EANS-Adhoc: Österreichische Volksbanken-Aktiengesellschaft / Republic of Austria and Volksbanks stabilise VBAG

--------------------------------------------------------------------------------
ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
distribution. The issuer is solely responsible for the content of this
announcement.
--------------------------------------------------------------------------------

Company Information

27.02.2012

Österreichische Volksbanken-AG (VBAG), Deutsche
Zentral-Genossenschaft, Ergo Versicherung AG, Raiffeisen Zentralbank
AG, Österreichische Volksbanken Holding eGen, the Volksbanks and the
Republic of Austria have concluded a joint agreement on the long-term
stabilisation of VBAG. The objective of this agreement is to
transform VBAG into a sustainable cooperative bank in accordance with
section 30a of the Austrian Banking Act (BWG).

The agreement contains the following key points:

• Investkredit is to be merged with VBAG retroactively to 31 December 2011

• the creation of a cooperative bank in accordance with section 30a of the
Austrian Banking Act
• DZ Bank, Ergo, RZB, Österreichischer Genossenschaftsverband and
Volksbanken Holding will approve a cut in capital effective 31 December 2011 and
ensure that the holding accounted for by the participation capital of the
Republic of Austria is reduced to not more than 70%.
• This capital decrease will also entail a capital increase of around
EUR480 million. The capital increase will be performed by the Republic of
Austria in the amount of EUR250 million and the Austrian Volksbanks in the
amount of at least EUR230 million. The Volksbanks will remain the majority owner
of VBAG.
• Asset guarantee from the Republic of Austria for VBAG in the amount of
EUR100 million with a fee of 10% from the time of a legally binding resolution
by the Volksbanks to form a cooperative bank in accordance with section 30a BWG
expiring 31 December 2017 at the latest.
• The Volksbanks undertake to ensure and pay the fee for the asset
guarantee issued by the Republic of Austria for VBAG. In addition, the
cooperative is prohibited from making distributions as long as the Republic of
Austria has not been fully served as a shareholder, guarantor or participant or
liability fees are outstanding. Furthermore, the Volksbanks will ensure the
repayment of the participation capital of the Republic of Austria from the 2009
issue after the capital reduction as at 31 December 2011.
• Presentation of a restructuring and reorganisation concept by the
Management Board of VBAG.
• In order to strengthen VBAG´s capital ratios, RZB will ensure best
efforts in order to assist VBAG in its disposal of RZB shares and in any case
guarantees to implement adequate measures that will improve capital ratios and
liquidity at VBAG. DZ Bank and ERGO undertake to leave all liquidity held in
VBAG Group unchanged until further notice. In particular, this relates to the
refinancing of VB Romania and VB Leasing International by DZ Bank.
• In addition, DZ Bank will assume a portfolio of the Frankfurt branch of
Investkredit in the amount of EUR400 million. RWA. The sale of shares in VB
Romania and VB Leasing International is still intended at the best possible
time.

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:
Walter Gröblinger
Tel.: +43/ (0) 50 4004-0
E-Mail: walter.groeblinger@volksbank.com

end of announcement euro adhoc
--------------------------------------------------------------------------------

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: Regulated free trade: Wien, stock market: Prague Stock Exchange
language: English