The Public Finance section, as a strong player in this segment, undertakes public sector financing in the extended Alps to Adriatic region. Hypo Group Alpe Adria has distinguished itself through its holistic and sustained in situ support for customers in finance matters: from financing, investment, consultancy through to cash management. Sector-specific solutions such as PPP projects or non-recourse financing can also be developed, working together with the customer and drawing on the expertise of the whole Group. In so doing, Hypo Group Alpe Adria can use its experience in the region, which dates back several decades, as well as its specialists on the ground, and thus be in a position to offer tailored solutions.

The Public Finance section was restructured in 2008, with a management and control function set up at Group level and Public Finance units installed at all the subsidiary banks. As a result of the continued growth of the Group, but in particular as a result of increased demand from the public sector for financing solutions for infrastructure improvement projects in the countries of the extended Alps to Adriatic region, Hypo Group Alpe Adria achieved new lending volumes of EUR 565 m. EUR 281.2 m, or 49.8 % of this went to South Eastern European locations. Liabilities rose, as an annual average, from EUR 747 m to EUR 1.3 bn (+79 %). The main areas for financing in this section were education, highways construction, the health sector and public housing.

Amongst the year’s highlights were: the section’s involvement in implementing non-recourse financing in Montenegro; the introduction of total giro solutions for customers; and mandates for consultancy on debt management. Particularly noteworthy is the fact that Public Finance is the preferred partner of a state-owned development bank. A PPP for a water purification project in Montenegro was also successfully concluded. As an example, Public Finance made available funds of EUR 56 m for education projects in Croatia and EUR 70 m for social housing in Austria.

As a result of the continuing financial crisis, it can be assumed that the public sector in most countries will increase its investment activity. The Public Finance section should benefit from this, in particular as the number of competitors could shrink as a result of the economic conditions. The focus in 2009 will certainly be on continuing to implement the “Expert at Your Side” strategy and develop long-term customer relationships on the ground. This will be achieved through increased, and wider, customer contact, as well as focussed training and development of Treasury Sales staff. Additionally, the highly successful area of non-recourse financing will be expanded in the coming year.