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30.03.06

Record Year for Raiffeisen International.

Consolidated net profit surges by 83 per cent to 382 million. Total assets grow by 41 per cent to almost 41 billion. Successful IPO followed by largest acquisition in the companys history Bank Aval. Growing importance of retail banking as well as Southeastern Europe and CIS segments as planned.

Raiffeisen International Bank-Holding AG, operating the Central andEastern European subsidiaries of its parent company RaiffeisenZentralbank ?sterreich AG (RZB), has ended the business year 2005 withrecord profit growth. Consolidated net profit (after tax and minorities)amounted to 382.3 million (2004: 209.4 million), surging by 172.9 million (82.6 per cent). Profit before tax climbed to 568.6 million (2004: 340.8 million), while Profit after tax rose to 459.6 million (2004: 269.8 million). Earnings per share increased by 0.86 to 2.79 (2004: 1.93). All figures according to International Financial Reporting Standards (IFRS).

Herbert Stepic, CEO of Raiffeisen International:The business year 2005 was not only the most eventful, but also the most successful in the history of Raiffeisen International. We have successfully completed the largest IPO in Austrian history and, with Bank Aval, closed the largest acquisition in the long history ofRaiffeisen. Finishing the year with the largest profit increase in the history of this company completes the pleasant picture. Over the past three years, we have almost quadrupled our consolidated profit.

In 2005, Raiffeisen International acquired JSPP Bank Aval in Ukraine,becoming the largest banking group in this growth market of 50 millioninhabitants. In February 2006, Raiffeisen International announced theacquisition of Russian Impexbank, which is expected to be completed bythe middle of May. Upon completion of the acquisition, RaiffeisenInternational will become the largest international banking groupoperating in this growth market of 140 million people.

Our strategic position to utilize the long-term growth potential in the region is already superb. Especially in the high growth markets Southeastern Europe and CIS we have an unparalleled market position, which already pays off, said Stepic with reference to the fact thatthese two regions already contribute 60 per cent to pre-tax profit. With Impexbank, we are on the brink of a quantum leap in Russia.

Volume significantly increased Total Assets grew by 41 per cent

Raiffeisen International has utilized the dynamic growth potential inthe markets of Central and Eastern Europe (CEE) and significantlyincreased its customer business. Loans and advances to customers surgedby 52.2 per cent to 24.7 billion, while deposits from customers increased by 37 per cent to 24.9 billion. Total assets grew by 40.8 per cent to 40.7 billion, with two thirds accounted for by organic growth. Stepic: Within the past two years we have doubled our assets and we are therefore one of the strongest growing banking groups in the region.

Operating Results and Efficiency further improved

Operating income improved across all components and grew by 45.5 percent to 1,887 million. Net interest income amounted to 1,202.1 million or 63.7 per cent thereof and experienced the strongest growth with 49.6 per cent. Net commission income improved by 35.8 per cent to 406.8 million, while trading profit surged 36.6 per cent to 300.8million.

Due to tight cost management, general administrativeexpenses increased only by 41.2 per cent to 1,162.5 million despite significant investments and stayed below the increase of operating income.

Resulting profit from operating activities increased by 52.9per cent to 725 million. The Cost/Income ratio, which represents general administrative expenses in relation to operating income, further improved from 63.5 per cent to 61.6 per cent.

Branch Network substantially expanded, Customer Number almost doubled

In the past year Raiffeisen International continued to invest in theexpansion of the branch network, adding 185 new outlets. In addition tothat Bank Aval contributed 1,342 outlets, bringing the total number ofoutlets to 2,443, which is 1,527 or 167 per cent more than in theprevious year.

The number of staff almost doubled in the reportingperiod to 43,614 (2004: 22,851), primarily due to the acquisition ofBank Aval. At year-end 2005 Raiffeisen International served 9.7 millioncustomers almost double the number of the previous year (5 million). Ofthe 4.7 million increase 3.3 million were contributed by Bank Aval withthe remaining 1.4 million (30 per cent) new customers accounted for byorganic growth.

Outlook for 2006

Total assets are expected to grow by at least 20 per cent per year until2008 with the strongest growth anticipated in the CIS-countries, partlybecause of the acquisitions made there. In order to further improve thecapital base the issue of hybrid Tier 1 capital is planned. Stepic:We expect strong earnings growth for the medium term in the CIS-countries, above all in Ukraine and Russia. However, we expect that transformation costs resulting from acquisitions will burden the earnings in the short term. For 2006, we expect an increase in consolidated profit of more than 25 per cent.

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Raiffeisen International operates one of the leadingbanking networks in CEE with 16 subsidiary banks and many leasingcompanies in 16 markets. Representative offices in Lithuania and Moldovacomplement the Group''s presence in the region. Raiffeisen Internationalis a fully consolidated subsidiary of Raiffeisen Zentralbank OsterreichAG (RZB), which owns 70 per cent of the common stock. The remaining 30per cent is free float, the shares are traded on the Vienna StockExchange. RZB is a leading corporate and investment bank in Austria andthe central institution of the Austrian Raiffeisen Banking Group, thecountry''s most powerful banking group.

You can access the web-version of RI''s annual report onhttp://ar2005.ri.co.at. The English printed version will be available on5 April 2006 and can be subscribed to on that site.

For further information please contact Michael Palzer (+43.1/71707-1504, michael.palzer@ri.co.at) or Lars D. Hofer (+43.1/71 707-1930,lars.hofer@ri.co.at).

http://www.ri.co.at, http://www.rzb.at

 

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