Hypo Group Alpe Adria’s entry into market usually starts with the establishment of a leasing company, which acts as a solid base for further expansion – also in banking – and for the growth of both segments. From this, Hypo Group Alpe Adria assumes a leading position in all markets and is well placed with its companies on the ground. With 81 locations, Hypo Group Alpe Adria has a dense network in the Alps to Adriatic region and has been able to develop sustainable leasing markets in the countries concerned. More than 1,100 employees in Austria, Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Germany, Italy, Montenegro, Hungary, Bulgaria, Macedonia and Ukraine act as expert advisors to more than 83,000 customers in those countries. 57 % of customers come from the European Union countries, 41 % from South Eastern Europe and 2 % from OECD and other countries.

The financial year just ended was characterised by a worldwide decrease in property values, which correspondingly led to cautious valuations and the creation of risk provisions. In some cases realisation of existing assets was necessary. The generally difficult economic conditions and related shortage of liquidity were felt by the Leasing segment as well – and more stringent screening of financing projects, stricter lending criteria and higher refinancing costs were the result. In order to be able to meet the higher risk, the Leasing Segment was also assigned some projects to optimise risk management. Moreover, from autumn 2008 onwards, no further financing projects in Swiss Francs were accepted, because of the volatility in exchange rates.

Following the intensive period of acquisition in previous years, 2008 was a year of consolidation in the existing markets. To this end, the sales network was strengthened through the opening of new branch offices, primarily in conurbations. The Ukrainian subsidiary posted its first full financial year following its establishment at the end of 2007. Despite the extremely difficult market conditions, the subsidiary was able to report satisfactory growth and became a Top 3 player in the country in its first year.

The implementation of a new core leasing application based on Oracle 2007 in Croatia, Bulgaria and Macedonia helped to improve workflow considerably. There is now a fully integrated leasing system with ERP (resource planning) and CRM (customer relationship management) installed in these countries, on which a lot of further work was done in 2008, in particular with regard to extending functionality, with the country staff actively supporting. Once the additional functionality is in place, this will be rolled out to the other country organisations in the coming years.

The increase in new financing volumes in the Serbian market resulted from the positive development of both the subsidiaries located there. Close collaboration with the largest car dealers in the region was a major factor in the increase in vehicle leasing rates. Pleasingly, our position as a partner of the Serbian economy was strengthened in 2008: through the agreement concluded with the European Investment Bank in the year under review, Hypo Alpe-Adria-Leasing d.o.o. will benefit from EUR 50 m of funds for financing projects.

The Montenegrin subsidiary Hypo Alpe-Adria-Leasing d.o.o. Podgorica increased new financing volume in 2008 to EUR 97.1 m. Steady growth was recorded in the year in particular for industrial equipment leasing. Increased demand in financing solutions for highways construction, water supply and public transport projects can be expected in the near future as a result of the country’s economic development. A similarly positive development can be expected in vehicle and real estate leasing for private individuals.

Total assets also rose again in the year under review. As of 31 December 2008, total assets came to EUR 7.9 bn, some 23.4 % or EUR 1.5 bn above the previous year’s level (2007: EUR 6.4 bn).