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Overview

Founded in 1896, Hypo Group Alpe Adria is now active in the countries of an extended Alpine to Adriatic region with its two large business segments Banking and Leasing. With over 7,500 employees in the core business at more than 380 locations in Austria, Italy, Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Germany, Bulgaria, Macedonia, Hungary and the Ukraine, the company is considered one of the leading financial corporations in the region. Hypo Group Alpe Adria’s network, which covers a wide area, ensures optimum support for over 1.3 m customers, whereby proximity to customers and a high quality of services comprise the main focus.


In line with a clearly focused Alpine-Adriatic strategy, for the past financial year the financial institution has been focusing on consolidating its existing network following years of controlled growth. At the same time, it has also successfully continued to improve internal structures and processes to meet increasing requirements, and adapted the risks of Hypo Group Alpe Adria in line with an orientation towards sustainability.


The difficult conditions on international financial markets in 2008, along with their effects on the real economy, also impact the economic growth of Hypo Group Alpe Adria, it also had to adjust existing risks and take precautions for further risk minimisation.


The Group’s equity base was strengthened by a capital increase of EUR 700 m which was undertaken in the fourth quarter, involving BayernLB at approximately EUR 699.9 m and the Hypo Alpe Adria Mitarbeiter Privatstiftung (employee foundation) at approximately EUR 0.1 m. In addition, subsequent to the respective resolutions by the committees, the Executive Board of the Bank utilised a government package of measures (BGBl (Federal Law Gazette) I 136 / 2008) and also issued non-voting share capital.


In accordance with an agreement in principle to issue non-voting share capital, which was concluded with the Republic of Austria, the terms of the share certificate and the subscription agreement of 29 December 2008, the Republic of Austria subscribed 18,000 share certificates at a nominal amount of EUR 50,000.00 each, as well as non-voting share capital at a total amount of EUR 900 m.

Based on these two capital measures, as well as a Tier 1 capital ratio of 8.3 % and total equity ratio of 11.9 %, on the closing date of 31 December 2008 Hypo Group Alpe Adria possesses a very solid equity base and is therefore well prepared for further strategic growth.


Following the completion of both capital measures, as well as further shifts in investments, Bayerische Landesbank (BayernLB) held 67.08 % of base capital as of the 31 December 2008 closing date. 20.48 % of shares were owned by the BVG Beteiligungs- und Verwaltungsgesellschaft mbH (GRAWE-Group [Grazer Wechselseitige Versicherung AG]). An additional 12.42 % were held by the Landes- und Hypothekenbank-Holding (Kärntner Landesholding), and 0.02 % by the Hypo Alpe Adria Mitarbeiter Privatstiftung (staff foundation).

Concurrent with the restructuring and reorganisation of Hypo Group Alpe Adria, significant developments affecting the future direction of the company also took place in the Group’s Supervisory and Executive Board. In this vein, Michael Kemmer, Chairman of the Executive Board of BayernLB, was elected Chairman of the Supervisory Board for Hypo Group Alpe Adria. In its meeting of 30 April 2008, the Supervisory Board appointed Božidar Špan, previously Chairman of the Executive Board for Hypo Alpe-Adria-Bank d.d., Slovenia, and Andreas Dörhöfer, previously department manager Risk Office Corporates and Financial Institutions at BayernLB to serve on the Executive Board. The appointment of Božidar Špan, who has been responsible for the areas Corporate and Leasing since 1 June 2008, corresponds with the increasing significance of international markets for the bank, as this is the first time in the history of the company that a director from a Hypo country has been appointed to the Board. Andreas Dörhöfer has been responsible for the areas Risk Management and Settlement since 1 May 2008. Josef Kircher, most recently a director on the bank’s Board with responsibilities for Corporate and Leasing, has left the Executive Board effective 31 May 2008 at his own request. Thomas Morgl, most recently responsible for the areas Retail, IT / Organisation and Settlement, has also left the Executive Board in December 2008. His functions have been transferred to the remaining Directors as of January 2009.


Hypo Alpe-Adria Bank International AG, as the representative of Hypo Group Alpe Adria on international capital markets, has been assigned a non-guaranteed long-term A2 rating, as well as a guaranteed long-term rating of Aa2, a BFSR (Bank Financial Strength Rating) of D-, and a bond rating of Aaa. On 11 November 2008, the rating agency Moody’s put the non-guaranteed long-term rating of A2 and the short-term rating of P-1, as well as the rating for subordinate liabilities (A3) and preference stock rating (Baa2) on review for a possible downgrade.