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26.09.2006

BA-CA comments on assertions made by a London-based hedge fund:
BA-CA's new role within UniCredit Group is substantially strengthening BA-CA

The number of countries in Central and Eastern Europe for which BA-CA is responsible will double to 24 countries
CEE business volume will rise from EUR 40 billion to over EUR 60 billion
BA-CA expects sustained growth of profits in the new structure
All shareholders can benefit from the earnings potential

Bank Austria Creditanstalt (BA-CA) comments on public assertions made by the London-based hedge fund Polygon Investment Partners. The company asserts, among other things, that the planned restructuring of BA-CA does not take the interests of minority shareholders into account. Moreover, Polygon maintains that the sale of Bank BPH is not in the interests of BA-CA and that the purchase price is not fair.

BA-CA makes the following comments on these assertions and publishes the comments in line with the principle of equal treatment of all shareholders:

Integration in UniCredit Group is significantly strengthening BA-CA. Within UniCredit Group, BA-CA assumes extended responsibility for the growth region of Central and Eastern Europe (CEE): BA-CA will become the holding company for CEE operations of UniCredit Group. Thus, BA-CA will have access to new markets and will significantly increase its market presence in those CEE countries in which it has been active so far. With the step-by-step implementation of the target structure, UniCredit will transfer to BA-CA its six CEE banks in Turkey, Croatia, Bulgaria, the Czech Republic, Slovakia and Romania as a package and as a contribution in kind against a capital increase at the fair value. In addition, BA-CA will acquire HypoVereinsbank's equity interests in banks in Russia and in the Baltic countries through a cash transaction at the fair value. At the same time, BA-CA will sell to UniCredit its equity interest in the Polish BPH at the fair value and against a share in current profits (for the years 2007 to 2009) mainly because – as required by the Polish government – the banking operations in Poland must be held directly by UniCredit. The valuations of the companies and of the transactions were carried out by independent experts. Additionally, fairness opinions have been obtained from international investment banks.

This package of measures will significantly extend the perimeter of BA-CA's activities in CEE: in the future, BA-CA will be responsible for a region comprising 24 countries (instead of previously 12 countries) and more than 300 million inhabitants (instead of previously 100 million inhabitants). BA-CA's business volume in CEE will rise from currently about EUR 40 billion to over EUR 60 billion.

The banking sector in Central and Eastern Europe (CEE) is experiencing a sustained process of expansion and convergence, with a rate of real economic growth that is about triple the figure recorded in the EU-15 countries. Especially Turkey and Russia are two markets with strong potential for future growth. In Turkey and Russia, GDP is expected to grow by 6.4 per cent and 5.8 per cent, respectively, in 2008; these rates are considerably higher than those expected for all other CEE countries (including Poland with 4.5 per cent).
 
These developments result in significant earnings potential from which all shareholders can benefit. On the basis of BA-CA's new orientation in CEE business, the bank expects a significant and sustainable increase in the bank's profits.  Moreover, a clear objective of management is to reinvest available equity capital and make further successful acquisitions in the CEE region.

The favourable view of BA-CA's new structure is confirmed by a number of independent international and Austrian investment banks.

Plans to transfer the activities in Austria to a separate company are under consideration. Without the consent of the holders of registered shares this cannot be done before 2012. This new structure will have no impact on shareholders because the company will be a subsidiary under the listed company Bank Austria Creditanstalt.

For more information:   Bank Austria Creditanstalt Press Department, Austria
Peter N. Thier, tel. +43 (0)5 05 05 ext: 52371;
e-mail: peter.thier@ba-ca.com