DGAP-News: UniCredit Bank Austria AG: Results for the first nine months of
2013: Bank Austria posts net profit of over EUR 1 billion for the first nine
DGAP-News: UniCredit Bank Austria AG / Key word(s): Quarter Results
UniCredit Bank Austria AG: Results for the first nine months of 2013:
Bank Austria posts net profit of over EUR 1 billion for the first nine
12.11.2013 / 11:03
Date of entry: 12 November 2013
Results for the first nine months of 2013:
Bank Austria posts net profit of over EUR 1 billion for the first nine
- Supported by growth of customer business, operating profit is slightly
higher than in the previous year, despite substantial charges for bank
- Lending volume, at EUR 134 billion, is about 1 per cent higher than at
the end of the previous year
- Total charge for bank levies (Austria and CEE) and financial
transaction tax in Hungary adding up to about EUR 148 million
- Cost of risk rises slightly, to 98 basis points; provisioning charge
reaches EUR 999 million
- Large volume of direct funding: customer loans covered by customer
deposits and debt securities in issue to the extent of 100 per cent
- Net profit of about EUR 1.1 billion matching the previous year's level
- Core Tier 1 capital ratio further improved to an excellent 11.3 per
Bank Austria's CEO Willibald Cernko: 'In an environment which continues to
be characterised by low interest rates and moderate credit demand, we
performed well in our business with customers. And we achieved sound
results, with a net profit of about EUR 1.1 billion. It is important to
note that a large part of our profit comes from CEE while our profitability
in Austria is weighed down by a cost burden that is becoming heavier. The
total charge for bank levies and the Hungarian financial transaction tax
was EUR 148 million, of which Austria accounts for almost one-half. On the
positive side, we launched Smart Banking Solutions, a new and innovative
service model offered to private customers throughout Austria. This is
giving us a pioneering role in the Austrian market, making our business
model sustainable in the long term.'
Items in the income statement (Footnote 1)
Net interest in the first nine months of 2013 was EUR 3,273 million,
matching the previous year's level (1-9 2012: EUR 3,288 million).
Accounting for about 62 per cent of total operating income, net interest
remained the most important revenue component in an environment which
continued to be characterised by low interest rates.
Net fees and commissions developed favourably again, contrary to the
general trend which started with the onset of the financial crisis. From a
low level, they rose by 11 per cent to EUR 1,290 million (1-9 2012: EUR
Net trading, hedging and fair value income was EUR 559 million, down by 5.6
per cent from the same period of the previous year (1-9 2012: EUR 592
million). It should be noted, however, that the comparative figure for the
previous year included gains of EUR 126 million on the buyback of hybrid
instruments and gains of EUR 76 million on the sale of shares in MICEX
(Moscow Interbank Currency Exchange), adding up to a one-off effect of EUR
Overall, operating income in the first nine months amounted to EUR 5,294
million, an increase of 1.6 per cent (1-9 2012: EUR 5,211 million).
Operating costs rose by a moderate 2.4 per cent to EUR 2,961 million
compared with the previous year (1-9 2012: EUR 2,890 million). As bank
levies and financial transaction taxes continued to rise, the increase in
operating costs was held down to a moderate level only through strict cost
discipline and ongoing efficiency enhancement in business operations.
The total charge for bank levies in Austria and CEE was EUR 114.1 million.
Moreover, the financial transaction tax in Hungary added EUR 33.7 million
to operating costs. This means that the total burden resulting from bank
levies and the financial transaction tax amounted to EUR 147.8 million,
representing 5 per cent of total operating costs in the first nine months
Of the total charge, bank levies accounted for EUR 72.6 million in Austria,
EUR 10.7 million in Slovakia, EUR 1.6 million in Romania, EUR 1.3 million
in Slovenia, and EUR 27.9 million in Hungary; additionally, the financial
transaction tax in Hungary amounted to EUR 33.7 million.
Operating profit was EUR 2,334 million, a slight increase of 0.5 per cent
over the previous year (1-9 2012: EUR 2,321 million); this sound operating
performance was achieved despite the charges for bank levies and the
financial transaction tax. If the comparative figure for the previous year
is adjusted for one-off effects (see net trading, hedging and fair value
income), operating profit improved by 10 per cent compared with the same
period of the previous year.
Net write-downs of loans and provisions for guarantees and commitments rose
by 29.7 per cent in the first nine months of 2013, reaching EUR 999 million
(1-9 2012: EUR 770 million). This is to be seen especially in connection
with a further increase in the coverage ratio. In Austrian customer
business, the provisioning charge rose slightly, by 5.2 per cent, to EUR
173 million (1-9 2012: EUR 164 million), thus stabilising at a low level.
Net write-downs of loans and provisions for guarantees and commitments in
CEE increased by 36.3 per cent to EUR 828 million (1-9 2012: EUR 607
million), mainly due to the fact that the coverage ratio in Ukraine in
particular was raised further in response to the current operating
Net operating profit - i.e. operating profit less net write-downs of loans
and provisions for guarantees and commitments - in the first nine months of
2013 was EUR 1,334 million, down by 14 per cent (1-9 2012: EUR 1,551
million). Adjusted for the above-mentioned one-off effects in 2012 (buyback
of hybrid instruments/MICEX), net operating profit more or less matched the
figure for the first nine months of the previous year (down by EUR 14
million or 1 per cent).
Among the non-operating items, provisions for risks and charges amounted to
EUR 142 million (1-9 2012: EUR 74 million). The increase over the previous
year was mainly due to the judgment of the Swiss Federal Supreme Court in
the legal dispute with Bundesanstalt für vereinigungsbedingte
Sonderaufgaben; the judgment is final and binding, and the related charge
in the second quarter of 2013 was EUR 65 million. This means that all
charges relating to the Swiss lawsuit against Bank Austria have been
included in the financial statements and that there is no risk of any
further costs arising from this case.
Net income from investments was EUR 198 million, significantly higher than
in the previous year (1-9 2012: minus EUR 45 million). The increase
reflects one-off income of EUR 191 million from the sale of equity
interests in Turkish insurance companies (Sigorta/Emeklilik).
After the inclusion of non-operating items, profit before tax for the first
nine months of 2013 was EUR 1,375 million, slightly lower than in the
previous year (1-9 2012: EUR 1,429 million). The same applies to profit for
the period, which amounted to EUR 1,120 million (1-9 2012: EUR 1,155
million). The one-off effects recorded in the previous year (gains on
hybrid instruments/MICEX), which totalled EUR 202 million, and those in
2013 (Sigorta/Emeklilik) in the amount of EUR 191 million more or less
balance each other out.
Net profit, at EUR 1,086 million, came very close to the level achieved in
the previous year (1-9 2012: EUR 1,099 million).
The following key financial data have been calculated on the basis of the
- Return on equity before tax was 10.6 per cent.
- Return on equity after tax was 8.6 per cent.
- The cost/income ratio remained stable, at 53.8 per cent, compared with
the previous year.
- The risk/earnings ratio (provisioning charge as a percentage of net
interest income) was 29.8 per cent.
- The total capital ratio (based on all risks) improved to 13.5 per cent
(year-end 2012: 12.5 per cent).
- The Tier 1 capital ratio (based on all risks) rose to 11.6 per cent
(year-end 2012: 10.8 per cent).
- The Core Tier 1 capital ratio (based on all risks) increased to 11.3
per cent (year-end 2012: 10.6 per cent).
Results of the Divisions
Bank Austria reports its results in four Divisions: Retail & Corporates,
Corporate & Investment Banking (CIB), Private Banking and Central Eastern
Europe (CEE). The bank also shows results for the Corporate Center.
In the first nine months of 2013, the Retail & Corporates Division
generated a profit before tax of EUR 141 million (1-9 2012: EUR 179
million). The decline was due to the fact that interest rates were low and
credit demand remained subdued; moreover, costs rose as a result of
additional IT-related expenses. Both developments are reflected in the
increase in the cost/income ratio to 73.7 per cent (2012 as a whole: 70.0
Profit before tax generated by the Private Banking Division in the first
nine months of 2013 was EUR 31 million, up by 44.9 per cent (1-9 2012: EUR
21 million). The favourable development was mainly driven by net fees and
commissions, which improved by about 15.8 per cent compared with the same
period of the previous year. The cost/income ratio declined to 71.3 per
cent (2012 as a whole: 75.4 per cent).
The Corporate & Investment Banking (CIB) Division achieved a profit before
tax of EUR 166 million in the first nine months of 2013, a figure which is
14.5 per cent lower than for the same period of the previous year (1-9
2012: EUR 194 million). This development was mainly due to a decline in net
interest from the Markets subsegment, which reflects the low level of
interest rates and was not offset by a strong trading performance and
strict cost discipline. Customer business developed favourably, with
double-digit growth. The cost/income ratio was 38.8 per cent (2012 as a
whole: 39.2 per cent).
The CEE Division recorded solid growth in the first nine months of 2013.
Profit before tax rose to EUR 1,373 million, an increase of 4.6 per cent
over the same period of the previous year (1-9 2012: EUR 1,313 million). At
constant exchange rates, profit before tax showed an increase of 8.3 per
cent. This was mainly driven by growing fees and commissions across the CEE
region, good net interest income, particularly in Russia and Turkey, and
sound trading results. The sale of the Turkish insurance business resulted
in income of EUR191 million, while results for the previous year included
one-off income of EUR76 million from the sale of shares in MICEX (Footnote
2). Net profit rose by 9.3 per cent to EUR 1,111 million. The cost/income
ratio (excluding bank levies) was 44.1 per cent (2012 as a whole: 44.4 per
Within UniCredit, Bank Austria is the sub-holding company for operations in
Central and Eastern Europe. Its banking network comprises about 2,500
branches and about 46,000 employees (Footnote 3) in 14 countries. The Group
continues to see itself as a long-term investor in the CEE region and is
going to maintain its leading market position in the region through
selective investments in the strategic CEE markets of the Czech Republic,
Turkey and Russia.
The benefits of a brighter European growth environment are also
materialising across Central and Eastern Europe. Following a particularly
weak finish last year, industry has posted an impressive rebound in some
countries. Many of the younger EU states are at a point which should see
credit turn more supportive of domestic demand. Much of the hard work on
fiscal policy has been done so that consolidation should act as less of a
drag on economic activity going forward in the younger EU states.
'As the business environment in Central and Eastern Europe remains
challenging, we continue to focus on asset quality, risk and efficiency. A
sound customer business and a strict cost discipline have enabled us to
increase the profit before tax, which clearly demonstrates the scope of our
ongoing efforts', says Gianni Franco Papa, Bank Austria's Deputy CEO and
Head of the CEE Division.
Bank Austria's total assets as at 30 September 2013 were EUR 197.1 billion,
down by EUR 10.5 billion or 5.1 per cent from the end of the previous year
(31 December 2012: EUR 207.6 billion). In addition to exchange rate effects
reflecting depreciation of several CEE currencies, the decrease resulted
especially from the deconsolidation effect following the sale of ATF Bank,
Kazakhstan, and from the reduction of interbank business to optimise the
structure of assets and liabilities.
On the assets side, loans and receivables with customers totalled EUR 134.1
billion as at the end of September 2013, an increase of 1.2 per cent over
the end of the previous year (31 December 2012: EUR 132.4 billion). Loans
and receivables with banks declined substantially, by 21.3 per cent or EUR
6 billion, to EUR 22.1 billion (31 December 2012: EUR 28.1 billion). The
deconsolidation of ATF Bank, a banking subsidiary previously classified as
held for sale, reduced total assets by EUR 3.7 billion.
On the liabilities side, primary funds - i.e. the sum total of deposits
from customers and debt securities in issue - decreased slightly, by 3.1
per cent, to EUR 134.4 billion (31 December 2012: EUR 138.6 billion).
Deposits from banks were also down, by 4.4 per cent or EUR 1.4 billion, to
EUR 29.7 billion. Expressed as a proportion of total liabilities and
equity, primary funds rose from 66.8 per cent at year-end 2012 to 68.2 per
cent at the end of September 2013. This means that Bank Austria's loans to
customers are funded with primary funds to the extent of 100 per cent.
As at 30 September 2013, IFRS equity was more or less unchanged, at EUR
18.1 billion (31 December 2012: EUR 18.2 billion), although exchange rate
movements also affected components of equity. Foreign currency translation,
which reflects exchange differences from capital consolidation, was
negative, at minus EUR 691 million.
Capital ratios continued to improve compared with the year-end 2012 levels.
The total capital ratio based on all risks rose to 13.5 per cent (31
December 2012: 12.5 per cent). The Tier 1 capital ratio based on all risks
increased to 11.6 per cent (31 December 2012: 10.8 per cent) and the Core
Tier 1 capital ratio (excluding hybrid capital) based on all risks improved
to 11.3 per cent (31 December 2012: 10.6 per cent).
Staff numbers in the Bank Austria Group including the employees of
UniCredit Group's subsidiaries (Footnote 4) in Austria totalled 55,944
(full-time equivalents - FTEs) as at 30 September 2013 (30 September 2012:
58,057 FTEs). Of this total, 9,916 FTEs were employed in Austria and 46,028
FTEs in CEE countries.
Footnote 1: To ensure comparability, the comparative figures for 2012 are
shown on an adjusted basis and segment reporting has been adjusted to the
Footnote 2: On 6 November 2013 the Russian subsidiary ZAO UniCredit Bank
announced the sale of the remaining shares (totalling 5.711%) which it
holds in the Moscow Interbank Currency Exchange. The proceeds from the sale
will be reflected in results for the fourth quarter of 2013.
Footnote 3: Figures without Poland
Footnote 4: Mainly UniCredit Business Integrated Solutions Austria GmbH
(UBIS Austria), Pioneer Investments Austria und UniCredit Leasing.
Quart figur First mont prev year
erly es 9 hs ious
in Euro mn Q1 + Q2 +Q3 = 9M 9M +/- +/-
2013 2013 2013 2013 2012 EUR
Net interest 1,103 1,099 1,071 3,273 3,288 -15 -0%
Dividend income and other
from equity investments 35 28 14 77 76 +2 +2%
Net fees and commissions 418 450 422 1,290 1,162 +127 +11%
Net trading, hedging and
fair value income 144 227 188 559 592 -33 -6%
Net other expenses/income 38 14 44 95 93 +2 +2%
Operating Income 1,737 1,818 1,739 5,294 5,211 +83 +2%
Payroll costs -495 -504 -467 -1,466 1,477 +11 -1%
Other administrative expenses -445 -426 -424 -1,296 1,219 -77 +6%
Recovery of expenses 0 1 0 2 1 +1 >100%
Amortisation, depreciation and
losses on intangible and
tangible assets -67 -69 -65 -201 -195 -6 +3%
Operating costs -1,007 -998 -956 -2,961 2,890 -71 +2%
Operating profit 730 820 783 2,334 2,321 +12 +1%
Net write-downs of loans and
for guarantees and commitments -298 -390 -311 -999 -770 -229 +30%
NET OPERATING PROFIT 432 430 472 1,334 1,551 -216 -14%
Provisions for risks and
charges -74 -46 -22 -142 -74 -68 +92%
Integration/restructuring costs -2 -4 -10 -16 -3 -12 >100%
Net income from investments -1 5 194 198 -45 +243 n.m.
PROFIT BEFORE TAX 355 384 635 1,375 1,429 -54 -4%
Income tax for the period -65 -104 -101 -270 -255 -15 +6%
Total profit or loss after tax
operations 8 6 0 14 -19 +33 n.m.
Profit for the period 299 287 534 1,120 1,155 -35 -3%
Non-controlling interests -11 -4 -12 -26 -39 +13 -32%
NET PROFIT ATTRIBUTABLE TO THE
OWNERS OF BANK AUSTRIA BEFORE
PPA 288 283 522 1,093 1,116 -23 -2%
Purchase Price Allocation
effect 0 0 0 0 -7 +7 -100%
Goodwill impairment -3 -3 -3 -8 -10 +2 -20%
NET PROFIT ATTRIBUTABLE TO THE
OWNERS OF BANK AUSTRIA 285 281 520 1,086 1,099 -14 -1%
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
2) Recast: The comparative figures for 2012 have been recast to reflect
the consolidation perimeter and business structure in 2013.
3) Purchase Price Allocation (PPA) effects Russia.
in Euro bn 30.09.2013 31.12.2012
Total Assets 197.1 207.6
Equity 18.1 18.2
UniCredit Bank Austria AG
Schottengasse 6-8, 1010 Vienna, Austria
Largest bonds by volume issued:
ISIN Stock exchanges:
Further stock exchanges where bonds are admitted to listing:
Frankfurt, Stuttgart, Paris, Zurich, Munich
Corporate Relations - Bank Austria
phone: +43 (0) 50505 - 57232
End of Corporate News
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Company: UniCredit Bank Austria AG
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Phone: 0043 (0) 50505 - 57232
Fax: 0043 (0) 50505 - 8957232
Listed: Foreign Exchange(s) Luxemburg, Wien (Amtlicher Handel /
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