Österreichische Volksbanken-Aktiengesellschaft

EANS-Adhoc: Österreichische Volksbanken-Aktiengesellschaft
European Commission approves state aid for Österreichische Volksbanken-AG and restructuring measures

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Company Information

19.09.2012

The European Commission has today (19 September 2012) approved the comprehensive
restructuring plan developed by Österreichische Volksbanken-AG (VBAG) in the
wake of the financial and economic crisis to restore long-term profitability.
The approval encompasses measures that were introduced in 2009 as well as the
support measures as agreed with the Republic of Austria in late April 2012
(write-down of participation capital held by the Republic by 70% plus a EUR 250
million recapitalisation).

Under the newly-approved restructuring plan, the following measures have to be
implemented by VBAG until 31 December 2017 (restructuring phase):


-       VBAG's total assets will be gradually reduced to EUR 18.39 billion (EUR
30.49 billion as at 30 June 2012) and risk-weighted assets (RWA) are to be
gradually reduced to EUR 10.08 billion (EUR 15.54 billion as at 30 June 2012).

-       Core business will only include business areas that provide services to
the regional Volksbanks (key focus: role as central institution of the
association of Volksbanks and providing and distributing products and services
to Volksbanks and their clients). Business areas that do not constitute core
business are to be discontinued as stipulated in the restructuring plan.

-       Disposal of holdings in Raiffeisen Zentralbank and the following
companies:
o       Volksbank Leasing International
o       Volksbank Malta
o       Investkredit International Bank, Malta
o       Volksbank Romania 

-       Prohibition of dividend payments during the restructuring phase up to
and including for the business year ending on 31 December 2017 (moratorium on
dividend payments for shares, participation capital and participation capital
certificates).


-       No payments on performance-related equity instruments (such as hybrid
financial instruments and non-voting equity securities/Genussscheine) are
allowed, unless contractually or legally required. 

Supplementary capital (upper tier II bonds) issued by VBAG and Investkredit are
not affected by the moratorium. 

VBAG is also required to take all necessary measures to ensure that the Republic
of Austria is fully relieved of its participation commitments until 31 December
2017 or immediately after that date.

On 18 September 2012, the Austrian Financial Market Authority approved the new
association of Volksbanks (Kreditinstitute-Verbund) pursuant to Section 30a of
the Austrian Banking Act, which means that now all requirements for establishing
the new association comprising the regional Volksbanks and VBAG as the central
body are met.

The measures concluded at the end of April and approved by the Annual General
Meeting on 26 April 2012 are due to be entered in the commercial register and
therefore take legal effect at the end of September. Those measures are:

(i)     Write-down of VBAG shares and participation capital by 70% and VBAG
capital increase of EUR 484 million, subscribed by the Republic of Austria (EUR
250 million) and Volksbanks (EUR 234 million);

(ii)    Merger of Investkredit Bank AG with VBAG which is the acquiring company
and sole legal successor.

All measures will be applied retroactively, with effect from 31 December 2011.



Stock exchange listed participation capital issued by Österreichische
Volksbanken-Aktiengesellschaft

ISIN:

AT0000755665 Österreichische Volksbanken-AG Partizipationsscheine
XS0359924643 EUR 500,000,000 Perpetual Non Cumulative Participation Capital
Certificates (issued by Banque de Luxembourg in its function as trustee)


The five largest listed issues of Österreichische Volksbanken-Aktiengesellschaft
in terms of issue volume:

ISIN:

XS0417722393
AT000B053442
XS0275528627
AT000B061437
AT000B056544


The issues of Österreichische Volksbanken-Aktiengesellschaft are admitted on the
following stock exchanges:
Regulated market of the Vienna Stock Exchange
Official trading of the Vienna Stock Exchange
Regulated market of Baden-Württembergische Wertpapierbörse
Regulated market of the Prague Stock Exchange  
RM-SYSTÉM Czech Stock Exchange
Regulated market of the Luxembourg Stock Exchange
Open Market of Berlin Stock Exchange
Open Market of Stuttgart Stock Exchange
Open Market of Frankfurt Stock Exchange

The five largest listed issues of Investkredit Bank AG in terms of issue volume:

ISIN:
AT0000A0SNL2
AT0000A0SNJ6
AT0000A0SNG2
AT0000A0SNF4
AT0000A0SNH0

The issues of Investkredit Bank AG are admitted on the
following stock exchanges:

Second regulated market of the Vienna Stock Exchange
Official trading of the Vienna Stock Exchange
Regulated market of the Luxembourg Stock Exchange
Open Market of Frankfurt Stock Exchange


Hybrid capital issues of Österreichische Volksbanken-Aktiengesellschaft and
Investkredit Bank AG:

XS0201306288 EUR 250,000,000 Fixed/Floating Rate Non-cumulative Non-voting
Preferred Securities
DE0009576108 Investkredit Funding Ltd. Subordinated Noncumulative Limited
Recourse Notes 2002


Further inquiry note:
Walter Gröblinger
Tel.: +43/ (0) 50 4004-0
E-Mail: walter.groeblinger@volksbank.com

end of announcement                               euro adhoc 
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issuer:      Österreichische Volksbanken-Aktiengesellschaft
             Kolingasse  19
             A-1090 Wien
phone:       +43 0 50 4004-0
WWW:      www.volksbank.com
sector:      Banking
ISIN:        AT0000755665
indexes:     Standard Market Auction
stockmarkets: Regulated free trade: Wien, stock market: Prague Stock Exchange 
language:   English
 



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