HYPO VORARLBERG BANK AG ANNUAL REPORT 2020 KEY FIGURES 2020 Key figures of Hypo Vorarlberg Bank AG (Hypo Vorarlberg) – Group reporting per IFRS: Balance sheet figures Notes 31/12/2020 31/12/2019 Change Change TEUR in TEUR in % Total assets 15,296,768 13,979,941 1,316,827 9.4 Loans and advances to banks 227,250 116,743 110,507 94.7 Loans and advances to customers 10,340,227 10,042,455 297,772 3.0 Liabilities to banks 2,844,254 1,536,100 1,308,154 85.2 Liabilities to customers 5,646,971 5,434,969 212,002 3.9 Securitised liabilities 5,186,498 5,425,331 -238,833 -4.4 Income statement Notes 2020 2019 Change Change TEUR in TEUR in % Net interest income (6) 174,160 169,541 4,619 2.7 Net fee and commission income (8) 34,647 36,466 -1,819 -5.0 Administrative expenses (13) -95,112 -96,291 1,179 -1.2 Earnings before taxes 48,825 91,692 -42,867 -46.8 Consolidated net income 37,331 70,376 -33,045 -47.0 Corporate figures Notes 2020 2019 Change Change absolute in % Cost/Income ratio (CIR) 51.18 % 53.24 % -2.06 % -3.9 Return on equity (ROE) 4.07 % 8.13 % -4.06 % -49.9 Employees (53) 694 719 -25 -3.5 Own funds 31/12/2020 31/12/2019 Change Change TEUR absolute in % Common equity tier 1 capital (CET1) 1,239,951 1,190,026 49,925 4.2 Additional tier 1 capital (AT1) 50,003 50,005 -2 0.0 Tier 1 capital (T1) 1,289,954 1,240,031 49,923 4.0 Tier 2 capital (T2) 249,973 269,642 -19,669 -7.3 Own funds 1,539,927 1,509,673 30,254 2.0 CET1 capital ratio (CET1) 14.34 % 14.07 % 0.27 % 1.9 Surplus of CET1 capital (CET1) 850,923 809,498 41,425 5.1 T1 capital ratio (T1) 14.92 % 14.66 % 0.26 % 1.8 Surplus of T1 capital 771,250 732,661 38,589 5.3 Total capital ratio 17.81 % 17.85 % -0.04 % -0.2 Surplus of total capital 848,321 833,179 15,142 1.8 The shareholders of Hypo Vorarlberg Bank AG (Hypo Vorarlberg) as at 31 Dezember 2020: Shareholders Total shareholding Voting Rights Vorarlberger Landesbank-Holding 76.8732 % 76.8732 % Austria Beteiligungsgesellschaft mbH 23.1268 % 23.1268 % - Landesbank Baden-Württemberg 15.4179 % - Landeskreditbank Baden-Württemberg Förderbank 7.7089 % Share capital 100.0000 % 100.0000 % Ratings Standard & Poor's Moody's Long-term senior debt A+ A3 Short-term A-1 P-2 Outlook negativ stable TABLE OF CONTENTS HYPO VORARLBERG 4 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) 33 Foreword of the Managing Board 6 I. Statement of comprehensive income 35 Organisational chart 7 II. Balance sheet dated 31 December 2020 36 Executive Boards 9 III. Statement of changes in shareholders’ equity 37 Advisory Board 11 IV. Cash flow statement 38 GROUP MANAGEMENT REPORT 13 V. Notes 39 Macroeconomic conditions 14 VI. Managing Board and Supervisory Board 110 The Austrian banking sector in 2020 16 VII. Subsidiaries and holdings 111 Hypo Vorarlberg’s business model 17 Managing Board declaration 114 Major challenges in 2020 19 Report of the Supervisory Board 115 Development by segment 24 Auditor’s report 116 Subsidiaries and holdings 26 BRANCHES AND CONTACT 119 Outlook for the 2021 financial year 27 Branch offices and subsidiaries 120 Risk management at Hypo Vorarlberg 28 Locations and branches 122 Disclosure of information on remuneration policy and practices in 2020 30 Imprint 123 Mindful business 31 HYPO VORARLBERG WILFRIED AMANN MICHEL HALLER PHILIPP HÄMMERLE MEMBER OF THE MANAGING BOARD CHAIRMAN OF THE MANAGING MEMBER OF THE MANAGING BOARD BOARD HYPO VORARLBERG 5 FOREWORD OF THE MANAGING BOARD Crises are best tackled together: Customers value Hypo Vorarlberg as a reliable and stable partner, particularly in economically challenging times. Dear customers, business partners, shareholder representatives and results, but also to assess whether they manufacture their products employees, in a particularly climate-friendly way, for example. The way in which business is done is extremely important to us. For this reason, we Hypo Vorarlberg can look back on an extremely challenging finan- have long defined ethical and sustainable criteria in our investment cial year: The outbreak of the new coronavirus hit society and the and financing business. economy around the globe with an intensity that few could have imagined. As expected, the economic effects of the COVID-19 pan- As a mindful advisory bank, sustainability is practically in Hypo Vor- demic in Hypo Vorarlberg’s market areas had a negative impact on arlberg’s genes, but we will nonetheless redouble our efforts in the our results and the effects of the crisis will probably stay with us for future, as demand for sustainable financial products is increasing. years. The current EU regulation on disclosure requirements creates one thing above all – even more transparency for investors. It is there- In this context, we are all the more pleased that we managed to fore a key element for showing how and where the bank invests its bring in a good operating result in 2020. As at the end of 2020, customers’ money. In any case, growing demand for sustainable fi- loans and advances to customers were above the previous year’s nancial instruments will further increase pressure – so the situation level, partly due to coronavirus-related measures, and net interest remains exciting. income was also higher than in the previous year (up 2.7%). In a difficult environment, it is particularly important to have a relia- In addition to dealing with the effects of the pandemic, the ECB’s ble and stable partner by your side. For us, stability means that we low and even negative interest rate policy and increasing regulation focus on our core business. But it also means that we are a long- kept us busy. Digitalisation also gained momentum significantly term partner for our customers and not just a temporary one – es- again and put the business model of entire sectors to the test. It will pecially when it comes to tackling crises. be even more important to seize these new opportunities in the fu- ture – as became very clear in the past year. The new Managing Thank you to our nearly 900 employees for their particular ambition Board line-up introduced in May 2020 takes account of the new re- and commitment in the past financial year. We are confident that quirements for our banks. we will also overcome the challenges of 2021 – true to our motto of “Achieving great things together”. A similar effect is generated by the growing trend towards sustaina- bility. Social awareness of a more sustainable way of life does not The members of the Managing Board stop when it comes to the financial world. Banks have a major influ- ence in that they decide who to grant loans to: In future, it will therefore be important not just to look at companies’ financial Michel Haller Wilfried Amann Philipp Hämmerle Chairman of the Managing Board Member of the Managing Board Member of the Managing Board HYPO VORARLBERG 6 ORGANISATIONAL CHART MANAGING BOARD MICHEL HALLER WILFRIED AMANN PHILIPP HÄMMERLE CHAIRMAN OF THE MANAGING BOARD MEMBER OF THE MANAGING BOARD MEMBER OF THE MANAGING BOARD Credit Management – Corporate Customers Corporate Customers Sales Finance Stefan Germann Stephan Sausgruber Bernhard Egger ▪ Credit Management – Corporate ▪ Branch Offices Corporate Customers ▪ Bookkeeping, Supervisory Reporting Customers ▪ International Services ▪ Account Management ▪ Credit Management Banks & Leasing ▪ Syndication / Structured Financing ▪ Data and Document Management ▪ Credit Management St. Gallen Private Customers Sales / Private Banking Controlling ▪ Financial Aids Department Markus Felder Peter Holzer ▪ Balance Sheet Analysis ▪ Branch Offices Private Customers Asset Management Credit Management -- Private Customers ▪ Private Banking Karl-Heinz Strube Martin Heinzle ▪ Wealth Management (Bregenz) ▪ Asset Management ▪ Credit Management – Private Customers ▪ EU-Payment Transactions ▪ Funds Management ▪ Certification / Collateralization Sales Vienna ▪ Financial Analysis / Research ▪ Credit Service / Collateral Management Roswitha Klein ▪ Active Advisory ▪ Housing Construction Aids ▪ Corporate Customers Mid- and Backoffice Funds, Group Risk Controlling ▪ Private Customers / Mobile Sales Uni Securities and Derivatives Markus Seeger ▪ Wealth Management (Vienna) Johannes Tschanhenz ▪ Swap Group Law Sales Support ▪ Funds Service Klaus Diem Stephan Modler ▪ Securities Settlement ▪ Central Loan Monitoring Corporate / ▪ Product Management ▪ Private Customers ▪ Customer Service Center Data Protection ▪ Contract Law ▪ Marketing Management Daniel Oberauer Human Resources Treasury IT / Organisation Egon Helbok Florian Gorbach Johann Berchtold ▪ Funding & Investor Relations ▪ Organisation Communication ▪ APM & Investments ▪ IT Governance Sabine Nigsch ▪ Money- Foreign Exchange and ▪ International Payment Transactions Compliance & Outsourcing Interest Derivatives Trading Jörg Ruwe Reinhard Kaindl ▪ Securities Customer Trading ▪ Information Technology ▪ Digitisation Strategic Bank Management Marketing David Blum Angelika Rimmele Logistics Wilhelm Oberhauser Corporate and Internal Audit ▪ Youth Marketing Christoph Schwaninger ▪ Sponsoring and Events ▪ Facility and Materials Administration ▪ Creation ▪ Sustainability St. Gallen Branch Office Thomas Reich Participation Administration Emmerich Schneider Hypo Vorarlberg Leasing, Italy Michael Meyer (Backoffice/Risk Management) St. Gallen Branch Office Dieter Wildauer Immo Italia, Italy Dipl.-Kfm. Walter Ernst Alexander Ploner Hypo Vorarlberg Leasing, Italien Christian Fischnaller (Sales) Hypo Immobilien & Leasing GmbH Wolfgang Bösch Peter Scholz AS OF APRIL 2021 HYPO VORARLBERG 7 BRANCH OFFICES OF HYPO VORARLBERG Data Protection Vienna Branch Office Bregenz Private Customers Branch Office Daniel Oberauer Roswitha Klein, RW Stephan Spies, SPC Roswitha Klein, HPB + HWM Stephan Bohle, HPB Compliance & Outsourcing Robert Glasner, BM Alexander Walterskirchen, HPL Reinhard Kaindl Hans-Jürgen Spitzer, HCC Bregenz Corporate Customers Branch Office Ombudsperson Katharina Jantschgi, SPC Martha Huster (inkl. Bregenzerwald) Graz Branch Office Simon Ruff, BOH Corporate and Internal Audit Ernst Albegger, RM Christoph Schwaninger Gerhard Vollmann, HPC BP Germany Corp.