EANS-Adhoc: Österreichische Volksbanken-Aktiengesellschaft / anticipated loss in 2011 - information on planned de-merger and on measures to strengthen capitalization

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Company Information

13.10.2011

Since last year, Oesterreichische Volksbanken-Aktiengesellschaft
(VBAG) has focused on the redesign of its business model and has
evaluated strategic options. In particular, the major deterioration
of the market environment for banks, the severe crisis on
international financial markets as well as extraordinary impairment
requirements on country risks, on participations, and from the sale
of participations are expected to significantly affect VBAG´s results
as well as its planned measures:

• Annual loss (according to guidance) in the VBAG single entity financial
statements is expected to amount to approximately EUR 900 million (+/- EUR 150
million depending on the development of the markets. We expect a loss ranging
from EUR 500 million to EUR 750 million on the consolidated group level (IFRS).
The main drivers are significant write-downs in the amount of EUR 700 million on
the book value of the participations in Investkredit Bank AG and Volksbank
Romania S.A. in the single entity accounts of VBAG.
• The planned transfer of the banking business of Österreichische
Volksbanken-Aktiengesellschaft to Investkredit Bank AG by way of de-merger will
not take place this year.
• Currently no repayment of EUR 300 million participation capital held by
the Republic of Austria.
• Despite of the expected loss, capital ratios according to pillar I are
clearly exceeding regulatory requirements. In addition, VBAG Group strengthened
capital ratios through the sale of Volksbank International to Sberbank,
resulting in an expected increase of the core capital ratio to 10.4% and a rise
of the equity ratio to 13.7% by year end 2011.

Currently the board of directors and the core shareholders of VBAG
are discussing measures to strengthen VBAG´s capitalization. Part of
these discussions is the modification of the Schultze-Delitzsch
Genossenschaftsverbund in the form of a cooperation under Article 3
of the directive 2006/48/EC (part of the European application of
Basel II) or the Article 9 of the CCR I draft (Capital Requirements
Regulation I, which is the directly applicable regulatory part of the
Basel III execution on the European level). A resolution to implement
such modification was adopted today.

Stock exchange listed issues of participation capital issued by
Österreichische Volksbanken-Aktiengesellschaft: ISIN: AT0000755665
Österreichische Volksbanken-AG Partizipationsscheine XS0359924643 EUR
500,000,000 Perpetual Non Cumulative Participation Capital
Certificates

The five biggest listed issues of Österreichische
Volksbanken-Aktiengesellschaft in terms of issue volume:

ISIN:
XS0451759012
XS0417722393
XS0412533399
XS0271095357

AT000B053442

The issues of Österreichische Volksbanken-Aktiengesellschaft are
admitted on the following stock exchanges: Second Regulated market of
Wiener Börse AG Official trading of Wiener Börse AG EUWAX segment of
Baden-Württembergische Wertpapierbörse Regulated market of
Baden-Württembergische Wertpapierbörse Regulated market of the Prague
Stock Exchange Regulated market of the Luxembourg Stock Exchange Open
Market of Berlin Stock Exchange Open Market of Stuttgart Stock
Exchange Open Market of Frankfurt Stock Exchange

Further inquiry note:
Ansprechpartner:

Walter Gröblinger

Tel.: +43/ (0) 50 4004-0

E-Mail: walter.groeblinger@volksbank.com

end of announcement euro adhoc
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issuer: Österreichische Volksbanken-Aktiengesellschaft
Kolingasse 19
A-1090 Wien
phone: +43 0 50 4004-0
WWW: www.volksbank.com
sector: Banking
ISIN: AT0000755665
indexes: Standard Market Auction
stockmarkets: stock market: Prague Stock Exchange, official market: Wien
language: English