DGAP-News: UniCredit Bank Austria AG: Results for the first nine months of 2008

Bank Austria Creditanstalt AG / Quarter Results

12.11.2008

Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
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Corporate News

Bank Austria’s third quarter results 2008

Date of entry: 12 November 2008

Results for the first nine months of 2008:

Bank Austria: EUR 1.6 billion profit despite financial market crisis
 Central and Eastern Europe continues to drive growth:
profit before tax up by 50 per cent
 Net interest income and net fees and commissions rise by 17 per
cent
to a combined EUR 5.2 billion
 Net trading result for the first nine months negative and
substantially lower than in the previous year
 Strong deposit growth brings primary funds to EUR 137 billion, up
by 14 per cent

In the third quarter of 2008 Bank Austria, a member of UniCredit Group,
achieved results which were better than in the same period of the previous
year, despite the continued repercussions of the credit market crisis which
started over a year ago. Profit before tax was 14.7 per cent higher than
the figure for the third quarter of the previous year.

Consolidated profit (after minority interests) for the first nine months of
2008 reached EUR 1,642 million, slightly higher than the previous year’s
level. The largest contribution came from the Central Eastern Europe
business division, which improved its profit before tax by 50 per cent
compared with the same period of the previous year. This increase was due
to acquisitions in Ukraine and Kazakhstan and continued strong organic
growth of the CEE banking subsidiaries.

Items in the income statement1

In the first nine months of 2008, net interest income was the mainstay of
the bank’s revenues, rising by 27 per cent to EUR 3,615 million (2007: EUR
2,857 million). Adjusted for additions to the group of consolidated
companies , net interest income rose by 20.3 per cent. Net fees and
commissions were EUR 1,559 million, more or less unchanged compared with
the first nine months of the previous year (2007: EUR 1,574 million);
adjusted for consolidation effects2, they were 6.6 per cent below the
previous year’s level, due to lower demand for securities investments,
capital market-related financing instruments and structured investment
products.

The strongest direct impact of the financial market crisis is reflected in
the net trading, hedging and fair value result, which showed a net loss of
EUR 278 million (2007: net income of EUR 180 million). The net trading,
hedging and fair value result was influenced by the application of the
amendments to IAS 39 and IFRS 7, ‘Reclassification of Financial Assets’,
which were approved by the IASB and adopted by the European Union in
October 2008. Various financial assets held for trading were reclassified
into the item ‘loans and receivables with customers’ in accordance with the
new IFRS rules, a move which reflects the intention to hold them for a
longer term. As a result of this measure, valuation losses of EUR 120
million in the net trading, hedging and fair value result were avoided at
the reporting date. The net effect on consolidated profit was EUR 93
million.

Operating expenses were EUR 2,894 million, up by 13 per cent over the same
period of the previous year (2007: EUR 2,555 million); this is a positive
trend in view of the significant business expansion (acquisition of ATF
Bank and Ukrsotsbank) and investment in 325 new branches opened in CEE this
year. Adjusted for consolidation effects of the acquisition of ATF Bank and
Ukrsotsbank, operating expenses were only slightly higher than in the first
nine months of the previous year.

Bank Austria generated an operating profit of EUR 2,163 million, a figure
that is only 3 per cent lower than for the first nine months of the
previous year (2007: EUR 2,227 million); adjusted for consolidation
effects2, the difference compared with the same period of the previous year
is 7 per cent. Apart from changes in the cost base as a result of
acquisitions (significantly higher payroll costs in particular), the
decline is mainly due to the negative swing of EUR 457 million in the net
trading, hedging and fair value result compared with the previous year.

Net writedowns of loans and provisions for guarantees and commitments rose
by 36 per cent to EUR 483 million (2007: 355 million), mainly because of
the further expansion of the CEE network. Adjusted for the consolidation
effects from the acquisition of ATF Bank and of Ukrsotsbank, net writedowns
of loans and provisions for guarantees and commitments increased by only
0.6 per cent.

Profit before tax was EUR 2,052 million, up by 1 per cent on the previous
year (2007: EUR 2,030 million); adjusted for the above-mentioned
consolidation effects2, the increase over the previous year was 2.9%.
Consolidated profit (after tax and minority interests) amounted to EUR
1,642 million, a slight increase over the figure for the same period of the
previous year (2007: EUR 1,638 million); adjusted for consolidation
effects2, the increase was 1.6 per cent.

change
in Euro m 1-9/08 1-9/07* in %
Net interest 3,375 2,638 28.0
Dividend income 118 107 11.0
Income from investments
in companies valued
at equity 121 113 7.6
Net interest income 3,615 2,857 26.5
Net fee and commission
income 1,559 1,574 -1.0
Net trading income -278 180
Net other operating
income/expenses 161 171 -5.9
TOTAL REVENUES 5,057 4,783 5.7
Staff expenses 1,688 1,331 26.8
Other administrative
expenses -978 -1,023 -4.4
Expenses recovery 3 2 11.7
Writedowns of
tangible/intangible
assets -231 -204 13.3
OPERATING EXPENSES -2,894 -2,555 13.3
OPERATING PROFIT 2,163 2,227 -2.9
Provisions for risks
and charges -39 -41 -7.1
Goodwill impairment
Net writedowns of loans -483 -355 36.1
Net income
from investments 411 219 87.6
Integration costs -20
PROFIT BEFORE TAX 2,052 2,030 1.1
Income taxes -312 -310 0.5
NET PROFIT 1,740 1,720 1.2
Minority interests -99 -82 20.8
CONSOLIDATED PROFIT 1,642 1,638 0.2

* First nine months of 2007 adjusted for the ASVG equivalent

1-9/08 1-9/07
ROE after taxes 14.8% 17.9%
Cost/income ratio 57.2% 50.3%
Risk/earnings ratio 13.4% 12.4%

in Euro bn change
30/09/08 31/12/07 in %
Total assets 229.8 209.2 9.9
Equity (without
minority interests) 15.4 14.7 4.6

Tier 1 ratio 7.6%** 8.8%

** calculated in accordance with Basel II

The Bank Austria Interim Report at 30 September 2008 will be published on
November 14, 2008.

Enquiries:
Günther Stromenger
Investor Relations Bank Austria
phone: +43 (0) 50505 - 87230
e-mail: guenther.stromenger@unicreditgroup.at

Issuer:
UniCredit Bank Austria AG
Schottengasse 6-8. 1010 Vienna. Austria
e-mail: IR@unicreditgroup.at
Internet: http://ir.bankaustria.at

Largest bonds by volume issued:
ISIN: Stock exchanges:
Xs0211008544 Luxembourg
Xs0206399627 Luxembourg

Further stock exchanges where bonds are admitted to listing:
Vienna. Frankfurt. Stuttgart. Paris. Zurich

Contact:
Günther Stromenger
Investor Relations UniCredit Bank Austria AG
phone: +43 (0) 50505 - 87230
e-mail: guenther.stromenger@unicreditgroup.at

12.11.2008 [1] Financial News transmitted by DGAP

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Language: English
Issuer: Bank Austria Creditanstalt AG
Am Hof 2
1010 Wien
Österreich
Phone: 0043 (0) 50505 - 87230
Fax: 0043 (0) 50505 - 8987230
E-mail: ir@unicreditgroup.at
Internet: www.bankaustria.at
ISIN: AT0000995006
WKN: 99500
Listed: Freiverkehr in Berlin, München, Stuttgart; Open Market in
Frankfurt; Foreign Exchange(s) Warschau, Wien

End of News DGAP News-Service

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