2014 Annual Financial Report - RCB
Transcript of 2014 Annual Financial Report - RCB
2014AnnualFinancialReport
04–12 Company 04 KeyData2014 05 PrefacebytheChairmanoftheSupervisoryBoards 06 CEOEditorial 07 CorporateBodies 08 ManagementBoardInterview 09 CorporateGovernance/Compliance 11
13–21 GroupManagementReport 13 EconomicEnvironment 14 DevelopmentofBusinessandEarningsin2014 14 ReviewofBusinessSegments 16 PerformanceIndicators 18 RiskManagement 18 InternalControlSystem 19 HumanResources 20 Outlook2015 20 SignificantEventsaftertheBalanceSheetDate 20 ResearchandDevelopment 20 ReportoftheSupervisoryBoard 21
21 StatementofLegalRepresentatives 21
22–29 ConsolidatedFinancialStatements2014 22 IncomeStatement 23 BalanceSheet 25 StatementofChangesinEquity 26 CashFlowStatement 27 SegmentReporting 28
AnnualFinancialReport2014:AnOverview
30–80 NotestotheConsolidatedFinancialStatements2014 30 NotestotheIncomeStatement 32 NotestotheBalanceSheet 37 DisclosurestoFinancialInstruments 46 RiskReport 54 OtherDisclosures 59 DisclosuresBasedonAustrianRegulations 60 ConsolidationRange 66 AccountingPolicies 68 Auditor'sReport 80
81–92 ManagementReport2014 81 EconomicEnvironment 82 DevelopmentofBusinessandEarningsin2014 82 ReviewofBusinessSegments 85 PerformanceIndicators 87 RiskManagement 87 InternalControlSystem 90 HumanResources 91 Outlook2015 91 SignificantEventsaftertheBalanceSheetDate 91 ResearchandDevelopment 91 DistributionoftheProfit2014 92
92 StatementofLegalRepresentatives 92
93–115 IndividualFinancialStatements2014 93 BalanceSheet 94 IncomeStatement 96 DevelopmentofFixedAssets 98 Notes 100 Auditor'sReport 115
116–117 ContactsundPublisher'sDetails 116
ThisisatranslationfromGerman.IncaseofanydiscrepanciesbetweentheEnglishandGerman version,theGermantextshallprevailandbebinding.
TheCompany
KeyData2014ofRaiffeisenCentrobank
in € thousand / in per cent 1/1-31/12/2014 1/1-31/12/2013 Change
Income Statement
Netinterestincome 3,807 3,315 14.8%
Netfeeandcommissionincome (393) 999 >100%
Tradingprofit 44,183 46,226 (4.4%)
Generaladministrativeexpenses (36,942) (41,484) (10.9%)
Profitaftertaxfromcontinuedoperations 8,354 8,532 0.0%
Profitaftertaxfromdiscontinuedoperations 72 2,723 >100%
Groupnetprofit 8,894 12,422 (28.4%)
Balance Sheet
Loansandadvancestocreditinstitutions 377,361 269,111 40.2%
Loansandadvancestocustomers 83,697 98,925 (15.4%)
Tradingassets 2,137,495 2,033,716 5.1%
Liabilitiestocreditinstitutions 71,354 106,672 (33,1%)
Liabilitiestocustomers 221,241 117,237 88.7%
Tradingliabilities 2,283,134 2,119,104 7.7%
Equityincl.groupnetprofit 102,219 106,258 (3.8%)
Totalassets 2,730,676 2,510,575 8.8%
Key ratios
Returnonequitybeforetax(fromcontinuedoperations) 9.2% 11.2% -
Cost/incomeratio(fromcontinuedoperations) 81.1% 79.6% -
Bank-specific indicators pursuant to the Austrian Banking Act
Eligibleownfunds 87,740 89,115 (1.5%)
Totalownfundsrequirement 54,639 57,436 (4.9%)
Resources
Employeesasofreportingdate(fromcontinuedoperations) 204 217 (6.0%)
Employeesasofreportingdate(fromdiscontinuedoperations) 103 122 (15.6%)
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Afteranin-depthanalysisaspartoftheFitforFuture2016efficiencyenhancingprogramofRaiffeisenCentrobank’sparentRaiffeisenBankInternational(RBI),thefutureorientationofRaiff-eisenCentrobankwasdecidedinthesummerof2014.Goingforward,RaiffeisenCentrobankwillfocusonitsexistingcorebusinessareas:equitiestradingandsales,andcertificates.ThedecisionwasalsomadetorestructuretheEquityCapitalMarkets/Mergers&AcquisitionsandPrivateBankingsegmentsandthecommoditytradingsubsidiaries.
RaiffeisenCentrobank’sneworientationwillalsobringchangesintheManagementBoard.StartinginJanuary2015,theformerdirectorofthecorebusinessareas,WilhelmCeleda,willassumethefunctionofCEO.MarkusKirchmairwillassumethefunctionofChiefFinancialandChiefRiskOfficer.GiventhecombinationofthemeasuresfortherestructuringofRaiffeisenCent-robankandthecontinuedturbulentmarketcon-ditions,theemployeesdeliveredexceptionalperformanceinthereportingperiod.RaiffeisenCentrobankremainedthelargestplayerontheAustrianstockmarketwithashareof9.2percentofthespotmarketontheViennaStockEx-change,expandeditsshareoftheinstitutionalinvestormarkethereto10.2percent,andalsoachievedthelargesttradingvolumeofanymar-ketmakeratover19percent.Alarge
numberofmarketmakermandateswerewonforAustrianandEasternEuropeanbluechipsontheEurexFrankfurt.Activitieswerealsosuccess-fullyexpandedonforeignexchangesincludingtheWarsawStockExchangeandtheBucharestStockExchange.TheStructuredProductsdepartmentclosedtheyearwitharecordresult.IntheEquityCapitalMarketssegment,Raiffei-senCentrobankdefendeditspositionontheViennaStockExchangeandalsoconcludedalargenumberofequitytransactionsinrelevantEuropeanmarketstogetherwiththeRBInetworkbanks.TheperformanceoftheM&Abusinesssegmentwasbelowexpectations.
InthenameoftheSupervisoryBoard,IwouldliketothankexitingManagementBoardmem-bersEvaMarchart,MichaelSpiss,andGer-hardGrundfortheirgoodworkoverthepastyears–theseeffortslaidthefoundationforthesuccessfulgrowthofRaiffeisenCentrobank.
Iwouldalsoliketothankeveryonewhocontri-butedtothegoodresultsofthepastyear,andwishthenewManagementBoardallthebestandmuchsuccess.
PrefacebytheChairmanoftheSupervisoryBoard
KlemensBreuerChairmanoftheSupervisoryBoard
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LadiesandGentlemen,dearReader,
Financialyear2014wasanexcitingperiodofchangeandstability,growthandreductionforRaiffeisenCentrobank.Theconcentrationonthecorebusinessareasofequitytradingandsalesandonissuanceandmarketmakingforstructu-redproductsisthemostimportantelementofcontinuityandgrowthatRaiffeisenCentrobank.Atthesametime,thedecisionwasmadetodis-poseofourcommoditytradingsubsidiariesandthePrivateBankingsegment.TheMergers&AcquisitionsandEquityCapitalMarketsseg-mentwillalsobecarvedoutofRaiffeisenCent-robankandintegratedintotheexistingInvest-mentBankingdivisionofourGroupparent,RaiffeisenBankInternational,in2015.There-structuringofRaiffeisenCentrobankalsobroughtchangesintheManagementBoard.EvaMarchart,MichaelSpiss,andGerhardGrund,whowereresponsibleforthesuccessfuldevelopmentoftheBankformanyyears,lefttheBoardtotakeonotherduties.MarkusKirch-mairandIarenowdirectingtheoperationsofthebanktogetherandwilldoourutmosttofulfillourresponsibilitiesprofessionallyandwiththegreatestpossiblecareandvision.
ThefundamentalrestructuringofRaiffeisenCentrobankisnotonlysettingthestageforthefutureofourBank,itisalsopointingustowardsamajorgoal:raisingourprofileonthebasisofourstrengths,offeringourcustomersevengrea-terserviceandproductquality,steadilyexpan-dingourmarketshares,andequippingoursel-vesasbestaspossibleforthecomingyears.TheRaiffeisenCentrobankteamisworkinginconcerttoattainthisgoal–withtheenergyandcommitmentthathaslongsetitapart.Thisisalsoagainreflectedintheresultforthe2014financialyear,includingall-timehighstructuredproductsalesandtheimpressiveresultfromse-curitiesactivitiesoverall–despitethepersistent-lychallengingbusinessconditions.ThenumerousnationalandinternationalawardstakenbyRaiffeisenCentrobankoverthepastyeararealsoatestamenttotheoutstandingqualityofourwork.
Forfurtherdetailsaboutthedevelopmentofbusinessin2014,pleaseseetheManagementBoardinterviewonthefollowingpages,themanagementreport,andthenotestotheconsolidatedfinancialstatements.Iwishyouaninterestingreviewofthefinancialyear!
Sincerely,
CEOEditorial
WilhelmCeledaCEOofRaiffeisenCentrobankAG
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CorporateBodiesManagement Board EvaMarchart (ChiefExecutiveOfficeruntil31December2014) AlfredMichaelSpiss (DeputyChiefExecutiveOfficeruntil31December2014) GerhardGrund (MemberoftheManagementBoarduntil31December2014) WilhelmCeleda ChiefExecutiveOfficerasof1January2015 (MemberoftheManagementBoarduntil31December2014) MarkusKirchmair MemberoftheManagementBoardasof1January2015 Supervisory Board KlemensBreuer Chairman MemberoftheManagementBoard, RaiffeisenBankInternationalAG,Vienna WalterRothensteiner 1stDeputyChairman(until31December2014) ChiefExecutiveOfficer, RaiffeisenZentralbankÖsterreichAG,Vienna
KarlSevelda 1stDeputyChairman(since1January2015) ChiefExecutiveOfficer, 2ndDeputyChairman(until31December2014) RaiffeisenBankInternationalAG,Vienna
JohannStrobl Member(until29April2014)) DeputyChiefExecutiveOfficer, RaiffeisenBankInternationalAG,Vienna, HannesMösenbacher Member(since29April2014) DivisionHead, RaiffeisenBankInternationalAG,Vienna
WernerKaltenbrunner Member DivisionHead, RaiffeisenBankInternationalAG,Vienna
State Commissioners AlfredHacker,TamaraEls
Vienna,15April2015TheManagementBoard
WilhelmCeledaChiefExecutiveOfficer
MarkusKirchmairMemberoftheManagementBoard
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Wilhelm Celeda (Chief Executive Officer) and Markus Kirchmair (Chief Financial Officer/Chief Risk Officer) have been the new Manage-ment Board of Raiffeisen Centrobank (RCB) since 1 January 2015. In this interview, they talk about the restructuring of the Bank that was announced in 2014, challenging overall condi-tions, and the development of the markets and course of business in 2014.
Restructuring was a central theme of financial year 2014 for Raiffeisen Centrobank (RCB). As part of a comprehensive strategic review, Raiffei-sen Centrobank throughly assessed its future ori-entation and position within the Group. You an-nounced concrete changes for the Bank in No-vember 2014. What can we look forward to?
Celeda:Goingforward,wewillbefurtherincreasingourfocusonourcorebusinessare-as.WehaveanoutstandingmarketpositioninAustriaandinourextendedcoremarketsinCentralandEasternEurope,andintendtofurtherexpandthispositioninthecomingyears.
Kirchmair:Inotherwords,RaiffeisenCentro-bankwillbefocusingonitscorebusinessare-asofequitiesandderivativestrading,broke-rage,equityanalysis,andtheissueandtra-dingofcertificates.RaiffeisenCentrobank’sthreeotherbusinessareasarecurrentlyunder-goingcomprehensiverestructuring.
Wewillbesellingourcommoditytradingacti-vitiesafteradetailedassessment.ThePrivateBankingsegmentwillbecarvedoutofRaiffei-senCentrobankbythemiddleof2015andintegratedintoKathreinPrivatbankAG,asistercompanyofRaiffeisenCentrobank.
Wearepursuingasimilarstrategyforourin-vestmentbankingactivities.Inthepast,ECMandM&AadvisoryserviceswereofferedinnumerousEasternEuropeanmarketsbyRaiffei-senCentrobankandbythenetworkbanksofRaiffeisenCentrobank’sGroupparent,Raiffei-senBankInternational(RBI).Inthefuture,theseactivitieswillbeintegratedintotheinvestment
bankingunitofRaiffeisenBankInternational,therebyeliminatingredundancies,ensuringdi-rectaccesstotheRaiffeisenBankInternationalcustomerplatform,andmakingthebestpossi-bleuseoftheexistingservicestructuresforcor-poratesandinstitutionalcustomersthroughouttheentirenetwork.
Celeda:Allinall,thecomingchangesareaimedatleveragingsynergiesinthefieldofinvestmentbankingwithourGroupparentRaiffeisenBankInternationalandatplacingRaiffeisenCentrobank’sfuturefocussquarelyonequitiesandcertificates.Asspecialistsinthisarea,weatRaiffeisenCentrobankwillworkhardonrefiningexactlytheseproductsandonboostingourservicequalitysoastofurtherimprovetheeffectivenessandefficiencyofourBank.
How have these changes been received by employees and customers?
Celeda:Theyear2014wasdefinitelyachal-lengingtimefortheemployeesofRaiffeisenCentrobank.Therewasasenseofinsecuritythatwasnotunjustifiedfromtheannouncementoftheevaluationprocessforthefutureorienta-tioninthesummeruntilthedecisionwasmadeabouttheconcretereorientationintheautumn.Thefactthatouremployeescontinuedtofulfilltheirdutiesconsistentlyandwithgreatcommit-mentandachievedarespectableresultfortheyeardespitethedifficultconditionsismorethanimpressiveinmyeyes.Iwouldliketoex-pressmygratitudeforthisagainhere!Sincethen,thedrivehasgrownfurtheramongtheRaiffeisenCentrobankteamtocontinuedeve-lopingourcoreareasofbusinesstogether.As
„Goingforward,wewillbefurtherincreasingourfocusonourcorebusinessareas“
We experienced growing revenue in all of our core business areas, both for certificates and stocks. We also defended or expanded our market shares.
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Centrobankdidwhatitstandsforoverthepastyear,namelyenablingitscustomerstoexploitmarketopportunities.
What will Raiffeisen Centrobank focus on in 2015?
Kirchmair:Inadditiontotheconcentrationonourcoreareasofbusinessasdiscussedaboveandtheassociatedrestructuringofthecompa-ny,weseethefollowingstrategicfocuses:con-tinuedgrowthinsecuritiesbusiness,theexpan-sionofRaiffeisenCentrobankastheGroup-widecompetencecenterforequitiesandcerti-ficates,efficiencyincreasesespeciallyinthemanagementandsupportfunctions,andtheproactiveimplementationandfulfillmentofsu-pervisoryregulations.Thecurrentandexpec-tedtighteningoftheregulatoryprovisionsnotonlyentailshighownfundsrequirements,butalsorequirescontinuousandextensiveadap-tationsinourprocessesandsystems.
What do you expect from the current financial year?
Celeda:Ithinkwewillseeapositiveyearforequities.Thecontinuedlowinterestratelevelalonewillleaveinvestorslittlealternativetostocks.However,itisnotagiventhatprivateinvestorswillshiftmoretoindividualstocks.MiFIDII(theEU’sMarketsinFinancialInstru-mentsDirective)willmakeitincreasinglydif-ficulttoactivelyrecommendindividualinvest-mentsinstocks.Forthisreason,privateinves-torsareoftenbetteroffinvestingthroughcertificateswithlowerriskorthroughotherin-dexforms.MiFIDIIaffectscertificatesdifferent-ly.Thedirectivebringsgreaterproducttrans-parencyanddisclosure.Webelievethatthiswilleventuallyreducetherangeofpreferred
farasourcustomersareconcerned,weinfor-medthematanearlystageandcomprehensi-velyaboutthecomingchanges.Ithinkwewereabletoeffectivelycommunicatethead-vantagesthatthisnewstructurewillbringforourcustomers:increasedsynergiesattheBankandGrouplevel,thefocusingofcorecompe-tencesandresourcesindedicatedunits,andtheresultingfurtherimprovementofcustomerservice.
How would you sum up the course of business in 2014
Celeda:Ingeneral,theyearwasverysatisfac-toryoverall.Ithinkthatwemarketedtheassetclassesofequitiesandcertificatesasbestaswaspossiblegiventheprevailinglackofin-vestmentalternativesandtheinterestratecon-ditionsandthatwecommunicatedtheadvan-tagesoftheseassetstoevenmoreprivateandinstitutionalinvestors.Weexperiencedgro-wingrevenueinallofourcorebusinessareas,bothforcertificatesandstocks.Wealsode-fendedorexpandedourmarketshares.Withashareof9.2percentoftheViennaStockExchange’sspotmarket,wewereagainthelargestplayeronthedomesticstockmarket,forexample.RaiffeisenCentrobankalsogene-ratedthegreatestsalesofanymarketmakerandspecialistontheViennaStockExchange.Aparticularhighlightwastheimpressivesuc-cessofourstructuredproductsteam,whichsurpassedthepre-crisisyearsof2006/2007withabsoluterecordcertificatesales.EquityCapitalMarkets(ECM)activitiesalsodevelo-pedencouragingly.Here,wewereinvolvedinnumerouscapitalmarkettransactionsinEuro-pe.Ofallareas,onlyourM&Aactivitiessuffe-redlossesbecauseofthedifficulteconomicconditionsthatresultedfromthetensionsbet-weenUkraineandRussia.TheclosingofsomeM&AofficesinCentralandEasternEuropealsocausednegativeone-offeffects.Allinall,IcansaythatRaiffeisen
certificatesandincreasetheproductquality.Thisshouldhaveapositiveeffectondemandforandthesaleofcertificates,includinginEas-ternEurope–thoughtheconditionsvaryfromcountrytocountryinsomecases.Regulatorychangeswillcontinueatthelevelofindividualproductsandatthelevelofbanksandtheen-tireindustry.Inshort,2015willbeayearofopportunityandchallengingconditionsforusandforourcustomers.
Kirchmair:Thegeopoliticalenvironmentwillre-maintense,especiallyinRussiaandUkraine.Afewmonthsago,theECBannouncedthatitwouldbeconductinganextensivebondpurchasingprogram.Thelong-termeffectsthatthisquantitativeeasingwillhaveareunclearatthispoint,butweexpectpositiveeconomicef-fectsovertheshortterm.TheincreasingsignsofeconomicrecoveryintheEurozonealsomakeusoptimistic.TherobusteconomicgrowthseeninthenewEUmemberstatesintheEastin2014willcontinue.Allofthisiscauseforustoantici-pategoodthingsforthecurrentfinancialyear.Inparticular,weexpectourrestructuringtobesuccessfulandtomeetourambitiousearningsandcosttargets.
I expect our restructuring to be successful and to meet our ambitious earnings and cost targets.
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CollaborationbetweentheSupervisoryBoardandManagementBoard
AkeyprincipleofgoodcorporategovernanceisopendiscussionbetweentheManagementBoardandSupervisoryBoardandwithinthesegoverningbodies.
TheManagementBoardsubmitsregular,timelyandcomprehensivere-portstotheSupervisoryBoardaboutallrelevantissuesoftheBank’sbusi-nessdevelopment,includingtherisksituationandriskmanagementmeasu-resattheBankandallmaterialGroupcompanies.ThechairmanoftheSupervisoryBoardisinregularcontactwiththeChiefExecutiveOfficeranddiscussesthedevelopmentofbusinessandriskmanagementwithher.TheManagementBoardimmediatelyreportsallimportanteventstothechairmanoftheSupervisoryBoardandalsoreportsimmediatelyonallcircumstancesthatareofmaterialrelevancetotheprofitabilityorliquidityoftheCompany.
TheManagementBoardcoordinatesthestrategicorientationoftheCom-panywiththeSupervisoryBoardanddiscussesthestatusoftheimplemen-tationofthestrategyatregularintervalswiththisBoard.
TheSupervisoryBoardmeetsatleastfourtimesperfinancialyear.
TransparentInformationPolicy
RaiffeisenCentrobankattachesconsiderableimportancetoopenandtransparentcommunicationwithitsshareholdersandotherstakeholders.Tothisend,itprovidesextensiveinformationonitswebsite:
•Pressreleases,keydata•Shareholderstructure•DownloadableannualreportsinPDFformat•DownloadablesecuritiesprospectusesinPDFformat•DownloadableRaiffeisenCentrobankstockanalysesandproduct brochuresinPDFformat,etc.
CriteriafortheIndependenceoftheSupervisoryBoardMembersforthePurposesoftheAustrianCodeofCorporateGovernance
ASupervisoryBoardmemberisconsideredtobeindependentwhenheorsheisnotinanybusinessorpersonalrelationshipwiththeCompanyoritsManagementBoardthatcouldcauseamaterialconflictofinterestsandthatcouldthereforeinfluencethebehaviouroftheBoardmember.
All members of the Supervisory Board of Raiffeisen Centrobank are independent according to the defined criteria for independence.
Compliance
RaiffeisenCentrobankfullyappliestheStandardComplianceCodethatwasdevelopedbytheAustrianbankingindustryasthebasisforitsbusinessactivities,inparticularintheareasoftradingfinancialinstruments,providinginvestmentadvice,assetmanagement,issuingsecurities,financialanalysis,publicrelationsworkandmarketing,andinmanycasesgoesaboveandbeyondthestandardsdefinedinthiscodeandinthenationalandEuropeanregulations(MiFID).Tothisend,acodeofconductwasputinplacebytheGroupcomplianceofficeasabindingsetofrulesforethicalbehaviourinaccordancewiththehigheststandardsinallbusinessdealings.
CorporateGovernanceThesharesofRaiffeisenCentrobankarenotlistedonastockexchange.AstheissuerofalargenumberofstructuredproductsandasoneofthemostimportantsecuritiesbrokersinViennaandotherfinancialcentres,RaiffeisenCentrobankorientsitselftowardstherulesandprinciplesofgoodandres-ponsiblecorporategovernanceassetforthintheAustrianCodeofCorpo-rateGovernancetotheextentthattheserulesandprinciplesareapplicableforRaiffeisenCentrobank.RaiffeisenCentrobankhasnot(yet)formallyunder-takentocomplywiththeAustrianCodeofCorporateGovernance.
EfficientcollaborationbetweenthevariousbodiesoftheCompanyonastrongfoundationoftrust,protectionofitsshareholder’sinterestsandopenandtransparentcommunicationarekeyelementsofRaiffeisenCentrobank’sapproachtogoodcorporategovernance.ThefollowingcommentsillustratesomeaspectsofRaiffeisenCentrobank’scompliancewiththeCodeinthereportingperiod(1Januaryto31December2014).
ManagementBoard
TheManagementBoardismadeupofseveralpersons,withonememberactingasthechairperson.Therulesofproceduregovernhowresponsibili-tiesareassignedandhowthemembersoftheBoardworktogether.
TheBoardisresponsibleforcommunicationmeasuresthatmateriallyshapetheimageoftheCompanyandissupportedbythecorrespondingdepartmentsinfulfillingthisresponsibility.
AninternalauditingdepartmenthasbeensetupasaseparatestaffunitoftheManagementBoard;thisdepartmentcreatesanauditingplanandre-portsregularlytotheBoardontheresultsofitsactivities.
RulesforProprietaryTrading
TheManagementBoardmakesitsdecisionsonthebasisofthemembers’professionalexpertiseandirrespectiveofanypersonalinterests.MembersoftheManagementBoarddiscloseallmaterialpersonalinterestsintran-sactionsofRaiffeisenCentrobankanditsGroupcompaniesandanyotherconflictofintereststotheSupervisoryBoard.AlltransactionsbetweenRaiffeisenCentrobankoritsGroupcompaniesandthemembersoftheManagementBoardorpartiesrelatedtothemareconductedinac-cordancewithgenerallyacceptedindustrystandardsandareapprovedbytheSupervisoryBoardinadvance.
MembersoftheManagementBoardandmanagerialstaffarenotpermittedtooperatebusinessesorbeofficersinotherbusinessentitieswit-houttheapprovaloftheSupervisoryBoardunlesstheseentitiesareinagrouprelationshipwithRaiffeisenCentrobankorunlessRaiffeisenCentro-bankholdsaninterestintheseentities.MembersoftheManagementBoardandmanagerialstaffarealsonotpermittedtoconductbusinesstransactionsfortheirownaccountortheaccountofanotherpartyortoholdashareinanothercompanyasapersonallyliablepartnerintheare-asinwhichRaiffeisenCentrobankisactivewithouttheapprovaloftheSu-pervisoryBoard.
SupervisoryBoard
TheSupervisoryBoardmonitorsandassiststheManagementBoardinthedirectionofRaiffeisenCentrobank,inparticularwithregardstodecisionsoffundamentalimportance.
TheSupervisoryBoardhaspreparedacatalogueoftransactionsrequiringitsapprovalbeforetheycanbeconductedbyRaiffeisenCentrobankoritsGroupcompaniesandhasassignedappropriatevaluelimits.
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Implementationofthe4thAnti-MoneyLaunderingDirective(GWRL)-provi-sionsrelatingtoanti-moneylaunderingandterroristfinancinghavebeenamendedintheircontentsandhavebeentightenedup(e.g.definitionofbeneficialowner,includingdomesticPoliticallyExposedPersons,etc.).
MiFIDII/MiFIR(MarketsinFinancialInstrumentsDirectiveII/MarketsinFinancialInstrumentsRegulation)basedonMiFIDIisdesignedtoamendandtightenupstandardsforequitytradingandinvestmentadvisoryservi-ces(e.g.stricterrulesforOTCtransactions,comprehensivecustomerinfor-mationrequirements,etc.).
PRIIPregulations(PackagedRetailandInsurance-basedInvestmentPro-ducts/KeyInformationDocument)extendcustomerinformationobligationsforPRIPPissuers(bymeansofstandardizedKIDs–KeyInformationDocu-ments).
ImplementingMADII/MAR(MarketAbuseDirectiveII/MarketAbuseRegulation)–extensionofMADcontents(includingadditionalequitiesandderivatives,amendmentsrelatingtopublicdisclosures,director’sdealings,etc.).
AEOI(AutomaticExchangeofInformation;="EU-FATCA")isaEU-wideinformationexchangeproject(analoguetoUSFATCA)tofighttax-evasiveEUcitizens.
Thiscodeofconductstipulateszerotoleranceforanyformofbriberyorcorruptionandalsocontainsprinciplesforinteractionwithcustomers,businesspartnersandco-workersandforhowsensitiveareasofbusinessaretobehandled.
MeasurestakentoimplementeffectivecomplianceinRaiffeisenCentro-bankincludeperiodicreviewsoftheadherencetotheExecutionPolicywhenexecutingcustomerorders,measurestopreventatitsbestconflictsofinterest,insidertradingandmarketmanipulation,seamlessmonitoringofemployeetransactionsandsupervisionoftradingactivities,directandregularcommunicationbetweentheManagementBoardandCompli-ance,aswellasinstitutionalizedreportingtotheManagementBoard,Su-pervisoryBoardandGroupCompliance.
Listedcompanies,companiesissuingexchangetradedfinancialinstrumentsaswellascreditandfinancialinstitutionsaresubjecttostrengthenedcapitalmarket-relatedcomplianceregulationsaimedatenhancingtheintegrityofthecapitalmarket.RaiffeisenCentrobankisfullyawarethatasidefromcomprehensiveregulatoryrequirementsinternalguidelinesneedtobedevelopedalongthespecificsoftheCompanyinordertoimple-mentaneffectivecomplianceorganization.
This“individualization“ofcomplianceguidelinesinvolvesanalyzingthecompany,thecompany’sinternalprocesses,itsproducts,customers,businesspartnersandemployeesandsubsequentlyresultsinimplementingcomplianceguidelinestailoredtotheCompany’sspecificproducts,businesssegmentsandprocesses,i.e.particularlyexposedproductsaresubjecttospecialcomplianceguidelines.ThecomplianceorganizationwithinRaiffeisenCentrobankidentifiesindicatedcompliancemeasuresasthecasemaybe,andimplementsthem,respectively.
RaiffeisenCentrobankisfullyawarethatforcapitalmarketparticipantswhodonotornotfullyadheretorulesandregulationstherewillbeconsiderableconsequencestoreckonwith,wherebyimposingadministrati-vepenaltieswillbeoneoftheweakestsanctions.Inadditiontoconsequencesundercriminallaw,thecompanymaybefacedwithclaimsfordamagesanddamagetoreputation.Inordertoavoidsuchconsequencesatitsbest,ithasprovedeffectiveinRaiffeisenCentrobanktosetupthecomplianceorganizationasintegralpartofriskmanagement.Accordingly,thecomplianceorganizationisinvolvedinstrategicandoperationalissuesandhasbeenvestedwithpowerstotakedecisionsandresponsibilitiestomeetthehigheststandards.
In2014,theComplianceOfficeofRaiffeisenCentrobankfocusedonfurtherimplementingFATCAregulations(registrationofRCBattheInternalRevenueService(IRS),initiatingFATCAreportingimplementationphase,etc.).
InthereportingperiodRaiffeisenCentrobank’sComplianceOfficefo-cusedonanalyzingimplicationsofregulatoryaswellascivilandtax-lawrelatedissueslistedbelowandwillconcentrateonimplementingtheseregulationsintheforthcomingyears:
GeraldDeimelDirectorLegal,Compliance&Tax
ComplianceOfficer
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GroupManagementReportofRaiffeisenCentrobankAGasof31December2014,accordingtotheInternationalFinancialReportingStandards(IFRS)
Thedesignation“RaiffeisenCentrobankGroup”referstothegroupofcompaniesparentedbyRaiffeisenCentrobankAG.Thecompanyitselfasanindividualentity(theparentcompany)isreferredtoas“RaiffeisenCentrobank.”
Theadditionofroundednumbersusingautomatedsystems,aswasdoneforthisreport,mayresultinminordifferencesinamounts.Thechangesindicatedinpercentrefertotheactualamountsandnottheroundedamountsshowninthisreport.
Alldesignationsthatareusedtorefertopersonsinthisreportapplyequallytobothgendersunlessreferenceisbeingmadetoaspecificindividual.
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EconomicConditionsThemacroeconomicconditionsmadeforaverychallengingbusinessenvironmentin2014.ThesituationinEuropewasdrivenbytheconflictbetweenRussiaandUkraineandtheassociatedeconomicsanctionsimposedbytheEUCommission,continuedlowinterestrates,andthestag-natingeconomy.TheEurozonesaweconomichighsandlowsin2014.Thesewerereflectedaboveallinthesentimentindicators,whichclimbedatthebeginningoftheyearbutthenlostgroundagaininthesecondhalfoftheyear.WhiletheeconomicupswingcontinuedtosteamaheadintheUSA,theEurozonefellbehindtheexpectationsasitstagnatedatonly0.8percentannualizedgrowth,withprivateconsumptionandarecoveryinexportspreventingaslideintonegativeterritory.Nevertheless,aseriesoffactorspointedtothepossiblepositivedevelopmentoftheEurozoneeco-nomyoverthemediumterm.Theseespeciallyincludetheexpansivemone-tarypolicyoftheEuropeanCentralBank,goodprospectsfortheexportindustrythankstotheweakeuro,andtheburgeoningUSandBritisheco-nomies.Thelowoilprice,whichisnotonlyboostingconsumerpurchasingpowerbutalsodecreasingcostsforcompanies,isalsogoodnews.TheAustrianeconomysteadilylostmomentumoverthecourseof2014.Thethirdquarterbroughtalowpoint,whentherealgrossdomesticproductcontractedby0.3percentinannualizedtermsbetweenJulyandSeptem-ber.Thisweakrecoverywasabovealltheresultofdecliningprivateinvest-mentactivity.TheRussia-Ukraineconflictremainedoneoftheprimaryriskfactors,especiallyforinvestmentdecisionsintheEurozone.Incontrast,theUSAenteredaself-sustainingupswingthatwilllikelylastthrough2015.Theeconomytherewasmorerobustthanithasbeensince1980withfewexceptions.
FinancialMarkets
WhiletheFederalReservedecidedtoenditsbondpurchasingprograminOctober2014,takinganimportantsteptowardsnormalizingitsmonetarypolicy,theEuropeanCentralBank(ECB)decidedtoexpanditssecuritiespurchasestoincludegovernmentbondsinresponsetothethreatofdeflati-onintheEurozone.AccordingtotheECB,thekeyinterestrateswillgonolower.Theyielddifferencebetweentwo-yearGermanandAmericangovernmentbondsremainedthekeydeterminantoftheEUR/USDex-changerate.ThisyielddifferencewidenedtothebenefitoftheUSdollarbetweenthesummerandendof2014.TheEUR/USDratewasatjustunder1.20attheendoftheyear.Littleisexpectedtochangeinthediver-gingmonetarypoliciesoftheFedandECBin2015.
Ontheequitymarkets,theUSAshowedthebestperformance.Drivenbythestrongeconomicexpansionandtheresultingcorporateearningsgrowth,theS&P500roseby15percent,showingthehighestgainsofanydevelopedmarket.TheNikkei225alsoroseby7.1percent,buoyedbythecapitalbeingpumpedintothesystembytheJapaneseNationalBank.DevelopmentsinEuropevariedwidely.WhileGermany’sDAXma-nagedtoclimbby2.7percent,theregionalEasternEuropeindexoftheViennaStockExchange(CECE)lost6percent,Britain’sFTSE2.7percent,andAustria’sATX15percent.ThenegativeperformanceoftheATXcanbeattributedtotheRussia-Ukrainecrisis,thegenerallyweakeconomicdevelopmentoftheEurozone,andprofitwarningsfromsomecompanies.Russia’sMICEXgainedgroundagainoverthecourseoftheyear.Howe-ver,thesegainsmustbeviewedinthecontextofthemassivedevaluationoftheRussianruble,whichlostmorethanhalfofitsvalueagainsttheeuro.
CommodityMarkets
StartingataclosingpricefortheyearofUSD2265/t(SingaporeExchange:TSR20),naturalrubberpricesfellsubstantiallyinJanuary,thenstabilizedtoacertainextent,androseagainstartingattheendofFebruary(USD1790/t)toreachUSD2006/t.Thesubsequentpricedec-linelasteduntiltheendofApril(USD1646/t).ThesubsequentsidewaystrendwasinterruptedbyabriefjumpattheendofJune(USD1795/t),andpricesthenfellsteadilyuntilthebeginningofOctober(USD1387/t).AfterreachingUSD1600/tattheendofOctober,theclosingpricefor2014wasUSD1522/t.ThepricefelltoaroundUSD1400/tinthemiddleofJanuary2015.Supplycontinuedtoexceeddemand,whichwasreflectedinthelowpricelevel.
TheolefinsthataretradedbyCentrotradeChemicalscorrelatewiththeoilprice.ThiswasbelowUSD110/bblforthemajorityofthefirsthalfoftheyear,androsetoaroundUSD115/bblattheendofJuneduetotheun-restinIraq.Thisclimbwasonlybrief,andwaswipedoutbyadrasticslideinthesecondhalfoftheyear(especiallystartinginSeptember).TheclosingpricefortheyearwasroughlyUSD56/bbl.
DevelopmentofBusinessandEarningsin2014Inthe2014financialyear,therealignmentofRaiffeisenCentrobankwasexaminedandthecompetentbodiesdecidedtofocusthecorebusinessareasonequitytradingandsalesandoncertificates.
Followingthisre-alignmenttheEquityCapitalMarkets(ECM),Mergers&Acquisitions(M&A)businesssegmentsincludingthesubsidiariesandthecommoditytradingsubsidiariesarestatedseparatelyinthenotes.Theyarereflectedasdiscontinuedoperationsintheincomestatementasat31De-cember2014pursuanttoIFRS5andinthebalancesheetasassetsorliabilitiesheldforsale.
Despitethecontinuedchallengingmarketenvironment,RaiffeisenCentro-bankGroupgeneratedagroupnetprofitof€8,894million,fallingshortofthe2013resultbyroughly28percentor€3,528million,thereof€0,072million(2013:€2,723million)relatetodiscontinuedoperationsand€0.468million(2013:€1,166million)totheshareofprofitduetonon-controllinginterests.
Theprofitaftertaxfromcontinuedoperationsmarginallydeclinedcompa-redtothepreviousyearperiodfrom€8,532millionto€8,354million.Totalearnings,madeupofnetinterestincomeafterprovisioning,netfeeandcommissionincome,thetradingprofitandthenetincomefromfinanci-alinvestmentsandderivativefinancialinstruments,fellbyroughly9percentor€4.348millionto€46.125million(2013:€50.473million).
Themarginalriseinnetinterestincomeby€0.492millionto€3.807milli-on(2013:€3.315million)ismainlyduetohigherdepositswithbanks.In-terestexpensesslightlyroseto€1.261million(2013:€1.193million).
Thedecreaseinnetfeeandcommissionincomeby€1.392millionto€ minus0.393million(2013:€ 0.999million)isprimarilyattributabletohigherfeeandcommissionexpensesinthecertificatesbusiness.Inthe2014financialyear,feeandcommissionexpensescameupto€16,677million,recordingarisecomparedto2013(€14,336million)by16.3percent(€2,341million).
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Thetradingprofitcameto€44.183million,€2.043millionlessthaninthepreviousyear(2013:€46.226million).Despiteanincreaseinthecertificatebusiness,theprofitcontributionfromtradingactivitieswaslowerthaninthe2013financialyearinabsoluteterms.
Thenetincomefromfinancialinvestmentsrecordsalossof€1.490millionin2014(2013:€ minus0.083),withthemajornegativeeffectbeingattri-butabletovaluationlossofAustriangovernmentbondsandtoprovisionsforpotentiallossesinequityparticipations.
Generaladministrativeexpenseswerereducedcomparedtothecompara-tiveperiod2013anddeclinedby10.9percentor€4.542millionto€36.943million(2013:41.484million.).Staffexpensesandotheradmi-nistrativeexpensesrecordedadecreaseby€2.599millionto€20.746million,andby€1.951millionto€14.665million,respectively.Thedeclineinstaffexpensesismainlyduetoadecreaseinprovisionsforbonuspayments,whichwerepartlysetoffbyhigherprovisionsforseverancepayments.Inotheradministrativeexpenses,sundryexpensesdeclinedfollowingadecreaseinstaffexpensescharged.Legal,advisoryandconsultancyservicesdeclinedaswellwhereasexpensesforcommunicationrecordedanincrease.
Theotheroperatingresultdroppedby€2.243millionto€minus0.555million(2013:€1.689million),whichisduetothedoublingofthebanklevy(from€1,077millionin2013to€2,060millionin2014)aswellastoaspecialeffectinthe2013financialyearintheamountof€2,000mil-lionrelatingtotherepurchaseofasubordinatedbondfromRaiffeisenMal-taBankplc.,Sliemapriortomaturity.
Thus,theprofitbeforetaxescomesupto€8.628million(2013:€10.662million).
Incometaxeschangedcomparedtothepreviousyearperiodfromminus€2,129milliontominus€0.275million.Thedeclineisprimarilyattributab-letothesettlementofthegroupchargefortheyears2005to2007andaresultingtaxincomeintheamountof€1,132millionfollowingataxauditatthegroupparent.
ThenetresultfromdiscontinuedoperationsrelatestothesegmentsEquityCapitalMarkets(ECM),M&A(includingsubsidiaries)andcommoditytra-dingsubsidiariesandcomesupto€0,072million(2013:€2,723million).ThedeclineismainlyduetoloweroperatingincomeintheM&Abusiness.
Includingtheshareofprofitduetonon-controllinginterests(onlyrelatingtodiscontinuedoperations)intheamountof€0.468million(2013:€1,166million),the2014groupnetprofitcomesupto€8,894millioncomparedto€12,422millionin2013.
Thebalancesheetasof31December2014showedayear-on-yearriseintotalassetsbyroughly9percentor€220.102millionto€2,730.676million.Ontheassetsside,thegreatestchangewasseenin“Tradingas-sets“(roughly78percentofthebalancesheettotalon31December2014androughly81percenton31December2013),whichroseby€103.779millionto€2,137.495million.Thisrisecanbeattributedtoavolume-relatedincreaseintimeandsightsdepositsfortradingpurposes.Thiseffectispartlycompensatedbyadeclineinnotesofcreditinstitutions.TradablemoneymarketdepositsinthetradingbookwereassignedtoRaiffeisenBankInternationalAGandserveprimarilyashedgesfortheguaranteeproductsissuedbyRaiffeisenCentrobank.Theequities,optionsandfuturesthatarealsoreportedunder“Tradingassets”servehedgesfortheissuedcertificates,optionsandshort-salestogetherwiththebonds,orarepartoftheBank’smarketmakeractivities.
“Securitiesandfinancialinvestments”recordedanincrease.Thisiteminclu-desAustriangovernmentbondssumminguptoroughly€31million,heldtocomplywiththeliquiditycoverratiotowardsthesupervisingauthorities,whichincreasedinparticularbythisamountcomparedtothepreviousyearperiod.
“Loansandadvancestocreditinstitutions“(roughly14percentofthebalancesheettotalon31December2014androughly11percenton31December2013)postedariseby€108.250millionto€377.361million.Thisincreaseismainlyrelatedtohighermoneymarketdepositsandahigh-ergiroandclearingbusiness.
“Loansandadvancestocustomers”(roughly3percentofthebalancesheettotalon31December2014androughly4percenton31Decem-ber,2013)declinedby€15.228millionto€83.697million.Thiswaspri-marilycausedbyincreasedrepaymentsoflendingstocorporatecusto-mers.
Theincreasein“Otherassets“(roughly0.3percentofthebalancesheettotalon31December2014androughly0.2percenton31December2013)by€1.744millionto€7.583millionwasprimarilyduetheriseinloansandadvancestothetaxauthorities.
Assetsheldforsalerelatetodiscontinuedoperationsandcomeupto€64.729millionasat31December2014andto€73.782millionasat31December2013.
Ontheequityandliabilitiessideofthebalancesheet,themostnotablechangewasaswellseenin“Tradingliabilities“(roughly84percentofthebalancesheettotalon31December2014androughly84percenton31December2013),whichroseby€164,029millionto€2,283.134comparedtotheyear-end2013.Thisrisecanbeattributedtoanincreaseintradingcertificatesandcertificateswithoptioncharacter,whereasthevolumeofshort-sellingoftradingassetsdecreased.“Tradingliabilities”consistmainlyofstructuredguaranteeproductsissuedbyRaiffeisenCentro-bank,includingbluechipcertificates,warrantsandothercertificatessuchasturbocertificatesonindicesandsingleshares.Theitemalsoincludesliabilitiesfromshort-sellinginconnectionwiththeBank’smarketmakingac-tivities.Pleaseseealsothecommentsonthedevelopmentof“Tradingas-sets”andthehedgingrelationshipsbetweentheseitems.
“Liabilitiestocreditinstitutions“(roughly3percentofthebalancesheettotalon31December2014androughly4percenton31December2013)declinedby€35.319millionto€71.354millioninannualcompa-rison.Thiswastheresultofrepayingmoneymarketdepositsofdomesticcreditinstitutions.
„Liabilitiestocustomers”(rouhgly8percentofthebalancesheettotalon31December2014androughly5percenton31December2013)pos-tedanincreaseby€104.003millionto€221.241millionduetohigherdepositsfromforeigncustomers.
Liabilitiesheldforsalerelatetodiscontinuedoperationsandcomeupto€30.862millionasat31December2014and€38.548millionasat31December2013.
Includingthegroupnetprofitfor2014of€8.894millionandthedividendpaymentforthe2013financialyearintheamountof€13.755million,equitydecreasedby€4.039millionfrom€106.258millionattheendof2013to€102.219million.The“Shareofprofitduetonon-controllinginte-rests“on31December,2014amountedtominus€0.506million(31De-cember2013:minus€0.329million).
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SegmentReporting
Inthe2014financialyear,itwasdecidedtorestructurethebusinessmodelofRaiffeisenCentrobankandtofocusthecoreareasofbusinessonequitytradingandsalesaswellasoncertificates.Followingthesedecisions,theEquityCapitalMarkets(ECM),Mergers&Acquisitions(M&A)businesssegmentsincludingthesubsidiariesandthecommoditytradingsubsidiarieswillbesoldorclosedorwillbetransferredtoRaffeisenBankInternationalortherespectivenetworkbanks.Furtheron,thebusinesssegmentsofRaiff-eisenCentrobankaredividedintocontinuedanddiscontinuedoperations.
ContinuedoperationsofRaiffeisenCentrobankSecurities Trading & Sales and TreasuryRaiffeisenCentrobankisthelargestplayerincertificatesandequitiestradingandholdsakeypositiononthemarketsinCentralandEasternEurope.
TradingvolumeontheViennaStockExchangerosebyanimpressive23percentinannualcomparison,butliquidityonothermarketsthatarerele-vantforRaiffeisenCentrobankcontractedfurtheringeneral(WarsawStockExchangeminus6percent,andtheexchangesinPragueandBu-dapestfellbyroughly20percenteach).Thedevelopmentoftherelevantequityindiceswasalsonotuniform.LargerwesternEuropeanindicespos-tedslightgainsinannualcomparison,whiletheATXfellsubstantially(minus15percent)andotherindicesintheregionlesssubstantially(suchastheWIG20atminus3.5percent).
Duetothemarginpressureandcontinuedlowtradingvolumesinlong-termcomparison,grossincomeincustomerbusinesswithstockscontinuedtosuffer,asdidmarketmakingandproprietarytradingingeneral.WearehappytoreportthatRaiffeisenCentrobankwasagainthelargestmarketparticipantontheAustrianequitymarketin2014withashareof9.2percentoftheViennaStockExchange’sspotmarket.RaiffeisenCentrobankalsogeneratedthegreatestsalesofanymarketmakerandspecialistontheViennaStockExchange.
Thepre-taxprofitoftheSecuritiesTrading&SalesandTreasurysegmentdecreasedcomparedtothepreviousyearfrom€ 11.324millionto€ 7.881million.Thedeclineisattributabletolowerincomefromtradingandanincreaseinthebanklevy,whichcouldnotbeoffsetbyhigherincomegeneratedinthecertificatesbusiness.
InstitutionalEquitySalesTheshareoftheAustrianequitymarketinthecustomerbusinesssegmentwasincreasedfrom8.9to10.2percent.
Themarketingactivitieswerecontinuedatthesamehighlevelaslastyear:33researchroadshows74corporateroadshows21institutionallunchesforAustrianinstitutionalinvestors5reverseroadshows27transactionroadshows
InadditiontothetraditionalinvestorconferenceinZürswithanewrecordnumberofparticipants(60companies,150investors,1,100one-on-onemeetings),asuccessfulinvestorconferencewasalsoorganizedinWar-saw(14companies,29investors,121one-on-onemeetings).
BusinesswithPolishinvestorswasincreasedsignificantlythroughthefruitfulcollaborationwithRaiffeisenPoland(plus250percent).Significantde-
mandfortheprimarymarkettransactionswecompletedintheperiod(RaiffeisenBankInternational,PORR,TelekomAustria,ElectricaS.A.)wasalsogeneratedthroughlocalbrokers.
ThesuccessfulconclusionoftheRBIorderroutingprojectagainhighligh-tedthecentralpositionthatRaiffeisenCentrobankplaysastheequityhouseoftheRBIGroup.Electronicsalestradingwasexpandedsignificant-lyandoffersconsiderablegrowthpotentialfor2015aswell.
Trading/MarketMakingRaiffeisenCentrobankagaindefendeditsmarketleadershipintheViennaStockExchange’smarketmakingsegmentin2014.Intheprimemarket,RaiffeisenCentrobankreceived37ofthe39totalmarketmakerand/orspecialistmandatesandwasthelargestmarketmakerontheViennaStockExchangewithashareof19.3percent.
WiththetransferofthederivativeinstrumentsfromtheOeTOBViennatotheEurexFrankfurt,RaiffeisenCentrobankassumedalargenumberofmar-ketmakermandatesforAustrianandEasternEuropeanbluechipsontheEurexFrankfurt.InadditiontotheEurex,RaiffeisenCentrobankexpandeditsequities,certificates,andderivativesmarketmakingactivitiesonvariousforeignexchangessuchastheWarsawStockExchangeandtheBucha-restStockExchangebywinningnewmandatesandexpandingitsmarketmakingtonewproductclasses.
StructuredProductsTheverypositivecourseofbusinessfortheStructuredProductsdepartmentfromtheprioryearscontinuedwithanotherrecordresultin2014.Certifica-tesaretakingonanincreasinglyimportantroleasafixedpartofamo-dernportfolio.RaiffeisenCentrobanksawsignificantgrowthinallofitscoremarketsandcustomergroups.TheoutstandingmarketvolumeforRaiffeisenCentrobankcertificatesroseagaintoanall-timehighof€3.1billion,evenfarsurpassingthelevelachievedin2006/2007.Thisenab-ledRaiffeisenCentrobanktoextenditsleadershiponthedomesticcertifi-catemarketandtoincreaseitsmarketshareby27percent(correspondsto15percentagepoints).Totalturnoverfor2014cameto€1.4billion,anincreaseofover10percentinannualcomparison.Withashareofover70percent,bonusandguaranteecertificateswerethemostpopularproductcategoriesbyfar.Attractiveyieldpotentialwith(partial)protectionisinhighdemandinthecurrentlow-interestenvironment.This(partial)pro-tectionmechanismsofferslowerriskthananinvestmentinequitiescom-binedwithahigherpossibleyieldthanispossiblefromaninvestmentinbonds–anidealcombinationformanyinvestorsunderthecurrentcondi-tions.AsanAustrianissuer,activityfocusednotonlyonproductsbasedonthetraditionallyimportanthomemarket,butalsoonmajorEuropeanandglobalindicessuchastheEuroStoxx50andSTOXXGlobalSelectDivi-dend100andonEasternEuropeanbluechips.
Inadditiontoreturnandsecurity,agrowingnumberofinvestorsarealsofocusingonsociallyresponsibleinvesting.RaiffeisenCentrobankaddressedthistrendwithcorrespondingnewissues.Allinall,RaiffeisenCentrobankissued3,256productsin2014,bringingthetotalofitspublic-lyofferedissuestoanewrecordofover4,300asoftheendoftheyear.InadditiontotheViennaStockExchange,allRaiffeisenCentrobankcertifi-catesarelistedontheleadingEuropeancertificateexchangesinStuttgart(EUWAX)andFrankfurt.TheEasternEuropeanexchangesinWarsaw,Prague,Budapest,andBucharestarealsobecomingmoreimportantintermsofthenumberoflistedRaiffeisenCentrobankproductsandturnoverfortheseproducts.AnotherrecordresultwasachievedonthecoremarketsinEasternEurope.Revenuehererosebynearly20percentinannualcom-parison.RaiffeisenCentrobankiscurrentlyactiveinninecountriesinCen-tralandEasternEuropeandfurtherintensifieditscollaborationwiththelo-calnetworkbanksthere.Inadditiontotherecordrevenueandhighestle-
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velofoutstandingcertificatesever(plus26percent),moreissues(subscriptionsandprivateplacements)andeducationmeasureswerecom-pletedthaneverbefore.Aparticularhighlightduringtheyearweresuc-cessfultransactionswithslovakiaTatrabanka.Amongotherachievements,asingleBonusCertificateissueworthover€40millionwasconcludedandplacedinthelocalprivatebankingsegment.Aftercomingoutontopin2007,2010,and2012,RaiffeisenCentrobankwasnamedthebestcer-tificatehouseinCEEforthefourthtimeattheStructuredProductsEuropeAwards2014.
IncreasingvolumesofcertificatesarealsobeingsoldbytheRaiffeisenbanksinAustria.Recordsweresetintermsofrevenueandsubscriptionvo-lume.NumeroustrainingmeasuresandcustomereventsnotonlyincreasedtheBank’spresence,butalsoimprovedadvisorandcustomerknowledgeaboutcertificates.Underthecontinuedchallengingconditions,especiallywithregardstotheregulatoryframework,RaiffeisenCentrobankfeelsthatthedisseminationofknowledgeandinformationisoneofthemostimpor-tantsalesmeasuresforensuringlong-termsuccess.ThesustainabilityofRaiffeisenCentrobank’scertificatebusinessisuniqueinAustriaandCentralandEasternEurope.TheissueristheonlycompleteAustrianprovider,bothintermsofcertificatetypesandunderlyings.Inadditiontoofferingabroadproductspectrum,RaiffeisenCentrobankboastsmanyyearsofactivepre-sence,extensiveinvestorservices,andinnovativeproductideas,andhaslongplayedapioneeringroleincertificatesinCEE.Thishighlevelofex-cellencewasrecognizedbyindependentexpertsattheCertificateAwardsAustriafortheeighthtimeinarow.RaiffeisenCentrobankwasna-medthebestissuerinAustria.
TheresultsofthesecuritiesdepartmentareincludedinthereportfortheSecuritiesTrading&SalesandTreasurysegment.
Company ResearchTheCompanyResearchdepartmentpublished349companyupdatesin2014.Thisisanincreaseof32companyupdatescomparedwiththepre-viousyear.Atotalof226companyupdateswerepreparedforEasternEuropeancompanies,223companyupdatesforAustrian.Attheendoftheyear,thecoveragelistincluded138companiesintotal–37stocksfromAustrianand101stocksfromEasternEuropeancompanies.Theana-lysisuniversewasalsoexpandedduringthepastyear.Thefollowingcom-panieswereadded:PORR,BUWOG,andFACCinAustria;PKPCargo,BankHandlowy,CapitalPark,andAltusinPoland;ElectricainRomania;andRossetiandMOESKinRussia.
Thefocusinthefirsthalfof2014wasprimarymarketactivity.TransactionresearchincludingextensiveinvestoreducationforEuropeaninvestorswaspreparedforthesecondpublicofferingofBUWOGandtheIPOofthePolishcompanyAltus.CompanyResearchassistedthelocalresearchteaminBucharestinconnectionwiththeIPOoftheRomanianutilityElectricaS.A.
Theincreaseindirectcontactbetweentheanalystsandinvestorswasreflectedinveryextensiveroadshowactivity.Sectorreportsandroads-howsonthesectorsofoilandgas,ITandtechnology,telecommunica-tions,banks,Russianutilities,andPolishretailersandrealestate,andoncountrystrategiesforPoland,Russia,andtheentireCentralandEasternEuroperegionwereactivelymarketed.ThedestinationsoftheroadshowswereVienna,London,Zurich,Frankfurt,Warsaw,Prague,Helsinki,Stock-holm,andTallinn.ReverseroadshowswerealsoorganizedforinvestorsinVienna.
StrategyAustria&CEEwaspreparedtogetherwithRaiffeisenResearcheveryquarterasusual.
CompanyResearchwasalsocloselyinvolvedintheorganizationoftheinvestorconferencesinZürsandWarsaw.Separatecompanyupdatesorfactsheetswerepreparedforallparticipatingcompanies.Theanalystswerealsobookedforintensiveone-on-onemeetings.
ThecostsoftheCompanyResearchdepartmentareincludedinthere-portingforthesegments“SecuritiesTrading&SalesandTreasury,”and“OtherBankDepartments.”
DiscontinuedoperationsofRaiffeisenCentrobankEquity Capital Markets (ECM)WhilepricesinEuropetrendedupforthemostpartduringthefirsthalfof2014,geopoliticaltensionsinUkraineandRussiabroughtsubstantiallyhig-herlevelsofvolatilityinthesecondhalfoftheyear,andmostEuropeanequitymarketsclosedtheyearunchangedorupslightlycomparedwiththeendof2013.SomekeyexchangesinCEEincludingRussiaandPo-landfailedtokeeppacewiththemarketsinwesternEurope.TheViennaStockExchangefollowedtheCEEequitymarketsdownward,especiallyinthesecondhalfof2014,andclosedtheyearatalossofaround15percent.
Europesawatotalof67initialpublicofferings(IPOs)withanoffervolumeofover€200millioneachin2014.Activityonthetransactionmarketslo-wedsomewhatinthesecondhalfoftheyear.
RaiffeisenCentrobankdefendeditsstrongpositionontheViennaStockExchangeintheEquityCapitalMarketssegmentagainin2014andalsoconductedatotaloftenequitytransactionsintherelevantEuropeanmar-ketstogetherwiththeRaiffeisenBankInternationalnetworkbanks.
HighlightsincludedthecapitalincreaseofRaiffeisenBankInternationalAG,thelargeststockissueoftheyearontheViennaStockExchangewithatotalvolumeof€2.8billion.RaiffeisenCentrobankwasthejointglobalcoordinatorandjointbookrunner.ThistransactionwasthelargeststockissueontheViennaStockExchangesincethestartofthefinancialcrisisandsignificantlyincreasedthefreefloattojustunder40percent.FurtherhighlightsincludedthebookrunnerpositionsforthecapitalincreaseofPorrAG(€119million)andparticipationinthecapitalincreaseofTelekomAustriaAG(€1billion).
TheBankwasalsoinvolvedintransactionsontheRomanianandPolishequitymarkets,includingthelargestinitialpublicofferinginthehistoryoftheRomaniancapitalmarket,theIPOofElectricaS.A.ontheexchangesinBucharestandLondon.
OntheViennaStockExchange,RaiffeisenCentrobankassistedBUWOGAGwithitspublicofferingthroughaspin-offfromImmofinanzAG.Asidefromthepurestockissues,RaiffeisenCentrobankactedasleadmanagerforaconvertiblebondfromWarimpexFinanz-undBeteiligungsAG.
Russia,thelargestmarketinCEE,fellwellbehindtheperformanceofpreviousyearsandtheexpectationsduetothegeopoliticaltensions.IssueactivityinPolandwasalsolowerthaninpreviousyears.TheIPOoftheassetmanagerAltusTFIS.A.withavolumeofPLN175millionwasoneofthelargestissuesoftheyearontheWarsawStockExchangeandunderscoredtheincreaseinEquityCapitalMarkets(ECM)activityintheregion.TheRomanianequitymarketagainsawarobustleveloftransac-tions,fromwhichRaiffeisenprofitedasthemarketleaderinthecountry’stransactionbusiness.TheBankwasinvolvedintwotransactionswithatotalvolumeofroughly€450million.
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InadditiontothetransactionsinAustriaandCEE,RaiffeisenCentrobankwasaconsortiummemberfortwolargecapitalmarkettransactionsinwes-ternEurope.ThesewerethecapitalincreaseofDeutscheBankAG,thelargeststockissueinEuropewithavolumeof€6.4billion,andthelargestIPOinEurope,thatofNNGroupN.V.ontheAmsterdamStockEx-change.Alongsidenumeroussuccessfullyfulfilledmandates,someplannedtransactionswerenotconcludedin2014duetothemarketconditions.
RaiffeisenCentrobankisalsooneoftheleadingpaymentofficesforAustri-ancompanies,andcurrentlyprovidestheseservicesfor19entities.
Mergers & Acquisitions (M&A)MarketconditionsinCEE’sM&AsegmentwereverychallenginginEuro-pein2014.Thetransactionvolumeintheregionfellbyaround34percentto€27.4billion,andthenumberofcompleteddealsdecreasedbyroughly37percent.
Despitethedifficultenvironment,RaiffeisenCentrobankconcluded19tran-sactionswithadealvolumeof€2.8billion,including•MandateasafinancialadvisorforOrklaforthesaleofRieberFoods PolskaS.A.(Delecta)toaninvestmentfundmanagedbyInnovaCapital.•RaiffeisenCentrobankadvisedRaiffeisenLeasinginthesaleofREE WindparkstoKELAGandEnergieAG.•RaiffeisenCentrobankwasanadvisorinthesaleofthefamouscoffee brandAmigoofPanfoodsCo.Ltd.(UK)/Cia.IguacudeCafeSoluvel (Brazil)toStraussCoffeeB.V.•RaiffeisenCentrobankadvisedOMVandE.Onregardingthesaleof sharesinCongaztoGazdeFrance.•TogetherwithitsinternationalpartnerLazard,RaiffeisenCentrobank actedasthefinancialadvisorforKKRfortheacquisitionofSerbia Broadband(SBB),thelargestcableandsatelliteproviderintheformer Yugoslavia.•TogetherwithLazardandthelocalRaiffeisennetworkbank,Raiffeisen CentrobankadvisedPanasonicCorporationintheacquisitionofa90 percentshareinViko,aTurkishmanufacturerofelectricalequipment.•TheBankalsoadvisedAgrokorGroup,thelargestfoodandretail conglomerateintheBalkanstates,inthesaleofitsfruitjuicedivision toBosnianStanicGroup.
CommodityTrading
ThesubsidiariesoftheCentrotradeGroupoperatingunderCentrotradeHoldingAG,Vienna,areactiveinrubbertradeandtradingwitholefins.
Thefullyconsolidatedoperatingcompaniesclosedtheyearpositivelyoverall,butfellwellshortofthebudget.Intherubbergroup,asolidlatexdivisionwasunabletocompensatefortheweakerresultfromthedryrubbersegment.Thepending,notyetrealizedtransactionsimprovedsubstantially,whichwasencouraginggiventhedifficultmarketconditions.
Theolefinsdivisiondevelopedsolidly,butatalowlevelbecauseoftheeconomicconditions(oil,commodities),andpostedaprofitthatwasclearlybelowthebudgettarget.
Theannualprofitfromdiscontinuedoperationsisstatedseparatelyintheconsolidatedfinancialstatementsasat31December2014.
PerformanceIndicatorsFinancialperformanceindicators
Thelowerpre-taxprofitfromcontinuedoperationsresultedinadeclineintheReturnonEquitybeforetaxfrom11.2percentto9.2percentatloweraverageownfunds.Becausetheoperatingincome(netinterestincomebeforeprovisioning,netfeeandcommissionincome,thetradingprofit,theresultfromfinancialinvestments,andtheotheroperatingresult)fellmoresubstantiallyrelativetotheadministrativeexpenses,thecost-incomeratiorosefrom79.6percentin2013to81.1percentin2014.
Non-financialperformanceindicators
RiskManagementBecauseofitsspecializationintradingequitiesandequityderivatives,itisparticularlyimportantforRaiffeisenCentrobanktomaintainamodern,profes-sional,andactiveriskmanagementsystem.
RiskManagementisresponsibleforassessingthecurrentrisksituationinac-cordancewiththeBank’srisk-bearingcapacityandthecorrespondingrisklimits,andtherebyassiststheManagementBoardwiththemanagementoftheBank’soverallrisk.
Initsinterdepartmentalandintercompanyrole,RiskManagementisalsores-ponsiblefortherefinementoftheriskidentification,measurement,andma-nagementmethodsandformaintainingandupdatingtherelevantrules.
Inadditiontoongoingmeasuresforcompliancewithregulatoryrequire-ments,RiskManagementalsomadesubstantialprogressin2014intheas-sessmentandmeasurementofmarket,credit,andoperationalrisks.Oneex-ampleistheimplementationofthescenariomatrixmethodformeasuringnon-deltarisks.
Inoperationalterms,thedepartmentfocusedonautomatingdailyroutinestoreduceoperationalrisks,assessingcross-unitprocesses,andimprovingthequalityofthedatausedtovaluederivatives.
Pleasealsoseethedetailedriskreportinthenotes.
2014 2013
Returnonequitybeforetaxes(inpercent)fromcontinuedoperations 9.2 11.2
Cost-incomeratio(inpercent)fromcontinuedoperations 81.1 79.6
Earningspershareineurosfromcontinuedoperations 13.58 18.97
Earningspershareineurosfromdiscontinuedoperations 0.82 5.93
2014 2013
Averagenumberofemployees(fromcontinuedoperations) 211 215
Averagenumberofemployees(fromdiscontinuedoperations) 110 124
Stockexchangememberships 10 10
Numberofnewlyissuedwarrantsandcertificates 3,256 3,326
19
InternalControlSystemasRelevantfortheConsolidatedAccountingProcessRaiffeisenCentrobankanditsgoverningbodiesarecommittedtoensuringbalancedandcompletefinancialreporting.Afundamentalrequirementinthisiscompliancewithallrelevantlegalregulations.Inconnectionwiththeaccountingprocess,theManagementBoardisresponsiblefordesigningandinstallinganinternalcontrolandriskmanagementsystemthatmeetstherequirementsoftheCompany.Theobjectofthisinternalcontrolsystemistosupportthemanagementbymakingcertainthateffectiveinternalcont-rolsareappliedtotheaccountingprocessandthatthesecontrolsareen-hancedwheneverappropriate.Thecontrolsystemisdesignedtoassurecompliancewithguidelinesandregulations,aswellastocreateoptimalconditionsforspecificcontrolmeasures.
Formanyyears,RaiffeisenCentrobankhasemployedaninternalcontrolsystemwithaframeworkofdirectivesandworkinginstructionsforstrategi-callyimportantissues.AspartofRZBGroup,RaiffeisenCentrobankGroupisalsosubjecttoitsparentgroup’sinstructionsandregulations.Auditsareconductedatanindividualcompanylevelandagroupleveltoensurecompliancewiththeserules.
Theconsolidatedfinancialstatementsarepreparedonthebasisoftheper-tinentAustrianlaws,abovealltheAustrianBankingAct(BWG)inconnec-tionwithEURegulationno575/2013(CapitalRequirementsRegulation,“CRR“)andtheUniformCommercialCode(UGB),whichgovernsthepreparationofconsolidatedannualfinancialstatementsforcreditinstitu-tions.TheaccountingstandardsappliedfortheconsolidatedfinancialstatementsaretheInternationalFinancialReportingStandards(IFRS)asadoptedbytheEU.
BecauseRaiffeisenCentrobankisamemberofRZBGroup,thetechnical(quantitative)preparationofitsconsolidatedfinancialstatementshasbeendelegatedtoRaiffeisenBankInternationalAGandishandledbyitsGroupFinancialReportingdepartment.Thequalitativeelementsarepreparedin-ternallybytheControllingandRegulatoryReportingdepartment.
Theconsolidatedfinancialstatementsarepreparedusingstandardizedformsforallcompaniesinthegroup.TherecognitionandmeasurementstandardsaredefinedintheGroupAccountsManualofRZBGroup,andarebindingforthecompilationoftheconsolidatedfinancialdata.Chan-gesintheinstructionsandstandardsarecommunicatedtotheaffectedunitsinspeciallyconvenedInternetconferences.
ThepreparationoftheindividualfinancialstatementsinaccordancewiththeGrouprequirementsishandledseparatelybyeachoftheGroupunits.Thestaffandmanagerswhoaretaskedwithpreparingtheaccountswithintheindividualgroupunitsareresponsibleforensuringthecompletedepic-tionandcorrectmeasurementofalltransactions.Thelocalmanagementisresponsibleineachcaseforensuringthattherequiredinternalcontrolmeasures,suchastheseparationofcertainfunctionsandthedual-controlprinciple,areimplementedcorrectly.ThefinancialdataforthereportingperiodaresubmittedtotheGroupFinancialReportingdepartmentatRaiff-eisenBankInternationalAGbywayofdirectentryintotheCognosCont-rollerconsolidationsystem.Thissystemisprotectedbyarestrictivesystemofuserpermissions.
ThefinancialdatasubmittedbytheGroupunitsofRaiffeisenCentrobankarethencheckedbyRaiffeisenCentrobank’sControllingandRegulatoryReportingdepartmentforplausibility.Followingthis,thefurtherconsolidati-onsteps,includingcapitalconsolidation,expenseandincomeconsolidati-on,anddebtconsolidationarecompletedintheCognosControllercon-solidationsystem.Then,anyintragroupprofits,whichgenerallyonlyarisefromtransactionsbetweenthecommoditytradingsubsidiaries,areelimina-tedthroughintragrouppostings.Thefinalconsolidationstepistheprepara-tionofthenotesaccordingtotheIFRS,BWG,andUGBrequirements,andiscompletedbytheControllingandRegulatoryReportingdepartmentatRaiffeisenCentrobank.Aconsolidatedmanagementreportcontainingaverbalaccountofthecourseofbusinessduringtheperiodinaccordancewiththelegalrequirementsisalsoprepared.
TheManagementBoardevaluatesandmonitorsmaterialrisksinconnec-tionwiththeconsolidatedaccountingprocess.Inthis,thefocusisplacedontherisksthataretypicallyfoundtobematerial.Theannualevaluationoftheinternalcontrolmeasuresappliedbyeachoftheresponsibleunitsisbasedonarisk-orientedapproach.Theriskoffaultyfinancialreportingisassessedonthebasisofanumberofdifferentcriteria.Forexample,com-plexrecognitionprinciplescanincreasetheriskoferrors.Differentprincip-lesforthemeasurementofassetsandcomplexorchangingbusinesscon-ditionscanalsocausesubstantialerrorsinthefinancialreporting.
Estimatesmustregularlybemadeduringthepreparationofthefinancialstatements.Inallofthesecases,thereisaninherentriskthattheactualde-velopmentsmaydeviatefromtheseestimates.Thisespeciallyappliestotheparametersinvaluationmodelsthatareusedtodeterminethefairvaluesoffinancialinstrumentsforwhichthereisnocurrentpricequotationaswellastosocialcapital,theoutcomeoflegaldisputes,thecollectibilityofclaims,andtheimpairmentofequityholdingsandsupplies.Insomecases,externalexpertsareinvolvedorpubliclyavailableinformationsourcesusedtominimizetheriskofincorrectestimates.
InadditiontotheManagementBoard,thegeneralcontrolframeworkalsoincludeshighermanagement(thedepartmentheads).Allcontrolmeasuresareappliedtothedailybusinessprocessestoensurethatpotentialerrorsordeviationsinthefinancialreportingarepreventedordiscoveredandcorrected.Thecontrolmeasuresthatareappliedatregularintervalsrangefromthereviewoftheperiodicresultsbythemanagementtothespecificreconciliationandcoordinationofaccountsandtheanalysisandfurtheroptimizationofaccountingprocesses.TheInternalAuditdepartmentisalsoinvolvedinthemonitoringprocess.ItsactivitiesarebasedontheAustrianFinancialMarketAuthority’sminimumstandardsforinternalauditingandinternationalbestpractices.TheInternalAuditdepartmentreportsdirectlytotheManagementBoard.RZBGroup’sgroupaccountingdepartmentalsoindependentlyverifiescompliancewiththeinternalregulationsonaregularbasis.TheconsolidatedfinancialstatementsincludingthemanagementreportarereviewedanddiscussedbytheAuditCommitteeoftheSupervisoryBoardandthensubmittedtotheSupervisoryBoardforapproval.TheconsolidatedfinancialstatementsarepublishedontheCompany’swebsiteaspartoftheannualreportaswellasinAmtsblattzurWienerZeitungandaresubmittedtothecommercialcourtwithwhichtheCompanyisregistered.Duringthefinancialyear,interimconsolidatedreportsarepreparedonthebasisofIAS34inaccordancewiththeStockExchangeAct.ConsolidatedfinancialstatementsthataretobepublishedaresubjectedtoafinalreviewbymanagerialstaffandtheManagementBoardbeforetheyaresubmittedtotheSupervisoryBoard.Analysesarealsopreparedforthemanagementinconnectionwiththeconsolidatedfinancialstatements.
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HumanResourcesFollowingthere-alignmentofRaiffeisenCentrobankthenumberofemplo-yeeswasadjustedaccordingly.Asat31December2014thestaffatRaiff-eisenCentrobankfromcontinuedoperationscameto204persons(31December2013:217),whereasthenumberofemployeesfromdiscontinu-edoperationsamountedto103asat31December2014(31December2013:122).
Outlook2015ThesmolderingconflictbetweenRussiaandUkraineandtheexpansionofassetpurchasesbytheECBwillremainkeydrivingfactorsforthedevelop-mentoftheEurozoneeconomy.IntheUSA,therobustdevelopmentofthelabormarketshouldspurtheFedtobeginhikingitskeyinterestratein2015.Thiswilllikelyresultinalongerperiodofdiametricalmonetarypoli-ciesintheUSAandEurozone.Thiswillalsohaveanimpactonthecapitalmarkets.WhileUSyieldshavesomeupsidepotential,thepurchasesoftheECBcouldcausegovernmentbondyieldstofallfurther.Evenwithanincre-aseintheriskofsetbacks,equityinvestmentswillenjoyhigherdemandbe-causeofalackofalternatives.
Mostexchangesshouldseeclearlypositivedevelopmentin2015,whichmakesRaiffeisenCentrobankoptimisticaboutitscorebusinessareasofequitytradingandsalesandcertificates.Marketconditionswillremainchallengingbecauseofplannedregulatorychanges,butbusinessintheseareasisexpectedtodeveloppositivelyingeneral.TherestructuringofRaiffeisenCentrobankthatwasannouncedattheendof2014willalsohaveakeyimpactduringthecurrentfinancialyear.Thegoalwillbetodis-poseofthetraditionalprivatebankingactivitiesandthecommoditysubsi-diariesinthefirsthalfof2015.WorkisalsounderwayontheintegrationoftheMergers&AcquisitionsandEquityCapitalMarketssegmentsintotheInvestmentBankingdivisionoftheGroupparentRBI.Thelattermeasu-reisaimedatincreasingsynergiesandfurtherimprovingtheserviceprovi-dedtocustomerswithintheGroup.
Furthertothere-alignmentofRaiffeisenCentrobankandtheimplementati-onoftherelatedmeasures,theresultofbusinessyear2015isexpectedtobeslightlylowerthantheresultgeneratedin2014.
EventsaftertheBalanceSheetDateInthecourseofimplementinganexitstrategyassetoutbyRaiffeisenBankInternationalregardingtheCentrotradesubsidiaries,asharepurchaseag-reementwassignedinJanuary2015tosellthefourrubbertradingcompa-nies.Theclosingisexpectedformid-2015.
ResearchandDevelopmentRaiffeisenCentrobankengagesinnoresearchanddevelopmentactivities.
21
StatementofLegalRepresentativespursuantto§82StockExchangeActWeconfirmtothebestofourknowledgethattheconsolidatedfinancialstatementsgiveatrueandfairviewoftheassets,liabilities,financialpositi-on,andprofitorlossoftheGroupasrequiredbytheapplicableaccoun-tingstandardsandthatthegroupmanagementreportgivesatrueandfairviewofthedevelopmentandperformanceofthebusinessandthepositionoftheGroup,togetherwithadescriptionoftheprincipalrisksanduncer-taintiestheGroupfaces.
Weconfirmtothebestofourknowledgethattheannualfinancialstatementsgiveatrueandfairviewoftheassets,liabilities,financialposition,andprofitorlossoftheCompanyasrequiredbytheapplicableaccountingstandardsandthatthemanagementreportgivesatrueandfairviewofthedevelopmentandperformanceofthebusinessandthepositionoftheGroup,togetherwithadescriptionoftheprincipalrisksanduncertaintiestheGroupfaces.
Vienna,April15,2015TheManagementBoard
SupervisoryBoardReportTheannualfinancialstatementsfor2014thatwereauditedandapprovedwithoutqualificationbytheelectedfinancialauditor–KPMGAustriaGmbH,Wirtschaftsprüfungs-undSteuerberatungsgesellschaft,Porzellan-gasse51,A-1090Vienna–werepresentedtothe42ndordinaryAnnualGeneralMeetingon29April2015,andacknowledged.
KPMGAustriaGmbH,Wirtschaftsprüfungs-undSteuerberatungsgesellschaftauditedtheconsolidatedannualfinancialstatementsforthe2014financialyearinApril2015andawardeditsunqualifiedauditopinion.TheSupervi-soryBoardscrutinizedandapprovedtheconsolidatedannualfinancialstatementsforthe2014financialyearthatwereauditedbyKPMGAustriaGmbH,Wirtschaftsprüfungs-undSteuerberatungsgesellschaft.
Vienna,April2015
WilhelmCeledaChiefExecutiveOfficer
MarkusKirchmairMemberoftheManagementBoard
KlemensBreuerChairmanoftheSupervisoryBoard
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ConsolidatedFinancialStatementsofRaiffeisenCentrobankAGasat31December2014inaccordancewithInternationalFinancialReportingStandards(IFRS)
Throughoutthisreport,RaiffeisenCentrobankGroupisusedtorefertotheRaiffeisenCentrobankGroup.RaiffeisenCentrobankisusedwheneverstatementsrefersolelytoRaiffeisenCentrobankAG,theparentcompany.
Theadditionofroundednumbersusingautomatedsystems,aswasdoneforthisreport,mayresultinminordifferencesinamounts.Thechangesindicatedinpercentrefertotheactualamountsandnottheroundedamountsshowninthisreport.
23
Statementofcomprehensiveincome
in€thousand Notes 1/1/-31/12/2014 1/1-31/12/2013 Change
Interestincome 5,068 4,508 12.2%
Interestexpenses (1,261) (1,193) 5.1%
Net interest income (2) 3,807 3,315 14.8%
Netallocationtoprovisioningforimpairmentlosses (3) 18 16 11.9%
Net interest income after provisioning 3,825 3,331 14.8%
Feeandcommissionincome 16,284 15,335 6.2%
Feeandcommissionexpenses (16,677) (14,336) 16.3%
Net fee and commission income (4) (393) 999 >100%
Tradingprofit (5) 44,183 46,226 (4.4%)
Valuationresultfromderivativefinancialinstruments (6) 0 0 0.0%
Netincomefromfinancialinvestments (7) (1,490) (83) >100%
Generaladministrativeexpenses (8) (36,942) (41,484) (10.9%)
Otheroperatingresult (9) (555) 1,689 >100%
Netincomefromdisposalofgroupassets 0 (16) 100%
Profitbeforetax 8,628 10,662 (19.1%)
Incometaxes [10] (275) (2,129) (87.1%)
Profit after tax from continued operations 8,354 8,532 (2.1%)
Profit after tax from discontinued operations [11] 72 2,723 (97.3%)
Profitaftertax 8,426 11,255 (25.1%)
Shareofprofitduetonon-controllinginterests 468 1,166 (59.9%)
Group net profit 8,894 12,422 (28.4%)
Incomestatement
Basedonastrategicdecision,there-alignmentofRaiffeisenCentrobankwasimplemented.ThecompetentbodiesdecidedtofocustheactivitiesofRaiffeisenCentrobankonthecoreareasofbusinessequitytradingandsalesandstructuredproducts.ThebusinesssegmentsEquityCapitalMarkets(ECM),M&Aincludingthesubsidiariesandthecommoditytradingsubsidiarieswereclassfiedasassetsheldforsaleasat31December2014andareshownintheincomestatementasdiscontinuedoperations.
Assetsandliabilitiesaswellasincomeandexpenses(includingpreviousyeardata)relatingtothesebusinesssegmentsaredepictedseparatelyinthebalancesheet,asassetsandliabilitiesheldforsaleaswellasprofitaftertaxfromdiscontinuedoperations.Thuscashflowstatementandnoteswereadjusted. M
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Total Group equity Non-controlling interests in€€thousand 1/1-31/12/2014 1/1-31/12/2013 1/1-31/12/2014 1/1-31/12/2013 1/1-31/12/2014 1/1-31/12/2013
Profit after tax from continued operations 8,354 8,532 8,354 8,532 0 0
Profit after tax from discontinued operations 72 2,723 540 3,889 (468) (1,166)
Profit after tax 8,426 11,255 8,894 12,421 (468) (1,166)
Items which are not reclassified to profit and loss (537) 334 (537) 334 0 0
Remeasurementsofdefinedbenefitplans (715) 445 (715) 445 0 0
Deferredtaxesonitemswhicharenot reclassifiedtoprofitandloss 179 (111) 179 (111) 0 0
Items that may be reclassified subsequently to profit or loss 1,711 (743) 1,417 (654) 294 (89)
Exchangedifferences 1,711 (743) 1,417 (654) 294 (89)
hereofunrealizednetgains(losses)oftheperiod 1,711 (743) 1,417 (654) 294 (89)
Other comprehensive income 1,174 (409) 880 (320) 294 (89)
Total comprehensive income 9,600 10,846 9,774 12,101 (174) (1,255)
in€€thousand 2014 2013 Veränderung
Earningspersharefromcontinuedoperations 12.75 13.03 (0.28)
Earningspersharefromdiscontinuedoperations 0.82 5.93 (5.11)
Therewerenoconversionoroptionrightsoutstanding;accordingly,therewasnodilutionofearningspershare.
in€€thousand Remeasurements reserve Exchange differences Deferred taxes
Balanceasat1/1/2013 (541) (2,867) 140
Netchangeduringthereportingyear 445 (654) (111)
Balanceasat31/12/2013 (96) (3,521) 29
Netchangeduringthereportingyear (715) 1,417 179
Balance as at 31/12/2014 (811) (2,104) 208
Retainedearnings
Thefollowingcomponentsofretainedearningsdevelopedasfollows:
Earningspershare
Other comprehensive incomeExchangedifferencesderivedespeciallyfromchangesinEuro,USdollarandRussianrouble.
Othercomprehensiveincomeandtotalcomprehensiveincome
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Balancesheet
Assets Notes 31/12/2014 31/12/2013 Change in€€thousand
Cashreserve [14,34] 2,898 4.337 (33.2%)
Loansandadvancestocreditinstitutions [15,34,49] 377,361 269,111 40.2%
Loansandadvancestocustomers [16,34,49] 83,697 98,925 (15.4%)
Impairmentlossesonloansandadvances [17,34] (75) (93) (19.6%)
Tradingassets [18,34] 2,137,495 2,033,716 5.1%
Derivativefinancialinstruments [19,34] 186 42 >100.0%
Securitiesandfinancialinvestments [20,34] 46,847 14,923 >100.0%
Intangiblefixedassets [21,23] 115 199 (42.2%)
Tangiblefixedassets [22,23] 9,840 9,795 0.5%
Assetsheldforsale(IFRS5) [25] 64,729 73,782 (12.3%)
Otherassets [24] 7,583 5,839 29.9%
Total assets 2,730,676 2,510,575 8.8%
Equity and liabilities Notes 31/12/2014 31/12/2013 Change in€€thousand
Liabilitiestocreditinstitutions [26,34,49] 71,354 106,672 (33.1%)
Liabilitiestocustomers [27,34,49] 221,241 117,237 88.7%
Provisions [28,34] 14,596 17,059 (14.4%)
Tradingliabilities [29,34] 2,283,134 2,119,104 7.7%
Derivativefinancialinstruments [30] 398 292 36.4%
Liabilitiesheldforsale(IFRS5) [32] 30,862 38,548 (19.9%)
Otherliabilities [31,34] 6,872 5,403 27.2%
Equity [33] 102,219 106,258 (3.8%)
Consolidatedequity 93,831 94,166 (0.4%)
Groupnetprofit 8,894 12,422 (28.4%)
Non-controllinginterests (506) (329) 54.0%
Total equity and liabilities 2,730,676 2,510,575 8.8%
Basedonastrategicdecision,there-alignmentofRaiffeisenCentrobankwasimplemented.ThecompetentbodiesdecidedtofocustheactivitiesofRaiffeisenCentrobankonthecoreareasofbusinessequitytradingandsalesandstructuredproducts.ThebusinesssegmentsEquityCapitalMarkets(ECM),M&Aincludingthesubsidiariesandthecommoditytradingsubsidiarieswereclassfiedasassetsheldforsale.
Assetsandliabilitiesrelatingtothesebusinesssegmentsaredepictedseparatelyinthebalancesheetandinthenotes.Followingtheclassificationasdiscontinuedoperations,previousyeardatawerereclassifiedpursuanttoIFRS5.
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Statementofchangesinequity in€€thousand Subscribed Capital Retained Group Non- Total capital reserves earnings net profit controlling for the interests period
Equity as at 1/1/2013 47,599 6,651 41,595 12,170 846 108,862
Capitalpaid-in 0 0 0 0 0 0
Transferredtoretainedearnings 0 0 (1,585) 1,585 0 0
Dividendpayments 0 0 0 (13,755) 0 (13,755)
Comprehensiveincome 0 0 (320) 12,422 (1,255) 10,846
OtherChanges 0 0 225 0 80 305
Equity as at 31/12/2013 47,599 6,651 39,915 12,422 (329) 106,258
Equity as at 1/1/2014 47,599 6,651 39,915 12,422 (329) 106,258
Capitalpaid-in 0 0 0 0 0 0
Transferredtoretainedearnings 0 0 (1,333) 1,333 0 0
Dividendpayments 0 0 0 (13,755) 0 (13,755)
Comprehensiveincome 0 0 880 8,894 (174) 9,600
Otherchanges 0 0 119 0 (3) 116
Equity as at 31/12/2014 47,599 6,651 39,581 8,894 (506) 102,219
Otherchangesinequityaretheresultofexchangedifferencesbetweentheincomestatementandthebalancesheet,andareattributabletochangesintheshareholdinginGroupunits.Detailsonotherchangesareprovidedinthenotesunderitem(33)“Equity”.
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Cashflowstatement in€€thousand 2014 2013
Group net profit 8,426 11,255
Non-cashpositionsinprofitandtransitiontonetcashfromoperatingactivities:
Write-downs,write-upsoftangiblefixedassetsandfinancialinvestments 1,725 1,884
Netprovisionsforliabilitiesandchargesandimpairmentlosses 624 8,084
Gains/lossesfromdisposalsoftangiblefixedassetsandfinancialinvestments 846 (1,110)
Otheradjustments(net) (35,703) 108,153
Subtotal (24,082) 128,266
Changeinassetsandliabilitiesarisingfromoperatingactivitiesaftercorrectionsfornon-cashitems:
Loansandadvancestocreditinstitutionsandcustomers (91,335) (58,559)
Tradingassets/tradingliabilities(net) 91,533 4,672
Otherassets/otherliabilities(net) (31,946) 16,203
Liabilitiestocreditinstitutionsandcustomers 68,060 (62,499)
Cash flow from operating activities 12,230 28,083
Proceedsfromthesaleof:
Financialinvestmentsandequityparticipations 100 4,051
Tangibleandintangiblefixedassets 3 2
Paymentsfortheacquisitionof:
Tangibleandintangiblefixedassets (19) (1,031)
Cash flow from investing activities 84 3,022
Kapitaleinzahlungen 0 0
Inflows/outflowsofsubordinatedcapital 0 (18,516)
Dividendspaid (13,755) (13,755)
Cash flow from financing activities (13,755) (32,271)
in€€thousand 2014 2013
Cash and cash equivalents at the end of the previous period 4,375 5,541
Netcashfromoperatingactivities 12,230 28,083
Netcashfrominvestingactivities 84 3,022
Netcashfromfinancingactivities (13,755) (32,271)
Cash and cash equivalents at the end of the period 2,934 4,375
Cashandcashequivalentsfromdiscontinuedoperations (36) (38)
Cash and cash equivalents at the end of the period from continued operations 2,898 4,337
NoseparatedepictionofthecashflowpursuanttoIFRS5fromdiscontinuedoperationspursuanttoactivitiesisprovidedforreasonsofmateriality.
Cash flows for taxes, interest and dividends 2014 2013
Interestreceived 4,573 4,194
Dividendsreceived 182 1,082
Interestpaid (1,145) (1,053)
Incometaxespaid (1,045) (1,993)
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Thecashflowstatementshowsthestructureandchangesincashandcashequivalentsduringthefinancialyearandisbrokendownintothreesec-tions:operatingactivities,investingactivitiesandfinancingactivities.
Netcashfromoperatingactivitiescomprisesthecashflowsarisingfromloansandadvancestocreditinstitutionsandcustomersaswellasthecashflowsarisingfromliabilitiestocreditinstitutions.Thisitemalsoincludesin-flowsandoutflowsoftradingassetsandtradingliabilities,derivativefinan-cialinstruments,otherassetsandotherliabilities.Theinterest,dividendandtaxpaymentsfromoperatingactivitiesareshownseparately.
Netcashfrominvestingactivitiesshowstheinflowsandoutflowsfromfi-nancialinvestmentsaswellastangibleandintangiblefixedassets.
Netcashflowfromfinancingactivitiescomprisestheinflowstoandout-flowsofequityandsubordinatedcapital,whicharerelatedtodividendpayments
Cashandcashequivalentscomprisethecashreserverecognizedinthebalancesheetwhichconsistsofcashinhandaswellasdepositswithcen-tralbanksthatarepayableondemand.Loansandadvancestocreditinsti-tutionsthatarepayableondemandarenotincludedunderthissection,butundercashflowfromoperatingactivities.
SegmentreportingSegmentsofRaiffeisenCentrobank
Theidentificationoftheindividualsegmentsisbasedonthemanagementapproach,i.e.reportingfollowsthesamesegmentationusedbymanage-menttomakedecisions.Theinternalmanagementincomestatementpursu-anttoAustrianBankingActandAustrianCommercialCodeusedbytheManagementBoardandtheSupervisoryBoardofRaiffeisenCentrobanktoassessperformanceandallocateresourcesisbasedonthecompany’sfunctionalorganization.Itisstructuredasamulti-stagecontributionmarginstatement,withincomeandexpensesallocatedaccordingtothecausationprinciple.Incomeitemsincludenetinterestincome,netfeeandcommissionincome,tradingprofitandotheroperatingresult.Generaladministrativeexpensescomprisebothdirectandindirectcosts.Directcosts(staffandotheradministrativeexpenses)areincurredbythebusinesssegments,whileindirectcostsareallocatedtothecash-generatingunitsaccordingtoag-reedratios.Thesameappliestotheemployeesinthesupportandcentraladministrationdepartmentsaswellasthemanagementadministrativede-partments.Theresultsoftheoperatingsegmentsarepresenteddowntoprofitbeforetax.
ProvisioningforimpairmentlossesintheCreditDepartmentincludethere-cognitionandreleaseofimpairmentlossesforcreditrisksanddirectwrite-downsaswellasincomereceivedfromwritten-downclaims.Thesecostsarecarriedbythebankasawholeandarenotmaterial;accordingly,theyarenotallocatedtotheindividualoperatingsegments,butshowninthetransitioncolumn.Thetransitioncolumnalsoincludestheeliminationofinte-rimprofitsandconsolidationentriesbetweentheindividualsegmentsaswellastransitionfromAustrianCommercialCode/AustrianBankingActtoIFRSstandards.
RaiffeisenCentrobankhasdefinedthefollowingoperatingsegments(CashGeneratingUnits):•SecuritiesTrading&SalesandTreasury•OtherDepartments
Thesegment“SecuritiesTrading&SalesandTreasury”comprisestheissueofsecurities(certificates,structuredproductsandwarrants)aswellassecuritiestradingbycustomers(brokeragetransactions).Italsoincludesmarketmaking,proprietarysecuritiestrading,assetandliabilitymanage-ment(matchingofmaturities),liquiditymanagement,moneymarketandinterestratetransactionswithon-balancesheet(e.g.moneymarketdeposits)andoff-balancesheetproducts(e.g.futuresandoptions).Inaccordancewiththerelatedsettlementcosts,50percentoftheincomerecordedbyRaiffeisenCentrobankfrominitialandsecondarypublicoffe-rings(IPO/SPO)isalsoallocatedtothissegment.Theremaining50percentaredepictedinttheresultfromdiscontinuedoperations.
Thesegment“OtherDepartments”includesthe“PrivateBanking”and“Countertrade”departmentsofRaiffeisenCentrobankandfromthebusi-nessyear2014ontheformersegment“CreditDepartment”forreasonsofmaterialityaswellasbusinesstransactionsbyRaiffeisenCentrobankthatcannotbeallocatedtooneoftheothersegments.
Thefollowingbusinesssegmentsarenolongershownasseparateseg-mentsfromthe2014financialyearon,astheyhavebeenclassifiedas“discontinuedoperations”:
Thesegment“EquityCapitalMarkets”whichcomprisedconsultingservi-cesprovidedbythecompanybefore,duringandaftercapitalmarkettran-sactions(IPO/SPO,stockbuybackprograms,delistings,relistingsandothersimilarmeasures)aswellasadvisingforthebuyer(s)orseller(s)inconnectionwithtakeoversandmergers(M&Atransactions)andprivatiza-tions.
Thesegment“CommodityTrading”,whichincludedtheresultsofthefullyconsolidatedcommoditytradingsubsidiariesoftheRaiffeisenCentrobankGroupengagedinrubberandolefintrading,wasexcludedfromthesegment“OtherDepartments”
Assessmentofsegmentresults
Thepresentationofsegmentperformanceisbasedontwosteeringbenchmarks:
Thereturn on equity before tax istheratiothatstatestheprofitbeforetaxtoaverageequityemployedandexpressesthereturnoncapitalemployed.
Thecost/income ratiorepresentsthecostefficiencyoftheindividualoperatingsegments.Thisindicatoriscalculatedasthequotientofgeneraladministrativeexpensesandtotalofnetinterestincome,netfeeandcom-missionincome,tradingprofitandotheroperatingresult(excludingresultsfromthevaluationofhedgeaccountingandotherderivativefinancialinstruments).
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Netinterestincomeinthesegment“OtherDepartments”includesadividendpaymentrelatingtoacompanynotincludedintoconsolidationintheamountof€1.000million.
Forreasonsofcomparability,adjustmentsof“discontinuedoperations”weremadeinthe2013figures.
1.1.–31.12.2013 Wertpapier Kapital- Kredit- Sonst. Über- Gesamt Angabenin€€Tausend handel und markt- geschäft Bankab- leitung -sales und geschäft teilungen und Treasury Commodity Trading
Zinsüberschuss 1.257 45 2.381 -12 -402 3.268
Kreditrisikovorsorgen 0 0 0 16 16
ZinsüberschussnachKreditrisikovorsorgen 1.257 45 2.381 -12 -386 3.284
Provisionsüberschuss -634 14.813 93 1.004 402 15.678
Handelsergebnis 46.277 -77 0 -105 0 46.094
ErgebnisausderivativenFinanzinstrumenten 135 -135 0 0
ErgebnisausFinanzinvestitionen -83 1.003 0 0 0 920
Verwaltungsaufwendungen -31.438 -21.011 -1.601 -9.406 497 -62.960
SonstigesbetrieblichesErgebnis 2.000 59 9.183 -227 11.014
ErgebnisausEndkonsolidierungen 0 0 0 0 -16 -16
Jahresüberschuss, -fehlbetrag vor Steuern 17.514 - 5.169 737 663 269 14.014
Bemessungsgrundlage(Kredit-undMarktrisiko) 434.263 3.625 90.300 40.088 0 568.275
DurchschnittlicheAktiva 2.504.249 10.136 83.972 128.481 -99.109 2.627.729
DurchschnittlichePassiva(ohneEigenkapital) 2.442.249 3.746 3.823 171.508 -88.526 2.532.801
DurchschnittlicheMitarbeiterzahl 143 112 10 74 0 339
Cost/Income Ratio 64,4 % 132,6% 64,7 % 93,4 % - 81,8 %
1/1–31/12/2014 Securities Other Transition Total in€€thousand Trading & Departments Sales and Treasury
Netinterestincome 2,664 1,579 (436) 3,807
Provisioningforimpairmentlosses 0 0 18 18
Netinterestincomeafterprovisioning 2,664 1,579 (418) 3,825
Netfeeandcommissionincome (1,902) 1,510 (1) (393)
Tradingprofit 43,692 637 (146) 44,183
Valuationresultfromderivativefinancialinstruments 0 0 0 0
Netincomefromfinancialinvestments (1,490) 0 0 (1,490)
Generaladministrativeexpenses (33,048) (4,046) 151 (36,942)
Otheroperatingresult (2,035) 1,089 391 (555)
Netincomefromdisposalofgroupassets 0 0 0 0
Profit/loss before tax 7,881 769 (22) 8.628
Basisofassessment(creditandmarketrisk) 431,152 107,590 0 431,152
Averageassets 2,528,985 100,392 13,863 2,528,985
Averageliabilities 2,381,370 175,383 12,080 2,381,370
Averagenumberofstaff 177 26 0 177
Cost/incomeratio 80.7% 84.0% - 81.1%
Averageequity 73,621 15,323 1,583 90,526
Return on equity (ROE) before tax 10.7% 5.0% - 9.5%
1.1.–31.12.2013 Wertpapier Kapital- Kredit- Sonst. Über- Gesamt Angabenin€€Tausend handel und markt- geschäft Bankab- leitung -sales und geschäft teilungen und Treasury Commodity Trading
Zinsüberschuss 1.257 45 2.381 -12 -402 3.268
Kreditrisikovorsorgen 0 0 0 16 16
ZinsüberschussnachKreditrisikovorsorgen 1.257 45 2.381 -12 -386 3.284
Provisionsüberschuss -634 14.813 93 1.004 402 15.678
Handelsergebnis 46.277 -77 0 -105 0 46.094
ErgebnisausderivativenFinanzinstrumenten 135 -135 0 0
ErgebnisausFinanzinvestitionen -83 1.003 0 0 0 920
Verwaltungsaufwendungen -31.438 -21.011 -1.601 -9.406 497 -62.960
SonstigesbetrieblichesErgebnis 2.000 59 9.183 -227 11.014
ErgebnisausEndkonsolidierungen 0 0 0 0 -16 -16
Jahresüberschuss, -fehlbetrag vor Steuern 17.514 - 5.169 737 663 269 14.014
Bemessungsgrundlage(Kredit-undMarktrisiko) 434.263 3.625 90.300 40.088 0 568.275
DurchschnittlicheAktiva 2.504.249 10.136 83.972 128.481 -99.109 2.627.729
DurchschnittlichePassiva(ohneEigenkapital) 2.442.249 3.746 3.823 171.508 -88.526 2.532.801
DurchschnittlicheMitarbeiterzahl 143 112 10 74 0 339
Cost/Income Ratio 64,4 % 132,6% 64,7 % 93,4 % - 81,8 %
1/1–31/12/2013 Securities Other Transition Total in€thousand Trading & Departments Sales and Treasury
Netinterestincome 1,257 2,382 (324) 3,315
Provisioningforimpairmentlosses 0 0 16 16
Netinterestincomeafterprovisioning 1,257 2,382 (308) 3,331
Netfeeandcommissionincome (634) 1,635 (2) 999
Tradingprofit 46,277 (37) (13) 46,226
Valuationresultfromderivativefinancialinstruments 135 (135) 0 0
Netincomefromfinancialinvestments (83) 0 0 (83)
Generaladministrativeexpenses (36,551) (5,085) 152 (41,484)
Otheroperatingresult 923 514 252 1,689
Netincomefromdisposalofgroupassets 0 0 (16) (16)
Profit/loss before tax 11,324 (727) 65 10.662
Basisofassessment(creditandmarketrisk) 434,263 134,013 0 568,275
Averageassets 2,504,249 103,505 13,053 2,620,807
Averageliabilities 2,403,802 133,885 18,026 2,555,713
Averagenumberofstaff 183 33 0 216
Cost/incomeratio 76.6% 148.9% - 79.6%
Averageequity 69,588 19,394 1,408 90,389
Return on equity (ROE) before tax 16.3% - 4.6% 11.8%
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NotesThecompany
RaiffeisenCentrobankAG,Vienna,hasbeenregisteredinthecompanyregisterattheViennaCommercialCourtunderthenumber117507fsince29March1974.TheregisteredofficesofthecompanyarelocatedinTe-getthoffstrasse1,1010Vienna,Austria.
RaiffeisenCentrobankisasubsidiaryofRaiffeisenBankInternationalAG(RBI),whichholds654,999ofthe655,000zeroparvaluesharesofsharecapitalthroughRBIKI-BeteiligungsGmbHanditssubsidiaryRBIIBBeteiligungsGmbH,Vienna.TheremainingzeroparvalueshareisheldbyLexxusServicesHoldingGmbH,Vienna.
RaiffeisenCentrobank,Vienna,isinaGrouprelationshipwithRaffeisen-Landesbanken-HoldingGmbH,Vienna(theparentcompanyoftheGroup),andbelongstothelatter’srangeoffully-consolidatedcompanies.Thisfinancialholdingcompany,throughRaiffeisenZentralbankÖsterreichAktiengesellschaft,holdsamajoritystakeinRaiffeisenBankInternationalAG.TheRaiffeisenCentrobankGroupisincludedintheconsolidatedfi-nancialstatementsofRaiffeisenZentralbankÖsterreichAktiengesellschaftandofRaiffeisenBankInternationalAG.
RaiffeisenCentrobankisaleadingAustrianinvestmentbank,whichprovi-destheentirespectrumofservicesandproductsfocusingonshares,deri-vatives,andequitycapitalmarkettransactionsincludingandexcludingthestockexchange,aswellasinrelationtothemergersandacquisitions(M&A)business.TheM&Abusinessisalsoconductedthroughownsubsi-diaries,mostofwhichareincludedinthefinancialstatementsthroughfullconsolidation.TheothercompaniescomprisingtheRaiffeisenCentrobankGroupareactiveinthefieldsofinternationalcommoditytrading,focusingonrubberandchemicals(olefins).Basedonastrategicdecision,there-alignmentofRaiffeisenCentrobankwasimplemented.Thecompetentbo-diesdecidedtofocustheactivitiesofRaiffeisenCentrobankonthecoreareasofbusinessequitytradingandsalesandstructuredproducts.
ThebusinesssegmentsEquityCapitalMarkets,Mergers&Acquisitionsincludingthesubsidiariesandthecommoditytradingsubsidiarieswereclassfiedasassetsheldforsaleasat31December2014andareshownintheincomestatementasdiscontinuedoperations.Assetsandliabilitiesaswellasincomeandexpensesrelatingtothesebusinesssegmentsaredepictedseparatelyinthebalancesheetandinthenotes.Followingtheclassificationasdiscontinuedoperations,previousyeardatawerereclassi-fiedintheincomestatementandcashflowstatementpursuanttoIFRS5.
TheconsolidatedfinancialstatementswereapprovedbytheManagementBoardon15April2015andsubsequentlysubmittedtotheSupervisoryBoardforexaminationandapproval.
Principlesunderlyingthepreparationoffinancialstatements
Principles underlying the consolidated fianancial statementsTheconsolidatedfinancialstatementsforthe2014financialyearandthecomparativeamountsforthe2013financialyearwerepreparedinac-cordancewiththeInternationalFinancialReportingStandards(IFRS)issuedbytheInternationalAccountingStandardsBoard(IASB)andtheinternatio-nalaccountingstandardsadoptedbytheEUonthebasisofIASRegulati-on(EC)1606/2002,includingtherelevantinterpretationsoftheInternati-onalFinancialReportingInterpretationsCommittee(IFRIC/SIC).Allstan-
dardspublishedbytheIASBtobeappliedtothefinancialstatements2014andadoptedbytheEUhavebeenappliedTheconsolidatedfinan-cialstatementswerepreparedinaccordancewith§245aoftheAustrianCommercialCodeinconnectionwith§59aoftheAustrianBankingActregardingexemptingconsolidatedfinancialstatementspursuanttointerna-tionalaccountingstandards.,IAS11,20,23,29,31,40and41aswellasIFRS2,4,6and11werenotappliedbecausetherewerenorelevantbusinesstransactionsintheGroup.
Theconsolidatedfinancialstatementsarebasedonthereportingpa-ckagessubmittedbyallfullyconsolidatedcompanies,whicharepreparedaccordingtoIFRSrulesanduniformGroupstandards.Theclosingdateforthefinancialstatementsofallfully-consolidatedcompaniesis31Decem-ber.Theamountsintheseconsolidatedfinancialstatementsarepresentedin€thousandandmaycontainrounding-offdifferences.
Theconsolidatedfinancialstatementswerepreparedonthebasisofthegoing-concernprinciple.Anassetisrecognizedwhenitisprobablethatthefutureeconomicbenefitswillflowtothecompany,andwhenitsacqui-sitionorproductioncostoranothervaluecanbereliablymeasured.Alia-bilityisrecognizedwhenitisprobablethatanoutflowofresourcesembo-dyingeconomicbenefitswillresultfromthesettlementoftheobligationandtheamountatwhichthesettlementwilltakeplacecanbemeasuredreliably.RevenueisrecognizediftheconditionsofIAS18aremetandifitisprobablethattheeconomicbenefitswillflowtoRaiffeisenCentrobankandtheamountofrevenuecanbemeasuredreliably.
Foreign currency translationTheconsolidatedfinancialstatementsofRaiffeisenCentrobankareprepa-redinEuro,whichisthefunctionalcurrencyofRaiffeisenCentrobankAGThefunctionalcurrencyisthecurrencyoftheprincipaleconomicenviron-mentinwhichthecompanyoperates.EachentitywithintheGroupdetermi-nesitsownfunctionalcurrencytakingallfactorslistedinIAS21intoac-count.
Thefully-consolidatedcompaniespreparedinforeigncurrenciesweretranslatedintoEurosemployingthemodifiedcurrentratemethodinac-cordancewithIAS21.Equitywastranslatedatitsrelevanthistoricalex-changerate,whileallotherassets,equityandliabilitiesandtheNotestothefinancialstatementsweretranslatedattheprevailingforeignexchangeratesasofthebalancesheetdate.Differencesarisingfromthetranslationofequity(historicalexchangerates)wereoffsetagainstretainedearningsandareshownin“Othercomprehensiveincome”.Incomestatementitemsweretranslatedattheaverageexchangeratefortheyear,whichwasdeterminedastheaverageoftheexchangeratesattheendofeachmonth.Differencesarisingbetweentheexchangerateasofthebalancesheetdateandtheaverageexchangerateappliedintheincomestatementwereoffsetagainstequity(retainedearnings)andnotrecognizedintheincomestatementandareshownasotherchangesinthestatementofchangesinequity.
Duetotheeconomicnatureoftheunderlyingbusinesstransactions,theUSdollarrepresentsthefunctionalcurrencyofCentrotradeChemicalsAG,CentrotradeMinerals&MetalsInc.andCentrotradeSingaporePteLtd.
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Exchangeratein 2014 2013localcurrencyper€ Balance Average for Balance Average for sheet date the year sheet date the year
PolishZloty(PLN) 4.273 4.191 4.154 4.203
MalaysianRinggit(MYR) 4.247 4.348 4.522 4.208
RomanianLeu(RON) 4.483 4.441 4.471 4.417
RussianRouble(RUB) 72.337 51.424 45.325 42.444
TurkishLira(TRY) 2.832 2.899 2.961 2.551
USDollar(USD) 1.214 1.326 1.379 1.330
Thefollowingexchangerateswereusedforforeigncurrencytranslation:
Critical accounting judgments and key sources of estimation uncertainty
IfestimatesorassessmentsarenecessaryforaccountingandmeasuringunderIAS/IFRSrules,theyaremadeinaccordancewiththerespectivestandards.Theyarebasedonpastexperienceandotherfactorssuchasplanningandexpectationsorforecastsoffutureeventsthatappearlikelyfromthecurrentperspective.Theestimatesandunderlyingassumptionsarereviewedonanongoingbasis.Alterationstoestimatesthataffectonlyoneperiodwillbetakenintoaccountonlyinthatperiod.Ifthefollowingre-portingperiodsarealsoaffected,thealterationswillbetakenintoconside-rationinthecurrentandfollowingperiods.Thecriticalaccountingjudg-mentsandkeysourcesofestimationuncertaintyareasfollows:
Risk provisions for loans and advancesAteachreportingdate,allfinancialassetsnotmeasuredatfairvaluethroughprofitorlossaresubjecttoanimpairmenttesttodeterminewhe-theranimpairmentlossistoberecognizedthroughprofitorloss.Inparti-cular,itisrequiredtodeterminewhetherthereisobjectiveevidenceofim-pairmentasaresultofalosseventoccurringafterinitialrecognitionandtoestimatetheamountandtimingoffuturecashflowswhendetermininganimpairmentloss.Riskprovisionsaredescribedindetailinnote(41)“’Riskreport”,inthesectiononcreditrisk.
Fair value of financial instruments Fairvalueisthepricereceivedforthesaleofanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasu-rementdate.Thisappliesregardlessofwhetherthepricecanbedirectlyobservedorhasbeenestimatedonthebasisofameasurementmethod.Indeterminingthefairvalueofanassetorliability,theGrouptakesintoaccountcertainfeaturesoftheassetorliability(e.g.conditionandlocationoftheassetorrestrictionsinthesaleanduseofanasset)ifmarketpartici-pantswouldalsotakeaccountofsuchfeaturesindeterminingthepricefortheacquisitionoftherespectiveassetorforthetransferoftheliabilityatthemeasurementdate.Wherethemarketforafinancialinstrumentisnotacti-ve,fairvalueisestablishedusingavaluationtechniqueorpricingmodel.Forvaluationmethodsandmodels,estimatesaregenerallyuseddepen-dingonthecomplexityoftheinstrumentandtheavailabilityofmarket-baseddata.Theinputstothesemodelsarederivedfromobservablemar-ketdatawherepossible.Undercertaincircumstances,valuationadjust-mentsarenecessaryinordertoaccountformodelrisk,liquidityriskorcre-ditrisk.Thevaluationmodelsaredescribedinthenotesinthesectiononfinancialinstruments–Recognitionandmeasurement.Inaddition,thefairvaluesoffinancialinstrumentsisshowninnote(39)“Fairvalueoffinancialinstruments”.
Deferred tax assetsDeferredtaxassetsarerecognizedonlytotheextentthatitisprobablethatsufficienttaxableprofitwillbeavailableagainstwhichthoseunusedtaxlosses,unusedtaxcreditsordeductibletemporarydifferencescanbeutilized.Thisassessmentrequiressignificantmanagementjudgmentsandassumptions.Deferredtaxesarenotreportedseparatelyintheincomestatementandbalancesheet.Detailsareprovidedinthestatementofcomprehensiveincomeandinnotes(10)”Incometaxes”,(24)“Otherassets”,and(28)“Provisions”.
Provisions for pensions and similar obligations Thecostofthedefinedbenefitpensionplanisdeterminedusinganactua-rialvaluation.Theactuarialvaluationinvolvesmakingassumptionsaboutdiscountrates,expectedratesofreturnonassets,futuresalaryincreases,mortalityratesandfuturepensionincreases.Theinterestrateusedtodis-counttheGroup’sdefinedbenefitobligationsisdeterminedonthebasisoftheyieldsobtainedinthemarketatthebalancesheetdatefortop-ratedfixed-incomecorporatebonds.Considerablediscretionhastobeexer-cisedinthisconnectioninsettingthecriteriafortheselectionofthecorpo-ratebondsrepresentingtheuniversefromwhichtheyieldcurveisderived.Themaincriteriafortheselectionofsuchcorporatebondsaretheissuan-cevolumesofthebonds,thequalityofthebondsandtheidentificationofoutliers,whicharenottakenintoaccount.Mercer’srecommendationisusedtodeterminetheinterestrate.AssumptionsandestimatesusedforthedefinedbenefitobligationcalculationsaredescribedinthesectionProvisi-onsforpensionsandsimilarobligationsfollowingtheterminationoftheemployment.Quantitativedatarelatingtolong-termprovisionsforstaffex-penesesareshowninitem(28)“Provisions”.
Impairment of non-financial assetsCertainnon-financialassets,includinggoodwill,aresubjecttoanannualimpairmentreview.Goodwillandotherintangibleassetsaretestedmorefrequentlyifeventsorchangesincircumstances,suchasanadversechangeinbusinessclimate,indicatethattheseassetsmaybeimpaired.Thedeterminationoftherecoverableamountrequiresjudgmentsandas-sumptionstobemadebymanagement.Thecarryingamountsofgoodwillwerereclassifiedtoitem(25)“Assetsheldforsale”pursuanttoIFRS5.
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Notestotheincomestatement(1) Income statement according to measurement categoryThefollowingtablepresentstheincomestatementaccordingtomeasurementcategoriespursuanttothedefinitionscontainedinIAS39:
in€€thousand 2014 2013
Net gains (losses) on financial assets and liabilities held for trading 42,565 44,437
Financial assets and liabilities at fair value through profit and loss 130 104
Netinterestincome 929 167
Gains(losses)onfinancialassetsandliabilitiesatfairvaluethroughprofitandloss (800) (64)
Available-for-sale financial assets (691) 981
Netinterestincome 0 1,000
Impairmentlossesonavailableforsalefinancialassets (691) (19)
Loans and advances 4,157 3,357
Netinterestincome 4,138 3,340
Impairmentlossesonfinancialassetsnotmeasuredatfairvaluethroughprofitandloss 18 16
Financial liabilities at amortized cost (1,158) (1,018)
Interestexpenses (1,158) (1,018)
Derivatives (hedging) (103) (175)
Netinterestincome (103) (175)
Net revaluations from exchange differences 1,617 1,788
Other operating income/expenses (37,889) (38,813)
Profit before tax from continued operations 8,628 10,662
(2) Net interest income Netinterestincomeincludesinterestincomeandexpensesfromitemsofthebankingbusiness,dividendincome,andcommissionssimilartointerest.
in€€thousand 2014 2013
Total interest and interest-like income 5,068 4,508
Interest income 5,068 3,508
fromdepositswithcentralbanks 3 10
fromloansandadvancestocreditinstitutions 1,571 1,113
fromloansandadvancestocustomers 2,565 2,217
fromsecurities 929 167
Current interest-like income 0 1,000
fromsharesinaffiliatedcompanies 0 1,000
Total Interest and interest-like expenses (1,261) (1,193)
Interest expenses (1,261) (1,193)
forliabilitiestocreditinstitutions (1,051) (537)
forliabilitiestocustomers (107) (145)
forsubordinatedcapital 0 (336)
forderivativefinancialinstruments(non-trading)net (103) (175)
Net interest income 3,807 3,315
Theinterestmargininrelationtotherespectiveaveragesofthestatedbasedevelopedasfollows:
inpercent 2014 2013
Interestmargin(totalassets) 0.15 0.13
Interestmargin(riskassetsforcreditrisk) 1.95 1.69
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(3) Provisioning for impairment lossesTheprovisionsforimpairmentlossestoon-balancesheetandoff-balancesheetitemsareasfollows:
Detailedinformationonprovisionsispresentedinnote(17)“Impairmentlossesonloansandadvances”.
in€€thousand 2014 2013
Individual loan loss provisions 18 16
Releaseofprovisionsforimpairmentlosses 18 16
Total 18 16
(4) Net fee and commission income
Feeandcommissionincometotaled€16,284thousandforthereportingyear(2013:€15,335thousand),whilefeeandcommissionexpensesamountedto€16,677thousand(2013:€14,336thousand).
Thedecreaseinnetfeeandcommissionincomeismainlyattributabletoincomefrominvestmentandpensionfundmanagementandtovolume-relatedhig-herexpensesinthesecuritiesbusiness.
(5) Trading profitThepositionnettradingincomeincludesinterestanddividendincome,refinancingcosts,commissionsandanychangesinfairvalueoftradingportfolios.
Inadditiontorealizedandunrealizedgainsfromthetradingportfolio,tradingprofitalsoreferstointerestincomefromdebtinstruments,dividendincomefromequityinstrumentsofthetradingportfolioandrefinancingcostsfortradingassets.
in€€thousand 2014 2013
Interest-basedtransactions 1,556 (12,124)
Currency-basedtransactions (2,751) (337)
Equity/index-basedtransactions 45,378 58,686
Total 44,183 46,226
in€€thousand 2014 2013
Paymenttransfers (17) (29)
Loanadministrationandguaranteebusiness 1 (160)
Securitiesbusiness (375) 1,213
Otherbankingservices (1) (26)
Total (393) 999
(6) Valuation result from derivative financial instruments
in€€thousand 2014 2013
Valuation result from derivative hedging instruments (IAS 39, fair value hedges) 0 0
Changesinthepresentvalueofderivativefinancialinstruments (1) (135)
Changesinthepresentvalueoftheunderlyingtransaction 1 135
Total 0 0
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(7) Net income from financial investmentsNetincomefromfinancialinvestmentsincludesvaluationresultsandnetproceedsfromthesaleofsecuritiesatfairvaluethroughprofitandlossandfromequityparticipations.Thisincludessharesinaffiliatedcompaniesandotherinterests.
NetincomefromsecuritiesatfairvaluethroughprofitandlossresultsmainlyfromthevaluationofAustriangovernmentbondsheldtocomplywiththeliquiditycoverratiotowardsthesupervisingauthoritiesin2014.
in€€thousand 2014 2013
Net income from equity participations (691) (19)
Netvaluationsofequityparticipations (691) (19)
Net income from securities at fair value through profit and loss (800) (64)
Netvaluationsfromthesaleofsecurities (800) (64)
Total (1,490) (83)
(8) General administrative expensesGeneraladministrativeexpensesincludestaffexpenses,otheradministrativeexpenses,aswellasdepreciationontangibleandintangiblefixedassetsasfollows:
Legal,advisoryandconsultingexpensesincludeauditfeesforRaiffeisenCentrobankanditsGroupcompanies.Ofthistotal,thefeefortheauditoftheconsolidatedfinancialstatementstotaled€281thousand(2013:€290thousand)andthefeeforotherconsultingservicesamountedto€41thousand(2013:€40thousand).
Thedecreasein“Sundryadministrativeexpenses”isprimarilyattributabletolowerprovisonsforbonuspayments.
in€€thousand 2014 2013
Staff expenses (20,746) (23,345)
Wagesandsalaries (15,312) (16,661)
Socialsecuritycostsandstaff-relatedtaxes (3,689) (3,827)
Voluntarysocialexpenses (425) (459)
Expensesfordefinedcontributionpensionplans (571) (520)
Expensesfordefinedbenefitpensionplans (3) (16)
Expensesforotherpost-employmentbenefits (475) (952)
Expensesforotherlong-termemployeebenefits 0 (6)
Deferredbonuspayments (271) (905)
Other administrative expenses (14,665) (16,616)
Officespaceexpenses (1,096) (1,128)
ITcosts (1,713) (1,845)
Communicationexpenses (4,011) (3,361)
Legal,advisoryandconsultingexpenses (905) (1,338)
Advertising,PRandpromotionalexpenses (910) (1,079)
Officesupplies (177) (162)
Carexpenses (446) (346)
Securityexpenses (26) (31)
Travellingexpenses (215) (257)
Trainingexpensesforstaff (188) (178)
Sundryadministrativeexpenses (4,977) (6,890)
Depreciation on tangible and intangible fixed assets (1,531) (1,523)
Tangiblefixedassets (1,366) (1,274)
Intangiblefixedassets (165) (249)
Total (36,942) (41,484)
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Expenses on severance payments and retirement benefits
in€thousand 2014 2013
MembersoftheManagementBoard (273) 607
Otheremployees 2,034 734
Total 1,761 1,341
ExpensesforseverancepaymentsformembersoftheManagementBoardintheamountof€ 16thousand(2013:€ 500thousand)werepaidout.
(9) Other operating result OtheroperatingresultincludessalesrevenuesandexpensesofRaiffeisenCentrobank’scommoditytradingsubsidiariesandfromothernon-bankingactivitiesaswellasincomeandexpensesfromthedisposaloftangibleandintangiblefixedassets.
in€thousand 2014 2013
Netresultarisingfromnon-bankingactivities (4) (86)
Salesrevenuesfromnon-bankingactivities 44 129
Expensesfromnon-bankingactivities (48) (215)
Netproceedsfromdisposaloftangibleandintangiblefixedassets 3 0
Othertaxes (2,060) (1,077)
thereofspecialbanklevy (2,060) (1,077)
Netresultfromtheallocationandreleaseofotherprovisions 0 418
Netresultfromtherepurchaseofsubordinatedcapital 0 2,000
Otheroperatingincome 1,956 1,413
Otheroperatingexpenses (449) (979)
Total (555) 1,689
Thedeclinein“Otheroperatingresult”isattributabletoachangeintheamountofthestabilityfeepursuanttothelawmodifyingtaxes(Abgabenände-rungsgesetz)2014.In2013theitemrecordedapositiveresultfurthertoincomefromtherepurchaseofasubordinatedbond.
(10) Income taxesIncometaxesarecomprisedofthefollowing:
Thefollowingtabledescribestherelationbetweengroupnetprofitandtaxes:
Theitem”Otherchanges”alsoincludestaxsavingsfromtheGrouptaxationschemeinAustriaintheamountof€ 324thousand(2013:€ 791thousand).
in€€thousand 2014 2013
Currentincometaxes (249) (2,095)
Austria (249) (2,095)
Deferredtaxes (25) (34)
Total (275) (2,129)
in€€thousand 2014 2013
Profit before tax 8,628 10,662
Theoreticalincometaxexpenseinthefinancialyearbasedonthedomesticincometaxrateof25percent (2,157) (2,665)
Effectofdivergentforeigntaxrates (14) (14)
Taxdeductionsduetotax-exemptincomefromequityparticipationsandotherincome 1,799 2,204
Taxincreasesduetonon-deductibleexpenses (225) (225)
Incomefromgroupchargepreviousyear 1,136 0
Otherchanges (814) (1,429)
Effective tax burden (275) (2,129)
Tax rate in per cent 9.85% 19.97%
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(11) Profit after tax from discontinued operations
in€€thousand 2014 2013 Change
Interestincome 218 127 72.1%
Interestexpenses (264) (173) 52.1%
Net interest income (46) (47) (1.9%)
Netinterestincomeafterprovisioning (46) (47) (1.9%)
Feeandcommissionincome 12,509 19,416 (35.6%)
Feeandcommissionexpenses (2,429) (4,737) (48.7%)
Net fee and commission income 10,080 14,679 (31.3%)
Tradingprofit (1,357) (131) >100.0%
Valuationresultfromderivativefinancialinstruments (2,223) 1,003 >100.0%
Generaladministrativeexpenses (16,921) (21,476) (21.2%)
Otheroperatingresult 10,839 9,325 16.2%
Profit before tax 373 3,352 (88.9%)
Incometaxes (301) (630) (52.2%)
Profit after tax from discontinued operations 72 2,723 (97.3%)
Thedeclinein“Netfeeandcommissionincome”isprimarilyduetoareductionintheEquityCapitalMarkets(ECM)/M&Abusiness.Therisein“Otheroperatingresult”from€9,325thousandto€10,839thousandismainlyattributabletothereleaseofotherprovisionsintheM&Asegment.
The“Otheroperatingresult“includesthenetincomefromnon-bankingactiviitesrelatingtothecommoditytradingsubsidiariesandbreaksdownasfollows:
Thedeclinein“Generaladministrativeexpenses”form€21,476thousandin2013to€16,921thousandismostlyduetoareductioninstaffexpenses.In2014staffexpensescameto€ 12,095thousandanddeclinedby€3,463comparedto2013(2013:€15,558thousand).“Otheradministrativeexpenses”declinedby€1,050thousandto€4,632thousandin2014comparedto€5,682thousandin2013.
(12) Earnings per share
Nooptionorconversionrightswereissued;forthisreasonthereisnodilutionofearningspershare.
in€thousand 2014 2013
Profitaftertaxfromcontinuedoperations 8,354 8,532
Profitaftertaxfromdiscontinuedoperations1 540 3,889
Averagenumberofordinarysharesoutstanding 655,000 655,000
Earnings per share in € from continued operations 12.75 13.03
Earnings per share in € from discontinued operations 0.82 5.931includesnon-controllinginterestswhichhavebeenentirelyallocatedtodiscontinuedoperations.
in€€thousand 2014 2013
Salesrevenuesfromnon-bankingactivities 257,071 311,761
Expensesfromnon-bankingactivities (247,313) (301,868)
Net income from non-banking activities 9,758 9,893
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NotestotheBalanceSheet(13) Balance sheet according to measurement categoryThefollowingtableshowsthecarryingamountofthemeasurementcategoriesasdefinedinIAS39ofcontinuedoperations.Assetsandliabilitiesheldforsalearenetted:
Assets by measurement category 2014 2013 in€€thousand
Cash reserve 2,898 4,337
Trading assets 2,137,680 2,033,725
Positivefairvaluesofderivativefinancialinstruments 109,739 119,046
Structuredproducts 139,539 159,024
Shares 296,951 338,453
Bonds,notesandotherfixed-interestsecurities 410,661 597,643
Call/timeplacementsfortradingpurposes 1,180,790 819,559
Financial assets measured at fair value through profit and loss 41,693 9,770
Bonds,notesandotherfixed-interestsecurities 41,693 9,770
Available-for-sale financial assets (financial investments) 5,154 5,153
Sharesinotheraffiliatedcompanies 19 19
Otherinterests 5,135 5,135
Loans and advances 468,566 373,782
Loansandadvancestocreditinstitutions 377,361 269,111
Loansandadvancestocustomers 83,697 98,925
Othernon-derivativefinancialassets 7,583 5,839
Impairmentlossesonloansandadvances (75) (93)
Derivatives (hedging) 0 33
Positivefairvaluesofderivatives(hedging) 0 33
Assetsheldforsale 64,729 73,782
Other assets 9,955 9,994
Intangibleandtangiblefixedassets 9,955 9,994
Total assets 2,730,676 2,510,575
Equity and liabilities by measurement category 2014 2013 in€€thousand
Trading liabilities 2,283,532 2,119,174
Negativefairvaluesofderivativefinancialinstruments 1,165,778 995,970
Short-sellingoftradingassets 424,838 497,847
Issuedcertificates 692,916 625,357
Financial liabilities 299,467 229,312
Liabilitiestocreditinstitutions 71,354 106,672
Liabilitiestocustomers 221,241 117,237
Othernon-derivativefinancialliabilities 6,872 5,403
Derivatives (hedging) 0 222
Negativefairvaluesofderivativesinfairvaluehedge 0 222
Provisions 14,596 17,059
Liabilities held for sale 30,862 38,548
Equity 102,219 106,258
Total equity and liabilities 2,730,676 2,510,575
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(14) Cash reserve
in€€thousand 2014 2013
Cashinhand 214 192
Depositswithcentralbanks 2,685 4,144
Total 2,898 4,337
(15) Loans and advances to credit institutions
Loansandadvancestocreditinstitutionsareclassifiedregionally(counterparty’sseat)asfollows:
in€€thousand 2014 2013
Giroandclearingbusiness 154,219 99,993
Moneymarketbusiness 223,141 169,118
Total 377,361 269,111
in€€thousand 2014 2013
Austria 258,931 202,629
Othercountries 118,430 66,482
Total 377,361 269,111
(17) Impairment losses on loans and advances ProvisionsforimpairmentlossesareformedinaccordancewithuniformGroupstandardsandcoverallrecognizablecreditrisks.Atablewiththedevelop-mentoftheimpairmentlossesonloansandadvancescanbefoundintheriskreportonpage54ff..Impairmentlossesonloansandadvancesarealloca-tedtothefollowingassetclasses:
in€€thousand 2014 2013
Retailcustomers–privateindividuals 75 93
Total 75 93
(16) Loans and advances to customers
Retail(private)customersreferexclusivelytowealthyprivateindividualsandself-employedpeople(highnetworthindividuals).
Loansandadvancestocustomersclassifiedregionally(counterparty’sseat)areasfollows:
in€€thousand 2014 2013
Corporatecustomers–large 49,447 61,482
Retailcustomers–privateindividuals 34,249 37,443
Total 83,697 98,925
in€€thousand 2014 2013
Austria 30,150 46,326
Othercountries 53,547 52,599
Total 83,697 98,925
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(18) Trading assets Tradingassetscomprisethefollowingsecuritiesandderivativefinancialinstruments:
Theshareportfoliosstemmingfrommarketmakingactivitiesalongwithothersecurities,options,derivativesandpurchasedstructuredproductsrepresenthedgingitemsforcertificatesandwarrantsissuedbyRaiffeisenCentrobank.PursuanttoIAS39.11structuredproductsincludedembeddedderivatives.
“Bonds,notesandotherfixed-interestsecurities”recordsadecreasecomparedtoDecember2013.Thisisduetothefactthatcall/timeplacementsfortradingpurposesareusedtohedgeguaranteeproductsissuedbyRaiffeisenCentrobank,therebyreplacingthezerobonds.“Bondsandnotesofpublicissuers”relatestoafixed-interestbondissuedbytheFederalRepublicofGermany.
in€€thousand 2014 2013
Bonds, notes and other fixed-interest securities 410,661 597,643
Bondsandnotesissuedbycreditinstitutions 375,917 560,538
Bondsandnotesofpublicissuers 33,885 32,454
Bondsandnotesofnon-bankissuers 859 4,650
Shares and other variable-yield securities 296,951 338,453
Sharesandcomparablesecurities 270,682 319,274
Mutualfunds 26,269 19,179
Structured products 139,539 159,024
Positive fair values from derivative financial instruments 109,554 119,037
Interest-basedtransactions 0 699
Currency-basedtransactions 74 7
Equity/index-basedtransactions 109,480 118,331
Call/time placements for trading purposes 1,180,790 819,559
Total 2,137,495 2,033,716
(19) Derivative financial instruments
Thisitemshowsthepositivefairvaluesofderivativefinancialinstrumentsnotheldfortradingpurposes.AslongastheconditionsforhedgeaccountingaccordingtoIAS39arefulfilled,derivativefinancialinstrumentsaremeasuredattheirfairvalues(dirtyprices)intheirfunctionashedginginstruments.Thehedgeditemsinconnectionwithfairvaluehedgesareloansandadvancestocustomersandliabilitiestocreditinstitutionswhicharetobehedgedagainstinterestraterisks.Inaddition,IAS39providesfortheapplicationofcashflowhedgeaccountingforderivativestohedgetheriskofchangesinfuturecashflows.ThisitemalsoincludesthepositivefairvaluesofderivativefinancialinstrumentsthatareneitherheldfortradingnorconstitutefairvaluehedginginstrumentsunderIAS39.
in€€thousandd 2014 2013
Positive fair values of derivatives in fair value hedges IAS 39 0 1
Interest-basedtransactions 0 1
Positive fair values of derivatives in cash flow hedges IAS 39 0 32
Currency-basedtransactions 0 32
Positive fair values of other derivative financial instruments 186 9
Currency-basedtransactions 186 9
Total 186 42
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(20) Securities and financial investmentsThisitemcomprisesfinancialassetsrecognizedatfairvaluethroughprofitandloss(securitiesandshares),andstrategicequityparticipationsheldonalong-termbasis.
in€€thousand 2014 2013
Bonds, notes and other fixed-interest securities 41,693 9,770
Bondsandnotesofpublicbodieseligibleforrefinancing 8,220 7,238
Otherbondsandnotesofpublicbodies 33,473 2,532
Equity participations 5,154 5,153
Sharesinaffiliatedcompanies 19 19
Otherinterests 5,135 5,135
Total 46,847 14,923
Theitem“Otherbondsandnotesofpublicbodies”relatestoanAustriangovernmentbondwithacountervalueofroughly€31millionheldtocomplywiththeliquiditycoverageratiotowardsthesupervisingauthorities.
DisclosuresrelatingtoassociatedcompaniespursuanttoIAS28:
Initsannualfinancialstatementsfortheyearended31December2014SyrenaImmobilienHoldingAGreportsabalancesheettotalof€32,107thousand(31/12/2013:€32,042thousand),equityof€29,614thousand(31/12/2013:€29,550thousand)andnetprofitfortheyearof€64thousand(2013:€75thousand).
(21) Intangible fixed assets
in€€thousand 2014 2013
Software 115 199
Total 115 199
(22) Tangible fixed assets
in€€thousand 2014 2013
LandandbuildingsusedbytheGroupforownpurposes 6,617 6,773
Officefurnitureandequipmentaswellasothertangiblefixedassets 3,223 3,022
Total 9,840 9,795
(23) Development of fixed assets Thefollowingtableshowsthedevelopmentofintangiblefixedassetsandtangiblefixedassetsduring2014:
Cost of acquisition Balance Change in Exchange Additions Disposals Transfers Balance as or production as at 1/1/2014 consolidation differences at 31/12/2014in€€thousand from continued range from continued operations operations
Intangible fixed assets 3,801 0 0 76 (4) 0 3,873
Goodwill 0 0 0 0 0 0 0
Softwareandmiscellaneous 3,801 0 0 76 (4) 0 3,873
Tangible fixed assets 25,806 0 0 1,365 (518) 0 26,652
LandandbuildingsusedbytheGroupforownpurposes 9,481 0 0 0 0 0 9,481
thereofvalueofdevelopedland 2,066 0 0 0 0 0 2,066
Othertangiblefixedassets 16,325 0 0 1,365 (518) 0 17,171
Total 29,606 0 0 1,441 (522) 0 30,525
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Write-ups, amortization, depreciation and impairment Cumulative Revaluations Depr./amort. Carrying amount Carrying amountin€€thousand as at 31/12/2014 as at 31/12/2014 from continued from discontinued operations operations
Intangible fixed assets (3,758) 0 (165) 115 115
Goodwill 0 0 0 0 91
Softwareandmiscellaneous (3,758) 0 (165) 115 24
Tangible fixed assets (16,812) 0 (1,366) 9,840 301
LandandbuildingsusedbytheGroupforownpurposes (2,864) 0 (156) 6,617 0
thereofvalueofdevelopedland 0 0 0 2,066 0
Othertangiblefixedassets (13,948) 0 (1,210) 3,223 301
Total (20,570) 0 (1,531) 9,955 416
Thefollowingtableshowsthedevelopmentofintangiblefixedassetsandtangiblefixedassetsduring2013:
Cost of acquisition Balance Change in Exchange Additions Disposals Transfers Balance as or production as at 1/1/2013 consolidation differences at 31/12/2013in€€thousand range
Intangible fixed assets 4,168 0 (17) 142 0 0 4,292
Goodwill 139 0 (10) 0 0 0 128
Softwareandmiscellaneous 4,029 0 (7) 142 0 0 4,164
Tangible fixed assets 28,834 0 (74) 890 (6) 0 29,644
LandandbuildingsusedbytheGroupforownpurposes 9,137 0 0 0 0 0 9,137
thereofvalueofdevelopedland 2,006 0 0 0 0 0 2,006
Othertangiblefixedassets 19,697 0 (74) 890 (6) 0 20,507
Total 33,002 0 (91) 1,032 (6) 0 33,936
in€€thousand Write-ups, amortization, depreciation and impairment Carrying amount Carrying amount Carrying amount as of as of as of 31/12/2013 31/12/2013 31/12/2013 from continued from operations discontinued Cumulative Revaluations Depr./amort. operations
Intangible fixed assets (3,979) 0 (257) 314 199 115
Goodwill (43) 0 0 85 0 85
Softwareandmiscellaneous (3,936) 0 (257) 229 199 30
Tangible fixed assets (19,367) 0 (1,501) 10,276 9,795 482
LandandbuildingsusedbytheGroupforownpurposes (2,364) 0 (156) 6,773 6,773 0
thereofvalueofdevelopedland 0 0 0 2,006 2,006 0
Othertangiblefixedassets (17,003) 0 (1,346) 3,503 3,021 482
Total (23,346) 0 (1,758) 10,591 9,994 597
Forreasonsofmateriality,nodetailedoverviewofimplicationsofIFRS5onthedevelopmentoffixedassetsisprovidedfor2013.
Addtionstointangiblefixedassetsandtangiblefixedassetsdonotincludeanyrelevantindividualinvestments.
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(24) Other assets
in€€thousand 2014 2013
Taxassets 5,619 2,625
Currenttaxassets 5,110 1,186
Deferredtaxassets 509 1,439
Loansandadvancesarisingfromnon-bankingactivities 64 1,080
Prepaymentsandotherdeferrals 1,201 1,491
Clearingclaimsfromsecuritiesandpaymenttransferbusiness 126 0
Currentassets 572 525
Anyotherbusiness 0 118
Total 7,583 5,839
Deferredtaxesbreakdownasfollows:
in€€thousand 2014 2013
Deferredtaxassets 509 1,439
Total (net) 509 1,439
DerSaldolatenterSteuernstammtausfolgendenPosten:
in€€thousand 2014 2013
Tangibleandintangiblefixedassets 0 999
Provisions 516 327
Otherliabilities 0 56
Otherbalancesheetitems 4 124
Deferred tax assets 519 1,507
Loansandadvancestocustomers 0 56
Tradingassets 11 12
Deferred tax liabilities 11 68
Net deferred taxes 509 1,439
(25) Assets held for sale
in€€thousand 2014 2013
Cashreserve 35 38
Loansandadvancestocreditinstitutions 6,245 8,069
Loansandadvancestocustomers 32 1,317
Derivativefinancialinstruments 242 0
Securitiesandfinancialinvestments 2,628 3,837
Intangiblefixedasssets 115 115
Tangiblefixedassets 302 482
Otherassets 55,130 59,925
Total 64,728 73,782
“Otherassets“includeinventoriesofthecommoditytradingsubsidiaries,whichmarginallydeclinedcomparedtothepreviousyearperiodfurthertoadeclineindemandandthegeneraleconomicsituation.
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(26) Liabilities to credit institutions
Liabilitiestocreditinstitutionsareclassifiedregionally(counterparty’sseat)asfollows:
in€€thousand 2014 2013
Giroandclearingbusiness 23,864 13,943
Moneymarketbusiness 47,490 92,729
Total 71,354 106,672
in€€thousand 2014 2013
Austria 37,630 75,608
Othercountries 33,724 31,065
Total 71,354 106,672
(27) Liabilities to customers
in€€thousand 2014 2013
Sightdeposits 191,145 107,172
Timedeposits 30,095 10,065
Total 221,241 117,237
Liabilitiestocustomersarecomprisedofthefollowing:
in€€thousand 2014 2013
Corporatecustomers–large 32,593 34,791
Retailcustomers–privateindividuals 188,647 82,446
Total 221,241 117,237
Retail(private)customersreferexclusivelytowealthyprivateindividualsandself-employedpersons(highnetworthindividuals).
Liabilitiestocustomersareclassifiedregionally(counterparty’sseat)asfollows:
in€€thousand 2014 2013
Austria 37,513 41,394
Othercountries 183,727 75,843
Total 221,241 117,237
in€€thousandd Balance Change in Additions Reversals Use Transfers, Balance as at Balance as at as at 1/1/2014 consolidation exchange 31/12/2014 31/12/2014 from continued range differences from continued from discontinued operations operations operations
Severancepayments 3,845 0 1,183 (15) (551) 0 4,463 692
Retirementbenefits 0 0 0 0 0 0 0 487
Taxes 189 0 0 (117) (71) 0 0 301
Current 189 0 0 (117) (71) 0 0 155
Deferred 0 0 0 0 0 0 0 146
Pendinglegalissues 3,526 0 606 0 0 0 4,132 0
Overduevacation 1,327 0 38 0 0 0 1,365 341
Other 8,172 0 4,977 (1,531) (6,984) 0 4,635 1,995
Total 17,059 0 6,805 (1,662) (7,606) 0 14,596 3,815
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in€thousand Balance Change in Additions Reversals Use Transfers, Balance Balance Balance as at consolidation exchange as at as at as at 1/1/2013 range differences 31/12/2013 31/12/2013 31/12/2013 from continued from discontinued operation operations
Severancepayments 5,044 0 653 0 (1,425) (4) 4,267 3,845 422
Retirementbenefits 449 0 14 0 0 0 462 0 462
Taxes 1,027 0 157 (542) (318) (71) 252 189 64
Current 995 0 157 (542) (287) (70) 252 189 64
Deferred 32 0 0 0 (31) (2) 0 0 0
Pendinglegalissues 3,247 0 279 0 0 0 3,526 3,526 0
Overduevacation 1,671 0 162 (124) (37) (3) 1,668 1,327 341
Other 11,587 0 9,647 (2,143) (7,599) (168) 11,323 8,172 3,150
Total 23,026 0 10,911 (2,810) (9,380) (247) 21,500 17,059 4,440
(29) Trading liabilities
in€€thousand 2014 2013
Negative fair values of derivative financial instruments 1,165,380 995,626
fromtradingincertificateswithoptioncharacter 1,000,862 885,881
fromOTCoptions 150,431 82,708
fromtradinginwarrants 2,525 1,819
fromtradinginOeTOBproducts 0 11,524
fromtradinginEUREXoptions 6,068 9,967
fromtradinginotheroptions 5,494 3,727
Issued certificates (guarantee bonds) 424,838 497,847
Short-selling of trading assets 692,916 625,631
Total 2,283,134 2,119,104
TradingliabilitiesincludestructuredguaranteeproductsissuedbyRaiffeisenCentrobanksuchastheBlueChipcertificates.Thisitemalsoincludeswarrantsandothercertificates,suchasturbocertificatesonindexesandshares.
Theitemalsoincludestheshort-sellingofstocks,whicharerelatedtothemarketmakingactivitiesofRaiffeisenCentrobankandprimarilyrepresentcounter-positionstostockandindexfuturesaswellascash(bank)positionsrecordedunderassets.
InthecourseoftheterminationofderivativestradingontheOeTOBinVienna,transactionsinderivativeswererelocatedtotheEuropeanderivativesex-changeEUREX.
(30) Derivative financial instruments
in€€thousand 2014 2013
Negative fair value of derivatives in fair value hedges (IAS 39) 0 222
Interest-basedtransactions 0 222
Negative fair values of other derivative financial instruments 398 70
Currency-basedtransactions 398 70
Total 398 292
Thisitemalsoincludesthenegativefairvaluesofotherderivativefinancialinstrumentswhicharenotheldfortradingpurposes.InsofarastheconditionsforhedgeaccountingaccordingtoIAS39arefulfilled,derivativefinancialinstrumentsaremeasuredatfairvalues(dirtyprices)intheirfunctionashedginginstruments.Thehedgeditemsinconnectionwiththefairvaluehedgesareloansandadvancestocustomersandliabilitiestocreditinstitutions.Thehedgedrisksareinterestraterisks.Inaddition,theitemincludesnegativefairvaluesofderivativefinancialinstrumentswhichareneitherheldfortradingpurposesnorserveasfairvaluehedgepursuanttoIAS39.
ForreasonsofimmaterialitynodetaileddescriptionoftheimplicationofIFRS5forthe2013financialyearisprovided.
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(31) Other liabilities
in€€thousand 2014 2013
Accrualsanddeferreditems 331 194
Clearingclaimsfromsecuritiesandpaymenttransferbusiness 0 12
Anyotherbusiness 6,541 5,197
Total 6,872 5,403
(32) Liabilities held for sale
in€€thousand 2014 2013
Liabilitiestocreditinstitutions 11,072 10,573
Liabilitiestocustomers 2,108 2,626
Provisions 3,815 4,440
Derivativefinancialinstruments 0 52
Otherliabilities 13,867 20,856
Total 30,862 38,548
(33) Equity
in€€thousand 2014 2013
Consolidated equity 93,831 94,166
Subscribedcapital 47,599 47,599
Capitalreserves 6,651 6,651
Retainedearnings 39,581 39,915
Group net profit 8,894 12,422
Non-controlling interests (506) (329)
Total 102,219 106,258
ThesubscribedcapitalofRaiffeisenCentrobankAGcontinuestobedividedinto655,000zeroparvalueshares.InaccordancewiththeArticlesofAs-sociation,thetotalnominalvalueequals€47,598,850.Statementofchangesinequityisavailableonpage26.
“Non-controllinginterests”relatestosharesofthirdpartiesinOOORaiffeisenInvestment,Moscow(Russia)andRaiffeisenInvestmentPolskasp.z.o.o.,Warsaw(Poland).
TheManagementBoardwillproposetotheAnnualGeneralMeetingthatadividendof€11.00perordinarysharebedistributedfromthebalancesheetprofitintheindividualfinancialstatementsofRaiffeisenCentrobankAGasat31December2014,amountingto€10,268thousand.Thisrepre-sentsatotaldividendpaymentof€7,205thousand.Anamountof€3,000thousandwillbeallocatedtofreereservesandtheremainingamountof€63thousandwillbecarriedforwardtothenewbalancesheet.
Otherliabilitiescompriseprimarilyliabilitiestothetaxauthorities.
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(34) Breakdown of the remaining terms to maturity
2014 Payable on demand or Up to 3 3 months 1 to 5 Over in€€thousand with indefinite maturity dates months to 1 year years 5 years
Cashreserve 2,898 0 0 0 0
Loansandadvancestocreditinstitutions 154,219 48,077 175,064 0 0
Loansandadvancestocustomers 55,472 7,188 955 12,080 8,002
Impairmentlossesonloansandadvances (75) 0 0 0 0
Tradingassets 296,951 200,329 350,818 1,100,882 188,515
Securitiesandfinancialinvestments 5,154 0 41,693 0 0
Available-forsalefinancialassets 7,086 57,733 0 0 0
Otherassets 8,399 7,175 2,026 33 0
Total assets 530,104 320,503 570,557 1,112,995 196,517
Liabilitiestocreditinstitutions 23,864 46,450 1,039 0 0
Liabilitiestocustomers 191,145 10,468 19,627 0 0
Tradingliabilities 424,837 100,086 323,054 1,119,629 315,527
Liabilitiesheldforsale 11,298 19,405 0 0 0
Otherliabilities 10,135 10,711 1,180 0 0
Subtotal 661,279 187,120 344,901 1,119,629 315,527
Equity 102,219 0 0 0 0
Total equity and liabilities 763,498 187,120 344,901 1,119,629 315,527
Disclosurestofinancialinstruments
2013 Payable on demand or Up to 3 3 months 1 to 5 Over in€€thousand with indefinite maturity dates months to 1 year years 5 years
Cashreserve 4,337 0 0 0 0
Loansandadvancestocreditinstitutions 100,743 153,970 14,398 0 0
Loansandadvancestocustomers 48,415 6,911 13,330 14,749 15,519
Impairmentlossesonloansandadvances (93) 0 0 0 0
Tradingassets 338,453 246,674 193,311 1,122,072 133,207
Securitiesandfinancialinvestments 5,153 0 9,770 0 0
Available-for-salefinancialassets 8,836 53,773 11,174 0 0
Otherassets 14,729 1,145 0 0 0
Total assets 520,573 462,472 241,983 1,136,821 148,726
Liabilitiestocreditinstitutions 16,977 89,050 645 0 0
Liabilitiestocustomers 107,172 1,612 8,452 0 0
Tradingliabilities 0 0 0 0 0
Liabilitiesheldforsale 497,847 157,276 234,614 950,802 278,566
Subordinatedcapital 10,905 28,137 0 0 0
Otherliabilities 19,861 2,382 1 15 0
Subtotal 652,764 278,457 243,713 950,817 278,566
Equity 106,258 0 0 0 0
Total equity and liabilities 759,022 278,457 243,713 950,817 278,566
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(35) Foreign currency volumesContinuedoperationsconsistofthefollowingvolumesofassetsandliabilitiesdenominatedinforeigncurrency:
in€€thousand 2014 2013
Assets 642,128 474,834
Liabilities 590,608 421,291
(36) Assets pledged as collateral
TheGrouppledgesassetsascollateralmainlyforsecuritieslendingtransactionsandformarginingpurposesonderivativeliabilities.
Thesubsequentchartincludesassetsfromsecuritieslendingtransactionsacceptedascollateralforliabilities.
Thesubsequentchartdepictsassetsfromderivativesandstockexchangetransactionswithotherrestrictionsondisposalacceptedascollateralforliabilities.
Thesubsequenttableshowsliabilitiesfromderivativesandstockexchangetransactionswithotherrestrictionsondisposalacceptedascollateralforliabilities.
Thesubsequenttableshowssecuritiesandotherfinancialassetsacceptedascollateral:
TheGroupreceivedcollateralwhichcanbesoldorrepledgedifnodefaultoccursinthecourseofsecuritieslendingbusiness,derivativeorothertransactions.
Significant Restrictions regarding access to or usage of Group assets
Statutory,contractualorregulatoryrequirementsmightrestricttheabilityoftheGrouptoaccessandtransferassetsfreelytoorfromotherGroupentitiesandsettleliabilities.
ThefollowingproductsrestricttheGroupintheuseofitsassets:securitieslendingcontractsaswellasotherlendingcontractsformarginingpurposesonderivativeandstockexchangeliabilities.Thetablebelowshowsassetspledgedascollateralandotherwiserestrictedassetswithacorrespondingliability.Theseassetsarerestrictedfromusagetosecurefunding,forlegalorotherreasons.
in€€thousand 2014 2013
Loansandadvances 1,506 1,875
Total 1,506 1,875
in€€thousand 2014 2013
Loansandadvances 135,123 91,429
Tradingassets 33,405 75,783
Securitiesandfinancialinvestments 9,989 9,065
Total 178,517 176,278
in€€thousand 2014 2013
Securitiesandotherfinancialassetsacceptedascollateral 1,193 2,705
in€€thousand 2014 2013
Otherliabilities 188,645 168,267
Total 188,645 168,267
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(37) Offsetting of financial assets and liabilitiesThedisclosuressetoutinthetablesbelowincludefinancialassetsandfinancialliabilitiesthatareoffsetinRaiffeisenCentrobank’sbalancesheetoraresubjecttoalegallyenforceablemasternettingarrangementorsimilaragreementthatcoverssimilarfinancialinstruments,irrespectiveofwhethertheyareoffsetinthebalancesheet.
Thesimilaragreementsincludederivativeclearingagreements,globalmasterrepurchaseagreements,andglobalmastersecuritieslendingagreements.Similarfinancialinstrumentsincludederivatives,andsecuritiesborrowingandlendingagreements.
Someoftheagreementsarenotset-offinthebalancesheet.Thisisbecausetheycreate,forthepartiestotheagreement,arightofsetoffofrecognizedamountsthatisenforceableonlyfollowinganeventofdefault,insolvencyorbankruptcyofRaiffeisenCentrobankorthecounterpartiesorfollowingotherpredeterminedevents.Inaddition,RaiffeisenCentrobankanditscounterpartiesdonotintendtosettleonanetbasisortorealizetheassetsandsettletheliabilitiessimultaneously.RaiffeisenCentrobankreceivesandgivescollateralsintheformofcashandmarketablesecurities.
In2014,assetswhichwerenotsubjecttolegallyenforceablenettingagreementsamountedto€ 2,674,757thousand(2013:€2,473,001thousand).Moreover,liabilitieswhicharenotsubjecttolegallyenforceablenettingagreementstotaled€2,484,447thousandin2014(2013:€2,328,991thousand).
2014 Gross amount Net amount Related amounts not set off in the balance sheet Net amountAssets of recognised of recognised of recognised Financial instruments Cash collateral in€ thousand assets set off liabilities set assets set off received in the balance sheet off in the balance sheet in the balance sheet
Derivatives 54,726 0 54,726 32,222 22,039 465
Reversepurchase,securitieslending&similaragreements 1,193 0 1,193 1,193 0 0
Total 55,919 0 55,919 33,415 22,039 465
2014 Gross amount Net amount Related amounts not set off in the balance sheet Net amountLiabilities of recognised of recognised of recognised Financial instruments Cash collateral in€ thousand assets set off liabilities set assets set off pledged in the balance sheet off in the balance sheet in the balance sheet
Derivatives 143,504 0 143,504 32,222 105,324 5,959
Reversepurchase,securitieslending&similaragreements 0 0 0 0 0 0
Total 143,504 0 143,504 32,222 105,324 5,959
2013 Gross amount Net amount Related amounts not set off in the balance sheet Net amountAssets of recognised of recognised of recognised Financial instruments Cash collateral in€ thousand assets set off liabilities set assets set off received in the balance sheet off in the balance sheet in the balance sheet
Derivatives 35,781 0 35,781 25,111 10,272 399
Reversepurchase,securitieslending&similaragreements 1,793 0 1,793 0 1,793 0
Total 37,574 0 37,574 25,111 12,065 399
in€ thousand 2014 2013 Otherwise Otherwise restricted with restricted with Pledged liabilities Pledged liabilities
Loansandadvances 1,506 135,123 1,875 91,429
Tradingassets 0 33,405 0 75,783
Securitiesandfinancialinvestments 0 9,989 0 9,065
Total 1,506 178,517 1,875 176,278
49
2013 Gross amount Net amount Related amounts not set off in the balance sheet Net amountLiabilities of recognised of recognised of recognised Financial instruments Cash collateral in€ thousand assets set off liabilities set assets set off pledged in the balance sheet off in the balance sheet in the balance sheet
Derivatives 74,996 0 74,996 25,111 44,471 5,415
Reversepurchase,securitieslending&similaragreements 0 0 0 0 0 0
Total 74,996 0 74,996 25,111 44,471 5,415
Thegrossamountsoffinancialassetsandfinancialliabilitiesandtheirnetamountsdisclosedintheabovetableshavebeenmeasuredateitherfairvalue(derivatives,otherfinancialinstruments)oramortizedcost(loansandadvances,depositsandotherfinancialinstruments).Allamountshavebeenreconciledtothelineiteminthebalancesheet.
(38) Derivative financial instrumentsThetotalvolumeoftheunsettledderivativefinancialinstrumentsincontinuedoperationsasat31December2014comprisesthefollowing:
2014 Nominal amount by maturity Fair values
in€ thousand < 1 year 1 to 5 years > 5 years Total Positive Negative
Total 1,836,135 2,169,822 1,404,910 5,410,866 109,739 (1,165,778)
Interest rate contracts 26,300 200 0 26,500 0 (707)
OTCproducts
Interestrateswaps 0 0 0 0 0 0
Optionsoninterest-rateinstruments 0 200 0 200 0 0
Productstradedonstockexchange
Interestratefutures 26,300 0 0 26,300 0 (707)
Foreign exchange and gold contracts 100,818 4,469 42,511 147,797 470 (14,998)
OTCproducts
Forwardexchangecontracts 84,788 0 0 84,788 186 (398)
Goldcontracts 0 2,969 0 2,969 41 0
Productstradedonstockexchange
Currencyfutures 16,030 0 0 16,030 210 0
Othercurrencycontracts/goldcontracts 0 1,500 42,511 44,011 34 (14,600)
Equity/index contracts 1,616,998 1,998,080 1,335,903 4,950,981 107,552 (1,026,044)
OTCproducts
Equity-/index-basedoptions–purchased 121,366 365,123 191,919 678,408 96,493 0
Equity-/index-basedoptions–sold 158,758 802,928 605,392 1,567,078 0 (112,701)
Otherequity-relatedcontracts 16,777 19,000 0 35,777 163 0
Productstradedonstockexchange
Equity/indexfutures 626,012 55 0 626,067 1,081 (2,082)
Equity/indexoptions 517,081 97,421 0 614,503 9,740 (13,463)
Otherequitycontracts 177,005 713,552 538,592 1,429,148 75 (897,797)
Commodities transactions 77,833 146,652 14,338 238,823 1,569 (99,388)
Precious metals transactions 14,186 20,422 12,158 46,765 148 (24,640)
Derivativefinancialinstrumentsfromcontinuedopreationsshowapositivefairvalueof€242thousandasat31December2014andrelateexclusivelytoforeignexchangecontracts.
Forhedgingpurposes,thenetsettlementamountofnegativefairvaluesforotherequityandindexcontractsisoffsetagainstacquiredshareslistedundertradingassets,whicharenotencompassedinthechartabove.
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Thetotalvolumeoftheunsettledderivativefinancialinstrumentsfromcontinuedoperations,asat31December2013comprisesthefollowing:
31/12/2013 Nominal amount by maturity Fair values
in€ thousand < 1 year 1 to 5 years > 5 years Total Positive Negative
Total 1,765,862 1,542,738 706,417 4,015,017 119,079 (995,918)
Interest rate contracts 46,624 15,924 0 62,548 1,439 (296)
OTCproducts
Interestrateswaps 5,624 15,724 0 21,348 699 (232)
Optionsoninterest-rateinstruments 0 200 0 200 1 0
Productstradedonstockexchange
Interestratefutures 41,000 0 0 41,000 739 (64)
Foreign exchange and gold contracts 110,506 0 14,737 125,243 48 (25,888)
OTCproducts
Forwardexchangecontracts 70,286 0 0 70,286 41 (70)
Goldcontracts 11,835 0 0 38,391 0 0
Productstradedonstockexchange
Currencyfutures 16,566 0 0 16,566 0 (774)
Othercurrencycontracts/goldcontracts 11,819 0 14,737 26,556 7 (25,044)
Equity/index contracts 1,454,297 1,386,871 668,079 3,509,247 114,587 (846,785)
OTCproducts
Equity-/index-basedoptions–purchased 64,143 295,092 178,066 537,301 87,254 0
Equity-/index-basedoptions–sold 170,754 473,137 283,725 927,616 0 (73,230)
Otherequity/indexcontracts 0 35,762 0 35,762 549 0
Productstradedonstockexchange
Equity/indexfutures 762,250 597 0 762,847 16,567 (28,598)
Equity/indexoptions 319,036 63,351 0 382,387 9,237 (8,366)
Otherequitycontracts 138,114 518,932 206,288 863,334 980 (736,591)
Commodities transactions 107,031 127,219 11,415 245,666 2,962 (105,634)
Precious metals transactions 47,403 12,724 12,186 72,313 43 (17,315)
(39) Fair value of financial instrumentsIntheGroupfairvalueisprimarilymeasuredbasedonexternaldatasources(mainlystockexchangepricesorbrokerquotationsinhighlyliquidmarkets).FinancialinstrumentswhicharemeasuredusingquotedmarketpricesaremainlylistedsecuritiesandderivativesandalsoliquidbondswhicharetradedonOTCmarkets.ThesefinancialinstrumentsareassignedtoLevelIofthefairvaluehierarchy.
Inthecaseofamarketvaluationwherethemarketcannotbeconsideredanactivemarketbecauseofitsrestrictedliquidity,theunderlyingfinancialinstrumentisassignedtoLevelIIoftheFairValuehierarchy.Ifnomarketpricesareavailable,thesefinancialinstrumentsaremeasuredusingvaluationmodelsbasedonobservablemarketdata.Theseobservablemarketdataaremainlyreproducibleyieldcurves,creditspreadsandvolatilities.RaiffeisenCentrobankgenerallyusesvaluationmodelswhicharesubjecttoaninternalauditbytheMarketRiskCommitteeinordertoensureappropriatemeasurementparameters.
Iffairvaluecannotbemeasuredusingeitherinsufficientlyregularlyquotedmarketprices(LevelI)orusingvaluationmodelswhichareentirelybasedonobservablemarketprices(LevelII),thenindividualinputparameterswhicharenotobservableonthemarketareestimatedusingappropriateassumptions.Ifparameterswhicharenotobservableonthemarkethaveasignificantimpactonthemeasurementoftheunderlyingfinancialinstrument,itisassignedtoLevelIIIofthefairvaluehierarchy.Thesemeasurementparameterswhicharenotregularlyobservablearemainlycreditspreadsderivedfrominternalestimates.
Assigningcertainfinancialinstrumentstothelevelcategoriesrequiresregularassessment,especiallyifmeasurementisbasedonbothobservableparametersandalsoparameterswhicharenotobservableonthemarket.Theclassificationofaninstrumentcanalsochangeovertimebecauseofchangesinmarketliquidityandthuspricetransparency.
Derivativefinancialinstrumentsformdiscontinuedoperationsshowanegativefairvalueof€52thousandasat31December2013andrelateexclusi-velytoforeignexchangecontracts.
51
Fair value of financial instruments reported at fair value Bondsandtradablemoneymarketdepositsareprimarilymeasuredusingpricesthatcanberealizedinthemarket.Ifnoquotationsareavailable,thesecuriti-esaremeasuredusingthediscountedcashflowmodel.Themeasurementparametersusedherearetheyieldcurveandanadequatecreditspread.Thecre-ditspreadiscalculatedusingcomparablefinancialinstrumentswhichareavailableonthemarket.Forasmallpartoftheportfolio,aconservativeapproachwasselectedandcreditdefaultspreadswereusedformeasurement.Externalmeasurementsbythirdpartiesarealsotakenintoaccount,allofwhichareindi-cativeinnature.Itemsareassignedtolevelsattheendofthereportingperiod.
InRaiffeisenCentrobank,well-knownvaluationtechniquesareusedtomeasureOTCderivatives.Forexample,interestrateswaps,crosscurrencyswapsorforwardrateagreementsaremeasuredusingthecustomarydiscountedcashflowmodelfortheseproducts.OTCoptions,suchasequityforeignexchangeoptionsorcapsandfloors,arebasedonvaluationmodelswhichareinlinewithmarketstandards.Forplainvanillaoptions(AmericanandEuropeanexer-cise)theBlackScholesmodelandbinominalmodelpursuanttoCox,RossandRubinsteinareapplied.AsianoptionsarecalculatedwiththeCurranapproxi-mation,barrieroptionswiththeHeynen-KatmodelandspreadoptionswiththeKirkmodel.
Todeterminethefairvalueacreditvalueadjustment(CVA)isalsonecessarytoreflectthecounterpartyriskassociatedwithOTCderivativetransactions,espe-ciallyofthosecontractualpartnerswithwhomhedgingviacreditsupportannexeshasnotyetbeenconducted.Thisamountrepresentstherespectiveestima-tedmarketvalueofasecuritywhichcouldbeusedtohedgeagainstthecreditriskofthecounterpartiestotheGroup'sOTCderivativeportfolios.
ForOTCderivatives,creditvalueadjustments(CVA)areusedtocoverexpectedlossesfromlendingbusiness.TheCVAwilldependontheexpectedfutureexposure(expectedpositiveexposure)andtheprobabilityofdefaultofthecontractualpartner.AfurtherelementoftheCVAinvolvesdeterminingaprobabili-tyofdefaultforeachcounterparty.Wheredirectcreditdefaultswap(CDS)quotationsareavailable,RaiffeisenCentrobankcalculatesthemarket-basedpro-babilityofdefaultand,implicitly,theloss-given-default(LGD)fortherespectivecounterparty.Theprobabilityofdefaultforcounterpartieswhicharenotactivelytradedonthemarketiscalculatedbyassigningacounterparty'sinternalratingtoasectorandrating-specificCDScurve.Thevaluationresultduetochangedcreditriskofthecounterpartyisdisclosedundernote(5)Nettradingincome,interest-basedtransactions.
Inthefollowingtables,thefinancialinstrumentsforcontinuedoperationsreportedatfairvalueinthebalancesheetaregroupedaccordingtoitemsintheba-lancesheetandclassifiedaccordingtomeasurementcategory.Adistinctionismadeastowhetherthemeasurementisbasedonquotedmarketprices(LevelI),orwhetherthevaluationmodelsarebasedonobservablemarketdata(LevelII)oronparameterswhicharenotobservableonthemarket(LevelIII).Itemsareassignedtolevelsattheendofthereportingperiod.
in€thousand 31/12/2014 31/12/2013 Quoted Measurement Measurement Quoted Measurement Measurement market prices techniques techniques market prices techniques techniques (Level I) based on not based on (Level I) based on not based on market market market market data data data data (Level II) (Level III) (Level II) (Level III)
Trading assets 428, 814 1,708,682 0 470,983 1,562,742 0
Positivefairvaluesofderivativefinancialinstruments1 60,890 48,664 0 59,472 59,574 0
Structuredproducts 0 139,539 0 159,024 0
Sharesandothervariable-yieldsecurities 296,571 380 0 337,431 1,022 0
Bond,notesandotherfixed-interestsecurities 71,353 339,309 0 74,080 523,563 0
Call/timeplacementsfortradingpurposes 0 1,180,790 0 0 819,559 0
Financial assets at fair value through profit and loss 41,693 0 0 9,770 0 0
Sharesandothervariable-yieldsecurities 0 0 0 0 0 0
Bonds,notesandotherfixed-interestsecurities 41,693 0 0 9,770 0 0
Derivatives (hedging) 0 0 187 1 32 0
Positivefairvaluesofderivativesinfairvaluehedges(IAS39) 0 0 187 1 32 0
1Includingotherderivatives
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in€thousand 31/12/2014 31/12/2013 Quoted Measurement Measurement Quoted Measurement Measurement market prices techniques techniques market prices techniques techniques (Level I) based on not based on (Level I) based on not based on market market market market data data data data (Level II) (Level III) (Level II) (Level III)
Trading liabilities 557,300 1,699,480 26,752 594,400 1,494,258 30,568
Negativefairvaluesofotherderivativefinancialinstruments1 132,914 1,014,008 18,856 96,607 875,827 23,314
Shortsellingoftradingassets 424,386 453 497,793 54
Issuedcertificates(guaranteebonds) 0 685,020 7,896 0 618,377 7,254
Derivatives (hedging) 0 0 0 222 0 0
Negativefairvaluesofderivativesinfairvaluehedges(IAS39) 0 0 0 222 0 0
1Includingotherderivatives
Movements between Level I and Level II
Foreachfinancialinstrument,acheckismadewhetherquotedmarketpricesareavailableonanactivemarket(LevelI).Forfinancialinstrumentswheretherearenoquotedmarketprices,observablemarketdatasuchasyieldcurvesareusedtocalculatefairvalue(LevelII).Reclassificationtakesplaceifthisestimatechanges.
IfinstrumentsarereclassifiedfromLevelItoLevelII,thismeansthatmarketquotationswerepreviouslyavailablefortheseinstrumentsbutarenolongerso.Thesesecuritiesarenowmeasuredusingthediscountedcashflowmodel,usingtherespectivevalidyieldcurveandtheappropriatecreditspread.
IfinstrumentsarereclassifiedfromLevelIItoLevelI,thismeansthatthemeasurementresultswerepreviouslycalculatedusingthediscountedcashflowmodelbutthatmarketquotationsarenowavailableandcanbeusedformeasurement.
In2014,mainlyderivativefinancialinstrumentsontheequityandliabilitiessideweretransferredbetweenLevelIandLevelIIdrivenbyareducedmarketliquidityofindividualproducts.
Movements to and from Level III
Inthereportingyear,therewerenomovementstoandfromLevelIII.
Movement in Level III fair value of financial instruments reported at fair value
Thesubsequentchartdescribesthefairvalueoffinancialinstruments.Thevaluationmethodsofwhicharebasedonnon-observableparameters.
in€ thousand As at Changes in Exchange Purchases Sales Income Other Transfer to Transfer from As at 1/1/2014 consolidation differences redemptions statement comprehensive Level III Level III 31/12/2014 range income
Derivatives(hedging) 0 0 0 187 0 0 0 0 0 187
in€ thousand As at Changes in Exchange Purchases Sales Income Other Transfer to Transfer from As at 1/1/2014 consolidation differences redemptions statement comprehensive Level III Level III 31/12/2014 range income
Tradingliabilities 30.568 0 0 0 0 (3.816) 0 0 0 26.752
in€ thousand As at Changes in Exchange Purchases Sales Income Other Transfer to Transfer from As at 1/1/2013 consolidation differences redemptions statement comprehensive Level III Level III 31/12/2013 range income
Tradingliabilities 33.634 0 0 0 0 (3.065) 0 0 0 30.568
Inassetsheldforsalereportedatfairvaluederivativefinancialinstruments(31December2014:€242thousand,31December2013:€0thousand)areclassifiedaslevelII.Item“Securitiesandfinancialinvestments”(31December2014:€2,682thousand,31December2013:€3,837thousand)includeexclusivelysecuritiesofLevelIII.
Inliabilitiesheldforsalereportedatfairvalueincludederivativefinancialinstruments(31December2014:€0thousand,31December2013:€52thousand)classifiedasLevelII.
53
GainsandlossesresultingfromfinancialinstrumentsofthelevelIIIhierarchyamountedin2014tominus€ 3,816thousand(2013:minus€ 3,065thousand).
Financial assets Type Fair value Valuation Significant Range of in€€thousand techniques unobservable unobservable inputs inputs
Positivefairvalueofbankingbook derivativeswithouthedgeaccounting Forwardforeignexchangecontract 187 Discountedcashflowmethod Interestrate 10-30%
Total 187
Financial liabilities Type Fair value Valuation Significant Range of in€€thousand techniques unobservable unobservable inputs inputs
Closingperiod 2-16%
Currencyrisk 0-5%
Volatility 0-3%
Negativefairvalueofderivativefinancialinstruments OTC-options 18,856 Optionmodel Index-category 0-5%
Closingperiod 0-3%
Bid/askspread 0-3%
Volatility 0-3%
Structuredproducts(guaranteebonds) Certificates 7,896 Optionmodel Index-category 0-2.5%
Total 26,752
Qualitative information for the measurement of level III financial instruments
Fair value of financial instruments not reported at fair value Fairvalueswhicharedifferentfromthecarryingamountarecalculatedforfixed-interestloansandadvancestoanddepositsfrombanksorcustomers,iftheremainingmaturityismorethanoneyear.Variable-interestloansandadvancesanddepositsaretakenintoaccountiftheyhaveaninterestrolloverperiodofmorethanoneyear.Thefairvalueofloansandadvancesiscalculatedbydiscountingfuturecashflowsandusinginterestratesatwhichsimilarloansandadvanceswiththesamematuritiescouldhavebeengrantedtocustomerswithsimilarcreditworthiness.Moreover,thespecificcreditriskandcollateralsareconsideredforthecalculationoffairvaluesforloansandadvances.Thesubsequenttablesrelateexclusivelytocontinuedoperations:
31/12/2014 Level I Level II Level III Fair Value Carrying Difference in€ thousand amount
Assets
Cashreserve 0 2,898 0 2,898 2,898 0
Loansandadvancestocreditinstitutions 0 377,361 0 377,361 377,361 0
Loansandadvancestocustomers 0 55,498 28,224 83,697 83,697 0
Equityparticipations 0 0 5,154 5,154 5,154 0
Liabilities
Liabilitiestocreditinstitutions 0 71,354 0 71,354 71,354 0
Liabilitiestocustomers 0 221,241 0 221,241 221,241 0
31/12/2013 Level I Level II Level III Fair Value Carrying Difference in€ thousand amount
Assets
Cashreserve 0 4,337 0 4,337 4,337 0
Loansandadvancestocreditinstitutions 0 269,111 0 269,111 269,111 0
Loansandadvancestocustomers 0 48,415 50,510 98,925 98,925 0
Equityparticipations 0 0 5,153 5,153 5,153 0
Liabilities
Liabilitiestocreditinstitutions 0 106,672 0 106,672 106,672 0
Liabilitiestocustomers 0 117,237 0 117,237 117,237 0
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(40) Contingent liabilities and other off-balance sheet obligations
in€€thousand 2014 2013
Contingent liabilities 447 447
Otherguarantees 447 447
Credit risks 0 1,053
Irrevocablecreditlines/standbyfacilities 0 1,053
Upto1year 0 1,053
Thesubsequenttabledescribesrevocablecreditlinesnotassociatedwithacreditrisk:
in€€thousand 2014 2013
Revocable credit lines/standby facilities 2,368 5,098
Upto1year 2,368 5,098
(41) Risk report
Principles
In2014,RaiffeisenCentrobankagainpursuedaprudentriskstrategy.Businessopportunitiesandearningspotentialarerealizedbasedonactiveriskmanagementbytakingriskinatargetedandcontrolledmanner.TheBankhasasystemofriskinstrumentsinplaceformeasuringandmonito-ringrisksInallrelevantareasofriskefficientmonitoringandcontollinginstrumentsareavailableenablingthecompetentbodiestoreacttomarketopportunitiesandspecificbankingbusinessrisks.
AsasubsidiaryofRaiffeisenBankInternational,RaiffeisenCentrobankisintegratedintotheriskmanagementprocessoftheRZBCreditInstitutionGroup,safeguardingthatallmajorrisksareidentified,measuredandcontrolledonGroup-levelandensuringthattransactionsareconcludedexclusivelyifparticularrisk/rewardrelationsarecompliedwith.
Riskgovernance
TheManagementBoardofRaiffeisenCentrobankisresponsibleforallrisksoftheBankaswellasforimplementingariskstrategy.TheManage-mentBoardissupportedinimplementingthesetasksbyanindependentriskmanagementunit,whichisclearlyseparatedfromthefrontoffices.
RiskmanagementatRaiffeisenCentrobankissplitintothreecategories:
•CreditRisk&ICAAP(counterpartyandcountryrisk,overallbank management)•Marketrisk(marketandliquidityrisk)•Operationalrisk
ThecentralriskmanagementunitsareresponsiblefortheadequateandappropriateimplementationoftheBank’sriskmanagementproves.TheseunitsaretheRiskManagementCommittee(RMK),theInternalLimitCom-mittee(ILC),theOperationalRiskManagementCommittee(ORMK)andtheAssetandLiabilityCommittee(ALCO).
TheRMK,whichmeetsweekly,addressesallissuesandregulationsintheareaofriskmanagementoftheBankandthecommoditytradingsubsidia-riesfocusinginparticularoncreditriskmarketriskandoperationalrisk.OverdraftsoverdueloansandadvancesandnecessaryvalueadjustmentsarereportedinduecourseandrecommendationsfortheManagementBoardaredeveloped.
TheILC,whichmeetseverysecondweek,decideswithinitscompetency(dependingontypeandamountofthelimit)oncounterparty,countryandmarketrisklimits.LargeexposuresrequiretheapprovaloftheSupervisoryBoard.Onceayear,theaggregateoflargeexposuresisreportedtotheSupervisoryBoard.
TheORMK,whichmeetsonceaquarter,establishesanappropriateframeworkforoperationalriskmanagementanddefinesandapprovesanadequateriskstrategy.Moreover,riskassessments,scenarioanalysesandriskindicatorsarediscussedandapprovedandmaterialeventsofdefaultandresultingmeasurestobetakenareanalyzed.
TheALCO,whichmeetsonceamonth,continuouslyevaluatesthemacroe-conomicenvironmentandcontrolsandassessesinterestraterisk,liquidityriskandbalancesheetstructuralrisk.
InNovember2014,theRiskCommitteepursuantto§39dAustrianBankingActmet.TheriskmanagementreportedonthemajorrisksandtherisksituationofRaiffeisenCentrobank.
Thesubsequenttablesrelateexclusivelytocontinuedoperations:
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RiskmanagementsystematRaiffeisenCentrobankRaiffeisenCentrobankemploysacomprehensiveriskmanagementsystemtakingintoaccountalllegal,businessandregulatoryrequirements.Theappliedprocessesandmodelsaresubjecttoongoingreviewandfurtherdevelopment.ThekeycomponentsoftheriskmanagementsystemsarecompliancewithregulatorycapitalrequirementspursuanttoBaselIII,limitingspecificbankingrisksandprovidinganadequateriskcoveragesumsaswellaspermanentsupervisionandcontroloflitigationriskswithinacomprehensiveInternalControlSystem.
1. Capital requirements to limit market risk, credit risk and operational risk Tosecurecapitaladequacyforcreditrisk,marketriskandoperationalriskpursuanttoBaselIII,RaiffeisenCentrobankappliesthestandardap-proach.Tocalculateoption-relatednon-linearrisksthescenariomatrixme-thodisemployed.
Detailsoncapitalrequirementsperriskcategoryaredepictedinitem(47).
2. Identifying and limiting specific banking business risks (ICAAP)WithinICAAP(InternalCapitalAdequacyAssessmentProcess)RaiffeisenCentrobankhasimplementedaprocesstodeterminetheoverallbankingriskpotentialandrisk-bearingcapacity.Therisk-bearingcapacityisanaly-zedquarterlyforboththegoingconcern(VaRwithaconfidencelevelof95percentandthreemonthsretentionperiod)andliquidationscenario(VaRwithaconfidencelevelof99.9percent,threemonthsretentionperi-od)undsupportstheManagementBoardinmanagingtheoverallban-kingrisk.AsasubordinatecompanyofRaiffeisenZentralbank,RaiffeisenCentrobankisintegratedintotheICAAPofRaiffeisenZentralbankandRaiffeisenBankInternationalonaconsolidatedbasis.
3. Internal Control SystemRaiffeisenCentrobankhasimplementedaGroup-widemodernInternalControlSystemthatmeetstherequirementsoftheCompany.Allbankingprocessesandimmanentrisksaredocumentedandrespectivecontrolsaresetupandreviewed.Processdescriptions,risksandmonitoringarereview-edsemi-annuallyandarecontinuouslyoptimized.
TheInternalAuditatRaiffeisenCentrobankregularlyreviewstheefficiencyandcorrectnessoftheoverallriskmanagementincludingtheInternalCon-trolSystem.TheresultsarereportedinwritingtotheManagementBoardandtheChairmanoftheSupervisoryBoard.Moreover,quarterlymeetingsareheldwiththeManagementBoardandtheseniormanagementtodis-cusscurrentreviewreportsandthestatusofappliedactions.
Majorrisks
Market riskTheCompanydefinesmarketriskastheriskofpossiblelossesarisingfromchangesinmarketprices(equityandcommodityprices,changesininterestratesandexchangerates).AsthemainfocusofthebusinessactivitiesofRaiffeisenCentrobankisinsecuritiestradingandtheissueofequity-indexbasedderivativesandstructuredproducts(certificatesandguaranteebonds),thetoppriorityofRaiffeisenCentrobankistocounteractmarketrisk.RaiffeisenCentrobankmeasures,monitorsandmanagesallmarketrisksbysettingavarietyoflimitssetupbytheManagementBoardinac-cordancewiththeGroup-wideMarketRiskCommittee.Themulti-leveldif-ferentiatedlimitsystemincludesvolume,positionandsensitivitylimits(delta,
gamma,vegaandbasispointvalue)aswellasstop-losslimits,dependingonthetypeoftransaction.
Inmarketriskmanagement,theVaRisemployed,whichfurnishesforecastsonpotentiallossesundernormalmarketconditionsandiscontrastedagainstaparticularlimit.Onthebasisofthevariance-covariancemodelwhichiscalculateddailytheVaRforinterestraterisk,currencyriskandpri-ceriskiscalculatedwithaconfidenceintervalof99percentandareten-tionperiodofoneday.
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TheabovechartdepictstheperformanceofVaR(VAR)andtheoreticalP&L(PL_HYP-profitandlossthatwouldhaveoccuredinaconstantportfolioandactuallyrecordedmarketmovements)in2014.
InadditiontoVaR,RaiffeisenCentrobankusesbackteststoevaluatemarketrisk.Backtestssimulatetheperformaneoftheportfoliounderabnormalmarketsituationsandatypicalpricemovements.
Credit riskThecreditriskrepresentsdefaultriskthatarisesfromtheinabilityofacusto-mertofulfilcontractuallyagreedfinancialobligations,whenserviceshavebeenrendered(e.g.liquidity,securities,advisoryservices)orwhenunrea-lisedprofitsfrompendingbusinesstransactionscannolongerbereco-vered(counterpartycreditrisk).
ThemajorcreditrisksofRaiffeisenCentrobankresultfrompositionsofpurchaseddebtinstruments,tradablemoneymarketdepositsandOTCoptionsservingprimarilytohedgeissuedcertificatesandstructuredpro-ductsaswellasfrommarginpositionsrelatingtoOTCandstockexchangetransactions.ThisaffectsprimarilymembersoftheRZBCreditInstitutionGroupandtoalimitedextentotherfinancialinstitutions.ThetraditionalcreditandloanbusinessisofimmaterialsignificanceforRaiffeisenCentro-bankduetothelimitedbusinessvolumeandthecompany’sstrategicorientation(financing(commoditytrading)subsidiaries,lombardloans,otherloanstoprivateandcorporatecustomers).
Creditriskmanagementisbasedoncounterparty-relatednominallimitswhicharecomprehensivelymonitoredbytheInternalControlSystemforcreditrisks.Thelimitsareapproved-dependingontypeandsize-bytherespectivehierarchicalcompetenceauthorityscheme.Creditdecisionsaretakendependingontheassessmentofthecounterpartycreditrisktakingintoaccounttheratingandapplicablecreditriskmitigatingmeasureslikefinancialcollaterals(e.g.cashorequity).IntheGroup-widedefaultandandratingdatabasecustomersareregisteredandevaluatedandeventsofdefaultaredocumented.ThewholelendingdecisioncorrespondstoregulatoryrequirementsandRZBGroupDirectives.
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in€€thousand Balance as at Changes in Allocation Release Use Transfer. Balance as 1/1/2014 consolidation exchange 31/12/2014 range differences
Individual loan loss provisions 93 0 0 - 18 0 0 75
Loansandadvancestocustomers 93 0 0 -18 0 0 75
thereofAustria 93 0 0 -18 0 0 75
Total 93 0 0 - 18 0 0 75
in€€thousand Balance as at Changes in Allocation Release Use Transfer. Balance as 1/1/2013 consolidation exchange 31/12/2013 range differences
Individual loan loss provisions 110 0 0 - 16 0 0 93
Loansandadvancestocustomers 110 0 0 -16 0 0 93
thereofAustria 110 0 0 -16 0 0 93
Total 110 0 0 - 16 0 0 93
Loansandadvancesaswellasloanlossprovisionsbasedonthestructureaccordingtoassetclassesareshowninthefollowingtable:
2014 Carrying amount Individual Net carrying Impaired Fair value in€thousand loan loss amount assets provisions
Creditinstitutions 377,361 0 377,361 0 377,361
Corporatecustomers–large 49,428 0 49,428 0 49,428
Retailcustomers–privateindividuals 34,269 75 34,194 75 34,194
Total 461,058 75 460,983 75 460,983
2013 Carrying amount Individual Net carrying Impaired Fair value in€thousand loan loss amount assets provisions
Creditinstitutions 269,111 0 269,111 0 269,111
Corporatecustomers–large 60,952 0 60,952 0 60,952
Retailcustomers–privateindividuals 37,973 93 37,880 93 37,880
Total 368,036 93 367,943 93 367,943
Thefollowingtableshowsthedevelopmentofindividualloanlossprovisionsaccordingtobalancesheetitems:
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Impaired financial instrumentsThefollowingtableshowsthecarryingamountofloansandadvancesreducedthroughindividualloanlossprovisionsaswellastherelatedindividualloanlossprovisionsandthecorrespondingnetvalueofavailablecollateral:
Overdue financial instrumentsThedefinitionofdefaultandtheassessmentoftheexpectedrecoveryvalueareheavilyinfluencedbythenumberofdayspaymentsarelate.Noloansandadvancestocreditinstitutions,corporatecustomersandretailcustomerswereoverdueneitherasat31December2014noron31December2013.
31.12.2013 Maximum credit exposure Fair value of collaterals
Net Commitments/ Reselling/ in€ thousand exposure guarantees issued repledging allowed
Creditinstitutions 269,111 275 275
Corporatecustomers–large 60,952 5,311 30,089
Retailcustomers–privateindividuals 37,880 1,012 29,806
Total 367,943 6,599 60,171
Thefollowingtableshowsthemaximumcreditriskexposureandthefairvalueofcollaterals:
2014 Maximum credit exposure Fair value of collaterals
Net Commitments/ Reselling/ in€ thousand exposure guarantees issued repledging allowed
Creditinstitutions 377,361 275 275
Corporatecustomers–large 49,428 717 25,987
Retailcustomers–privateindividuals 34,194 1,823 30,166
Total 460,983 2,815 56,428
Collateralreadytobesoldorrepledgedintheabsenceofdefaultofthedebtoramountedto€56,428thousand(2013:€60,171thousand).
31/12/2014 Individually Individual Individually Collaterals for Interest on Impairments and collateral impaired loan loss Impaired assets after individually individually in€€thousand assets provisions deduction of individual impaired impaired loan loss provisions assets assets
Retailcustomers–privateindividuals 75 75 0 0 0
Total 75 75 0 0 0
31/12/2013 Individually Individual Individually Collaterals for Interest on Impairments and collateral impaired loan loss Impaired assets after individually individually in€€thousand assets provisions deduction of individual impaired impaired loan loss provisions assets assets
Retailcustomers–privateindividuals 93 93 0 0 0
Total 93 93 0 0 0
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Operational riskOperationalriskisdefinedastheriskofunexpectedlossesresultingfrominadequateorfailedinternalprocesses,peopleandsystemsorfromexternaleventsincludinglegalrisk.Thisriskcategoryisanalyzedandmanagedonthebasisoftheresultsofregularself-assessments,standardizedkeyriskindicators,scenarioanalysesandinternalhistoricaldata.
EventsofdefaultinoperationalriskareregisteredintheGroup-widedatabasisORCA(OperationalRiskControllingApplication)andarerecognizedseparatelybybusinesssegmentandtypeofevent.Measurestakenarealsodocumentedandlinkedwiththeeventofdefault.
Liquidity riskLiquidityriskiscalculatedbasedonaliquiditymodeldevelopedincooperationwithRaiffeisenBankInternational.DailybalancesheetitemsofRaiffeisenCentrobankareseparatedbymaturitybandsandcurrencies,theirinflowsandoutflowsaremodelledbasedonpre-definedfactors.Theliquidityrequire-mentindifferentmaturitybandsislimitedbymeansofregulatorylimitsaswellasbylimitsdeterminedbyRaiffeisenBankInternational.
2013 Carrying Contractual < 3 months 3-12 months 1-5 years > 5 years in€ thousand amount cash flows
Non-derivative liabilities 1,352,738 1,418,745 661,710 220,994 477,823 58,218
Liabilitiestocreditinstitutions 106,672 110,300 2,199 108,101 0 0
Liabilitiestocustomers 117,237 120,767 110,662 10,105 0 0
Otherliabilities 1,128,829 1,187,678 548,849 102,788 477,823 58,218
Derivative liabilities 995,918 1,031,037 169,412 108,801 498,787 254,037
Derivativesinthetradingbook 995,626 1,030,745 169,342 108,579 498,787 254,037
Hedgingderivatives 222 222 0 222 0 0
Otherderivatives 70 70 70 0 0 0
Credit risks 1,053 1,053 0 1,053 0 0
Irrevocablecreditcommitments/standbyfacilities 1,053 1,053 0 1,053 0 0
2014 Carrying Contractual < 3 months 3-12 months 1-5 years > 5 years in€ thousand amount cash flows
Non-derivative liabilities 1,417,221 1,417,221 672,780 295,753 349,933 98,755
Liabilitiestocreditinstitutions 71,354 71,354 259 71,095 0 0
Liabilitiestocustomers 221,241 221,241 191,146 30,095 0 0
Otherliabilities 1,124,626 1,124,626 481,375 194,563 349,933 98,755
Derivative liabilities 1,165, 778 1,165,778 36,267 143,091 782,993 203,426
Derivativesinthetradingbook 1,165,380 1,165,380 36,267 142,693 782,993 203,426
Otherderivatives 398 398 0 398 0 0
Credit risks 0 0 0 0 0 0
Irrevocablecreditcommitments/standbyfacilities 0 0 0 0 0 0
Moreover,regularliquiditystresstestsarecarriedoutandthetime-to-allinthestressscenarioismonitoredindifferentcurrencies.Inflowsneedtosurpassoutflowsforaperiodofatleast30daysinacrisisscenario(marketcrisis,namecrisisandscenarioofboth).Caclulationsconfirmanadequateliquiditysurplusforthe2014financialyear.
InaccordancewithGroup-internaldirectives,theminimumliquiditycoverageratio(LCR)wascalculatedonamonthlybasisforinternalcontrollingpurpo-sesandreportedtotheAustrianNationalBank.Inthefinancialyear2014theLCRconstantlyexceeded60percent.
TheNetStableFundingRatioandLeverageRatiowerecalculatedandincludedintothemonitoringinthe2014financialyear.
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Overallbankmanagement
ForRaiffeisenCentrobankactiveriskmanagementmeanstheidentification,measurement,monitoringandmanagementofspecificbankingrisksaswellastheprovisionofadequatecapitalresources.Inthecourseofmonitoringtheoverallbankrisk(ICAAP),RaiffeisenCentrobankhasimplementedaprocesstoidentifytheoverallbankriskpotentialandtheriskbearing-capacity.Thisriskbearingcapacityanalysisisatoppriorityinriskmanagement.
Theriskappetite(overallbankVaRlimit)comesupto80percentoftheriskcoveragesum.Thequarterlyrisk-bearingcapacityanalysisfocusesonthegoingconcern(VaRwithaconfidenceintervalof95percentand3monthsretentionperiod)andliquidationperspective(VaRwithaconfidenceintervalof99.9percent,3monthsretentionperiod).
Riskmeasurementusesthesubsequentapproaches:Marketrisk:calculationoftheVaRbasedonahistoricalMonteCarlosimulationwithatimeframeof3monthsCreditriskandequityparticipationrisk:determinationofaVaRconsistentriskvaluebasedonamodifiedIRBapproach.Theequityparticipationriskincludesnotonlycarryingamountsinthebankingbookof(unlisted)equityparticipationsbutalsoloanstoparticipationsOperationalrisk:calculationofaVaRbasedonregulatorycapitalrequirementscoupledwithamodelingthroughgeneralizedParetodistribution.Otherrisks(suchase.g.businessrisk,repuationrisk,balancesheetrisk).Coverageiseffectedbyvariousriskbuffers.
Thesubsequenttableshowsthedistributionofriskrelatingtotheeconomiccapital(VaR)attherespectivebalancesheetdate:
Going-concern-perspective 31/12/2014 31/12/2013
1.Marketrisk 33.8percent 34.7percent
2.Creditrisk 13.7percent 16.4percent
3.Operationalrisk 12.7percent 12.2percent
4.Businessrisk 2.9percent 4.1percent
5.Equityparticipationrisk 25.2percent 20.3percent
6.Otherrisks 11.6percent 12.3percent
Liquidationperspective 31/12/2014 31/12/2013
1.Marketrisk 10.3percent 11.1percent
2.Creditrisk 19.3percent 19.5percent
3.Operationalrisk 33.6percent 33.5percent
4.Businessrisk 0.9percent 1.3percent
5.Equityparticipationrisk 12.1percent 10.6percent
6.Otherrisks 23.8percent 23.9percent
Asasubordinatecompany,RaiffeisenCentrobankisintegratedintotheICAAPofRZBonaconsolidatedbasis.RaiffeisenCentrobankisprovidedwithmonthlyICAAPreports.Theseanalysesincludeagoingconcernperspectivewithaconfidenceintervalof95percentandatargetratingperspectivewithaconfidenceintervalof99.95percent.
(42) Foreign assets/liabilities AssetsandliabilitieswithcounterpartiesfromcontinuedoperationsoutsideAustriaareasfollows:
in€€thousand 2014 2013
Assets 676,651 660,604
Liabilities 388,009 215,203
(43) Fiduciary businessFiduciarybusinessfromcontinuedoperationsnotrecognizedinthebalancesheetwasconcludedwiththefollowingvolumesasatthebalancesheetdate:
in€€thousand 2014 2013
Securitiesandfinancialinvestments 7,091 7,091
Fiduciary assets 7,091 7,091
Otherfiduciaryliabilities 7,091 7,091
Fiduciary liabilities 7,091 7,091
OtherDisclosures
Fiduciarybusinessfromdiscontinuedopeationsamountedto€0thousandasat31December2014(€2,000thousandasat31December2013).
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(44) Operating leaseFuturerentalandleasepaymentsfromcontinuedoperationsareasfollows:
in€€thousand 2014 2013
Upto1year 589 588
1to5years 2,358 2,354
Total 2,947 2,942
(45) Securities admitted for trading on a stock exchange pursuant to § 64 of the Austrian Banking Act
in€€thousand 2014 2014 2013 2013 Listed Unlisted Listed Unlisted
Bondsandnotesissuedbypublicbodies 64,912 0 32,454 0
Bonds,notesandotherfixed-interestsecurities 239,352 0 340,119 0
Sharesandothervariable-yieldsecurities 301,406 137,472 356,441 145,312
(46) Volume of the securities trading book
in€€thousand 2014 2013
Securities 3,280,409 3,153,900
Otherfinancialinstruments 5,325,406 3,933,572
Total 8,605,815 7,087,472
DisclosuresbasedonAustrianregulations
(47) Capital management and own funds pursuant to CRR/CRD IV and Austrian Banking Act Capitalwasandisanintegralpartofbankmanagement.RegulatoryvaluesaredefinedforRaiffeisenCentrobankonanindividualbasisbytheAustrianBankingAct(BWG)basedonadequateguidelinesoftheEUandontheapplicableregulationoftheEuropeanParliament(CRR).RaiffeisenCentrobankusestargetvaluesforinternalregulation,whichcompriseallrisktypes(includingtradingbook,currencyriskandoperationalrisk).Thecurrentplanning/budgetingisshapedbythedevelopmentsinBaselandBrusselsregardingtheadvancementandharmonizingofownfundsregulations.
Themainfocusinthecontrolisonthecommonequitytier1andtotalequityratio.Additionally,ariskcapacitybasedontheVaRratioiscalculatedbothforagoing-concernscenario,usingaggregateriskcoverdefinedonthebasisoftheriskstrategy,andforaliquidationscenario.Forfurtherinformationpleaseseetheriskreport.
Current regulatory developments and passed capital measuresBaselIIIwasimplementedintheEuropeanUnionviaaregulation(CRR)andadirective(CRDIV).Bothregulationswerepublishedon27June2013intheEUOfficialJournalandarethereforeeffective.
Asof1January2014,theCRRisdirectlyapplicablelawforallEUmemberstates.TheCRDIVbecameeffectiveon17July2013andhadtobetransferredintolocallawuntil31December2013.Asofbeginningof2014,thenewregulations–CRRandCRDIV–havetobethereforeappliedunderconsiderationofseveraltransitionalperiods.
Moreover,theEuropeanCentralBank(ECB)tookoversupervisionoflargebanksintheEurozone,whosetotalassetsexceed€ 30billionor20percentofthecountry’seconomicperformanceinNovember2014.AspartoftheRZBCreditInstitutionGroupt,RaiffeisenCentrobankpartlyfallsunderECBsupervisi-on.
Afterphase-outofthetransitionalperiodBaselIIIandCRRI/CRDIVrespectivelyprovidesharderspecificationsfortheregulatorycapitalwithaminimumofcorecapital(commonequitytier1)of4.5percent,corecapital(tier1)of6percentandtotalcapitalof8percent.Moreover,allbanksareobligedtoholdaso-called“capitalconservationbuffer”of2.5percentcomprisingcommonequitytier1inadditiontothenewminimumrequirements.Thisbringstherequire-mentfortotalcommonequitytier1to7percent,forcorecapital(tier1)to8.5percentandfortotalcapitalto10.5percent.Aviolationofthecapitalcon-servationbufferinducesconstraintsofe.g.dividenddistributionandcouponpaymentsforcertaincapitalinstruments.
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Anadditionalbuffer,thesocalled“countercyclicalbuffer“,canbeimplementedbythememberstatesinordertostemexcesslendinggrowth.Moreover,nationalsupervisorscandeterminesystemicriskbuffers(1to5percent)aswellasadditionalcapitaladd-onsforsystemicbanks(0to3.5percent).Incasesystemicriskbuffersaswellasadd-onsforsystemicbanksaredeterminedforabankinginstitute,onlythehigherofthetwovaluesisapplicable.
TheimpactsofregulatoryrequirementsaredisplayedandanalyzedinscenariocalculationsbyRaiffeisenCentrobankonanongoingbasis.Possibleeffectsareincludedinplanningandsteering,ifnecessary.
Calculationofeligibletier1wasbasedonPart2andcalculationoftotalownfundsrequirementwasbasedonarticle92CRR.TheownfundsofRaiffeisenCentrobankbreakdownasfollows:
in€€thousandandpercent 2014
Paid-incapital 47,599
Earnedcapital 44,721
Core capital (Tier 1 capital) 92,320
Deductionsintangiblefixedassets (115)
DeductionsfromTier1capital(prudentvaluation) (4,464)
Eligible Tier 1 capital (after deductions) 87,740
Total own funds 87,740
Total own funds requirement 54,639
TotalTier1ratio 12.8%
Ownfundsratioin% 12.8%
Angabenin€€Tausend 2014
Risikogewichtete Aktiva (RWA gesamt) 682.985
EigenmittelerfordernisfürdasKreditrisiko 22.333
Standardansatz 20.860
CVARisiko 1.473
EigenmittelerfordernisfürdasPositionsrisikoinSchuldtiteln,Substanzwerten,WarenundFremdwährungen 20.766
EigenmittelerfordernisfürdasoperationelleRisiko 11.539
Gesamtes Eigenmittelerfordernis 54.639
in€€thousand 2014
Risk-weighted assets (total RWA) 682,985
Totalownfundsrequirementforcreditrisk 22,333
Standardizedapproach 20,860
CVArisk 1,473
Totalownfundsrequirementforpositionsinbonds,equities,commoditiesandopencurrencypositions 20,766
Totalownfundsrequirementforoperationalrisk 11,539
Total own funds requirement 54,639
Angabenin€€Tausend 2014
Risikogewichtete Aktiva (RWA gesamt) 682.985
EigenmittelerfordernisfürdasKreditrisiko 22.333
Standardansatz 20.860
CVARisiko 1.473
EigenmittelerfordernisfürdasPositionsrisikoinSchuldtiteln,Substanzwerten,WarenundFremdwährungen 20.766
EigenmittelerfordernisfürdasoperationelleRisiko 11.539
Gesamtes Eigenmittelerfordernis 54.639
in€€thousand 2014
Risk-weighted assets according to standardized approach 260,754
Centralgovernmentsandcentralbanks 556
Publicbodies 68
Institutions 112,167
Corporates 109,830
Equityparticipations 15,803
Positionswithparticularlyhighrisk 3,582
Otherpositions 18,747
CVA risk 18,409
Total 279,163
Riskweightedassetsforthecreditriskaccordingtoassetclassesbreakdownasfollows:
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Theownfunds(calculatedaccordingtoAustrianBankingAct(BWG)1993/Amendment2006–BaselII)asofyear-end2013breakdownasfollows:
in€€thousand 2013
Paid-incapital 47,599
Earnedcapital 41,721
Intangiblefixedassets (205)
Core capital (tier- 1 capital) 89,115
Deductionsfromcorecapital 0
Eligible core capital (after dedcutions) 89,115
Long-termsupplementarycapital 0
Additional own funds (tier- 2 capital) 0
Deductionitems 0
Eligibleadditionalownfunds(afterdedcutions) 0
Total own funds 89,115
Total own fund requirement 57,436
Excesssownfunds 31,679
Excesscoverratio 155.2%
Coretier1ratio,creditrisk 47.0%
Coretier1ratio,total 12.4%
Ownfundsratio 12.4%
Thetotalownfundsrequirementiscomposedasfollows:
in€€thousand 2013
Risk-weighted assets according to section 22 Austrian Banking Act 189,788
thereof8percentownfundsforthecreditriskaccordingtosections22ato22hAustrianBankingAct 15,183
Ownfundsrequirementforpositionriskinbonds,equitiesandcommodities 29,937
Ownfundsrequirementforopencurrencypositions 342
Ownfundsrequirementforoperationalrisk 11,974
Total own funds requirement 57,436
(48) Average number of staffTheaveragenumberofstaffemployedduringthefinancialyear(full-timeequivalents)fromcontinuedoperationsbreaksdownasfollows:
Average 2014 2013
Salariedemployees 202 205
Wageemployees 9 10
Total 211 215
Reportingdate 2014 2013
Salariedemployees 195 207
Wageemployees 9 10
Total 204 217
Employeesfromdiscontinuedopeationscomeuponaverageto110personsasat31December2014(31December2013:124)
Employeesfromdiscontinuedoperationscomeupasofreportingdateto103personsasat31December2014(31December2013:122).
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(49) Related parties Companiescancarryoutbusinesswithrelatedpartiesthatmayaffecttheentity’sasset,financialandearningsposition.TherelatedpartiesoftheRaiffeisenCentrobankaredividedintothefollowingcategories:
•TheparentcompaniesareRaiffeisenZentralbankÖsterreichAktiengesellschaft,RaiffeisenBankInternationalAG,RZBKIBeteiligungsGmbHandLexxus ServicesHoldingGmbH.•AffiliatedcompaniesencompassthoseaffiliatedcompaniesofRaiffeisenZentralbankÖsterreichAktiengesellschaftwhicharenotincludedinthe consolidatedfinancialstatementsofRaiffeisenCentrobankAG.•CompaniesvaluedatequityarecompanieswhichareclassifiedbyRaiffeisenZentralbankÖsterreichAktiengesellschaftascompaniesvaluedatequity.•Otherinterests.
InformationonthebusinesstiesoftheRaiffeisenCentrobankwiththekeymanagement(ManagementBoard)isprovidedinsection(50).
Asat31December2014transactionsfromcontinuedoperationswithrelatedpartieswereasfollows:
in€€thousand Parent Affiliated Companies Other company companies valued at equity interests
Loansandadvancestocreditinstitutions 230,536 3,289 2,737 0
Loansandadvancestocustomers 0 0 514 0
Tradingassets 1,544,445 104,703 0 0
Securitiesandfinancialinvestments 0 16 5,135 0
Otherassets(incl.derivatives) 0 208 15 0
Liabilitiestocreditinstitutions 1 9,602 16 0
Liabilitiestocustomers 0 85 8 0
Provisions 671 0 0 0
Tradingliabilities 21,168 3,084 12,801 0
Otherliabilities(incl.derivatives) 7,174 997 2 0
in€€thousand Parent Affiliated Companies Other company companies valued at equity interests
Loansandadvancestocreditinstitutions 171,949 4,178 3,094 0
Loansandadvancestocustomers 0 0 514 0
Tradingassets 1,371,389 119,792 796 0
Securitiesandequityparticipations 0 234 5,135 0
Otherassets(incl.derivatives) 21 64 9 0
Liabilitiestocreditinstitutions 77,265 2,512 1,962 0
Liabilitiestocustomers 0 740 1 0
Provisions 1,825 0 0 0
Tradingliabilities 23,741 2,644 0 288
Otherliabilities(incl.derivatives) 3,191 2,789 21 0
Asat31December2013transactionsfromcontinuedoperationswithrelatedpartieswereasfollows:
31/12/2014 Parent Affiliated Companies Other in€€thousand company companies valued at equity interests
Interestincome 1,381 46 15 0
Interestexpenses (115) (1) (1) 0
Feeandcommissionincome 10,933 1,327 270 0
Feeandcommissionexpenses (230) (4,902) (117) 0
Profit/lossduetonon-inclusionofnon-financial 0 1 0 0
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(50) Relations to key management
in€€thousand 2014 20131
Currentremuneration 2,416 2,697
TherearenocontractualobligationsregardingremunerationtopreviousmembersoftheManagementBoard.
TherelationsofmembersoftheManagementBoardofRaiffeisenCentrobankAGtotheRaiffeisenCentrobankGroupareasfollows:
in€€thousand 2014 2013
Sightdeposits 1,365 1,348
ThefollowingtableshowstherelationsofclosefamilymembersoftheManagementBoardtotheRaiffeisenCentrobankGroup:
in€€thousand 2014 2013
Sightdeposits 65 105
TherearenootherrelationsbetweentheGroupandkeymanagement.
Remuneration of the Management BoardThefollowingtableshowstotalremunerationofthemembersoftheManagementBoardaccordingtoIAS24.17.TheexpensesaccordingtoIAS24wererecognizedonanaccrualbasisandaccordingtotherulesoftheunderlyingstandards(IAS19andIFRS2):
31/12/2013 Parent Affiliated Companies Other in€€thousand company companies valued at equity interests
Interestincome 978 59 12 0
Interestexpenses (194) (336) (1) 0
Feeandcommissionincome 5,372 76 3,376 0
Feeandcommissionexpenses (269) (2,933) (179) 0
1Adjustmentofpreviousyeardata
in€€thousand 2014 2013
RemunerationSupervisoryBoard 95 110
Remuneration of the Supervisory Board
ThemembersoftheSupervisoryBoardreceivedattendancefeestotaling€95thousandfortheperiod2014(2013:€110thousand).
Moreover,nocontractssubjecttoapprovalinthemeaningofSection95(5)item12AustrianJointStockCompanyAct(AktG)wereconcludedwithmembersoftheSupervisoryBoardinthefinancialyear2014.
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(51) Members of the Management Board, the Supervisory Board and State Commissioners
Management Board EvaMarchart (ChiefExecutiveOfficeruntil31December2014) AlfredMichaelSpiss (DeputyChiefExecutiveOfficeruntil31December2014) GerhardGrund (MemberoftheManagementBoarduntil31December2014) WilhelmCeleda ChiefExecutiveOfficerasof1January2015 (MemberoftheManagementBoarduntil31December2014) MarkusKirchmair MemberoftheManagementBoardasof1January2015 Supervisory Board KlemensBreuer Chairman MemberoftheManagementBoard, RaiffeisenBankInternationalAG,Vienna WalterRothensteiner 1stDeputyChairman(until31December2014) ChiefExecutiveOfficer, RaiffeisenZentralbankÖsterreichAG,Vienna
KarlSevelda 1stDeputyChairman(since1January2015) ChiefExecutiveOfficer, 2ndDeputyChairman(until31December2014) RaiffeisenBankInternationalAG,Vienna
JohannStrobl Member(until29April2014)) DeputyChiefExecutiveOfficer, RaiffeisenBankInternationalAG,Vienna, HannesMösenbacher Member(since29April2014) DivisionHead, RaiffeisenBankInternationalAG,Vienna
WernerKaltenbrunner Member DivisionHead, RaiffeisenBankInternationalAG,Vienna
State Commissioners AlfredHacker,TamaraEls
Vienna,15April2015TheManagementBoard
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WilhelmCeledaChiefExecutiveOfficer
MarkusKirchmairMemberoftheManagementBoard
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(52) Significant Events after the Balance Sheet DateInrealizingtheexitstrategyasdefinedbyRBIwithregardtotheCentrotradesubsidiaries,aSharePurchaseAgreementwassignedinJanuary2015relatingtothesaleofthefourrubbertradingsubsidiaries.Theclosingisexpectedtotakeplaceinmid-2015.
(53) Group composition
Consolidation rangeNumberoffullyconsolidatedassociatedcompanieschangedasfolllows:
Numberofunits 2014 2013
Asatbeginningofperiod 12 13
Excludedinthefinancialperiod 0 (1)
As at end of period 12 12
Hereofdiscontinuedoperations 11 11
Company,registeredheadquarters(country) Subscribed capital in local Share of which Type2
in currency in % indirectly1
CentrotradeChemicalsAG,Zug(CH) 5,000,000 CHF 100.0% SU
CentrotradeCommoditiesMalaysiaSdnBhd,KualaLumpur,(MY) 1,400,000 MYR 100.0% SU
CentrotradeDeutschlandGmbH,Eschborn(DE) 410,000 EUR 100.0% SU
CentrotradeHoldingAG,Vienna(AT) 3,000,000 EUR 100.0% SU
CentrotradeMinerals&MetalsInc.,Chesapeake(US) 2,000 USD 100.0% SU
CentrotradeSingaporePte.Ltd.,Singapore(SG) 500,000 SGD 100.0% SU
RaiffeisenInvestmentAdvisoryGmbH,Vienna(AT) 730,000 EUR 100.0% FI
RaiffeisenInvestmentLtd.,Moscow(RU) 47,904,192 RUB 50.1% FI
RaiffeisenInvestmentPolskasp.z.o.o.,Warsaw(PL) 3,024,000 PLN 50.0% FI
RaiffeisenInvestmentRomaniaLLC,Bucharest(RO) 159,130 RON 100.0% FI
RaiffeisenInvestmentFinancialAdvisoryServicesLtd.Co. 70,000 TRL 99.0% FI
RaiffeisenCentrobankAG,Vienna(AT) 47,599,000 EUR 100.0% KI
List of fully-consolidated companies
Company,registeredheadquarters(country) Subscribed capital in local Share of which Type2
in Währung in % indirectly1
CentroAssetManagementLimited,St.Helier(JE) 10,000 GBP 100.0% FI
MENARAIHoldingGmbH,Vienna(AT) 35,000 EUR 100.0% SU
RaiffeisenInvestment(Bulgaria)EOOD,Sofia(BG) 60,050 BGN 100.0% FI
RaiffeisenInvestments.r.o.,Prague(CZ) 200,000 CZK 100.0% FI
TOVRaiffeisenInvestmentUkraine,Kiev(UA) 3,733,213 UAH 100.0% FI
RIInvestments,Warsaw(PL) 500,000 PLN 100.0% FI
SORANISRaiffeisenPortfolioManagementGmbH,Vienna(AT) 35,000 EUR 100.0% SU
Other companies not included in consolidation
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Company,registeredheadquarters(country) Subscribed capital in local Share of which Type2
currency in % indirectly1
AlpenbankAktiengesellschaft,Innsbruck(AT) 10,220,000 EUR 0.0% KI
ACGBorGlasworks,BorCity(RU) 418,956,270 RUB 7.4% 7.4% SU
CellmedResearchGmbH,Krems(AT) 1,718,907.47 EUR 5.8% SU
ÖsterreichischeRaiffeisen-Einlagensicherungreg.Gen.m.b.H.,Vienna(AT) 3,100 EUR 3.2% SU
ScanviwoodCo.Ltd.,HoChiMinhCity(VN) 2,500,000 USD 6.0% SU
SocietyforWorldwideInterbankFinancialTelecommunications.c.,LaHulpe(BE) 13,923,125 EUR 0.0% SU
SyrenaImmobilienHoldingAG,SpittalanderDrau(AT) 22,600,370 EUR 21.0% SU
RSCRaiffeisenServiceCenter,Vienna(AT) 2,000,000 EUR 0.1% SU
Other interests
1Sharesheldbycompaniesthatarenotincludedintheconsolidatedfinancialstatements(pro-ratashare)2Companytype KI=Creditinstitution FI Financialinstitution SU Othercompanies
Structured units
Thefollowingtableshows,bytypeofstructuredentity,thecarryingamountsofGroup’sinterestrecognizedinthebalancesheet(exclusivelyfunds)aswellasthemaximumexposuretolossresultingfromtheseinterests.Thecarryingamountspresentedbelowdonotreflectthetruevariabilityofreturnsbecausetheydonottakeintoaccounttheseeffectsofcollateralorhedges.
Nature,purposeandextentoftheRaiffeisenCentrobank’sinterestsinnon-consolidatedstructuredentities:
TheGroupengagesinvariousbusinessactivitieswithstructuredentitieswhicharedesignedtoachieveaspecificbusinesspurpose.Astructuredentityisonethathasbeensetupsothatanyvotingrightsorsimilarrightsarenotthedominantfactorindecidingwhocontrolstheentity.Anexampleiswhenvotingrightsrelateonlytoadministrativetasksandtherelevantactivitiesaredirectedbycontractualarrangements.
Astructuredentityoftenhassomeorallofthefollowingfeaturesorattributes:
•Restrictedactivities;•€Anarrowandwelldefinedobjective;•€Insufficientequitytopermitthestructuredentitytofinanceitsactivitieswithoutsubordinatedfinancialsupport;•€Financingintheformofmultiplecontractuallylinkedinstrumentstoinvestorsthatcreateconcentrationsofcreditorotherrisks(tranches).
Theprincipalusesofstructuredentitiesaretoprovideclientswithaccesstospecificportfoliosofassetsandtoprovidemarketliquidityforclientsthroughsecu-ritizingfinancialassets.Structuredentitiesmaybeestablishedascorporations,trustsorpartnerships.Structuredentitiesgenerallyfinancethepurchaseofassetsbyissuingdebtandequitysecuritiesthatarecollateralizedbyand/orindexedtotheassetsheldbythestructuredentities.StructuredentitiesareconsolidatedwhenthesubstanceoftherelationshipbetweentheGroupandthestructuredentitiesindicatethatthestructuredentitiesarecontrolledbytheGroup.
BelowisadescriptionoftheGroup’sinvolvementsinnon-consolidatedstructuredentitiesbytype:
FundsTheGroupestablishesstructuredentitiestoaccommodateclientrequirementstoholdinvestmentsinspecificassets.TheGroupalsoinvestsinfundsthataresponsoredbythirdparties.Agroupentitymayactasfundmanager,custodianorsomeothercapacityandprovidefundingandliquidityfacilitiestobothgroupsponsoredandthirdpartyfunds.Thefundingprovidediscollateralizedbytheunderlyingassetsheldbythefund.
FinancialsupportTheGroupdidnotprovidenon-contractualsupportduringtheyeartonon-consolidatedstructuredentities.
2014 Loans and advances Equities Debt instruments Derivatives in€€thousand
Funds 0 26,269 0 0
Total 0 26,269 0 0
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Accountingpolicies
Financial instruments: recognition and measurement (IAS 39)IAS39requiresallassetsandliabilities,includingderivativefinancialinstruments,toberecordedinthebalancesheet.Afinancialinstrumentisdefinedasanycontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityorequityofanotherentity.Oninitialrecognition,financialinstrumentsaretobemeasuredatfairvalue,whichgenerallycorrespondstothetransactionpriceatthetimeofacquisitionorissue.AccordingtoIFRS13,thefairvalueisdefinedastheexitprice.Thisisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.Forsubsequentmeasurement,financialinstrumentsarerecognizedinthestatementoffinancialpositionaccordingtotherespectivemeasurementcategorypursuanttoIAS39,eitherat(amortized)costoratfairvalue.
Categorization of financial assets and financial liabilities and their measurement
ThemeasurementcategoriesforfinancialinstrumentspursuanttoIAS39donotequatetotheprincipallineitemsinthestatementoffinancialposition.Relati-onshipsbetweentheprincipallineitemsinthestatementoffinancialpositionandthemeasurementstandardappliedaredescribedinthetable"CategoriesoffinancialinstrumentsaccordingtoIFRS7"andinthenotesunder(1)Incomestatementaccordingtomeasurementcategoriesand(13)Statementoffinanci-alpositionaccordingtomeasurementcategories.
1. Financial assets and financial liabilities at fair value through profit and loss
Oninitialrecognition,RaiffeisenCentrobankcategorizescertainfinancialassetsandliabilitiesasheld-for-tradingormeasuredatfairvalue.Thesefinancialassetsandliabilitiesarerecognizedatfairvalueandshownasfinancialassetsandliabilitiesatfairvalue.
a. Trading assets and trading liabilitiesTradingassetsandtradingliabilitiesareacquiredorincurredprincipallyforthepurposeofgeneratingprofitfromshort-termfluctuationsinmarketprices.Secu-rities(includingshortsellingofsecurities)andderivativefinancialinstrumentsheldfortradingpurposesarerecognizedattheirfairvalues.Ifproductsarelisted,thefairvalueisbasedontherelevantstockexchangeprices.Wheresuchpricesarenotavailable,internalpricesbasedonpresentvaluecalculationsforpri-maryfinancialproductsandfuturesoroptionpricingmodelsforoptionsareapplied.Presentvaluecalculationsarebasedontheinterestratecurvewhichismadeupofmoneymarket,futuresandswapratesanddoesnotcontainanyratingmarkups.Appropriatemodelsareusedasoptionpriceformula,depen-dingonthetypeofoption.Forplainvanillaoptions(AmericanandEuropeanstyle)theBlack-ScholesmodelandthebinomialpricingmodelaccordingtoCox,RossundRubinsteinareapplied.TheCurranapproximationisappliedtoAsianoptionswhereasbarrieroptionsuseHeinen-KatandspreadoptionsrelyontheKirkmodel.
Derivativesheldfortradingpurposesareshownunder“Tradingassets”and“Tradingliabilities”.Positivefairvaluesincludingaccruedinterest(dirtyprice)areshownunder“Tradingassets”.Negativefairvaluesarerecordedunder“Tradingliabilities”.Positiveandnegativefairvaluesarenotnetted.Changesindirtypricesarerecognizedintheincomestatementunder“Tradingprofit”.Derivativesnotheldfortradingpurposesareshownunder“Derivativefinancialinstru-ments”.Tradingliabilitiesalsoincludeanyobligationsresultingfromtheshort-sellingofsecurities.
b. Designated financial instruments at fair valueThiscategorycomprisesmainlyallthosefinancialassetswhichareirrevocablydesignatedasfinancialinstrumentatfairvalue(so-calledfairvalueoption)uponinitialrecognitioninthebalancesheet,independentoftheintentiontotrade.Thefairvalueoptiondesignationmayonlybeusedifsuchdesignationre-sultsinmorerelevantinformationforthereader.Thisisthecaseforallfinancialassetsthatarepartofaportfolioforwhichthemanagementandevaluationofassetperformancearecarriedoutonafairvaluebasis.
Theseinstrumentsarebonds,notesandotherfixed-interestsecuritiesaswellassharesandothervariable-yieldsecurities.Thesefinancialinstrumentsarevalu-edatfairvalueunderIAS39.Theyarerecognizedinthebalancesheetunder“Securitiesandfinancialinvestments”.Currentincomeispresentedin“Netinte-restincome”,whilenetvaluationsandnetproceedsfromsalesarerecordedunder“Netincomefromfinancialinvestments”.
Thefinancialliabilitiesaremostlystructuredbonds.Thefairvalueofthesefinancialliabilitiesiscalculatedbydiscountingthecontractualcashflowswithacre-dit-risk-adjustedyieldcurve,whichreflectsthelevelatwhichtheGroupcouldissuesimilarfinancialinstrumentsatthereportingdate.Themarketriskparame-tersareevaluatedaccordingtosimilarfinancialinstrumentsthatareheldasfinancialassets.
2. Financial assets held-to-maturity
RaiffeisenCentrobankdidnotholdanyfinancialassetsheld-to-maturity.
3. Loans and advancesNon-derivativefinancialassetswithfixedordeterminablepaymentforwhichthereisnoactivemarketareallocatedtothiscategory.Thesefinancialinstru-mentsaremainlyrecordedunderitem“Loansandadvancestocreditinstitutions”and“Loansandadvancestocustomers”.
Theyaremeasuredatamortizedcost.Ifimpairmentoccursitistakenaccountofwhendeterminingtheamortizedcost.Impairmentprovisionsandprovisionsforlossesthathaveoccurredbuthavenotyetbeenidentifiedarereportedintheincomestatementunderitem“Impairmentlossesonloansandadvances”.Profitsfromthesaleofimpairedloansarerecognizedintheincomestatementunderitem“Provisioningforimpairmentlosses”.
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4. Available-for-sale financial assets (AfS)Thiscategorycontainsthosefinancialinstruments(primarilyequityparticipations,forwhichthereisnoactivemarket)thatdidnotqualifytobeincludedinanyoftheotherthreecategories.Theyarestatedatfairvalue,ifafairvaluecanbereliablydetermined.Valuationdifferencesareshowndirectlyinothercompre-hensiveincome,andareonlyrecognizedin“Netincomefromfinancialinvestments”ifthereisanobjectiveindicationofimpairmentoriftheavailable-for-salefinancialassetissold.
Forunquotedequityinstruments,forwhichreliablefairvaluescannotbeassessedregularlyandarethereforevaluedatcostlessimpairmentlosses,itisnotpossibletoshowanappreciationinvalue.Thistypeoffinancialinstrumentisreportedunder“Securitiesandfinancialinvestments”.
Interestanddividendincomefromavailable-for-salefinancialassetsarerecordedintheitem“Netinterestincome”.
5. Financial liabilities Liabilitiesarepredominantlyrecognizedatamortizedcost.Discounteddebtsecuritiesandsimilarobligationsaremeasuredattheirpresentvalue.Financialliabilitiesarereportedinthestatementoffinancialpositionundertheitem“depositsfrombanks”,“depositsfromcustomers”or“otherliabilities“.Interestex-pensesarestatedundernetinterestincome.
Derecognition of financial assets and liabilities
a. Derecognition of financial assetsAfinancialassetisderecognizedwhenthecontractualrightstothecashflowsarisingfromafinancialassethaveexpired,whentheGrouphastransferredtherightstothecashflows,oriftheGrouphastheobligation,incasethatcertaincriteriaoccur,totransferthecashflowstooneormorereceivers.Atransferredassetisalsoderecognizedifallmaterialrisksandrewardsofownershipoftheassetsaretransferred.
b. Derecognition of financial liabilitiesTheGroupderecognizesafinancialliabilityiftheobligationsoftheGrouphavebeenpaid,expiredorrevoked.
ReclassificationInaccordancewithIAS39.50,non-derivativefinancialinstrumentsclassifiedastradingassetsoravailable-for-saleassetscanbereclassifiedtofinancialassetsheld-to-maturity.Thecompanyneitherutilizedthisoptionin2014norin2013.
Offsetting of financial instrumentsInthecaseofidentityofborrowerandlender,offsettingofloansandliabilitieswithmatchingmaturitiesandcurrenciesoccursonlyifalegalright,bycontractorotherwise,existsandoffsettingisinlinewiththeactuallyexpectedcourseofthebusiness.Informationonoffsettingoffinancialinstrumentisprovidedinitem(37)“Offsettingfinancialassetsandliabilities”.
Derivative financial instrumentsWithintheoperatingactivity,RaiffeisenCentrobankcarriesoutdifferenttransactionswithderivativefinancialinstrumentsfortradingandhedgingpurposes.RaiffeisenCentrobankusesderivativesincludingswaps,standardizedforwardcontracts,futures,creditderivatives,optionsandsimilarcontracts.RaiffeisenCentrobankappliesderivativesinordertomeettherequirementsoftheclientsconcerningtheirriskmanagement,tomanageandsecurerisksandtogenerateprofitinproprietarytrading.Derivativesareinitiallyrecognizedatthetimeofthetransactionatfairvalueandsubsequentlyrevaluedtofairvalue.Theresultingvaluationgainorlossisrecognizedimmediatelyintradingprofitorinvaluationresultfromderivativefinancialinstruments,unlessthederivativeisdesignatedasahedginginstrumentforhedgeaccountingpurposesandthehedgeiseffective.Herethetimingoftherecognitionwilldependonthetypeofhedgingre-lationship.
Derivatives,whichareusedforhedgingagainstmarketrisk(excludingtradingassets/liabilities)foranon-homogeneousportfolio,donotmeettheconditionsforIAS39hedgeaccounting.Thesearerecognizedasfollows:thedirtypriceisbookedunder"Derivativefinancialinstruments"(positivefairvaluesontheassetsideandnegativefairvaluesontheliabilityside).Thechangeinvalueofthesederivatives,onthebasisofthecleanprice,isshownin“Tradingprofit”.
Additionalinformationonderivativesisprovidedinthenotes(38)“Derivativefinancialinstruments”.
Hedge accountingIfderivativesareheldforthepurposeofriskmanagementandiftherespectivetransactionsmeetspecificcriteria,RaiffeisenCentrobankuseshedgeaccoun-ting.RaiffeisenCentrobankdesignatescertainhedginginstrumentsasfairvaluehedgesorcashflowhedges.Atthebeginningofthehedgingrelationship,therelationshipbetweenunderlyingandhedginginstrument,includingtheriskmanagementobjectives,isdocumented.Furthermore,itisnecessarytoregularlydocumentfromthebeginningandduringthehedgingrelationshipthatthefairvalueorcashflowhedgeiseffectivetoalargedegree
a. Fair value hedgeHedgeaccountingaccordingtoIAS39appliesforthosederivativeswhichareusedtohedgethefairvaluesoffinancialassetsandliabilities.Inparticular,thecreditbusinessissubjecttosuchfairvalueriskswithregardtofixed-interestloans.Interestrateswapsthatsatisfytheprerequisitesforhedgeaccountingarecontractedtohedgeagainsttheinterestraterisksarisingfromloans.Hedgesareformallydocumented,continuouslyassessedandratedtobehighlyeffecti-ve.Inotherwords,throughoutthetermofahedge,onecanassumethatchangesinthefairvalueofthehedgeditemwillbenearlycompletelyoffsetbyachangeinthefairvalueofthehedginginstrumentandthattheactualoutcomewillliewithinarangeof80to125percent.
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Derivativeinstrumentsheldtohedgethefairvaluesofindividualbalancesheetitems(excepttradingassets/liabilities)arerecognizedattheirfairvalues(dirtyprices)under“Derivativefinancialinstruments”(positivedirtypricesunderassets,andnegativedirtypricesunderliabilities).Changesinthecarryingamountsofhedgeditems(assetsorliabilities)areallocateddirectlytothecorrespondingbalancesheetitemsandreportedseparatelyinthenotes.Boththeeffectofchangesinthecarryingamountsofpositionsrequiringhedgingandtheeffectsofchangesinthecleanpricesofthederivativefinancialinst-rumentsarerecordedunder“Valuationresultfromderivativefinancialinstruments”.
b. Cash flow hedgeCashflowhedgeaccountingaccordingtoIAS39appliesforthosederivativesthatareusedtohedgeagainsttheriskoffluctuatingfuturecashflows.Variab-le-interestliabilities,aswellasexpectedtransactionssuchasexpectedborrowingorinvestment,areespeciallysubjecttosuchcashflowrisks.Interestrateswapsusedtohedgeagainsttheriskoffluctuatingcashflowsarisingfromspecificvariableinterest-rateitems,arerecognizedasfollows:Thehedginginstru-mentisrecognizedatfairvalue,changesinitscleanpricearerecordedasaseparateitemin“Othercomprehensiveincome”.Theineffectiveportionisrecog-nizedinprofitorlossontheotherhand,intheposition“Valuationresultfromderivativefinancialinstruments”.
Fair valueThefairvalueisthepricethatwouldbereceivedforthesaleofanassetorpaidforthetransferofaliability,inanorderlybusinesstransactionbetweenmar-ketparticipantsonthemeasurementreferencedate.Thisappliesirrespectiveofwhetherthepriceisdirectlyobservableorhasbeenestimatedusingavaluati-onmethod.InaccordancewithIFRS13,thefollowinghierarchyisusedtodetermineandreportthefairvalueforfinancialinstruments.
Quoted prices in an active market (level I)Fairvalueisbestexpressedasamarketvalueifapublishedpricequotationisavailableonanactivemarket.Thisappliesparticularlytoequityinstrumentsandderivativestradedonstockexchangesaswellasdebtinstrumentstradedintheinterbankmarket.Thevaluationismainlybasedonexternaldatasources(stockexchangepricesorbrokerquotesinliquidmarketsegments).Inanactivemarket,transactionsoffinancialassetsandliabilitiesaretradedinsufficientfrequencyandvolumes,sothatpriceinformationiscurrentlyavailable.Indicatorsforactivemarketsarethenumber,thefrequencyofupdateorthequalityofquotations(e.g.banksorstockexchanges).Moreover,alsonarrowbid/askspreadsandquotationsofmarketparticipantswithinacertaincorridorareindi-catorsforanactiveliquidmarket.
Measurement method using observable parameters (level II)Whencurrentbidandaskingpricesforfinancialinstrumentsareunavailable,thepriceofsimilarfinancialinstrumentsprovideevidenceofthecurrentfairvalueoraredeterminedbyacceptedmeasurementmethodsenclosingobservablepricesorparameters(inparticularpresentvaluecalculationoroptionpricemo-del).ThesemethodsconcernthemajorityoftheOTC-derivativesandnon-quoteddebtinstruments.
Measurement methods based on non-observable parameters (level III)Ifnoobservablepublishedquotationsorpricesareavailable,fairvalueiscalculatedusingmeasurementmodelsappropriatetotherespectivefinancialinstru-ment.Theuseofthesemodelsnecessitatesassumptionsandestimatesbymanagement,thescopeofwhichisdeterminedbythepricetransparencyoftherelevantfinancialinstrument,bythemarketandbythecomplexityoftheinstrument.
FurtherinformationtomeasurementmethodsandquantitativeinformationfordeterminationoffairvalueisshownunderNotes(39)Fairvalueoffinancialinstruments.
Amortized costTheeffectiveinterestratemethodisamethodofcalculatingtheamortizedcostofafinancialinstrumentandallocatinginterestincometotherelevantperiods.Theeffectiveinterestrateistheinterestrateusedtodiscounttheforecastfuturecashinflows(includingallfeeswhichformpartoftheeffectiveinterestrate,tran-sactioncostsandotherpremiumsanddiscounts)overtheexpectedtermofthefinancialinstrumentorashorterperiod,whereapplicable,toarriveatthecar-ryingamount.
Classes of financial instruments as defined by IFRS 7Becausethenatureoffinancialinstrumentsisalreadyexpressedappropriatelythroughtheclassificationofthebalancesheetitems,classificationaddressesthoseitemsinthebalancesheetwhichconstitutefinancialinstruments.Classesoffinancialinstrumentsontheassetsideofthebalancesheetare,firstandfore-most,cashreserves,loansandadvancestocreditinstitutions,loansandadvancestocustomers,tradingassets,derivativefinancialinstruments,derivativesfromhedgingtransactionsandsecuritiesandfinancialinvestments(separatelyincludingfinancialassetsnottradedonanactivemarket,whicharemeasuredatcost).Classesoffinancialinstrumentsontheequityandliabilitiessideofthebalancesheetare,inparticular,tradingliabilities,derivativefinancialinstruments,derivativesfromhedgingtransactions,liabilitiestocreditinstitutions,liabilitiestocustomersandsubordinatedliabilities.
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Impairment losses on loans and advancesAteachreportingdateanassessmentismadeastowhetherthereisanyobjectiveevidencethatafinancialassetorgroupoffinancialassetsisimpaired.Afinancialassetoragroupoffinancialassetsisimpairedandimpairmentlossesareincurred,when:
•thereisobjectiveevidenceofimpairmentasaresultofalosseventthatoccurredaftertheinitialrecognitionoftheassetuntilthereportingdate (a"lossevent");•thatlosseventhasanimpactontheestimatedfuturecashflowsofthefinancialassetorgroupoffinancialassets,and•theamountcanbereliablyestimated.
Objectiveevidenceforanimpairmentmayexistwhentheissuerorthecounterpartyfaceconsiderablefinancialdifficulties,abreachofcontractoccurs(forexample,defaultordelayininterestorredemptionpayments)oritcanbeassumedwithhighprobabilitythatinsolvencyorotherrestructuringprocee-dingswillbeinstitutedagainsttheborrower.
Creditrisksareaccountedforbymakingindividualimpairmentprovisionsandportfolio-basedimpairmentprovisions.Individualandportfolio-basedim-pairmentprovisionsarenotnettedagainstcorrespondingreceivables,butarestatedseparatelyinthebalancesheet.Portfolio-basedprovisionswerenotformedduetoimmateriality.
Forcreditriskrelatedtoloansandadvancestocreditinstitutionsandcustomers,provisionsaremadeintheamountofexpectedlossaccordingtounifiedGroup-widestandards.Objectiveindicationsofavalueadjustmentaredeemedtoexistifthediscountedprojectedrepaymentamountsandinterestpay-mentsarebelowthecarryingamountoftheloans,takingtheexistingcollateralintoaccount.
Theentireamountoftheprovisionforimpairmentlossesarisingfromon-balance-sheetloans(individualloanslossprovisionsonly)isshownasaseparateitemontheassetsideofthebalancesheet.Theprovisionforimpairmentlossesarisingfromoff-balancesheettransactionsisrecordedasprovisions.
Classification Primary measurement criterion IAS 39 category Fair Value Amortised Cost Other
Asset classes
Cashreserve Nominalvalue n/a
Tradingassets X Tradingassets
Derivativefinancialinstruments X Tradingassets
Loansandadvancestocreditinstitutions X Loansandadvances
Loansandadvancestocustomers X Loansandadvances
Securitiesandfinancialinvestments X Financialassetsat fairvalue throughprofitandloss
Securitiesandfinancialinvestments X Available-for-sale financialassets
thereoffinancialassets AtCost Available-for-sale nottradedon financialassets anaktivemarket
Positivefairvaluesofderivatives X n/a forhedgeaccounting(IAS39)
Liability classes
Tradingliabilities X Tradingliabilities
Derivativefinancialinstruments X Tradingliabilities
Liabilitiestocreditinstitutions X Financialliabilities
Liabilitiestocustomers X Financialliabilities
Debtsecuritiesissued X Financialliabilities
Debtsecuritiesissued X Financialassetsat fairvalue throughprofitandloss
Negativefairvaluesofderivatives X n/a forhedgeaccounting(IAS39)
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Securities lendingRaiffeisenCentrobankconcludessecuritieslendingtransactionswithbanksorcustomersinordertomeetdeliveryobligationsortoconductsecuritysaleandrepurchaseagreements.Securitieslendingtransactionsareshowninthesamewayasgenuinesaleandrepurchaseagreements.ThismeansloanedsecuritiescontinuetoremaininthesecuritiesportfolioandarevaluedaccordingtoIAS39.Borrowedsecuritiesarenotrecognizedandnotvalued.CashcollateralprovidedbyRaiffeisenCentrobankforsecuritieslendingtransactionsareshownasaclaimunder"Loansandadvancestocreditinstitutions"or"Loansandadvancestocustomers"whilecollateralreceivedisshownas“Liabilitiestocreditinstitutionsor“Liabilitiestocustomers”inthebalancesheet.
Operating leaseAnoperatingleaseexistsifthelessorbearsallrisksandenjoystherewardsofownership.Theleasedassetsarereportedbythelessorunder“Tangiblefixedassets”anddepreciatedinaccordancewiththeprinciplesapplicabletothetypeoffixedassetsinvolved.TheleaseinstallmentspaidbytheRaiffeisenCentro-bankGroupfortheuseofleasedobjectsarerecognizedintheincomestatementas“Otheradministrativeexpenses”.
Consolidation principles
SubsidiariesAllmaterialsubsidiariesinwhichRaiffeisenCentrobankdirectlyorindirectlyhascontrolarefullyconsolidated.TheGrouphascontroloveranentitywhenitisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee.
Inordertodeterminewhenanentityhastobeconsolidated,aseriesofcontrolfactorshavetobechecked.Theseincludeanexaminationof
•thepurposeandtheconstitutionoftheentity,•therelevantactivitiesandhowtheyaredetermined,•iftheGrouphastheabilitytodeterminetherelevantactivitythroughitsrights,•iftheGroupisexposedtorisksoforhasrightstovariablereturns•iftheGrouphastheabilitytouseitspowerovertheinvesteeinordertoaffecttheamountofvariablereturns.
Ifvotingrightsarerelevant,theGrouphascontroloveranentity,inwhichitdirectlyorindirectlyholdsmorethan50percentofthevotingrights;exceptwhenthereareindicatorsthatanotherinvesteehastheabilitytodetermineunilaterallytherelevantactivitiesoftheentity.Oneormoreofthefollowingpointsmaybesuchanindicator:
•AnotherinvestorhascontrolovermorethanhalfofthevotingrightsduetoanagreementwiththeGroup•Anotherinvestorhastheabilitytocontrolfinancialpolicyandoperationalactivitiesoftheparticipationduetolegallaworanagreement.•AnotherinvestorhascontrolovertheparticipationduetoitspossibilitytoappointandwithdrawthemajorityofmembersoftheBoardormembersof anequivalentgoverningbody.•AnotherinvestorhascontrolovertheentityduetoitspossibilitytodisposeofthemajorityofthedeliveredvotingrightsinameetingofmembersoftheBoard orofmembersanequivalentgoverningbody
Whenjudgingcontrol,alsopotentialvotingrightsareconsideredasfarastheyarematerial.
TheGroupassessesevidenceofcontrolincasesinwhichitdoesnotholdthemajorityofvotingrightsbuthastheabilitytounilaterallygoverntherelevantactivitiesoftheentity.ThisabilitymayoccurincasesinwhichtheGrouphastheabilitytocontroltherelevantactivitiesduetoitssizeanddistributionofvotingrightsoftheinvestees.
Inprinciple,subsidiariesarefirstlyintegratedintheconsolidatedgrouponthedatewhentheGroupobtainscontrolofthecompanyandareexcludedfromthedateonwhenitnolongerhascontrolofthecompany.Theresultsfromsubsidiariesacquiredordisposedofduringtheyeararerecordedintheconsolida-tedincomestatement,eitherfromtheactualdateofacquisitionoruptotheactualdateofdisposal.TheGroupreviewstheadequacyofpreviousdecisionsonwhichcompaniestoconsolidateatleasteveryquarter.Accordingly,anyorganizationalchangesareimmediatelytakenintoaccount.Apartfromchangesinownership,thesealsoincludetheGroup’sexistingornewcontractualarrangementswithaunit.
Non-controllinginterestsareshownintheconsolidatedstatementoffinancialpositionaspartofequity,butseparatelyfromRaiffeisenCentrobank'sequity.Theprofitattributabletonon-controllinginterestsisshownseparatelyintheconsolidatedincomestatement.
Indebtconsolidation,intra-grouploansandliabilitiesareeliminated.Remainingtemporarydifferencesarerecognizedin"otherassets/otherliabilities"intheconsolidatedstatementoffinancialposition.
Intra-groupincomeandexpensesarealsoeliminatedandtemporarydifferencesresultingfrombankbusinesstransactionsareincludedpartlyinnetinterestincomeandpartlyinnettradingincome.Otherdifferencesareshownin"othernetoperatingincome."
Intra-groupresultsareeliminatedinsofarastheyhaveamaterialeffectontheincomestatementitems.BankbusinesstransactionsbetweenGroupmembersareusuallyexecutedonanarm'slengthbasis.
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Changes in the Group’s participation quota of existing subsidiaries If,inthecaseofexistingcontrol,furthersharesareacquiredorsoldwithoutlossofcontrolinsubsequentconsolidation,suchtransactionsarerecognizeddi-rectlyinequity.ThecarryingamountofthesharesholdbytheGroupandthenon-controllinginterestsareadjustedinthewaythattheyreflectthechangesoftheparticipationquotaoftheexistingsubsidiaries.Anydifferencebetweentheamountwhichisadjustedforthenon-controllinginterestsandthefairvalueoftheconsiderationpaidorreceivedisrecognizeddirectlyinequityandisassignedtotheshareholdersoftheparentcompany.
Ifthecompanylosescontroloverasubsidiary,theincome/lossfromdisposalofgroupassetsisshownintheincomestatement.Thisiscalculatedasdifferencebetween
•thetotalamountoffairvalueofthereceivedconsiderationandfairvalueofthesharesretainedand•thecarryingamountofassets(includinggoodwill),liabilitiesofthesubsidiaryandallnon-controllinginterests
Allamountsrelatedtothesesubsidiariesandshowninothercomprehensiveincomearerecognizedasthiswouldbedoneincaseofsaleofgroupassets.Thismeanstheamountsarereclassifiedtoincomestatementordirectlytransferredtoretainedearnings.
Associated companiesAnassociatedcompanyisanentityoverwhichtheGrouphassignificantinfluence.Significantinfluenceisthepowertoparticipateinthefinancialandopera-tingpolicydecisionsofanentityinwhichsharesareheld.Thereexistsnocontrolorjointmanagementofdecisionmakingprocesses.Asarule,significantinfluenceisassumed,iftheGroupholds20to50percentofthevotingrights.Whenjudging,iftheGrouphastheabilitytoexertasignificantinfluenceonanotherentity,theexistenceandtheeffectofpotentialvotingrightswhichareactuallyusableorconvertiblearetakenintoaccount.Furtherparametersforjudgingsignificantinfluenceare,forexample,therepresentationinexecutivecommitteesandsupervisoryboards(SupervisoryBoardinAustrianJointStockcompanies)oftheentityandmaterialbusinesscaseswiththeentity.Sharesinassociatedcompaniesarevaluedatequityandshowninthestatementoffinancialpositonunder“Investmentsinassociates”.
Sharesinsubsidiariesnotincludedintheconsolidatedfinancialstatementsbecauseoftheirminorsignificanceandsharesincompaniesthathavenotbeenvaluedatequityareincludedin“financialinvestments”andaremeasuredatacquisitioncost.
Ateachreportingdate,theGroupreviewstowhatextentthereisobjectiveevidenceforimpairmentofaparticipationinanassociatedcompany.Ifthereisobjectiveevidenceofimpairment,animpairmenttestiscarriedouttodeterminetherecoverablevalueoftheparticipation-thisishigheroftheusablevalueandthefairvalueexcludingsellingcosts-andthecarryingamount.Animpairmentmadeinpreviousperiodsisreversedonlyiftheassumptionsunderlyingthedeterminationoftherecoverablevaluehavebeenchangedsincerecognitionofthelastimpairment.Inthiscasethecarryingamountiswrittenuptothehigherrecoverablevalue.
Business combinationsTheacquisitionofbusinessoperationsisrecognizedaccordingtotheacquisitionmethod.Theconsiderationtransferredinabusinesscombinationismeasuredatfairvalue.Thisiscalculatedastheaggregateoftheacquisition-datefairvalueofallassetstransferred,liabilitiesassumedfromformerownersoftheacquiredbusinesscombinationandequityinstrumentsissuedbytheGroupinexchangetocontrolofthebusinesscombination.Transactioncostsrelatedtobusinesscombinationsarerecognizedintheincomestatementwhenincurred.
Goodwillismeasuredastheexcessoftheaggregateofthevalueoftheconsiderationtransferred,theamountofanynon-controllinginterestandtheacquisition-datefairvalueoftheacquirer’spreviously-heldequityinterestintheacquiree(ifany),andthenetoftheacquisition-dateamountsoftheidentifiableassetsacquiredandtheliabilitiesassumed.Incasethatthedifferenceisnegativeafterfurtherreview,theresultinggainisrecognizedimmediatelyinincomestatement.
Cash reserveThecashreserveincludescashinhandandbalanceswithOesterreichischeNationalbank(theAustrianNationalBank)thatarepayableondemand.Theyareshownattheirnominalvalue.
Equity participationsShareholdinginsubsidiariesnotincludedintheconsolidatedfinancialstatementsbecauseoftheirimmaterialsignificance,andshareholdingsinassociatedcompaniesthatarenotvaluedatequityareshownunder“Securitiesandfinancialinvestments”.Theyaremeasuredatamortizedcostifnosharepricesareavailable.Impairmentisshownin“Netincomefromfinancialinvestments”.
Intangible fixed assetsPurchasedsoftwareandgoodwillarereportedunderthisitem.
Acquiredintangiblefixedassetswithparticularusefullives(software)arecapitalizedatacquisitioncostandamortizedovertheirestimatedusefullives.Theusefullifeforsoftwareamountstobetweenthreeandsevenyears.
Asatthebalancesheetdateandimpairmenttestforgoodwilliscarriedout.Incaseoftriggereventssuchimpairmenttestiscarriedoutinthecourseoftheyear.Incasethereisanindicationofimpairmentofanasset,suchimpairmentistoberecognizedpursuanttoIAS36.
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Tangible fixed assets Tangiblefixedassetsarecarriedatcostlessdepreciationandimpairmentlosses.Theyareshownunder“Generaladministrativeexpenses”.Depreciationiscalculatedonastraightlinebasiswiththefollowingusefullivesapplieduniformlyinthecompany:
Landisnotsubjecttoscheduleddepreciation.
Expectedusefullives,residualvaluesanddepreciationmethodsarereviewedannually;allfuturechangeofestimatesistakenintoaccount.Ifapermanentimpairmentistobeexpected,extraordinarywrite-downsarecarriedout.Intheeventthatthereasonforthewrite-downnolongerapplies,awrite-upwilltakeplaceuptotheamountoftheamortizedcostoftheasset.
Theresultinggainorlossfromthesaleofatangiblefixedassetisdeterminedasthedifferencebetweentheproceedsonsaleandthecarryingamountoftheasset,andisrecognizedin“Otheroperatingresult”.Ifatangiblefixedassetisretired,theremainingcarryingamountisalsorecognizedunderthisitem.
InventoriesInventoriesaremeasuredatthelowerofcostornetrealizablevalue.Write-downsarecarriedoutiftheacquisitioncostisabovethenetrealizablevalueasofthebalancesheetdateorlimitedusageorlongerperiodsorstoragehaveimpairedthevalueoftheinventory.
Non-current assets held for sale and discontinued operationsNon-currentassetsanddiscontinuedoperationsareclassifiedasheldforsalewhentherelatedcarryingamountwillberecoveredprincipallythroughasaletransactionratherthanthroughcontinuinguse.Thisconditionisonlyconsideredmetifthesaleishighlyprobableandtheasset(ordiscontinuedoperation)isimmediatelyavailableforsaleandfurthermorethattheanagementhascommitteditselftoasale.Moreover,thesaletransactionmustbeduetobecompletedwithin12months.
Non-currentassetsanddiscontinuedoperationsclassifiedasheldforsalearevaluedattheloweramountoftheiroriginalcarryingvalueorfairvaluelesscoststosellandarereportedunderotherassets.Incomefromnon-currentassetsheldforsaleanddiscontinuedoperationsarereportedunderotheropera-tingincome.
IntheeventthattheGrouphascommittedtoasaleinvolvingthelossofcontroloverasubsidiary,allassetsandliabilitiesofthesubsidiaryconcernedareclassifiedasheldforsaleprovidedtheaforementionedconditionsforthisaremet.ThisappliesirrespectiveofwhethertheGroupretainsanon-controllinginte-restintheformersubsidiaryafterthesaleornot.Resultsfromdiscontinuedbusinessoperationsarereportedseparatelyintheincomestatementasresultfromdiscontinuedbusinessoperations.
Other provision ProvisionsarecreatedwhentheRaiffeisenCentrobankGrouphasacurrentobligationarisingfromapasteventanditisprobablethattheGroupwillbere-quiredtosettlethisobligation;andwhentheamountoftheobligationcanbemeasuredwithsufficientreliability.Theamountoftheprovisionrepresentsthebestpossibleestimateoftheresourcesrequiredtomeettheobligationasofthebalancesheetdate,takingintoaccounttherelatedrisksanduncertainties.Theseprovisionswerenotdiscountedbecausetheresultinginteresteffectwouldhavebeenimmaterial.Thesetypesofprovisionarereportedinthebalancesheetunderitem"Provisions".Allocationtothevarioustypesofprovisionisperformedbymeansofvari-ousitemsintheincomestatement.Restructuringprovisioning,provisioningforlegalrisksandotheremployeebenefitsarerecordedin“Generaladministrativeexpenses”.Provisionallocationsthatarenotassignedtoacorrespondinggeneraladministrativeexpenseareasamatterofprinciplebookedagainstotheroperatingincome.
Provisions for pensions and similar obligations Allprovisionsrelatedtoso-calledsocialcapital(provisionsforretirementbenefitsandseverancepayments)aremeasuredusingtheProjectedUnitCreditMe-thodinaccordancewithIAS19–EmployeeBenefits.
Pensioncommitmentsexisttowardsanemployeewhohasleftthecompany.Therearenopensioncommitmentstopeoplewhoarealreadyretired.Theactua-rialcalculationofthecompany’sprovisionsforretirementbenefitsisbasedonthefollowingassumptions:
Usefullife Years
Buildings 10–40
Officefurnitureandequipment 3–10
Hardware 3–5
inpercent 2014 2013
Discountrate 2.0 3.5
Expectedincreaseinretirementbenefits 0.0 2.0
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Calculationsarebasedonatheoreticalretirementageof65years.
Theactuarialcalculationofseverancepaymentobligationsisbasedonthefollowingassumptions:
ThebiometricalbasisforthecalculationofallprovisionsforsocialcapitalisprovidedbyAVÖ2008-P-RechnungsgrundlagenfürdiePensionsversicherung(ComputationalFrameworkforPensionInsurance)-Pagler&Pagler,usingthevariantforsalariedemployeestakingintoaccountalongevityfactor.
Furtherdetailson“Provisionsforpensionsandsimilarobligations”areprovidedinthenotesunderitem(28).
Defined contribution pension schemesUnderdefinedcontributionplans,thecompanypaysfixedcontributionsintoapensionfund.Thesepaymentsarerecordedunder“Staffexpenses”intheincomestatement.
Employee compensation plansInRaiffeisenCentrobankvariablecompensationisbasedonabonuspoolthathasfixedminimumandmaximumlevelsandthusdefinesmaximumpayoutvalues.
Asofthefiscalyear2011,thegeneralandspecificprinciplesfortheallocation,theclaimandthepaymentofvariableremuneration(includingthepaymentofthedeferredportionofthebonus)foridentifiedstaff("riskpersonnel")areapplied:
•60percentoftheannualbonuswillbepaid•40percentoftheannualbonuswillbedeferredoveraperiodoffiveyears(deferralperiod).
RaiffeisenCentrobankdoesnotfulfilltheobligationarisingfromClause11oftheAnnextoSection39boftheAustrianBankingAct(BWG)whichstipulatesthatatleast50percentofthevariableremunerationofriskpersonnelmustbepaidoutintheformofsharesorsimilarnon-cashinstruments.
ForManagementBoardMembersofRaiffeisenCentrobankAG,thestipulationspursuanttoRZBGroupDirectiveTotalRewardsManagementareapplied,whichprovideforallocation,claimandpaymentofvariableremuneration(includingpaymentofthedeferredportionofthebonus)foridentifiedstaff(“riskpersonnel”).
•60percentoftheannualbonuswillbepaidoutonaproportionalbasisas50percentcashimmediately(up-front),and50percentthroughaphantom shareplan(seedetailsbelow),whichwillpayoutafteraholdingperiod(retentionperiod)ofoneyear.•40percentoftheannualbonuswillbedeferredoveraperiodoffiveyears(deferralperiod)andwillbepaidoutonaproportionatebasisas50percent incashand50percentthroughaphantomshareplan.
Theallocation,theclaimandthepaymentofthevariableremuneration(includingthepaymentofaportionofthedeferredbonus)dependonthefollowingcriteria:
•earninganetprofit,•theachievementofthelegallyrequiredcoretier1ratioofRaiffeisenCentrobankandoftheRaiffeisenBankInternationalGroup•theperformanceofthebusinessareaandtheaffectedperson.
Net interest incomeInterestandinterest-likeincomeiscomprisedprimarilyofinterestincomeonloansandadvancestocreditinstitutionsandcustomersaswellasinterestonfixed-interestsecurities.Interestandsimilarexpensesmainlyincludesinterestpaidonliabilitiestocreditinstitutionsandcustomersaswellasinterestonsubordinatedcapital.Interestincomeandexpensesareaccruedinthereportingperiod.Moreover,currentinterestincomefromsharesandothervariable-yieldsecurities(dividends)-ifnotallocabletotradingprofit-aswellasincomefromequityparticipationsandexpensessimilartointerestarereportedasnetinterestincome.
Net fee and commission income Netfeeandcommissionincomemainlyincludesincomeandexpensesarisingfrompaymenttransfers,securitiestransactionsnotclassifiedastradingprofitincludingincomefromprovidingservicesinconnectionwithcapitalmarkettransactions(IPOsandSPOs),currencyandcredittransactionsaswellasconsul-tingincomefromMergers&Acquisitions.Commissionincomeandexpensesareaccruedinthereportingperiod.
Trading profit Tradingprofitcomprisesthetradermarginsresultingfromforeigncurrencytransactionsandtheresultsofforeignexchangetranslation,andallrealizedandunrealizedgainsandlossesonfinancialassetsandfinancialliabilitiesatfairvalue.Inaddition,itincludesallinterestanddividendincomeattributabletotra-dingactivitiesandrelatedrefinancingcosts.
inpercent 2014 2013
Discountrate 2.0 3.5
Averageincreaseinsalary 3.0 3.0
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General administrative expensesGeneraladministrativeexpensesincludestaffandotheradministrativeexpensesaswellasamortization/depreciationandimpairmentlossesfortangibleandintangiblefixedassets.
Income taxesProvisionsforincometaxesarecalculatedonthebasisoftaxableincomefortheyear.Taxableincomediffersfromthegroupnetprofitinthestatementofcomprehensiveincomeduetoincomeandexpenseswhichwillbecometaxableortaxdeductibleinlateryearsoratnopointintimeasthecasemaybe.ProvisionsforincometaxesoftheGrouparecalculatedonthebasisofprevailingor,withregardtothebalancesheetdate,shortlybecomingapplicabletaxrates.
DeferredtaxesarerecognizedandcalculatedinaccordancewithIAS12applyingtheliabilitymethod.Deferredtaxesarebasedonalltemporarydifferen-cesthatresultfromcomparingthecarryingamountofassetsandliabilitiesintheIFRSaccountswiththetaxbasesofassetsandliabilitieswhichwillberever-sedinthefuture.Thecalculationsarebasedonthetaxrateapplicabletothespecificcountry.Adeferredtaxassetshouldalsoberecognizedontaxlosscar-ry-forwardsifitisprobablethatsufficienttaxableprofitwillbeavailableagainstwhichthetaxlosscarry-forwardscanbeutilizedwithinthesameentity.Thecarryingamountofdeferredtaxassetsisauditedeachyearatthebalancesheetdateandimpairedifitisnolongerprobablethatsufficienttaxableincomeisavailableinordertorealizetheassetsinfullorinpart.Deferredtaxassetsanddeferredtaxliabilitieswithinthesameentityarenetted.
RaiffeisenCentrobankAG,Vienna,andRaiffeisenInvestmentAdvisoryGmbH,havebeenmembersofthecorporategroupofRaiffeisenZentralbankÖster-reichAktiengesellschaftpursuantto§9oftheAustrianCorporateIncomeTaxActsince2008.Inaddition,since2006RaiffeisenCentrobankAGhasalsobeenamemberofanequitygrouppursuantto§9AustrianCorporateIncomeTaxAct,inregardtoacompanyinwhichithasaminorityshareholding.Loansandadvancesandliabilitiesarisingfromapositiveornegativetaxcontributionarereportedrespectivelyunder(24)“Otherassets”or(31)“Otherliabilities”.
Currenttaxesandmovementsofdeferredtaxesarerecognizedintheincomestatement.Incasethattheyarelinkedtoitemswhicharerecognizedinothercomprehensiveincome,currentanddeferredtaxesarealsodirectlyrecognizedinothercomprehensiveincome.
TaxassetsandtaxliabilitiesofotherGroupcompaniesarecomprisedinitem(24)“Otherassets”oritem(28)“Provisions”respectively.
Other comprehensive incomeOthercomprehensiveincomecomprisesallincomeandexpensesdirectlyrecognizedinequityaccordingtoIFRSstandards.Incomeandexpensesrecog-nizeddirectlyinequitythatarereclassifiedintheincomestatementarereportedseparatelyfromincomeandexpensesrecognizeddirectlyinequitythatarenotreclassifiedintheincomestatement.Inparticular,thisincludesdifferencesresultingfromthetranslationofequityheldinforeigncurrencyand-whereappli-cable-changesresultingfromthevaluationofavailable-for-salefinancialassets(Afs)andtherelateddeferredtaxes.Revaluationsofdefinedbenefitplansarereportedinincomeandexpensesrecognizeddirectlyinequitythatarenotreclassifiedintheincomestatement
Fiduciary businessTransactionsarisingfromtheholdingandplacementofassetsonbehalfofthirdpartiesarenotshownonthebalancesheet.Commissionfeesarisingfromthesetransactionsarereportedunder“Netfeeandcommissionincome”.
Contingent liabilities and other off-balance sheet obligations Thisitemmainlyincludescontingentliabilitiesarisingfromsureties,guaranteecreditsandlettersofcreditaswellasloancommitmentsattheirnominalvalue.Suretiesrepresentcircumstancesunderwhichthereportingcompanyactsasaguarantortothecreditorofathirdpartyand,inthisfunction,isresponsibleforthefulfillmentofanobligationofthisthirdparty.Irrevocableloancommitmentsrepresentobligationsthatcanleadtoacreditrisk.Thesecommitmentsincludeobligationstograntloans,topurchasesecuritiesortoprovideguaranteesandbillsofacceptance.Loanlossprovisionsforcontingentliabilitiesandirrevo-cableloancommitmentsarereportedunderprovisionsforliabilitiesandcharges.
Disclosures regarding the cash flow statement ThecashflowstatementreportsthechangeincashandcashequivalentsfortheGroupresultingfromtheinflowsandoutflowsofpaymentsfromoperating,investingandfinancingactivities.Cashflowfromactivitiesiscomprisedaboveallofproceedsfromthesaleofandpaymentsfortheacquisitionoffinancialinvestmentsandtangiblefixedassets.Financingactivitiescompriseallcashflowsfromequitycapitalorsubordinatedcapital.Allothercashflowsareassig-nedtocashflowsfromoperatingactivitiesaccordingtointernationalpracticesforfinancialinstitutions.Disclosures on segment reporting InformationontheoperatingsegmentsofRaiffeisenCentrobankisprovidedunderSegmentReportingonpage28ff.
Disclosures regarding the nature and scope of risks InadditiontotheinformationpertainingtorisksarisingfromfinancialinstrumentsdisclosuresintheNotes,inparticularsection(41)“RiskReport”providesde-tailedexplanationsonthetopicsofmarketrisks,creditrisks,operationalrisksandliquidityrisks.
Capital managementDisclosuresoncapitalmanagement,ownfundsandrisk-weightedassetsarepresentedinthenotesundersection(47)“CapitalmanagementandownfundspursuanttoCRR/CRDIVandtheAustrianBankingAct”.
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Application of new and revised standards
IAS 32 (Offsetting financial assets and liabilities; entry into force on January 1, 2014) TheamendmentsofIAS32clarifyexistingapplicationissuesrelatingtotheoffsettingoffinancialassetsandfinancialliabilities.Specifically,theamendmentsclarifythemeaningof“currentlyhasalegallyenforceablerighttosetoff”and“simultaneousrealizationandsettlement”.TheapplicationoftherevisedversionofIAS32hasnomaterialimpactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
IAS 27 (Separate financial statements; entry into force on January 1, 2014) TherevisedIAS27willonlyberelevantforseparatefinancialstatements.TheapplicationoftherevisedversionofIAS27hasnoimpactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
IAS 28 (Investments in associates and joint ventures; entry into force on January 1, 2014) JointventuresareaddedtothescopeoftherevisedIAS28,since,underIFRS11,jointventuresmayonlybeincludedintheconsolidatedfinancialstatementsaccordingtotheequitymethod.TheapplicationoftherevisedversionofIAS28hasnoimpactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
IFRS 10 (Consolidated financial statements; entry into force on January 1, 2014)IFRS10replacesthepartsofIAS27(ConsolidatedandSeparateFinancialStatements)thatdealwithconsolidatedfinancialstatements.SIC-12(Consolidati-on–SpecialPurposeEntities)isreplacedbyIFRS10.InIFRS10,thereisonlyonebasisforconsolidation,namelycontrol.UnderIFRS10,controlexistsifaninvestorhasallthreeofthefollowingelements:(a)controllinginfluenceoveraninvestee,(b)exposure,orrights,tovariablereturnsfromitsinvolvementwiththeinvestee,and(c)theabilitytouseitspowerovertheinvesteetoaffecttheamountoftheinvestor'sreturn.Extensiveguidancehasbeenaddedinthestandardtodealwithcomplexscenarios.TheapplicationoftherevisedversionofIFRS10hasnoimpactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
IFRS 11 (Joint arrangements; entry into force on January 1, 2014) IFRS11replacesIAS31(InterestsinJointVentures)andSIC-13(JointlyControlledEntities–Non-MonetaryContributionsbyVentures).IFRS11dealswithhowajointarrangementshouldbeclassified.Jointarrangementsareclassifiedasacontractualagreementinwhichtwoormorepartiespracticejointma-nagement.Jointmanagementcanextendtoajointventureorajointoperation.IncontrasttoIAS31,accountingforjointlycontrolledassetsisnolongeraddressedseparatelyinIFRS11;therulesforjointventuresareapplied.Theclassificationofajointarrangementasjointoperationorjointventuredependsontherightsandobligationsofthepartiestotheagreement.Inaddition,jointventuresunderIFRS11mustbeaccountedforusingtheequitymethod,whereasjointlycontrolledentitiesunderIAS31canbeaccountedforusingproportionateconsolidationortheequitymethod.TheapplicationofIFRS11hasnoim-pactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
IFRS 12 (Disclosures of interests in other entities; entry into force on January 1, 2014)IFRS12isadisclosurestandardregardingstatementsinthenotesandisapplicabletoentitiesthathaveinterestsinsubsidiaries,jointarrangements(jointven-turesorjointoperations),associatesand/orunconsolidatedstructuredentities.Ingeneral,thedisclosurerequirementsinIFRS12arefarmoreextensivethanthoseinthecurrentstandards.
Amendments to IFRS 10, IFRS 11 and IAS 27 (Investment entities; entry into force on January 1, 2014)TheseamendmentsprovideanexceptiontotheconsolidationrequirementsofsubsidiariesinIFRS10(ConsolidatedFinancialStatements).Thisappliesiftheparentcompanymeetsthedefinitionofan“investmentcompany“(forexample,certainmutualfunds).Theseentitiesmeasuretheirinvestmentsinparticularsub-sidiariesatfairvaluethroughprofitorlossinaccordancewithIFRS9(FinancialInstruments)orIAS39(FinancialInstruments:RecognitionandMeasurement).TheseamendmentshavenoimpactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
Amendments to IFRS 10, IFRS 11 and IFRS 12 (Transition guidance; entry into force on January 1, 2014)Asaresultoftheseamendments,thetransitionguidanceinIFRS10,IFRS11andIFRS12isclarifiedandadditionalreliefprovidedinallthreestandards.Ad-justedcomparativeinformationisonlyrequiredfortheprecedingcomparativeperiod.Inaddition,inconnectionwiththedisclosuresinthenotesonnon-conso-lidatedstructuredentitiesthereisnoobligationtoprovidecomparativeinformationforperiodsthatprecedethefirst-timeapplicationofIFRS12.
Amendments to IAS 36 (Recoverable amount disclosures for non-financial assets; entry into force January 1, 2014)ThechangesrepresentacorrectionofthedisclosurerulesthatwerechangedmoreextensivelythanintendedinconnectionwithIFRS13.Theserelatetoim-pairedassetsforwhichtherecoverableamountisequivalenttofairvaluelesscostsofdisposal.Atpresent,therecoverableamountmustbedisclosedregard-lessofimpairment.Thecorrectionnowrestrictsthedisclosuretoactualimpairments,butextendsthedisclosurestobemadeinsuchcases.
Amendments to IAS 39 (Novation of OTC derivatives and continuation of hedging relationship; entry into force January 1, 2014)Asaresultoftheamendments,derivativesremaindesignatedashedginginstrumentsinexistinghedgingrelationshipsdespitenovation.Novationreferstoca-sesinwhichtheoriginalpartiestoaderivativescontractagreethatacentralcounterpartyshallreplacetheiroriginalcounterpartytobecomethecounterpartytoeachoftheoriginalparties.Thefundamentalrequirementisthattheuseofacentralcounterpartyisrequiredbylaworregulation.Moreover,changestocontractualarrangementsmustbelimitedtothosethatarenecessaryfornovation.Theobjectiveoftheamendmentsistoavoidanyimpactonhedgeaccoun-tingasaconsequenceofthewrite-offofthederivativeontheconversionofthecontracttoacentralcounterparty.ThesechangeshavenomaterialimpactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
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IFRIC 21 (Levies; entry into force on January 1, 2014)IFRIC21containsguidanceastowhenaliabilityistoberecognizedforalevyimposedbyagovernment(e.g.banklevies).Theobligatingeventforthere-cognitionofaliabilityisidentifiedastheactivitythattriggerspaymentaccordingtotherelevantlegislation.Leviesdonothavetoberecognizeduntiltheobli-gatingeventhasoccurred.Theobligatingeventmayalsooccurgraduallyoveraperiodoftimeandtheliabilityisthereforerecognizedprogressively.
Standards and interpretations that are not yet applicable (already endorsed by the EU)Thefollowingneworamendedstandardsandinterpretations,whichhavebeenadopted,butarenotyetmandatory,havenotbeenappliedearly.
IAS 19 (Employee contributions; entry into force July 1, 2014)Theamendmentswillclarifytheprovisionsthatrelatetotheallocationofemployeeorthird-partycontributionslinkedtoservicetoperiodsofservice.Inadditi-on,asolutionthatsimplifiesaccountingpracticeispermittediftheamountofthecontributionsisindependentonthenumberofyearsofserviceperformed.TheseamendmentshavenomaterialimpactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
Annual Improvements to IFRS – 2010–2012 cycle (entry into force July 1, 2014)TheAnnualImprovementstoIFRS–2010–2012cycleincludenumerousamendmentstovariousIFRS.Theamendmentsareeffectiveforannualperiodsbe-ginningonorafterJanuary1,2014.TheseamendmentshavenomaterialimpactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
Annual Improvements to IFRS – 2011–2013 cycle (entry into force July 1, 2014)TheAnnualImprovementstoIFRS2011–2013cycleincludenumerousamendmentstovariousIFRS.Theamendmentsareeffectiveforannualperiodsbegin-ningonorafterJanuary1,2014.TheseamendmentshavenomaterialimpactontheconsolidatedfinancialstatementsofRaiffeisenCentrobank.
Standards and interpretations not yet applicable (not yet endorsed by the EU)
IFRS 9 (Financial Instruments; entry into force January 1, 2018)IFRS9(financialinstruments),issuedinNovember2009,introducednewrequirementsfortheclassificationandmeasurementoffinancialassets.IFRS9wasamendedinOctober2010toincluderequirementsfortheclassificationandmeasurementoffinancialliabilitiesandforderecognition.KeyrequirementsofIFRS9are:
AccordingtoIFRS9,allrecognizedfinancialassetsmustbesubsequentlymeasuredatamortizedcostorfairvalue.Specifically,debtinvestmentsthatareheldwithinabusinessmodelwhoseobjectiveistocollectthecontractualcashflows,andthathavecontractualcashflowsthataresolelypaymentsofprinci-palandinterestontheprincipaloutstandingaremeasuredatamortizedcostattheendofsubsequentaccountingperiods.Allotherinstrumentsmustbemea-suredatfairvalue.
IFRS9alsoincludesanirrevocableoptiontorecognizesubsequentchangesinthefairvalueofanequityinstrument(notheldfortradingpurposes)inothercomprehensiveincomeandtorecognizeonlydividendincomeintheprofitandlossstatement.Withregardtothemeasurementoffinancialliabilities(desig-natedasmeasuredatfairvaluethroughprofitorloss),IFRS9requiresthatchangesinfairvaluearisingoutofchangesinthedefaultriskofthereportingentityaretoberecognizedinothercomprehensiveincome.However,thisdoesnotapplyifrecognitionofsuchchangesinothercomprehensiveincomewastocreateorincreaseanaccountinginconsistencyinorcomparedtotheprofitandlossstatement.Changesinfairvalueattributabletoareportingentity’sowncreditriskmaynotbesubsequentlyreclassifiedtoprofitorloss.RCBanticipatesthattheapplicationofIFRS9inthefuturemayhaveasignificantimpactonamountsreportedinrespectoftheGroup'sfinancialassetsandfinancialliabilities.However,itisnotpracticabletoprovideareasonableestimateoftheim-pactofIFRS9untiladetailedreviewhasbeencompleted.
ThepublishedversionofIFRS9nolongerincludesaneffectivedate,asthecompletionoftheoutstandingprojectphasesisstillpending.InFebruary2014,theIASBdecidedthatthemandatorydateoftheinitialapplicationofIFRS9willbeJanuary1,2018.
IFRS 15 (Revenue from contracts with customers; entry into force January 1, 2017)Thestandardregulatesthedeterminationwhentorecognizerevenueandhowmuchrevenuetorecognize.IFRS15replacesIAS18'Revenue',IAS11'Con-structioncontracts'andaseriesofrevenue-relatedinterpretations.TheapplicationofIFRS15isobligatoryforallIFRSusersandisvalidforalmostallcontractswithcustomers–thematerialexemptionsareleasingcontracts,financialinstrumentsandinsurancecontracts.
IFRS 14 (Regulatory deferral accounts; entry into force January 1, 2016)JustentitiesfirstlyapplyingIFRSandwhorecognizeregulatorydeferralsaccordingtothepreviousaccountingstandardsareallowedtocontinuewithregula-torydeferralsaftertransitionintoIFRS.Thestandardisintendedtobeashort-terminterimsolutiontilltheIASBconcludesthelong-termfundamentalprojecttoprice-regulatedbusinesstransactions.
Amendments to IFRS 11 (Joint arrangements; entry into force January 1, 2016)TheamendmentstoIFRS11(Recognitionofacquiredsharesofajointarrangement)modifiesIFRS11,sothattheacquirerofsharesofajointarrangementrepresentingabusinessoperationasdefinedinIFRS3,hastoapplyallprinciplesregardingtherecognitionofbusinesscombinationsaccordingtoIFRS3andotherIFRS,asfarastheydonotcontradictotherrulesofIFRS11.
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Amendments to IAS 16/IAS 38 (Clarification of acceptable methods of depreciation; entry into force January 1, 2016)Theseamendmentsprovideguidelinesformethodsofdepreciationontangibleandintangiblefixedassetstobeused;especiallyrelatedtorevenue-basedmethodsofdepreciation.
Amendments to IAS 27 (Equity-method in separate financial statements; entry into force January 1, 2016)Theseamendmentsallowinvestorsinseparatefinancialstatementstousetheoptionofrecognizingsharesinsubsidiaries,jointventuresorassociatedentitiesatequity.
Amendments to IFRS 10/IAS 28 (Disposal or contribution of financial assets between an investor and an associated entity or joint venture; entry into force January 1, 2016)Theamendmentsclarifythatrevenuerecognitionoftransactionswithanassociatedentityorjointventureisdependentonthefactthatthedisposedorcontri-butedfinancialassetsrepresentabusinessoperation.
Annual Improvements to IFRS – 2012–2014 cycle (entry into force January 1, 2016)AmendmentsandclarificationstoseveralIFRS.
Vienna,15April2015TheManagementBoard
WilhelmCeledaChiefExecutiveOfficer
MarkusKirchmairMemberoftheManagementBoard
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Auditor’sreport
ReportontheConsolidatedFinancialStatementsWehaveauditedtheaccompanyingconsolidatedfinancialstatementsofRaiffeisenCentrobankAG,Vienna,fortheyearfrom1January2014to31December2014.Theseconsolidatedfinancialstatementscomprisetheconsolidatedbalancesheetasof31December2014,theconsoli-datedstatementofcomprehensiveincome,theconsolidatedcashflowstatementandtheconsolidatedstatementofchangesinequityfortheyearended31December2014andasummaryofsignificantaccountingpoliciesandotherexplanatorynotes.
Management'sResponsibilityfortheConsolida-tedFinancialStatementsandfortheAccountingSystemTheCompany’smanagementisresponsiblefortheGroupaccountingsystemandforthepreparationandfairpresentationoftheseconsolida-tedfinancialstatementsinaccordancewithInternationalFinancialRepor-tingStandards(IFRSs)asadoptedbytheEU.Thisresponsibilityincludes:designing,implementingandmaintaininginternalcontrolrelevanttothepreparationandfairpresentationoftheconsolidatedfinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.
Auditor'sResponsibilityandDescriptionofTypeandScopeoftheStatutoryAuditOurresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithlawsandregulationsapplicableinAustriaandinaccordancewithInternationalStandardsonAuditing,issuedbytheInternationalAuditingandAssuranceStandardsBoard(IAASB)oftheInternationalFederationofAccountants(IFAC).Thosestandardsrequirethatwecomplywithprofessi-onalguidelinesandthatweplanandperformtheaudittoobtainreasona-bleassuranceaboutwhethertheconsolidatedfinancialstatementsarefreefrommaterialmisstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresintheconsolidatedfinancialstatements.Theproceduresselecteddependontheauditor'sjudgment,includingtheas-sessmentoftherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheGroup’spreparationandfairpresentationoftheconsolidatedfinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances.butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup’sinternalcontrol.Anauditalsoincludesevaluatingtheappropria-tenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebymanagement.aswellasevaluatingtheoverallpresen-tationoftheconsolidatedfinancialstatements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.
OpinionOurauditdidnotgiverisetoanyobjections.Inouropinion,whichisbasedontheresultsofouraudit,theconsolidatedfinancialstatementscomplywithlegalrequirementsandgiveatrueandfairviewofthefinan-cialpositionoftheGroupasof31December2014andofitsfinancialperformanceanditscashflowsfortheyearfrom1Januaryto31Decem-ber2014inaccordancewithInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEU.
ReportontheManagementReportfortheGroupPursuanttostatutoryprovisions.themanagementreportfortheGroupistobeauditedastowhetheritisconsistentwiththeconsolidatedfinancialstatementsandastowhethertheotherdisclosuresarenotmisleadingwithrespecttotheCompany’sposition.Theauditor’sreportalsohastocontainastatementastowhetherthemanagementreportfortheGroupisconsistentwiththeconsolidatedfinancialstatementsandwhetherthedisclosurespursuanttoSection243aUGB(AustrianCommercialCode)areappropriate.
Inouropinion,themanagementreportfortheGroupisconsistentwiththeconsolidatedfinancialstatements.ThedisclosurespursuanttoSection243aUGB(AustrianCommercialCode)areappropriate.
WilhelmKovsca(AustrianCharteredAccountant)
JosefKirchknopf(AustrianCharteredAccountant)
Vienna,April15,2015KPMGAustriaGmbHWirtschaftsprüfungs-undSteuerberatungsgesellschaft
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ManagementReportofRaiffeisenCentrobankAGforthe2014financialyear
Theadditionofroundednumbersusingautomatedsystems,aswasdoneforthisreport,mayresultinminordifferencesinamounts.Thechangesindicatedinpercentrefertotheactualamountsandnottheroundedamountsshowninthisreport.
Alldesignationsthatareusedtorefertopersonsinthisreportapplyequallytobothgendersunlessreferenceisbeingmadetoaspecificindividual.
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EconomicConditionsThemacroeconomicconditionsmadeforaverychallengingbusinessenvironmentin2014.ThesituationinEuropewasdrivenbytheconflictbetweenRussiaandUkraineandtheassociatedeconomicsanctionsim-posedbytheEUCommission,continuedlowinterestrates,andthestagna-tingeconomy.TheEurozonesaweconomichighsandlowsin2014.The-sewerereflectedaboveallinthesentimentindicators,whichclimbedatthebeginningoftheyearbutthenlostgroundagaininthesecondhalfoftheyear.WhiletheeconomicupswingcontinuedtosteamaheadintheUSA,theEurozonefellbehindtheexpectationsasitstagnatedatonly0.8percentannualizedgrowth,withprivateconsumptionandarecoveryinexportspreventingaslideintonegativeterritory.Nevertheless,aseriesoffactorspointedtothepossiblepositivedevelopmentoftheEurozoneeconomyoverthemediumterm.TheseespeciallyincludetheexpansivemonetarypolicyoftheEuropeanCentralBank,goodprospectsfortheexportindustrythankstotheweakeuro,andtheburgeoningUSandBritisheconomies.Thelowoilprice,whichisnotonlyboostingconsumerpurchasingpowerbutalsodecreasingcostsforcompanies,isalsogoodnews.TheAustrianeconomysteadilylostmomentumoverthecourseof2014.Thethirdquarterbroughtalowpoint,whentherealgrossdomesticproductcontractedby0.3percentinannualizedtermsbetweenJulyandSeptember.Thisweakrecoverywasabovealltheresultofdecliningpriva-teinvestmentactivity.TheRussia-Ukraineconflictremainedoneoftheprimaryriskfactors,especiallyforinvestmentdecisionsintheEurozone.Incontrast,theUSAenteredaself-sustainingupswingthatwilllikelylastthrough2015.Theeconomytherewasmorerobustthanithasbeensince1980withfewexceptions.
FinancialMarkets
WhiletheFederalReservedecidedtoenditsbondpurchasingprograminOctober2014,takinganimportantsteptowardsnormalizingitsmonetarypolicy,theEuropeanCentralBank(ECB)decidedtoexpanditssecuritiespurchasestoincludegovernmentbondsinresponsetothethreatofdeflati-onintheEurozone.AccordingtotheECB,thekeyinterestrateswillgonolower.Theyielddifferencebetweentwo-yearGermanandAmericangovernmentbondsremainedthekeydeterminantoftheEUR/USDex-changerate.ThisyielddifferencewidenedtothebenefitoftheUSdollarbetweenthesummerandendof2014.TheEUR/USDratewasatjustun-der1.20attheendoftheyear.Littleisexpectedtochangeinthediver-gingmonetarypoliciesoftheFedandECBin2015.
Ontheequitymarkets,theUSAshowedthebestperformance.Drivenbythestrongeconomicexpansionandtheresultingcorporateearningsgrowth,theS&P500roseby15percent,showingthehighestgainsofanydevelopedmarket.TheNikkei225alsoroseby7.1percent,buoyedbythecapitalbeingpumpedintothesystembytheJapaneseNationalBank.DevelopmentsinEuropevariedwidely.WhileGermany’sDAXma-nagedtoclimbby2.7percent,theregionalEasternEuropeindexoftheViennaStockExchange(CECE)lost6percent,Britain’sFTSE2.7percent,andAustria’sATX15percent.ThenegativeperformanceoftheATXcanbeattributedtotheRussia-Ukrainecrisis,thegenerallyweakeconomicdevelopmentoftheEurozone,andprofitwarningsfromsomecompanies.Russia’sMICEXgainedgroundagainoverthecourseoftheyear.Howe-ver,thesegainsmustbeviewedinthecontextofthemassivedevaluationoftheRussianruble,whichlostonethirdagainsttheeuro.
CommodityMarkets
StartingataclosingpricefortheyearofUSD2265/t(SingaporeEx-change:TSR20),naturalrubberpricesfellsubstantiallyinJanuary,thenstabilizedtoacertainextent,androseagainstartingattheendofFebrua-ry(USD1790/t)toreachUSD2006/t.ThesubsequentpricedeclinelasteduntiltheendofApril(USD1646/t).ThesubsequentsidewaystrendwasinterruptedbyabriefjumpattheendofJune(USD1795/t),andpri-cesthenfellsteadilyuntilthebeginningofOctober(USD1387/t).AfterreachingUSD1600/tattheendofOctober,theclosingpricefor2014wasUSD1522/t.ThepricefelltoaroundUSD1400/tinthemiddleofJanuary2015.Supplycontinuedtoexceeddemand,whichwasreflectedinthelowpricelevel.
TheolefinsthataretradedbyCentrotradeChemicalscorrelatewiththeoilprice.ThiswasbelowUSD110/bblforthemajorityofthefirsthalfoftheyear,androsetoaroundUSD115/bblattheendofJuneduetotheunrestinIraq.Thisclimbwasonlybrief,andwaswipedoutbyadrasticslideinthesecondhalfoftheyear(especiallystartinginSeptember).TheclosingpricefortheyearwasroughlyUSD56/bbl.
DevelopmentofBusinessandEarnings2014DevelopmentofEarnings
Withanoperatingincomeof€61.856millionandoperatingexpensesof€46.193million,anoperatingresultof€15.663millionwasgeneratedinthe2014financialyear.Underconsiderationofnetvaluationsandnetpro-ceedsintheamountofminus€3.300million,theresultonordinaryactivi-tiescameto€12.364million.Thepreviousyearresultonordinaryactivi-tieswhichamountedto€21.657millionwasundercutby€9.293or42.9percent.
Duetothechallengingmarketenvironment,theoperatingincome2014fellby11.7percentor€8.206millionto€61.856million.Thedeclineinoperatingincomeisattributabletoanegativenetinterestincome,lowernetfeeandcommissionincomeandadeclineinincomefromshares,sharerightsandvariable-yieldsecurities.Thisdeclinecouldnotbeoffsetbyariseinnetprofitonfinancialtradingactivities.
Thenegativenetinterestincomeisprimarilyduetohigherinterestexpensesrelatedtotheissueofstructuredproductswhichcontraststoapositivevalu-ationresultfromtradablemoneymarketdepositsinthetradingprofit.
ThedeclineinnetfeeandcommissionincomeresultsfromanegativenetfeeandcommissionincomeinthesecuritiesbusinessrelatedtohighercommissionstoforeignpartnersandlowercommissionincomeformtheM&Abusiness,whichcouldonlypartlybeoffsetbyhigherincomefromequitycapitalmarkettransactions.
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Balancesheetdevelopment
ComparedtoDecember2103,thebalancesheettotalrosebyroughly9percentfromroughly€2,499milliontoroughly€2,713million.
Ontheassetside,themostsignificantchangecomparedto2013wasintheitem“Loansandadvancestocreditinstitutions“(roughly62percentofthebalancesheettotalon31December2014androughly53percenton31December2013).Theitemincreasedbyroughly€371milliontoroughly€1,691million,andcontainsmainlytradablemoneymarketdepo-sits(roughly€1,181million),unlistedbonds(roughly€133million.)andcollateralforsecuritiestransactionsandsecuritieslendings(roughly€97million).Interbankdepositswhichrosebyroughly€55milliontoroughly€223millioncomparedtothepreviousyearexclusivelycomprisedepo-sitsatRaiffeisenBankInternational(previousyear:€167million).Compa-redtothepreviousyear,collateralincreasedbyroughly€8million,unlis-tedbondsdroppedby€97million,whereastradablemoneymarketde-positsrosebyroughly€361million.
“Bonds,notesandotherfixed-interestsecurities“(roughly9percentofthebalancesheettotalon31December2014androughly14percenton31December2013)declinedbyroughly€101milliontoroughly€239milli-oncomparedtothepreviousyear.Thedeclineismainlyduetoadropinlistedbondssubstitutedbytradablemoneymarketdeposits.
Theitem“Sharesandothervariable-yieldsecurities(roughly16percentofthebalancesheettotalon31December2014androughly20percenton31December2013)fellmyroughly€63milliontoroughly€439million,mainlyasaresultofthedeclineinforeignsharesbyroughly€50million.
Theshares,purchasedoptionsandzerobondsreportedunderotheritemsserveashedgesfortheissuedcertificatesandwarrants,orarepartoftheBank’smarketmakeractivities.
Theitem“Otherassets“(roughly4percentofthebalancesheettotalon31December2014androughly5percenton31December2013)declined,mainlyinlistedoptions,byroughly€11milliontoroughly€117million.
Theitem“Loansandadvancestocustomers“(roughly5percentofthebalancesheettotalon31December2014androughly6percenton31December2013)recordedadecreasebyroughly€15milliontoroughly€126million.Thisdeclineismainlyattributabletoalowerloanvolumeinthecorporatecustomersegment.
in€million€ 2014 2013 Change
Operating income 61.856 70.062 (11.7%)
Staffexpenses (27.327) (28.684) (4.7%)
Otheradministrativeexpenses (15.007) (16.617) (9.7%)
Depreciation (1.710) (1.754) (2.5%)
Otheroperatingexpenses (2.148) (0.728) >100.0%
Operating expenses (46.193) (47.784) (3.3%)
Operating result 15.663 22.278 (29.7%)
Valueadjustments,netproceeds (3.300) (0.621) >100.0%
Result on ordinary activities 12.364 21.657 (42.9%)
Taxes (3.766) (5.147) (26.8%)
Net profit for the year 8.598 16.510 (47.9%)
Netprofitonfinancialtradingactivitiesimprovedcomparedtothepreviousyearperiod,which,intermsofvolume,isprimarilyduetotheexpansionofthecertificatesandsalesbusiness.Incontrastthereto,thereisanegativevaluationresultfurthertomarket-relatedadjustmentsintradablemoneymarketdeposits.
Operatingexpensescameupto€46.193millionandwereby3.3percentor€1.591millionbelowthepreviousyearresultof€47.784million.Staffexpensesamountingto€27,327millionandotheradministrativeex-pensessummingupto€15,007millionbothundercutthepreviousyearvaluesby€1.357millionand€1.611million,respectively.Thisismainlyattributabletolowerprovisionsforbonuspayments,whichwerepartlycompensatedbyhigherprovisionsforseverancepayments.Inotheradmi-nistrativeexpenses,legal,advisoryandconsultancyservicesdeclined,sundryadministrativeexpensesdecreasedinparticularduetolowerstaffexpensescharged,whereasexpensesforcommunicationrecordedanin-crease.
Thecost/incomeratio,whichhadcomeupto68.2percentin2013,roseto74.7percentfurthertothedeclineinoperatingincome.
Thechangeinvaluationresultsandnetproceedsresultsmainlyfromane-gativevaluationresultintheamountof€2.070million(2013:€0.002million)insecuritiesclassifiedascurrentassetsandfromhigherprovisionsforpotentiallossesinaffiliatedcompaniesintheamountof€0.950million.
Theresultonordinaryactivities2014amountedto€12.364millioncom-paredto€21.657millioninthepreviousyear.
Inthe2014financialyear,incometaxescameto€0.253million(2013:€1.964million).Thedeclineisprimarilyattributabletotaxincomefromthesettlementofthegroupchargefortheyears2005to2007(€1.136million).
Othertaxesamountedto€3.512millioninthe2014financialyear(2013:€3.183million).Theyincludevalue-addedtaxesandbanklevieswhichroseby€1.077millionto€2.060millioncomparedtothepreviousyearperiodfurthertoalegalchangeinthecalculationmethod).
Thenetincomefortheyearamountsot€8.598million(2013:€16.510million).
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in€€million 2014 2013
ROE before tax 13.2% 23.7%
Cost/income ratio 74.7% 68.2%
Corecapital(tier1)afterdeductions 87,740 89,115
Eligible own funds 87,740 89,115
Ownfundsrequirement 54,638 57,436
Surplus of own funds 33,101 31,679
Own funds ratio* 12.8% 12.4%
Core capital ratio** 12.8% 12.4%2014:*) Calculation:eligibleownfunds/assessementbasistodetermineownfundsrequirementpursuanttoCRR**)Calculation:corecapital(tier1)/assessmentbasistodetermineownfundsrequirementpursuanttoCRR
2013:*) Calculation:eligibleownfunds/assessementbasistodetermineownfundsrequirementpursuanttoAustrianBankingAct**)Calculation:corecapital(tier1)/assessmentbasistodetermineownfundsrequirementpursuanttoAustrianBankingAct
Keydata
Thesubsequentchartdepictsthekeydata:
Theitem“Bondsandnotesissuedbypublicbodies“(roughly2percentofthebalancesheettotalon31December2014androughly1percenton31December2013)containsAustrianorGermangovernmentbonds.
Zerobonds,structurednotesandtradabledepositspurchasedbyRBIinrelationtotheissuingactivitiesinthecertificatesbusinessareincludedin“Loansandadvancestocreditinstitutions“,“Sharesandothervariable-yieldsecurities”andin“Bonds,notesandotherfixed-interestsecurities”andcomeuptoatotalofroughly€1,500million(December2013:roughly.€1,315million).Inaddition“Otherassets“includeOTCoptionspurchasedfromRBIintheamountofroughly€ 45million.
Ontheequityandliabilitiesside“Otherliabilities“(roughly56percentofthebalancesheettotalon31December2014androughly58percenton31December2013)recordedarisebyroughly€63million.Theitem“Liabilitiestocreditinstitutions”(roughly3percentofthebalancesheettotalon31December2014androughly4percenton31December2013)declinedbyroughly€37millionto€75millionismainlyduetolowermoneymarketdepositsofAustrianbanks.Thegrowthinitem“Otherliabilities”byroughly€63milliontoroughly€1,515millionisprimarilyattributabletoanincreasedvolumeofcertificatesbyroughly€87million,whileshort-sellingsoftradingassetsfellbyroughly€67million.Short-sel-lingswereeffectedinconnectionwiththemarketmakingactivitiesofRaiff-eisenCentrobankinrelationtopensionplansandrepresentoffsettingitemstoequityandequityindexfuturesaswellastocashpositionsontheassetsideofthebalancesheet.Theriseinitem„Liabilitiestocustomers“(roughly8percentofthebalance
sheettotalon31December2014androughly5percenton31Decem-ber2013)byroughly€99milliontoroughly.€230millionisprimarilyattributabletohigherliabilitiesofforeigncustomers.
“Securitizedliabilities“(roughly28percentofthebalancesheettotalon31December2014androughly27percenton31December2013)in-creasedbyroughly€95milliontoroughly€772million,primarilyasaresultofissuingnewbonds.
“Provisions”(roughly1percentofthebalancesheettotalon31Decem-ber2014androughly1percenton31December2013)declinedinthecomparativeperiodfromroughly€20.1millionon31December2013toroughly€18.6millionon31December2014.Thisisprimarilyduetoareductioninprovisionsforbonuspayments(2014:roughly€1.8million,2013:€4.4milllion).Provisionsforseverancepaymentsrecordedanincre-aseinparticularfurthertohigherprovisionsforrestructuringmeasures.
Thedeclinein“Netprofitfortheyear”(roughly0percentofthebalancesheettotalon31December2014androughly1percenton31Decem-ber2013)byroughly€8.1milliontoroughly€10.3millionrepresentsthebalanceofdividendpaymentsforthe2013financialyearcominguptoroughly€13.8millionandthenetincomeforthe2014financialyearintheamountofroughly€8.6million.Inaddition,€3.0millionwerealloca-tedtoretainedearnings.
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SegmentReportingInthe2014financialyear,itwasdecidedtorestructurethebusinessmodelofRaiffeisenCentrobankandtofocusthecoreareasofbusinessonequitytradingandsalesaswellasoncertificates.Followingthesedecisions,theEquityCapitalMarkets(ECM),Mergers&Acquisitions(M&A)businesssegmentsincludingthesubsidiariesandthecommoditytradingsubsidiarieswillbesoldorclosedorwillbetransferredtoRaffeisenBankInternationalortherespectivenetworkbanks.
SegmentsofRaiffeisenCentrobankAG
Securities Trading & Sales and TreasuryRaiffeisenCentrobankisthelargestplayerincertificatesandequitiestradingandholdsakeypositiononthemarketsinCentralandEasternEurope.
TradingvolumeontheViennaStockExchangerosebyanimpressive23percentinannualcomparison,butliquidityonothermarketsthatarerelevantforRaiffeisenCentrobankcontractedfurtheringeneral(WarsawStockExchangeminus6percent,andtheexchangesinPragueandBu-dapestfellbyroughly20percenteach).Thedevelopmentoftherelevantequityindiceswasalsonotuniform.LargerwesternEuropeanindicespos-tedslightgainsinannualcomparison,whiletheATXfellsubstantially(minus15percent)andotherindicesintheregionlesssubstantially(suchastheWIG20atminus3.5percent).
Duetothemarginpressureandcontinuedlowtradingvolumesinlong-termcomparison,grossincomeincustomerbusinesswithstockscontinuedtosuffer,asdidmarketmakingandproprietarytradingingeneral.WearehappytoreportthatRaiffeisenCentrobankwasagainthelargestmarketparticipantontheAustrianequitymarketin2014withashareof9.2percentoftheViennaStockExchange’sspotmarket.RaiffeisenCentrobankalsogeneratedthegreatestsalesofanymarketmakerandspecialistontheViennaStockExchange.
InstitutionalEquitySalesTheshareoftheAustrianequitymarketinthecustomerbusinesssegmentwasincreasedfrom8.9to10.2percent.
Themarketingactivitieswerecontinuedatthesamehighlevelaslastyear:33researchroadshows74corporateroadshows21institutionallunchesforAustrianinstitutionalinvestors5reverseroadshows27transactionroadshows
InadditiontothetraditionalinvestorconferenceinZürswithanewrecordnumberofparticipants(60companies,150investors,1,100one-on-onemeetings),asuccessfulinvestorconferencewasalsoorganizedinWar-saw(14companies,29investors,121one-on-onemeetings).BusinesswithPolishinvestorswasincreasedsignificantlythroughthefruitfulcollaborationwithRaiffeisenPoland(plus250percent).Significantdemandforthepri-marymarkettransactionswecompletedintheperiod(RaiffeisenBankIn-ternational,PORR,TelekomAustria,ElectricaS.A.)wasalsogeneratedthroughlocalbrokers.
ThesuccessfulconclusionoftheRaiffeisenbankInternationalorderroutingprojectagainhighlightedthecentralpositionthatRaiffeisenCentrobankplaysastheequityhouseoftheRaiffeisenbankInternationalGroup.Elect-ronicsalestradingwasexpandedsignificantlyandoffersconsiderablegrowthpotentialfor2015aswell.
Trading/MarketMakingRaiffeisenCentrobankagaindefendeditsmarketleadershipintheViennaStockExchange’smarketmakingsegmentin2014.Intheprimemarket,RaiffeisenCentrobankreceived37ofthe39totalmarketmakerand/orspecialistmandatesandwasthelargestmarketmakerontheViennaStockExchangewithashareof19.3percent.
WiththetransferofthederivativeinstrumentsfromtheOeTOBViennatotheEurexFrankfurt,RaiffeisenCentrobankassumedalargenumberofmar-ketmakermandatesforAustrianandEasternEuropeanbluechipsontheEurexFrankfurt.InadditiontotheEurex,RaiffeisenCentrobankexpandeditsequities,certificates,andderivativesmarketmakingactivitiesonvariousforeignexchangessuchastheWarsawStockExchangeandtheBucha-restStockExchangebywinningnewmandatesandexpandingitsmarketmakingtonewproductclasses.
StructuredProductsTheverypositivecourseofbusinessfortheStructuredProductsdepartmentfromtheprioryearscontinuedwithanotherrecordresultin2014.Certifica-tesaretakingonanincreasinglyimportantroleasafixedpartofamo-dernportfolio.RaiffeisenCentrobanksawsignificantgrowthinallofitscoremarketsandcustomergroups.TheoutstandingmarketvolumeforRaiffeisenCentrobankcertificatesroseagaintoanall-timehighof€3.1billion,evenfarsurpassingthelevelachievedin2006/2007.Thisenab-ledRaiffeisenCentrobanktoextenditsleadershiponthedomesticcertifi-catemarketandtoincreaseitsmarketshareby27percent(correspondsto15percentagepoints).Totalturnoverfor2014cameto€1.4billion,anincreaseofover10percentinannualcomparison.Withashareofover70percent,bonusandguaranteecertificateswerethemostpopularproductcategoriesbyfar.Attractiveyieldpotentialwith(partial)protectionisinhighdemandinthecurrentlow-interestenvironment.This(partial)pro-tectionmechanismsofferslowerriskthananinvestmentinequitiescom-binedwithahigherpossibleyieldthanispossiblefromaninvestmentinbonds–anidealcombinationformanyinvestorsunderthecurrentcondi-tions.AsanAustrianissuer,activityfocusednotonlyonproductsbasedonthetraditionallyimportanthomemarket,butalsoonmajorEuropeanandglobalindicessuchastheEuroStoxx50andSTOXXGlobalSelectDivi-dend100andonEasternEuropeanbluechips.
Inadditiontoreturnandsecurity,agrowingnumberofinvestorsarealsofocusingonsociallyresponsibleinvesting.RaiffeisenCentrobankaddressedthistrendwithcorrespondingnewissues.Allinall,RaiffeisenCentrobankissued3,256productsin2014,bringingthetotalofitspublic-lyofferedissuestoanewrecordofover4,300asoftheendoftheyear.InadditiontotheViennaStockExchange,allRaiffeisenCentrobankcertifi-catesarelistedontheleadingEuropeancertificateexchangesinStuttgart(EUWAX)andFrankfurt.TheEasternEuropeanexchangesinWarsaw,Prague,Budapest,andBucharestarealsobecomingmoreimportantintermsofthenumberoflistedRaiffeisenCentrobankproductsandturnoverfortheseproducts.AnotherrecordresultwasachievedonthecoremarketsinEasternEurope.Revenuehererosebynearly20percentinannualcom-parison.RaiffeisenCentrobankiscurrentlyactiveinninecountriesinCen-tralandEasternEuropeandfurtherintensifieditscollaborationwiththelo-calnetworkbanksthere.Inadditiontotherecordrevenueandhighestle-velofoutstandingcertificatesever(plus26percent),moreissues(subscriptionsandprivateplacements)andeducationmeasureswerecom-pletedthaneverbefore.Aparticularhighlightduringtheyearweresuc-cessfultransactionswithslovakiaTatrabanka.Amongotherachievements,asingleBonusCertificateissueworthover€40millionwasconcludedandplacedinthelocalprivatebankingsegment.Aftercomingoutontopin2007,2010,and2012,RaiffeisenCentrobankwasnamedthebestcer-tificatehouseinCEEforthefourthtimeattheStructuredProductsEuropeAwards2014.
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IncreasingvolumesofcertificatesarealsobeingsoldbytheRaiffeisenbanksinAustria.Recordsweresetintermsofrevenueandsubscriptionvo-lume.NumeroustrainingmeasuresandcustomereventsnotonlyincreasedtheBank’spresence,butalsoimprovedadvisorandcustomerknowledgeaboutcertificates.Underthecontinuedchallengingconditions,especiallywithregardstotheregulatoryframework,RaiffeisenCentrobankfeelsthatthedisseminationofknowledgeandinformationisoneofthemostimpor-tantsalesmeasuresforensuringlong-termsuccess.ThesustainabilityofRaiffeisenCentrobank’scertificatebusinessisuniqueinAustriaandCentralandEasternEurope.TheissueristheonlycompleteAustrianprovider,bothintermsofcertificatetypesandunderlyings.Inadditiontoofferingabroadproductspectrum,RaiffeisenCentrobankboastsmanyyearsofactivepre-sence,extensiveinvestorservices,andinnovativeproductideas,andhaslongplayedapioneeringroleincertificatesinCEE.Thishighlevelofex-cellencewasrecognizedbyindependentexpertsattheCertificateAwardsAustriafortheeighthtimeinarow.RaiffeisenCentrobankwasna-medthebestissuerinAustria.
Equity Capital Markets (ECM)WhilepricesinEuropetrendedupforthemostpartduringthefirsthalfof2014,geopoliticaltensionsinUkraineandRussiabroughtsubstantiallyhig-herlevelsofvolatilityinthesecondhalfoftheyear,andmostEuropeanequitymarketsclosedtheyearunchangedorupslightlycomparedwiththeendof2013.SomekeyexchangesinCEEincludingRussiaandPo-landfailedtokeeppacewiththemarketsinwesternEurope.TheViennaStockExchangefollowedtheCEEequitymarketsdownward,especiallyinthesecondhalfof2014,andclosedtheyearatalossofaround15percent.
Europesawatotalof67initialpublicofferings(IPOs)withanoffervolumeofover€200millioneachin2014.Activityonthetransactionmarketslo-wedsomewhatinthesecondhalfoftheyear.
RaiffeisenCentrobankdefendeditsstrongpositionontheViennaStockExchangeintheEquityCapitalMarketssegmentagainin2014andalsoconductedatotaloftenequitytransactionsintherelevantEuropeanmar-ketstogetherwiththeRaiffeisenBankInternationalnetworkbanks.
HighlightsincludedthecapitalincreaseofRaiffeisenBankInternationalAG,thelargeststockissueoftheyearontheViennaStockExchangewithatotalvolumeof€2.8billion.RaiffeisenCentrobankwasthejointglobalcoordinatorandjointbookrunner.ThistransactionwasthelargeststockissueontheViennaStockExchangesincethestartofthefinancialcrisisandsignificantlyincreasedthefreefloattojustunder40percent.FurtherhighlightsincludedthebookrunnerpositionsforthecapitalincreaseofPorrAG(€119million)andparticipationinthecapitalincreaseofTelekomAustriaAG(€1billion).
TheBankwasalsoinvolvedintransactionsontheRomanianandPolishequitymarkets,includingthelargestinitialpublicofferinginthehistoryoftheRomaniancapitalmarket,theIPOofElectricaS.A.ontheexchangesinBucharestandLondon.
OntheViennaStockExchange,RaiffeisenCentrobankassistedBUWOGAGwithitspublicofferingthroughaspin-offfromImmofinanzAG.Asidefromthepurestockissues,RaiffeisenCentrobankactedasleadmanagerforaconvertiblebondfromWarimpexFinanz-undBeteiligungsAG.
Russia,thelargestmarketinCEE,fellwellbehindtheperformanceofprevi-ousyearsandtheexpectationsduetothegeopoliticaltensions.Issueacti-vityinPolandwasalsolowerthaninpreviousyears.TheIPOoftheassetmanagerAltusTFIS.A.withavolumeofPLN175millionwasoneofthelargestissuesoftheyearontheWarsawStockExchangeandunderscoredtheincreaseinEquityCapitalMarkets(ECM)activityintheregion.TheRomanianequitymarketagainsawarobustleveloftransac-tions,fromwhichRaiffeisenprofitedasthemarketleaderinthecountry’stransactionbusiness.TheBankwasinvolvedintwotransactionswithatotalvolumeofroughly€450million.
InadditiontothetransactionsinAustriaandCEE,RaiffeisenCentrobankwasaconsortiummemberfortwolargecapitalmarkettransactionsinwes-ternEurope.ThesewerethecapitalincreaseofDeutscheBankAG,thelargeststockissueinEuropewithavolumeof€6.4billion,andthelargestIPOinEurope,thatofNNGroupN.V.ontheAmsterdamStockEx-change.Alongsidenumeroussuccessfullyfulfilledmandates,someplannedtransactionswerenotconcludedin2014duetothemarketconditions.
RaiffeisenCentrobankisalsooneoftheleadingpaymentofficesforAustri-ancompanies,andcurrentlyprovidestheseservicesfor19entities.
Mergers & Acquisitions (M&A)MarketconditionsinCEE’sM&AsegmentwereverychallenginginEuro-pein2014.Thetransactionvolumeintheregionfellbyaround34percentto€27.4billion,andthenumberofcompleteddealsdecreasedbyroughly37percent.
Despitethedifficultenvironment,RaiffeisenCentrobankconcluded19tran-sactionswithadealvolumeof€2.8billion,including:•MandateasafinancialadvisorforOrklaforthesaleofRieberFoods PolskaS.A.(Delecta)toaninvestmentfundmanagedbyInnovaCapital.•RaiffeisenCentrobankadvisedRaiffeisenLeasinginthesaleofREE WindparkstoKELAGandEnergieAG.•RaiffeisenCentrobankwasanadvisorinthesaleofthefamouscoffee brandAmigoofPanfoodsCo.Ltd.(UK)/Cia.IguacudeCafeSoluvel (Brazil)toStraussCoffeeB.V.•RaiffeisenCentrobankadvisedOMVandE.Onregardingthesaleof sharesinCongaztoGazdeFrance.•TogetherwithitsinternationalpartnerLazard,RaiffeisenCentrobank actedasthefinancialadvisorforKKRfortheacquisitionofSerbia Broadband(SBB),thelargestcableandsatelliteproviderintheformer Yugoslavia.•TogetherwithLazardandthelocalRaiffeisennetworkbank,Raiffeisen CentrobankadvisedPanasonicCorporationintheacquisitionofa90 percentshareinViko,aTurkishmanufacturerofelectricalequipment.•TheBankalsoadvisedAgrokorGroup,thelargestfoodandretailcon glomerateintheBalkanstates,inthesaleofitsfruitjuicedivisionto BosnianStanicGroup.
Company ResearchTheCompanyResearchdepartmentpublished349companyupdatesin2014.Thisisanincreaseof32companyupdatescomparedwiththepre-viousyear.Atotalof226companyupdateswerepreparedforEasternEuropeancompanies,223companyupdatesforAustrian.Attheendoftheyear,thecoveragelistincluded138companiesintotal–37stocksfromAustrianand101stocksfromEasternEuropeancompanies.Theana-lysisuniversewasalsoexpandedduringthepastyear.Thefollowingcom-panieswereadded:PORR,BUWOG,andFACCinAustria;PKPCargo,BankHandlowy,CapitalPark,andAltusinPoland;ElectricainRomania;andRossetiandMOESKinRussia.
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2014 2013
Return-on-Equitybeforetax(inpercent) 13.2 23.7
Return-on-Equityaftertax(inpercent) 9.1 18.1
Cost-incomeratio(inpercent) 74.7 68.2
2014 2013
Employeesatyear-end 233 259
Averagenumberofemployees 247 259
Stockexchangememberships 10 10
Numberofnewlyissuedwarrantsandcertificates 3,256 3,326
FinancialandNon-FinancialPerformanceIndicatorsFinancialPerformanceIndicators
ThelowerprofitbeforetaxcausedtheReturnonEquitybeforetaxtofallby23.7percentto13.2percent.Accordingly,theReturnonEquityaftertaxdeclinedfrom18.1percentto9.1percentcomparedtothepreviousyear.
Asinannualcomparisonoperatingincomerecordedadecrease,thecost-incomeratiorosefrom68.2percentin2013to74.7percent.
Non-FinancialPerformanceIndicators
ComparedtoDecember2013,thenumberofemployeeswasreducedto233asat31December2014.Duringthereportingyear,thenumberofemployeesfellonaverageby12personsto247employees.Thestockexchangemembershipscameupto10andremainedun-changedtothepreviousyear.Despitethechallengingmarketenvironment,thenumberofwarrantsandcertificatesissuedbytheBankin2014roseto3,256representingadeclineby2percent.
RiskManagementPrinciples
In2014,RaiffeisenCentrobankagainpursuedaprudentriskstrategy.Businessopportunitiesandearningspotentialarerealizedbasedonactiveriskmanagementbytakingriskinatargetedandcontrolledmanner.TheBankhasasystemofriskinstrumentsinplaceformeasuringandmonito-ringrisksInallrelevantareasofriskefficientmonitoringandcontollinginstrumentsareavailableenablingthecompetentbodiestoreacttomarketopportunitiesandspecificbankingbusinessrisks.
AsasubsidiaryofRaiffeisenBankInternational,RaiffeisenCentrobankisintegratedintotheriskmanagementprocessoftheRZBCreditInstitutionGroup,safeguardingthatallmajorrisksareidentified,measuredandcontrolledonGroup-levelandensuringthattransactionsareconcludedexclusivelyifparticularrisk/rewardrelationsarecompliedwith.
Thefocusinthefirsthalfof2014wasprimarymarketactivity.TransactionresearchincludingextensiveinvestoreducationforEuropeaninvestorswaspreparedforthesecondpublicofferingofBUWOGandtheIPOofthePolishcompanyAltus.CompanyResearchassistedthelocalresearchteaminBucharestinconnectionwiththeIPOoftheRomanianutilityElectricaS.A.
Theincreaseindirectcontactbetweentheanalystsandinvestorswasre-flectedinveryextensiveroadshowactivity.Sectorreportsandroadshowsonthesectorsofoilandgas,ITandtechnology,telecommunications,banks,Russianutilities,andPolishretailersandrealestate,andoncountrystrategiesforPoland,Russia,andtheentireCentralandEasternEuroperegionwereactivelymarketed.ThedestinationsoftheroadshowswereVienna,London,Zurich,Frankfurt,Warsaw,Prague,Helsinki,Stockholm,andTallinn.ReverseroadshowswerealsoorganizedforinvestorsinVien-na.
StrategyAustria&CEEwaspreparedtogetherwithRaiffeisenResearcheveryquarterasusual.
CompanyResearchwasalsocloselyinvolvedintheorganizationoftheinvestorconferencesinZürsandWarsaw.Separatecompanyupdatesorfactsheetswerepreparedforallparticipatingcompanies.Theanalystswerealsobookedforintensiveone-on-onemeetings.
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Riskgovernance
TheManagementBoardofRaiffeisenCentrobankisresponsibleforallrisksoftheBankaswellasforimplementinganddevelopingariskstrate-gy.TheManagementBoardissupportedinimplementingthesetasksbyanindependentriskmanagementunit,whichisclearlyseparatedfromthefrontoffices.
RiskmanagementatRaiffeisenCentrobankissplitintothreecategories:•CreditRisk&ICAAP(counterpartyandcountryrisk,overallbank management)•Marketrisk(marketandliquidityrisk)•Operationalrisk
Thecentralriskmanagementunitsareresponsibleforlimitation,manage-mentandcontroloftheBank’srisks.aretheRiskManagementCommittee(RMK),theInternalLimitCommittee(ILC),theOperationalRiskManage-mentCommittee(ORMK)andtheAssetandLiabilityCommittee(ALCO).
TheRMK,whichmeetsweekly,addressesallissuesandregulationsintheareaofriskmanagementoftheBankandthecommoditytradingsubsidia-riesfocusinginparticularoncreditriskmarketriskandoperationalrisk.OverdraftsoverdueloansandadvancesandnecessaryvalueadjustmentsarereportedinduecourseandappropriatemeasuresarepresentedtotheManagementBoard.
TheILC,whichmeetseverysecondweek,decideswithinitscompetency(dependingontypeandamountofthelimit)oncounterparty,countryandmarketrisklimits.LargeexposuresrequiretheapprovaloftheSupervisoryBoard.Onceayear,theaggregateoflargeexposuresisreportedtotheSupervisoryBoard.
TheORMK,whichmeetsonceaquarter,establishesanappropriateframeworkforoperationalriskmanagementanddefinesandapprovesanadequateriskstrategy.Moreover,riskassessments,scenarioanalysesandriskindicatorsarediscussedandapprovedandmaterialeventsofdefaultandresultingmeasurestobetakenareanalyzed.
TheALCO,whichmeetsonceamonth,continuouslyevaluatesthemacroe-conomicenvironmentandcontrolsandassessesinterestraterisk,liquidityriskandbalancesheetstructuralrisk.
InNovember2014,theRiskCommitteepursuantto§39dAustrianBan-kingActmetforthefirsttime.TheriskmanagementreportedindetailonthemajorrisksandtherisksituationofRaiffeisenCentrobank.
RiskmanagementsystematRaiffeisenCentrobank
RaiffeisenCentrobankemploysacomprehensiveriskmanagementsystemtakingintoaccountalllegal,businessandregulatoryrequirements.Theappliedprocessesandmodelsaresubjecttoongoingreviewandfurtherdevelopment.ThekeycomponentsoftheriskmanagementsystemsarecompliancewithregulatorycapitalrequirementspursuanttoBaselIII,limi-tingspecificbankingrisksandprovidinganadequateriskcoveragesumsaswellaspermanentsupervisionandcontroloflitigationriskswithinacomprehensiveInternalControlSystem.
1. Capital requirements to limit market risk, credit risk and operational risk Tosecurecapitaladequacyforcreditrisk,marketriskandoperationalriskpursuanttoBaselIII,RaiffeisenCentrobankappliesthestandardapproach.Tocalculateoption-relatednon-linearrisksthescenariomatrixmethodisemployed.
2. Identifying and limiting specific banking business risks (ICAAP)WithinICAAP(InternalCapitalAdequacyAssessmentProcess)RaiffeisenCentrobankhasimplementedaprocesstodeterminetheoverallbankingriskpotentialandrisk-bearingcapacity.Therisk-bearingcapacityisanaly-zedquarterlyforboththegoingconcern(VaRwithaconfidencelevelof95percentandthreemonthsretentionperiod)andliquidationscenario(VaRwithaconfidencelevelof99.9percent,threemonthsretentionperi-od)undsupportstheManagementBoardinmanagingtheoverallban-kingrisk.AsasubordinatecompanyofRaiffeisenZentralbank,RaiffeisenCentrobankisintegratedintotheICAAPofRaiffeisenBankInternationalonaconsolidatedbasis.
3. Internal Control SystemRaiffeisenCentrobankhasimplementedaGroup-widemodernInternalControlSystemthatmeetstherequirementsoftheCompany.Allbankingprocessesandimmanentrisksaredocumentedandrespectivecontrolpro-ceduresaresetupandreviewed.Processdescriptions,risksandmonitoringarereviewedsemi-annuallyandareoptimizedonanongoingbasis.
TheInternalAuditatRaiffeisenCentrobankregularlyreviewstheefficiencyandcorrectnessoftheoverallriskmanagementincludingtheInternalCon-trolSystem.TheresultsarereportedinwritingtotheManagementBoardandtheChairmanoftheSupervisoryBoard.Moreover,quarterlymeetingsareheldwiththeManagementBoardandtheseniormanagementtodis-cusscurrentreviewreportsandthestatusofappliedactions.
Majorrisks
Market riskTheCompanydefinesmarketriskastheriskofpossiblelossesarisingfromchangesinmarketprices(equityandcommodityprices,changesininterestratesandexchangerates).AsthemainfocusofthebusinessactivitiesofRaiffeisenCentrobankisinsecuritiestradingandtheissueofequity-indexbasedderivativesandstructuredproducts(certificatesandguaranteebonds),thetoppriorityofRaiffeisenCentrobankistocounteractmarketrisk.RaiffeisenCentrobankmeasures,monitorsandmanagesallmarketrisksbysettingavarietyoflimitssetupbytheManagementBoardinac-cordancewiththeGroup-wideMarketRiskCommittee.Themulti-leveldif-ferentiatedlimitsystemincludesvolume,positionandsensitivitylimits(delta,gamma,vegaandbasispointvalue)aswellasstop-losslimits,dependingonthetypeoftransaction.
Inmarketriskmanagement,theVaRisemployed,whichfurnishesforecastsonpotentiallossesundernormalmarketconditionsandiscontrastedagainstaparticularlimit.Onthebasisofthevariance-covariancemodelwhichiscalculateddailytheVaRforinterestraterisk,currencyriskandpri-ceriskiscalculatedwithaconfidenceintervalof99percentandareten-tionperiodofoneday.
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TheabovechartdepictstheperformanceofVaRandtheoreticalP&L(profitandlossthatwouldhaveoccuredinaconstantportfolioandactuallyrecordedmarketmovements)in2014.
InadditiontoVaR,RaiffeisenCentrobankusesbackteststoevaluatemarketrisk.Backtestssimulatetheperformaneoftheportfoliounderabnormalmarketsituationsandatypicalpricemovements.
Credit riskThecreditriskrepresentsdefaultriskthatarisesfromtheinabilityofacusto-mertofulfilcontractuallyagreedfinancialobligations,whenserviceshavebeenrendered(e.g.liquidity,securities,advisoryservices)orwhenunrea-lisedprofitsfrompendingbusinesstransactionscannolongerbereco-vered(counterpartycreditrisk).
ThemajorcreditrisksofRaiffeisenCentrobankresultfrompositionsofpurchaseddebtinstruments,tradablemoneymarketdepositsandOTCop-tionsservingprimarilytohedgeissuedcertificatesandstructuredproductsaswellasfrommarginpositionsrelatingtoOTCandstockexchangetran-sactions.ThisaffectsprimarilymembersoftheRZBCreditInstitutionGroupandtoalimitedextentotherfinancialinstitutions.ThetraditionalcreditandloanbusinessisofimmaterialsignificanceforRaiffeisenCentrobankduetothelimitedbusinessvolumeandthecompany’sstrategicorientation.
Creditriskmanagementisbasedoncounterparty-relatednominallimitswhicharecomprehensivelymonitoredbytheInternalControlSystemforcreditrisks.Thelimitsareapproved-dependingontypeandsize-bytherespectivehierarchicalcompetenceauthorityscheme.Creditdecisionsaretakendependingontheassessmentofthecounterpartycreditrisktakingintoaccounttheratingandapplicablecreditriskmitigatingmeasureslikefinancialcollaterals(e.g.cashorequity).IntheGroup-widedefaultandandratingdatabasecustomersareregisteredandevaluatedandeventsofdefaultaredocumented.ThewholelendingdecisioncorrespondstoregulatoryrequirementsandRZBGroupDirectives.
IntheindividualfinancialstatementspursuanttotheAustrianBankingAct/AustrianCommercialCode,RaiffeisenCentrobankreportsinterest-bearingassetsandanoff-balancesheetvolumeof€2,121,976thousandbeforedeductionsofvalueadjustments(2013:€1,834,485thousand).
Operational riskOperationalriskisdefinedastheriskofunexpectedlossesresultingfrominadequateorfailedinternalprocesses,peopleandsystemsorfromexter-naleventsincludinglegalrisk.Thisriskcategoryisanalyzedandmana-gedonthebasisoftheresultsofregularself-assessments,standardizedkeyriskindicators,scenarioanalysesandinternalhistoricaldata.
EventsofdefaultinoperationalriskareregisteredintheGroup-widedatabasisORCA(OperationalRiskControllingApplication)andarerecog-nizedseparatelybybusinesssegmentandtypeofevent.Measurestakenarealsodocumentedandlinkedwiththeeventofdefault.
Liquidity riskLiquidityriskiscalculatedbasedonaliquiditymodeldevelopedincooperationwithRaiffeisenBankInternational.DailybalancesheetitemsofRaiffeisenCentrobankareseparatedbymaturitybandsandcurrencies,theirinflowsandoutflowsaremodelledbasedonpre-definedfactors.Theliquidityrequirementindifferentmaturitybandsislimitedbymeansofregu-latorylimitsaswellasbylimitsdeterminedbyRaiffeisenBankInternational.
Moreover,regularliquiditystresstestsarecarriedoutandthetime-to-wallinthestressscenarioismonitoredindifferentcurrencies.Inflowsneedtosurpassoutflowsforaperiodofatleast30daysinacrisisscenario(marketcrisis,namecrisisandscenarioofboth).Calculationsconfirmanadequateliquiditysurplusforthe2014financialyear.
InaccordancewithGroup-internaldirectives,theminimumliquiditycoverageratio(LCR)wascalculatedonamonthlybasisforinternalcontrollingpurposesandreportedtotheAustrianNationalBank.Inthefinancialyear2014theLCRconstantlyexceeded60percent.
TheNetStableFundingRatioandandtheLeverageRatiowerecalculatedinthepastbusinessyearandwereincludedintothecurrentreporting.
Asset volume 31/12/2014 31/12/2013 in€thousand
Bondsandnotesissued bypublicbodies 64,912 32,454
Loansandadvances tocreditinstitutions 1,691,112 1,320,342
Loansandadvances tocustormers 126,560 141,382
Bonds 239,352 340,119
2,121,936 1,834,297
Product-weightedoff-balance sheettransactions 40 188
2,121,976 100,0% 1,834,485 100,0%
Irrecoverable 75 0.01% 93 0.01%
Impaired 1,107 0.06% 1,249 0.07%
Requiringattention 31,576 1.49% 33,903 1.85%
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Overallbankmanagement
ForRaiffeisenCentrobankactiveriskmanagementmeanstheidentification,measurement,monitoringandmanagementofspecificbankingrisksaswellastheprovisionofadequatecapitalresources.Inthecourseofmoni-toringtheoverallbankrisk(ICAAP),RaiffeisenCentrobankhasimplemen-tedaprocesstoidentifytheoverallbankriskpotentialandtheriskbea-ring-capacity.Thisriskbearingcapacityanalysisisatoppriorityinriskma-nagement.
Theriskappetite(overallbankVaRlimit)comesupto80percentoftheriskcoveragesum.Thequarterlyrisk-bearingcapacityanalysisfocusesonthegoingconcern(VaRwithaconfidenceintervalof95percentand3monthsretentionperiod)andliquidationperspective(VaRwithaconfi-denceintervalof99.9percent,3monthsretentionperiod).
Risk measurement uses the subsequent approaches: •Marketrisk:calculationoftheVaRbasedonahistoricalMonteCarlo simulationwithatimeframeof3months•Creditriskandequityparticipationrisk:determinationofaVaRconsistent riskvaluebasedonamodifiedIRBapproach.Theequityparticipation riskincludesnotonlycarryingamountsinthebankingbookof(unlisted) equityparticipationsbutalsoloanstoparticipations•Operationalrisk:calculationofaVaRbasedonregulatorycapital requirementscoupledwithamodelingthroughgeneralizedPareto distribution.•Otherrisks(suchase.g.businessrisk,repuationrisk,balancesheetrisk). Coverageiseffectedbyvariousriskbuffers.
Thesubsequentchartsshowsthedistributionofriskinrelationtotheecono-miccapital(VaR)attherespectivebalancesheetdate:
Asasubordinatecompany,RaiffeisenCentrobankisintegratedintotheICAAPofRZBonaconsolidatedbasis.RaiffeisenCentrobankisprovidedwithmonthlyICAAPreports.Theseanlaysesincludeagoingconcernperspectivewithaconfidenceintervalof95percentandatargetratingperspectivewithaconfidenceintervalof99.95percent.
InternalControlSystemasRelevantfortheAccountingSystemRaiffeisenCentrobankanditsgoverningbodiesarecommittedtoensuringbalancedandcompletefinancialreporting.Afundamentalrequirementinthisiscompliancewithallrelevantlegalregulations.Inconnectionwiththeaccountingprocess,theManagementBoardisresponsiblefordesigningandinstallinganinternalcontrolandriskmanagementsystemthatmeetstherequirementsoftheCompany.Theobjectofthisinternalcontrolsystemistosupportthemanagementbymakingcertainthateffectiveinternalcont-rolsareappliedtotheaccountingprocessandthatthesecontrolsareen-hancedwheneverappropriate.Thecontrolsystemisdesignedtoassurecompliancewithguidelinesandregulations,aswellastocreateoptimalconditionsforspecificcontrolmeasures.
ThefinancialstatementsarepreparedonthebasisofthepertinentAustrianlaws,abovealltheAustrianBankingAct(BWG)inconnectionwiththeEURegulationno575/2013(CapitalRequirementsRegulation“CRR”)aswellastheAustrianCommercialCode(UGB).
TheaccountingdepartmentisresponsiblefortheBank’saccountingsystem.AccountingandfinancialreportingaredirectlysubordinatedtotheManagementBoard.Thedepartmentisresponsiblefordealingwithallaccountingissuesandhastheauthoritytoprovideforsafeguardingtheapplicationofuniformstandards.Organisationalinstructionsandguideli-nes,whicharecomprisedinamanual,havebeensetupforsupport.
AccountingaccordingtotheAustrianBankingActandAustrianCommer-cialCodeiseffectedviaacentralITsystemapplyingthePAGORO/400system,whichisprotectedbytherestrictedassignmentofaccessauthorisa-tions.ThetableofaccountsistailoredtotheBank’sindividualrequire-ments.Transactionsareregisteredbothautomaticallyandmanually.Accountingvouchersarethenfiledsystematicallyandchronologically.
MonthlybalancesheetsarecreatedandpassedontotheManagementBoardandtheseniormanagementbymeansofastandardisedfinancialreportingsystem.AtleastonceperquartertheSupervisoryBoardisinfor-medinthecourseoftheSupervisoryBoardmeetingsofthecurrentcourseofbusinessincludingthebank’soperativeplanningandmedium-termstrat-egy.
TheManagementBoardevaluatesandmonitorsmaterialrisksinconnec-tionwiththeaccountingprocess.Inthis,thefocusisplacedontherisksthataretypicallyfoundtobematerial.Theannualevaluationoftheinternalcontrolmeasuresappliedbyeachoftheresponsibleunitsisbasedonariskorientedapproach.Theriskoffaultyfinancialreportingisassessedonthebasisofanumberofdifferentcriteria.Forexample,complexaccoun-tingprinciplescanincreasetheriskoferrors.Differentprinciplesforthemeasurementofassetsandcomplexorchangingbusinessconditionscanalsocausesubstantialerrorsinthefinancialreporting.
Estimatesmustregularlybemadeduringthepreparationofthefinancialstatements.Inallofthesecases,thereisaninherentriskthattheactualde-velopmentsmaydeviatefromtheseestimates.Thisespeciallyappliestotheparametersinvaluationmodelsthatareusedtodeterminethefairvaluesoffinancialinstrumentsforwhichthereisnocurrentpricequotationaswellastosocialcapital,theoutcomeoflegaldisputes,thecollectabilityoflo-ansandadvances,andtheimpairmentofequityparticipationsandinven-tories.Insomecases,externalexpertsareinvolvedorpubliclyavailableinformationsourcesusedtominimisetheriskofincorrectestimates.
Going-concern-perspective 31/12/2014 31/12/2013
1.Marketrisk 33.8percent 34.7percent
2.Creditrisk 13.7percent 16.4percent
3.Operationalrisk 12.7percent 12.2percent
4.Businessrisk 2.9percent 4.1percent
5.Equityparticipationrisk 25.2percent 20.3percent
6.Otherrisks 11.6percent 12.3percent
Liquidationperspective 31/12/2014 31/12/2013
1.Marketrisk 10.3percent 11.1percent
2.Creditrisk 19.3percent 19.5percent
3.Operationalrisk 33.6percent 33.5percent
4.Businessrisk 0.9percent 1.3percent
5.Equityparticipationrisk 12.1percent 10.6percent
6.Otherrisks 23.8percent 23.9percent
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WilhelmCeledaChiefExecutiveOfficer
MarkusKirchmairMemberoftheManagementBoard
InadditiontotheManagementBoard,thegeneralcontrolframeworkalsoincludesseniormanagement(thedepartmentheads).Allcontrolmeasuresareappliedtothedailybusinessprocessestoensurethatpotentialerrorsordeviationsinthefinancialreportingarepreventedordiscoveredandcorrected.Thecontrolmeasuresthatareappliedatregularintervalsrangefromthereviewoftheperiodicresultsbythemanagementtothespecificreconciliationandcoordinationofaccountsandtheanalysisandfurtheroptimisationofaccountingprocesses.TheInternalAuditdepartmentisalsoinvolvedinthemonitoringprocess.ItsactivitiesarebasedontheAustrianFinancialMarketAuthority’sminimumstandardsforinternalauditingandinternationalbestpractices.TheInternalAuditdepartmentreportsdirectlytotheManagementBoard.
TheControlling&RegulatoryReportingDepartmentisresponsiblefordraf-tingthenotestotheannualfinancialstatementssetupaccordingtotheAustrianBankingActandtheAustrianCommercialCode.Inaddition,amanagementreportisdrawnupwhichexplainstheresultsinlinewithstatu-toryrequirements.TheannualfinancialstatementsandthemanagementreportareforwardedtoandreviewedbytheAuditCommitteeoftheSu-pervisoryBoardandarethenpresentedtotheSupervisoryBoardforitsacceptance.Theannualfinancialstatementsarepublishedonthecompany’swebsite,theOfficialGazettetotheWienerZeitung,andarealsofiledwiththeAustrianCompanyRegister.KeyemployeesandtheManagementBoardreviewtheannualfinancialstatementspriortotheirdistributiontotheSupervisoryBoard.Moreover,analysesoftheannualfinancialstatementsarepreparedespeciallyfortheseniormanagement.
HumanResourcesRaiffeisenCentrobankAGhad233employeeson31December2014(31December2013:259).Thereductioninthenumberofemployeesisattributabletoadjustingstaffresourcestothecourseofbusiness.
Outlook2015ThesmolderingconflictbetweenRussiaandUkraineandtheexpansionofassetpurchasesbytheECBwillremainkeydrivingfactorsforthedevelop-mentoftheEurozoneeconomy.IntheUSA,therobustdevelopmentofthelabormarketshouldspurtheFedtobeginhikingitskeyinterestratein2015.ThiswilllikelyresultinalongerperiodofdiametricalmonetarypoliciesintheUSAandEurozone.Thiswillalsohaveanimpactonthecapitalmarkets.WhileUSyieldshavesomeupsidepotential,thepurchasesoftheECBcouldcausegovernmentbondyieldstofallfurther.Evenwithanincreaseintheriskofsetbacks,equityinvestmentswillenjoyhigherdemandbecauseofalackofalternatives.
Mostexchangesshouldseeclearlypositivedevelopmentin2015,whichmakesRaiffeisenCentrobankoptimisticaboutitscorebusinessareasofequitytradingandsalesandcertificates.Marketconditionswillremainchallengingbecauseofplannedregulatorychanges,butbusinessintheseareasisexpectedtodeveloppositivelyingeneral.TherestructuringofRaiffeisenCentrobankthatwasannouncedattheendof2014willalsohaveakeyimpactduringthecurrentfinancialyear.Thegoalwillbetodisposeofthetraditionalprivatebankingactivitiesandthecommoditysubsidiariesinthefirsthalfof2015.WorkisalsounderwayontheintegrationoftheMergers&AcquisitionsandEquityCapitalMarkets
segmentsintotheInvestmentBankingdivisionofthegroupparentRaiffei-senbankInternational.Thelattermeasureisaimedatincreasingsynergiesandfurtherimprovingtheserviceprovidedtocustomerswithinthegroup.
Furthertoimplementingthemeasuresrelatingtothere-alignmentofRaiffei-senCentrobank,theprofitfortheyear2015isexpectedtobedownonthe2014result.
SignificantEventsaftertheBalanceSheetDateInthecourseofimplementinganexitstrategyassetoutbyRaiffeisenbankInternationalregardingtheCentrotradesubsidiaries,asharepurchaseagreementwassignedinJanuary2015tosellthefourrubbertradingcompanies.Theclosingisexpectedformid-2015.
ResearchandDevelopmentRaiffeisenCentrobankdoesnotengageinresearchanddevelopment.
Vienna,15April2015TheManagementBoard
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DistributionoftheProfit2014The2014financialyearclosedwithanetincomefortheyearof€8,598,087.95.Includingtheprofitcarriedforwardof€1,670,146.76thenetprofitfortheyearamountedto€10,268,234.71.
TheManagementBoardofRaiffeisenCentrobankrecommendstotheSu-pervisoryBoardthatadividendof€11.00persharebedistributedfromthenetprofitasat31December2014.Thiscorrespondstoatotaldivi-dendamountingto€7,205,000.00for655,000shares.TheManage-mentBoardfurtherrecommendstocarryforwardtheremainingprofitof€63,234.71andtoallocateanamountof€3,000,000.00tootherreser-ves.Otherreserveswillchangefrom€23,500,000.00to€26,500,000.00.
Vienna,15April2015TheManagementBoard
StatementofLegalRepresentativespursuantto§82StockExchangeActWeconfirmtothebestofourknowledgethattheannualfinancialstate-mentsgiveatrueandfairviewoftheassets,liabilities,financialposition,andprofitorlossoftheCompanyasrequiredbytheapplicableaccoun-tingstandardsandthatthemanagementreportgivesatrueandfairviewofthedevelopmentandperformanceofthebusinessandthepositionoftheCompany,togetherwithadescriptionoftheprincipalrisksanduncer-taintiestheCompanyfaces.
Vienna,15April2015TheManagementBoard
WilhelmCeledaChiefExecutiveOfficer
MarkusKirchmairMemberoftheManagementBoard
WilhelmCeledaChiefExecutiveOfficer
MarkusKirchmairMemberoftheManagementBoard
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IndividualFinancialStatementsofRaiffeisenCentrobankAGasat31December2014accordingtotheAustrianBankingAct
Theadditionofroundednumbersusingautomatedsystems,aswasdoneforthisreport,mayresultinminordifferencesinamounts.
Thechangesindicatedinpercentrefertotheactualamountsandnottheroundedamountsshowninthisreport.
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BalancesheetasatDecember31,2014
Assets 31/12/2014 31/12/2014 31/12/2013 31/12/2013 € € in € thousand in € thousand
1. Cashinhandanddepositswithcentralbanks 2,898,413.09 4,337
2. Bondsandnotesissuedbypublicbodieseligibleforrefinancingwithcentralbanks bondsandnotesissuedbypublicbodiesandsimilarsecurities 64,911,575.34 32,454
3. Loansandadvancestocreditinstitutions
a)payableondemand 154,436,109.96 102,261
b)otherloansandadvances 1,536,676,262.95 1,691,112,372.91 1,218,081 1,320,342
4. Loansandadvancestocustomers 126,484,703.31 141,289
5. Bonds,notesandotherfixed-interestsecurities
a)issuedbypublicbodies 10,666,953.25 9,769
b)issuedbyotherborrowers 228,685,537.71 239,352,490.96 330,349 340,118
6. Sharesandothervariable-yieldsecurities 438,878,163.88 501,754
7. Equityparticipations 5,137,370.67 5,137
8. Sharesinaffiliatedcompanies 10,665,295.23 8,911
9. Intangiblefixedassets 115,397.00 205
10.Tangiblefixedassets 15,157,245.64 15,336
threreoflandandbuildingsusedbythecreditinstitution forownpurposes:€11,925,676.92 previousyear:€12,219thousand
11.Otherassets 117,092,790.59 127,826
12.Prepaymentsandotherdeferrals 1,566,741.62 1,714
Total assets 2,713,372,560.24 2,499,443
Off-balance sheet items
1. Foreignassets 710,827,883.33 706,717
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Equity and liabilities 31/12/2014 31/12/2014 31/12/2013 31/12/2013
€ € in € thousand in € thousand
1. Liabilitiestocreditinstitutions
a)repayableondemand 23,637,354.18 13,753
b)withagreedmaturitydatesorperiodsofnotice 51,256,190.52 74,893,544.70 97,911 111,664
2. Liabilitiestocustomers
a)repayableondemand 200,367,599.15 121,410
b)withagreedmaturitydatesorperiodsofnotice 30,095,314.63 230,462,913.78 10,065 131,475
3. Securitisedliabilities(othersecuritisedliabilities) 771,677,077.37 676,674
4. Otherliabilities 1,514,807,343.56 1,451,614
5. Accrualsanddeferreditems 331,057.30 194
6. Provisions
a)forseverancepayments 6,078,528.18 4,238
b)forretirementbenefits 486,571.77 463
c)otherprovisions 12,047,221.33 18,612,321.28 15,376 20,077
7. Subscribedcapital 47,598,850.00 47,599
8. Capitalreserves(committed) 6,651,420.71 6,651
9. Retainedearnings
a)legalreserve 1,030,936.83 1,031
b)otherreserves 23,500,000.00 24,530,936.83 20,500 21,531
10.LiabilityreservepursuanttoArticle23para6AustrianBankingAct1 13,538,860.00 13,539
11.Netprofitfortheyear 10,268,234.71 18,425
Total equity and liabilities 2,713,372,560.24 2,499,443
Off-balance sheet items
1. Contingentliabilities arisingfromguaranteesandassetspledged ascollateralsecurity 446,661.93 696
2. Creditrisks 9,896,078.65 33,089
3. Commitmentsarisingfromfiduciarybusinesstransactions 7,091,124.47 7,079
4. EligibleownfundspursuanttoPart2ofRegulation(EU)No575/20132 87,740,413.17 -
5. CapitalrequirementspursuanttoArticle92ofRegulation(EU) 682,984,714.72 - No575/2013(Totalrisk-weightedassets)2 hereof:capitalrequirementspursuanttoArticle92(1)(a)to(c) ofRegulation(EU)No575/2013 hereof:capitalrequirementspursuanttoArticle92(a) 12.85% - hereof:capitalrequirementspursuanttoArticle92(b) 12.85% - hereof:capitalrequirementspursuanttoArticle92(c) 12.85% -
6. Foreignequityandliabilities 391,928,410.74 225,6661 December31,2013:LiabilityreservepursuanttoArticle23para6AustrianBankingAct(prevailingversionofBWGatthattime) 2 DetailsandpreviousyearfiguresintheprevailingversionofBWGatthattimecanbefoundinthenotesunderchapterownfunds.
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Incomestatementforthe2014financialyear 2014 2014 2013 2013 € € in € thousand in € thousand
1. Interestandinterest-likeincome 11,135,001.28 12,485
thereoffixed-interestsecurities 3,180,824.01 4,425
2. Interestandinterest-likeexpenses (18,437,396.77) (16,954)
I. Net interest income (7,302,396.77) (4,469)
3. Incomefromsecuritiesandfinancialinvestments
a)Incomefromshares,sharerightsandother variable-yieldsecurities 10,874,381.92 14,312
b)Incomefromsharesinaffiliatedcompanies 1,292,975.10 12,167,357.02 5,404 19,716
4. Feeandcommissionincome 26,875,420.80 30,5167
5. Feeandcommissionexpenses (19,387,978.48) (19,704)
6. Netprofitonfinancialtradingactivities 45,689,943.18 40,405
7. Otheroperatingincome 3,813,588.39 3,598
II. Operating income 70,061,813.00 70,489
8. Generaladministrativeexpenses (42,333,751.54) (45,302)
a)staffexpenses
aa)wagesandsalaries 19,200,535.24 21,985
bb)expensesforstatutorysocialcontributions andcompulsorycontributionsrelated towagesandsalaries 4,515,527.07 4,855
cc) othersocialexpenses 481,545.33 519
dd)expensesforpensionsand assistance 710,980.41 675
ee)provisionsforretirementbenefits 25,448.33 3
ff)expensesforseverancepayments andcontributionsto severancefunds 2,392,774.33 647
27,326,810.71 28,684
b)otheradministrativeexpenses 15,006,940.83 16,617
9. Valueadjustments onassetitems9and10 (1,170,485.85) (1,754)
10.Otheroperatingexpenses (2,148,398.40) (728)
III. Operating expenses (46,192,635.79) (47,784)
IV. Operating result 15,663,299.63 22,278
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2014 2014 2013 2013 € € in € thousand in € thousand
IV. Operating result (= amount carried forward) 15,663,299.63 22,278
11.Loanslossprovisionsandexpendituresarisingfromthevaluation ofloansandadvancesanddisposalofsecuritiesheldasother currentassets (2,071,942.73) (341)
12.Incomearisingfromthevaluationofloansandadvances anddisposalofsecuritiesheldasothercurrentassets 19,940.31 18
13.Expendituresarisingfromthevaluationofinterestsand sharesinaffiliatedcompaniesheldasfinancialinvestments (1,247,595.00) (298)
V. Result on ordinary activities 12,363,702.21 21,657
14.Incometaxes 253,080.65 (1,964) (thereofpassedonfromparentcompany: € 324,377.69(previousyear:€ 767thousand)
15.Othertaxesunlessincludedinitem14 (3,512,533.61) (3,183)
VI. Net income for the year 8,598,087.95 16,510
16.Allocationtoretainedearnings 0.00 (11,000)
VII. Profit for the year 8,598,087.95 5,510
17.Profitcarriedforward 1,670,146.76 12,915
VIII.Net profit for the year 10,268,234.71 18,425
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DevelopmentofFixedAssetsinthe2014FinancialYear Amounts in € Cost of acquisition Cost of acquisition Cost of acquisition Cost of acquisition Accumulated Carrying amount Carrying amount Depreciation Balance as at 1/1/2014 Additions Disposals Balance as at 31/12/2014 depreciation 31/12/2014 31/12/2013 in the financial year 2014
I. Intangible fixed assets
Software licenses 3,801,212.85 75,995.51 4,144.61 3,873,063.75 3,757,666.75 115,397.00 204,600.00 165,150.51
II. Tangible fixed assets
1.Landandbuildingsusedbythecreditinstitution forownpurposes thereofvalueofproperty:€ 3,066,200.92; previousyear:€3,066thousand 14,789,785.11 0.00 0.00 14,789,785.11 2,864,108.19 11,925,676.92 12,218,767.92 293,091.00
2.Officefurnitureandequipment 18,193,485.43 1,382,551.34 535,993.88 19,040,042.89 15,808,474.17 3,231,567.72 3,137,483.72 1,252,244.34
32,983,270.54 1,382,551.34 535,993.88 32,829,828.00 18,672,582.36 15,157,245.64 15,356,251.64 1,545,335.34
III. Financial investments
1.Sharesinaffiliatedcompanies thereofincreditinstitutions:€0.00 9,450,702.79 1,753,778.44 0.00 11,204,481.23 539,186.00 10,665,295.23 8,911,516.79 0.00
2.Equityparticipations thereofcreditinstitutions:€0.00 5,156,700.61 0.00 0.00 5,156,700.61 19,329.94 5,137,370.67 5,137,370.67 0.00
14,607,403.40 1,753,778.44 0.00 16,361,181.84 558,515.94 15,802,665.90 14,048,887.46 0.00
Total 51,391,886.79 3,212,325.29 540,138.49 54,064,073.59 22,988,765.05 31,075,308.54 29,609,739.10 1,710,485.85
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DevelopmentofFixedAssetsinthe2014FinancialYear Amounts in € Cost of acquisition Cost of acquisition Cost of acquisition Cost of acquisition Accumulated Carrying amount Carrying amount Depreciation Balance as at 1/1/2014 Additions Disposals Balance as at 31/12/2014 depreciation 31/12/2014 31/12/2013 in the financial year 2014
I. Intangible fixed assets
Software licenses 3,801,212.85 75,995.51 4,144.61 3,873,063.75 3,757,666.75 115,397.00 204,600.00 165,150.51
II. Tangible fixed assets
1.Landandbuildingsusedbythecreditinstitution forownpurposes thereofvalueofproperty:€ 3,066,200.92; previousyear:€3,066thousand 14,789,785.11 0.00 0.00 14,789,785.11 2,864,108.19 11,925,676.92 12,218,767.92 293,091.00
2.Officefurnitureandequipment 18,193,485.43 1,382,551.34 535,993.88 19,040,042.89 15,808,474.17 3,231,567.72 3,137,483.72 1,252,244.34
32,983,270.54 1,382,551.34 535,993.88 32,829,828.00 18,672,582.36 15,157,245.64 15,356,251.64 1,545,335.34
III. Financial investments
1.Sharesinaffiliatedcompanies thereofincreditinstitutions:€0.00 9,450,702.79 1,753,778.44 0.00 11,204,481.23 539,186.00 10,665,295.23 8,911,516.79 0.00
2.Equityparticipations thereofcreditinstitutions:€0.00 5,156,700.61 0.00 0.00 5,156,700.61 19,329.94 5,137,370.67 5,137,370.67 0.00
14,607,403.40 1,753,778.44 0.00 16,361,181.84 558,515.94 15,802,665.90 14,048,887.46 0.00
Total 51,391,886.79 3,212,325.29 540,138.49 54,064,073.59 22,988,765.05 31,075,308.54 29,609,739.10 1,710,485.85
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A.AccountingPolicies
General principlesThefinancialstatementsofRaiffeisenCentrobankforthe2014financialyearhavebeenpreparedinaccordancewiththegeneralaccountingprin-ciplesstipulatedintheAustrianCommercialCodeandthespecificsecto-ralregulationsasspecifiedbytheAustrianBankingAct.ThebalancesheetandtheincomestatementhavebeenstructuredaccordingtoAppendix2oftheformscontainedinArticle43AustrianBankingAct.PursuanttoanamendmentoftheAustrianBankingActtoreflectEUregulationsCRR/CRDIV,thebalancesheetstructurewaspartlyadjusted.Inthereportingyear,theBankimplementedtheseadjustmentsaccordingly.
Nochangesintheaccountingandvaluationmethodshavebeenmadecomparedtothe2013financialstatements.
Foreign currency translationAssetsandliabilitiesdenominatedinforeigncurrenciesarereportedatthemiddleratesofexchangesfixedbytheEuropeanCentralBankontheba-lancesheetdate.AmountsdenominatedincurrenciesforwhichtheEuro-peanCentralBankpublishednoratesareconvertedatthemiddleratesofexchangepublishedbyRaiffeisenBankInternationalAGonthebalancesheetdate.
Currencyfuturesandoptionstransactionsinforeigncurrenciesarecapita-lizedattheforwardexchangerates.Anydifferencesinratesresultingfromcurrencyconversionarereportedasaprofitorlossintheincomestate-ment.
Trading portfolio – valuation of securities, futures and options Adailymarketpricesystemisappliedforthevaluationofsecuritiesheldfortradingpurposesorasothercurrentassets.
Intermsofsecuritiesheldfortradingpurposesorasothercurrentassets,thecompany’sportfolioofsharesinpublicly-listedcompaniesaswellasfixed-interestsecuritiesisreportedatthesharepriceprevailingontheba-lancesheetdate.Ifnoquotesorsharepricesareavailablethevalueisdeterminedbymeansofvaluationmodels.
Certificatesacquiredbasedonanequity-basedorindex-basedperfor-mancearevaluedwiththesharepricesprevailingonthebalancesheetdate,andifnosharepricesareavailable,withtheassistanceofvaluationmodelstoillustratestochasticdevelopmentprocesses.
BondsissuedbyborrowersfromEasternEuropeanmarketsaswellassha-resissuedbyEasternEuropeancompaniesheldbythecompanyfortra-dingpurposesarevaluedatthemarketratesannouncedbyothercreditinstitutionsandbrokers,orasquotedbyReuters,orvaluationmodels,provi-dedthatsharepricesforthesesecuritiesarenotavailableordonotprovi-desufficientinformation.Ifnosuchmarketratesareavailable,pricesforprimaryfinancialinstrumentsarecalculatedonthebasisofthenetpresentvaluemethod.Thismethodisbasedonaninterestratecurvewhichcom-prisesmoneymarket,futuresandswaprateswithoutspreads.Inorderto
determinethevalueofunlistedbankbondsdepreciationorparameterad-justmentsareconsideredtoreflectmarketliquidityriskswithintheseevalua-tionmethods.
Optionsonsecuritiesofpublicly-listedcompaniesandoptionsonsecurityindices(i.e.purchasedandsoldcallsandputs,primarilyEUREXoptions)aswellasfuturesheldfortradingpurposesarevaluedaccordingtothemarketpricesprevailingonthebalancesheetdate.Valueadjustmentsweremadetotaketemporaldifferencesintoaccount.
VariousmodelsareusedforthevaluationofOTCoptions,dependingonthetypeofoption.Forplain-vanillaoptions(AmericanandEuropeanstyle),theBlack-ScholesmodelandthebinomialpricingmodelaccordingtoCox-Ross-Rubinsteinareapplied.TheCurranapproximationisappliedtoAsianoptions,whereasbarrieroptionsuseHeynen-Katandspreadop-tionsrelyontheKirkmodel.
Loans and advances to credit institutions and customersLoansandadvancestocreditinstitutionsandcustomersareshownattheirnominalvalue.Individualloanlossprovisionsaremadeinthecaseofanidentifiablerecognizableriskofdefaultonthepartofborrowers.
Equity participations and shares in affiliated companiesEquityparticipationsandsharesinaffiliatedcompaniesareprincipallycapi-talizedaccordingtotheprincipleof“goingconcern”(theabilitytocontinuefunctioningasabusinessentity)attheircostofacquisition.Depreciationiscarriedoutwhen,inallprobability,permanentimpairmenthastakenplace.
Intangible and tangible fixed assetsThevaluationofintangibleandtangiblefixedassets(i.e.landandbuil-dings,officefurnitureandequipmentaswellasothertangiblefixedassets)iscarriedoutatthecostofacquisitionlesstheirscheduled,lineardepre-ciation.
Depreciationratesappliedare33.3percentand14.3percentp.a.forintangiblefixedassets,2.5percentand10.0percentp.a.forimmovablefixedassets,and10percent–33percentformovablefixedassets.Afullyear’sdepreciationistakeninthecaseofadditionsmadeduringthefirsthalfofthefinancialyear,whereashalf-yeardepreciationappliestoaddi-tionsinthesecondhalfofthefinancialyear.Lowvalueassets(costofac-quisitionperitemlessthan€0.4thousand)arefullydepreciatedintheyearofacquisition.
Liabilities to credit institutions and customersLiabilitiestocreditinstitutionsandcustomersarereportedattheamountofrepayment,takingintoconsiderationtheprincipleoffinancialprudence.
Securitized liabilitiesSecuritizedliabilities(themajorityofwhicharestructuredcapitalguaran-teedbonds,whoserateofinterestdependsonthesharepriceorsharepriceindexperformance)arevaluatedaccordingtothepresentvalueme-thod,oraccordingtocommonoptionvaluemethodsfortheoptioncom-ponent.
Provisions for severance paymentsTheprovisionsforseverancepaymentsaredesignedtofulfilllegalde-mands,aswellasthosearisingfromindividualorcollectivecontractualag-reements.Provisionsarecalculatedinaccordancewiththeguidelinesspe-cifiedbyIAS19,applyingtheProjectedUnitCreditMethodandassumingacalculatoryinterestrateof2.0percent(previousyear:3.5percent),aswellasanunchangedannualsalaryincreaseamountingto3percent.
FinancialStatementsasat31December2014
Notes
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TheAVÖ(Austrianactuaries’association)2008-P-basisforcalculatingreti-rementpensioninsurances–Pagler&Paglerforsalariedemployeeswastakenasbiometricbasisforcalculation.Theunderlyingpresumptionisadecreasingfluctuationrateinconnectionwiththeearliestpossibleretire-mentdate,attheageof60forwomenand65formen,takingintoac-countthechangestoAustria’sGeneralSocialSecurityLawinaccordancetotheBudgetaryAmendment2003.Thepremiumreserveamountsto93.12percentofthestatisticalterminationbenefitobligationsonthebalan-cesheetdate.
Provisions for retirement benefitsProvisionsforretirementbenefitsarecalculatedinaccordancewiththegui-delinesspecifiedbyIAS19,applyingtheProjectedUnitCreditMethodandassumingacalculatoryinterestrateof2.0percent(previousyear:3.5percent),anunchanged2.0percentincreaseintheprobableprofitsha-ringrate,andaretirementageof65years.TheAVÖ(Austrianactuaries’association)2008-P-basisforcalculatingretirementpensioninsurances–Pagler&Paglerforsalariedemployeeswastakenasbiometricbasisforcalculation.
Thepremiumreserveforofthepensionplanreinsuranceconcludedforfuturebeneficiariesisreportedas“Otherassets”.
Other provisionsOtherprovisionshavebeenmadeaccordingtoexpecteddemands.Theycompriseidentifiablerisksandliabilities,theextentofwhichhasnotyetbeendetermined.
B.NotestotheFinancialStatements
I. Cash in hand and deposits with central banksThebalancesheetitemA1,whichencompassescashinhandanddepositswiththeAustrianNationalBank,isreportedas€2,898thousand(31/12/2013:€4,337thousand).Prevailingregulationspertainingtoliquidityandminimumreserveswereobserved.
II.1. Classification of loans and advances other than those payable on demand according to their term to maturity
II. Loans and advances
31/12/2014 0-3 3-12 1-5 >5 Total in€€thousand months months years years
Bondsandnotesissuedbypublicbodies 480 31,026 0 33,405 64,912
Loansandadvancestocreditinstitutions 333,444 179,454 927,418 97,361 1,536,676
Loansandadvancestocustomers 6,920 955 27,226 8,202 43,303
Bonds,notesandotherfixed-interestsecurities 47,104 134,277 51,041 6,931 23,352
Sharesandothervariable-yieldsecuritiehs 0 76,632 62,907 0 139,539
387,948 422,344 1,068,593 145,898 2,023,783
31/12/2013 0-3 3-12 1-5 >5 Total in€€thousand months months years years
Bondsandnotesissuedbypublicbodies 471 0 0 31,984 32,454
Loansandadvancestocreditinstitutions 310,866 95,551 741,252 70,411 1,218,081
Loansandadvancestocustomers 7,724 13,805 18,920 15,519 55,968
Bonds,notesandotherfixed-interestsecurities 24,997 96,853 211,932 6,336 340,119
Sharesandothervariable-yieldsecurities 3.523 17,924 138,235 0 159,681
347,581 224,133 1,110,339 124,250 1,806,303
Comparative figures as at 31/12/2013
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II.2. Loans and advances to affiliated companies and equity participations
as at 31/12/2014 Loans and advances to Loans and advances to equity in€€thousand affiliated companies participations in which Raiffeisen (direct/indirect > 50 %) Centrobank has a direct shareholding (< 50%)
Loansandadvancestocreditinstitutions 1,528,357 0
Loansandadvancestocustomers 27,497 514
Bonds,notesandotherfixed-interestsecurities 186,574 0
Sharesandothervariable-yieldsecurities 123,539 0
Otherassets 44,722 9
1,910,689 523
Comparative figures as at 31/12/2013
as at 31/12/2013 Loans and advances to Loans and advances to equity in€€thousand affiliated companies participations in which Raiffeisen (direct/indirect > 50 %) Centrobank has a direct shareholding (< 50%)
Loansandadvancestocreditinstitutions 1,192,617 0
Loansandadvancestocustomers 37,498 514
Bonds,notesandotherfixed-interestsecurities 277,999 0
Sharesandothervariable-yieldsecurities 140,401 0
Otherassets 56,858 9
1,705,373 523
III. Securities
Figures supplied pursuant to Article 64 para 1 no 10 and 11 Austrian Banking Act
as at 31/12/2014 Unlisted Listed Total Valued at in€€thousand market price
Bondsandnotesissuedbypublicbodies,A2 0 64,912 64,912 64,912
Bonds,notesandotherfixed-interestsecurities,A5 12,304 227,048 239,352 239,352
Sharesandothervariable-yieldsecurities,A6 137,472 301,406 438,878 438,878
Equityparticipations,A7 5,137 0 5,137 x
Sharesinaffiliatedcompanies,A8 10,665 0 10,665 x
Comparative figures as at 31/12/2013
as at 31/12/2013 Unlisted Listed Total Valued at in€€thousand market price
Bondsandnotesissuedbypublicbodies,A2 0 32,454 32,454 32,454
Bonds,notesandotherfixed-interestsecurities,A5 0 340,119 340,119 340,119
Sharesandothervariable-yieldsecurities,A6 145,312 356,441 501,754 501,754
Equityparticipations,A7 5,137 0 5,137 x
Sharesinaffiliatedcompanies,A8 8,912 0 8,912 x
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Thefairvalueofsecuritiesheldasothercurrentassetsexceededtheacquisitioncostsby€ 44thousandasat31December2014(31/12/2013:€ 46thousand).
Asat31December2014balancesheetitemsA2andA5includefixed-interestsecuritiesamountingto€ 304,264thousand(31/12/2013balancesheetitemA2andA5:€ 372,573thousand)ofwhich€ 212,019thousand(31/12/2013:€ 121,541thousand)willfalldueintheforthcomingyear.
BalancesheetitemsA7andA8werevaluedaccordingtothemoderatelowerofcostormarketprinciple.
IV. Equity participations and shares in affiliated companiesThefollowinglistcontainsinformationoncompaniesinwhichtheBankdirectlyheldaminimumof20percentshareholdingonthebalancesheetdate.
Figures as at 31/12/2014
in€€thousand Name Shareholding in % Equity Annual results Domicile 2014
1CentrotradeHoldingAG 100 4,422 1,213 Vienna
2CentrotradeChemicalsAG 100 7,332 125 Zug
3RaiffeisenInvestmentAdvisoryGmbH 100 764*) (2,131)*) Vienna
4CentroAssetManagementLtd. 100 405*) 242*) Jersey
5SyrenaImmobilienHoldingAG 21 29,614 64 Spittal/Drau*)unauditedfigures
Comparative figures as at 31/12/2013
in€€thousand Name Shareholding in % Equity Annual results Domicile 2013
1CentrotradeHoldingAG 100 5,709*) 2,572*) Vienna
2CentrotradeChemicalsAG 100 6,839 (123) Zug
3RaiffeisenInvestmentAdvisoryGmbH 100 2,009*) 1,390*) Vienna
4CentroAssetManagementLtd. 100 163*) 152*) Jersey
5SyrenaImmobilienHoldingAG 21 29,550 75 Spittal/Drau
V. Fixed assetsThecompositionanddevelopmentoffixedassetsiscontainedinthetableoutliningthedevelopmentoffixedassets.
VI. Other assetsBalancesheetitemA11“Otherassets“amountingto€ 117,472thousand(31/12/2013:€ 127,826thousand)primarilyreferstopurchasecontractsfromtradinginderivativefinancialinstrumentsreportedatfairvalueasat31/12/2014intheamountof€ 109,100thousand(31/12/2013:€ 118,380thousand)aswellasloansandadvancesontaxauthoritiesof€ 1,992thousand(31/12/2013:€ 1,355thousand).
*)unauditedfigures
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Comparative figures as at 31/12/2013
31/12/2013 0-3 3-12 1-5 > 5 years Total in€€thousand months months years
Liabilitiestocreditinstitutions 97,911 0 0 0 97,911
Liabilitiestocustomers 1,612 8,452 0 0 10,065
Securitizedliabilities 38,987 95,938 482,102 59,647 676,674
138,510 104,390 482,102 59,647 784,650
VII.2. Liabilities to affiliated companies and equity participations
31/12/2014 Liabilities to affiliated Liabilities to equity in€€thousand companies (direct/indirect >50 %) participations in which Raiffeisen Centrobank has a direct shareholding (< 50%)
Liabilitiestocreditinstitutions 10,691 0
Liabilitiestocustomers 7,197 0
Otherliabilities 25,165 0
43,053 0
VII. Liabilities
VII.1. Classification of liabilities other than those repayable on demand according to their term to maturity
31/12/2014 0-3 3-12 1-5 > 5 years Total in€€thousand months months years
Liabilitiestocreditinstitutions 51,256 0 0 0 51,256
Liabilitiestocustomers 10,468 19,627 0 0 30,095
Securitizedliabilities 63,819 180,361 428,742 98,755 771,677
125,543 199,989 428,742 98,755 853,029
VII.3. Securitized liabilitiesThebalancesheetitemP3containsownissuestotaling€ 244,180thousand(31/12/2013:€ 134,925thousand),whichwillfalldueinthecourseof2015.
VII.4. Other liabilitiesThebalancesheetitemP4“Otherliabilities“amountingto€ 1,514,807thousand(31/12/2013:€ 1,451,614thousand)primarilyreferstoliabilitiesre-portedatfairvalueaswellaspremiumsreceivedfromtradinginsecuritiesandderivativefinancialinstrumentsof€ 1,511,457thousand(31/12/2013:€ 1,442,430thousand).
Comparative figures as at 31/12/2013
31/12/2013 Liabilities to affiliated Liabilities to equity in€€thousand companies (direct/indirect >50 %) participations in which Raiffeisen Centrobank has a direct shareholding (< 50%)
Liabilitiestocreditinstitutions 79,426 0
Liabilitiestocustomers 11,667 0
Otherliabilities 29,344 0
120,437 0
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VIII. Share capitalThesharecapitaliscomprisedof655,000no-par-valueshares.
ThesharesinRaiffeisenCentrobankareownedbythefollowingcompanies:
% Shares
RBIIBBeteiligungsGmbH,Vienna 100.00 654.999
LexxusServicesHoldingGmbH,Vienna 0.00 1
100.00 655,000
IX. ProvisionsProvisionsbreakdownasfollows:
in€€thousand 31/12/2014 31/12/2013
Provisionsforseverancepayments 6,079 4,328
Provisionsforretirementbenefits 486 462
Otherprovisions 12,047 15,377
Provisionsforbonuspayments 1,774 4,412
Provisionsforlitigationrisks 4,132 3,526
Provisionsforoverduevacation 1,640 1,556
Legal,auditingandconsultingexpenses 333 452
Provisionsforpotentiallossesinaffiliatedcompanies 705 968
ProvisionsfortheSecuritiesTrading&SalesDepartment 486 238
ProvisionsfortheM&Abusiness 703 812
Provisionsforoutstandinginvoices 1,185 758
ProvisionsforchargedcostsforManagementBoardmembers 936 2,451
Provisionsformanagementfees 58 94
Sundry 95 110
Total 18,612 20,077
XI. Supplementary data
Assets and liabilities in foreign currenciesThefollowingamountsarecontainedinthebalancesheetinforeigncurrencies:
Currentvaluein€€thousand 31/12/2014 31/12/2013
Assets 668,503 507,128
Liabilities 595,861 430,487
X. Obligations arising from the use of tangible fixed assets not recognized in the balance sheetTherentalandleasingexpensesduringtheperiodunderreviewamountedto€ 1,084thousand(31/12/2013:€ 994thousand),thereof€ 299thousand(31/12/2013:€ 257thousand)toaffiliatedcompanies.Forthe2015financialyear,rentalcostsareexpectedtototal€ 760thousandand€ 3,039thousandforthe2015-2019financialyears,ofwhichtherentalcoststoaffiliatedcompanieswilltotal€255thousandand€ 1,277thousand,respectively.
Provisionsforseverancepaymentsincludearestructuringprovisionintheamountof€954thousand.
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Unsettled futures and options contracts according to the VERA scheme1
Atthebalancesheetdate,thefollowingfuturesandoptionstransactions(bankingandtradingbook)hadnotyetbeensettled:
in€€thousand 31/12/2014 31/12/2013
Purchase contracts
Interestratefutures 0 5,000
Currencyandinterestrateswapsinasinglecurrency 0 10,673
Optionsoninterest-rateinstruments 200 200
Forwardexchangecontracts/goldcontracts 68,286 61,404
Futuresinassetvalues 1,962 1,618
Indexfuturecontracts 526,641 600,857
Optionsonassetvaluesandequityindexoptions 858,585 674,804
Preciousmetalsandcommodityfuturecontracts 22,915 17,863
Commodityoptions 39,436 48,071
Otherforwardtransactions,futurecontracts,optionsandsimilartransactions 35,777 35,762
Volume of the securities trading book Asatthebalancesheetdatethesecuritiestradingbookwasmadeupasfollows:
Volumen 31/12/2014 31/12/2013
Securities 3,280,409 3,153,900
Otherfinancialinstruments 5,325,416 3,933,572
Total 8,605,825 7,087,472
in€€thousand 31/12/2014 31/12/2013
Sales contracts
Interestratefutures 26,300 36,000
Currencyandinterestrateswapsinasinglecurrency 0 10,673
Forwardexchangecontracts/goldcontracts 93,419 83,083
Futuresinassetvalues 2,628 375
Indexfuturecontracts 94,374 159,997
Optionsonassetvaluesandequityindexoptions 3,430,553 2,035,835
Preciousmetalsandcommodityfuturecontracts 0 0
Commodityoptions 223,236 252,045
Securities trading bookAsecuritiestradingbookismaintained.Onthebalancesheetdatethetradingvolumeatfairvalues(derivativesonshares,commodities,preciousmetalsandgoldwithdeltavalues)valuedpursuanttointernalriskcalculationamountsto
in€thousand 31/12/2014 31/12/2013
Shares/mutualfunds (134,717) (168,743)
Listedoptions (3,732) (21,485)
Futures 429,560 433,542
Warrants/certificates (924,915) (516,744)
OTCoptions (53,776) 307,027
Purchasedbonds 1,751,265 1,530,651
Issuedguaranteebonds (771,265) (676,501)
Total 292,420 887,747
1ThechartisinlinewiththereportingguidelinesVERAoftheAustrianNationalBank(PartA1aunconsolidatedstatementofassets).
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Data on transactions with derivative financial instrumentsStockmarkettradinginderivativefinancialinstrumentsfocusesonequitiesandequity/indexfuturesandoptions.ThefinancialinstrumentsissuedbyRaiffei-senCentrobankcanbeclassifiedaswarrants,certificatesmainlyonequitiesandequityindices(Turbo,Discount,BonusandOpen-EndCertificates),andguaranteebondswithapaymentstructurerelatedtoequityorequityindices.
Listedderivativesarereportedinthebalancesheetatthelistedmarketprice.Unlistedderivativesarereportedinthebalancesheetwithsyntheticmarketprices.Inbothcases,adjustmentsinvaluearerecognizedthroughprofitorlossintheincomestatement.Thesyntheticmarketpricesaredeterminedaccor-dingtothebank’sownevaluationmethods,whichareexaminedandapprovedbytheriskmanagementteamsandwhicharebasedonrecognizedopti-on-theoreticalmodels.
Forplainvanillaoptions(AmericanandEuropeanstyle),theBlack-ScholesmodelandthebinomialpricingmodelaccordingtoCox-Ross-Rubinsteinareapplied.TheCurranapproximationisappliedtoAsianoptions,whereasbarrieroptionsuseHeynen-KatandspreadoptionsrelyontheKirkmodel.
ThevolumeofderivativefinancialinstrumentsinthebankingbookrelatestoanOTCproducttohedgeinterestraterisksandtoFXforwardstohedgecur-rencyrisks.FXforwardtransactionsareprimarilyconcludedtohedgecurrencyrisksofthecommoditytradingsubsidiaries.Thetransactionsarevaluedatfairvalueapplyingobservablemarketparameter.Currencyderivativesasat31December2014comeuptoafairvalueof€201thousand(31/12/2013:€118thousand).
VolumesofderivativefinancialtransactionsaccordingtotheVERAscheme1for2014areasfollows:
in€thousandNominal amount Positive fair value Negative fair value as at 31/12/2014 Banking book Trading book Banking book Trading book Banking book Trading book
1. Interest rate contracts 200 26,300 0 0 0 40,994
1.1. OTC products 200 0 0 0 0 0
Interestrateswaps 0 0 0 0 0 0
Optionsoninterest-rateinstruments 200 0 0 0 0 0
1.2. Products traded on stock exchange 0 26,300 0 0 0 40,994
Interestratefutures 0 26,300 0 0 0 40,994
2. Foreign exchange contracts 98,690 63,010 201 16,105 (201) 14,600
2.1. OTC products 96,690 2,969 201 41 (201) 0
Forwardexchangecontracts 96,690 0 201 0 (201) 0
Goldcontracts 0 2,969 0 41 0 0
2.2. Products traded on stock exchange 0 60,041 0 16,064 0 14,600
Forwardexchangecontracts 0 16,068 0 16,064 0 0
Currencyfutures/Goldcontracts 0 43,973 0 0 0 14,600
3. Equity contracts 0 5,236,113 0 648,396 0 1,249,206
3.1. OTC products 0 2,281,264 0 96,656 0 112,701
Equity/index-basedoptions-purchased 0 678,408 0 96,493 0 0
Equity/index-basedoptions-sold 0 1,567,078 0 0 0 112,701
Otherequity-basedcontracts 0 35,777 0 163 0 0
3.2. Products traded on stock exchange 0 2,954,849 0 551,739 0 1,136,505
Shareandotherequity/indexoptionsandfuturecontracts 0 2,585,847 0 538,879 0 933,498
Commodities/preciousmetals 0 285,588 0 12,861 0 124,028
Certificates(ReverseConvertibles) 0 83,414 0 0 0 78,979
Total OTC products 98,890 2,284,232 201 96,697 (201) 112,701
Total listed products 0 3,041,190 0 567,803 0 1,192,099
Total 98,890 5,325,422 201 664,500 (201) 1,304,7991ThechartisinlinewiththereportingguidelinesVERAoftheAustrianNationalBank(PartA1aunconsolidatedstatementofassets).
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VolumesofderivativefinancialtransactionsaccordingtotheVERAscheme1for2013areasfollows:
in€€thousandNominal amount Positive fair value Negative fair value 31/12/2013 Banking book Trading book Banking book Trading book Banking book Trading book
1. Interest rate contracts 9,343 53,204 (221) 6,265 222 50,058
1.1. OTC products 9,343 12,204 (221) 43 222 (43)
Interestrateswaps 9,143 12,204 (222) 43 222 (43)
Optionsoninterest-rateinstruments 200 0 1 0 0 0
1.2. Products traded on stock exchange 0 41,000 0 6,222 0 51,101
Interestratefutures 0 41,000 0 6,222 0 51,101
2. Foreign exchange contracts 89,534 54,957 118 16,573 (118) 25,044
2.1. OTC products 89,534 11,835 118 0 (118) 2,660
Forwardexchangecontracts 89,534 0 118 0 (118) 0
Goldcontracts 0 11,835 0 0 0 2,660
2.2. Products traded on stock exchange 0 43,122 0 16,573 0 22,384
Forwardexchangecontracts 0 16,566 0 16,566 0 0
Currencyfutures/Goldcontracts 0 26,556 0 7 0 22,384
3. Equity contracts 0 3,827,222 0 721,339 0 1,101,183
3.1. OTC products 0 1,500,679 0 87,803 0 73,230
Equity/index-basedoptions-purchased 0 537,301 0 87,254 0 0
Equity/index-basedoptions-sold 0 927,616 0 0 0 73,230
Otherequity-basedcontracts 0 35,762 0 549 0 0
3.2. Products traded on stock exchange 0 2,326,543 0 633,536 0 1,027,954
Shareandotherequity/indexoptionsandfuturecontracts 0 1,960,395 0 612,691 0 854,592
Commodities/preciousmetals 0 317,979 0 20,845 0 122,624
Certificates(ReverseConvertibles) 0 48,170 0 0 0 50,738
Total OTC products 98,877 1,524,718 (103) 87,846 104 75,847
Total listed products 0 2,410,665 0 656,331 0 1,100,439
Total 98,877 3,935,383 (103) 744,177 104 1,176,2861ThechartisinlinewiththereportingguidelinesVERAoftheAustrianNationalBank(PartA1aunconsolidatedstatementofassets).
C.NotestotheIncomeStatement
I. Interest and similar income
in€€thousand 2014 2013
forliabilitiestocreditinstitutions 1,578 1,128
forliabilitiestocustomers 3,516 3,573
forsecuritizedliabilities 6,041 7,784
11,135 12,485
II. Interest and similar expenses
in€€thousand 2014 2013
forliabilitiestocreditinstitutions (2,223) (1,998)
forliabilitiestocustomers (108) (147)
forsecuritizedliabilities (16,106) (14,809)
(18,437) (16,954)
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III. Fee and commission income
in€€thousand 2014 2013
fromsecuritiesbusiness 12,052 13,043
fromM&Atransactions 5,377 11,931
fromECMtransactions 7,806 4,059
fromcreditbusiness 119 83
frompaymenttransactions 185 227
fromotherbankingservices 1,337 1,174
26,875 30,516
IV. Fee and commission expenses
in€€thousand 2014 2013
fromsecuritiesbusiness (15,664) (13,714)
fromM&Atransactions (1,924) (4,333)
fromECMtransactions 0 (543)
frompaymenttransactions (147) (218)
fromotherbankingservices (985) (896)
(19,388) (19,705)
Interestandsimilarexpensesaremainlyrelatedtocouponpaymentsforstructuredproducts.Theincreasecomparedtothepreviousyearisattributabletoanaverageriseintheissueofstructuredproductswithcouponpayments.Theliquidityderivedfromissuesisprimarilyinvestedintotradablemoneymarketdepositswithoutcurrentcouponswhichareincludedinthetradingbook.Theresultfromtradablemoneymarketdepositsincludedinthetradingbookisshowninnetprofitonfinancialtradingactivities.
Interestandsimilarexpensesforcouponpaymentsforstructuredproductstowhichthenegativenetinterestincomeisprimarilyattributabletoareoffsetbyapositivevaluationresultfromtradablemoneymarketdepositsinthenetprofitonfinancialtradingactivities.
V. Net profit on financial trading activities
in€€thousand 2014 2013
fromthevaluationandsaleofcertificatesandshares 91,700 (8,806)
fromthevaluationandsaleofotheroptionsandfutures (42,768) 49.497
fromthevaluationofspotandfuturespositions (3,241) (286)
45,690 40,405
VI. Other operating incomeTheitemincludesmainlyincomefromthereleaseofnon-interestbearingprovisionsintheamountof€1,350thousand,andincomefromthereleaseofM&Avalueadjustmentsintheamountof€880thousand.In2013,theitemcontained€ 2,000thousandfromtherepurchaseofasubordinatedbondofRaiffeisenBankMaltaplc,Sliema.
Inthereportingyear,thenetprofitonfinancialtradingactivitieswaspositivefurthertoariseinvolumeinthecertificatesbusinessandanincreaseinthetransactionvolumeinthesalesbusiness.Contrary,therewerenegativevaluationeffectsinthetradingbusinesswhichareattributabletomarket-relatedadjustmentsinforeigntradablemoneymarketdeposits.
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VIII. Other operating expenses“Otheroperatingexpenses“amountingto€ 2,148thousand(31/12/2013:€ 728thousand)primarilyrelatestoM&Avalueadjustmentsintheamountof€ 1,290(2013:€ 68thousand)andtoexpenseschargedfornon-bankingtransactionsintheamountof€ 801thousand.
X. Deferred taxesThebankdidnotexerciseitsrighttocapitalizedeferredtax.Thecapitalizableamountofabout€ 421thousand(2013:€ 317thousand)wascalculatedonthebasisofnon-deductibleexpensesforthe2014financialyearandpreviousyears.
XI. Expenses for auditing the financial statementsExpensesforauditingthefinancialstatementssplitintoexpensesforauditingandfortaxconsultancyservicesarecontainedintheconsolidatedfinancialstatements.
IX. Income taxesIncometaxesarecomprisedofthefollowing:
in€€thousand 2014 2013
Grouptaxation 324 768
Taxesforformerperiods 0 33
Taxesforformerperiods(settlementofGroupcharge) (1,136) 0
Notrecognizedasforeignwithholdingtax 1,065 1,163
253 1,964
VII. General administrative expenses
in€€thousand 2014 2013
Officespaceexpenses(maintenance,operation,administration,insurance) (1,377) (1,396)
Officesupplies,printedmatter,literature (292) (393)
ITcosts (2,073) (2,239)
Communicationcosts (1,069) (1,001)
Informationservices (3,522) (3,011)
Carexpensesandtravellingexpenses (949) (1,085)
Advertisingandpromotionalexpenses (1,019) (1,218)
Legal,advisoryandconsultancyservices (1,127) (1,277)
Contributionstoassociations (734) (436)
Sundry (2,845) (4,561)
(15,007) (16,617)
Thedecreasein“Generaladministrativeexpenses”isattributabletothereleaseofprovisionsforbonuspayments.
D.OtherDisclosures
Contingent liabilitiesThebreakdownofcontingentliabilitiesarisingfromguaranteesandsuretiestotaling€ 447thousand(31/12/2013:€ 696thousand)consistsofthefollowing:
in€€thousand 31/12/2014 31/12/2013
Lettersofcredit 0 248
Guarantees 447 448
447 696
thereofforaffiliatedcompanies 0 248
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InaccordancewithArticle93AustrianBankingAct,theBankislegallyobligedtoprovideforproportionatedepositinsuranceaspartofitsmembershipinaprofessionalassociation.RaiffeisenCentrobankAGisamemberoftheFachverbandderRaiffeisenbanken(professionalassociationoftheRaiffeisenBankingGroup).ThisalsoentailsanaffiliationwithÖsterreichischenRaiffeisenEinlagensicherungreg,GenmbH.,Vienna(thedepositinsurancearmoftheRaiffeisenBankingGroup,registeredasalimitedliabilitycompany).Inthefinancialyearthetheoreticalclaimonthisinsuranceislimitedtoarateof1.5percentoftheassessmentbasisinaccordancewithArticle22para2AustrianBankingActatthebalancesheetdate,plustheweighteditemsofthesecuritiestradingbook,alsoinaccordancewithpart3CRR.Thesecontingentliabilitiesarereportedatamarketvalueof€0.07.
Commitments shown under the balance sheetCommitmentsshownunderthebalancesheetamountingto€9,896thousand(31/12/2013:€33,090thousand)refertoirrevocableandrevocablecreditlinesandstandbyfacilities.
Other contractual bank guarantee obligationsThefollowingassetswerepledgedassecurityforobligationsasofDecember31,2014:
ItemA2Loansandadvancestocreditinstitutions€145,265thousand (31/12/2013:€115,912thousand) Collateraldepositedwithbanksandstockexchangesforthesecuritiesandoptionsbusiness
ItemA5Bonds,notesandotherfixed-interestsecurities€ 54,431thousand (31/12/2013:€84,156thousand) Collateraldepositedwithbanksandstockexchangesforthesecuritiesandoptionsbusiness
ItemA6Sharesandothervariable-yieldsecurities€ 0thousand (31/12/2012:€10,989thousand Collateraldepositedwithbanksandstockexchangesforthesecuritiesandoptionsbusiness
Letters of comfortAsatthebalancesheetdateanon-bindingletterofcomforttowardsanassociatedcompanywasinexistence.Nocircumstanceswereknownwhichwouldhaveinvolvedaprovisionforcontingentlosses.
Trustee transactions Trusteetransactionsnotincludedinthebalancesheetrefertooneequityparticipationheldintrust.
Own funds Theownfundspursuanttopart2CRRarecomprisedofthefollowing:
in€thousand 31/12/2014
Capitalpaid-in 47,599
Earnedcapital 44,721
Core capital (tier 1 capital) before deductions 92,320
Intangiblefixedassets (115)
Prudentvaluation (4,464)
Core capital (tier 1 capital) after deductions 87,740
Supplementaryownfunds 0
Core capital 87,740
Supplementarycapital 0
Supplementary own funds (after deductions) 0
Total own funds 87,740
Total risk-weighted assets 682,985
Coretier1ratio,creditrisk 31.4%
Coretier1ratio,total 12.8%
Ownfundsratio 12.8%
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Inthereportingyear,anamountof€3,000wasallocatedtootherreservespursuanttothedecisionoftheAnnualGeneralAssemblyof29April2014.
Risk-weightedassetsforthecreditriskaccordingtoassetclassesbreakdownasfollows:
in€€thousand 2014
Risk-weighted assets according to standardized approach 260,754
Centralgovernmentsandcentralbanks 556
Publicbodies 68
Institutions 112,167
Corporates 109,830
Equityparticipations 15,803
Positionswithparticularlyhighrisk 3,582
Otherpositions 18,747
CVA risk 18,409
Total 279,163
in€€thousand 2014
Total risk-weighted assets 682,985
Totalownfundsrequirementforcreditrisk 22,333
Standardapproach 20,860
CVArisk 1,473
Totalownfundsrequirementforpositionriskinbonds,equities,commoditiesandopencurrencypositions 20,766
Totalownfundsrequirementforoperationalrisk 11,539
Total own funds requirement 54,639
Eligibleownfundspursuantto§23para14AustrianBankingoldversionamountedto€89,115thousandin2013,includingownfundspursuantto§23para14item7AustrianBankingActoldversionintheamountof€0thousand.
Totalownfundsrequirementpursuantto§22para1austrianBankingActoldversioncameupto€57,435thousandincludingtotalownfundsrequire-mentpursuantto§22para1item1and4AustrianBankingActoldversionintheamountof€ 27,203thousand.
Number of staff
31/12/2014 Annual 31/12/2013 Annual average average
Salariedemployees(includingManagementBoard) 224 238 249 249
thereofpart-time 27 27 26 27
Wageemployees 9 9 10 10
thereofpart-time 2 3 5 5
Total 233 247 259 259
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Advances and loans to members of the Management Board and Supervisory Board AtthebalancesheetdatenoadvancesandloanshadbeengrantedtomembersoftheManagementBoard.Noadvances,loansorguaranteesweregrantedtomembersoftheSupervisoryBoard.
Expenses for severance payments and retirement benefits Expensesforseverancepaymentsandretirementbenefits(includingcontributionstopensionfundsandstaffretirementbenefitplans,aswellasprovisionsforseverancepayments)breakdownasfollows:
Expensesforseverancepayments2014includerestructuringprovisionsintheamountof€954thousand.
Paymenttoemployeepensionfundscameupto€225thousand(2013:€216thousand).
RemunerationsandexpensesonseverancepaymentsandretirementbenefitsformembersoftheManagementBoardwerebornebyRaiffeisenBankInternationalAG(anaffiliatedcompany)andareincludedasrefundin“Otheradministrativeexpenses”.
SeverancepaymentstomembersortheManagementBoardcameupto€16thousand(2013:€500thousand).
Remuneration for members of the Management Board and Supervisory BoardInthe2014financialyearremunerationforfourManagementBoardmemberstotaled€2,689thousand(2013:€2,090thousand).Astotheremunerati-onoftheManagementBoard€2,647thousand(2013:€1,785thousand)werechargedbyRaiffeisenBankInternationalAG(anaffiliatedcompany)andareincludedin“Otheradministrativeexpenses”.
In2014attendingfeesintheamountof€95thousandwerepaidtomembersoftheSupervisoryBoard(2013:€110thousand).
Group relations ThecompanyisanaffiliatedcompanyofRaiffeisen-Landesbanken-HoldingGmbH,Vienna,andisintegratedinitsconsolidatedfinancialstatements,aswellasintheconsolidatedfinancialstatementsofRaiffeisenBankInternationalAG,Viennawhichprovidestheconsolidatedfinancialstatementsfortheleastnumberofcompaniesrequired.
RaiffeisenCentrobankitselfisconsideredtobeaparentcompanypursuanttoArticle30para1AustrianBankingAct.Provisionspertainingtotheexempt-ingconsolidatedfinancialstatementspursuanttoArticle245para5AustrianCommercialCodearenotapplicable,duetothefactthatsecuritiesissuedbythecompanyaretradedonanorganizedstockexchangeasstipulatedinArticle4para1(92)ofEUDirective575/2013.Forthisreason,thecompa-nydrawsupitsownconsolidatedfinancialstatementsforitssubgroupinaccordancewithInternationalFinancialReportingStandards.Theseconsolida-tedfinancialstatementsareavailableattherelevantparentcompanyaswellasattheCommercialCourtofVienna.
SinceDecember17,2008,thecompanyhasbeenamemberofthecorporategroupRaiffeisenZentralbankÖsterreichAktiengesellschaft(RZB)pursuanttoArticle9AustrianCorporationTaxAct.TheapplicationsubmittedbythecompanytobecomeagroupmemberofthecorporategroupRZBasofthebusinessyear2008pursuanttoArticle9AustrianCorporationTaxActwasnotifiedtothefinancialauthoritiesonDecember19,2008andwasappro-vedbynoticeonApril22,2009.
Thetaxableresultsofthemembersofthegroupareattributedtotheparentcompany.Anytaxadjustmentsbetweentheparentcompanyandtheindividualmembersofthecorporategroupareregulatedintheformofataxallocationagreement.
Retirement benefits Severance payments 2014 2013 2014 2013
ManagementBoardmembersandseniormanagement (313) 442 40 165
Employees 512 689 2.618 647
Total 199 1.131 2.658 812
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Members of the Management Board, the Supervisory Board and State Commissioners
Management Board EvaMarchart (ChiefExecutiveOfficeruntil31December2014) AlfredMichaelSpiss (DeputyChiefExecutiveOfficeruntil31December2014) GerhardGrund (MemberoftheManagementBoarduntil31December2014) WilhelmCeleda ChiefExecutiveOfficerasof1January2015 (MemberoftheManagementBoarduntil31December2014) MarkusKirchmair MemberoftheManagementBoardasof1January2015 Supervisory Board KlemensBreuer Chairman MemberoftheManagementBoard, RaiffeisenBankInternationalAG,Vienna WalterRothensteiner 1stDeputyChairman(until31December2014) ChiefExecutiveOfficer, RaiffeisenZentralbankÖsterreichAG,Vienna
KarlSevelda 1stDeputyChairman(since1January2015) ChiefExecutiveOfficer, 2ndDeputyChairman(until31December2014) RaiffeisenBankInternationalAG,Vienna
JohannStrobl Member(until29April2014)) DeputyChiefExecutiveOfficer, RaiffeisenBankInternationalAG,Vienna, HannesMösenbacher Member(since29April2014) DivisionHead, RaiffeisenBankInternationalAG,Vienna
WernerKaltenbrunner Member DivisionHead, RaiffeisenBankInternationalAG,Vienna
State Commissioners AlfredHacker,TamaraEls
Vienna,15April2015TheManagementBoard
WilhelmCeledaChiefExecutiveOfficer
MarkusKirchmairMemberoftheManagementBoard
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Auditor'sreport
ReportontheFinancialStatementsWehaveauditedtheaccompanyingfinancialstatements,includingtheaccountingsystem,ofRaiffeisenCentrobankAG,Vienna,forthefiscalyearfrom1January2014to31December2014.Thesefinancialstate-mentscomprisethebalancesheetasof31December2014,theincomestatementforthefiscalyearended31December2014,andthenotes.
Management'sResponsibilityfortheFinancialStatementsandfortheAccountingSystemTheCompany’smanagementisresponsiblefortheaccountingsystemandforthepreparationandfairpresentationofthesefinancialstatementsinaccordancewithAustrianGenerallyAcceptedAccountingPrinciples.Thisresponsibilityincludes:designing,implementingandmaintaininginter-nalcontrolrelevanttothepreparationandfairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies;andma-kingaccountingestimatesthatarereasonableinthecircumstances.
Auditor'sResponsibilityandDescriptionofTypeandScopeoftheStatutoryAuditOurresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithlawsandregulationsapplicableinAustriaandAustrianStandardsonAuditing.Thosestandardsrequirethatwecomplywithprofessionalguidelinesandthatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor'sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheCompany’spreparationandfairpresentati-onofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.
OpinionOurauditdidnotgiverisetoanyobjections.Inouropinion,whichisba-sedontheresultsofouraudit,thefinancialstatementscomplywithlegalrequirementsandgiveatrueandfairviewofthefinancialpositionoftheCompanyasof31December2014andofitsfinancialperformancefortheyearfrom1Januaryto31December2014inaccordancewithAus-trianGenerallyAcceptedAccountingPrinciples.
ReportontheManagementReportPursuanttostatutoryprovisions,themanagementreportistobeaudi-tedastowhetheritisconsistentwiththefinancialstatementsandastowhethertheotherdisclosuresarenotmisleadingwithrespecttotheCompany’sposition.Theauditor’sreportalsohastocontainastatementastowhetherthemanagementreportisconsistentwiththefinancialstate-mentsandwhetherthedisclosurespursuanttoSection243aUGB(Austri-anCommercialCode)areappropriate.
Inouropinion,themanagementreportisconsistentwiththefinancialstate-ments.ThedisclosurespursuanttoSection243aUGB(AustrianCommer-cialCode)areappropriate.
WilhelmKovsca(AustrianCharteredAccountant)
JosefKirchknopf(AustrianCharteredAccountant)
Vienna,15April2015KPMGAustriaGmbHWirtschaftsprüfungs-undSteuerberatungsgesellschaft
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ContactsandPublisher'sDetails
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JohannesHämmerleEquities&[email protected]:+43(1)51520-439
[email protected]:+43(1)51520-407
[email protected]:+43(1)51520-472
KlausImhofMergers&[email protected]:+43(1)51520-760
[email protected]:+43(1)51520-421
SiegfriedNeumü[email protected]:+43(1)51520-652
[email protected]:+43(1)51520-710
GeraldDeimelLegal,Compliance&[email protected]:+43(1)51520-216
ChristianSlavik,MBAControlling&[email protected]:+43(1)51520-349
GünterVölkerIT&[email protected]:+43(1)51520-280
EleonoreLederHR&[email protected]:+43(1)51520-206
AndreaPelinka-KinzCommunications&[email protected]:+43(1)51520-614
ContactsandPublishers'sDetailsofRaiffeisenCentrobank
Publisher's details
OwnerandPublisherConcept,Layout,ProductionandEditorialRaiffeisenCentrobankAGA-1015Vienna,Tegetthoffstrasse1Phone+43-1-51520-0Fax:+43-1-5134396
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www.rcb.at