Consolidated-Annual-Report-2009

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Consolidated-Annual-Report-2009 2009 Consolidated annual report Key Figures Balance Sheet (in millions of Euros) 2009 2008 Change in per cent Assets 41,225 41,578 -0.8% Financial assets 14,543 14,367 +1.2% Receivables from customers 21,066 20,697 +1.8% Payables to customers 22,674 22,585 +0.4% Issued securities at cost 3,343 3,703 -9.7% Eligible own funds 2,826 2,180 +29.6% Income Statement (in millions of Euros) 2009 2008 Change in per cent Net interest income 564.3 652.5 -13.5% Net fee and commission income 154.8 143.9 +7.6% Gains and losses on assets and liabilities adjusted for minority interest 1) 138.9 -406.3 – Administrative expenses -517.3 -617.4 +16.2% Provisions and impairment losses -236.7 -281.4 +15.9% Profit (loss) before tax adjusted for minority interest 1) 45.5 -614.6 – Key figures 2009 2008 Tier I capital ratio 10.0% 6.6% Own funds ratio 13.6% 9.8% Cost:income ratio 2) 67.3% 174.4% Resources, as of 31.12. 2009 2008 Workforce (in full-time equivalents) 4,954 5,351 Bank branches 153 166 Post office branches 1,230 1,298 Rating 2009 2008 Moody’s rating 3) Baa1 Baa1 1) Under IFRS, the item Gains and losses on financial assets and liabilities also includes the valuation of securities whose risk is borne by minority shareholders. These securities are subject to substantial fair value fluctuations. In order to improve the comparability of the results, the valuation results attributable to minority shareholders have been excluded in the figures presented on this page. Compared to the income statement presented in the Consolidated Financial Report according to IFRS, the item Gains and losses on financial assets and liabilities is EUR 186.6 million lower (2008: EUR 189.5 million higher). Accordingly, the item Profit (loss) before tax presented above is EUR 186.6 million lower (2008: EUR 189.5 million higher) than the Profit (loss) before tax presented in the Consolidated Financial Report according to IFRS. 2) Operating income: net interest income, income and expenses from fees and commissions, other income and expenses, gains and losses on financial assets and liabilities; Operating expenses: administrative expenses, scheduled amortisation and depreciation on intangible and tangible assets. 3) Rating refers to long-term senior unsecured debt; Moody’s outlook, November 2009: “stable”. ORGANISATIONAL CHART OF BaWAG P.s.K. 2010 Chairman of the Managing Board and CEO / Chief Financial Officer Accounting Controlling Corporate Office Development & Communications International Corporates Business Development Participations Programme & Project Management ByRON hAyNES Strategy & Development Deputy Chairman / Chief Risk Officer Corporate & Institutional Risk Special Projects Credit Risk Retail & SME Operational Risk Workout Group Economics & Research Legal Market Risk Stephan Koren Personnel Risk Reporting Remits of the Managing Board as a Body Compliance Office Internal Audit Central Procurement Customer Service Center Payments Operation Chief Operating Officer Information Technology Business Continuity Planning Operations Commercial Operations Center Retail & Small Business Operations Center SANjAy ShARMA Treasury Operations Real Estate & Facility Management Asset Liability Management Retail & Funding Treasury Controlling Treasury Treasury Investments Treasury Markets CARSTEN SAMUSCh Corporate Business Solutions Corporate Sales Institutional Customers & Public Finance Austrian Banking Direct Sales Internet & Telephone Service Center Marketing & Products Retail Sales Alternative Sales REGINA PREhOFER BAWAG Branches Financial Distribution Post Center & Regional Branches Financial Distribution Post Standard Branches & Loans Mobile Sales Retail Services Small Business 2009 Consolidated annual report CONTENTS Preface by the Chairman of the Managing Board 4 Group Management Report 11 The Economy 11 Key Events during the Financial year 14 Notes to the Annual Financial Statements 22 Non-Financial Performance Indicators 32 Events after the Balance Sheet Date 39 Outlook 40 Internal Control and Risk Management System 42 Consolidated Financial Report Prepared in Accordance with IFRS 45 Consolidated Accounts 48 Notes 53 Risk Report 119 Statement of All Legal Representatives 151 Boards and Officers 152 Auditor’s Opinion 154 Supervisory Board’s Report 156 Preface by the Chairman of the Managing Board PREFaCE BY THE CHAIRMAN OF THE MANAGING BOARD BaWag p.s.K. delivers strong positive pre-tax operating profit of eur 46 million1, despite the challenging economic environment BAWAG P.S.K. recorded a significant improvement in overall operating performance with a pre-tax profit of EUR 46 million in 2009 compared to a loss of EUR 615 million for 2008. This improved operating performance was despite the very challenging economic environment with the full-year impact of the global financial crisis resulting in low interest rates, weak asset demand from custom- ers, strong competition for customer deposits and rising risk costs. Throughout the year the Bank continued to focus successfully on executing its key priorities including: 4 Investing and developing our core Austrian retail and commercial customer franchises to build further sustainable profitability over the medium term; 4 Continuing to build the liquidity position of the Bank and redeploy to support households, small and medium enterprises and commercial customers and companies; 4 Strengthening the capital position of the Bank; 4 Improving productivity and stringent cost optimisation with a focus on non-personnel costs; and 4 Pro-active risk management in response to the challenging market environment. successful development and growth of our core austrian retail and commercial franchises BAWAG P.S.K. launched several initiatives in 2009 in support of our Austrian retail and commercial customer franchises. In particular through our “Unternehmen Österreich” initiative the Bank confirmed its continued commitment in supporting the Austrian economy, providing tailor-made savings and investment products with a clear Austrian focus. In addition, BAWAG P.S.K. also started an initiative offering attractive financing to municipalities using the slogan “BAWAG P.S.K. Kommunalmilliarde” (“BAWAG P.S.K. Billion for Municipali- ties”) which was taken up with huge interest by the public sector market. In this way, the Bank intends to increase support for investments of Austrian federal states, cities and municipalities in infrastructure projects. 1) Adjusted for minority interests. 4 Preface by the Chairman of the Managing Board Retail customer franchises The Bank’s retail businesses through its three distribution channels – BAWAG, PSK BANK and easybank – focused in 2009 on providing products and advisory services meeting the changing needs of our customers in response to the global financial crisis. In particular: 4 The Bank was successful in renewing savings of EUR 5.1 billion following the maturity of capital savings books (Kapitalsparbücher) by providing customers with attractive value for money product alternatives; 4 Sales of securities to private customers increased significantly by EUR 550 million to EUR 1,465 million, a 60 per cent increase; 4 BAWAG P.S.K. Wohnbaubank sold bonds in the amount of EUR 348 million and is therefore the market leader regarding new issues in 2009, with a market share of 28 per cent; 4 BAWAG P.S.K.’s direct bank easybank increased its balance sheet total by 84 per cent to EUR 1.5 billion, and the number of accounts increased by 45,000 to 290,000; 4 BAWAG P.S.K. Invest increased its funds under management by EUR 517 million, a 17 per cent increase; and 4 The Bank’s alternative and mobile distribution channels also developed strongly through the introduction of the “Vorteilswelt” (“World of benefits”) comprising customers with a “Betriebsservice card” or a “VÖS card” (Savings Clubs Association card). Commercial customer franchises BAWAG P.S.K. commercial businesses developed well in 2009 with our dedicated industry specialists and regionally focused account managers providing our customers with specialised products supporting their banking needs. In particular: 4 New commercial loans amounted to EUR 3.9 billion, a 10 per cent increase compared to 2008 and higher than the overall market despite the weak demand; 4 Lead manager for six new corporate bond issuances in Austria and participating as a member of the syndicate in 60 per cent of all new issuances; 4 One of the market leaders in providing financing to the public sector with new volumes in 2009 of more than EUR 1 billion, an increase of 100 per cent compared to 2008; 4 Continued support of the social housing sector with an 11 per cent market share; and 4 BAWAG P.S.K leasing grew its market share in Austria by 2.3 percentage points to over 7 per cent with new business volumes in excess of EUR 400 million. 5 Preface by the Chairman of the Managing Board BaWag p.s.K. continued investment in our employees and the community The Bank continues to focus on investing in our people, systems and processes to deliver outstanding service to our customers and other stakeholders, which has resulted in improvement in operational performance and continued financial strength. Several important successful initiatives were started in 2009 in support of the development of our employees, such as the EMERGE programme for creating and supporting new talent in the organisation, as well as the Women’s Initiative and the Diversity programme. Another key focus was the Leadership Development Initia- tive, where a revised and enhanced “Management by Objectives” process was introduced across the Bank, reflecting the changes introduced to modernise the Bank over the last two years. Through these programmes BAWAG P.S.K. succeeded in taking important steps on the way to becoming one of Austria’s employers of choice. BAWAG P.S.K. is also undertaking significant efforts in order to live up to its social responsibility. In 2009, the Bank became a member of the UN Global Compact. Projects and initiatives included the introduction of a current account, the “New Chance Account”, which is a basic account for all customers regardless of their credit standing.
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