bank austria – Öffentliche pfandbriefe (public sector ... · (pfandbrief law 1938)...

January 2011

Bank Austria – Öffentliche Pfandbriefe(Public Sector Covered Bonds)

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UNICREDIT GROUP / BANK AUSTRIA: OVERVIEW

PUBLIC SECTOR COVERED BOND OF BANK AUSTRIA

AUSTRIAN LEGAL FRAMEWORK PFANDBRIEFE

AGENDA

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AGENDA




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Market share(1) Ranking Logo

Austria 16.3% # 1

Emerging Europe 7.0% # 1 e.g.

Italy 13.5% # 2

Germany 3.5% # 3

UNICREDIT GROUP IS “A TRULY EUROPEAN BANK”

Market capitalisation (in € bn)as of 30 September 2010

Leading position in core markets

(1) Market share in terms of loans as of Feb. 2010(Source: UniCredit Research Network)

At a glance*

Strong local roots in 22 European countries

Approx. 161,000** employees, approx. 9.600** branches

Total assets: € 969 bn

Shareholders’ equity: € 64 bn

Loans and receivables with customers: € 559 bn

Customers deposits and debt securities in issue: € 589 bn

€ 185 bn of Assets under Management

€ 19.8 bn operating income in 9M10 (€ 27.6 bn in 2009)

Aa3 Stable / A Stable / A Negative long-term ratings(Moody's, S&P, Fitch)

* As of September 2010** Including all employees and branches of subsidiaries consolidated proportionately

(Sources: FY2009 and 1H10 financial reports)

3rd inEurozone

UNICREDIT GROUP: OVERVIEW

33,5

41,3

49,0

51,8

53,8

53,9

64,1

142,8

69,9

UniCredit

Barclays

UBS

StanChart

RBS

Lloyds

BNP Paribas

Santander

HSBC

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2009 results confirm the solid franchise

UNICREDIT & BANK AUSTRIA: OVERVIEW

EXECUTIVE SUMMARY ON 2009 FINANCIALS

Even in a difficult market

environment

Key pillars

Diversificationbenefits

Cost control

Deleveraging

Capital strength

UniCredit Group

€ 1.7 bn net profit in a challenging year

Operating profit up 20.3% y/y, or +27.5%at constant FX and perimeter

Operating costs -8.2% y/y, -5.3% atconstant FX and perimeter

Effective deleveraging:total assets -11.2% from Dec. 2008;Tangible assets / tangible equity from29x to 22x pro-forma for € 4 bn capitalincrease (announced in Sept. 2009 andfinalized in Feb. 2010)

Tier 1 ratio at 8.63%, ~9.5% pro forma(Core Tier 1 ratio ~8.47%) for € 4 bncapital increase

Bank Austria Group

€ 1.1 bn consolidated net profit in achallenging year

Operating profit up 10.3% y/y

Operating costs -8.1% y/y,Cost/Income Ratio at 49.9%

Total assets (€ 194 bn) down by 12%vs. December 2008

Core Tier 1 ratio at 8.33%

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9M10 – UNICREDIT GROUP AND BANK AUSTRIA GROUP

Key pillars

9M10 results reflect focus on cost and sustained profitability at decreasing provisioning chargein a still challenging environment

Cost control

Balance sheetstabilization

Capital strength

Focus on assetquality

UNICREDIT & BANK AUSTRIA: OVERVIEW

Core Tier 1 ratio increased further to8.61% (+99 bps since end of 2009) dueto controlled development of RWA

Diversificationbenefits

€ 1,003 mn consolidated profit in 9M10

Operating Income of € 19.8 bn withresilient trend

Provisioning charge keeps decreasing(-17.7% vs. 9M09); 122 bps cost of risk(-19 bps vs. 9M09)

Asset quality deterioration slowing:gross impaired loans +2.3% q/q; grossNPLs +2.2% q/q

Total assets (€ 969 bn) back tomoderate growth with stable loans anddeposits, lower net interbank exposure

UniCredit Group

Cost/income ratio: 59.3% (-3,893 FTEin 9M10)

€ 761 mn consolidated profit in 9M10in a still challenging environment

Operating Income of € 5.4 bn on levelof previous quarters

Operating expenses: € 2.8 bn (+4%vs. 9M09)

Further optimization of total assets(€ 191.5 bn vs. 194.5 bn at YE09)

Core Tier 1 ratio rose to 9.63% -following a capital increase of € 2 bncarried out in March 2010Tier 1 ratio up at 9.95%

Provisioning charge decreasing(-18% vs. 9M09); cost of risk down at139 bps (180 bps in 2009)

Bank Austria Group

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STRONG CAPITAL POSITION: CORE TIER 1 RATIO 9.63%,TOTAL CAPITAL RATIO 11.76% (BA GROUP)

Core Tier 1 ratio stands at 9.63% - following a capital increase of € 2 bn carried out in March 2010 – hereby exceeding

the ratio of most Austrian competitors

Safe capital base as Bank Austria – unless its main competitors – did not take up state capital which would be to be

repaid at a later stage

Deleveraging of RWA (-5% since the end of 2008) also contributed to strengthening of capital ratios

Core Tier 1 Ratio (Basel 2)

+130 bps

Sept. 10

9.63%

Dec. 09

8.33%

+84 bps

Sept. 10

11.76%

Dec. 09

10.92%

Total Capital Ratio (Basel 2)

BANK AUSTRIA GROUP: OVERVIEW

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Customer Deposits(€ bn)

Leverage Ratio1)

Customer Loans(€ bn)

Shareholders’ Equity(€ bn)

1) Defined as Assets / Equity according to IFRS

Leverage ratio improving to 10.7% mainly due to€ 2 bn capital increase

Customer loans increased by 3.3% at BA Group level Increase in particular in some areas: Turkey, Russia,

Czech Republic and CIB Austria

Securities in Issue(€ bn)

Customer deposits up, securities in issue slightlydown

Customer loans funded nearly at 100% bycustomer deposits and securities

Increase in equity mainly due to € 2 bn capital increasein March 2010 and retained profit

BALANCE SHEET EVOLUTION IN 9M10 AGAIN SOLID (BA GROUP)

Dec. 09 Sept. 10

123.6 127.7

Dec. 09 Sept. 10

97.0 97.7

Dec. 09 Sept. 10

28.8 27.9

Sept. 10Dec. 09

13.5%10.7%

Sept. 10Dec. 09

14.417.9

BANK AUSTRIA GROUP: OVERVIEW

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RATING OVERVIEW

(as of January 2011)

1) Grandfathered debt is rated Aa2 (senior debt) and respectively Aa3 (subordinated debt) by Moody’s and AA+ (senior and subordinated debt)

by Standard & Poor’s. This relates to securities issued before 31 Dec. 2001 which are guaranteed by the City of Vienna.

Short Term Long Term Subordinated Short Term Long Term Subordinated Short Term Long Term Subordinated

P-1 A1 A2 A-1 A A- - - -

negative outlook stable outlook

P-1 Aa3 A1 A-1 A A- F1 A A-

stable outlook stable outlook negative outlook

Bank Austria -

Public Sector

Covered Bond

Bank Austria -

Mortgage Bond

Fitch

UniCredit S.p.A.

Bank Austria 1)

FitchMoody's

- - -

S&P

Aaa - -

Moody's S&P

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AGENDA




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EXECUTIVE SUMMARY BANK AUSTRIAPUBLIC SECTOR COVER POOL

Aaa Rating by Moody‘s

Strong and long existing legal framework for Austrian Pfandbriefe

All cover pool assets are either originated in Austria (99%) or originated in Europe and guaranteed

by the Republic of Austria (1%) *)

Average volume of loans is approx. € 1 mn

Average seasoning is 5.2 years

* < 5% of this one percent are from non-European countries

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PARAMETERS OF COVER POOL AND ISSUES

Total Value of the Cover Pool as of 31 December 2010 in EUR equivalent: 4,227 mn

• thereof in EUR: 2,967 mn

• thereof in CHF*: 221 mn

• thereof public sector bonds in EUR equivalent: 1,040 mn

Moody’s Rating: Aaa

Nominal Over-Collateralisation: 76.3%**

Present Value Over-Collateralisation: 79.0%

Total Value of Sold Covered Bonds as of 31st December 2010 in EUR: 2,398 mn

• thereof in CHF: 160 mn

* Cover Pool after deduction of an FX haircut of 18.4%.

** Austrian Mortgage Law requires a nominal over-collateralisation of min. 2%. Additionally, in its Articles of Association,

UniCredit Bank Austria commits itself to an over-collateralisation on a present value basis.

Parameters of Cover Pool

Weighted Average Life (in years incl. Amortization) 9.9

Contracted Weighted Average Life (in years) 13.4

Average Seasoning (in years) 5.2

Total Number of Loans 3,807

Total Number of Debtors 1,223

Total Number of Guarantors 117

Average Volume of Loans (in EUR) 1,096,176

Stake of 10 Biggest Loans 24.7%

Stake of 10 Biggest Guarantors 41.0%

Stake of Bullet Loans 44.8%

Stake of Fixed Interest Loans 34.5%

Parameters of Issues:

Total Number 43

Average Maturity (in years) 4.3

Average Volume (in EUR) 55,776,274

1313

MATURITY STRUCTURE OF COVER POOL AND ISSUES

Maturity of Assets in the Cover Pool in mn EUR in %

Maturity up to 12 months 79 1.9%

Maturity 12 - 60 months 711 16.8%

thereof Maturity 12 - 36 months 445 10.5%



Maturity longer than 120 months 2,662 63.0%

Total 4,227 100.0%

Maturity of Issued Covered Bonds in mn EUR in %

Maturity up to 12 months 124 5.2%

Maturity 12 - 60 months 2,044 85.2%

thereof Maturity 12 - 36 months 1,259 52.5%



Maturity longer than 120 months 220 9.2%

Total 2,398 100.0%

1414

REGIONAL BREAKDOWN OF ASSETS* IN AUSTRIA

* Considering Guarantors

Regional Breakdown Austria in mn EUR in %

Vienna 426 10.1%

Lower Austria 841 19.9%

Upper Austria 645 15.3%

Salzburg 141 3.3%

Tyrol 222 5.2%

Styria 511 12.1%

Carinthia 756 17.9%

Burgenland 193 4.6%

Vorarlberg 179 4.2%

Republic of Austria 314 7.4%

Total Austria 4,227 100.0%

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VOLUME BREAKDOWN BY SIZE OF ASSETS

Volume Breakdown by Size of Assets in mn EUR Number

below 300,000 243 2,213

thereof under 100,000 51 1,169

thereof 100,000 - 300,000 191 1,044

300,000 - 5,000,000 1,453 1,494

thereof 300,000 - 500,000 202 521

thereof 500,000 - 1,000,000 348 501

thereof 1,000,000 - 5,000,000 904 472

above 5,000,000 2,531 100

Total 4,227 3,807

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ASSETS VOLUME BREAKDOWN BY TYPE OF DEBTOR /GUARANTOR

Assets: Type of Debtor / Guarantor in mn EUR Number

State 62 3

Federal States 534 411

Municipalities 1,356 2,799

Guaranteed by State 252 32

Guaranteed by Federal States 1,290 112

Guaranteed by Municipalities 423 256

Other 312 194

Total 4,227 3,807

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AGENDA




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AUSTRIAN LEGAL FRAMEWORKMORTGAGE AND PUBLIC SECTOR PFANDBRIEFE

Austrian Covered Bonds

Pfandbriefe

Pfandbriefgesetz(Pfandbrief Law 1938)

Hypothekenbankgesetz(Mortgage Banking Act 1899)

FundierteSchuldverschreibungen

Law of 1905

Bank Austria

Remark:Austrian ‘Mortgage Pfandbriefe‘ also follow the same legal regulation as ‘Public Sector Pfandbriefe‘

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Criteria of Pfandbrief law /Hypothekenbankgesetz

Austria Germany

Pfandbrief law in place YES YES

Mortgage and public sectorcollateral assets in separate pools

YES YES

Cover register YES YES

Collateral assets limited to Europe YES X

Legally required minimum over -collateralization

YES YES

Cover Pool monitoring (Trustee) YES YES

Special proceedings in case of

insolvencyYES YES

Pfandbriefe remain outstanding incase of issuer‘s bankruptcy

YES YES

NPV matching YES* YES

* if included in the Articles of Association of the respective credit institution

Austrian „Hypothekenbankgesetz“was intially based on the Germanlegislation

Important changes to the German"Pfandbrief" - legislation werefollowed by the Austrian"Hypothekenbankgesetz", whichcontinues to reflect the principalfeatures of the German"Pfandbriefgesetz”

Main differences in the currentversion are:

• German law also allowscollateral assets from non-European countries

• German law includescompulsory NPV-matching,whereas in Austrian law NPV-matching is voluntary (Bankneeds to setup a self-commitment in its articles ofassociation – which is the casefor Bank Austria’s Public SectorCover Pool)

COMPARISON AUSTRIA VS. GERMANY

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YOUR CONTACTS

CFO FinanceUniCredit Bank Austria AG

Franz StegmüllerHead of Strategic FundingTel. +43 (0) 50505 [email protected]

Günther StromengerHead of Corporate RelationsTel. +43 (0) 50505 [email protected]

Impressum

UniCredit Bank Austria AGCFO FinanceA-1010 Wien, Schottengasse 6-8

Corporate & Investment BankingUniCredit Bank Austria AG

Gabriele WiebogenHead of Long Term FundingTel. +43 (0) 50505 [email protected]

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DISCLAIMER

This publication is presented to you by:UniCredit Bank Austria AGSchottengasse 6-8A-1010 Wien

The information in this publication is based on carefully selected sources believed to be reliable. However we do not make any representation as to its accuracy or completeness. Any opinions herein reflect our judgement at the date hereofand are subject to change without notice. Any investments presented in this report may be unsuitable for the investor depending on his or her specific investment objectives and financial position. Any reports provided herein are provided forgeneral information purposes only and cannot substitute the obtaining of independent financial advice. Private investors should obtain the advice of their banker/broker about any investments concerned prior to making them. Nothing in thispublication is intended to create contractual obligations. Corporate & Investment Banking of UniCredit Group consists of UniCredit Bank AG, Munich, UniCredit Bank Austria AG, Vienna, UniCredit CAIB Securities UK Ltd. London, UniCreditS.p.A., Rome and other members of the UniCredit Group. UniCredit Bank AG is regulated by the German Financial Supervisory Authority (BaFin), UniCredit Bank Austria AG is regulated by the Austrian Financial Market Authority (FMA),UniCredit CAIB AG is regulated by the Austrian Financial Market Authority (FMA) and UniCredit S.p.A. is regulated by both the Banca d'Italia and the Commissione Nazionale per le Società e la Borsa (CONSOB).

Note to UK Residents:In the United Kingdom, this publication is being communicated on a confidential basis only to clients of Corporate & Investment Banking of UniCredit Goup (acting through UniCredit Bank AG, London Branch and/or UniCredit CAIB SecuritiesUK Ltd. who (i) have professional experience in matters relating to investments being investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“FPO”); and/or (ii)are falling within Article 49(2) (a) – (d) (“high net worth companies, unincorporated associations etc.”) of the FPO (or, to the extent that this publication relates to an unregulated collective scheme, to professional investors as defined in Article14(5) of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 and/or (iii) to whom it may be lawful to communicate it, other than private investors (all such persons beingreferred to as “Relevant Persons”). This publication is only directed at Relevant Persons and any investment or investment activity to which this publication relates is only available to Relevant Persons or will be engaged in only with RelevantPersons. Solicitations resulting from this publication will only be responded to if the person concerned is a Relevant Person. Other persons should not rely or act upon this publication or any of its contents.The information provided herein (including any report set out herein) does not constitute a solicitation to buy or an offer to sell any securities. The information in this publication is based on carefully selected sources believed to be reliable butwe do not make any representation as to its accuracy or completeness. Any opinions herein reflect our judgement at the date hereof and are subject to change without notice.We and/or any other entity of Corporate & Investment Banking of UniCredit Group may from time to time with respect to securities mentioned in this publication (i) take a long or short position and buy or sell such securities; (ii) act asinvestment bankers and/or commercial bankers for issuers of such securities; (iii) be represented on the board of any issuers of such securities; (iv) engage in “market making” of such securities; (v) have a consulting relationship with anyissuer. Any investments discussed or recommended in any report provided herein may be unsuitable for investors depending on their specific investment objectives and financial position. Any information provided herein is provided forgeneral information purposes only and cannot substitute the obtaining of independent financial advice.UniCredit Bank AG, London Branch is regulated by the Financial Services Authority for the conduct of business in the UK as well as by BaFIN, Germany. UniCredit CAIB Securities UK Ltd., London, a subsidiary of UniCredit Bank Austria AG,is authorised and regulated by the Financial Services Authority.Notwithstanding the above, if this publication relates to securities subject to the Prospectus Directive (2005) it is sent to you on the basis that you are a Qualified Investor for the purposes of the directive or any relevant implementing legislationof a European Economic Area (“EEA”) Member State which has implemented the Prospectus Directive and it must not be given to any person who is not a Qualified Investor. By being in receipt of this publication you undertake that you willonly offer or sell the securities described in this publication in circumstances which do not require the production of a prospectus under Article 3 of the Prospectus Directive or any relevant implementing legislation of an EEA Member Statewhich has implemented the Prospectus Directive.

Note to US Residents:The information provided herein or contained in any report provided herein is intended solely for institutional clients of Corporate & Investment Banking of UniCredit Group acting through UniCredit Bank AG, New York Branch and UniCreditCapital Markets, Inc. (together “UniCredit”) in the United States, and may not be used or relied upon by any other person for any purpose. It does not constitute a solicitation to buy or an offer to sell any securities under the Securities Act of1933, as amended, or under any other US federal or state securities laws, rules or regulations. Investments in securities discussed herein may be unsuitable for investors, depending on their specific investment objectives, risk tolerance andfinancial position.In jurisdictions where UniCredit is not registered or licensed to trade in securities, commodities or other financial products, any transaction may be effected only in accordance with applicable laws and legislation, which may vary fromjurisdiction to jurisdiction and may require that a transaction be made in accordance with applicable exemptions from registration or licensing requirements.All information contained herein is based on carefully selected sources believed to be reliable, but UniCredit makes no representations as to its accuracy or completeness. Any opinions contained herein reflect UniCredit's judgement as of theoriginal date of publication, without regard to the date on which you may receive such information, and are subject to change without notice.UniCredit may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in any report provided herein. Those reports reflect the different assumptions, views and analytical methods ofthe analysts who prepared them. Past performance should not be taken as an indication or guarantee of further performance, and no representation or warranty, express or implied, is made regarding future performance.UniCredit and/or any other entity of Corporate & Investment Banking of UniCredit Group may from time to time, with respect to any securities discussed herein: (i) take a long or short position and buy or sell such securities; (ii) act asinvestment and/or commercial bankers for issuers of such securities; (iii) be represented on the board of such issuers; (iv) engage in “market-making” of such securities; and (v) act as a paid consultant or adviser to any issuer.The information contained in any report provided herein may include forward-looking statements within the meaning of US federal securities laws that are subject to risks and uncertainties. Factors that could cause a company's actual resultsand financial condition to differ from its expectations include, without limitation: Political uncertainty, changes in economic conditions that adversely affect the level of demand for the company‘s products or services, changes in foreignexchange markets, changes in international and domestic financial markets, competitive environments and other factors relating to the foregoing. All forward-looking statements contained in this report are qualified in their entirety by thiscautionary statement.

UniCredit Bank Austria AG, Viennaas of 23 February 2011

bank austria – Öffentliche pfandbriefe (public sector ... · (pfandbrief law 1938)...

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