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05.09.06

RZB Group Interim Report for the Semi-Annual Results 2006.RZBcontinues its growth path.

Total Assets exceed EUR 100 billion. Again excellent results– profit before tax climbed by 34 per cent. RZB is among the 100 largest banks in the world. Network in Central and Eastern Europe expanded.

The group of Raiffeisen Zentralbank Osterreich AG (RZB) has againachieved excellent results for the first half of 2006*. The semi-annualprofit before tax grew by 33.7 per cent to EUR 579.0 million. Thisrepresents the best semi-annual result in RZB''s history and the seventhconsecutive record result for the first semester.

"Once again, RZB is growing considerably faster than the banking market,thus further improving its already good position in the first half of2006," said CEO Walter Rothensteiner. From January to June 2006, RZBexpanded its market share in Austria (aggregated total assets) fromabout 13 per cent to 13.5 per cent.

RZB expands business with Austrian corporate customers

Business with Austrian corporate customers continued to developfavourably during the first semester. Risk-weighted assets with localtop-1,000 customers increased by 17.3 per cent. The overall risk-profileof RZB''s Austrian business has improved in step with the advance of itscustomers'' financial standing. Furthermore, RZB is excellentlypositioned throughout its product spectrum. A steadily growing number ofcustomers have their treasury business, above all interest and currencyhedging, handled by RZB."Business with corporate customers is RZB''ssolid foundation. The high level of product and service quality ensuressatisfied customers and is the key to success," added Rothensteiner.

Continuing strong growth in Austria and CEE

RZB has maintained its growth momentum with total assets growing byabout 10 per cent to EUR 103.2 billion, for the first time surpassingthe EUR 100-billion threshold. As in the previous years, RZB grewstronger than the Austrian banks as a whole, for which OesterreichischeNationalbank (OeNB) accounted a 5.5 per cent growth rate. Also notablyexpanded were loans and advances to customers (15.7 per cent) anddeposits from customers (17.1 per cent). With 46.6 per cent of totalassets, Austria represents RZB''s most important regional segment,followed by Central Europe with 17.4 per cent.

CEE network expanded and condensed

With an increase of total assets of 14 per cent to EUR 46.3 billion,Raiffeisen International Bank-Holding AG has contributed significantlyto the growth of the RZB Group. The RZB Group''s Central and EasternEuropean (CEE) network, which is steered by Raiffeisen International,was further expanded and condensed. A total of 282 new business outletswere added to the distribution network, with 78 business outlets havingbeen newly opened and 204 business outlets resulting from theacquisition of Impexbank.

"In the first six months of 2006, Raiffeisen has attracted about onemillion new retail customers. Together with the new customers fromImpexbank, we now serve 11.2 million retail customers in CEE. This is animpressive proof of our expansion in the region," said Rothensteiner.The business results from Raiffeisen International also developed verypositively. Profit before tax amounted to EUR 421 million, which is a 54per cent increase compared to the same period of the previous year.Consolidated profit (after minorities) grew by 55.6 per cent to EUR289.2 million.

Through Raiffeisen International, RZB pools 17 network banks andnumerous leasing companies in CEE. Moreover, RZB is active in Lithuaniaand Moldova through representative offices. In eight markets, therespective Network Bank ranks among the Top 3, and is market leader inAlbania and Serbia.

Growing earnings power and considerable profit growth

"RZB continues to display high earnings power in operative business andstrikingly underlines its chosen growth path. The more so, since thegood results were achieved against continual high investments into theexpansion," said Rothensteiner.

Net interest income after provisioning grew by 34.8 per cent compared tothe same period of the previous year, while net commission income soaredby 88.2 per cent and trading profit increased by 5.8 per cent. Profitbefore tax climbed by 33.7 per cent to EUR 579.0 million.

The semi-annual consolidated profit (after tax and minorities) grew by64 per cent to EUR 356.2 million. The increase in comparison to the samereporting period of the previous year is mainly attributed to improvedoperating results from almost all group units.

Strong performance ratios– ROE 24.2%, ROA 1.18%, CIR 53.9%

The return on equity (ROE) before tax of 24.2 per cent is excellent,especially in the light of a double digit growth in equity. Furthermore,return on assets before tax of 1.18 per cent and the cost/income ratioof 53.9 per cent have improved and are the best results of largeAustrian banks.

Solid own funds

Total own funds of RZB have increased by 12.5 per cent to EUR 5.9billion. The excess cover ratio of 13.6 per cent is still comfortable.The own funds ratio amounts to 9.1 per cent, the core capital ratio to7.2 per cent, which represents a decrease of 1.1 percentage points. Intotal, RZB has a healthy capital base, which is sufficient for themedium-term plans considering profits to be retained at the end of theyear.

Acquisition of Impexbank in Russia and eBanka in the Czech Republic

In May 2006, 100 per cent of Russian Impexbank was acquired. Thepurchase price amounts up to USD 550 million, plus a possible priceadjustment resulting from the valuation of a real estate. Impexbank notonly contributed 204 new branches but also 350 additional points of saleto the CEE network. The merger with Raiffeisenbank Austria, Moscow isplanned for 2007.

The acquisition of eBanka in the Czech Republic was prepared during thefirst semester. The purchase agreement of EUR 130 million has alreadybeen signed and submitted to the authorities for approval. eBanka willcontribute a network of 37 business outlets and 117,000 customers to thegroup.

Sale of Raiffeisenbank Ukraine

After the acquisition of Bank Aval, now Raiffeisen Bank Aval, in autumn2005, there were numerous interested buyers for Raiffeisenbank Ukraine.In June, a purchase agreement was signed with Hungarian OTP Bank.Subject to the approval of the authorities, OTP will purchase the bankfor EUR 650 million. Since the deal has not been closed yet, the salesprice is not included in the semi-annual results.

Employer for 53,085 staff

The highly skilled work force is one of RZB''s most valuable assets. Withthe expansion of the branch network, the number of staff has alsoincreased by 14.8 per cent to 50,385 at the end of June 2006. Theacquisition of Impexbank accounted for about 5,400 new employees.

A comprehensive description of the business segments as well as detailedinformation about the balance-sheet and the P&L statement can be foundin the Interim Report 2006. You can access it online:http://www.rzb.at/interimreport2006. You will find the semi-annualresults of Raiffeisen International at http://www.ri.co.at under CompanyInfo, section"Business Development".

RZB has adapted the comparative figures for the first half of 2005 toreflect the proceeds from the sale of shares in Raiffeisen Internationalat the time of the IPO in the equity.

* -RZB Semi Annual Results 2006

For further information please contact Andreas Ecker-Nakamura (+43.1/71707-1753, andreas.ecker@rzb.at) or Gregor Bitschnau (+431-71707-1955,gregor.bitschnau@rzb.at). http://www.rzb.at

 

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