Clear answers for real benefits. - Bank Austria · Clear answers for real benefits. Interim Report at 31 March 2013 Bank Austria Interim Report at 31 March 2013 2 Contents Bank Austria

Clear answers for real benefits.

Interim Report at 31 March 2013

2Bank Austria · Interim Report at 31 March 2013

Contents

Bank Austria at a Glance 3

Interim Report at 31 March 2013 4The banking environment in early 2013 4Introductory remarks 6Bank Austria in the first quarter of 2013 7Financial position and capital resources 12Development of business segments 14Outlook 19

Consolidated Financial Statements 21Consolidated Income Statement for the first quarter of 2013 21Consolidated Statement of Comprehensive Income for the first quarter of 2013 22Statement of Financial Position at 31 March 2013 23Statement of Changes in Equityfor the first quarter of 2013 24Notes to the Consolidated Financial Statements 25

Notes to the income statement 27Notes to the statement of financial position 33Segment reporting 38Risk report 47Additional disclosures 52

Additional Information 55Investor Relations, ratings, imprint, notes 55


Bank Austria at a Glance

1) Comparative figures for 2012 recast to reflect the current structure and methodology. / 2) End of period. / 3) Total assets /equity (without intangible assets). / 4) Not adjusted. / 5) Employees and offices of companies accounted for under the proportionate consolidation method are included at 100%.

Income statement figures(€ million) Q1 2013 Q1 2012 1) +/–

Net interest 1,103 1,070 +3.1%Net fees and commissions 418 373 +12.0%Net trading, hedging and fair value income 144 293 –50.7%Operating income 1,737 1,765 –1.6%Operating costs –1,007 – 944 +6.7%Net write-downs of loans and provisions for guarantees and commitments –298 –247 +20.4%Net operating profit 432 574 –24.6%Profit before tax 355 531 –33.1%Net profit attributable to the owners of the parent company 285 402 –29.1%

Key performance indicatorsQ1 2013 2012 1)

Return on equity after tax (ROE) 6.8% 2.4% 4)

Cost / income ratio (without bank levies) 54.7% 55.8%Provisioning charge/avg. lending volume (cost of risk) 0.89% 0.84%Loans and receivables with customers /primary funds 2) 98.4% 95.5%Leverage ratio 2) 3) 12.7 13.0Tier 1 capital ratio 2) 11.0% 10.8% 4)

Tier 1 capital ratio without hybrid capital (Core Tier 1 capital ratio) 2) 10.8% 10.6% 4)

Volume figures(€ million) 31 march 2013 31 dec. 2012 1) +/–

Total assets 205,830 207,596 –0.9%Loans and receivables with customers 136,420 132,424 +3.0%Primary funds 138,634 138,626 +0.0%Equity 18,489 18,192 +1.6%Risk-weighted assets (overall) 131,594 130,251 +1.0%

Staff 5)

31 march 2013 31 dec. 2012 1) +/–

Bank Austria (full-time equivalent) 57,939 58,182 –0.4%Central Eastern Europe business segment 47,277 47,478 –0.4%Kazakhstan (held for sale) 3,350 3,314 +1.1%Austria (other business segments) 7,313 7,390 –1.0%

Offices 5)

31 march 2013 31 dec. 2012 +/–

Bank Austria 2,943 2,970 –0.9%Central Eastern Europe business segment 2,519 2,542 –0.9%Kazakhstan (held for sale) 137 139 –1.4%Austria (other business segments) 287 289 –0.7%



The banking environment in early 2013

� The noticeable slowdown in global economic activity in the latter part of 2012, and especially in the fourth quarter, was followed by stabilisation in the first quarter of 2013. Although the conditions required for a moderate recovery were in place, the expected growth failed to materialise, at least in any sustainable manner. The world’s major regions experienced varying trends, which hindered any self-sustaining upswing. Temporary slackness of world trade in spring 2013 was due to overcapacity and inventory adjustments.

US economic performance in the first quarter of 2013 came as a positive surprise: with quarter-on-quarter growth of 2.5% (on an annualised basis) the US returned to its role as driver of the global economy after a prolonged break. Recent data indicate steadier trends in the US, too. As the real estate sector gradually returned to normal conditions, consumer spending picked up. But expansion is coming up against limits set by the need for fiscal consolidation (tax increases). A new political leadership in Japan made an unprece-dented effort in the first quarter of 2013 to get out of deflation through monetary policy measures accompanied by strong currency depreciation (year to date: –12% against the euro). Economic growth in Japan probably reached 0.5% in the first quarter of 2013 com-pared with the preceding quarter (after a decline at the end of 2012) and will gain momentum as the year progresses, though this will mean accepting risks. Economic trends in china failed to meet expectations, with growth of 7.7% in the previous year remaining below the expected rate of over 8%. Global demand has not yet started to build up although liquidity is high.

This means that global economic trends were not strong enough to compensate for internal weakness in the euro area. After a decline in the final quarter of 2012 (–0.5%) the euro area’s real GDP probably fell only slightly in the first quarter of 2013 (–0.1%, hardly measura-ble). divergence between core countries and the periphery continues to be the main problem. But the downward trend in the Spanish and Italian economies is petering out: according to estimates by our economists, strong declines in the fourth quarter of 2012 (–0.9% and –0.8%, respectively) were followed by much less pronounced decreases in the reporting period (–0.2% and –0.5%, respectively), and the turnaround may be seen in the spring or summer. In Germany, on the other hand, the economy started to grow again (probably +0.3% after –0.6%), with a moderate domestic expansion supported by strong fundamentals. Sentiment indicators and surveys for Germany in March and April 2013 show temporary adjustments of exports, investment and inventory management to the global slack in demand.

� Financial market activity continued to reflect the ECB’s announce-ment, made in August 2012, that it would intervene through OMT, i. e. purchases in the secondary market of – if necessary, unlimited amounts of – government bonds of crisis countries (with maturities of less than three years) subject to conditionality agreed with the Euro-pean Stability Mechanism (ESM). Even the difficult agreement with Cyprus on a rescue programme (reached in two steps in the middle and at the end of March) did therefore not have any strong direct impact on risk premiums of highly indebted countries: CDS spreads (Ireland, Italy, Spain and Portugal, weighted by outstanding government debt) fluctuated in a range between about 200 and 250 basis points, thus remaining significantly below the peaks of about 500 basis points seen in the crisis months at the end of 2011 and in mid-2012 (see chart on page 5). But the agreement ultimately reached after 10 days of additional negotiations between cyprus and the troika (on 25 March 2013) shows a new quality: in addition to shareholders and bondhold-ers, bank deposits (beyond the deposit guarantee threshold) are required to contribute to restructuring oversized banks through dra-matic haircuts. Capital controls were introduced within the euro area for the first time. The related loss of confidence could have an indirect impact on the banking sector elsewhere. This has made the planned banking union and the Europe-wide deposit guarantee scheme as one of its elements a matter of greater urgency.

Quite generally, the situation in the European interbank sector has eased since autumn 2012. The ECB is still making available unlimited liquidity. Funding needs and precautionary balances of banks (hoard-ing) have declined in the meantime: excess liquidity in the Eurosystem is now only one half of what it was after the three-year tenders had been allocated in early 2012. Balance-of-payments imbalances within the euro area have also diminished somewhat. The Target 2 liabilities of peripheral countries have decreased from close to one trillion euros in August 2012 to a level below €770 billion, with Germany’s claims moving in line with this development. While risk premiums for banks narrowed in parallel with those for sovereign borrowers, issues of

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Euro area retards global economic growth

Commodity prices/industry

50 = growththreshold

global

Leading indicators:Purchasing Managers’ Indices

(PMI/ industry)

Euro area

Prices for industrial commodities (S&P GSCI,spot, US$, year-end 2009 = 100, smoothened), left-hand scale

Markit Purchasing Managers’ Index, industry /euro area, right-hand scale

JPM global Purchasing Managers’ Index, PMI / industry, right-hand scale



The banking environment (CONTINUED)

banks are in many cases still more expensive than corporate bonds with a good rating. The euro has held up comparatively well (on a trade-weighted basis, +0.2% from the end of December 2012 to the end of March 2013, and –1.1% from the end of March 2012 to the end of March 2013). This makes it clear that debt problems are a worldwide phenomenon.

market interest rates remained very low given the fact that infla-tionary risks failed to materialise and in view of increasingly expan-sionary monetary policies. The entire benchmark yield curve up to long maturities is below 1% p.a. From autumn 2012, gains were seen especially in share prices (EuroStoxx up by 94% from the middle of September 2012 to the end of March 2013). This proves that the corporate sector is in good shape and there is hope of over-coming the lull in business. For the time being, however, both com-panies and private individuals in Europe gave priority to consolidating their financial position. As a result of this basically defensive attitude, credit demand was weak although lending and deposit rates offered by banks (at least in the core countries) fell to historical lows.

� For most countries within Bank austria’s perimeter of opera-tions, the first three months of 2013 was a time of waiting for eco-nomic recovery in Europe, which is considered to be long overdue. In austria, the Bank Austria Business Indicator for the first three months of 2013 pointed to stagnation, with sentiment of consumers and manufacturers moving in opposite directions. Consumer confi-dence has improved from its low in September, even if it is still below the multi-year average. This compared with a gradual downturn in the confidence of entrepreneurs as a result of developments among trading partners in Europe and overseas, and investment stagnated. On the labour market, the rise in employment since the middle of 2009 came to a standstill. With modest growth of 0.1% based on moderate export activity and weaker imports, the economy again offset the slight decline of the fourth quarter, and a recession was avoided. In a year-on-year comparison, the growth rate amounted to only 0.5% in real terms because Q1 2012 was an exceptionally strong quarter. The annual inflation rate declined from 2.8% at the end of 2012 to 2.5% in March 2013, and is likely to fall further. In a comparison with the previous year, loans expanded very slowly while bank deposits rose sharply. Mutual funds recorded net inflows for the first time in quite a while.

Among cee countries, it was, as expected, primarily the five eU countries with a high degree of foreign-trade integration which were strongly impacted by weak demand from western and southern Europe in the first three months of 2013. However, available leading indicators point to a stabilisation after the weak fourth quarter of 2012. Economic growth was driven by exports and industrial output as budgetary discipline (avoidance of EU deficit procedures) does not permit the economy to be boosted by fiscal stimulus, contrary to the measures taken after 2008. In addition, rising unemployment led to a drop in consumer confidence, and greater caution resulted in an

increase in household savings. The last few quarters moreover saw slower growth in lending, partly attributable to the supply side (delev-eraging by investors from Western Europe, more pressure to gener-ate local funding). These developments gave greater prominence to monetary policy, and a number of countries initiated a process of interest rate reductions and general easing. The significant narrowing of current account deficits (moderate import pull), the decline in inflation and continued inflows of portfolio investments now afforded more scope to implement such measures. The most aggressive move was the interest rate cut in Hungary (despite heavy dependence on foreign capital inflows). Against this background, growth in the CEE region was again driven by Turkey and russia. In Turkey, the expan-sive monetary policy was more successful in setting specific targets than in lowering interest rates, and growth again accelerated to almost 1% in real terms compared with the preceding quarter; infla-tion is high, at almost 7%. In Russia, revenues from energy exports declined (real GDP growth of an estimated 0.8% after 1.2%). At the other end of the spectrum, Ukraine has slid into deep recession as a result of an inconsistent economic policy, and is running high twin deficits. In Slovenia, the restructuring of the banking sector has become more difficult on account of the crisis management in Cyprus. Overall, risk premiums payable by CEE countries were sig-nificantly below those of the highly indebted EU countries (see chart). exchange rates fluctuated due to trends in the EUR/USD rate, but over the longer term no significant currency movements were experienced against the euro (the strongest movements were seen in the Serbian dinar, which depreciated by 3.1% against the euro). Bank Austria-weighted and in average terms, CEE currencies remained almost unchanged against the euro in the first three months of 2013 compared with the same period of the previous year (−0.7%).

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IIPS = Ireland, Italy, Portugal and Spain; CEE = Czech Republic, Slovakia, Hungary, Slovenia, Romania, Bulgaria, Croatia, Russia, Ukraine and Turkey;core euro countries = Germany, France, Belgium, the Netherlands and Austria

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Government bond risk premiums (CDS): Core euro countries/highly indebted countries (IIPS)/CEE (Bank Austria perimeter)CDS, five-year; country groups weighted by government debt outstanding



Introductory remarks

� condensed income statement: The commentary in this man-agement report refers to the condensed income statement shown on page 8. The same format is used for segment reporting. This makes it possible to consistently explain the contributions made by the various business segments to the items in the income state-ment and to Bank Austria’s overall development. A reconciliation of the condensed income statement to the mandatory reporting sched-ule – presented in a different format – of the consolidated financial statements is given in the notes to the consolidated financial state-ments on pages 38 to 39.

� New structure for management and control: As part of a UniCredit-wide initiative (Group Organisation Leaner Design = GOLD project) we changed the Management Board responsibilities and the definitions of business segments for segment reporting purposes as of the beginning of 2013. The previous F&SME Division has been combined with the previous CIB departments Corporates II (corpo-rate customers with an annual turnover of over €50 million) and Real Estate as well as with the Public Sector unit. This means that all Austrian customer business with retail and corporate customers is covered by the new retail & corporates Division, which is headed by a Management Board member. The new structure strengthens regional responsibility; customer service teams can moreover adjust more quickly to local market changes. The Retail & Corporates Division comprises Retail, i. e. business with private individuals, ranging from mass-market to affluent customers; Corporates, the subdivision serving the entire range of business customers, SMEs and medium-sized and large companies which do not access capital markets (including Real Estate and Public Sector); and Factoring, the business conducted by FactorBank AG. corporate & Investment Banking (cIB) continues to operate within the network of the global CIB Division, with a focus on serving multinational companies and international and institutional real estate customers, which are provided with investment banking solutions and capital market services. Moreover, CIB serves financial institutions such as banks, asset managers, institutional customers and insurance companies. The definitions and tasks of the other customer business segments for segment reporting purposes, i. e. Private Banking and central eastern europe (cee), have not changed. The corporate center comprises equity interests that are not assigned to other segments – including the 31.01% sharehold-ing interest in UniCredit Leasing, which is accounted for under the equity method. The inclusion of the Competence Lines, i. e. central steering and administrative units, means that the day-to-day tasks related to corporate management are reflected in the Corporate Center’s results. Also included in the Corporate Center are funding costs of consolidated subsidiaries, inter-segment eliminations and impairment losses on goodwill. Moreover, the Corporate Center includes the current effects from the reclassification of ATF Bank, Kazakhstan, which was allocated to the Corporate Center.

➔ The business segments (Divisions) covered by segment reporting are frequently combined in various ways in the following commentary: austrian customer business is defined as the sum total of Retail & Corporates, Private Banking and Corporate & Investment Banking (CIB). The CEE business segment is not divisionalised. customer business encompasses the Austrian Divisions and CEE, representing the entire bank without the Corporate Center.

� aTF Bank, Kazakhstan: In line with the strategy of focusing on high-growth and high-profitability CEE countries, the Management Board decided to sell the banking business in Kazakhstan. For this reason the equity interest in ATF Bank, Kazakhstan, (and its subsidiaries in Kazakh-stan and Kirgizstan) was classified as a discontinued operation and transferred from the CEE business segment to the Corporate Center. The contributions made by ATF Bank to the income statement are therefore balanced and shown separately in the item “Total profit or loss after tax from discontinued operations”. To ensure comparability with the previous year’s figures, the items in the published income statement for the same period of the previous year were adjusted to reflect the struc-ture of 2013. Net profit (attributable to the owners of the parent com-pany) is not affected thereby.

� recast comparative figures: To obtain consistent time series, in addition to the above-mentioned reclassification, the comparative figures for 2012 have been recast to reflect the current structure and minor changes in the consolidation perimeter have also been taken into account. The recasting differences to the totals for the various items of the income statement are shown in the segment reporting tables in the notes to the consolidated financial statements on pages 42 and 43.

➔ The commentary of the income statement compared with the pre-vious year generally refers to changes compared with the recast 2012 figures. The consistent time series of quarterly figures is presented for all business segments in the quarterly segment reporting section on pages 44 to 46.

� Given Bank Austria’s cross-regional perimeter of operations, exchange rate effects from the translation of local financial state-ments may be a significant factor. To smoothen these influences, which may be volatile from time to time, amounts in the local income state-ments are translated into euro at average exchange rates for the rele-vant period. In some of the past years, currency depreciation at CEE business segment level had a strong effect. The comparison of the first quarter of 2013 with the first quarter of 2012 is hardly influenced by exchange rate movements as CEE currencies taken together depreciated by 0.7% in weighted terms; reference to this effect is therefore limited to specific countries. Exchange rate effects were slightly stronger for figures where the comparison is made on the basis of end-of-period levels (31 March 2013 compared with year-end 2012), e. g. items in the statement of financial position (CEE currency appreciation: +3.5% in weighted terms).



Bank Austria in the first quarter of 2013

OverviewOver the past few quarters, including the early part of 2013, Bank Austria has faced persistently weak demand in Austria and in most of the CEE countries within the bank’s perimeter of operations, with the exceptions of Russia and Turkey. When comparing the reporting period with the same period of the previous year, especially in the context of a first quarter, one should bear in mind that the past twelve months saw many changes: an optimistic economic outlook and the boost to liquidity given by the European Central Bank a year ago compare with disappointing economic data and wide divergence in Europe in early 2013. The period in between was characterised by the second wave of the government debt crisis and, in late summer 2012, the stabilisation of financial markets by the ECB. And finally, market interest rates have fallen to a level close to zero and Europe is experiencing wide divergence and weak credit demand.

� In these difficult conditions, Bank Austria was again able to achieve a stable operating performance, if special effects which influence the comparison with the previous year are left out of account. Net operating profit for the first quarter of 2013 was €432 million, down by €141 million or 25% from the first quarter of 2012. The major part of this decrease is attributable to one-off income of €124 million from the buyback of hybrid instruments a year ago. Moreover, the bank levies included in administrative expenses amounted to €56 million in the first quarter of 2013 (not least due to the advance payment of the full-year amount in Hun-gary), more than double the figure for the same period of the previ-ous year (an increase of €32 million). This means that Bank Austria’s underlying operating performance matched the previous year’s level. The year-on-year comparison is also influenced by the fact that the bank recorded exceptionally strong net trading income in the first quarter of 2012 (€293 million compared with €144 million for the first quarter of 2013), which was mainly driven by its participation in profit of the UniCredit Markets product line. On the other hand, the sustainable income components – i. e. net interest and net fees and commissions – were significantly higher, by 5%, than in the first quarter of the previous year. Moreover, operating performance was supported by the low increase in costs (+7% as a result of expan-sion in CEE; without the bank levies, costs grew by 3%). It should be noted that payroll costs were stable, rising by only 1%, despite higher inflation in several CEE countries. Net write-downs of loans and provisions for guarantees and commitments were up by 20% on the same period of the previous year; the increase is explained by two factors: the provisioning charge in Turkey returned to a more normal level compared with the exceptionally low figure in the first quarter of 2012, and a special effect was recorded in Hungary a year ago. Overall, the cost of risk was 89 basis points of average lending volume; in Austria, it was 37bp, remaining close to the very low level of 33bp recorded in 2012.

� Bank Austria’s net profit (attributable to the owners of the parent company) for the first quarter of 2013 was €285 million. Non-oper-ating items to be deducted from net operating profit to arrive at net profit totalled €147 million (including income tax and non-controlling interests). The largest item among them was provisions for risks and charges, which amounted to €74 million. As the court of final instance confirmed a judgment in a lawsuit against the German Bundesanstalt für vereinigungsbedingte Sonderaufgaben (“BvS”, the former Treuhandanstalt) in Switzerland, which lasted almost 20 years, the related provision had to be increased by €64 million. Net profit was down by €117 million or 29% from the same period of the previous year. Without the special factors mentioned above (one-off income of €124 million from the buyback of hybrid instruments in the first quarter of 2012, an increase of €32 million in bank levies, a provision of €64 million relating to BvS in the first quarter of 2013), net profit would have increased by a substantial €100 million. The comparison with the fourth quarter of 2012, in which Bank Austria recorded a net loss of €676 million, is not meaningful because per-formance in that period was strongly impacted by large impairment losses on goodwill (Ukraine, equity interest in leasing operations) and expenses in connection with the forthcoming sale of ATF Bank, Kazakhstan.

� The moderate trend in business volume reflects the low level of demand: as at 31 March 2013, total assets were €205.8 billion. As is frequently seen in a first quarter, total assets were thus slightly lower than at year-end 2012 (down by 0.9%, mainly due to the seasonal decline in interbank business). The increase in total assets compared with the end of March 2012 was a moderate 2.5%. Loans and receivables with customers rose by 4.8% year-on-year, reflecting growth of 8.4% in the CEE business segment and a slight decline of 0.8% in Austrian customer business. On the liabilities side, customer deposits were up by 7.9% on a year earlier (CEE: +8.3%, Austria: +7.7%). This shows the currently high level of liquidity in the business sector and successful efforts in the area of local fund-ing in CEE. As at 31 March 2013, IFRS equity of Bank Austria was €18.5 billion.

capital ratios pursuant to the Austrian Banking Act improved in the first three months of 2013: the Core Tier 1 capital ratio (Core Tier 1 capital / total risk-weighted assets) rose by 0.2 percentage points from 10.6% at the end of 2012 to 10.8% at the end of March 2013, and the Tier 1 capital ratio increased by 0.2 percentage points from 10.8% to 11.0%. The total capital ratio reached 12.9% (+0.3 per-centage points compared with year-end 2012). The increase was due to moderate growth of risk-weighted assets (+1.2%) and to profit retention in CEE as well as a new issue in Tier 2 capital which more than offset maturing supplementary capital.



Bank Austria in the first quarter of 2013 (CONTINUED)

Condensed income statement of Bank Austria1) (€ million)

recaST 2) Q1 12 Q2 12 Q3 12 Q4 12 Q1 13chaNGe OVer

PreVIOUS Year

+/– € IN %

Net interest 1,070 1,109 1,118 1,109 1,103 +33 +3%

Dividend income and other income from equity investments 30 52 –6 –231 35 +5 +18%

Net fees and commissions 373 390 400 440 418 +45 +12%

Net trading, hedging and fair value income 293 43 256 188 144 –148 –51%

Net other expenses/ income 0 35 58 47 38 +38 n.m.

Operating income 1,765 1,629 1,826 1,553 1,737 –28 –2%

Payroll costs –490 –487 –499 –498 –495 –5 +1%

Other administrative expenses –388 –412 –409 –463 –445 –57 +15%

Recovery of expenses 0 0 0 1 0 +0 +27%

Amortisation, depreciation and impairment losses on intangible and tangible assets –66 –66 –64 –69 –67 –2 +2%

Operating costs – 944 – 965 – 972 –1,029 –1,007 –63 +7%

Operating profit 821 663 855 525 730 – 91 –11%

Net write-downs of loans and provisions for guarantees and commitments –247 –245 –286 –334 –298 –50 +20%

Net operating profit 574 418 568 190 432 –141 –25%

Provisions for risks and charges –8 –59 –7 –231 –74 –66 >100%

Integration/ restructuring costs 0 –3 0 –30 –2 –2 >100%

Net income from investments –34 –16 5 –32 –1 +33 – 97%

Profit before tax 531 340 566 –103 355 –176 –33%

Income tax for the period –108 –72 –77 – 97 –65 +43 –40%

Total profit or loss after tax from discontinued operations –5 –8 –6 –282 8 +13 n.m.

Profit for the period 419 260 484 –482 299 –120 –29%

Non-controlling interests –10 –8 –21 1 –11 –1 +13%

Net profit before PPA 3) 409 252 463 –481 288 –121 –30%

Purchase Price Allocation effect 4) –2 –2 –2 –7 0 +2 –100%

Goodwill impairment –4 –3 –3 –189 –3 +2 –42%

Net profit 3) 402 247 458 –676 285 –117 –29%

n.m. = not meaningful. /1) Bank Austria’s income statement as presented in this table is a reclassified format corresponding to the format used for segment reporting. / 2) Recast to reflect the consolidation perimeter and business structure in 2013. / 3) Attributable to the owners of the parent company. 4) PPA effects Russia and Aton.




Details of the income statement� revenues generated by Bank Austria in the past twelve months were remarkably stable, largely thanks to broad regional diversification. Operating income totalled €1,737 million in the reporting period, exceeding the average for the past four quarters. While the bank recorded a stable revenue trend, developments also reflect quarterly fluctuations and special effects. Operating income in the first quarter of 2013 was up by €184 million or 12% on the fourth quarter of 2012; in this context one should note that the figure for the final quarter of the previous year included a negative contribution from, and an impairment loss on, our equity interest in UniCredit Leasing. A comparison with the first quarter of 2012 shows that operating income in the reporting period declined slightly, by €28 million. The comparative figure includes a one-off effect of €124 million in net trading income which resulted from gains on the buyback of hybrid instruments; without this effect, operating income would have improved by 6%. The “sustainable” income components, i. e. net interest and net fees and commissions generated by core business, were not sub-ject to major fluctuations: over the past twelve months these reve-nue components have shown a moderate upward trend, increasing by 5% over the previous year, although credit demand and margin developments in most of the countries within our perimeter of operations present banking operations with an unfavourable en vironment. In regional terms, revenue growth compared with the previous year was driven by the CEE business segment, mainly by Turkey and Russia. CEE accounted for 70% of operating income from customer business in the first quarter of 2013. Operating income from Austrian customer business (Retail & Corporates, Private Banking and CIB) matched the previous year’s figure.

Net interest in the first quarter of 2013 was €1,103 million, more or less equal to the figure for the preceding quarter (–0.5%) and up by €33 million or 3% on a year earlier. The Austrian customer business segments (–12%) were affected by a weak volume trend and continued narrowing of margins in an environment character-ised by low interest rates. Average loans and receivables with cus-tomers in these business segments were 4% lower than in the same period of the previous year, with lending volume in the Retail & Corporates Division holding up well (–0%); the decrease is to be seen primarily in connection with large customers which enjoy a strong liquidity position. The net interest margin (net interest /average loans to customers) fell by 22 basis points to 239bp, reflecting the policy of low interest rates in the past year. The CIB Division recorded a lower net interest margin (mainly because interest income from Markets /Counterparts declined). The signifi-cant decline of 34 basis points in margins in the Retail subseg-ment was also caused by interest rate adjustment clauses which permit adjustments to become effective only with a time lag. Loans

and receivables with customers in the CEE business segment grew by an average 7%, and the net interest margin was 8 basis points higher than in the same period of the previous year. As a result, net interest rose by €66 million or 9%. All of this growth came from Turkey and Russia (net interest up by a combined €96 mil-lion), countries with a relatively high degree of economic autonomy where growth reached about 15% and interest margins improved. The other CEE countries, mainly those in Central Europe, were impacted – like Austria – by weak credit demand and declining interest rates while deposits expanded relatively strongly. Net interest was also supported by a lower net interest expense in the Corporate Center compared with the previous year.

The development of net fees and commissions indicates that the business sector and investors are prepared to become more active when general conditions provide sufficient impetus. Net fees and commissions rose especially in the fourth quarter of 2012, after the ECB had stabilised financial markets, when demand for equi-ties and corporate bonds increased because benchmark interest rates were close to zero. However, securities business is still sensitive to external uncertainty. While net fees and commissions declined by 5%, to €418 million, from the fourth quarter of 2012 to the first quarter of 2013, they exceeded the previous year’s figure by 12%. CEE saw an increase of 14% on a wide regional basis as interest-rate and exchange-rate management and the settlement of stronger international capital inflows created a sound commercial environment in the region. In Austrian customer busi-ness, the increase of 4% in net fees and commissions was seen mainly in the private customer segments. Private Banking achieved particularly strong growth of 19%; assets under management rose by an average 15% over the previous year, with direct investments and deposits remaining stable. This development raises hopes that investors will become more active again.

Net trading, hedging and fair value income in the first quarter of 2013 was €144 million after €293 million in the same period of the previous year. Following the restructuring of trading activities in the past years, trading performance is predominantly related to customer business, but it also includes trading income recognised in the Corporate Center; for this reason, trading performance is still volatile. Net trading income in CEE in the first quarter of 2013 was a relatively strong €122 million after €101 million in the same period of the previous year, reflecting the fact that banks in CEE countries with flexible exchange rates and strong portfolio investment inflows handle a significant amount of customer busi-ness in interest-rate /exchange-rate management; the peak figure was recorded in the third quarter of 2012, when the sovereign debt crisis in Southern Europe and efforts to overcome it led to large turnover. Net trading income in the Austrian customer business segments showed a positive swing of €29 million to net



income of €26 million. A contribution to this favourable develop-ment came from the early repurchase of an issue in the real estate sector. The net trading result for the first quarter of 2013 in the Corporate Center was slightly negative, at – €4 million, due to various factors including the performance of subholding company functions. Compared with the previous year, net trading income in the Corporate Center was down by €198 million, mainly due to the above-mentioned one-off income of €124 million in the first quar-ter of 2012 from equity capital management (buyback of hybrid instruments ahead of the stricter definition of equity capital). Pursuant to the terms of the sale of UniCredit CAIB, Bank Austria participates in profit of the UniCredit Markets product line, which comprises UniCredit’s group-wide financial market trading activi-ties; in the first quarter of 2012, which saw high activity levels in financial markets, this share in profit was larger than in the com-paratively calm reporting period.

Among the other income components, dividends and other income from equity investments were €35 million in the first quarter of 2013, up by €5 million on a year earlier. The figure for the fourth quarter of 2012 was negative, at – €231 million, reflecting an impairment loss on UniCredit Global Leasing S.p.A. and that com-pany’s current results; Bank Austria has held an equity interest in the company since the bank transferred its own leasing company to UniCredit Global Leasing S.p.A. A comparison of income in the first quarter of 2013 with the preceding quarter is therefore not meaningful.

� Operating costs (€1,007 million) were lower, by 2%, in the first quarter of 2013 than in the fourth quarter of 2012 and up by 7% on the first quarter of 2012. A detailed analysis shows that a large portion of the increase of €63 million was induced by exter-nal factors: one-half of it was due to bank levies, which rose by €32 million to €56 million. (The full-year amount of the significant bank levy in Hungary was payable already in the first quarter of 2013; in the same period of the previous year, a portion of the losses resulting from mandatory conversion of foreign currency loans was permitted to be offset against the bank levy.) Without the bank levies, overall costs rose by only 3%, with payroll costs remaining almost unchanged (+1%).

In the cee division, costs without the bank levies grew by 6%, while revenue growth was much stronger (+14%). Payroll costs in CEE were up by only 3% compared with the same period of the previous year; all of the increase was accounted for by the expand-ing banks in Turkey and Russia, which generate strong income. Staff numbers (full-time equivalents, FTEs) at the end of March 2013 were down by 960 FTEs (–2%) from the end of March 2012. With the exception of a moderate increase in Turkey and no


change in Russia, the number of employees declined across all countries, with the strongest declines seen in Ukraine, Bulgaria and Croatia.

Operating costs in austrian customer business rose by 3%; within the total, payroll costs remained unchanged. Costs in the newly defined Corporate & Investment Banking Division were almost 10% lower than in the first quarter of the previous year, while costs in the Retail & Corporates Division were 6% higher. One should note that follow-up and development activities in con-nection with the difficult IT changeover in autumn 2012 (EuroSIG) are still having an impact (in the form of overtime) and work on an upgrading is ongoing. In Austria (including the Corporate Center but without Kazakhstan as the shareholding interest in the local bank is held for sale), staff numbers were down by 235 FTEs or 3%.

The cost / income ratio – without bank levies – for the first quar-ter of 2013 was 54.7%. The increase of 2.6 percentage points over the previous year primarily reflects large one-off income recorded in the first quarter of 2012. The cost / income ratio (without bank levies) in CEE was 44.5%, lower than in Austrian customer business (64.2%) and declining.

� Net write-downs of loans and provisions for guarantees and commitments amounted to €298 million in the first quarter of 2013, a figure which was 11% lower than in the fourth quar-ter of 2012 but 20% higher than in the first quarter of 2012. cee has seen an upward trend over the past twelve months (Q1 2013: €240 million). The increase of €58 million or 32% in the provisioning charge in CEE (Q1 2013 compared with Q1 2012) was partly determined by a special development in Turkey and technical effects in Hungary. The cost of risk (provisioning charge/average lending volume in basis points) in CEE in the first quarter of 2013 was 133bp, down by 34bp from the preceding quarter and 25bp higher than in the first quarter of 2012 (108bp). While this is still high in absolute terms, the cost of risk has stabilised recently when compared with the peak levels of 350bp at the end of 2009 and 280bp at the end of 2011. Given the time lag in economic trends between Turkey and the euro area (both recession and upswing experienced earlier in Turkey), loan loss provisions in 2011 and 2012 were at high levels and the provisioning charge rose only slowly, returning to normal. For this reason, the cost of risk at the bank in Turkey in which we hold an equity interest was low, at 75bp, in the past year and rose to 122bp in the reporting period while still remaining below the CEE average of 133bp. In early 2012, the local bank in Hungary released a loan loss provision made in connection with foreign currency debt restructuring. The figure for the first quarter




of 2013 therefore represents an increase of €22 million and the cost of risk was 165bp. Net write-downs of loans and provisions for guarantees and commitments in austrian customer business continued to decline, by €7 million or 11%; in the Retail & Corpo-rates Division, the provisioning charge was down by a substantial 25%. At 41bp, the cost of risk remained very low compared with 45bp in the first quarter of the previous year and an annual aver-age of 37bp for 2012. Insolvency statistics confirm that compa-nies are in good shape. Private individuals also frequently used their strong liquidity position to reduce debt.

Key figures of asset quality remained stable in the first quarter of 2013: at the end of March, impaired loans totalled €6.7 billion in net terms, unchanged in a comparison with the end of 2012 and slightly higher than a year earlier (€6.3 billion). Of this total amount, 48.0% was covered by loan loss provisions. Impaired loans accounted for 4.9% of total loans, after 5.1% (year-end 2012) and 4.8% (end of March 2012). Within the total amount of impaired loans, €2.5 billion in loans were non-performing, with a coverage ratio of 62.4%. The proportion of non-performing loans (NPL ratio) net of loan loss provisions was 1.9% after 1.7% (year-end 2012) and 1.5% (end of March 2012).

� Net operating profit for the first quarter of 2013 was €432 million (after €190 million in the fourth quarter of 2012). Thus operating performance was in line with that of an average quarter (average in 2012: over €435 million). When comparing performance with the same period of the previous year (down by €141 million or 25%), one should take into account – as men-tioned above – the higher charge for bank levies in the reporting period and one-off income (buyback of hybrid instruments) in the past year. This shows that underlying operating performance improved significantly.

� The balance of non-operating items to be deducted from net operating profit to arrive at profit before tax for the first quarter of 2013 was a net charge of €77 million compared with a net charge of €42 million in the first quarter of the previous year. The change is due to the net addition to provisions for risks and charges (€74 million), which resulted mainly from the judgment by the court of final instance in a lawsuit in Switzerland which lasted 20 years (BvS versus predecessor banks and UniCredit Bank Aus-tria as legal successor); in this context, €64 million was added to provisions for risks and charges. Provisions for the credit card bonus points programme in Turkey in the first quarter of 2013 were comparatively small. Given that sales proceeds from held-to-maturity investments and available-for-sale financial assets are

recognised in net trading, hedging and fair value income, net income from investments is no longer characterised by strong fluctuations; in the first quarter of 2013, this item showed a more or less balanced result (– €1 million after – €34 million in the same period of the pre-vious year).

� Profit before tax came to €355 million, income tax on this amount was €65 million. The item “Total profit or loss after tax from discontinued operations” reflects the net result of ATF Bank, the bank in Kazakhstan which is classified as held for sale. The net charge aris-ing from this item in the fourth quarter of 2012 was €282 million; this compares with a small profit of €8 million in the first quarter of 2013 and a loss of €5 million in the same period of the previous year.

After deduction of non-controlling interests and a low charge for goodwill impairment, net profit (attributable to the owners of the parent company) for the first quarter of 2013 was €285 million, down by €117 million or 29% from the same period of the previous year (€402 million) on account of the above-mentioned special fac-tors. (The comparative figure for the first quarter of the previous year without adjustments was €399 million.) The fourth quarter of 2012 closed with a net loss of €676 million resulting from substantial valu-ation adjustments (goodwill impairment and preparations for the sale of the shareholding interest in the bank in Kazakhstan). Return on equity (ROE after tax), based on average equity, for the first quarter of 2013 was 6.8% p.a. after 9.4% p.a. a year earlier.

Austrian customerbusiness segments

2009 2010 2011 20120

100

200

300

400

500

600

Cost of risk and net interest margin Net interest and provisioning charge in basis pointsof average loans to customers

Central and Eastern Europe

2009 2010 2011 2012

Net interest margin Q1 13: 462bp

Net interest margin Q1 13: 239bp

Cost of risk Q1 13: 133bp

Cost of riskQ1 13: 41bp



Financial position and capital resources

Major items in the statement of financial position (€ million)

31 march 2013

PerceNTaGe 31 decemBer 2012 PerceNTaGe chaNGe

aSSeTSOther financial assets 1) 23,293 11.3% 23,384 11.3% – 91 –0.4%

Loans and receivables with banks 22,974 11.2% 28,112 13.5% –5,138 –18.3%Loans and receivables with customers 136,420 66.3% 132,424 63.8% +3,996 +3.0%Intangible assets 2,463 1.2% 2,459 1.2% +4 +0.2%Non-current assets and disposal groups classified as held for sale 4,110 2.0% 3,788 1.8% +323 +8.5%Other asset items 16,570 8.1% 17,429 8.4% –858 –4.9%Total assets 205,830 100.0% 207,596 100.0% –1,766 –0.9%

LIaBILITIeS aNd eQUITYDeposits from banks 28,528 13.9% 31,061 15.0% –2,533 –8.2%Primary funds 2) 138,634 67.4% 138,626 66.8% +9 +0.0%Liabilities included in disposal groups classified as held for sale 4,044 2.0% 3,506 1.7% +538 +15.3%Provisions for risks and charges 5,476 2.7% 5,389 2.6% +87 +1.6%Equity 18,489 9.0% 18,192 8.8% +297 +1.6%Other liability items 10,660 5.2% 10,822 5.2% –162 –1.5%Total liabilities and equity 205,830 100.0% 207,596 100.0% –1,766 –0.9%

1) Financial assets at fair value through profit or loss + available-for-sale financial assets + held-to-maturity investments. / 2) Primary funds = deposits from customers and debt securities in issue.

Financial positionAs at 31 March 2013, total assets were €205.8 billion, a slight decrease of €1.8 billion or 0.9% compared with year-end 2012 which resulted from a decline in interbank business after the year-end on the assets side and on the liabilities side. A comparison with total assets as at the end of March 2012 shows an increase of €4.9 billion or 2.5%. The contributions from ATF Bank, Kazakhstan, which is classified as held for sale on the basis of a strategic decis-ion on risk reduction, are no longer included in the respective items of the statement of financial position as at year-end 2012 and as at the end of March 2013; they are instead shown under “Non-current assets and disposal groups classified as held for sale” and “Liabili-ties included in disposal groups classified as held for sale”. This does not affect the change in the bank’s total assets.

The following items on the assets side declined: cash and cash balances (– €0.5 billion), loans and receivables with banks (– €5.1 billion), financial assets held for trading (– €0.2 billion), hedging derivatives (– €0.7 billion) and the sum total of financial assets at fair value through profit or loss, available-for-sale financial assets and held-to-maturity investments (– €0.1 billion). Such decli-nes from year-end peak levels are frequently seen in the early part of a financial year. Loans and receivables with customers, on the other hand, rose by €4.0 billion or 3.0% to €136.4 billion from December 2012 to March 2013, and represented 66.3% of total assets as at 31 March 2013. The increase compared with 31 March 2012 (without Kazakhstan) was €6.2 billion or 4.8%. Credit expansion was driven by the CEE business segment (+8.4%),

especially in Turkey, Russia, the Czech Republic and Slovakia. Lending volume in Austrian customer business more or less stag-nated (–0.8%) compared with the previous year, a development which primarily reflects weak demand from private customers. On the liabilities side, the most significant decrease was seen in deposits from banks (– €2.5 billion /–8.2%); financial liabilities held for trading, financial liabilities at fair value through profit or loss and hedging derivatives also declined, by a combined €0.3 billion or 4.3%. At €110.4 billion, deposits from custom-ers hardly changed against year-end 2012 (– €0.2 billion / –0.2%). A comparison with the previous year shows a strong increase of €8.1 billion or 7.9%, with growth recorded in both Austrian customer business (+7.7%) and CEE (+8.3%). Debt securities in issue totalled €28.3 billion (+€0.2 billion /+0.7%). Primary funds – i. e. the sum total of deposits from customers and debt securities in issue – as at 31 March 2013 amounted to €138.6 billion (unchanged compared with year-end 2012; +€6.9 billion /+5.2% compared with 31 March 2012). This means that customer loans are covered by primary funds to the extent of over 100%; most recently, the loan/primary funds ratio was 98.4%. equity increased by €0.3 billion or 1.6% to €18.5 billion in the first three months of 2013, reflecting the first-quarter profit. Thus the leverage ratio (based on the cash con-cept, without intangible assets) declined, from 13.0 at the end of December 2012 to 12.7 as at 31 March 2012. A few years ago, in autumn 2008, the leverage ratio was about 10 percentage points higher.



Financial position and capital resources (CONTINUED)

Capital resources pursuant to the Austrian Banking Act� risk-weighted assets (RWAs) as at 31 March 2013 were €131.6 billion, a moderate increase of €1.5 billion or 1.2% over year-end 2012. Credit-risk RWAs rose by €1.6 billion and RWAs from operational risk declined slightly, by €0.1 billion, in the re-porting period. Market-risk RWAs remained more or less unchanged compared with year-end 2012. All of the increase in RWAs resulted from the CEE business segment, where volume rose, partly amplified by currency appreciation; the downgrading of a country rating (Croatia) also led to an increase in RWAs. capital requirements for credit risk nevertheless rose only slightly, by €0.1 billion to €9.3 billion, and capital requirements for all types of risk increased by €0.1 billion to €10.5 billion.

� Net capital resources were €16.9 billion, up by €0.7 billion or 4.5% from the year-end 2012 level. Tier 1 capital rose mainly on account of retained profits of subsidiaries. The increase in net capital resources also reflected exchange rate effects. Net Tier 2 capital rose by €0.4 billion compared with year-end 2012, reflecting a new issue of €0.5 billion, which was offset by maturing subordinated capital and other deductions to a small extent.

� capital ratios therefore improved in the first three months of 2013: from year-end 2012 to the end of March 2013, the Tier 1 capital ratio based on all risks increased by 0.2 percentage points to 11.0% and the Core Tier 1 capital ratio (Tier 1 capital ratio without hybrid capital) based on all risks also rose by 0.2 percentage points to 10.8%. At the end of March 2013, the total capital ratio was 12.9%, up from 12.5% at year-end 2012.

Capital ratios

31 march 2013

31 dec.2012

based on all risks 1) Tier 1 capital ratio 11,0% 10,8%… without hybrid capital (Core Tier 1 capital ratio) 10,8% 10,6%Total capital ratio 12,9% 12,5%

based on credit risk 2) Tier 1 capital ratio 12,4% 12,3%… without hybrid capital (Core Tier 1 capital ratio) 12,2% 12,0%Total capital ratio 13,5% 13,0%

1) Credit risk, operational risk, position risk and settlement risk. / 2) Capital resources less requirement for the trading book and for commodities risk, exchange rate risk and operational risk as a percentage of the risk-weighted assessment basis for credit risk.



Development of business segments

Retail & CorporatesBusiness segment as a whole of which: Retail of which: Corporates(€ million) Q1 2013 Q1 2012 1) chaNGe Q1 2013 Q1 2012 1) chaNGe Q1 2013 Q1 2012 1) chaNGe

Operating income 378 376 +2 +1% 193 199 –6 –3% 183 176 +8 +4%Operating costs –283 –266 –17 +6% –191 –182 – 9 +5% –89 –83 –7 +8%Net write-downs of loans –45 –59 +15 –25% –16 –25 +9 –36% –28 –34 +6 –17%Net operating profit 51 51 +0 +0% –14 –8 –6 +83% 65 59 +7 +12%Profit before tax 51 51 +0 +0% –14 –8 –6 +82% 65 59 +7 +11%Loans to customers (avg.) 41,278 41,371 – 93 –0% 14,410 14,984 –574 –4% 26,553 26,209 +344 +1%Primary funds (avg.) 43,020 41,919 +1,101 +3% 23,110 22,716 +394 +2% 19,890 19,198 +692 +4%Risk-weighted assets (avg.) 2) 17,989 17,485 +504 +3% 8,190 8,501 –311 –4% 9,529 8,830 +699 +8%Average equity 3) 1,934 1,913 +21 +1% 892 900 –8 –1% 1,023 1,004 +19 +2%

1) For segment reporting purposes, the comparative figures for 2012 were recast to reflect the structure and methodology of the 2013 reporting period (see the segment reporting section on pages 40 to 46 of this report. / 2) Average risk-weighted assets under Basel 2.5 (all risks). / 3) Standardised capital; capital allocation to subsidiaries reflects actual IFRS capital. / This information applies to all business segment tables.

The new retail & corporates division essentially covers two equally large subdivisions: “retail”, which comprises customer segments ranging from mass-market to affluent customers, and “corporates”, the subdivision serving the entire range of business customers, SMEs and medium-sized and large companies which do not access capital markets (including Real Estate and Public Sector). The subdivision also includes Factoring, the business conducted by the specialised FactorBank AG, whose contribution to overall results is not significant (0.5% of revenue). With 7% of all employees and an 11% share of allocated capital, the Retail & Corporates Division generated about 22% of the bank’s revenues, though this was offset by substantial costs which are in structural terms related to branch operations. In the first quarter of 2013 the new Division contributed about 13% to the bank’s net operating profit.

In the first three months of 2013, the Retail & Corporates Division generated a net operating profit and a profit before tax of €51 million which matched the figure for the first quarter of 2012. Operating income was up by 1% on the same period of the previ-ous year. This was achieved under very diverse conditions within each of the two subdivisions, as reflected in the respective net inter-est performance. Combined net interest income has been declining for about one year, which is explained by the development of market interest rates and volumes. In the Retail subdivision, average lending volume declined while deposits remained stable. This was accompa-nied by a significant decline in margins in both lending and deposit business as a result of interest rate adjustment clauses. The interest margin, measured against lending volume, narrowed by 36 basis points. Net interest generated by the Retail subdivision was conse-quently 14% down on the first quarter of 2012, when the interest yield curve was still steeper. In the Corporates subdivision lending volume was maintained at previous levels (with an increase in short-term loans), reflecting the success of initiatives in business with small and medium-sized companies and a slight improvement in

demand. The interest margin remained more or less unchanged in the Corporates subdivision as a result of ongoing repricing meas-ures, with net interest rising by over 1%. In the first quarter of 2013, net fees and commissions generated by the Retail & Corporates Division (€114 million) remained stable at the level of the same period of the previous year; a weak trend recorded in net fees and commissions in business with corporates was more or less offset by a 6% rise in the Retail subdivision. This reflects the success of marketing initiatives of the Retail subdivision in the area of fund-based savings, with sales exceeding market growth. Among the remaining income components, net trading, hedging and fair value income contributed €11 million to overall performance through the early repurchase of bonds.

In the first quarter of 2013, operating costs in the Retail & Corpo-rates Division (€283 million) were up by 6% on the figure for the same period of the previous year. Within this item, payroll costs increased by 5% despite a decrease in staff numbers in the Retail subdivision (−18 FTEs), because HR costs rose on account of higher expenses for pension provisions (adjustment of the discount rate). Several factors are responsible for the more pronounced increase in non-staff expenses, including the follow-up work by UBIS, our IT provider, following the IT changeover in autumn 2012 (EuroSIG). The Retail & Corporates Division had a cost / income ratio (excluding bank levies) of 72.2%; that of the Corporates subdivision was 45.4% due to its leaner customer service model, while that of Retail was 97.5% on account of the branch network. Against this background, the “SmartBanking” project is of high strategic impor-tance: implementation of the project started in the reporting period to enhance the efficiency of sales operations by means of a modern multi-channel offering designed to meet customers’ needs. Profit before tax of €51 million and allocated capital of €1.9 billion resulted in a return on equity of 10.6% (ROE before tax).



Development of business segments (CONTINUED)

Private Banking(€ million) Q1 2013 Q1 2012 chaNGe

Operating income 38 34 +4 +12%Operating costs –27 –26 –2 +6%Net write-downs of loans 0 0 +0 n.a.Net operating profit 11 8 +3 +31%Profit before tax 11 7 +3 +40%Total financial assets (avg.) 18,681 17,495 +1,186 +7%Loans to customers (avg.) 595 608 –13 –2%Primary funds (avg.) 7,738 7,619 +120 +2%Risk-weighted assets (avg.) 833 846 –13 –2%Average equity 162 165 –3 –2%

n.m. = not meaningful

The Private Banking business segment, whose composition has remained unchanged, is market leader in the top segment of high net worth individu-als and private foundations with its two well-known brands Bank Austria Private Banking – the private banking arm of a major bank – and Schoell-erbank – a traditional private banking institution. Private Banking focuses on holistic asset optimisation based on a long-term view, thereby meeting the current needs of the target group, especially as investment activity has picked up since autumn 2012. This development has helped the Division to turn in favourable results for the first quarter of 2013 after a satisfactory performance in the fourth quarter of 2012. The good first quarter results are primarily reflected in increased business volume, a stronger bias towards more sophisticated investments, and in net fee and commission income.

In the first quarter of 2013, total financial assets (average for the reporting period) of the Division were €18.7 billion, an increase of €1.2 billion or 7% on the same period of the previous year. This gratifying performance is attributed to the success of asset management operations in generating strong net inflows; assets under management consequently increased by over 15% year-on-year and accounted for 31% of total financial assets at the end of March 2013. Direct deposits rose by 4%, and assets under cus-tody were up 3%. In line with this development, net fees and com-missions (€26 million) increased by 19% year-on-year. This growth was partly offset by the squeeze on margins in deposit business (net interest: −7%). Overall, operating income in the first quarter of 2013 increased by 12% over the previous year. Costs grew by 6% and thus rose more slowly than revenues. The cost / income ratio in this segment characterised by high staffing levels and a focus on advisory services improved from 75.2% to 71.6%. The number of employees de-clined slightly, by 2% to 536 FTEs. Profit before tax increased from €7 million in the first quarter of 2012 to €11 million in the first quarter of 2013. Return on equity (ROE before tax) was 25.9%.

Corporate & Investment Banking (CIB)(€ million) Q1 2013 Q1 2012 chaNGe

Operating income 127 134 –7 –5%

Operating costs –57 –63 +6 –10%

Net write-downs of loans –13 –6 –8 >100%

Net operating profit 57 65 –8 –13%

Profit before tax 55 65 –10 –16%

Loans to customers (avg.) 14,057 16,082 –2,025 –13%

Primary funds (avg.) 9,085 8,410 +675 +8%

Risk-weighted assets (avg.) 9,925 9,814 +110 +1%

Average equity 1,038 964 +74 +8%

Corporate & Investment Banking (CIB) focuses on serving multina-tional companies and large international customers, providing them with capital market services and/or investment banking solutions tailored to meet their specific needs. CIB also serves banks, asset managers, institutional customers and insurance companies. Moreover, with its financial market expertise, CIB performs important functions as a product provider for other Divisions (including struc-tured finance, export and trade finance, cash management, risk management, investments) and for the bank as a whole.

CIB’s net operating profit for the first quarter of 2013 was €57 million, up from a weaker fourth quarter of 2012 (€34 million). At this level, profit before tax was down by €8 million or 13% from the good performance of the first quarter of the previous year. Oper-ating income in the first quarter of 2013 declined by €7 million or 5% from the same period of the previous year as net interest was down and the decrease was not fully offset by growth in net fees and commissions and in net trading, hedging and fair value income. The 25% decline in net interest resulted mainly from the net interest performance of Markets Counterparts, which was particularly strong in the previous year. Net interest generated by commercial banking activities was stable: lending volume declined, while deposits rose; however, thanks to timely interest rate adjustments, margins held up well on the lending and deposits sides. costs in the CIB business segment were reduced by 10% year-on-year, and operating profit more or less matched the previous year’s level (–1%). Staff numbers were reduced by 108 FTEs or 15% to 597 FTEs, in connection with the closure of international brokerage subsidiaries, and this contrib-uted to the cost reduction. Net write-downs of loans and provisions for guarantees and commitments were €13 million, down from the fourth quarter of 2012 (€37 million, reflecting a legacy charge); this compares with a very low figure of €6 million for the first quarter of the previous year. The cost of risk was very low, at 37 basis points. In the first quarter of 2013, CIB generated a return on equity of 21.2% (ROE before tax). With only 1% of the bank’s employees and 6% of total costs, CIB accounted for about 13% of the bank’s net operating profit and 15% of overall profit before tax.




Central Eastern Europe (CEE)(€ million) Q1 2013 Q1 2012 chaNGe *)

Operating income 1,241 1,090 +152 +14%Operating costs –585 –528 –58 +11%Net write-downs of loans –240 –182 –58 +32%Net operating profit 416 380 +36 +9%Profit before tax 403 375 +28 +7%Loans to customers (avg.) 72,045 67,447 +4,599 +7%Primary funds (avg.) 63,433 56,826 +6,607 +12%Risk-weighted assets (avg.) 84,321 81,815 +2,506 +3%Average equity 14,274 12,539 +1,735 +14%

*) An adjustment for exchange rate movements has no major effect on the comparison of figures for the first nine months of 2012 and 2011. Average currency depreciation is less than 1 percentage point in the various items at the divisional level, leading to erratic rounding differences in the rates of change. This is the reason why the table does not include the column showing adjusted figures (calculated at constant exchange rates).

The CEE business segment remained Bank Austria’s strongest revenue source in the first quarter of 2013 and generated a profit before tax of €403 million (total figure for Bank Austria’s customer business: €519 million). Overall, growth in volume and revenues was lagging behind the rates achieved in previous years as the region was unable to escape the effects of economic weakness in Western Europe. The CEE Division nevertheless benefited from the widely diversified presence of banking subsidiaries in 16 countries and took advantage of the continued upward economic trend in Russia and Turkey. All banking subsidiaries made positive contributions to profits, even in those countries where the economic environment is volatile (e. g. Hungary) or the banking sector is experiencing difficulties (e. g. Slovenia, Ukraine).

Operating income totalled €1,241 million in the first quarter of 2013, an increase of 14% over the same period of the previous year. Contributions to this improvement came from all income components: net interest showed the strongest growth, rising by €66 million or 9% as credit expansion continued and funding costs in Russia (net interest up by 36%) and Turkey (+32%) declined. In the other coun-try groups, net interest decreased slightly for the reasons mentioned above. Average loans to customers in the Division as a whole were up by 7% and the net interest margin held up well; most recently, it was 462bp (compared with 239bp in Austrian customer business), a slight year-on-year increase of 8bp. This is a noteworthy achieve-ment as primary funds – i. e. customer deposits and debt securities in issue – in CEE also rose strongly (+12% year-on-year) in an environment characterised by intense competition within the banking sectors. Net fees and commissions (€262 million) improved by a strong 14% compared with the same period of the previous year; unlike the trend in net interest, the increase was seen across all

countries including Central Europe and South-East Europe. This sug-gests that market penetration with banking products is progressing, despite a weak economic performance. Net trading, hedging and fair value income, which is significant and relatively stable in CEE in view of the importance of customer-driven trading activities in coun-tries with flexible exchange rates, rose by 20% to €122 million; this growth also reflects value increases in the available-for-sale portfolio.

costs grew strongly, by 11%, in the first quarter of 2013, but this also includes bank levies (mainly the advance payment of the full-year amount in Hungary, in addition to the new financial transaction tax in that country). If the charge for bank levies is left out of account, costs rose by 5% while revenue growth was 14%. The cost / income ratio (without bank levies) thus improved from 48.3% in the first quarter of the previous year to 44.5% in the reporting period. The moderate increase of 3% in payroll costs sup-ported the improvement. Average staff numbers were down by 960 full-time equivalents (–2%). This reflects a slight decline in most countries, a significant reduction in Ukraine and less pronounced decreases in Croatia, Hungary and Bulgaria while the number of employees in Turkey continued to rise and the Czech Republic also saw a slight increase (in average terms for the period).

Net write-downs of loans and provisions for guarantees and commitments remained high in the first quarter of 2013, at €240 million, and the cost of risk was 133 basis points of average loans to customers. The increase is in line with the objective of rais-ing the coverage ratio for impaired loans. Of the total increase of €58 million or 32% over the first quarter of 2012, a large portion (€23 million) was due to a special effect in the first quarter of the previous year (in Hungary: reclassification of provisions to other oper-ating expenses in connection with the Early Repayment Programme). Also to be taken into account is the return of the provisioning charge in Turkey to a more normal level: in the first quarter of the previous year it was particularly low because of the time shift in the credit cycle (the cost of risk in Turkey rose from 75bp to 122bp while remaining disproportionately low). At the end of March 2013, impaired loans accounted for 7.0% of lending volume (in net terms), and non-performing loans (NPL ratio) for 3.1%.

Net operating profit (operating profit less net write-downs of loans and provisions for guarantees and commitments) in the first quarter of 2013 was €416 million, up by €36 million or 9% on the previous year. After deduction of provisions for risks and charges, to which provisions for the credit card bonus programme in Turkey made a significant contribution, profit before tax was €403 million (+7%), which gives a return on equity (ROE before tax) of 11.3%.




Income statement of the consolidated banking subsidiaries in CEE 1)

(€ million)

cee BUSINeSS SeGmeNT 2) cZech rePUBLIc SLOVaKIa hUNGarY

Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012

Net interest 833 767 59 64 19 21 48 54Dividends and income from equity investments 3 5 0 0 0 0 0 0Net fee and commission income 262 231 19 19 9 8 23 15Net trading income 122 101 10 11 1 4 9 5Net other operating income/expenses 21 –14 0 0 0 0 1 –28Operating income 1,241 1,090 87 94 29 33 82 45Operating costs –585 –528 –45 –48 –21 –21 –67 –28Operating profit 656 562 42 46 8 12 16 17Net write-downs of loans –240 –182 –15 –17 –4 –4 –14 8Net operating profit 416 380 28 29 3 7 2 26Provisions for risks and charges –12 –10 0 0 0 0 –1 0Integration/ restructuring costs –2 0 –1 0 0 0 0 0Net income from investments 1 5 0 5 0 0 0 1Profit before tax 403 375 26 34 3 7 1 26

Customer loans 73,635 67,935 7,491 7,195 3,040 2,976 3,250 3,506Customer deposits and debt securities in issue 62,655 57,037 8,840 8,428 2,839 2,609 3,439 3,305

Exchange rate 100.73 3) 100.00 25.566 25.084 Euro Euro 296.50 296.85 Appreciation/depreciation against the euro –0.7% –1.9% +0.1%

(€ million)

SLOVeNIa BULGarIa rOmaNIa BaLTIcS

Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012

Net interest 12 14 57 58 43 46 3 4Dividends and income from equity investments 0 2 0 0 0 0 0 0Net fee and commission income 6 5 22 19 16 13 0 0Net trading income 0 0 4 9 19 12 1 1Net other operating income/expenses 0 0 0 0 5 2 0 0Operating income 19 21 83 87 84 74 5 5Operating costs –10 –11 –34 –35 –39 –38 –3 –3Operating profit 8 11 49 52 45 36 1 2Net write-downs of loans –7 –6 –20 –24 –30 –30 –1 –2Net operating profit 1 4 29 28 15 6 0 –1Provisions for risks and charges 0 0 0 0 0 0 0 0Integration/ restructuring costs 0 0 0 0 0 0 0 0Net income from investments 0 –2 0 0 0 0 0 0Profit before tax 1 2 29 29 14 6 0 –1

Customer loans 2,232 2,455 4,519 4,115 3,739 3,547 562 636Customer deposits and debt securities in issue 1,274 1,062 4,155 3,828 2,664 2,465 288 278

Exchange rate Euro Euro 1.9558 1.9558 4.3865 4.3533 0.6996 4) 0.6985 Appreciation/depreciation against the euro 0.0% –0.8% –0.2%

1) The income statement figures are shown on a consolidated basis at country level. / 2) The CEE business segment for segment reporting purposes comprises the total figures for the CEE banks shown in this table and the Vienna-based CEE headquarters. / 3) Index of the relevant currencies against the euro, weighted by operating income. / 4) Latvian lat (LVL).




(€ million)

TUrKeY 5) rUSSIa UKraINe

Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012

Net interest 212 160 165 121 34 52Dividends and income from equity investments 2 1 0 0 0 0Net fee and commission income 80 72 33 26 14 13Net trading income 11 14 40 33 0 2Net other operating income/expenses 10 8 2 0 –1 2Operating income 315 255 240 180 48 69Operating costs –137 –122 –72 –67 –35 –31Operating profit 178 133 168 113 14 38Net write-downs of loans –44 –24 –16 –11 –11 –24Net operating profit 133 109 152 102 2 14Provisions for risks and charges –11 – 9 0 0 0 0Integration/ restructuring costs 0 0 0 0 0 0

Net income from investments 1 1 0 0 0 0Profit before tax 123 101 152 102 2 14

Customer loans 15,048 12,769 13,127 11,534 2,481 2,777Customer deposits and debt securities in issue 14,303 12,235 12,248 11,037 1,795 1,666

Exchange rate 2.3577 2.3556 40.152 39.550 10.668 10.503 Appreciation/depreciation against the euro –0.1% –1.5% –1.5%

(€ million)

crOaTIa BOSNIa SerBIa

Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012

Net interest 76 99 23 22 22 20Dividends and income from equity investments 2 2 0 0 0 0Net fee and commission income 28 28 8 7 4 4Net trading income 25 8 1 1 3 3Net other operating income/expenses 3 1 0 0 0 0Operating income 134 139 32 31 29 26Operating costs –60 –63 –18 –19 –10 – 9Operating profit 74 75 13 12 19 17Net write-downs of loans –8 –22 –4 –3 –7 –6Net operating profit 65 54 9 8 12 11Provisions for risks and charges 0 0 0 0 0 0Integration/ restructuring costs 0 0 0 0 0 0Net income from investments 0 0 0 0 0 0Profit before tax 66 54 9 8 12 11

Customer loans 9,264 9,724 1,479 1,385 1,334 1,271Customer deposits and debt securities in issue 8,255 7,861 1,522 1,451 794 648

Exchange rate 7.5838 7.5568 1.9558 1.9558 111.654 108.147 Appreciation/depreciation against the euro –0.4% 0.0% –3.1%

5) pro quota



Outlook

The economic environment� Recent business climate indicators and surveys in April showed downward trends, confirming that economic growth has not yet picked up in spring 2013. After a good start to the year, growth in the US will probably weaken in the next few quarters on account of fiscal cuts. Growth in China is expected to remain at 7 ¾%, a rate that is seen as moderate by Chinese standards. Even if downside risks have grown, we think that the current deterioration is a temporary weakness rather than a turning point. Hard data such as order books and output figures have recently indicated a more favourable trend than sentiment indicators. Therefore the basic scenario published in our Annual Report a few weeks ago remains intact.

The basic conditions required for the expected upswing later in the year have recently improved: while the highly indebted coun-tries need to continue with fiscal austerity, the burdens imposed may be less painful, all the more so as some progress has been made in reducing government deficits. Structural reforms initiated so far are beginning to show tangible results in peripheral coun-tries’ foreign trade with regard to their competitiveness. The Euro-pean Central Bank, by lowering the key interest rate to 0.5% recently and additionally considering the possibility of providing direct support to lending by banks in the crisis countries, has sent a further signal for expansion. Uncertainty eased after the ECB’s announcement, made in August 2012, that it is prepared to inter-vene (OMT programme), and should continue to subside in view of the determined countermeasures. Following the formation of the new Italian government, the risk premiums for highly indebted countries have fallen to the lowest levels since the middle of 2012 (CDS in weighted terms: 192 basis points). Moreover, central banks worldwide, e. g. in Japan, intend to provide additional mon-etary impetus. Inflation rates have further declined at all levels and in all regions, and market interest rates will remain low for the foreseeable future. Last but not least, five years after the financial market crisis broke out, most of the situations which may present problems are at least known and crisis management institutions have been improved. All that is missing for more robust economic growth is the actual impetus, which we think will come from the continued upswing in emerging markets. The European economy is starting from a low level after the decline seen in the fourth quarter of 2012 and also after the first quarter of 2013. Annual average growth rates will therefore remain low, although a recov-ery is expected as the year progresses. For the euro area we still expect real GDP in 2013 to stagnate year-on-year (–0.1%) and growth reaching 1.2% in 2014. The recession in Italy and Spain should bottom out in 2013.

� Sentiment in the austrian economy will soon improve, sup-ported by signs of a worldwide recovery, and this will be reflected in real figures in the coming months. Thanks to rising exports (+3.3% in real terms after +1.7% in the past year) Austrian industry is likely to see growing demand in 2013. In the second half of the year, external impetus should also be transmitted to investment activity in view of accumulated demand. At 1.5% in real terms, gross fixed capital formation will be moderate but higher than in the previous year. Persistent strain on the labour market will put pressure on private consumption, which will there-fore expand only slightly. While the unemployment rate will rise from 4.4% in 2012 to an annual average of 4.8% in 2013, grow-ing employment and declining inflation will provide some support. 2013 is likely to see annual average inflation of 2.2%; it is now more probable that the actual figure will be lower. Developments in the past few months have delayed hopes for an upswing of the Austrian economy, but these hopes are still intact. We continue to expect economic growth of 0.9% for 2013 as a whole.

Credit growth in Austria remained moderate in early 2013. The total volume of loans outstanding in February was even slightly lower than a year earlier (–0.2%). Consumer and SME loans con-tinue to decline, a development which fails to be offset by the slight increase in housing loans. Corporate loans outstanding, up by just under 1% on the previous year, have been stagnating since August 2012. Interest rates on corporate loans and housing loans fell to a record low. In the first two months of 2013, the net volume of new issues of corporate bonds was about €400 million per month – as in the previous year – but several projects are in the pipeline. While deposit growth declined in early 2013, to a rate of 1% in February year-on-year (August 2012: +4.3%), investment funds recorded a further increase in net inflows.

Forecasts (Change in % over previous year)

reaL GdP cONSUmer PrIceS

2012 2013 2014 2012 2013 2014

USA 2.2 2.2 2.6 2.1 1.9 2.5China 7.8 7.8 7.7 2.7 2.8 3.3Euro area (EMU) –0.5 –0.1 1.2 2.5 1.8 1.7Germany 0.9 0.8 1.5 2.0 1.8 1.9Italy –2.4 –1.1 0.7 3.0 1.7 1.7Spain –1.4 –1.4 0.4 2.4 1.9 2.5Austria 0.8 0.9 1.5 2.4 2.2 1.9Czech Republic –1.2 0.4 2.2 3.3 1.9 2.1Hungary –1.7 –0.1 0.9 5.6 3.1 3.9Turkey 2.7 3.4 3.9 8.9 6.7 6.3Russia 3.4 3.6 3.9 5.1 6.3 5.1



Outlook (CONTINUED)

� The weak trends in the euro area also affected central and eastern europe. The Purchasing Managers’ Indices continued to decline in April, indicating that the export-driven recovery of the region may be delayed. This means that central banks will probably accelerate their policy of monetary easing. CEE offers more scope for such a policy than Western Europe, and monetary policy has an even stronger effect on credit demand. Our economists believe that the credit cycle has bottomed out and credit conditions will provide stronger support to domestic demand in 2013. Central and Eastern Europe had to cope with a supply-side credit shock in the past six quarters: external finance diminished and deposit growth weakened in line with the downward trend in economic activity. In the mean-time, the decline in external finance has slowed, and deposits are growing more strongly than loans in most CEE countries.

We are confident that real economic data will improve from now on, though only slowly. Growth in 2013 as a whole will be far from impressive. Weak performance in the past year means that most countries enjoy a much less significant overhang. Turkey, Poland and Russia benefit from a positive growth overhang from the previous year. As in 2012, GDP growth in the region will vary from country to country. Slovenia, Croatia and Hungary will probably continue to see recession, with Hungary coming close to the growth threshold. Poland is expected to achieve growth of almost 2%. Turkey, Russia and the Baltic countries will probably lead the field with growth of over 3% in 2013. Our GDP forecast for the region as a whole (including Poland) remains at 2.8% for 2013 and 3.4% for 2014.

Outlook for Bank Austria’s performanceEconomic data for the first few months of 2013 have hardly changed the overall conditions and outlook for 2013. The interim financial statements confirm our business expectations for the year as a whole, as published in the outlook section (on page 85) of our 2012 Annual Report a few weeks ago.

Figures for the first quarter of 2013 confirm the underlying trends in operating activities: credit expansion will remain subdued. While demand from small and medium-sized businesses in Austria has picked up, credit demand in retail banking and from large com-panies is still weak or even declining. In the CEE business segment, the countries which are EU members and whose economies are closely integrated present a similar picture. Stronger credit growth will probably be seen in countries which enjoy a higher degree of economic autonomy or stronger monetary expansion (Turkey and Russia, and to some extent Bulgaria and Romania). Interest rates in the euro area will remain low, and this pattern will spread to coun-tries in South-East and Eastern Europe. Margins will remain under

pressure across the whole region. Liquidity will lead to strong inflows of deposits. While this development is good for local fund-ing, it will impact net interest income, for which we expect only moderate growth.

The interim financial statements for the first quarter of 2013 sug-gest a more favourable outlook for net fees and commissions. Investors should gradually become more active, shifting the funds held on deposit into higher-yield forms of investment. This should benefit mutual fund business and asset management services. In our scenario we also anticipate an increase in commercial transactions and turnover in the latter part of the year. We aim to take advantage of this through intensive cross-regional cross-sell-ing activities. Any further increase in net write-downs of loans will depend on various factors, e. g. the time required for domestic demand in CEE countries to pick up. Our objective is to keep the cost / income ratio at least stable.

Assessing the risks to this scenario is now easier than in previous years (though the usual event risks cannot be excluded): at pre-sent there is a lower probability of any new escalation in the sov-ereign debt crisis and financial market disruptions. Many situations are covered by crisis management. The main risks are a further delay in the expected economic recovery, or its failure to arrive, and a possible departure from stabilisation policies outside the core euro countries as a result of internal political tensions.

With Smart Banking Solutions, our strategic key project, we started to implement our new customer service model in Austria. We will thereby give our customers more choice from an intelli-gent multi-channel offering for day-to-day banking transactions and for personal advisory services. This comprises “physical branches” – i. e. flaghip stores, classic branches and self-service foyers, complemented by mobile sales activities – and “virtual branches”, i. e. SmartBanking via digital media. We are thereby adjusting to major trends in consumer behaviour: digitalisation and urbanisation. At the same time we are responding to continued pressure on margins, a structurally high cost / income ratio and to a return on equity in retail banking that is well below the cost of capital. We are giving high priority in 2013 to keeping a rein on risk-weighted assets while strengthening capital resources to build up the required capital buffers in a sustainable manner. In this connection we give attention to efficient capital allocation in line with our strategy of selective expansion in Central and Eastern Europe. In addition to expanding in the growth markets of Turkey, Russia and the Czech Republic, the focus is on using new techno logies in local branch banking and intensifying cross-border business with corporate customers, an area in which we are market leader.



of the Bank Austria Group for the first quarter of 2013

Consolidated Income Statement

Income statement (€ million)

1 Jan.–31 March 2013


Interest income and similar revenues 2,069 2,203Interest expense and similar charges – 966 –1,141net interest margin 1,103 1,062Fee and commission income 534 490Fee and commission expense –117 –119net fees and commissions 418 371Dividend income and similar revenue 7 4Gains and losses on financial assets and liabilities held for trading 108 173Fair value adjustments in hedge accounting 1 1Gains and losses on disposal of: 29 99

a) loans 2 –28b) available-for-sale financial assets 12 3c) held-to-maturity investments 3d) financial liabilities 11 124

Gains and losses on financial assets / liabilities at fair value through profit or loss 9 –8Operating incOMe 1,674 1,702Impairment losses on: –298 –286

a) loans –289 –243b) available-for-sale financial assets – –28c) held-to-maturity investments – –11d) other financial assets –8 –4

net income from financial activities 1,376 1,416Premiums earned (net) 44 37Other income (net) from insurance activities –36 –31net income from financial and insurance activities 1,385 1,422Administrative costs: – 941 –875

a) staff expense –496 –490b) other administrative expense –445 –385

Provisions for risks and charges –74 –8Impairment /write-backs on property, plant and equipment –45 –44Impairment /write-backs on intangible assets –22 –25Other net operating income 26 23Operating cOsts –1,056 – 928Profit (loss) of associates 25 26Gains and losses on tangible and intangible assets measured at fair value – –Impairment of goodwill –3 –4Gains and losses on disposal of investments 2 5tOtal prOfit Or lOss befOre tax frOM cOntinuing OperatiOns 353 521Tax expense (income) related to profit or loss from continuing operations –65 –107total profit or loss after tax from continuing operations 288 414Total profit or loss after tax from discontinued operations 8 –5net prOfit Or lOss fOr the periOD 296 409Attributable to:

Owners of the parent company from continuing operations 277 404 from discontinued operations 8 –5Non-controlling interests from continuing operations 11 10 from discontinued operations – –Earnings per share (in €, basic and diluted) from continuing operations 1.20 1.75 from discontinued operations 0.04 –0.02

ATF Bank, Kazakhstan, is classified as a disposal group held for sale and presented in the income statement as a discontinued operation. The figures for the previous year were reclassified in accordance with IFRS 5.




Consolidated Statement of Comprehensive Income

Statement of comprehensive income (€ million)



total profit or loss after tax from continuing operations 288 414total profit or loss after tax from discontinued operations 8 –5net prOfit fOr the periOD 296 409Gains/ losses on assets available for sale (available-for-sale reserve) –45 252Gains / losses on cash flow hedges (cash flow hedge reserve) –31 23Changes at companies accounted for under the equity method –3 –6Foreign currency translation – exchange differences 68 288Foreign currency translation relating to disposal groups classified as held for sale –18 –16Actuarial gains / losses on defined-benefit plans – –Taxes on items directly recognised in equity 35 –51Other changes – 2Other comprehensive income after tax from continuing operations 24 507Other comprehensive income after tax from discontinued operations –18 –16cOMprehensiVe incOMe after tax frOM cOntinuing OperatiOns 312 921cOMprehensiVe incOMe after tax frOM DiscOntinueD OperatiOns –10 –21tOtal cOMprehensiVe incOMe after tax 302 900Attributable to:Owners of the parent company from continuing operations 323 931 from discontinued operations –10 –21Non-controlling interests from continuing operations –11 –10

Taxes on items directly recognised in equity (€ million)



Gains/ losses on assets available for sale (available-for-sale reserve) 25 –45Gains / losses on cash flow hedges (cash flow hedge reserve) 11 –6Actuarial losses on defined-benefit plans – –taxes On iteMs DirectlY recOgniseD in eQuitY 35 –51

Earnings per share (in €, basic and diluted) (€)



Earnings per share from comprehensive income after tax from continuing operations 1.35 3.98Earnings per share from comprehensive income after tax from discontinued operations –0.04 –0.09



of the Bank Austria Group at 31 March 2013

Statement of Financial Position

Assets (€ million)

31 March 2013 31 Dec. 2012

Cash and cash balances 2,211 2,754Financial assets held for trading 2,650 2,855Financial assets at fair value through profit or loss 463 426Available-for-sale financial assets 21,100 21,063Held-to-maturity investments 1,730 1,895Loans and receivables with banks 22,974 28,112Loans and receivables with customers 136,420 132,424Hedging derivatives 3,455 4,125Changes in fair value of portfolio hedged items (+/–) 57 54Investments in associates and joint ventures 2,360 2,348Insurance reserves attributable to reinsurers – 1Property, plant and equipment 2,537 2,509

of which held for investment 853 782Intangible assets 2,463 2,459

of which goodwill 2,139 2,127Tax assets 1,371 1,336

a) current tax assets 52 52b) deferred tax assets 1,319 1,284

Non-current assets and disposal groups classified as held for sale 4,110 3,788Other assets 1,928 1,446tOtal assets 205,830 207,596

Liabilities and equity (€ million)

31 March 2013 31 Dec. 2012

Deposits from banks 28,528 31,061Deposits from customers 110,371 110,563Debt securities in issue 28,264 28,063Financial liabilities held for trading 2,056 2,196Financial liabilities at fair value through profit or loss 1,031 1,152Hedging derivatives 2,976 2,989Changes in fair value of portfolio hedged items (+/–) – –Tax liabilities 833 856

a) current tax liabilities 101 88b) deferred tax liabilities 732 768

Liabilities included in disposal groups classified as held for sale 4,044 3,506Other liabilities 3,764 3,428Provisions for risks and charges 5,476 5,389

a) post-retirement benefit obligations 4,635 4,600b) other provisions 841 789

Insurance reserves – 201Equity 18,489 18,192

of which non-controlling interests (+/–) 531 530tOtal liabilities anD eQuitY 205,830 207,596



Statement of Changes in Equity


(€ million)

sub- scribeD capital

capital reserVes

retaineD earnings

fOreign currencY

translatiOn

reserVes in accOrDance With ias 39*)

actuarial lOsses in

accOrDance With ias 19

share- hOlDers’

eQuitY

nOn-cOn-trOlling

interests eQuitY

as at 1 January 2012 1,681 7,097 10,380 –1,898 507 –642 17,127 534 17,661Changes in the group of consolidated companies 0 1 1Shares in controlling companies 0 0 0 0Net profit for the period 399 399 10 409Recognised income and expenses –4 272 222 0 490 1 491Dividend paid 0 –1 –1as at 31 March 2012 1,681 7,097 10,775 –1,626 730 –642 18,016 544 18,561

*) Reserves in accordance with IAS 391 Jan. 2012

31 March 2012

Cash flow hedge reserve 336 353 Available-for-sale reserve 171 377 Total 507 730

sub- scribeD capital

capital reserVes

retaineD earnings

fOreign currencY

translatiOn

reserVes in accOrDance With ias 39*)

actuarial lOsses in

accOrDance With ias 19

share- hOlDers’

eQuitY

nOn-cOn-trOlling

interests eQuitY

as at 1 January 2013 1,681 7,100 10,805 –1,735 1,143 –1,332 17,662 530 18,192Changes in the group of consolidated companies – 9 – 9Shares in controlling companies 3 3 0 3Net profit for the period 285 285 11 296Recognised income and expenses –3 51 –41 0 7 –1 6Dividend paid 0 –1 –1as at 31 March 2013 1,681 7,103 11,087 –1,684 1,102 –1,332 17,957 531 18,488

*) Reserves in accordance with IAS 391 Jan. 2013

31 March 2013

Cash flow hedge reserve 237 216 Available-for-sale reserve 906 885 Total 1,143 1,102



Notes to the Consolidated Financial Statements

Accounting methodsAs Bank Austria’s shares are no longer listed on a stock exchange, we are not required to prepare quarterly financial statements as at 31 March and 30 September.

However, with a view to maintaining a high level of transparency in the market, we will continue to publish condensed interim reports as at 31 March and 30 September.

The income statement and the statement of financial position contained in this condensed interim report have been prepared in accordance with Inter-national Financial Reporting Standards (IFRS) complemented by explanatory information.

Except as described below, the accounting policies applied by the Group in this condensed interim report are the same as those applied by the Group in its consolidated financial statements for the year 2012.

IFRS 13 The new IFRS 13 sets out a single framework for measuring fair value and provides guidance on how to implement the framework in practice. The Group applies IFRS 13 Fair Value Measurement with effect from 1 January 2013.

The application of IFRS 13 has no significant impact on the Bank Austria Group in the presented condensed interim report.

Effects of amendments to IAS 39 and IFRS 7In accordance with the amendments to IAS 39 and IFRS 7, Reclassification of Financial Assets, published in October 2008, and in response to the rare circumstances presented by the financial market crisis, we reclassified asset-backed securities (ABSs/specific securitised assets) from financial assets held for trading into loans and receivables with customers with effect from 1 July 2008 at the fair values determined at that date.

The following disclosure table shows the effects of reclassification by item in the statement of financial position and by income statement item as at 31 March 2013:

Reclassified financial assets: carrying amount, fair value and effects on comprehensive income (€ million)

accOunting pOrtfOliO befOre reclas-sificatiOn

accOunting pOrtfOliO after reclassificatiOn

carrYing aMOunt

as at 31 March

2013

fair Value as at

31 March 2013

incOMe/expenses absent reclassificatiOn

(befOre taxes)

incOMe/expenses recOgniseD During the periOD (befOre taxes)

tYpes Of instruMentsfrOM

MeasureMent OtherfrOM

MeasureMent Other

Debt securities –3,721 –3,650 18 20 9 25HFT AFS –17 –17 – – – –HFT HTM –20 –21 – – – –HFT Loans to banks – – – – – –HFT Loans to customers –758 –693 24 7 9 7AFS Loans to banks –2,926 –2,919 –7 12 – 17

tOtal –3,721 –3,650 18 20 9 25

Impairment testIn Bank Austria, the impairment test in respect of goodwill allocated to each cash-generating unit was performed as at 31 December 2012.

As at 31 March 2013, the projections used for the impairment test are still considered to be valid. Depending on financial performance of the individ-ual units, such projections may need to be revised.



Notes (CoNTINuEd)

Group of consolidated companies and changes in the group of consolidated companies of the Bank Austria Group in the first quarter of 2013Consolidated companies

nuMber

Opening balance 144additions 3

Newly established companies 1Acquired companies 2

Disposals –1Companies sold or liquidated –1

Other changes –1clOsing balance 145

Companies accounted for under the proportionate consolidation methodnuMber

Opening balance 17Additions –Disposals –Other changes –clOsing balance 17

Companies accounted for under the equity methodnuMber

Opening balance 29additions –

Newly established companies –Newly added companies –

Disposals –Companies sold or liquidated –Mergers –

Other changes 1clOsing balance 30

AdditionsnaMe Of cOMpanY MOa*) DOMicile aDDitiOn as at

UniCredit Consumer Financing AD C Sofia 1 January 2013UniCredit Consumer Financing IFN S.A. C Bucharest 1 January 2013UniCredit Center am Kaiserwasser GmbH C Vienna 31 March 2013

disposalsnaMe Of cOMpanY MOa*) DOMicile DispOsal as at

Lowes Limited in liquidation C Nicosia 1 February 2013

*) Method of accounting:C = consolidated



Notes to the income statement

Interest income/ Interest expense

Interest expense and similar charges (€ million)

1 Jan.–31 March 20131 Jan.–

31 March 2012

DepOsits securitiesOther

transactiOns tOtal tOtal

Deposits from central banks –23 X – –23 – 9Deposits from banks –125 X – –125 –197Deposits from customers –561 X – –561 –662Debt securities in issue X –205 – –205 –232Financial liabilities held for trading – – –22 –22 –19Financial liabilities at fair value through profit or loss – –2 – –2 –3Other liabilities X X –1 –1 –Hedging derivatives X X –27 –27 –20tOtal –709 –208 –50 – 966 –1,141

Interest income and similar revenues (€ million)


31 March 2012

Debt securities lOansOther

transactiOns tOtal tOtal

Financial assets held for trading 6 – 26 32 26Financial assets at fair value through profit or loss 1 – – 1 1Available-for-sale financial assets 199 – – 199 172Held-to-maturity investments 23 – – 23 54Loans and receivables with banks 18 67 – 85 134Loans and receivables with customers 6 1,600 – 1,606 1,680Hedging derivatives X X 121 121 131Other assets X X 2 2 6tOtal 253 1,667 149 2,069 2,203



Notes to the income statement (CoNTINuEd)

Fee and commission income (€ million)



Guarantees given 53 51Credit derivatives – –Management, brokerage and consultancy services 140 119Collection and payment services 220 210Securitisation servicing – –Factoring 2 2Tax collection services – –Management of multilateral trading facilities – –Management of current accounts 54 50Other services 66 59tOtal 534 490

Fee and commission expense (€ million)



Guarantees received –10 –17Credit derivatives –4 –5Management, brokerage and consultancy services –26 –25Collection and payment services –65 –63Other services –12 –10tOtal –117 –119

Fee and commission income/Fee and commission expense

(€ million)

1 Jan.–31 March 2013 1 Jan.–31 March 2012

DiViDenDs

incOMe frOM units in

inVestMent funDs tOtal DiViDenDs

incOMe frOM units in

inVestMent funDs tOtal

Financial assets held for trading – – – – – –Available-for-sale financial assets 3 – 3 3 – 4Investments 4 X 4 – X –tOtal 7 – 7 3 – 4

dividend income and similar revenue

Gains and losses on financial assets and liabilities held for trading (€ million)


31 March 2012unrealiseD

prOfitsrealiseD

prOfitsunrealiseD

lOssesrealiseD

lOsses net prOfit net prOfit

Financial assets held for trading 3 34 –1 –15 21 54Financial liabilities held for trading – – – – – 1Other financial assets and liabilities: exchange differences X X X X 24 –66Derivatives 654 114 –593 –171 62 184tOtal 657 149 –594 –186 108 173




(€ million)

1 Jan.–31 March 2013 1 Jan.–31 March 2012

gains lOsses net prOfit gains lOsses net prOfit

financial assetsLoans and receivables with banks – – – – – –Loans and receivables with customers 3 –1 2 3 –31 –28Available-for-sale financial assets 31 –19 12 7 –4 3Held-to-maturity investments 4 – 3 – – –tOtal assets 38 –20 18 10 –35 –25

financial liabilitiesDeposits from banks – – – – – –Deposits from customers – – – – – –Debt securities in issue 11 – 11 124 – 124tOtal liabilities 11 – 11 124 – 124

tOtal 49 –20 29 134 –35 99

Gains and losses on disposals / repurchases

Net change in financial assets and liabilities at fair value through profit or loss (€ million)


31 March 2012

unrealiseD prOfits

realiseD prOfits

unrealiseD lOsses

realiseD lOsses net prOfit net prOfit

financial assets 6 1 – – 6 –1Debt securities – – – – – –Equity instruments – – – – – –Units in investment funds 6 1 – – 6 –1Loans – – – – – –

financial liabilities 26 – –3 – 23 –110Debt securities 26 – –3 – 23 –110Deposits from banks – – – – – –Deposits from customers – – – – – –

credit and financial derivatives – – –20 – –20 103tOtal 32 1 –24 – 9 –8



Impairment lossesImpairment losses on loans and receivables (€ million)


31 March 2012

Write-DOWns Write-bacKs

specific

Write-Offs Other pOrtfOliO specific pOrtfOliO tOtal tOtal

Loans and receivables with banks – – – – – – –Loans and receivables with customers –10 –441 –27 167 21 –289 –243tOtal –10 –441 –27 167 21 –289 –243

Impairment losses on other financial transactions (€ million)


31 March 2012


specific


Guarantees given – –15 –2 7 – –10 –3Credit derivatives – – – – – – –Commitments to disburse funds – –1 – 3 – 1 –2Other transactions – –1 – 1 – – 1tOtal – –17 –3 11 – –8 –4

Impairment losses on available-for-sale financial assets (€ million)


31 March 2012


specific

Write-Offs Other specific tOtal tOtal

Debt securities – – – – 3Equity instruments – – x – –31tOtal – – – – –28


Impairment losses on held-to-maturity investments (€ million)


31 March 2012


specific


Debt securities – – – – – – –11Loans to banks – – – – – – –Loans to customers – – – – – – –tOtal – – – – – – –11




(€ million)


31 March 2012

prOVisiOnsreallOcatiOn

surplus tOtal tOtal

Other provisionsLegal disputes –66 1 –65 –3Staff costs – – – –Other –11 2 – 9 –5tOtal –77 3 –74 –8

Net provisions for risks and charges

(€ million)



indirect taxes and duties –74 –33Miscellaneous costs and expenses –371 –351

Advertising, marketing and communication –28 –27Expenses related to credit risk – 9 –6Expenses related to personnel –15 –14Information and communication technology expenses –105 – 97Consulting and professional services –19 –18Real estate expenses –82 –83Other functioning costs –113 –107

tOtal –445 –385

other administrative expenses

(€ million)



employees –480 –478Wages and salaries –349 –346Social charges –77 –76Severance pay – –Social security costs – –Allocation to employee severance pay provision – –Provision for retirement payments and similar provisions –62 –61Payments to external pension funds –6 –7Costs related to share-based payments –3 –1Other employee benefits –23 –25Recovery of compensation*) 39 38

Others –15 –12tOtal –496 –490

*) This includes recovery of staff costs relating to Bank Austria employees who are not active within the Group.

Payroll




Other operating expenses (€ million)



Costs for operating leases – –Reclassification of gains / losses associated with cash flow hedges of non-financial assets or liabilities from equity to profit or loss (IAS 39, paragraph 98a) – –Non-deductible tax and other fiscal charges – –Write-downs on improvements of goods owned by third parties –1 –1Costs related to the specific service of financial leasing – –Other –13 –12tOtal Other Operating expenses –14 –13

other net operating income

Other operating income (€ million)



recovery of costs – –Other income 40 35

Revenue from administrative services 10 11Reclassification of valuation reserve relating to cash-flow hedging of non-financial assets / liabilities – –Revenues from rentals of real estate investments (net of direct operating costs) 5 4Revenues from operating leases 3 1Recovery of miscellaneous costs paid in previous years – 1Revenues from finance lease activities – –Others 21 18

tOtal Other Operating incOMe 40 36Other net Operating incOMe 26 23

Earnings per shareDuring the reporting period, no financial instruments with a dilutive effect on the bearer shares were outstanding. Therefore basic earnings per share in accordance with IAS 33 equal diluted earnings per share in accordance with IAS 33. Earnings per share are calculated on the basis of the average number of shares outstanding (231.2 million shares).



Financial assets held for trading (€ million)

31 March 2013 31 Dec. 2012

fair Value leVel 1

fair Value leVel 2

fair Value leVel 3 tOtal

fair Value leVel 1

fair Value leVel 2


financial assets (non-derivatives) 189 224 44 457 283 146 71 500Debt securities 166 224 44 433 252 145 71 469Equity instruments 24 – – 24 24 – – 24Units in investment funds – 1 – 1 7 1 – 7Loans – – – – – – – –

Derivative instruments 1 2,186 6 2,193 1 2,350 5 2,355Financial derivatives 1 2,181 6 2,187 1 2,344 5 2,350Credit derivatives – 6 – 6 – 6 – 6

tOtal 190 2,411 49 2,650 284 2,496 76 2,855

Notes to the statement of financial position

Financial assets at fair value through profit or loss

This item shows assets in respect of which Bank Austria used the option to designate financial instruments as at fair value through profit or loss in order to avoid inconsistencies in the valuation of assets and liabilities which are connected with each other. Most of these assets are complex struc-tures with embedded derivatives.

(€ million)

31 March 2013 31 Dec. 2012

fair Value leVel 1

fair Value leVel 2


fair Value leVel 1

fair Value leVel 2


Debt securities 60 259 31 350 61 224 32 317Equity instruments – – – – – – – –Units in investment funds 14 – 98 112 14 – 95 109Loans – – – – – – – –tOtal 74 259 129 463 75 224 127 426cOst 72 260 129 462 73 224 127 424

Available-for-sale financial assets (€ million)

31 March 2013 31 Dec. 2012

fair Value leVel 1

fair Value leVel 2


fair Value leVel 1

fair Value leVel 2


Debt securities 9,928 8,899 1,241 20,069 9,845 8,824 1,368 20,037Equity instruments 37 – 807 844 37 – 800 837Units in investment funds 35 88 64 187 31 89 68 189Loans – – – – – – – –tOtal 10,000 8,987 2,112 21,100 9,914 8,913 2,236 21,063

Held-to-maturity investments (€ million)

31 March 2013 31 Dec. 2012

bOOK Value fair Value

fair Value leVel 1

fair Value leVel 2

fair Value leVel 3

bOOK Value fair Value

fair Value leVel 1

fair Value leVel 2

fair Value leVel 3

Debt securities 1,730 1,804 1,170 454 180 1,895 1,967 1,184 601 182Loans – – – – – – – – – –tOtal 1,730 1,804 1,170 454 180 1,895 1,967 1,184 601 182



Notes to the statement of financial position (CoNTINuEd)

Loans and receivables with banks (€ million)

31 March 2013 31 Dec. 2012

loans to central banks 6,578 7,996loans to banks 16,396 20,116

Current accounts and demand deposits 4,498 5,214Time deposits 4,932 7,489Other loans 2,538 2,984Debt securities 4,428 4,429

tOtal (carrYing aMOunt) 22,974 28,112tOtal (fair Value) 23,085 28,148Loan loss provisions deducted from loans and receivables 43 46

Loans and receivables with customers (€ million)

31 March 2013 31 Dec. 2012

perfOrMing iMpaireD tOtal perfOrMing iMpaireD tOtal

Current accounts 12,915 581 13,495 12,344 533 12,877Reverse repos 993 – 993 587 – 587Mortgages 25,337 2,538 27,875 25,669 2,519 28,188Credit cards and personal loans, including wage assignment loans 8,281 51 8,333 8,338 125 8,463Finance leases 536 19 555 515 19 535Factoring 1,166 22 1,188 1,264 13 1,277Other transactions 79,592 3,472 83,064 76,058 3,478 79,535Debt securities 895 23 917 939 24 963tOtal (carrYing aMOunt) 129,715 6,705 136,420 125,715 6,710 132,424tOtal (fair Value) 130,519 6,906 137,425 125,816 6,661 132,477Loan loss provisions deducted from loans and receivables 749 6,195 6,944 739 6,092 6,831




Non-current assets and disposal groups classified as held for sale

This item includes non-current assets and disposal groups whose sale is highly probable. They are recognised at the lower of their carrying amount and fair value less costs to sell and are stated separately in the consolidated financial statements.

Individual assetsThe sub-item “Individual assets” includes – pursuant to a resolution passed by the Management Board – the Schottengasse 6–8 property, which is intended to be sold, the UNO Shoppingcenter, Linz, which is intended to be repositioned and sold in cooperation with a strategic partner, the office building previously used by UniCredit Czech Republic, and properties of IVONA Beteiligungsverwaltung GmbH. Also included in this sub-item are EK Mittelstandsfinanzierungs AG, Mezzanin Finanzierungs AG and Pay Life Bank GmbH.

Asset groups classified as held for saleBased on a strategic decision on risk downsizing of the investment in Kazakhstan, the Management Board decided to sell ATF Bank. For this reason ATF Bank was classified as a disposal group held for sale as of 31 December 2012.

The disposal group comprises ATF Bank and its subsidiaries in Kazakhstan and Kirgizstan and adds up to €3,646 million in assets and €3,777 million in liabilities.

On 26 March 2013, Yapi Kredi Bank agreed to sell its non-life and life insurance businesses (Yapi Kredi Sigorta AS, Yapi Kredi Emeklilik AS and Yapi Kredi B Tipi Yatirim Ortakligi AS) to Allianz and to establish a 15-year strategic distribution partnership for non-life insurance, life insurance and pension products in Turkey. The closing is expected by the end of June subject to regulatory approval.

(€ million)

31 March 2013 31 Dec. 2012

individual assetsFinancial assets 273 25Equity investments 26 27Property, plant and equipment 140 179Intangible assets 3 –Other non-current assets 21 –total 464 231

asset groups classified as held for saleFinancial assets held for trading – –Financial assets at fair value through profit or loss 1 1Available-for-sale financial assets 18 62Held-to-maturity investments – –Loans and receivables with banks 123 110Loans and receivables with customers 2,997 2,948Equity investments – –Property, plant and equipment 96 95Intangible assets 8 8Other assets 403 332total 3,646 3,557assets 4,110 3,788




deposits from customers

debt securities in issue (€ million)

31 March 2013 31 Dec. 2012

carrYing aMOunt

fair Value leVel 1

fair Value leVel 2

fair Value leVel 3

carrYing aMOunt

fair Value leVel 1

fair Value leVel 2

fair Value leVel 3

securitiesBonds 27,993 1,503 24,698 1,640 27,706 975 25,932 1,425Other securities 270 – 259 11 357 – 333 24

tOtal 28,264 1,503 24,957 1,651 28,063 975 26,265 1,449

Financial liabilities held for trading (€ million)

31 March 2013 31 Dec. 2012

fair Value leVel 1

fair Value leVel 2


fair Value leVel 1

fair Value leVel 2


financial liabilities 34 16 – 50 42 19 – 61Deposits from banks – – – – – – – –Deposits from customers 34 16 – 50 42 19 – 61Debt securities – – – – – – – –

Derivative instruments – 1,920 86 2,006 – 2,133 2 2,135Financial derivatives – 1,910 4 1,915 – 2,063 2 2,066Credit derivatives – 10 82 92 – 70 – 70

tOtal 34 1,936 86 2,056 42 2,152 2 2,196

deposits from banks (€ million)

31 March 2013 31 Dec. 2012

Deposits from central banks 3,993 4,758Deposits from banks 24,535 26,303

Current accounts and demand deposits 2,861 3,449Time deposits 6,744 7,573Loans 14,869 15,111Other liabilities 59 170

tOtal 28,528 31,061fair Value 28,863 31,466

(€ million)

31 March 2013 31 Dec. 2012

Current accounts and demand deposits 57,686 55,767Time deposits 49,399 52,493Loans 1,904 929Liabilities in respect of commitments to repurchase treasury shares 660 649Other liabilities 721 726tOtal 110,371 110,563fair Value 111,074 111,234



(€ million)

31 March 2013 31 Dec. 2012

fair Value leVel 1

fair Value leVel 2


fair Value leVel 1

fair Value leVel 2


Deposits from banks – – – – – – – –Deposits from customers – – – – – – – –Debt securities – 1,031 – 1,031 – 1,152 – 1,152tOtal – 1,031 – 1,031 – 1,152 – 1,152

Financial liabilities at fair value through profit or loss

This item shows liabilities in respect of which Bank Austria used the option to designate financial instruments as at fair value through profit or loss in order to avoid inconsistencies in the valuation of assets and liabilities which are connected with each other. Most of these liabilities are debt securities and complex structures with embedded derivatives.

Liabilities included in disposal groups classified as held for sale


Provisions for risks and charges (€ million)

31 March 2013 31 Dec. 2012

pensions and other post-retirement benefit obligations 4,635 4,600Other provisions for risks and charges 841 789

Legal disputes 363 301Staff expenses 16 16Other 462 472

tOtal 5,476 5,389

(€ million)

31 March 2013 31 Dec. 2012

liabilities associated with assets classified as held for saleDeposits 11 –Securities – –Other liabilities 255 3total 266 3

liabilities included in disposal groups classified as held for saleDeposits from banks 121 161Deposits from customers 2,975 2,681Debt securities in issue 638 620Financial liabilities held for trading – 1Financial liabilities at fair value through profit or loss – –Provisions – –Other liabilities 43 41total 3,777 3,504

liabilities 4,044 3,506



Segment reporting

Reconciliation of reclassified accounts to mandatory reporting schedule (€ million)



Net interest 1,103 1,062Dividends and other income from equity investments 35 30

Dividend income and similar revenue 7 4minus: dividends from equity instruments held for trading 0 0

Profit (loss) of associates – of which: income (loss) from equity investments valued at net equity 28 26Net fees and commissions 418 371Net trading, hedging and fair value income 144 293

Gains (losses) on financial assets and liabilities held for trading 108 173plus: dividends from equity instruments held for trading 0 0Fair value adjustments in hedge accounting 1 1Gains (losses) on disposal and repurchase of available-for-sale financial assets 12 3Gains (losses) on disposal and repurchase of held-to-maturity investments 3 0Gains (losses) on disposal or repurchase of financial liabilities 11 124Gains (losses) on financial assets and liabilities designated at fair value through profit or loss 9 –8

Net other expenses/ income 38 0Gains (losses) on disposals / repurchases of loans and receivables – not impaired 3 –29Premiums earned (net) 44 37Other income (net) from insurance activities –36 –31Other net operating income 26 23

minus: other operating income – of which: recovery of expenses 0 0plus: impairment on tangible assets – other operating leases 0 0minus: Other operating expenses – write-downs on improvements of goods owned by third parties 1 0

Operating incOMe 1,737 1,755Payroll costs –495 –490

Administrative costs – staff expenses –496 –490minus: integration/ restructuring costs 0 0

Other administrative expenses –445 –385Administrative costs – other administrative expenses –445 –385

minus: integration/ restructuring costs 2 0plus: Other operating expenses – write-downs on improvements of goods owned by third parties –1 0

Recovery of expenses = Other net operating income – of which: Other operating income – recovery of costs 0 0Amortisation, depreciation and impairment losses on intangible and tangible assets –67 –66

Impairment /Write-backs on property, plant and equipment –45 –44minus: impairment losses/write-backs on property owned for investment 0 0minus: impairment on tangible assets – other operating leases 0 0

Impairment /Write-backs on intangible assets –22 –27minus: integration/ restructuring costs 0 0minus: Purchase Price Allocation effect 0 5

Operating cOsts –1,007 – 940Operating prOfit 730 815



Segment reporting (CoNTINuEd)



Net write-downs of loans and provisions for guarantees and commitments –298 –245Gains (losses) on disposal and repurchase of loans 0 1Impairment losses on loans –289 –243Impairment losses on other financial assets –8 –4

net Operating prOfit 432 570Provisions for risks and charges –74 –8

Net provisions for risks and charges –74 –8minus: integration/ restructuring costs 0 0

Integration/ restructuring costs –2 0Net income from investments –1 –34

Impairment losses on available-for-sale financial assets 0 –28Impairment losses on held-to-maturity investments 0 –11

plus: impairment losses/write-backs on property owned for investment 0 0Profit (loss) of associates 25 26

minus: profit (loss) of associates – income (loss) from equity investments valued at net equity –28 –26Gains and losses on tangible and intangible assets 0 0Gains (losses) on disposal of investments 2 5

prOfit befOre tax 355 528Income tax for the period –65 –108

Tax expense (income) related to profit or loss from continuing operations –65 –107minus: taxes on Purchase Price Allocation effect 0 –1

Total profit or loss after tax from discontinued operations 8 –5prOfit (lOss) fOr the periOD 299 415Non-controlling interests –11 –10net prOfit attributable tO the OWners Of the parent cOMpanY befOre ppa 288 406Purchase Price Allocation effect 0 –2Impairment of goodwill –3 –4net prOfit attributable tO the OWners Of the parent cOMpanY 285 399

Gains/ losses on the sale of available-for-sale financial assets and held-to-maturity investments were reclassified from the item “Net income from in-vestments” to the item “Net trading, hedging and fair value income” in 2013. Figures for the same period of the previous year were recast accordingly.



description of segment reportingThe segment reporting format is based on the internal reporting structure of business segments, which reflects management responsibilities in the Bank Austria Group in 2013. The business segments are presented as independent units with responsibility for their own results. The definition of business segments is primarily based on organisational responsibility for customers.

structural changes in segment reporting: As part of a UniCredit-wide initiative (Group Organisation Leaner Design = GOLD project) we changed the Management Board responsibilities and the definitions of business segments for segment reporting purposes as of 2013. The new structure strengthens regional control, customer service teams can adjust more quickly to local market changes. The new Retail & Corporates Division has been created by combining the customer segments of the previous Family & SME Banking (F&SME) business segment with the previous CIB customer segments Corporates II (corporate customers with an annual turnover of over €50 million), Real Estate and Public Sector. The new Division also includes Factoring, the business conducted by FactorBank AG. The Corporate & Investment Banking (CIB) business segment continues to operate within the network of the global CIB Division; following the transfer of the local corporate customer segments, CIB focuses on serving multinational companies and large institutional customers, which are provided with investment banking solutions and capital market services. The definition and tasks of the other customer business segments – i.e. Private Banking and Central Eastern Europe (CEE) – and also the Corporate Center are more or less unchanged.

Segment reporting covers the following business segments:

Retail & CorporatesThe Retail & Corporates business segment comprises business with private individuals (Retail), including the Mass Market and Affluent customer segments except Private Banking customers, and thus encompasses the entire multi-channel distribution network. Also included in this Division are subsidiaries active in credit card business and FactorBank. The Corporates subdivision covers the customer segments SMEs (small and medium-sized businesses) and corporate customers with an annual turnover of over €50 million, and Real Estate including various subsidiaries (e.g. Wohnbaubank, Bank Austria Real Invest Group) and the Public Sector customer segment.

Private BankingPrivate Banking has responsibility for private customers with investments exceeding €500,000. Schoellerbank AG and various other small subsidiaries are also included in the Private Banking business segment.

Corporate & Investment BankingThe Corporate & Investment Banking segment covers the customer segment of multinational companies and large international customers using capital market services and investment banking solutions. Corporate & Investment Banking also serves financial institutions including banks, asset managers, institutional customers and insurance companies. The product lines offered by CIB to these customers are Financing & Advisory (classic and structured lending business and capital market advisory services), Global Transaction Banking (including payment transactions, trade finance, cash management) and within Markets & Corporate Treasury Sales the services relating to customer-driven trading activities. The product specialists continue to support commercial banking activities of the bank’s other business segments.

Central Eastern Europe (CEE)The CEE business segment includes the commercial banking units of the Bank Austria Group in the region of Central and Eastern Europe (including Turkey). On the basis of a strategic decision on risk reduction, the equity interest in JSC ATF Bank and its subsidiaries in Kazakhstan and Kirgizstan was classified as a discontinued operation. These companies are therefore no longer included in the CEE business segment but have been allocated to the Corporate Center. Figures for previous periods were adjusted accordingly.

Corporate CenterThe Corporate Center comprises current expenses relating to steering and administrative functions for the entire bank and all equity interests that are not assigned to a business segment, including the contribution from UniCredit Leasing, in which Bank Austria has a shareholding interest of 31.01 % accounted for under the equity method. Funding costs relating to consolidated subsidiaries and equity not allocated to business segments are also assigned to the Corporate Center. Also included are inter-segment eliminations, other items which are not to be assigned to the business segments, impairment losses on goodwill, and the total profit or loss from JSC ATF Bank and its subsidiaries in Kazakhstan and Kirgizstan, which is classified as a discontinued operation.




MethodsNet interest is split up according to the market interest rate method. Costs are allocated to the individual business segments from which they arise.

The result of each business segment is measured by the profit earned by the respective segment. The interest rate applied to investment of equity allocated to the business segments is determined for one year in advance as part of the budgeting process. Essentially, it is composed of the 1-month EURIBOR and a liquidity cost margin based on the average term of balance sheet volume.

Overhead costs are allocated to the business segments according to a key of distribution applied within the Group on a uniform basis (50% costs, 20% revenues, 20% FTEs and 10% proportionately).

In 2013, capital allocated to the business segments in UniCredit Bank Austria AG, based on the Tier 1 capital ratio, is 9% of risk-weighted assets of the preceding quarter.

Recasting:A number of structural changes took place within the business segments and in the group of consolidated companies. This means that results for 2013 are not fully comparable with those for 2012. For this reason, the segment results for 2012 have been adjusted to the new structure. The difference compared with Bank Austria’s overall results is presented in a separate column showing “Recasting differences”.

The main pro-forma adjustments are as follows:• Theprofit-or-losseffectofchangesintheorganisationalstructure(GroupOrganisationLeanerDesign=GOLDproject)wasalsotakenintoaccount

in previous periods.• Startingwith2013,theAustrianbanklevywasallocatedtothebusinesssegmentsessentiallyonthebasisoftotalassets(UniCreditBankAustriaAG)

of the respective business segments. Figures for previous periods were adjusted accordingly.• DOMUSFacilityManagementGmbHwassoldtoUniCreditGlobalInformationServicesinSeptember2012.DOMUSFacilityManagementGmbHis

therefore no longer included in the recast figures for 2012.• UniCreditConsumerFinancingAD(Bulgaria)andUniCreditConsumerFinancingIFNS.A.(Romania)wereacquiredinJanuary2013.Thetwo

companies are therefore retrospectively included in the recast figures for 2012.





Segment reporting 1–3 2013/1– 3 2012 (€ million)

retail & cOrpOrates

priVate banKing

cOrpOrate & inVestMent

banKing (cib)

central eastern

eurOpe (cee)

cOrpOrate center

banK austria

grOup (recast)

recasting Differ-ences 1)

banK austria

grOup (publisheD) 2)

Net interest 1–3 2013 235 12 87 833 –64 1,103 – 1,1031–3 2012 250 13 116 767 –76 1,070 –8 1,062

Dividends and other income 1–3 2013 7 – 4 3 21 35 – 35from equity investments 1–3 2012 5 – – 5 20 30 – 30Net fees and commissions 1–3 2013 114 26 25 262 – 9 418 – 418

1–3 2012 114 21 22 231 –16 373 –2 371Net trading, hedging and 1–3 2013 18 – 8 122 –4 144 – 144fair value income/ loss 1–3 2012 3 1 –6 101 194 293 – 293Net other expenses/ income 1–3 2013 5 – 3 21 9 38 – 38

1–3 2012 4 –1 1 –14 8 – – –Operating incOMe 1–3 2013 378 38 127 1,241 –47 1,737 – 1,737

1–3 2012 376 34 134 1,090 131 1,765 –10 1,755Operating cOsts 1–3 2013 –283 –27 –57 –585 –55 –1,007 – –1,007

1–3 2012 –266 –26 –63 –528 –61 – 944 4 – 940Operating prOfit 1–3 2013 96 11 70 656 –102 730 – 730

1–3 2012 110 8 71 562 70 821 –6 815Net write-downs of loans and provisions 1–3 2013 –45 – –13 –240 – –298 – –298for guarantees and commitments 1–3 2012 –59 – –6 –182 – –247 2 –245net Operating prOfit 1–3 2013 51 11 57 416 –102 432 – 432

1–3 2012 51 8 65 380 70 574 –3 570Provisions for risks and charges 1–3 2013 – – – –12 –62 –74 – –74

1–3 2012 – –1 – –10 3 –8 – –8Integration/ restructuring costs 1–3 2013 – – – –2 – –2 – –2

1–3 2012 – – – – – – – –Net income from investments 1–3 2013 – – –2 1 – –1 – –1

1–3 2012 – – – 5 –39 –34 – –34prOfit befOre tax 1–3 2013 51 11 55 403 –164 355 – 355

1–3 2012 51 7 65 375 33 531 –3 528Income tax for the period 1–3 2013 –8 –3 –13 –77 36 –65 – –65

1–3 2012 –12 –2 –18 –72 –4 –108 – –108Total profit or loss after tax from 1–3 2013 – – – – 8 8 – 8discontinued operations 1–3 2012 – – – – –5 –5 – –5prOfit (lOss) fOr the periOD 1–3 2013 43 8 42 325 –119 299 – 299

1–3 2012 39 6 47 303 24 419 –3 415Non-controlling interests 1–3 2013 –2 – 1 –16 6 –11 – –11

1–3 2012 –2 – – –10 2 –10 – –10net prOfit attributable tO the 1–3 2013 41 8 43 309 –114 288 – 288OWners Of the parent cOMpanY befOre ppa

1–3 2012 38 6 47 293 26 409 –3 406

Purchase Price Allocation effect 1–3 2013 – – – – – – – –1–3 2012 – – – – –2 –2 – –2

Goodwill impairment 1–3 2013 – – – – –3 –3 – –31–3 2012 – – – – –4 –4 – –4

net prOfit attributable tO the 1–3 2013 41 8 43 309 –116 285 – 285OWners Of the parent cOMpanY 1–3 2012 38 6 47 293 20 402 –3 399

1) The segment results have been recast. The difference compared to Bank Austria’s results is presented in a separate column showing “Recasting differences”, which for 2012 mainly relate to the sale of Domus Facility Management GmbH and the purchase of UniCredit Consumer Financing AD (Bulgaria) and UniCredit Consumer Financing IFN S.A. (Romania).

2) The figures 2012 and 2013 reflect the accounting figures, restatements as described in the notes included accordingly.




retail & cOrpOrates

priVate banKing


banKing (cib)

central eastern

eurOpe (cee)

cOrpOrate center

banK austria

grOup (recast)

recasting Differ-ences 1)

banK austria

grOup (publisheD) 2)

risk-weighted assets (rWa) (avg.) 1–3 2013 17,989 833 9,925 84,321 17,855 130,922 – 130,9221–3 2012 17,485 846 9,814 81,815 15,653 125,614 –220 125,394

loans to customers (end of period) 1–3 2013 40,758 592 14,864 73,635 6,571 136,420 – 136,4201–3 2012 40,995 615 15,071 67,935 5,583 130,199 3,162 133,361

primary funds (end of period)3) 1–3 2013 42,442 7,761 9,776 62,655 16,000 138,634 – 138,6341–3 2012 42,074 7,647 8,442 57,037 16,550 131,749 3,942 135,691

Cost / income ratio in % 1–3 2013 72.2 71.6 38.2 44.5 n.m. 54.7 n.m. 54.71–3 2012 68.3 75.2 40.9 48.3 n.m. 52.1 n.m. 52.1

Risk /earnings ratio in % 4) 1–3 2013 18.4 1.6 14.4 28.7 n.m. 26.2 n.m. 26.21–3 2012 23.2 2.9 4.8 23.6 n.m. 22.5 n.m. 22.5

1) The segment results have been recast. The difference compared to Bank Austria’s results is presented in a separate column showing “Recasting differences”, which for 2012 mainly relate to the sale of Domus Facility Management GmbH and the purchase of UniCredit Consumer Financing AD (Bulgaria) and UniCredit Consumer Financing IFN S.A. (Romania).

2) The figures 2012 and 2013 reflect the accounting figures, restatements as described in the notes included accordingly.3) Primary funds: deposits from customers and debt securities in issue.4) Risk /earnings ratio: net write-downs of loans and provisions for guarantees and commitments measured against net interest and dividends and other income from equity

investments.n. m. = not meaningful




Segment reporting Q1 2013/Q1– Q4 2012 (€ million)

retail & cOrpOrates

priVate banKing


banKing (cib)

central eastern

eurOpe (cee)cOrpOrate

center

banK austria grOup

(recast) 1)

Net interest Q1 2013 235 12 87 833 –64 1,103Q4 2012 242 13 99 833 –78 1,109Q3 2012 237 10 103 834 –67 1,118Q2 2012 255 12 114 793 –65 1,109Q1 2012 250 13 116 767 –76 1,070

Dividends and other income Q1 2013 7 – 4 3 21 35from equity investments Q4 2012 10 – 1 4 –246 –231

Q3 2012 8 – – 4 –18 –6Q2 2012 15 – – 4 33 52Q1 2012 5 – – 5 20 30

Net fees and commissions Q1 2013 114 26 25 262 – 9 418Q4 2012 124 28 25 280 –17 440Q3 2012 119 22 18 258 –16 400Q2 2012 116 20 23 247 –17 390Q1 2012 114 21 22 231 –16 373

Net trading, hedging and Q1 2013 18 – 8 122 –4 144fair value income/ loss Q4 2012 7 – 9 154 18 188

Q3 2012 9 1 – 182 64 256Q2 2012 7 – –5 106 –65 43

Q1 2012 3 1 –6 101 194 293Net other expenses/ income Q1 2013 5 – 3 21 9 38

Q4 2012 7 – –1 44 –4 47Q3 2012 5 1 1 40 11 58Q2 2012 5 – – 20 10 35Q1 2012 4 –1 1 –14 8 –

Operating incOMe Q1 2013 378 38 127 1,241 –47 1,737Q4 2012 390 41 133 1,315 –326 1,553Q3 2012 378 33 121 1,319 –25 1,826Q2 2012 398 33 132 1,170 –105 1,629Q1 2012 376 34 134 1,090 131 1,765

Operating cOsts Q1 2013 –283 –27 –57 –585 –55 –1,007Q4 2012 –303 –28 –62 –572 –65 –1,029Q3 2012 –274 –27 –60 –550 –61 – 972Q2 2012 –271 –26 –54 –552 –63 – 965Q1 2012 –266 –26 –63 –528 –61 – 944

Operating prOfit Q1 2013 96 11 70 656 –102 730Q4 2012 88 13 71 744 –391 525Q3 2012 104 7 62 769 –87 855Q2 2012 128 7 78 618 –167 663Q1 2012 110 8 71 562 70 821

Net write-downs of loans and provisions Q1 2013 –45 – –13 –240 – –298for guarantees and commitments Q4 2012 –7 – –37 –289 –2 –334

Q3 2012 –76 – –1 –210 – –286Q2 2012 –18 – –5 –224 1 –245Q1 2012 –59 – –6 –182 – –247

net Operating prOfit Q1 2013 51 11 57 416 –102 432Q4 2012 81 13 34 455 –392 190Q3 2012 28 7 61 559 –87 568Q2 2012 109 7 74 394 –166 418Q1 2012 51 8 65 380 70 574

Provisions for risks and charges Q1 2013 – – – –12 –62 –74Q4 2012 –2 – –15 –37 –177 –231Q3 2012 –1 – – –7 – –7Q2 2012 – – – –10 –49 –59Q1 2012 – –1 – –10 3 –8

1) Quarterly figures based on recast data only.




retail & cOrpOrates

priVate banKing


banKing (cib)

central eastern


center

banK austria grOup

(recast) 1)

Integration/ restructuring costs Q1 2013 – – – –2 – –2Q4 2012 –27 –1 – –1 – –30Q3 2012 – – – – – –Q2 2012 – – –3 – – –3Q1 2012 – – – – – –

Net income from investments Q1 2013 – – –2 1 – –1Q4 2012 –19 – –2 –13 2 –32Q3 2012 – – – –2 7 5Q2 2012 –6 – –4 2 –8 –16Q1 2012 – – – 5 –39 –34

prOfit befOre tax Q1 2013 51 11 55 403 –164 355Q4 2012 33 12 17 403 –568 –103Q3 2012 28 7 61 551 –80 566Q2 2012 104 7 67 386 –223 340Q1 2012 51 7 65 375 33 531

Income tax for the period Q1 2013 –8 –3 –13 –77 36 –65Q4 2012 – 9 –3 –8 –68 – 9 – 97Q3 2012 –2 –2 –15 –103 45 –77Q2 2012 –22 –3 –19 –72 43 –72Q1 2012 –12 –2 –18 –72 –4 –108

Total profit or loss after tax from Q1 2013 – – – – 8 8discontinued operations Q4 2012 – – – – –282 –282

Q3 2012 – – – – –6 –6Q2 2012 – – – – –8 –8Q1 2012 – – – – –5 –5

prOfit (lOss) fOr the periOD Q1 2013 43 8 42 325 –119 299Q4 2012 25 9 8 335 –858 –482Q3 2012 25 5 46 448 –41 484Q2 2012 82 5 48 314 –188 260Q1 2012 39 6 47 303 24 419

Non-controlling interests Q1 2013 –2 – 1 –16 6 –11Q4 2012 –2 – 1 –3 5 1Q3 2012 –4 – – –24 7 –21Q2 2012 –1 – – –14 6 –8Q1 2012 –2 – – –10 2 –10

net prOfit attributable tO the Q1 2013 41 8 43 309 –114 288OWners Of the parent cOMpanY Q4 2012 23 9 9 332 –854 –481befOre ppa Q3 2012 22 5 46 424 –34 463

Q2 2012 81 5 48 300 –182 252Q1 2012 38 6 47 293 26 409

Purchase Price Allocation effect Q1 2013 – – – – – –Q4 2012 – – – – –7 –7Q3 2012 – – – – –2 –2Q2 2012 – – – – –2 –2Q1 2012 – – – – –2 –2

Goodwill impairment Q1 2013 – – – – –3 –3Q4 2012 – – – –22 –167 –189Q3 2012 – – – – –3 –3Q2 2012 – – – – –3 –3Q1 2012 – – – – –4 –4

net prOfit attributable tO the Q1 2013 41 8 43 309 –116 285OWners Of the parent cOMpanY Q4 2012 23 9 9 310 –1,027 –676

Q3 2012 22 5 46 424 –39 458Q2 2012 81 5 48 300 –187 247Q1 2012 38 6 47 293 20 402

1) Quarterly figures based on recast data only.




retail & cOrpOrates

priVate banKing


banKing (cib)

central eastern


center

banK austria grOup

(recast) 1)

risk-weighted assets (rWa) (avg.) Q1 2013 17,989 833 9,925 84,321 17,855 130,922Q4 2012 17,775 1,039 9,719 84,717 17,478 130,728Q3 2012 17,628 1,020 9,203 86,010 17,797 131,658Q2 2012 17,587 910 9,003 84,123 17,340 128,964Q1 2012 17,485 846 9,814 81,815 15,653 125,614

loans to customers (end of period) Q1 2013 40,758 592 14,864 73,635 6,571 136,420Q4 2012 41,798 599 13,250 70,456 6,475 132,577Q3 2012 41,141 621 14,943 70,401 6,150 133,256Q2 2012 41,701 614 14,591 69,527 6,323 132,756Q1 2012 40,995 615 15,071 67,935 5,583 130,199

primary funds (end of period) 2) Q1 2013 42,442 7,761 9,776 62,655 16,000 138,634Q4 2012 43,598 7,716 8,394 64,211 14,629 138,548Q3 2012 43,604 7,737 8,379 60,560 14,746 135,026Q2 2012 42,552 7,448 7,998 59,163 14,921 132,082Q1 2012 42,074 7,647 8,442 57,037 16,550 131,749

Cost / income ratio in % Q1 2013 72.2 71.6 38.2 44.5 n.m. 54.7Q4 2012 75.2 68.2 40.1 42.3 n.m. 63.7Q3 2012 69.9 80.0 42.4 40.9 n.m. 51.4Q2 2012 65.6 78.9 34.5 46.3 n.m. 57.2Q1 2012 68.3 75.2 40.9 48.3 n.m. 52.1

Risk /earnings ratio in % 3) Q1 2013 18.4 1.6 14.4 28.7 n.m. 26.2Q4 2012 2.7 2.3 37.1 34.5 n.m. 38.1Q3 2012 31.0 0.1 0.6 25.0 n.m. 25.7Q2 2012 6.8 3.1 4.2 28.1 n.m. 21.1Q1 2012 23.2 2.9 4.8 23.6 n.m. 22.5

1) Quarterly figures based on recast data only.2) Primary funds: deposits from customers and debt securities in issue.3) Risk /earnings ratio: net write-downs of loans and provisions for guarantees and commitments measured against net interest and dividends and other income from equity investments.n. m. = not meaningful



Risk report

Country riskRisk associated with cross-border transactions with all customer groups is reflected in country risk (“transfer and convertibility risk”; country risk includes, for example, loans to foreign corporate customers or banks). Risk associated with the state itself (e.g. the purchase of government bonds) is reflected in sovereign risk, irrespective of whether such risk is cross-border or local risk. Both risks are assessed via a group-wide credit process. Country limits and sovereign limits are assessed by the responsible risk management team, approved by the relevant body having approval authority, and assigned to UniCredit subsidiaries according to business needs. In general, cross-border business is not limited for countries which are presumedless risky, e.g. the US, Japan, core EU countries; for all other countries, cross-border business is limited via the assigned country limit. Sovereign risk is in each case limited via counterparty limits. The overall bond exposure is monitored via nominal credit risk limits and market risk limits. Impairment losses are recognised, if necessary, according to international standards.

GreeceGreek bond exposure was completely disposed of in the previous year. Business with Greek banks has been reduced to a minimum.

CyprusBank Austria had largely discontinued business with Cypriot banks even before the crisis broke out in March 2013. Credit risk in this connection is therefore minimal. In line with UniCredit Group’s strategy, new transactions with Cyprus-related risk are not effected until further notice. Exposures in Austria to Cyprus-based corporate customers are small and all of them are handled on a secured basis.

SpainUniCredit Group responded to the crisis in the Spanish financial market with a strict watch list strategy. Business partners accepted by the Group are primarily internationally active tier 1 banks, other business transactions with Spanish banks are entered into only in individual cases after careful case-by-case examination.

ItalyThe Italian risk is also centrally monitored and has been adjusted via a watch list strategy, mainly focusing on UniCredit, tier 1 banks and the sovereign within assigned counterparty credit and market risk limits.

Eastern Europe, Hungary and SloveniaIn view of the economic and political situation in Hungary and the difficult situation in Slovenia, UniCredit Group has taken prudent risk-mitigating measures. UniCredit is monitoring the situation and its portfolio and has also limited business via a watch list strategy.

Large sovereign exposures for other countries (e.g. Russia, Romania, Croatia) mainly result from excess liquidity management of Bank Austria banking subsidiaries or guarantees from the respective sovereign provided to support local (i.e. Bank Austria banking subsidiaries in e.g. Serbia, Croatia) corporate business. Both are monitored and limited within the framework of credit risk management.



Risk report (CoNTINuEd)

Sovereign riskWithin the Group’s sovereign exposures as at 31 March 2013, the carrying amount of sovereign debt securities as at 31 March 2013 was €17,592 million, of which about 94% concentrated on ten countries. For each of the ten countries, the table below shows the carrying amount of the exposures broken down by portfolio as at 31 March 2013.

Breakdown of sovereign debt securities by country and portfolio (€ million)

31 March 2013

cOuntrY/pOrtfOliO bOOK Value

austria 5,650HFT financial assets / liabilities (net exposures) 1) –Financial assets at FV through P&L –Available for sale 5,504Loans and receivables –Held-to-maturity investments 145

turkey 2) 3,234HFT financial assets / liabilities (net exposures) 1) 17Financial assets at FV through P&L –Available for sale 2,208Loans and receivables –Held-to-maturity investments 1,009

czech republic 2,048HFT financial assets / liabilities (net exposures) 1) 85Financial assets at FV through P&L 308Available for sale 1,655Loans and receivables –Held-to-maturity investments –

hungary 1,570HFT financial assets / liabilities (net exposures) 1) 23Financial assets at FV through P&L –Available for sale 1,511Loans and receivables 28Held-to-maturity investments 8

romania 950HFT financial assets / liabilities (net exposures) 1) –Financial assets at FV through P&L –Available for sale 950Loans and receivables –Held-to-maturity investments –

croatia 883HFT financial assets / liabilities (net exposures) 1) –Financial assets at FV through P&L –Available for sale 879Loans and receivables –Held-to-maturity investments 3

italy 642HFT financial assets / liabilities (net exposures) 1) –Financial assets at FV through P&L –Available for sale 638Loans and receivables –Held-to-maturity investments 4

1) Including exposures in credit derivatives2) Amounts recognised using proportionate consolidation with reference to the ownership percentage for exposures held by joint ventures.



31 March 2013

cOuntrY/pOrtfOliO bOOK Value

bulgaria 587HFT financial assets / liabilities (net exposures) 1) 19Financial assets at FV through P&L 3Available for sale 490Loans and receivables 7Held-to-maturity investments 68

slovakia 567HFT financial assets / liabilities (net exposures) 1) –Financial assets at FV through P&L –Available for sale 552Loans and receivables –Held-to-maturity investments 15

russia 412HFT financial assets / liabilities (net exposures) 1) 26Financial assets at FV through P&L –Available for sale 387Loans and receivables –Held-to-maturity investments –

Other countries 1,049HFT financial assets / liabilities (net exposures) 1) 32Financial assets at FV through P&L –Available for sale 990Loans and receivables –Held-to-maturity investments 26

tOtal 17,592thereof:slovenia 187portugal 30spain 6greece 1

1) Including exposures in credit derivatives2) Amounts recognised using proportionate consolidation with reference to the ownership percentage for exposures held by joint ventures.

Sovereign exposures are bonds issued by and loans granted to central banks, governments and other public sector entities. ABSs are not included.

#




In addition to the exposures to sovereign debt securities, loans to central and local governments and other governmental bodies must be taken into ac-count. The table below shows the total amount of loans to countries where the overall exposure exceeded €100 million as at 31 March 2013; these countries accounted for 94% of the total.

Breakdown of sovereign loans by country (€ million)

31 March 2013

cOuntrY bOOK Value

Austria 5,221Croatia 2,238Indonesia 517Slovenia 256Hungary 205Bosnia and Herzegovina 187Serbia 180

Czech Republic 127Philippines 119Romania 111Other 595tOtal On-balance sheet expOsure 9,755

Sovereign loans are loans granted to central and local governments and other public sector entities.




Credit riskIn the first three months of 2013, net write-downs of loans and provisions for guarantees and commitments of the Bank Austria Group increased over the same period of the previous year, as a result of various factors including one-off effects in Hungary and a higher provisioning requirement in Turkey. The provisioning requirement for Austrian business was in line with expectations.

Legal risks In 2007, UniCredit Bank Austria AG (“Bank Austria”) joined a lawsuit as a process-guiding intervening party in support of its former subsidiary the defendant AKB Privatbank Zürich AG [formerly Bank Austria (Schweiz) AG]. The lawsuit was brought in Switzerland by Bundesanstalt für vereinigungsbedingte Sonderaufgaben (“BvS”, formerly Treuhandanstalt), the German public body for the new Länder reconstruction.

After almost 20 years of proceedings and contradictory decisions of former instances, on 20 March 2012, the Court of Appeal of Zurich granted the plaintiff’s claim and ordered Bank Austria’s former subsidiary – which Bank Austria is obliged to indemnify – to pay €128 million plus interest dating back to 1994, plus costs. On 7 May 2012, Bank Austria filed an appeal against that judgment before the Swiss Federal Supreme Court.

On 8 April 2013, the Swiss Federal Supreme Court rejected Bank Austria’s appeal and confirmed the judgment of the Court of Appeal of Zurich dated 20 March 2012, which is now final and binding. Thus, Bank Austria’s former subsidiary and Bank Austria, respectively, were obliged to pay approximately €254 million (including accrued interest and costs). As Bank Austria has already built up appropriate risk provisions for this scenario, the residual P&L effect from this court ruling should be around €65 million in 2013.

Bank Austria and its former subsidiary hold that BvS has breached various duties under German law and has further already recovered a substantial proportion of the sums for which it initially brought proceedings in Switzerland. For this reason, legal actions have been initiated against BvS in Germany. These proceedings, which had been stayed with regard to the pending Swiss proceedings, shall now be continued.




Guarantees given and commitments (€ million)

31 March 2013 31 Dec. 2012

financial guarantees given to: 5,460 5,549Banks 713 743Customers 4,747 4,807

commercial guarantees given to: 15,519 15,524Banks 1,113 1,174Customers 14,407 14,350

Other irrevocable commitments to disburse funds 17,324 15,718Banks 148 152

Usage certain 99 103Usage uncertain 49 49

Customers 17,175 15,566Usage certain 6,265 6,248Usage uncertain 10,910 9,318

underlying obligations for credit derivatives: sales of protection – –assets used to guarantee others’ obligations 241 238Other commitments 16,479 14,524tOtal 55,023 51,554

Additional disclosures

EmployeesShare-based payments The Management Board and selected key management personnel of Bank Austria participate in UniCredit Group’s incentive scheme for share-based payments. The share-based payment arrangements relate to Stock Options, Performance Shares and Restricted Shares based on shares in the parent company UniCredit S.p.A. (UCI).

UniCredit calculates the economic value of the share-based payment arrangements on a uniform basis for the entire Group and provides the Group companies with the relevant information. In the Bank Austria Group, the total amount recognised in the income statement for the first three months of 2013 is €3 million.

Events after the reporting periodBank Austria has completed the disposal of its shareholding interest of 99.75% in Kazakh JSC ATF Bank to KazNitrogenGaz LLP. The National Bank of Kazakhstan approved the transaction on 29 March 2013.

Full-time equivalentsQ1 2013 2012

Salaried staff 57,091 57,708Other employees 70 75tOtal *) 57,161 57,783

of which: in Austria 7,316 7,496of which: abroad 49,845 50,287

*) Average full-time equivalents of staff employed in the Bank Austria Group (employees of companies accounted for under the proportionate consolidation method are included at 100%), excluding employees on unpaid sabbatical or maternity /paternity leave.



Additional disclosures (CoNTINuEd)

Consolidated capital resources and regulatory capital requirementsNet capital resources of the Bank Austria group of credit institutions (€ million)

31 March 2013 31 Dec. 2012

Paid-in capital (less own shares) 1,681 1,681

Reserves and minority interests 14,117 13,709

Intangible assets –507 –509Deductions from Tier 1 capital (in particular 50% deduction pursuant to Section 23 (13) 3 to 4d of the Austrian Banking Act) –846 –804

core capital (tier 1) 14,445 14,078Net subordinated liabilities 2,891 2,494

Revaluation reserves and undisclosed reserves 317 308

IRB excess in risk provision – –

Deductions from Tier 2 (50% deduction pursuant to Section 23 (13) 3 to 4d) –800 –752

supplementary capital resources (tier 2) 2,407 2,050Deductions from Tier 1 and Tier 2 (deduction pursuant to Section 23 (13) 4a) –138 –137

net capital resources (excl. tier 3) 16,714 15,991Tier 3 (re-assigned subordinated capital) 206 204

net capital resOurces (incl. tier 3) 16,920 16,194

Capital requirements of the Bank Austria group of credit institutions (€ million)

31 March 2013 31 Dec. 2012

capital requirements ofa) Credit risk pursuant to standardised approach 5,461 5,397

b) Credit risk pursuant to internal ratings-based (IRB) approach 3,857 3,793

Credit risk 9,318 9,190

Operational risk 1,004 1,012

Position risk – debt instruments, equities, foreign currencies and commodities 206 204

Settlement risk – –

capital reQuireMent 10,527 10,405Total RWA 131,594 130,067

Capital ratios31 March 2013 31 Dec. 2012

Tier 1 capital ratio, based on all risks 11.0% 10.8%Total capital ratio, based on all risks 1) 12.9% 12.5%Tier 1 capital ratio, based on credit risk 12.4% 12.3%Total capital ratio, based on credit risk 2) 13.5% 13.0%

1) Net capital resources (incl. Tier 3) as a percentage of the risk-weighted assessment basis for all risks2) Total capital resources less requirement for trading book, commodities risk, exchange rate risk and operational risk as a percentage of the risk-weighted assessment basis for credit risk



The Management Board

Willibald Cernko ceO support services (chairman)

Gianni Franco Papa cee banking Division (Deputy chairman)

Helmut Bernkopf commercial banking Division

Francesco Giordano cfO finance

Dieter Hengl corporate & investment banking Division

Jürgen Kullnigg crO risk Management

Doris Tomanek human resources austria & cee

Robert Zadrazil private banking Division

Vienna, 30 April 2013

Willibald Cernko Gianni Franco Papa

Helmut Bernkopf Francesco Giordano dieter Hengl

Jürgen Kullnigg doris Tomanek Robert Zadrazil


Additional Information

Investor Relations

Information and disclosure pursuant to Sections 24 and 25 of the Austrian Media Act (Mediengesetz):Publisher and media owner:UniCredit Bank Austria AGA-1010 Vienna, Schottengasse 6–8Tel.: + 43 (0)5 05 05-0Fax: + 43 (0)5 05 05-56155Internet: www.bankaustria.ate-mail: [email protected]: BKAUATWWAustrian bank routing code: 12000Register of Firms: FN 150714pData Processing Register number: 0030066VAT registration number: ATU 51507409

Editor: Planning & Controlling Austria External Reporting, Michael Trischler

Creative concept: Orange 021

Design, graphic development and composition: Mercurio GP – Milan

Graphics: www.horvath.co.at

Business objective: Credit institution pursuant to Section 1 (1) of the Austrian Banking Act (Bankwesengesetz)

Persons (Management Board) authorised to represent the media owner:Willibald Cernko (Chairman of the Management Board), Gianni Franco Papa (Deputy Chairman of the Management Board), Helmut Bernkopf (from 1 January 2013), Jürgen Kullnigg, Francesco Giordano, Rainer Hauser (until 31 Dec. 2012), Dieter Hengl, Doris Tomanek, Robert Zadrazil.

Supervisory Board of the media owner: Erich Hampel (Chairman of the Supervisory Board), Paolo Fiorentino (Deputy Chairman of the Supervisory Board), Alessandro Decio, Wolfgang Heinzl, Johannes Koller, Adolf Lehner, Alfredo Meocci, Jean Pierre Mustier, Roberto Nicastro, Vittorio Ogliengo, Emmerich Perl, Franz Rauch, Karl Samstag, Wolfgang Sprißler, Ernst Theimer, Robert Traunwieser, Barbara Wiedernig.

Interests held in the media owner pursuant to Section 25 of the Austrian Media Act:UniCredit S.p.A. holds 99.996% of the shares in the media owner (information on the shareholder structure of UniCredit S.p.A. is available at https://www.unicreditgroup.eu/en/governance/shareholder-structure.html).

“Betriebsratsfonds des Betriebsrats der Angestellten der UniCredit Bank Austria AG, Region Wien” (the Employees’ Council Fund of the Employees’ Council of em-ployees of UniCredit Bank Austria AG in the Vienna area) and “Privatstiftung zur Verwaltung von Anteilsrechten” (a private foundation under Austrian law; founder: Anteilsverwaltung-Zentralsparkasse; beneficiary: WWTF – Wiener Wissenschafts-, Forschungs- und Technologiefonds) have a combined interest of 0.004% in the media owner.

NotesThis report contains forward-looking statements relating to the future performance of Bank Austria. These statements reflect estimates which we have made on the basis of all information available to us at present. Should the assumptions underlying forward-looking statements prove incorrect, or should risks – such as those mentioned in this report – materialise to an extent not anticipated, actual results may vary from those expected at present. Market share data are based on the most recent information available at the editorial close of this report.

“Bank Austria” as used in this report refers to the group of consolidated compa-nies. “UniCredit Bank Austria AG” as used in this report refers to the parent company.

In adding up rounded figures and calculating the percentage rates of changes, slight differences may result compared with totals and rates arrived at by adding up component figures which have not been rounded off.

DisclaimerThis edition of our Interim Report is prepared for the convenience of our English-speaking readers. It is based on the German original, which is the authentic ver-sion and takes precedence in all legal respects.

Financial calendar6 August 2013 Publication of the half-year results as of 30 June 2013

11 November 2013 Publication of the results as of 30 September 2013All information is available electronically at http:// ir.bankaustria.at

UniCredit Bank Austria AG/Corporate RelationsLassallestrasse 5, 1020 Vienna, AustriaTel: (+43) (0)5 05 05-57232 Fax: (+43) (0)5 05 05-8957232e-mail: [email protected] Internet: http://ir.bankaustria.atGünther StromengerTel: (+43) (0)5 05 05-57232Erich KodonTel: (+43) (0)5 05 05-54999Andreas PetzlTel: (+43) (0)5 05 05-59522

RatingsLonG-TErM SuBorDInATED LIABILITIES ShorT-TErM

Moody’s1) A3 Baa3 P-2Standard & Poor’s2) A BBB A-1

Public-sector mortgage bonds of Bank Austria are rated Aaa by Moody’s.1) Grandfathered debt is rated Aa2, subordinated debt rating is Aa3.2) Grandfathered debt is rated AA–, subordinated debt rating is AA–.

Clear answers for real benefits. - Bank Austria · Clear answers for real benefits. Interim Report at 31 March 2013 Bank Austria Interim Report at 31 March 2013 2 Contents Bank Austria

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