Development of the segments
Banking
Banking
Convincing corporate and retail customers alike with its integrated network of specialists, locations, products and services, Hypo Group Alpe Adria was able to hold its ground very well in the first half of 2008.
In line with its overall strategy, Hypo Group Alpe Adria has been treating the extension of its retail activities as a priority since 2007. Accordingly, much of the first half of 2008 was dedicated to the realization of the »new retail strategy« and in particular to the continued implementation of the new branch bank and service concept in all markets where Hypo Group Alpe Adria acts. Combined with the continuation of its targeted distribution campaign, this allowed the retail segment to pursue an uninterrupted growth policy during the first six months of the current financial year. The increase of the assets volume double compared with the first half of 2007, while at the same time the growth of the credit volume was noticeably more dynamic than during the same period of the previous year.
The corporate banking segment – an important partner in the corporate clients business in virtually every important industry and sector in South Eastern Europe such as trade, industry, tourism, project financing and infrastructure – was able to prolong the many years of positive development and achieved continuous volume and revenue increases in the first six months of 2008.
In the first half of 2008, the continued implementation of the control units for the segments »Public Finance« and »Investment Banking« successfully created a solid basis for intensified supraregional business activities in these areas. In the first six months of the financial year, both segments continued to roll out the new structure in the individual markets. Special departments at the respective sites now ensure that customers receive high quality and comprehensive support on location.
In the first six months of 2008, the primary influences in the banking segment were the previously described exceptional charges as a consequence of the crisis in the financial markets and the increased risk provisions on loans and advances. In spite of the increase of the net interest income by EUR 33.9 million to EUR 289.7 million (+ 13.2 %), the negative development of the interest rate in the area of derivatives as well as the higher refinancing costs. While the fee and commission income in the segment still increased by 5.5 % (respectively +12.2 % after adjustment for Alpe Adria Privatbank AG, Liechtenstein), the result from trading and financial investments deteriorated significantly due to the current crisis in the financial markets. After consideration of other results, an operating income in an amount of EUR 327.3 million is obtained, representing a decrease of EUR – 5.2 million. Due to the implementation of a more restrictive risk policy, but also as a result of exposures from large individual loans, the risk provisions on loans and advances from banking business doubled during the period under review from EUR – 68.9 million (2007) to EUR –140.5 million (2008). The operating expenses as the sum total of personnel expenses, general overheads and depreciation increased by EUR –33.8 million to EUR – 213.2 million. From the balance of operating income (EUR 327.3 million), on the one hand and risk provisions on loans and advances (EUR –140.5 million) and operating expenses (EUR – 213.2 million) on the other, a negative segment result of EUR – 26.4 million is obtained, whereas the segment result in the same period of the previous year, namely EUR 84.3 million, had still been clearly positive.
Convincing corporate and retail customers alike with its integrated network of specialists, locations, products and services, Hypo Group Alpe Adria was able to hold its ground very well in the first half of 2008.
In line with its overall strategy, Hypo Group Alpe Adria has been treating the extension of its retail activities as a priority since 2007. Accordingly, much of the first half of 2008 was dedicated to the realization of the »new retail strategy« and in particular to the continued implementation of the new branch bank and service concept in all markets where Hypo Group Alpe Adria acts. Combined with the continuation of its targeted distribution campaign, this allowed the retail segment to pursue an uninterrupted growth policy during the first six months of the current financial year. The increase of the assets volume double compared with the first half of 2007, while at the same time the growth of the credit volume was noticeably more dynamic than during the same period of the previous year.
The corporate banking segment – an important partner in the corporate clients business in virtually every important industry and sector in South Eastern Europe such as trade, industry, tourism, project financing and infrastructure – was able to prolong the many years of positive development and achieved continuous volume and revenue increases in the first six months of 2008.
In the first half of 2008, the continued implementation of the control units for the segments »Public Finance« and »Investment Banking« successfully created a solid basis for intensified supraregional business activities in these areas. In the first six months of the financial year, both segments continued to roll out the new structure in the individual markets. Special departments at the respective sites now ensure that customers receive high quality and comprehensive support on location.
In the first six months of 2008, the primary influences in the banking segment were the previously described exceptional charges as a consequence of the crisis in the financial markets and the increased risk provisions on loans and advances. In spite of the increase of the net interest income by EUR 33.9 million to EUR 289.7 million (+ 13.2 %), the negative development of the interest rate in the area of derivatives as well as the higher refinancing costs. While the fee and commission income in the segment still increased by 5.5 % (respectively +12.2 % after adjustment for Alpe Adria Privatbank AG, Liechtenstein), the result from trading and financial investments deteriorated significantly due to the current crisis in the financial markets. After consideration of other results, an operating income in an amount of EUR 327.3 million is obtained, representing a decrease of EUR – 5.2 million. Due to the implementation of a more restrictive risk policy, but also as a result of exposures from large individual loans, the risk provisions on loans and advances from banking business doubled during the period under review from EUR – 68.9 million (2007) to EUR –140.5 million (2008). The operating expenses as the sum total of personnel expenses, general overheads and depreciation increased by EUR –33.8 million to EUR – 213.2 million. From the balance of operating income (EUR 327.3 million), on the one hand and risk provisions on loans and advances (EUR –140.5 million) and operating expenses (EUR – 213.2 million) on the other, a negative segment result of EUR – 26.4 million is obtained, whereas the segment result in the same period of the previous year, namely EUR 84.3 million, had still been clearly positive.
