RZB achieves new record result

ROE exceeds 25 per cent. Balance-sheet total plus 17 per cent. Strong equity base. One-off effects provide additional boost for the result.

The year 2006 was dominated by the figure 100 for Raiffeisen Zentralbank Österreich AG (RZB). The RZB Group passed the benchmark figure in no less than three categories: Its balance-sheet total exceeded 100 billion euros, it moved up the ladder into the circle of the world's Top-100 banks and Raiffeisen International Bank-Holding AG's share price surpassed 100 euros. Adding some income flavour to this hattrick, another record result, reinforced by one-off effects, is expected.

Balance-sheet total to exceed 110 billion euros

Having surpassed the mark of 100 billion euros in total assets, RZB is now among the world's 100 largest banks, as per the reliable statistics of the Financial Times publication The Banker. According to projections, the group's balance-sheet total as of year-end will grow by 17 per cent year-on-year to more than 110 billion euros. "This growth is above all organic," commented Walter Rothensteiner, CEO of the RZB Group. "Noticeable as they were, both acquisitions of 2006, Russian Impexbank and Czech eBanka, together account for only one seventh of the increase in our assets."

Success in corporate business

Business with corporate customers serviced out of Vienna – on of the Group's core business segments – has again developed very favourably. This segment's projected profit contribution increased by 65 per cent. Export business, another strong pillar of RZB's income statement, filed significant gains in market share again. RZB once again arranged the largest number of syndicated-loan transactions for corporate customers in CEE and also takes a leading position worldwide with 88 deals for financial institutions. In total RZB arranged 129 syndicated-loan transactions.

Expected consolidated profit 700 million euros without one-off effects

RZB's result will get additional boost by high one-off effects of around 600 million euros resulting from the sale of former Raiffeisenbank Ukraine (now OTP Bank), the sale of the minority stake in Kazakh Bank TuranAlem and the sale of a real-estate property in Warsaw. Consolidated profit after tax and minorities is expected to reach more than 1.5 billion euros, corresponding to an increase of more than 150 per cent. Disregarding these one-off effects, consolidated profit will still increase by approximately 55 per cent to more than 700 million euros.

Profit before tax is estimated to reach more than 1.2 billion euros (1.8 billion euros including one-off effects). Profit after tax is anticipated at more than 960 million euros (and at more than 1.6 billion euros with the mentioned one-off effects). The profit contribution of Raiffeisen International – the company managing the Network Banks, leasing units and specialist companies in Central and Eastern Europe (CEE) – continues to be disproportionately high in 2006.

Own funds increase to 7.4 billion euros

The RZB Group's attributable own funds are forecast to increase by approximately 40 per cent to more than 7.4 billion euros. The excess-cover ratio would therefore exceed 28 per cent. "RZB disposes of a comfortable capital basis to fund the further growth in CEE," said Rothensteiner.

Growing ROE and strongly growing own funds

In spite of strongly growing own funds – the own funds ratio will exceed 10 per cent – return on Equity (ROE) before tax is anticipated at 25 per cent (disregarding one-off effects, 2005: 23.9 per cent. Including the mentioned one-off effects, ROE would be 38 per cent.

Despite the continual strong expansion, the Group's Cost/income ratio will again improve. While 58.9 cent had to be paid in cost for every euro earned in 2005, it is expected to be less the 57 cent this year.

More than 55,000 employees

The RZB Group's growth rate is not least reflected in its development in staff figures. "We create jobs at home and abroad. This year alone, we will add more than 2,800 to our qualified workforce," said Rothensteiner. As per year-end, the number of staff will be approximately 55,400 (31 December 2005: 46,243). Included in that number are about 5,400 staff members of Impexbank and about 900 of eBanka.

RZB Group result outlook 2006*

* Previews rounded downwards
** IFRS-figures fo 2005
*** full-time equivalents"