The result for 2010 shows that we took the right countermeasures during the crisis. Despite the continuing slight rise in non-performing loans (NPL), which we expect to finally peak in the course of the second half 2011, we made a consolidated profit of € 1,087 million. This represents growth of 142 per cent on the previous year (pro forma values). The emerging economic recovery and the measures initiated in the current year to improve our efficiency and competitiveness give me confidence for 2011. Even so, there are still many environmental uncertainties, in particular those of a political nature.
The exchange ratio for the merging companies was fixed as follows: 30.701845 bearer shares in Raiffeisen International Bank-Holding AG were granted for each bearer share in Cembra Beteiligungs AG. The exchange ratio was based on the valuation of the companies Raiffeisen International and Cembra on 8 July 2010. These valuations were confirmed by two independent auditing companies who were appointed by the two companies as independent assessors.
What specifically helped you to restore the trust you had lost? By joining in the debate and also being able to come up with the figures to back up our plans. We had to convince our investors, who had actually invested in a CEE pure play with the Raiffeisen International stock, that our operations in Austria and
other financial centers would enhance the business. We tirelessly explained to our shareholders and the public the huge opportunity presented by this merger. At the end of the day we managed to do just that, and our share price recovered sharply within a few weeks. When it came to valuing Raiffeisen International and RZB we tried from the outset to make our shareholders a fair, balanced offer. The valuation was made in a clear, transparent manner to ensure that the interests of all shareholders were safeguarded. We submitted, I believe, not just a fair valuation in terms of price, but one that was also transparent.
RBI also engages selectively in business with corporate customers and financial institutions in world financial centers as well as in Asia via business outlets, subsidiaries and representative offices.
Martin Grüll prefers to tie double knots to loose ends in the morning.
High/low in 2010 (closing prices) € 42.75 / € 29.01 Earnings per share for 2010 € 4.56 Before deduction of the compensation for participation rights € 5.59 Market capitalization as of 31 December 2010 € 8.0 billion Average daily trading volume in 2010 (single counting) 367,619 shares Stock exchange turnover in 2010 (single counting) € 3.3 billion Free float as of 31 December 2010 21.5%
Share details ISIN AT0000606306 Ticker symbols RBI (Vienna Stock Exchange) RBI AV (Bloomberg) RBIV.VI (Reuters) Market Segment Prime Market Issue price per share at IPO (25 April 2005) € 32.50 Issue price per share at capital increase (5 October 2007) € 104.00 Number of shares issued as of 31 December 2010 195,505,124 Average number of shares in 2010 194,529,537
The reports and presentations to the 2010 Annual General Meeting and a video of the Management Board presentations are available at www.rbinternational.com → Investor Relations → Events → Annual General Meeting.
Capital markets communications Enhanced online information RBI seeks to keep all market participants well informed at all times, with the emphasis on using the internet. In the course of ongoing improvements to its internet communications, it has added telephone conference presentations since the start of 2010 as online webcasts. It also offers an opportunity on its website to subscribe to an e-mail service for investors and other interested parties, at www.rbinternational.com → Investor Relations → Reports & Presentations → Ordering- and E-Mail-Service
Walter Rothensteiner, 1953 11 May 2001 Regular Annual Chairman General Meeting 2011
The table contains fixed and performance–based remuneration, including compensation for functions in the management bodies of associated companies, bonus payments and benefits in kind. In the financial year the share of performancebased components amounted to 1.9 per cent (2009: 5.5 per cent).
Members of the Management Board of the company 147,611 43,061 221,417
Detailed information concerning corporate responsibility at RBI will be published in the next corporate responsibility report. It is anticipated that it will be published in the second quarter of 2011.
The CIS region had the fastest growth in total assets in the years 2004 to 2008, averaging almost 40 per cent a year. However, as in the other regions, there was no growth here again in 2009, although the economic recovery in 2010 probably led to a return to at least 15 per cent.
The positive trend in Poland resulted in growth in total lending, which was also the case in the Czech Republic. By contrast, lending fell in 2009 in Romania, Russia, and Ukraine as a result of the weak economies in these countries. However, GDP grew sharply in 2010 in Russia and Ukraine, not least because of the strong baseline effect after the sharp drop in the previous year. This stabilization was helped by financial assistance from the IMF, EU and World Bank, and the commitment by the banking sector to stay engaged in the region.
As of 31 December 2010, RBI’s scope of consolidation comprised 132 Group units, including 21 banks and a number of financial institutions and bank-related service providers. For information about the change in the scope of consolidation, please refer to page 144 in the notes section. RZB's principal business areas added 38 fully consolidated companies to the scope of consolidation. The merger places some restrictions on any proper comparison of the figures for 2010 with the figures of Raiff eisen International for the previous year.
Structure of assets on the statement of financial position in € billion
The plausibility of each Group unit's financial statements is initially checked by the relevant key account manager within the Group Financial Reporting department. The subsequent consolidation steps are then performed using the Cognos Controller consolidation system, including capital consolidation, expense and income consolidation, and debt consolidation. Lastly, possible intra-Group gains are eliminated. At the end of the consolidation process, the notes to the financial statements are prepared in accordance with IFRS, the BWG and UGB.
The CEBS stress tests simulated the effects of various scenarios for economic developments for 91 European financial institutions. Specific attention was paid to the direct and indirect influences of predetermined crisis scenarios on future capital requirements, necessary provisioning for impairment losses as well as earnings and capital components, based on variables like GDP growth rates, exchange rates and risk premiums. RZB clearly passed this test, showing capitalization well above the recommended minimum ratio even in a simulated continuing crisis. This was despite the fact that the risk scenarios used for the Austrian banks, developed specially by the Austrian National Bank (OeNB) were significantly more rigorous than the original CEBS scenarios.
All other units STA STA STA STA 1 IRB = internal ratings-based approach. 2 Only for risks of open foreign exchange positions and general interest rate risk on the trading book. 3 STA = Standard approach. 4 Only at consolidated level.
Central Europe 101 Southeastern Europe 104 Russia 106 CIS other 108 Group corporates 110 Group markets 112 Corporate center 114
Net allocations to provisioning for impairment losses for the region fell by 19 per cent (€ 79 million) to € 335 million. The net allocations to individual loan loss provisions declined by 5 per cent year-on-year – a reduction of € 16 million – to € 336 million. The improvement was mainly generated in Romania, where net allocations to provisioning for loans and advances to retail and corporate customers were scaled back. Meanwhile, Bulgaria and Bosnia and Herzegovina saw individual loan loss provisions rise, particularly for corporate customers. Portfolio-based loan loss provisions totaled € 1 million in 2010, with nearly all countries in the region recording lower allocations and releases of existing provisions. Non-performing loans made up 9 per cent of the loan portfolio.
Income taxes were up 13 per cent year-on-year to € 39 million, whilst the regional tax rate remained unchanged at 13 per cent. Net profit after non-controlling interests came in at € 248 million.
Russia Profit before tax in this segment rose by € 115 million to € 267 million in 2010 despite a fall in operating income. Growth was driven by lower net allocations to provisioning for impairment losses and higher net trading income. The return on equity before tax rose by 6.4 percentage points to 24.7 per cent.
Net fee and commission income remained in negative territory, as in the previous year, at minus € 17 million. This was largely due to commission payments by Group headquarters for country risk insurance in connection with financing abroad.
Other net operating income in the segment amounted to € 133 million, down by 2 per cent on 2009. This was derived largely from income from the Group internal allocation of costs to the other segments on a user-pays basis. In addition, revenues from the Raiffeisen Service Center in Vienna, which offers services such as payment transactions and securities settlement, also made a positive contribution.
Risk-weighted assets (credit risk) increased by over 8 per cent year-on-year to € 39.4 billion. The main reasons for this were the growth in loans and advances to customers in the wake of the economic recovery, the application of higher default probabilities and a lower level of collateralization.
Operating income in the business division was down by 1 per cent year-on-year to € 2,475 million. Net interest income remained on a par with the value for the previous year at € 1,639 million – weighed down by the change in the method of calculating interest on impaired loans in Ukraine. Net fee and commission income increased by 5 per cent and contributed € 845 million to net operating income. Romania again made the largest contribution (€ 144 million), primarily from payment transfer business and loan administration and guarantee business. Other operating income fell below the value for the previous year to minus € 9 million. While operating leasing made a positive contribution of € 10 million, the bank levy in Hungary had a negative impact on the earnings.
Operating income fell as a result of a decline in net interest and net fee and commission income from € 489 million to € 481 million, a drop of 2 per cent year-on-year. The 6 per cent contraction in net interest income was primarily attributable to the generally lower level of business in this area in Group headquarters. The contraction in net fee and commission income from € 169 million to € 147 million (13 per cent decrease) was a result of lower volumes. Net trading income, on the other hand, increased considerably by € 40 million to € 54 million, while other operating income declined from € 7 million to minus € 2 million.
Further details about the above mentioned changes are reported under note (34) equity.
In the course of capital consolidation, all identifiable assets, liabilities and contingent liabilities of the subsidiary are measured at their fair values on the acquisition date according to IFRS 3. The acquisition costs are offset with the proportional net assets. The resulting positive differences are capitalized as goodwill. The goodwill is tested annually for impairment. Negative differences arising within initial consolidation will be recognized immediately in profit.
RB International Finance (Hong Kong) Ltd., Hong Kong (HK) 100.0% 1/1 Merger
Credit risk is accounted for by making individual impairment provisions and portfolio-based impairment provisions. The latter comprise impairment provisions for portfolios of loans with identical risk profiles that are compiled under certain conditions. In the retail segment, provisions are built according to product portfolio and past due days. Individual and portfolio-based impairment provisions are not netted against corresponding receivables but are stated separately in the statement of financial position.
A financial asset is derecognized when the contractual rights to the cash flows arising from a financial asset expire or when the Group has transferred the rights or if the Group has the obligation in case that certain criterion occurs to transfer the cash flows to one or more receivers. A transferred asset is also derecognized if all material risks and rewards of ownership of the assets are transferred.
Other shareholdings are categorized as financial assets available-for-sale upon initial recognition. Changes in value are therefore recognized in other comprehensive income. Impairment is shown in net income from financial investments.
Interest and similar income mainly includes interest income on loans and advances to banks and customers and from fixedinterest securities. In addition, current income from shares and other variable-yield securities (especially dividends), income from equity participations and from investments accounted for at equity, and similar income calculated as interest are also reported under net interest income. Dividend income is recognized if the entitlement of the owner for payment exists. Interest paid and similar charges mainly include interest paid on deposits from banks and customers and on debt securities issued and subordinated capital. Interest income and interest expenses are accrued in the reporting period.
The following table shows income statement according to IAS 39 measurement categories: Net gains (losses) on financial assets and liabilities held-for-trading 304,784 348,485
Financial assets and liabilities at fair value through profit or loss 364,155 253,136
The change of method in the Ukrainian network unit as described under net interest income led to a reduction of net provisioning for impairment losses of € 70,399 thousand.
Amortization of intangible fixed assets capitalized in the course of initial consolidation amounted to € 5,994 thousand (2009: € 5,687 thousand). This is due to scheduled amortization of the acquired customer base.
Financial assets at fair value through profit or loss 8,070,267 3,233,527
Office furniture, equipment and other tangible fixed assets 1,054,926 96,155 19,493 170,601 (102,628) (3,693) 1,234,854
In the consolidated financial statements, deferred tax assets are recognized for unused tax loss carry-forwards which amounted to € 269,811 thousand (2009: € 79,107 thousand). The tax loss carry-forwards are mainly without any time limit. The Group did not recognize deferred tax assets of € 56 thousand (2009: € 2,464 thousand) because from current point of view there is no prospect of realizing them within a reasonable period of time.
The following table contains debt securities issued exceeding € 200,000 thousand nominal value: Issuer ISIN Type Currency Nominal value in €000 Coupon Due
RBI XS0326967832 Supplementary capital EUR 600,000 5.770% 29/10/2015 1 Current interest rate, interest clauses are agreed. RBI … Raiffeisen Bank International AG, Vienna RFJ4 … RZB Finance (Jersey) IV Limited, St. Helier
Share-based remuneration In 2010, the second allotment of the share incentive plan (SIP – SIP allotment 2007) matured. In accordance with the terms and conditions (published in the official register of Wiener Zeitung on 30 May 2007) the number of shares shown in the table below was transferred: Share incentive program (SIP) 2007
Risk management functions are performed on different levels in the Group. RBI develops and implements the relevant concepts in coordination with RZB AG as the parent credit institution of the Group and in cooperation with its subsidiaries. The central risk management functions are responsible for the adequate and appropriate implementation of the Group’s risk management processes. In particular, they establish common risk management principles and set business-specific standards, tools, and practices for all Group entities.
In addition, local risk management units are established in the different Group units of RBI. They implement the risk policies for specific risk types and take active steering decisions within the approved risk budgets in order to achieve the targets set in the business policy. For this purpose, they monitor resulting risks using standardized measurement tools and they send them to central risk management units via defined reporting interfaces.
Risk contribution of individual risk types to economic capital as of 31/12/2010
Parallel to that procedure, internal capital adequacy also is assessed with focus on the uninterrupted operation of the Group on a going concern basis. In this perspective, risks again are compared to risk taking capacity – now with focus on regulatory capital and minimum capital requirements.
The following table shows the maximum credit exposure of this asset class by segment: Central europe
Collateralization is one of the main strategies and an actively pursued measure for reducing potential credit risks. The value of collateral and the effect of other risk mitigation techniques are determined within each limit application. The risk mitigation effect taken into account is the value that RBI expects to receive when selling the collateral within a reasonable liquidation period. Eligible collaterals are defined in the Group’s collateral catalogue and evaluation guidelines for collateral. The collateral value is calculated according to specified methods, which include standardized calculation formulas based on market values, predefined minimum discounts, and expert assessments.
The credit portfolio and individual borrowers are subject to constant monitoring. The main purpose of monitoring is to ensure that the borrower meets the terms and conditions of the contract as well as following the obligor’s economic development. A review is conducted at least once annually in the non-retail asset classes corporates, financial institutions, and sovereigns. This includes a rating review and the re-evaluation of financial and tangible collateral.
In RBI’s funding plans, special attention is paid to a diversified structure of funding to mitigate funding liquidity risk. In the Group, funds are not only raised by RBI as the Group’s parent institution, but also individually by different banking subsidiaries. Those efforts are coordinated and optimized through a joint funding plan. Moreover, Raiffeisen Bank International enables
The total volume of unsettled financial instruments as of 31 December 2010 breaks down as follows: Nominal amount by maturity Fair values
Equity/index futures – forward pricing 498,142 0 1,298 499,439 11,316 (1,319) Equity/index futures 408,280 40,657 0 448,937 9,347 (11,408)
Foreign exchange rate and gold contracts 15,660,923 2,511,959 60,506 18,233,388 414,232 (276,141)
Loans and advances to customers 71,399,994 71,156,209 243,785 49,184,889 47,434,386 1,750,503
(47) Fair value of financial instruments reported at fair value €000 Level I Level II Level III Level I Level II Level III
Positive fair values of derivatives from hedge accounting 0 925,409 0 0 21,565 0 1 Including other derivatives. 2 Includes only companies traded on the stock exchange.
The determination of the target values in relation to the compulsory minimum requirements needs additional internal control calculations. The department Risk Controlling calculates the value-at-risk in comparison with the risk taking capacity. Moreover, a balance between economic capital and the respective cover is drawn. The economic capital is integral part of the planning and control of RBI. Further details regarding this calculation are stated in the risk report.
The own funds of RBI according to Austrian Banking Act (BWG) 1993/Amendment 2006 (Basel II) break down as follows: Paid-in capital 4,913,878 3,637,865
Performance-based remuneration components of the Managing Board normally consist of bonus payments that are linked to achieve the objectives regarding profit after tax, return on risk adjusted capital, cost/income ratio and to achieve the personal objectives that are agreed annually and of the amount of allotment regarding SIP (see page 192 share-based remuneration). For the year 2009, all members of the Managing Board waived the right for bonus payments. The value of the distributed shares in 2010 is as in the previous year 100 per cent of the performance-based remuneration. There were no material changes in principle for profit sharing against the previous year. A cash retention bonus promise of € 768 thousand payable in 2013 was granted to the former members of the Managing Board of Raiffeisen Bank International. The payment is linked to the development of RBI’s share price.
Martin Grüll 3 January 2005 1 January 2015 1 Assignment effective with registration of the merger in the Companies Register as of 10 October 2010.
Raiffeisen Banca pentru Locuinte S.A., Bucharest (RO) 131,074,560 RON 33.3% 0.0% BA
Raiffeisen Pension Insurance d.o.o., Zagreb (HR) 14,400,000 HRK 100.0% 0.0% FI
The Zagreb Stock Exchange Ltd., Zagreb (HR) 40,408,000 HRK 41.5% 0.0% WP
Patrick Butler Member of the Managing Board for Global Markets responsible for Credit Markets, Raiffeisen Research, Capital Markets and Institutional Clients
RZB-Kreditinstitutsgruppe – Pursuant to Section 30 of the Austrian Banking Act (BWG), RZB-Kreditinstitutsgruppe is made up of all banks, financial institutions, securities companies and companies rendering banking related services in which RZB holds direct or indirect interests or has control as a superordinate institution.
Hodžovo námestie 3 81106 Bratislava Phone: +421-2-5919 3168 Fax: +421-2-5919 3048 www.tatraleasing.sk
India RBI Representative Office Mumbai 803 Peninsula Heights C.D. Barfiwala Road, Andhere (W)
Public Relations inquiries Phone: +43-1-71707 2828 E-mail: rbi-pr@rbinternational.com Internet: www.rbinternational.com → Public Relations
The online issue of the annual report is available in German at The English report is also available online (
This annual report has been prepared and the data checked with the greatest possible care. Nonetheless, rounding, transmission, typesetting and printing errors cannot be ruled out. This annual report was prepared in German. The annual report in English is a translation of the original German report. The only authentic version is the German version.