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The RZB Group impresses with continuous positive development.

Fifth record result in a row. ROE roughly 24 per cent. Balance sheettotal plus 20 per cent. Network in Central and Eastern Europepurposefully extended.

The RZB Group, headed by Vienna-based Raiffeisen Zentralbank OesterreichAG (RZB), again looks back to another very successful year and will according to the Groups preliminary figures for 2004 present the fifth record result in a row. Thanks to a growth that has again outpaced that of the market as a whole, RZB has continued its dynamic growth and constantly gained market shares in Austria and Central and Eastern Europe (CEE). RZB has a good strategic alignment and is well on track. It has a consistent business focus in its home markets Austria and Central and Eastern Europe, a strict cost and risk-awareness and of course highly qualified staff, said Walter Rothensteiner, RZBs General Manager.

Balance sheet total expected to be roughly EUR 68 billion Earning power remains strong

According to the Groups preliminary figures for the year ending December 2004, the balance sheet total reached roughly EUR 68 billion, an increase of 20 per cent compared with the figure for year-end 2003. This increase is again mainly contributable to organic growth. Acquisitions only account for about 3 percentage points of the balance sheet totals growth.

The expected net interest income after provisioning grows by more than40 per cent to reach roughly EUR 950 million; net commission income isabout EUR 470 million, an increase of 30 per cent. Trading profitremained at a high level, but will probably be 8 per cent below thefigure for year-end 2003.

Expected profit before tax at roughly EUR 620 million

With roughly EUR 620 million, the Groups expected profit before tax is more than 80 per cent higher than last year. Profit after tax is expected to come in at about EUR 500 million, just as the same level of increase. The Groups consolidated profit will even out at roughly the doubled figures of the previous year. The figure on review is more than EUR 430 million.

RZBs result is traditionally based on business development in the corporate business both in Austria and CEE. Treasury is another reliant earnings base, said Rothensteiner. Particularly pleasing about the current development is the fact that Retail Banking started toearn back the initial investments for its roll-out in CEE. This strategically important business segment does not only show impressive growth rates but also positively contributed to the Groups result. The expected number of retail customers in CEE is more than 4.3million, an increase of one third compared with the figure for year-end 2003.

Ratios again clearly improved high return on equity

The surge in profits also generated a further improvement in RZBs performance ratios. Despite continuous high levels of investment in the expansion in CEE, which are being undertaken to create a secure and sustainable basis for the Groups long-term business strength and success, RZBs cost/income ratio improved to about 62 percent compared with 64.1 per cent at year-end 2003. The return on equity (ROE) before tax increased from 15.5 per cent to approximately 24 per cent, the best ratios recorded by any major Austrian bank. The development of the provisions for possible loan losses was pleasing. They are roughly one fifth below last years figure.

EUR 4.1 billion eligible own funds more than 40 per cent excess cover ratio

The RZB Groups eligible own funds went up one third to roughly EUR 4.1 billion. That increase results from retained earnings and a capital increase of about EUR 147 million which is an impressive mark of confidence of RZBs shareholders and the entry of the IFC und EBRD indie Raiffeisen International Bank-Holding AG (Raiffeisen International). They have invested a total of EUR 200 million and now hold an interest of 4 per cent each in the holding company for RZBs banking network in CEE. The expected excess cover ratio now is more than 40 percent and RZBs core capital ratio came down to above 11 per cent, as did the own funds ratio to over 9 per cent. Consequently, the RZB Groups equity capitalization is fully sufficient.

About 3,600 Jobs created, staff increased by one fifth

Also in 2004, the RZB Group again shows a strong increase in its staffnumber. At year-end, the RZB Group will probably employ roughly 25,700people, which translates into a growth of more than 20 per cent. Theincrease reflects the strong organic growth on the one hand, and theacquisition of the meanwhile renamed Raiffeisen Bank in Albania on theother hand. On balance, the RZB Group has created about 3,600 jobs;roughly 1,000 jobs were added following the acquisition of the AlbanianRaiffeisen Bank.

Network in Central and Eastern Europe further extended

In 2004, the acquisition of the leading Albanian bank was completed. Themeanwhile renamed Raiffeisen Bank boasts a local market share of morethan 50 per cent. It was purchased for USD 126 million in April. Withit, RZB further strengthened its role as the leading bank in SouthEastern Europe.

Following this acquisition, RZBs banking network in CEE now consists of 15 banks and two representative offices in 16 markets of the region. RZBs subsidiary banks rank among the three largest banks in eight CEE markets. The number of Raiffeisen Internationals branches increases by 200 82 of which were contributed by Raiffeisen Bank Albania to about 920.

Balance sheet total in CEE increases by more than one third

The expected balance sheet total of Raiffeisen International increasedby approximately 37 per cent to EUR 27.6 billion and can be mainlyattributed to organic growth. Raiffeisen International continued todisproportionately contribute to the RZB Groups consolidated results.

Survey of the RZB-Groups key data (preliminary figures)

RZB Group according to IFRS, in million2004e2003Change
Balance sheet total68,00056,051roughly 20 %
Profit before taxroughly 620343.6roughly 80 %
Consolidated profit (after minority interests)roughly 430216.2roughly 100 %
Return on Equity (before tax)roughly 24 %15.5 %roughly 8.5 PP
Staff (at reporting date)roughly 25,70018,386roughly 20 %
Banking outletsroughly 940740roughly 27 %

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