FORESIGHT - btv-bank.de · Dechant-Wieshofer-Str. 7 6380 St. Johann in Tirol T +43/(0)5 05 333-0 F...

FORESIGHT

BUSINESS REPORT 2014

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KEY INDICATORS 2014ADDRESSES

The BTV Group at a glance

INCOME in € million

2014 2013* Change in %

Net interest income 182.3 180.2 +1.1 %Loan-loss provisions in the credit business –29.0 –46.9 –38.1 %Net commission income 43.7 45.3 –3.4 %Operating expenses –139.6 –96.0 +45.4 %Other operating income/expenditure 30.0 –2.3 >–100 %Annual net profit before tax 89.8 86.3 +4.0 %Group net profit for the year 76.1 68.5 +11.0 %

BALANCE SHEET in € million

31.12.2014 31.12.2013* Change in %

Total assets 9,598 9,592 +0.1 %Loans and advances to clients after loan loss provisions 6,187 6,197 –0.2 %Primary funds 6,919 6,702 +3.2 % – of which savings deposits 1,176 1,176 +0.0 % – of which securitised debt including subordinated capital 1,392 1,282 +8.5 %Equity 1,004 933 +7.7 %Managed deposits 12,156 11,532 +5.4 %

EQUITY UNDER CRR (BWG PREVIOUS YEAR) in € million

31.12.2014 31.12.2013 Change in %

Risk-adjusted assets 6,213 6,055 +2.6 %Equity 930 964 –3.5 % – of which common equity (CET1) 796 n. a. n. a. – of which total core capital (CET1 and AT1) 796 807 –1.4 %Common equity Tier 1 ratio 12.81 % n. a. n. a.Core capital ratio 12.81 % 13.33 % –0.52 %-ppEquity ratio 14.97 % 15.93 % –0.96 %-pp

COMPANY KEY FIGURES in percentage points

31.12.2014 31.12.2013* Change in percentage

points

Return on equity before tax (RoE) 9.27 % 9.50 % –0.23 ppReturn on Equity after tax 7.86 % 7.54 % +0.32 ppCost/income ratio 54.4 % 42.8 % +11.6 ppRisk/earnings ratio 15.9 % 26.0 % –10.1 pp

RESOURCES Number

31.12.2014 31.12.2013 Change figure

Weighted average number of employees 1,195 793 +402Number of branches 38 37 +1

KEY INDICATORS FOR BTV SHARES 31.12.2014 31.12.2013*

Number of ordinary no par value shares 22,500,000 22,500,000Number of preference shares 2,500,000 2,500,000Top price of ordinary/preference share in € 21.90/18.00 19.50/16.60Bottom price of ordinary/preference share in € 19.50/16.50 17.30/15.45Closing price of ordinary/preference share in € 21.35/18.00 19.50/16.50Market capitalisation in € million 525 480IFRS EPS in € 3.04 2.74P/E ratio, ordinary share 7.0 7.1P/E ratio, preference share 5.9 6.0* In 2013 adjusted to the changed consolidation scope. Explanation: n.s. = not shown

Shareholder structure

BTV SHAREHOLDER STRUCTURE BY SIZE OF HOLDING

*) Shareholders who form part of the syndicate agreement.

37.53% CABO Beteiligungs GmbH, Vienna

13.59% BKS Bank AG, Klagenfurt *)

13.22% Oberbank AG, Linz *)

19.42 % Widely spread shareholdings

13.60% Generali 3 Banken Holding AG, Vienna *)

2.28% Wüstenrot Wohnungswirtschaft reg. Gen.mbH, Salzburg *)

BTV SHAREHOLDER STRUCTURE BY VOTING RIGHTS


41.70 % CABO Beteiligungsgesellschaft GmbH, Vienna

15.10 % BKS Bank AG, Klagenfurt *)

2.53 % Wüstenrot Wohnungswirtschaft reg. Gen.mbH, Salzburg *)


14.69 % Oberbank AG, Linz *)


0.40 % BTV Private Foundation


IMPORTANT DATES FOR BTV SHAREHOLDERSAnnual General Meeting 13 May 2014, 10.00 am, Stadtforum 1, Innsbruck

The dividend will be published on the BTV homepage and in the gazette of the Wiener Zeitung the day after the Annual General Meeting.

Ex-dividend date 22.05.2015Payment of dividend 26.05.2015Interim report as at 31 March 2015 Published on 22 May 2015 (www.btv.at)Interim Financial Report up to 30 June 2015 Published on 21 August 2015 (www.btv.at)Interim report as at 30 September 2015 Published on 27 November 2015 (www.btv.at)

Switzerland

Vienna

Tyrol

Baden- Württemberg

VBG

Alto Adige

Trentino

BavariaStuttgart

Munich

Ravensburg

Memmingen

Staad

InnsbruckDornbirn

KitzbühelWinterthur

Garmisch- Partenkirchen

Lienz

Nuremberg

Germany BTV LeasingVienna

Albertinaplatz Corporate clientsTegetthoffstraße 71010 WienT +43/(0)5 05 333-8723F +43/(0)5 05 [email protected]

Albertinaplatz Retail clientsTegetthoffstraße 71010 WienT +43/(0)5 05 333-8744F +43/(0)5 05 [email protected]

StaadHauptstrasse 199422 StaadT +41/71/85 810-10F +41/71/85 810-11 (Retail clients)F +41/71/85 810-12 (Corporate clients)[email protected]

Bavaria

Garmisch-PartenkirchenMohrenplatz 682467 Garmisch- PartenkirchenT +49/8821/75 26 85-0F +49/8821/75 26 85-7344Key indicators for btv shares

MemmingenFlach VillaBuxacher Straße 187700 MemmingenT +49/8331/92 77-8F +49/8331/92 [email protected]

MunichNeuhauser Straße 580331 MünchenT +49/89/255 44 730-8F +49/89/255 44 [email protected]

AugsburgNagahama-Allee 7586153 Augsburg T +49/821/59 980-8F +49/821/59 980-7144 [email protected] Nuremberg (from 5 January 2015)Gleißbühlstraße 290402 NurembergT +49/911/23 42 08-0F +49/911/23 42 [email protected]

Baden-Württemberg

Ravensburg /WeingartenFranz-Beer-Straße 11188250 WeingartenT +49/751/56 116-0 F +49/751/56 [email protected]

StuttgartIndustriestraße 470565 Stuttgart (Vaihingen)T +49/711/787 803-8F +49/711/787 [email protected]

BTV headquarters

Innsbruck Head OfficeStadtforum 16020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Business area Retail clientsT +43/(0)5 05 333-1111F +43/(0)5 05 [email protected]

Business area Corporate clientsT +43/(0)5 05 333-1301F +43/(0)5 05 [email protected]

Business area Institutional clients and banksT +43/(0)5 05 333-1204F +43/(0)5 05 [email protected]

Service centreT +43/(0)5 05 [email protected]

Finance & controllingT +43/(0)5 05 333-1430F +43/(0)5 05 [email protected]

Corporate auditT +43/(0)5 05 333-1534F +43/(0)5 05 [email protected]

Credit managementT +43/(0)5 05 333-1361F +43/(0)5 05 [email protected]

Marketing and Communications T +43/(0)5 05 333-1403F +43/(0)5 05 [email protected]

Human resourcesT +43/(0)5 05 333-1464F +43/(0)5 05 [email protected]

Legal and corporate investmentsT +43/(0)5 05 333-1501F +43/(0)5 05 [email protected]

Switzerland

BludenzWerdenbergerstraße 146700 BludenzT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

BregenzKaiserstraße 336900 BregenzT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Bregenz VorklosterMariahilfstraße 45 a6900 BregenzT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

DornbirnKlostergasse 86850 DornbirnT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

FeldkirchBahnhofstraße 86800 FeldkirchT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

GötzisIm Buch 66840 GötzisT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

WolfurtUnterlinden 236922 WolfurtT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

EhrwaldKirchplatz 21 a6632 EhrwaldT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

ImstDr.-Pfeiffenberger-Str. 186460 ImstT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

LandeckMalser Straße 346500 LandeckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

ReutteUntermarkt 236600 ReutteT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

SöldenDorfstraße 316450 SöldenT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

TelfsAnton-Auer-Straße 26410 TelfsT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

KirchbichlCorporate clientsE3 Wirtschaftspark KirchbichlEuropastraße 86322 KirchbichlT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

KitzbühelVorderstadt No. 96370 KitzbühelT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

KufsteinOberer Stadtplatz 46330 KufsteinT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

MayrhofenHauptstraße 4406290 MayrhofenT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

SchwazInnsbrucker Straße 56130 SchwazT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

St. Johann in TirolDechant-Wieshofer-Str. 76380 St. Johann in TirolT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

WörglBahnhofstraße 186300 WörglT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-DEZAmraser-See-Straße 56 a6020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-Hötting*Schneeburggasse 76020 Innsbruck

Innsbruck-Mitterweg Mitterweg 9 6020 Innsbruck T +43/(0)5 05 333-0 F +43/(0)5 05 333-4025 [email protected]

Innsbruck- Olympisches DorfSchützenstraße 496020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-SonnparkAmraser Straße 546020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-StadtforumStadtforum 16020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-WiltenLeopoldstraße 31 a6020 Innsbruck

Hall in TirolStadtgraben 196060 Hall in TirolT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

SeefeldKlosterstraße 3976100 SeefeldT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

VölsBahnhofstraße 38 a6176 VölsT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

LienzSüdtiroler Platz 29900 LienzT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

BTV VIER LÄNDER BANK

Tiroler Oberland and Außerfern

Tiroler UnterlandVorarlberg Innsbruck Stadt Innsbruck Land/East Tyrol

Addresses

* Only BTV service area

BTV Stadtforum6020 InnsbruckT +43/(0)5 05 333-2028F +43/(0)5 05 [email protected] www.btv-leasing.com

BregenzKaiserstraße 336900 Bregenz T +43/(0)5 05 333-6006F +43/(0)5 05 [email protected]

Albertinaplatz ViennaTegetthoffstraße 71010 Wien T +43/(0)5 05 333-8818F +43/(0)5 05 [email protected]

BTV Leasing Schweiz AGStaadHauptstrasse 199422 Staad T +41/71/85 810-74F +41/71/85 [email protected]

WinterthurZürcherstrasse 468400 Winterthur T +41/52/20 40 450F +41/71/85 [email protected]

BTV Leasing Deutschland GmbHGeschäftsstelle MünchenNeuhauser Straße 580331 München T +49/89/255 44 730-7542F +49/89/255 44 [email protected]

AugsburgNagahama-Allee 7586153 Augsburg T +49/821/59 980-7170F +49/821/59 [email protected] Nuremberg ~ (from 5 January 2015)Gleißbühlstraße 290402 NurembergT +49/911/23 42 08-7650F +49/911/23 42 [email protected]

Ravensburg /WeingartenFranz-Beer-Straße 11188250 Weingarten T +49/751/56 116-7231F +49/751/56 [email protected]

StuttgartIndustriestraße 470565 Stuttgart (Vaihingen) T +49/711/78 78 03-7450F +49/711/78 78 [email protected]

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ManageMent reportgroup FinanCiaL stateMents

Contents

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history and strategy 12retail clients 14Corporate clients 16institutional clients and banks 18Vienna 19switzerland 19

northern italy 20southern germany 20BtV Leasing 21the BtV brand 22

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Contents 01Letter from the Board 02introducing the BtV management 04

BTV head office and market chiefs 06 Milestones 2014 08

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economic environment 24Business trends 26Compliance and money laundering 37BtV employees 38

report on the internal control system for the financial reporting process 40shares and shareholder structure 42outlook 44

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Group financial statements 2014 47Balance sheet 50statement of comprehensive income 51statement of change in equity 52Cash flow statement 53 BtV group: notes 2014 54 accounting and valuation principles 54statement by the statutory representatives according to the stock exchange act 152

report from independent auditors 153report from the supervisory board 155BtV group - a 5-year overview 1573 Banks shareholder structure 159overview of 3 Banken group – group information 160imprint 161

BTV Business RepoRT 2014 |01

peter gaugg and Matthias Moncher jointly signed off their first BTV balance sheet about 20 years ago. „We had ambitious goals. We wanted to continue the growth path of our mentor Dr gerhard Moser († 2013), who sat on the BTV Board for 33 years.“

it was a time of change in an increasingly close-knit Europe. And in terms of its opportunities. There was a spirit of optimism. Europe became the major domestic market, austria joined the eu in 1995 and the EU introduced the euro in 2002. And what about BtV? it followed the needs of its customers that were carrying out their business increasingly internationally. In 2004 BTV opened its first foreign branch in switzerland and at the same time started to look after Italian customers. This was then fol-lowed by a move into Southern Germany in 2005. Today the „expansion markets“ belong to BTV, as do Tyrol and Vorarlberg. This is why the brand name has also been changed to BtV Vier LÄnDer BanK: our heart has been beating for a long time not only in tyrol and Vorarlberg, but also in Vienna, Switzerland, Southern Germany and Northern Italy.

The question is whether we can expand prudently. We can if we remain true to ourselves. Despite or even because of its progressive thinking, BtV has remained the same after 110 years: the best net-worked principal bank for small to medium-sized, export-oriented corporate clients and discerning retail clients in the most attractive economic area of Europe. BTV has done its utmost to look after our customers as equals, to be a genuine „sparring partner“ and thus exceed expectations. A service provider lives by the quality of its service. BTV nev-er wanted to differentiate based on the best price and become a mass supplier, rather it wanted to re-main a premium bank. To bridge the gap between meeting sophisticated demands and providing a reliable, local service. To enthrall our customers and grow their number by word of mouth.

This has been a success. It was bound to be, as BTV has always been able to act independently and autono-mously, quickly and flexibly as regards our corporate clients. Defending BTV‘s independence will also remain the ultimate objective in the next 110 years. As only then can we offer customised financial solutions. and only then will our business model remain as it is: customer commitment, enterprise and stability of value. There has not been a single change in strategy since BTV was founded in 1904. BTV has always been a corporate and asset management bank. BTV still holds its regionality in high esteem: this is where we are at home, this is where we know our way around, this is where we invest.

Continuity, regionality and a strong focus on custom-ers have a uniting effect. And on the Board. Thus, there has only been one change at the top of the company in the last 53 years. After 20 years the time was right again to consider a rigorously planned succession. The opportunity could not have been better: our dream successors of gerhard Burtscher, Mario pabst and Michael Perger will join the Board on 1 January 2016. gerhard Burtscher has worked at BtV for 26 years and has already been a Board member for one and a half years. Mario Pabst has been with the company for 25 years and Michael Perger 18 years. The three new Board members will uphold BTV‘s core pillars: independence, enterprise, refreshing conservatism and complete customer focus.

BTV‘s opportunities are becoming greater than ever before, because customers never used to scru-tinise a bank‘s security and stability so rigorously. they never used to be interested so fervently in our business model. BTV constantly benefits from this change in customer requirements.

We are grateful. For what was and what will be. 110 years of BTV, over 7,500 satisfied corporate clients and 110,000 discerning retail clients are more than a good basis.

together, we say thanK You,

Foresight

We have reached the end of two extremely successful decades. But this is only the beginning.

Mag. Matthias Moncher peter gaugg gerhard Burtscher

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MANAGEMENT REPORTGROUP FINANCIAL STATEMENTS

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Photographs of the Board and management (next page) taken by Nicoló Degiorgis. Born in Bolzano in 1985, this photographer has been exhibiting his work in FO.KU.S at the BTV Stadtforum since 2012. In 2014 Degiorgis published the books entitled Oasis Hotel and Hidden Islam, for which he has been awarded several prizes. www.nicolodegiorgis.com

02|03 BTV BUSINESS REPORT 2014

Introducing the BTV managementThe BTV management comprises the marketing managers for retail and corporate clients in all BTV markets and the managers of internal divisions. After the Board, the BTV management is the level of management that essen-tially promotes the implementation of the overall banking strategy and so reinforces the BTV brand as a model for its teams.

01 Member of the BTV Board of Directors

Mag. Matthias Moncher

02 Spokesman for the BTV Board of Directors Peter Gaugg

03 Member of the BTV Board of Directors Gerhard Burtscher

04 Representative of Board members*/ Retail clients division

Michael Perger

05 Representative of Board members*/ Finance & controlling

Mario Pabst

06 Service centre Michael Draschl

07 Corporate audit Richard Altstätter

08 Legal and corporate invest-ments Dr Stefan Heidinger

09 Human resources Mag. Ursula Randolf

10 Institutional clients and banks division Mag. Rainer Gschnitzer

11 Marketing & Communications Mag. Matthias Ampferer

12 Credit management Mag. Robert Walcher

13 Northern Italy Private Mag. Manuele Lussu

14 Corporate clients division Mag. (FH) Karl Silly

01 02 03 04 05 06 07 08 09 10 11 12 13 14

* as from 28.11.2014

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15 Kitzbühel-München Private Mag. Peter Kofler

16 Southern Germany corporate Dr Hansjörg Müller

17 Vienna corporate Mag. Martina Pagitz

18 Vienna private Josef Sebesta

19 Switzerland Mag. Markus Scherer

20 Tiroler Unterland corporate

Stephan Haas

21 Tiroler Oberland and Aus-serfern corporate

Michael Falkner

22 Vorarlberg corporate Mag. Michael Gebhard

23 Tyrol and Vorarlberg Private

Mag. Stefan Nardin

24 Tyrol and Vorarlberg Private

Bernd Scheidweiler

25 Innsbruck corporate Thomas Gapp

26 BTV Leasing Gerd Schwab

27 BTV Leasing Johannes Wukowitsch

28 C3 Logistik Mag. Elmar Schlattinger

29 3 Banks Insurance Brokers Wilfried Suitner

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

04|05 BTV BUSINESS REPORT 2014

BtV head office and market chiefs

Corporate ClientsMag. (FH) Karl Silly

– Direct supervision corporate financing

Mag. Martin Krismer– Direct supervision payment

transactions rudolf oberleiter– Direct supervision interest,

currency and liquidity management

helmut pfurtscheller

retail ClientsMichael perger

– branch business harald gapp– productive investment Mag. Martin Mausser – asset management Dr Jürgen Brockhoff

BtV stadtforum headquarters

Credit managementMag. Robert Walcher

– germany and switzerland Corporate clients

Christoph Meister– austria and south tyrol Corporate clients MMMag. Johannes Öfner– retail clients Mag. Martin Schwabl – reorganisation management Mag. Paul Jäger

marketing and CommuniCationsMag. Matthias Ampferer

Corporate auditrichard altstätter

obmannCentral works CounCilharald gapp

ComplianCe and money laundering preventionMag. Martin RohnerManfred unterwurzacher

btv leasinggerd schwabJohannes Wukowitsch

Human resourCesMag. Ursula Randolf

– human resources support Friedrich Braito

institutional Clients and banksMag. Rainer Gschnitzer

– Client account management Mag. Bettina Lussu

legal and Corporate investmentsDr stefan heidinger

FinanCe & ControllingMario pabst

serviCe CentreMichael Draschl

– securities service sabine Dadak-nedl– payment and commerce Christine schurl

3 banks insuranCe brokersWilfried suitner

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BTV‘s Markets

tyrol and vorarlberg privateMag. Stefan NardinBernd scheidweiler

– innsbruck central Claudia Kaufmann– innsbruck West Mag. Eva-Maria Ringler – innsbruck east norbert peer– hall Kurt Moser– unterinntal and Zillertal robert Lang– St. Johann Markus Lanzinger– seefeld and garmisch-partenkirchen stefan glas– tyrolean oberland Wilfried gabl– ausserfern urs schmid

– Bludenz patrik Lauermann– Lake Constance Christof Kogler– rhine Valley Mag. Carmen Kresser-Wolf– Montfort hubert Kotz– Mobile housing construction Vorarlberg Manfred angermann

expert team

– productive investment expert team Dr peter strele – professions innsbruck edi plattner– Mobile housing construction tyrol Ludwig grolich– Co-support stadtforum Mag. Kerstin Schuchter

innsbruCk Corporate thomas gapp

– Key accounts and special financing– property, tourism and south tyrol Mag. Christoph Wenzl– sMes

tiroler oberland and ausserFern CorporateMichael Falkner

– imst– reutte andreas Wilhelm

tiroler unterland Corporatestephan haas

– Co-support Mag. Günter Mader

vorarlberg CorporateMag. Michael Gebhard

– Co-support evelin stöckler– sMes and tourism Mag. Benno Wagner– Key accounts and special financing Mag. Philipp Schöflinger

vienna privateJosef sebesta

– productive investment expert team– Liberal professions, Vienna Jürgen Jungmayer

vienna CorporateMag. Martina Pagitz

– Key accounts and special financing – real estate and project financing– small and medium-sized companies 1 Walter tacha– small and medium-sized companies 2 Mag. Nina Steinacher, M.BC.

nortHern italy privateMag. Manuele Lussu

– support for productive investment italy– Co-support italy– east tyrol private Manfred steurer

switzerland private Mag. Markus Scherer

– staad

switzerland CorporateMag. Markus Scherer – staad– Co-support Mag. (FH) Markus Hämmerle

kitzbüHel-münCHen privateMag. Peter Kofler

– Kitzbühel Mag. Michael Sommer– Munich– augsburg

soutHern germany CorporateDr hansjörg Müller

– Munich– augsburg– Memmingen tobias Bott – ravensburg andreas Kleiner – stuttgart stefan Fischer

|07 06 BtV Business report 2014

Milestones 2014

For 110 years, BtV has proved that this region is the best breeding ground for long-term, successful business activity. In 2014 BTV invested in new sites in Bludenz, Dornbirn, Winterthur, Memmingen and nuremberg, which will open in 2015 and 2016. BTV has been serving its customers in garmisch-partenkirchen since the autumn.

Only someone going his own way cannot be overtaken by anyone: BTV‘s employees followed this motto in 2014 too and made a strong impact.

institutionaL CLients anD BanKs• tyrol sent out an invitation: BtV invited austrian

and international banking partners to a networking and specialist event in Stubaital in Tyrol.

• networking by institutional clients: For the first time, BtV brought institutional clients together as part of a networking and specialist event at BTV Vienna.

• actively dealing with the german capital market: the institutional Clients and Banks division increased its presence among german banking partners to place BTV issues and promissory notes.

• strong network for partners: BtV maintains contacts with over 900 banking partners across the globe.

retaiL CLients• BtV is now also in garmisch-partenkirchen:

BtV investment experts now also serve their customers in Garmisch-Partenkirchen.

• top asset management: the asset managers increased the managed volume (strategic and Premium asset management) by 28%.

• Dynamic strategy asset management in ChF: With the Dynamic strategy asset management in ChF, customers used swiss francs as a crisis-proof currency.

• subordinate BtV loans: Customers made a long-term investment in BTV at attractive terms.

• excellent: For the austrian Dachfonds award, 3 Banken-generali Kag was awarded again for its asset management.*

• ‚firstfive‘ award: BtV ranked once again amongst the top five asset managers in the balanced risk class (12 and 60 months).*

• Clients make provisions: BtV was pleased to announce numerous new orders for its retirement planning products.

• Well insured: With its partner generali, BtV offered a highly flexible, lifelong pension plan – the Generali LifePlan.

• home construction/3-Banken Wohnbaubank ag: More than €140 million flowed into the creation of new housing space.

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* Awards and successes in the past do not guarantee success or continued growth in the future. More information at: www.btv.at/auszeichnungen.

Corporate CLients• number 1 export bank: For export fund financing,

BtV clearly ranked as number 1 among banks in Western Austria.

• securing foreign trade as a success factor: export-oriented small to medium-sized clients ordered about 30% more letters of credit. this was mainly observed in trade with Asia.

• growth in primary deposits: During the year BtV posted a rise in total premiums for corporate cli-ent business of around 10%.

• new funding guidelines: the new funding guidelines came into force on 1 July 2014. experts provide information on the comprehensive inno-vations by means of brochures, newsletters and mainly in numerous personal customer meetings.

• SEPA-fit: on 1 august 2014 BtV successfully switched some 7,500 corporate clients over to SEPA.

• Lfa global loan: By underwriting the Lfa global loan, BtV has ensured a favourable means of refinancing, which will benefit Bavarian SMEs.

• professional liquidity management: More and more corporate clients are entrusting their liquidity management to BTV.

Leasing• No. 1 leasing partner in Tyrol: Thanks to its financing

volume, BTV Leasing ranks no. 1 in Tyrol and no. 8 in Austria.

• Plus for financing: BtV Leasing exceeded €700 mil-lion in lease financing as a cash value.

• record for new business: For the first time BTV Leasing exceeded the €200 million mark for gross new business.

• also coming soon in nuremberg: BtV Leasing Germany is preparing a new site in Nuremberg.

• Capacity leasing completely on track: More and more customers would like to structure lease financing as flexibly as possible and the relevant demand accordingly. it is not only funicular railway companies that are therefore placing their trust in BTV capacity leasing.

08|09 BtV Business report 2014

BtV anD CuLture: ton haLLe• First epiphany concert in Vorarlberg: For the first

time, BTV organised an Epiphany concert in Ländle. the east tyrolean Musikbanda Franui delighted the audience. at the same time, stefan Dohr (cornet), guy Braunstein (violin) and ohad Ben-ari (piano) played at the ton halle in innsbruck with a festive programme of chamber music.

• toninton 2014: the ensemble Mo’ Blow, the Julian & roman Wasserfuhr Quartet and the trio Jou-bran delighted music fans at BTV Stadtforum.

• Jeunesse austria: Cellist Kian soltani and pianist ardita statovci gave a virtuoso performance of Romantic and modern works.

• BtV autumn concert: One of the world‘s great-est double bassists avishai Cohen played at the Ton Halle. he was accompanied by the fantastic pianist Nitai Hershkovits.

FO.KU.S PHOTO ART IN THE STADTFORUM• pentti sammallahti: FO.KU.S showcased a

retrospective of the work of the internationally renowned photographic artist from Finland – photographs taken over nearly 50 years and in numerous countries.

• Jim rakete: The „Stand der Dinge“ exhibition was originally developed by the german photogra-pher of the famous for the German Film Museum. FO.KU.S paid homage to film-makers.

• Elfie Semotan: FO.KU.S provided a deep insight into the multifaceted creation of the renowned Austrian photographer.

• Jörn Vanhöfen: the german photographer captures modern ruins of our time. Fascinatingly beautiful and alarmingly inescapable.

• nilbar güres: the photographs, videos and video installations of the istanbul-born artist address the violence and clichés of a patriarchal society.

proMoting taLent• talent management: in order to promote BtV

talents, the bank is offering an integrated training and development programme.

• 16th BtV Marketing trophy: Who has the greatest marketing talent in the country? BTV will find out.

• Dr Moser going europe foundation: a total of 94 commercial high school pupils are already looking forward to being sponsored for training in another European country.

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history and strategyretail clientsCorporate clientsinstitutional clients and banks Viennaswitzerlandnorthern italysouthern germanyBtV Leasingthe BtV brand


the history of the Bank für tirol und Vorarlberg ag began on the 8th of April 1904. On this day, the impe-rially and royally appointed allgemeine Verkehrsbank in Vienna received approval to set up a stock corpo-ration from the Austrian interior ministry. The bank bought the two banking houses „Payr & Sonvico“ in Innsbruck and „Ludwig Brettauer sel. Erben“ in Bregenz. The first directors of the new company were

the former company directors hans sonvico and Ferdinand Brettauer. Entry into the com-mercial register on the 18th of august 1904 was then only a formality – the ‚Bank für tirol und Vorarlberg‘ was born. BTV

experienced strong business expansion in its early years. Numerous branch openings in North and south tyrol and in Vorarlberg were the visible signs of growth. BTV‘s reputation among the population and in economic circles grew from year to year – BtV quickly established a firm place for itself.

the wonder of the inn at the end of the First World War, the european borders were redrawn and south tyrol given to ita-ly: whereupon BtV had to close its south tyrolean branches in 1922. Like Germany, Austria suffered from galloping inflation which had fatal effects for the Tyrolean and Vorarlberg economy. The popula-tion stormed the banks to remove their savings deposits. Unlike most of their competitors, BTV was able to pay the savings deposits to its customers immediately and survive these difficult times. BTV‘s company philosophy, which still applies today – of not making any risky speculations on financial markets – has proven itself. Due to its conserva-tive business policy, BtV was the only regional joint stock bank to survive the economic crisis and even emerged stronger from the 20th century due to the targeted takeover of domestic banks. The austrian press recently hailed BtV as the ‚Wonder from the Inn‘.

economic boomafter the second World War, gradual economic stabilisation created the financial foundations for reconstruction. By granting credit to regional companies, BTV specifically boosted the domes-tic economy which was then experiencing the „golden“ decades. In 1952, new associates joined BtV in the form of the Bank for upper austria and Salzburg and the Bank for Carinthia and Styria. today, oberbank, BKs Bank and BtV together form the 3 Bank Group. It stands for a voluntary union oriented towards democratic principles, which is more than ever considered an important partner of the domestic economy. For all three banks, this cooperation is a central component of their autonomy and independence.

true customer proximitythe BtV branch network was greatly expanded under the two executive boards of Dr gerhard Moser and Dr otto Kaspar in the 1970s and 1980s of the 20th century. With this step, BTV successfully made its endeavour „to be close to the customer“ and „to expand into the regions“ a reality. The personal relationship between the customer and employees was and is a central success factor for BTV. Since 1986, BtV has been the only austrian regional bank to be quoted on the Vienna stock exchange - ‚a giant leap for the alpine inhabitants‘, in the eyes of the Tyrolean artist paul Flora, who has captured this important event for BTV in his pictures.

european perspectivesBoth BTV directors Peter Gaugg and Mag. Matthias Moncher have been giving the bank new impetus since the latter half of the 1990s. Since 2014, as the third member of the board, gerhard Burtscher has reinforced the proven management duo. Gerhard Burtscher is responsible along with peter gaugg for the client business, whilst Mag. Matthias Moncher concentrates on the market consequences. BTV is a market leader in corporate and private client business in its key markets of Tyrol and Vorarlberg. However, as one of the highest revenue banks of austria, BtV also utilises the opportunities provided by contemporary

history and strategyBank for Tyrol and Vorarlberg. And Southern Germany. And Vienna. And Switzerland. And Northern Italy.

Over 110 years, BTV has grown from the regional bank to become BTV VIER LÄNDER BANK.

„With a consistent, customer-focused strategy, BtV has succeeded in overcoming all of the crises in the global and financial economy.“

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Europe. In 1989 the company underwent an expansion to Vienna, and in 2004, its 100th year of existence, it opened its first foreign branch in Staad am Bodensee in Switzerland. BTV was successfully launched onto the market in Bavaria and Baden-Württemberg in 2006. With its new brand name BtV Vier LÄnDer BanK (the Bank of Four Countries), which was introduced in 2011, BtV is demonstrating a pledge: namely, that its commitment in all four countries is sustainable and profitable. Thus, today BTV‘s heart is not only beat-ing in tyrol and Vorarlberg, but also passionately in Vienna, Bavaria, Baden-Wuerttemberg, switzerland and Northern Italy. In focus: BTV‘s clientsBTV‘s clients are at the heart of its strategy. Build-ing on their needs and desires, customer-friendly innovations are developed on an ongoing basis. With entrepreneurial spirit, BtV focuses on above-average performances, thus securing its long-term autonomy. Because of the mergers in the banking sector in past years, this autonomy has become an extraordinary advantage which is becoming ever rarer. BTV generates profits, has its outgoings in hand and masters technology to reinforce and further expand a good asset basis.

offering tailored solutionsWhether it involves investment, financing or other financial services – BTV‘s performance and above-average commitment impresses its clients. BTV‘s clients value the tailored solutions and competent advice. As well as its wide range of banking prod-ucts, BtV subsidiaries, holdings and cooperations also provide other bank-related services such as leasing or insurance. Over 900 banking partners are available to BTV for international transactions. BTV is also the official representative in the German

Chamber of Commerce and the switzerland-aus-tria-Liechtenstein Chamber of Commerce in tyrol and Vorarlberg – a service that is very much appre-ciated by our export-oriented corporate clients.

approaching and listening to clientsBtV is a regional service provider specialised in han-dling money. This is apparent from solutions which are individually tailored to the customer and first and foremost from the highly qualified employees who, with their specialist expertise, constitute BTV‘s most impor-tant possession. The customer structure primarily comprises family-owned medium-sized companies and demanding pri-vate clients. Fulfilling their needs and desires in the best possible way – that is what is near and dear to BTV. BTV employees therefore actively approach clients, not only to inform them but also to discover their needs. BTV wants to remain in business, not make business. Our task, which we fulfil prudently and sustainably, is not to maximise profit but to secure BTV‘s autonomy. BTV‘s clients benefit from this, especially in times like these.

„BTV‘s heart beats not only in tyrol and Vorarlberg today, but also in Vienna, southern germany, Switzerland and Northern Italy.“

today as then: a bank from the region for the region.


the Bank für tirol und Vorarlberg ag has expanded in the past decade beyond the borders of its core markets of tyrol and Vorarlberg and evolved into the BTV VIER LÄNDER BANK. The needs remain the same: highest quality, closeness to customers, confidence and the responsible handling of clients‘ money determine the BTV strategies. Cross-border opportunities must be utilised and the regional anchoring ensures optimal solutions as well as short and swift decision-making procedures. BTV‘s independence and autonomy provide a consid-erable benefit: the account managers only offer solutions which meet with clients‘ benefits and are comprehensible.

tried-and-tested principles lead to success – BtV strategic investmentthere is no patent formula – just as every individual is different, the same applies to investments. Just as every person has different personal circumstances, expectations and estimations of risk, they have one element in common: you always need to follow a certain strategy to invest successfully. The BTV

investment strategy is in line with the needs and require-ments of clients and provides a wide range of investment forms, from flexible savings products and custody accounts to asset management. That‘s because

the correct combination must initially be found by customers and account managers and then consist-ently implemented. Continuous active management ensures success.

good performance for BtV asset managementDespite a turbulent market environment, which was marked by geopolitical conflicts and the monetary policy of central banks, BtV asset management was able to achieve a pleasant performance in individual mandates. The responsible concept, which is under-pinned by transparent components and a high degree of flexibility, also resulted in a substantial net inflow. also in 2014, BtV asset management ranked amongst the top five asset managers in the balanced risk class (12 and 60 months).*

attractive mortgage bondsas in previous years, an attractive mortgage bond was again set up in 2014. The funds from the pro-ceeds of the issue are continuing to flow to mort-gage clients who are creating new living spaces. thus, BtV is supporting young families and the regional economy.

intelligent investment products in the low interest rate environment the extremely low interest rates require creative investment products to invest profitably and se-curely. The creation of money market floaters with lower interest limits enables investors to benefit from increases in the interest rate while having a minimum coupon in case of stagnating interest rates. With the subordinate BTV loans, customers benefit from the higher return and make long-term investments in BTV. With the Dynamic Strategy asset management in swiss francs, customers can take advantage of the swiss franc as a crisis-proof currency. In addition, customers can diversify ac-cording to currency and location (BTV Switzerland).

With the BtV fund plan, customers can decide on the strategy for building up their assets – they invest monthly in the asset management‘s philosophy.

retail clients

the search for lucrative investments which are, at the same time, stable in value presents a challenge in times of extremely low interest rates. BTV provides its customers with lasting solutions.

„highest quality, closeness to customers, confidence and the responsible handling of clients‘ money determine the BTV strategies.“

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BTV Investors‘ symposiumtop-quality speakers and exciting topics from dif-ferent perspectives shaped the two BTV Investors‘ symposiums in Bregenz and Innsbruck. Here and at numerous regional small events, BtV clients were offered the possibility of lively and knowledgeable exchange of views and dialogue with the bank‘s Board as well as the BTV investment managers.

Residential construction financingspecialised, residential construction advisors work out individual financing concepts together with their clients. In 2014, BTV was able to retain new residential construction financing business at pleasingly high levels. The combined support of clients with financing in foreign currencies con-tinued to prove effective. Agreements were made with many clients to reduce the foreign currency liability and therefore the risk for our customers considerably.

More service, individuality and security in payment transactions – more time for clientssince 2014, BtV has reserved afternoons exclusively for consultations. Independent of the bank open-ing times, the account managers are very much there for the customers. New ATM sites in shopping centres, petrol stations and transport hubs provide BtV customers with money directly there where they need it. The realignment of account packages makes it possible to freely select the type and num-ber of accounts and cards included. This is unique in Austria. All of the cards issued by BTV were furnished with new designs for easier discernibility as well as a chip. In this way, customers in the BTV service area can access several accounts using only one card. At the same time, this investment increas-es counterfeit protection and makes contact-free payment possible with an ATM card.

Focus on 2015: investing with BtVFor 2015 BtV plans to step up expertise in all four of its markets – austria, switzerland, germany and Italy. This widespread expertise is underlined from top events to trends on the international financial markets as well as re-gional specialist and networking events. BTV will run a marketing campaign from a position of strength in all markets.

„independent of the bank opening times, the account managers are very much there for the customers.“

* Awards and successes in the past do not guarantee success or continued growth in the future. More information at: www.btv.at/auszeichnungen.

The following reflected and provided information on events in the financial markets and answered critical questions from the public: the renowned economic researcher stephan schulmeister, BtV chairman gerhard Burtscher, psychologist and executive director of the Max planck institute gerd gigerenzer, and Head of BTV Asset Management Jürgen Brockhoff. At the second BTV Investors‘ symposium in Innsbruck and Bregenz, 500 interested BTV customers took part.


Influenced by a strategy of sustained profitable growth, during the course of the last 10 years a considered expansion from innsbruck towards the neighbouring countries was pushed forward and, as a result, our already available expertise in cross-border business was further strengthened and expanded locally.

Independent and autonomous financial partner in four countriesBtV has always stood for independence and autonomy. The balanced and stable shareholder structure enables BtV decision-makers to make all important decisions locally, for the benefit of their clients, without external influence. The relationship with our corporate clients, the understanding of their business models and prompt decisions are a key part of the strategy.

as a universal bank, BtV supports its small to medi-um-sized corporate clients in all the financial transac-tions relevant to them in the strongest economic area of Europe. From Innsbruck to Bregenz, Zurich, Stutt-gart, Munich, Vienna and to south tyrol, BtV uses a wide network of partners - accountants, local business promotion agencies, national funding agencies in the

field of investment and foreign trade, chambers of commerce and banking partners. BTV advisors and experts also make their sector-specific know-how

available to corporate customers for consultancy services such as market analyses, market building and expansion, as well as for the professional support of businesses for urgent funding or setting up coopera-tions. As the Tyrol and Vorarlberg representative for the german Chamber of Commerce in austria (DhK) and the switzerland-austria-Liechtenstein Chamber of Commerce (HKSÖL), international networks can be utilised in the interests of BTV clients.

Highly qualified, experienced staffBtV not only invests in the specialised further education of experts, but also in the sector-specific

and regional training programmes for its corporate customer advisors. Through the continuous further training of BtV staff it is possible for them to recog-nise current developments and opportunities at an early stage and to provide active input. This turns the contact people at BtV into genuine „sparring part-ners“ for operative and strategic decisions in SMEs. in this context, the best possible, understandable and outcome-oriented advice and support for medium-sized industrial, commercial and tourism businesses have the highest priority for BtV corporate customer advisors and experts. In addition to advising on typical finance and investment instruments, we are on hand with help and advice to answer any questions whatso-ever regarding possibilities for enterprise investment, foreign trade deals, company succession planning, company pension scheme, cross-border operations, tailored structuring of financing and investment instruments, interest and currency hedging as well as cash management and leasing arrangements.

thanks to the cooperation with large national and international companies as well as with institution-al market participants, new services can be con-tinuously developed and implemented. Based on this principle of a linked-up consultancy approach, BtV Vier LÄnDer BanK has for a number of years provided its customers with an ideal platform to bring the most diverse and partly complex top-ics - from financing, interest rate and currency risk to asset and receivables management - in line with the relevant strategies of the companies concerned and the current situation in the financial markets.

payment transactions developmentevery week 80,000 corporate client transactions are processed in BTV‘s sphere of influence. BTV was able to post a 10% increase in the expansion market of Southern Germany alone in 2014.

SEPA-fitDuring the changeover to sepa, BtV was able to successfully switch 7,500 corporate clients seam-lessly over to SEPA on 1 August 2014.

Corporate clients

the BtV Vier LÄnDer BanK focuses on professional support of medium-sized, export-oriented and owner-managed businesses in Austria, Switzerland, Southern Germany and South Tyrol.

„BtV successfully switched 7,500 corporate clients over to SEPA.“

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support for private enterpriseFor many years, BtV Vier LÄnDer BanK has been offering small to medium-sized companies in particular the best possible support and active guidance when applying for enterprise investment. Government, ‚Land‘ and other institutions (Austria Wirtschaftsservice GmbH, Österreichische Hotel-treuhand, ERP-Fonds etc.) provide funds in Austria under certain conditions – in the form of (interest) subsidies amongst other things.

in germany, the funding occurs through funding agencies mainly through the awarding of low-cost fixed-interest loans. BTV is accredited with the awarding of these funding loans both by the ger-man government funding agency (KfW) as well as each of the federal Länder in which BtV operates (Lfa Förderbank Bayern and L-Bank) and is happy to sponsor funding projects in Germany. BTV experts have many years and a wealth of experience in the Austrian and German subsidy systems.

BtV export solutionsFor decades, BtV Vier LÄnDer BanK has placed special value on service and support to export-oriented companies. The broad performance spectrum and the international network in correspondent banks in international trade are continually adjusted by BtV employees in line with the needs of their corporate clients. The letter of credit hedging instrument in particular was much more popular last year than in previous years. The number of export fund loans for SMEs rose again in the area of export finance.

BtV experts have many years of experience in the professional deployment of financing and hedg-ing instruments in the export and import business. through the support of many companies, with a lively foreign trade, BtV staff are thoroughly famil-iar with the requirements of a wide range of indus-tries and markets. This is also the reason why BTV Vier LÄnDer BanK has the largest market share in export financing to medium-sized businesses in Tyrol and Vorarlberg.

„the number of export fund loans rose again.“

understanding the business model of corporate clients and finding the optimal solution using considerable knowledge of the market and special know-how: this is what BtV advisors home in on for their customers. Regardless of whether they are in industry, trade or tourism.


the extension of networks to international bank-ing partners was also a central concern of the BtV Institutional Clients and Banks division in 2014. In the same vein, the business area once again invited bank partners to a networking and specialist event in Vienna and Tyrol. BTV maintains contacts with over 900 bank partners across the globe.

BtV clients therefore have the possibility of ben-efiting from financial services from many markets – whether in payment transactions, financing or interest and currency hedging. These contacts and networks with foreign partner banks are also help-ful for clients who are expanding into new market areas and are wanting to benefit from BTV‘s experi-ence and know-how.

Within the framework of the overall management of the bank, the business area, institutional Clients and Banks, is primarily responsible for the optional liquidity

management. Due to the demanding market environ-ment, intensive contacts with monetary trading partners are the basis for

sound liquidity management. The management of institutional Clients and Banks thereby underpins the activities of the business area.

owing to the merger of the money market busi-ness, the management of institutional clients and bank supervision on 1 January 2014, synergies are consistently used and the sales focus further strengthened. Also in 2014, we managed to further increase the active visits to (potential) clients and money market trading partners and therefore raise the number of bank partners and clients. With this sales-oriented strategy, the business area provides the BtV client and internal business with even more flexibility.

in line with the market area of BtV in four countries – austria, germany, switzerland and italy – the fo-cus of bank support lies in these markets. Via these four countries, BtV maintains relationships with banking partners in each of all the regions which are or can be significant for clients of BTV.

institutional clients and banks division

a strong network of national and international bank partners creates a solid basis for the client business.

„Great flexibility due to a strong network of partners.“

Maintaining networks: BtV sets great store by this, not least for the benefit of its customers.

10 years of BTV in Switzerland. BTV would like to thank its customers for their confidence in us.

serving their customers for 25 years: the employees of BTV Vienna.

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BTV has been represented in Vienna since 1989. It therefore marked its 25th anniversary in 2014. BTV manages a location for retail and corporate clients at the heart of the federal capital. Its first-class advice and true client proximity are what differenti-ate BTV Vienna from its competitors. The personal commitment and the specialist competence of the employees are impressive – customers benefit from BTV‘s independence, rapid decisions and tailored solutions. BTV staff are guided by the various phases of their clients‘ lives; the service packages grow to meet their requirements. Thanks to BTV‘s cross-border market area, which encompasses aus-tria, southern germany, switzerland and northern Italy, BTV customers also benefit from international solutions via a single point of contact.

Local austrian private bankBtV operates the traditional private bank business in Vienna: they are distinguished by great commit-ment and a service culture. BTV‘s independence leads to solutions where the focus is solely on the client‘s requirements. Innovation, discretion and continuity are top priority. Comprehensive knowl-edge of client requirements is crucial for the BtV investment recommendations: dimensions and objectives are a matter of priority in our dealings with client funds. An independent selection of products and sound, individual advice feature in every profile of BTV on the Vienna market.

Corporate client competenceBtV has over 110 years of experience and tradition in the corporate client business as a commercial bank. In Vienna, BTV offers the entire service bun-dle of the key market, where here too the focus is on advising and supporting medium-sized com-panies. In addition to the traditional medium-sized and large company business, in Vienna BtV has specialised in the financing of property and com-pany purchases and sales, as well as the financing of aircraft and impresses with its expert know-how. together with the BtV advisors, the experts from BtV Leasing offer one-stop solutions for the Vienna market. From there or directly at the client‘s prem-ises, BTV employees will liaise with the client to find the optimum solutions for all issues concerning corporate client business.

BtV marked its 10th anniversary in switzerland in 2014: it has been present in the banking country of Switzerland since 2004 with a full bank licence. employees who act in an entrepreneurial way with four countries‘ expertise – over and above the swiss Banking Business they are also familiar with those in austria, germany and italy – enthuse their clients. Integrated solutions which are partially cross-border offer the clients of BtV in switzerland added value which is crucial for the success of inno-vative and future-oriented business activities.

Comprehensive offerin switzerland, BtV concentrates on the actively managed corporate client and retail client segment. experienced banking specialists from switzerland, ger-many and austria especially advise owner-managed, export and growth-oriented companies and high net worth private clients. this combination ensures a cross-border transfer of expertise and philosophy which contributes to innova-tive financial solutions which are perfectly tailored to clients‘ needs.

Optimum finance solutionsthe performance spectrum of BtV staad for corporate clients is coordinated in a very targeted way to the requirements of successful small to medium-sized companies. It comprises solutions for the operational settlement on switzerland, austria and germany as well as investment, growth and export funding. The active management of available liquidity profits, very flexible four-country compatible payment transfer instruments and the active support of company suc-cessions round off the BTV corporate client offering. A team of experienced securities and asset management experts advise BTV‘s private clients in Switzerland and also outside the normal bank opening hours where BTV customers request it. In so doing a great deal of importance is attached to a specific, discreet and ac-tive management which is adjusted to the investment profile of the client.

Comprehensive export assistancein representing the Chamber of Commerce for switzerland, austria and Liechtenstein, BtV also supports companies in international trade with a broad service offering of network partners which are specialised in cross-border solutions.

switzerlandBranch: • staad am Bodensee

ViennaBranch: • albertinaplatz


a high degree of expertise and short distances – this is how BTV convinces its Italian customers too. Customer service takes place from the stadtforum in Innsbruck and from BTV Lienz.

service at the highest levelthe focus on client service lies in the high-quality investment consultancy and asset management. With their special know-how and experience, BtV investment experts are in a position to develop specially tailored solutions for the respective re-quirements and objectives of the client.

Diversification through different legal systems in the past few years, the lowest interest level led to an increased need for the distribution of assets. In addition to the diversification in various asset classes, BtV clients increas-ingly also rely on country distribution due to the economic and financial challenges of individual countries. They thereby use the chance to divide their assets up amongst sev-eral countries - each having a robust legal system.

top consultancy in your mother tonguea special advantage of BtV in client support is the fact that their investment experts are multilingual. this is especially welcomed and valued by the ital-ian clients – in conjunction with the excellent advi-sory competence and flexibility of BTV advisors.

BtV was launched onto the market in Bavaria and Baden-Württemberg in 2006. In Germany too, BTV is a medium-sized bank for small to medium-sized firms and operates in both the corporate client and retail client segments. BTV employees know what medium-sized firms need: quick decisions, compe-tent point of contact, straightforward handling and reliability, even in turbulent times.

safe money investment in the private client business, BtV also offers service bundles for exacting requirements. Thanks to tailored investment strategies, demanding customers are very well cared for. The high level of expertise of BTV‘s asset management is proven not only by robust fund performance in accordance with the creed of ‚invest-ing, not speculating‘ but also by numerous internation-

al awards as well.* As a traditional bank, BtV feels bound by the values and ethos of the sound banking industry as they were established. Therefore, BTV quite consciously dispenses with invest-ment banking and proprietary trading.

Medium-sized bank for medium-sized companiesBTV‘s interest is focused on client requirements. Thus, BtV employees not only possess special know-how and understanding of business models, they also main-tain genuine close relationships with their customers: the concept of mobile sales means that BtV advisors visit clients at their premises. The branch network is therefore concentrated on locations with good trans-port links in selected conurbations.

utilising networksIn 110 years as an independent financial partner, BtV has always committed itself to medium-sized companies; this strategy has never changed. BTV‘s aspiration is and remains to develop further with entrepreneurial, export and growth-oriented companies. BTV‘s solutions go beyond traditional banking business: BtV employees see themselves as genuine sparring and network partners. As an integrated financing partner, BTV VIER LÄNDER BanK also offers leasing solutions via its own leas-ing company in Germany.

southern germany Branches: • augsburg • Munich • garmisch-partenkirchen • ravensburg/Weingarten • Memmingen • stuttgart

northern italyheadquarters: • innsbruck (BtV stadtforum) • Lienz

„Four countries, one bank. This is invaluable to BtV clients, especially in payment transactions.“

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BtV Leasing gmbh – a fully owned subsidiary of the Bank für tirol und Vorarlberg ag – is headquar-tered in Innsbruck. Since it was founded in 1988, it has been offering its clients individual support and assisting them with tailored solutions. BTV Leasing has greatly expanded in past years. This is reflected in the increase in the number of customers and the total volume of business.

asset management in a different wayFree liquidity is a valuable asset in any company. using this for the pure ownership of a commodity binds up liquidity in the company assets. Leasing of investment goods increases the financial scope and so facilitates investment projects. Leasing ena-bles investments which preserve equity as it does not increase the balance sheet total. BTV Leasing features a high level of specialist know-how in the field of investment financing and in addition to the standardised leasing models; it also offers flexible and individual solutions. Models such as capacity leasing or shift-use leasing enable financing vari-ants which are agreed with the particular customer. The optimum leasing financing depends on several factors, such as the use of the leased object, the replacement cycle, as well as the additional side benefits in taxation and balance sheet. BTV Leasing experts help you to make the right decisions in all matters.

Crossing bordersBtV Leasing advisors are acquainted with the particular features of the respective market. The product range extends from machines, produc-tion plants and cable cars via special solutions in the aviation leasing field to commercial property. Because of its competence in four countries, inter-national solutions from a single source and with a single contact partner are possible.

Affiliates in Switzerland and Southern GermanyBTV has fulfilled the principle of regional roots - closeness to the market and identification with the region - by founding the two 100% affiliates BTV Leasing Schweiz AG (2003) with registered office in staad and BtV Leasing Deutschland gmbh (2006) with registered office in Augsburg. In the Tyrol office, in Staad, Winterthur, Ravensburg, Munich, augsburg, stuttgart, Vienna and, from 2015, also in nuremberg, BtV Leasing staff are now available to provide customers with their personal dedication and specialist competence.

a very successful year in 2014Due to holding firm to strategic guidelines, it was possible to further extend the customer base – with habitually low risk costs. Thanks to consistent han-dling of the market, the total volume of gross new business rose in 2014 from €185 million (2013) to €217 million. The company continued to expand in the attractive markets of Germany and Switzerland. With the opening in nuremberg, BtV Leasing is now represented locally in all the major markets in Bavaria and Baden-Württemberg. BTV Leasing Germany managed to increase its gross new business from €85 million (2013) to €93 million. In Switzerland, gross new business rose from €11 million (2013) to €32 million. overall, the total cash value in external leases in all markets rose from €700 million (2013) to €750 mil-lion; this was at the same time as a very low-key risk trend in all countries.

using synergiesa further success factor of BtV Leasing consists of the cooperation with the BTV VIER LÄNDER BANK. the mutual support, especially in sales, results in lucrative business connections and comprehensive service bundles, which represent clear added value – both for the clients and also for BtV and BtV Leasing itself.

BtV Leasing

BtV Leasing offers tailored solutions – thanks to the four-country competence and more than 25 years of experience.

„BtV Leasing also increased its busi-ness with new customers in 2014.“


BtV Vier LÄnDer BanK has its roots in tyrol and Vorarlberg. It has been serving customers in Vienna

since 1989, in switzerland since 2004 and in southern germany and northern Italy since 2006. BTV has been adding value and connecting people for

110 years. BTV employees see themselves as partners for medium-sized firms, not least to assist them with succession regulations. Going forward, more atten-tion should be paid to in whose hands entrepreneurs place their life‘s work. BTV has been managed on an extremely consistent and rigorous basis since it was founded in 1904, always prudently and with the goal of making the values maintained for more than 110 years tangible also for future generations.

Brand as a means to store performanceBtV employees convey these values long before the initial contact with the customer because brands work. an initial conversation is not the beginning, but rather the first high point in the customer relationship. Not missing any opportunity to bring about a customer benefit by offering non-standard services and there-fore creating a corresponding feeling of worth for the customer inspires confidence in the BTV brand.

relevance rules the worlda lack of imagination on the part of so many sales staff today results in the attitude of always being able to sell at the cheapest price and thus becom-ing number one. BTV VIER LÄNDER BANK has set itself the goal of adding value, which is relevant for customers, for its 110,000 retail clients and over 7,500 corporate clients, in the most attractive economic area of europe, through its services and jointly with its network partners: acting with an en-trepreneurial spirit, connecting people, transferring performance advantages, living an identity in four countries. What this means in everyday life is that each employee will have to bundle this aspiration in their overall ability in their day-to-day actions. A service is like a prototype: as a service company, we must prove ourselves again each time.

BtV customers assess the quality and are prepared to pay a reasonable price for it. Quality managementthe quality factor has played a major role at the Bank für Tirol und Vorarlberg since it was founded. in the last 20 years several in-house initiatives have been set up on this topic, which are still valid. We take into account that the desire for simplicity, personal care and intensive advice in the case of complex affairs is stronger than ever for our cus-tomers. The customer‘s accessibility to the advisor is an important matter for us. The presence of our employees plays an equally major role as friendli-ness at the counter or being put through quickly on the telephone. BTV places value on details. this can already be experienced on entering the branch and continues in many further details – for example, offering coffee – which, in brief, makes a noticeable difference. We aspire to offer quality at the highest level. This is because customer satisfac-tion only arises through continuous quality.

the BtV brand

In times of excess, customers make decisions based on relevance and satisfaction. As a branded company, BTV sells customer satisfaction.

„it is our aim to be the best connect-ed entrepreneurial bank in the most attractive economic area of Europe.“

The firm footing is what allows us to climb so well: complete focus on the customer benefit also guides the brand.

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Management report

Business trendsCompliance and money launderingCharacteristics of the internal control and risk management system shares and shareholder structureoutlook


economic environment2014 represented a turbulent period for the global economy. Geopolitical crises and concern about a weakening of the global economic climate damp-ened investor sentiment, while positive economic indicators in the us and an extreme expansionary central bank policy supported economic devel-opment and gave new impetus to the financial markets.

although the slight recovery in the eurozone continued last year, the currency union suffered severely, however, from the consequences of the ukraine crisis and existing structural problems such as high rates of unemployment. In December, the failed presidential elections in greece also came as a surprise, as a result of which the political risk took centre stage again. The European Central Bank‘s extreme expansionary monetary policy, which was eased on several occasions in 2014, supported the fragile upturn and mainly resulted in a definite weakening of the common currency in the second half. Combined with a low oil price, slightly positive and higher-than-expected growth was therefore observed in the eurozone towards the year-end. Germany was the main driver. Rising private consumption, greater corporate investment and attractive exports and imports resulted in a definite increase in GDP in the fourth quarter of 2014. The swiss economy also stabilised in 2014, while austria displayed a slight weakness.

The US economic climate was also robust in 2014. positive leading and sentiment indicators, produc-tion and trade data, and an ongoing improvement in the labour market clearly hinted that this trend will also continue in 2015. Economic growth slowed down and bottomed out in the emerging coun-tries. These countries suffered in part from capital outflows, a weak economic climate in China and the low oil price.

interest ratesthe eCB decided on various measures to ease mon-etary policy in 2014. For one thing, it lowered the base rate in June and september by 10 basis points each time, reaching the record low of 0.05%. It also intro-duced a negative deposit rate and reduced this during the previous year to -0.2%. In June the ECB also de-cided on a series of conditional long-term refinancing operations (LTROs) totalling €400 billion. Consequent-ly, the purchase of pfandbriefen (covered bonds) and asset-backed securities was announced in October. As these measures had not made any clear impact by the year-end, however, the eCB had a broadly conceived programme to purchase government bonds in view. The ECB‘s extreme expansionary monetary policy led to a sharp fall in yields on government bonds in both the peripheral and the core countries of Europe. The yield on 10-year german Bunds reached its all-time low of 0.54% at the end of December.

the us Federal reserve continued on its taper-ing path last year and ended the monthly bond purchase programme in October. It also held out on the prospect of an initial base rate hike, which is expected from mid-2015. Increased uncertainty on the markets in the meantime resulted, however, in sharp fluctuations in the yield on 10-year US government bonds, which lost just under 80 basis points during the year and fell to 2.17%.

Currency marketsIn the first half of 2014, we saw a strong euro that fluctuated between USD 1.35 and USD 1.40. The divergent central bank policies adopted by the eCB and the Fed resulted in a definite weakening of the common currency as from July. At the year-end, the euro was listed at USD 1.21, thus reaching its lowest level for more than two years.

Management report and notes on BtV group business development in 2014

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the eur/ChF exchange rate came considerably close, mainly in the second half of the year, to the Swiss National Bank‘s exchange rate floor of 1.20. the main reason for this included the excellent swiss economic data, concern about a slowdown in the global economy and the ECB‘s extreme mon-etary easing. The SNB therefore introduced nega-tive interest rates to defend the exchange rate floor of EUR/CHF 1.20. By the end of the year, the euro was listed at 1.20 to the Swiss franc and therefore about roughly 2% less than at the start of the year. the Japanese yen performed sideways to the euro (closing rate: 144.85), although was subjected to substantial fluctuations during the year. The reason for this was the extreme expansionary monetary policy adopted by both central banks (eCB and Bank of Japan).

equity marketsequity markets in developed countries performed in a very pleasing way throughout 2014. The US stock exchanges posted the best performance, while the swiss sMi represented the strongest european equity market during the year. In the second quarter, the Japanese market was able to offset most of the losses incurred in the first half owing to the extremely relaxed monetary policy adopted by the BoJ and on 31 Decem-

ber was clearly in the black compared with the begin-ning of the year. Geopolitical conflicts, concern about a slowdown in the global economy and speculation regarding the turnaround in us interest rates resulted again and again in short-term corrections during the year. The markets in developed countries were mainly supported, however, by the sustained monetary easing of the main central banks, as a result of which major share indices such as the s&p 500, Dow Jones and Dax reached new all-time highs. Stock exchanges in emerging countries performed extremely positively until September. The falling oil price, the presidential election in Brazil and the geopolitical conflicts resulted, however, in a definite correction towards the year-end, which is why the MsCi emerging Markets Index lost about 2%.

Almost all major financial centres showed a positive performance. The Euro Stoxx 50 lagged and gained +1.2%, the Swiss SMI represented the strongest European market with +9.5%, the US Dow Jones gained +7.5% and the Japanese Nikkei rose by +7.1%. Vienna‘s ATX index was down by a not inconsider-able 15.2%.

BTV‘s ordinary shares rose by 9.5% to €21.35 in 2014 and preference shares by 9.1% to €18.00.


Business trends

IFRS Group financial statementsThe BTV Group financial statements have been drawn up according to iFrs regulations as well as the interpretations by the international Financial reporting interpretations Committee (iFriC) as exempting consolidated financial statements as defined by section 59a of the Austrian Banking Act (BWg) in conjunction with section 245a of the aus-trian Commercial Code (UGB). In establishing the present financial statements, all standards which were required for this financial year were applied. an overview of the standards and the balancing principles is provided in the annex, from page 54 onwards. Various new and revised standards ap-plied in 2014 (see pp. 63 et seq.).

the statement of comprehensive income and the balance sheet were affected by changes in the con-solidation scope. The main effects are commented on below in the individual items. VoMoNoSi Beteili-gungs ag (to date consolidated at equity, holds a participation in silvretta Montafon Bergbahnen ag), tiMe holding gmbh (holds a participation in Moser holding ag) and retroactively BtV Beteiligungshold-ing gmbh and BtV 2000 Beteiligungsverwaltungsge-sellschaft m.b.H. (the former is a holding company, the latter holds various participations in BtV) are now included in the full consolidation scope. In addition, aLpenLÄnDisChe garantie-geseLLsChaFt M.B.H. is run as a proportionally consolidated com-pany (to date consolidated at equity). Please refer to pp. 54 et seq. for more detailed information.

Detailed explanations about risk management as well as descriptions of the relevant risks and uncertainties to which the company is exposed can be found in the risk report starting on page 90.

analysis of business performancethe business activity of the BtV group is analysed below having taken into account the financial and non-financial performance indicators which are most important for business activity:

Profit trendThanks to the Bank für Tirol und Vorarlberg‘s sus-tained and essentially conservative business policy, the bank managed to end 2014 - the seventh year of the ongoing financial and economic crisis - with a further profit increase. BTV focuses on a bank‘s core business: placing customers and their needs and demands centre stage. It is because of this fact that, even in such difficult times, BTV continues to enjoy customers‘ confidence and consequently could achieve stable results, which are based on customer business. Despite the challenging envi-ronment and the weak economic situation, annual net profit before tax rose by €3.5 million to €89.8 million, or 4.0%, compared with the previous year.

BTV‘s interest-earning business also failed to escape the impact of low interest rates, which therefore posted a drop of €4.5 million, or 2.9%, in earnings. In sum, net interest income increased by €2.1 million, or 1.1%, to €182.3 million owing to higher income from holdings valued at equity. Pru-dent decision-making behaviour and close custom-

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er support are the reasons for BTV‘s improved risk structure and the associated lower risk costs, which were clearly reduced in 2014 from €46.9 million in the previous year to €29.0 million in the reporting year. The „Operating expenses“ (+€43.6 million) and „Other operating profit“ (+€32.2 million) items rose sharply owing to the inclusion of the silvretta Montafon group in the full consolidation scope, which is why a direct comparison of the years is only given to a limited extent here. This change was also the cause of the increased cost-income ratio by 11.6 percentage points to 54.4% compared with the previous year. The total profit arising from financial assets amounted to €1.7 million, com-pared with €5.0 million in the previous year.

BreaKDoWn oF Changes in proFit in 2014

in thousands of euros

net interest income +2,055Loan-loss provisions in the credit business +17,843net commission income –1,550trading income –236operating expenses –43,571Other operating profit +32,228Income from financial assets –3,275Annual net profit before tax +3,494Group net profit for the year +7,558


net interest incomeInterest income rose to €182.3 million, which corre-sponds to growth of 1.1%. In the existing uncertain environment, with companies‘ ongoing reluctance to invest, customer receivables increased slightly in the corporate client segment; on the other hand, receivables from retail clients fell by €74 million as an annual average. The ongoing low interest rates were a key factor in the earnings development, which resulted in a downward interest rate struc-ture result and therefore in a drop in earnings for this item. Interest income includes income from businesses valued at equity, which clearly rose year-on-year by €6.5 million to €34.2 million and made a significant contribution to the results.

risk provisionsLoss provisions for credit business represent the bal-ance of inflows and releases of loss provisions, includ-ing direct write-downs on receivables. To these are added proceeds from receivables which had already been written down. Loss provisions fell by 38.1% to €29.0 million in the reporting year. This trend resulted mainly from an improvement in the credit risk port-folio. This resulted in a significantly lower provision requirement when forming portfolio reserves. The share of the two worst risk categories fell from 4.2% to 3.4%, while the share of the non-performing credit risk volume - the non-performing exposure ratio (npe ratio) - dropped from 3.0% to 2.7%. In relation to total customer receivables, the non-performing loans ratio (NPL ratio) fell from 4.1% to 3.8%.

Change in operating inCoMe 2010-2014

net interest income net commission income trading income

0.0

100.0

200.0

150.0

amounts in € million

50.0

20142010 2011 2012 2013

182.3

43.7

0.8

164.6

42.5

0.6

146.6

43.3

2.8

164.3

42.3

3.2

180.2

45.3

1.0

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net commission incomein particular, the drop in transaction fees in the securities business, which could not be fully offset by higher asset management earnings, reduced securities income by €1.1 million, or 4.9%, which - at €20.5 million, or 47% - represented the lion‘s share of commission income. There was also a downward trend for payment transactions (down €0.8 million to €12.3 million) and for currency, foreign exchange and

precious metals (down €0.2 million to €2.9 million), whereas there was an upturn in income from lending (up €0.4 million to €6.1 million) and in income from other business (up €0.1 million to €1.9 million). All in all, net commission income posted a result of €43.7

trading incomeTrading income dipped. This was €0.2 million less than the previous year, at €0.8 million. The cause of this was the drop in earnings from hedging business. At €0.9 million, income from foreign exchange and currency transactions was at the previous year‘s level, while income from securities transactions posted growth of €0.1 million to €0.5 million.

Change in net CoMMission inCoMe 2010-2014

securities payment transactions Currency, foreign exchange Credit and other business and precious metal businesses

0.0

30.0

50.0

40.0


10.0

20.0

2010 2011 2012 2013 2014

20.5

12.32.9

8.0

18.6

14.1

3.56.3

19.7

13.5

3.26.9

18.5

12.6

4.3

6.9

21.6

13.13.1

7.5


operating expensesCompared with the previous year, operating expenses rose by €43.6 million, or 45.4%, to €139.6 million. A significant share amounting to €34.3 million was attributable to the inclusion of VoMonosi Beteili-gungs AG in the group of consolidated companies.

the detailed breakdown shows, in absolute terms, the biggest growth in staff costs, which rose by €23.0 million to €83.4 million and so proportion-ally represent the main expenditure item. As from april 2014, the banking industry pay settlement increased collective agreement salaries by 2.2%. During the reporting period, the number of staff employed by the BtV group increased by 402 per-sons/year, of whom 397 persons/year are allotted to VoMoNoSi Beteiligungs AG. The lion‘s share of the increase (€16.5 million) was attributable to the inclusion of this company in the group of consoli-dated BTV companies.

For the social capital parameters, there were modi-fications to all three factors compared with the pre-vious year. Owing to the falling interest rates on the capital market, the actuarial interest rate dropped by 1.35% to 2.15%. The calculation parameter for the collective agreement fell from 2.75% to 2.48%, while the career trend parameter rose from 0.50% to 0.70%.

Expenditure on materials rose by €10.7 million year-on-year. Here too, the lion‘s share (€9.5 mil-lion) was attributable to the change in the group of consolidated companies. Without this particular-ity, the main driver was the increase in data centre costs, which were up by €0.4 million. In percentage terms, the biggest increase was posted in deprecia-tion. Here too, the growth mainly results from the change in the consolidation scope, as €9.6 million out of €9.9 million is based on this effect compared with the previous year. The number of BTV branch offices increased from 37 to 38 compared with the previous year.

please refer to the back cover of this business report for the existing BTV branches.

given that no independent and planned research was carried out, in order to uncover new scientific or technical knowledge, nor any development in preparation for commercial production, as in the previous year there were therefore no research and development activities carried out in the meaning of section 243 (3) line 3 of the austrian Commercial Code (UGB).

CHANGE IN OPERATING EXPENSES 2010-2014

staff costs Material costs Depreciation

0.0

40.0

140.0

120.0

100.0

80.0


20.0

60.0

2010 2011 2012 2013 2014

83.4

39.5

16.8

61.0

26.67.2

57.8

26.46.7

59.5

26.76.6

60.4

28.86.8

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Other operating profitThe result for other operating profit improved by €32.2 million to €30.0 million. Here too, the increase in the reporting year can be attributed to the inclusion of VoMonosi Beteiligungs ag in the group of consoli-dated companies, which contributed earnings of €41.2 million. Furthermore, this item included the Austrian stability tax for BTV AG (up €3.4 million to €7.3 mil-lion) and the allocation to reserves for the neu deposit protection fund totalling €7.7 million.

Income from financial assetsIn 2014 the income from financial assets was €3.3 mil-lion down on the previous year. The main reason for this change were the special effects that arose owing to capital gains on the disposal of participations. All in all, the profit arising from financial assets amounted to €1.7 million in the reporting year.

Taxes on earnings and profitBesides the ongoing effect of corporation tax, the amounts recorded at ‚Taxes on income and profit‘ relate primarily to the latent taxes to be paid on accru-als and prepayment adjustments, in accordance with IFRS. Tax expenses for 2014 for the BTV Group are calculated at €4.1 million, or 22.9%, less at €13.7 mil-lion. The effective tax rate was thus 15.2% compared with 20.6% in the previous year.

Annual pre-tax profit and group net profit for the yearthe focus on customers and the consistent imple-mentation of the risk strategy resulted in 2014 in an increase in annual pre-tax profit by €3.5 million (4.0%) to €89.8 million compared with the previous year. After tax, annual profit was calculated at €76.1 million, which signified an improvement of €7.6 million, or 11.0%, compared with the previous year.

CHANGE IN ANNUAL NET PROFITS PRE-TAX 2010-2014

Annual net profits pre-tax

0.0

60.0


30.0

90.0

2010 2011 2012 2013 2014

89.8

64.761.870.1

86.3


earnings per shareThe significantly higher group net profit for the year resulted in an increased profit per share of 11%. This increased from €2.74 in the previous year to €3.04.

For the financial year 2014, the Board of Directors will propose an unchanged dividend (from previ-ous year) of €0.30 per share at the annual general meeting.

Change in earnings per share 2010 - 2014

earnings per share

0.0

3.00

Values in €

2014

2.00

1.00

2010 2011 2012 2013

3.04

2.161.98

2.442.74

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Balance sheet performancein particular, in the ever strained economic envi-ronment, BtV remained faithful to its approach of placing customers and their needs at the heart of its actions and also continuing to act - with respect to low interest rates - true to the motto „investing instead of speculating“. BTV‘s cautious handling of money was therefore also reflected in the changes on the balance sheet.

Changes to signiFiCant BaLanCe sheet iteMs in 2014

in € million

total assets +6Loans to clients –18Loans to Credit institutions –48Financial assets including holdings +1Liabilities to credit institutions –358primary investments including supplementary capital

+216

equity +72

Change in assets total assets stabilised and at 31 December 2014 were €9,598 million, up €6 million, or 0.1%, above the year-end 2013.

the reduced credit at central banks (down €44 million) was the main reason for the drop in cash reserves. This item fell to €173 million.

Loans to credit institutions also fell. These dropped from €322 million to €274 million in 2014. This cor-responded to a fall of just under 15%.

the economy was also unable to pick up speed deci-sively during 2014. Brief positive prospects followed sometimes severe setbacks. The modest demand for credit was also due to the uncertain environment. Despite these difficult circumstances, BTV managed to maintain the „Loans to clients“ item at the previ-ous year‘s level of €6,387 million. In detail, they fell by €18 million, or 0.3%. In the corporate client business, incl. BTV Leasing, the volume expanded by just under €97 million. Loans to retail clients in contrast fell by €74 million in this period. Growth regions are still BTV‘s expansion markets. This is also reflected in the distribution of loans to domestic and foreign custom-

ers. Loans to foreign customers rose by €38 million in 2014, while loans to domestic customers fell by €56 million.

Risk provisions dipped by 3.8% to €199 million in 2014. There were mainlysmaller appropriations to the portfolio reserve and a slightly higher consumption of risk provisions compared with previous years, which resulted in this decline. For risk management objectives, methods and declarations regarding existing de-fault and market risks, please see the detailed risk report starting on page 90.

Financial assets and interests, including trading assets remained almost unchanged compared with the previ-ous year, at €1 million. The growth in holdings valued at equity totalling €51 million was confronted with a decline mainly in fixed-rate securities.

Change in BaLanCe sheet assets 2010-2014

Loans Loans to customers Financial assets including holdings other assets

0.0


3,000

6,000

9,000

2010 2011 2012 2013 2014

6,387

2,612

274

325

6,214

2,472

282

247

5,940

2,490

235

221

6,387

2,456

467

186

6,405

2,611

322

254


Change in liabilities Primary funds formed the basis of the refinancing: As at 31 December 2014, BTV‘s clients invested in primary funds to the tune of €6,919 million. The pleasing increase of €216 million, or +3.2%, versus year-end 2013 primarily resulted from an increase in securitised liabilities totalling €138 million and in liabilities to customers (savings and account depos-its) by €107 million to €5,527 million. This mainly included customer account deposits, which grew, while savings deposits remained unchanged over-all. The basic strategic principle of BTV, refinancing customer credit business using primary funds, is still intact even in times of low interest rates. At 89.4%, the loan deposit ratio (ratio of customer loans by loan loss provisions to primary funds) improved from 92.3% in the previous year.

Conversely, liabilities to banks fell to €1,395 million (down 20.4%) at the year-end. Owing to the low interest rate, many customers switched to securities investments, particularly in BTV Asset Management. all in all, the volume of deposits rose as a result by €407 million to €5,236 million. Managed client de-posits totalled €12,155 million, which corresponds to an increase of €624 million (up 5.4%).

Balance sheet equity (including group net profit for the year) increased by €72 million, or 7.7%, to €1,004 million. This increase primarily resulted from the profit of the financial year 2014 (€76.1 million).

Change in BaLanCe sheet LiaBiLities 2010-2014

Liabilities Ki Liabilities Clients securitised liabilities and subordinated capital equity and other liabilities

0.0


3,500

7,000

10,500

2010 2011 2012 2013 2014

5,527

1,392

1,395

1,284

5,373

1,255

1,601

986

4,881

1,287

1,795

924

5,395

1,188

1,812

1,101

5,420

1,282

1,753

1,137

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Consolidated equityin accordance with regulation (eu) no 575/2013 (Crr), in conjunction with the Crr accompanying regulation of the austrian Financial Market author-ity (FMa), subject to application of the transitional provisions, the qualifying consolidated equity accord-

ing to the Capital requirements regulation (Crr) amounted to €930.1 million as at 31 December 2014. Common Equity Tier 1 (CET1) stood at €796.1 million at the year-end. Risk-weighted assets (RWA) rose by €157 million to €6,213 million, mainly as a result of the application of the CRR transitional provisions.

in accordance with regulation (eu) no 575/2013 (Crr), in conjunction with the Crr accompanying regulation of the FMa, subject to application of the transitional provisions, the CET1 ratio was 12.81%

as at 31 December 2014. This value corresponds to the core capital ratio. The total capital ratio was 14.97%.

sections 22 and 23 BWg formed the calculation basis until 2013, as from 2014: regulation (eu) no 575/2013 (Crr), in conjunction with the Crr accom-panying regulation of the FMa, subject to application

of the transitional provisions. The equity calcula-tion for 2014 included retained earnings totalling €19,465 thousand following approval by the Supervisory Board on 27 March 2015.

Change in CapitaL 2010 - 2014

Qualifying equity

0

1,000


333

667

2010 2011 2012 2013 2014

930

853935

995 964

Change in Core CapitaL ratio 2010 - 2014

Core capital ratio

0.00 %

Values in %

3.50 %

10.50 %

14.00 %

2010 2011 2012 2013 2014

7.00 %

12.81 %

11.22 %

8.89 %

12.45 %13.33 %


Key indicatorsthe return on equity (roe) on the basis of the pre-tax annual net profit was 9.27% at the end of the year - 23 basis points below the previous year‘s value. After tax, the value rose by 32 basis points to 7.86% owing to the lower tax ratio. At 89.4%, the loan deposit ratio (ratio of customer loans by loan loss provisions to primary funds) improved from 92.3% in the previous year. At 109.9%, the liquidity coverage ratio (LCR) now already exceeds the provisions following complete introduc-tion of the CRR (target figure >100%). At 8.15%, the leverage ratio also significantly exceeds the required minimum figure of 3%. The cost-income ratio for the reporting year 2014 was 54.4%. The growth of 11.6% points compared with the previous year is attributable mainly to the inclusion of VoMonosi Beteiligungs ag

in the group of consolidated companies. The risk/ earnings ratio was 15.9% (previous year: 26.0%). The significant improvement resulted from the lower risk costs.

KeY inDiCators in %

roe before tax 9.27 %roe after tax 7.86 %Loan Deposit ratio 89.4 %LCr (Liquidity Coverage ratio) 109.9 %Leverage ratio 8.15 %Cost/income ratio 54.4 %risk/earnings ratio 15.9 %Common equity tier 1 ratio according to Crr 12.81 %equity ratio according to Crr 14.97 %

Events after the financial statement date on 15 January 2015 the swiss national Bank re-moved its exchange rate floor of 1.20 francs to the euro. At the same time, it cut the interest rate for credit on current accounts that exceed a specific ex-empt amount by 0.5 percentage points to -0.75%. It moved the target range for the three-month Libor further into negative territory to between -1.25% and -0.25%. It had previously been between -0.75% and +0.25%.

Overall, as at 31 December 2014, BTV‘s CHF expo-sure was around CHF 1.2 billion; compared with the previous year, the volume dropped by CHF 0.2 billion. Of this volume, CHF 0.5 billion was apportioned to the branch in Staad. Furthermore, CHF 0.1 billion was assigned to cross-border workers who are paid in Swiss francs. Based on the currency effect, total assets increased by around €120 million; additional adjust-ments to the tune of €1-2 million are expected.

on 1 March 2015 the austrian government decided not to make any further tax money available to heta asset resoLution ag (heta) as the succes-sor company to hypo alpe-adria-Bank international AG (HAA). Consequently, the Austrian Financial Market authority (FMa) took over control of the company in accordance with the Banking restruc-turing and resolution act (Basag) and, as an initial measure, mandated that heta should not make any interest or redemption payments on most of its liabilities until 31 May 2016. The moratorium is being used to reassess the assets and liabilities and to work out a strategy for the final company. BTV is not affected by this as it does not have any receiva-bles or other financial instruments in its books vis-à-vis HETA or the federal state of Carinthia. On 5 January 2015 BtV opened a new branch in nurem-berg in the market area of Germany. Otherwise between the end of the financial year and the crea-tion and approval of the financial statement by the auditors, there were no significant events relating to the business.

Change in Cost/inCoMe ratio 2010 - 2014

Cost/income ratio

0.0 %

Values in %

20.0 %

40.0 %

60.0 %

2010 2011 2012 2013 2014

54.4 %

45.6 %47.2 %44.2 % 42.8 %

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Complianceat the Bank für tirol und Vorarlberg aktiengesells-chaft (BtV), employees undertake on joining to comply with the provisions of BTV‘s compliance code. These rules are based on the Standard Com-pliance Code of the austrian banking industry, the regulations of the emittenten-Compliance-Verord-nung [issuers Compliance ordinance] (eCV 2007) and the Compliance regulations of the securities Supervision Act (WAG 2007). The objective of these regulations is not only the prevention of insider trading, market manipulation or avoidance of con-flicts of interest, but the prevention or minimisation of all compliance-relevant risks, which could result from the non-compliance with laws, regulations, non-statutory recommendations or internal guide-lines. Internal procedures and measures for compli-ance with these rules, which are regularly checked and documented, have been defined by company compliance officers, with no infringements being ascertained during the reporting period.

a compliance e-learning tool was developed dur-ing the reporting year. All BTV employees have successfully completed the compliance e-learning in the form of a test. In addition, more than 130 em-ployees in the branches and divisions participated in classroom training in 2014 in order to ensure full compliance with the regulations of the Compliance Rules and the MiFID.

Money launderingBTV‘s goal is to prevent any form of money launder-ing or the financing of terrorism within its business activities. For this purpose, various procedures and systems are set up within BtV in order to uncover unusual transactions and business cases, and to pass these on to the money laundering reporting authority if money laundering is suspected. The daily embargo examination which is also supported by the system, as well as the examination of exist-ing and new business relationships with politically prominent persons (pep) were carried out according to the legal regulations.

over 140 employees received training during the reporting period on the issues of money launder-ing and the financing of terrorism, with a focus on creating understanding of risky transactions and business cases, as well as the individual employee‘s responsibility for preventing money laundering and financing of terrorism.

Compliance and money laundering


the following statements focus on BtV Bank and Leasing employees and therefore on BTV‘s core business as they are not comparable to the non-banking service areas. Education and further train-ing are of great importance to BtV – regardless of whether this involves new or long-serving em-ployees. Because of this, BTV offers a large number of workshops, seminars and training sessions to aid employees in their personal and professional development to help them to be successful.

BtV talent managementBTV initiated BTV talent management two years ago. it provides selected employees with a platform to broaden their potential, to try out new tasks and lastly to take on more responsibility. In the last two years

the talent group has focused on „Fit for BTV“ and „Fit for the customer“. Its goal? To increase understanding of the entire bank and heighten awareness of customer needs. In addition to

personal development, more than half of the talent also decided on career progression at BTV.

in December 2014 BtV started the next round of the talent management with 35 new talented individuals and a kick-off event. This was the final event for the talent generation 2013/2014. Around 80 participants discussed the subsequent regulations at BtV with Board spokesman peter gaugg, followed by a practical exchange with customers and experts. The genera-tion changeover was marked with a symbolic torch handover on Bergisel.

Zuker project and full-time trainersinvesting in the training and further education of BTV employees is a central concern of BTV. The decision for the Zuker (future-success) project and therefore for full-time trainers underpins this endeavour. In 2014 the project team, together with personnel management, focused on analysing and restructuring training in the retail client business. the team focused on the scope and sales orienta-tion of the content and on the correct timing of the training for successful application of what has been learned in practice.

strategy trainingin 2014 all BtV managers completed strategy training as the basis for the upcoming strategy work and in line with their responsibility as managers. This ensured intensive involvement with BTV‘s business model (customer benefits, adding value) for a deep under-standing of the strategy process and to reflect on the success factors in the implementation.

Company group insurance scheme owing to a change in the legal framework condi-tions, new employees can opt to pay contributions into a company group insurance scheme instead of to the pension fund. Employees will have the option to change from age 55. BTV informed its employees in meetings on the changes and took out company group insurance.

BtV bank employees

The success of a service provider depends to a considerable extent on the performances of its employees. BTV therefore consistently invests in its employees.

„entrepreneurial, responsible and competent employees are key to the company‘s success.“

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eMpLoYees BY CountrY 2012–2014

austria germany switzerland

640

740

800

760

780


660

680

700

720

2012 2013 2014

731.32

46.26

26.0022.00

Change in eMpLoYees (BanK anD Leasing) 31.12.2012 31.12.2013 31.12.2014

White collar 803.58 788.17 813.05of which managers 98.00 106.00 114.00 average age (in years) 38.83 39.20 39.26 average length of service (in years) 12.53 12.57 12.51 part-time working ratio (%) 16.51 15.83 17.48 turnover rate (%) 14.70 14.43 12.78 health rate* (%) 50.48 51.29 51.84 Female quota (%) 44.57 44.71 45.04 average number of training days per employee 5.31 4.82 7.03 investment in training per employee (in euro) 848.90 746.25 1,031.13 employees in talent management 62 62 35applications 1,077 1,005 1,218 accepted 91 89 115

* Sickness days per employee ≤ 3

60.17

730.88

712.88

52.29

23.00


as required by section 243a para 2 of the austrian Commercial Code (ugB), the most important characteristics of BTV‘s internal control and risk management system with regard to the account-ing process are cited below.

BTV‘s Board of Directors is responsible for the implementation and organisation of an internal control and risk management system correspond-ing to the requirements of the group, in relation to the accounting process. This report provides an overview of how the internal controls are regulated in relation to the accounting process.

the following explanations follow an opinion for the austrian Financial reporting and auditing Committee (aFraC) on drawing up the manage-ment report required by sections 243, 243a and 267 of the Commercial Code (ugB) of June 2009 and also the tasks of the audit Committee as laid down in Section 63a of the Banking Act (BWG). The description of the significant characteristics is structured pursuant to the framework concept of the Committee of sponsoring organisations of the Treadway Commission (COSO).

accounting (bookkeeping and presentation of the accounts) and its associated processes, as well as the associated risk management, fall within the Finance and Controlling area (reporting and presentation of the accounts groups and tax and Accounting, as well as Risk Controlling Group). regular and legally prescribed checks are carried out by the Internal Audit department.

the primary tasks of the internal control system and of the risk management system are to inspect all accounting-related processes and to identify, analyse and constantly monitor the risks affecting the correctness and reliability of the bookkeeping, and where necessary, to adopt measures to ensure that the company‘s goals can be achieved.

Control environmentin addition to compliance with legal provisions in austria, germany and switzerland, the principles of conduct defined by BTV are given priority. Em-phasis is also placed on observing BTV‘s corporate governance principles and on the implementation of its standards.

For the overall control environment, descriptions of jobs with their associated competences and allocated areas of responsibility exist for the entire department, with corresponding training pyramids for the optimal further development of employee expertise. In this way, it is also possible for innova-tions to be included in the accounting process in a proper and timely fashion. The department employees have the necessary knowledge and experience at their disposal to work in accordance with their remits.in order to comply with the prescribed legal provi-sions and relevant accounting standards, within BtV, accounting processes (iFrs, ugB), in particular key processes, are supported by numerous guide-lines, manuals, working aids and written instruc-tions in the Finance and Controlling departments. these are regularly checked and updated where necessary.

risk assessmenta catalogue of risks has been developed cover-ing the most significant typical company business processes in accounting, with the identification of the most important risk areas. These are monitored with controls on an ongoing basis or reviewed and, where necessary, evaluated. Internal controls may provide an adequate degree of certainty of meet-ing these objectives, but no absolute guarantee. the possibility of mistakes when performing activi-ties, or errors when estimating or applying scope for discretion evidently exists.

reporting on the significant features of the internal control and risk management system with regard to the accounting process.

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Because of this, it is not possible to provide an un-limited guarantee that errors in the annual financial statements will be detected or prevented. In order to minimise the risk of a misjudgement, selective use is made of external experts and publicly acces-sible sources are taken into account.

Control measuresthese activities include systemic controls, which have been defined by BTV and the IT provid-ers (sap, gaD, geos nostro, Finanz-Logistik ag, priBasys ag with the Finnova programme), as well as manual controls such as plausibility checks, the four-eyes principle (partly with the involvement of the regional manager or the section manager) or job rotation within the division. As a supplemen-tary safeguard of security within the systems, sensi-tive activities within BtV are protected through restrictive management of IT authorisations. These comprehensive control measures are backed up by internal handbooks, working aids, checklists, process descriptions and job descriptions with their associated areas of responsibility. In addition reconciliations and plausibility checks are per-formed on the data between the accounting and presentation of the accounts groups and tax and accounting on the one hand, and risk Controlling on the other. This guarantees the accuracy and compliance of the data used in the risk reports and legal publications.

information and communicationtimely and comprehensive reports on the most significant accounting processes and group activi-ties are drawn up for the Board of Directors (in the form of monthly financial reports), for the Super-visory Board and audit Committee, as well as for the BTV shareholders (quarterly financial reporting) with explanations as needed.

supervisory measuresthe supervision of the accounting process was guaranteed on the one hand, by the functional internal control system which is regularly updated (iKs), and on the other, by the independent internal auditing department of BtV (which reports directly to BTV‘s Board of Directors).

the head of department, as well as the responsible team leaders, carry out a supporting supervisory and oversight function for the accounting processes.

additional supervisory measures to guarantee the reliability and correctness of the accounting process and its associated reporting are executed by the legally designated auditors of the group annual financial statements and the mandatorily appointed Audit Committee.


the share capital of the Bank für tirol und Vorarlberg Aktiengesellschaft (BTV) amounts to €50.0 million and is divided into 22.5 million no par value ordinary shares, and into 2.5 million no par value, non-voting preference shares, with a minimum dividend of 6% of the proportional amount of share capital, paid in arrears.

the shareholders oberbank ag, BKs Bank ag, gen-erali 3 Banken holding ag and Wüstenrot Wohnung-swirtschaft reg. Gen.m.b.H. form a syndicate, with the purpose of preserving the autonomy of BtV, it being in the interests of the syndicate partners for BtV to continue to develop as an earnings- and profit-oriented company. In order to realise this objective, the syn-dicate partners have agreed on joint exercise of their corporate rights associated with their shareholdings and of their pre-emptive rights.

shares and shareholder structure

BTV is autonomous and independent.

BtV sharehoLDer struCture BY siZe oF hoLDing


37.53% CaBo Beteiligungs gmbh, Vienna

13.59% BKs Bank ag, Klagenfurt *)

13.22% oberbank ag, Linz *)


13.60% generali 3 Banken holding ag, Vienna *)


0.36 % BtV private Foundation

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under the form of the BtV private Foundation BtV employees have a stake in the company. The Board of Directors, the Foundation‘s Advisory Board and its auditors constitute the executive bodies of the BTV Private Foundation. The exclusive purpose of BtV privatstiftung is to pass on, directly and in full, income from holdings in BTV or affiliated group companies. This provides a collective opportunity for active involvement by the staff of BtV both in shaping the company and in its success.

BtV is permitted to purchase its own shares for the purposes of securities trading, as well as for its own employees, managers, members of the Board of Directors as well as the supervisory Board by 14 november 2016, with the proviso that the trading portfolio of shares acquired for this purpose may not exceed 5% of the share capital at the end of any day. On the basis of these decisions, shares may only be purchased if the equivalent per share does not differ either positively or negatively by more than 20% from the average of the official BTV share price on the Vienna stock exchange during the three trading sessions preceding the purchase.


BtV sharehoLDer struCture BY Voting rights

41.70 % CaBo Beteiligungsgesellschaft gmbh, Vienna

15.10 % BKs Bank ag, Klagenfurt *)



14.69 % oberbank ag, Linz *)

15.12% generali 3 Banken holding ag, Wien *)



it must be assumed that there will be a slight upturn in the global economic climate in 2015. The eurozone remains fragile but could benefit from the weak euro, the ECB‘s policy of monetary easing and the low oil price. However, the main chal-lenges will continue to be the low rate of inflation and high unemployment rates. At the same time, the us, which grew solid in 2014, will also be the growth engine of the global economy in 2015. The improved situation in the labour market and the low oil price should further stimulate consumption, which forms the main pillar of US growth.

Japan remains fragile too. Major structural reforms such as liberalisation of the labour market are still called for and will be decisive for the future devel-opment of the Japanese economy.

The world‘s second largest national economy - Chi-na - could see significantly weaker gains compared with previous years. Chinese leaders are expected to decide on infrastructure and other stimulus programmes in order to peg growth at 7%.

economic development in the emerging countries could remain robust despite the current difficult environment. It seems as though the Emerging Markets have reached the relative low point of the growth dynamic and now find themselves in a slight process of recovery. The Asian countries in particular, which are largely oil importers, could benefit from the low prices. Many of the emerging countries also reacted to the high capital outflows in previous years and improved their current ac-counts. The first interest rate hike in the US should not have an overly significant impact on these countries. Those countries with ongoing high cur-rent account deficits, high price inflation and weak currencies could, however, suffer again from the tightening of monetary policy.

although the major central banks have been pur-suing an extreme expansionary monetary policy for several years, this has not yet, however, resulted in a significant increase in prices. In the US high price inflation is gradually moving in the desired direction, while concerns about a price collapse predominate in the eurozone. The main reason for the low inflation is the ongoing overcapacity in the producing sector as the major industrial and emerging countries do not yet exploit their full growth potential. The major central banks (Fed, eCB, BoJ, pBoC) will therefore continue to be concerned about not stifling the global economic recovery. Consequently, we are not expecting any rash changes to the abundant liquidity supply and a rejection of the low interest rate policy. Quite the opposite: the european Central Bank and the swedish riksbank have already announced that they are also resorting to unconventional methods to counteract deflation and kick-start the economy. only in the us are we expecting a normalisation of monetary policy and the first interest rate cut from mid-2015.

this environment facilitates BtV to continue its successful growth strategy, whose cornerstones are the market development of the expansion markets of Vienna, Bavaria, Baden-Württemberg, eastern switzerland as well as south tyrol and Veneto (from Innsbruck). In Tyrol and Vorarlberg, BtV is already the market leader in the main target groups. Here, this position must be consolidated and further market shares must be gained. In the client business area which is important to BtV, the emphasis is on organic increases to client loans, primary funds and investment volumes. There will be no change to the strategically pursued principle of entirely refinancing customer loans by means of primary funds.

outlook

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the sustained low interest rates will continue to burden the structural result also in the current year and this development cannot be offset in full by the customer business recognised on the balance sheet, which is growing moderately in the planning. In the commission business, the focus is mainly continuing the expansion of the securities business. Owing to the loss of special factors, a slight decrease will be record-ed in staff expenses and an increase will be reported in other operating income. The costs for the risk profiling are also expected to be slightly negative in comparison with 2014. In sum, these factors are supposed to lead, if the conditions described come to the fore in 2015, to the annual profit before tax to be at least at the same level as in the current reporting year.

Owing to the expiry of the director‘s mandate of Mr Peter Gaugg and Mag. Matthias Moncher on 31 December 2015, the supervisory Board unani-mously decided in the session on 28 november 2014 to extend the appointment term of Mr gerhard Burtscher until 31 December 2019 and to appoint him as spokesperson of the Board of Directors from 1 January 2016 and to appoint Mr Mario pabst and Mr Michael perger as representatives of members of the Board of Directors as from 28 november 2014 to 31 December 2015 and as members of the Board of Directors from 1 January 2016 for an appointment term of three years.

innsbruck, 16 March 2015

the Board of Directors

peter gauggBoard spokesperson

spokesperson for the Board of Directors with responsibility for corporate client business in Vorarlberg, innsbruck, south tyrol and Vienna; Corporate and private customer business southern Germany; Corporate audit, Human resources, Marketing & Communi-cations divisions; Compliance and money laundering.

Mag. Matthias MoncherMember of the Board

Member of the Board of Directors with responsibility for risk, pro-cess, IT and cost management; the departments for finance and controlling, legal matters and investments and group audit; Compliance and money laundering.

gerhard BurtscherMember of the Board

Member of the Board, responsi-ble for private client business in tyrol, Vorarlberg, Vienna and italian clients; Corporate client business in tiroler oberland and unter-land; Corporate and private customer business in switzer-land; Institutional Clients and Banks, Corporate audit; Compli-ance and money laundering.

BtV Business report 2014 |45 44

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group financial statements

Group financial statements 2014Balance sheetstatement of comprehensive incomestatement of change in equityCash flow statementBtV group: notes 2014

report from independent auditorsreport from the supervisory board

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77 | notes to the Balance sheet - other and supplementary notes

131 | other notes 36

132 | notes relating to offsetting of financial instruments 36a

133 notes pursuant to section 64 BWg 36b

133 | Comfort letters 36c

134 information on shares in other companies 37

135 | notes on transactions with closely related persons 38

135 | emoluments and loans to members of the Board of Directors and supervisory Board 38a

136 | Loans and liabilities to affiliated non-consolidated companies and stakeholdings 38b

136 | Loans and liabilities to associated companies and stakeholdings 38c

136 | shares in at-equity valued companies 38d

137 shares in at-equity valued companies 38e

137 | acquisition costs carried over or companies valued at fair value 38f

138 | total volume of not yet unwound derivative financial products 39

141 | Fair Value hierarchy of Financial instruments 40

144 | Fair Value of financial instru-ments which are not valued at the fair market value 41

146 | Fair Value hierarchy of financial instruments which are not valued at the fair market value 42

147 | Life to maturity breakdown 43

149 | organs of BtV ag 44

150 | representation of share holdings 45

52 | statement of Changes to equity

53 | Cash flow statement 131 | Miscellaneous and supplemen-tary notes to the Balance sheet - assets


assets in thousands of euros

31.12.2014 31.12.2013* adjusted

31.12.2013 Change absolute

Change in %

Cash reserve 1 [reference to notes] 173,002 229,545 229,545 –56,543 –24.6 %Loans to Credit institutions 2 273,979 321,850 321,850 –47,871 –14.9 %Loans to Customers 3 6,386,508 6,404,543 6,404,543 –18,035 –0.3 %risk provisions 4 –199,274 –207,146 –207,146 +7,872 –3.8 %trading assets 5 38,433 27,208 27,208 +11,225 +41.3 %Financial assets – at fair value through profit or loss 6

142,208 155,223 155,223 –13,015 –8.4 %

Financial assets – available for sale 7 1,263,076 1,206,697 1,251,189 +56,379 +4.7 %Financial assets – held to maturity 8 741,772 846,262 846,262 –104,490 –12.3 %shares in at-equity valued companies 9 426,931 376,204 333,672 +50,727 +13.5 %Intangible fixed assets 10a 5,543 51 51 +5,492 >+100 %property, plant and equipment 10b 165,818 85,364 85,364 +80,454 +94.2 %Properties held as financial investments 10c 52,807 46,754 46,754 +6,053 +12.9 %Current tax refunds 11 87 154 1 –67 –43.5 %Latent tax refunds 11a 17,008 4,947 223 +12,061 >+100 %other assets 12 109,804 94,146 93,786 +15,658 +16.6 %

total assets 9,597,702 9,591,802 9,588,525 +5,900 +0.1 %

Balance sheet at 31 December 2014

LiaBiLities in thousands of euros

31.12.2014 31.12.2013* adjusted

31.12.2013 Change absolute

Change in %

Liabilities to Credit institutions 13 1,394,692 1,752,704 1,752,704 –358,012 –20.4 %Liabilities to customers 14 5,527,031 5,419,758 5,427,569 +107,273 +2.0 %securitised debt 15 1,012,571 874,491 880,491 +138,080 +15.8 %trading Liabilities 16 15,806 21,443 21,443 –5,637 –26.3 %reserves 17 127,366 69,611 69,601 +57,755 +83.0 %Current tax owed 18 1,732 9,877 9,878 –8,145 –82.5 %Deferred tax owed 18a 5,184 2,593 5,152 +2,591 +99.9 %other Liabilities 19 129,973 100,782 100,781 +29,191 +29.0 %subordinated capital 20 378,952 407,841 407,841 –28,889 –7.1 %equity 21 1,004,395 932,702 913,065 +71,693 +7.7 %

attributable to non-controlling interests 541 0 0 +541 >+100 %attributable to the owners of the parent company 1,003,854 932,702 913,065 +71,152 +7.6 %

total liabilities 9,597,702 9,591,802 9,588,525 +5,900 +0.1 %

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proFit anD Loss aCCount in €000s 2014 2013* adjusted

2013 Change absolute

Change in %

interest and similar income 208,803 243,107 241,811 –34,304 –14.1 %interest and similar expenses –60,754 –90,583 –90,626 +29,829 –32.9 %income from at-equity valued companies 34,219 27,689 24,524 +6,530 +23.6 %net interest income 22 182,268 180,213 175,709 +2,055 +1.1 %

Loan loss provisions for credit transactions 23 –29,041 –46,884 –46,884 +17,843 –38.1 %Commission income 48,825 51,254 51,254 –2,429 –4.7 %Commission expenses –5,096 –5,975 –5,975 +879 –14.7 %net commission income 24 43,729 45,279 45,279 –1,550 –3.4 %

trading income 25 765 1,001 1,001 –236 –23.6 %operating expenses 26 –139,608 –96,037 –96,027 –43,571 +45.4 %Other operating profit 27 29,956 –2,272 –2,272 +32,228 >+100 %Income from financial assets – at fair value through profit or loss 28

209 2,518 2,518 –2,309 –91.7 %

Profit arising from financial assets – available for sale 29

1,904 2,479 2,815 –575 –23.2 %

Profit arising from financial assets – held to maturity 30

–414 –23 –23 –391 >–100 %

Annual net profit before tax 89,768 86,274 82,116 +3,494 +4.0 %

Taxes on earnings and profit 31 –13,687 –17,751 –17,748 +4,064 –22.9 %

Group net profit for the year 76,081 68,523 64,368 +7,558 +11.0 %non-controlling interests 211 0 0 +211 >+100 %owners of the parent company 75,870 68,523 64,368 +7,347 +10.7 %

Combined profit and loss account as at 31 December 2014

other CoMprehensiVe inCoMe in €000s 2014 2013*adjusted

2013

Group net profit for the year 76,081 68,523 64,368revaluation from performance-oriented pension plans –16,292 –2,724 –2,724Changes in at-equity valued companies recognised directly in equity –658 –2,787 –2,787Profits/losses with regard to deferred taxes, applied directly against equity 4,073 679 679Total headings which could subsequently not be allocated into profit or loss –12,877 –4,832 –4,832Unrealised profit/loss on assets retained for disposal (AfS reserve) 15,253 –3,873 25,264Changes in at-equity valued companies recognised directly in equity 2,594 –4,040 –3,201Unrealised profits/losses from adjustments due to currency conversions 242 –196 –196Profits/losses with regard to deferred taxes, applied directly against equity –2,698 1,126 –6,159Total of the items which can subsequently be allocated to profit or loss 15,391 –6,983 15,708sum other comprehensive income 2,514 –11,815 10,876

Overall profit for the financial year 78,595 56,708 75,244non-controlling interests 211 0 0owners of the parent company 78,384 56,708 75,244

* In 2013 adjusted to the changed consolidation scope.|51 50 BtV Business report 2014

stateMent oF Change in eQuitY in thousands of euros

sub-scribed capital

reserves retained earnings

afs reserve

actuarial profit/loss

equity excl.

minority interests

Minority interests

equity

equity at 31 December 2012 50,000 60,935 647,147 99,745 –12,302 845,524 0 845,524Capital increases 0 0 0 0 0 0 0Overall profit for the financial year

revenue 0 0 64,368 0 0 64,368 0 64,368other income 0 0 –11,664 25,264 –2,724 10,876 0 10,876

Distributions 0 0 –7,500 0 0 –7,500 –7,500own shares 0 –228 0 0 0 –228 –228other changes with a neutral effect on results

0 0 +25 0 0 +25 +25

Equity at 31 December 2013 50,000 60,707 692,376 125,008 –15,026 913,065 0 913,065

stateMent oF Change in eQuitY in thousands of euros

sub-scribed capital

reserves retained earnings

afs reserve

actuarial profit/loss

equity excl.

minority interests

Minority interests

equity

equity at 31 December 2013 50,000 60,707 692,376 125,008 –15,026 913,065 0 913,065Consolidation effects 0 0 48,773 –29,137 0 19,636 0 19,636equity at 31 December 2013 adjusted

50,000 60,707 741,149 95,871 –15,026 932,702 0 932,702

Capital increases 0 0 0 0 0 0 0 0Overall profit for the financial year

revenue 0 0 75,870 0 0 75,870 211 76,081other income 0 0 3,553 15,253 –16,292 2,514 0 2,514

Distributions 0 0 –7,500 0 0 –7,500 0 –7,500own shares 0 426 0 0 0 426 0 426other changes with a neutral effect on results

0 0 –158 0 0 –158 330 172

Equity at 31 December 2014 50,000 61,133 812,914 111,124 –31,318 1,003,854 541 1,004,395

statement of change in equity

KeY Figures 31.12.2014 31.12.2013*

earnings per share in € 32 3.04 2.74roe before tax 9.27 % 9.50 %roe after tax 7.86 % 7.54 %Cost/income ratio 54.4 % 42.8 %risk/earnings ratio 15.9 % 26.0 %

* In 2013 adjusted to the changed consolidation scope.

By including the subgroup BtV Beteiligungsholding gmbh in the group of consolidated companies of BtV ag, the available-for-sale reserve decreased by

€29,137 thousand in the reporting year 2013. Overall, equity increased by €19,636 thousand in the reporting year 2013 owing to consolidation effects.

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Cash flow statement as of 31 December 2014

Cash FLoW stateMent in thousands of euros 31.12.2014 31.12.2013

Annual Profit 76,081 68,523Non-cash items in annual profit and reconciliations to the cash flow from operating activities:

– Depreciation/revaluation of fixed assets/financial assets/other working capital 26,540 10,305– increase/reduction in reserves and provisions for risks 38,498 50,757– Profits/losses from sale of financial and fixed assets –12,698 –6,140– adjustments for other non-cash items –30,606 –37,752

sub-total 97,815 85,694

Changes to assets and liabilities from operating activities after correction for non-cash items:

– Loans to credit institutions 53,706 192,441– Loans to customers –159,949 –69,936– trading assets –7,687 –2,980– other working capital –30,610 –98,772– other assets from operating activities 15,085 11,138– Liabilities to credit institutions –224,000 –33,796– Liabilities to customers 92,738 30,511– securitised liabilities 106,226 132,565– other liabilities from operating activities –3,792 –18,237

Operating cash flow –60,468 228,628

Funds inflow from sales of– Fixed assets and intangible assets 1,318 496– Financial assets 227,893 138,449

Funds outflow through investment in– fixed assets –22,848 –7,744– Financial assets –154,076 –204,240

Investment cash flow 52,287 –73,039

Dividend payments –10,417 –7,500Subordinated liabilities and other financing activities –37,946 –27,612

Financing cash flow –48,363 –35,112

Cash position at the end of the previous period 229,545 109,068

Operating cash flow –60,467 228,628Investment cash flow 52,287 –73,039Financing cash flow –48,363 –35,112

Cash position at the end of the period 173,002 229,545

interest received 186,648 240,819Dividends received 36,391 29,977interest paid –60,158 –90,583payment of tax on income –18,632 –24,726

the payment instruments include the cash reserve bal-ance sheet items comprising cash in hand and credit balances at central banks. Cash flow from investment

activity includes a cash flow of €18,086 thousand from the acquisition of associated companies.


accounting and valuation principlesthe group accounts of the ‚Bank für tirol und Vorarlberg AG (BTV AG)‘ have been drawn up ac-cording to iFrs regulations and the interpretations by the international Financial reporting interpreta-tions Committee (iFriC) as these are to be applied in the European Union. In establishing the present financial statements, all standards which were required for this financial year were applied.

the Bank für tirol und Vorarlberg ag is an ‚ak-tiengesellschaft‘ (public limited company) head-quartered in Austria. The company‘s registered office is Stadtforum in 6020 Innsbruck. The main activities of the company and its subsidiaries include asset management, corporate and retail banking, the holding of participations and the operation of funicular railways and other tour-ism firms. The segment reporting contains more detailed information on this.

the accounting and valuation methods applied uniformly across the group comply with the standards for european balance sheets, so that the informative value of these group financial state-ments equates to those pursuant to the provisions of the austrian Commercial Code (ugB), in conjunc-tion with the provisions of the austrian Banking act (BWG). The additional information required pursu-ant to Austrian legislation is included in the Annex.

The approval to publish the group financial state-ments was given by the Board of Directors to the Supervisory Board on 16 March 2015. The approval for publication of the group financial statements by the Supervisory Board is planned for 27 March 2015.

principles of consolidation and scope of consolidationAll significant subsidiaries which are controlled by BtV under iFrs 10 are consolidated in the group financial statements, pursuant to IFRS 10. The Group controls a company if it is exposed to fluctuating returns on its commitment to the company or pos-sesses rights thereon and has the ability to influence these returns using its power of control over the company. In accordance with the principles of IFRS 3,

the consolidation of capital in the context of the acquisition method is performed by offsetting the consideration against the proportionally identified assets and liabilities. The assets and liabilities of the subsidiaries are stated at their respective fair market values at the time of acquisition. As part of the con-sideration, shares of other associates are valued with their share in the identified assets and liabilities. The difference between the acquisition costs and the net asset recorded at fair value is capitalised as good-will. The capitalised goodwill is subject to an annual impairment test pursuant to the provisions of iFrs 3, in connection with IAS 36 and IAS 38. Subsidiaries of lesser significance for the asset, financial and income situation of the group are not fully consolidated.

The scope of full consolidation changed in 2014. Due to the resolution of the vote trust agreement, Mpr holding gmbh gained control over VoMonosi Beteiligungs AG as at 1 January 2014. TiMe Holding gmbh was established on 24 March 2014 and is a wholly owned subsidiary of MPR Holding GmbH. its purpose is to hold the participation in Moser Holding AG.

the new european supervisory provisions for credit institutions - Basel iii implementation in the form of the Capital requirements regulation (Crr), Capital requirements Directive (CrD) and the eBa stand-ards based on them - result in a situation whereby, for supervisory purposes, reporting should take place on a consolidated basis in accordance with iFrs, while the consolidation scope is governed by the CRR. Owing to the change for supervisory purposes, in the reporting year 2014 all relevant companies of the consolidation scope under the Crr that had not hitherto been included in the iFrs group - regardless of the current assessment of their materiality for balance sheet purposes - were also included in the consolidation scope as at 31 December 2014. Owing to this modification, in the reporting period 2014 BtV Beteiligungshold-ing gmbh and in further consequence BtV 2000 Beteiligungsverwaltungsgesellschaft m.b.H. were retroactively included in the group of consolidated companies in accordance with the procedure

BtV group: notes 2014

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under iFrs 10, in order to achieve in future the greatest possible harmony between the iFrs group figures published for participants in the capital market and the IFRS figures determined under supervisory law for the CRR group. In doing so, the reporting year 2013 was also adjusted retroactively. Material changes in the „Financial assets - available

for sale“, „Holdings in companies valued at equity“, „Latent tax refunds“ and „Deferred tax owed“ items and in interest income are shown in the details. There were no material changes in the other items.

in addition to BtV, the full scope of consolidation includes the following holdings:

in the reporting year, silvretta Montafon infrastruktur gmbh merged with silvretta Montafon Bergbahnen

ag as the acquiring company and so no longer appears in the group of consolidated companies.

FuLLY ConsoLiDateD CoMpanies share in % Voting rights in %

BTV Leasing Gesellschaft m.b.H., Innsbruck 100.00 % 100.00 %BTV Real-Leasing Gesellschaft m.b.H., Vienna 100.00 % 100.00 %BTV Real-Leasing I Gesellschaft m.b.H., Innsbruck 100.00 % 100.00 %BTV Real-Leasing II Gesellschaft m.b.H., Innsbruck 100.00 % 100.00 %BtV real-Leasing iii nachfolge gmbh & Co Kg, innsbruck 100.00 % 100.00 %BTV Real-Leasing IV Gesellschaft m.b.H., Innsbruck 100.00 % 100.00 %BTV Real-Leasing V Gesellschaft m.b.H., Innsbruck 100.00 % 100.00 %BtV anlagenleasing 1 gmbh, innsbruck 100.00 % 100.00 %BtV anlagenleasing 2 gmbh, innsbruck 100.00 % 100.00 %BTV Anlagenleasing 3 Gesellschaft m.b.H., Innsbruck 100.00 % 100.00 %BtV anlagenleasing 4 gmbh, innsbruck 100.00 % 100.00 %BtV Leasing Deutschland gmbh, augsburg 100.00 % 100.00 %BtV Leasing schweiz ag, staad 99.99 % 99.99 %

BtV hybrid i gmbh, innsbruck 100.00 % 100.00 %BtV hybrid ii gmbh, innsbruck 100.00 % 100.00 %Mpr holding gmbh, innsbruck 100.00 % 100.00 %

tiMe holding gmbh, innsbruck 100.00 % 100.00 %VoMonosi Beteiligungs ag, innsbruck 100.00 % 100.00 %

silvretta Montafon Bergbahnen ag, gaschurn 100.00 % 100.00 %silvretta Montafon gastronomie gmbh, gaschurn 100.00 % 100.00 %silvretta skischule gmbh, gaschurn 100.00 % 100.00 %silvretta Verwaltungs gmbh, gaschurn 100.00 % 100.00 %Silvretta Montafon Sporthotel GmbH & Co. KG, Gaschurn 100.00 % 100.00 %HJB Projektgesellschaft mbH, St. Gallenkirch 100.00 % 100.00 %Josefsheim projektentwicklungsgesellschaft mbh, St. Gallenkirch 100.00 % 100.00 %silvretta sportservice gmbh, schruns 51.00 % 51.00 %process engineering sMt gmbh, Dornbirn (in liquidation) 51.00 % 51.00 %Skischule Silvretta Montafon St. Gallenkirch GmbH, St. Gallenkirch 50.00 % 50.00 %

BtV Beteiligungsholding gmbh, innsbruck 100.00 % 100.00 %BTV 2000 Beteiligungsverwaltungsgesellschaft m.b.H., Innsbruck 100.00 % 100.00 %


at eQuitY ConsoLiDateD CoMpanies share in % Voting rights in %

BKs Bank ag, Klagenfurt 18.89 % 19.57 %oberbank ag, Linz 16.99 % 18.51 %Drei-Banken Versicherungs-aktiengesellschaft, Linz 20.00 % 20.00 %Moser holding ag, innsbruck 24.99 % 24.99 %

Leasing companies and the companies of the silvretta Montafon Bergbahnen group were included in the business report as at 30 september 2014, in accord-ance with their divergent financial year. The balance sheet date of the leasing companies and the compa-nies of the silvretta Montafon Bergbahnen group is 30 september, with the exception of skischule Silvretta Montafon St. Gallenkirch GmbH, which is 31 May. BTV Beteiligungsholding GmbH‘s account-ing year ends on 30 November. The companies of silvretta Montafon have a divergent accounting date due to their seasonal activity. Owing to the structural situation in the group organisation, there is a different reporting date for both the leasing companies and BtV Beteiligungsholding GmbH.

the remaining fully consolidated companies were con-solidated using the reporting date of 31 December.

as at 31 December 2014 the group did not disclose any direct minority interests owing to the acquisi-tion of the remaining minority interests in VoMon-oSi Beteiligungs AG in March 2014. MPR Holding gmbh held 100% of the shares in VoMonosi Beteiligungs AG as at 31 December 2014. There are only indirect minority interests, which are the re-sult of the holding in silvretta sportservice gmbh, process engineering sMt gmbh and skischule Silvretta Montafon St. Gallenkirch GmbH. Silvretta Montafon Bergbahnen ag holds 51% of the shares in silvretta sportservice gmbh, based in schruns, 51% of the shares in process engineering sMt gmbh, based in Dornbirn and 50% of the shares in Skischule Silvretta Montafon St. Gallenkirch GmbH based in St. Gallenkirch. The result for the period that is allocated to the indirect minority interests is €211 thousand.

at the annual general meeting of 2 December 2013, silvretta sportservice gmbh resolved to distribute dividends of €700 thousand, of which €343 thousand was allocated to minority interests.

With the circular resolution to shareholders on 13 January 2014, process engineering sMt gmbh resolved to distribute €70 thousand of dividends to shareholders. Of this, €34 thousand was allocated to minority interests. Skischule Silvretta Montafon St. Gallenkirch GmbH only began operating in the 2013/2014 financial year.

Significant holdings over which BTV has a major influ-ence are recorded by the equity method. As a rule, a stake of between 20% and 50% is considered to be a significant influence („associated companies“). according to the equity method, holdings in associat-ed companies are included in the financial statements at acquisition cost plus any changes in the group‘s share of the net assets of the associated company after the initial consolidation.

there were also changes in associated companies as at 31 December 2014. Moser Holding AG is in-cluded at equity in the consolidated financial state-ments for the first time. The purchase of 24.99% of shares in Moser holding ag closed on 27 March 2014. The share purchase agreement had already been signed on 16 July 2013. Moser Holding AG has a divergent financial year with a year-end date of 30 June and is included in the business report as of 30 September 2014.

VoMonosi Beteiligungs ag was included in the scope of full consolidation and as such no longer appears under the companies reported at-equity.

in addition, the at-equity holding in oberbank ag was increased by 3.04% owing to the inclusion of BtV Beteiligungsholding gmbh and BtV 2000 Beteiligungsverwaltungsgesellschaft m.b.H. in the group of consolidated companies.

the following holdings were included using the equity method:

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proportionaLLY ConsoLiDateD CoMpanies share in % Voting rights in %

ALPENLÄNDISCHE GARANTIE-GESELLSCHAFT M.B.H. 25.00 % 25.00 %

the holdings in oberbank ag and BKs Bank ag have been included in the group financial state-ments for the following reasons, despite the fact that they are below the 20% holding threshold:

For the holding in the oberbank ag, there is a syndication contract between BtV, the BKs Bank AG and the Wüstenrot Wohnungswirtschaft reg. Gen.m.b.H. For the holding in the BKS Bank AG, there is a syndication contract between BtV, the oberbank ag and the generali 3 Banken hold-ing AG. The purpose of each of these syndication contracts is the maintenance of the independ-ence of the bank. In this way, for both of the cited companies, there is the possibility of exercising a significant influence.

the associated companies are each taken into account with the reporting date 30 september in order to enable the year-end accounts to be prepared close to the end of the year. Receivables and liabilities, expenses and income internal to the

group are eliminated except where they are insig-nificant. An interim net profit elimination has been waived, since material interim net profit figures were not available.

the aLpenLÄnDisChe garantie geseLLsChaFt M.B.H. is classed as joint operations after IFRS 11 came into effect on 1 January 2014. The company aLpenLÄnDisChe garantie-geseLLsChaFt M.B.H. has a concession under Section 1 para. 1, line 8, of the Austrian Banking Act (BWG). Its exclu-sive corporate object is the granting of guarantees, sureties and other liabilities for lending businesses of the 3 Banken Group. The 3 Banken Group is pri-marily the only source for payment flows that con-tribute to the continued activities of the arrange-ment and is therefore classed as joint operations in accordance with IFRS 11.B29-32. The proportional assets and liabilities of aLpenLÄnDisChe garan-TIE-GESELLSCHAFT M.B.H. are considered on the reporting date of 31 December.

structured entitiesstructured entities are companies that have been designed in such a way that voting or similar rights are not the dominating factor when assessing control. For example, this is the case if voting rights only relate to administrative tasks and the rights for managing the essential activities are controlled on the basis of contractual principles. In the BTV group, mainly project and leasing companies with limited areas of activity, as well as public invest-ment funds, third-party financial companies and securitisation companies, are regarded as struc-

tured entities, provided that the business connec-tion to these entities does not constitute ordinary business activity. In the reporting year 2014 there were no material contractual or non-contractual relationships with structured companies. BTV is regarded as the sponsor of a structured entity if market operators associate the entity with the Group, mainly by using the name BTV in the firm or on business documents in companies for which the BTV Group acts as broker. BTV did not maintain any material business connections in the 2014 financial year and in this sense did not act as a sponsor.


Valuation principlesSpot transactions in financial assets were recorded or closed out on the settlement day.

BTV‘s consolidated financial statements are drawn up in euros (€), as the functional currency of the group. Unless otherwise indicated, all amounts are indicated in €‘000). Rounding differences are pos-sible in the following tables.

Currency conversionassets and liabilities denominated in foreign currencies as well as non-completed foreign cur-rency cash transactions are converted at the eCB reference rate on the balance sheet date. Forward currency transactions are converted at current forward rates valid for their maturity. The conver-sion of the annual financial statements of the Swiss branches is performed according to the functional conversion method. Conversion differences of the previous years‘ results are taken to equity. Along-side financial instruments in the functional curren-cy there are primarily financial instruments in Swiss francs, US dollars and Japanese yen.

Cash reservespetty cash and the credit with central bank are included in the cash reserves.

receivablesLoans to credit institutions and customers with fixed or determinable payment are balanced with the carried over acquisition costs. Where direct write-downs have been made, these have reduced the receivables. Value adjustments are shown openly as loan loss provisions.

risk provisionsthe particular risks of the banking business are recognised by BtV through the creation of value adjustments and reserves as appropriate. For cred-itworthiness risks group-wide standard assessment criteria are applied and provided for by provision of securities. The total amount of risk provisions is, when it relates to balance sheet receivables, shown explicitly as a reduction on the asset side of the balance sheet, after the loans to credit institutions and loans to customers. Risk provisions for off-bal-ance sheet transactions (in particular completion guarantees) are held in the item „reserves“. Loan loss provision for receivables includes individual adjustments for receivables for which an impair-ment has already been applied. In addition to the

adjustment of individual values, this item also includes adjustments to the portfolio, which at the balance sheet date formed losses to the loan portfolio, which had already occurred, but had not yet been identified, whose amount is based on the probability of default and the losses to the loan portfolio which have not been provided for else-where. In determining the portfolio impairment, the economic environment and current events are considered.

trading assets Under trading assets are shown the financial assets held for trade. These assets are mainly used to gain profits from short-term price movements or trad-ing margins. Trading assets are valued at fair value and impact the P&L. The Trading Assets position also includes positive market values of deriva-tives which are classified in the fair value option. Valuation is also carried out at fair value where this affects earnings.

Financial assets - at fair value through profit or lossFor securities and structured products with em-bedded derivatives which would otherwise require separation the Fair Value option is applied follow-ing IAS 39. All realised and unrealised valuation gains from the fair value option are shown in the income statement in the position „income from financial assets - at fair value through profit or loss“. interest and dividend income from the fair value option is shown under net interest income.

Financial assets - available for salesecurities which are assigned to the available-for-sale portfolio, and holdings in non-consolidated companies are shown in the item „Financial assets – available for sale“. Changes in the fair value of securities in the available-for-sale portfolio, which arise from valuation, are held in the capital, with no effect on the P&L until the asset is transferred out. the relevant actual value of investments in equity instruments (e.g. shares in limited companies) is determined on the basis of a stock exchange price or on the basis of recognised valuation models. as far as these asset values are overall of minor relevance for the asset, finance and income situa-tion of the group, they will be valued at purchasing costs (at cost). exceptional depreciation based on impairments are taken into the p&L under the item „income from financial assets - available for sale“.

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Financial assets – held to maturitythis balance sheet item includes the bonds and other fixed interest securities which are intended to be held until their maturity date, provided that they have a maturity date. These elements are assigned to the held-to-maturity portfolio. The valuation is according to the carried over acquisi-tion costs, whereby any obligations or discount is resolved on the basis of the effective interest rate method up to maturity.

shares in at-equity valued companiesthis item records the holdings in those associated companies which are included according to the equity method.

impairmentimpairments under ias 39 are based on the in-curred loss model. There is an impairment under the incurred loss model and therefore a loss under IAS 39.59 if objective information is available that, since the asset was acquired, one or more loss events have occurred which, owing to their influ-ence on future payment flows, have the effect of a sustained or ongoing decline in the fair value to below the acquisition cost. The loss events men-tioned in IAS 39.58 are accepted for debt financing instruments. In the case of equity instruments, a significant or sustained decline in the fair value to below the acquisition cost is accepted if the fair value of the equity instrument is 20% below the historical acquisition value. The reference is the last annual balance sheet or the last interim report. Any currency fluctuations in the securities price are disregarded. A sustained decrease in value of an equity instrument is also accepted if in the previ-ous nine-month period the fair value of a financial instrument is permanently below the historical acquisition cost. If the price is quoted above the acquisition cost again at any time within the nine-month period, a new period will begin for the impairment test. Any currency fluctuations in the securities price should be disregarded. If there are no longer grounds for an impairment, a reversal is recognised in profit or loss in the case of debt financing instruments, whereas the reversal is rec-ognised directly in equity for equity instruments.

DerivativesFinancial derivatives are shown in the balance sheet at their fair values, and any changes in value are immediately taken to the P&L.

to the extent that hedge accounting is applied at BtV, as defined in IAS 39, it is used to cover the income from interest rates and the market risk. As measures to minimise interest rate change risk and to reduce the market risk mainly fair value hedges are applied. The fair value hedge transactions are offset by swapping fixed interest deals in transactions linked to the money markets. In particular, this applies to the portion of own issues as well as securities in the AfS portfolio. For the fair value hedge accounting mainly interest rate swaps are used.

if the fair value option under ias 39 is applied, then the derivative financial instruments are being used to avoid or remove valuation mismatches between initial value and the valuation of assets and liabilities. Deriva-tives are valued using fair value with a P&L impact.

Financial guaranteesThe accounting for financial guarantees follow IAS 39. For their presentation in the balance sheet the net principle is applied. This method nets off the premium cash value and the commitment cash value from the financial guarantee.

Intangible fixed assetsthis item includes rental leases, industrial property rights and other rights. The valuation is done at acquisition costs, reduced by regular depreciation. the scheduled depreciation applied is straight line based on the estimated useful life. The ex-pected useful life and the depreciation method are checked at the end of each financial year and all changes in estimates are prospectively considered. the amortisation of intangible assets is basically performed via a useful life of between 3 and 20 years or 40 years for long-term lease rights and other rights of use. In the event of an impairment under IAS 36, impairment losses are recognised. if the reason for an earlier recognised impairment loss has lapsed, an allocation will be made to the amortised acquisition or production cost, except in the case of goodwill.

property, plant and equipmentFixed assets - land and buildings, as well as produc-tion and business fittings are presented at acquisi-tion or production cost, minus scheduled linear depreciation corresponding to the expected useful life. The useful life for buildings is between 33 1/3 and 40 years, and for production and business fit-tings between 4 and 10 years.


in the non-banking sector, the measurement of scheduled depreciation is based on a group-wide useful life of between 3 and 50 years.

assets written off in full will be recorded under acquisition and production cost and accumulated depreciation until they are decommissioned. In the case of asset disposals, the acquisition or produc-tion cost and accumulated depreciation are de-ducted. Earnings on asset disposals (sale proceeds less carrying amount) are recorded under other operating income or other operating expenses.assets are capitalised at the acquisition or produc-tion cost. Acquisition and production incidental costs and expansion investment are capitalised; however, maintenance expenses in the period in which they have arisen are recognised as an expense. Borrowing costs that can be directly apportioned to the acquisition or production of a qualified asset are included in the acquisition or production cost.

Properties held as financial investmentsLand and buildings as well as fittings in rented proper-ties, which the BTV Group holds as long-term financial investments for the purpose of achieving rental income and capital value increases are accounted for at the purchase and production costs, reduced by scheduled linear depreciations corresponding to their expected length of use. For buildings, the useful life is 50 years, for fittings in rented property, the useful life is determined according to the duration of rental. The corresponding rental contracts are shown in the p&L item „Other business revenues“.

Leasingthe leasing agreements which exist within the BtV Group are mainly classified as ‚Finance leases“, accord-ing which all the risks and benefits linked to the lease capital are transferred to the lessee. According to IAS 17 the lessor shows a receivable against the lessee to the value of the cash value of the contractually agreed payments and taking into account any residual value. In the case of ‚Operating lease‘ agreements (in which case the risks and benefits linked to the property re-main with the lessor) the object of the lease is shown by the lessor under the heading „properties held as financial investments“ and depreciation is applied using the rules for the relevant class of asset. Lease payments are collected on the p&L according to the transfer of use.

Current assetsother current assets in the non-banking sector are recorded in other assets and basically include inventories, accounts receivable and other receiva-bles and assets of the Silvretta Montafon Group.

inventories are valued at acquisition or production cost, whichever is the lower, less discounts and deductibles, similar price reductions and the net realisable value. The acquisition cost is calculated on a sliding average cost basis. Inventory risks arising from the duration of storage or reduced ap-plicability are taken into account through deprecia-tion. Lower values on the reporting date owing to reduced sales proceeds are taken into account.

accounts receivable are assigned to the category loans and receivables and recorded on the balance sheet under ias 39 at acquisition cost less impair-ments for anticipated irrecoverable components. other receivables and assets are recorded at the nominal amount or acquisition cost - where appropri-ate, less necessary impairments - if the fair value is correspondingly lower.

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LiabilitiesLiabilities to customers or credit institutions as well as securitised debts are valued at their repayment or nominal value. Nominal value. The amount of the securitised liabilities is reduced by the acquisi-tion cost of the issues held in the object.

securitised debts and subordinate capital loans, which have been secured with derivative financial instruments in the context of interest risk control are either assigned to the fair-value-option valua-tion category, or hedge accounting is applied.

all valuation gains from the fair value option are shown in the income statement in the item „in-come from financial assets - at fair value through profit or loss“.

trading liabilities in trading liabilities the negative market values of derivatives in the trading portfolio or from the fair value option are recorded. Valuation is carried out at fair value.

reserves and provisionsLong-term reserves for staff (pension, redundancy, anniversary payments and death payment commit-ments) are shown as per ias 19 using the projected unit credit method. Future commitments are valued on the basis of actuarial assessments, which not only take into account the pensions which are known at the date of balance sheet, but also the expected future rates of increase.

other reserves are created as required by ias 37, if the company has existing legal or factual liabilities, which result from historical transactions or events, for which it is likely that to meet the commitment an outflow of economically productive resources is required, and a realistic estimation of the value of the liability is possible. Reserves are subject to annual review and recalculation. This includes uncertainties in estimation which may lead to adjustments the following year.

other liabilitiesaccounts payable for non-banking services are not interest-bearing and are recognised at the nominal value.

tax claims and tax debtsClaims and liabilities relating to income tax are presented in the items „Tax claims“ or „Tax debts“.

For the calculation of deferred taxes, the balance sheet-related temporary concept is applied, which compares the valuations of assets and liabilities with the valuations which apply for taxation of the relevant group company. Differences between these two valuations lead to temporary differences, for which deferred tax claims or liabilities must be shown in the balance sheet. Current income tax claims and liabilities are set at the tax values which are expected to be set-tled with the respective tax authorities.

Deferred tax assets on unused tax loss carry-forwards are presented in the balance sheet when it is likely that in the future, taxable profits of a corresponding amount will accrue. Deferred taxes are not discounted. The option of group taxation is used by BTV in its capacity as the parent company.

genuine repurchase agreementsgenuine repurchase agreements are agreements whereby financial assets are transferred against the payment of an amount and where it is agreed at the same time that the financial assets must be returned to their owner at a later stage against the payment to the transferor of an amount defined in advance. The financial assets in question continue to remain in the balance sheet of the BTV Group. these are valued using the relevant presentation rules for the respective balance sheet item. The liquidity obtained from the pension transactions was classified as liabilities to credit institutions or liabilities to customers.

net interest incomethe net interest income includes revenue and expens-es which represent compensation for the provision of capital. In addition in this heading there are also the income from shares and other bonds as well as other variable interest securities, so long as it is not income and expenses from securities or derivatives, which are to be classified as trading assets or trading liabilities.


also income from holdings and from stakes in associ-ated companies - provided they are not consolidated because of their smaller size - are also shown in this heading. This item also includes income from at-equity valued companies.

interest income and expenses are delimited and re-corded on an accrual basis. Income from investments is recorded when the legal claim to payment arises.

Loan-loss provisions in the credit businessThe heading „Loan loss provision“ includes increases to impairments and reserves or income from the cancellation of impairments and reserves as well as direct write-offs and later receipts of already written-down liabilities in connection with credit transactions.

net commission incomethe commission income is the balance of the revenues and expenses from services provisions. above all, these include income and expenses for services arising from payment handling, securities transactions, credit transactions as well as from for-eign exchange, foreign cash and precious metals business, and other miscellaneous services.

trading incomeThis heading includes profits and losses realised from the sale of securities, derivatives and other financial instruments from the trading portfolio, unrealised valuation gains and losses from the market valuation of securities, derivatives and other financial instru-ments from the trading portfolio, interest income and dividend receipts from the trading portfolio as well as refinancing costs for these financial assets.

operating expensesin the operating expenses are included staff costs, material costs as well as scheduled depreciation of fixed assets, amortisation of intangible assets and of properties held as financial investments for the reporting period.

in the staff costs are included wages and salaries, variable salary elements, legally required and voluntary social costs, staff-related taxes and levies as well as expenses (including changes to reserves) for redundancies, pensions, anniversary payments and death benefits.

Under material costs are, alongside IT costs, the office building costs and the costs for running the office, the costs for advertising and marketing and legal and consultancy costs and other administrative costs.

Other operating profitIn other operating profit are shown all the revenues and costs of the BtV group which are not attribut-able to current business activities. This includes in particular the profits from the renting or sale of properties maintained as financial investments and other fixed assets, cost of sales and revenues for non-banking activities, such as insurance and revenue from funicular railways and tourism. Fur-thermore, in addition to expenses for other taxes and levies, this item also included expenses for the increase in reserves as well as income from the liquidation of other reserves.

Profit arising from financial assets – at fair value through profit or lossunder this item is shown the income from the revaluation or sale of securities, derivatives, loans and own issues in the fair value portfolio.

Profit arising from financial assets – available for salerevenue from sales and impairments of securities and holdings in the available-for-sale portfolio are posted here.

Profit arising from financial assets – held to maturityunder this heading is the income from sales and impairments of securities in the held-to-maturity portfolio.

taxes on earningsCurrent and deferred taxes on income are recorded under this item.

Discretionary decisions, assumptions and estimatesIn drawing up the BTV group financial statements, values are determined on the basis of discretionary decisions, as well as through the use of assump-tions and estimates. The associated uncertainties may lead in future reporting periods to additional income or expenses or make it necessary to adjust the book value in the balance sheet. The manage-ment estimates and assumptions used are based on historical experience and other factors such as planning and likely expectations and predictions of future events, based on current assessments, and this is with the objective of providing meaningful information on the asset, financial and earnings situ-ation of the company.

areas of application for assumptions and estimates lie in the determination and balancing of loan loss provi-sions in the loan business, in impairment assumptions for the available-for-sale or held-to-maturity portfolio and in the formation of long-term payroll reserves and

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other reserves. Uncertainties in estimates also arise in determining fair values on the basis of valuation models for financial assets and liabilities, if no quoted market price is available. Assumptions are also re-quired in determining deferred tax assets, with regard to the expected date of occurrence and the amount of future taxable income as well as for future tax plan-ning. The specification of the expected useful life of tangible assets is also based on an estimate.

Disclosure pursuant to part 8 of regulation (eu) no 575/2013 (Crr)the disclosure of the BtV group pursuant to part 8 of regulation (eu) no 575/2013 (Crr) can be found on the Internet at www.btv.at in the menu item „Com-pany > Investor Relations > Publications / Financial Reports > Information according to Offenlegungsver-ordnung [Disclosure ordinance] (offV) or pursuant to Part 8 of Regulation (EU) No 575/2013 (CRR)“.

Use of modified/new IFRS/IAS standards The table below shows published or modified standards and interpretations on the balance sheet date, which were applied for the first time during this reporting period. Material effects arise from the application of iFrs 11 in connection with aLpenLÄnDisChen garantie-geseLLsChaFt M.B.H., which is classified as a joint activity pursu-ant to the conditions of IFRS 11.

The first-time adoption of the other IFRS and IFRIC quoted had a minor impact on BTV AG‘s consoli-dated financial statements as at 31 December 2014 as the changes were applicable only here and there. There were no changes to the accounting policies and valuation methods.

stanDarD/interpretation naMe to Be appLieD For

FinanCiaL Years FroM

aLreaDY

aDopteD BY eu

iFrs 10 Consolidated Financial statements 01.01.2014 YesiFrs 11 Joint arrangements 01.01.2014 YesiFrs 12 Disclosures of interests in other entities 01.01.2014 Yesias 27 – amendments separate Financial statements 01.01.2014 Yesamendments to iFrs 10, iFrs 11 and iFrs 12

investment entities 01.01.2014 Yes

amendments to iFrs 10, iFrs 12 and ias 27

transition guidance 01.01.2014 Yes

ias 28 – amendments investments in associates and Joint Ventures 01.01.2014 Yesias 32 – amendments offsetting Financial assets and Financial

Liabilities01.01.2014 Yes

ias 36 – amendments recoverable amount Disclosures for non-Financial assets

01.01.2014 Yes

ias 39 – amendments novation of Derivatives and Continuation of hedge accounting

01.01.2014 Yes


stanDarD/interpretation naMe to Be appLieD For

FinanCiaL Years FroM

aLreaDY

aDopteD BY eu

iFriC 21 Levies 17.06.2014 Yesias 19 Defined Benefit Plans: Employee Contributions 01.02.2015 Yesimprovements to iFrss (May 2012)

01.02.2015 Yes

improvements to iFrss (June 2011)

01.01.2015 Yes

iFrs 10, iFrs 12 and ias 28

investment entities: applying the Consolidation exception

01.01.2016 no

ias 1 Disclosure initiative 01.01.2016 noiFrs 10 and ias 28 sale or Contribution of assets between

an investor and its associate or Joint Venture01.01.2016 no

ias 27 equity Method in separate Financial statements

01.01.2016 no

ias 16 and ias 41 Bearer plants 01.01.2016 no

improvements to iFrss (May 2012)

01.01.2016 no

iFrs 14 regulatory Deferral accounts 01.01.2016 no

ias 1 – amendments Clarification of Acceptable Methods of Depreciation and amortisation

01.01.2016 no

iFrs 11 accounting for acquisitions of interests in Joint operations

01.01.2016 no

iFrs 15 revenue from Contracts with Customers 01.01.2017 noiFrs 9 Financial instruments 01.01.2018 no

insofar as BtV has already investigated the remain-ing standards and interpretations, no significant changes in terms or materiality are expected in fu-ture consolidated financial statements. The impact of iFrs 9 on the BtV group is currently being fur-

ther investigated; a reliable statement regarding its impact on future consolidated financial statements is not possible from today‘s perspective. There are no plans for early adoption of the new standards and interpretations.

The next table shows newly published or modified standards and interpretations on the balance sheet date which came into effect through the iasB or in part through the eu endorsement procedure but

application of which is not yet mandatory. These have not been applied to these consolidated finan-cial statements.

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Balance sheet – assets

1 Cash reserVe in €‘000 31.12.2014 31.12.2013

petty cash balance 28,924 41,426Credit with central bank 144,078 188,119

Cash reserves 173,002 229,545

2 Loans to CreDit institutions in €‘000 31.12.2014 31.12.2013

Loans to domestic credit institutions 79,782 134,817Loans to foreign credit institutions 194,197 187,033

loans to Credit institutions 273,979 321,850

3 Loans to CLients in €‘000 31.12.2014 31.12.2013

Loans to austrian clients 4,250,336 4,306,350Loans to foreign clients 2,136,172 2,098,193

Loans to clients 6,386,508 6,404,543

Loans to customers include finance-lease contracts with a net investment value in the amount of €695,641 thousand (previous year: €624,180 thou-sand). The corresponding gross investment value of these leasing contracts amounts to €773,959 thousand (previous year: €693,194 thousand), the associated unrealised financial revenue amounted

to €78,318 thousand (previous year: €69,014 thou-sand). The residual value of the total lease assets are guaranteed both in the current and previous financial years. On the balance sheet date, there were value adjustments for unrecoverable leasing receivables in the amount of €10,286 thousand (previous year: €10,719 thousand).

3a LiFetiMe to MaturitY BreaKDoWn FinanCe Lease Loans in €‘000

< 1 year 1 – 5 years > 5 years total

gross investment value 205,322 360,431 208,206 773,959Unrealised financial revenue 14,496 39,651 24,171 78,318net investment value 190,826 320,780 184,035 695,641


4 risK proVisions in €‘000 2014 2013

opening balance of credit transactions at 1 January 207,146 194,492– releases –8,568 –6,893+ allocation 28,279 45,220– application –40,289 –25,662+/– Change in consolidation scope 12,700 0(+/–) Changes arising from currency differences 6 –11

Loan-loss provision for credit transactions at 31 December 199,274 207,146

opening balance commitments at 1 January 1,552 1,107– releases –1,379 –74+ allocation 9,791 519– application 0 0+/– Change in consolidation scope 28,693 0(+/–) Changes arising from currency differences 0 0

Reserves Performance Guarantees at 31/12. 38,657 1,552

overall total risk provisions at 31/12. 237,931 208,698

5 traDing assets in €‘000 31.12.2014 31.12.2013

Debenture bonds and other fixed-interest securitiesListedunlisted

7,1227,122

0

000

equities and other variable-interest securities 0 0positive market values arising from derivative transactions – trading

Currency related tradesinterest related tradesother trades

6,5161,5714,832

113

6,0231,9054,118

0positive market values arising from derivative transactions – Fair value option

Currency related tradesinterest related tradesother trades

24,7950

24,7950

21,1850

21,1850

trading assets 38,433 27,208

in the risk provisions, the consolidation-related changes arise from the proportional consolidation of

aLpenLÄnDisChen garantie-geseLLsChaFt M.B.H. in the reporting year 2014.

4a risK proVisions (inVentories) €000s

position 31 December

2013

appro-priation

releases Consump-tion

Currency conversion

Consolida-tion-related

amendment


2014individual valuation adjustment of loans to credit institutions

0 0 0 0 0 0 0

individual valuation adjustment of loans to customers

125,925 25,837 –8,516 –40,289 6 12,700 115,662

portfolio valuation adjustments pursuant to ias 39

80,311 2,442 0 0 0 0 82,753

Counterparty risk 910 0 –52 0 0 0 859 Loan-loss provisions in the credit business

207,146 28,279 –8,568 –40,289 6 12,700 199,274

reserves and provisions commitments

1,552 9,791 –1,379 0 0 28,693 38,657

total risk provisions 208,698 38,070 –9,947 –40,289 6 41,393 237,931

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6 FinanCiaL assets – at Fair VaLue through proFit or Loss in €‘000 31.12.2014 31.12.2013

Debenture bonds and other fixed-interest securitiesListedunlisted

132,873132,873

0

145,773145,773

0equities and other variable-interest securities

Listedunlisted

9,3359,207

128

9,4509,149

301

Financial assets - at fair value through profit or loss 142,208 155,223

7 FinanCiaL assets – aVaiLaBLe For saLe in thousand € 31.12.2014 31.12.2013

Debenture bonds and other fixed-interest securities 1,104,186 980,290Listed 1,082,969 975,154unlisted 21,217 5,136

equities and other variable-interest securities 7,254 72,835Listed 5,651 10,411unlisted 1,603 62,424

other shareholdings 46,246 51,723Listed 16,970 10,018unlisted 29,276 41,705

Other affiliated shareholdings 105,390 101,850

Financial assets - available for sale 1,263,076 1,206,697

8 FinanCiaL assets – heLD to MaturitY in €‘000 31.12.2014 31.12.2013

Debenture bonds and other fixed-interest securities 741,772 846,262Listed 741,772 846,262 unlisted 0 0

Financial assets – held to maturity 741,772 846,262

By retroactively including the subgroup BtV Beteili-gungsholding gmbh in the group of consolidated

companies of BtV, total holdings decreased by €44,491 thousand in 2013.

66|67 BtV Business report 2014

FIXED ASSET OVERVIEW – 31 DECEMBER 2013in thousands of euros

Acquis. value 01.01.2013

Change in consolida-tion scope

additions Disposals

Intangible fixed assets 7,467 0 55 0Land and buildings 95,783 0 2,638 –1,084Production and business fittings 47,274 0 4,951 –8,117Properties held as financial investments (IAS 40) 68,947 0 417 –2,700

total 219,471 0 8,061 –11,901

10 FIXED ASSET OVERVIEW – 31 DECEMBER 2014in thousands of euros

Acquis. value 01.01.2014


additions Disposals

Intangible fixed assets 7,522 11,151 56 –288Land and buildings 97,332 102,858 1,127 –108Production and business fittings 44,069 131,125 18,804 –3,907Properties held as financial investments (IAS 40) 66,554 4,176 4,622 –1,514

total 215,477 249,310 24,609 –5,818

9 hoLDings in at-eQuitY VaLueD CoMpanies in €‘000 31.12.2014 31.12.2013

Credit institutions 409,623 372,188non-credit institutions 17,308 4,016

Shares in at-equity valued companies 426,931 376,204

the fair value of the shares in companies valued at equity amounted to €379,665 thousand (previous year: €349,090 thousand).

in case of indicators which could possibly show a possible reduction in value, the equity book value was subjected to an impairment test in accordance with IAS 36. The test was performed with the use of a valuation procedure on the basis of future finan-cial surpluses. Currently, no need for a devaluation results from this.

By retroactively including the subgroup BtV Beteili-gungsholding gmbh in the group of consolidated companies of BtV, the total number of companies valued at equity increased by €42,531 thousand in the reporting year 2013.

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splitting group transfers

changes to currency

exchange rates

Acquis. value31.12.2013

accumulated depreciation

Book value 31.12.2013


Depreciation Book value31.12.2012

0 0 0 7,522 –7,472 51 0 –38 34–5 0 0 97,332 –23,628 73,704 0 –2,029 73,595

5 0 –44 44,069 –32,409 11,660 0 –3,370 10,2020 0 –110 66,554 –19,800 46,754 0 –1,424 49,286

0 0 –154 215,477 –83,308 132,169 0 –6,862 133,118

splitting group transfers

changes to currency

exchange rates

Acquis. value31.12.2014

accumulated depreciation



Depreciation Book value31.12.2013

0 0 0 18,442 –12,899 5,543 –4,069 –1,646 512,433 0 0 203,642 –89,112 114,530 –60,733 –4,784 73,704

–2,414 0 55 187,733 –136,444 51,288 –98,911 –8,886 11,660–19 0 142 73,960 –21,152 52,807 0 –1,447 46,754

0 0 197 483,776 –259,607 224,168 –163,713 –16,763 132,169


10a INTANGIBLE FIXED ASSETS in €000s 31.12.2014 31.12.2013

Intangible fixed assets 5,543 51

Intangible fixed assets 5,543 51

10b propertY, pLant anD eQuipMent in €000s 31.12.2014 31.12.2013

Land and buildings 114,530 73,704Production and business fittings 51,288 11,660

Property, plant and equipment 165,818 85,364

10c properties heLD as FinanCiaL inVestMents in €‘000 31.12.2014 31.12.2013

Properties held as financial investments 52,807 46,754

Properties held as financial investments 52,807 46,754

Properties held as financial investments - at fair val-ue amounted to €59,174 thousand (previous year: €54,469 thousand). The determination of fair value was achieved by use of revenue value calculations for which the agreed rents provided the basis.

the rental income in the reporting year amounted to €3,395 thousand (previous year: €3,285 thou-sand), the expenses relating to achieving the rental income totalled including depreciation €2,636 thousand (previous year: €2,364 thousand).

10d reMaining LiFe to MaturitY BreaKDoWn operating Lease ContraCts i in €‘000

< 1 year 1 – 5 years > 5 years total

Future minimum leasing payments 661 2,646 11,394 14,701

Under the item ‚Properties held as financial investments‘, book values from operating lease contracts are included at a total of €14,630 thou-sand (previous year: €14,648 thousand). The fair

value amounts to €15,071 thousand (previous year: €14,929 thousand). For conditional rental payments there was no income during the reporting year.

the fair value of property, plant and equipment amounted to €167,889 thousand (previous year: €86,158 thousand).

in the reporting period borrowing costs of €49 thousand were capitalised (previous year: €0). An interest rate of 1.34% or 2.10% was applied.

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companies of BtV, latent tax refunds from balanc-ing effects increased by €4,724 thousand in 2013.

11a LATENT TAX REFUNDS in €‘000 31.12.2014 31.12.2013

Financial assets - at fair value through profit or loss 3,286 2,097Financial assets - available for sale –17,789 –15,414Financial assets – held to maturity 1,068 –775Long-term payroll reserves 10,547 6,209hedge accounting and Derivatives –2,630 –3,541portfolio impairments 20,688 20,078revaluation Finance Leasing and other –941 –3,930Latent tax refunds from losses carried forward 2,779 223other latent tax refunds and tax debts abroad 0 0

Deferred tax refunds 17,008 4,947

12 other assets in €‘000 31.12.2014 31.12.2013

positive market values from derivatives trades 80,544 50,193other assets 29,260 43,953

Other assets 109,804 94,146

11 TAX REFUNDS in €000s 31.12.2014 31.12.2013

Current tax refunds 87 154Deferred tax refunds 17,008 4,947

Tax refunds 17,095 5,101


Balance sheet – Liabilities

13 LiaBiLities to CreDit institutions in €‘000 31.12.2014 31.12.2013

austrian credit institutions 732,408 679,439Foreign credit institutions 662,284 1,073,265

Liabilities to credit institutions 1,394,692 1,752,704

14 LiaBiLities to CLients in €‘000 31.12.2014 31.12.2013

savings depositsaustrian 1,024,949 1,039,940Foreign 151,308 135,843

sub-total savings deposits 1,176,257 1,175,783

other depositsaustrian 3,241,688 3,073,459Foreign 1,109,086 1,170,516

sub-total other deposits 4,350,774 4,243,975

Liabilities to clients 5,527,031 5,419,758

15 seCuritiseD LiaBiLities in €‘000 31.12.2014 31.12.2013

Debentures 811,994 675,527Domestic bonds 200,578 198,964

Securitised debt 1,012,572 874,491

of which fair value 424,874 395,711

the redemption amount for the securitised debts, for which the fair value option was exercised, totalled €420,186 thousand (previous year: €396,406 thou-sand). The difference between the fair value of the securitised liabilities for which the fair value option was chosen and their repayment amount totalled €4,688 thousand (previous year: €5,305 thousand).

BtV ag placed its own issues associated with loan se-curity in the form of housing loans. As coverage funds, these housing loans had no impact on the valuation of BTV AG‘s covered bond issues.

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16 traDing LiaBiLities in €‘000. 31.12.2014 31.12.2013

negative market values arising from derivative transactions – trading 4,786 8,969Currency related trades 2,115 1,787interest related trades 2,671 7,182

negative market values arising from derivative transactions – Fair value option 11,020 12,474Currency related trades 0 0interest related trades 11,020 12,474

trading liabilities 15,806 21,443

17 reserVes in €‘000 31.12.2014 31.12.2013

Long-term payroll reserves 85,077 65,590other reserves and provisions 42,289 4,021

reserves and provisions 127,366 69,611

pensions reservesThe benefits and entitlements are based on the collective bargaining agreement regarding the revision of pensions rights. The area of applica-tion covers all BtV employees employed in austria who are covered by the collective bargaining agreement for banks and bankers and who joined before 1 January 2002. The collective bargaining agreement governs benefits and entitlements to occupational disability and accident insurance, old age pension and early retirement pension, admin-istrative pension, social contributions and care allowance contribution.

For the surviving dependants, regulations are included about pensions for surviving dependants in the form of widow, widower and orphan pen-sion, care allowance contribution, widow/widower settlement and quarter of the death.

in the calculation of the reserves, the entitlements are also included in addition to the benefits. At January 2000 entitlements to old age and early retirement pension including benefits to surviving dependents based on this were transferred over to the VBV pension fund.

the company pension scheme granted in the silvretta Montafon Bergbahnen group is based on the benefits agreed in detail between the company and its employees.

severance pay provisionsFor all employees in the BtV group in austria whose working relationship began before 1 Janu-ary 2003, there is in accordance with the regula-tions of the employment law or severance pay law for workers a claim for severance,which will be paid out in the case of respective reasons for termina-tion. For all other working relationships, the group companies pay contributions into the corporate pension insurance fund according to the regula-tions of the BMSVG.

Furthermore, in accordance with the collective bar-gaining agreement for banks and bankers, there exist a claim for two additional months‘ pay as severance payment if the working relationship lasted more than 5 years and was terminated by the employer or more than 15 years and is terminated due to an old-age pension or a disability pension being taken. In contrast to the legal severance, this collective-bargaining claim exists as well for working relationships which began after 31 December 2002 or will begin in the future.in addition, in accordance with the regulations of the collective bargaining agreement for pension fund for permanent employees who joined after 31 December 1996, there is an additional entitlement for 3 months‘ pay (20 years of service) or 4 months‘ pay (25 years of service) if the employer gives notice. For employees in germany and in switzerland, there is no obligation to build up pension or severance reserves.


17a staFF reserVes For BeneFits aFter terMination oF the WorKing reLationship: perForManCe-orienteD pLans in €‘000

reserves for pensions.

severance reserves

total

Old-age pension severance reserves as at 1 January 2013 41,030 15,406 56,436

Income recorded for the period.interest chargeperiod of service cost

1,338231

576705

1,914936

included in the other results Actuarial Profit (–)/Loss (+) from changes to demographic assumptions Actuarial Profit (–)/Loss (+) from changes to financial assumptions

0

2,228

0

496

0

2,724other

payments from these obligations –3,026 –1,199 –4,225

Old-age pension and severance reserves as at 31 December 2013 41,801 15,984 57,785

Income recorded for the period.interest chargeperiod of service cost

1,260299

587797

1,8471,096

included in the other results Actuarial Profit (–)/Loss (+) from changes to demographic assumptions Actuarial Profit (–)/Loss (+) from changes to financial assumptions Actuarial Profit (–)/Loss (+) from changes to experience-related assumptions

0

7,820

5,521

0

2,797

225

0

10,617

5,746other

payments from these obligationsChange in consolidation scope

–2,939750

–7071,149

–3,6461,899

Old-age pension and severance reserves as at 31 December 2014 54,512 20,832 75,344

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17b other Long-terM personneL reserVes in €‘000 anniversary reserves

other staff reserves

total

Other long-term staff reserves as at 1 January 2013 4,933 2,570 7,503

Income recorded for the period.interest chargeperiod of service costActuarial Profit (–)/Loss (+)

178332–18

980

155

276332137

otherpayments from these obligations –362 –81 –443

Other long-term personnel reserves as at 31 December 2013 5,063 2,742 7,805

Income recorded for the period.interest chargeperiod of service cost Actuarial Profit (–)/Loss (+) from changes to demographic assumptions Actuarial Profit (–)/Loss (+) from changes to financial assumptions Actuarial Profit (–)/Loss (+) from changes to experience-related assumptions

227354

0

751

–237

950

0

3,541

–2,821

322354

0

4,292

–3,058 other

payments from these obligationsChange in consolidation scope

–292326

–160

–308326

Other long-term personnel reserves as at 31 December 2014 6,192 3,541 9,733

The expense contained in the profit and loss ac-count for severance, pensions, anniversary pay-ments and other personnel reserves is shown in personnel expenses, with the exception of interest expense, which is presented in the interest results.

Actuarial profit and loss for severance and old-age pensions are shown in the other result and are based entirely on adjustments and changes to actuarial assumptions according to experience.


17c oVerVieW Long-terM personneL reserVes 2010–2014 in thousands of euros

31.12.2014 31.12.2013 31.12.2012 31.12.2011 31.12.2010

pension reserves 54,512 41,801 41,030 40,088 39,044redundancy reserves 20,832 15,984 15,406 15,223 14,790anniversary reserves 6,192 5,063 4,933 4,819 4,637other payroll reserves 3,541 2,742 2,570 2,442 2,162

total 85,077 65,590 63,939 62,572 60,633

17d aCtuariaL assuMptions For the BanKing seCtor 2014 2013

Financial assumptionsrate for the discount 2.15 % 3.50 %pay increase 3.18 % 3.25 %increase the old-age pension 2.48 % 2.75 %Discount for employee turnover 0 0

Demographic assumptionsage for pension entitlement: female employees 65 years 65 yearsage for pension entitlement: male employees 65 years 65 yearsmortality table AVÖ 2008 AVÖ 2008

17e aCtuariaL assuMptions For the non-BanKing seCtor 2014 2013

Financial assumptionsrate for the discount 2.40 % 3.50 %pay increase 3.13 % 3.25 %increase the old-age pension 2.43 % 2.75 %Discount for employee turnover 0 0

Demographic assumptionsage for pension entitlement: female employees 65 years 65 yearsage for pension entitlement: male employees 65 years 65 yearsmortality table AVÖ 2008 AVÖ 2008

The weighted average term of the defined contrac-tual obligations (duration) for the banking sector is 12.28 years in the reporting year for severance payments (previous year: 12.49 years), for pension commitments 15.45 years (previous year: 13.46 years) and for death grants (Sterbequartale) 23.00 years (previous year: 20.66 years). For non-banking benefits, the duration in the reporting year was 12.38 years for severance payments and 12.75 years for pension commitments.

no contributions to the plan are expected for the next reporting periods. The evaluation of the exist-ing personnel reserves is based on assumptions re-garding the calculated interest rate, the retirement age, the life expectancy, the fluctuation rate and the future salary developments. In the calculations, the current regulations for the gradual alignment of the retirement age for men and women to 65 were taken on board.

Compared with BtV ag, other actuarial assump-tions arise owing to the non-banking benefits

and the different accounting year for the silvretta Montafon Bergbahnen Group.

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17h other reserVes in thousands of euros


2013

Currency conversion

additions Consump-tion

reductions splitting position 31 December

2014

other reserves and provisions

4,021 9 10,040 –692 –2,823 31,734 42,289

Other reserves and provisions

4,021 9 10,040 –692 –2,823 31,734 42,289

the other reserves have been created as required by IAS 37 for legal or actual obligations of the group. In BtV this balance sheet item mainly includes reserves for off-balance sheet guarantees and other liabili-ties, legal cases as well as for taxes and levies. The consumption of reserves in the current year can be expected with a high degree of probability.

The reclassification of reserves totalling €31,734 thou-sand results from the proportional consolidation of aLpenLÄnDisChen garantie-geseLLsChaFt M.B.H. and the full consolidation of VoMoNoSi Beteiligungs AG.

17g MaturitY proFiLe oF the EXPECTED BENEFIT PAyMENTS in €000s

2015 2016 2017 2018 2019 total

severances 527 1,706 513 818 1,382 4,946 pensions 2,735 3,016 2,895 2,778 2,653 14,077 Death grants (sterbequartale) 88 88 96 104 114 490

The maturity profile of the expected benefit pay-ments from the staff reserves formed looks as fol-

lows for the reporting years 2014 to 2018:

in the case of a change of the calculated interest rate by +/– 1.00 percentage points, a change of +/– 0.50 percentage points for pay increases as well as a change of +/– 0.50 percentage points for pension

increases, the contributions to the reserves would develop as follows if all other parameters remain the same:

17f sensitiVitY anaLYsis in thousands of euros

Calculated interest rate pay increase pension increases

–1,00 % +1,00 % –0,50 % +0,50 % –0,50 % +0,50 %severances 23,352 18,397 19,480 21,921 0 0pensions 63,506 47,392 53,882 55,020 51,426 57,760 Death grants (sterbequartale) 4,457 2,876 3,517 3,568 3,222 3,911


the supplementary capital shown among subordi-nated capital shows maturities during the financial years 2015-2030 and coupons of between 0.386% and 7.000% (previous year: 0.528% and 6.500%).

in the reporting year, subordinated supplementary capital of €33,486 thousand was issued with final maturity of 2024 (previous year: €0). In the report-ing year, €23,700 thousand (previous year: €27,500 thousand) in listed supplementary capital and €46,888 thousand (previous year: €0) in unlisted supplementary capital was repaid.

an early redemption of the bonds by the bank or the lender is not possible. Interest can only be paid, if they are covered by the annual profit as defined by company law before assignments to reserves.

repayment on maturity is only possible on pro-portional deduction for the losses which occurred during the lifetime. For supplementary capital which was issued after 1 January 2010, the interest is only to be paid out if this is covered by dispos-able profits.

the overall expense for subordinated liabilities in the year under review was €8,895 thousand (previ-ous year: €8,797 thousand). In the financial year 2015, issued supplementary capital with a total nominal amount of €48,500 thousand (previous year: €70,588 thousand) will fall due.

the repayment amount for the subordinated capi-tal for which the fair value option was exercised amounted to €179,086 thousand (previous year:


companies of BtV, deferred tax owed from balancing effects decreased by €2,559 thousand in 2013.

18 TAX DEBTS in €‘000 31.12.2014 31.12.2013

Current tax owed 1,732 9,877Deferred tax owed 5,184 2,593

Tax debts 6,916 12,470

19 other LiaBiLities in €‘000 31.12.2014 31.12.2013

negative market values from derivatives trades 39,026 41,440other liabilities 90,947 59,342

other liabilities 129,973 100,782

20 suBorDinateD CapitaL in €‘000 31.12.2014 31.12.2013

subordinated capital 378,952 407,841

Subordinated capital 378,952 407,841

of which fair value 195,833 153,085

18a LATENT TAX OBLIGATIONS in €‘000 31.12.2014 31.12.2013

revaluation Finance Leasing and other 318 0other latent tax refunds and tax debts abroad 4,866 2,593

Deferred tax owed 5,184 2,593

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21a regulatory capital and debt levels as of 2014, the consolidated capital of the group is reported in accordance with the provisions of Basel III. This is based on EU Regulation 575/2013 (Capital requirements regulation – Crr), in conjunction with the Austrian CRR accompanying regulation. the capital according to Crr consists of the com-mon equity (Common equity tier 1 – Cet1), the additional core capital (additional tier 1 – at1) and supplementary capital (Tier 2 – T2). The respective capital ratios are determined by contrasting the corresponding regulatory capital component after taking into account all regulatory deductions and transitional provisions of the overall measure of risk. In accordance with the provisions of the CRR a minimum requirement of 4.5% is planned for Cet1 which will be increased by the capital buffer defined in accordance with CRD IV (Capital Require-

ments Directive IV). For the entire core capital, a minimum requirement of 6.0% is provided; the total capital must reach a value of 8.0%. Pursuant to the Crr accompanying regulation, for austria, different minimum requirements are set from those specified by the CRR, i.e. 4.0% for common equity and 5.5% for the entire core capital. The minimum requirement for total capital remains unchanged at 8.0%. Additional regulatory capital buffers are not defined for the 2014 reporting period. With regard to the debt ratio (leverage ratio), a revised version of the guidelines for the determination and disclosure of the leverage ratio was published in January 2014. It is expected to be adopted into the European regulatory framework in 2015. Within BtV the future impact will be examined and the ap-propriate requirements in terms of disclosure from 1 January 2015 prepared.

€137,804 thousand). The amount of the difference between the fair value of the subordinated capital, for which the fair value option was applied, and its repayment amount is €16,747 thousand (previous year: €15,281 thousand).

During the reporting year for the BtV group, no hybrid loan was issued (previous year: €0). Over-all interest paid for the hybrid loans amounted to €5,199 thousand (previous year: €5,199 thousand).

21 eQuitY

on 31 December 2014 the issued capital totalled €50.0 million (previous year: €50.0 million). The share capital is represented by 22,500,000 (previous year: 22,500,000) – bearer – voting individual shares (common shares). In addition 2,500,000 (previ-ous year: 2,500,000) – bearer – non-voting shares (preference shares) were issued, with a minimum dividend of 6% attached (in the event of dividends being suspended, to be paid retrospectively). The

book value of the shares held by the company was €223 thousand on the balance sheet date (previous year: €571 thousand). The capital reserves include premium values from the share issues. In the capital reserves both retained earnings as well as income and expenses with no effect on profits were ac-counted. The represented shares correspond to the approved shares.

DeVeLopMent oF the shares in CirCuLation in shares 2014 2013

issued shares in circulation 01/01 24,964,869 24,978,583purchase of own shares –5,503 –14,759sale of own shares 27,623 1,045issued shares in circulation 31/12 24,986,989 24,964,869plus own shares in group portfolio 13,011 35,131shares issued 31/12 25,000,000 25,000,000


the structure of regulatory capital is based on the final proposal of the guidelines of the eBa (euro-pean Banking Authority); the values are assessed on the basis of the scope of consolidation required by supervisory regulations. The comparative figures with Basel ii are limited to the total items, since the structure of equity under Basel iii differs considerably from that under Basel II.

the equity calculation for 2014 included retained earnings totalling €19,465 thousand following ap-proval by the Supervisory Board on 27 March 2015.

Explanation: n.s. = not shown

ConsoLiDateD eQuitY aCCorDing to Crr in € million Basel iii 31.12.2014

Basel ii 31.12.2013

Common equity (Cet1)Capital instruments qualifying as Cet1 99.5proprietary Cet1 instruments –1.5retained earnings 778.5aggregated other income 60.3other reserves 128.7transitional changes owing to the transitional provisions for Cet1 capital instruments 4.0goodwill 0.0other intangible assets –0.0Regulatory changes in connection with CET1 instruments of financial companies, in which the bank holds a substantial interest

–324.7

other transitional changes to Cet1 51.3Common equity (Cet1) 796.1 n. a.

additional core capital (additional tier 1)Changes owing to the transitional provisions for additional tier 1 capital instruments 64.8other transitional changes to additional tier 1 –64.8additional core capital (additional tier 1) 0.0

Core capital (tier 1): sum of common equity (Cet1) and additional (at1) core capital 796.1 807.0

supplementary capital (tier 2)paid-up capital instruments and subordinated loans 141.1Direct positions in supplementary capital instruments –0.9Changes owing to the transitional provisions for supplementary capital instruments and subordinated loans

71.8

other transitional changes to supplementary capital –78.0supplementary capital (tier 2) 134.0 157.3Equity applied under Section 23 para. 14 line 7 BWG (Tier 3) n. a. 0.1

total qualifying equity 930.1 964.4total risk-weighted assets 6,212.8 6,055.4

Common equity tier 1 ratio 12.81 % n. a.Core capital ratio 12.81 % 13.33 %equity ratio 14.97 % 15.93 %

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22 interest inCoMe in €‘000 2014 2013

interest and similar income fromLending and money market transactions with credit institutions 6,574 8,360Lending and money market transactions with clients 150,984 152,288Debenture bonds and fixed-interest securities 43,590 49,691equities and variable-rate securities 1,855 1,241other shareholdings 2,172 2,288other transactions 3,628 29,239

sub-total interest and similar income 208,803 243,107

interest and similar expenses onCredit institutions deposits –8,929 –9,871Customer deposits –26,388 –31,199securitised debt –4,591 –3,144subordinated capital –13,758 –13,348other trades –7,088 –33,021

sub-total interest and similar expenses –60,754 –90,583

income from at-equity valued companies 34,219 27,689

Net interest income 182,268 180,213

information on overall income statement and segment reports

The interest income for financial assets, including at-equity income for which valuation is not carried out at fair value, amounted to €238,764 thousand (previous year: €268,677 thousand). The correspond-ing interest costs for financial liabilities amounted to €54,063 thousand (previous year: €84,465 thousand).

For impaired financial assets, accumulated interest in the amount of €1,739 thousand (previous year: €1,742 thousand) was collected.

owing to the inclusion of BtV 2000 Beteiligungs-verwaltungsgesellschaft m.b.H. in the group of consolidated companies, 2013 was also adjusted and in this case the „income from companies val-ued at equity“ item increased by €3,165 thousand.


25 traDing inCoMe in €‘000 2014 2013

income from derivatives –668 –295income from securities 503 388income from foreign exchange and notes and coins transactions 930 908

Trading income 765 1,001

26 OPERATING EXPENSES in €‘000 2014 2013

payroll –83,353 –60,401thereof salaries and wages –62,956 –44,721thereof legal social contributions –16,337 –12,424thereof other personnel costs –1,940 –2,004thereof expenditures for long-term personnel deferrals –2,120 –1,252

Materials –39,492 –28,774amortisation –16,763 –6,862

Operating expenses –139,608 –96,037

personnel costs include expenses for contributable pension plans of €1,601 thousand (previous year: €1,432 thousand).

23 risK proVisions in CreDit transaCtions in €‘000 2014 2013

allocation of on-balance sheet provision –28,280 –45,220allocation of off-balance sheet provision –9,791 –519Loan loss insurance premiums 0 –4,405release of on-balance sheet provisions 8,567 6,893release of off-balance sheet provisions 1,379 74Direct amortisation –1,213 –3,965income from amortised receivables 297 258

Loan-loss provisions in the credit business –29,041 –46,884

the allocations to and write backs from provisions for off-balance sheet loan risks are contained in the above figures.

the premium for the loan default insurance included the payments to aLpenLÄnDisChe garantie-ge-SELLSCHAFT M.B.H. which, owing to the proportional consolidation of the company, amounted in the report-ing year to €0 (previous year: –€4,405 thousand).

24 net CoMMission inCoMe in €‘000 2014 2013

Credit transaction 6,063 5,703payment transactions 12,287 13,108securities trading 20,546 21,601Currency, foreign exchange and precious metals trading 2,943 3,094other services business 1,890 1,773

Net commission income 43,729 45,279

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in addition, in the reporting year, an average of 26 employees (previous year: 26 employees) were sent

to closely related companies. These are not taken into account in the table above.

27 other operating inCoMe in €‘000 2014 2013

other operating income 60,096 6,102other operating expenses –30,228 –8,341hedge accounting income 88 –33

Other operating profit 29,956 –2,272

28 inCoMe FroM FinanCiaL assets – at Fair VaLue through proFit or Loss in €‘000

2014 2013

Profit arising from financial assets – at fair value through profit or loss 209 2,518

Profit arising from financial assets – at fair value through profit or loss 209 2,518

26b aVerage nuMBer oF eMpLoYees, WeighteD aCCorDing to personnel years 2014 2013

White collar 888 766Blue collar 307 27

Payroll 1,195 793

the costs invoiced by the auditors of the group (KpMg austria gmbh auditor and accounting com-pany and KpMg network companies) for the audit of

the individual and group financial statements as well as other services rendered amounted to (incl. VAT):

26a AUDITOR EXPENSES in €000s 2014 2013

audit of year end accounts company and group 349 317tax advisory services 51 65other services 89 31

Auditor expenses 489 413

the total amount of other taxes which apply to other operating income totalled €9,785 thousand in 2014 (previous year: €4,199 thousand). The gains on fair value hedge accounting amounted to €88 thousand in the reporting year (previous year: loss of €33 thou-

sand). Hedged underlying transactions incurred a loss of €33,371 thousand (previous year: €14,438 thou-sand), while hedging instruments made a gain of €33,459 thousand (previous year: €14,405 thousand).


29 proFit FroM FinanCiaL assets – aVaiLaBLe For saLe in €‘000 2014 2013

Profit arising from financial assets – available for sale 1,904 2,479

Profit arising from financial assets – available for sale 1,904 2,479

From the sales of available financial assets in the reporting period in the area of fixed interest and non-fixed interest securities a total profit of €14,969 thou-sand (previous year: loss of €10,953 thousand) was recorded directly under equity.

In the reporting period, a total profit from other investments and other associated investments in the amount of €62,575 thousand (previous year: €58,672 thousand) was recorded directly under equity. In addition, in the reporting year, due to

sales or repayments from the afs assessment re-serves €5,388 thousand profit (previous year: profit of €2,758 thousand) was posted under the p&L heading „Income from financial assets – available for sale“. In addition, this result item in the finan-cial year 2014 includes permanent write-downs (impairments) of fixed interest and non-fixed interest securities to the value of €0 (previous year: €107 thousand). In the reporting year, write-downs of €711 thousand were recorded for other invest-ments and other associated investments.

31 TAXES ON INCOME AND PROFITS in €‘000 2014 2013

Current tax expense –18,632 –24,726tax provision cost (-)/income (+) 4,945 6,975

Taxes on earnings and profit –13,687 –17,751

the taxes on income include the individual group companies on the basis of calculated taxable results from current income taxes, income tax cor-

rections for previous years and changes to the tax provisions.

30 inCoMe FroM FinanCiaL assets – heLD to MaturitY in €‘000 2014 2013

Profit arising from financial assets – held to maturity –414 –23

Profit arising from financial assets – held to maturity –414 –23

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31a TAX: reConCiLiation CaLCuLation in €‘000 2014 reconcilia-tion of

tax rate

2013 reconcilia-tion of

tax rateAnnual net profit before tax 89,768 86,274Calculated tax expense –22,442 25.0 % –21,569 25.0 %tax reduction due to tax-exempt revenue from holdings and other tax-exempt revenues

1,910 –2.1 % 1,756 –2.0 %

tax increase from non-deductible expenses –1,527 1.7 % –512 0.6 %other 2,078 –2.3 % 5,793 –6.7 %tax expense for other periods –1,349 1.5 % –9,230 10.7 %tax exemption at-equity revenues 7,643 –8.5 % 6,011 –7.0 %

Taxes on earnings and profit –13,687 15.3 % –17,751 20.6 %

32 earnings per share (CoMMon anD preFerenCe shares) 2014 2013

equities (ordinary and preference shares) 25,000,000 25,000,000Average float (ordinary and preference shares) 24,967,581 24,972,350Group net profit attributable to the owners in €000s 75,870 68,523

eps (earnings per share) in € 3.04 2.74Diluted earnings per share in € (ordinary and preference shares) 3.04 2.74Dividend per share in € 0.30 0.30

the diluted earnings per share are the same as the undiluted earnings per share as no financial instruments with diluting effect were issued. These

means that there is no difference between the values „earnings per share“ and „diluted earnings per share“.

33 appLiCation oF proFits

The distributable profits are determined from the financial statements of BTV AG. The net earnings for the financial year 2014 amounted to €30,592 thou-sand (previous year: €51,167 thousand). After increase of reserves of €23,185 thousand (previous year: €43,600 thousand) and adding back the profits carried forward there is an available sum of €7,568 thousand (previous year: €7,619 thousand). The Board of Direc-tors will recommend to the annual general Meeting

that for the financial year 2014 a dividend of €0.30 per share (previous year: €0.30) be paid out. The pay-ment requires therefore a total of €7,500 thousand (previous year: €7,500 thousand). The total amount of dividends on preference shares was €750 thousand (previous year: €750 thousand). The remaining profit is to be carried forward as per section 65 para 5 of the Shares Act (Aktiengesetz).

The „Other“ item comprises essentially the tax assessment and differences from foreign taxation. the tax expenses not relating to the period con-tains taxes on income from previous periods and other sources of tax.

in the reporting year, on the statement of compre-hensive income, €1,375 thousand (previous year: €1,805 thousand) in deferred taxes was recorded directly under equity. Of this, unrealised profits/losses on disposal of assets held for sale (deprecia-tion reserves) accounted for -€2,642 thousand (pre-vious year: €1,125 thousand) and the revaluation of performance-related pension plans accounted for €4,018 thousand (previous year: €679 thousand).


34 segMent reporting

BTV adapted its segment reporting in 2014. This was based on the newly developed overall bank management reports and due to the inclusion of VoMonosi Beteiligungs ag (includes the silvretta Montafon group) in the scope of full consolidation and BtV Leasing crossing the qualitative and quan-titative thresholds defined in IFRS 8 (previously reported in corporate banking). For the new overall bank management reports the previous year‘s fig-ures were calculated so that a comparison with last year could be shown in the segment reporting.

segment reporting is provided by BtV group as required by the information and valuation rules of IFRS 8. Segment information is based on what is known as the „Management Approach“. This requires segment information to be presented ac-cording to internal reporting as it is regularly used by the company‘s key decision-makers for deci-sions on allocation of resources to the segments and to assess their performance. The qualitative and quantitative thresholds defined in IFRS 8 are met by this segment reporting. The business areas are reported as independent businesses.

segment reporting is based on internal divisional accounting for the corporate and retail customers business areas, on the overall bank report for the institutional clients and banks business area, on the reporting package and the monthly report for the BtV Leasing subgroup and on the respective monthly report for the silvretta Montafon Berg-bahnen Group. These reports reflect the structure of management responsibilities within BTV in 2014. these internal reports to the Board of Directors, which only satisfy iFrs accounting standards in part, are supplied monthly and are almost totally automated by preparatory systems and interfaces. the reporting dates for the data are the respective period closing dates of the subsidiaries included in the consolidated financial statements. The informa-tion of the internal and external accounting system is based on the same base data and is agreed in the

Finance and Controlling division for the reports. A reciprocal check, current agreements or plausibility checks between the sales and strategy Control-ling, risk Controlling, reporting and Balance sheet presentation and tax and accounting groups are therefore guaranteed. The criterion for the separa-tion of business areas is primarily the responsibility for looking after clients. Changes in this responsi-bility can also lead to changes in attribution to a segment during the course of a year. These effects were, where insignificant, not corrected in the com-parison with last year.

In 2014, the following business areas are defined within BtV:the corporate client business area is responsible for small, medium and large business clients and chartered accountants and auditors. The retail client business area is responsible for the retail cli-ents, freelance professionals and micro-companies market segments. The institutional clients and banks division mainly includes treasury and trading activities. BTV Leasing brings together all leasing operations of BTV AG. The Silvretta Montafon Berg-bahnen Group contains all of its tourism activities. the results of these segments also include transac-tions between segments, particularly between the corporate customer segment and leasing and the Silvretta Montafon Group. Services are charged for at market rates. Alongside these five reporting segments is the „other segments/consolidations/misc.“ heading. This item reports the results from service areas across BtV, such as Finance and Controlling, Legal and investments, Marketing and Communications and Group Auditing, etc. In addi-tion, the effects of consolidation and fully consoli-dated companies below the thresholds (alpenlän-dische Garantie-Gesellschaft m.b.H., BTV Hybrid i gmbh and BtV hybrid ii gmbh, as well as tiMe Holding GmbH) are allocated to this segment.

The results of the five reporting segments are described below.

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Corporate client segmentinterest income in the corporate client business exceeded the previous year‘s result by 1.7% based on the moderate rise in business volume and amounted to €87.0 million in the reporting year. Another factor determining income is the established risk provision: This fell in comparison to 2013 by €5.1 million, or down 20.5%. In 2014 risk provisions of €19.8 million were formed for the corporate client business. Com-pared with the previous year, net commission income in the corporate client segment grew by €0.2 million to €20.0 million. At €33.8 million, operating expenses were only €0.9 million, or 2.6%, above the 2013 value.

In total, this led to an annual profit before tax increase of €5.9 million to €53.3 million for the cor-porate client segment, outperforming the previous year‘s value by 12.5%.

the segment loans grew in 2014 from €4,267 million to €4,281 million. The segment liabilities increased significantly from €1,734 million to €1,902 million, or by 9.7%.

retail client segmenthere the reduced volume in client receivables is put-ting pressure on interest income. In 2014 net interest income was nonetheless maintained just under the previous year‘s level and amounted to €38.4 million for the reporting year. In 2014 commission income was, however, well down on the previous year. Com-mission income of €31.3 million was still achieved in 2013, while in 2014 it was down to €27.3 million. The retail client segment is typically highly cost intensive because of the high staff and premises resources required. Costs rose by 5.8% in 2014. Staff costs amounted to €51.5 million. Loan loss provisions for the credit business remained stable, falling by €0.3 million to €3.6 million.

Pre-tax profit for this segment fell overall by €6.7 mil-lion, or 36.9%, to €11.4 million.

the segment loans fell by €53 million to €1,266 mil-lion. The liabilities for the segment increased from €2,784 million to €2,807 million.

institutional Clients and Banks segmentinterest income in the institutional Clients and Banks division fell from €15.3 million to €12.3 mil-lion, or by 20.0%, owing to the weak interest rate stuctural result in the financial year 2014.no loan loss provisions had to be formed in 2014 for the Institutional Clients and Banks division. Loan loss provisions totalling €0.4 million were

reversed. Operating expenses were up €0.3 million and amounted to around €2.6 million for 2014. the main reason for the declining result was the „Income from financial assets and trading income“ item, which following a drop from €6.0 million to €2.4 million was 60.4% below the value of 2013.

In total, this led to an annual profit before tax of €12.5 million, which was €3.1 million, or 19.9%, below the previous year‘s profit.

the segment loans rose by €174 million to €2,377 mil-lion. The liabilities for the segment fell from €3,193 million to €2,752 million.

segment LeasingBTV Leasing posted an excellent financial year. The leasing subsidiary‘s net interest income jumped from €13.9 million to €15.7 million, or by 12.7%. The loan loss provisions formed for the leasing business fell from €1.2 million to €1.1 million, or down 2.8%, in 2014.

Overall, pre-tax profit grew by €1.6 million to €12.4 million.

the cash volume rose in 2014 by €17 million, or 2.5%, and stood at €718 million at 30 September 2014.

silvretta Montafon segmentthe result of the silvretta Montafon group is reported for the first time due to full consolidation in 2014, so there are no comparable values. On the reporting date, the months of october 2013 to september 2014 for silvretta Montafon Bergbah-nen Group were included. Owing to the course of business being dominated by tourism, the result fell drastically due to the season. Other operating profit (€41.2 million) mainly includes the revenues. these are the decisive factors for silvretta Mon-tafon with its average of 397 employees in the quarter under review. Administrative expenses amounted to €34.3 million.

Overall, the annual pre-tax profit with a slightly negative net interest income (down €0.9 million) was around €6.0 million.


segMent reporting in in €000s

Year Corporate clients

retail clients

institutional clients

and banks

Leasing silvretta Montafon

reporting segments

other segments/consolida-tion/misc.

group balance

sheet/p&L

net interest income 12/2014 87,000 38,426 12,276 15,711 –941 152,472 –4,423 148,04912/2013 85,509 38,715 15,341 13,935 0 153,500 –976 152,524

income from at-equity valued companies

12/2014 0 0 0 0 0 0 34,219 34,21912/2013 0 0 0 0 0 0 27,689 27,689

Loan-loss provisions in the credit business

12/2014 –19,763 –3,612 372 –1,140 0 –24,143 –4,898 –29,04112/2013 –24,867 –3,961 –3,500 –1,173 0 –33,501 –13,383 –46,884

net commission income 12/2014 19,950 27,333 0 527 0 47,810 –4,081 43,72912/2013 19,753 31,342 0 512 0 51,607 –6,328 45,279

operating expenses 12/2014 –33,842 –51,479 –2,566 –6,153 –34,264 –128,304 –11,303 –139,60812/2013 –32,974 –48,639 –2,310 –6,016 0 –89,939 –6,098 –96,037

Other operating profit 12/2014 0 727 0 3,416 41,243 45,386 –15,430 29,95612/2013 0 596 0 3,628 0 4,224 –6,495 –2,271

Profit arising from finan-cial assets and trading profit

12/2014 0 0 2,395 69 0 2,464 0 2,46412/2013 0 0 6,048 –73 0 5,975 0 5,975

Annual profit before tax 12/2014 53,345 11,395 12,477 12,430 6,038 95,685 –5,916 89,76812/2013 47,421 18,053 15,579 10,813 0 91,866 –5,591 86,274

segment loans 12/2014 4,280,865 1,266,182 2,376,810 717,977 1,821 8,643,655 224,911 8,868,56612/2013 4,267,023 1,319,433 2,202,426 700,707 0 8,489,589 435,921 8,925,510

segment liabilities 12/2014 1,901,694 2,806,926 2,751,868 673,298 34,359 8,168,145 160,907 8,329,05212/2013 1,733,619 2,784,298 3,193,290 633,553 0 8,344,760 131,477 8,476,237

Changes in this responsibility can lead to changes in attribution to a segment. These effects are not corrected in the year-on-year comparison.

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segment reporting: explanatory notesthe net interest income is allocated according to the market interest method. Sales figures are included in the corporate and retail clients for management reasons, among other items. Income from equity-valued companies is allocated to the „other segments/consolidation/misc.“ area. Net commission income is determined by the assignment of the internal divi-sional accounting (including all manual entries being assigned to commission). Costs are allocated to the respective segments in which they were incurred and the expenses of BtV Leasing gmbh or silvretta Mon-tafon group are directly allocated in accordance with the management reports. Costs not directly imputable are shown under „other segments/consolidation/misc.“ The other operating income includes, among other things, the conversion of the silvretta Montafon group and, in addition to the consolidation effects, essentially the stability tax and rental operations under „Other segments/consolidation/misc.“

the segment receivables include the entries for loans and advances to banks, loans and advances to clients, trading assets and all fixed-interest secu-rities, guarantees and liabilities. The „Other seg-ments/consolidation/misc.“ column includes loan loss provisions, since the internal control considers the liabilities as net figures in contrast to the bal-ance sheet. Also included in this column are consol-idating entries. The entries for liabilities to banks, liabilities to clients, trading liabilities, securitised debt, trading liabilities and subordinated capital are allocated to the liabilities segment. Consolidat-ing entries are also included here in the „other segments/consolidation/misc.“ column.

The success of the business field concerned is measured by the before-tax annual net profit gen-erated by that segment.

the result of the investment in the silvretta Mon-tafon group was included in 2013 in the at-equity result and not yet part of the full consolidation, therefore the comparative figures for the „Silvretta Montafon“ segment for 2013 are stated as 0.


35 risK reporting

risk strategy and policy for risk managementas part of the risk report, a qualitative and quan-titative disclosure is made of the iCaap (internal Capital Adequacy Assessment Process) at BTV. This disclosure includes the global banking level as well as the individual risk categories. BTV‘s risk catego-ries were determined as follows:

BTV‘s global bank risk is defined as the sum of

credit, market, liquidity, operational, macroeco-nomic and other risks. This states the likelihood of BtV continuing to be in a position to meet the risk capability requirements within a specific time horizon.

Within BtV, risk is understood to mean the risk of a negative divergence from an expected result. The conscious and selective assumption of risks and their appropriate management represents a core banking function and hence a core function of BTV too. The aim is to achieve a balanced ratio between risk and profit, in order to make a sustainable contribution to the positive development of the company. Because of the operational necessity of being able to continue to meet the risk capability requirement and to maintain

a balance between risk and profit, BTV has developed a risk strategy. This risk strategy is characterised by a conservative approach to operational banking risks, resulting from the demands of a client-oriented focus in banking business and the attitude towards the legal requirements.

therefore a control loop has been implemented within BtV, which ensures that all risks within the group are identified, quantified, aggregated and actively managed. The individual risk definitions and management mechanisms applied as part of this control circuit are described in detail below.

Credit riskat BtV credit risk is broken down as follows:

• risk of default by other party• equity investment risk• Credit concentration risk• risks from credit risk reducing techniques

the securitisation risk is of no relevance, since BtV has no securitisation positions in its asset portfolio.

risk of default by other partyunder this heading BtV looks at the total or partial default of a counterparty and the resultant loss of the income due or loss of the capital invested. particular importance is attached to the monitor-ing of party default risk, being the most important type of risk for BTV.

Management of counterparty default risk the credit management department is responsi-ble for risk management of its loan book as well as for assessing the creditworthiness of clients. This department is also responsible for overall manage-ment, restructuring management, management of loan commitments in default, drawing up of financial statements and company analyses, as well as collec-tion and evaluation of sector information. Knowing our customers well is particularly important for BTV. This is reflected strongly in the loan management area. Regular meetings between customers and loan managers from BtV are just as self-evident as at least annual borrower reviews.

risK CapaBiLitY

Credit riskrisk of default by other partyequity investment riskCredit concentration riskrisks from credit risk reducing techniques

Market riskrisk of a change in interest ratesCurrency riskshare price riskCredit spread risk

Liquidity riskoperational riskMacroeconomic riskother risks

strategic riskreputation riskCapital riskProfit or business riskModel risk

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The main defined goals for the management of the borrower‘s default risk have been defined as the long-term optimisation of the lending business with regard to the risk/return ratio, and in the short term, the achievement of the credit risk objectives budgeted for in the individual client segments. At individual level, risk management techniques include assessment of creditworthiness when granting loans, the acceptance of collateral, ongoing monitoring of account man-agement and scheduled reviews of ratings and the soundness of collateral. Loan loss provision is carefully formed, taking into consideration existing collateral, for default risks identified and quantified during the financial year.

transactions involving debt arrangements here, it concerns transactions in which the borrow-er, who has been under financial pressure has been given through one or more measures the opportu-nity to pay off his liabilities within the framework of his current economic situation.

types of debt arrangement the following types of debt arrangement are distinguished at BtV:

Debt arrangement concerning capital repayment:• The credit period is extended.• Arrears are capitalised.• Redemption payments are temporarily put on hold.• Loans are waived in part or as a whole.• Repayment vehicles are temporarily put on hold. Debt arrangements concerning the interest pay-ments to be made:• Interest payments are temporarily put on hold.• Favourable rates of interest are agreed in order to

reduce the burden of interest.

other types of debt arrangement:• The credit relationship is readjusted by contract.• the obligation to comply with binding conditions

(covenants) on the part of the borrower is temporarily relaxed.

• Securities are released.• additional borrowers are adopted into the credit

relationship.

the measures listed are applied in both an individual as well as combined way.

risksall of the measures mentioned above generally re-duce the risk of the borrower defaulting. If however the agreements made are not adhered to on the part of the client, there is the risk of a reduced quo-ta of collectability due to the delay of the default or the delay in a possible termination of the loan.

risk management and risk controlthe internal regulations of BtV provide that debt arrangements are only to be granted if, on the basis of the available data, documents and information, a proper repayment is ensured. The approval is made through the decision-making channels. The agreements made with the borrower are always to be documented in writing. If there is interference in existing contracts, the changed or new contracts have to be agreed to by the borrower as well as all the co-borrowers and issuers of securities.

the control is carried out by the credit manage-ment department by means of existing control systems such as, for instance, lists for overdrafts and credit limits. Other agreements made with the client are controlled separately through the relevant responsible person for the market.

accounting policies and valuation methodsDebt arrangements granted to borrowers do not lead directly to a loan loss provision, a reserve or a derecognition of the receivable.

if the agreed measures are not complied with, the client is submitted to a renewed and timely credit check. Within the context of this check, a change of the borrower‘s rating to default as well as the formation of a loan loss provision or a reserve will be evaluated.

if, within a credit commitment, a credit default is to be expected, a loan loss provision or a reserve is created for the part that is probably not recoverable.


generally, entire or partial write-offs of claims take place only with clients who have already defaulted and after assessment through the reorganisa-tion management. Provided that a borrower in a difficult financial position can cover some of his obligations, in individual cases a release of existing claims can take place also for clients who have not defaulted.

probation period once an agreed debt arrangement has formally come into force, a two-year probation period will start for the borrower. after the two-year probation period has been com-pleted and all of the criteria listed below have been cumulatively fulfilled, the client is again managed as a client without a debt arrangement:

• The client is within the living rating area.• according to the assessment of the commercial

situation, the borrower can repay the claims.• Within the probationary period, the payment

obligations are fulfilled properly.• Currently, the total position of the borrower

is less than 30 days overdue.

if a customer who has been granted a debt ar-rangement defaults during the probationary period, the probationary period will be interrupted for 365 calendar days. The customer cannot obtain a living rating for the period of interruption of the probationary period. Provided that the borrower‘s overall position is not overdue, a new two-year probationary period will start when the inter-ruption period ends. For those customers whose probationary period was interrupted, stringent monitoring criteria will apply to the new probation-ary period:

• If the borrower‘s overall position is more than 30 days overdue, this is regarded as default.

• the granting of a further debt arrangement is regarded as default.

equity investment riskequity investment risks (shareholder risks) are de-fined within BTV as the potential losses from equity furnished, non-payment of dividends, partial write-downs, losses on disposals, reduction of hidden re-serves, liability risks (e.g. letters of comfort), or profit transfer agreements (assumption of losses). Credit concentration riskWithin BTV, credit risk concentration is defined as the risks which arise from un uneven distribution of business partners in loan or other business rela-tionships, the formation of geographical or sector-specific business clusters or other concentrations, which may generate losses that are large enough to threaten BTV‘s continued existence.

risks from credit risk reducing techniquesthis is understood to mean the risk that the credit risk reducing techniques implemented by BtV are less effective than expected. This risk can be differentiated according to credit, market, liquidity, operational and other risks.

under credit risk BtV looks in this context at the total or partial default of a counterparty and of the collateral issuer or security provider and the resultant loss of income due or loss of the capital invested.

Market risks include the interest rate change, currency, share price and credit spread risks. The currency risk arises as a result of inconsistencies in the currency between debts and risk-mitigating techniques. If the nominal price of the security changes negatively in relation to the nominal price of the loan, the unsecured portion of the debt will increase and so will the potential loss amount in the event of default on the debt. The interest rate change, share price and credit spread risks should be seen here as mainly being connected with financial security. For example, the market values of financial security (equities, bonds, etc.) could be reduced owing to macroeconomic influences.

as part of the risks arising from risk-mitigating techniques, liquidity risk is defined as the non-liquidity of parts of the collateral portfolio.

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Furthermore, operational and other risks – cor-responding to the definitions in the following sec-tions – may result in parts of the collateral portfolio losing in value.

in the case of all the risks mentioned, owing to the reduction in the value of the security, the unse-cured portion of the debt increases and so does the potential amount of the economic loss for BtV in the event of default on the debt.

Market riskunder market risk BtV understands the potential loss which can arise due to changes in prices and interest rates in financial markets for all the posi-tions of the bank and its trading book. The market risk is made up of interest risk, currency risk, share price risk and credit-spread risk types.

Control of market risksManagement of market risks is undertaken cen-trally in the institutional Clients and Banks business area of BTV. Both the periodical and net asset value effects of asset/liability management are taken into consideration to this end. As central auxiliary con-ditions, the impacts of the management measures on invoicing according to iFrs and ugB and the clauses relating to supervisory law are taken into consideration.

at BtV, management measures include the iden-tification of commitment incongruities and their adjustment, the ongoing monitoring of credit spreads in the security nostro, the assurance of the effectiveness of hedge relationships, the separa-tion of income components using a transfer price system and the assurance of risk-bearing ability at all times. interest rate riskInterest rate risk has a twofold impact. On the one hand there is the risk of reduced net asset values due to the changes of market rates in the interest register. On the other hand, there is a risk that the expected interest revenue will not be achieved due to a change in interest rates.

types of interest rate riskWithin BtV, the different forms of interest rate risk are broken down as follows:

• interest rate adjustment risk: this risk arises from setting of interest rates, which can lead to inconsistencies in the fixed interest rates and a potential reduction in the net interest margin.

• interest curve risk: this risk arises from changes in the yield curve (position, steepness, convex-ity), which on the one hand affect the net present value of interest rate-sensitive positions, and on the other hand influence the structural contribu-tion to the net interest margin.

• Basis risk: this risk arises from the different rate sensitivities of asset and liability positions to interest rate movements.

• non-linear risks from derivative positions and embedded options.

While the first three categories of interest risk arise from traditional banking activity and are moni-tored, the fourth type of risk arises in the case of transactions involving options.

Currency riskBTV defines currency risk as the danger that the profit which is obtained from transactions which require conversion from one currency to another, deviates negatively from the expected result.

share price riskWithin BtV, share price risk is understood to be price fluctuations in equities and equity funds.

Credit spread riskthe credit spread represents a risk premium for investments which include loan and liquidity risks. The credit spread is defined as the difference in re-turns from an asset and a risk-free reference bond. Credit spread risk in BTV is reflected in fluctuations in the net value of bond portfolios, which cannot be attributed to interest rate changes.

Liquidity riskWithin liquidity risk, BtV distinguishes between liquidity risk in the narrower and in the broader sense.


Liquidity risk in the narrower sense (insolvency risk or funding liquidity risk) is defined as the danger that BtV is no longer able to meet its current and future payment liabilities either in full or by the established deadlines. This can occur due to short-term liquidity bottle-necks such as e.g. delayed arrival of expected payments, unexpected with-drawal of deposits and drawdowns on approved lines of credit.

Within BtV, liquidity risk in the narrower sense essen-tially consists of management of the following risks:

• Due date risk as the risk of an unscheduled extension to the capital commitment period of lending operations due to behaviour which is not contractually compliant.

• Withdrawal risk, which is the danger arising from unexpected drawdown of lending commitments or the unexpected withdrawal of deposits.

Liquidity risk in the broader sense essentially is risk within the structural liquidity, and describes the effects on earnings of sub-optimal availability of liquidity. Within BTV, this category is a part of the management of assets and liabilities and consists of refinancing risk and market liquidity risk:

• Refinancing risk is the danger that additional refinancing can only be obtained at higher mar-ket interest rates. This describes the situations in which only insufficient liquidity can be obtained under the expected conditions. The maturity mismatches which are deliberately contracted from the point of view of profitability, entail the danger that purchasing conditions will become more expensive. This situation can arise either due to disturbance in the interbank market or due to a reduction in the credit rating of BTV. on the basis of the money-at-risk approach, this risk thus corresponds to the costs which would have to be borne by the bank in the event of an unspecified negative scenario occurring, in order to exclude this risk, i.e. in order to close out the existing maturity mismatches (sale of realisable assets or assumption of long-term refinancing).

• Market liquidity risk is the danger, contingent on extraordinary events, that assets may only be realised at discounts in the market.

Management of liquidity riskBTV‘s liquidity risk management is used to guaran-tee adequate liquidity at all times, so that the bank is able to meet its payment liabilities.

the institutional Clients and Banks department is responsible for short-term liquidity risk manage-ment. The primary task of short-term liquidity risk management is to identify and manage the option-al liquidity risk position. This management is based on an analysis of daily payments and the planning of expected cash flows, as well as demand-related money market trading, taking into account the liquidity buffer and access to central bank facilities.

Monitoring of the long-term liquidity risk is carried out by BtV bank management and consists of the following points:

• Optimisation of the refinancing structure with minimisation of refinancing costs

• Sufficient provision of primary funds• Diversification of sources of refinancing• optimisation of the liquidity buffer• Clear investment strategy for tenderable securi-

ties on the bank‘s books• Compliance with regulatory conditions in

connection with the provisions of regulation (eu) no 575/2013 (Crr), the austrian Banking act (BWg) and the Credit institution risk Management ordinance (Ki-rMV)

operational riskOperational risk is defined as the danger of losses due to the failure of internal processes, procedures, systems and individuals, or as a result of external events. This definition includes legal risk, but ex-cludes strategic risk and reputation risk.

Macroeconomic riskrisk are described as macroeconomic risks if they result from unfavourable changes in the economic development as a whole in the markets in which BTV transacts business.

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These risks lie outside the sphere of influence of BtV, the sensitivity of client groups, sectors and markets versus negative economic changes as a whole is however expresses itself to different degrees and is taken into account in the direction of the business. From this perspective, an internal closeness to the strategic risks is also the case.

other risksBTV understands „other risks“ to cover the follow-ing types of risk:

• strategic risk• reputation risk• Capital risk• Profit or business risk• Model risk

BTV defines these types of risk as follows:

as far as BtV is concerned, strategic risk arises from the negative effects on equity and revenue of business policy decisions, changes in the economic environment, failure to implement or inadequate implementation of decisions or a failure to adapt to changes in the economic environment.

reputation risk describes the negative conse-quences which may arise from a negative diver-gence in BTV‘s reputation from the expected level. reputation is understood to be the standing of BtV with regard to its competence, integrity and trustworthiness resulting from the perceptions of public stakeholders (shareholders, employees, customers, etc.).

Capital risk arises from the inadequate availability of risk cover capital.

the earnings and business risk arises from inad-equate diversification of the earnings structure or from the inability to achieve an adequate and last-ing level of profitability.

the model risk is the risk that a model generates incorrect results and therefore incorrect steering impulses are given. The production of incorrect results can be due to the fact that the model was incorrectly designed, or is unsuitable for the se-lected application. The model may also have been used incorrectly, or the incorrect input data were used for a model. It is also possible that a model is no longer valid or is inconsistent.


the central responsibility for risk management lies with all the Directors. It decides on risk policy, approves the basic principles of risk management, determines limits for all of the relevant risks for BtV and defines the procedures for risk monitoring. The central steering committees are the apM meeting and the BTV Bank Management.

Within the framework of risk management, the supervisory board of BtV has the responsibility for monitoring the risk management system. The reali-sation of this supervisory role is essentially carried out through the reports listed below: • risk reporting of the group Management Board

within the framework of the preparing sessions of the auditing committee and within the ple-num of the Supervisory Board.

• annual iCaap report to the audit committee• annual session of the risk and credit committee• on-going reports by the group audit to the au-

dits undertaken with different areas of emphasis• annual report of the auditor about the functional

capacity of the risk management system to the Chairman of the supervisory Board

at present the apM meeting is held on a monthly basis, one week before the BTV Bank Management. it comprises the divisional board members and the heads of the business areas institutional Clients

and Banks as well as Finance and Controlling. The main responsibility of the apM meeting includes decisions with regard to investment activities in the bank register, the development of hedging strate-gies as well as the analysis of the interest income components. Furthermore, a thorough analysis of the liquidity situation as well as BTV‘s refinancing costs takes place.

at present the BtV Bank Management meets monthly. It consists of the full Board of Directors and the heads of the Finance and Controlling and Credit Management departments, as well as the Corporate Client, retail Client and institutional Cli-ents and Banks departments. The Controlling team leader is responsible for chairing this meeting. The principal responsibility of BtV Bank Management covers management of the balance sheet struc-ture from the perspective of risk/return, as well as management of credit, market, liquidity risk as well as operational and macroeconomic risk. Strategic, reputation, capital and business risk, as well as model risks are combined in the „other risks“ risk category and are also discussed within the context of BTV Bank Management.

risk Controlling is responsible for providing inde-pendent and neutral reporting of risks within BtV for management and guidance decisions. The core tasks of Risk Controlling are the identification, measurement,

structure and organisation of risk management

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analysis, monitoring and reporting of risks, as well as advising managers within the corporate divisions and processes. Through these core tasks, Risk Controlling provides an important supportive business manage-ment service to the management for risk-oriented planning and management.

As an autonomous supervisory body, BTV‘s group audit audits the effectiveness and appropriateness of overall risk management and thereby also sup-plements the role of representatives of regulatory bodies and owners.

the compliance function monitors all legal regula-tions and internal guidelines relating to financial services according to the securities supervision act (WAG). The supervision of employee and customer transactions is intended to secure confidence in the capital markets, whereby compliance contributes directly to the protection of the reputation of BTV.

the anti-money laundering department has the task of preventing money laundering and financing of terrorism within BTV. On the basis of the legally prescribed risk analysis, measures and guidelines are defined to prevent the channelling of illegally obtained assets into the legal financial system. In case of evidence of money laundering or the fi-nancing of terrorism, the money laundering officer must inform the Federal Ministry of the Interior.

Both the compliance function and the money laundering officer report directly to the full Board of Directors.

Within BtV, the functions of risk control, group audit and the compliance/money laundering func-tion are organised so as to be independent of each other. This guarantees that these organisational units can execute their tasks in an appropriate manner within the framework of an effective inter-nal control system.


the requirements which apply to a quantitative risk management system, which arise from the 2nd pil-lar (iCaap) of Basel iii and from commercial needs, are covered within BtV mainly by the risk capacity calculation. With the help of this calculation, BTV determines the extent to which it is able to absorb unexpected losses.

in calculating risk capacity, BtV assumes two viewpoints - the going concern and the perspective of liquidation. BTV has also built an early warning stage to cater for both approaches. From the per-spective of a going concern, the continued exist-ence of a regular ongoing concern is to be assured. the aim of the protection at the early warning stage is to be able to ensure that smaller, high-probability risks can be absorbed, without needing to change the type and extent of business activity, or the risk strategy. Furthermore, triggering of the early warning stage has the effect of implementing cor-responding measures. From a liquidation perspec-tive, the early warning stage should ensure BTV‘s aim of guaranteeing the claims of outside financial backers (holders of debt securities, savings depos-

its, etc.). The determination of the risk and the risk cover capital are carried out by various methods, using the going-concern and liquidation approach. this occurs against the background of the differing protection aims of the two approaches. The risk capacity requirement must be fulfilled for both ap-proaches in a normal as well as a stress situation.

in the liquidation approach, equity is essentially defined as internal capital (risk cover capital). In the going-concern approach, the risk cover capital essentially consists of the expected net profits for the financial year, the hidden reserves and the core capital surplus. At BTV, the core income capital is defined as the surplus of core capital beyond the internally defined minimum core capital ratio.

in order to measure the risks within the context of iCaap, the following processes and parameters are applied:

risk measurement procedures

interest rate risK LiQuiDation approaCh going-ConCern approaCh

Confidence interval 99.9 % 95.0 %probability horizon 250 days 30/250 daysinternal capital (risk cover capital)

i. w. qualifying equity expected annual net profit, hidden reserves and core capital surplus

Credit risk risk of default by other party irB approach equity investment risk irB-pD/LgD approach Credit concentration risk irB granularity adjustmentMarket risk Diversification across market risks considered interest rate risk Var (historical simulation) Currency risk Var (historical simulation) share price risk Var (historical simulation) Credit spread risk Var (historical simulation)

Liquidity risk structural liquidity risk (p&L risk)

structural liquidity risk(Cash value risk)

operational risk standard approach Var approach

Macroeconomic risk macroeconomic risk extreme scenario

macroeconomic risk extreme scenario

other risks 10% buffer 10% buffer

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Furthermore, limits are defined for each risk category (credit, investment, credit concentration, market, liquidity, operational and macroeconomic risk) in total, as well as for controlling units (corporate clients, private clients, institutional clients and banks) within the credit risk and for detailed risk categories within market risk. The other risks which are not quantifiable are taken into account by means of a buffer in the risk bearing capacity calculation.

Credit riskBtV uses the irB basic approach to quantify the counterparty default risk and the irB-pD/LgD approach to quantify the investment risk in the risk-bearing capacity calculation.

the probability of default represents the central parameter for calculating credit risk in this ap-proach. This is derived from internal bank ratings. For corporate and retail clients, as well as for banks and property project financing, rating systems are used which spread the credit risks over a scale with 13 available levels. The rating forms the basis for the calculation of credit risks and provides the framework for a risk-based calculation of terms, as well as for the early identification of problem cases. the price calculation in the lending business is based on this and is carried out taking into consid-eration ratings-based risk premiums.

the risk from high credit volumes is integrated into iCaap at BtV in two respects:

• Model to quantify the risk from high credit vol-umes (irB granularity adjustment)

• stress test to analyse the risk in relation to high credit volumes

The quantification of the risk in relation to risks from credit risk reducing techniques as well as credit concentration risks, which are not related to high credit volumes with individual clients or com-mercial entities, takes place by means of sensitivity analyses. For this purpose, stress tests are per-formed for the following four subportfolios:

• Construction and tourism firms• Property development financing• repayment vehicle loans• Foreign currency loans

Credit risks not considered here are taken into ac-count under the other risks in the buffer of the risk bearing capacity calculation.

the management of credit risk at portfolio level is primarily based on internal ratings, classes by size, sectors, currencies and countries. Besides the risk bearing capacity calculation, the credit risk reporting system and here above all, the continually produced BtV credit risk report, represent a central manage-ment and monitoring instrument for decision makers.

Market riskFor risk measurement purposes at the overall bank level, BTV quantifies the value-at-risk for the risk categories of interest, currency, share price and credit spread risk with regard to the liquidation ap-proach, on the basis of a confidence level of 99.9% and a retention period of 250 days. The value at risk (Var) is the loss which on the basis of a given prob-ability, will not be exceeded over a defined period.

Value at risk is calculated on the basis of a historic simulation method. The basis for the market param-eters used are historical time series from the last 4 years. Diversification effects between the individual market risk classes are already implicitly included in the data histories and are accounted for separately.

The VaR model can be briefly outlined as follows:

• Definition of risk factors for each risk category• Mapping of the products on the risk factors• Determination of the historical risk factors based

on historical observations• simulation of changes in risk factors based

on historical events• revaluation of positions in all scenarios and

calculation of profit and loss• Calculation of the VaR quantile based on profit

or loss distribution of positions

interest rate riskin the context of the iCaap, the risk capital is com-pared with the potential risk according to the Var model, and is therefore limited.

BtV’s interest risk is herewith also part of reporting in the course of the management of assets and liabilities. a basis point value limit is used for each maturation band. The basis point value is the change in value of the interest portfolio which results from an increase of the interest by one basis point.

The basis for this is BTV‘s interest rate portfolio, which comprises all interest rate sensitive assets and liabilities and derivative transactions. This portfolio is broken down into fixed interest rates for individual


transactions and combined in a maturity structure (gap analysis).

Currency riskthe quantifying of the foreign currency risk is also carried out on the basis of a historical value-at-risk ap-proach. The measurement of the foreign currency risk at overall bank level is carried out on a monthly basis in the course of drafting of the ICAAP.

share price riskthe quantifying of the share price risk is carried out on the basis of a historical value-at-risk approach. in which individual shares are directly assigned to the respective rate histories. Share price risk at overall bank level is measured on a monthly basis.

Credit spread riskthe quantifying of the credit spread risk is carried out on the basis of a historical value-at-risk ap-proach. The credit default swap spread serves as a basis for calculating the credit spreads per issuer. In the case of non-tradable credit default swaps, the asset value is allocated to a CDS index. The credit spread risks are measured on a monthly basis.

Liquidity riskthe measurement of liquidity risks begins with the drawing up of a liquidity maturity statement, in which all balance sheet, off-balance sheet and derivative transactions are classified by maturity intervals. For positions with an indeterminate capital commitment, care is taken to ensure that the liquidity assumptions correspond as closely as possible to actual client behaviour. For this purpose maturity profiles are estimated based on historical data and using statistical methods. In ad-dition assumptions are modelled for the drawdown on unused credit and the take-up of guarantees. securities and credits suitable for central banks within the liquidity buffer (under consideration of a relevant haircut) are treated as assets that can be liquidated at any time.

For the determination of the liquidity risk, the risk premiums of a pool of reference banks are ana-lysed in comparison with best-rated government bonds and the volatilities for the individual maturi-ties are calculated on the basis of the fluctuations in these premiums. The multiplication of these credit spread volatilities with the cumulative liquid-ity gaps gives the liquidity risk over the period.

the drivers of the risk are therefore the amount and the distribution of the liquidity gaps as well as the fluctuations in the risk premiums in the individual terms.

alongside the integration of the liquidity risk as a risk to earnings in iCaap, the liquidity risk situation at group level is monitored daily. For this the net fi-nancing gap (capital inflows minus capital outflows plus liquidity buffer) is assigned limits which are time-dependent, which influences the medium-term liquidity requirement. The cumulative net financing gap indicates from what moment in time the liquidity buffer is exhausted by the net capital outflows if there is no new business or exten-sions. And dependencies on large capital suppliers (whether in the banking or in the customer area) are shown in the liquidity report and confined by applying the limits.

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operational riskin BtV a risk management process has been devel-oped, which applies both for qualitative and quan-titative methods. For losses which have already oc-curred, a loss database exists which collects details of all cases of losses. After analysis of the losses, suitable measures are taken to minimise the risk of loss in future. This approach is complemented by the implementation of self-assessments for the operational risk where all areas and processes are checked for possible operational risks. These risks are assessed through interviews, and if necessary, internal processes and systems are then adapted.

under the liquidation approach the operational risk is measured using the standard approach. In the going-concern approach, BtV applies a Var ap-proach that uses previously sustained losses in the loss database to quantify the risk.

Macroeconomic riskthe macroeconomic risk manifests itself in the negative change for BtV within the market envi-ronment and its implications for the significant risk drivers. Consequently, the quantifying takes place by means of a macroeconomic stress test which contains the significant changes in the parameters of an economic downturn. Herein the maintaining of the risk-bearing capacity in the case of stress is now calculated implicitly.

other risksother risks are considered within the risk capacity calculation through the buffer.


the following explanations relate to the extent and type of BTV‘s risk reporting system.

the measurement of overall bank risk and of individual risk categories is carried out on a monthly basis. The short-term liquidity risk as well as the individual mar-ket risks in the trading book are measured daily. The macroeconomic risk is quantified on a quarterly basis, while the operational risk is quantified on an annual basis. In addition, an ad hoc report is drawn up in so far as this is necessary. Within BTV Bank Management, a report is given on the current utilisation levels and limiting of overall bank risk, as well as of the individual risk categories, together with definition and monitor-ing of control measures.

BtV is subject to an internal limit on utilisation of the quantified overall risk as a percentage of risk cover capital of 90%, with this amounting at year-end to 72.8% (€819.5 million). The highest relative level of usage was in October 2014. 10% of the risk cover capital is reserved for unquantifiable other risks.

risk reporting system

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the above presentation is essentially characterised by two changes to the design of the iCaap which was taken into consideration in the reporting year 2014 for the first time. On the one hand, qualifying equity (risk cover capital) rose between February and March 2014 owing to first-time adoption of the CRR and its

transitional provisions. On the other hand, the limit utilisation rose between March and april 2014 owing to a modification in the presentation of the ICAAP. The modification consisted in including the buffer for other risks totalling 10% of the risk cover capital in the total limit and risk utilisation.

total bank risk - liquidation approach

Jan 14 Feb 14 March 14 april 14 May 14 June 14 July 14 aug 14 sept 14 oct 14 nov 14 Dec 140.0 %

25.0 %

50.0 %

100.0 %

75.0 %

0

400

800

1,200

amounts in € million Values in %

Qualifying rCC / absolute limit utilisation in € million

Limit as % of rCC (right-hand scale) utilisation as % of rCC (right-hand scale)

RCC = risk cover capital

totaL BanK risK - LiQuiDation approaCh Maximum average Year-end

31.12.2014 utilisation in € million 867.9 800.6 819.5utilisation in % of risk cover capital 73.7 % 69.7 % 72.8 %



Counterparty default - liquidity approach




Credit riskthe illustrations below show the risks in comparison with the allocated risk cover capital and the set limit for the counterparty default and equity investment risk as well as the credit concentration risk.

as can be seen from the illustrations below, the limit in all the partial risk categories of the credit risk was maintained. In addition, a buffer for the applied limit was available at all times.


20.0 %

40.0 %

0

600

800


60.0 %

From February to March 2014, a decline in the relative use of the counterparty default risk was recognised. This decline was again related to the

increase in the risk cover capital already described for the overall banking risk.

400

200

CounterpartY DeFauLt risK - LiQuiDitY approaCh Maximum average Year-end



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investment risk - liquidity approach





1.0 %

3.0 %

2.0 %

4.0 %

0

20

10

50

40

30


in March 2014, increased use of the investment risk was apparent. This increase was attributable to a change in the ICAAP presentation. As already described in the presentation of the overall bank-

ing risk, the modification consisted in including the buffer for other risks totalling 10% of the risk cover capital in the total limit and risk utilisation.

inVestMent risK - LiQuiDitY approaCh Maximum average Year-end




Credit concentration risk – liquidation approach

CreDit ConCentration risK – LiQuiDation approaCh Maximum average Year-end







1.0 %

2.0 %

0

10

20

30

40


3.0 %

the credit concentration risk proved to be constant in 2014. Utilisation fluctuated between €18.3 mil-lion and €15.7 million or 1.7% and 1.3% respectively

of the risk cover capital. Utilisation was therefore always within the allotted limit of 2% of the risk cover capital.

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Due date Data no visible risk of default

With comment

high risk of default

problematic

total

31.12.2014 total drawn 7,785,229 789,831 59,392 241,214 8,875,666share in % 87.7 % 8.9 % 0.7 % 2.7 % 100.0 %risk provisions 55,607 22,265 4,990 107,773 190,635percentage of cover 0.7 % 2.8 % 8.4 % 44.7 % 2.1 %

31.12.2013 total drawn 7,733,160 820,265 104,712 267,373 8,925,510share in % 86.6 % 9.2 % 1.2 % 3.0 % 100.0 %provision for risks 45,889 22,933 11,488 127,475 207,787percentage of cover 0.6 % 2.8 % 11.0 % 47.7 % 2.3 %

Change in draw down vs. previous year 52,069 –30,434 –45,321 –26,159 –49,844drawn down as % of previous year 0.7 % –3.7 % –43.3 % –9.8 % –0.6 %of loan loss provisions to previous year 9,718 –669 –6,498 –19,702 –17,151of loan loss provisions to previous year in % 21.2 % –2.9 % –56.6 % –15.5 % –8.3 %


With comment


problematic

total



Change in draw down vs. previous year –70,457 –33,637 –15,304 –36,801 –156,199drawn down as % of previous year –1.6 % –5.4 % –25.7 % –18.0 % –2.9 %of loan loss provisions to previous year 7,556 396 –3,202 –21,423 –16,674of loan loss provisions to previous year in % 31.7 % 2.4 % –45.9 % –21.2 % –11.2 %

Creditworthiness structure overall in €‘000

Creditworthiness structure, domestic in €‘000

Creditworthiness structure, domestic and Foreignthe presentation is based on the country of origin of the borrower or issuer. In Austria, the overall credit risk volume fell by €156.2 million, or 2.9%,

relative to the previous year. The foreign component of the credit risk volume, on the other hand, rose by €106.4 million, or 3.0%.

Credit risk - overview the credit risk volume is made up from the balance sheet items „Loans to credit institutions“, „Loans to customers“, all fixed interest securities as well as securities and guarantees (gross presentation). as required by the guidelines in ias 39 payment guarantees and letters of credit are not taken into consideration in the credit risk volume.

the total loan volume of BtV fell year-on-year by €49.8 million or 0.6% to €8,876 million. The amount of bad debt was reduced by €26.2 million or 9.8%. Consequently, the share in the total volume fell from 3.0% to 2.7%.


Creditworthiness foreign in €‘000

Creditworthiness structure of credit risk by countryAround 59.3% of the credit risk volume related to domestic borrowers. 20.1% is accounted for by German and 6.7% by Swiss borrowers.The remaining 13.9% is distributed as follows: the us, italy, France, spain, hungary and ireland ac-count for 5.5 percentage points. There are currently no receivables owed by greek and portuguese debtors. The remaining 8.4 percentage points are distributed over borrowers in other countries.

Countries no visible risk of default

With comment


problematic total share in %

austria 4,453,951 594,706 44,228 167,621 5,260,507 59.3 %germany 1,629,538 93,406 9,517 50,840 1,783,301 20.1 %switzerland 486,190 85,584 3,219 21,755 596,748 6.7 %usa 179,144 201 0 7 179,352 2.0 %italy 161,232 9,274 383 589 171,477 1.9 %France 124,800 0 0 0 124,801 1.4 %ireland 8,737 0 0 0 8,737 0.1 %hungary 1,884 0 0 0 1,884 0.0 %spain 384 0 0 165 549 0.0 %greece 0 0 0 0 0 0.0 %portugal 0 0 0 0 0 0.0 %other 739,369 6,660 2,043 237 748,309 8.4 %

total 7,785,229 789,831 59,392 241,214 8,875,666 100.0 %

Creditworthiness structure by country in €‘000

Change in CountrY struCture CreDit risK in %

2014

austria germany

switzerland other

2013201220112010


With comment


problematic total



Change in draw down vs, previous year 122,527 3,203 –30,017 10,642 106,355drawn down as % of previous year 3.8 % 1.7 % –66.4 % 16.9 % 3.0 %of loan loss provisions to previous year 2,162 –1,064 –3,296 1,721 –478of loan loss provisions to previous year in % 9.8 % –16.4 % –73.1 % 6.5 % –0.8 %

59,3

20,16.7

13,9

58.0

18.48.6

15.0

59.4

18.88.4

13.4

59.4

18.88.4

13.4

60.9

19.0

12.47.7

60.7

19.26.2

13.9

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Creditworthiness by sector of selected countriesthe following table illustrates the volume of receiva-bles owed by debtors in the countries of italy, ireland, Spain and Russia, ordered by sectors. There are currently no receivables owed by greek, portuguese and Ukrainian debtors. Against the backdrop of recent trends on the financial markets, the loan, insurance and public authority sectors have been highlighted.

accordingly, the loan and insurance sector accounts for €41.7 million. The credit risk illustrated for Ireland is essentially accounted for by a US group, the finan-cial services subsidiary of which is headquartered in Ireland.

Creditworthiness structure of credit risk by sectorthe sectoral focus points are like last year in the loan and insurance business, retail clients and production of physical goods. In terms of proportional weight these are followed by the property management, public

sector, services, trade, tourism and construction sectors. The relative share of the other sectors has decreased in comparison with the previous year and is now at 5.9%.

sectors italy ireland spain russia total

Loans and insurance 33,092 8,654 0 0 41,746public sector 0 0 0 0 0remaining sectors 138,385 83 549 460 139,478

total 171,477 8,737 549 460 181,224

all sectors together no visible risk of default

With comment



Loans and insurance 1,481,655 1,993 3 288 1,483,940 16.7 %private 1,049,468 62,394 26,488 47,763 1,186,114 13.4 %physical goods manufacture 1,029,599 92,539 5,242 42,330 1,169,709 13.2 %property management 832,274 255,584 6,005 14,695 1,108,558 12.5 %public sector 1,033,301 26 0 74 1,033,401 11.6 %services 685,419 173,320 6,998 50,323 916,060 10.3 %trade 507,669 34,280 4,465 32,470 578,883 6.5 %tourism 374,156 97,353 7,888 28,698 508,094 5.7 %Construction 306,231 41,835 1,051 14,049 363,167 4.1 %transport and communications 210,165 19,738 929 4,337 235,168 2.6 %Cable cars 207,773 378 287 205 208,643 2.4 %energy/Water utilities 54,540 6,973 0 3,732 65,246 0.7 %other 12,978 3,418 37 2,249 18,682 0.2 %

total 7,785,229 789,831 59,392 241,214 8,875,666 100.0 %

structure by sector of selected countries in €000s

Creditworthiness by sector total in €‘000


Foreign sectors no visible risk of default

With comment



Loans and insurance 1,092,736 0 0 0 1,092,736 30.2 %physical goods manufacture 640,479 38,046 1,361 18,619 698,505 19.3 %public sector 415,437 26 0 74 415,537 11.5 %private 271,068 12,358 7,035 20,801 311,263 8.6 %services 178,203 76,327 3,559 20,156 278,244 7.7 %property management 236,973 28,039 0 4,826 269,838 7.5 %trade 229,620 10,332 2,046 2,923 244,922 6.8 %tourism 79,921 17,886 1,136 1,226 100,170 2.8 %transport and communications 72,477 5,836 26 963 79,302 2.2 %Construction 64,581 4,134 0 3,528 72,242 2.0 %energy/Water utilities 41,220 2,128 0 0 43,348 1.2 %Cable cars 4,234 0 0 0 4,234 0.1 %other 4,327 13 0 476 4,817 0.1 %

total 3,331,278 195,125 15,163 73,593 3,615,159 100.0 %

Creditworthiness structure by sector, foreign in €‘000

in comparison with the previous year, a decrease has been recorded for retail clients and in the sec-tors production of physical goods, loans and insur-ance, trade, tourism, cable cars and energy/water utilities. By contrast, the relative share of the credit

volumes in the sectors of real estate, services, pub-lic sector, construction, transport and communica-tions increased.

Domestic sectors no visible risk of default

With comment



private 778,400 50,036 19,453 26,962 874,851 16.6 %property management 595,301 227,545 6,004 9,870 838,721 15.9 %services 507,217 96,993 3,439 30,167 637,816 12.1 %public sector 617,864 0 0 0 617,864 11.7 %physical goods manufacture 389,120 54,493 3,880 23,712 471,204 9.0 %tourism 294,234 79,466 6,752 27,472 407,924 7.8 %Loans and insurance 388,919 1,993 3 288 391,203 7.4 %trade 278,049 23,948 2,419 29,547 333,962 6.3 %Construction 241,650 37,702 1,051 10,521 290,924 5.5 %Cable cars 203,540 378 287 205 204,409 3.9 %transport and communications 137,688 13,902 903 3,374 155,866 3.0 %energy/Water utilities 13,320 4,845 0 3,732 21,898 0.4 %other 8,651 3,405 37 1,772 13,865 0.3 %

total 4,453,951 594,706 44,228 167,621 5,260,507 100.0 %

Creditworthiness by sector, domestic in €‘000

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Creditworthiness structure of credit risk by type of businessthe share of the corporate client segment in the total credit risk volume was 59.3% (previous year:

57.9%). Retail clients represented a share of 14.8% (previous year: 15.5%), the remainder 25.9% (previ-ous year: 26.5%) related to Institutional Clients and Banks.

Creditworthiness structure by type of business in €‘000

types of busi-ness

Data no visible risk of default

With comment

increasedrisk of default

problematic total

Corporate clients

total drawn 4,354,400 685,143 30,953 190,414 5,260,910share in % 82.8 % 13.0 % 0.6 % 3.6 % 100.0 %provision for risks 40,107 17,433 2,625 88,285 148,450percentage of cover 0.9 % 2.5 % 8.5 % 46.4 % 2.8 %

retail clients total drawn 1,134,157 98,695 28,438 50,800 1,312,090share in % 86.4 % 7.5 % 2.2 % 3.9 % 100.0 %provision for risks 10,233 4,286 2,365 19,488 36,372percentage of cover 0.9 % 4.3 % 8.3 % 38.4 % 2.8 %

institutional clients and banks

total drawn 2,296,672 5,993 0 0 2,302,665share in % 99.7 % 0.3 % 0.0 % 0.0 % 100.0 %provision for risks 5,268 546 0 0 5,814percentage of cover 0.2 % 9.1 % 0.0 % 0.0 % 0.3 %

total total drawn 7,785,229 789,831 59,392 241,214 8,875,666Share in % 87.7 % 8.9 % 0.7 % 2.7 % 100.0 %Provision for risks 55,607 22,265 4,990 107,773 190,635Percentage of cover 0.7 % 2.8 % 8.4 % 44.7 % 2.1 %

Currency no visible risk of default

With comment



eur 6,762,080 661,813 43,970 215,795 7,683,658 86.6 %ChF 599,732 45,263 12,539 7,265 664,798 7.5 %ChF with swiss customers 335,826 80,664 2,702 18,002 437,192 4.9 %usD 60,725 378 0 38 61,141 0.7 %JpY 13,997 1,713 181 115 16,006 0.2 %other 12,870 0 0 0 12,870 0.1 %

total 7,785,229 789,831 59,392 241,214 8,875,666 100.0 %

Creditworthiness structure of credit risk by currency86.6% (previous year: 85.7%) of the credit risk volume related to loans in euro. 12.4% was accounted for by Swiss francs (previous year: 12.8%), the remaining

currencies accounted for 1.0% (previous year: 1.5%) of the volume of receivables. The share of CHF financing in the eurozone dropped from 8.3% to 7.5%.

Creditworthiness structure by currency in €‘000


Dimension no visible risk of default

With comment


problematic total

31.12.2014 total drawn 7,785,229 789,831 59,392 241,214 8,875,666Land register collateral 1,531,874 285,178 29,193 57,731 1,903,976Collateral securities 128,113 31,701 2,060 611 162,485Collateral securities 625,361 114,836 9,772 28,890 778,860

Collateral in % 29.4 % 54.7 % 69.6 % 36.2 % 32.1 %

31.12.2013 total drawn 7,733,160 820,265 104,712 267,373 8,925,510Land register collateral 1,468,800 302,988 41,845 59,965 1,873,597Collateral securities 161,099 33,161 5,697 577 200,534Collateral securities 594,762 164,711 21,728 20,248 801,449

Collateral in % 28.8 % 61.1 % 66.2 % 30.2 % 32.2 %

Collateral receivedBtV has received collateral in the form of mortgages, shares and other securities and other assets. In particular for higher risk classes we ensure that with a reduction in the level of quality of borrower creditwor-thiness the amount of the collateralisation increases.

the lower level of securities in the creditworthiness class ‚bad debt‘ (this category contains clients who have defaulted) is due to securities already having been used.

Collateral received in €‘000

Creditworthiness structure of overdue loansthe following charts show a breakdown of over-due, but not written-down financial debts by the number of days overdue and the risk-class as-signed. The borrower is in arrears in relation to pay-

ment or interest or repayment of capital. Accord-ing to BtV estimates - where the debtors or the available securities are assessed - it is however not correct to establish individual value adjustments.

Creditworthiness structure by overdue debts in €‘000

Due date Due date no visible risk of default

With comment


total

31.12.2014 31 - 60 days61-90 days

14,138736

549152

60374

15,291962

Total 31 December 2014 14,874 701 678 16,253

31.12.2013 31 - 60 days61-90 days

2,518556

1,377 366

452869

4,3461,790

Total 31 December 2013 3,074 1,743 1,321 6,137

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Credit quality Values no visible risk of default

With comment


problematic total

not individually value-adjusted and not bad debt

total drawn 42,213 9,472 9,674 0 61,359provision for risks 443 236 855 0 1,535shares/other securities 17,967 6,795 5,498 0 30,260

not value-adjusted and bad debt

total drawn 0 0 0 5,510 5,510provision for risks 0 0 0 0 0shares/other securities 0 0 0 995 995

Value-adjusted and bad debt

total drawn 0 0 0 59,270 59,270provision for risks 0 0 0 18,133 18,133shares/other securities 0 0 0 26,821 26,821

total total drawn 42,213 9,472 9,674 64,780 126,139Provision for risks 443 236 855 18,133 19,668Shares/other Securities 17,967 6,795 5,498 27,816 58,076

risk structure of transactions involving debt arrangements according to credit qualitythe table below illustrates transactions involving debt arrangements structured according to their credit quality. The credit quality is differentiated hereby as follows: • not individually value-adjusted and not bad debt• not value-adjusted and bad debt• Value-adjusted and bad debt in addition for each credit quality, the extent to which the risk provision has been built up is illustrated or the extent of the securities available. Within the risk

provisions illustrated in the first three credit rating levels, it concerns portfolio valuation adjustments. The risk provisions shown in the category „bad debt“ are value adjustments or reserves.

the credit risk volume in the „not individually value-adjusted and not bad debt“ category fell by €9.9 million compared with the previous year. An increase was observed for „not value-adjusted and bad debt“ (€5.1 million) and „Value-adjusted and bad debt“ (€39.1 million). At the same time, collat-eral for volumes of bad debt improved to reach the current level of 45.3% (previous year: 31.6%).

risk structure of transactions involving debt arrangements according to credit quality in €000s


type of debt arrangement number of debt arrangements/

account

no visible risk of default

With comment


problematic total

Capital repayment was adjusted

1 41,380 8,746 7,465 36,167 93,7582 828 604 2,209 1,958 5,5983 0 0 0 0 0

interest payment to be made was reduced

1 5 0 0 8,789 8,7942 0 0 0 0 03 0 0 0 0 0

revision of credit relationship

1 0 122 0 3,251 3,3732 0 0 0 0 03 0 0 0 0 0

easing of compliance with binding obligations (covenants)

1 0 0 0 14,616 14,6162 0 0 0 0 03 0 0 0 0 0

total 42,213 9,472 9,674 64,780 126,139

risk structure of transactions involving debt arrangements according to type and number/accountthe following table shows the volume of loans af-fected by debt arrangements dependent on the type of debt arrangements agreed. Furthermore a break-down according to the number of debt arrangements granted per borrower within the reporting period is presented.

the type of capital repayment was adjusted for the largest section of the volume affected by debt ar-rangements. It hereby concerns a volume of loans to the tune of €99.4 million or 78.8%. With regard to €8.8 million or 7.0%, there was a reduction in the interest payments to be made. The entire financing structure of customers was rearranged for a volume of loans totalling €3.4 million or 2.7%. Other agree-ments were modified amounting to €14.6 million or 11.6%.

risk structure of transactions involving debt arrangements according to type and number/account in €000s

segment no visible risk of default

With comment


problematic total

Corporate clients 31,544 5,809 8,973 62,452 108,777retail clients 10,669 3,663 701 2,328 17,362

total 42,213 9,472 9,674 64,780 126,139

risk structure of transactions involving debt arrange-ments according to segmentas in the previous year, debt arrangements were par-ticularly made regarding loans to corporate clients.

risk structure of transactions involving debt arrangements according to segment in €000s

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sector no visible risk of default

With comment


problematic total

services 20,118 1,267 1,408 17,970 40,764trade 1,299 300 0 22,855 24,453physical goods manufacture 766 1,414 1,361 14,917 18,458private 10,244 2,330 684 2,126 15,383tourism 6,888 2,779 4,820 776 15,263property management 1,952 1,278 1,135 1,275 5,639Construction 0 84 0 4,387 4,472Cable cars 882 0 0 205 1,087transport and communications 65 0 265 0 330Loans and insurance 0 6 0 0 6other 0 13 0 270 283

total 42,213 9,472 9,674 64,780 126,139

risk structure of transactions involving debt arrangements according to economic sectoras in the previous year, the volume of loans affected by debt arrangements was distributed equally

across the economic sectors. A concentration of debt arrangements in specific economic sectors cannot be recognised.

risk structure of transactions involving debt arrangements according to economic sector in €000s

Country no visible risk of default

With comment


problematic total

austria 34,190 4,900 6,340 45,301 90,730germany 4,539 3,485 3,334 17,922 29,279switzerland 3,485 1,088 0 1,528 6,100italy 0 0 0 29 29

total 42,213 9,472 9,674 64,780 126,139

risk structure of transactions involving debt arrangements according to countrythe following table shows the risk structure of transactions involving debt arrangements struc-tured according to country. The largest part of the

volume, with a volume of loans amounting to €90.7 million or 71.9%, concerns borrowers from Austria. Furthermore, debt arrangements were agreed with borrowers in Germany, Switzerland and Italy.

risk structure of transactions involving debt arrangements according to country in €000s


risk structure for derivatives according to segmentsthe presented credit volume of derivatives corre-sponds to the fair value. The credit volume from de-rivatives amounted to €111.9 million on the reporting date of 31 December 2014. €77.3 million or 69.1% of

this is related to loans to credit institutions. Loans to corporate clients amounted to €34.3 million or 30.7% and to retail clients €0.2 million or 0.2%.


With comment


problematic total

Corporate clients 26,440 7,749 88 60 34,337private 164 1 61 0 226institutional clients and banks 76,756 535 0 0 77,291

total 103,360 8,285 150 60 111,855


With comment


problematic total

Corporate clients 712 139 157 1,386 2,394retail clients 153 52 3 50 258

total 865 191 161 1,436 2,652

income structure of transactions involving debt arrangements according to segmenttransactions, for which debt arrangements were agreed, generated interest income to the tune of €2.7 million in the financial year 2014.

interest income in the ratio to volume of credit with debt arrangements was at the previous year‘s level.

income structure of transactions involving debt arrangements according to segment in €000s

risk structure of derivatives according to segments in €000s

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Derivative risk structure by type of business and currenciesAs in the previous year, around 93.5% of the vol-ume is accounted for by loans which are denomi-

nated in EUR. 5.7% originate from CHF transactions, the remaining 0.8% relate to USD, JPy and other currencies.

segment Currency no visible risk of default

With comment


problematic total

Corporate clients

eur 25,642 6,666 88 60 32,456ChF 715 1,083 0 0 1,798other 83 0 0 0 83

private eur 164 0 0 0 164ChF 0 1 61 0 63

institutional clients and banks

eur 71,484 535 0 0 72,019ChF 4,495 0 0 0 4,495JpY 774 0 0 0 774usD 4 0 0 0 4

total 103,360 8,285 150 60 111,855

Risk structure of derivatives according to segments and currencies in €‘000


risk structure of derivatives by transaction type84.9% of loans relate to interest rate swaps, 8.6% to currency derivatives and 5.6% to foreign exchange futures. Currently there is no credit risk in relation

to derivatives on asset values. As in the previous year, most of the volume is for interest rate swaps while currency swaps are down slightly.

transaction type no visible risk of default

With comment


problematic total

interest rate swaps 90,520 4,247 150 39 94,955Currency swaps 5,666 3,905 0 0 9,571Foreign exchange futures 6,314 1 0 0 6,315interest options 860 20 0 21 901Bond options 0 113 0 0 113

total 103,360 8,285 150 60 111,855

risk structure of derivatives by country44.3% of debts are in respect of counterparties in Germany. A further 39.4% relate to Austrian part-ners. The remainder is distributed among clients

in switzerland, the united states, France and other countries. There are no credit risks from derivatives with regard to greece, ireland, italy, portugal, spain and Hungary.

Country no visible risk of default

With comment


problematic total

germany 49,468 18 61 0 49,547austria 35,865 8,105 88 60 44,118switzerland 1,602 44 0 0 1,646usa 935 118 0 0 1,053France 877 0 0 0 877other 14,614 0 0 0 14,614

total 103,360 8,285 150 60 111,855

Risk structure of derivatives by transaction type in €‘000

Risk structure of derivatives by country in €‘000

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market risk - liquidation approach

Market risk the following diagram shows the utilisation of market risk limits at global banking level. Risk capital is assigned to each of the risk types of interest risk, currency risk, equity price risk and credit spread risk. the correlations which are inherent in the timelines have a risk-reducing effect.

For the interest risk, 15.5% of the respective risk cov-er capital was allocated to risk capital, while for the categories currency risk and equity price risk a limit of 1.5% was allocated to each. The credit spread risk from investments in the banking book was capped at 8.0% of the risk cover capital.

in June 2014, there was an increase in the market risk. This increase resulted from the loss of the diver-sification effect, which came about because of the interaction between changes in credit spreads and interest rates. In this context, a significant synchroni-sation of both risk factors was recognised on some days in the data history. The drop in the absolute and relative risk during the rest of the year was mainly attributable to the lower interest rate risk.





6.0 %

18.0 %

12.0 %

24.0 %

0

80

120

40

240

200

160

280


MarKet risK - LiQuiDation approaCh Maximum average Year-end




interest rate risk - liquidation approach




interest rate riskthe following diagram shows the utilisation of interest risk limits on the global banking level. The interest risk primarily results from the differences in time periods in the assets/liabilities items in the bank register. The interest rate risk at global banking level continued to

fall throughout 2014. The interest rate risk fell during the year owing to a decline in the interest rate maturity transformation, particularly as a result of a shortening of the maturity of securities.

Jan 14 Feb 14 March 14 april 14 May 14 June 14 July 14 aug 14 sept 14 oct 14 nov 14 Dec 140

40

120


80

160

200

0.0 %

4.0 %

16.0 %

12.0 %

interest rate risK - LiQuiDation approaCh Maximum average Year-end



8.0 %

120

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Currency riskthe following illustration depicts the risk in com-parison to the allocated risk-covering capital and the limit set for this risk category. The absolute and relative fluctuations in the risk utilisation were mainly attributable to short-term open currency

positions. The average utilisation in 2014 was ap-prox. €9.4 million or 0.8% of the risk cover capital. the maximum relative utilisation was measured at 1.2% in July 2014.

currency risk - liquidation approach






20

10

0.0 %

2.0 %

1.0 %

30

CurrenCY risK - LiQuiDation approaCh Maximum average Year-end




share price risk - liquidation approach

share price riskthe following illustration depicts the risk in com-parison to the allocated risk-covering capital and the limit set for this risk category. The generation of income from the equity business does not count amongst BTV‘s core activities. This was underlined

by an average utilisation of €11.5 million or 1.0% of the risk cover capital. In addition, the risk position was significantly reduced at the year-end. This was observed in the utilisation of €2.8 million or 0.2% of the risk cover capital at the year-end.





20

30


10

0.0 %

2.0 %

1.0 %

share priCe risK - LiQuiDation approaCh Maximum average Year-end



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Credit spread riskthe risk utilisation appeared to be relatively constant throughout 2014 as the change in credit spreads has plateaued at a moderate level in comparison with previous years. The table below shows an increase in the risk utilisation from april to May 2014. The increase is model-specific as the estimate of a 99.9% confidence interval was made

more robust owing to an expansion of the market data history, which now contains a larger number of extreme values. The average risk utilisation was €69.5 million or 6.1% of the risk cover capital. The maximum absolute utilisation of the credit spread risk was recorded at €74.1 million in July 2014.

Credit spread risk - liquidity approach






60

40

20

80

100

0.0 %

6.0 %

4.0 %

2.0 %

8.0 %

120

CreDit spreaD risK - LiQuiDitY approaCh Maximum average Year-end




Liquidity risk - liquidation approach

Liquidity riskthe utilisation of the liquidity risk demonstrated vola-tile behaviour over the course of 2014. This behaviour resulted from alternating rising and falling credit spread volatilities. The average absolute utilisation

was €15.2 million or 1.3% of the risk cover capital. the maximum absolute utilisation was measured at €19.5 million in September 2014.






10

20

30

0.0 %

1.0 %

2.0 %

3.0 %40

LiQuiDitY risK - LiQuiDation approaCh Maximum average Year-end



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in accordance with contractual residual maturities under IFRS 7.39, the structure of liabilities showed a significant year-on-year reduction in overnight deposits. Increased issuing activities in the capital market resulted overall in long-term refinancing being available and therefore being placed on a sounder footing.

the internal control of the liquidity risk is carried out at BtV either on the basis of modelled payment flows, or using the increasingly popular funding matrix approach according to contractual capital commitments by managing the Liquidity Coverage ratio (LCr) and mainly also the net stable Funding Ratio (NSFR).

resiDuaL Maturities oF LiaBiLi-TIES 2014 UNDER IFRS 7.39 in thousands of euros

overnight < 3 M. 3 M.–1 y. 1–5 y. > 5 y. total income

Liabilities to banks 292,878 425,564 280,098 327,171 97,002 1,422,713Liabilities to clients 3,150,704 1,092,053 700,102 492,809 128,158 5,563,827securitised debt 0 29,606 119,508 577,026 331,683 1,057,824subordinated capital 2,172 1,349 105,200 236,395 76,843 421,959

total liabilities 3,445,754 1,548,572 1,204,909 1,633,402 633,686 8,466,323

Derivative financial liabilities

–0 –2,894 –4,482 –8,599 –99 –16,073

total derivatives –0 –2,894 –4,482 –8,599 –99 –16,073

resiDuaL Maturities oF LIABILITIES 2013 UNDER IFRS 7.39 in thousands of euros

overnight < 3 M. 3 M.–1 y. 1–5 y. > 5 y. total income

Liabilities to banks 205,739 841,150 554,091 70,220 86,490 1,757,690Liabilities to clients 3,402,688 977,578 539,495 450,311 95,441 5,465,513securitised debt 1,502 38,329 81,867 588,645 253,454 963,796subordinated capital 49 22,189 95,653 249,219 83,803 450,914


Derivative financial liabilities

–1 –3,126 –6,232 –12,582 –658 –22,599

total derivatives –1 –3,126 –6,232 –12,582 –658 –22,599


operational risk – liquidation approach




operational riskin order to guarantee a closed circuit process and the quality of the implemented control loop - risk identification, risk quantification and risk management - decision-makers are kept informed on a continuous basis by a quarterly report on the trend in operational risk (loss events incurred) and the measures taken and their ongoing monitoring.

the calculation of the operational risk is made an-nually. Therefore, the absolute utilisation remains constant throughout the year. The relative utilisation on the other hand varies depending on the risk cover capital available at the time.



1.0 %

2.0 %

4.0 %

0

10

20

50

30

3.0 %40

operationaL risK – LiQuiDation approaCh Maximum average Year-end



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Macroeconomic riskFrom May to June 2014 an increase was recorded in the utilisation of the macroeconomic risk. This increase was due to changes in the parameters underlying the stress test performed.

macroeconomic risks - liquidation approach






40

20

60

80

100

0.0 %

7.0 %

8.0 %

6.0 %

5.0 %

4.0 %

3.0 %

2.0 %

1.0 %

MaCroeConoMiC risK - LiQuiDation approaCh Maximum average Year-end




Further developments in 2014

Further developments in 20142014 was essentially characterised by changes con-ditional on the currently applicable provisions of the CRR. In addition, the risk measurement systems were validated and the stress-testing methodology was further developed.

the implementation of the Crr requires that the valuation of assets and of off-balance sheet items should now be carried out in accordance with the applicable accounting standards. Therefore, BTV has to apply iFrs for the purpose of calculating the consolidated capital requirement.

the implementation of the Crr also required the formation of a consolidation scope for supervisory purposes. This consolidation scope for supervisory purposes should be used, inter alia, to calculate the consolidated capital requirement. The consolida-tion scope for supervisory purposes is different from the consolidation scope, which is formed under IFRS as part of the financial statements. As already stated above, BtV uses the same base data to calculate the capital requirement and the eco-nomic risk. Therefore, the risk is now also presented in the iCaap in accordance with the consolidation scope for supervisory purposes.

It should also be pointed out that the CRR‘s imple-mentation at BTV has resulted in modification of the equity calculation. At BTV, equity forms an essential component of the risk cover capital in the liquidation approach and impacts on the risk cover capital in the going-concern approach of the ICAAP.

New liquidity figures were an essential component in the introduction of the CRR. Thus, comprehen-sive templates for calculating the monthly Liquidity Coverage ratio (LCr) and the quarterly net stable Funding ratio (nsFr) had to be completed by the reporting date on 31 March. Liquidity has become an increasingly important commodity for banks over the last few years. Thus, the topic of liquidity was discussed in many sessions and meetings at BtV and measures for improving structural liquid-ity were worked out, which resulted in a significant improvement in the LCR.

in addition to the above-mentioned requirement for further development for supervisory purposes, the risk measurement systems were validated. Within credit risk, validation of the rating systems was carried out here. The validation was divided up into a quantita-tive and qualitative section. The qualitative validation, on the one hand, comprised all validation processes in

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which statistical core values (selectivity, stability and calibration) of the rating processes were determined and interpreted using an empirical database. The qualitative validation, on the other hand, had the task of ensuring the applicability and the correct use of the quantitative methods in practice. The quantitative and qualitative validation facilitated the derivation of potential for improvement and resulted in the adop-tion of measures to achieve this. Within the market and liquidity risk, a validation of the interest or capital commitment of products with non-specific interest or capital commitments was undertaken.

Following the EU‘s directive proposal (BRRD), the Banking intervention and restructuring act (Birg) was passed in Austria. The BIRG came into force as of 2014 before the EU Directive. It requires the obligation to draw up restructuring plans by 1 July 2015 and resolution plans by 31 December 2015. With regard to the legal requirements, BTV has undertaken all the preparations in the form of its own project to draw up the restructuring plan for submission to the austrian Financial Market Authority (FMA). As a result of the supersession - effective on 1 January 2015 - by the Federal act on the restructuring and resolution of banks (Basag for short), BtV now has to draw up its restructuring plan by 30 September 2015; the preparation of the resolution plan is carried out directly by the FMA.


outlook for 2015

outlook for 2015 anyone who wants to shape the future must be prepared for it. With this thought in mind, the strat-egy project „BTV 20.20“ was launched in 2014. The aim of this project is to develop a new pioneering, forward-looking corporate strategy by mid-2015.

BtV’s philosophy has always been to invest rather than to speculate. This philosophy has been rein-forced by the successes of previous years. BTV will therefore also focus on extending its equity basis and expanding its refinancing sources even further in the current financial year.

BtV views the quality of its management instru-ments and its human capital as central success fac-tors in this loop. Against this backdrop, the existing management instruments will be further enhanced in 2015 and the already high level of knowledge reinforced by targeted top-class training.

Furthermore, new risk-controlling software will be rolled out in 2015. Going forward, this programme will take over the calculation tasks below:

• Capital requirement for the credit risk• Capital requirement for the market risk • Capital requirement for the credit valuation

adjustment (CVa) risk• economic risk for the counterparty and invest-

ment risk• stress tests for the capital requirement for the

credit risk, market risk and CVa risk, as well as for the counterparty and investment risk

• Leverage ratio

the new application will replace existing solutions and combine them in a single module. This will further increase the transparency of the results and will make the calculation process more efficient. It will increase the level of integration and signifi-cantly improve the performance of simulations.

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36 other DetaiLs in €‘000 31.12.2014 31.12.2013

a) non interest-bearing loans 213,065 147,223

assets deposited as guarantees:Debenture bonds and other fixed-interest securities 1,592,746 2,006,389Loans to Credit institutions 19,096 31,590Loans to clients 945,386 960,596

b) assets deposited as guarantees 2,557,228 2,998,575

c) Liabilities for which collateral was transferred:trust fund deposits 11,730 11,671Bonds issued 276,450 221,610Liabilities to credit institutions 108,598 118,674

c) Liabilities for which collateral was transferred 396,778 351,955

subordinated assets:Loans to clients 8,410 8,900Debenture bonds and other fixed-interest securities 43,217 42,328equities and other variable-interest securities 12,024 20,560

d) subordinated assets 63,651 71,789

Foreign currency volumesreceivables 1,364,729 1,396,162Liabilities 618,416 831,995

e) Foreign currency volumes

Foreign volumes:Foreign assets 3,728,022 3,509,411Foreign liabilities 2,735,225 2,119,290

f) Foreign volumes

trust loans: 67,586 61,173 Loans to clients 67,586 61,173

trust liabilities: 67,586 61,773Liabilities to credit institutions 43,334 41,036Liabilities to clients 24,252 20,737

g) trust business

h) genuine repurchase agreements 893,196 871,125

performance guarantees and credit risks:performance guarantees 224,183 225,239Credit risks 1,085,749 1,097,790

i) performance bonds and credit risks 1,309,932 1,323,029

notes to the Balance sheet - other and supplementary notes


The European Investment Bank (EIB) refinanced investment loans for clients amounting to €4,825 thousand.

transactions in which securities are sold with the agreement of a retrocession on a specific date are referred to as repos. The sold financial instruments are recorded on BTV‘s balance sheet as all the risks and rewards related to ownership basically remain with BTV AG. The financial instruments are retro-ceded on expiry of the repo. During the term of the repo, BTV AG is the beneficiary of all interest payments and other income received during the term. The accounting as financing corresponds to the economic substance of the transaction.

in the context of repos, securities were transferred to third parties. At 31 December 2014, the total market value was €1,650,442 thousand. Of which €887,796 thousand were in the category „Available for Sale“, €0 in the fair value option and €762,646 thousand were in the category „Held to Maturity“. At 31 December 2014, the carrying value was €1,547,085 thousand. the associated liabilities are shown under liabilities to credit institutions and liabilities to customers. the utilisation on 31 December 2014 amounted to €893,196 thousand.

the contractual terms for all collateral and setoff agreements are in line with banking practice.

36a inForMation regarDing oFFsetting oF FinanCiaL instruMents as at 31 DeCeMBer 2014 in €000s

Financial assets/debts

effects from settlement

agreements

received/issued securities in the form of financial

instruments

Financial assets/debts (net)

trading assets - derivatives 91,469 –20,007 –14,331 57,131total debt 91,469 –20,007 –14,331 57,131

Liabilities to Credit institutes and client deposits

6,921,723 0 –1,355,769 5,565,954

trading liabilities – Derivatives 49,644 –20,007 –17,287 12,350total liabilities 6,971,367 –20,007 –1,373,056 5,578,304

inForMation regarDing oFFsetting oF FinanCiaL instruMents as at 31 DeCeMBer 2013 in €000s

Financial assets/debts

effects from settlement

agreements

received/issued securities in the form of financial

instruments

Financial assets/debts (net)

trading assets - derivatives 66,302 –24,181 –3,059 39,062total debt 66,302 –24,181 –3,059 39,062

Liabilities to Credit institutes and client deposits

7,180,273 0 –1,071,136 6,109,137

trading liabilities – Derivatives 64,152 –24,181 –30,473 9,498total liabilities 7,244,425 –24,181 –1,101,609 6,118,635

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seLeCteD Data anD Figures ConCerning BranChes pursuant to seCtion 64 BWg in thousands of euros

austria switzerland germany

net interest income 157,335 9,209 15,724operating income 196,559 12,777 17,426number of employees in persons/years 1,118 23 54Annual profit before tax 81,003 4,894 3,871taxes on earnings 12,235 568 884state aid received 0 0 0

return on inVestMent pursuant to seCtion 64 BWg 2014 2013

return on investment 0.79 % 0.71 %

BtV has a branch in switzerland, BtV switzerland with registered office in Staad, and BTV Leasing has a branch, BtV Leasing schweiz ag, also with registered office in Staad.

BtV has a branch in germany, BtV germany with registered office in Memmingen, and BTV Leasing has a branch, BtV Leasing Deutschland gmbh with registered office in Augsburg.

36c CoMFort Letters

36b notes pursuant to seCtion 64 BWg

During the reporting year, BtV did not issue any comfort letters (previous year: €299 thousand).


the sales revenue of the subgroup VoMonosi Beteiligungs ag amounted to €51,340 thousand for the reporting year. Annual net profit after tax was €4,995 thousand since the acquisition date, which equates to the reporting year 2014.

on 14 March 2014 Mpr holding gmbh acquired the remaining 36% of shares in VoMonosi Beteiligungs ag and has therefore held 100% of the shares since the quarterly reporting date of 31 March 2014. As a result of this transaction among shareholders in March 2014 only indirect minority interests have been reported since 31 March 2014.

the resolution of the voting trust agreements re-sults in a participation adjustment measured at fair value in the income statement of €1,755 thousand. Mpr holding gmbh held 64% of the shares in Vo-

MoNoSi Beteiligungs AG as at 1 January 2014. of these shares, 36% are minority interests at the time of acquisition.

MinoritY interests at Date oF aCQuisition in €000s 01.01.2014

indirect minority interests 744Direct minority interests 987Total minority interests as at 1 January 2014 1,731

37 inForMation on shares in other CoMpanies

With the resolution of the vote trust agreement, Mpr holding gmbh gained control over VoMonosi Beteiligungs AG as at 1 January 2014. The purpose of VoMonosi Beteiligungs ag is to hold participa-tions in the tourism segment. Due to the resolution of the vote trust agreements, Mpr holding gmbh

obtained 15% of the voting rights. As such, MPR holding gmbh held 64% of the shares and 64% of the voting rights in VoMonosi Beteiligungs ag as at 1 January 2014. The resolution of the voting trust agreement is to be seen as an element in the implementation of the overall strategy.

assets anD DeBts oF VoMonoso BeteiLigungs ag at the point oF aCQuisition in thousands of euros

01.01.2014

petty cash balance 80 Loans to Credit institutions 4,165 Loans to clients 1 intangible assets 349 property, plant and equipment 78,515 Financial assets 322 accrued income 236 other assets 6,060 Deferred tax assets 4,073 Liabilities to banks –79,839other liabilities –4,916 Deferred tax liabilities –299 Long-term payroll reserves –1,899 other reserves and provisions –3,361 net assets 3,487

indirect non-controlling interestsnet assets without indirect non-controlling interests

744 2,743

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Change in the share oF Mpr hoLDing gMBh in VoMonosi BeteiLigungs ag in €000s

share of Mpr holding gmbh as at 1 January 2014 (without indirect minority interests) 1,755effect of the increase of the amount of holding to 100% 987shares in the comprehensive income as at 31 March 2014 849Less profit carried forward from previous years –786Share of MPR Holding GmbH as at 31 March 2014 2,805

reConCiLiation oF the eQuitY MethoD to the pro rata aCCounting oF assets anD DeBts in €000s

at-equity valued investment 1 January 2014 974

Disclosed assets and debts 31 March 2014:Loans to Credit institutions 43,761reserves for guarantees –42,781other reserves and provisions –6

Equity at 31 March 2014 974

the company aLpenLÄnDisChe garantie- GESELLSCHAFT M.B.H. is classed as joint operations as of 1 January 2014 as a result of iFrs 11 coming into effect and recognised pro rata with the assets and debts in the consolidated financial statements.

38 notes on transaCtions With CLoseLY reLateD persons

as part of normal business activity transactions are concluded with closely related companies and per-

sons at normal market terms and conditions. the scope of these transactions is shown below:

38a eMoLuMents anD Loans to MeMBers oF the BoarD oF DireCtors anD the superVisorY BoarD

the loans and advances granted to the members of the Board of Directors amounted to a total volume at the end of 2014 of €142 thousand (previous year: €350 thousand). Loans of €6,091 thousand are due from members of the supervisory Board (previ-ous year: €42,194 thousand). The interest rates and other conditions (maturity and collateral) are in line with the market. During the current financial year, members of the Board of Directors made loan repayments of €222 thousand (previous year: €0). Members of the Supervisory Board made loan repayments during 2014 of €41,310 thousand (pre-vious year: €48 thousand).

in the reporting year, remuneration of the Board of Directors amounted to €1,355 thousand including severance pay (previous year: €1,693 thousand), the pension payments to former members of the Board of Directors amounted to €597 thousand (previous year: €589 thousand).

During the financial year, active members of the BTV ag supervisory Board received annual remuneration for their positions in the amount of €242 thousand (previous year: €200 thousand).


38d reConCiLiation oF the eQ-uitY CarrYing VaLue oF the as-soCiateD CoMpanies inCLuDeD in the group FinanCiaL state-Ments BaseD on the portFoLio as at 31 DeCeMBer 2014 in €000s

Written-down

value as at 1 January

2014

Change not recognised

in profit and loss

2014

Change recognised

in profit and loss

2014

Written-down value

as at 31 December

2014

Market price of

ordinary shares

Market price of

preference shares

BKs Bank ag 133,471 9,911 6,580 149,962 17.30 15.20oberbank ag 237,742 1,822 20,096 259,660 50.35 37.81Drei-Banken Versicherungs-aktien-gesellschaft

4,285 0 91 4,376 n.a. n.a.

Moser holding ag 11,354 –203 1,782 12,933 n.a. n.a.

38c reCeiVaBLes anD LiaBiLities to assoCiateD CoMpanies anD hoLDings in €000s

31.12.2014 31.12.2013

Loans to Credit institutions 10,154 105,125Loans to clients 67 35,897

Liabilities to customers 10,221 141,022

Liabilities to credit institutions 62,858 140,646Liabilities to clients 852 1,843

total liabilities 63,711 142,489

In the context of the profit and loss account, there are earnings of €77 thousand (previous year: €1,207 thou-sand) and expenditure of €320 thousand (previous year: €780 thousand) was incurred for transactions with the parent company and its associated companies.

the fair value of the listed companies, which are included according to the equity method, was

€362 million on the reporting date (previous year: €344 million). The temporary differences under IAS 12.87 at the balance sheet date were €330 million (previous year: €299 million).

the number of shares held by associated compa-nies was 6,702,625 (previous year: 6,702,625 shares).

38b Loans anD LiaBiLities to assoCiateD non-ConsoLiDateD CoMpanies anD hoLDings in €000s

31.12.2014 31.12.2013

Loans to Credit institutions 0 0Loans to clients 13,279 8,215

Liabilities to customers 13,279 8,215

Liabilities to credit institutions 0 0Liabilities to clients 11,964 10,362

total liabilities 11,964 10,362

In the context of the profit and loss account, there are earnings of €365 thousand (previous year: €275 thousand) and expenditure of €105 thousand (pre-

vious year: €57 thousand) was incurred for transac-tions with the parent company and its associated companies.

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Explanation: n.a. = not available

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38e the assoCiateD CoMpanies VaLueD at eQuitY shoWeD the FoLLoWing VaLues at the BaLanCe sheet Date in €000s

31.12.2014 31.12.2013

BKs Bank ag 6,859,235oberbank ag 18,038,640Drei-Banken Versicherungs-aktiengesellschaft 136,449Moser holding ag 145,349

assets 25,179,673 24,672,249

BKs Bank ag 6,117,767oberbank ag 16,507,700Drei-Banken Versicherungs-aktiengesellschaft 114,916Moser holding ag 89,961

Liabilities 22,830,344 22,538,948

BKs Bank ag 247,418oberbank ag 603,480Drei-Banken Versicherungs-aktiengesellschaft 11,248Moser holding ag 107,686

earnings 969,832 984,367

Group net profit for the year 43,003other comprehensive income 5,387

BKs Bank ag total annual earnings 48,390Group net profit for the year 132,652other comprehensive income 7,219

oberbank ag total annual earnings 139,871Group net profit for the year 754other comprehensive income n.a.

Drei-Banken Versicherungs-aktiengesellschaft total annual earnings 754Group net profit for the year 8,368other comprehensive income –338

Moser holding ag total annual earnings 8,030Overall profit for the financial year 197,045 160,082

BKs Bank ag 1,548oberbank ag 2,008Drei-Banken Versicherungs-aktiengesellschaft 90Moser holding ag 0

Dividends received 3,646 3,646

38f aCQuisition Costs CarrieD oVer or assoCiateD CoMpanies VaLueD at Fair VaLue shoWeD the FoLLoWing VaLues at the BaLanCe sheet Date in thousands of euros

31.12.2014 31.12.2013

assets 69,837 67,939Liabilities 31,283 29,302earnings 61,860 57,415Profit/loss for the period 1,207 –276

The last available annual financial statements were used as the basis for the calculation of the values in tables 38e and 38f.


Explanation: n.a. = not available

39 totaL VoLuMe oF not Yet transaCteD DeriVatiVe FinanCiaL proDuCts

in thousands of euros Contract volume / residual terms Market valuespositive negative positive negative positive negative

< 1 year 1- 5 years > 5 years total < 1 year 1- 5 years > 5 yearsinterest rate swaps 259,929 908,998 506,900 1,675,827 2,586 –1,733 32,845 –29,633 58,763 –7,759

purchase 107,063 322,217 80,350 509,630 0 –1,733 0 –29,630 0 –7,657sale 152,866 586,781 426,550 1,166,197 2,586 0 32,845 –3 58,763 –102

interest rate options 69,586 225,441 32,972 327,999 22 –22 638 –584 154 –196purchase 34,793 112,333 16,486 163,612 22 0 403 –167 69 –65sale 34,793 113,108 16,486 164,387 0 –22 235 –417 85 –131

interest rate contracts, total 329,515 1,134,439 539,872 2,003,826 2,608 –1,755 33,483 –30,217 58,917 –7,955

Currency swaps 30,000 32,755 0 62,755 4,927 –4,899 4,801 –5,311 0 0purchase 15,000 15,568 0 30,568 0 –4,899 0 –5,311 0 0sale 15,000 17,187 0 32,187 4,927 0 4,801 0 0 0

Foreign exchange futures 56,781 11,728 0 68,509 723 –1,237 318 –227 0 0FX Swaps 1,027,388 0 0 1,027,388 5,119 –2,136 0 0 0 0

total currency exchange rate contracts 1,114,169 44,483 0 1,158,652 10,769 –8,272 5,119 –5,538 0 0

Derivative trades relating to securities and other derivatives

4,300 14,650 0 18,950 30 0 664 0 0 0

purchase 0 0 0 0 0 0 0 0 0 0sale 4,300 14,650 0 18,950 30 0 664 0 0 0

trades relating to securities and other derivatives total

4,300 14,650 0 18,950 30 0 664 0 0 0

total bank book 1,447,984 1,193,572 539,872 3,181,428 13,407 –10,027 39,266 –35,755 58,917 –7,955

Coupon swap options – trading book

5,650 8,135 31,413 45,198 0 0 0 0 87 –91

purchase 2,825 3,604 15,394 21,823 0 0 0 0 87 0sale 2,825 4,531 16,019 23,375 0 0 0 0 0 –91

Coupon swap – trading book 0 0 0 0 0 0 0 0 0 0purchase 0 0 0 0 0 0 0 0 0 0sale 0 0 0 0 0 0 0 0 0 0

interest rate contracts, total 5,650 8,135 31,413 45,198 0 0 0 0 87 –91


0 0 2,000 2,000 0 0 0 0 113 0

purchase 0 0 2,000 2,000 0 0 0 0 113 0trades relating to securities and other derivatives total

0 0 2,000 2,000 0 0 0 0 113 0

total trading book 5,650 8,135 33,413 47,198 0 0 0 0 200 –91

Non-transacted derivatives Total financial instruments

1,453,634 1,201,707 573,285 3,228,626 13,407 –10,027 39,266 –35,755 59,117 –8,046

Total volume of not yet transacted derivative financial products at 31 December 2014:

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in thousands of euros Contract volume / residual terms Market valuespositive negative positive negative positive negative

< 1 year 1- 5 years > 5 years total < 1 year 1- 5 years > 5 yearsinterest rate swaps 221,169 1,063,618 482,666 1,767,453 1,490 –1,486 37,135 –35,197 19,537 –5,344

purchase 110,923 420,797 97,443 629,163 0 –1,486 4 –34,735 118 –4,991sale 110,246 642,821 385,223 1,138,290 1,490 0 37,131 –462 19,419 –353

interest rate options 54,808 197,033 131,760 383,601 185 –185 407 –410 1,078 –986purchase 27,404 98,659 65,880 191,943 183 –2 399 –6 778 –198sale 27,404 98,374 65,880 191,658 2 –183 8 –404 300 –788

interest rate contracts, total 275,977 1,260,651 614,426 2,151,054 1,675 –1,671 37,542 –35,607 20,615 –6,330

Currency swaps 17,500 48,536 12,186 78,222 1,943 –1,909 7,674 –7,564 1,291 –1,619purchase 8,750 24,268 5,300 38,318 0 –1,909 0 –7,564 0 –1,619sale 8,750 24,268 6,886 39,904 1,943 0 7,674 0 1,291 0

Foreign exchange futures 37,116 4,358 0 41,474 336 –1,006 3 –160 0 0FX Swaps 921,960 0 0 921,960 5,506 –7,056 0 0 0 0

total currency exchange rate con-tracts

976,576 52,894 12,186 1,041,656 7,785 –9,971 7,677 –7,724 1,291 –1,619


26,000 16,000 5,000 47,000 814 0 554 0 60 0

purchase 0 0 0 0 0 0 0 0 0 0sale 26,000 16,000 5,000 47,000 814 0 554 0 60 0

trades relating to securities and other derivatives total

26,000 16,000 5,000 47,000 814 0 554 0 60 0

total bank book 1,278,553 1,329,545 631,612 3,239,710 10,274 –11,642 45,773 –43,331 21,966 –7,949

Coupon swap options – trading book

0 15,383 34,735 50,118 0 0 8 –11 303 –315

purchase 0 7,171 17,022 24,193 0 0 8 0 303 0sale 0 8,212 17,713 25,925 0 0 0 –11 0 –315

Coupon swap – trading book 0 0 0 0 0 0 0 0 0 0purchase 0 0 0 0 0 0 0 0 0 0sale 0 0 0 0 0 0 0 0 0 0

interest rate contracts, total 0 15,383 34,735 50,118 0 0 8 –11 303 –315


0 0 0 0 0 0 0 0 0 0

purchase 0 0 0 0 0 0 0 0 0 0trades relating to securities and other derivatives total

0 0 0 0 0 0 0 0 0 0

total trading book 0 15,383 34,735 50,118 0 0 8 –11 303 –315

Non-transacted derivatives Total financial instruments

1,278,553 1,344,928 666,347 3,289,828 10,274 –11,642 45,781 –43,342 22,269 –8,264

Total volume of not yet transacted derivative financial products as at 31 December 2013:


the trading volume is divided by the type of underly-ing financial instrument into the categories of interest rate, currency rate and security related trades. The se-lected subdivision of the volumes by time to maturity concords with international recommendations, as does the classification into interest rate, currency rate and security based trades. At the end of 2014, BTV only had OTC (over the counter) trades on its books.

the derivative instruments held for non-trading purposes are mainly represented by interest rate contracts primarily requested by customers. alongside interest swaps customers also asked for cross-currency swaps and interest rate options. BtV closes off these positions with back-to-back transactions with other credit institutions and does not carry any risk on its own book. BTV itself uses primarily interest rate swaps to manage the overall bank rate risk. For management of currency rate risks BtV mainly uses foreign exchange futures and

currency swaps. The securities-related transactions relate solely to issued structured investment prod-ucts. The options required for these were bought in through third-party banks.

the hedging period for derivatives used in hedge accounting is identical to that for the hedged item.

the group uses fair value hedge accounting predomi-nantly through interest rate swaps, in order to hedge against changes in the fair values of fixed-income financial instruments due to movements in market interest rates. The fair values of the hedging instru-ments are classified under assets in the other assets and classified as liabilities in the other liabilities.

the following table shows the current fair market value of derivatives, which are held as part of fair value hedges:

DeriVatiVes Fair VaLue (as part oF Fair VaLue heDges) in thousands of euros

other assets 2014

other liabilities

2014

other assets 2013

other liabilities

2013

Derivatives in fair value hedges 47,135 7,451 12,461 6,237

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40 Fair VaLue hierarChY oF FinanCiaL instruMents WhiCh are VaLueD at Fair VaLue

The financial instruments reported at fair value are classified at fair value in the three tier valuation hierarchy as follows.

This hierarchy reflects the significance of the input data used for the valuation and is classified as follows: Quoted prices in active markets (Level 1): this category contains equity, corporate bonds and government lending listed on major exchanges. The fair value of financial instruments traded in active mar-kets is calculated on the basis of quoted prices, in so far as these represent prices applied within the context of regular and current transactions. An active market must fulfil cumulatively the fol-lowing conditions:

• the products traded on the market are homogenous,

• normally willing contractual buyers and sellers can be found any time and

• prices are available to the public.

A financial instrument is seen as listed on an active market if its prices are available easily and regularly from a stock exchange, a trader or broker, an indus-try group, a price service agency or a supervisory authority and these prices represent actual and regularly occurring market transactions.

Valuation procedure through observable param-eters (Level 2): this category includes otC derivative contracts, receivables and issued debt securities of the group classified at fair value.

Valuation procedures through significant unob-servable parameters (Level 3): The financial instruments in this category show input parameters which are based on unobserv-able markets.

The allocation of certain financial instruments to the categories requires a systematic assessment, especially if the valuation is based on both observ-able as well as unobservable market parameters. The instrument classification may also change over time in consideration of changes to the market parameters.

For securities and other investments which are val-ued at fair value, the following valuation processes are applied:

Level 1 the fair value is derived from the transaction prices as traded on the stock exchange.

Level 2securities which are not traded in an active market are valued by means of the discounted cash flow method. This means that the future projected cash flows are discounted by means of suitable discount factors in order to calculate the fair value. The dis-count factors contain both the credit curve without credit risk as well as the credit spreads which follow the credit rating and the rank of the issuer. The interest curve for discounting contains securities account, money-market futures and swap rates as observable on the market. The calculation of the credit spread follows a 3-step process:

1) if there is for the issuer a bond of the same rank and of the same remaining term which is actively traded on the market, this credit spread is used.2) if there is no comparable bond which is actively traded on the market, the credit default swap spread (CDS spread) with a similar term is applied. 3) if there is neither a comparable bond traded on the market nor an actively traded CDs, then the credit spread from a comparable issuer is applied (level 3). This approach is currently not being used at the BTV group.


Level 3the accompanying current values of the men-tioned financial assets in the third stage where de-termined in accordance with generally recognised valuation processes. Significant parameters are the depreciation rate as well as long-term success and capitalisation values with consideration of the ex-perience of the management as well as knowledge of the market conditions of the specific industry.

the issues are categorised at level 2 and the valuation takes place in accordance with the following process:

Level 2the own issues are not subject to active trade on the capital market. Instead they are retail issues and private placements. The valuation consequently takes place by means of a discounted cash flow valuation model. This is based on an interest curve based on money market interest rates and swap interest as well as BTV‘s credit spreads. The credit spreads align themselves with the spreads that are payable at the time for an interest rate hedging transaction (interest spread on swap).

The derivatives are also categorised at level 2. The following valuation processes are applied:

Level 2Derivative financial instruments are divided into derivatives with a symmetrical payment profile as well as derivatives with an asymmetrical payment profile.

at BtV, derivatives with a symmetrical payment profile contain interest derivatives (interest swaps and interest rate forwards) and foreign currency derivatives (FX Swaps, cross currency swaps and FX outright transactions). These derivatives are calculated by means of the discounted cash flow method which is based on money market interest rates, money market futures-interest rates, swap interest rates as well as basis spreads which can be observed continually on the market.

at BtV, derivatives with an asymmetrical pay-ment profile contain interest derivatives (caps and floors). The calculation of the fair value occurs here by means of the Black-76-Option price model. All inputs are either completely directly observable on the market (money market rates, money market futures- interest rates as well as swap interest rates) or derived from input factors observable on the market (caps / floor volatilities implicitly deducted from option prices).

the following tables show the fair value valuation methods used in order to determine the fair value of the balance sheet financial instruments.

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Fair VaLue hierarChY oF FinanCiaL instruMents WhiCh are VaLueD at Fair VaLue as at 31 DeCeMBer 2014 in €000s

prices listed in active markets

Level 1

Valuation methods based on

market data

Level 2

Valuation methods not

based on market data

Level 3Financial assets stated at fair value

trading portfolio securities 0 7,122 0Positive market values from derivative financial instruments 0 111,854 0Assets classified at fair value 115,935 26,145 128Financial assets available for disposal 984,509 126,932 151,635

Overall financial assets classified at fair value 1,100,444 272,053 151,763

Financial liabilities stated at fair valueNegative market values from derivative financial instruments 0 54,833 0Liabilities classified at fair value 0 620,707 0

Overall liabilities classified at fair value 0 675,540 0

Fair VaLue hierarChY oF FinanCiaL instruMents WhiCh are VaLueD at Fair VaLue as at 31 DeCeMBer 2013 in €000s


Level 1

Valuation methods based on

market data

Level 2



Level 3Financial assets stated at fair value

trading portfolio securities 0 0 0Positive market values from derivative financial instruments 0 77,401 0Assets classified at fair value 129,100 25,823 301Financial assets available for disposal 891,804 127,321 187,573

Overall financial assets classified at fair value 1,020,904 230,545 187,874

Financial liabilities stated at fair valueNegative market values from derivative financial instruments 0 62,883 0Liabilities classified at fair value 0 548,796 0

Overall liabilities classified at fair value 0 611,679 0


41 Fair VaLue oF FinanCiaL instruMents, WhiCh are not VaLueD at Fair VaLue

in the following table for each balance sheet item the fair market value is compared to the book value. The market value is the amount, which in an active market could be raised from the sale of a financial instrument or which would need to be paid to make an equivalent purchase.

For positions without a contractually fixed term the relevant book value was applied. If no market prices exist, then generally accepted valuation models were applied, in particular analysis using discounted cash flow and the option price model.

During the reporting period, there were no reclas-sifications between the individual levels. Owing to consolidation effects in connection with the subgroup VoMonosi Beteiligungs ag, there were changes totalling -€33,970 thousand. Purchases and other additions resulted on the one hand from purchases of equity instruments totalling €6,401 thousand and on the other hand from company formations and share-holder contributions totalling €825 thousand.

In the reporting year 2014, no significant profits and losses were realised from sales for level 3 financial in-struments. The amounts in level 3 recognised in profit and loss resulted mainly from valuation losses.

at the end of a reporting period, BtV ag checks to what extent regroupings have taken place owing to changes in relevant parameters between the different levels of the fair value hierarchy. Regroup-ings take place on the basis of the portfolios in the reporting period concerned.

MoVeMents in LeVeL 3 oF FinanCiaL instruMents as-sesseD at Fair VaLue in 2014 in €000s

December 2013

result p&L

result in other

operating income

pur-chases

sales, repay-ments

transfer to

level 3

transfer from

level 3

Con-solidation

effects

Currency conversion

December 2014

trading portfolio securities 0 0 0 0 0 0 0 0 0 0positive market values from de-rivative financial instruments

0 0 0 0 0 0 0 0 0 0

Classified at fair value - assets

301 –57 0 0 –116 0 0 0 0 128

available for sale financial assets

187,573 0 3,905 7,226 –13,099 0 0 –33,970 0 151,635

Overall financial assets classified at fair value

187,874 –57 3,905 7,226 –13,215 0 0 –33,970 0 151,763

MoVeMents in LeVeL 3 oF FinanCiaL instruMents assesseD at Fair VaLue in 2013 in €000s

December 2012

result p&L

result in other

operating income

pur-chases

sales, repay-ments

transfer to

level 3

transfer from

level 3

Con-solidation

effects

Currency conversion

December 2013

trading portfolio securities 0 0 0 0 0 0 0 0 0 0positive market values from derivative financial instruments

0 0 0 0 0 0 0 0 0 0

Assets classified at fair value 0 –307 0 0 0 608 0 0 0 301

Financial assets available for disposal

0 0 0 0 0 187,573 0 0 0 187,573

Overall financial assets classified at fair value

0 –307 0 0 0 188,181 0 0 0 187,874

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assets in thousands of euros

Fair value 31 December

2014



2013


Cash reserves 173,002 173,002 229,545 229,545Loans to Credit institutions 276,423 273,979 323,088 321,850Loans to clients 6,916,304 6,386,508 6,881,828 6,404,543Financial assets – held to maturity 800,149 741,772 875,006 846,262

LiaBiLities in thousands of euros


2014



2013


Liabilities to credit institutions 1,442,880 1,394,692 1,744,778 1,752,704Liabilities to clients 5,551,723 5,527,031 5,423,886 5,419,758securitised debt 580,884 587,697 467,988 478,781subordinated capital 183,507 183,119 253,086 254,756

assets

Level 1For securities which were assigned to the account-ing category ‚held to maturity‘ (HtM), the fair value is calculated from the price created on the market.

Level 2For securities which cannot be valued through prices created on the market (mostly regarding securi-ties traded on stock exchanges and on functioning markets), the fear value is determined in accordance with the discounted cash flow method. This means that the future projected cash flows are discounted by means of suitable discount factors in order to calculate the fair value. In this case, adequate credit spreads per bond issuer are flowing in. The credit spread is primar-ily derived for illiquid securities from credit default swaps. If no credit default swap spread is available, the calculation of the credit spread is made via comparable financial instruments from comparable issuers avail-able on the market. Furthermore, external valuations by third parties are also taken into consideration which however have indicative character at any rate.

Level 3at level 3, the fair value calculation takes place via models, whereby a part of the input parameters contains data not observable on the market and,

consequently, are based on assumptions which are made within the bank. This primarily effects non-securitised loans to customers and banks which are valued ‚at cost‘. Herewith, for the fair value calcula-tion the underlying credit spread per counter party is normally not known and also cannot be derived from the market.

Liabilities

Level 2For liabilities which are not accounted for at fair value, the fair value is determined according to the discounted cash flow method. This means that the future projected cash flows are discounted by means of suitable discount factors in order to calculate the fair value. In the case of securitised liabilities, BTV‘s credit spread is used which orien-tates itself with the spreads of bond issues payable at the time.

Level 3in the same way as the non-securitised loans, the non-securitised liabilities to customers and banks are also components of level 3. These products are also generally not valued at market value. The crea-tion of a fair value also takes place by means of the discounted cash flow method whereby the credit spread remains disregarded here.


42 Fair VaLue hierarChY oF FinanCiaL instruMents, WhiCh are not VaLueD at Fair VaLue as at 31 DeCeMBer 2014 in €000s


Valuation methods based on market data



Financial assets not valued at fair valueLoans to Credit institutions 0 0 276,423Loans to clients 0 0 6,916,304Financial assets held until maturity 800,149 0 0

Overall financial assets not valued at fair value 800,149 0 7,192,727

Financial liabilities not valued at fair valueLiabilities to credit institutions 0 0 1,442,880Liabilities to clients 0 0 5,551,723securitised debt 0 580,884 0subordinated capital 0 183,507 0

overall liabilities not valued at fair value 0 764,391 6,994,603

Fair VaLue hierarChY oF FinanCiaL instruMents, WhiCh are not VaLueD at Fair VaLue as at 31 DeCeMBer 2013 in €000s


Valuation methods based on market data



Financial assets not valued at fair valueLoans to Credit institutions 0 0 323,088Loans to clients 0 0 6,881,828Financial assets held until maturity 829,821 45,186 0

Overall financial assets not valued at fair value 829,821 45,186 7,204,916

Financial liabilities not valued at fair valueLiabilities to credit institutions 0 0 1,744,778Liabilities to clients 0 0 5,423,886securitised debt 0 467,988 0subordinated capital 0 253,086 0

overall liabilities not valued at fair value 0 721,074 7,168,664

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43 terM to MaturitY BreaKDoWn

LiaBiLities as at 31 DeCeMBer 2014 in €000s

overnight < 3 months 3 months – 1 year

1- 5 years > 5 years total

Liabilities to credit institutions 273,921 427,824 285,306 347,161 60,479 1,394,692Liabilities to clients 3,053,923 1,199,556 659,343 480,907 133,302 5,527,031securitised debt 0 24,609 117,340 549,144 321,478 1,012,571trading liabilities 0 2,980 1,517 10,820 489 15,806subordinated capital 0 0 57,971 214,013 106,968 378,952


assets as at 31 DeCeMBer 2014 in €000s



Loans to Credit institutions 42,620 160,630 50,094 20,635 0 273,979Loans to clients 1,050,324 500,802 1,154,453 1,906,438 1,774,491 6,386,508trading assets 0 5,378 1,434 19,896 11,725 38,433Financial assets - at fair value through profit or loss

128 0 4,384 134,736 2,960 142,208

Financial assets - available for sale 41,255 28,129 127,616 738,644 327,432 1,263,076Financial assets – held to maturity 0 31,020 80,256 371,846 258,650 741,772

total assets 1,134,327 725,959 1,418,237 3,192,195 2,375,258 8,845,976


assets as at 31 DeCeMBer 2013 in €‘000



Loans to Credit institutions 167,473 118,768 4,975 30,634 0 321,850Loans to clients 1,198,311 424,232 1,009,606 1,925,176 1,847,218 6,404,543trading assets 0 5,360 1,214 18,954 1,680 27,208Financial assets - at fair value through profit or loss

301 0 14,600 132,217 8,105 155,223

Financial assets - available for sale 72,835 49,127 88,093 610,065 386,577 1,206,697Financial assets – held to maturity 0 99,992 112,216 333,999 300,055 846,262

total assets 1,438,920 697,479 1,230,704 3,051,045 2,543,635 8,961,783

LiaBiLities as at 31 DeCeMBer 2013 in €‘000



Liabilities to credit institutions 208,152 842,619 559,243 94,890 47,800 1,752,704Liabilities to clients 2,987,851 1,219,764 588,804 535,333 88,006 5,419,758securitised debt 0 32,854 75,169 538,661 227,807 874,491trading liabilities 0 4,378 4,232 11,657 1,176 21,443subordinated capital 0 20,320 86,475 209,651 91,395 407,841


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the following members of the Board of Directors and the supervisory Board were active for BtV during 2014:

ChairmanConsul peter gaugg – spokesman for the BoardMag. Matthias Moncher, Member of the Board of Directorsgerhard Burtscher, Member of the Board of Directors

supervisory Board

honorary presidentshonorary Chairman Dr hermann Bell, Linz† Dr heinrich treichl, Vienna (died on 2 november 2014)

Chairman

Consul Kommerzialrat Chief executive Dr Franz gasselsberger, MBa, Linz

DeputyConsul Kommerzialrat Chief executive Business school graduate Dr heimo Johannes penker, Klagenfurt (until 14 May 2014)Consul Board Chairwoman Mag. Dr Herta Stockbauer, Klagenfurt (as from 14 May 2014)

MembersMag. Pascal Broschek, FieberbrunnDipl.-Ing. Johannes Collini, HohenemsFranz Josef haslberger, Freising (D) (from 11 May 2012)Univ.-Prof. Dr Waldemar Jud, GrazDr Dietrich Karner, Viennara Dr andreas König, innsbruckConsul General „Councillor of Commerce“ Business School Graduate Dr Johann F. Kwizda, ViennaDr edgar oehler, Balgach (Ch)Director Karl samstag, Vienna Councillor of Commercehanno ulmer, Wolfurt

employee representativeharald gapp, Chairman of the Central Works Council, innsbruckalfred Fabro, Deputy Chairman of the Works Council, Wattensharald praxmarer, Deputy Chairman of the Works Council, neustift im stubaitalstefan abenthung, götzensBirgit Fritsche, nüzidersBettina Lob, Vils

government commissionergovernment commissioner privy councillor Dr erwin trawöger, innsbruckDeputy: privy Councillor Dr elisabeth stocker, innsbruck

44 bodies of BtV ag


45 presentation oF hoLDings as at 31 DeCeMBer 2014

naMe oF CoMpanY anD registereD oFFiCe total capi-tal holding

Direct capi-tal holding

equity in €000s1

results in €000s2

reporting date

a) Affiliated companies1. Domestic financial institutions:

BTV Real-Leasing VI Gesellschaft m.b.H., Vomp 100.00 % 855 18 31.12.20142. Other domestic companies:

Beteiligungsholding 3000 gmbh, innsbruck 100.00 % 100.00 % 7,587 12 30.11.2014Beteiligungsverwaltung 4000 gmbh, innsbruck 100.00 % 4,198 –212 30.11.2014stadtforum tiefgaragenzufahrt gmbh, innsbruck 100.00 % 100.00 % 35 9 31.12.2014Mayrhofner Bergbahnen aktiengesellschaft, Mayrhofen

50.52 % 63,378 4,482 30.11.2013

Freiraum i gmbh, Mayrhofen 50.52 % 36 13 30.11.2013KM immobilienservice gmbh, innsbruck 100.00 % 6 –21 31.12.2013KM immobilienprojekt iV gmbh, innsbruck 100.00 % 540 –35 31.12.2013Miniaturpark Bodensee gmbh, Meckenbeuren 100.00 % 0 437 31.12.2013pV Management gmbh, innsbruck 5 100.00 % 100.00 % 26 6 31.10.2014C3 Logistik gmbh, innsbruck 100.00 % 158 –125 30.09.2014iC telfs-untermarkt grundverwertungs gmbh, innsbruck

100.00 % –339 293 31.12.2013

Dr Wilhelm greil straße 4 in innsbruck, immobilienverwaltungs gmbh, innsbruck 3)

100.00 % 99.71 %

3. Other foreign companies:ag für energiebewusstes Bauen ageB, staad 50.00 % 165 –11 30.06.2014KM Beteiligungsinvest ag, staad 100.00 % 25,104 –11 31.12.2014

as at 31 December 2014, the company had holdings in at least 20% of the shares in the following companies which are included in the group accounts and are also insignificant as a whole:

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1 equity in the sense of section 229 of the austrian Commercial Code (ugB) plus untaxed reserves2 annual profit/loss after taxes on income, before transfer to reserves or application of results, for fiscal entities and

non-limited companies annual profit before taxes.3 Company established in 2014, first balance sheet on 31 December 2015



naMe oF CoMpanY anD registereD oFFiCe total capi-tal holding

Direct capi-tal holding

equity in €000s1

results in €000s2

reporting date

b) associated companiesother domestic companies:Beteiligungsverwaltung Gesellschaft m.b.H., Linz 30.00 % 30.00 % 13,703 625 31.12.2014DREI-BANKEN-EDV Gesellschaft m.b.H., Linz 30.00 % 30.00 % 3,488 –13 31.12.20143-Banken Beteiligung Gesellschaft m.b.H., Linz 30.00 % 20,110 245 31.12.2014shs unternehmensberatung gmbh, innsbruck 25.00 % 846 446 31.12.2013sitzwohl in der gilmschule gmbh, innsbruck 25.71 % 22 117 30.09.2014 Montafoner Kristberg-Bahn silbertal gesellschaft m.b.H., Silbertal

32.29 % 570 74 30.04.2014

Montafon tourismus gmbh, schruns 27,71 % –185 –287 31.12.2013


spokesperson for the Board of Directors with responsibility for corporate client business in Vorarlberg, innsbruck, south tyrol and Vienna; Corporate and private customer business southern Germany; Corporate audit, human resources, Marketing & Communications divisions; Compliance and money laundering.


Member of the Board of Directors with responsibility for risk, pro-cess, IT and cost management; The departments for finance and controlling, legal matters and investments and group audit; Compliance and money laundering.


Member of the Board, responsible for retail client business in tyrol, Vorarlberg, Vienna and italian clients; Corporate client business in Tiroler Oberland and Unterland; Corporate and private customer business in Switzerland; institutional Clients and Banks, Corporate audit; Compliance and money laundering.


Declaration by the statutory representatives pursuant to section 82 (4) and 87 (1) Börseg (stock exchange act)

We confirm that to the best of our knowledge the group accounts, drawn up in accordance with the statutory accounting standards provides a true picture of the assets, financial and profit situation of the group, that the management report presents the course of business, the results of business activ-ities and the situation of the group in a way which provides a true and fair view of the assets, financial and earnings situation of the group, and that the management report discloses all significant risks and uncertainties to which the group is exposed.

We confirm that to the best of our knowledge that the accounts of the parent company, drawn up in accordance with the statutory accounting stand-ards provides a true picture of the assets, financial and earnings situation of the company, that the management report presents the course of busi-ness, the results of business activities and the situa-tion of the company in a way which provides a true and fair view of the assets, financial and earnings situation of the company, and that the manage-ment report discloses all significant risks and uncertainties to which the company is exposed.




spokesperson for the Board of Directors with responsibility for corporate client business in Vorarlberg, innsbruck, south tyrol and Vienna; Corporate and private customer business southern Germany; Corporate audit, human resources, Marketing & Communications divisions; Compliance and money laundering.


Member of the Board of Directors with responsibility for risk, process, IT and cost management; the departments for finance and controlling, legal matters and investments and group audit; Compliance and money laundering.


Member of the Board, responsible for retail client business in tyrol, Vorarlberg, Vienna and italian clients; Corporate client business in tiroler Oberland and Unterland; Corpo-rate and private customer business in Switzerland; Institutional Clients and Banks, Corporate audit; Compliance and money laundering.

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Audit Certificate

report on group accounts We have audited the attached group accounts for

Bank für tirol und Vorarlberg ag aktiengesellschaft, innsbruck,

audited for the financial year from 1 January to 31 De-cember 2014 including the underlying bookkeeping. These group financial statements include the group balance sheet on 31 December 2014, the group profit and loss statement, the group cash flow statement and the statement of changes in the group equity for the financial year ending 31 December 2014, as well as the notes to the group accounts.

Legal representatives‘ responsibility for the group accounts and the bookkeeping the legal representatives of the company are re-sponsible for the maintenance of the books for the group as well as for preparing the group accounts, which are to reflect a true picture of the assets, financial and earnings situation of the group, in accordance with the international Financial report-ing Standards (IFRSs), as applied in the EU. This responsibility includes: Design, implementation and enforcement of an internal control system, as required to support creation of the group accounts which present a true picture of the assets, financial and earnings situation of the group, so that these are free of any material misrepresentations, wheth-er due to deliberate or unintentional errors; the choice and application of appropriate accounting policies and valuation methods; the preparation of estimates which appear suitable taking existing circumstances into consideration.

responsibility of the group auditors and description of the type and scope of the legal annual auditour responsibility consists of issuing an audit opinion on these group financial statements on the basis of our audit. We carried out our audit in accordance with the legal provisions which apply in austria and the international standards on audit-ing (isas) issued by the international auditing and assurance standards Board (iaasB) of the inter-national Federation of Accountants (IFAC). These principles require that we adhere to professional standards and plan and carry out the audit in such a manner that we have sufficient assurance to be able to form an opinion as to whether the group financial statements are free from any material misrepresentation.

an audit includes carrying out checks to provide audit evidence of amounts and other information provided in the group financial statements. The choice of audit checks is governed by the duty of judgement on the group account auditors taking into account their assessment of the risk of material misrepresentations being present, whether due to deliberate or unintentional errors. In undertaking this risk assessment, the group accounts auditor must also take into consideration the internal con-trol system, insofar as it affects the creation of the group financial statements and the presentation of a true picture of the assets, financial and earnings situation of the group, in order to determine suit-able audit checks to carry out appropriate to the circumstances, but not in order to provide an audit opinion on the effectiveness of the internal con-trols themselves within the group. The audit also includes an opinion on the appropriateness of the accounting policies and valuation methods applied and all material assessments made by the legal rep-resentatives, as well as an evaluation of the overall presentation of the group financial statements.We believe that we obtained sufficient and suitable verification with our audit, so that our audit provides a reasonably sound basis for our audit opinion.

report from independent auditors


audit opinion Our audit did not lead to any objections. Based on the results of our audit, in our judgement the group finan-cial statements are in accordance with legal require-ments and provide a true and fair view of the assets and financial situation of the group as at 31 December 2014 as well as the earnings position of the group and the group‘s cash flows for the financial year from 1 January to 31 December 2014 in accordance with international Financial reporting standards (iFrs), as applied in the EU.

opinion on the group Management report the group management report is to be audited according to the legal requirements as to whether it is in accordance with the group financial state-ments and whether the further information in the management report does not provided a mislead-ing picture of the group situation. The audit cer-tificate must also contain an opinion as to whether the consolidated management report is consistent with the consolidated financial statements and whether the data are accurate, pursuant to section 243a UGB.

in our judgement the group management report is consistent with the group financial statements. The data are accurate, pursuant to Section 243a UGB.


KpMg austria gmbh auditing and tax advisory company

Mag. Ulrich Pawlowski auditor

Mag. Peter Humer, CIAauditor

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the supervisory Board has carried out the tasks required of it by the law and the company statutes while adhering to the regulations of the current version of the austrian Code of Corporate govern-ance. The Board of Directors reported regularly on the progress of business and the situation of the company and the group. In particular, the develop-ment of the economic environment as well as the implementation of the regulatory specifications, emphasis on Basel iii, were again at the centre and were comprehensively discussed and debated at the meetings of the supervisory board and its com-mittees. During the financial year, the supervisory board convened each quarter, whereby the Board of Directors has also been communicating outside the sessions of the supervisory board and its com-mittees with the supervisory board in particular in relation to significant events.

Both the Working Committee and the risk and Loans Committee of the supervisory board have continuously monitored the business events which required its approval. In addition, the auditing committee met twice, as planned, and has per-formed its legally required audit and monitoring tasks to the fullest extent, particularly in relation to the internal control system, the risk manage-ment system, the accounting process as well as the corporate governance report. The remunera-tion committee met twice and fully performed during the financial year the duties assigned to it especially through the Banking act, especially the passing, auditing and controlling of the principles of the remuneration policy as well as the measur-ing of the variable remuneration of the Members of the Board. The appointments committee also met twice and, owing to the expiry of the mandates of Mr Peter Gaugg and Mag. Matthias Moncher on 31 December 2015, as part of a structured recruitment process, proposed the entire succession of BTV‘s Board of Directors to the plenum of the supervi-sory Board and to extend the appointment term of Mr gerhard Burtscher until 31 December 2019 and to appoint him as spokesperson of the Board of Directors from 1 January 2016 and to appoint Mr Mario pabst and Mr Michael perger as representa-

tives of members of the Board of Directors from 28 november 2014 to 31 December 2015 and as members of the Board of Directors from 1 January 2016 for an appointment term of three years, which proposal was unanimously adopted in the super-visory Board‘s meeting on 28 November 2014. In addition, the appointments committee fulfilled the duties otherwise assigned to it under the Banking Act to their full extent. The risk and credit com-mittee met once, as planned, and fully performed during the financial year the duties assigned to it especially under the Banking act, particularly advising management on risk appetite and risk strategy and monitoring the implementation of the risk strategy, and checking the appropriateness of the pricing and of the risk incentives inherent in the remuneration system. The meetings and decisions of the committees of the supervisory Board were reported to the plenum of the supervisory Board at the respective subsequent meeting.

to permanently ensure the professional suitability of members of the supervisory Board and manage-ment of BtV, educational and training courses run by both external and in-house lecturers took place throughout the year.

The auditor of the financial statements, KPMG austria gmbh auditor and accounting Company, innsbruck, has checked the book-keeping, the in-dividual and the group financial statements as well as the individual and group management reports for the company. The audit conformed to the legal requirements and did not give rise to any objec-tions. The financial statements are accompanied by an unqualified opinion.

at its meeting on 27 March 2015, the auditing com-mittee examined the individual and group financial statements and the individual and group manage-ment reports of the company and also the Corpo-rate governance report and recommended the findings from the annual financial statements to the full meeting of the supervisory Board, in which regard this was reported to the full meeting of the Supervisory Board accordingly.

report from the supervisory board


the supervisory Board adopts the results of the au-dit, declares that it is in agreement with the finan-cial statements presented by the Board of Directors including management report and approves the fi-nancial statements for 2014 for the company, which are thereby established as required by section 96 para 4 of the Share Act.

the supervisory Board had available to it copies of the Financial statements and Management report, drawn up as required by the austrian company legal requirements. The Financial Statements show at 31 December 2014 a true and fair view of the capital and financial situation of the Bank für Tirol und Vorarlberg Aktiengesellschaft. A similar view for the time period 1 January up to 31 December 2014 is provided by the attached comments on the earnings situation. The audit carried out by KPMG austria gmbh auditing and accounting Company, Innsbruck, did not give rise to any objections.

the recommendation of the Board of Directors to pay out a dividend of €0.30 per share for the year 2014, i.e. €7,500,000.00 and to carry forward the re-sidual profit is endorsed by the Supervisory Board.


the supervisory Board

Dr Franz gasselsberger, MBa Chairman

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BtV group - a 5-year overview

BaLanCe sheet € million 2014 2013 2012 2011 2010

total assets 9,598 9,592 9,496 9,215 8,887Loans to Credit institutions 274 322 467 282 235Loans to clients 6,387 6,405 6,387 6,214 5,940risk provisions –199 –207 –194 –184 –165Financial assets - at fair value through profit or loss

142 155 203 203 226

Financial assets - available for sale 1,263 1,207 1,111 1,034 1,005Financial assets – held to maturity 742 846 788 909 965shares in at-equity valued companies 427 376 319 297 277Liabilities to credit institutions 1,395 1,753 1,812 1,601 1,795Liabilities to clients 5,527 5,420 5,395 5,373 4,881securitised debt 1,013 874 749 776 804subordinated capital 379 408 439 479 483equity 1,004 933 846 767 676primary funds 6,919 6,702 6,583 6,628 6,168Volume of securities held in deposit for customers 5,237 4,830 4,786 4,343 4,521

proFit & Loss stateMent in € million 2014 2013 2012 2011 2010

net interest income 182.3 180.2 164.3 164.6 146.6Loan-loss provisions in the credit business –29.0 –46.9 –39.9 –37.1 –42.1net commission income 43.7 45.3 42.3 42.5 43.3trading income 0.8 1.0 3.2 0.6 2.8operating expenses –139.6 –96.0 –92.8 –94.8 –90.9Other operating profit 30.0 –2.3 –2.4 –1.2 1.8Profit arising from financial assets – at fair value through profit or loss

0.2 2.5 7.8 –6.7 2.6

Profit arising from financial assets – available for sale

1.9 2.5 –8.5 –3.2 –1.2

Profit arising from financial assets – held to maturity

–0.4 –0.0 –3.8 0.0 –1.2

Annual net profit before tax 89.8 86.3 70.1 64.7 61.8Group net profit for the year 76.1 68.5 60.7 53.5 49.2Dividend paid by BtV ag 7.5 7.5 7.5 7.5 7.5


eQuitY unDer Crr/austrian BanKing aCt (BWg) in € million

2014 (Crr) Ø Lending and market risk equiva-

lent pursuant to section 22

BWg

Ø Lending and market risk equiva-


BWg



BWg



BWgrisk-adjusted assessment basis 6,213 6,055 5,992 6,387 6,038Qualifying equity 930 964 995 935 853Common equity ratio in % 12.81 % n. a. n. a. n. a. n. a.Core capital ratio in % 12.81 % 13.33 % 12.45 % 11.22 % 8.89 %total capital ratio in % 14.97 % 15.93 % 16.61 % 14.63 % 14.13 %

CoMpanY KeY inDiCators 2014 2013 2012 2011 2010

earnings per share in € 3.04 2.74 2.44 2.16 1.98return on equity before tax 9.27 % 9.50 % 8.69 % 8.96 % 9.59 %return on equity after tax 7.86 % 7.54 % 7.52 % 7.42 % 7.63 %Cost/income ratio 54.4 % 42.8 % 44.2 % 45.6 % 47.2 %risk/earnings ratio 15.9 % 26.0 % 24.3 % 22.5 % 28.7 %Weighted average number of employees 1,195 793 805 816 819number of branches 38 37 37 40 41


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3 Banks shareholder structure

BKs BanK BY Voting rights

oBerBanK BY Voting rights


18.51% BKs Bank ag, Klagenfurt *)

2.21% generali 3 Banken holding ag, Vienna



6.74 % uniCredit Bank austria ag, Vienna



3.10 % Wüstenrot Wohnungswirtschaft reg. Gen.m.b.H., Salzburg

7.84 % generali 3 Banken holding ag, Vienna *)

19.57 % BtV ag, innsbruck *)


18.51% BtV ag, innsbruck *)


3.82 % employee holdings

0.37 % BKs-Belegschaftsbeteiligungsprivatstiftung

BtV sharehoLDer struCture BY Voting rights


15.10 % BKs Bank ag, Klagenfurt *)




15.12% generali 3 Banken holding ag, Wien *)



overview of 3 Banken group – group information

proFit anD Loss in € million 2014 2013 2014 2013 2014 2013

net interest income 157.3 146.2 372.9 335.6 182.3 180.2Loan-loss provisions in the credit business –49.5 –42.7 –78.0 –70.6 –29.0 –46.9net commission income 44.7 45.4 119.3 114.6 43.7 45.3operating expenses –105.8 –100.8 –236.9 –231.0 –139.6 –96.0other operating income/expenditure –2.5 –7.3 –25.0 –12.1 30.0 –2.3Annual net profit before tax 51.2 45.5 157.6 141.7 89.8 86.3Consolidated annual profit after tax 46.6 40.6 136.5 122.4 76.1 68.5

eQuitY unDer Crr/austrian BanKing aCt (BWg) in € million

Basis for measuring capital 4,846.6 4,423.3 11,935.2 10,734.0 6,212.8 6,055.4equity 580.9 707.6 1,874.4 1,824.8 930.1 964.4

of which common equity (Cet1) 543.7 n. a. 1,306.9 n. a. 796.1 n. a.of which total core capital (Cet1 and at1) 543.7 662.5 1,385.2 1,320.6 796.1 807.0

Common equity ratio in % 11.22 % n. a. 10.95 % n. a. 12.81 % n. a.Core capital ratio in % 11.22 % 13.92 % 11.61 % 12.30 % 12.81 % 13.33 %total capital ratio in % 11.99 % 16.00 % 15.70 % 17.00 % 14.97 % 15.93 %

nuMBer of resources

Weighted average number of employees 915 910 2,004 2,001 1,195 793number of branches 57 56 156 150 38 37

BKs Bank oberbank BtV

CoMpanY KeY inDiCators in%

return on equity before tax 6.74 % 6.49 % 10.68 % 10.31 % 9.27 % 9.50 %return on equity after tax 6.13 % 5.79 % 9.25 % 8.91 % 7.86 % 7.54 %Cost/income ratio 52.7 % 54.3 % 50.1 % 52.1 % 54.4 % 42.8 %risk/earnings ratio 31.5 % 29.2 % 20.9 % 21.1 % 15.9 % 26.0 %

proFit & Loss stateMent in € million

total assets 6,864.5 6,743.8 17,774.9 17,531.8 9,597.7 9,591.8Loans and advances to clients after loan loss provisions 4,828.9 4,874.2 11,801.8 11,277.9 6,187.2 6,197.4primary funds 5,013.0 4,597.5 12,288.6 12,250.4 6,918.6 6,702.1

of which savings deposits 1,705.5 1,741.2 3,098.5 3,352.1 1,176.3 1,175.8 of which securitised debt including subordinated capital

789.1 813.9 2,295.0 2,224.4 1,391.5 1,282.3

equity 805.7 714.2 1,534.1 1,421.0 1,004.4 932.7Managed deposits 12,972.0 11,383.4 23,441.9 22,787.5 12,155.4 11,532.0

of which customer deposits 7,959.0 6,785.9 11,153.3 10,537.1 5,236.8 4,829.9

160


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Bank für tirol und Vorarlberg aktiengesellschaftstadtforum 16020 innsbruck

t +43/5 05 333-0F +43/5 05 333-1180sWiFt/BiC: BtVaat22Routing no.: 16000Data processing register: 0018902Commercial register no.: 32.942wtax iD: atu 317 12 [email protected]

notesany reference in the company reports to a person (e.g. he, him) is intended to apply equally to wom-en and men.

in the BtV company report there may be slightly differing values between tables or charts.

this report contains forward-looking statements relating to the future performance of BTV. These statements reflect estimates which have been made on the basis of all information available to us on the reporting date. Should the assumptions un-derlying such forward-looking statements prove incorrect, or should risks materialise to an extent not anticipated, actual results may vary from those expected at present.

Media owner (publisher)Bank für tirol und Vorarlberg agstadtforum 16020 innsbruck

DesignBtV Marketing & Communication (page 1–22)Mag. Barbara Riesner

BtV Finanzen & Controlling (pages 23–161)Mag. Hanna MeranerMa (Ms) reinhard auerMa Martin Wurzer

DesignBtV Marketing & CommunicationMarkus geets photographsnicolò Degiorgis (pages 3–5)Ötztal Tourismus/Albin Niederstrasser (p. 8)BTV/Julia Hammerle (p. 8)Tyrolit (p. 9)Voyage Air (p. 9)fotowerk aichner (pages. 10, 15)Markus Bstieler (p. 10)Flying Colours Ltd/Getty Images (p. 17)Dietmar Mathis (p. 18)Raimo Rudi Rumpler (p. 18)Clemens Ascher (p. 18)hemis.fr/Getty Images (p. 22)

printingPircher Druck, Ötztal-Bahnhof Final version16 March 2015


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The BTV Group at a glance

INCOME in € million

2014 2013* Change in %

Net interest income 182.3 180.2 +1.1 %Loan-loss provisions in the credit business –29.0 –46.9 –38.1 %Net commission income 43.7 45.3 –3.4 %Operating expenses –139.6 –96.0 +45.4 %Other operating income/expenditure 30.0 –2.3 >–100 %Annual net profit before tax 89.8 86.3 +4.0 %Group net profit for the year 76.1 68.5 +11.0 %

BALANCE SHEET in € million

31.12.2014 31.12.2013* Change in %

Total assets 9,598 9,592 +0.1 %Loans and advances to clients after loan loss provisions 6,187 6,197 –0.2 %Primary funds 6,919 6,702 +3.2 % – of which savings deposits 1,176 1,176 +0.0 % – of which securitised debt including subordinated capital 1,392 1,282 +8.5 %Equity 1,004 933 +7.7 %Managed deposits 12,156 11,532 +5.4 %

EQUITY UNDER CRR (BWG PREVIOUS YEAR) in € million

31.12.2014 31.12.2013 Change in %

Risk-adjusted assets 6,213 6,055 +2.6 %Equity 930 964 –3.5 % – of which common equity (CET1) 796 n. a. n. a. – of which total core capital (CET1 and AT1) 796 807 –1.4 %Common equity Tier 1 ratio 12.81 % n. a. n. a.Core capital ratio 12.81 % 13.33 % –0.52 %-ppEquity ratio 14.97 % 15.93 % –0.96 %-pp

COMPANY KEY FIGURES in percentage points

31.12.2014 31.12.2013* Change in percentage

points

Return on equity before tax (RoE) 9.27 % 9.50 % –0.23 ppReturn on Equity after tax 7.86 % 7.54 % +0.32 ppCost/income ratio 54.4 % 42.8 % +11.6 ppRisk/earnings ratio 15.9 % 26.0 % –10.1 pp

RESOURCES Number

31.12.2014 31.12.2013 Change figure

Weighted average number of employees 1,195 793 +402Number of branches 38 37 +1

KEY INDICATORS FOR BTV SHARES 31.12.2014 31.12.2013*

Number of ordinary no par value shares 22,500,000 22,500,000Number of preference shares 2,500,000 2,500,000Top price of ordinary/preference share in € 21.90/18.00 19.50/16.60Bottom price of ordinary/preference share in € 19.50/16.50 17.30/15.45Closing price of ordinary/preference share in € 21.35/18.00 19.50/16.50Market capitalisation in € million 525 480IFRS EPS in € 3.04 2.74P/E ratio, ordinary share 7.0 7.1P/E ratio, preference share 5.9 6.0* In 2013 adjusted to the changed consolidation scope. Explanation: n.s. = not shown

Shareholder structure

BTV SHAREHOLDER STRUCTURE BY SIZE OF HOLDING


37.53% CABO Beteiligungs GmbH, Vienna

13.59% BKS Bank AG, Klagenfurt *)

13.22% Oberbank AG, Linz *)




BTV SHAREHOLDER STRUCTURE BY VOTING RIGHTS


41.70 % CABO Beteiligungsgesellschaft GmbH, Vienna

15.10 % BKS Bank AG, Klagenfurt *)



14.69 % Oberbank AG, Linz *)




IMPORTANT DATES FOR BTV SHAREHOLDERSAnnual General Meeting 13 May 2014, 10.00 am, Stadtforum 1, Innsbruck

The dividend will be published on the BTV homepage and in the gazette of the Wiener Zeitung the day after the Annual General Meeting.

Ex-dividend date 22.05.2015Payment of dividend 26.05.2015Interim report as at 31 March 2015 Published on 22 May 2015 (www.btv.at)Interim Financial Report up to 30 June 2015 Published on 21 August 2015 (www.btv.at)Interim report as at 30 September 2015 Published on 27 November 2015 (www.btv.at)

Switzerland

Vienna

Tyrol

Baden- Württemberg

VBG

Alto Adige

Trentino

BavariaStuttgart

Munich

Ravensburg

Memmingen

Staad

InnsbruckDornbirn

KitzbühelWinterthur

Garmisch- Partenkirchen

Lienz

Nuremberg

Germany BTV LeasingVienna

Albertinaplatz Corporate clientsTegetthoffstraße 71010 WienT +43/(0)5 05 333-8723F +43/(0)5 05 [email protected]

Albertinaplatz Retail clientsTegetthoffstraße 71010 WienT +43/(0)5 05 333-8744F +43/(0)5 05 [email protected]

StaadHauptstrasse 199422 StaadT +41/71/85 810-10F +41/71/85 810-11 (Retail clients)F +41/71/85 810-12 (Corporate clients)[email protected]

Bavaria

Garmisch-PartenkirchenMohrenplatz 682467 Garmisch- PartenkirchenT +49/8821/75 26 85-0F +49/8821/75 26 85-7344Key indicators for btv shares

MemmingenFlach VillaBuxacher Straße 187700 MemmingenT +49/8331/92 77-8F +49/8331/92 [email protected]

MunichNeuhauser Straße 580331 MünchenT +49/89/255 44 730-8F +49/89/255 44 [email protected]

AugsburgNagahama-Allee 7586153 Augsburg T +49/821/59 980-8F +49/821/59 980-7144 [email protected] Nuremberg (from 5 January 2015)Gleißbühlstraße 290402 NurembergT +49/911/23 42 08-0F +49/911/23 42 [email protected]

Baden-Württemberg

Ravensburg /WeingartenFranz-Beer-Straße 11188250 WeingartenT +49/751/56 116-0 F +49/751/56 [email protected]

StuttgartIndustriestraße 470565 Stuttgart (Vaihingen)T +49/711/787 803-8F +49/711/787 [email protected]

BTV headquarters

Innsbruck Head OfficeStadtforum 16020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Business area Retail clientsT +43/(0)5 05 333-1111F +43/(0)5 05 [email protected]

Business area Corporate clientsT +43/(0)5 05 333-1301F +43/(0)5 05 [email protected]

Business area Institutional clients and banksT +43/(0)5 05 333-1204F +43/(0)5 05 [email protected]

Service centreT +43/(0)5 05 [email protected]

Finance & controllingT +43/(0)5 05 333-1430F +43/(0)5 05 [email protected]

Corporate auditT +43/(0)5 05 333-1534F +43/(0)5 05 [email protected]

Credit managementT +43/(0)5 05 333-1361F +43/(0)5 05 [email protected]

Marketing and Communications T +43/(0)5 05 333-1403F +43/(0)5 05 [email protected]

Human resourcesT +43/(0)5 05 333-1464F +43/(0)5 05 [email protected]

Legal and corporate investmentsT +43/(0)5 05 333-1501F +43/(0)5 05 [email protected]

Switzerland

BludenzWerdenbergerstraße 146700 BludenzT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

BregenzKaiserstraße 336900 BregenzT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Bregenz VorklosterMariahilfstraße 45 a6900 BregenzT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

DornbirnKlostergasse 86850 DornbirnT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

FeldkirchBahnhofstraße 86800 FeldkirchT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

GötzisIm Buch 66840 GötzisT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

WolfurtUnterlinden 236922 WolfurtT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

EhrwaldKirchplatz 21 a6632 EhrwaldT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

ImstDr.-Pfeiffenberger-Str. 186460 ImstT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

LandeckMalser Straße 346500 LandeckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

ReutteUntermarkt 236600 ReutteT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

SöldenDorfstraße 316450 SöldenT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

TelfsAnton-Auer-Straße 26410 TelfsT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

KirchbichlCorporate clientsE3 Wirtschaftspark KirchbichlEuropastraße 86322 KirchbichlT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

KitzbühelVorderstadt No. 96370 KitzbühelT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

KufsteinOberer Stadtplatz 46330 KufsteinT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

MayrhofenHauptstraße 4406290 MayrhofenT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

SchwazInnsbrucker Straße 56130 SchwazT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

St. Johann in TirolDechant-Wieshofer-Str. 76380 St. Johann in TirolT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

WörglBahnhofstraße 186300 WörglT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-DEZAmraser-See-Straße 56 a6020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-Hötting*Schneeburggasse 76020 Innsbruck

Innsbruck-Mitterweg Mitterweg 9 6020 Innsbruck T +43/(0)5 05 333-0 F +43/(0)5 05 333-4025 [email protected]

Innsbruck- Olympisches DorfSchützenstraße 496020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-SonnparkAmraser Straße 546020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-StadtforumStadtforum 16020 InnsbruckT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

Innsbruck-WiltenLeopoldstraße 31 a6020 Innsbruck

Hall in TirolStadtgraben 196060 Hall in TirolT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

SeefeldKlosterstraße 3976100 SeefeldT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

VölsBahnhofstraße 38 a6176 VölsT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

LienzSüdtiroler Platz 29900 LienzT +43/(0)5 05 333-0F +43/(0)5 05 [email protected]

BTV VIER LÄNDER BANK

Tiroler Oberland and Außerfern

Tiroler UnterlandVorarlberg Innsbruck Stadt Innsbruck Land/East Tyrol

Addresses

* Only BTV service area

BTV Stadtforum6020 InnsbruckT +43/(0)5 05 333-2028F +43/(0)5 05 [email protected] www.btv-leasing.com

BregenzKaiserstraße 336900 Bregenz T +43/(0)5 05 333-6006F +43/(0)5 05 [email protected]

Albertinaplatz ViennaTegetthoffstraße 71010 Wien T +43/(0)5 05 333-8818F +43/(0)5 05 [email protected]

BTV Leasing Schweiz AGStaadHauptstrasse 199422 Staad T +41/71/85 810-74F +41/71/85 [email protected]

WinterthurZürcherstrasse 468400 Winterthur T +41/52/20 40 450F +41/71/85 [email protected]

BTV Leasing Deutschland GmbHGeschäftsstelle MünchenNeuhauser Straße 580331 München T +49/89/255 44 730-7542F +49/89/255 44 [email protected]

AugsburgNagahama-Allee 7586153 Augsburg T +49/821/59 980-7170F +49/821/59 [email protected] Nuremberg ~ (from 5 January 2015)Gleißbühlstraße 290402 NurembergT +49/911/23 42 08-7650F +49/911/23 42 [email protected]

Ravensburg /WeingartenFranz-Beer-Straße 11188250 Weingarten T +49/751/56 116-7231F +49/751/56 [email protected]

StuttgartIndustriestraße 470565 Stuttgart (Vaihingen) T +49/711/78 78 03-7450F +49/711/78 78 [email protected]

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FORESIGHT - btv-bank.de · Dechant-Wieshofer-Str. 7 6380 St. Johann in Tirol T +43/(0)5 05 333-0 F...

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