STATISTIKEN SPECIAL ISSUE - BANKING STATISTICS YEARBOOK FOR 2007 - OENB
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OESTERREICHISCHE NATIONALBANK
EUROSYSTEM
STATISTIKEN
Special Issue
Banking Statistics Yearbook for 2007
Stabilty and Security. July 08Contents
Preface 4
I. Changes in Reporting for Banking Statistics in 2007 5
1 The New Risk-Oriented Reporting System ROM 5
1.1 Reporting of Intragroup Transactions of Financial Conglomerates 7
1.2 New Reporting Requirements to the ECB on Euro Banknote Recycling 8
II. Reporting Obligation to International Organizations 9
1 Consolidated Banking Data 9
2 ECB Blue Book Data 9
3 Financial Soundness Indicators 10
III. Structural Developments in Austrian Banking in 2007 11
1 Banking Office Development 11
2 Development of Employment in Banking 12
IV. Economic Developments in Austrian Banking 14
1 Business Activities of Banks Reporting to the OeNB – Unconsolidated Results 14
1.1 External Business Remains the Driving Force behind Asset Growth 15
1.2 Time Deposits Push Total Deposit Growth 16
1.3 Slowdown in Foreign Currency Lending Intensifies 17
2 Profitability of Banks Operating in Austria – Unconsolidated Results 18
2.1 Operating Profits 2007 18
3 Profitability of Banking Groups that Prepare Consolidated Financial Statements in Accordance
with Articles 59 and 59a of the Austrian Banking Act 20
4 Interest Rate Developments 22
4.1 Lending Rates – New Business 22
4.2 Lending Rates – Outstanding Amounts 22
4.3 Deposit Rates – New Business 23
4.4 Deposit Rates – Outstanding Amounts 23
5 Developments in the Building and Loan Associations Sector 24
6 Development of Mutual Funds 24
7 Development of Money Market Funds 25
8 Development of Severance Funds 26
9 Development of Pension Funds 26
2 STATISTIKEN SPECIAL ISSUE JULY 08V. Tables and Charts 28
1 Changes in the Banking Structure in 2007 28
2 Internationalization Indicators 35
3 Tables and Charts for Each Survey 41
VI. Publications of the OeNB’s Supervisory and Monetary Statistics Division in 2007 62
1 Information Folders 62
2 Press Releases 62
3 Reports Published in the OeNB’s “Statistiken – Daten & Analysen” Series 63
3.1 Analyses 63
3.2 Brief Papers 64
4 Other Publications 64
4.1 Bank Archiv – Zeitschrift für das gesamte Bank- und Börsenwesen 64
4.2 Magazine „Industrie aktuell“
(published by the Austrian Institute for Industrial Research – IWI) 64
4.3 Magazine „Steuer und Wirtschaftskartei“ (SWK) (published by Lindeverlag) 65
4.4 Brochure of the Landesbank Baden-Württemberg 65
VII. Overview of the OeNB’s “Statistiken – Daten & Analysen” Series 66
STATISTIKEN SPECIAL ISSUE JULY 08 3Preface
The OeNB’s statistical publications business developments and profitability
include the quarterly series “Statistiken performance as well as retail interest
– Daten & Analysen” (in German, with rate developments, but also focuses on
an English executive summary) and structural changes, e.g. in the number
special issues on selected statistical of banking offices and in sector
topics. employment. The OeNB has been pub-
This yearbook provides information lishing such a comprehensive overview
about developments in banking statis- about statistical developments in the
tics, including changes in prudential Austrian banking sector yearly in
reporting, in 2007 and sheds light on German since 2003 and with this issue
the current state of the Austrian for the first time provides a translation
banking sector. It not only highlights into English.
4 STATISTIKEN SPECIAL ISSUE JULY 08I. Changes in Reporting for
Banking Statistics in 2007
A new supervisory reporting system featuring extended coverage and greater risk sensitivity Patrick Thienel1
went into effect in Austria on January 1, 2007. The introduction of this system – the risk-
oriented reporting system ROM – represents the most far-reaching overhaul of banks’
reporting to the Oesterreichische Nationalbank (OeNB). Moreover, starting from June 30,
2007, limits on risk concentration within a financial conglomerate have had to be reported
to the OeNB. In compliance with provisions of the European Central Bank (ECB), the OeNB
introduced a report on cash transaction data: It obligates professional cash handlers involved
in cash recycling activities to report data on cash handling equipment and transactions using
such equipment to the OeNB semiannually from mid-2007.
1 The New Risk-Oriented ing groups that prepare financial state-
Reporting System ROM ments under the International Financial
Austria’s high banking density is a major Reporting Standards (IFRS) (Financial
reason why off-site analysis hand in Reporting – FINREP). Moreover, the
hand with a relatively comprehensive system was to cover the reporting
prudential reporting system play an im- requirements for the newly developed
portant role in Austria. This contrasts quantitative risk assessment models for
with the supervisory practice in many off-site analysis in Austria. Last but not
other countries where a few large bank- least, the redesign of the reporting sys-
ing groups are frequently subject to tem was to account for the new frame-
permanent on-site inspection. An work conditions in the domestic
essential input into banking supervisory banking industry. In future there will
activities, prudential reporting is thus be a stronger focus on the compi-
required to provide Financial Market lation of data from banking groups and
Authority (FMA) and OeNB officials foreign subsidiaries as well as of detailed
responsible for banking supervision risk information. Following intense
with high-quality data about develop- negotiations with industry representa-
ments and changes in the banking tives and representatives of Austrian
structure. banks, agreement on the main features
When the new international capital of the new ROM reporting system was
requirements known as Basel II and finally reached at the beginning of 2006.
effective from 2007 were still at While the frequency of banks’
the discussion stage, the OeNB cooper- reporting unconsolidated financial
ated with the FMA on a project enti- statement and participating interest
tled “Risiko-orientiertes Meldewesen data was reduced from monthly to
(ROM).” This project, which was quarterly reports, the additional report-
launched in mid-2002, was aimed at ing requirements increased the data
adapting the supervisory reporting sys- volume considerably.
tem for banks. ROM was to meet the From 2007 onward, the old monthly
data requirements for Basel II (Com- balance sheet reports (monthly reports)
mon Solvency Reporting – COREP), and quarterly profit and loss reports
which were at least partly harmonized (quarterly reports) were phased out and
throughout the EU, as well as for bank- replaced by the asset, income and risk
1
The author thanks the staff of the Supervisory and Monetary Statistics Division for valuable input.
STATISTIKEN SPECIAL ISSUE JULY 08 5Changes in Reporting for Banking Statistics in 2007
Structure of the New ROM Supervisory Reporting System
Frequency Unconsolidated Consolidated Banks’ foreign subsidiaries Bank’s foreign branches
Ad hoc Master data
Monthly Central Credit Register Report on compliance with
(GKE), report on compliance regulatory standards (ONA)
with regulatory standards – overview
(ONA) – overview
Quarterly Asset, income and risk state- Asset, income and risk state- Asset, income and risk Asset statement
ment (VERA), ment (VERA) under Article statement (VERA)
report on compliance with 59 and 59a Banking Act, under Article 59 and 59a
regulatory standards (ONA) report on compliance with Banking Act
– details regulatory standards (ONA)
– details
Annual Annual financial statements, Loss data according to the
external auditors’ prudential annual financial statements
report + report on hidden (at the highest consolidation
reserves level)
statement (Vermögens-, Erfolgs-, und Asset Statement
Ririkoausweis – VERA) and the report This report details banks’ assets and
on compliance with regulatory standards liabilities as well as their off-balance
(Ordnungsnormenausweis – ONA). sheet activities (broken down by
A detailed overview of the new ROM domestic/foreign and euro/foreign
reporting structure is presented below: currency activities and by economic
sectors). It corresponds to a quarterly
Master Data Report preliminary balance sheet based on a
Master data are the basis of every statis- bank’s accounting records. Supervisors
tical report. Banks must immediately use these data to analyze corporate
notify the OeNB of any change in their structure and business activity.
master data – their address, bodies,
approaches to calculating the solvency Income Statement
ratio and the like. This report provides a detailed prelimi-
nary overview of a bank’s earnings and
Asset, Income and Risk Statement expenses. It is filed quarterly based on a
This report collects data from individual bank’s accounting records. Supervisors
banks, partly from foreign branches, use these data to monitor intrayear
and banking groups as well as fully profit and loss developments.
consolidated foreign subsidiaries. Banks
may choose their accounting method Participations and Equity Interests
and may draw up consolidated financial This report collects data on banks’ par-
statements either according to inter- ticipating interests (assets) and equity
national accounting standards (e.g. IFRS) interests (liabilities) and thus provides
or according to the Banking Act (Bank- supervisors with insights into the par-
wesengesetz, BWG) and the Austrian ticipation and ownership structures of
Commercial Code (Unternehmens- Austrian banks.
gesetzbuch – UGB).
Depending on the scope of consolida- Credit Risk
tion, this report on banks’ condition and This report collects data about the
income comprises the following parts: quality of banks’ credit portfolios.
6 STATISTIKEN SPECIAL ISSUE JULY 08Changes in Reporting for Banking Statistics in 2007
Equity Risk ance with specific legal provisions and
This report collects data about banks’ risk assessment methods. It serves to
stock portfolios broken down by markets. control the factual accuracy of the
statements and valuation methods as
Residual Maturity and Country Risk well as compliance with the relevant
This report provides a more precise legal provisions.
assessment of banks’ liquidity risk based
on residual maturities as well as a break- Report on Hidden Reserves
down of claims on foreign debtors This report documents the existence of
including a presentation of ultimate risk. hidden reserves and losses, their struc-
It thus serves to capture international in- ture and the consequent audit result of
terlinkages and banks’ country risk. the bank auditors.
Moreover, since 2007, this report has
included information about foreign cur- Report on Loss Data
rency loans broken down by currencies This yearly report documents losses
and about repayment vehicles. resulting from operational risk.
Interest Risk 1.1 Reporting of Intragroup Transac-
This report, which collects data on tions of Financial Conglomerates
banks’ interest rate risk profile, serves On April 1, 2007, the FMA’s Regulation
as a basis for supervisory control of on Reporting and Limiting of Risk
interest rate risk. Concentration and Reporting of Intra-
group Transactions of Financial Con-
Report on Compliance with Regulatory glomerates went into effect. Reporting
Standards under this regulation began on June 30,
This report serves to monitor compli- 2007. The legal basis for reports is the
ance with the regulatory standards Financial Conglomerates Act (Finanz-
laid down in Articles 22 to 22q, 23 konglomerategesetz – FKG), which
to 25, 27 and 29 Banking Act, provi- stipulates reporting to the FMA and
sions which are intended to limit risk. the OeNB at quarterly intervals under
It collects data on solvency (i.e. compli- Article 14 paragraph 3.
ance with Basel II minimum capital The reporting regulation covers
requirements), own funds, liquidity, proof of capital adequacy at the
large exposures and participating financial conglomerate level, compli-
interests in nonfinancial institutions. ance with risk concentration limits
Data are collected both at the individual under Article 9 Financial Conglo-
bank level and at the consolidated level merates Act (by analogy to the report-
for groups of credit institutions ing of large exposures by banks) and
according to Article 30 Banking Act. reporting of intragroup transactions
under Article 10 Financial Conglo-
Annual Financial Statements merates Act.
This report corresponds to an Austrian On December 31, 2007, four financial
bank’s consolidated and unconsolidated conglomerates were subject to the
annual accounts audited by a bank auditor. reporting requirement:
• Bausparkasse Wüstenrot AG
External Auditors’ Prudential Report • Erste Bank der Oesterreichischen
This report contains bank auditors’ Sparkassen AG
comments on audited banks’ compli- • Grazer Wechselseitige Versicherung AG
STATISTIKEN SPECIAL ISSUE JULY 08 7Changes in Reporting for Banking Statistics in 2007
• Raiffeisen Zentralbank Österreich AG2 banknotes in circulation and to take
Pursuant to Article 14 paragraph 3 appropriate action.
Financial Conglomerates Act, the By collecting data, the ECB and the
OeNB must provide the FMA with NCBs are able in particular to
expert opinions on the reports submit- • determine who is involved in bank-
ted to the FMA. By analogy to the note recycling,
monitoring of banks’ compliance with • compare the unfit rates of individual
the Banking Act, the OeNB provides a professional cash handlers in order to
table indicating financial conglomerates’ analyze the functioning of their
noncompliance with the Financial fitness sorting activities and
Conglomerates Act. On December 31, • identify issues that may require
2007, all financial conglomerates clarification by NCBs, e.g. in the
fulfilled the capital adequacy provision form of on-site visits.
under Article 6 Financial Conglomer- To this end, the OeNB developed a
ates Act. system to collect data from professional
cash handlers, such as banks, cash in
1.2 New Reporting Requirements transit companies and bureaux de
to the ECB on Euro Banknote change. Since banks represent the bulk
Recycling of the reporting entities, the OeNB’s
In January 2006, the ECB introduced Supervisory and Monetary Statistics
new reporting requirements for national Division in April 2007 took charge of
central banks (NCBs) under the capturing and processing the data,
Banknote Recycling Framework. The given that it fulfills the appropriate
NCBs must for instance collect infor- organizational and technical require-
mation about recycling and cash centers, ments. The responsibility for the con-
statistics on the volume of cash opera- tent of the related statistics, however,
tions and information about the cash remains with the OeNB’s Cashier’s
handling machinery used for checking Division.
euro banknotes for authenticity and The reporting entities must provide
fitness for circulation. operational data on banknote recycling
The overarching goal of capturing semiannually to the OeNB. Also, they
such data is to enable the Eurosystem, must notify the OeNB of any changes
which is responsible for issuing euro in reporting entities’ master data within
banknotes, to continuously monitor three months. Banks and other profes-
banks’ and other professional cash sional cash handlers may report data
handlers’ banknote recycling activities to the OeNB using an online portal
in order to assess the quality of (www.myoenb.at).
2
Raiffeisen Zentralbank Österreich AG was subject only to the capital adequacy reporting requirement on
December 2007.
8 STATISTIKEN SPECIAL ISSUE JULY 08II. Reporting Obligation to International
Organizations
In 2007, the OeNB provided the ECB with monetary statistics, the Bank for International
Settlements (BIS) with data about the regional breakdown of claims and liabilities, and the
OECD with information about the structure of the financial system. In addition, the OeNB
submitted consolidated data about banks’ profitability, balance sheets and solvency as well
as supplementary prudential data to the ECB within the consolidated banking data (CBD)
framework. Also, the OeNB sent comparative economic data, data on payment systems and
data on securities trading, clearing and settlement systems to the ECB as input for the pub-
lication “Payment Systems in the European Union” (the “Blue Book”). Finally, the OeNB
transmitted data on financial soundness indicators (FSI), which serve to present countries’
financial stability, to the IMF.
1 Consolidated Banking Data ment systems (e.g. on volumes and
Consolidated data on banks’ profitabil- turnover) are published in the Blue
ity, balance sheets and solvency as well Book. Additionally, the data are broken
as supplementary prudential data are down by euro area and non-euro area
reported annually by the OeNB for countries. The data for these statistics
Austria on request of the Working are compiled in close cooperation with
Group on Macro-Prudential Analysis EU central banks.
(WGMA) of the European System of
Central Banks (ESCB). The OeNB sub- ECB Guideline
mitted all consolidated banking data as The EU-27 central banks used to deliver
at December 31, 2006, in time in the data for the ECB’s Blue Book to the
summer 2007. ECB by on a voluntary basis. To under-
The introduction of Basel II and pin the collection of data from central
the implementation of the new ROM banks with a legal basis, the ECB
risk-oriented reporting system in Aus- adopted the recast Guideline on mone-
tria entailed substantial adjustments in tary, financial institutions and market
data content and of technical aspects to statistics (ECB/2007/9) on August 1,
meet future consolidated banking data 2007. This guideline is the basis for the
reporting requirements. delivery of data to the ECB.
Article 17 of this guideline details
2 ECB Blue Book Data the provisions applicable to the report-
Smooth Handling of Data Trans- ing of payment statistics data, stating
mission that data on payment transactions and
Within the framework of the Blue Book structure and related information on
data project, the OeNB successfully monetary financial institutions’ balance
transmitted all data for central coun- sheet items and structural information
terparty clearing statistics and for secu- on credit institutions must be submit-
rities settlement systems statistics to ted in accordance with electronic
the ECB in April 2007. reporting standards set out by the ECB.
Basic economic reference data (e.g. Moreover, the guideline details the
GDP and HICP data), data about pay- scope of reporting, the reporting
ment systems (e.g. on the value and frequency and deadline, the revision
volume of transactions), and data about policy, back data reporting and the require-
securities trading, clearing and settle- ments for electronic transmission.
STATISTIKEN SPECIAL ISSUE JULY 08 9Reporting Obligation to International Organizations
3 Financial Soundness Indicators pilation Exercise (CCE) at its head-
At the beginning of August 2007, the quarters in Washington D.C. The
OeNB transmitted data on financial meeting was aimed at drawing conclu-
soundness indicators (FSIs), which sions from the CCE and provided a
serve to present countries’ financial forum to exchange views and discuss
stability, to the IMF. These indicators the way forward among IMF represen-
may be retrieved from the Internet by tatives and coordinators.
interested users across the world. The At this meeting, the OeNB had
FSIs contain credit institution data called for closer cooperation on data
about profitability, balance sheets and transmission between the IMF, the
solvency, data of other financial institu- ECB and the OECD to contain the
tions, nonfinancial corporations and administrative burden. To ensure con-
households as well as data on market tinuity and comparability, the OeNB
liquidity and the real estate market. also suggested leaving the valid frame-
These data are compiled in conformity work unchanged. The IMF is consider-
with Basel I, Basel II and IFRS provisions. ing introducing a quarterly reporting
In May 2007, the IMF held a meet- frequency rather than the current an-
ing for coordinators of the countries nual frequency of transmission of FSI
participating in the Coordinated Com- indicators.
10 STATISTIKEN SPECIAL ISSUE JULY 08III. Structural Developments in Austrian
Banking in 2007
After personnel figures had been on the rise in recent years at Austrian banks, the number
of banking offices also rose marginally (by 6) in 2007. At the end of 2007, there were
870 head offices and 4,286 branch offices in Austria. The number of employees in the
Austrian banking sector increased by 1,519 to 79,180.
1 Banking Office Development outcome of the establishment of 53 new
The figures below are based on the date banking offices and the closure of 47
of licensing of head offices and of noti- banking offices.
fication of the establishment in Austria In a regional breakdown, Vienna
of branch offices of foreign banks. The had 22 new establishments, Tyrol 8,
actual beginning of operations may well Lower Austria 6, Styria 5, Upper Aus-
differ from this date. tria and Carinthia 4 each, and Salzburg
In the course of 2007, the degree of and Vorarlberg 2 new banking offices
concentration of Austrian banking each. In Vienna 21 banking offices were
offices augmented, as in the preceding closed, in Upper Austria, Tyrol and
years. The number of head offices Lower Austria 5 each, in Salzburg 4,
declined by 1 to 870 from the end of in Styria and Carinthia 3 each and in
2006, a change that resulted from 11 Burgenland 1.
mergers (among Raiffeisen credit coop-
eratives), one license relinquishment Number of Inhabitants per Banking
(among Volksbank credit cooperatives), Office Declines Marginally
1 closure (of a main office established Assuming a constant number of inhab-
under Article 9 Banking Act) and 12 itants, the number of inhabitants per
new establishments (of 3 joint stock banking office diminished from 1,611
banks, 3 special purpose banks, 3 main to about 1,610.
offices established under Article 9 Bank- The comparable values for Germany
ing Act, 1 spinoff among mortgage (some 2,250) and Switzerland (some
banks, 1 Internet bank and 1 factoring 2,135) are higher.
bank in the Raiffeisen sector). In the
same period, the branch office network Number of Branch Offices Abroad
expanded by 7 branch offices in Austria. Rises
The total number of banking offices of
Trend Change in Banking Office Austrian banks abroad increased by
Numbers 29 to 159. In a breakdown, on Decem-
The number of banking offices expanded ber 31, 2007, Austrian banks operated
in 2007 for the first time since 1992, 105 branch offices (+27) and 54 repre-
thus marking a trend reversal. From sentative offices (+2) abroad. The num-
end-December 2006 to end-December ber of banking offices abroad with
2007, the number of banking offices Austrian majority ownership augmented
grew by 6 to 5,156. This change is the by 12 to 92.
STATISTIKEN SPECIAL ISSUE JULY 08 11Structural Developments in Austrian Banking in 2007
2 Development of Employment magnitudes. The decline in the case of
in Banking special purpose banks resulted from
Rise in Employee Numbers the shift of Investkredit Bank AG to the
The number of employees3 in Austrian Volksbank credit cooperative sector
banks augmented by 1,519 persons and was a key reason that this sector
from 77,661 (+1.9%) to 79,180 (of posted a 9.4% increase. In absolute
which 980 were employees on low figures, the Raiffeisen sector recorded
earnings) from December 31, 2006, to the biggest enlargement (+660 or
December 31, 2007. The rise occurred +2.8%) of employee figures. Banking
in nearly all sectors, joint stock banks, offices established under Article 9
private banks and special purpose banks Banking Act displayed the largest per-
being the exception. centage increase in employee figures
Broken down by the type of employ- (+10.0%). Other sectors with note-
ment contract, the total increase of 1,519 worthy increases were the savings
was distributed as follows: full-time banks sector (+2.6%), the state mort-
employees (+888 or +1.4%), part-time gage bank sector (+2.4%) and the
employees (+623 or +4.3%) and employ- building and loan association sector
ees on low earnings (+8 or +0.8%). (+4.8%).
1.2% of all Austrian banking jobs There were no important changes
were filled with employees on low in the breakdown of employees by prov-
earnings at year-end 2007. The total inces in 2007. The share of employees
number of such jobs came to 980, working for branch and representative
40.0% of which were at joint stock offices of Austrian banks abroad wid-
banks and private banks. 746 or more ened by 376 (+0.4 percentage points)
than three-quarters of the employees to 2.2% (1,770). As in previous years,
filling these positions were women. Vienna accounted for just over a third
52.9% of the new full-time posi- (33.9%) of all bank employees.
tions were filled by men, whereas
90.9% of the new part-time jobs were See also:
held by women; moreover, women Table 1 New Head Office Establishments in 2007
filled all new low-earnings positions. Table 2 Head Office Closures in 2007
In full-time equivalents,4 banks em-
Table 3 Head Office Mergers in 2007
ployed 68,221 persons at end-2007.
This represents a rise by 1,714 persons Table 4 Name Changes of Head Offices in 2007
(+2.6%) from end-2006.
Table 5 Changes in Foreign Branches of Austrian
Banks in 2007
Employee Figures Expand in the
Raiffeisen Sector Table 6 Changes in Fully Consolidated Foreign
Subsidiaries in 2007
In a sectoral breakdown, joint stock
banks and private banks (–0.7%) and Table 7 Changes in Foreign Representative Offices
special purpose banks (–5.9%) showed of Austrian Banks in 2007
a decline in employee figures. The Table 8 Changes in Austrian Representative
other sectors displayed rises of various Offices of Foreign Banks in 2007
3
Austrian banks subject to reporting requirements are requested to file year-end employment statistics (total number
of employees – including part-time staff, persons on paid leave and on sabbaticals, persons doing compulsory
military service, excluding blue-collar workers). As of 2005, these figures include employees on low earnings.
4
Banks’ income statements reported to the OeNB include blue-collar workers.
12 STATISTIKEN SPECIAL ISSUE JULY 08Structural Developments in Austrian Banking in 2007
Table 9 Representative Offices of Austrian Banks Table 15 Number of Banks in Austria as at
Abroad December 31, 2007
Table 10 Branch Offices of Austrian Banks Chart 1 Number of Banking Offices Rises Again
Abroad
Table 16 Share of Men and Women Working Full-
Table 11 100% Foreign-Owned Banks in Austria Time and Part-Time at Austrian Banks
Table 12 50% to under 100% Foreign-Owned Chart 2 Trend toward a Rise in Employees (in
Banks in Austria Headcount Figures and in Full-Time Equivalents)
Continues
Table 13 25% to under 50% Foreign-Owned
Banks in Austria
Table 14 Branch Offices of Foreign Banks in
Austria
STATISTIKEN SPECIAL ISSUE JULY 08 13IV. Economic Developments in Austrian
Banking
Norbert Schuh5 Despite international financial turbulence, total asset growth of banks reporting to the
OeNB reached a record high, as did operating profits. Still, a minor impact of the turbulence
can be discerned in certain segments.
Total asset growth hit a ten-year peak. On the asset side, external business was the
main driver of growth as in recent years. On the liabilities side, time deposits posted the
highest increase, which may be partly a result of the international financial crisis: It seems
that banks have increasingly turned to this source of funding because of unfavorable money
market conditions. Consequently, deposit growth reached its highest rate by far over the
past ten years. Austrian banks’ domestic issues also continued to gain importance.
Foreign currency lending decelerated even more than in the past, so that total lending
growth continued to decline even though lending in euro increased markedly in 2007. The
OeNB’s new foreign currency loans statistics offers fresh insights into the risk potential faced
by households and nonfinancial corporations.
Unconsolidated operating profits reached a record high. On the earnings side, this
development was ascribable to a strong rise in dividend payments by affiliates and a steady
increase in fee-based income. Even though growth in net interest income accelerated, its
contribution to operating profits continued to decline. Since 2001, external business has
been the only segment to post increases in net interest income, which is partly attributable
to the fact that Austrian banks’ net external assets have been rising since end-2004; this
means that domestic deposits are used to fund loans to nonresidents. As in recent years,
foreign subsidiaries continued to further boost group profitability of large credit institutions
operating in Austria.
As a consequence of the international financial crisis and the upturn in money market
rates, retail interest rates for new and existing loans rose faster than the two increases in
key ECB interest rates would have suggested. The high share of variable rate loans implied
that Austrian customers’ interest rate advantage narrowed in several loan segments.
The financial market turmoil also affected the mutual fund business, which was charac-
terized by strong net capital outflows in the second half of 2007. Assets invested in money
market funds went up in the full-year 2007, but declined in the second half of the year.
While pension funds were also affected by financial market uncertainty, severance
funds continued to develop dynamically.
1 Business Activities of Banks ble-digit rates were recorded only in
Reporting to the 1998 (10.3%) and 2005 (11.2%).
OeNB – Unconsolidated Results As in recent years, external business
At end-2007, unconsolidated total made the largest contribution to total
assets of banks reporting to the OeNB asset growth, with external assets rising
came to EUR 899.54 billion, thus by EUR 57.48 billion (+19.6%), and
almost reaching the EUR 900 billion claims on nonresidents increasing the
mark. At EUR 101.78 billion, total most (+28.4%).
asset growth exceeded the EUR 100 On the liabilities side, the fastest-
billion mark for the first time; this growing instruments were time depos-
corresponds to an annual growth rate its (+51% or EUR 13.73 billion) and
of 12.8% in 2007 – the highest rate Austrian banks’ domestic issues to non-
observed over the past ten years. Dou- banks (+24.2% or EUR 18.61 billion).
5
The author would like to thank the staff of the OeNB’s Supervisory and Monetary Statistics Division for valuable
input.
14 STATISTIKEN SPECIAL ISSUE JULY 08Economic Developments in Austrian Banking
In recent years, securities have steadily international comparisons) dropped by
gained in importance as a source of more than 1 percentage point to 43.3%.
funding. Their share in total liabilities Austria’s ten largest banks ranked
climbed by 2.3 percentage points to in terms of their total assets as at
10.6% over the past three years. The December 31, 2007, are listed below:
surge in time deposits seems to be
linked with the financial turmoil. Given 1. Bank Austria Creditanstalt AG
the higher cost of refinancing in the 2. Erste Bank der oesterreichischen
money market, banks chose to raise Sparkassen AG
(partly significantly) their interest rates 3. Raiffeisen Zentralbank Österreich
on such deposits, and so many market Aktiengesellschaft
participants decided to invest part of 4. BAWAG P.S.K. Bank für Arbeit
their capital in time deposits as an in- und Wirtschaft und Österreichische
terim solution in view of the financial Postsparkasse Aktiengesellschaft
market uncertainty. The sharp acceler- 5. Oesterreichische Kontrollbank Ak-
ation in time deposit growth in the tiengesellschaft
second half of the year (+EUR 9.0 bil- 6. ÖsterreichischeVolksbanken-Aktien-
lion), which is almost twice as fast as in gesellschaft
the first half-year (+EUR 4.7 billion), 7. Kommunalkredit Austria AG
confirms this assumption. 8. Hypo Alpe-Adria-Bank International
Total assets of all banking sectors AG
increased in 2007. Raiffeisen credit 9. Raiffeisenlandesbank Oberöster-
cooperatives registered the strongest reich Aktiengesellschaft
growth in total assets (+12.5% or EUR 10. Raffeisenlandesbank Niederöster-
24.58 billion), followed by joint stock reich-Wien AG
banks (+16.9% or EUR 20.96 billion).
Total asset growth was lowest for build- 1.1 External Business Remains the
ing and loan associations (+1.8% or Driving Force behind Asset
EUR 0.37 billion). Growth
At end-2007, joint stock banks held While the growth rate of external
the largest market share (27.9%) in assets remained at almost the same level
terms of total assets, followed by Raif- as in the previous year (19.4% in 2006
feisen credit cooperatives (24.7%) and against 19.6% in 2007), that of exter-
savings banks (16.7%). State mortgage nal liabilities halved from 10.5% in
banks registered a market share of 2006 to 5.4% in 2007.
9.8%, special purpose banks 9.7%, As a result of this divergent devel-
Volksbank credit cooperatives 7.7%, opment, Austrian banks’ net external
building and loan associations 2.3% and assets surged by EUR 43.38 billion
branch offices established under Article to EUR 77.65 billion. At end-2007,
9 Austrian Banking Act 1.2%. external assets came to EUR 351.01
At end-2007, the market share of billion and accounted for 39.0% of total
Austria’s ten largest banks came to assets, while external liabilities stood at
56.4% in terms of total assets and was EUR 273.35 billion and accounted for
thus only marginally lower (–0.1 per- 30.4% of total liabilities. Some three
centage points) than at end-2006. The years ago, Austrian banks’ net external
ranking of the top ten banks remained assets still matched net external liabili-
the same as in 2006. The share of the ties: At the end of September 2004,
five largest banks (which is used in external business accounted for some
STATISTIKEN SPECIAL ISSUE JULY 08 15Economic Developments in Austrian Banking
31% of the totals on both sides of the from sight deposits to time deposits was
balance sheet. observed at direct banks. Savings
In the second half of 2007, how- deposits grew at a considerably slower
ever, external business growth slowed pace, rising by 4.5% to EUR 146.12
down, so that the share of external billion. Still, growth was twice as fast
transactions declined by 0.6 percentage as in 2006 or on average in the five-year
points on the asset side and by 1.7 per- period from 2002 to 2006. 2001 has
centage points on the liability side. been the only year since 1996 in which
Claims on foreign nonbanks, at savings deposits grew at a comparable
around EUR 104 billion, represented pace (4.8%) as in 2007. While savings
just under 30% of external assets, but deposits remained the most popular
accounted for some 50% of external deposit category, their share dropped
asset growth in 2007. While German below 60% (56.6%) for the first time.
nonbanks accounted for the largest share Time deposits climbed by 4.1 percent-
(17.7%), borrowers from Austria’s six age points, reaching a share of 15.8%,
most important business partners in whereas sight deposits stagnated at
Eastern and Southeastern Europe (Croa- around 28%.
tia, Czech Republic, Romania, Poland, Time deposit growth was strong in
Slovenia, Hungary) taken together almost all banking sectors, with joint
accounted for more than one-third stock banks posting the highest increase
(34.3%) in claims on foreign nonbanks. (+EUR 6.55 billion), followed by
Raiffeisen credit cooperatives (+EUR
1.2 Time Deposits Push Total De- 2.79 billion) and savings banks (+EUR
posit Growth 1.40 billion).
Total deposits with banks reporting This spectacular growth may well
to the OeNB came to EUR 258.21 be associated with the international
billion at end-2007, which is a sharp financial turmoil. In light of the higher
increase by 11.7% or EUR 27.06 billion cost of refinancing in money markets,
against end-2006. This was by far banks raised their interest rates on time
the highest annual growth rate ever deposits partly significantly, and thus
recorded; the second-highest rate many market participants decided to
(7.8%) was observed in 2001. In 2006, temporarily invest part of their capital
total deposits grew by 4.7% or EUR in such deposits, given the uncertainty
10.40 billion. Despite their strong on financial markets. This assumption
growth, deposits continued to lose is also confirmed by the sharp accelera-
significance as refinancing vehicles in tion of time deposit growth in the
2007. Their share in total assets shrank second half of the year (+EUR 9.0
to 28.7%, down by almost 5 percent- billion), which was almost twice as fast
age points over the past five years and as in the first half of 2007 (+EUR
by even more than 10 percentage points 4.7 billion). Nonfinancial corporations
since 1995. accounted for around one-half of this
All deposit categories registered growth, while households and nonbank
positive growth in 2007, particularly financial intermediaries accounted for
time deposits, which posted the highest one-quarter each.
annual growth rate (51.0%) and reached In view of competition from direct
EUR 40.7 billion. Sight deposits also banks, Austrian banks also launched
increased quite markedly (by 10.9% to new products that allow households
EUR 71.41 billion), even though a shift to manage deposits with agreed matu-
16 STATISTIKEN SPECIAL ISSUE JULY 08Economic Developments in Austrian Banking
rity via the Internet. This type of euro-denominated loans for the remain-
investment had previously been avail- ing EUR 238.5 billion.
able to large customers only. As a result, The share of foreign currency lend-
direct banks’ deposit business grew at a ing dropped in all Austrian provinces,7
slower pace (+11.1%) than that of all with the decline being most pronounced
banks (+11.7%) for the first time in in those provinces with the largest
years; their share in the total deposit shares: Vorarlberg saw a decrease by
business came to 1.9% at end-2007. 6.3 percentage points to 34.5%, still
Moreover, a shift from sight deposits to the largest share at end-2007, followed
time deposits was observed at direct by the Tyrol (–5.5 percentage points to
banks: Their time deposit volume 23.8%), Carinthia (–3.1 percentage
tripled to around EUR 1 billion in points to 18.0%), and Styria (–3.5 per-
2007, partly at the expense of sight centage points to 17.3%). Lower Aus-
deposit growth. tria (–2.9 percentage points to 16.8%)
and Vienna (–1.1 percentage points to
1.3 Slowdown in Foreign Currency 15.1%) recorded levels around the
Lending Intensifies Austrian average.
Growth of euro-denominated loans Loans denominated in Swiss franc
more than doubled from 3.1% in 2005 (CHF) declined by EUR 5.9 billion,
to 6.8% in 2007. Still, growth of loans and thus by EUR 0.5 billion more
to domestic nonbanks continued to than all other foreign currency-denom-
decelerate from 5.0% in 2004 to 4.7% inated loans combined (EUR 5.4 bil-
in 2005, to 4.5% in 2006 and to 3.6% lion). Still, with a share of 88.5%, the
(EUR 9.9 billion) in 2007. The share of CHF remained by far the most impor-
loans in total assets (31.7% at end-2007) tant foreign currency. At end-2007,
thus declined by almost 7 percentage the outstanding loan volume denomi-
points since end-2004. nated in CHF came to EUR 41.6 bil-
The moderate development of bank lion. The volume of loans denominated
lending was attributable to a sharp decline in U.S. dollar (USD) – the second-most
in foreign currency lending in 2007.6 important currency – fell by EUR 0.5
After an increase by 11.1% in 2005, the billion to EUR 2.4 billion. By contrast,
volume of these loans decreased by the volume of loans denominated in
2.4% (EUR 1.3 billion) in 2006 and by Japanese yen (JPY) increased by EUR
10.3% (EUR 5.4 billion) in 2007. 0.2 billion to EUR 1.7 billion, while
As a result, the share of foreign that of other foreign currencies rose by
currency loans in total loans fell mark- EUR 0.8 billion to EUR 1.4 billion.
edly by 2.6 percentage points against The development of loans denominated
end-2006, reaching 16.3% at end-2007. in Czech koruna (CZK) was especially
Such a low share was last recorded in noteworthy: CZK-denominated loans
1999 (15.7%). Of the total loan volume expanded from a negligible level to
of EUR 285.1 billion, foreign currency EUR 0.9 billion, so that the CZK has
loans accounted for EUR 46.6 billion, become the fourth-most important
6
This figure was not adjusted for exchange rate effects; the decline was around ½ percentage point smaller when
adjusted for exchange rate effects.
7
The conclusiveness of comparisons between provinces is limited, because supraregionally operating banks are
always allocated to the head office location (BA-CA is, for instance, allocated to Vienna).
STATISTIKEN SPECIAL ISSUE JULY 08 17Economic Developments in Austrian Banking
foreign currency for loans in Austria. about EUR 1 billion higher than they
This rise seems to have come to an end, would have been otherwise. Another
however, as lending in CZK has stagnated factor is the investment risk associated
since October 2007. with repayment vehicles. Consequently,
In the course of 2007, outstanding the effective cost of a loan (principal
foreign currency loans to households plus interest rate payments) is only
came down by EUR 1.7 billion in determined at maturity.
absolute terms, but their share rose by
3.7 percentage points to 68.3%, as the See also:
Table 17 Business Activity of Banks in Austria
decline in foreign currency loans to the
other sectors was even more pro- Chart 3 External Business Accounts for Almost
nounced: The share of nonfinancial 35% of Unconsolidated Total Assets
corporations decreased by 3.2 percent- Chart 4 Share of Savings Deposits in Total Deposits
age points to 21.2% and that of other Reaches a Historical Low
monetary financial institutions (state Chart 5 Growth of Loans to Nonbanks: Euro
and nonbank financial intermediaries) Area Has Outpaced Austria
by 0.4 percentage points to 10.0%.
Chart 6 Euro-Denominated Lending Rises amid
This means that 28.2% of new house- Slumping Demand for Foreign Currency Loans
hold loans were denominated in foreign
currencies, but only 8% of new corpo- Chart 7 The CHF Remains by Far the Dominant
Loan Currency despite Declining Importance
rate loans.
Almost 70% of foreign currency Chart 8 Most Foreign Currency Loans Go to
loans to households are housing loans. Households
This share went up by 1.6 percentage Chart 9 Bullet Loans Linked to Repayment
points in 2007, and by more than 10 per- Vehicles Account for 75% of All Foreign Currency
centage points over the past ten years. Loans to Households
Since 2007, the OeNB’s new for- Chart 10 Bullet Loans Linked to Repayment
eign currency loans statistics can be Vehicles Extended to Households Will Reach
used to analyze the risk associated with Significant Levels in 5 to 7 Years
foreign currency loans for bullet loans Chart 11 External Assets by Country Groups
and repayment vehicles. While bullet (Ultimate Risk)
loans linked to repayment vehicles
account for almost 75% of all foreign 2 Profitability of Banks Operating
currency loans to households, they in Austria – Unconsolidated
Results
make up only around 20% of loans to
enterprises. This means that households 2.1 Operating Profits 20078
are particularly affected by high In 2007, unconsolidated operating
exchange rate risk and investment risk, profits of banks reporting to the OeNB
as for bullet loans, the exchange rate at reached a new record high of EUR 6.66
maturity determines the amount due in billion, thus exceeding the 2006 results
euro. The CHF appreciation by 3% in by 14.5% or EUR 0.85 billion. Operat-
January 2008 alone implies that, at this ing profit growth was mainly ascribable
exchange rate, repayments would be to a rise in operating income by 5.5%
8
The unconsolidated profits of banks reporting to the OeNB are based on data from the quarterly report of Decem-
ber 31, 2007. The following report draws on provisional and, in some cases, expected income data provided by the
credit institutions, as final income data (based on audited financial statement data) were not available at the
editorial close of this special issue.
18 STATISTIKEN SPECIAL ISSUE JULY 08Economic Developments in Austrian Banking
and a remarkably modest increase billion). Nevertheless, their share in
in operating expenses by 0.6%. This operating profits decreased by almost
development is also reflected in an im- 1 percentage point in 2007, compared
provement of the cost-to-income ratio with a decline by 9.3 percentage points
(CIR) by 3 percentage points to the best to 42.3% over the last five years.
result recorded so far (62%), after a The origin of net interest income
somewhat worse result in 2006 (65%) (EUR 7.40 billion) is especially note-
and the previous best result in 2005 worthy as more than 70% were gener-
(64.1%). In 2006, the trend of a con- ated abroad in 2007, compared with
tinuously improving CIR had been inter- less than 50% in 2006. Since 2001,
rupted due to a one-off allocation external business has been the only
to pension provisions. Owing to the source of net interest income growth.
release of these provisions, the extent While in 2000, only 15.9% of net
of the 2007 improvement is overstated. interest income had been earned
Between 2003 and 2007, the CIR abroad, its share already amounted to
dropped from 68.2% to 62.0%, by 70.7% in 2007. This development can
around 1 percentage point each year. be attributed to the fact that interest
This result is, however, in no way margins abroad are higher than in
exceptional by international standards. Austria and that Austrian banks’ net
The rise in operating income by external assets have surged since 2004.
EUR 0.91 billion to EUR 17.51 billion In Austria, the interest margin on
was mainly driven by income gains new business came to 0.77 percentage
from securities-related activities, but points – down from 1.74 percentage
also by growing interest income and points in January 2003 – which is about
fee-based income. one-half of the euro area average of
Income from securities and partici- 1.38 percentage points. Interest margins
pating interests surged by 22.3% or are even higher in the catching-up
EUR 0.64 billion to EUR 3.52 billion in economies of Eastern and Southeastern
2007, mainly backed by rising income Europe. This is why in 2004 (when
from shares in affiliated undertakings Austrian banks’ net external position
(+EUR 0.45 billion). The rise in income was almost balanced), external business
from shares, other equity as well as vari- had a share of around 30% in total
able-yield securities by EUR 0.16 billion assets but generated 40% of net interest
was primarily the result of high divi- income.
dend and profit participation payments. The significance of net external
The share of income from securities- assets for net interest income becomes
related activities in operating profits evident from the fact that, in 2007, net
climbed by 2.8 percentage points to external assets climbed by EUR 43.4
20.1 percentage points in 2007, com- billion to EUR 77.7 billion at year-end.
pared with a rise by 7.2 percentage This means that domestic deposits
points over the last five years. finance close to EUR 80 million of
Even though interest payable and claims on nonresidents. As a result, net
similar charges jumped to EUR 30.26 interest income generated abroad grew
billion (+36.3% or EUR 8.06 billion particularly fast by almost 50% in
compared with 2006), net interest in- 2007.
come growth tripled (+3.2%) in 2007, The net result of financial trans-
as interest receivable and similar income actions – a component that has in fact
rose even more strongly (+EUR 8.29 little impact on operating profits –
STATISTIKEN SPECIAL ISSUE JULY 08 19Economic Developments in Austrian Banking
clearly reflects the effects of interna- 3 Profitability of Banking Groups
tional financial market turbulence: The that Prepare Consolidated
net surplus on financial transactions Financial Statements in
shrank by 57.9% to EUR 0.29 billion. Accordance with Articles 59
On the positive side, net fee-based and 59a of the Austrian Banking
income rose again markedly in 2007, Act
reaching EUR 4.71 billion (+9.8% In 2007, interest income including risk
against 2006). The share of fee-based provisions of the 21 banking groups
income in operating profits thus that prepare their consolidated financial
increased by 1 percentage point to statements in line with the Interna-
26.8% in 2007, compared with a rise tional Financial Reporting Standards
by 4.9 percentage points over the last (IFRS; Article 59a of the Austrian
five years. Banking Act) or the Austrian Commer-
Operating expenses climbed by just cial Code (Unternehmensgesetzbuch –
EUR 0.06 billion to EUR 10.85 billion, UGB; Article 59 of the Austrian Bank-
owing to a sharp decline in other oper- ing Act) climbed to EUR 15.26 billion,
ating expenses and the release of pen- which is an increase of EUR 3.13 bil-
sion provisions. lion or 25.8% against 2006. In the same
Administrative expenses grew by period, interest income including risk
2.4% to EUR 9.17 billion in 2007 provisions collected by the respective
against 2006, mainly on the back of a parent banks rose by EUR 0.50 billion
rise in expenditure on goods and (+9.1%) to EUR 6.12 billion. This
services by 5.4% to EUR 3.70 billion. implies that the higher net interest in-
While staff expenses increased by come in 2007 could only be achieved
just 0.4% to EUR 5.47 billion in 2007 at the group level: In 2007, banking
because of the release of pension provi- groups’ interest income amounted to
sions, wages and salaries rose more EUR 11.72 billion and was thus some
markedly, reaching EUR 3.79 billion in 2.5 times higher than that of parent
2007 (+5.6% compared with 2006). banks (1.9 and 2.2 times higher in 2005
In the reporting year, depreciation and 2006, respectively).
of tangible and intangible fixed assets Operating income including risk
dropped by 5.2% to EUR 0.61 billion, provisions of banking groups reporting
continuing the trend of recent years, to the OeNB was EUR 21.06 billion,
and other operating expenses fell by that is EUR 3.54 billion or 20.2% higher
EUR 0.12 billion (–9.9%) to EUR 1.06 than in 2006. Parent banks posted a rise
billion. by 4.9% or EUR 0.39 billion to EUR
8.44 billion. The increase at group level
See also: was primarily sustained by high interest
Chart 12 Banks Operating in Austria Post Best and fee-based income. The decrease in
Result Ever for Cost-to-Income Ratio the “other operating result” UGB item
Table 18 Austrian Banks’ Profitability by 24.7% as at December 31, 2007, was
attributable to capital and valuation
Chart 13 Two-Thirds of Net Interest Income Gen- losses on securities. Trading income
erated Abroad in 2007
declined by 82%, which was the main
Chart 14 Declining Importance of Net Interest reason for the low growth in parent
Income banks’ operating income.
Chart 15 Income from Participating Interests In 2007, banking groups’ credit risk
Boosts Operating Profits provisions grew by 26.3% or EUR 0.57
20 STATISTIKEN SPECIAL ISSUE JULY 08Economic Developments in Austrian Banking
billion to –EUR 2.74 billion, against – 0.07 billion) to EUR 2.76 billion.
EUR 2.17 billion in the previous year. Depreciation of tangible fixed assets and
This growth can be ascribed to a higher other expenses came down by 10.8%
allocation to loan loss provisions at joint to EUR 0.99 billion year on year.
stock banks. Credit risk provisions rose Operating profits of banking groups
also at parent banks, namely by 10.4% reporting to the OeNB in compliance
to –EUR 1.25 billion. The lower need with IFRS or UGB requirements
for allocating credit risk provisions at augmented by 21.6% or EUR 1.24 bil-
parent banks can be partly explained by lion to EUR 7.01 billion in 2007 against
the fact that UGB requirements allow the previous year. Parent banks’ oper-
transferring unused loan loss provisions ating profits went up by 21.7% to EUR
to the profits and loss account, while 2.68 billion.
this is not permitted in the consolidated In 2005 and 2006, operating in-
statements prepared in line with IFRS. come of banking groups reporting to
Banking groups’ fee-based income the OeNB surged in relation to operat-
amounted to EUR 7.16 billion (+24.4%), ing expenses. Over that period, the
that of parent banks to EUR 2.49 billion CIR improved as well, for the first time
(+12.6% compared with 2006). Fee- dropping below 60% in 2006. As of
based income thus continued to grow December 31, 2007, the groups’ consoli-
steadily in 2007. dated CIR was 59.1%, thus improving
By contrast, trading income dropped by 0.7 percentage points against 2006.
sharply both at the banking group level After taxes and minority interests,
(–22.5% to EUR 0.80 billion) and, the groups’ period profit came to EUR
even more so, at the parent bank level 5.88 billion in 2007, down by 12.8%
(–82% to EUR 0.07 billion). This down- or EUR 0.86 billion on 2006. This
ward trend in trading income can be decline in consolidated annual profits
explained by the climate of uncertainty was the result of higher credit risk
and downturns on international capital provisions and the drop in trading
markets in 2007. income on the one hand, and of valua-
While administrative expenses rose tion losses on securities and other valua-
by 19.6% or EUR 2.30 billion to EUR tion results on the other hand. Parent
14.05 billion at group level, they banks’ period profit amounted to EUR
declined slightly by 1.4% to EUR 5.76 2.87 billion in 2007, up by 11.2% or
billion at parent bank level, so that they EUR 0.29 billion from 2006.
were around 2.4 times higher at group Total assets climbed continuously
level than at the parent bank level. until the end of the fourth quarter of
Higher staff costs and expenditure on 2007. Consolidated total assets stood at
goods and services were the main EUR 912.56 billion at end-2007, up by
growth drivers at group level. Expendi- 18.2% or EUR 140.20 billion from
ture on goods and services increased by 2006. Parent banks’ total assets rose by
26.1% or EUR 0.99 billion to EUR 13.4% or EUR 68.34 billion, reaching
4.77 billion; in absolute terms, staff EUR 578.00 billion at end-2007.
costs grew even more strongly by Consolidated total assets were there-
20.3% or EUR 1.27 billion to EUR fore some 1.6 times higher than total
7.53 billion. assets of parent banks. The rise in
Parent banks’ administrative expenses consolidated total assets points to a
declined somewhat, with staff costs further expansion of Austrian banking
going down slightly (–2.3% or EUR groups’ international business.
STATISTIKEN SPECIAL ISSUE JULY 08 21Economic Developments in Austrian Banking
See also: and December 2007, the aggregated
Table 19 Comparison of Austrian Banking Groups
and the Respective Individual Banks as at Decem- retail lending rate for new euro loans
ber 31, 2007 climbed by 0.84 percentage points
Chart 16 Fully Consolidated Foreign Subsidiaries
from 4.38% to 5.22%.
Account for Some 28% of Banking Groups’ Total Interest rates for loans to house-
Assets holds went up more strongly (0.92 per-
Chart 17 Share of Foreign Subsidiaries in Banking centage points) than for loans to non-
Groups’ Operating Profits Rises to Around 51% financial corporations (0.85 percentage
points). This development was attribut-
4 Interest Rate Developments able to housing loans – the most impor-
As a result of financial turmoil, retail tant category of loans to households –
interest rates rose much more markedly which increased by 0.99 percentage
in 2007 than the ECB’s two upward points to 5.27%. Consequently, the
key rate adjustments (by 0.25 percent- Austrian interest rates for new housing
age points, respectively) to 4.0% would loans were 9 basis points above the euro
have suggested. In light of the unstable area average in December 2007. In
financial market situation, money 2007, Austria’s average interest rate
market rates increased in particular. advantage was still 14 basis points,
Given the higher share of variable whereas in 2006, Austrian banks’ aver-
rate lending in Austria, the country’s age interest rate for new housing loans
interest rate advantage vis-à-vis the had ranged at the lower end of the euro
euro area was offset in some segments. area spectrum.
Interest rates for outstanding amounts
of housing loans with a maturity of 4.2 Lending Rates – Outstanding
more than five years – the most impor- Amounts
tant loan category for Austrian house- In 2007, interest rates for housing loans
holds – were significantly above the euro with a maturity of more than five years
area average. Thus, Austrian customers’ increased in Austria more than they did
interest rate advantage of 0.06 percent- on average in the euro area. At the end
age points as at December 31, 2006, of December 2007, interest rates in
turned into a disadvantage of 0.5 per- this segment reached 5.5%, which was
centage points as at December 31, 2007. 50 basis points above the euro area
Deposit rates for new business rose average and thus at the upper end of the
even more markedly, as high-interest euro area spectrum.
time deposits gained strongly in impor- A comparison with Germany in this
tance, generating 50% of deposit category reveals that the fast interest
growth in 2007. rate increase in Austria turned the
In turn, Austrian banks’ interest country’s interest rate advantage of
margin on new business narrowed 0.55 percentage points into a disadvan-
further to 0.77 percentage points, which tage of 0.40 percentage points.
was the lowest rate in the euro area (euro Interest rates on loans to non-
area average: 1.38 percentage points). financial corporations with a maturity
of more than five years amounted to
4.1 Lending Rates – New Business 5.13% in Austria and were thus still
Retail interest rates for new loans to below the euro area reference value
nonfinancial corporations and house- (5.28%), but the interest rate advantage
holds rose more strongly than key halved from 0.32 percentage points at
interest rates. Between December 2006 end-2006 to 0.15 percentage points at
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