EANS-News: Kommunalkredit Austria AG / results for 2016

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annual report

Steinbichler: "A highly positive year after privatisation"
Kommunalkredit Austria AG reports its results for 2016

* IFRS profit after tax of EUR 49.0 million
* Continued strengthening of equity base: total capital ratio 42.3%;
common equity tier 1 ratio 32.9%
* No credit defaults in 2016
* Positive development of business expected for 2017

(Vienna, 10 March 2017) - In 2016, the first full business year after
its privatisation, Kommunalkredit Austria AG (Kommunalkredit)
generated an IFRS after-tax profit for the year of EUR 49.0 million.
The bank holds a loan portfolio of high asset quality without a
single default in the reporting year, and its capital base was
further strengthened in 2016: the total capital ratio increased to
42.3% and the common equity tier 1 ratio to 32.9%. Customer deposits
increased from EUR 9.0 million to EUR 210.8 million in the course of
the year. The bank generated new business in a volume of EUR 242.6
million.

As Alois Steinbichler, CEO of Kommunalkredit, notes, "The first full
business year after privatisation in the autumn of 2015 was very
successful. Kommunalkredit generated solid results in 2016. With our
excellent capitalisation and our clearly defined business model, we
are very well positioned as a specialist bank in the fast growing
market of infrastructure finance."

Strategy and development of business: Kommunalkredit acts as a bridge

As a bank specialising in infrastructure finance, Kommunalkredit acts
as a bridge between infrastructure developers, such as
municipalities, public-sector enterprises or private project
operators, on the one hand, and institutional investors, such as
insurance companies or pension funds, on the other hand.
Kommunalkredit meets the complementary interests of both side: While
infrastructure developers require structuring and financing
solutions, investors are increasingly looking out for asset classes
with stable cash flows in the long term. Kommunalkredit's focus is on
projects in the areas of energy and the environment (especially
sustainable sources of energy), social infrastructure (care homes,
health care and educational facilities, administrative buildings) and
transport (commuter transport, road and rail transport). With its
business model, the bank is able to use the opportunities offered by
the infrastructure market. According to estimates by the European
Commission, capital expenditure in a volume of EUR 150 billion to EUR
200 billion per year will be required to reach the targets of the
Europe 2020 strategy. In Austria, too, major investments will have to
be made in the coming years.

In 2016, Kommunalkredit played a leading role in the financing of
numerous infrastructure projects in European core countries. These
projects included wind farms in France, the North Sea and Austria, a
broadband network in Germany, a toll road in Spain, road
infrastructure, including road lighting, in a large city in Great
Britain, and the administrative headquarters of a German government
ministry. Overall, Kommunalkredit generated new business in a volume
of EUR 242.6 million in 2016; the prolongation of loans in its
existing portfolio accounted for another EUR 64.5 million.

Income position: IFRS after-tax profit for the year of EUR 49.0
million

In 2016, Kommunalkredit generated an IFRS after-tax profit for the
year of EUR 49.0 million. A comparison with 2015 is of limited value,
as the previous year's figures only cover the abridged business year
from the date of privatisation on 26 September 2015 to 31 December
2015.

Kommunalkredit reports net interest income of EUR 36.5 million and
net commission income of EUR 16.8 million; net general administrative
expenses amount to EUR 38.5 million. Thus, the bank's operating
result comes to EUR 15.4 million. Its net trading and valuation
result of EUR 36.2 million comprises income from the early redemption
of own issues and the resulting closure of hedging transactions, as
well as valuations of the fair-value portfolio.

In 2016, Kommunalkredit contributed EUR 2.5 million to the Bank
Resolution Fund and paid EUR 11.6 million in stability tax ("bank
levy") under the Stability Tax Act. In addition to the current
stability tax for 2016 of EUR 3.9 million, this expense item also
comprises the non-recurrent special payment of EUR 7.7 million
pursuant to the 2016 Tax Amendment Act. After this special payment,
the financial burden resulting from the recurring stability tax
payable for 2017 will be significantly reduced (expected stability
tax expense in 2017: EUR 0.7 million). The tax result for the
reporting period is positive at EUR 13.5 million due to the
capitalisation of tax losses carried forward.

The Annual Shareholders' Meeting on 10 March 2017 decided to
distribute a dividend in the amount of EUR 32.0 million. Thus,
Kommunalkredit's equity, after distribution of the dividend,
increased by EUR 40.5 million to EUR 296.8 million. With the
intention of supporting future growth, the Shareholders' Meeting also
decided to grant authorized capital in an amount of EUR 79.7 million.

Balance sheet structure: Strengthened capital base and higher
customer deposits

As at 31 December 2016, Kommunalkredit's consolidated total assets
according to IFRS amounted to EUR 3.8 billion, down by EUR 0.4
billion from EUR 4.2 billion as at 31 December 2015. The reduction is
primarily due to the runoff of asset positions and the elimination of
derivative transactions. The bank's total assets include loans to
customers in the amount of EUR 2.4 billion (31/12/2015: EUR 2.6
billion). The securities portfolio amounts to EUR 560.8 million
(31/12/ 2015: EUR 661.0 million).

Kommunalkredit further strengthened its capital position, reporting
the equity in a total amount of EUR 296.8 million (31/12/2015: EUR
256.3 million) and common equity tier 1 of EUR 225.5 million
(31/12/2015: EUR 194.9 million). Thus, as at 31 December 2016, the
bank's total capital ratio came to 42.3% (31/12/ 2015: 34.1%) and the
CET 1 ratio to 32.9% (31/12/2015: 25.6%); the leverage ratio as at 31
December 2016 was 7.2% (31/12/2015: 5.0%).

Kommunalkredit has a sound funding structure. In 2016, amounts owed
to customers increased to a total of EUR 552 million (31/12/2015: EUR
383 million). This increase resulted from the steep rise in customer
deposits from EUR 9.0 million as at 31 December 2015 to EUR 210.8
million as at 31 December 2016. The increase came from deposits by
corporate customers as well as deposits acquired via the KA Direct
online platform. KA Direct is an efficient investment and cash
management product for municipalities and enterprises operating in
the municipal sector.

Outlook

Kommunalkredit has started the new business year from a promising
position. The macro-economic fundamentals and the high demand for
infrastructure investments in Europe create a favourable environment
for the bank. Public authorities show a growing interest in using
funds provided by institutional investors to carry out public
infrastructure projects. As a strong and effective bank specializing
in infrastructure finance, Kommunalkredit is strategically very well
positioned in this environment.

After its satisfactory performance in 2016, Kommunalkredit expects to
generate another sound result in 2017, although extraordinary income
from the early redemption of own issues will not be as high as in
2016. Kommunalkredit will continue to consistently implement its
strategy in 2017. The bank's objective is to increase the volume of
its new business as well as the volume of issues to be placed in the
market, especially with institutional investors. As regards funding,
the bank intends to further increase the volume of deposits in 2017,
in line with the positive development seen in the reporting year.

SELECTED INDICATORS OF THE IFRS INCOME STATEMENT
OF THE KOMMUNALKREDIT GROUP

Selected Income Statement

figures 01/01-31/12/2016 6/09-31/12/2015 1)
in EUR Million

Net interest income 36.5 9.3

Net fee and commission 16.8 4.6
income

Net administrative
expenses after services -38.5 -10.2
invoiced to KF

Operating result 15.4 4.1

Net trading and valuation 36.2 1.7
result

Contributions to Bank -2.5 -0.8
Resolution Fund

Stability tax -11.6 -1.0

Consolidated profit for 35.4 4.0
the year before tax

Taxes on income 13.5 1.6

Consolidated profit for 49.0 5.6
the year after tax

Comprehensive income 48.6 5.6
(incl. changes in equity)

1) Owing to the new incorporation of the company as of 26/09/2015,

the figures for the previous year only cover the period from
26/09/2015- 31/12/2015 and are therefore not comparable with the
current reporting period from 01/01/2016-31/12/2016.

SELECTED INDICATORS OF THE IFRS BALANCE SHEET
OF THE KOMMUNALKREDIT GROUP

Assets 31/12/2016 31/12/2015
in EUR 1,000

Cash and balances with 310,457.4 79,693.3
banks

Loans and advances to 101,865.4 240,994.6
Banks

Loans and advances to 2,138,929.0 2,353,017.9
customers

Assets at fair value 91,616.0 752,691.9

Derivatives 337,156.4 544,055.9

Assets 3,790,805.0
4,162,013.8

Liabilities and equity 31/12/2016 31/12/2015
in EUR 1,000

Amounts owed to banks 795,027.9 463,975.7

Amounts owed to customers 552,093.0 383,002.3

Derivatives 263,347.5 427,177.4

Securitised liabilities 1,779,165.4 2,527,894.0

Equity 296,779.0
256,263.8

Liabilities and equity 3,790,805.0
4,162,013.8

Further inquiry note:
Kommunalkredit Austria AG
Martin Hehemann (Corporate Communications)
Tel.: +43 (0) 1/31 6 31-532 oder +43 (0)664/8031631 532
m.hehemann@kommunalkredit.at
www.kommunalkredit.at

end of announcement euro adhoc
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company: Kommunalkredit Austria AG
Türkenstraße 9
A-1092 Wien
phone: +43 1 31 6 31
FAX: +43 1 31 6 31 105
mail: kommunal@kommunalkredit.at
WWW: www.kommunalkredit.at
sector: Banking
ISIN: -
indexes:
stockmarkets: stock market: Luxembourg Stock Exchange, Wien, SIX Swiss Exchange
language: English

Original-Content von: Kommunalkredit Austria AG, übermittelt durch news aktuell