Bank Austria Creditanstalt - Annual Report 2005

“We see ourselves as intermediaries in the markets. We help regional customers in Central and Eastern Europe to access global financial markets and support global investors entering the growth markets in Central and Eastern Europe.”

Willi Hemetsberger, Managing Board member responsible for International Markets

The International Markets business segment comprises BA-CA’s operations in international financial markets. INM links financial markets, customers and the bank.

INM also performs an essential complementary function as a centre of competence for commercial customer business, in which derivative financial instruments play an increasingly important role.

We help global companies to access markets in Central and Eastern Europe, offering them a comprehensive range of tailor-made services to meet their specific needs.

We assist medium-sized companies in their efforts to modernise their financial management and optimise their risk management.

The unique selling proposition of the International Markets business segment – within the Group and in the market – is its emerging markets competence, in both sales and primary market activities. INM conducts the financial market transactions of BA-CA’s banking subsidiaries and thus ensures uniform service standards for our customers, irrespective of a market’s stage of development.

INM’s proprietary trading operations are the basis for all these functions. In this area INM looks back on a steady upward trend in results in a varying market environment. The wide diversification of trading activities made a significant contribution to the steady improvement in results.

Over the past years, International Markets has made a growing contribution to BA-CA’s profits. An important aspect in this context is equity allocated to the business segment: in the past years, mainly as a result of the growing use of derivatives, the amount of capital employed by INM declined significantly while business volume rose. In 2005, operating revenues including the net result from investments exceeded € 300 m. Accounting for 3% of total equity allocated to BA-CA’s business segments, INM generated 12% of BA-CA’s net income. The ROE after taxes reached 58.4%. All areas of proprietary trading and customer business contributed to these excellent results.

In 2005, International Markets pursued further growth in customer business:

A strategic focus was on rolling out derivative financial products for companies across the entire CEE network. On the model of the successful Treasury Sales strategy in Austria, we launched the CEE Sales Initiative in cooperation with account managers in the Central and Eastern Europe business segment. We are thereby responding to strongly growing demand from young and modern CEE companies, and we also aim to achieve a sustainable increase in risk-free fee and commission income from sales of derivative products. Following the set-up of the required systems, we are now in a position to offer all derivative products and structures available in the BA-CA Group also to business customers in CEE, which enables us to tap new earnings and customer business potential.
Another strategic objective in 2005 was to intensify services for institutional customers. We bundled the relevant sales activities within the Institutional Sales & Origination unit with a view to offering these customers tailor-made solutions from a single source. We also created the conditions required for business relations with hedge funds, a customer group with which we aim to intensify business relations using our emerging markets expertise.

INM Awards

Global Finance

Best FX Bank in CEE
Best FX Bank in Austria

Finance New Europe

Best Investment Bank in CEE (CA IB)
Best Equity House in CEE (CA IB)
Best Regional Brokerage House in CEE (CA IB)

Rzeczpospolita

Most active IPO House in Poland 2005 (CA IB)

Global Custodian

“Best Agent Bank in Central and Eastern European Markets”
“Top Rated Agent Bank” in
Bulgaria (HVB Bank Biochim)
Croatia (HVB Splitska Banka)
Hungary (HVB Bank Hungary)
Poland (Bank BPH)
Romania (HVB Bank Romania)
Russia (International Moscow Bank)
Ukraine (HVB Bank Ukraine)

Global Investor “European sub-custody review”
1st place (weighted) in:

Czech Republic (HVB Bank Czech Republic)
Poland (Bank BPH)
Slovakia (HVB Bank Slovakia)
Slovenia (Bank Austria Creditanstalt)

Institutional Investor

Best Equity Research in Hungary and Poland (CA IB)

Thomson Financial/Extel

Best Research in CEE (CA IB)

Euromoney

Best Equity House in Hungary (CA IB)

International Markets (INM)