0317 bank austria - investor presentation 4q14 en · 3 bank austria at a glance bank austria...

Bank Austria

Vienna, March 2015

Presentation to Fixed Income Investors

2

Agenda

Overview Bank Austria

Profit & Loss

Liquidity & Funding

Funding Strategy & Position

Balance Sheet & Capital Ratios

Business Model & Strategy

Transactions

Annex

Cover Pool

3

Bank Austria at a glance

Bank Austria continues being…

the leading corporate bank in Austria

one of the largest retail banks in Austria

parent bank of the largest banking networks in CEE

embedded in UniCredit, a large European banking group with access to

group know-how and the major financial centers worldwide

benefitting from stable liquidity with a perfect balance between customer

loans and primary funds

and a sound capital base: Common Equity Tier 1 (CET1) ratio of 10.3%

and Total Capital ratio of 13.4% (as of 31 December 2014)

4

UniCredit / Structure Re-organization completed in 2013Countries more accountable / simplified service model to the customers

New organizational structure (effective as from January 2013) is fully implemented:

From a divisional breakdown to a regional view in Italy, Germany, Austria and Poland

CIB remains a Global division to further strengthen its focus on multinational and

large corporate customers, with clear investment banking needs regardless of

turnover

CEE, Asset Management and GBS (Global Banking Services) not impacted by the

organizational changes

In Italy, the adoption of the new model allowed to cut one organizational layer and to create

7 fully-accountable regional banking hubs to foster the client relationship and proximity

This project created a leaner organization, streamlined decision-making

processes, improved operational efficiency in Bank Austria for its regional

responsibility in Austria & CEE

5

Business Model and Market Position in Bank Austria‘sHome Market

Bank Austria is one of the strongest banks in Austria:

CIB = Corporate & Investment Banking

CIB

Leading corporate bank in

the country (7 of 10 large

corporates are clients)

Focus on

- Multinational corporates

- International and

institutional Real Estate

customers requiring

investment banking

solutions and capital

markets-related products

- Financial Institutions

Clients have access to the

largest banking network in

CEE as well as to UniCredit

branches in major financial

centers worldwide

Commercial Banking

The division covers

- Retail customers

- Corporate customers

- Real Estate

- Public Sector (excluding

Republic of Austria)

Broad coverage through a

network of approx. 240

branches, offering its

customers a complete

range of high-quality

products

12% market share in loans

to individual customers

Strong market position in

all corporate segments

Private Banking

24% of Austrian High Net

Worth Individuals are

customers of BA

Clients benefit from the

combination of local

understanding and

international capabilities

Tailored financial services

to High Net Worth

Individuals and foundations

Successful client

approach through BA‘s PB

Division and Schoellerbank

6

Bank Austria‘s Market Shares1) in the Domestic Customer Business(as of November 2014)

1) UniCredit Bank Austria AG2) Pioneer Investments Austria + Bank Austria real estate funds Source: Monthly Report Austrian National Bank (OeNB); VÖIG

Funds2)

Loans total

Retail Loans

Corporate Loans

Public Sector Loans

Deposits total

Retail Deposits

Corporate Deposits

Public Sector Deposits

Very efficient network structure to cover the important size of customer sharewith only 6% of all bank branches in Austria

15.2%

18.9%

21.8%

27.6%

14.2%

10.6%

14.2%

12.2%

12.7%

Austrian economic growth YoY in % Austrian inflation rate YoY in %

Economic Conditions in Austria

Sources: Statistik Austria, Bank Austria Economics & Market Analysis Austria

forecast

7

Employment and unemployment rate

2,32,2

3,2

0,5

3,3

2,4

1,7

0,9

1,6

2,0

1,9

1,5

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

3,43,6

1,5

-3,8

1,9

0,3

0,7

0,2

0,9

3,1

2,1

1,5

-4,0

-3,5

-3,0

-2,5

-2,0

-1,5

-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

forecast

Hopes of perceptible economic growth in 2014 were

dashed by faltering support from growth markets andthe Ukraine conflict with Russia. Austria’s economygrew by an insignificant 0.3% in 2014 as a whole

There are at least five good reasons why 2015 will bebetter than 2014: The modest increase in globaldemand, supported by the weaker euro and lower oil

prices, and fiscal and monetary impetus in the pipeline

The sharp fall in oil prices will significantly curbthe inflationary trend in Austria also in 2015, while

the economy still lacks the impetus for an improvementon the labor market. 2015 will probably see a furtherrise in unemployment in Austria to 5.1 %

0

1

2

3

4

5

6

7

8

9

10

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

3000

3100

3200

3300

3400

3500

3600

3700Employment excl. persons drawing maternity benefits, military service andtraining (1000s, SA) - RSUnemployment rate (%, SA) - LS

Macroeconomics: CEE remains a diverse region

Real GDP growth, % Real GDP growth by country, %

0,4

-2,1

-0,7

1,5

2,5

0,0

3,3

2,3

2,7

2,3

2,9

-3,4

-0,7

-0,2

1,51,82,0

2,32,42,52,5

3,4

UA

-4.6-6.7

RURSHRBGSIBHHUCZROSKTR

2015 F2014 E

2010 2011 2012 2013 2014 2015 2016

3.0

1.0

5.0

0.5

4.5

4.0

3.5

2.5

2.0

1.5

-0.5

2.0

2.0

2.6

-0.3

2.1

1.1

CEE CESEE

Sources: UniCredit Research, UniCredit CEE Strategic Analysis8

Note: CEE (Central Eastern Europe) includes Bosnia, Bulgaria, Croatia, Czech Republic, Hungary, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey,Ukraine; CESEE (Central Europe and South Eastern Europe) is CEE excluding Russia, Turkey and Ukraine.

9

Net Profit (2)

(€ mn)

Countries ofpresence (3)

Total Assets (1)

(€ bn)

Number ofBranches

Data as of30 June 2014

CEE, % share inGroup revenues

UniCredit confirms its leadership in CEE

116 1,299 3,92719

19

6

15

4

11

9

15

-480

81

172

n.a.

199

380

902

991

2,518

1,843

771

2,920

1,475

2,488

84

55

17

33

25

10

n.m.

80

77

76

56

37

33

142

(4)

(5)

Notes: (1) 100% of total assets for controlled companies (stake > 50%) and pro rata for non- controlled companies (stake < 50%), except for OTP; (2) After tax and before minorities;(3) Including direct and indirect presence in the 25 CEE countries, excluding representative offices; (4) Results of RBI exclude group corporate, markets and corporate center segments;(5) As of FY13, as 1H14 data not available.

Source: UniCredit CEE Strategic Analysis

(5) (5) (5)

(5) (5)

10

The Leading Network in Central & Eastern EuropeBroad presence of UniCredit / Bank Austria in CEE Region

The leading player in CEE:

# 1 by assets, branches and

net profit

~ € 80 bn Direct funding (Primary

funds = Deposits from customers +

Debt securities in issue)

~2,500 branches*) and ~47,000 FTE *)

Within top 5 in 10 Countries

*) excl. ~1,000 branches and ~18,000 FTE of Turkish Joint Venture

RankingMarket

Share

Total

Assets

(€ mn)

Customer

Loans

(€ mn)

Primary

Funds

(€ mn)

Offices

Poland 2 11% 38,553 26,896 30,218 1,036

Russia 9 2% 18,916 11,384 12,058 110

Czech Republic 4 9% 18,349 12,231 13,552 183

Slovakia 5 7% - - - -

Croatia 1 26% 14,165 9,723 8,406 137

Bulgaria 1 15% 8,189 5,683 5,450 203

Romania 5 7% 7,299 4,591 3,645 184

Hungary 6 6% 7,085 3,115 3,838 85

Ukraine ("held for sale") 6 3% - - - 291

Slovenia 5 7% 2,806 1,937 1,375 33

Bosnia & Herzegovina 1 22% 2,661 1,675 1,845 120

Serbia 3 9% 2,284 1,431 1,106 72

Turkey 5 9% - - - 1,042

o/w Azerbaijan 10 2% - - - 14

Rep. Offices

Belarus

Macedonia

Montenegro

CEE Division (excl. Turkey, excl. Ukraine) 86,930 57,009 51,469 2,463

CEE Region (excl. Turkey, excl. Ukraine) 125,483 83,905 81,687 3,499

Note: Data as of 31 December 2014, ranking and market share as of 30 September 2014

Poland (Bank Pekao) under management of UniCredit

Since 1 Dec. 2013, foreign branch of UniCredit Bank Czech Republic and Slovakia

Turkey's balance sheet items not included as consolidated at equity as from 2014

Representative Office of UniCredit Russia

incl. Turkey, incl. Ukraine

2)

3)

4)

5)

1)

5)

4)

3)

2)

1)

5)

11

Turkey and Ukraine shown separately as

Yapi Kredi (Turkish Joint-Venture) consolidated at equity as from 1 January 2014

Ukrsotsbank (Ukraine) reclassified to “Held for Sale” on 31 December 2013

CEE Division1) – incl. Details on Turkey and Ukraine(as of 31 December 2014)

1) excl. Poland (under direct management of UniCredit)2) Primary funds (= Direct Funding) = Deposits from Customers + Debt Securities in Issue

11.2% 4.8%

8.8% 4.2%

Market Share CEE Division – Customer Loansas of December 2014 (CEE Division excl. Turkey and Ukraine)

Market Share CEE Division – Customer Depositsas of December 2014 (CEE Division excl. Turkey and Ukraine; deposits do notinclude Assets under Management or Assets under Custody)

Excl. Russia Incl. Russia

Excl. Russia Incl. Russia

(€ mn)

Loans to Customers 56,378 19,337 1,699

Primary Funds2) 51,485 17,563 1,212

CEE(excl. TR, UA)

Turkey(at 40.9%)

Ukraine

▪ Reinforcing business refocusing through:

Country portfolio optimization, targeting leadership position, increasing profitabilityand volumes market share with attention to risk awareness

Discipline and execution

Focus on efficiency

Leveraging on presence in CEE as added value for the Group

▪ Boost value creation of corporate portfolio through:

Enhancement of service model (targeting “capital light” approach) on a value baselogic, strengthening cross-selling and pricing capabilities

Increase penetration and customer base on most attractive sub-segments thanks tofocus on SME and internationalization program

▪ Profound business model transformation, enabled by investments in infrastructure, toquickly boost profit generation through:

RetailTransformation

Simplification of operating model to free-up resources

Service model revision to enhance productivity

Extensive leverage of digital and multi-channels

Further increase customer base

Balancedgrowth

ReinforcingLeadershipin Corporate

To support the strategic ambition of CEE Division, a large-scale program hasbeen launched, targeting transformation and improved profitability in keyareas

12

CEE keeps focus on portfolio optimization, targeting balanced growth andefficiency

Sale of ATF Bank

Sale of Yapi Kredi Sigorta

Merger of UCB CZ and UCB SK Acquisition of AXA retail portfolio

(CZ)

Wind-down of bank activities andmerger with UC Leasing Latvia

JV with Renault,Nissan and Infiniti

Sale of MICEX

Retail portfolio acquisition (RBS)

Merger of UniCredit Bank Ukraineand Ukrsotsbank

CAIBs Integration of CAIBs completed

UCIFIN Integration in RO, BG completed

Leasings Signing in remaining countries in 4Q14

CEEregion

Done in 2014XX

13

Strategy for 2014: Bank Austria, a modern retail bankand the most innovative player in the Austrian market

Strategic repositioning

Basic services bank Basic top-quality services around the clock,

meeting everyday financial needs

Permanent presence for banking transactions to meet everydayneeds

Advisory bank Specialists offer various customer groups

highly-qualified advisory services at branchesand via SmartBanking

Leading multi-channel bank

With the “Online-Konto“ (online account), BankAustria creates the first online bank withpersonal advisory services and the productrange of a truly universal bank

14

15

SmartBanking – the bank of the future is smart & multi-channel-oriented

10,000 new customers since start of the project, approx. 60,000 customers overall

On average, 800 advisory talks via videotelephony per month, furthermore, customers contact thebank via phone, e-mail, messages via the communication center in OnlineBanking, via SMS,MobileBanking, etc. – significant increase of new business

Offer open to all customers of Bank Austria with a minimum age of 14 years

Approx. 70 staff in SmartBanking

High customer satisfaction

The customers appreciate the innovative approach, the comfort to be able to communicatewith their personal relationship manager anywhere and anytime, and in general the prolongedservice hours, availability of the whole product range and the whole branch network ofBank Austria, i.e. a clear differentiation to pure online banks

Trendsetting appsincluding ATM finder, importing and generating ofQR codes and full support for all tablets

SmartBanking, together with the new branches, formsthe new service model, allowing the customerto choose how, where and when he/she wants to getin contact with Bank Austria

Long-Term Short-Term Subordinated Long-Term Short-Term Subordinated Long-Term Short-Term Subordinated

Baa2 P-2 Ba2 BBB+ A-2 BB+ A F1 -

Rating underReview/

uncertain

CreditWatchnegative

Negative

Baa2 P-2 Ba2 BBB- A-3 BB BBB+ F2 BBB

Rating under

Review/up

Stable Negative

Public Sector

Covered Bond

Mortgage Covered

BondAa1 - -

Aaa - -

UniCredit S.p.A.

Moody's S&P Fitch

Bank Austria

16

Rating Overview

1) Subordinated (Lower Tier II)2) Securities issued before 31 Dec. 2001 which benefit from a secondary liability by the City of Vienna (grandfathered debt) are also rated as shown

above, with the exception of Baa1 by Moody’s for the relevant senior debt

1) 1) 1)

2)

(as of 18 March 2015)

17

Agenda


Profit & Loss

Liquidity & Funding




Transactions

Annex

Cover Pool

P&L of Bank Austria – FY14Stable operating income (decrease mainly due to high one-offs in 2013)Operative improvement mainly due to lower net write-downs of loans

Note: Non-operating items include provisions for risks and charges, profit from investments and integration costs

Operating income y/y down by 9%, mainly due to lower equity contribution from Turkey (due to sale of Sigorta

insurance in 3Q13) and decreased trading income (MICEX-sale 4Q13)

Costs slightly lower vs. FY13, driven by strict cost management and despite further increase in Austrian bank levy

Net write-downs of loans significantly lower (-47% y/y), decrease both in Austria and in CEE

Group Net Profit at € 1,383 mn, last year’s result was impacted by the total write-off of goodwill and other special

factors

1-12 1-12(€ mn) 2014 2013

Operating Income 5,890 6,503 -9.4% 1,429 1,554 1,715 -8.1% -16.7%

Operating Costs -3,336 -3,387 -1.5% -865 -814 -895 6.3% -3.3%

Operating Profit 2,554 3,116 -18.1% 563 740 820 -23.9% -31.3%

Net Write-Downs of Loans -693 -1,313 -47.2% -192 -169 -536 13.7% -64.2%

Net Operating Profit 1,860 1,803 3.2% 371 571 284 -35.0% 30.8%

Non-Operating Items -82 -1,006 -91.8% -15 -84 -848 -81.5% -98.2%

Profit Before Tax 1,778 797 >100.0% 356 487 -564 -27.0% >-100.0%

Income Tax -287 -428 -33.0% -87 -73 -245 18.8% -64.5%

Group Net Profit 1,383 -1,542 >-100.0% 191 416 -2,667 -54.2% >-100.0%

Cost / Income Ratio - excl. bank levies (in %) 53.9% 49.9% 400 bp 58.3% 50.1% 50.5% 819 bp 779 bp

y/y 4Q14 3Q14 4Q13 q/q y/y

18

19

Net Operating Profit Composition (€ mn)

-536

-169 -192

-895

4Q14

371

-865

1,429

3Q14

571

-814

1,554

4Q13

284

1,715

Net Operating ProfitDespite Sigorta and MICEX sale in 2013, slightly above prior year, mainlydue to lower LLPs and costs

LLP

Costs

Operating income

1-12/2014

1,860

-693

-3,336

5,890

1-12/2013

1,803

-1,313

-3,387

6,503

+3%

Austria

CEE

27%

73%

*) without Corporate Center

Share of Divisions *) –Net Operating Profit by region (%)

NOP up by 3% y/y

Reduction of revenues y/y due to sale of Sigorta

insurance /Turkey in 3Q13), sale of shares in the

Russian stock exchange MICEX and currency effects

(mainly Ruble/4Q14)

Y/y, decrease in costs despite higher bank levies in

Austria, due to strict cost control and currency effects

LLP requirements strongly decreased y/y (both in

Austria and in CEE)

20

Cost of Risk (in basis points)Net Write-Downs of Loans (in mn €)

192169

536

4Q143Q144Q13

191

39

33

112

116

-3

11

61

CIB

CommercialBanking

BA Group

CEE

1-12/2014FY13

Loan Loss Provisions and Cost of RiskReduced LLPs in CEE leading to drastically lower Cost of Risk

1-12/2014

693

1-12/2013

1,313

-47%

LLPs: decreased y/y by 47%, both in Austria and in CEE, due to lower needs and partly due to

write-backs in Austria (CIB) and several CEE countries

Cost of risk significantly lower compared to 2013 (BA Group -51 bps vs. FY13), with

Commercial Banking (i.e. the Austrian customer business) reductions on an already low level

and CIB even recorded net releases and

also CEE could strongly decrease its cost of risk

21

Net Impaired Loans 1)

(in bn €)% of Net Impaired Loans

on Total Net Loans 1)

% Coverage Ratio onImpaired Loans 1)

1) on-balance clients (non-banks) only

Asset QualityNet Impaired Loans declining, coverage ratio improving

Net impaired loans on

a decreasing trend y/y,

due to exclusion of

Turkey (consolidated at

equity starting in 2014)..

Q/q, stable

Net impaired loan ratio

stable (with slight

decrease in Austria),

increase in 1Q14 due to

exclusion of Turkey

Coverage ratio on

impaired loans

improved y/y by

56 bp. Coverage ratio

improved both in

Austria and CEE (if

excluding Turkey also in

4Q13)

-4%

4Q14

4.9

3Q14

5.1

4Q13

5.1

+35bp

4Q14

4,3%

3Q14

4,4%

4Q13

4,0%

+56bp

4Q14

55.4%

3Q14

54.6%

4Q13

54.9%

-4%

4Q14

1.3

3Q14

1.2

4Q13

1.3

0bp

4Q14

2.2%

3Q14

2.1%

4Q13

2.2%

+152bp

4Q14

64.5%

3Q14

65.2%

4Q13

62.9%

-4%

4Q14

3.7

3Q14

3.9

4Q13

3.8

97bp

4Q14

6.5%

3Q14

6.8%

4Q13

5.5%

4Q14

-5bp

51.2%

3Q14

50.0%

4Q13

51.2%

BA Group

Austria

BA GroupBA Group

AustriaAustria

CEE CEECEE

CEE Division increases profit before tax by 6 per cent atconstant exchange rates

Profit before tax up by 6% (at

constant rates)

based on stable revenues (excl.

gain on sale of Sigorta/Turkey and

MICES/Russia), strict cost

management and a favorable

development of loan loss

provisions

Within a difficult environment,

Russia confirmed as important

profit contributor

Strong improvement in Czech

Republic/Slovakia, Bulgaria and

Croatia

Hungary substantially improved

despite new burdens

Turkey decrease mainly due to

one-off gain Sigorta

Cost/income ratio of CEE

Division at excellent 40.3%

Slovenia 0

Hungary 64

CZ/SK 214

CE 278

Bosnia 45

Serbia 46

Romania 50

Croatia 149

Bulgaria 162

SEE 452

Turkey 341

Russia 447

CEE 1,500

22 1) Turkey consolidated at equity, therefore incl. in CEE total with net profit of € 341 mn. The proportionate profit before tax amounts to € 426 mn.

1)

9%

141%

30%

95%

57%

42%

59%

65%

-39%

-24%

6%

n.m.

n.m.

1)

Profit before tax 1-12 2014in EUR mn - change in % (at constant exchange rates)

23

Agenda


Profit & Loss

Liquidity & Funding




Transactions

Annex

Cover Pool

24

Other Assets

OtherFinancial Assets

Loans andreceivableswith customers

Loansand receivableswith banks

Assets

189,118 (100%)

12,687 (7%)

32,158 (17%)

113,732 (60%)

30,542 (16%)

Equity

Other Liabilities

Debt securitiesin issue

Deposits fromcustomers

Deposits frombanks

Liabilities

189,118 (100%)

14,925 (8%)

18,213 (10%)

30,014 (16%)

102,271 (54%)

23,696 (13%)

Balance Sheet structure (as at 31 December 2014)

Balance Sheet (€ mn) Change vs. 31 December 2013

+6.5%

12/14

189

12/13

178

Balance sheet Loans to customers

-0.5%

12/14

114

12/13

114

Deposits fromcustomers

Securitiesin issue

+5.9%

12/14

102

12/13

97

+9.9%

12/14

30

12/13

27

(€ bn)

12/14

15

12/13

15

-0.8%

5.6%

12/1412/13

Shareholders’equity

Leverage ratio1)

(quarterly average)

1) starting from 2014, according

to Basel 3 phase-in

n.a.

Balance sheet development (+6.5%% vs. 2013) partly driven by strong deposit

growth and issuance activities

Classical commercial bank - loans and primary funds (customer deposits + debt

securities in issue) well balanced and representing a high share in the balance sheet

Debt securities in issue up by € 2.7 bn (4 covered bond issues totaling € 2 bn and 3

Tier 2 issues in a total of € 1.5 bn)

Solid capital base of € 15 bn, stable vs. YE13, current profit mainly compensated by

currency effects (in particular Ruble)

As from 2014, Turkey (Yapi Kredi) is consolidated at equity and therefore only included

as participation; year-end 2013 adjusted accordingly to enable comparisons

25

Loans to Customers1) (€ mn)

-1%

-1%

4Q14

113,732

57,353

56,378

3Q14

115,167

57,430

57,737

2Q14

115,304

58,213

57,091

1Q14

113,224

58,619

54,606

4Q13

114,763

58,328

56,436

Loan and Deposit VolumesLoans more than covered by deposits and debt securities in issue

3Q14

6%+2%

99,914

52,978

46,935

2Q14

95,842

50,425

45,417

1Q14

95,730

51,057

44,672

4Q14

102,271

53,475

48,796

4Q13

96,490

49,810

46,679

Deposits from Customers1) (€ mn)

CEE

Austria

91% 86%93% 92% 88%

Loans/Direct Funding Ratio

1) All figures recast (excl. Turkey and Ukraine)

Loans to customers -1% y/y due to decrease in Austria and currency devaluation in CEE, q/q decrease mainly due

to Ruble devaluation

Deposits from customers +6% y/y, with growth in CEE being mitigated by currency devaluation. In Austria, y/y

increase by € 3.6 bn. Significant increase q/q (+2%) both in Austria and CEE (in particular corporate business)

Loans more than covered by deposits and debt securities in issue, Loans/Direct Funding Ratio on an excellent

level of 86%

CEE

Austria

26

Customers loans / Primary funds (€ bn) 1)

Volumes in CEEGood business development, impact from currency movements

Loans to customers: growth in 2014 compensated by

currency fluctuations (mainly Ruble)

Primary funds: Increase y/y by € 2 bn, despite currency

devaluations. Deposit growth in almost all countries, in

particular in Russia and Bulgaria

Primary funds (€ bn) - December ‘14 1)

Customer loans (€ bn) - December ‘14

Regional Breakdown

1) Primary funds = Deposits from customers + Debt securities in issue

4Q14

51.5

56.4

3Q14

50.1

57.7

4Q13

49.5

56.4

Primary fundsCustomer loans

Romania 5

Croatia 9

Bulgaria 6

Hungary 3

CZ/SK 12

Russia 11

o/w

CEE 56

4

51

Romania

Croatia 8

Bulgaria 5

Hungary 4

CZ/SK 14

Russia 12

o/w

CEE

Regional Breakdown

Credit risk

Operational risk

CVA charge

Market risk

4Q14 B3

130.4

4.60.6

12.1

113.0

2013

118.5

103.6

12.8

2.1

2012

130.1

114.9

12.6

2.5

Risk-Weighted Assets (€ bn)

CET1

Tier 1

4Q14B3 phase-in

13.4%

10.3%

10.3%

2013

13.5%

11.3%

11.6%

2012

12.5%

10.6%

10.9%

Capital Ratios

Additional

Tier 1

17.5

13.5

0.0

2013

16.0

13.4

0.3

2012

16.2

13.8

0.3

4Q14B3 phase-in

CET1

Regulatory Capital (€ bn)

Total CAR

Total Capital Total RWA

1) Starting with 2014, figures in accordance with Basel 3/CRR and since 3Q14 based on IFRS; transitional adjustments (phase-in) only relevant for capital, not for RWA

1)1)

1)

Capital position and RWASound capital ratios

Common Equity Tier 1 (CET1) ratio stands at

solid 10.3% and Total Capital ratio at 13.4%

(both according to Basel 3 phase-in and IFRS)

Safe capital base as Bank Austria – unlike its

main competitors – did not take up state capital

RWA development in FY14 influenced by

implementation of the CRR (leading to higher

market risk RWA in 2014), volume growth in CEE

and switch to IFRS. Decrease in 2013 includes

sale of Kazakh subsidiary

27

28

Agenda


Profit & Loss

Liquidity & Funding




Transactions

Annex

Cover Pool

29

Bank Austria Acts as Regional Liquidity Center for Austria / CEEand is a Strategic Issuing Platform for UniCredit Group

UniCredit S.p.A. – Holding

Bank capital

OBG (coveredbonds)

Registered sec./Schuldschein-darlehen (SSD)

Senior benchmark

Private placement

Retail issues

Mortgage- andPublic SectorPfandbriefe

Senior benchmark

Registered sec.(SSD, NSV*))covered / senior

Private placements

Retail Issues

Certificates

Mortgage- and PublicSector Pfandbriefe

Senior benchmark

Housing-bank-bonds(Wohnbaubank-anleihen)

Registered sec. (SSD,NSV*)) covered/senior

Private placements

Retail issues

UniCredit S.p.A

(Baa2/BBB-/BBB+)

RLC Germany RLC Poland

Retail issues

Bearer bonds

Own Issue Programs

Presence on the local and global markets

During the liquidity crisis no state aid needed

Coordination of the global market presence through UniCredit Holding

RLC Austria/CEE

Long-Term Ratings by (Moody’s/S&P/Fitch) as of 12 March 2015 *) Namensschuldverschreibungen

RLC Italy

UniCredit Bank AG

(Baa1/A-/A+)

Bank Pekao SA

(A2/BBB+/A-)

UniCredit Bank

Austria AG

(Baa2/BBB+/A)

30

Self-funding of Business Growth of Bank Austria Group

Business Growth of BA Group to be self-funded by a well-balanced mix of customer deposits

and market issuances

Well-diversified funding base due to BA’s commercial banking model. Priority is on growth of local funding

sources out of customer business with a variety of products (sight, savings, term deposits) as well as medium- and

long-term placements of own issues

The self-funding strategy of Bank Austria was demonstrated by returning to the capital markets: from 2010 focus

was given to issuance of benchmark-sized Pfandbriefe and since 2013 also on Senior Unsecured Benchmarks

The strict principle of self-sufficient funding of Bank Austria

• ensures that the proceeds are used primarily for business development of entities of Bank Austria Group

• enables Bank Austria to calculate its own funding costs according to its own risk profile

Same Principles apply for the CEE banks of BA Group

Also in CEE the business model as commercial bank with its priority on growth of local funding sources from

customer business leads to a well-diversified funding base

Self-sufficiency target is applied in CEE as a business principle of UniCredit Group and is also strongly favored

by regulators, e.g. introduction of ”Loans to Local Stable Funding Ratio - LLSFR” by Austrian National Bank (OeNB)

Through its know-how and international business relationships BA actively supports the development of

local capital markets, especially in local currency, e.g. local Covered Bond issuance in Czech Republic, first SME

Covered Bond in Turkey and Senior Unsecured issues in Russia, Turkey and Romania

31

Liquidity and Funding Management within BA Group based onclear and strict Risk Management Principles

Clear Rules and Principles in Bank Austria for the Management of Liquidity and Funding

Liquidity strategy

Bank Austria acting as an independent Regional Liquidity Center (RLC) within UniCredit Group - in line with the

self-funding principle of the new Group Strategy

Bank Austria manages the liquidity development in Austria and CEE

Clear operative rules

Active liquidity and funding management by defining short-term and structural liquidity and funding limits for all

banking subsidiaries of BA Group

In addition to the Austrian regulator’s principles, BA strictly monitors the balanced intra-group funding flows

within BA Group

All international and national legal / regulatory constraints have to be followed on single bank level

Bank Austria establishes a separate Funding and Liquidity Plan for Austria and its CEE subsidiaries as part of

the Funding and Liquidity Plan of UniCredit Group

Constant prudent net liquidity reserve

inflows from market and captive customer

base

positive effect of cash pooling

Cash horizon constantly above 3M

Sound counterbalancing capacity

(approx. € 26bn on 1Y average)

32(1) Sum of net liquidity inflow + counterbalancing capacity

BA RLC 3 month available liquidity position (1) (2)

Structural liquidity ratio (1Y)

(3) Calculated as ratio between liabilities (cumulative sum above one year) and assets (cumulative sum above one year)

(2) Assuming no roll-over of current outstanding wholesale debt

BA Group-wide Liquidity Position (steered centrally by ALM BA)

Structural liquidity ratio3) well above limits…

Internal rule of 0.90 for maturities above 1y

Level as of February 2015: 1.09, in line with the

previous month

… thanks to

Stable Loan/Deposit ratio

2015 M/L Term Funding Plan positively

kicked off

0

10.000

20.000

30.000

40.000

50.000

60.000

30

.09.

10

31

.10.

10

30

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10

31

.12.

10

31

.01.

11

28

.02.

11

31

.03.

11

30

.04.

11

31

.05.

11

30

.06.

11

31

.07.

11

31

.08.

11

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.09.

11

31

.10.

11

30

.11.

11

31

.12.

11

31

.01.

12

29

.02.

12

31

.03.

12

30

.04.

12

31

.05.

12

30

.06.

12

31

.07.

12

31

.08.

12

30

.09.

12

31

.10.

12

30

.11.

12

31

.12.

12

31

.01.

13

28

.02.

13

31

.03.

13

30

.04.

13

31

.05.

13

30

.06.

13

31

.07.

13

31

.08.

13

30

.09.

13

31

.10.

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13

31

.12.

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.01.

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28

.02.

14

31

.03.

14

30

.04.

14

31

.05.

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.06.

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.01.

15

28

.02.

15

0,880,890,900,910,920,930,940,950,960,970,980,991,001,011,021,031,041,051,061,071,081,09

Jan

-10

Feb

-10

Ma

r-10

Ap

r-1

0M

ay-

10

Jun

-10

Jul-

10

Au

g-1

0Se

p-1

0O

ct-1

0N

ov-

10

De

c-10

Jan

-11

Feb

-11

Ma

r-11

Ap

r-1

1M

ay-

11

Jun

-11

Jul-

11

Au

g-1

1Se

p-1

1O

ct-1

1N

ov-

11

De

c-11

Jan

-12

Feb

-12

Ma

r-12

Ap

r-1

2M

ay-

12

Jun

-12

Jul-

12

Au

g-1

2Se

p-1

2O

ct-1

2N

ov-

12

De

c-12

Jan

-13

Feb

-13

Ma

r-13

Ap

r-1

3M

ay-

13

Jun

-13

Jul-

13

Au

g-1

3Se

p-1

3O

ct-1

3N

ov-

13

De

c-13

Jan

-14

Feb

-14

Ma

r-14

Ap

r-1

4M

ay-

14

Jun

-14

Jul-

14

Au

g-1

4Se

p-1

4O

ct-1

4N

ov-

14

De

c-14

Jan

-15

Feb

-15

1Y Liquidity Ratio

1Y Limit

33

Medium- & Long-Term Funding Development and Target 2015

Medium- & Long-Term Funding(in € bn)

Benchmark Issuances in 2014

and 2015:

Mortgage Pfandbrief

Benchmarks in January, April,

September 2014 and February

2015 successfully placed

Public Sector Pfandbrief

Benchmark in May 2014

successfully placed

Plan for 2015:

Benchmark Issues, Private

Placements and Issuance via

own Network of Covered

Bonds and Senior Bonds

3,18

4,63

2,10

3,79 3,854,08

2014 2015 Plan

o/w 0.5Pre-Funding

2015

2013

o/w 0.5Pre-Funding

2014

201220112010

Pfandbriefe€ 2.3 bn






34

Maturity Profile(in € mn)

Split of Instruments(in € mn)

4,498

13,106

8,371

Subordinated Bonds

Senior Bonds

CoveredBonds

Maturity Profile of Bank Austria’s Own Issues(as of 28 February 2015)

Note: Data including issues sold through Group network

Above percentage distribution of

these instruments targeted to be

maintained at similar levels also

in the future

Approx. 15% of total own issues

were placed as retail issues

920 834 865

623

after 2019

9,577

4,598

1,446

3,533

2019

2,021

1,015

1,005

1

2018

2,162

1,298

0

2017

3,443

139

2,682

2016

5,238

4,244

160

2015

3,532

2,432

181

Covered Bonds

Senior Bonds

Subordinated Bonds

25,974Total

35

Agenda


Profit & Loss

Liquidity & Funding




Transactions

Annex

Cover Pool

36

Overview of Pfandbrief Benchmark Issues 2015

In February, successful issue of a 10-year Mortgage Pfandbrief Benchmark

Insurance companies

Central Banks/Official Institutions

4%

Funds

18%

Banks

30%

48%

OthersSwitzerland

UK

France

Asia

Austria

6%Germany

25%

52%

Bank AustriaMortgage Pfandbrief

0.75% 25/02/2025 € 500 mn Feb. 2015 MS + 3bps

3%

5%

3% 6%

37

Overview of Pfandbrief Benchmark Issues 2014 1/2

In January, successful issue of a 10-year Mortgage Pfandbrief Benchmark

9%

6%

30%55%

Insurance companies

Central Banks

Funds

Banks

In April, successful issue of a long 5-year Mortgage Pfandbrief Benchmark

Insurance companies

Central Banks5%

Funds

12%

Banks

31%

52%

2%

Others

2%

Switzerland

3%

Italy

6%UK

France

Asia

9%

Austria

10%

Germany

21%

47%


2.375% 22/01/2024 € 500 mn Jan. 2014 MS + 35bps


1.25% 14/10/2019 € 500 mn April 2014 MS + 23bps

Benelux 11%

3%Italy 2%

2%

SpainAsiaSwitzerland

10%Nordics

6%

Austria

12%

Germany54%

In May, successful issue of a 7-year Public Sector Pfandbrief Benchmark

Corporates

37%

Funds46%

3%

Insurance companies

4%

Central Banks 10%

Banks

UK

1%3%

Nordics/Benelux

3%

Others

3%

Italy

2%

France

Germany

71%

4%

Austria 10%

Switzerland

3%Asia

Bank AustriaPublic SectorPfandbrief

1.375% 26/05/2021 € 500 mn May 2014 MS + 25bps

In September, successful issue of long 5-year Mortgage Pfandbrief Benchmark

Banks62%

Insurance companies6%

Central Banks

4%

Funds 28%

UK/Ireland

7%Benelux

7%

6%Italy

4%

Nordics

Switzerland

3%Middle East

4%

Austria

France

2%

7%

Germany

56%

Others

4%


0.5% 16/01/2020 € 500 mn Sept. 2014 MS + 7bps

38

Overview of Pfandbrief Benchmark Issues 2014 2/2

39

Overview of Pfandbrief Benchmark Issues prior to 2014

Bank AustriaPublic Sector Pfandbrief

2.375% € 750 mn June 2010 Mid-Swap +45

24/02/2021 € 1 bn Feb. 2011 Mid-Swap +69

04/11/2016 € 500 mn Nov 2011

15/06/2015

4.125%

2.875% Mid-Swap +85

2.625% 25/04/2019 € 500 mn Apr 2012 Mid-Swap +88





1.25% € 500 mn July 2013 Mid-Swap +2630/07/2018

Bank AustriaMortgage Pfandbrief /First Tap

1.25% €200 mn Sept. 2013 Mid-Swap +1030/07/2018


1.875% € 500 mn Oct 2013 Mid-Swap +2529/10/2020

Strong performance of all BA Covered Benchmark Bonds issued so far

40

Bank Austria Covered Bond Spread Comparison

Source: Bloomberg Mid ASW-Spread

41

Overview of Senior Unsecured Benchmark Issues 2013

Senior Unsecured Benchmarks (January 2013 and its first tap in May and an additional one inNovember 2013) were successfully issued

Bank AustriaSenior Unsecured Bond

2.625% € 500 mn Jan. 2013 Mid-Swap +16330/01/2018


2.625% € 250 mn May 2013 Mid-Swap +10530/01/2018

Overview of Investors

6%

Other

10%Italy

3%Nordics

Switzerland5%

Netherlands 11%

France

12%

UK

13%

Austria17%

Germany

23%


2.5% € 500 mn Nov. 2013 Mid-Swap +13527/05/2019

Other

6%8%Insurances

Banks31%

Funds54%

42

CEE – Local issuance activities strengthen the liquidity profile of ourbanking subsidiaries and open up new funding sources

Notice: TR = Turkey, RU = Russia, CZ = Czech Republic *) WAL = weighted average life

RU 1 y€ 250 mln

equivalent RUBMay 2014 9,70%

Senior PublicMarket

MS +63bps

RU 1 y€ 250 mln

equivalent RUBAug. 2014 10,30%

Senior PublicMarket

MS +65bps

TR 5 y€ 362 mln

equivalent USDOct. 2014 5,125%

Senior PublicMarket

MS +357bps

TR 1 y € 1 bn equivalent(USD 340 mln / € 761 mln)

Oct. 2014 floatingClub Term Loan MS + 80bps

TR 17 y WAL*) € 362 mlnequivalent USD

Oct. 2014 floatingDiversified

Payment of Rights(DPR)

MS + 211bps

TR 1 y € 1,1 bn equivalent(USD 319 mln / € 853 mln)

May 2014 floatingClub Term Loan MS + 78bps

RU 1 y€ 96 mln

equivalent RUBNov. 2014 12,00%

Senior PublicMarket

MS + 145bps

CZ 4 y € 196 mln Dec. 2014 1,875%Mortgage Covered

BondMS + 81bps

43

Agenda


Profit & Loss

Liquidity & Funding




Transactions

Annex

Cover Pool

44

Executive Summary Bank AustriaPublic Sector Cover Pool

Aaa Rating by Moody‘s

ECBC Covered Bond Label has been granted to the Public Sector Cover Pool of Bank Austria

Cover Pool Volume as of 31 December 2014 amounts to EUR 7,007 mn

Average volume of loans is approx. € 1.94 mn

Average seasoning is 5.4 years

45

Public SectorParameters of Cover Pool and Issues

Total Value of the Cover Pool as of 31 December 2014 in EUR equivalent: 7,007 mn

• thereof in EUR: 3,477 mn

• thereof in CHF: 1,597 mn

• thereof public sector bonds in EUR equivalent: 1,933 mn

Moody’s Rating: Aaa

Nominal / Present Value Over-Collateralization*): 60.4% / 52.1%

Total Value of Sold Covered Bonds as of 31 December 2014 in EUR: 4,370 mn

*) Austrian Mortgage Banking Act requires a nominal over-collateralisation of 2%. The basis for its calculation is a cover pool valuereduced by legally defined haircuts. Taking these haircuts into consideration, the cover pool value amounts to EUR 6,667 mn, thus theovercollateralization is 52.6%.Additionally, in its Articles of Association, UniCredit Bank Austria commits itself to an over-collateralisation on a present value basis.

Parameters of Cover Pool

Weighted Average Life (in years incl. Amortization) 7.0

Contracted Weighted Average Life (in years) 9.4

Average Seasoning (in years) 5.4

Total Number of Loans 3,605

Total Number of Debtors 1,370

Total Number of Guarantors 271

Average Volume of Loans (in EUR) 1,943,671

Stake of 10 Biggest Loans 29.0%

Stake of 10 Biggest Guarantors 34.1%

Stake of Bullet Loans 61.7%

Stake of Fixed Interest Loans 37.0%

Amount of Loans 90 Days Overdue 0

Average Interest Rate 1.7%

Parameters of Issues:

Total Number 39

Average Maturity (in years) 5.1

Average Volume (in EUR) 112,042,451

46

Public SectorMaturity Structure of Cover Pool and Issues

Maturity of Assets in the Cover Pool in mn EUR in %

Maturity up to 12 months 1,296 18.5%

Maturity 12 - 60 months 1,348 19.2%

thereof Maturity 12 - 36 months 358 5.1%


Maturity 60 - 120 months 1,223 17.5%

Maturity longer than 120 months 3,140 44.8%

Total 7,007 100.0%

Maturity of Issued Covered Bonds in mn EUR in %

Maturity up to 12 months 790 18.1%




Maturity 60 - 120 months 2,072 47.4%

Maturity longer than 120 months 338 7.7%

Total 4,370 100.0%

47

Public SectorRegional Breakdown of Assets*) in Austria

*) Considering Guarantors

48

Public SectorAssets Volume Breakdown by Type of Debtor / Guarantor

Assets: Type of Debtor / Guarantor in mn EUR Number

State 550 4

Federal States 2,265 51

Municipalities 1,179 2,586

Guaranteed by State 521 148

Guaranteed by Federal States 1,662 262

Guaranteed by Municipalities 700 471

Other 129 83

Total 7,007 3,605

49

Public SectorVolume Breakdown by Size of Assets

Volume Breakdown by Size of Assets in mn EUR Number

below 300,000 238 2,151

thereof under 100,000 51 1,133

thereof 100,000 - 300,000 187 1,018

300,000 - 5,000,000 1,399 1,319

thereof 300,000 - 500,000 164 423

thereof 500,000 - 1,000,000 315 437

thereof 1,000,000 - 5,000,000 920 459

above 5,000,000 5,370 135

Total 7,007 3,605

50

Executive SummaryBank Austria Mortgage Cover Pool New

Aa1 rating by Moody’s

Bank Austria decided to streamline its Mortgage Cover Pool targeting a simple and transparent

pool composition:

focus on Austrian mortgages only

change to whole loan reporting instead of collateral volume

Benefit:

pure Austrian risk offer to our investor base

no blending of risk, diversification to be decided by investor

simple pricing logic

ECBC Covered Bond Label has been granted to the BA Mortgage Cover Pool

The over-collateralization is approx. € 3.5 bn or 74% (as of 31 December 2014)

Covering of CHF risk in Cover Pool

FX-risks are explicitly considered in the rating process of Moody´s andare reflected as part of their over-collateralization requirement

Moody´s currently requires an OC of 26.5%

Bank Austria contractually committed itself to a higher OC of 32%

Internal Risk Management of Bank Austria

According to the Cover Pool Regulation of Bank Austria NPLs are removed regularly(monthly)

Less than 1% of the loans (175 of 26,000) were taken out in 2014 for this reason

Special safety buffers are designated for CHF Loans

The credit rating of FX-Loans is subject to additional and stricter standards andwill - as always - be evaluated regularly

For CHF Loans an additional FX-buffer of 20% on the credit volume is considered,which must be covered by the credit rating of the client

No new CHF mortgage loans, therefore no inflows into Cover Pool since 2010

Overview 31.12.2014

Issue volume EUR 4.8 bn

Over-collateralization EUR 3.5 bn 31.12.2014 31.01.2015Total Asset Value EUR 8.3 bn o/w CHF EUR 1.6 bn EUR 1.8 bn (22% of total asset value)

Total Cover Value EUR 5.6 bn o/w CHF EUR 670 mln EUR 670 mln (12% of collateral value / HypBG)

(74%)

51

CHF Loans in mortgage Cover Poolare 100% private residential financing

Changes due toCHF revaluation

52

Mortgage Cover PoolParameters of the Cover Pool and Issues

Total Value of the Cover Pool as of 31 December 2014 in EUR equivalent: 8,338 mn

• thereof in EUR: 6,598 mn

• thereof in CHF: 1,632 mn

• thereof substitute cover in EUR: 109 mn

Moody’s Rating: Aa1

Nominal / Present Value Over-Collateralisation*): 74.1% / 80.8%

Total Value of Issued Mortgage Pfandbriefe as of 31 December 2014 in EUR: 4,791 mn

Total Value of Sold Mortgage Pfandbriefe as of 31 December 2014 in EUR: 3,591 mn

*) Austrian Mortgage Banking Act requires a nominal over-collateralization of 2%. The basis for its calculation is a cover pool value reduced by legally definedhaircuts. Taking these haircuts into consideration, the cover pool value amounts to EUR 5,631 mn, thus the overcollateralization is 17.5%. Additionally, in itsArticles of Association, UniCredit Bank Austria commits itself to an over-collateralization on a present value basis.

Parameters of Cover Pool

Weighted Average Life (in years incl. Amortization) 9.4

Contracted Weighted Average Life (in years) 13.8

Average Seasoning (in years) 6.5

Total Number of Loans 26,308

Total Number of Debtors 24,578

Total Number of Mortgages 26,308

Average Volume of Loans (in EUR) 312,827

Stake of 10 Biggest Loans 12.0%

Stake of 10 Biggest Debtors 17.7%

Stake of Bullet Loans 34.8%

Stake of Fixed Interest Loans 13.0%

Amount of Loans 90 Days Overdue 0

Average Interest Rate 1.7%

Parameters of Issues:

Total Number 108

Average Maturity (in years) 5.2

Average Volume (in EUR) 44,357,712

53

Mortgage Cover PoolMaturity Structure of Cover Pool and Issues

Maturity of Assets in the Cover Pool in mn EUR in %


Maturity 12 - 60 months 817 9.8%



Maturity 60 - 120 months 1,557 18.7%

Maturity longer than 120 months 5,236 62.8%

Total 8,338 100.0%

Maturity of Issued Covered Bonds in mn EUR in %




thereof Maturity 36 - 60 months 1,470 30.7%

Maturity 60 - 120 months 1,713 35.8%

Maturity longer than 120 months 475 9.9%

Total 4,791 100.0%

54

Mortgage Cover PoolAssets Volume Breakdown

Volume Breakdown by Size of Loans in mn EUR Number

below 300,000 2,820 23,383

thereof under 100,000 578 10,349

thereof 100,000 - 300,000 2,242 13,034

300,000 - 5,000,000 2,384 2,754

thereof 300,000 - 500,000 533 1,458

thereof 500,000 - 1,000,000 427 614

thereof 1,000,000 - 5,000,000 1,424 682

above 5,000,000 3,134 171

Total 8,338 26,308

55

Mortgage Cover PoolRegional Breakdown *) of Mortgages in Austria

*) Without substitute cover (consists of bonds)

56

Mortgage Cover PoolBreakdown*) by Type of Use

*) Without substitute cover (consists of bonds)

Mortgages Breakdown by Type of Use in mn EUR Number

Residential 3,251 22,670

Residential subsidized 1,745 2,032

Residential used for business purposes 437 1,007

Commercial 2,797 599

thereof Office 1,268 121

thereof Trade 709 62

thereof Tourism 201 77

thereof Agriculture 14 65

thereof mixed Use / Others 605 274

Total 8,230 26,308

57

Mortgage Cover PoolBreakdown*) by Type of Use

Bank Austria’s Mortgage Cover Pool Value accounts for € 8,230 mn as of 31 December 2014

(without substitute cover)

All mortgages in cover pool are located in Austria

The main concentration is in the City of Vienna 38.8% and the state of Lower Austria 26.5%

Breakdown of cover pool by type of use:

66.0% residential real estate (thereof 21.2% subsidized)

34.0% commercial real estate, divides as follows:

Office 15.4%

Trade 8.6%

Tourism 2.4%

Other / Mixed use 7.6%

*) all percent Values are respective cover pool value without substitute cover

58

Bank Austria’s Whole Loan ApproachWhole Loan Approach and its Benefits for Investors

Scenario II = Approach of Bank Austria = Whole Loan Approach

Loan Volume

&

Value to cover issuedPfandbriefe

Scenario I: Split Loan Approach = Minimum Approach

Loan Volumesplit

Value of Mortgage

&

€ 100 € 100 = €60 + €40 € 60

€ 100 € 100 € 100

For optimization of its collateral value

loans are split into 2 parts:

1) included in cover pool and

2) not included in cover pool

The whole loan – and not only its legally

assigned value – is included in the cover

pool to collateralize BA‘s issued

Mortgage Pfandbriefe.

Thus, investors benefit from

collateralization above legal

requirement in BA‘s cover pool.

€60 = MaximumPfandbrief volumeissued accordingto HypBG

€40 = AdditionalPool volume

Value of Mortgage

Not inCover Pool

Loan inCover Pool

Value to cover issuedPfandbriefe

Loan inCover Pool

According to the Austrian Mortgage Banking Act (HypBG), the maximum coverage volume of ”Beleihungswert” is 60%(maximum current outstanding of the loan)

€60 = MaximumPfandbrief volumeissued accordingto HypBG

59

Agenda


Profit & Loss

Liquidity & Funding




Transactions

Annex

Cover Pool

60

Agenda

Annex

Bank Austria within UniCredit Group

Legal Situation – Austrian Covered Bonds

Real Estate Market Austria

61

UniCredit at a glanceA clear international profile based on a strong European identity

1) Source: UniCredit analysis on Sodali Shareholders' ID. All data based on ordinary shares as at 31 March 20142) As at 9 March 2015

Strong local roots in almost 20 countries

~ 130,000 employees

~ 7,500 branches

~ 31 mn customers in Europe

One of the most important banks in Europe

with total assets of ~ € 840 bn

One of the 30 Global Systemically Important

Banks (“G-SIBs”) worldwide

Market capitalization of ~ € 36 bn 2)

Common Equity Tier 1 (CET1) Ratio at 10.02%

under Basel 3 fully loaded

Main shareholders:

Stable shareholders, e.g. Foundations

Institutional investors

Retail investors

Shareholder Structure1)UniCredit Highlights

Retail,miscellaneous

and unidentifiedInvestors

StableShareholders

24.3%

InstitutionalShareholders

27.4%

48.3%

62

Role of Bank Austria within UniCredit

Within UniCredit, Bank Austria is the

Central hub for the CEE Region(except Poland) and the

Responsible unit for the Austrianmarket

Bank Austria benefits from being part ofUniCredit:

Strong market presence in 17European countries

Access to a worldwide network

Leveraging on the know-how of theGroup‘s product factories

Bank Austria as UniCredit‘s centralhub for the CEE Region:

Holding for banks in 13 CEEcountries with a population ofapprox. 300 mn

Managing a network of about1,400 branches and 30,000FTE*) in CEE**)

Development of retail andcorporate business in the region

Liquidity management for theCEE subsidiaries

Management of credit andmarket risk

Responsibility for HRdevelopment

*) FTE = Full-time equivalent**) excl. a further 1,000 branches and ~18,000 FTE of the Turkish Joint Venture

63

Agenda

Annex




64

Austrian Real Estate MarketOverview

The Austrian Real Estate Market is a small, relatively stable market. In the first quarter of

2014, appr. € 650 mn were invested in commercial real estate (according to CBRE)

Top yields in the office market are slightly below 5%. Currently, there is stable demand and a

very limited offer in the office market

The Austrian retail market is saturated. Throughout Austria there is very limited new

construction or extension of shopping centers. The top return regarding shopping centers is

approx. 5.25%.

Prices for residential real estate increased significantly within the last years (see next page).

Austrian National Bank (OeNB) mentions an overvaluation of approx. 22% in the first quarter

2014

According to OeNB, the low increase in real estate loans and a still low indebtedness of

households in an international comparison (and decreasing in relation to the GDP) indicates

a high share of own funds in private real estate purchases

65

Austrian Real Estate MarketPrices for residential real estate

Source: OeNB, TU Wien, Institut für Stadt- und Regionalforschung

Strong increase in residential real estate prices in Vienna

Austria excl. Vienna shows a much more stable development

Wohnimmobilienpreisindex (2000 = 100)

80

100

120

140

160

180

200

220

Q1

00

Q3

00

Q1

01

Q301

Q1

02

Q3

02

Q1

03

Q3

03

Q1

04

Q3

04

Q1

05

Q3

05

Q1

06

Q306

Q1

07

Q3

07

Q1

08

Q3

08

Q1

09

Q3

09

Q1

10

Q3

10

Q1

11

Q311

Q1

12

Q3

12

Q1

13

Q3

13

Q1

14

Wien Österreich ohne Wien

Residential Real Estate Price Index (2000 = 100)

Austria excl. ViennaVienna

66

Austrian Real Estate MarketOffice Market

Source: CBRE, IRG, EHL

The Viennese office market remains one of the most stable ones in Europe

Neuproduktion und VermietungsleistungBüroflächen Wien 2001-2014f

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

400.000

450.000

500.000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

f

Neuflächenproduktion in m² Vermietungsleistung in m²

Office Space in Vienna 2001-2014

New space in m2 Rentable space in m2

67

Agenda

Annex




68

Austrian Legal FrameworkMortgage and Public Sector Pfandbriefe

Austrian Covered Bonds

Pfandbriefe

Pfandbriefgesetz(Pfandbrief Law 1938)

Hypothekenbankgesetz(Mortgage Banking Act 1899)

FundierteSchuldverschreibungen

Law of 1905

Bank Austria

Remark:Austrian ‘Mortgage Pfandbriefe‘ also follow the same legal regulation as ‘Public Sector Pfandbriefe‘

69 * if included in the Articles of Association of the respective credit institution

Austrian„Hypothekenbankgesetz“ wasinitially based on the Germanlegislation

Important changes to theGerman "Pfandbrief" -legislation were followed by theAustrian"Hypothekenbankgesetz",which continues to reflect theprincipal features of theGerman "Pfandbriefgesetz”

Main differences in the currentversion are:

• German law also allowscollateral assets fromnon-European countries

• German law includescompulsory NPV-matching, whereas inAustria a voluntarycommitment is foreseento be stipulated in thearticles of association.Bank Austria, accordingly,included such clause inits articles of association

Comparison Austria vs. Germany

Criteria of Pfandbrief law /Hypothekenbankgesetz

Austria Germany

Pfandbrief law in place YES YES

Mortgage and public sector

collateral assets in separate poolsYES YES

Cover register YES YES

Collateral assets limited to Europe YES X

Legally required minimum over-

collateralizationYES YES

Cover pool monitoring (Trustee) YES YES

Special proceedings in case ofinsolvency

YES YES

Pfandbriefe remain outstanding in

case of issuer‘s bankruptcyYES YES

NPV matching YES* YES

70

Your Contacts

CFO FinanceUniCredit Bank Austria AG

Martin KlauzerHead of FinanceTel. +43 (0) 50505 [email protected]

Thomas Ruzek

Head of Strategic Funding

Tel. +43 (0) 50505 82560

[email protected]

Gabriele WiebogenHead of Long Term FundingTel. +43 (0) 50505 [email protected]

Werner Leitner

Head of Cover Pool Management

Tel. +43 (0) 50505 82647

[email protected]

CFO Planning & Controlling Austria

UniCredit Bank Austria AG

Günther StromengerHead of Corporate RelationsTel. +43 (0) 50505 [email protected]

Impressum

UniCredit Bank Austria AGCFO FinanceA-1010 Vienna, Schottengasse 6-8

71

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