EANS-Adhoc: Investkredit Bank AG / European Commission approves state aid for Österreichische Volksbanken-AG and restructuring measures

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Company Information

19.09.2012

The European Commission has today (19 September 2012) approved the
comprehensive restructuring plan developed by Österreichische
Volksbanken-AG (VBAG) in the wake of the financial and economic
crisis to restore long-term profitability. The approval encompasses
measures that were introduced in 2009 as well as the support measures
as agreed with the Republic of Austria in late April 2012 (write-down
of participation capital held by the Republic by 70% plus a EUR 250
million recapitalisation).

Under the newly-approved restructuring plan, the following measures
have to be implemented by VBAG until 31 December 2017 (restructuring
phase):

- VBAG's total assets will be gradually reduced to EUR 18.39 billion (EUR
30.49 billion as at 30 June 2012) and risk-weighted assets (RWA) are to be
gradually reduced to EUR 10.08 billion (EUR 15.54 billion as at 30 June 2012).

- Core business will only include business areas that provide services to
the regional Volksbanks (key focus: role as central institution of the
association of Volksbanks and providing and distributing products and services
to Volksbanks and their clients). Business areas that do not constitute core
business are to be discontinued as stipulated in the restructuring plan.

- Disposal of holdings in Raiffeisen Zentralbank and the following
companies:
o Volksbank Leasing International
o Volksbank Malta
o Investkredit International Bank, Malta
o Volksbank Romania

- Prohibition of dividend payments during the restructuring phase up to
and including for the business year ending on 31 December 2017 (moratorium on
dividend payments for shares, participation capital and participation capital
certificates).

- No payments on performance-related equity instruments (such
as hybrid financial instruments and non-voting equity
securities/Genussscheine) are allowed, unless contractually or
legally required.

Supplementary capital (upper tier II bonds) issued by VBAG and
Investkredit are not affected by the moratorium.

VBAG is also required to take all necessary measures to ensure that
the Republic of Austria is fully relieved of its participation
commitments until 31 December 2017 or immediately after that date.

On 18 September 2012, the Austrian Financial Market Authority
approved the new association of Volksbanks (Kreditinstitute-Verbund)
pursuant to Section 30a of the Austrian Banking Act, which means that
now all requirements for establishing the new association comprising
the regional Volksbanks and VBAG as the central body are met.

The measures concluded at the end of April and approved by the Annual
General Meeting on 26 April 2012 are due to be entered in the
commercial register and therefore take legal effect at the end of
September. Those measures are:

(i) Write-down of VBAG shares and participation capital by 70%
and VBAG capital increase of EUR 484 million, subscribed by the
Republic of Austria (EUR 250 million) and Volksbanks (EUR 234
million);

(ii) Merger of Investkredit Bank AG with VBAG which is the
acquiring company and sole legal successor.

All measures will be applied retroactively, with effect from 31
December 2011.

Stock exchange listed participation capital issued by Österreichische
Volksbanken-Aktiengesellschaft

ISIN:

AT0000755665 Österreichische Volksbanken-AG Partizipationsscheine
XS0359924643 EUR 500,000,000 Perpetual Non Cumulative Participation
Capital Certificates (issued by Banque de Luxembourg in its function
as trustee)

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

ISIN:

XS0417722393
AT000B053442
XS0275528627
AT000B061437
AT000B056544

The issues of Österreichische Volksbanken-Aktiengesellschaft are
admitted on the following stock exchanges: Regulated Market of the
Vienna Stock Exchange Official Trading of the Vienna Stock Exchange
Regulated Market of Baden-Württembergische Wertpapierbörse Regulated
Market of the Prague Stock Exchange RM-SYSTÉM Czech 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

The five largest listed issues of Investkredit Bank AG in terms of
issue volume:

ISIN:
AT0000A0SNL2
AT0000A0SNJ6
AT0000A0SNG2
AT0000A0SNF4
AT0000A0SNH0

Hybrid capital issues of Österreichische
Volksbanken-Aktiengesellschaft and Investkredit Bank AG:

XS0201306288 EUR 250,000,000 Fixed/Floating Rate Non-cumulative
Non-voting Preferred Securities DE0009576108 Investkredit Funding
Ltd. Subordinated Noncumulative Limited Recourse Notes 2002

The issues of Investkredit Bank AG are admitted on the
following stock exchanges:

Second Regulated Market of Vienna Stock Exchange
Official Trading of Vienna Stock Exchange
Regulated Market of the Luxembourg Stock Exchange
Open Market of Frankfurt Stock Exchange

Further inquiry note:
Investkredit Bank AG
Mag. Julius Wallner
Tel.: +43 0 50 4004 - 4211
mailto:julius.wallner@investkredit.at

end of announcement euro adhoc
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issuer: Investkredit Bank AG
Kolingasse 14 - 16
A-1090 Wien
phone: +43 1 504004 - 4207
FAX: +43 1 504004 84207
mail: invest@investkredit.at
WWW: www.investkredit.at
sector: Banking
ISIN: -
indexes:
stockmarkets: stock market: Wien
language: English