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New destinations for expansion in the CEE growth market

  • UniCredit Group is planning to open offices in three additional countries in Central and Eastern Europe
  • Russia is booming and will remain the Group's largest market for expansion

UniCredit Group aims to expand its leading position and pursue further growth in the fast-growing region of Central and Eastern Europe. Based on organic growth, the Group will open some 200 new branches by the end of 2008. The main destinations for expansion are the growth markets of Russia, Turkey and Ukraine as well as Hungary. The Group is planning to win a total of at least one million new customers in these countries by the end of next year. In addition to expanding its branch network, the Group also wants to open up new markets: as a first step, it will open representative offices in Montenegro, Belarus and Kazakhstan. "We are pursuing our course in a consistent manner. As market leader in Central and Eastern Europe, our objective is to get even closer to our customers and their needs. The new branches and offices in three new markets which we will make available to our customers will enhance our presence while enabling us to use opportunities in the CEE growth markets," says Erich Hampel, Head of UniCredit Group's CEE Division and CEO of Bank Austria Creditanstalt (BA-CA). 

Realignment of UniCredit Group's operations in CEE complete
With the transfer to BA-CA of CEE banking subsidiaries of UniCredit and HVB, UniCredit Group has completed the reorganisation of business in Central and Eastern Europe. BA-CA is responsible for operations in the fast-growing CEE region and makes a substantial contribution to Group profits: in 2006, BA-CA's banking subsidiaries in CEE generated a profit before tax of EUR 707 million; a pro-forma calculation for the newly set up “CEE Division” 2006 (including the CEE banks which were transferred to BA-CA in the first quarter of 2007 and excluding Poland) shows a profit before tax of close to EUR 1.1 billion.

The transfer of CEE banks has also increased BA-CA's business volume in CEE: total assets have risen from some EUR 40 billion to about EUR 78 billion. The number of customers has risen from about 6 million to 18 million, and the number of employees from about 19,000 to 39,000. The number of branches has increased from 1,100 to almost 1,800. Overall, including Austria, BA-CA now has some 50,000 employees in about 2,200 branches. UniCredit Group's CEE Division, managed by BA-CA, is responsible for operations in a market of over 300 million inhabitants. BA-CA's perimeter in this region has tripled.

Mergers of banking subsidiaries are under way in Bulgaria, Romania, the Czech Republic and Bosnia and Herzegovina, and will be completed by the end of 2007. At the beginning of April, the two banking subsidiaries in Slovakia merged to form UniCredit Bank, the fourth-largest bank in the country.

Russia: a booming market
The Russian market continues to achieve the strongest growth of all banking markets in the region. At 43 per cent annually, revenue growth in Russia in the period 2004-2006 is double the figure for the other CEE markets1) (22 per cent). In 2009, Russia will account for about one half of profits generated by banks in the region2).

UniCredit Group's presence in Russia comprises International Moscow Bank (IMB) and the brokerage firm ATON, acquired at the end of 2006. IMB is the eighth-largest bank in Russia, with total assets of about EUR 7 billion and 47 branches. The bank has launched an ambitious growth programme, planning to open some 70 new branches by the end of 2008. This should bring the number of IMB's customers from currently 150,000 to 500,000 by the end of next year. "Russia is certainly one of the most attractive markets in the region, given the number of inhabitants and the country's size. One half of the population does not yet hold a bank account. This offers enormous business opportunities which we want to use. Therefore the expansion of our branch network in Russia is an important element in our expansion strategy," says Erich Hampel.

ATON is among the top three investment banks in Russia with 275 employees. The brokerage firm has offices in Moscow, London, New York, Frankfurt and Cyprus, and is active in the areas of equities and bonds as well as in corporate finance advisory services.

UniCredit Group
UniCredit Group ranks among the five leading financial services groups in Europe, with a market capitalisation of over EUR 70 billion, 142,000 employees, 35 million customers and 7,200 branches in 20 countries. The Group has total assets of EUR 823 billion (as at 31 December 2006).

The Group operates the largest banking network in the region of Central and Eastern Europe (CEE). With total assets of EUR 114 billion in CEE, the Group is about double the size of its nearest competitor. 65,000 employees serve 24 million customers in 17 countries.

Communications CEE
Ildiko Füredi-Kolarik, +43 50505 56102, ildiko.fueredi@ba-ca.com

1) CEE8: BG, HR, CZ, HU, PL, RO, SK, TK
2) Compared with CEE8