(50) Capital management and regulatory own funds according to the Austrian Banking Act (BWG) Capital was and is an integral part of bank management. RBI as an international Group considers several control parameters. From a regulatory view, RBI is part of the RZB credit institution group. Moreover, RBI – on an individual basis – has to adhere to the legal own funds regulations.
Regulatory values are defined for RBI on an individual basis by the Austrian Banking Act (BWG) based on adequate guidelines of the EU and on the applicable regulation of the European Parliament. There are also – often deviating with regard to content – guidelines in the several countries in which RBI operates. Such guidelines have to be adhered to by the local Group units.
Control on a Group level is exerted by Planning & Finance. The individual Group units are responsible for the observation of the capital targets in coordination with central departments responsible for the participation management of the respective unit.
The main focus in the control is on the core tier 1 ratio (common equity tier 1) and the internal capital (total equity ratio) within the framework of ICAAP. Accordingly, the mixture of capital instruments (several kinds of tier 1, tier 2 and tier 3 capital) has an important role due to the complex mutual consideration limits (under Basel II).
The Basel Committee for banking supervision published a framework of global regulatory standards regarding capital adequacy and liquidity in December 2010. The aim of this framework is the strengthening of global capital and liquidity guidelines for a robust banking industry and an improved ability of the banking sector for absorption of financial and economic stress situations independent from the particular causes.
CRR I became effective on 28 June 2013 and represents applicable law for all EU member states as of 1 January 2014. CRD IV became effective on 17 July and had to be transferred by all EU member states into local law until 31 December 2013. The new framework has to be applied since beginning of 2014 with a transitional period until 2023.
The impacts of Basel III respectively CRR I/CRD IV are displayed and analyzed in scenario calculations by Planning & Finance as well as Risk Controlling on an ongoing basis. The effects are included in planning and steering.
From 2014 on, the European Central Bank (ECB) takes over supervision of large banks in the Eurozone, whose balance sheet total exceeds € 30 billion or 20 per cent of the country’s economic performance. As part of the RZB credit institution group, RBI is indirectly supervised by the European Central Bank (ECB).
The determination of eligible own funds in accordance with Section 29a of the Austrian Banking Act (BWG) is based since the previous year on international accounting standards. The own funds of RBI according to Basel II break down as follows:
Raiffeisen Bank International AG, Vienna (Austria) IRB1 n.a. Internal model2 STA3
All other units STA STA STA STA 1 IRB = internal ratings-based approach. 2 Only for risk of open currency positions and general interest rate risk in the trading book. 3 STA = standardized approach. 4 Only on consolidated level.
The same regulations for employees are in principle valid for six members of the Management Board. These regulations provide a basic contribution to a pension fund from the company and an additional contribution if the employee pays own contributions of the same amount. Four members of the Management Board additionally have individual retirement benefits, which are funded by a reinsurance policy.
In the event of termination of function or employment contract and retirement from the company, two members of the Management Board are entitled to severance payments according to the Salaried Employees Act (Angestelltengesetz) or Bank Collective Agreement (Bankenkollektivvertrag), one member of the Management Board according to contractual agreements and three members of the Management Board according to the Company Retirement Plan Act (Betrieblichen Mitarbeitervorsorgegesetz). The entitlement to receive severance payments according to the Salaried Employee Act or according to contractual agreements lapses with the exemption of one member of the Management Board in case of termination by the employee.
Moreover, protection against the risk of occupational invalidity exists which is covered by a pension fund and/or by individual pension agreements secured through reinsurance. The contracts of the members of the Management Board are concluded for the functional duration or limited to a maximum of five years. The severance payments in case of premature termination of function without good cause shall not exceed more than two years total remuneration.
Provisions for liabilities and charges 113 2,515 0 0 2013 in € 000 Parent companies
Performance-based remuneration components of the Management Board comprise basically bonus payments and share-based remunerations in line with the share incentive program (SIP; see share-based remuneration under note (34) equity). In 2013, there was no allotment to the share-based remuneration. Due to the merger of Raiffeisen International with the principal business areas of Raiffeisen Zentralbank in 2010, no tranche of the SIP program was issued.
The other remunerations comprise remunerations for membership of boards in affiliated subsidiaries, sign-in bonuses, payments to pension funds and business insurances, other insurances and grants. It also comprises one-time retention bonuses for those members of the Management Board of RBI which were granted in connection with the merger of Raiffeisen International und the principal business areas of Raiffeisen Zentralbank.
Thus, in the financial year, € 550 thousand (2012: € 550 thousand) was paid to the members of the Supervisory Board.
Peter Anzeletti-Reikl Member Member – Member 1 Assignment by the Supervisory Board as of 20 September 2012.
The tensions in the region also had an impact on Russia, where uncertainties resulted in double-figure slides on the Moscow stock exchange and devaluation of the Russian rouble against the US dollar of around 10 per cent. This devaluation resulted in negative exchange differences in RBI’s equity.
Centrotrade Minerals & Metals Inc., Chesapeak (US) 2,000 USD 100.0% OT
Raiffeisenbank Austria d.d., Zagreb (HR) 3,621,432,000 HRK 100.0% BA 1 Less own shares. 2 Company type: BA Bank, BR Company rendering banking-related ancillary services, FI Financial institution, OT Other companies, VV Insurance, SC Securities firms.
(58) List of equity participations The following tables show a selection of equity participations. The complete list of the equity participations of RBI AG is deposited with the Group parent’s headquarters.
Raiffeisen Banca pentru Locuinte S.A., Bucharest (RO) 131,074,560 RON 33.3% BA 1 Company type: BA Bank, BR Company rendering banking-related ancillary services, FI Financial institution, OT Other companies, VV Insurance, SC Securities firms.
Raiffeisen Voluntary Pension Funds Management d.o.o., Zagreb (HR) 33,445,300 HRK 100.0% FI 1 Company type: BA Bank, BR Company rendering banking-related ancillary services, FI Financial institution, OT Other companies, VV Insurance, SC Securities firms.
Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Raiffeisen Bank International AG, Vienna, for the year from 1 January 2013 to 31 December 2013. These consolidated financial statements comprise the consolidated statement of financial position as of 31 December 2013, the consolidated statement of comprehensive income, the consolidated cash flow statement and the consolidated statement of changes in equity for the year ended 31 December 2013 and a summary of significant accounting policies and other explanatory notes.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the consolidated financial statements comply with legal requirements and give a true and fair view of the financial position of the Group as of 31 December 2013 and of its financial performance and its cash flows for the year from 1 January 2013 to 31 December 2013 in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU.
Statement of all legal representatives We confirm to the best of our knowledge that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group as required by the applicable accounting standards and that the Group management report gives a true and fair view of the development and performance of the business and the position of the Group, together with a description of the principlal risks and uncertainties the Group faces.
Chief Executive Officer responsible for Group Communications, Group Strategy, Human Resources, Internal Audit,
Markets, Trading & Sales, Institutional Clients, Investment Banking Products and Raiffeisen Research
Member of the Management Board responsible for Corporate Customers, Corporate Sales Management &
Glossary Back testing – The backward comparison of vaR figures with actual results to test the quality of a model.
Basel II – The body of capital adequacy regulations proposed in recent years by the “Basel Committee,” an international forum dedicated to improving bank supervision. According to EU Directives 2006/48/EC and 2006/49/EC, the regulations must be applied in the member states of the European Union from 1 January 2007 onwards to all banks and financial service institutions. As in the case of the Basel I Accord, the goal is to ensure that banks have adequate capital resources and that uniform competitive conditions are created for both lending and credit trading. The main objective of the changes made by Basel II compared to Basel I is to orient capital adequacy requirements prescribed by regulators more effectively to actual risk and hence approximate the capital requirements internally ascertained by banks.
Cost/income ratio – General administrative expenses in relation to operating income (less bank levies and impairments of goodwill).
default risk – Risk that counterparties in a financial transaction will not be able to fulfill an obligation, causing the other party a financial loss.
Earnings per share (EPS) – Adjusted consolidated profit (after deduction of dividend for participation capital) divided by the average number of ordinary shares outstanding for the reporting period.
EBRd (European Bank for Reconstruction and development) – An institution that promotes the transition to an open market economy and to private and entrepreneurial action in the countries of Central and Eastern Europe. Through its investments, it supports activity of the private sector and strengthens financial institutions, legal systems, and development of infrastructure needed by the private sector.
General administrative expenses (operating expenses) – Comprises staff expenses, other administrative expenses, and depreciation/amortization on intangible and tangible fixed assets.
Leverage ratio – Relation of total unweighted exposure (exposures on the statement of financial position, derivative exposures, securities financing transaction exposures and other exposures off the statement of financial position) to tier 1 capital.
Quarter-on-quarter – Compared to the quarter which precedes the quarter under consideration; for example, the third quarter of 2013 in comparison to the second quarter of 2013.
Risk-weighted assets (credit risk) – This is the sum of the weighted accounts receivable and includes receivables in the form of asset items, items off the statement of financial position according to Annex 1 of Section 22 and derivatives according to Annex 2 of Section 22 BWG.
Risk-weighted assets (total risk) – Risk-weighted assets (credit risk) plus market risk and operational risk.
Stress test – Stress tests endeavor to simulate extreme fluctuations in market parameters. They are used because such fluctuations are usually inadequately captured by vaR models (vaR forecasts maximum losses under normal market conditions).
VaR – value at risk expresses the potential loss that will, with a 99 per cent probability, not be exceeded within the period for which an asset is held in the portfolio in question.
Year-on-year – Compared to the point in time, or the time period, which occurs one year before the point in time, or the time period, under consideration; for example, the first half year of 2013 in comparison to the first half year of 2012, or 30 June 2013 in comparison to 30 June 2012.
Austria Am Stadtpark 9 1030 vienna Phone: +43-1-71 707-0 Fax: +43-1-71 707-1715 www.rbinternational.com ir@rbinternational.com rbi-pr@rbinternational.com
Albania Raiffeisen Bank Sh.a. “European Trade Center” Bulevardi “Bajram Curri” Tirana
Belarus Priorbank JSC v. Khoruzhey Str. 31-A 220002 Minsk Phone: +375-17-28 9-9090 Fax: +375-17-28 9-9191 SWIFT/BIC: PJCBBY2X www.priorbank.by
Bosnia and Herzegovina Raiffeisen BANK d.d. Bosna i Hercegovina Zmaja od Bosne bb 71000 Sarajevo Phone: +387-33-287 101 Fax: +387-33-21 385 1 SWIFT/BIC: RZBABA2S www.raiffeisenbank.ba
Belarus JLLC “Raiffeisen-Leasing” v. Khoruzhey 31-A 220002 Minsk Phone: +375-17-28 9-9394 Fax: +375-17-28 9-9974 www.rl.by
Moldova I.C.S. Raiffeisen Leasing S.R.L. Alexandru cel Bun 51 2012 Chişinău Phone: +373-22-27 931 3 Fax: +373-22-22 838 1 www.raiffeisen-leasing.md
UK RBI London Branch 10 King William Street London EC4N 7TW Phone: +44-20-79 33-8000 Fax: +44-20-79 33-8099
RBI Hong Kong Branch Unit 2102, 21st Floor, Tower One, Lippo Centre 89 Queensway, Hong Kong Phone: +85-2-27 30-2112 Fax: +85-2-27 30-6028
Malaysia RBI Labuan Branch Licensed Labuan Bank No. 110108C Level 6 (1E), Main Office Tower Financial Park Labuan Malaysia Phone: +607-29 1-3800 Fax: +607-29 1-3801
Raiffeisen Centrobank AG Tegetthoffstraße 1 1015 vienna Phone: +43-1-51 520-0 Fax: +43-1-51 343-96 www.rcb.at
The forecasts, plans and forward-looking statements contained in this annual report are based on the state of knowledge and assessments of Raiffeisen Bank International AG at the time of its preparation. Like all statements about the future, they are subject to known and unknown risks, as well as uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. No guarantee can be provided for the accuracy of forecasts, target values or forwardlooking statements.