THE BANK FÜR TIROL UND VORARLBERG AG SHAREHOLDERS …€¦ · Number of resources 31/03/2017...

THE BANK FÜR TIROL UND VORARLBERG AG SHAREHOLDERS REPORT INTERIM REPORT AS OF 31/03/2017

InterimReport

2 BTV INTERIM REPORT AS OF 31/03/2017

Contents

Diary dates for BTV shareholders in 2016The BTV Group at a glance

Management report and notes on BTV Group business developmentEconomic environment and BTV shares Business trends

Abridged consolidated financial statementsBalance sheet Comprehensive income statement Key indicators Statement of changes in equity Cash flow statement BTV Group: Notes Accounting and valuation principles

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Main business events during the reporting period Events after the date of the interim financial statement Balance sheet – Assets Balance sheet – Liabilities Comprehensive income statement Notes Other notes Segment reporting

Statements by the statutory representatives

Overview of 3 Banken Group

Imprint

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Important dates for BTV shareholders

Annual General Meeting 12/05/2017, 10:00 am, Stadtforum, Innsbruck, AustriaThe 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 19/05/2017Payment of dividend 23/05/2017Interim Report as at 31 March 2017 Published on 26 May 2017 (www.btv.at)Interim Financial Report as at 30 June 2017 Published on 25 August 2017 (www.btv.at)Interim Report as at 30 September 2017 Published on 24 November 2017 (www.btv.at)

BTV INTERIM REPORT AS OF 31/03/2017 3

The BTV Group at a glance

Profit and loss in EUR million 31/03/2017 31/03/2016 % change

Net interest income 41.0 38.9 +5.6 %Loan-loss provisions in the credit business –0.7 –0.4 +82.0 %Net commission income 13.1 11.7 +11.8 %Operating expenses –42.7 –42.1 +1.4 %Other operating income 27.3 21.9 +24.9 %Net pre-tax profit for the period 37.6 30.5 +23.6 %Group profit for the period 30.5 26.1 +16.9 %

Balance sheet figures in EUR million 31/03/2017 31/12/2016 Change in %

Total assets 10,178 10,014 +1.6 %Loans and advances to customers after loan-loss provisions 6,819 6,754 +1.0 %Primary funds 7,238 7,323 –1.2 %

of which savings deposits 1,258 1,248 +0.8 %of which securitised debt including subordinated capital 1,378 1,393 –1.1 %

Equity 1,259 1,219 +3.2 %Managed deposits 13,413 13,238 +1.3 %

Regulatory (CRR) equity in EUR million 31/03/2017 31/12/2016 % change

Risk-weighted assets 6,735 6,709 +0.4 %Equity 976 988 –1.2 %

of which common equity (CET1) 928 975 –4.9 %of which total core capital (CET1 and AT1) 928 975 –4.9 %

Common equity Tier 1 ratio 13.78 % 14.54 % –0.76 ppCore capital ratio 13.78 % 14.54 % –0.76 ppEquity ratio 14.49 % 14.73 % –0.24 pp

Key indicators in pp 31/03/2017 31/12/2016Change in per-centage points

Return on equity before tax (RoE) 12.31 % 6.21 % +6.10 % ppReturn on equity after tax 9.97 % 5.39 % +4.58 % ppCost/income ratio 52.5 % 65.4 % –12.9 % ppRisk/earnings ratio 1.8 % 11.2 % –9.4 % pp

Number of resources 31/03/2017 31/12/2016 Change in number

Weighted average number of employees 1,400 1,350 +50Number of branches 36 36 +0

Key indicators for BTV shares 31/03/2017 31/03/2016

Number of ordinary no par value shares 25,000,000 25,000,000Number of preference shares 2,500,000 2,500,000Top price of ordinary/preference share in EUR 22.30/19.50 21.30/20.00Bottom price of ordinary/preference share in EUR 21.40/19.00 20.70/19.01Closing price of ordinary/preference share in EUR 22.30/19.40 21.10/19.01Market capitalisation in EUR million 606 575IFRS EPS in EUR 3.83 3.16P/E ratio, ordinary share 5.8 6.7P/E ratio, preference share 5.1 6.0


Management report and notes on BTV Group business trends in 2017

Economic environmentThe eurozone is benefitting from the generally higher growth expectations for the global economy, which is why the first quarter of 2017 was very positive for the currency union. Domestic consumption grew, unemployment rates fell further to 9.5 %. Inflation in March was an annualised 1.5 %, but most of this was in fact due to rising oil prices. To achieve the desired sustainable rise in inflation, wages growth needs to be stronger. The mood among businesses, consumers and investors became noticeably more positive in the first quarter, so that each of the sentiment indicators kept on climbing. This means the lights are still green for the eurozone. But while the economic trends so far were surprisingly positive, there is still political uncertainty given that the elections later this year will be crucial for policy direction.

The fiscal policy impetus announced by US President Trump, such as tax cuts and higher spending on infrastruc-ture are driving US growth and inflation expectations upwards. This positive mood among market participants is reflected in the leading economic indicators. The purchase managers‘ indices for both industry and the services sector, as well as consumer confidence again hit new multi-year highs. So far, the hard facts (the trailing economic indica-tors) are lagging some way behind the leading indicators. The expectant attitude of market participants therefore includes potential for disappointment.

Interest ratesThe global government bond yields showed some very strong movements in the first quarter. At the start of the year, the expectations of an increasing global trend towards growth led to euphoria on the financial markets. Therefore those govern-ment bonds regarded as safe were less in demand. This plus the prospect of increasing inflation led to a rise in long-term interest rates on the international bond markets. Towards the end of the quarter, political imponderables, such as whether Trump‘s agenda could be pushed through, or the presidential elections in France, again came to the fore. More investors started looking for safe haven investments, which led to a growing downward pressure on rates.

The European Central Bank‘s (ECB) target is to continue to keep interest rates low. Because of speculation about rate increases, ECB president Mario Draghi made an announce-ment stressing that he did not want to raise the key rate until after the asset purchase programme was terminated. The US central bank, the FED, was more active, as expected, and decided at its interest rate meeting on 15 March to increase the key rate by 25 base points to 1 %. This led to an increase in short-term US rates. Over the first quarter, the US interest rate curve therefore flattened out some-what.

The long-dated euro interest rates rose in Q1 2017 by +10 base points to 0.76 % (10-year euro swap), the money market rates (3-month EURIBOR) fell compared to 31/12/2016 by -1 base point to -0.33 %.

CurrenciesThe improved US economic expectations were reflected at the start of the year in the EUR/USD exchange rate. This fell to below 1.05 at its lowest point. The dollar‘s strength, however, was soon disrupted. Uncertainties relating to the planned measures to stimulate the US economy, and positive econom-ic developments in the eurozone meant the euro began to appreciate. The increase in the US key rate by the FED in mid-March and uncertainty about the outcome of the French presidential elections put the euro under pressure again. At the end of the quarter the rate was hovering between 1.06 and 1.08.

Due to the uncertain political environment in the eurozone and the USA, the Swiss franc and the Japanese yen, both of which stand alongside the US dollar and the euro among the major reserve currencies, gained ground. The upward pressure on the Swiss franc in particular increased, which is why the Swiss National Bank (SNB) was repeatedly forced to intervene on the foreign exchange market. The aim of the SNB is to keep the Swiss franc becoming too strong, as this would harm the economic upswing of the Swiss economy. The EUR/CHF exchange rate moved within the narrow band of 1.06 to 1.08.


The Japanese yen was able to gain during the first quarter against both the US dollar and the euro, despite the interest rate advantage of the US over Japan. As uncertain-ty increased, the yen moved steadily upwards over the course of the quarter.

EquitiesThe international stock markets were able to profit from the positive market mood at the start of the year, and from the improved economic indicators. In addition to this, the global stock markets took hope from higher expectations regarding company profits. Those who benefited most in the first quarter were the emerging markets, followed by the European stock-markets with IBEX and ATX leading the way. The US markets lagged behind the European ones, but the S&P 500 and the Dow Jones still kept turning in new record highs. The FED raising the key interest rate did nothing to slow down soaring US equities. Political matters did, however, keep providing short breathing spaces on the stock markets.

However, the so-called „fear barometer“, the volatility index, remained firmly at a historically low level.The ATX showed a gain of +8.0 % in Q1. The Euro Stoxx 50 rose by +6.4 %, the Swiss SMI by +5.3 %. Among the US leading indices, the increases in Q1 of +5.5 % (S&P 500) and +4.6 % (Dow Jones) were relatively moderate. The Japanese Nikkei 225, despite positive fundamentals, delivered a drop of -1.1 %. The strong yen depressed the stock market.

BTV‘s ordinary shares rose in the first quarter of 2017 by +6.2 % to EUR 22.30. The preference shares added +2.1 % and stood at EUR 19.40 on 31/03.

Performance of BTV shares in 2017 in EUR

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22,00

24,00

31.03.2012 31.03.2013 31.03.2014 31.03.2015 31.03.2016 31.03.2017

BTV Stammaktie

BTV Vorzugsaktie


Balance sheet performanceThe total assets rose on 31/03/2017 by EUR +164 million to EUR 10,178 million. The first three months showed an increase in customer receivables, which at the end of March 2017 were EUR +60 million higher than their value at the end of 2016, along with the financial assets which had risen by EUR +309 million.

The level of loan-loss provisions for the lending business at EUR -204 million was slightly below the position at 31/12/2016.

Financial assets grew by EUR +309 million to EUR 2,430 million with the knowledge that known repayments for 2017 had already been replaced by forward purchases. By taking this approach, the cash reserves could be reduced by EUR -122 million, and the receivables from credit institutions by EUR -94 million.

Primary deposits on 31/03/2017 reached EUR 7,238 million, which corresponds to a reduction of -1.2 % or EUR -85 million since the end of last year. In relation to the refinanc-ing of customer lending, this means a loan-deposit ratio of 94.2 %. Customer funds under management, the sum of both primary deposits and deposit volumes, stood at EUR 13,413 million at the end of March 2017. Compared to year-end 2016, this represents growth of +1.3 % or EUR +174 million. The volume of deposits showed positive growth in Q1, rising by EUR +259 million to EUR 6,174 million, which is an increase of +4.4 %. Liabilities to banks rose by EUR +213 million in comparison to year-end 2016.

The equity on the balance sheet rose by EUR +39 million to EUR 1,259 million.

As at 31 March 2017, the banking group‘s qualifying net equity under CRR (Basel III) was EUR 976.3 million. Overall, total equity fell by EUR -11.9 million, or -1.2 %, compared with the end of 2016. The common equity (CET1) of the banking group as defined in CRR was EUR 927.8 million as of 31 March 2017. This included the planned transitional provisions which caused

a fall of EUR -47.3 million or -4.9 %. Total risk-weighted assets rose by EUR +27.7 million to EUR 6,735.5 million. From this, the core capital ratio is calculated to be 13.78 % and the overall equity ratio is 14.49 %.

Profit trendInterest earnings after loan-loss provisionsInterest earnings excluding loan-loss provisions rose, against the trend, because of the expansion in volume compared to the first quarter of 2016, by EUR +2.1 million to EUR 41.0 million. The earnings from companies valued at-equity exceeded the previous year by EUR +1.2 million to reach EUR 10.6 million. The loan-loss provisions in the first quarter of 2017, as in the previous year, remained at an extremely low level.

Net commission income Securities trading delivered the bulk of the growth for the overall commission income. The stock market environment in the first three months was very investor friendly, which was also reflected in customers‘ behaviour. The clear rise in the volume of securities trading can also be seen from the earnings. At EUR 6.2 million, earnings were up EUR +0.7 mil-lion or +12.0 % over the previous year‘s figure. The results from payment processing showed growth of EUR +0.4 million to EUR 3.3 million. The surplus from foreign curren-cies, cash and precious metal trading clearly exceeded the previous year by EUR +0.3 million or +43.3 % at EUR 1.0 million. Lending business earnings rose compared to the previous year by EUR +0.5 million. Other services business fell by EUR -0.5 million to EUR 0.5 million. In total, the net commission earnings grew by EUR +1.4 million or +11.8 % compared to the previous year, to EUR 13.1 million.

Trading incomeThe trading results as of 31/03/2017 at EUR -0.1 were below the previous year value of EUR 1.1 million due to valuation changes.


Operating expensesOperating expenses rose slightly during the reporting period compared to the previous year by EUR +0.6 million or +1.4 % to EUR 42.7 million. This was caused by staff costs (EUR +0.4 million) and cost of materials (EUR +0.2 million). Depreciation remained unchanged. At EUR 6.7 million at 31/03/2017 this was just -1.3 % below the previous year.

Other operating incomeOther operating income increased by EUR +5.5 million over the previous year, or +24.9 %.

Income from financial assetsIncome from financial assets improved to EUR -0.4 million, which compared to the figure for 31/03/2016 is an increase of EUR +0.3 million.

Tax positionThe amounts recorded under „Taxes on income and profit“ include the current cost of Austrian corporation tax, and otherwise relate primarily to the accrual and prepayment provisions for deferred taxes required by IFRS. As of 31/03/2017, the tax liability was up by +63.3 % compared to the previous year, at EUR -7.1 million. The effective tax rate was thus 18.8 %.

Group incomePre-tax profit for the period rose by EUR +7.2 million, or +23.6 %, to EUR 37.6 million. The group profit for the period rose compared to the previous year by EUR +4.4 million or +16.9 % to EUR 30.5 million.

The cost-income ratio fell compared to year-end 2016 from 65.4 % to 52.5 %. The pre-tax return on equity (RoE) rose from 6.2 % at 31/12/2016 to 12.3 %. Both KPIs also improved compared to 31/03/2016. The risk-earnings ratio fell significantly to 1.8 %, compared to 11.2 % as of 31/12/2016.

Outlook

The overall improving and moderately positive environ-ment allows BTV to continue its successful growth strategy. In the corporate client business, the growth will be driven in particular by the expansion markets in Germany, Vienna and Switzerland. The new branch in Mannheim will also help the existing branches in these markets to drive up the volume of customer borrowing. The strategic principle of fully refinancing customer loans by means of primary funds, will be retained in future.

Nothing substantial has changed in the forecast results since the publication of the 2016 Annual Report. Interest earnings in 2017 are expected to be slightly higher than 2016 due to the increasing customer volumes. The budget for loan-loss provisions has been raised again, after very low costs in the last few years. Commission income is expected to be at the same level as the previous year, with securities trading providing the likely driver for growth. There was relatively minor growth in the budgets for trading income and other operating results, but costs will increase, mainly because of increasing staff costs. Based on these developments, the profit before tax in 2017 is expected to exceed the previous year.


Assets in EUR thousand 31/03/2017 31/12/2016Absolute

change Change in %

Cash reserves 194,993 316,527 –121,534 –38.4 %Loans and advances to banks 1 [see notes] 224,205 318,185 –93,980 –29.5 %Loans and advances to customers 2 7,022,330 6,962,087 +60,243 +0.9 %Loan-loss provisions 3 –203,557 –207,890 +4,333 –2.1 %Trading assets 4 17,384 18,762 –1,378 –7.3 %Financial assets – at fair value through profit and loss 5 113,878 133,248 –19,370 –14.5 %Financial assets – available for sale 6 1,745,635 1,434,553 +311,082 +21.7 %Financial assets – held to maturity 7 0 0 +0 +0.0 %Shares in companies valued at-equity 8 553,212 534,941 +18,271 +3.4 %Intangible fixed assets 3,122 3,471 –349 –10.1 %Property, plant and equipment 290,170 291,176 –1,006 –0.3 %Properties held as financial investments 56,125 55,357 +768 +1.4 %Current tax due or refunds due 149 253 –104 –41.1 %Deferred tax payable or refunds 26,539 27,856 –1,317 –4.7 %Other assets 133,381 125,242 +8,139 +6.5 %Total assets 10,177,566 10,013,768 +163,798 +1.6 %

Liabilities in EUR thousand 31/03/2017 31/12/2016Change

as valueChange

in %

Liabilities to banks 9 1,407,132 1,194,270 +212,862 +17.8 %Liabilities to customers 10 5,860,292 5,930,629 –70,337 –1.2 %Securitised debt 11 1,202,497 1,179,744 +22,753 +1.9 %Trading liabilities 12 5,859 11,020 –5,161 –46.8 %Reserves and provisions 13 125,575 126,375 –800 –0.6 %Current tax liabilities 7,414 4,340 +3,074 +70.8 %Deferred tax liabilities 5,887 5,887 +0 +0.0 %Other liabilities 128,582 129,045 –463 –0.4 %Subordinated capital 14 175,472 213,024 –37,552 –17.6 %Equity 15 1,258,856 1,219,434 +39,422 +3.2 %

Non-controlling interests 40,382 35,815 +4,567 +12.8 %Owners of the parent company 1,218,474 1,183,619 +34,855 +2.9 %

Total liabilities 10,177,566 10,013,768 +163,798 +1.6 %

Abridged consolidated financial statements

Balance sheet at 31 March 2017


Comprehensive income statement in EUR thousand01/01–

31/03/201701/01–

31/03/2016Change

as valueChange

in %

Interest and similar income 41,275 43,805 –2,530 –5.8 %Interest and similar expenses –10,836 –14,329 +3,493 –24.4 %Earnings from companies valued at-equity 10,602 9,385 +1,217 +13.0 %Net interest income 16 41,041 38,861 +2,180 +5.6 %Loan-loss provisions 17 –686 –377 –309 +82.0 %Commission income 14,234 12,793 +1,441 +11.3 %Commission expenses –1,148 –1,085 –63 +5.8 %Net commission income 18 13,086 11,708 +1,378 +11.8 %Trading income 19 –83 1,128 –1,211 –107.4 %Operating expenses 20 –42,658 –42,058 –600 +1.4 %Other operating income 21 27,331 21,879 +5,452 +24.9 %Profit from financial assets – at fair value through profit and loss 22 –520 –455 –65 +14.3 %

Income from financial assets – available for sale 23 115 –234 +349 –149.1 %Income from financial assets – held to maturity 24 0 0 +0 +0.0 %Net pre-tax profit for the period 37,626 30,452 +7,174 +23.6 %Taxes on earnings and profit –7,149 –4,377 –2,772 +63.3 %Group profit for the period 30,477 26,075 +4,402 +16.9 %

Non-controlling interests 4,567 4,519 +48 +1.1 %Owners of the parent company 25,910 21,556 +4,354 +20.2 %

Comprehensive income statement as at 31 March 2017

Other comprehensive income in EUR thousand01/01–

31/03/201701/01–

31/03/2016

Group profit for the period 30,477 26,075Revaluation from defined benefit pension plans –1 713Changes from companies valued at-equity recognised directly in equity 1,678 4,367Gains/losses with regard to deferred taxes, applied directly in equity 0 –178Total of items which can not subsequently be allocated to profit and loss

1,677 4,902

Unrealised profit/loss on assets held for sale (AfS reserve) –38 11,168Changes from companies valued at-equity recognised directly in equity 7,218 –1,582Unrealised gains/losses from adjustments in currency conversion 120 –156Gains/losses with regard to deferred taxes, applied directly in equity –0 2,051Total of items which can subsequently be allocated to profit and loss

7,300 11,481

Total of other comprehensive income 8,977 16,383Comprehensive income for the period 39,454 42,458

Non-controlling interests 4,567 4,519Owners of the parent company 34,887 37,939

Key indicators 31/03/2017 31/03/2016

EPS in EUR 26 0.94 0.78RoE before tax 12.31 % 10.47 %RoE after tax 9.97 % 8.97 %Cost/income ratio 52.5 % 57.2 %Risk/earnings ratio 1.8 % 1.0 %


Statement of changes in equity in EUR thousand

Sub-scribed capital

Re-serves

Retained earnings

AfS re-

serveActuarial

profit/loss

Total own-ers of the

parent company

Non-con-

trolling inter-

ests Equity

Equity at 01/01/2016 55,000 107,060 972,113 11,002 –29,943 1,115,232 33,501 1,148,733Capital increases 0 0 0 0 0 0 0 0Comprehensive income for the period

Revenue 0 0 21,556 0 0 21,556 4,519 26,075Other income 0 0 4,502 11,168 713 16,383 0 16,383

Dividend payments 0 0 0 0 0 0 0 0Own shares 0 1 0 0 0 1 0 1Other changes with a neutral effect on results

0 0 –855 0 0 –855 –303 –1,158

Equity at 31/03/2016 55,000 107,061 997,316 22,170 –29,230 1,152,317 37,717 1,190,034

Statement of changes in equity in EUR thousand

Sub-scribed capital

Re-serves

Retainedearnings

AfS re-

serveActuarial

profit/loss

Total own-ers of the

parent company

Non-con-

trolling inter-

ests Equity

Equity at 01/01/2017 55,000 106,996 1,031,836 24,012 –34,225 1,183,619 35,815 1,219,434Capital increases 0 0 0 0 0 0 0 0Comprehensive income for the period

Revenue 0 0 25,910 0 0 25,910 4,567 30,477Other income 0 0 9,016 –38 –1 8,977 0 8,977

Dividend payments 0 0 0 0 0 0 0 0Own shares 0 42 0 0 0 42 0 42Other changes with a neutral effect on results

0 –4 –70 0 0 –74 –0 –74

Equity at 31/03/2017 55,000 107,034 1,066,692 23,974 –34,226 1,218,474 40,382 1,258,856

Statement of changes in equity


Cash flow statement as at 31 March 2017

Cash flow statement in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Cash position at the end of the previous period 316,527 146,757Operating cash flow –80,721 –11,715Investment cash flow –2,795 –10,958Financing cash flow –38,018 5,051Cash position at the end of the period 194,993 129,135


BTV Group: notes to the accounts 2017

Accounting and valuation principlesThe present interim BTV Group accounts as at 31/03/2017 have been drawn up according to IFRS regulations and Interpretations by the International Financial Reporting Interpretations Committee (IFRIC) that exempt from preparation of consolidated financial statements as defined by section 59a of the Austrian Banking Act (Bankwesenge-setz - BWG) in conjunction with section 245a of the Aus-trian Commercial Code (Unternehmensgesetzbuch - UGB) and in accordance with IAS 34 (Interim Financial Reporting).

The Bank für Tirol und Vorarlberg AG is an ‚Aktiengesells-chaft‘ (public limited company) headquartered 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 tourism opera-tions. 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 statements equates to those pursuant to the provisions of the Austrian Commercial Code (UGB), in conjunction with the provisions of the Austrian Banking Act (BWG). The group interim report was prepared accord-ing to the same accounting principles as those applied to the audited annual BTV Group accounts 2016.

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 possesses 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 offset-ting 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 consideration, 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 goodwill. 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 low significance for the asset, financial and income situa-tion of the group are not fully consolidated.

The scope of full consolidation has not changed compared with 31/12/2016. As at 31 March 2017, the scope of full consolidation includes the following holdings.


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, Munich 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 in Liqu., Innsbruck 100.00 % 100.00 %MPR Holding GmbH, Innsbruck 100.00 % 100.00 %

TiMe Holding GmbH, Innsbruck 100.00 % 100.00 %Silvretta Montafon GmbH, 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 %„Das Schruns“ Hotelprojektentwicklungsgesellschaft mbH, St. Gallenkirch 100.00 % 100.00 %Silvretta Sportservice GmbH, Schruns 100.00 % 100.00 %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 %

Mayrhofner Bergbahnen AG, Mayrhofen 50.52 % 50.52 %


Leasing companies and the companies of the Silvretta Montafon Bergbahnen Group were included in the Busi-ness Forecast as at 30/09, in accordance with their diver-gent financial year. The balance sheet date of Skischule Silvretta Montafon St. Gallenkirch GmbH is 31/05. BTV Beteiligungsholding GmbH, BTV 2000 Beteiligungsverwal-tungsgesellschaft m.b.H. and Mayrhofner Bergbahnen AG finish their financial year on 30/11. The companies of Silvretta Montafon and Mayrhofner Bergbahnen AG 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 as well as BTV Beteiligungsholding GmbH and BTV 2000 Beteiligungsverwaltungsgesellschaft m.b.H.

The remaining fully consolidated companies were consid-ered to have a reporting date for their financial statements of 31 December.

As at 31 March 2017 MPR Holding GmbH holds 100 % of the shares in Silvretta Montafon GmbH. There are only indirect minority interests, which are the result of the holding in Skischule Silvretta Montafon St. Gallenkirch GmbH.

BTV Beteiligungsholding GmbH holds 100 % of the shares in BTV 2000 Beteiligungsverwaltungsgesellschaft m.b.H. BTV 2000 Beteiligungsverwaltungsgesellschaft m. b. H. holds 50.52 % of Mayrhofner Bergbahnen AG. There are direct mi-nority interests which result from the holding in Mayrhofner Bergbahnen AG.

The share of earnings for the period allocated to minority interests amounts to EUR 4,567 thousand.

At the Annual General Meeting of Mayrhofner Bergbahnen AG on 01/07/2016, a dividend of EUR 200,000 was agreed, of which EUR 99,000 was assigned to minority interests.

Significant holdings over which BTV has a major influence 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 associated 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.


The following holdings were included using the equity method:

BKS Bank AG based in Klagenfurt and Oberbank AG based in Linz are regional universal banks and together with BTV form the 3 Banken Group. Moser Holding AG is active in publishing with a focus on print (daily newspapers, free weekly newspapers and magazines) and online.

The holdings in Oberbank AG and BKS Bank AG have been included in the group financial statements for the follow-ing reasons, despite the fact that they are below the 20 % holding threshold: For the holding in Oberbank AG there is a syndication agreement between BTV, BKS Bank AG and Wüstenrot Wohnungswirtschaft reg. Gen.m.b.H. and for the holding in BKS Bank AG there is a syndication agree-ment between BTV, Oberbank AG and the Generali 3 Banken Holding AG, the purpose of which is to safeguard the independence of these institutions.

In this way, for both of the cited companies, there is the possibility of exercising a significant influence. For the purposes ofdrawing up the financial statements in a timely fashion, at-equity

valued companies are included for the period from 01/10/2016 to 31/12/2016.

Receivables and liabilities, expenses and income internal to the group are eliminated except where they are insignifi-cant. An interim net profit elimination has been waived, since material interim net profit figures were not available.

Alpenländische Garantie-Gesellschaft m.b.H. is classed as joint operations. The company has a concession under Section 1 para. 1, line 8, of the Austrian Banking Act (BWG). Its exclusive corporate object is the granting of guarantees, sureties and other liabilities for lending businesses of the 3 Banken Group. The 3 Banken Group is primarily the only source for payment flows that contribute to the continued activities of the arrangement. It is therefore classed as a joint operation in accordance with IFRS 11.B29-32. The proportional assets and liabilities of the company are included for the reporting date of 31 March.

Main business events in the reporting period The resolutions of the 99th Annual General Meeting of the Bank für Tirol und Vorarlberg AG held on 12/05/2017 are published on the BTV website (www.btv.at) under „The Company“.

In Q2 2017, BTV is undertaking a capital increase, in which up to 3,437,500 new ordinary shares are being issued with an

offer price of EUR 21.70, and a subscription ratio of 8:1.

Since the date of the interim report there have not been any activities or events in the BTV Group which are relevant to the report as a result of their form or content, and which would affect the picture of the asset, financial and earnings situation conveyed by this report.

Companies consolidated at-equity Share

in % Voting rights

in %

BKS Bank AG, Klagenfurt 18.89 % 19.50 %Oberbank AG, Linz 15.88 % 16.98 %Drei Banken Versicherungsagentur GmbH, Linz 20.00 % 20.00 %Moser Holding AG, Innsbruck 24.99 % 24.99 %

Proportionally consolidated companies Share in % Voting rights

in %

Alpenländische Garantie-Gesellschaft m.b.H. 25.00 % 25.00 %


1 Loans and advances to banks in EUR thousand 31/03/2017 31/12/2016

Loans to domestic credit institutions 17,990 93,746Loans to foreign credit institutions 206,215 224,439Loans to credit institutions 224,205 318,185

2 Customer receivables in EUR thousand 31/03/2017 31/12/2016

Loans to Austrian customers 4,615,546 4,620,991Loans to foreign customers 2,406,784 2,341,096Loans to customers 7,022,330 6,962,087

3 Loan-loss provisions in EUR thousand 31/03/2017 31/12/2016

Opening balance of loan transactions at 01/01. 207,890 196,882– Releases –3,427 –16,536+ Allocation 3,168 35,822– Application –4,089 –8,308(+/–) Other reclassifications/Change in consolidation scope 0 0(+/–) Changes arising from currency differences 15 30

Loan-loss provisions in the credit business 203,557 207,890Opening balance of loan transactions at 01/01. 33,429 35,626

– Releases –1,611 –5,113+ Allocation 2,697 827– Application 0 0(+/–) Other reclassifications/Change in consolidation scope –310 2,088(+/–) Changes arising from currency differences 1 1

Credit transactions reserves 34,206 33,429Overall total loan-loss provisions 237,763 241,319

Balance sheet – Assets


4 Trading assets in EUR thousand 31/03/2017 31/12/2016

Debenture bonds and other fixed-interest securities 0 1Equities and other variable-interest securities 0 0Positive market values arising from derivative transactions – Trading 8,857 7,479Positive market values arising from derivative transactions – Fair value option 8,527 11,282Trading assets 17,384 18,762

5 Financial assets – at fair value through profit and loss in EUR thousand 31/03/2017 31/12/2016

Debenture bonds and other fixed-interest securities 92,666 112,546Equities and other variable-interest securities 21,212 20,702Financial assets - at fair value through profit and loss 113,878 133,248

8 Shares in companies valued at-equity in EUR thousand 31/03/2017 31/12/2016

Credit institutions 534,807 518,557Non-credit institutions 18,405 16,384Shares in companies valued at-equity 553,212 534,941

6 Financial assets – available for sale in EUR thousand 31/03/2017 31/12/2016

Debenture bonds and other fixed-interest securities 1,634,842 1,337,691Equities and other variable-interest securities 20,705 6,823Other shareholdings 51,401 51,400Other affiliated shareholdings 38,687 38,639Financial assets - available for sale 1,745,635 1,434,553

7 Financial assets – held to maturity in EUR thousand 31/03/2017 31/12/2016

Debenture bonds and other fixed-interest securities 0 0Financial assets – held to maturity 0 0

9 Liabilities to banks in EUR thousand 31/03/2017 31/12/2016

Austrian credit institutions 947,607 686,931Foreign credit institutions 459,525 507,339Liabilities to credit institutions 1,407,132 1,194,270


12 Trading liabilities in EUR thousand 31/03/2017 31/12/2016

Negative market values arising from derivative transactions – Trading 3,924 8,165Negative market values arising from derivative transactions – Fair value option 1,935 2,855Trading liabilities 5,859 11,020

11 Securitised debt in EUR thousand 31/03/2017 31/12/2016

Debentures 906,966 886,166Domestic bonds 295,531 293,578Securitised debt 1,202,497 1,179,744of which fair value option 393,156 411,705

10 Liabilities to customers in EUR thousand 31/03/2017 31/12/2016

Savings depositsAustrian 1,092,637 1,080,040Foreign 165,302 168,193

Sub-total savings deposits 1,257,939 1,248,233Other deposits

Austrian 3,289,561 3,367,234Foreign 1,312,792 1,315,162

Sub-total other deposits 4,602,353 4,682,396Liabilities to customers 5,860,292 5,930,629

Balance sheet – Liabilities

13 Reserves and provisions in EUR thousand 31/03/2017 31/12/2016

Long-term payroll reserves 88,438 88,721Other reserves and provisions 37,137 37,654Reserves and provisions 125,575 126,375

14 Subordinated capital in EUR thousand 31/03/2017 31/12/2016

Subordinated capital 175,472 213,024Subordinated capital 175,472 213,024of which fair value option 138,584 154,696


15 Regulatory capital and debt levels

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 common equity (Common Equity Tier 1 – CET1), the additional core capital (Additional Tier 1 – AT1) and supple-mentary capital (Tier 2 – T2). The respective capital ratios are determined by contrasting the corresponding regula-tory capital component after taking into account all regulatory deductions and transitional provisions of the overall measure of risk. Under the provisions of the CRR, a

minimum requirement of 4.5 % is required for CET1, which will be increased by 1.25 % by the capital buffer defined in CRD IV (Capital Requirements Directive IV). For the entire core capital, a minimum requirement of 7.25 % is provided; the total equity must have a minimum value of 9.25 %. The leverage ratio indicates the ratio of the common equity (Tier 1) to the leverage exposure (unweighted asset items of the balance sheet and off-balance-sheet transactions pursuant to CRR). The provisions for calculating and disclosure of the leverage ratio within the EU are imple-mented by BTV as part of their disclosure obligations.


Consolidated equity under CRR in EUR million 31/03/2017 31/12/2016

Common equity (CET1)Capital instruments qualifying as CET1 150.8 150.8Proprietary CET1 instruments –9.9 –10.0Retained earnings and other surplus reserves 1,008.3 1,008.3Aggregated other income 28.0 28.0Other reserves 125.4 125.4Transitional changes owing to the transitional provisions for CET1 capital instruments 2.5 3.0

Prudential filters –0.8 –0.8Goodwill 0.0 0.0Other intangible assets –0.1 –0.1Regulatory changes in connection with CET1 instruments of financial companies, in which the bank holds a substantial interest

–424.4 –408.6

Other transitional changes to CET1 48.1 79.1Common equity (CET1) 927.8 975.1

Additional core capital (Additional Tier 1)Changes owing to the transitional provisions for Additional Tier 1 capital instruments 17.5 21.0

Other transitional changes to Additional Tier 1 –17.5 –21.0Additional core capital (Additional Tier 1) 0.0 0.0

Core capital (Tier 1): sum of common equity (CET1) and additional (AT1) core capital 927.8 975.1Supplementary capital (Tier 2)

Paid-up capital instruments and subordinated loans 95.1 93.8Direct positions in supplementary capital instruments –11.8 –11.8Changes owing to the transitional provisions for supplementary capital instruments and subor-dinated loans

6.3 10.2

Other transitional changes to supplementary capital –41.2 –79.2Supplementary capital (Tier 2) 48.5 13.1Total qualifying equity 976.3 988.2Total risk-weighted assets 6,735.5 6,708.8

Common equity Tier 1 ratio 13.78 % 14.54 %Core capital ratio 13.78 % 14.54 %Equity ratio 14.49 % 14.73 %


16 Net interest income in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Interest and similar income fromLending and money market transactions with credit institutions 2,020 2,361Lending and money market transactions with customers 34,696 35,029Debenture bonds and fixed-interest securities 1,164 1,123Equities and variable-rate securities 125 164Other transactions 2,802 4,968Interest earnings on liabilities 468 160Sub-total interest and similar income 41,275 43,805

Interest and similar expenses on

Credit institutions deposits –1,665 –1,693Customer deposits –3,639 –4,569Securitised debt –1,595 –41Subordinated capital –988 –3,074Other trades –2,674 –4,770Interest expense from assets –275 –182Sub-total interest and similar expenses –10,836 –14,329Earnings from companies valued at-equity 10,602 9,385

Net interest income 41,041 38,861

17 Loan-loss provisions in lending business in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Allocation of on-balance sheet provision –3,169 –4,195Allocation of off-balance sheet provision –2,697 –821Loan-loss insurance premiums 0 0Release of on-balance sheet provisions 3,559 1,762Release of off-balance sheet provisions 1,611 3,119Direct amortisation –18 –248Income from amortised receivables 28 6Loan-loss provisions in the credit business –686 –377

Comprehensive income statement Notes

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


18 Net commission income in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Credit transaction 1,999 1,512Payment transactions 3,333 2,923Securities trading 6,229 5,563Currency, foreign exchange and precious metals trading 1,016 709Other services business 509 1,001Net commission income 13,086 11,708

19 Trading income in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Income from derivatives 74 618Income from securities 65 108Income from foreign exchange and notes and coins transactions –222 402Trading income –83 1,128

20 Operating expenses in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Payroll –22,908 –22,470Materials –13,050 –12,803Amortisation –6,700 –6,785Operating expenses –42,658 –42,058

20a Average number of employees, weighted by person-years 31/03/2017 31/03/2016

Office staff 924 921Blue collar 476 494Payroll 1,400 1,415

The level of the workforce was reduced by the number of employees delegated to subsidiaries outside the circle of companies covered by the IFRS consolidation.


21 Other operating income in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Other operating income 32,783 32,462Other operating expenses –5,409 –10,588Hedge accounting income –43 5Other operating income 27,331 21,879

22 Profit from financial assets – at fair value through profit and loss in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Profit from financial assets – at fair value through profit and loss –520 –455Profit from financial assets – at fair value through profit and loss –520 –455

23 Profit from financial assets – available for sale in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Profit from financial assets – available for sale 115 –234Profit from financial assets – available for sale 115 –234

24 Profit from financial assets – held to maturity in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Profit from financial assets – held to maturity 0 0Profit from financial assets – held to maturity 0 0

Comprehensive income statement Notes


25 Performance bonds and credit risks in EUR thousand01/01-

31/03/201701/01-

31/03/2016

Securities/guarantees 277,720 237,337Credit risks 1,405,218 1,274,992Performance bonds and credit risks 1,682,938 1,512,329

26 Earnings per share (ordinary and preference shares) 31/03/2017 31/03/2016

Equities (ordinary and preference shares) 27,500,000 27,500,000Average float (ordinary and preference shares) 27,467,847 27,468,795Net Group income in EUR thousand 25,910 21,556

EPS (Earnings per share) in EUR 0.94 0.78Diluted earnings per share in EUR (ordinary and preference shares) 0.94 0.78

The diluted earnings per share are the same as the undi-luted 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“.


27 Fair value hierarchy of financial instruments which are valued at fair value

The financial instruments reported at fair value are classi-fied 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 markets 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 the following cumulative conditions:

• the products traded on the market are homogenous,• willing contractual buyers and sellers can normally be found any time and • prices are publicly available.

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 industry group, a price service agency or a supervisory authority and these prices represent actual and regularly occurring market transac-tions.

Valuation procedure through observable parameters (Level 2): This category includes OTC derivative contracts, receivables and issued debt securities of the Group classified at fair value.

Valuation procedures through significant unobservable parameters (Level 3): The financial instruments in this category show input parameters which are based on unobservable markets.

The allocation of certain financial instruments to the categories requires a systematic assessment, especially if the valuation is based on both observable as well as unobservable market parameters. The instrument classifi-cation may also change over time in consideration of changes to the market parameters.

For securities and other investments which are valued 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 discount 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 mentioned financial assets in the third stage where determined in accordance with generally recognised valuation processes. Significant parameters are the depreciation rate as well as long-term success and capitalisation values with considera-tion of the experience of the management as well as knowl-edge 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 follow-ing 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 payment profile contain interest derivatives (caps and floors). The calcula-tion 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.


Fair value hierarchy of financial instruments which are valued at fair value as at 31/03/2017 in EUR thousand

Prices listed in ac-tive markets

Level 1

Valuation methods based on market

data

Level 2

Valuation methods not based on market

data

Level 3

Financial assets stated at fair valueTrading portfolio securities 0 0 0Positive market values from derivative financial instruments

0 75,450 0

Assets classified at fair value 102,704 11,173 0Financial assets available for sale 1,574,867 80,680 63,752

Overall financial assets classified at fair value 1,677,571 167,303 63,752

Financial liabilities stated at fair valueNegative market values from derivative financial instruments

0 25,624 0

Liabilities classified at fair value 0 531,740 0Overall liabilities classified at fair value 0 557,364 0

Fair value hierarchy of financial instruments which are valued at fair value as at 31/12/2016 in EUR thousand

Prices listed in ac-tive markets

Level 1

Valuation methods based on market

data

Level 2

Valuation methods not based on market

data

Level 3

Financial assets stated at fair valueTrading portfolio securities 0 1 0Positive market values from derivative financial instru-ments

0 81,918 0

Assets classified at fair value 106,998 26,250 0Financial assets available for sale 1,263,792 80,722 63,752

Overall financial assets classified at fair value 1,370,790 188,891 63,752

Financial liabilities stated at fair valueNegative market values from derivative financial instruments

0 33,744 0

Liabilities classified at fair value 0 566,401 0Overall liabilities classified at fair value 0 600,145 0


Movements between level 1, level 2 and level 3 In the current reporting year 2017, there have not been any movements between the individual levels.

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.

28 Fair value of financial instruments, which are not valued at fair value

Changes in level 3 of finan-cial instruments assessed at fair value in EUR thousand

Jan. 2017

Profit from P&L

Profit in other income

Pur-chases

Sales, repay-ments

Transfer to level 3

Transfer from

level 3Currency

conversionMarch

2017

Securities held for trading

0 0 0 0 0 0 0 0 0

Positive market values from derivative financial instru-ments

0 0 0 0 0 0 0 0 0

Assets classified at fair value 0 0 0 0 0 0 0 0 0

Financial assets available for sale

63,752 0 0 0 0 0 0 0 63,752

Overall financial assets clas-sified at fair value

63,752 0 0 0 0 0 0 0 63,752

Assets in EUR thousandFair value

31/03/2017Book value

31/03/2017Fair value


31/12/2016

Cash reserves 194,993 194,993 316,527 316,527Loans to credit institutions 224,401 224,205 318,574 318,185Loans to customers 7,390,402 7,022,330 7,336,962 6,962,087Financial assets – held to maturity 0 0 0 0

Liabilities in EUR thousandFair value


31/03/2017Fair value


31/12/2016

Liabilities to credit institutions 1,403,581 1,407,132 1,192,133 1,194,271Liabilities to customers 5,870,844 5,860,292 5,944,902 5,930,629Securitised debt 806,007 809,341 765,588 768,039Subordinated capital 36,903 36,889 58,338 58,328


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 „Manage-ment Approach“. This requires segment information to be presented according to internal reporting as it is regularly used by the company‘s key decision-makers for decisions on allocation of resources to the segments and to assess their performance. The qualitative and quantitative thresh-olds defined in IFRS 8 are met by this segment reporting. The business areas are reported as independent business-es.

Segment reporting is based on internal divisional account-ing for the corporate and retail customers business areas, on the overall bank report for the institutional customers and banks business area, on the Reporting Package and the monthly report for the BTV Leasing subgroup, the respec-tive monthly report for the Silvretta Montafon Group and the respective monthly report for Mayrhofner Bergbahnen AG. These reports reflect the structure of management responsibilities within BTV in 2017. 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 consoli-dated financial statements. The information 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 Presen-tation and Tax and Accounting groups are therefore guaranteed. The criterion for separation of business areas is primarily who is responsible for looking after the custom-ers. Changes in this responsibility 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 comparison with last year.

In 2017, the following business areas have been defined within BTV:The corporate client business area is responsible for small, medium and large business customers and chartered accountants and auditors. The retail client business area is responsible for the retail customers, freelance professionals and micro-companies market segments. The institutional customers and banks division mainly includes treasury and trading activities. BTV Leasing brings together all leasing operations of BTV AG. The cable cars sector includes the Silvretta Montafon Group and Mayrhofner Bergbahnen AG, which contain all of the two companies‘ tourism activities. The results of these segments also include transactions between segments, particularly between the corporate customer segment and leasing and the cable cars. Services are transferred at market prices. Alongside these five reporting segments, under the „Other segments/consolida-tions/misc.“ heading results from service areas across BTV are reported, such as Finance and Controlling, Legal and Investments, Marketing, Communications and Board matters as well as Group Auditing etc. In addition, the effects of consolidation and fully consolidated companies below the thresholds (Alpenländische Garantie-Gesells-chaft m.b.H., BTV Hybrid I GmbH and BTV Hybrid II GmbH in Liqu. as well as TiMe Holding GmbH) are allocated to this segment.

The results of the five reporting segments are described below.

29 Segment reporting


Corporate client segmentThe corporate client sector is the largest division in terms of earnings at BTV. Operating interest income forms its main revenue component. All in all, in the first quarter 2017 the volume of deposits rose by EUR +1.9 million to EUR 23.8 million.

The loan-loss provisions for lending activities were reduced by EUR 0.9 million. Securities trading was responsible for the positive growth in commission earnings by EUR +1.0 million to EUR 7.2 million. The operating expenses in this segment rose moderately by EUR +0.2 million to EUR 7.4 million. Segment receivables grew by EUR +324 million to EUR 5,092 million because of strong new business. Seg-ment liabilities increased from EUR 2,184 million to EUR 2,304 million. Overall, the pre-tax profit for the period increased clearly by EUR +2.3 million to EUR 24.4 million compared to the previous year.

Retail client segmentThe retail client business is the second pillar of BTV, and contributed stable interest income of EUR 9.9 million to interest earnings. Following the turbulent developments in the financial markets (due to Brexit) in the past, above all in equity trading, the net commission income showed a slight increase of EUR +0.8 million to EUR 7.9 million.The cost intensity due to the retail sector typically being highly demanding in terms of staff and premises, led to an increase of +5.9 % in the operating costs of EUR 12.6 million. Other operating profits remained stable and were at the same level as last year at EUR 0.2 million. Compared to the previous year, loan-loss provisions in the lending business rose slightly by EUR 0.4 million. In total, this segment achieved a pre-tax profit for the period of EUR 5.0, (previous year: EUR 5.2 million).

Institutional clients and banks segmentThe institutional clients and banks division showed a stable result for the segment in the first quarter compared to the previous year. Interest earnings grew moderately by EUR +0.4 million to EUR 3.5 million. Income from financial assets, including trading income, fell to EUR -0.5 million, leaving it EUR 0.9 million below the level of the previous year. Operating expenses for the segment remained stable compared to Q1 2016, totalling EUR 0.5 million. The pre-tax profit for the period totalled EUR 2.3 million.

Leasing segmentBTV Leasing continued to show welcome growth in this reporting quarter. Customer cash volumes grew by EUR +85 million to EUR 883 million. Given the robust new business, the asset business showed a moderate increase of EUR +0.2 million to interest earnings of EUR 4.6 million. Net commis-sion income, at EUR 0.4 million, showed a drop of EUR -0.3 million compared to the previous year. Operating expenses fell slightly by EUR -0.1 million to EUR 1.5 million. Overall, BTV Leasing turned in pre-tax earnings for the period of EUR 4.5 million, which is EUR -0.1 lower than the previous year.

Cable cars segmentThe cable cars sector includes Mayrhofner Bergbahnen AG and the Silvretta Montafon Group. Both companies are dominated by the trends in the tourism sector, and there-fore their results are subject to strong seasonal variations. Interest income fell by EUR -0.1 million, to EUR -0.4 million. Other operating profits, which mainly includes the sales revenue, increased by EUR +0.5 million to EUR 27.9 million. These earnings are also the decisive factors for the Silvretta Montafon Group, with its average of 426 employees in the reporting year, and Mayrhofner Bergbahnen AG, with its average 205 employees.

The operating expenses grew due to seasonal fluctuations by EUR +0.6 million to EUR 15.4 million. In total, pre-tax earnings for the period were EUR 12.1 million, which is a drop of EUR -0.2 million below the previous year.


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

Segment reporting in EUR thousand Year

Cor-porate clients

Private clients

Institu-tional

clients and

banks LeasingCable

cars

Seg-ments

required to be re-

ported

Other seg-

ments/consoli-dation/

misc.

Group balance

sheet/P&L

Net interest income 03/2017 23,779 9,850 3,489 4,560 –396 41,282 –10,843 30,43903/2016 21,873 9,805 3,124 4,342 –250 38,894 –9,418 29,476

Earnings from companies valued at-equity

03/2017 0 0 0 0 0 0 10,602 10,60203/2016 0 0 0 0 0 0 9,385 9,385

Loan-loss provisions in the credit business

03/2017 873 –424 –81 –14 0 354 –1,040 –68603/2016 1,252 –27 –787 6 0 444 –821 –377

Net commission income 03/2017 7,157 7,878 0 369 0 15,404 –2,318 13,08603/2016 6,178 7,046 0 680 0 13,904 –2,196 11,708

Operating expenses 03/2017 –7,440 –12,562 –548 –1,456 –15,395 –37,402 –5,256 –42,65803/2016 –7,273 –11,862 –476 –1,584 –14,825 –36,019 –6,039 –42,058

Other operating income 03/2017 0 220 0 881 27,916 29,017 –1,686 27,33103/2016 0 194 0 1,104 27,415 28,713 –6,834 21,879

Earnings from financial assets and trading results

03/2017 0 0 –523 108 0 –415 –73 –48803/2016 0 0 421 18 0 439 0 439

Result for the period before tax

03/2017 24,368 4,961 2,337 4,449 12,126 48,242 –10,616 37,62603/2016 22,030 5,157 2,282 4,566 12,340 46,374 –15,922 30,452

Segment loans 03/2017 5,091,671 1,358,759 2,324,907 883,051 17,873 9,676,261 –421,201 9,255,06003/2016 4,767,806 1,320,495 1,980,320 798,364 13,517 8,880,502 –177,580 8,702,922

Segment liabilities 03/2017 2,304,212 3,315,199 2,511,935 827,109 86,474 9,044,929 –393,677 8,651,25203/2016 2,183,505 3,016,218 2,272,808 749,157 86,510 8,308,198 –240,194 8,068,004


Segment reporting: explanatory notesThe net interest income is allocated according to the market interest method. Sales commissions are included in the corporate and retail customers for management reasons, among other items. Earnings from companies valued at-equity are allocated to the area of „Other seg-ments/Consolidation/Misc“. Net commission income is determined by the assignment of the internal divisional accounting (including all manual entries being assigned to commission). Costs are allocated to the respective seg-ments in which they were incurred and the expenses of BTV Leasing GmbH or Silvretta Montafon Group and Mayrhofner Bergbahnen are directly allocated in accord-ance with the management reports. Costs not directly imputable are shown under „Other segments/consolida-tion/misc.“ The other operating income includes, among other things, the conversion of the Silvretta Montafon Group and Mayrhofner Bergbahnen and, in addition to the consolidation effects, essentially the stability tax and rental operations under „Other segments/consolidation/misc.“

The receivables for this segment include the entries „Loans and advances to banks“, „Loans and advances to custom-ers“, as well as all fixed-interest securities, guarantees and liabilities. The „Other segments/consolidation/misc.“ column includes loan-loss provisions, since the internal control considers the liabilities as net figures in contrast to the balance sheet. The postings resulting from consolida-tion are also found here. The entries for liabilities to banks, liabilities to customers, trading liabilities, securitised debt, trading liabilities and subordinated capital are allocated to the liabilities segment. Consolidating entries are also included here in the „Other segments/Consolidation/Misc.“ column.

The success of each business area is measured by the pre-tax surplus earned in the period by this segment.


We confirm that, to the best of our knowledge, the abridged interim group financial statements drawn up in accordance with the relevant accounting standards convey as faithful a picture as possible of the asset, financial and profit position of the BTV group, and that the report paints as faithful a picture as possible of the asset, financial and profit position of the BTV group with reference to the impor-tant occurrences during the first three months of the financial year and their effects on the abridged interim group financial statements with respect to the main risks and uncertainties to which the group is exposed.

Execution of an audit and/or an examination of the interim report by an auditor has been waived.

Innsbruck, May 2017

The Board of Directors

Declaration by the statutory representatives pursuant to Section 82 (4) and 87 (1) BörseG (Stock Exchange Act)

Gerhard BurtscherChairman of the Board

Chairman of the Executive Board with responsibility for corporate business and institutional customers and banks; leasing; the areas of staff management; marketing; group auditing; com-pliance and anti-money laun-dering.

Michael PergerMember of the Board

Member of the Executive Board, responsible for retail customer business; 3 Banks Insurance Brokers Group; group audit; compliance and anti-money laundering.

Mario PabstMember of the Board

Member of the Executive Board with responsibility for the back office; the areas of credit man-agement, finance and control-ling; legal matters and share-holdings; service centre; effectiveness and efficiency; property and procurement (HQ); group auditing; compliance and anti-money laundering.


Profit and loss in EUR million

01/01-31/03/2017

01/01-31/03/2016

01/01-31/03/2017

01/01-31/03/2016

01/01-31/03/2017

01/01-31/03/2016

Net interest income 37,0 37,4 87,0 83,7 41,0 38,9Loan-loss provisions in the credit business –8,3 –8,8 0,8 –1,9 –0,7 –0,4Commission income 13,3 12,9 34,7 33,0 13,1 11,7Operating expenses –26,6 –26,9 –63,3 –65,4 –42,7 –42,1Other operating income –3,9 –3,8 –0,3 0,9 27,3 21,9Net pre-tax profit for the period 13,4 10,9 61,6 52,5 37,6 30,5Group profit for the period 11,3 8,5 49,2 42,5 30,5 26,1

Regulatory capital in EUR million 31/03/2017 31/12/2016 31/03/2017 31/12/2016 31/03/2017 31/12/2016

Basis for measuring capital 4.926,3 4.974,1 13.018,8 12.821,3 6.735,5 6.708,8Equity 660,9 670,0 2.507,9 2.482,2 976,3 988,2

of which common equity (CET1) 573,1 625,9 2.048,9 2.009,4 927,8 975,1of which total core capital (CET1 and AT1)

577,1 625,9 2.119,6 2.086,0 927,8 975,1

Common equity ratio in % 11,60 % 12,58 % 15,70 % 15,67 % 13,78 % 14,54 %Core capital ratio in % 11,70 % 12,58 % 16,30 % 16,27 % 13,78 % 14,54 %Total capital ratio in % 13,40 % 13,47 % 19,30 % 19,36 % 14,49 % 14,73 %

Number of resources 31/03/2017 31/12/2016 31/03/2017 31/12/2016 31/03/2017 31/12/2016

Weighted average number of employees 924 926 2.034 2.048 1.400 1.350Number of branches 62 60 157 159 36 36

BKS Bank Oberbank BTV

Company indicators in % 31/03/2017 31/12/2016 31/03/2017 31/12/2016 31/03/2017 31/12/2016

Return on equity before tax (RoE) 6,90 % 5,48 % 10,70 % 10,76 % 12,31 % 6,21 %

Return on equity after tax 6,00 % 5,08 % 8,50 % 8,91 % 9,97 % 5,39 %Cost/income ratio 56,9 % 56,2 % 51,0 % 50,8 % 52,5 % 65,4 %Risk/earnings ratio 22,5 % 20,1 % –0,9 % 7,0 % 1,8 % 11,2 %

Balance sheet figures in EUR million 31/03/2017 31/12/2016 31/03/2017 31/12/2016 31/03/2017 31/12/2016

Total assets 7.250,1 7.581,1 19.524,5 19.158,5 10.177,6 10.013,8Loans and advances to customers after loan-loss provisions

5.110,9 5.175,3 13.781,0 13.328,2 6.818,8 6.754,2

Primary funds 5.477,6 5.568,0 12.849,7 13.008,9 7.238,3 7.323,4of which savings deposits 1.522,3 1.529,0 2.774,3 2.794,2 1.257,9 1.248,2of which securitised debt including sub-ordinated capital

722,8 743,2 2.017,3 2.064,5 1.378,0 1.392,8

Equity 973,1 958,8 2.372,1 2.282,8 1.258,9 1.219,4Managed deposits 13.765,7 13.723,1 26.664,1 26.528,1 13.412,7 13.238,4of which customer deposits 8.288,1 8.155,1 13.814,4 13.519,1 6.174,5 5.915,0

Overview of 3 Banken Group – Group information


Profit and loss in EUR million

01/01-31/03/2017

01/01-31/03/2016

01/01-31/03/2017

01/01-31/03/2016

01/01-31/03/2017

01/01-31/03/2016

Net interest income 37,0 37,4 87,0 83,7 41,0 38,9Loan-loss provisions in the credit business –8,3 –8,8 0,8 –1,9 –0,7 –0,4Commission income 13,3 12,9 34,7 33,0 13,1 11,7Operating expenses –26,6 –26,9 –63,3 –65,4 –42,7 –42,1Other operating income –3,9 –3,8 –0,3 0,9 27,3 21,9Net pre-tax profit for the period 13,4 10,9 61,6 52,5 37,6 30,5Group profit for the period 11,3 8,5 49,2 42,5 30,5 26,1

Bank für Tirol und Vorarlberg AktiengesellschaftStadtforum 16020 Innsbruck

T +43 (0)50 5 333-0F +43 (0)50 5 333-1180SWIFT/BIC: BTVAAT22BLZ: 16000DVR: 0018902FN: 32.942wUID: ATU 317 12 [email protected]

NotesAny reference in the interim report to a person (e.g. he, him) is intended to apply equally to women and men.

In the BTV interim report there may be slightly differing values between tables or graphics due to rounding differ-ences.

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 underlying such forward-looking state-ments 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 AktiengesellschaftStadtforum 16020 Innsbruck

Further details pursuant to Section 25 of the Austrian Media Act can be found at www.btv.at/impressum.

Principle objectiveDisplay and presentation of the company and information about the key products and services of the Bank für Tirol und Vorarlberg Aktiengesellschaft.

ContentsBTV Finance and ControllingNicole Margreiter, BSc.Hanna MeranerCarina Zieher, BA Hannes Gruber

DesignBTV Marketing, Communication, Executive Board mattersMarkus Geets

Final version8 May 2017

Imprint


Bank für Tirol und VorarlbergAktiengesellschaftStadtforum 16020 InnsbruckAustria

T +43 (0) 50 53 33 − 0F +43 (0) 50 53 33 − 11 [email protected]

A pilot provides safe passage. All our employees have a little BTV pilot‘s flag in their buttonhole. A meaningful symbol: We guide you on your route to success.

www.btv.at

THE BANK FÜR TIROL UND VORARLBERG AG SHAREHOLDERS …€¦ · Number of resources 31/03/2017...

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