UniCredit Bank Austria AG
- WKN: 813030
- ISIN: AT0000995006
- Land: Österreich
Nachricht vom 17.03.2010 | 12:22
UniCredit Bank Austria AG: Net profit of EUR 1.1 billion despite market turmoil
UniCredit Bank Austria AG / Final Results 17.03.2010 12:22 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Corporate News Bank Austria's results for the 2009 financial year Date of entry: 17 March 2010 Results for the 2009 financial year: Bank Austria: net profit of EUR 1.1 billion despite market turmoil - Operating profit up by 10 per cent to new record level of EUR 3.6 billion o Operating performance in customer business continues to improve in Austria and CEE o Operating income up by 6 per cent to EUR 7.2 billion (Footnote 1) o Net trading income of EUR 326 million, after net trading loss in the previous year o Operating expenses down by 8 per cent, cost/income ratio improves to 49.9 per cent - Provisioning charge rises to EUR 2.3 billion, but covered by operating profit - Austrian business divisions and CEE Division profitable - Net profit without minority interests almost matches the previous year's figure (down by 4 per cent) thanks to record level of operating performance in customer business - Bank Austria remains the most profitable bank in Austria, with net profit of EUR 1.1 billion - Core Tier 1 capital ratio improves to 10 per cent through capital increase without use of state aid Bank Austria's CEO Willibald Cernko: '2009 was a difficult and challenging year with exceptional adverse impacts. Our clear focus on classic customer business was a stabilising factor during the crisis. In business with customers, we achieved an operating profit of EUR 3.6 billion, a new record level to which both Austrian customer business and our CEE banking subsidiaries made contributions. On this basis we can easily cover the substantially higher provisioning charge on our own, with profits from our operating activities. This confirms the risk-bearing capability and profitability of our broadly-based business model. With a net profit of EUR 1.1 billion, we continue to be the most profitable bank in Austria. And thanks to the capital contribution of EUR 2 billion from our parent company UniCredit in the first quarter of 2010, Bank Austria also has the strongest equity capital base among all Austrian banks. This gives our customers security and reassurance that we can continue to focus on our core task of financing businesses and private households in Austria and in Central and Eastern Europe.' Items in the income statement The stable trend in our operating performance despite the turbulent developments during the year confirms the widely diversified business model of a universal bank focusing on customer business. Net interest in 2009 rose slightly compared with the previous year, by 2 per cent to EUR 4,733 million (2008: EUR 4,657 million). Dividend income and other income from equity investments declined substantially, by EUR 533 million to EUR 54 million, mainly due to a special effect (footnote 1) in the previous year. At the end of 2008, as part of the sale of profit-sharing rights in the B&C foundation, a special dividend of EUR 415 million was recorded as income and included in this item. Net interest income totalled EUR 4,877 million. Without the above-mentioned one-off effect it was up by 9 per cent on 2008; adjusted for the 'B&C effect' 1, net interest income was 2 per cent lower than in the previous year (2008: EUR 5,367 million). Net fees and commissions were down by 12 per cent to EUR 1,831 million from the previous year (2008: EUR 2,076 million), mainly due to persistently weak securities business. The net trading, hedging and fair value result was a net income of EUR 326 million, after a net loss of EUR 418 million recorded in the previous year in the wake of the global financial market crisis. Operating income in 2009 matched the figure for the previous year. Adjusted for the EUR 415 million one-off effect resulting in 2008 from the sale of profit-sharing rights in the B&C foundation, operating income in 2009 rose by 6 per cent to EUR 7,245 million (adjusted figure for 2008: EUR 6,812 million). Operating expenses were reduced by EUR 320 million or 8 per cent to EUR 3,615 million (2008: EUR 3,935 million), the cost/income ratio thus improved by 4.6 percentage points to 49.9 per cent. This cost reduction was achieved in Austria and in Central and Eastern Europe, through lower-cost processes and cross-regional synergies in back-office and administrative activities and also through staff reductions in Central and Eastern Europe. The number of employees declined in all CEE countries except Hungary, with Kazakhstan and Ukraine accounting for the major part of the reduction. Staff numbers in Kazakhstan were down by 690, due to several programmes for efficiency enhancement, and the reduction of regional administrative centres in Ukraine involved a reduction of 1,706 employees (full-time equivalents). Supported by the strong performance in customer business and the improvement in cost efficiency, operating profit rose to a new record level of EUR 3,630 million, an increase of EUR 338 million or 10 per cent over the previous year (2008: EUR 3,292 million). After a slight decline at the beginning of 2009, net writedowns of loans and provisions for guarantees and commitments increased as the year progressed. Developments in Austria and CEE, and in the various countries in Central and Eastern Europe, varied widely. Overall, the provisioning charge increased to EUR 2,267 million (2008: EUR 1,012 million). Of this total, the Austrian business segments accounted for EUR 549 million, a relatively moderate increase of 16 per cent over the previous year (2008: EUR 474 million). At the CEE banking subsidiaries, the provisioning charge rose to EUR 1,718 million (2008: EUR 537 million). The strong increase was limited to only a few of the 18 banking subsidiaries for which Vienna-based Bank Austria is responsible as sub-holding company for UniCredit Group. Some 55 per cent of the increase in, and the total amount of, the provisioning charge was accounted for by three countries: Kazakhstan with EUR 499 million (2008: EUR 124 million), Ukraine with EUR 228 million (2008: EUR 89 million) and Russia with EUR 207 million (2008: EUR 77 million). It should be noted in this context that the significant increase in net writedowns of loans and provisions for guarantees and commitments was covered by the continued strong results from operations. Net income from investments was EUR 113 million, significantly lower than in the previous year (2008: EUR 344 million), mainly because income from equity investments declined. The share of current profits of the Polish banking subsidiary (footnote 2) was down by EUR 131 million from the figure for 2008. Moreover, there were no significant gains on sales of equity interests compared with the previous year; in 2008, such gains contributed EUR 109 million to net income from investments. Goodwill impairment: After the substantial impairment loss on goodwill recognised in the previous year (2008: EUR 1,027 million), the impairment test at the end of 2009 resulted in an additional goodwill impairment loss of only EUR 19 million, mostly related to CJSC UniCredit Securities, the former ATON. The balance of non-operating items was a net expense of EUR 2,296 million, up from the previous year's figure (2008: EUR 1,787 million). After deduction of this amount from the operating profit of EUR 3,630 million, profit before tax was EUR 1,335 million (2008: EUR 1,505 million). Profit for 2008 (net profit without minority interests) was EUR 1,102 million, down by a marginal 4 per cent from the previous year's level (2008: EUR 1,144 million) despite the exceptional impacts resulting from the economic environment. This means that Bank Austria remains the Austrian bank with the strongest profitability. The following key financial data have been calculated on the basis of the above-mentioned results: - Return on equity before tax was 9.4 per cent. - Return on equity after tax improved to 8.1 per cent (2008: 7.8 per cent). - The cost/income ratio was reduced to 49.9 per cent (2008: 54.4 per cent). - The risk/earnings ratio (provisioning charge as a percentage of net interest income) increased to 46.5 per cent (2008: 18.8 per cent). - The Tier 1 capital ratio (based on all risks), including the capital increase of EUR 2 billion, improved to about 10.4 per cent (2008: 6.82 per cent; year-end 2009 figure without capital increase: 8.68 per cent) under Basel II (footnote 3). - The Core Tier 1 capital ratio (based on all risks), including the capital increase of EUR 2 billion, improved to about 10.0 per cent (2008: 6.52 per cent; year-end 2009 figure without capital increase: 8.32 per cent) under Basel II. - Earnings per share were EUR 5.45 (2008: EUR 5.66) based on the average number of 202 million shares outstanding in 2009. Results of the Divisions Bank Austria reports its results in four Divisions: Retail, Private Banking, Corporate & Investment Banking (CIB) and Central Eastern Europe (CEE). The bank also shows results for its Corporate Center. The Retail Division serves private individuals and small businesses in Austria. Although focused on classic banking business, the Retail Division was also affected by the repercussions of the financial market crisis and the recession. The demand side was characterised by customers' pronounced restraint in the area of securities investments and complex products, while the low levels of interest rates had an impact on liabilities-side business. Economic trends led to an increase in the provisioning charge. In this challenging environment, the Retail Division showed a comparatively stable performance supported by continued efficiency enhancement and professional risk management. However, results for 2009 fell short of the previous year's level. When comparing the figures with those for the previous year, it should be noted that the transfer of wealthy private customers to the Private Banking Division started at the beginning of September 2009 with a view to meeting the needs of this customer group with an emphasis of specialised services. Operating profit for 2009 was EUR 319 million, down by 14 per cent (2008: EUR 370 million). In the same period the provisioning charge rose by 17 per cent to EUR 243 million, weighing down profit before tax, which declined by 47 per cent to EUR 84 million (2008: EUR 159 million). Return on equity before tax was 10.2 per cent (2008: 19.6 per cent), the cost/income ratio reached 71.6 per cent (2008: 69.9 per cent). On the revenue side, net interest in a narrower sense was an anchor of stability: at EUR 711 million it was only 3 per cent lower than in 2008. Lending business developed favourably despite the challenging economic environment. Housing loans and medium-term/long-term loans held up well. On the other hand, customers strongly reduced their short-term overdraft loans and business loans. Cost management made an essential contribution to results for 2009. Operating expenses were EUR 807 million, down by EUR 52 million or 6 per cent. This effect offset about one half of the revenue shortfall associated with the economic downturn. Part of the significant reduction of non-staff costs was achieved in cooperation with our specialised back-office service provider Administration Services, which was transferred to UniCredit Business Partner S.p.A. The entire private banking know-how was bundled in the Private Banking Division with a view to providing comprehensive and integrated services to wealthy private customers and even better meeting the needs of these customers. The reorganisation of the Division was successfully completed in the past year with the reintegration of Bank Privat into Bank Austria and the transfer of private customers with a minimum investment potential of EUR 500,000 from other areas to the Private Banking Division. Operating income in 2009 was EUR 111 million, up by 1 per cent over the previous year's figure (2008: EUR 110 million). Operating expenses, at EUR 78 million, matched the figure for the previous year despite the internal reorganisation measures. The operating profit generated by the Private Banking Division rose by 5 per cent to EUR 33 million (2008: EUR 32 million). Net income from investments was balanced, down by EUR 9 million from 2008, a year in which book profits were realised on investments. Profit before tax was EUR 33 million, falling short of the 2008 figure by an amount that exactly corresponded to the above-mentioned one-off effect (2008: EUR 42 million). Return on equity (ROE) before tax was 22.8 per cent (2008: 25.4 per cent), the cost/income ratio improved to 69.9 per cent (2008: 70.9 per cent). Total financial assets (the total amount of assets managed for customers) in the Private Banking Division increased by 17 per cent to EUR 15.4 billion in 2009. Schoellerbank, which continues to operate under its own brand and is included in the above total amount, also recorded an increase of 2 per cent to EUR 6.5 billion in total financial assets. Of the total business volume in the Division, direct deposits account for 38 per cent, assets under management (including managed products) for 30 per cent and assets under custody for 32 per cent. Corporate & Investment Banking (CIB): With the objective of further sharpening the focus on customers, and in line with the 'one face to the customer' principle, the former Corporates Division was combined with the former Markets & Investment Banking to form the new Corporate & Investment Banking Division. UniCredit CAIB AG, a consolidated company, was made to focus on trading activities outside customer-driven business in 2009 and prepared in February 2010 for the intra-group sale to UniCredit Bank, Munich (the former Bayerische Hypo- und Vereinsbank). This transaction is subject to the required regulatory approvals, the closing is planned for 1 June 2010. The combination of commercial banking business with corporate customers and customer-driven trading activities in the new CIB Division creates a customer-focused business segment with enhanced performance capabilities. Bank Austria's corporate customers - companies, institutional investors and public sector entities - now benefit from shorter decision-making paths for integrated services provided to them, encompassing classic on-balance sheet products, commercial services, the use of UniCredit Group's entire international network and capital market transactions. Operating income rose significantly, by 66 per cent or EUR 656 million to EUR 1,657 million (2008: EUR 1,001 million), driven by a 16 per cent increase in net interest income and the fact that the combined figure of the other components of operating income was positive, after a net expense in the previous year. Operating expenses of the CIB Division were EUR 477 million, down by 3 per cent from the previous year (2008: EUR 490 million). On this basis, operating profit for 2009 more than doubled to EUR 1,179 million compared with the previous year (2008: EUR 510 million). The provisioning charge was EUR 306 million, up by 15 per cent from the previous year (2008: EUR 266 million). Due to the absence of major insolvencies, and through professional risk management, the increase was moderate. In a pro-forma comparison with the crisis year 2008, when the bank had to absorb significant writedowns on market value in the net trading result, profit before tax, at EUR 797 million, is five times as high as in the previous year (2008: EUR 159 million). Return on equity before tax (ROE) improved to 10.5 per cent (footnote 4) (2008: 2.1 per cent). The cost/income ratio was reduced to 28.8 per cent (2008: 49 per cent). In a challenging economic environment the CEE Banking Division further improved its operating profit compared to last year to EUR 2,668 million (2008: EUR 2,508 million). Despite this solid operating performance it was not possible to fully escape the impact of the crisis and as the provisioning charge tripled, profit before tax went down to EUR 915 million (2008: EUR 2,025 million). Return on equity before tax was 9.2 per cent (2008: 21.5 per cent), while the cost/income ratio improved significantly to 42.2 per cent (2008: 47.0 per cent). Bank Austria is the hub for UniCredit Group's banking network in Central and Eastern Europe. As the sub-holding company responsible for CEE, Bank Austria manages the leading banking network in the region with more than 52,000 employees and over 2,750 branches in 18 countries. The exceptional situation on the banking market called for a clear focus on risk management and cost efficiency. The focus was on optimising processes and structures, but included a staff reduction (mainly in Ukraine and Kazakhstan) too. This led to a significant improvement in the cost/income ratio and to an optimised position on the local markets, and made our banking subsidiaries ready to get off to a quick start again as soon as market conditions improve. This determined approach paid off: even in 2009, the second year of the crisis, the CEE subsidiaries, with the only exception of Kazakhstan, again managed to achieve a positive profit before tax. However, one of the consequences of the challenging market situation was the tripling of risk provisions, a development which should have peaked in 2009, but which was offset by the good operating profit. 'Throughout the crisis our subsidiaries have proven their strength and stability. Apart from Kazakhstan they all achieved positive results and clearly contributed to the good performance of our group. With the solid potential given in Central and Eastern Europe we expect the growth rates in the region to prevail those in Western Europe. In 2010 we will focus on continued organic growth to further strengthen our leading network in the region. We will start to invest selectively in some countries, where we are planning to open around 100 additional branches to further enhance our presence', says Federico Ghizzoni, Deputy CEO of Bank Austria. Balance sheet Bank Austria's total assets as at 31 December 2009 were EUR 194.5 billion, down by 12 per cent from the previous year (31 December 2008: EUR 222.2 billion). The reasons for the decline were market developments, especially the strong reduction of interbank business on both sides of the balance sheet and the intentional reduction of proprietary trading. Like the consolidated balance sheet at 31 December 2008, the consolidated balance sheet at 31 December 2009 includes disposal groups classified as held for sale, which are shown in accordance with IFRS 5 in the items Non-current assets and disposal groups classified as held for sale and Liabilities included in disposal groups classified as held for sale. These items show the investment bank UniCredit CAIB AG and UniCredit CAIB Securities UK Ltd. The brokerage firms in Poland and Russia, which in the previous year were classified as held for sale, and the other CEE units of CAIB will remain within Bank Austria on the basis of a decision made by the Management Board in September 2009. Card Complete GmbH, which was also classified as held for sale at year-end 2008 and in the preceding quarters, is no longer included in these items because the sale process was stopped in September 2009 as bids for the company were not satisfactory. On the assets side, loans and receivables with customers totalled EUR 123.6 billion, down by EUR 8.3 billion or 6 per cent from the previous year (31 December 2008: EUR 131.9 billion). Loans and receivables with banks rose by EUR 3.1 billion or 15 per cent to EUR 23.1 billion (2008: EUR 20.0 billion). Financial assets held for trading declined by 8 per cent to EUR 4.1 billion (2008: EUR 4.5 billion). On the liabilities side, the contraction of the balance sheet is mainly explained by the decrease in the item Liabilities included in disposal groups classified as held for sale and by the declines in interbank business and in financial liabilities held for trading. Deposits from customers rose by 2 per cent to EUR 97 billion (2008: EUR 95.2 billion), debt securities in issue were down by 12 per cent to EUR 28.8 billion (2008: EUR 32.6 billion). Primary funds - i.e. the sum total of deposits from customers and debt securities in issue - amounted to EUR 125.9 billion or 64.7 per cent of the balance sheet total. This means that primary funds covered more than 100 per cent of loans and receivables with customers. As at 31 December 2009, equity amounted to EUR 14.4 billion (2008: EUR 14.2 billion). At the end of 2009 the Tier 1 capital ratio based on credit risk under Basel II was 9.76 per cent (2008: 7.70 per cent). The Tier 1 capital ratio based on all risks improved to 8.68 per cent (2008: 6.82 per cent). The Core Tier 1 capital ratio (without hybrid capital) based on credit risk rose to 8.32 per cent (2008: 6.52 per cent). The strengthening of Bank Austria's equity capital base in the amount of EUR 2 billion by UniCredit Group following the resolution adopted at the Extraordinary General Meeting on 4 March 2010 has the following effects on capital ratios as at 31 December 2009: the Tier 1 capital ratio based on all risks improves to about 10.4 per cent. The Core Tier 1 capital ratio (without hybrid capital) based on all risks improves to about 10.0 per cent. Staff numbers in the Bank Austria Group including the employees at UniCredit Group subsidiaries (footnote 5) in Austria totalled 63,218 as at 31 December 2009 (FTEs; 31 December 2008: 67,002 employees). Of this total, 10,886 FTEs were employed in Austria and 52,332 FTEs in CEE countries. FOOTNOTES: 1)The following one-off effect should be noted when interpreting the income statement, and especially when analysing the bank's operating performance: as part of the sale of profit-sharing rights in the B&C foundation, a special dividend of EUR 415 m was recorded as income in 2008 in the item 'Dividend income' within net interest income ('B&C effect'). 2) When Bank BPH, Bank Austria's Polish banking subsidiary, was sold to UniCredit in November 2006, it was agreed that Bank Austria would receive a share of current profits of the combined Bank BPH and Pekao Bank for the three subsequent years. 3) Capital components held in non-consolidated companies are deducted from Tier 1 capital under Basel II and from total capital under Basel I. 4) 36.3 per cent if adjusting profit and equity by the excess capital effects (versus absorbed capital) 5) AS (Administration Services), BTS (Banking Transaction Services), Pioneer Investments Austria and WAVE were transferred on an intra-group basis.in Euro mn 2009 2008 change in % Net interest 4,733 4,657 2% Dividend income 54 587 -91% Other income from equity investments 89 123 -27% Net interest income 4,877 5,367 -9% Net fees and commissions 1,831 2,076 -12% Net trading, hedging and fair value income/loss 326 -418 n.m. Net other expenses/income 211 201 5% Net non-interest income 2,369 1,860 27% OPERATING INCOME 7,245 7,227 0% Payroll costs -1,894 -2,235 -15% Other administrative expenses -1,389 -1,371 1% Recovery of expenses 2 3 -39% Amortisation, depreciation and impairment losses on tangible and intangible assets -333 -331 1% OPERATING EXPENSES -3,615 -3,935 -8% OPERATING PROFIT 3,630 3,292 10% Goodwill impairment -19 -1,027 -98% Provisions for risks and charges -114 -87 31% Restructuring costs -9 -6 53% Net writedowns of loans and provisions for guarantees and commitments -2,267 -1,012 >100% Net income from investments 113 344 -67% PROFIT BEFORE TAX 1,335 1,505 -11% Income tax -182 -222 -18% NET PROFIT OR LOSS FOR THE YEAR 1,152 1,283 -10% Net profit attributable to the parent company 1,102 1,144 -4% Minorities 51 139 -63%2009 2008 ROE after taxes (excl. minorities) 8.1% 7.8% Cost/income ratio 49.9% 54.4% Risk/earnings ratio 46.5% 18.8%in Euro bn 31.12.2009 31.12.2008 change in % Total assets 194.5 222.2 -12% Equity 14.4 14.2 1.1% Tier 1 ratio (all risks) 8.68% 6.82% 1.86%Enquiries: Günther Stromenger Investor Relations - Bank Austria phone: +43 (0) 50505 - 87230 e-mail: email@example.com Issuer: UniCredit Bank Austria AG Schottengasse 6-8, 1010 Vienna, Austria e-mail: firstname.lastname@example.org Internet: http://ir.bankaustria.at Largest bonds by volume issued: ISIN: Stock exchanges: XS0372532514 Luxemburg XS0343689377 Luxemburg Further stock exchanges where bonds are admitted to listing: Vienna, Frankfurt, Stuttgart, Paris, Zurich Contact: Günther Stromenger Investor Relations - Bank Austria phone: +43 (0) 50505 - 87230 e-mail: email@example.com 17.03.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: UniCredit Bank Austria AG Schottengasse 6-8 1010 Wien Österreich Phone: 0043 (0) 50505 - 87230 Fax: 0043 (0) 50505 - 8987230 E-mail: firstname.lastname@example.org Internet: www.bankaustria.at ISIN: AT0000995006 WKN: 99500 End of News DGAP News-Service ---------------------------------------------------------------------------
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