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Klagenfurt, on March 31st, 2011. The crisis of the financial sector, political revolutions in Northern Africa, weak business activity in real economy, higher loan risks and a bulk of new formalities marked the business year 2010. Nevertheless BKS Bank stood the test excellently!

Dr.Heimo Penker, Chairman of the Management Board of BKS Bank, outlined that “in consideration of the continuing difficulties in the economic environment our business policy based on sustainability and healthy growth has proved once more successful. We are happy about constantly good results in the year 2010”.

The results are worth to have a closer look upon:
• 6,2 bn EUR balance sheet total (previous year 6,3 bn EUR)
• + 2,4 % increase of savings deposits (1,8 bn EUR)
• + 4,1 % increase of loan volume (4,6 bn EUR)

“Figures of the business year 2010 show that BKS Bank is a reliable partner for both established customers and numerous new customers even in tough times of the market. Our net income amounting to EUR 46,4 Mio. reached the highest level up to now since 2007” stated Mr.Heimo Penker contently.

The amount of EUR 6,2 bn of total assets was primarily determined by a solid growth of receivables from customers by 4,1 % to more than EUR 4,6 bn and on the total equity and liabilities side by a pleasant increase of primary liquidity by 6,4 % to
EUR 4,2 bn. In all of Austria the growth of lowns amounted to only 2,2 %.

The increase of loan business was effected almost completely on EURO basis. “Altogether we push the consistent reduction of foreign currency loans. So already since autumn 2008 we do not grant foreign currency loans to retail customers any longer “ Dr.Penker explains.

A significant increase shows the securities volume: the volume of customers’ securities rose by 7,9 % and amounted as at 31.12.2010 about EUR 5,9 bn. Altogether BKS Bank was entrusted with customers’ funds in the amount of
EUR 10,0 bn.

The Management Board was especially satisfied with the development of savings deposit business: “In the year 2010 a significant increase amounting to 2,4 % was observed. On the balance sheet date savers had entrusted EUR 1,8 bn of savings deposits to us.” Here as well BKS Bank significantly better developed than the total market. In the years 2010 savings deposits in Austria decreased by 1,7 %.

Good interest income

Interest income belongs to the most significant income positions of BKS Bank. Net interest income before impairment charge developed positively and increased from EUR 132,3 mio. by 8,6 % to EUR 143,6 mio.. Allowances for impairment charges were added by EUR 47,6 mio.. Net interest income after impairment charge amounted with EUR 96,1 mio. 1,3 % above the figure of 2009.

Regional development

Carinthia is the market of BKS Bank where the enterprise’s history began in 1922. Altogether there were 542 employees as an annual average working in Carinthia. Although especially Styria and Slovenia highly contribute to the result and to business volume, Carinthia stays the main market. In Carinthia the market share of our institute amounts to 25 % with corporate customers and to 13 % with retail customers.

Styria

In Styria BKS Bank is active since 1983 and it is growing steadily since the foundation of the first branch. Altogether in the reporting year BKS Bank employed 89 staff members (annual average) in 12 Styrian branches who managed about 1.690 enterprises and 21.320 retail customers. Styria also furthermore contributes the second largest amount to the balance sheet total as well as to net profit. “We succeeded to establish BKS Bank as banking partner for the most important Styrian enterprises and for the medium-sized economy. Also in the field of deposits a satisfying increase could always be achieved. In the year 2010 13,4 % of savings deposits originated from Styria.”

Internationally excellent on the way

“Our strategy for internationalisation is easily explained: We grow risk-sensitively out of our own strength – sometimes a bit slower but in the long run successful”, says Board Member Dr.Herta Stockbauer. As highlights of the expired business year she mentions the further set-up of business offices in Slovenia and the preparations for the operative business in Slovakia.

Slovenia is that international market where BKS Bank is active for the longest time. Meanwhile Slovenia is one of the most important markets of BKS Bank. “Here we are well positioned. In the year 2010 a new branch in Ljubljana-Trnovo had been opened and our Maribor branch has moved to a new and larger business office. Currently we concentrate on the establishment of further branches”, Dr.Stockbauer reports. Altogether BKS Bank group employs in Slovenia 56 staff members as an annual average, thereof 8 in the leasing subsidiary. The 4 Slovenian branches hold a financing volume of EUR 428,7 mio. and achieved a net income of EUR 3,9 mio. The business volume of the leasing subsidiary BKS-leasing d.o.o. amounted to EUR 66,7 mio. on the record date.

In Croatia BKS Bank is represented by a leasing company – BKS-leasing Croatia d.o.o. – as well as in banking business by BKS Bank d.d.. BKS-leasing Croatia d.o.o. achieved with 10 employees a leasing volume of EUR 50,5 mio.. BKS Bank d.d. employed in the reporting year 52 staff members and achieved as at 31.12.2010 a balance sheet total of EUR 102,2 mio. compared to EUR 81,0 mio. the year before. The loan volume could be increased by 23,3 % to EUR 72,0 mio.- fortunately with a furthermore low impairment charge on loan risks. Additionally retail banking business was implemented in Croatia. “We are happy that with these figures BKS Bank d.d. belongs to the fastest growing banks in Croatia”, explains Dr.Stockbauer.

“In Slovakia the first branch had been registered in Bratislava on November 1st, 2010 and the operative business has already been started”, Dr.Stockbauer comments activities in Slovakia.

Concerns about numerous regulations

The pleasing figures of BKS Bank cannot change the fact that in the meantime an uncoordinated mass of regulations has become a real threat for banks.

“We understand that banks have to contribute to the overcoming of the economic crises, but also banks’ capacities are limited. Because in summing up all measures Austrian banks are struck in an oversized way. Bank tax, price gain taxation, Basel III, revision of deposit protection and the increasing administrative expenses represent an enormous burden for banks” outlines Dr.Stockbauer. “Bank tax alone affects us with about EUR 1,7 mio.”

Finally she adds “Bank tax will weaken Austrian banks in an international comparison, as this tax above all is in conflict with the higher provision with capital resources requested by Basel III. In the presented form Basel III will have a significant impact on loan business and will definitely have an adverse effect on the economy’s supply with loans.”

Engaged throughout the bank

Responsible economic activity carries advantages for all partners, says BKS Bank’s credo. For this reason the institute gets involved in diverse areas far beyond its legal obligations. “Corporate Social Responsibility (CSR) is not a fair weather topic within BKS Bank”, board member Dr.Herta Stockbauer explains the strong engagement in different areas. Below see a small summary:

…..for its employees

Since November 2010 BKS Bank is bearer of the national quality label “berufundfamilie” (profession and family). The auditing gives participating employees the possibility to engage themselves actively in becoming an “attractive employer”. This implies among other things support with the caring of family members, coaching in crisis situations, child care, an optimized management of maternity leave, and much more.

Furthermore health minister Alois Stöger awarded a seal of quality to BKS Bank for its internal health promotion policy in the year 2010.The effective adjustment of the health programme for employees was especially accentuated within the handing over ceremony.

….for society

“Active responsibility” is the device for BKS Bank’s Annual Report. Colours, print finishing and a costly binding had been waived. With the saved expenses amounting to EUR 10.000,-- the SOS Kinderdorf in Moosburg/Carinthia had been supported in their changeover to an ecologically sensitive version of heating.

Meanwhile since 5 years BKS Bank is the initiator of TRIGOS – the ‘award for responsible enterprises’ in Carinthia and Styria. In 2010 there were more applications for the award in Carinthia as well as in Styria than ever before – a sign that the consequent positioning of the price bears fruits and the effect as an ideal of the up to now awarded enterprises has a significant influence on other enterprises.
The award is assigned in the categories working environment, society, market and ecology.

Forecast 2011 – Furthermore responsible growth

“We are looking confident into the future and adhere to our responsible growth strategy. This is only possible because of our excellent capital resources. Our core capital ratio amounts to 9,6 % which is more than twice as high as legally required. Also for 2011 we expect a volatile economic environment. We will keep our solid cost management and will continue acting with caution as far as loan growth is concerned.
Above all we will bring forward the consequent reduction of foreign currency loans”, board member Herta Stockbauer comments.

Further Information:
Ms. Claudia Wolfahrt, BKS Bank-Public Relations
T:  0463/5858-373,
M: 0664/805 567 234
E: claudia.wohlfahrt@bks.at