The credit exposure for corporate customers declined compared to year-end 2019 by € 301,514 thousand to € 81,650,480 thousand. Credit exposures in the rating grades from good credit standing to minimal risk increased € 2,843,450 thousand to € 47,377,058 thousand, corresponding to a share of 58.0 per cent (2019: 54.4 per cent).
6.3 Acceptable project risk profile – average risk 177,913 2.4% 91,268 1.3%
6.4 Poor project risk profile – high risk 10,820 0.1% 82,351 1.1%
Breakdown by country of risk of the credit exposure for corporate customers and project finance structured by region, taking into account the guarantor: in € thousand 2020 Share 2019 Share
The following table shows the credit exposure according to internal corporate rating (large corporates, mid-market and small corporates ). For presentation purposes, the individual grades of the rating scale have been combined into nine main rating grades. The migration from rating grade 2 (excellent credit standing) to rating grade 3 and 4 (very good credit standing, good credit standing) for the credit portfolio – corporate customers was due in particular to the (regular) update of the corporate customer rating model. In addition, there were also further downgrades of corporate customers, mainly due to COVID-19, which can be attributed to a generally worse economic outlook.
As at 31 December 2020, the credit exposure reported under project finance increased € 126,901 thousand to € 7,339,059 thousand. The € 830,636 thousand decline in rating grade 6.1 to € 4,536,285 thousand was mainly due to the rating migration from rating grade 6.1 to 6.2, which occurred due to the introduction of a new rating model which primarily affected Czech, Hungarian, Polish and Serbian customers. The shift was not caused by a rating downgrade. The increase in the 6.2 rating grade of € 984,661 thousand to € 2,294,223 thousand mostly resulted from the aforementioned rating migrations from rating grade 6.1, and new project financing in Romania also led to an increase. The rating allocation of a Bulgarian customer to rating grade 6.1 led to the € 4,811 thousand reduction in customers not rated to € 6,113 thousand.
At 93.1 per cent (2019: 92.6 per cent), the rating grades excellent project risk profile – very low risk and good project risk profile – low risk accounted for the majority of the portfolio. This mainly reflected the high level of collateralization in these types of specialized lending transactions.
The increase in mortgage loans of € 662,503 thousand to € 25,164,326 thousand was mainly attributable to Austria and Slovakia. The increase was offset by the depreciation of the Russian ruble and of the Czech koruna. The currency depreciations, especially of the Russian ruble, the Belarusian ruble and the Czech koruna, led to a reduction in personal loans and credit card financing.
At € 88,989,539 thousand, the credit exposure declined € 174,614 thousand compared to year-end 2019. The increase in Austria of € 1,162,293 thousand to € 17,873,085 thousand resulted mainly from credit and facility financing. Western Europe registered an increase of € 652,514 thousand to € 22,294,091 thousand, which was attributable to facility and credit financing in Great Britain, Luxembourg, Belgium and Switzerland as well as to swap transactions in Great Britain. This was partly offset by a reduction in repo transactions in Great Britain and documentary credits in Switzerland. Declining credit financing and the depreciation of the Russian ruble, the Belarusian ruble and the Ukrainian hryvnia were responsible for the decrease of € 2,465,927 thousand in Eastern Europe to € 13,160,438 thousand. In Central Europe, the increase of € 402,990 thousand to € 19,764,417 thousand resulted from facility financing in the Czech Republic and Slovakia. Credit financing also increased in Hungary and Slovakia. This was partly offset by a decline in credit financing in the Czech Republic and in Slovakia.
Credit exposure to corporates and project finance by industry of the original customer: in € thousand 2020 Share 2019 Share
Electricity, gas, steam and hot water supply 3,634,944 4.1% 3,440,651 3.9%
Compared to year-end 2019, the credit exposure to retail customers decreased € 525,192 thousand to € 41,659,478 thousand. The decrease was mainly attributable to the depreciation of the Russian ruble and of the Czech koruna.
The increase of € 420,112 thousand in Southeastern Europe to € 10,966,494 thousand resulted mainly from mortgage loans and SME and credit card financing in Bulgaria and Romania. Volume-related increases in personal loans in Eastern Europe were offset by currency depreciations, especially of the Russian ruble, and reduced the credit exposure by € 1,452,819 thousand to € 5,024,951 thousand. Increasing mortgage loans were mainly responsible for the € 386,179 thousand increase in Group Corporates & Markets to € 5,753,268 thousand.
Credit exposure to banks (excluding central banks) by products: in € thousand 2020 Share 2019 Share
Another asset class is formed by central governments, central banks, and regional municipalities as well as other public sector entities. The credit exposure to sovereigns includes local and regional governments (LRG). The assignment of LRG-related customers to the respective internal rating category is based on RBI’s internal rating model for LRGs.
The following table shows the credit exposure by internal rating for banks (excluding central banks). Due to the small number of customers (or observable defaults), the default probabilities of individual rating grades in this asset class are calculated based on a combination of internal and external data.
The decline in rating grade 2 of € 4,646,441 thousand to € 3,076,300 thousand resulted from the rating downgrade of Austrian and Czech banks to rating grade 3 and from a exposure decline in the Czech Republic, which was strengthened by the depreciation of the Czech koruna. The increase in rating grade 3 was offset by a decline in repo transactions in Spain and Italy and by rating downgrades of Canadian, German, French, Russian and Spanish banks to rating grade 4. Increasing repo transactions in France and Italy were mainly responsible for the € 1,883,730 thousand increase in rating grade 5 to € 2,541,460 thousand.
The increase in repo transactions of € 1,272,430 thousand to € 8,625,475 thousand was attributable to France, Germany, Spain and Italy and was partly offset by the decline in Great Britain and Russia. The increase in bonds of € 417,337 thousand to € 3,914,153 thousand was largely attributable to bonds of international organizations and Austrian bonds, which was partly offset by a decline in bonds in Luxembourg.
Credit exposure to sovereigns (including central banks) by internal rating: in € thousand 2020 Share 2019 Share
Compared to year-end 2019, the credit exposure to sovereigns increased € 12,982,083 thousand to € 48,739,138 thousand.
Rating grade B4 and below was defined as non-investment grade due to an update of the allocation between internal and external ratings. Non-investment grade credit exposure to sovereigns (rating grade B4 and below) was as follows: in € thousand 2020 Share 2019 Share
Since November 2019 RBI has fully applied the new definition of default of the CRR and also the corresponding requirements of the EBA (EBA/GL/2016/07). The new definition of default results in changes in the IRB approach, forcing banks to adapt their models. These adjustments must be approved by the competent supervisory authorities before implementation (Delegated Regulation EU 529/2014). RBI is currently working on these model adjustments. Due to the COVID-19 outbreak, RBI is also implementing the latest EBA guideline (EBA/GL/2020/02) on legislative and non-legislative moratoriums for loan payments applied in light of the COVID-19 crisis. This should support the group units in providing the necessary relief measures to borrowers and mitigate the potential impact on the volumes of non-performing exposures with restructuring measures, forborne and defaulted/non-performing exposures and the income statement.
Non-performing exposures pursuant to the applicable definition contained in the Implementing Technical Standard (ITS) on Supervisory Reporting (Forbearance and non-performing exposures) issued by the EBA: NPE NPE ratio NPE coverage ratio in € thousand 2020 2019 2020 2019 2020 2019
Development of non-performing exposure by asset classes (excluding items off the statement of financial position): in € thousand As at 1/1/2020 Change in consolidated group Exchange rate Additions Disposals As at 31/12/2020
The volume of the non-performing exposure decreased € 98,754 thousand. The organic increase was € 37,464 thousand. In contrast, the general currency trend led to a reduction of € 136,218 thousand, notably as a result of the depreciation of the Russian ruble and the Ukrainian hryvnia. Likewise, sales of non-performing loans (€ 202,243 thousand) took place and loans that were no longer economically recoverable (€ 276,252 thousand) were derecognized. These were mainly distributed in Central Europe (€ 155,194 thousand), Southeastern Europe (€ 104,152 thousand), Eastern Europe (€ 98,722 thousand) and RBI AG (€ 101,808 thousand). The NPE ratio in relation to the total exposure sank 0.2 percentage points to 1.9 per cent, while the coverage ratio increased 0.5 percentage points to 61.5 per cent.
Loans and advances (NPL) 2,938,040 (3,330) (132,888) 1,153,435 (1,115,214) 2,840,043 Bonds 11,344 0 0 261 (1,018) 10,587 in € thousand As at 1/1/2019 Change in consolidated group Exchange rate Additions Disposals As at 31/12/2019
Loans and advances (NPL) 3,399,562 0 62,118 1,180,660 (1,704,300) 2,938,040 Bonds 9,004 0 0 11,334 (8,994) 11,344
Non-financial corporations registered a decline in non-performing exposure of € 107,012 thousand compared to the beginning of the year to € 1,627,397 thousand, mainly due to sales and derecognitions in the Group Corporates & Markets segment in a total amount of € 120,426 thousand, in Central Europe of € 58,867 thousand, Eastern Europe of € 46,911 thousand and Southeastern Europe in a total amount of € 37,182 thousand. This was offset by increases in non-performing exposure in all segments. The share of non-performing exposure declined 0.2 percentage points to 3.7 per cent, while the coverage ratio increased slightly by 0.6 percentage points to 58.1 per cent.
Share of non-performing exposure (NPE) by segment (excluding items off the statement of financial position): NPE NPE ratio NPE coverage ratio in € thousand 2020 2019 2020 2019 2020 2019
In Southeastern Europe, non-performing exposure increased € 22,002 thousand to € 768,821 thousand, mainly driven by increases in the households portfolio of € 14,256 thousand and in the non-financial corporations portfolio of € 7,941 thousand. The NPE ratio declined 0.2 percentage points to 2.8 per cent, and the coverage ratio increased 0.8 percentage points since the start of the year to 70.8 per cent.
In the households portfolio, non-performing exposure was reduced by € 29,493 thousand to € 1,111,762 thousand, mainly due to derecognitions and sales in Central Europe totaling € 96,327 thousand, in Southeastern Europe by € 66,970 thousand and in Eastern Europe by € 51,811 thousand, offset by increases in non-performing exposure in all segments. The share of non-performing exposure to credit exposure went down 0.1 percentage points to 3.1 per cent, and the coverage ratio increased 2.1 percentage points to 69.0 per cent.
Non-performing exposure to other financial corporations increased € 39,205 thousand to € 95,050 thousand, due to an increase in non-performing exposure at RBI AG. The NPE ratio therefore increased 0.4 percentage points to 0.8 per cent, and the coverage ratio fell 20.6 percentage points to 38.1 per cent.
The non-performing portfolio with accompanying restructuring measures reduced further in 2020.
Country risk also is reflected in product pricing and in risk-adjusted performance measurement via the internal funds transfer pricing system. In this manner, the Group provides the business units with an incentive to mitigate country risk by taking out insurance (e.g. from export credit insurance organizations) or seeking guarantors in third countries. The insights gained from the country risk analysis are not only used for limiting the total cross-border exposure, but also for limiting the total credit exposure in each individual country (i.e. including the exposure funded by local deposits). The Group thus gears its business activities to the expected macroeconomic trend within different markets, which promotes broad diversification of its credit portfolio.
The credit portfolio of the Group is well diversified in terms of geographical region and industry. Single name concentrations are also actively managed (based on the concept of groups of connected customers) by way of limits and regular reporting. As a result, portfolio granularity is high.
Credit exposure across all asset classes increased € 13,643,138 thousand to € 202,726,989 thousand compared to year-end 2019.
The € 14,135,920 thousand increase in euro exposure to € 114,799,115 thousand was driven by deposits with the Austrian National Bank, the bond portfolio of the Republic of Austria and by credit and facility financing. The decline in the Russian ruble was caused by the currency depreciation. The credit exposure in Czech koruna increased, despite the currency depreciation, due to an increase in the bond portfolio, facility financing and repo transactions. The depreciation of the Hungarian forint was more than offset by the increase in money market transactions. The credit exposure in Romanian leu increased due to bonds and the minimum reserve.
Public administration and defense and social insurance institutions 17,561,019 8.7% 13,770,783 7.3%
Electricity, gas, steam and hot water supply 3,736,383 1.8% 3,684,371 1.9%
Credit exposures across all asset classes by the country of risk, grouped by regions: in € thousand 2020 Share 2019 Share
The increase was offset by the depreciation of the Czech koruna, the Hungarian forint and the Polish zloty. Austria registered an increase of € 8,314,791 thousand to € 46,695,641 thousand, due to deposits with the Austrian National Bank and to credit financing. The increase of € 3,354,181 thousand to € 36,190,926 thousand in the rest of the European Union was mainly due to bonds and repo transactions in France, Germany and Spain. In addition, bonds of international organizations, repo transactions in Belgium and facility financing in Ireland increased. Credit financing in Germany also increased. The decline in Russia was mainly responsible for the decline in Eastern Europe of €4,160,975 thousand to € 23,294,494 thousand. In addition to the depreciation of the Russian ruble, there was a decline in repo transactions and credit financing. Moreover, the decline in Eastern Europe was exacerbated by the depreciation of the Ukrainian hryvnia and of the Belarusian ruble. In Southeastern Europe, the increase of € 2,474,854 thousand to € 32,971,816 thousand was caused by bonds and overdraft facilities in Romania.
Wholesale trade and commission trade (except car trading) 14,254,703 7.0% 14,805,845 7.8%
The following measures are being taken by market risk management in order to counter the COVID-19 crisis. Market trends and position changes in the individual portfolios for RBI AG and the Group units were monitored more intensely and in addition to the regular committees, the results were also reported to the Contingency Committee. In addition, trends on local markets are updated daily and risk management is actively controlled to be able to respond quickly to changes. The aim is to adapt limits to the risk appetite, close positions where necessary, build up liquidity buffers where market conditions are more favorable, and adapt models to local and global measures (moratoriums) where necessary.
The Group uses a comprehensive risk management approach for both the trading and the banking book (total-return approach). Market risk is therefore managed consistently in all trading and banking books. The following indicators are measured and limited on a daily basis in the market risk management system:  Value-at-Risk (VaR) – confidence level 99 per cent, risk horizon one day Value-at-Risk is the main market risk steering instrument in liquid markets and normal market situations. VaR is measured based on a hybrid simulation approach in which 5,000 scenarios are calculated for the regulatory trading book and 4,000 scenarios for the banking book. The approach combines the advantages of a historical simulation and a Monte Carlo simulation and derives market parameters from 500 days of historical data. Distribution assumptions include modern features such as volatility declustering and random time changes, which helps in accurately reproducing fat-tailed and asymmetric distributions. The Austrian Financial Market Authority has approved the VaR model for use in calculating the total capital requirement for market risk. Value-at-risk results are not only used for limiting risk but also in the allocation of economic capital, for which longer time series of seven years are used for interest rate risk.
A comprehensive stress testing concept complements this multi-level limit system. It simulates potential present value changes of defined scenarios for the total portfolio. The results on market risk concentrations shown by these stress tests are reported to the Market Risk Committee and taken into account when setting limits. Stress test reports for individual portfolios are included in daily market risk reporting. In the financial year under review, the VaR measurement for the total return approach was adjusted using a historical simulation. In this connection, the calculation of the economic capital was also adjusted, based on a seven-year weighted time series.
Banking book VaR 99% 1d VaR as at Average VaR Minimum VaR Maximum VaR VaR as at in € thousand 31/12/2020 31/12/2019
 Stop loss Stop loss limits serve to strengthen the discipline of traders such that they do not allow losses to accumulate on their own proprietary positions but strictly limit them instead.
Trading book VaR 99% 1d VaR as at Average VaR Minimum VaR Maximum VaR VaR as at in € thousand 31/12/2020 31/12/2019
Total 72,891 58,353 29,628 147,703 31,447 1 Previous year figures adjusted due to a change in the Vega simulation in the financial year under review
Total VaR 99% 1d VaR as at Average VaR Minimum VaR Maximum VaR VaR as at in € thousand 31/12/2020 31/12/2019
The risk measurement approaches employed are verified – besides analyzing returns qualitatively – on an ongoing basis through backtesting and statistical validation techniques. If model weaknesses are identified, then they are adapted accordingly.
In the 2020 reporting year, there were two hypothetical backtesting violations. The following graph compares the VaR to the theoretical gains and losses on a daily basis. The VaR represents the maximum loss which will not be exceeded within one day, with a confidence level of 99 per cent. It is compared to the respective theoretical gain or loss which would arise on the following day due to the actual market conditions at the time.
The Group aims at stabilizing its capital ratio when managing exchange rate risks. Changes in foreign exchange rates thus lead to changes in the consolidated equity amount; however, the regulatory capital requirement for credit risks stemming from assets denominated in foreign currencies also changes correspondingly. This risk is managed on a monthly basis in the Group Asset/Liability Committee based on historical foreign exchange volatilities, exchange rate forecasts, and the sensitivity of the tier 1 ratio to changes in individual foreign exchange rates.
The following tables show the change in the present value of the Group’s banking book given a one-basis-point interest rate increase for the whole yield curve in € thousand for reporting dates 31 December 2020 and 31 December 2019.
The Group has a substantial database along with expertise in forecasting cash flows arising from all material on- and off-balance sheet positions. The modelling of liquidity in- and outflows is carried out on an appropriate granular level, differentiating between product and customer segments, and, where applicable, currencies as well. Modelling of retail and corporate customer deposits includes assumptions concerning the retention times for deposits after maturity. The model assumptions are quite prudent, e.g. there is a no rollover assumption on funding from banks and all funding channels and the liquidity buffer are stressed simultaneously.
The liquidity scenarios are modelled using a Group-wide approach, acknowledging local specifications where they are justified by influencing factors such as the market or legal environment or certain business characteristics; the calculation is performed at RBI AG. The modelling of cash inflows and outflows differentiates between product and customer segments, while if applicable, a distinction between different currencies is made as well. For products without a contractual maturity, the distribution of cash inflows and outflows is calculated using a geometric Brownian motion which derives the statistical forecasts for future daily balances from the observed, exponentially weighted historical volatility of the corresponding products.
Treasury units are committed to achieving KPIs and to complying with risk-based principles. The current set of KPIs includes general targets (e.g. for return on risk-adjusted capital (RORAC) or coverage ratios), as well as specific Treasury targets for liquidity such as a minimum survival period in defined stress scenarios or minimum liquidity targets in regulatory indicators. While generating an adequate structural income from maturity transformation which reflects the liquidity and market risk positions taken by the bank, Treasury has to follow a prudent and sustainable risk policy when steering the balance sheet. Strategic goals comprise a reduction of parent funding within the group, the sustainable management of the depositor base and credit growth as well as continuous compliance with regulatory requirements and the internal limit framework.
Regulatory and internal liquidity reports and ratios are generated based on certain modelling assumptions. Whereas the regulatory reports are calculated on specifications given by authorities, the internal reports are modelled with assumptions from empirical observations.
The liquidity position is monitored on Group level and on individual unit level and is restricted by means of a comprehensive limit system. Limits are defined both under a business as usual as well as under a stress perspective. In accordance with the defined risk appetite, each Group unit must demonstrate a survival horizon of several months (TTW) in a severe, combined stress scenario (reputational and market stress). This can be ensured either by a structurally positive liquidity profile or by a sufficiently high liquidity buffer. In a normal going concern environment, maturity transformation must be fully covered by the available liquidity buffer in the medium term. This means that the cumulative liquidity position over a period of up to one year must be positive. In the long term (one year or more), maturity transformation is permitted up to a certain level. The internal model limits are supplemented by limits for compliance with regulatory liquidity ratios, such as the liquidity coverage ratio (LCR). All limits must be complied with on a daily basis.
A conservative approach is adopted when establishing outflow ratios based on historical data and expert opinions. The simulation assumes a lack of access to the money or capital market and simultaneously significant outflows of customer deposits. In this respect, the deposit concentration risk is considered by assigning higher outflow ratios to large customers. Furthermore, stress assumptions are formulated for the drawdown of guarantees and credit obligations. In addition, the liquidity buffer positions are adapted by haircuts in order to cover the risk of disadvantageous market movements, and the potential outflows resulting from collateralized derivative transactions are estimated. The bank continuously monitors whether the stress assumptions are still appropriate or whether new risks need to be considered.
The time to wall concept has established itself as the main control instrument for day-to-day liquidity management and is therefore a central component of funding planning and budgeting. It is also fundamental to determining performance ratios relating to liquidity.
As shown by the daily liquidity risk reports, the main Group units actively maintain and manage liquidity buffers, including high quality liquid assets (HQLA) which are always sufficient to cover the net outflows expected in crisis scenarios. The Group has sizeable, unencumbered and liquid securities portfolios and favors securities eligible for Central Bank tender transactions in order to ensure sufficient liquidity in various currencies. The main Group units ensure the availability of liquidity buffers, test their ability to utilize central bank funds, constantly evaluate their collateral positions as regards their market value and encumbrance and examine the remaining counterbalancing capacity, including the funding potential and the salability of the assets.
In the past year and to date, the Group’s excess liquidity was above all regulatory and internal limits (with a handful of exceptions in the area of internal sub-limits). The result of the internal time to wall stress test demonstrates that the Group would survive throughout the modelled stress phase of several months even without applying contingency measures.
Stress tests are conducted for RBI AG and the network banks on a daily basis and on Group level. The tests cover three scenarios (market, reputational and combined crisis), consider the effects of the scenarios for a period of several months and demonstrate that stress events can simultaneously result in a time-critical liquidity requirement in several currencies. The stress scenarios include the principal funding and market liquidity risks. This means that in the stress tests of the Group, all network units are simultaneously subject to a pronounced combined crisis for all their major products. The results of the stress tests are reported to the Chief Risk Officer and the Chief Financial Officer as well as other members of management on a weekly basis; they also form a key component of the monthly ALCO meetings and are included in the bank’s strategic planning and contingency planning.
in € thousand 2020 2019 Maturity 1 month 1 year 1 month 1 year
For managing and limiting liquidity risks, the targets for the loan/deposit ratio (the ratio of customer loans to customer deposits) in the individual subsidiary banks take into account the planned future business volumes as well as the feasibility of increasing customer deposits in different countries. On the one hand, this initiative reduces external funding requirements. On the other hand, it also reduces the need for internal funding operations and the risk associated with such liquidity transfers.
Cash, cash balances at central banks and other demand deposits 24,289,265 24,585,290 24,585,290 0 0 0
The NSFR is defined as the ratio of available stable funding to required stable funding. The new regulatory requirements come into force as of 28 June 2021 and the regulatory limit of 100 per cent must be complied with. Available stable funding is defined as the portion of equity and debt which is expected to be a reliable source of funds over the time horizon of one year covered by the NSFR. A bank’s required stable funding depends on the liquidity characteristics and residual maturities of the various assets and off-balance sheet positions. The RBI Group targets a balanced funding position.
During the COVID-19 crisis, a stable liquidity situation was observed within RBI. Generally speaking, the crisis confirmed RBI’s strong liquidity position and its ability to respond quickly in the event of a lack of market-sensitive refinancing sources. Generally, the ILAAP framework and governance proved sound and well functioning.
Operational risk controlling units are responsible for reporting, implementing the framework, developing control measures and monitoring compliance with requirements. Within the framework of the annual risk management cycle, they also coordinate the participation of the relevant second line of defense departments (Financial Crime Management, Compliance, Vendor
Management, Outsourcing Management, Insurance Management, Information Security, Physical Security, BCM, Internal Control System, IT Risk Management) and all first line of defense partners (Operational Risk Managers).
In order to monitor operational risks, early warning indicators are used that allow prompt identification and minimization of losses. Loss data is collected in a central database called ORCA (Operational Risk Controlling Application) in a structured manner and on a Group-wide basis according to the event type and the business line. In addition to the requirements for internal and external reporting, information on loss events is exchanged with international data pools to further develop operational risk management tools as well as to track measures and control effectiveness. The Group is a participant in the ORX data pool (Operational Risk Data Exchange Association), whose data are currently used for internal benchmark purposes and analyses and as part of the operational risk model. The ORX data consortium is an association of banks and insurance groups for statistical purposes. The results of the analyses as well as events resulting from operational risks are reported in a comprehensive manner to the relevant Operational Risk Management Committee on a regular basis.
Furthermore, Polish common courts decided to approach the ECJ with requests for a preliminary ruling in another seven civil proceedings. That ruling could lead to further clarifications and may influence how court cases concerning currency loans are decided by national Polish courts. RBI is directly involved in one of these proceedings.
The impact assessment in relation to affected FX-indexed or FX-denominated loan agreements may also be influenced by the outcome of ongoing administrative proceedings conducted by the President of the Office of Competition and Consumer Protection (UOKiK) against RBI’s Polish branch. Such administrative proceedings are, inter alia, based on the alleged practice of infringing collective consumer interests as well as on the classification of clauses in standard agreements as unfair. As at this point of time, it is uncertain what the potential impact of said proceedings could be on FX-indexed or FX-denominated loan agreements and RBI. Furthermore, such proceedings could result in the imposition of administrative fines on RBI’s Polish branch – and in case of appeals – in administrative court proceedings.
Moreover, the Polish Financial Ombudsman, acting on behalf of two borrowers, initiated a civil proceeding against RBI alleging employment of unfair commercial practice towards consumers in respect of a case in which RBI – following the annulment of a loan agreement – claims the full loan amount originally disbursed without taking into account repayments made meanwhile as well as amounts due for the use of capital by the borrowers based on the principle of unjust enrichment and demanded that RBI discontinue such practice.
In this connection, and in view of what is currently perceived as a diverging judicial interpretation of Polish laws, the President of the Supreme Court of the Republic of Poland announced on 29 January 2021 a petition for the Supreme Court to deliver a leading judgment on certain key questions considered pivotal for the resolution of pending litigation surrounding FX-indexed or FXdenominated mortgages. The Supreme Court judgment is intended to unify the currently diverging decision practice of the Polish courts and clarify questions on which case law is fragmentary or non-uniform. The questions published by the Supreme Court would address, firstly, the problem of whether and in what form a mortgage can remain in place if contract terms relating to the setting of the exchange rate for conversion are deemed void and, secondly, the legal issues surrounding any cancellation of contract between the parties, including the statute of limitations for their respective claims, in the event that the mortgage agreement is voided in its entirety due to a potentially unlawful contract term. RBI hopes that these leading judgments will lead to the resolution of the large number of cases before the Polish courts and – looking to the future – to a workable solution for the problem of FX mortgages as a whole.
RBI has recognized a provision for the lawsuits filed in Poland. As the lawsuits have been filed by a number of customers, the provision is based on a statistical approach that takes into account both static data, where relevant, and expert opinions. Possible decision scenarios have been estimated together with the expected loss rates per scenario. The expected impact is based on loans from customers who have filed or indicated that they will file a lawsuit against the bank. To calculate the financial impact per scenario, the claim amount is multiplied by the estimated financial outflow in the scenario and the probability that the bank will ultimately have to pay compensation to the customer. An appropriate discount rate is applied to outflows that are not expected to arise within one year. The financial impacts of the individual scenarios are weighted on the basis of expert opinions. The resulting provision has been increased to € 89,188 thousand (2019: € 49,336 thousand). The main uncertainties associated with the calculation of the provision relate to a potentially higher number of claims and an increase in the probability of losing the court cases.
In October 2017, the consumer protection authority (ANPC) issued an order for RBI’s Romanian network bank Raiffeisen Bank S.A., Bucharest, to stop its alleged practice of not informing its customers about future changes in the interest rate charged to the customers. The order did not imply any monetary restitution or payment from Raiffeisen Bank S.A., Bucharest. However, the possibility of any monetary restitution claims instigated by customers cannot be excluded. RBI’s Romanian network bank Raiffeisen Bank S.A., Bucharest, disputed this order and obtained a stay of its enforcement. These proceedings are currently in the appeal phase, the first ruling on merits having been in favor of ANPC. Given current uncertainties, an exact quantification of the negative financial impact is not possible; however, the estimation of Raiffeisen Bank SA, Bucharest, based on the current known elements is that such impact is not expected to exceed € 20 million.
In July 2014, ANPC issued a decision applicable to Raiffeisen Bank S.A., Bucharest, asking the bank to stop the practice of including the credit management commission in the interest margin when restructuring consumer loans. Although, provisions describing that method were included in the respective agreements, ANPC is of the opinion that those provisions were not clear enough. Initially, it was not clear how the ANPC decision should be implemented; however, after a dispute in court that was lost by Raiffeisen Bank S.A. in June 2020, it is has now been decided that the implementation would mean returning a portion of the interest rate to all consumers to whom such practice had been applied, at least for the period starting from July 2014 until either the point of time such borrowers entered into a new agreement on the interest rate or the point of time the Romanian network bank actually implements the court decision. This also applies to originally affected loans that have been repaid in the meantime. After having obtained an external expert opinion on the specific implementation of the court decision, the Romanian network bank reduced its estimate of the negative financial impact from an originally expected amount of € 17 million to € 3.5 million. However, an exact quantification is still not possible since ANPC may dispute the said approach of implementing the court decision. In October 2020, ANPC asked Raiffeisen Bank S.A. to confirm how the court’s decision is being implemented. An answer has been provided by Raiffeisen Bank S.A. on the basis of the external opinion obtained, to which no comment or confirmation has been received from ANPC. Given current uncertainties, at this stage, an exact quantification of the negative financial impact is not possible.
In June 2012, a client (the Slovak claimant) of Tatra banka, a.s. (Tatra banka) filed a petition for damages and lost profits in the amount of approximately € 71 million. The lawsuit is connected with certain credit facilities entered into between Tatra banka and the Slovak claimant. The Slovak claimant claims that Tatra banka breached its contractual obligations by refusing to execute payment orders from the Slovak claimant’s accounts without cause and by not extending the maturity of facilities despite a previous promise to do so, which led to non-payment of the Slovak claimant’s obligations towards its business partners and the termination of the Slovak claimant’s business activities. In February 2016, the Slovak claimant filed a petition for the claimed amount to be increased by € 50 million but the court rejected this petition. A constitutional appeal was filed regarding this court’s decision. The constitutional court refused this appeal and rejected the proposed increase of the claimed amount. In December 2017, Tatra banka was delivered a new claim amounting to € 50 million, based on the same grounds as the petition from February 2016. This new claim was joined to the original claim. Thus, the Slovak claimant in this lawsuit demanded compensation of damage and lost profits in the amount of approximately € 121 million. In February 2018, the first-instance court rejected the petition in full. The Slovak claimant, which by law is now the trustee in the Slovak claimant’s bankruptcy proceedings, as the Slovak claimant has become bankrupt, launched an appeal against the rejection. In September 2018, the appellate court upheld the decision of the firstinstance court and confirmed the rejection of the claim in full. In January 2019, the Slovak claimant filed an extraordinary appeal with the Supreme Court of the Slovak Republic but the extraordinary appeal was turned down by the Supreme Court in April 2019. The Slovak claimant filed a constitutional appeal with respect to the Supreme Court ruling in July 2019. However, the constitutional court dismissed the appeal and the lawsuit has been closed.
Furthermore, a Cypriot company (the Cypriot claimant) filed a separate action for damages in the amount of approximately € 43 million. In January 2016, the Cypriot claimant filed a petition for increasing the claimed amount by € 84 million and the court approved this petition. It means that the total claimed amount in this lawsuit is approximately € 127 million. This lawsuit is connected with the proceeding of the Slovak claimant above because the Cypriot claimant having filed the action had acquired the claim from a shareholder of the holding company of the Slovak claimant. The matter of the claim is the same as in the proceeding above. According to the Cypriot claimant, this had caused damage to the Slovak claimant and, thus, also to the shareholder of the holding company in the form of a loss of value of its shares. Subsequently, the said shareholder assigned their claim to the Cypriot claimant. The Cypriot claimant claims that Tatra banka acted contrary to the good morals as well as contrary to fair business conduct and requires Tatra banka to pay part of its claims corresponding to the loss in value of the holding company’s shares. In November 2019, the claim was rejected in its entirety. The Cypriot plaintiff appealed the judgment in January 2020.
In July 2019, a former corporate customer (claimant) of RBI filed a request for arbitration with the International Court of Arbitration of the International Chamber of Commerce, claiming from RBI payment of USD 25 million (€ 20 million) plus damages, interest and further costs. The dispute relates to a guarantee of a third party, which served as a security for a loan granted by RBI to the
A claim against RBI Leasing GmbH (RBIL) for damages in the original provisional amount of some € 70 thousand plus interest in August 2019 was increased in March 2020 to an amount of around € 16 million. The claimant argues that property financed by RBIL was sold below market value to a third party after termination of the finance agreement, while he would have been able to obtain a considerably higher price. RBIL maintains that the financed property was offered to the claimant prior to conclusion of the final sale agreement with the third party.
In September 2018, two administrative fines totaling PLN 55 million (€ 12 million) were imposed on RBPL in the course of administrative proceedings based on alleged non-performance of the duties as the depositary and liquidator of certain investment funds. RBPL as custodian of investment funds assumed the role as liquidator of certain funds in spring 2018. According to the interpretation of the Polish Financial Supervision Authority (PFSA), RBPL failed to comply with certain obligations in its function as depository bank and liquidator of the funds. In the course of the transactions related to the sale of RBPL, the responsibility for said administrative proceedings and related fines was assumed by RBI. RBI filed appeals against these fines in their entirety. In September 2019, in relation to the PLN 5 million (€ 1 million) fine regarding RBPL’s duties as depositary bank, the Voivodship Administrative Court approved RBI’s appeal and overturned the PFSA’s decision in its entirety. However, the PFSA appealed the decision. In relation to the PLN 50 million (€ 11 million) fine regarding RBPL’s function as liquidator, the Voivodship Administrative Court decided to dismiss the appeal and uphold the PFSA decision in its entirety. RBI has appealed to the Supreme Administrative Court because it takes the view that RBPL has duly complied with all its duties.
As RBG’s central institution, RBI AG is a member of the federal IPS, whose members, in addition to the regional Raiffeisen banks, include: Raiffeisen-Holding Niederösterreich-Wien reg GmbH, Vienna, Posojilnica Bank eGen, Klagenfurt, Raiffeisen Wohnbaubank AG, Vienna, and Raiffeisen Bausparkasse Gesellschaft m.b.H., Vienna. The federal IPS is subject to separate supervisory provisions. For this purpose, permission was obtained from the competent supervisory authorities – the European Central Bank and the Austrian Financial Markets Authority (FMA) – in accordance with which, among other things, exposures among federal IPS members may be given a risk weight of zero per cent. This also requires joint supervision. At the level of the federal IPS, the provisions on own funds must be complied with on a consolidated basis. Similar mutual structures apply to members of the regional IPSs established in Austrian states. The IPSs thus constitute additional building blocks supplementing mutual support within RBG in the event of a member institution encountering financial difficulties.
RBI is or is expected to be involved in various tax audits, tax reviews and tax proceedings. RBI is involved in the following significant tax proceedings, among others: In Germany, a tax review and tax proceedings led or may lead to an extraordinary tax burden of approximately € 27 million in connection with property transfer tax, for which a provision has been recognized. Additionally, late payment interest and penalty payments may be imposed.
Fiduciary business not recognized in the statement of financial position was concluded with the following volumes on the reporting date: Loans to customers 220,435 219,330
Assets under finance leases break down as follows; the respective carrying amounts are presented in the statement of financial position under financial assets – amortized cost: Real estate leasing 939,951 964,734 1 Adaptation of previous year figures due to changed allocation
In the financial year, there was no income relating to variable lease payments not included in the measurement of the net investment in the lease. Profit due to sale of leased assets as part of a finance lease was € 318 thousand (2019: € 635 thousand).
Maturity analysis of undiscounted lease receivables to be received after the reporting date: More than 1 year, up to 5 years 58,894 89,361
The following information was prepared pursuant to § 48 (1) of the Austrian Banking Act (BWG).
The following table contains the funds managed by the Group: Retail investment funds 28,636,781 25,281,762
Leases mainly relate to land and buildings, vehicles and IT equipment.
Interest on lease liabilities is presented in profit or loss under net interest income and expenses relating to short-term leases and leases of low-value assets are presented in other administrative expenses.
2020 in € thousand Operating income hereof net interest income Profit/loss before tax Income taxes
The following table shows the maturity analysis of lease liabilities, showing the undiscounted lease payments to be paid after the reporting date; the respective carrying amounts are presented under financial assets – amortized cost: More than 1 year, up to 5 years 242,255 249,122
The following table was prepared pursuant to § 45 (2) of the Austrian Banking Act (BWG).
Loan commitments, financial guarantees and other commitments given 162,009 60,207 221,697 124,628
Loan commitments, financial guarantees and other commitments received 18,139 5 28,510 0 in € thousand
Investments in associates valued at equity Other interests in € thousand
Short-term employee benefits shown in the above table contain salaries and benefits in kind and other benefits, remuneration for membership of boards in affiliated companies and those parts of the bonuses which become due in the short-term.
The following table shows total remuneration of the members of the Management Board according to IAS 24.17. The expenses according to IAS 24 were recognized on an accrual basis and according to the rules of the underlying standards (IAS 19 and IFRS 2): Short-term employee benefits 8,397 9,861
Other long-term benefits contain portions of the provision for bonus payments relating to deferred bonus portions in cash and retained portions payable in instruments. For the latter, valuation changes due to currency fluctuations are considered.
An amount of € 1,1276 thousand (2019: € 1,137 thousand) was paid in pension benefits to former members of the Management Board and to their surviving dependants. In addition to these amounts, short-term benefits and deferred bonus components as well as severance payments totaling € 3,409 thousand (2019: € 1,346 thousand) were paid to former members of the Management Board.
In the 2020 financial year, no contracts subject to approval within the meaning of § 95 (5) 12 of the Austrian Stock Corporation Act (AktG) were concluded with members of the Supervisory Board.
The Management Board as at 31 December 2020 was as follows: Members of the Management Board Original appointment End of term
Martin Schaller, 1st Deputy Chairman 4 June 2014 Annual General Meeting 2024
Heinrich Schaller, 2nd Deputy Chairman 20 June 2012 Annual General Meeting 2022
A holding company, a company operating in the payment transfer business, a company active in providing IT services, two asset management companies and one leasing company were included for the first time. In the reporting period, four companies engaged in leasing and insurance broker business were excluded from the consolidated group due to immateriality. One leasing company was sold, one leasing company was merged into another.
Natalie Egger-Grunicke resumed her Supervisory Board functions from Sigrid Netzker on 1 January after returning from parental leave.
Included for the first time in the financial period 6 4
OOO Raiffeisen Capital Asset Management Company, Moscow (RU) 100.0% 1/1 Materiality
The Group has a number of leasing companies in the legal form of a GmbH & Co KG, in which a Group company assumes the role of general partner. Through this structure, the Group assumes the requisite personal liability which qualifies as exposure to the variability of the returns generated by the structured companies. These companies are included in the list of fully consolidated affiliated companies.
Consolidated subsidiaries where RBI holds less than 50 per cent of the ordinary voting shares Subsidiaries in which the Group holds less than half of the voting rights are fully consolidated if RBI has effective control according to the criteria of IFRS 10. This involves examining whether the Group is exposed or has rights to variable returns from its involvement in the investee and has the ability to affect those returns through its power over the investee.
Subsidiaries not fully consolidated where RBI holds more than 50 per cent of the ordinary voting shares Due to their negligible contribution to the Group’s assets, earnings and financial position, 290 subsidiaries were not included in the consolidated financial statements (2019: 309). Total assets of the companies not included came to less than 1 per cent of the Group’s total assets.
Raiffeisen WohnBau Seeresidenz Weyregg GmbH, Vienna (AT) 35,000 EUR 100.0% OT
Lentia Immobilienleasing GmbH & Co. Albert-Osswald-Haus KG, Eschborn (DE) 5,000 EUR 6.0% FI
Raiffeisen Leasing d.o.o. Sarajevo, Sarajevo (BA) 15,407,899 BAM 100.0% FI 1 Less own shares 2 Company type: BA Bank, BR Company rendering banking-related ancillary services, FH Financial holding, FI Financial institution, OT Other companies, VV Insurance, SC
RL Thermal GmbH & Co Liegenschaftsverwaltung KG, Vienna (AT) 1,453,457 EUR 100.0% FI
The Group provides funding to structured entities that hold a variety of assets. These entities may take the form of funding entities, trusts and private investment companies. The funding is collateralized by the assets in the structured entities. The Group’s investment activity involves predominantly lending.
The Group establishes structured entities to accommodate client requirements to hold investments in specific assets. The Group also invests in funds that are sponsored by third parties. A Group entity may act as fund manager, custodian or in another function and provide funding and liquidity facilities to both Group-sponsored and third party funds. The funding provided is collateralized by the underlying assets held by the fund.
The maximum exposure to loss is determined by considering the nature of the interest in the non-consolidated structured entity. The maximum exposure for loans and trading instruments is reflected by their carrying amounts in the statement of financial position. The maximum exposure for derivatives and instruments off the statement of financial position such as guarantees, liquidity facilities and loan commitments under IFRS 12, as interpreted by the Group, is reflected by the respective notional amount. Such amounts do not reflect the economic risks faced by the Group because they do not take into account the effects of collateral or hedges or the probability of such losses being incurred. As at 31 December 2020, the notional values of derivatives and instruments off the statement of financial position amounted to € 14,734 thousand (2019: € 17,672 thousand) and € 33,706 thousand (2019: € 18,884 thousand) respectively. The reduction in instruments off the statement of financial position was primarily caused by Raiffeisen Leasing s.r.o., Prague, and is connected with a change in the refinancing structure of the companies involved.
Since information on the size of structured entities is not always publicly available, the Group has determined that its exposure is an appropriate guide to the risk of loss from investments in non-consolidated structured entities.
As in 2019, the Group has not provided financial support during the financial year to non-consolidated structured entities.
As a sponsor, the Group is often involved in the legal set up and marketing of the entity and supports the entity in different ways such as providing operational support to ensure the entity’s continued operation. The Group is also deemed a sponsor for a structured entity if market participants would reasonably associate the entity with the Group. Additionally, the use of the Raiffeisen name for the structured entity often indicates that the Group has acted as a sponsor. The gross proceeds from sponsored entities for the year ending 31 December 2020 amounted to € 207,935 thousand (2019: € 216,505 thousand). No assets were transferred to sponsored non-consolidated structured entities in 2020 or 2019.
Bulevard Centar BBC Holding d.o.o., Belgrade (RS) 127,416 RSD 100.0% BR
INFRA MI 1 Immobilien Gesellschaft mbH, Vienna (AT) 72,673 EUR 100.0% OT 1 Company type: BA Bank, BR Company rendering banking-related ancillary services, FH Financial holding, FI Financial institution, OT Other companies, VV Insurance,
OBI Eger Ingatlankezelö Korlatolt Felelössegü Tarsasag, Budapest (HU) 3,000,000 HUF 74.9% FI
OBI Miskolc Ingatlankezelö Korlatolt Felelössegü Tarsasag, Budapest (HU) 3,000,000 HUF 74.9% FI
OBI Veszprem Ingatlankezelö Korlatolt Felelössegü Tarsasag, Budapest (HU) 3,000,000 HUF 74.9% FI
OOO Estate Management, Minsk (BY) 15,963,046 BYN 100.0% OT 1 Company type: BA Bank, BR Company rendering banking-related ancillary services, FH Financial holding, FI Financial institution, OT Other companies, VV Insurance,
Raiffeisen Future AD Beograd drustvo za upravljanje dobrovoljnim penzijskim fondom, Belgrade (RS) 143,200,000 RSD 100.0% FI
RAIFFEISEN INVEST AD DRUSTVO ZA UPRAVLJANJE INVESTICIONIM FONDOVIMA BEOGRAD, Belgrade (RS) 47,660,000 RSD 100.0% FI
Raiffeisen Investment Financial Advisory Services Ltd. Co., Istanbul (TR) 2,930,000 TRY 100.0% FI
RB International Finance (Hong Kong) Ltd., Hong Kong (HK) 10,000,000 HKD 100.0% OT
RB Szolgáltató Központ Kft. - RBSC Kft., Nyíregyháza (HU) 3,000,000 HUF 100.0% OT
Rent CC, s.r.o. v likvidácii, Bratislava (SK) 6,639 EUR 100.0% FI
R-Insurance Services sp. z o.o., Ruda O.S. (PL) 5,000 PLN 100.0% OT
RL-FONTUS Holding GmbH, Vienna (AT) 35,000 EUR 100.0% OT 1 Company type: BA Bank, BR Company rendering banking-related ancillary services, FH Financial holding, FI Financial institution, OT Other companies, VV Insurance,
ALCS Association of Leasing Companies in Serbia, Belgrade (RS) 853,710 RSD 12.5% OT
Aventin Grundstücksverwaltungs Gesellschaft m.b.H., St. Pölten (AT) 36,400 EUR 24.5% FI
Central Depository and Clearing Company, Inc., Zagreb (HR) 94,525,000 HRK <0.1% FI
Commodity Exchange Crimean Interbank Currency Exchange, Simferopol (UA) 420,000 UAH 4.8% OT
G + R Leasing Gesellschaft m.b.H., Graz (AT) 36,400 EUR 25.0% OT
O.Ö. Leasing für öffentliche Bauten Gesellschaft m.b.H., Linz (AT) 510,000 ATS 16.7% FI
Oberpinzg. Fremdenverkehrförderungs- und Bergbahnen AG, Neukirchen am Großvenediger (AT) 3,297,530 EUR <0.1% OT
ESP BH doo društvo sa ograničenom odgovornošću za informacijske i druge usluge, Sarajevo (BA) 8,500,000 BAM 45.0% OT
Joint Stock Company Stock Exchange PFTS, Kiev (UA) 32,010,000 UAH 0.2% OT 1 Company type: BA Bank, BR Company rendering banking-related ancillary services, FH Financial holding, FI Financial institution, OT Other companies, VV Insurance,
LITUS Grundstückvermietungs Gesellschaft m.b.H., St. Pölten (AT) 36,360 EUR 24.5% FI
LLC "Insurance Company 'Raiffeisen Life", Moscow (RU) 450,000,000 RUB 25.0% VV
OJSC NBFI Single Settlement and Information Space, Minsk (BY) 474,917,123,425 BYN 4.2% FI
Private Joint Stock Company Bird Farm Bershadskyi, Viytivka (UA) 6,691,141 UAH 0.5% OT
Private Joint Stock Company Sumy Enterprise Agrotechservice, Sumy (UA) 1,545,000 UAH 0.6% OT
Public Joint Stock Company Settlement Center for Servicing of Contracts in Financial Markets, Kiev (UA) 206,700,000 UAH <0.1% OT
Speedinvest Co-Invest AC GmbH & Co KG, Vienna (AT) 365,045 EUR 80.0% FI
Steirische Gemeindegebäude Leasing Gesellschaft m.b.H., Vienna (AT) 36,336 EUR 50.0% FI
Syrena Immobilien Holding AG, Spittal an der Drau (AT) 22,600,370 EUR 21.0% OT
As a rule, national supervisors are authorized to impose systemic risk buffers (up to 5 per cent) as well as additional capital addons for systemic banks (up to 3.5 per cent). In the event that systemic risk buffers as well as add-ons for systemic banks are imposed on a particular institution, only the higher of the two values is applicable. In September 2015, the Financial Market Stability Board (FMSB) of the FMA recommended a systemic risk buffer (SRB) for certain banks, including RBI. This came into force as of the beginning of 2016 through the FMA via the Capital Buffer Regulation (including subsequent amendments). The SRB for RBI was set at 0.25 per cent in 2016, was raised to 0.50 per cent as of 1 January 2017, and has increased progressively to 2 per cent until 2019.
Based on an annually undertaken Supervisory Review and Evaluation Process (SREP), the ECB currently instructs RBI by way of an official notification to hold additional capital to cover risks which are not or not adequately covered under Pillar I.
The Pillar 2 requirement is calculated based on the bank’s business model, risk management or capital situation, for example. The most recent official notification from the ECB specifies that the Pillar 2 requirement must be adhered to at the level of RBI (consolidated ) and the level of RBI AG (unconsolidated). In addition, RBI is subject to the minimum requirements of the CRR and the combined buffer requirement. The combined buffer requirement for RBI currently contains a capital conservation buffer, a systemic risk buffer and a countercyclical buffer. As at 31 December 2020, the CET1 requirement (including the combined buffer requirement) is 10.4 per cent for RBI. A breach of the combined buffer requirement would induce measures such as constraints on dividend payments and coupon payments on certain capital instruments. The capital requirements applicable during the year were complied with, including an adequate buffer, on both a consolidated and individual basis.
In the context of the COVID-19 pandemic, both the ECB and the EBA enacted regulatory relief measures to enable banks supervised by the ECB to continue to play their central role in providing financing to households and businesses. The ECB will explicitly allow banks under its supervision to operate below the levels defined by the Pillar 2 guidance, the capital conservation buffer and the liquidity coverage ratio (LCR). Banks will also be allowed to use other capital instruments in addition to common equity tier 1 capital to meet capital requirements. This particular measure would have otherwise come into force at the beginning of 2021 as part of the implementation of CRD V (Capital Requirements Directive). Furthermore, the ECB is of the opinion that these measures should be supported by an appropriate relaxation of the countercyclical capital buffer by the national supervisory authorities.
Qualifying tier 1 capital included in consolidated AT1 capital (including minority interests not included in row 5) issued by subsidiaries and held by third parties 1,639,022 1,139,347
Risk-weighted exposure amounts for credit, counterparty credit and dilution risks and free deliveries 65,094,414 5,207,553 65,851,379 5,268,110
This resulted in a (fully loaded) CET 1 ratio of 13.6 per cent (down 0.3 percentage points). The tier 1 ratio stood at 15.7 per cent (up 0.3 percentage points) and the total capital ratio at 18.4 per cent (up 0.6 percentage points).
Exposure amount of the following items which qualify for a risk weight of 1250%, where the institution opts for the deduction alternative (10,748) (18,377)
Amount of qualifying items referred to in Article 484 (4 and the related share premium accounts subject to phase out from AT1 88,250 90,475
Particular approach for position risk in CIUs 870 70 1,280 102
OpR standardized (STA) /alternative standardized (ASA) approaches 3,439,133 275,131 3,694,092 295,527
Total risk exposure amount for credit valuation adjustments 260,367 20,829 222,627 17,810 of which risk-weighted exposure amounts for credit risk: securitization positions (revised securitization framework) 954,347 76,348 652,676 52,214
The leverage ratio is defined in Part 7 of the CRR and as at 31 December 2020 was not yet a mandatory quantitative requirement. Until then it serves for information only.
According to IFRS 9, all financial assets, financial liabilities and derivative financial instruments are to be recognized in the statement of financial position. A financial instrument is defined as any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. On initial recognition, financial instruments are to be measured at fair value, which generally corresponds to the transaction price at the time of acquisition or issue. According to IFRS 13, the fair value is defined as the exit price. This is the price that would be received on sale of an asset or paid to transfer a liability in an orderly transaction between market participants. For subsequent measurement, financial instruments are recognized in the statement of financial position according to the respective measurement category pursuant to IFRS 9, either at (amortized) cost or at fair value.
IFRS 9 contains a classification and measurement approach for financial assets which is firstly based on the business model under which the assets are managed, and secondly on the cash flow characteristics of the assets. For RBI, this results in five classification categories for financial assets:  Financial assets measured at amortized cost (AC)  Financial assets measured at fair value through other comprehensive income (FVOCI)  Financial assets mandatorily measured at fair value through profit or loss (FVTPL)  Financial assets designated fair value through profit or loss (FVTPL) and  Financial assets held for trading (HFT)
They are measured at amortized cost. If there is a difference between the amount paid and face value – and this has an interest character – the effective interest method is used, and the amount is stated under net interest income. Interest income is calculated
Recognition is at fair value. Interest income, foreign exchange gains and losses from remeasurements and impairment expenses and reversals of impairment are recorded in the income statement and calculated in the same way as financial assets measured at amortized cost. The remaining fair value changes are recorded in other comprehensive income. On derecognition, the cumulative net gains or losses from the fair value changes which are recorded in other comprehensive income are reclassified to the income statement. In addition, the debt instruments in the category FVOCI are subject to the same impairment model (see chapter impairment general (IFRS 9)) as financial assets measured at amortized cost. The difference between the fair value and amortized cost is shown in other comprehensive income until the asset is derecognized.
In RBI, an equity instrument is shown at fair value through other comprehensive income if RBI irrevocably decides to present subsequent changes in fair value in other comprehensive income (OCI). This decision is made on an investment-by-investment basis for each investment and essentially covers strategic investments that are not fully consolidated. In contrast to debt instruments, the gains and losses recorded in other comprehensive income (OCI) are not reclassified to the income statement on sale; impairments are not recorded through profit or loss, either.
Liabilities are predominantly recognized at amortized cost. In addition to interest expense, if there are differences between the amount paid and face value, the effective interest method is applied and amounts are shown in net interest income. This category mainly includes customer deposits and securities issues for refinancing purposes.
Financial liabilities are also designated as financial instruments at fair value to avoid valuation discrepancies with related derivatives. The fair value of financial obligations under the fair value option in this category reflects all market risk factors, including those related to the credit risk of the issuer.
In 2020, as in 2019, observable market prices were used for the valuation of liabilities of subordinated issues measured at fair value. The financial liabilities are mostly structured bonds. The fair value of these financial liabilities is calculated by discounting the contractual cash flows with a credit-risk-adjusted yield curve, which reflects the level at which the Group could issue similar financial instruments at the reporting date. The market risk parameters are determined based on similar financial instruments. Valuation results for liabilities that are designated as a financial instrument at fair value are recognized in net trading income and fair value result.
The Group derecognizes a financial liability if the obligations of the Group have been paid, expired or revoked. The income or expense from the repurchase of own liabilities is shown in the notes under (7) Other net operating income. The repurchase of own bonds also falls under derecognition of financial liabilities. Differences on repurchase between the carrying amount of the liability (including premiums and discounts) and the purchase price are reported in the income statement under other net operating income.
Reclassification is only possible for financial assets, not for financial liabilities. In RBI, a change in the measurement category is only possible if there is a change in the business model used to manage a financial asset. Reclassification is then mandatory in such cases. Such changes must be determined by the Management Board and be significant for corporate activities. If such reclassification is necessary, this must be changed prospectively from the date of reclassification and approved by the RBI Management Board.
If derivatives are held for the purpose of risk management and if the respective transactions meet specific criteria, the Group uses hedge accounting. The Group designates certain hedging instruments – mostly derivatives – as fair value hedges, cash flow hedges or capital hedges. At the beginning of the hedging relationship, the relationship between underlying and hedging instrument, including the risk management objectives, is documented. Furthermore, it is necessary to regularly document from the beginning and during the lifetime of the hedging relationship that the fair value or cash flow hedge is highly effective.
Further information on measurement methods and quantitative information for determination of fair value is shown in the notes under (32) Fair value of financial instruments.
IFRS 9 grants accounting options for hedge accounting. RBI continues to apply the provisions on hedge accounting pursuant to IAS 39 while, however, taking into account the changes in the disclosures in the notes pursuant to IFRS 7. The respective disclosures are shown in the notes under (47) Hedge accounting – additional information.
This item mainly includes contingent liabilities from undrawn loan commitments. Loan commitments must be reported when a credit risk may occur. These include commitments to provide loans, to purchase securities or to provide guarantees and acceptances. Loan loss provisions for loan commitments are reported under provisions for liabilities and charges. Often, loan commitments are only partially drawn and thus comprise a drawn and an undrawn commitment. If it is not possible to separately identify the expected credit losses applicable to a drawn commitment and those to an undrawn commitment, these are shown together with the
Derivative instruments held to hedge the fair value of individual items in the statement of financial position (except trading derivatives ) are recognized at fair value (dirty price) under the item hedge accounting (for assets: positive dirty prices; for liabilities: negative dirty prices). Changes in the carrying amounts of hedged items (assets or liabilities) are allocated directly to the corresponding items of the statement of financial position and reported separately in the notes.
Since IFRS 9 entered into force, impairment losses for all debt instruments which are not measured at fair value and for loan commitments and financial guarantees (hereinafter referred to in this section as financial instruments) are recorded in the amount of the expected credit loss. Equity instruments are not subject to the impairment rules of IFRS 9.
In order to mitigate credit risks for financial assets, RBI endeavors to use collateral wherever possible. This collateral can take different forms, such as cash, securities, letters of credit/guarantees, real estate, receivables, inventories and other non-financial assets and credit improvements such as netting agreements. The accounting principles for collateral remain unchanged compared to IAS 39. Collateral is not recorded in RBI’s statement of financial position unless it is repossessed. Further details are provided in the notes under (35) Collateral and maximum credit risk.
The right-of-use asset is subsequently depreciated using the straight-line method in accordance with IAS 16 from the commencement date to the earlier of the end of the useful life or the end of the lease term of the right-of-use asset. The right-of-use asset is reduced by impairments, if any, and adjusted for certain remeasurements of the lease liability.
Further details on determining expected credit losses are provided in the notes under (36) Expected credit losses.
The lease liability is measured on an ongoing basis similarly to other financial liabilities, using an effective interest method, so that the carrying amount of the lease liability is measured on an amortized cost basis and the interest expense is allocated over the lease term. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the RBI’s estimate of the amount expected to be payable under a residual value guarantee, or if RBI changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a
In principle, subsidiaries are initially integrated into the consolidated group on the date when the Group obtains control of the company and are excluded from the date on when it no longer has control of the company. The results from subsidiaries acquired or disposed of during the year are recorded in the consolidated income statement, either from the actual date of acquisition or up to the actual date of disposal. During the initial consolidation of previously not included controlled subsidiaries due to their immateriality, changes in the value of individual assets and liabilities between the date of acquisition or foundation and the initial consolidation as well as profits/losses generated in this period of the subsidiary in question are taken into account directly in equity. The Group reviews the adequacy of previous decisions on which companies to consolidate at least every quarter. Accordingly, any organizational changes are immediately taken into account. Apart from changes in ownership, these also include any changes to the Group’s existing contractual arrangements or new contractual arrangements with a unit.
Non-controlling interests are shown in the consolidated statement of financial position as part of equity, but separately from RBI AG's equity. The profit attributable to non-controlling interests is shown separately in the consolidated income statement.
Raiffeisen Bank International | Annual Report 2020 corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of right-of-use asset has been reduced to zero.
Structured entities are entities in which the voting or similar rights are not the dominant factor for determining control, e.g. if the voting rights are solely related to administration activities and the relevant activities are governed by contractual agreements.
An associated company is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of an entity in which shares are held. No control or joint management of decision-making processes exists. As a rule, significant influence is assumed if the Group holds 20 to 50 per cent of the voting rights. When judging whether the Group has the ability to exert a significant influence on another entity, the existence and the effect of potential voting rights which are actually exercisable or convertible are taken into account. Further parameters for judging significant influence are, for example, the representation in executive committees and supervisory boards (Supervisory Board in Austrian Joint Stock companies) of the entity and material business transactions with the entity. Investments in associated companies are valued at equity and shown in the statement of financial position under the item investments in subsidiaries and associates under the sub-item investments accounted for at equity.
Goodwill is measured as the excess of the aggregate of the value of the consideration transferred, the amount of any non-controlling interest and the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree (if any), and the net
 the total amount of fair value of the received consideration and fair value of the shares retained and  the carrying amount of assets (including goodwill), liabilities of the subsidiary and all non-controlling interests.
These types of provision are reported in the statement of financial position under the item provisions for liabilities and charges. Allocation to the various types of provision is booked through different line items in the income statement depending on the nature of the provision. Allocation of loan loss provisions for contingent liabilities is recorded in the income statement under the line item impairment losses on financial assets. Restructuring provisioning and other employee benefits are recorded in general administrative expenses. Provision allocations that are not assigned to a corresponding general administrative expense are as a matter of principle booked against other net operating income.
The specific structure of the above-mentioned principles results in deviations for individual group units in order to take into account the partly stricter national legal regulations.
 All additional criteria and prerequisites for the allocation and/or payment of variable remuneration, as defined from time to time by the Management Board or the Supervisory Board (REMCO) of RBI, are met.
The Group fulfills the obligation arising from Clause 11 of the Annex to § 39b of the Austrian Banking Act (BWG) which stipulates that at least 50 per cent of the variable remuneration of risk personnel must be paid out in the form of shares or similar non-cash instruments by means of a phantom share plan as follows: 50 per cent of the up front and 50 per cent of the deferred portion of the bonus are divided by the average closing price of the RBI share on trading days of the Vienna Stock Exchange in the payment year serving as the basis for calculating the bonus. Thereby, a certain amount of phantom shares is determined. This amount is fixed for the entire duration of the deferral period. After the expiration of the respective retention period, the amount of specified phantom shares is multiplied by RBI's share price for the previous financial year, calculated as described above. The resulting cash amount is paid on the next available monthly salary payment date.
All expenses associated with the variable remuneration were recognized in personnel expenses in accordance with IAS 19 and the expected discounted payment amount was set aside. They are shown in more detail in the notes under (28) Provisions.
Further details to provisions for pensions and similar obligations can be found in the notes under (28) Provisions for liabilities and charges.
In the Group variable compensation is based on bonus pools on the bank or profit center level. Every variable remuneration system has fixed minimum and maximum levels and thus defines maximum payout values.
Issued subordinated capital and supplementary capital are shown either in financial liabilities – amortized cost or financial liabilities – designated fair value through profit/loss. Assets are subordinated if, in the event of liquidation or bankruptcy, they can only be met after the claims of the other – not subordinated – creditors have been satisfied. Supplementary capital contains all paid-in capital provided by a third-party and available for the company for at least eight years, for which interest is paid only from profit and which can be repaid in the case of insolvency only after all other creditors are satisfied.
Other comprehensive income comprises all income and expenses directly recognized in equity according to IFRS standards. Income and expenses recognized directly in equity that are reclassified in the income statement are reported separately from income and expenses recognized directly in equity that are not reclassified in the income statement. Currency differences resulting from the translation of equity in subsidiaries held in foreign currency, changes resulting from the hedging of net investments in a foreign entity (capital hedge), the effective part of a cash flow hedge, changes resulting from valuation of financial assets (debt
instruments) of the category FVOCI, proportionate other comprehensive income from associates accounted for at equity as well as deferred taxes on the mentioned items are recognized in other comprehensive income.
Liabilities arising from insurance contracts change depending on changes in interest rates, income from investments and expenses for pension agreements for which future mortality rates cannot be reliably predicted. IFRS 4 must be applied to the reporting of liabilities resulting from the existence of mortality rate risks and discretionary participation features. All assets associated with pension products are reported in accordance with IFRS 9. Liabilities are recorded under other liabilities.
General administrative expenses include staff and other administrative expenses as well as amortization/depreciation on tangible and intangible fixed assets.
IFRIC 23 is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates when there is uncertainty over income tax treatments under IAS 12. RBI is required to use judgment to determine whether each tax treatment should be considered independently or whether some tax treatments should be considered together. If RBI concludes that it is not probable that a particular tax treatment is accepted, it has to use the most likely amount or the expected value of the tax treatment. Otherwise, it uses the tax treatment that is consistent with its income tax filings. An entity has to reassess its judgments and estimates if facts and circumstances change.
Net cash from operating activities comprises inflows and outflows from the company’s principal revenue-producing activities and other activities that are not investing or financing activities. When using the indirect method to determine cash flows from operating activities, the profit/loss before tax from the income statement is adjusted by eliminating non-cash components and adding back cash related changes in assets and liabilities. In addition, the income and expense items attributable to investment or financing activities are deducted. The interest, dividend and tax payments from operating activities are separately stated in their own rows.
As RBI is a consolidated group consisting of multiple credit institutions, the informational value of the cash flow statement is regarded as low. The cash flow statement is not an instrument that can be deployed for liquidity or budget planning purposes, nor is it used as a management tool by RBI.
Notes on segment reporting are to be found in the section segment reporting.
Amendment to IFRS 3 (Definition of a Business; effective date: 1 January 2020)
Amendments to IFRS 9, IAS 39 and IFRS 7 (Interest Rate Benchmark Reform – Phase 1; effective date: 1 January 2020)
The amendment provides lessees with an exemption from assessing whether a COVID-19-related rent concession (e.g. rent-free periods or temporary rent reductions) is a lease modification. Lessees that apply the exemption must account for COVID-19related rent concessions as if they were not lease modifications. The amendment applies to rent concessions that reduce rent payments due on or before 30 June 2021. The adoption into European law took place on 9 October 2020. These exemptions are not applied to RBI as a lessee.
IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the standard. The objective of IFRS 17 is to ensure that entities provide relevant information that faithfully represents those contracts. This information gives a basis for users of financial statements to assess the effect of insurance contracts on an entity’s financial position, financial performance and cash flows. IFRS 17 was issued in May 2017 and applies to annual reporting periods beginning on or after 1 January 2023. The impact on the Group is still being analyzed and relates to UNIQA Insurance Group AG, Vienna, which is measured and accounted for using the equity method in the RBI consolidated financial statements and the fully consolidated subsidiary Raiffeisen Pension Insurance d.d., Zagreb. The standard has not yet been incorporated by the EU into European law.
Amendment to IAS 1 (Classification of Liabilities as Current or Non-current; effective date: 1 January 2022)
IASB published amendments – regarding the IBOR reform – to IFRS 9, IAS 39 and IFRS 7 in September 2019, which are to be applied for the business year beginning on 1 January 2020 (Interest Rate Benchmark Reform, Phase I) and which mainly consist of:  The change of certain hedge accounting regulations so that companies comply with these hedge accounting regulations under the assumption that the benchmark interest rate on which the hedged cash flows and the cash flows from hedging instruments are based, will not be changed by the reform of the benchmark interest rate;  Mandatory application of changes to all hedging relationships affected by the benchmark interest rate reform;  The amendments are not intended to provide relief from other consequences of the benchmark interest rate;  If a hedging relationship does not longer fulfil the hedge accounting regulations for reasons other than those mentioned in the amendments, hedge accounting must be abandoned;  Regulation of specific disclosure about the extent to which the hedging relationships of the companies will be affected by the amendments
Further information regarding Interest Rate Benchmark Reform are shown in the notes under (6) Hedge accounting.
The following new or amended standards and interpretations, which have been adopted, but are not yet mandatory, have not been applied early.
Amendment to IAS 37 (Onerous Contracts — Cost of Fulfilling a Contract; effective date: 1 January 2022)
Amendment to IFRS 3 (Reference to the Conceptual Framework; effective 1 January 2022)
Improvements to IFRS 1, IFRS 9, IFRS 16 and IAS 41. These improvements have not yet been incorporated by the EU into European law.
For the purpose of the analysis and description of the performance and the financial position these ratios are commonly used within the financial industry. The special items used below to calculate some alternative performance measures arise from the nature of Group’s business, i.e. that of a universal banking group. However, it is to mention that the definitions mostly vary between companies. Please find the definitions of these ratios below.
LLooaann//ddeeppoossiitt rraattiioo indicates a bank's ability to refinance its loans by deposits rather than wholesale funding. It is calculated with loans to non-financial corporations and households in relation to deposits from non-financial corporations and households.
The amendments update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework. The amendments also include two additions: For transactions and other events within the scope of IAS 37 or IFRIC 21, an acquirer is required to apply IAS 37 or IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a business combination. The amendments also add an explicit statement that an acquirer does not recognize contingent assets acquired in a business combination. The standard has not yet been incorporated by the EU into European law.
CCoosstt//iinnccoommee rraattiioo is an economic metric and shows the company’s costs in relation to its income. The ratio gives a clear view of operational efficiency. Banks use the cost/income ratio as an efficiency measure for steering the bank and for easily comparing its efficiency with other financial institutions. General administrative expenses in relation to operating income (before impairment) are calculated for the cost/income ratio. General administrative expenses comprise staff expenses, other administrative expenses and depreciation/amortization of intangible and tangible fixed assets. Operating income comprises net interest income, dividend income, current income from investments in associates, net fee and commission income, net trading income and fair value result, net gains/losses from hedge accounting and other net operating income.
EEffffeeccttiivvee ttaaxx rraattee ((EETTRR)) –– Relation of income tax expense to profit before tax. The effective tax rate differs from the company´s jurisdictional tax rate due to many accounting factors and enables a better comparison among companies. The effective tax rate of a company is the average rate at which its pre-tax profits are taxed. It is calculated by dividing total tax expense (income taxes) by profit before tax. Total tax expense includes current income taxes and deferred taxes.
NNPPEE ccoovveerraaggee rraattiioo describes to which extent, non-performing loans and debt securities have been covered by impairments (Stage 3) thus expressing also the ability of a bank to absorb losses from its NPE. It is calculated with impairment losses on loans to customers and banks and on debt securities set in relation to non-performing loans to customers and banks and debt securities.
NNPPLL ccoovveerraaggee rraattiioo describes to which extent non-performing loans have been covered by impairments (Stage 3) thus expressing also the ability of a bank to absorb losses from its NPL. It is calculated with impairment losses on loans to customers and banks set in relation to non-performing loans to customers and banks.
OOppeerraattiinngg rreessuulltt is used to describe the operative performance of a bank for the reporting period. It consists of operating income less general administrative expenses.
RReettuurrnn oonn eeqquuiittyy ((RROOEE bbeeffoorree//aafftteerr ttaaxx)) provides a profitability measure for both management and investors by expressing the profit for the period as presented in the income statement as a percentage of the respective underlying (either equity or total assets ). Return on equity demonstrates the profitability of the bank on the capital invested by its shareholders and thus the success of their investment. Return on equity is a useful measure to easily compare the profitability of a bank with other financial institutions. Return on the total equity including non-controlling interests, i.e. profit before tax respectively after tax in relation to average equity on the statement of financial position. Average equity is calculated on month-end figures including non-controlling interests and does not include current year profit.
Total capital specific key figures CCoommmmoonn eeqquuiittyy ttiieerr 11 rraattiioo – Common equity tier 1 as a percentage of total risk-weighted assets (RWA) according to CRR/CRD IV regulation.
LLeevveerraaggee rraattiioo – The ratio of tier 1 capital to all exposures on and off the statement of financial position insofar as they are not deducted when determining the capital measurand. The calculation is in accordance with the methodology set out in CRD IV.
TTiieerr 11 rraattiioo – Tier 1 capital to total risk-weighted assets (RWA).
TToottaall ccaappiittaall rraattiioo – Total capital as a percentage of total risk-weighted assets (RWA).
Closing is expected around the end of the second quarter of this year. On the basis that deal completion is successful, there is a plan to merge Equa bank with Raiffeisenbank and thereby allowing realization of the identified synergies.
PPrroovviissiioonniinngg rraattiioo is an indicator for development of risk costs and provisioning policy of an enterprise. It is computed by dividing impairment or reversal of impairment on financial assets (customer loans) by average customer loans (categories: financial assets measured at amortized cost and financial assets at fair value through other comprehensive income).
RReettuurrnn oonn rriisskk--aaddjjuusstteedd ccaappiittaall ((RROORRAACC)) is a ratio of a risk-adjusted performance management and shows the yield on the riskadjusted capital (economic capital). The return on risk-adjusted capital is computed by dividing consolidated profit by the riskadjusted capital (i.e. average economic capital). This capital requirement is calculated within the economic capital model for credit, market and operational risk.
Raiffeisen Bank International AG, Vienna, and its subsidiaries (“the Group”), which comprise the consolidated statement of financial position as at 31 December 2020, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and the notes to the consolidated financial statements.
As of the balance sheet date, impairments of EUR 2.5 billion were recognized for the above loans and advances, of which EUR 1.3 billion and EUR 1.2 billion relates to non-financial corporates and households, respectively.
Member of the Management Board responsible for Corporate Customers, Corporate Finance, Group Corporate Business Strategy &
Member of the Management Board responsible for Financial Institutions, Country & Portfolio Risk Management, Group Advanced
Banking, Sales & Distribution, International Premium & Private Banking, International Retail CRM, International Retail Lending, International Retail
For all other loans, a collective impairment provision is recognized for expected credit losses (ECL). In general, the 12 month ECL (Stage 1). In the event of a significant increase in the credit risk, the ECL is calculated using the total credit term (Stage 2). Extensive estimates and assumptions are required to determine the ECL. These encompass ratings-based default probabilities and loss ratios that take into account both current and forward-looking information.
As the previously applied valuation model cannot adequately reflect extraordinary circumstances, such as the COVID-19 crisis, the bank added to the provision (post model adjustments) over and above the result derived from the model. These adjustments were based on the bank's internal estimates as well as external forecasts over the economy’s development.
 For all other loans and advances, whose impairment provisions were calculated using the ECL, we compared the bank's calculation methods with IFRS 9 requirements. Furthermore, we assessed the bank's assessment of the models, to examine whether the models and their parameters appropriately calculate impairments. We assessed the appropriateness of the default probabilities for a 12 month period as well as the overall loan term and loss ratios. In particular, we assessed the appropriateness of the statistical models and parameters as well as the mathematical accuracy. In addition, the selection and measurement of forward-looking estimates and scenarios were analysed and considered, as part of the stage allocation and parameter estimation. We assessed the reasonableness of how post model adjustments are prepared, their justification as well the underlying assumptions. A sample of provisions were tested for mathematical accuracy. We involved financial risk management specialists in these procedures. We also involved IT specialists to test the operating effectiveness of specific automated IT controls related to the underlying valuation model.
As part of the credit risk monitoring process, the bank assesses whether there are any defaulted loans that require specific impairment provisions. Included in the assessment is whether clients are able to fulfil contractual repayments in full.
 From samples of different portfolios, we examined whether there are loan default indicators. The sample was selected using a risk-oriented approach, with special consideration given to the rating categories. From different portfolios, we selected a sample of defaults of individually significant loans and assessed the reasonableness of the bank’s assumptions as well as for consistency of the timing and amount of repayments.
We declare that we have not provided any prohibited non-audit services (Article 5 Paragraph 1 AP Regulation) and that we have ensured our independence throughout the course of the audit, from the audited Group.
We declare that our opinion expressed in the “Report on the Consolidated Financial Statements” section of our report is consistent with our additional report to the Audit Committee, in accordance with Article 11 AP Regulation.
The consolidated financial statements, together with our auditor’s opinion, may only be published if the consolidated financial statements and the group management report are identical with the audited version attached to this report. Section 281 Paragraph 2 UGB (Austrian Commercial Code) applies.
Russia AAOO RRaaiiffffeeiisseennbbaannkk St. Troitskaya17/1 129090 Moscow Tel: +7-495-721 99 00 SWIFT/BIC: RZBMRUMM www.raiffeisen.ru
Hungary RRaaiiffffeeiisseenn CCoorrppoorraattee LLíízziinngg ZZrrtt.. Váci út 116-118 1133 Budapest Tel: +36-1-486 5177 www.raiffeisenlizing.hu
Serbia RRaaiiffffeeiisseenn LLeeaassiinngg dd..oo..oo.. Djordja Stanojevica 16 11070 Novi Beograd Tel: +381-11-220 7400 www.raiffeisen-leasing.rs
Ukraine LLLLCC RRaaiiffffeeiisseenn LLeeaassiinngg AAvvaall Stepan Bandera Av. 9 Build. 6 Office 6-201 04073 Kiev Tel: +38-044-590 24 90 www.rla.com.ua
Poland RRBBII PPoollaanndd BBrraanncchh Ul. Grzybowska 78 00-844 Warsaw Tel: +48-22-578 56 00
RRaaiiffffeeiisseenn BBaauussppaarrkkaassssee GGeesseellllsscchhaafftt mm..bb..HH.. Mooslackengasse 12 1190 Vienna Tel: +43-1-54 646-0 www.bausparen.at
RRaaiiffffeeiisseenn CCeennttrroobbaannkk AAGG Tegetthoffstraße 1 1010 Vienna Tel: +43-1-51 520-0 www.rcb.at
VVaalliiddaa HHoollddiinngg AAGG Mooslackengasse 12 1190 Vienna Tel: +43-1-31 648-0 www.valida.at
Albania RRaaiiffffeeiisseenn BBaannkk SShh..AA.. European Trade Center Bulevardi „Bajram Curri” 1000 Tirana Tel: +355-4-23 81 381 SWIFT/BIC: SGSBALTX www.raiffeisen.al
Belarus PPrriioorrbbaannkk JJSSCC V. Khoruzhey St. 31 A 220002 Minsk Tel: +375-17-28 9-9090 SWIFT/BIC: PJCBBY2X www.priorbank.by
Bulgaria RRaaiiffffeeiisseennbbaannkk ((BBuullggaarriiaa)) EEAADD 55 Nikola I. Vaptzarov Blvd. Business Center EXPO 2000 PHAZE III 1407 Sofia Tel: +359-2-91 985 101 SWIFT/BIC: RZBBBGSF www.rbb.bg
Croatia RRaaiiffffeeiisseennbbaannkk AAuussttrriiaa dd..dd.. Magazinska cesta 69 10000 Zagreb Tel: +385-72-626 262 SWIFT/BIC: RZBHHR2X www.rba.hr
Hungary RRaaiiffffeeiisseenn BBaannkk ZZrrtt.. Váci út 116-118 1133 Budapest Tel: +36-1-48 444-00 SWIFT/BIC: UBRTHUHB www.raiffeisen.hu
Kosovo RRaaiiffffeeiisseenn BBaannkk KKoossoovvoo JJ..SS..CC.. Robert Doll St. 99 10000 Pristina Tel: +383-38-222 222 SWIFT/BIC: RBKOXKPR www.raiffeisen-kosovo.com
Romania RRaaiiffffeeiisseenn BBaannkk SS..AA.. Calea Floreasca 246C 014476 Bucharest Tel: +40-21-30 610 00 SWIFT/BIC: RZBRROBU www.raiffeisen.ro
Serbia RRaaiiffffeeiisseenn bbaannkkaa aa..dd.. Djordja Stanojevica 16 11070 Novi Beograd Tel: +381-11-32 021 00 SWIFT/BIC: RZBSRSBG www.raiffeisenbank.rs
Albania RRaaiiffffeeiisseenn LLeeaassiinngg SShh..aa.. European Trade Center Bulevardi „Bajram Curri” 1000 Tirana Tel: +355-4-22 749 20 www.raiffeisen-leasing.al
Bosnia and Herzegovina RRaaiiffffeeiisseenn LLeeaassiinngg dd..oo..oo.. SSaarraajjeevvoo Zmaja od Bosne bb. 71000 Sarajevo Tel: +387-33-254 340 www.rlbh.ba
Slovakia TTaattrraa--LLeeaassiinngg ss..rr..oo.. Hodžovo námestie 3 811 06 Bratislava Tel: +421-2-5919-3168 www.tatraleasing.sk
Slovenia RRaaiiffffeeiisseenn LLeeaassiinngg dd..oo..oo.. Letališka cesta 29a 1000 Ljubljana Tel: +386-8-281-6200 www.raiffeisen-leasing.si
France RRBBII RReepprreesseennttaattiivvee OOffffiiccee PPaarriiss 9-11 Avenue Franklin D. Roosevelt 75008 Paris Tel: +33-1-45 612 700
Sweden RRBBII RReepprreesseennttaattiivvee OOffffiiccee Nordic Countries Drottninggatan 89, 14th Floor 11360 Stockholm Tel: +46-8-440 5086
RRBBII RReepprreesseennttaattiivvee OOffffiiccee ZZhhuuhhaaii Room 2404, Yue Cai Building No. 188, Jingshan Rd, Jida, Zhuhai, Guangdong Province 519015, P.R. China Tel: +86-756-32 3-3500
Photos: David Sailer (page 6/7) Martin Hörmandinger (page 9) Raiffeisen NOE-Wien, Eva Kelety (page 12)