Corporates and Real Estate business segment was EUR 142 million, up by 18.3 per cent (2005: EUR 120 million). The return on equity after taxes and before deduction of minority interests improved to 20.1 per cent (2005: 16.2 per cent). The cost/income ratio was 46.3 per cent (2005: 46.2 per cent).

The International Markets segment performed strongly, with net income after taxes amounting to EUR 96 million, an increase of 43.3 per cent over the previous year (2005: EUR 67 million). The return on equity after taxes and before deduction of minority interests reached 121.5 per cent (2005: 53.8 per cent). The cost/income ratio was 48.9 per cent (2005: 55.3 per cent).

The Corporate Center of BA-CA recorded net income after taxes of EUR 45 million (2005: EUR 22 million).

Balance sheet
As at 30 June 2006, Bank Austria Creditanstalt's total assets amounted to EUR 160.6 billion, an increase of 1.1 per cent over the year-end 2005 figure (31 December 2005: EUR 158.9 billion).

On the assets side, trading assets rose slightly, by 1 per cent to EUR 17.8 billion (2005: EUR 17.7 billion). Loans and advances to, and placements with, banks increased by 12.1 per cent to EUR 29.6 billion (2005: EUR 26.4 billion). Loans and advances to customers were EUR 88.9 billion, up by 2.9 per cent (2005: EUR 86.4 billion). Investments totalled EUR 18.2 billion, matching the figure at the end of the previous year (2005: EUR 18.2 billion).

On the liabilities side, amounts owed to banks declined by 10.2 per cent to EUR 39.7 billion (2005: EUR 44.3 billion). Amounts owed to customers increased by 5.4 per cent to EUR 65.2 billion (2005: EUR 61.9 billion). Liabilities evidenced by certificates rose by 16 per cent to EUR 26.3 billion (2005: EUR 22.7 billion). Trading liabilities amounted to EUR 7.4 billion, up by 8 per cent (2005: EUR 6.8 billion). Shareholders' equity increased by 9 per cent to EUR 8.2 billion (2005: EUR 7.5 billion).

As at 30 June 2006, staff numbers in the Bank Austria Creditanstalt Group totalled 33,068, an increase of 9 per cent over the previous year (30 June 2005: 30,336 employees) resulting from acquisitions and organic growth in CEE. As at 30 June 2006, the number of BA-CA's offices was 1,679, up by 16 per cent compared with 30 June 2005.

Enquiries: Bank Austria Creditanstalt Press Relations
Martin Hehemann, tel.: +43 (0)5 05 05 57007; e-mail: martin.hehemann@ba-ca.com  
Ildiko Füredi-Kolarik, tel.: +43 (0)5 05 05 56102; e-mail: ildiko.fueredi-kolarik@ba-ca.com

Income statement of the Bank Austria Creditanstalt Group for the first six months of 2006

 

1 Jan.-
30 June 2006

1 Jan. –
30 June 2005

Change
in EUR m

Change
in %

 

in EUR m

in EUR m

 

 

Net interest income

1,333

1,282

51

4.0

Losses on loans and advances

-195

-208

14

-6.5

Net interest income after losses on loans and advances

1,139

1,074

65

6.1

Net fee and commission income

871

666

205

30.7

Net trading result

239

118

121

> 100

General administrative expenses

-1,391

-1,271

-121

9.5

Balance of other operating income and expenses

-3

-14

11

-78.5

Operating profit

854

573

281

49.1

Net income from investments

705

40

665

> 100

Amortisation of goodwill

-8

0

-8

> 100

Allocation to provisions for restructuring costs

0

0

0

 

Balance of other income and expenses

-2

-2

0

-6.8

Net income before taxes

1,549

611

938

153.6

Taxes on income

-164

-116

-48

41.3

Net income

1,385

495

890

180.0

Minority interests

-69

-41

-28

67.7

Net income after taxes and minority interests

1,316

453

862

190.3

Income statement of the Bank Austria Creditanstalt Group
by quarter

 

Q2 2006

Q1 2006

Q4 2005

Q3 2005

Q2 2005

 

in EUR m

in EUR m

in EUR m

in EUR m

in EUR m

Net interest income

690

643

686

644

686

Losses on loans and advances

-84

-110

-179

-108

-98

Net interest income after losses on loans and advances

606

533

507

536

588

Net fee and commission income

455

416

410

381

336

Net trading result

87

152

51

68

39

General administrative expenses

-699

-693

-705

-646

-637

Balance of other operating income and expenses

0

-3

-27

-7

1

Operating profit

449

405

237

332

328

Net income from investments

688

17

13

229

5

Amortisation of goodwill

-8

0

-4

0

0

Allocation to provisions for restructuring costs

0

0

-48

-60

0

Balance of other income and expenses

-1

-1

-8

-1

-2

Net income before taxes

1,128

421

190

500

331

Taxes on income

-84

-80

-18

-92

-63

Net income

1,044

341

172

409

268

Minority interests

-36

-34

-32

-38

-21

Net income after taxes and minority interests

1,008

308

140

371

246

 Business segments

Balance sheet of the Bank Austria Creditanstalt Group at 30 June 2006

Assets

30 June 2006

31 Dec. 2005

Change

Change

in EUR m

in EUR m

in EUR m

in %

Cash and balances with central banks

3,597

3,855

-258

-6.7

Trading assets

17,835

17,665

170

1.0

Loans and advances to, and placements with, banks

29,577

26,384

3,192

12.1

Loans and advances to customers

88,870

86,404

2,466

2.9

 - Loan loss provisions

-3,109

-3,232

123

-3.8

Investments

18,221

18,172

50

0.3

Property and equipment

1,056

1,097

-41

-3.7

Intangible assets

1,354

1,358

-4

-0.3

Other assets

3,226

3,956

-731

-18.5

Non-current assets classified
as held for sale

0

3,221

-3,221

-100.0

Total assets

160,626

158,879

1,746

1.1

 

 

 

 

 

Liabilities and shareholders‘ equity

30 June 2006

31 Dec. 2005

Change

Change

in EUR m

in EUR m

in EUR m

in %

Amounts owed to banks

39,743

44,279

-4,535

-10.2

Amounts owed to customers

65,180

61,863

3,316

5.4

Liabilities evidenced by certificates

26,337

22,703

3,634

16.0

Trading liabilities

7,354

6,807

547

8.0

Provisions

4,876

4,753

124

2.6

Other liabilities

3,741

3,671

70

1.9

Subordinated capital

5,198

5,400

-201

-3.7

Liabilities directly associated with non-current assets classified as held for sale

0

1,884

-1,884

-100.0

Shareholders' equity

8,196

7,521

675

9.0

   of which: minority interests

620

650

-30

-4.7

Total liabilities and
shareholders' equity

160,626

158,879

1,746

1.1