group investor relations july 2000 12345 market leader in the heart of europe analyst/investor...

Group Investor RelationsJuly 2000

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Market leader in the heart of Europe

Analyst/Investor Conference Call

July 2000

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HypoVereinsbank and Bank Austria join forces• Excellent strategic fit and ideal partner for the Bank of Regions in Europe

– Together market leader in the heart of Europe with more than 8 mm customers

• Innovative all share transaction in three steps– Separation of Bank Austria´s operating business into NewCo– Contribution of Bank Austria „new“ into HypoVereinsbank– Dissolution of BA „old“ - BA shareholders will receive 1 HypoVereinsbank

share for every Bank Austria share

• HVB offers attractive 34% premium for BA shares

• Transaction creates substantial value for HVB shareholders– Cost savings potential of Euro 500 mm p.a.– EPS accretive (+15%)– ROE enhancing (Cash ROE + 0,5%)– ROI with 12,6% almost twice as much as comparable transactions– Increases index weighting of HypoVereinsbank by about 25%


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Transaction unlocks significant value potential

• Cross-border transaction with in-market quality– European dimension– Regional, cultural and lingual proximity

• Market leader– Home markets in Southern Germany and Austria– Fast developing CEE growth markets

• Potential for success– Critical mass with more than 8 mm customers in the heart of

Europe– Product know-how (multi-channel retail banking, e-Business, real

estate, Corporate Finance, focused capital markets activities)– Significant cost savings and dynamic revenue growth


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#3 (>10%)

Poland

#4 (>5%)Czech Republic

#4 (>5%)Hungary#1 (>20%)

Austria#1 (>15%)

Bavaria Slovakia #6 (4%)

Germany

#2 (>5%)

Market leader in the heart of Europe with customer potential of 160 mm

HypoVereinsbank Bank Austria HypoVereinsbank/Bank Austria

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HypoVereinsbank and Bank Austria unlock a synergy potential of about € 500 mm p.a.

• Cost savings of € 320 mm p.a. by reducing the regional overlap and savings in the corporate centre, particularly in IT

1. Overlap-synergies

2. Optimizing Bank Austria´s cost platform

• Revenue growth through cross-selling and tapping of new growth areas

• Cost savings of € 175 mm p.a. by optimizing the domestic business

3. Revenue growth


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HypoVereinsbank is the ideal partner for Bank Austria

• Significantly strengthening of our position in the CEE markets– Contribution of HVB’s activities strengthens operating platform

– Enhances capital base for further growth in Central and Eastern Europe

– Co-ordination of all CEE activities out of Vienna

• HypoVereinsbank contributes sophisticated product know-how– Real estate finance (growth market in CEE!)

– Internet retail banking

– Asset management

• Economic interdependence of core markets, geographic and lingual proximity

• Harmony of Bank Austria’s strategy with HypoVereinsbank’s Bank of Regions philosophy


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Together the market leader in CEE with strong presence in all candidate-states for EU accession• HypoVereinsbank and Bank

Austria networks and client segments are highly complementary

• Best diversified network with broadest market penetration

• Excellent expertise in capital markets

• Strong brand name due to local branding

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8

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12

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Poland Czech Republic Hungary Others

HVB/BA Citibank KBC* Unicredito BA HVB

Source: Bankscope and J.P. Morgan Research, allocation of assets per quota when ownership < 100%* excluding IPB assets transferred

in € bn

Total assets of foreign banks


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Transaction milestones

July 24 Announcement of the transaction

End of August Invitation to Bank Austria EGM

September 27 Bank Austria EGM

Q1 2001 Exchange of Bank Austria shares in HypoVereinsbank shares


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Appendix: detailed transaction structure

1. Separation of operating business into NewCo• Tax neutral separation of Bank Austria’s business into a

subsidiary (NewCo)• Requires extraordinary shareholders’ meeting of BA

2. Contribution into HypoVereinsbank• Tax neutral contribution in kind of Bank Austria NewCo

shares against new HVB shares (using HVB’s authorized capital)

• No shareholders meeting of HVB necessary

3. Dissolution of Bank Austria “holding” through a „down-stream“ merger

• Bank Austria “holding” will be dissolved to avoid a holding company discount for BA shareholders

• Bank Austria shareholders will receive HypoVereinsbank shares and are now direct HVB shareholders

• Listing of HypoVereinsbank share in Frankfurt and Vienna

Bank AustriaNew Co

Bank Austria

100%

Bank AustriaHypoVereinsbank 21%

Bank AustriaNewCo

100%

HypoVereinsbank

Bank AustriaNewCo

100%

Bank Austriashareholders

21%

group investor relations july 2000 12345 market leader in the heart of europe analyst/investor...

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