HGAA_CompanyProfile_26082010

8/13/2019 HGAA_CompanyProfile_26082010

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COMPANY PROFILE

GLOBAL BANKAUGUST 26, 2010

Table of Contents:

COMPANY OVERVIEW 1FINANCIAL HIGHLIGHTS(AS REPORTED) 2BUSINESS ACTIVITIES 2DISTRIBUTION CAPACITY ANDMARKET SHARE 4OWNERSHIP AND STRUCTURE 5GROUP HOLDINGS 6COMPANY MANAGEMENT 7COMPANY HISTORY 8PEER GROUP 9RELATED WEBSITES ANDINFORMATION SOURCES 9MOODYS RELATED RESEARCH 10

Analyst Contacts:

FRANKFURT 49.69.70730 700

Dominique Nutolo 49.69.70730.714

Assistant Vice President Analyst

[email protected]

Carola Schuler 49.69.70730.766

Managing Director

[email protected]

Mathias Klpmann 49.69.70730.928

Senior Vice President

[email protected]

This report, exclusively provided to you byMoodys, presents a convenient summary ofas reported, publicly available information.The information is not adjusted for Moodysanalytic purposes. For Moodys Ratings,Opinion and Analytics on this company,please [Click here]. To access the latestMoody's Credit Opinion on this company,please[Click here].

Hypo Alpe-Adria-Bank International AGKlagenfurt, Austria

Company Overview

Hypo Alpe-Adria-Bank International AG (HAAB) is based in Austria but its franchise spansthe major banking markets of south-eastern Europe. It provides banking and leasing servicesto individuals and corporate customers through a network of over 350 branches in 12

countries as of 31 December 2009.

Initially a regional bank in the Austrian federal state of Carinthia, Hypo Alpe-Adria pursuedan aggressive growth strategy beginning in the 1990s to establish itself as a leading player insoutheastern Europe with significant operations in the former Yugoslavia. In Austria, it has agood retail and SME banking franchise in the region of Carinthia. Internationally, it isnotably one of the leading providers in the leasing industry in Bosnia-Herzegovina, Croatia,Serbia and Slovenia.

The bank was severely impacted by the global financial crisis, recording a 1.6 billion loss in2009 that erased a major portion of its Tier I capital of 2.7 billion. As a result, the bankrequired recapitalisation in order to avoid insolvency. After a final capital injection of more

than 1 billion by the banks former owners, the Austrian government decided to rescue andnationalise the bank at the end of 2009.

In 1896, HAAB was founded as Krntner Landes-Hypothekenanstalt, a co-operative creditinstitution, becoming a bank under the public law in 1924. As of 31 December 2009,HAAB reported total consolidated assets of 41.1 billion. In December 2008, the bankreceived a 900 million capital injection from the Republic of Austria as part of thegovernments support package for the countrys financial sector.

Source: Company Report (annual report Dec 09), Company data, Moodys research
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GLOBAL BANKING

2 AUGUST 26, 2010 COMPANY PROFILE: HYPO ALPE-ADRIA-BANK INTERNATIONAL AG

Financial Highlights (as Reported)

Note: The financials presented below are those reported by the entity and are not adjusted for Moodysanalytic purposes. For Moodys generated ratios on Hypo Alpe-Adria-Bank International AG, please see.

Latest Full-Year ResultsFIGURE 1

Hypo Alpe-Adria-Bank International AG

MILLION 31-DEC-09 31-DEC-08 31-DEC-07% CHANGE

09/08% CHANGE

08/07

Total Assets 41,079 43,336 37,939 (5.21) 14.23

Total Shareholders Equity 1,990 2,530 1,659 (21.33) 52.49

Shareholders Equity excluding Minority Interest 1,466 2,021 1,154 (27.47) 75.03

Own Capital Funds 3,000 4,173 2,872 (28.12) 45.30

Tier 1 Ratio (%) 6.6 7.8 6.2 (120) bps 160 bpsNet Income (1,551) (518) (70) N/M N/M

Net Income Attributable to Equity Holders (1,581) (520) 3 N/M N/M

Note: 1) Consolidated figures used for all financials

2) Own Capital Funds and Tier 1 Ratio for FY 2009 and FY 2008 are according to Basel II and for FY 2007 according to Basel I

3) Tier 1 Ratio is including market risk and is reported by the bank only up to one decimal place

Source: Company Reports (annual report Dec 09 and Dec 08)

Business Activities

HAAB a universal bank together with its subsidiaries provides banking and leasing services to

individuals and corporate customers. The bank provides a range of products and services includingfinancial products, payment transaction and documentation services; savings, deposits, and investmentproducts and asset management services; and leasing services for the vehicle, property, equipment,cross-border finance, aircraft- and ship-leasing segments.

Banking Services: HAAB along with its nine banking subsidiaries and its subsidiaries that aredirectly involved in banking activities provides a range of banking products and services. Bankingservices also includes the banks 51% held subsidiaries, HBInt Credit Management Limited andNorica Investments Limited, which, with the involvement of the co-investor, who holds 49 % of theshares, make long-term investments.

Products and services offered to retail and corporate customers can be further divided into several sub-

segments as follows:

Retail Banking, which offers products and services such as loans, savings deposits, securities,account management, investment products and cards.

Private Banking, which provides services such as asset management, wealth management, financialplanning including tailor-made solutions for high-net-worth individuals.
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Corporate and International, which provides services to domestic and international corporatecustomers, and SMEs, including cash management, international payments, documentary credits,

international guarantees, forfeiting, trade finance, investment products, cross-border finance, long-

term lending and project finance.

Public Finance, which offers services for public-sector related businesses, such as financing,investments, treasury sales, consultancy and cash management; as well as sector-specific solutionssuch as public-private partnership (PPP) projects or non-recourse financing.

Leasing Services: The bank, along with its 12 leasing subsidiaries, provides a range of tailored financialsolutions for the vehicle, property, equipment, cross-border, aircraft and ship-leasing segments. Theleasing business has been extended to include renewable energy financing activities and agriculturalequipment financing.

The bank organises its activities through nine segments which consist of the following key strategicGroup country markets: Austria, Italy, Slovenia, Croatia, Bosnia-Herzegovina, Serbia, as well asOther markets, Other business areas and HAAB as the holding company. For the year ended 31December 2009 (FYE December 2009), the Croatia segment was the largest contributor to the banks

net interest income (20.6%).

1

Austria, Italy, Slovenia, Croatia, Bosnia-Herzegovina, and Serbia: These six countries represent thecore markets for its banking and leasing business.

Other markets: This segment comprises the banking and leasing business in the non-core marketsof Montenegro, Macedonia, Ukraine, Hungary, Bulgaria and Germany.

Other business areas: This segment includes the companies involved in non-core businesses suchas property and tourism.

Holding company: This segment includes the Austrian ultimate holding company Hypo Alpe-Adria-Bank International AG and the sub-holding company Hypo Alpe-Adria-Leasing Holding

AG, as well as the investment and underwriting companies in St. Helier (Jersey), and the activitiesin the Netherlands.

Source: Company Report (annual report Dec 09), Company data

1Throughout this section, such percentages are presented excluding Consolidation results and Other business areas segment due to its negative contribution.


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FIGURE 2

Business Segment(% of Net Interest Income, consolidated, for FYE December 2009)

Croatia

20.6%

Italy

12.2%

Slovenia

10.8%Serbia

9.6%

Bosnia-Herzegovina

9.0%

Austria

7.8%

Other markets

5.7%

Holding

24.3%

Note: Excludes Consolidation results and Other business areas segment due to its negative contributionSource: Company Report (annual report Dec 09, Pg 96 and 97)

FIGURE 3

Operating Income by Business Segment(consolidated, in million)

84

116

85

165

71 64

3014

72

126 117 114

248

91104

-49 -46

186

-100

-50

0

50

100

150

200

250

Austria Italy Slovenia Croatia Bosnia-

Herzegovina

Serbia Other markets Other business

areas

Holding

2008 2009

Note: 1) Excludes Consolidation results2) Comparable figures for FY 2007 are not available as the bank changed its segment reporting in FY 2009Source: Company Report (annual report Dec 09, Pg 96,97,98 and 99 )

Distribution Capacity and Market Share

HAAB is based in Austria, where it maintains a network of 34 branches, of which 31 offer banking

services and three offer leasing products, as of 31 December 2009. Overall, the bank servicesapproximately 1.2 million customers through a network of over 350 branches in 12 countries. HAABalso distributes products and services through several alternative distribution channels including callcentres and the Internet.

As of 31 December 2009, HAAB had operations in Bosnia-Herzegovina (banking: 93 branches andleasing: 7), Bulgaria (leasing: 6), Croatia (banking: 70 and leasing: 14), Germany (leasing: 1), Hungary(leasing: 1), Northern Italy (banking: 30 and leasing: 1), Macedonia (leasing: 2), Montenegro


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(banking: 10 and leasing: 3), Serbia (banking: 42 and leasing: 12), Slovenia (banking: 18 and leasing:9) and Ukraine (leasing: 1).

In Austria, it has a good retail and SME banking franchise in the region of Carinthia. Internationally,it is notably one of the leading providers in leasing in Bosnia-Herzegovina, Croatia, Serbia andSlovenia.

In Bosnia-Herzegovina, the banks subsidiary Hypo Alpe-Adria-Bank a.d. (Banja Luka) had a marketshare of more than 30% in Republika Srpska in overall credit volume as of 31 December 2009. BanjaLuka held a leading position in Republika Srpska and was the fourth-largest bank in Bosnia-Herzegovina as of 31 December 2009 in terms of assets.

In Croatia, HAAB merged its subsidiaries Hypo Alpe-Adria-Bank d.d. and Slavonska Banka d.d.,Osijek. The merged entity, Hypo Alpe-Adria-Bank d.d., held a market share of around 10% as of 31December 2009.

In Slovenia, HAABs subsidiary Hypo Alpe-Adria-Bank d.d. held a market share of 4.90% in Sloveniaas of 31 December 2009. In terms of leasing activities, bank subsidiary Hypo Leasing d.o.o. was

market leader in Slovenia.

During FYE December 2009, Austria contributed 10.3% of the banks net interest income. Overall,the geographical distribution of total bank net interest income is as follows:

FIGURE 4

Hypo Alpe-Adria-Bank International AG

GEOGRAPHICAL SEGMENT % NET INTEREST INCOME

2009 2008

Austria 10.3 14.9

Italy 16.1 19.8

Slovenia 14.3 11.8

Croatia 27.2 21.7

Bosnia-Herzegovina 11.8 12.0

Serbia 12.7 13.0

Other markets 7.5 6.8

Total 100 0 100 0Note: 1) Excludes Consolidation results

2) Other markets include Montenegro, Macedonia, Ukraine, Hungary, Bulgaria and Germany

Source: Company Report (annual report Dec 09), Company data, Moodys research

Ownership and Structure

As of 31 December 2009, HAAB was wholly owned by the Republic of Austria. The Republic ofAustria acquired the stake from the banks previous owners: Bayerische Landesbank (BayernLB)(67.08%), Grazer Wechselseitige Versicherung AG (20.48%), Krntner Landesholding (12.42%), andHypo Alpe Adria Mitarbeiter Privatstiftung (0.02%).


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In December 2008, the Republic of Austria injected 900 million into HAABs capital as part of thegovernments support package for the countrys financial sector.

Group Holdings

Hypo Alpe Ad ria Bank International AG

HYPO Vermgensverwaltung GmbH

Klagenfurt

HYPO ALPE-ADR IA-LEASING HOLD ING AG,

Klagenfurt

HYPO ALPE-ADRIA-BANK AG

Klagenfurt

HYPO ALPE-ADRIA-BANK S.p.A.

Udine

HYPO ALPE-ADRIA-BANK d.d.

Ljubljana


Zagreb

HYPO ALPE-ADRIA-BANK A.D.

Banja Luka


Mostar

HYPO ALPE-ADRIA-BANK A.D.

Belgrade

HYPO ALPE-ADRIA-BANK A.D.Podgorica

HYPO ALPE-ADR IA-LEASING GmbH

Klagenfurt

HYPO ALPE-ADR IA-LEASING S.r.l.

Udine

HYPO LEASING d.o .o.

Ljubljana

HYPO-LEASING KROATIEN d.o.o.

Zagreb

HYPO ALPE-ADRIA-LEASING d.o.o.

Sarajevo

HYPO ALPE-ADRIA-L EASING DOO

Belgrade

HYPO ALPE-ADRIA-LEASING D.O.O.Podgorica

HYPO ALPE-ADR IA-LEASING GmbH

Munich

HYPO ALPE-ADRIA-L EASING OOD

Sofia 3

HYPO ALPE-ADR IA-LEASING Zrt.

Budapest

HYPO ALPE-ADRIA-LEASING DOOEL

Skopje

HYPO ALPE-ADRIA-RENT DOO

Belgrade

HYPO ULAGANJA d.o.o.

Zagreb

HYPO ALPE-ADRIA-LEASING TOV

Kiev

HYPO ALPE-ADRIA-BETEILIGUNGEN GMBH,

Klagenfurt

HYPO Alpe-Adria-Immobilien AG

Klagenfurt

HYPO Facility Services Gmb H

Klagenfurt 2

KARNTNER HOLDING BETEILIGUNGS-AG

Klagenfurt

HYPO Alpe Adria IT Holding GmbH

Klagenfurt

100% 1

Hypo Group Netherlands Ho lding B.V. Amsterdam

Note: 1) 100% of voting rights and capital rights as at 31 December 2009

2) 70% share; 15% share held by each of the domestic banks

3) Hypo Alpe-Adria-Leasing OOD, Sofia and its subsidiary managed by Hypo Alpe-Adria-Leasing Holding AG; majority share held by Hypo Alpe-Adria-

Bank International AG

Apart from the aforementioned major subsidiaries, the bank has interest in many other companies

In December 2007, HAAB sold a 51% stake in its former wholly owned subsidiary Hypo Alpe-Adria-Bank (Liechtenstein) AG while still retaining a 49%

stake. In March 2008, the Supervisory Board of HAAB approved the proposal of the Executive Board to entirely sell the 49% share in Hypo Alpe-Adria-

Bank (Liechtenstein) AG held by the bank following its partial sale in 2007. In April 2009, the bank passed the resolution to cease banking activities in

Liechtenstein and, subsequently, to put Alpe Adr ia Privatbank AG (formerly Hypo Alpe-Adr ia-Bank (Liechtenstein) AG), into liquidation.

Source: Company Report (annual report Dec 09), Company data


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Company Management

EXECUTIVE BOARD CURRENT TITLE AGE TENURE

Dr. Gottwald Kranebitter HAAB: Chairman of the Executive Board from April

2010

46


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Company History

In 1896, HAAB was founded as Krntner Landes-Hypothekenanstalt, a co-operative credit institutionbecoming a bank under the public law in 1924. The bank was under the state control of the German

Reich between 1938 and 1944.

In 1974, the bank was renamed Krntner Landes-Hypothekenbank, and changed its status from aspecialist to a universal bank in 1982. In 1991, the institution became a public limited company.From 1993 onwards, the bank began to expand internationally, initiating strategic investments in Italyand Slovenia. HAAB opened its first branch in Italy in 1995.

In 1998, the bank merged its Italian subsidiaries and Hyposervice S.r.l. to form Hypo Alpe-Adria-Bank S.p.A. In 1999, the bank was renamed Hypo Alpe-Adria-Bank AG.

HAAB expanded its banking business by establishing several banking subsidiaries including: HypoAlpe-Adria-Bank d.d. (formerly Hypo Banka Croatia d.d.) in Zagreb, Croatia in 1996; Hypo Alpe-

Adria-Bank d.d. in Slovenia in 1999; Hypo Alpe-Adria-Bank d.d. (formerly Auro-Banka d.d.) inMostar in 2001; and Hypo Alpe-Adria-Bank (Liechtenstein) AG in Liechtenstein in 2002.

In 1998, HAAB gained control of Slavonska Banka d.d. in Croatia. In 2002, HAAB acquired an86.6% stake in Depozitno-kreditna Banka (renamed Hypo Alpe-Adria-Bank A.D., Belgrade). It alsoacquired Kristal Banka d.d. in Serbia (renamed Hypo Alpe-Adria-Bank A.D., Banja Luka).

HAAB also took steps to develop its leasing activities by establishing a number of leasing subsidiariesincluding Hypo Leasing d.o.o. in Ljubljana and Hypo Leasing Kroatien d.o.o. in Zagreb (both in1994); Hypo Alpe-Adria-Leasing d.o.o. in Sarajevo (2001); Hypo Alpe-Adria-Leasing d.o.o. inBelgrade (2002); Hypo Alpe-Adria-Leasing GmbH in Munich, and Hypo Alpe-Adria-LeasingHolding AG in Klagenfurt (2003).

In June 2004, the bank restructured itself by dividing the company into two separate legal entities:Hypo Alpe-Adria-Bank International AG for the international business (formerly Hypo Alpe-Adria-Bank AG) and the newly founded Hypo Alpe-Adria-Bank AG for domestic business. Hypo Alpe-

Adria-Bank AG is a 100% subsidiary of Hypo Alpe-Adria-Bank International AG.

HAAB formed Hypo Alpe-Adria-Leasing S.r.l. (Udine) and Hypo Alpe-Adria-Leasing d.o.o.(Podgorica) in 2004 and 2005, respectively.

In 2006, HAAB established a banking subsidiary, Hypo Alpe-Adria-Bank a.d. Podgorica, and twoleasing subsidiaries, Hypo Alpe-Adria-Rent d.o.o. in Belgrade and Hypo Alpe-Adria-Leasing EOODin Sofia.

In 2007, the bank entered the Ukrainian market through a newly formed leasing subsidiary, HypoAlpe-Adria-Leasing TOV. In December 2007, HAAB sold a 51% stake in its former wholly ownedsubsidiary Hypo Alpe-Adria-Bank (Liechtenstein) AG while retaining a 49% share.

In May 2007, Bayerische Landesbank (BayernLB), one of Germanys largest banks, acquired a 50%stake plus one share in HAAB for 1.625 billion, becoming the majority shareholder of the bank.


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In March 2008, the Supervisory Board of HAAB approved a proposal by the Executive Board to sellits entire remaining 49% stake in Hypo Alpe-Adria-Bank (Liechtenstein) AG, held by the bankfollowing its partial sale in 2007. In April 2009, the bank passed a resolution to cease bankingactivities in Liechtenstein and subsequently put Alpe Adria Privatbank AG (formerly Hypo Alpe-

Adria-Bank (Liechtenstein) AG), into liquidation.

In April 2008, the bank acquired 100% stake in HYPO INVESTMENTS a.d. Beograd, a Serbianinvestment fund company.

In December 2008, the Republic of Austria injected 900 million into HAABs capital as part of thegovernments support package for the countrys financial sector. In December 2009, the Republic of

Austria became the sole shareholder of the bank by acquiring stakes from the previous owners(BayernLB, Grazer Wechselseitige Versicherung AG, Krntner Landesholding and the MitarbeiterPrivatstiftung).

In June 2009, the bank purchased a 100% stake in HYPO NEPREMICNINE d.o.o., a Slovenianproject development company for 1.8 million.

Source: Company Reports (annual report Dec 09, Dec 08, Dec 07 and Dec 04), Company data

Peer Group

Erste Group Bank AG Raiffeisen Zentralbank Oesterreich AG UniCredit Bank Austria AG Oesterreichische Volksbanken AG

Related Websites and Information Sources

For additional information, please see:

The companys website:www.hypo-alpe-adria.com The regulators website:www.oenb.at/enMOODYS has provided links or references to third party World Wide Websites or URLs (Links or References) solely for yourconvenience in locating related information and services. The websites reached through these Links or References have notnecessarily been reviewed by MOODYS, and are maintained by a third party over which MOODYS exercises no controlAccordingly, MOODYS expressly disclaims any responsibility or liability for the content, the accuracy of the information, and/oquality of products or services provided by or advertised on any third party web site accessed via a Link or Reference. Moreovera Link or Reference does not imply an endorsement of any third party, any website, or the products or services provided by anythird party.
http://www.hypo-alpe-adria.com/http://www.hypo-alpe-adria.com/http://www.hypo-alpe-adria.com/http://www.oenb.at/enhttp://www.oenb.at/enhttp://www.oenb.at/enhttp://www.oenb.at/enhttp://www.hypo-alpe-adria.com/


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Moodys Related Research

Credit Opinion:

Hypo Alpe-Adria-Bank International AGBanking System Outlook:

Austria, November 2007 (106088)Banking Statistics:

Hypo Alpe-Adria-Bank International AGSpecial Comment:

Banks in CIS and CEE continue to face extra risk from foreign currency lending, June 2010(125377)

EU Banks Able to Absorb Stressed Loss Levels Linked to Greek, Portuguese, Spanish and IrishMarkets, June 2010 (125557)

Moody's Approach to Estimating Austrian Banks' Credit Losses, November 2009 (121246) Calibrating Bank Ratings in the Context of the Global Financial Crisis, February 2009 (114705)To access any of these reports, click on the entry above. Note that these references are current as of the date of publication ofthis report and that more recent reports may be available. All research may not be available to all clients.
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11 AUGUST 26 2010 COMPANY PROFILE: HYPO ALPE-ADRIA-BANK INTERNATIONAL AG

Report Number: 127228

AuthorsDominique NutoloMathias KlpmannMira Kirschner

Production AssociateSarah Warburton

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