(3) Business combinations and disposals

Compared with the previous year, there have been the following changes in the group of consolidated companies of Bank Austria Creditanstalt:

On 1 January 2005, BPH Leasing S.A., Warsaw, was included in the group of consolidated companies in view of the dynamic development of the leasing business in Poland and its growing importance to results from the leasing activities of Bank BPH S.A.

At the end of February 2005, Austria Finanza S.P.A., Treviso, and Austrolease S.P.A., Bolzano, were sold. Bank Austria Creditanstalt Leasing GmbH sold these two companies to Fortis Lease Group S.A. against a cash payment of € 32 m. This transaction results in a profit of € 17 m in the BA-CA Group.

The closing of the purchase of Hebros Bank, Plovdiv, Bulgaria, took place on 1 March 2005. The Bank Austria Creditanstalt Group acquired 99.91% (13,690,107 shares) of Hebros Bank. In this context, Bank Austria Creditanstalt acquired 89.92% and Biochim Bank, Sofia (a 99.7% subsidiary of Bank Austria Creditanstalt AG), acquired 9.99% of Hebros Bank. The purchase price of € 124 m was paid in cash.

The purchase of Hebros Bank results in goodwill of € 81.5 m in the Bank Austria Creditanstalt Group.

In the middle of August 2005, the Bank Austria Creditanstalt Group sold its 28.23% interest in Investkredit Bank AG, Vienna.

On 1 September 2005, the acquisition of Banca Comerciala “Ion Tiriac” S.A., Bucharest, Romania, was completed by way of a purchase of shares and an exchange of shares. It is intended to merge Banca Comerciala “Ion Tiriac” S.A. with HVB Bank Romania S.A., Bucharest.

Bank Austria Creditanstalt acquired 9.09% of Banca Comerciala “Ion Tiriac” S.A. (1,827,783 shares). The preliminary purchase price for this equity interest (€ 42.5 m) – depending on the financial statements to be certified by independent public accountants as at the closing date – was paid in cash. At the same time, Bank Austria Creditanstalt acquired 8,225,010 shares in Banca Comerciala “Ion Tiriac” (equivalent to a 40.91% interest) in exchange for 50% less one share in HVB Bank Romania S.A., Bucharest.

In connection with this transaction, Bank Austria Creditanstalt made a payment, which in effect is tantamount to a non-repayable shareholder contribution of € 40 m, to a company which is managed jointly with Mr Tiriac and in which Bank Austria Creditanstalt holds a 30% interest. Following completion of the transaction, Bank Austria Creditanstalt now holds 10,052,793 shares in Banca Comerciala “Ion Tiriac” S.A. (corresponding to 50% of the share capital plus one share).

Overall, the preliminary purchase price of the entire transaction including incidental acquisition expenses is € 252.8 m. Following the measurement of assets and liabilities as well as the identification of intangible assets, this results in a difference of € 178.7 m between the purchase price and the net assets of Banca Comerciala “Ion Tiriac” S.A.; the differential amount was allocated to goodwill for the time being. The price of the transaction reflects the intrinsic value of Banca Tiriac, the synergies that can be achieved and, above all, the potential of the Romanian market.

Eksimbanka, Belgrade, Serbia and Montenegro, was merged with HVB Bank Serbia and Montenegro on 1 October 2005 and included in the group of consolidated companies as at the same date. Since then the new bank has operated under the name of “HVB Banka Srbija i Crna Gora A.D.”. The difference of € 24.9 m between acquisition cost and net assets of the merged bank was allocated to goodwill for the time being.

At the end of December 2005, Hypo Stavebni Sporitelna, Prague, the mortgage bank of HVB Czech Republic, was included in the group of consolidated companies.